Flag Ship Acquisition Corp 8-K, filed Apr 22, 2025
Flag Ship Acquisition Corp (FSHP)
About this 8-K
Flag Ship Acquisition Corp filed this 8-K on April 22, 2025, reporting on events of April 18, 2025.
Items reported
- Item 1.01: Entered into a material agreement
- Item 1.02: Ended a material agreement
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Current Report
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| Item 1.01. | Entry into a Material Definitive Agreement. |
As previously disclosed, on October 21, 2024, Flag Ship Acquisition Corporation (“Flag Ship” or the “Company”) entered into an Agreement and Plan of Merger (the “GRT Merger Agreement”) with Great Rich Technologies Limited, a public limited company incorporated under the laws of Hong Kong (“GRT”), and GRT Merger Star Limited, a Cayman Islands company limited by shares and a wholly-owned subsidiary of GRT (“GRT Merger Sub”). On April 18, 2025, pursuant to the GRT Merger Agreement, the parties to the GRT Merger Agreement entered into a Mutual Termination Agreement (the “Termination Agreement”) to terminate the GRT Merger Agreement. The Termination Agreement also provides that each other agreement among the parties relating to the GRT Merger Agreement is automatically terminated concurrently with the termination of the GRT Merger Agreement. The Termination Agreement also provides for a mutual release of claims among the parties and their affiliates, except for liabilities arising from or relating to any knowing or intentional breach of a representation, a warranty or a covenant of the GRT Merger Agreement. No party will be required to pay a termination fee as a result of the mutual decision to enter into the Termination Agreement. The foregoing description of the Termination Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the Termination Agreement, a copy of which is filed as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated herein by reference.
Merger Agreement
On April 18, 2025, Flag Ship entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Great Future Technology Inc., a Cayman Islands exempted company limited by shares (“PubCo” or “Parent”) and GFT Merger Sub Limited, a Cayman Islands exempted company limited by shares and a wholly-owned subsidiary of GFT (“Merger Sub”). The Merger Agreement replaces and supersedes the GRT Merger Agreement described above.
Pursuant to the Merger Agreement, among other things, the Company will merge with and into Merger Sub (the “Merger”), with Merger Sub continuing as the surviving entity and a wholly-owned subsidiary of PubCo (the “Surviving Company”). Immediately upon Closing, the Company and Merger Sub will cause a plan of merger (the “Plan of Merger”) approved by the directors of each such entity consistent with the Merger Agreement, and in the form and containing such other documents as may be required by the Cayman Companies Act (the “Merger Documents”) to be executed and then filed for registration by the Cayman Registrar. The Merger will become effective at such time as the Plan of Merger is registered by the Cayman Registrar, or at such other time subsequent thereto, but not exceeding 90 days from the date of registration, as mutually agreed between Merger Sub and the Company and specified in the Plan of Merger (the “Effective Time”).
At the Effective Time, by virtue of the Merger and without any action of the part of the Company, Merger Sub or any other Person: (i) each of the Company’s ordinary shares (the “Company Shares”) issued and outstanding immediately prior to the Effective Time, excluding the Excluded Shares and Dissenting Shares (each, as defined below), if any, will be automatically cancelled, extinguished and exchanged for the right to receive, immediately upon consummation the Merger, one (1) Class A ordinary share of PubCo (such shares of PubCo, collectively, “PubCo Class A Ordinary Shares”) for each such Company Share (the “Per Share Merger Consideration”); and (ii) each right to receive one-tenth (1/10th) of a Company Share at the consummation of a business combination of the Company (a “Company Right”) that is outstanding immediately prior to the Effective Time will be cancelled, extinguished and exchanged for the right to receive, immediately upon the consummation of the Merger, PubCo Class A Ordinary Shares in an amount equal to (in each case, as rounded down to the nearest whole number) the product of (a) the Per Share Merger Consideration, multiplied by (b) the number of Company Shares that the holder of the cancelled Company Right (the “Company Rights Holder”) would have been entitled to receive from the Company assuming satisfaction of the terms and conditions of such Company Right(the “Rights Merger Consideration”).
For purposes of this Item 1.01, the term “Excluded Shares” means Company Shares, if any, held immediately prior to the Effective Time by the Company or PubCo, and the term “Dissenting Shares” means Company Shares issued and outstanding immediately prior to the Effective Time that are held by any holder who is (a) entitled to dissent to the Merger pursuant to Section 238 of the Cayman Companies Act and (b) properly dissents to the Merger and makes a demand for payment of the fair value of such holder’s shares in accordance with Section 238 of the Cayman Companies Act, and has not withdrawn such dissent.
Merger Consideration
The aggregate consideration payable to pursuant to the Merger Agreement to the shareholders of the Company (“Company Shareholders”) entitled thereto shall consist of that number of PubCo Class A Ordinary Shares that is equal to (i) the Per Share Merger Consideration multiplied by the number of Company Shares registered in the name of those Company Shareholders immediately prior to the Effective Time, plus (ii) the Rights Merger Consideration, as described above.
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Indemnification Obligations
PubCo is obligated to cause all rights to indemnification and advancement of expenses and all limitations on liability existing in favor of any employee, officer or director of the Company to survive the consummation of the transactions contemplated in the Merger Agreement and continue in full force and effect and be honored by the Surviving Company and PubCo after the Effective Time.
Representation and Warranties
Under the Merger Agreement, PubCo and the Merger Sub (collectively, the “Group Companies”), on the one hand, and the Company, on the other hand, have each made representations and warranties to each other, including without limitation as to such parties’ corporate powers, capital structure, financial condition, legal activity and compliance, and in the case of each of the Group Companies, its assets, liabilities, properties, taxes, recent operations, contracts, related party transactions, intellectual property, insurance, employee matters and certain other matters.
The assertions embodied in those representations and warranties were made for purposes of the Merger Agreement and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The representations and warranties in the Merger Agreement are also modified in important part by the disclosure schedules and annexes attached thereto, which are not filed publicly and which may be subject to contractual standards of materiality or material adverse effect applicable to the contracting parties that differ from what may be viewed as material to investors. The representations and warranties in the Merger Agreement and the items listed in the disclosure schedules were used for the purpose of allocating risk among the parties rather than establishing matters as facts. The Company does not believe that the disclosure schedules contain information that is material to an investment decision. Investors are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates.
Covenants and Agreements of the Parties
Each party agreed in the Merger Agreement to use their commercially reasonable efforts to effect the closing of the transaction contemplated thereby. The Merger Agreement also contains covenants of the parties during the period between the signing of the Merger Agreement and the earlier of the Effective Time or the termination of the Merger Agreement, including covenants regarding (1) the operation of their respective businesses in the ordinary course of business, (2) the provision of access to their books and records, (3) confidentiality, (4) exclusive dealing, (5) notifications of certain breaches, consent requirements or other matters, (6) efforts to consummate the Merger and obtain third party and regulatory approvals, and (7) with respect to PubCo, its agreement that it has no claim against the trust account established for the benefit of the shareholders of the Company.
The Company also agreed, as promptly as practicable after the date of the Merger Agreement, to file a proxy statement (the “Proxy Statement”) for an extraordinary general meeting of its shareholders to approve the Merger Agreement and related matters (the “Shareholder Meeting”) and provide all of its public shareholders with the opportunity to redeem their public shares in conjunction with the shareholder vote and PubCo shall cause to be filed with the SEC a registration statement on Form F-4, in which the Proxy Statement will be included. Without limitation, in the Proxy Statement, the Company must seek from its shareholders (i) approval of the Merger Agreement, (ii) the adoption and approval of the Merger Documents, including the Plan of Merger, (iii) approval to obtain any and all other approvals necessary or advisable to effect the consummation of the Merger (the proposals set forth in the foregoing clauses (i) through (iii) are referred to as the “Company Proposals”), and (iv) any proposal to adjourn or postpone the meeting to a later date, if there are not sufficient votes for the approval of the Company Proposals, on the date on which such meeting is held. The Company agreed, through its board of directors, to recommend that the Company Shareholders vote in favor of all Company Proposals, and not withdraw or modify such recommendation prior to termination of the Merger Agreement.
From the date of execution of the Merger Agreement through the Closing, the Company shall use all reasonable efforts to remain as a public company on, and for its securities to be tradable over the Nasdaq Global Market. PubCo shall use all reasonable efforts to apply for a listing of the PubCo Class A Ordinary Shares on, and for PubCo Class A Ordinary Shares to be tradable over, the Nasdaq Stock Market.
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Conditions to Consummation of the Merger
Consummation of the transactions contemplated by the Merger Agreement is subject to the satisfaction or waiver by the respective parties of a number of conditions, including the approval of the Merger Agreement and the transactions contemplated thereby by PubCo’s and the Company’s respective shareholders. Other closing conditions include, among others: (i) the receipt of necessary consents, approvals and authorizations, including but not limited to, regulatory approval by Nasdaq and the Securities and Exchange Commission; (ii) the trading of the PubCo Class A Ordinary Shares on Nasdaq; (iii) receipt of all necessary approvals from the China Securities Regulatory Commission (the “CSRC”) in connection with the transaction; (iv) the absence of any law or governmental order enjoining, prohibiting or making illegal the consummation of the Merger; and (v) effectiveness of the Registration Statement of F-4 in accordance with the Securities Act of 1933, as amended.
In addition, the obligations of PubCo and Company to consummate the Merger are also conditioned upon, among other things: (i) the receipt by each of PubCo and the Company of the certificates, instruments and other agreements as set forth in the Merger Agreement; (ii) the accuracy of the representations and warranties of each party (subject to certain materiality standards set forth in the Merger Agreement); (iii) material compliance by each party with its pre-closing covenants; and (iv) the absence of any effect, development, circumstance, fact, change or event since the date of the Merger Agreement that, individually or in the aggregate, has had, or would reasonably be expected to prevent or materially delay or materially impair the ability of PubCo or the Company to consummate the Merger or otherwise have a material adverse effect on the Merger.
Termination
The Merger Agreement may be terminated under certain circumstances at any time prior to the Effective Time, including, among others, by (i) mutual written consent by the Company and PubCo, (ii) either party if the transactions contemplated by the Merger Agreement have not been completed by December 31, 2025 (as such date may be extended pursuant to the Merger Agreement, the “Outside Date”), (iii) either party if any representation or warranty of the opposing party is not materially true and correct or if the opposing party fails to perform in any material respect any covenant or agreement, subject to a 30-day cure period and other exceptions, and (iv) either party if the other party’s board of directors withdraws or changes its recommendation that its respective shareholders vote in favor of the proposals agreed upon, or if either party’s shareholders do not approve all the required proposals at the respective shareholder meetings of either party (or at any adjournment or postponement thereof).
Governing Law and Dispute Resolution
The Merger Agreement is governed by Delaware law. Subject to limited exceptions, all claims relating to the Merger Agreement and the transactions contemplated thereby will be subject to the exclusive jurisdiction of the Court of Chancery of the State of Delaware.
A copy of the Merger Agreement is filed with this Current Report on Form 8-K (this “Report”) as Exhibit 2.1 and is incorporated herein by reference. The foregoing description of the Merger Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Merger Agreement.
Related Agreements
This section describes the material provisions of certain additional agreements entered into or to be entered into pursuant to the Merger Agreement (the “Related Agreements”) but does not purport to describe all of the terms thereof. The following summary is qualified in its entirety by reference to the complete text of each of the Related Agreements, copies of each of which are attached hereto as exhibits. Shareholders and other interested parties are urged to read such Related Agreements in their entirety.
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Parent Shareholder Lock-Up and Support Agreement
As contemplated by the Merger Agreement, PubCo entered into a lock-up and support agreement with Flag Ship and certain shareholders of PubCo (“PubCo Lock-Up and Support Agreement”), with respect to PubCo Shares held by the PubCo shareholders party to such agreement. In such PubCo Lock-Up and Support Agreement, each holder agreed that, subject to certain exceptions, during the defined “Lock-Up Period”, it will not (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option, right or warrant to purchase or otherwise transfer or dispose of, or agree to transfer or dispose of, directly or indirectly, any of the PubCo Shares covered by such agreement (the “Restricted Securities”), (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Restricted Securities, or (iii) publicly disclose the intention to effect any transaction specified in clause (i) or (ii). In addition, each PubCo shareholder signatory to the PubCo Lock-Up and Support Agreement agreed to vote all of its capital shares in PubCo in favor of the Merger Agreement and the transactions contemplated thereby and any other proposal included in the Proxy Statement related to the Merger for which the PubCo’s board of directors has recommended that the PubCo shareholders vote in favor and against any competing transaction.
As defined by the PubCo Lock-Up and Support Agreement, the “Lock-Up Period” means, (i) with respect to 50% of the Restricted Securities, the period of time commencing on the closing of the Merger and expiring on the earlier of (A) the date that is six (6) months following the closing or (B) the date on which the closing trading price per PubCo Share equals or exceeds $12.50 per share (as adjusted for share splits, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any thirty (30)-trading day period commencing after the closing, and (ii) with respect to the remaining 50% of the Restricted Securities, the period of time commencing on the closing of the Merger and expiring on the date this six (6) months following such closing date; or earlier in either case, if subsequent to the closing date, PubCo completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of its shareholders having the right to exchange their PubCo Shares for cash, securities or other property. The PubCo Lock-Up and Support Agreement shall immediately terminate upon the earlier of (x) the termination of the Merger Agreement pursuant to its terms and (y) the date on which none of the PubCo and the Company and any holder of a locked-up share has any rights or obligations thereunder.
The PubCo Lock-Up and Support Agreement is filed with this Report as Exhibit 10.1 and is incorporated herein by reference. The foregoing description of the PubCo Lock-Up and Support Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the PubCo Lock-Up and Support Agreement.
Sponsor Lock-Up Agreement
As contemplated by the Merger Agreement, the Company and PubCo entered into a lock-up agreement with Whale Management Corporation (the “Sponsor”) (the “Sponsor Lock-Up Agreement”), with respect to the PubCo Class A Ordinary Shares to be issued to it in consideration of its ordinary shares of the Company. In such Sponsor Lock-Up Agreement, Sponsor agreed that, subject to certain exceptions, not to transfer the securities defined as “Locked-Up Private Placement Securities” in the Sponsor Lock-Up Agreement for a period of 30 days following the closing of the Merger. In addition, Sponsor agreed, subject to certain exceptions, not to transfer the securities defined as “Locked-Up Founder Securities” in the Sponsor Lock-Up Agreement for the same “Lock-Up Period” as applicable with respect to the PubCo Lock-Up and Support Agreement. The term “transfer”, as used in the Sponsor Lock-Up Agreement, has the same meanings as ascribed to such term under the PubCo Lock-Up and Support Agreement. The Sponsor Lock-Up Agreement shall immediately terminate upon the earlier of (x) the termination of the Merger Agreement pursuant to its terms and (y) the date on which none of the PubCo, Sponsor or any holder of a locked-up share has any rights or obligations thereunder.
The Sponsor Lock-Up Agreement is filed with this Report as Exhibit 10.2 and is incorporated herein by reference. The foregoing description of the Sponsor Lock-Up Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Sponsor Lock-Up Agreement.
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Sponsor Voting and Support Agreement
Concurrently with execution of the Merger Agreement, the Sponsor entered into a voting and support agreement with the Company and PubCo (the “Sponsor Voting and Support Agreement”). Under the Sponsor Voting and Support Agreement, the Sponsor thereto generally agreed to vote all of its capital shares in the Company in favor of the Merger Agreement and the transactions contemplated thereby, each other Company Proposal and any other proposal included in the Proxy Statement related to the Merger for which the Company’s board of directors has recommended that the Company Shareholders vote in favor and against any competing transaction. The Sponsor Voting and Support Agreement prevents transfers of the Company shares held by the Sponsor between the date of the Sponsor Voting and Support Agreement and the termination of the Sponsor Voting and Support Agreement, subject to certain limited exceptions. The Sponsor Voting and Support Agreement will terminate upon the earliest of (a) the termination of the Merger Agreement and (b) the Effective Time.
A copy of the Sponsor Voting and Support Agreement is filed with this Report as Exhibit 10.3 and is incorporated herein by reference. The foregoing description of the Sponsor Voting and Support Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Sponsor Voting and Support Agreement.
Amended and Restated Registration Rights Agreement
Pursuant to the Merger Agreement, PubCo, the Company and certain Investors (as defined in the Amended and Restated Rights Registration Agreement), as applicable, entered into an Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”), to be effective as of the Closing, pursuant to which PubCo agrees to file a registration statement as soon as practicable upon receipt of a written request from certain shareholders to register the resale of certain registrable securities under the Securities Act, subject to required notice provisions to other parties thereto. PubCo has also agreed to provide customary “piggyback” registration rights with respect to such registrable securities and, subject to certain circumstances, to file a resale shelf registration statement to register the resale under the Securities Act of such registrable securities.
The Registration Rights Agreement also provides that PubCo 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 or PubCo securities.
A copy of the Registration Rights Agreement is filed with this Report as Exhibit 10.4 and is incorporated herein by reference. The foregoing description of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Registration Rights Agreement.
| Item 1.02 | Termination of a Material Definitive Agreement. |
The information set forth in Item 1.01 above with respect to the termination of the GRT Merger Agreement is hereby incorporated by reference into this Item 1.02.
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IMPORTANT NOTICES
ADDITIONAL INFORMATION AND WHERE TO FIND IT
THIS CURRENT REPORT ON FORM 8-K (THIS “REPORT”) IS BEING MADE IN RESPECT OF A PROPOSED BUSINESS COMBINATION INVOLVING GREAT FUTURE TECHONOLOGY INC. (“PUBCO” OR “PARENT”) AND FLAG SHIP ACQUISITION CORPORATION (THE “COMPANY”). THIS REPORT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY OR SUBSCRIBE FOR ANY SECURITIES OR A SOLICITATION OF ANY VOTE OR APPROVAL NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. THE PROPOSED TRANSACTION WILL BE SUBMITTED TO THE SHAREHOLDERS OF PUBCO AND THE COMPANY FOR THEIR CONSIDERATION. PUBCO INTENDS TO FILE WITH THE SEC A REGISTRATION STATEMENT ON FORM F-4 (AS MAY BE AMENDED FROM TIME TO TIME, THE “REGISTRATION STATEMENT”) THAT WILL INCLUDE A PRELIMINARY PROSPECTUS WITH RESPECT TO PUBCO’S ORDINARY SHARES AND CLASS A ORDINARY SHARES TO BE ISSUED IN THE PROPOSED TRANSACTION AND A PROXY STATEMENT OF THE COMPANY IN CONNECTION WITH THE MERGER. AFTER THE REGISTRATION STATEMENT IS DECLARED EFFECTIVE, THE COMPANY WILL MAIL A DEFINITIVE PROXY STATEMENT/PROSPECTUS RELATING TO THE TRANSACTION TO ITS SHAREHOLDERS AS OF ARECORD DATE TO BE ESTABLISHED FOR VOTING ON THE PROPOSED TRANSACTION. THE INFORMATION IN THE PRELIMINARY PROXY STATEMENT/PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. PUBCO MAY NOT SELL THE ORDINARY SHARES REFERENCED IN THE PROXY STATEMENT/PROSPECTUS UNTIL THE REGISTRATION STATEMENT ON FORM F-4 BECOMES EFFECTIVE. THE REGISTRATION STATEMENT, INCLUDING THE PROXY STATEMENT/PROSPECTUS CONTAINED THEREIN, WHEN DECLARED EFFECTIVE BY THE SEC, WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND THE OTHER MATTERS TO BE VOTED UPON AT A MEETING OF THE COMPANY’S SHAREHOLDERS TO BE HELD TO APPROVE THE TRANSACTION AND RELATED MATTERS. THIS REPORT DOES NOT CONTAIN ALL OF THE INFORMATION THAT SHOULD BE CONSIDERED CONCERNING THE TRANSACTION AND OTHER MATTERS AND IT IS NOT INTENDED TO PROVIDE THE BASIS FOR ANY INVESTMENT DECISION OR ANY DECISION IN RESPECT TO SUCH MATTERS. THE PROXY STATEMENT/PROSPECTUS WILL BE PROVIDED TO THE COMPANY’S SHAREHOLDERS. PUBCO AND THE COMPANY ALSO PLAN TO FILE OTHER DOCUMENTS WITH THE SEC REGARDING THE PROPOSED TRANSACTION.
THIS REPORT IS NOT A SUBSTITUTE FOR ANY PROSPECTUS, PROXY STATEMENT OR ANY OTHER DOCUMENT THAT PUBCO OR THE COMPANY MAY FILE WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY 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 TRANSACTION.
YOU MAY OBTAIN COPIES OF ALL DOCUMENTS FILED WITH THE SEC REGARDING THIS TRANSACTION, FREE OF CHARGE, AT THE SEC’S WEBSITE (WWW.SEC.GOV). IN ADDITION, INVESTORS AND SECURITY HOLDERS WILL BE ABLE TO OBTAIN FREE COPIES OF THE PROXY STATEMENT/PROSPECTUS (WHEN THEY BECOME AVAILABLE) AND OTHER DOCUMENTS FILED WITH THE SEC WITHOUT CHARGE, AT THE SEC’S WEBSITE (WWW.SEC.GOV) OR BY CALLING 1-800-SEC-0330.
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PARTICIPANTS IN THE SOLICITATION
THE COMPANY, PUBCO AND THEIR RESPECTIVE DIRECTORS AND EXECUTIVE OFFICERS AND OTHER PERSONS MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES FROM THE COMPANY’S SHAREHOLDERS IN RESPECT OF THE PROPOSED BUSINESS COMBINATION. INFORMATION REGARDING THE COMPANY’S DIRECTORS AND EXECUTIVE OFFICERS IS AVAILABLE IN ITS FINAL PROSPECTUS RELATED TO ITS INITIAL PUBLIC OFFERING DATED JUNE 17, 2024, AND IN ITS SUBSEQUENT FILINGS WITH THE SEC. A LIST OF THE NAMES OF PUBCO’S DIRECTORS AND EXECUTIVE OFFICERS, ADDITIONAL INFORMATION REGARDING THE PARTICIPANTS IN THE PROXY SOLICITATION AND A DESCRIPTION OF THEIR DIRECT AND INDIRECT INTERESTS WILL BE CONTAINED IN THE PROXY STATEMENT RELATING TO THE TRANSACTION WITH PUBCO WHEN IT BECOMES AVAILABLE AND WHICH CAN BE OBTAINED FREE OF CHARGE FROM THE SOURCES INDICATED ABOVE.
NO OFFER OR SOLICITATION
THIS CURRENT REPORT ON FORM 8-K IS FOR INFORMATIONAL PURPOSES ONLY AND IS NEITHER AN OFFER TO PURCHASE, NOR A SOLICITATION OF AN OFFER TO SELL, SUBSCRIBE FOR OR BUY ANY SECURITIES OR THE SOLICITATION OF ANY VOTE IN ANY JURISDICTION PURSUANT TO THE PROPOSED TRANSACTIONS OR OTHERWISE, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OR SECURITIES IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW. NO OFFER OF SECURITIES SHALL BE MADE EXCEPT BY MEANS OF A PROSPECTUS MEETING THE REQUIREMENTS OF SECTION 10 OF THE SECURITIES ACT.
FORWARD LOOKING STATEMENTS
THIS REPORT AND THE EXHIBITS HERETO INCLUDE “FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF THE SAFE HARBOR PROVISIONS OF THE U.S. PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. ANY ACTUAL RESULTS MAY DIFFER FROM EXPECTATIONS, ESTIMATES AND PROJECTIONS PRESENTED OR IMPLIED AND, CONSEQUENTLY, YOU SHOULD NOT RELY ON THESE FORWARD-LOOKING STATEMENTS AS PREDICTIONS OF FUTURE EVENTS. WORDS SUCH AS “EXPECT,” “ESTIMATE,” “PROJECT,” “BUDGET,” “FORECAST,” “ANTICIPATE,” “INTEND,” “PLAN,” “MAY,” “WILL,” “COULD,” “SHOULD,” “BELIEVES,” “PREDICTS,” “POTENTIAL,” “CONTINUE,” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, THE COMPANY’S EXPECTATIONS WITH RESPECT TO FUTURE PERFORMANCE, ANTICIPATED FINANCIAL IMPACTS OF THE PROPOSED BUSINESS COMBINATION, APPROVAL OF THE BUSINESS COMBINATION TRANSACTIONS BY SECURITY HOLDERS, THE SATISFACTION OF THE CLOSING CONDITIONS TO SUCH TRANSACTIONS AND THE TIMING OF THE COMPLETION OF SUCH TRANSACTIONS.
SUCH FORWARD-LOOKING STATEMENTS RELATE TO FUTURE EVENTS OR FUTURE PERFORMANCE, BUT REFLECT THE PARTIES’ CURRENT BELIEFS, BASED ON INFORMATION CURRENTLY AVAILABLE. MOST OF THESE FACTORS ARE OUTSIDE THE PARTIES’ CONTROL AND ARE DIFFICULT TO PREDICT. A NUMBER OF FACTORS COULD CAUSE ACTUAL EVENTS, PERFORMANCE OR RESULTS TO DIFFER MATERIALLY FROM THE EVENTS, PERFORMANCE AND RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT MAY CAUSE SUCH DIFFERENCES INCLUDE, AMONG OTHER THINGS: (A) THE POSSIBILITY THAT THE BUSINESS COMBINATION DOES NOT CLOSE OR THAT THE CLOSING MAY BE DELAYED BECAUSE CONDITIONS TO THE CLOSING MAY NOT BE SATISFIED, INCLUDING THE RECEIPT OF REQUISITE SHAREHOLDER AND OTHER APPROVALS, THE PERFORMANCES OF THE COMPANY AND PUBCO, AND THE ABILITY OF THE COMPANY OR, AFTER THE CLOSING OF THE TRANSACTIONS, THE COMBINED COMPANY, TO CONTINUE TO MEET THE NASDAQ STOCK MARKET’S LISTING STANDARDS;
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(B) THE REACTION OF PUBCO’S LICENSORS, COLLABORATORS, SERVICE PROVIDERS OR SUPPLIERS TO THE BUSINESS COMBINATION; (C) UNEXPECTED COSTS, LIABILITIES OR DELAYS IN THE BUSINESS COMBINATION TRANSACTION; (D) THE OUTCOME OF ANY LEGAL PROCEEDINGS RELATED TO THE TRANSACTION; (E) THE OCCURRENCE OF ANY EVENT, CHANGE OR OTHER CIRCUMSTANCES THAT COULD GIVE RISE TO THE TERMINATION OF THE BUSINESS COMBINATION TRANSACTION AGREEMENT; (F) GENERAL ECONOMIC CONDITIONS; (G) CHANGES TO THE PROPOSED STRUCTURE OF THE BUSINESS COMBINATION THAT MAY BE REQUIRED OR APPROPRIATE AS A RESULT OF APPLICABLE LAWS OR REGULATIONS OR AS A CONDITION TO OBTAINING REGULATORY APPROVAL OF THE BUSINESS COMBINATION; (H) THE RISK THAT THE BUSINESS COMBINATION DISRUPTS CURRENT PLANS AND OPERATIONS OF PUBCO AS A RESULT OF THE ANNOUNCEMENT AND CONSUMMATION OF THE TRANSACTIONS DESCRIBED HEREIN; (I) THE ABILITY TO RECOGNIZE THE ANTICIPATED BENEFITS OF THE BUSINESS COMBINATION, WHICH MAY BE AFFECTED BY, AMONG OTHER THINGS, COMPETITION, THE ABILITY OF PUBCO TO GROW AND MANAGE GROWTH PROFITABLY, MAINTAIN RELATIONSHIPS WITH CUSTOMERS AND SUPPLIERS AND RETAIN ITS MANAGEMENT AND KEY EMPLOYEES; (J) CHANGES IN APPLICABLE LAWS OR REGULATIONS, INCLUDING LEGAL OR REGULATORY DEVELOPMENTS (INCLUDING, WITHOUT LIMITATION, ACCOUNTING CONSIDERATIONS) WHICH COULD RESULT IN UNFORESEEN DELAYS IN THE TIMING OF THE BUSINESS COMBINATION AND NEGATIVELY IMPACT THE ATTRACTIVENESS OF THE BUSINESS COMBINATION TO INVESTORS; AND (K) OTHER RISKS AND UNCERTAINTIES INDICATED FROM TIME TO TIME IN THE FINAL PROSPECTUS OF THE COMPANY RELATING TO ITS INITIAL PUBLIC OFFERING FILED WITH THE SEC, INCLUDING THOSE UNDER “RISK FACTORS” THEREIN, AND OTHER DOCUMENTS FILED OR TO BE FILED WITH THE SEC BY THE COMPANY, INCLUDING ITS ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2024. COPIES ARE AVAILABLE ON THE SEC’S WEBSITE AT WWW.SEC.GOV.
THE FOREGOING LIST OF FACTORS IS NOT EXCLUSIVE. ADDITIONAL INFORMATION CONCERNING THESE AND OTHER RISK FACTORS ARE CONTAINED IN THE COMPANY’S OR PUBCO’S MOST RECENT FILINGS WITH THE SEC. ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS CONCERNING THE COMPANY AND PUBCO, THE BUSINESS COMBINATION TRANSACTIONS DESCRIBED HEREIN OR OTHER MATTERS AND ATTRIBUTABLE TO THE COMPANY, PUBCO, OR ANY PERSON ACTING ON BEHALF OF ANY OF THEM ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS ABOVE. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON ANY FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE MADE. NEITHER THE COMPANY NOR PUBCO, UNDERTAKE OR ACCEPT ANY OBLIGATION OR UNDERTAKING TO RELEASE PUBLICLY ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENT TO REFLECT ANY CHANGE IN THEIR EXPECTATIONS OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENT IS BASED.
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| Item 9.01 | Financial Statement and Exhibits. |
(d) Exhibits
EXHIBIT INDEX
| * | Certain exhibits and schedules, have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish a supplemental copy of the omitted exhibits and schedules upon request by the SEC; provided, however, that the Company may request confidential treatment for any such exhibits or schedules so furnished. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| Flag Ship Acquisition Corporation | ||
| Dated: April 22, 2025 | By: | /s/ Matthew Chen |
| Name: | Matthew Chen | |
| Title: | Chief Executive Officer | |
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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
by and among
GREAT FUTURE TECHNOLOGY INC.,
GFT MERGER SUB LIMITED
and
FLAG SHIP ACQUISITION CORPORATION
APRIL 18, 2025
TABLE OF CONTENTS
| ARTICLE I THE MERGER; CLOSING | 2 | |||
| 1.01 | The Merger | 2 | ||
| 1.02 | Effect on Outstanding Securities | 3 | ||
| 1.03 | Organizational Documents | 4 | ||
| 1.04 | Directors and Officers | 4 | ||
| 1.05 | Dissenting Shares | 4 | ||
| 1.06 | Withholding | 4 | ||
| 1.07 | Payment Methodology | 4 | ||
| 1.08 | The Closing | 6 | ||
| 1.09 | Tax-Matters | 6 | ||
| ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 6 | |||
| 2.01 | Organization and Power | 6 | ||
| 2.02 | Authorization | 7 | ||
| 2.03 | No Violations | 7 | ||
| 2.04 | Capitalization; Subsidiaries | 7 | ||
| 2.05 | Governmental Consents, Etc. | 8 | ||
| 2.06 | Legal Proceedings | 8 | ||
| 2.07 | SEC Filings and Financial Statements | 8 | ||
| 2.08 | Absence of Certain Changes | 9 | ||
| 2.09 | Company Trust Amount | 10 | ||
| 2.10 | Broker | 10 | ||
| 2.11 | Solvency | 10 | ||
| 2.12 | Company Information | 11 | ||
| 2.13 | Listing | 11 | ||
| 2.14 | Affiliate Transactions | 11 | ||
| 2.15 | Company Contracts | 11 | ||
| 2.16 | Intellectual Property | 11 | ||
| 2.17 | Employees | 11 | ||
| 2.18 | Employee Benefits | 11 | ||
| 2.19 | Real Property | 12 | ||
| 2.20 | Tax Matters | 12 | ||
| 2.21 | Legal Requirements and Permits | 12 | ||
| 2.22 | Insurance | 12 | ||
| 2.23 | Vote Required | 12 | ||
| 2.24 | Intentionally Omitted | 13 | ||
| 2.25 | Investment Company | 13 | ||
| 2.26 | Intentionally Omitted | 13 | ||
| 2.27 | Absence of Certain Payments | 13 | ||
| 2.28 | Company Investigations | 13 | ||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PUBCO AND MERGER SUB |
13 | |||
| 3.01 | Existence and Good Standing | 14 | ||
| 3.02 | Authority; Enforceability | 14 | ||
| 3.03 | No Violations | 14 | ||
| 3.04 | Capitalization; Subsidiaries | 15 | ||
| 3.05 | PubCo Disclosures and Notifications; Financial Position | 16 | ||
| 3.06 | Financial Statements and Other Financial Matters; No Undisclosed Liabilities | 17 | ||
| 3.07 | Absence of Certain Changes | 18 | ||
| 3.08 | Real Property; Tangible Property | 19 | ||
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| 3.09 | Tax Matters | 20 | ||
| 3.10 | Contracts. | 21 | ||
| 3.11 | Intellectual Property and Data Security | 22 | ||
| 3.12 | Legal Proceedings; Orders | 24 | ||
| 3.13 | Consents | 24 | ||
| 3.14 | Employee Benefits | 24 | ||
| 3.15 | Insurance | 25 | ||
| 3.16 | Legal Requirements and Permits | 25 | ||
| 3.17 | Environmental Matters | 25 | ||
| 3.18 | Relationships with Related Persons | 26 | ||
| 3.19 | Employees; Employment Matters and Independent Contractors | 26 | ||
| 3.20 | Brokers’ Fees | 27 | ||
| 3.21 | Absence of Certain Payments | 27 | ||
| 3.22 | Books and Records | 27 | ||
| 3.23 | Company Investigations | 28 | ||
| 3.24 | Takeover Statutes and Charter Provisions | 28 | ||
| 3.25 | Power of Attorney | 28 | ||
| 3.26 | Shareholder Approval and Board Approval | 28 | ||
| 3.27 | Investment Company | 28 | ||
| ARTICLE IV COVENANTS OF THE COMPANY | 29 | |||
| 4.01 | Operations of the Company Prior to the Closing | 29 | ||
| 4.02 | Access to Books and Records | 30 | ||
| 4.03 | Company Confidentiality | 30 | ||
| 4.04 | Efforts to Consummate | 31 | ||
| 4.05 | Exclusive Dealing | 31 | ||
| 4.06 | Notification | 31 | ||
| ARTICLE V COVENANTS OF PUBCO AND MERGER SUB | 31 | |||
| 5.01 | Operations of PubCo and Merger Sub Prior to Closing | 31 | ||
| 5.02 | Access to Books and Records | 33 | ||
| 5.03 | PubCo Confidentiality | 33 | ||
| 5.04 | Exclusive Dealing | 34 | ||
| 5.05 | Notification | 34 | ||
| 5.06 | Efforts to Consummate | 34 | ||
| 5.07 | Audited and Financial Statements | 34 | ||
| ARTICLE VI ACTIONS PRIOR TO THE CLOSING | 35 | |||
| 6.01 | The Registration Statements and Proxy Statement | 35 | ||
| 6.02 | Regulatory Filings | 36 | ||
| 6.03 | Shareholder Vote; Recommendation of the Company Board | 37 | ||
| 6.04 | Company Shareholders’ Meeting | 37 | ||
| 6.05 | Listing | 38 | ||
| 6.06 | PubCo Shareholder Approval | 38 | ||
| 6.07 | No Claim Against Company Trust | 38 | ||
| 6.08 | Other Filings | 39 | ||
| 6.09 | Transaction Litigation | 39 | ||
| 6.10 | Tax Matters | 39 | ||
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| ARTICLE VII CONDITIONS TO CLOSING | 40 | |||
| 7.01 | Mutual Conditions to the Parties’ Obligations | 40 | ||
| 7.02 | Conditions to PubCo’s and Merger Sub’s Obligations | 40 | ||
| 7.03 | Conditions to the Company’s Obligations | 41 | ||
| ARTICLE VIII INDEMNIFICATION OF OFFICERS AND DIRECTORS OF THE COMPANY | 42 | |||
| 8.01 | Indemnification of Officers and Directors of the Company | 42 | ||
| 8.02 | Indemnification by Successors and Assigns | 42 | ||
| 8.03 | Tail Policy | 42 | ||
| ARTICLE IX TERMINATION | 43 | |||
| 9.01 | Termination | 43 | ||
| 9.02 | Effect of Termination | 44 | ||
| ARTICLE X DEFINITIONS | 44 | |||
| 10.01 | Definitions | 44 | ||
| 10.02 | Other Definitional Provisions | 54 | ||
| ARTICLE XI MISCELLANEOUS | 54 | |||
| 11.01 | Press Releases and Public Announcements | 54 | ||
| 11.02 | Expenses | 54 | ||
| 11.03 | Survival | 54 | ||
| 11.04 | Notices | 54 | ||
| 11.05 | Succession and Assignment | 55 | ||
| 11.06 | Severability | 55 | ||
| 11.07 | References | 56 | ||
| 11.08 | Construction | 56 | ||
| 11.09 | Amendment and Waiver | 56 | ||
| 11.10 | Entire Agreement | 56 | ||
| 11.11 | Third-Party Beneficiaries | 56 | ||
| 11.12 | WAIVER OF TRIAL BY JURY | 56 | ||
| 11.13 | Counterparts | 56 | ||
| 11.14 | Governing Law | 57 | ||
| 11.15 | Submission to Jurisdiction; Consent to Service of Process | 57 | ||
| 11.16 | Remedies Cumulative | 57 | ||
| 11.17 | Specific Performance | 57 | ||
| 11.18 | No Recourse | 58 | ||
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of April 18, 2025 (the “date hereof”), is made by and among Great Future Technology Inc., a Cayman Islands exempted company limited by shares (“PubCo” or “Parent”), GFT Merger Sub Limited, a Cayman Islands exempted company limited by shares (“Merger Sub”), and Flag Ship Acquisition Corporation, a Cayman Islands exempted company limited by shares (the “Company”). The Company, PubCo and Merger Sub shall each be referred to herein from time to time as a “Party” and, collectively, as the “Parties.” Capitalized terms used and not otherwise defined herein have the respective meanings given to them in ARTICLE X hereof.
WHEREAS, the Company is a blank check company incorporated in the Cayman Islands for the purpose of effecting a merger, share reconstruction, asset or share acquisition, exchangeable share transaction, reorganization, contractual control arrangement or other similar business combination with one or more businesses;
WHEREAS, Merger Sub is a newly incorporated, direct, wholly-owned subsidiary of PubCo, and was formed for the sole purpose of the Merger;
WHEREAS, the Parties desire and intend to effect a business combination transaction whereby, at the Effective Time, upon the terms and subject to the conditions of this Agreement and the Companies Act (as revised) of the Cayman Islands (the “Cayman Companies Act”), Company shall merge with and into Merger Sub, with Merger Sub continuing as the surviving company and wholly-owned subsidiary of PubCo after the Merger;
WHEREAS, in furtherance of the indirect acquisition of the issued and outstanding shares of the Company by PubCo and in accordance with the terms hereof, the Company shall provide an opportunity to its Public Shareholders to have their Company Shares redeemed for the consideration, and on the terms and subject to the conditions and limitations, set forth in this Agreement, the Prospectus and the Memorandum and Articles of Association in conjunction with, inter alia, obtaining approval from the Company Shareholders for the Merger (collectively with the other transactions, authorization and approvals set forth in the Proxy Statement, the “Offer”);
WHEREAS, in connection with the Merger, each Company Share issued and outstanding immediately prior to the Effective Time (excluding Excluded Shares and Dissenting Shares, if any) shall be exchanged for the right to receive the Per Share Merger Consideration, and each Company Right that is outstanding immediately prior to the Effective Time shall be exchanged for a Substitute Right, which in turn will give the holder thereof the right to receive, immediately upon the consummation of the Merger, PubCo Class A Ordinary Shares, as more fully described below;
WHEREAS, Whale Management Corporation (“Sponsor”) has delivered to PubCo and Company the Sponsor Voting and Support Agreement, dated as of the date hereof (the “Sponsor Voting Agreement”), pursuant to which, among other things, Sponsor has agreed to vote all such Company Shares it owns on the date hereof in favor of certain matters, including the consummation of the Merger, on the terms and subject to the conditions set forth therein;
WHEREAS, Sponsor has delivered to PubCo and Company the Sponsor Lock-Up Agreement, dated as of the date hereof (the “Sponsor Lock-Up Agreement”), pursuant to which, among other things, Sponsor has agreed not to transfer any such PubCo Class A Ordinary Shares it receives as its Merger Consideration and pursuant to Section 1.02(d) for a period of up to 180 days following the Closing Date, on the terms and subject to the conditions set forth therein;
WHEREAS, the PubCo Shareholder has delivered to PubCo and Company the PubCo Shareholder Lock-Up and Support Agreement, dated as of the date hereof (the “PubCo Shareholder Lock-Up and Support Agreement”), pursuant to which, among other things, the PubCo Shareholder has agreed to vote all such PubCo Ordinary Shares it owns in favor of certain matters, including the consummation by Merger Sub of the Merger, and not to transfer certain fixed percentages of the PubCo Ordinary Shares they own immediately after Closing for the duration of the Lock Up Period, on the terms and subject to the conditions set forth therein;
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WHEREAS, the board of directors of the Company has approved the execution and delivery by Company of this Agreement and any Transaction Documents it is contemplated hereunder it is to become a party to and the consummation of the transactions contemplated hereby and thereby, including the Merger, and determined to recommend to the Company Shareholders that they consent to the Merger;
WHEREAS, the sole director of the Merger Sub has approved the execution and delivery by the Merger Sub of this Agreement and any Transaction Documents it is contemplated hereunder it is to become a party to and the consummation of the transactions contemplated hereby and thereby, including the Merger, and determined to recommend to the PubCo, as the sole shareholder of the Merger Sub, that it consent to the Merger;
WHEREAS, the sole director of PubCo has approved the execution and delivery by the PubCo of this Agreement and any Transaction Documents it is contemplated hereunder it is to become a party to and the consummation of the transactions contemplated hereby and thereby, and, as sole shareholder of the Merger Sub, the PubCo’s consent to the Merger, and concurrently herewith and in such capacity PubCo is consenting to the Merger and has further determined to recommend to the shareholders of PubCo the resolution required to consummate the Merger; and
WHEREAS, the Parties desire for U.S. federal income tax purposes that the Merger qualify for the Intended Tax Treatment, that this Agreement constitute a “plan of reorganization” for purposes of Sections 354 and 361 of the Code and that PubCo and the Company shall each be a “party to the reorganization” within the meaning of Section 368(b) of the Code.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE
I
THE MERGER; CLOSING
1.01 The Merger.
(a) Subject to the terms and conditions hereof and the Plan of Merger (defined below), at the Effective Time, and in accordance with the applicable provisions of the Cayman Companies Act, the Company shall merge with and into Merger Sub (the “Merger”), whereupon the separate existence of the Company shall cease, and Merger Sub shall be the surviving company (the Merger Sub upon the consummation of the Merger, hereinafter, the “Surviving Company”).
(b) Immediately upon Closing, the Company and Merger Sub shall cause a plan of merger (the “Plan of Merger”) approved by the directors of each such entity consistent with this Agreement, and in the form and containing such other documents as may be required by the Cayman Companies Act (the “Merger Documents”) to be executed and then filed for registration by the Cayman Registrar. The filing of the Merger Documents shall be made using the express service offered by the Cayman Registrar. The Merger shall become effective at such time as the Plan of Merger is registered by the Cayman Registrar or at such other time subsequent thereto, but not exceeding 90 days from the date of registration as mutually agreed between Merger Sub and Company and specified in the Plan of Merger (the “Effective Time”).
(c) From and after the Effective Time, the rights, property of every description including choses in action, and the business, undertaking, goodwill, benefits, immunities and privileges of each of the Company and Merger Sub, shall immediately vest in the Surviving Company and the Surviving Company shall be liable for and be subject to all of the Liabilities, restrictions, obligations and duties of the Company and Merger Sub, all as provided under this Agreement, the Plan of Merger and the applicable provisions of the Cayman Companies Act. For purposes of clarity, the effect of the Merger shall include the assumption by Surviving Company of any and all agreements, covenants, duties and obligations of the Company to be performed after the Effective Time, and PubCo, as the sole shareholder of Surviving Company hereby agrees to assume and perform all such agreements, covenants, duties and obligations of the Company.
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(d) Immediately following Closing, the PubCo shall cause special resolutions of the Surviving Company in the form agreed by PubCo and the Company and as may be required by the Cayman Companies Act, approving the amended and restated memorandum and articles of association of the Surviving Company in the form agreed by PubCo and the Company, to be approved and adopted, and for such documents to be filed with the Cayman Registrar using the express service offered by the Cayman Registrar.
1.02 Effect on Outstanding Securities. Upon the terms and subject to the conditions of this Agreement:
(a) The Company Shares and Company Rights comprising each issued and outstanding Company Unit immediately prior to the Effective Time shall be automatically separated (the “Unit Separation”) whereupon each then holder of a Company Unit shall be deemed to hold one (1) Company Share and one Company Right and the register of members of the Company shall be closed and thereafter there shall be no further registration of transfers of Company Shares or Company Rights. At the Effective Time, by virtue of the Merger and without any action of the part of the Company, Merger Sub or any other Person, the Company Shares and Company Rights held following the Unit Separation and immediately prior to the Effective Time shall be automatically cancelled and extinguished in accordance with the applicable terms of this Section 1.02. From and after the Effective Time, the holders of Company Shares or Company Rights immediately prior to the Effective Time shall cease to have any rights with respect thereto except as otherwise provided in this Agreement or by Law.
(b) At the Effective Time, by virtue of the Merger and without any action of the part of the Company, Merger Sub or any other Person, each Company Share issued and outstanding immediately prior to the Effective Time (which excludes, in each case, Excluded Shares and Dissenting Shares, if any) shall be automatically cancelled, extinguished and exchanged for the right to receive, immediately upon the consummation of the Merger, the Per Share Merger Consideration. In furtherance of the foregoing, PubCo shall take the actions set forth in Section 1.07 of this Agreement.
(c) Each Company Share, if any, held immediately prior to the Effective Time by the Company or PubCo, if any (collectively, the “Excluded Shares”) shall be then automatically canceled and no exchange or payment shall be made therefor or with respect thereto.
(d) At the Effective Time, by virtue of the Merger and without any action of the part of the Company, Merger Sub or any other Person, each Company Right outstanding immediately prior to the Effective Time shall automatically be cancelled, extinguished and exchanged for the right (the “Substitute Right”) to receive, immediately upon the consummation of the Merger, PubCo Class A Ordinary Shares in an amount equal to (in each case, as rounded down to the nearest whole number) the product of (A) the Per Share Merger Consideration, multiplied by (B) the number of Company Shares that the holder of the cancelled Company Right would have been entitled to receive from the Company assuming satisfaction of the terms and conditions of such Company Right. Upon consummation of the Merger, such Substitute Rights shall, without any further action on the part of the Company, Merger Sub or any other Person, automatically convert into such number of PubCo Class A Ordinary Shares as determined in accordance with this Section 1.02(d). PubCo shall take all corporate action necessary to reserve for issuance a sufficient number of PubCo Class A Ordinary Shares for delivery upon the consummation of the Merger to all holders thereof in accordance with this Section 1.02(d) and shall use reasonable best efforts to cause such PubCo Class A Ordinary Shares to be issued in book-entry form.
(e) At the Effective Time, each ordinary share of the Merger Sub that is issued and outstanding immediately prior to the Effective Time (the “Merger Sub Share(s)”) shall remain issued and outstanding and owned by PubCo. Such Merger Sub Share(s) shall constitute the only issued and outstanding share capital of the Surviving Company with the rights, powers and privileges given to such share owned by the Governing Documents of the Surviving Company and the Cayman Companies Act, and shall constitute the only issued and outstanding share(s) of the Surviving Company immediately following the Effective Time. Immediately following the Effective Time, PubCo shall be the sole and exclusive owner of all share(s) of the Surviving Company and the register of members of the Surviving Company at the Effective Time shall reflect the foregoing.
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1.03 Organizational Documents. At the Effective Time, the memorandum and articles of association of the Merger Sub, as in effect immediately prior to the Effective Time, shall be the Governing Documents of the Surviving Company on and from Effective Time until thereafter changed or amended as permitted by applicable Law.
1.04 Directors and Officers. Immediately after the Effective Time, the members of the board of directors and officers of the Merger Sub prior to the Effective Time shall be the members of the board of directors and officers of the Surviving Company.
1.05 Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, but without prejudice to the provisions of Section 1.08(b), Company Shares issued and outstanding immediately prior to the Effective Time that are held by any holder who is (a) entitled to dissent to the Merger pursuant to Section 238 of the Cayman Companies Act and (b) properly dissents to the Merger and makes a demand for payment of the fair value of such holder’s shares in accordance with Section 238 of the Cayman Companies Act, and has not withdrawn such dissent (the “Dissenting Shares”) shall not be converted into the right to receive the corresponding Per-Share Merger Consideration for such Dissenting Shares pursuant to Section 1.02(b), but instead such holder shall be entitled to such rights as are granted by the Cayman Companies Act to a holder of Dissenting Shares unless and until such holder effectively withdraws or loses such dissenters’ rights (through failure to perfect such dissenters’ rights or otherwise) under the Cayman Companies Act. From and after the Effective Time, (A) the Dissenting Shares shall no longer be outstanding and shall automatically be cancelled and extinguished by virtue of the Merger and shall cease to exist and (B) the holders thereof shall be entitled only to such rights as may be granted to them under Section 238 of the Cayman Companies Act and shall not be entitled to exercise any of the voting rights or other rights of a shareholder of the Surviving Company or any of its Affiliates (including PubCo); provided, however, that if any holder of the Dissenting Shares effectively withdraws or loses such dissenters’ rights (through failure to perfect such dissenters’ rights or otherwise) under the Cayman Companies Act, then the Company Shares held by such holder (1) shall no longer be deemed to be Dissenting Shares and (2) shall be treated as if they had been converted automatically at the Effective Time into the right to receive the applicable portion of the Per Share Merger Consideration upon delivery of a properly completed and duly executed Letter of Transmittal (including, for the avoidance of doubt, any other documents or agreements required by the Letter of Transmittal) and the surrender of the applicable documents and other deliverables set forth in Section 1.07(b). Each holder of the Dissenting Shares who becomes entitled to payment for his, her or its Dissenting Shares pursuant to the Cayman Companies Act shall receive payment thereof from the Company in accordance with the Cayman Companies Act. The Company shall deliver prompt notice to the PubCo of any demands for payment or appraisal of any Company Shares, any withdrawal of any such demand and any other demand, notice or instrument delivered to the Company prior to the Effective Time pursuant to the Cayman Companies Act that relate to such demand and the PubCo shall have the right to participate in all negotiations and proceedings with respect to such demands. The Company shall not voluntarily make any payment with respect to any demand for appraisal with respect to any Dissenting Shares without the prior written consent of PubCo (which consent may or may not be given in the sole and absolute discretion of PubCo).
1.06 Withholding. Notwithstanding any provision contained herein to the contrary, each of PubCo, and the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable to any Company Shareholder pursuant to this Agreement such amounts as it is required to deduct and withhold with respect to the making of such payment under any provision of Tax Law. Any amount deducted or withheld pursuant to this Section 1.06 shall be treated for all purposes of this Agreement as having been paid to such Person in respect of such deduction and withholding. At least five (5) Business Days prior to the Closing, PubCo or the Exchange Agent, as applicable, shall (a) notify the Company Shareholders of any anticipated withholding, (b) consult with the Company in good faith to determine whether such deduction and withholding is required and (c) cooperate with the Company Shareholders to minimize the amount of any applicable withholding. Each of PubCo, and the Exchange Agent shall pay, or shall cause to be paid, all amounts so deducted or withheld to the appropriate taxing authority within the period required under applicable Law.
1.07 Payment Methodology.
(a) Prior to the Effective Time, the Company, PubCo and the Exchange Agent shall enter into an exchange agent agreement (the “Exchange Agent Agreement”), and at or prior to the Effective Time, PubCo shall make available to the Exchange Agent the Merger Consideration to be paid in respect of (i) the Company Shares pursuant to Section 1.02(b) and (ii) the Company Rights pursuant to Section 1.02(d) (the “Rights Shares”).
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(b) After the Closing, promptly following delivery by a Company Shareholder (other than any Person who was a registered holder of Excluded Shares or Dissenting Shares immediately prior to the Effective Time, solely with respect to such Excluded Shares or Dissenting Shares) to the Exchange Agent of a duly completed and executed letter of transmittal in a form mutually agreeable to the Parties (a “Letter of Transmittal”) and, if the Company Shares of such Company Shareholders are certificated, the share certificates representing such Company Shares, subject to the satisfaction of any other conditions to be met as set forth in the Letter of Transmittal, PubCo shall promptly (i) issue, or cause to be issued, to the Company Shareholders and Company Right Holders (and PubCo shall direct the Exchange Agent to take all necessary action to record and effect the same) the number of PubCo Class A Ordinary Shares equal to (A) the Per Share Merger Consideration multiplied by the number of Company Shares registered in the name of such Company Shareholder immediately prior to the Effective Time (the “Share Merger Consideration”) plus (B) the number of Rights Shares determined pursuant to Section 1.02(d) registered in the name of all the Company Right Holders immediately prior to the Effective Time (the “Rights Merger Consideration”) and (ii) issue, or cause to be issued, to such Company Shareholders and Company Right Holders (and PubCo shall direct the Exchange Agent to take all necessary action to record and effect the same) the number of PubCo Class A Ordinary Shares equal to the sum of (A) the Share Merger Consideration plus (B) the Rights Merger Consideration (the “Merger Consideration”). Any portion of the Merger Consideration that remains undistributed to the Company Shareholders on the date that is one (1) year after the Effective Time shall be delivered to PubCo upon demand, and any holders of Company Shares that were issued and outstanding immediately prior to the Merger who have not theretofore surrendered or transferred their certificates representing such Company Shares for exchange pursuant to this Section 1.07 shall thereafter look for payment of the Merger Consideration payable in respect of the Company Shares represented by such certificates solely to PubCo (subject to abandoned property, escheat or similar Laws). Any portion of the Merger Consideration remaining unclaimed by the Company Shareholders three (3) years after the Closing Date (or if earlier, 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 PubCo free and clear of any claims or interest of any Person previously entitled thereto.
(c) Any Merger Consideration that is to be issued to Company Shareholders under this Agreement shall be issued directly to registered Company Shareholders in accordance with the instructions specified by such holder in its Letter of Transmittal. In no event shall any fractional shares of Share Merger Consideration or fractional interest of Merger Consideration be issued under this Agreement (with any fractional PubCo Class A Ordinary Share that would otherwise be issued rounded down to the nearest whole PubCo Class A Ordinary Share). If any portion of the Merger Consideration is to be issued to a Person other than the Person in whose name the relevant Company Shares or Company Rights were registered immediately prior to the Effective Time, it shall be a condition to such delivery that (i) the transfer of such Company Shares or Company Rights shall have been permitted in accordance with the terms of the Company’s Governing Documents, as in effect immediately prior to the Effective Time, (ii) the certificate of such Company Shares or Company Rights shall be properly endorsed or shall otherwise be in proper form for transfer, (iii) the recipient of such portion of the Merger Consideration, or the Person in whose name such portion of the Merger Consideration is issued, shall have already executed and delivered counterparts to such other documents as are reasonably deemed necessary by the Surviving Company or PubCo, including, with respect to the Lock-Up Shareholders, the Lock-Up Agreements, and (iv) the Person requesting such delivery shall pay to the PubCo any transfer or other Taxes required as a result of such delivery to a Person other than the registered holder of such certificate of Company Shares or Company Rights or establish to the satisfaction of the Surviving Company and PubCo that such Tax has been paid or is not payable.
(d) None of PubCo, the Exchange Agent, the Surviving Company nor their Affiliates shall be liable to any Company Shareholder for any Merger Consideration paid to any public official pursuant to applicable abandoned property, escheat or similar Laws.
(e) In the event that any certificates representing Company Shares or Company Rights have been lost, stolen or destroyed, the Exchange Agent shall issue, upon receipt of an affidavit of that fact by the holder thereof in form and substance satisfactory to the Exchange Agent, the Merger Consideration payable in respect thereof pursuant to Section 1.02. PubCo or the Exchange Agent may, in its discretion and as a condition precedent to the payment of such Merger Consideration, require the owners of such lost, stolen or destroyed certificates to deliver a bond in such amount as it may direct as indemnity against any claim that may be made against PubCo, the Surviving Company or the Exchange Agent with respect to the Certificates alleged to have been lost, stolen or destroyed.
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1.08 The Closing.
(a) The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place electronically by the exchange of copies of documents at 10:00 a.m. local time in the Cayman Islands on the second Business Day following full satisfaction or, to the extent permitted by applicable Law, due waiver of all of the closing conditions set forth in ARTICLE VII hereof (other than those to be satisfied at the Closing itself, but subject to the satisfaction or waiver of such conditions) or on such other date or time as is mutually agreed to in writing by PubCo and the Company. The date on which the Closing actually occurs is referred to herein as the “Closing Date”.
(b) No later than the second (2nd) Business Day prior to the Closing Date, the Company shall deliver to PubCo written notice setting forth: (i) the aggregate amount of cash proceeds that shall be required to satisfy any exercise of the redemption of Company Shares prior to the Closing pursuant to the Governing Documents of the Company (the “Company Redemptions”); (ii) the amount of cash in the Trust Account and the amount of Company Transaction Costs as of the Closing; and (iii) the number of Company Shares and Company Rights to be outstanding as of immediately prior to the Effective Time and after giving effect to the Company Redemptions (such written notice of (i), (ii) and (iii), together, the “Closing Statement”). If the PubCo in good faith disagrees with any portion of the Closing Statement, then the PubCo may deliver a notice of such disagreement to the Company until the Business Day prior to the Closing Date (the “Pre-Closing Notice of Disagreement”). The Company and PubCo shall seek in good faith to resolve any differences they have with respect to the matters specified in the Pre-Closing Notice of Disagreement.
1.09 Tax-Matters. To the extent applicable, if the Merger qualifies for the Intended Tax Treatment, for U.S. federal income tax purposes, the Parties shall (to the maximum extent permitted by applicable Legal Requirements) prepare and file all U.S. income Tax Returns consistent with the Intended Tax Treatment; provided, for the avoidance of doubt, nothing in this Section 1.09 shall prevent any Party or any of their respective Affiliates from settling, or require any of them to litigate, any challenge or other similar proceeding by any Governmental Entity with respect to the Intended Tax Treatment. This Agreement is intended to constitute and hereby is adopted as a “plan of reorganization” with respect to the Merger within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a) for purposes of Sections 354, 361 and 368 of the Code and the Treasury Regulations thereunder.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the sections of the disclosure letter prepared by the Company and dated as of the date of this Agreement (as supplemented or modified by mutual agreement of the Parties prior to Closing, the “Company Disclosure Letter”) (each of which qualifies (a) the correspondingly numbered representation, warranty or covenant if specified therein and (b) such other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representation, warranty or covenant is reasonably apparent on its face) or in the SEC Reports filed or furnished by the Company prior to the date hereof (excluding any disclosures in such SEC Reports under the headings “Risk Factors”, “Forward-Looking Statements” or “Qualitative Disclosures About Market Risk” and other disclosures that are predictive, cautionary or forward looking in nature), the Company represents and warrants to PubCo and Merger Sub as follows:
2.01 Organization and Power. The Company is an exempted company limited by shares duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands, with full power and authority to enter into this Agreement and perform its obligations hereunder. There is no pending, or to the Company’s Knowledge, threatened, action for the dissolution, liquidation or insolvency of the Company.
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2.02 Authorization. Subject to receipt of the Company Shareholder Approval and the other consent or approvals described in Section 2.05 of this Agreement, the execution, delivery and performance of this Agreement by the Company and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all requisite corporate action, and no other proceedings on their part are necessary to authorize the execution, delivery or performance of this Agreement and the other Transaction Documents to which it is a party. This Agreement and the other Transaction Documents to which it is a party have been duly executed and delivered by the Company and, assuming that this Agreement is a valid and binding obligation of PubCo and Merger Sub, this Agreement constitutes a valid and binding obligation of the Company, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other legal requirements relating to or affecting creditors’ rights generally or by equitable principles (regardless of whether enforcement is sought at law or in equity).
2.03 No Violations. Subject to (a) receipt of the Company Shareholder Approval, (b) the registration of the Merger Documents (including the Plan of Merger) by the Cayman Registrar and (c) compliance with and filings under U.S. federal securities Laws, any U.S. state or foreign securities or “blue sky” laws and the rules and regulations of Nasdaq, the execution and delivery of this Agreement by the Company and the execution and delivery of other Transaction Documents to which the Company is party do not and shall not, and the performance and compliance with the terms and conditions hereof and thereof by the Company and the consummation of the transactions contemplated hereby and thereby by the Company shall not (with or without notice or passage of time, or both):
(a) violate or conflict with any of the provisions of the Company’s Governing Documents and any agreement(s) to which the Company is subject to; or
(b) violate, conflict with, result in a breach or constitute a default under any provision of, or require any notice, filing, consent, authorization or approval under, any Legal Requirement binding upon the Company.
2.04 Capitalization; Subsidiaries.
(a) Except for any changes to the extent permitted pursuant to Section 4.01 or for changes resulting from any Company Redemptions, the authorized share capital of the Company is US$50,000 divided into 50,000,000 ordinary shares of US$0.001 par value per share (the “Company Shares”). Assuming separation of all Company Units, as of the date of this Agreement, there are 8,863,000 Company Shares issued and outstanding, including a total of 1,963,000 Company Shares held by the Sponsor.
(b) The Company issued a total of 7,138,000 Company Units upon the consummation of its IPO, including 6,900,000 Company Units to the purchasers in the IPO and 238,000 Company Units to the Sponsor. Assuming separation of all Company Units, as of the date of this Agreement, there are (A) 8,863,000 Company Ordinary Shares issued and outstanding (including 7,138,000 Company Ordinary Shares issued and outstanding pursuant to the Company Units) (the “Outstanding Shares”), and (B) 7,138,000 Company Rights issued and outstanding (including 7,138,000 Company Rights issued and outstanding pursuant to the Company Units) (the “Outstanding Rights”). The Company Units, the Outstanding Shares and the Outstanding Rights are collectively referred as the “Company Equity Securities”. All the outstanding Company Equity Securities have been duly and validly issued and are fully paid and non-assessable, and were issued in accordance with the registration or qualification requirements of the Securities Act, and any relevant U.S. state securities Laws or pursuant to valid exemptions therefrom.
(c) Except for this Agreement, the Company Redemption obligation, the Outstanding Rights, or as set forth in Schedule 2.04 of the Company Disclosure Letter, the Company has not granted any outstanding options, share appreciation rights, warrants, rights or other securities convertible into or exchangeable or exercisable for Company Shares, or any other commitments or agreements providing for the issuance of additional shares, the sale of treasury shares, for the repurchase or redemption of any Company Shares or the value of which is determined by reference to the Company Shares, and there are no contracts of any kind which may obligate the Company to issue, purchase, redeem or otherwise acquire any of its Company Shares.
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(d) The Company has no Subsidiaries and does not own, directly or indirectly, any equity interests or other interests or investments (whether equity or debt) in any Person, whether incorporated or unincorporated. The Company is not party to any contract that obligates the Company to invest money in, loan money to or make any capital contribution to any other Person.
2.05 Governmental Consents, Etc. Except for (a) receipt of the Company Shareholder Approval, (b) the applicable requirements of the U.S. federal securities Laws, any U.S. state or foreign securities or “blue sky” laws, and the rules and regulations of Nasdaq, (c) the registration of the Merger Documents (including the Plan of Merger) by the Cayman Registrar, and (d) any consents, notices, approvals, authorizations, designations, declarations or filings, the absence of which would not reasonably be expected to have a Company Material Adverse Effect, the Company is not required to submit any notice, report or other filing with any Governmental Entity in connection with the execution, delivery or performance by it of this Agreement or the other Transaction Documents or the consummation of the transactions contemplated hereby or thereby, as applicable, and no consent, approval or authorization of any Governmental Entity or any other party or Person is required to be obtained by the Company in connection with its execution, delivery and performance of this Agreement or the other Transaction Documents or the consummation of the transactions contemplated hereby or thereby, as applicable.
2.06 Legal Proceedings. There are no pending or, to the Company’s Knowledge, threatened Legal Proceedings, in each case, against the Company including, any that (a) challenges the validity or enforceability of the Company’s obligations under this Agreement or the other Transaction Documents to which the Company is party or (b) seeks to prevent, delay or otherwise would reasonably be expected to adversely affect the consummation by the Company of the transactions contemplated herein or therein or otherwise result in a Company Material Adverse Effect.
2.07 SEC Filings and Financial Statements.
(a) Except as set forth on Schedule 2.07 of the Company Disclosure Letter, the Company has timely filed or furnished all forms, reports, schedules, forms, statements and other documents required to be filed by it with the SEC (collectively, as they have been amended since the time of their filing and including all exhibits and supplements thereto, the “SEC Reports”), and, as of the Closing, shall have filed or furnished all other statements, reports, schedules, forms, statements and other documents required to be filed or furnished with the SEC subsequent to the date of this Agreement. The SEC Reports did not at the time they were filed with the SEC (except to the extent that information contained in any SEC Report has been superseded by a later timely filed SEC Report) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
(b) Each of the financial statements (including, in each case, any notes thereto) contained in the SEC Reports was prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) and each fairly presents, in all material respects, the financial position, results of operations and cash flows of the Company as at the respective dates thereof and for the respective periods indicated therein.
(c) Except as and to the extent set forth on the balance sheet of the Company at December 31, 2024, including the notes thereto (as set forth in the Company’s Annual Report on Form 10-K for the period ended December 31, 2024 on file with the SEC, the “Company Subject Balance Sheet”) or described in Schedule 2.07 of the Company Disclosure Letter, the Company has no liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), of the type required to be reflected on a consolidated balance sheet prepared in accordance with GAAP except for (i) liabilities and obligations incurred since the date of the Company Subject Balance Sheet in the Ordinary Course of Business that are not, individually or in the aggregate, material to the Company and none of which results from or arises out of any material breach of or material default under any contract, material breach of warranty, tort, material infringement or material violation of Law; (ii) liabilities and obligations incurred in connection with the transactions contemplated by the Company as set forth in this Agreement; (iii) the Company Transaction Costs; and (iv) liabilities and obligations which are not, individually or in the aggregate, material to the Company.
(d) The Company has heretofore furnished to PubCo and Merger Sub complete and correct copies of all amendments and modifications that have not been filed by the Company with the SEC to all agreements, documents and other instruments that previously had been filed by the Company with the SEC and are currently in effect.
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(e) All comment letters received by the Company from the SEC or the staff thereof since its inception through the date hereof and all responses to such comment letters filed by or on behalf of the Company are either publicly available on the SEC’s EDGAR website or have otherwise been made available to PubCo and Merger Sub.
(f) To the Company’s Knowledge each director and executive officer of the Company has filed with the SEC on a timely basis all statements required by Section 16(a) of the Exchange Act and the rules and regulations thereunder.
(g) The Company has timely filed and made available to PubCo and the Merger Sub all certifications and statements required by (x) Rule 13a-14 or Rule 15d-14 under the Exchange Act or (y) 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) with respect to any SEC Report (the “Company Certifications”). Each of the Company Certifications is true and correct. The Company maintains disclosure controls and procedures required by Rule 13a-15 or Rule 15d-15 under the Exchange Act; such controls and procedures are reasonably designed to ensure that all material information concerning the Company is made known on a timely basis to the individuals responsible for the preparation of the Company’s SEC filings and other public disclosure documents. As used in this Section 2.07, the term “file” shall be broadly construed to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC.
(h) The Company maintains and shall continue to maintain a standard system of accounting established and administered in accordance with GAAP. The Company has designed and maintains a system of internal controls over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(i) The Company has no off-balance sheet arrangements.
(j) Neither the Company nor, to the Knowledge of the Company, any manager, director, officer, employee, auditor, accountant or other Representative of the Company has received or otherwise had or obtained knowledge of any complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or their respective internal accounting controls, including any complaint, allegation, assertion or claim that the Company has engaged in questionable accounting or auditing practices. No attorney representing the Company, whether or not employed by the Company, has reported evidence of a violation of securities laws, breach of fiduciary duty or similar violation by the Company or any of its officers, directors, employees or agents to the Company Board (or any committee thereof) or to any director or officer of the Company. Since the Company’s inception, there have been no internal investigations regarding accounting or revenue recognition discussed with, reviewed by or initiated at the direction of the chief executive officer, chief financial officer, general counsel, the Company Board or any committee thereof.
(k) Neither the Company nor any officer, employee, contractor, subcontractor or agent of the Company has discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against an employee of the Company in the terms and conditions of employment because of any act of such employee described in 18 U.S.C. § 1514A(a).
2.08 Absence of Certain Changes. Except as set forth in Schedule 2.08 of the Company Disclosure Letter, during the period from the date of the Company Subject Balance Sheet to the date hereof, the Company has conducted its business in the Ordinary Course of Business and:
(a) there has not been a Company Material Adverse Effect;
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(b) the Company has not declared, set aside or paid any dividend or other distribution or payment in respect of its securities;
(c) the Company has not sold, assigned, transferred, conveyed, leased or otherwise disposed of any material portion of its assets or incurred any Indebtedness;
(d) the Company has not made any loans, advances, or capital contributions to, or investments in, any Person;
(e) the Company has not (i) increased the base salary or base wages payable to any of its officers or employees other than increases made in the Ordinary Course of Business, (ii) increased severance obligations payable to any of its officers or employees or (iii) made or committed to make any bonus payment to any of its employees or agents other than payments or arrangements in the Ordinary Course of Business;
(f) the Company has not acquired by merger, consolidation or otherwise any business of any Person or division thereof;
(g) there has not been any casualty event that has resulted in or is reasonably likely to result in a loss in excess of $500,000, whether or not covered by insurance;
(h) there has not been any material change by the Company in accounting or Tax reporting principles, methods or policies;
(i) the Company has not made or rescinded any material election relating to Taxes, settled or compromised any material Claim relating to Taxes, or amended any material Tax Return;
(j) the Company has not settled any material Legal Proceedings; and
(k) the Company has not agreed or committed, whether orally or in writing, to do any of the foregoing.
2.09 Company Trust Amount. As of the day immediately preceding the date hereof, the Company Trust has a rounded-off balance of no less than $69,000,000 (the “Company Trust Amount”). Such monies are invested solely in United States Government securities or money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, and held in trust by Wilmington Trust, National Association pursuant to the Company Trust Agreement. The Company Trust Agreement is valid and in full force and effect and enforceable in accordance with its terms and has not been amended or modified. 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 Company Trust Agreement in the SEC Reports to be inaccurate in any material respect or that would entitle any Person (other than the underwriters of Company’s initial public offering for deferred underwriting commissions as described in the SEC Reports and holders of Company Public Shares who shall have elected to redeem their Company Shares pursuant to the Company’s Governing Documents, to any portion of the proceeds in the Company Trust). Prior to the Closing, none of the funds held in the Company Trust may be released except (x) to pay income and other tax obligations from any interest income earned in the Company Trust or (y) to redeem Company Shares in accordance with the provisions of Company’s Governing Documents (the “Permitted Releases”).
2.10 Broker. Except as set forth in Schedule 2.10 of the Company Disclosure Letter, there are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement based on any agreement made by or on behalf of the Company.
2.11 Solvency. The Company is not entering into this Agreement with the intent to hinder, delay or defraud either present or future creditors of the Company.
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2.12 Company Information. None of the information supplied or to be supplied by the Company or any of its Affiliates expressly for inclusion in the SEC Reports, the Proxy Statement to be delivered to the Company Shareholders with respect to the Offer or the Merger, any supplements thereto or in any other document filed with any Governmental Entity in connection herewith, shall, at the date of filing or mailing, as the case may be, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading (subject to the qualifications and limitations set forth in the materials provided by the Company or that is included in the applicable filings). No representation or warranty is made by the Company with respect to statements made or incorporated by reference therein based on information supplied or to be supplied by, the Group Companies, the shareholders of the Group Companies, or any of their respective Affiliates.
2.13 Listing. The Company Shares are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq as of the date hereof. As of the date hereof, there is no Legal Proceeding pending or, to the Company’s Knowledge, threatened in writing against the Company by the SEC with respect to the deregistration of the Company Shares under the Exchange Act. As of the date hereof, there is no Legal Proceeding pending or, to the Company’s Knowledge, threatened in writing against the Company by Nasdaq with respect to the delisting of the Company Shares on Nasdaq. The Company has taken no action that is designed to terminate the registration of the Company Shares under the Exchange Act.
2.14 Affiliate Transactions. Other than (i) for payment of salary and benefits for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company or (iii) with respect to any Person’s ownership of shares or other securities of the Company, there are no contracts or arrangements under which there are any existing or future liabilities or obligations between the Company, on the one hand, and, on the other hand, any (y) present or former manager, employee, officer or director of the Company or any of its Subsidiaries or (z) record or beneficial owner of 5% or more of the outstanding Company Shares as of the date hereof, except as described in the SEC Reports.
2.15 Company Contracts. The Company is not party to any contract (other than nondisclosure agreements (containing customary terms) to which the Company is a party that were entered into in the Ordinary Course of Business) except for those contracts filed as exhibits to the Company’s SEC Reports or as set forth on Schedule 2.15 of the Company Disclosure Letter.
2.16 Intellectual Property. The Company does not own or license the right to use any patents, copyrights, trademarks, trade secrets, know-how or software, and none are or ever have been necessary for the operation of its business.
2.17 Employees.
(a) Other than the officers of the Company, the Company has no employees.
(b) The Company is not, nor has ever been, a party to or bound by any collective bargaining agreement, nor has it experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes. There has been no organizational effort made or, to the Knowledge of the Company, threatened, either currently or since the date of organization of the Company, by or on behalf of any labor union with respect to the service providers of the Company. Except as would not reasonably be expected to have a Company Material Adverse Effect, (i) the Company is in compliance with all applicable Laws respecting labor, employment, fair employment practices (including equal employment opportunity laws), terms and conditions of employment, classification of employees, workers’ compensation, occupational safety and health, immigration, affirmative action, employee and data privacy, plant closings, and wages and hours, and (ii) all payments due from the Company on account of wages have been paid or properly accrued as a liability on the books of the Company.
2.18 Employee Benefits. Neither the Company nor any of its ERISA Affiliates maintains, sponsors or contributes to or in the past has maintained, sponsored or contributed to any Company Employee Benefit Plan. Neither the execution of this Agreement nor the consummation of the transactions contemplated by this Agreement shall, individually, in the aggregate or in connection with any other event, (a) result in any payment becoming due to any officer, employee, consultant or director of the Company, (b) increase or modify any benefits otherwise payable by the Company to any employee, consultant or director of the Company, or (c) result in the acceleration of time of payment or vesting of any such benefits.
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2.19 Real Property. The Company does not own, lease or use any real property except as described in the SEC Reports.
2.20 Tax Matters. Except as would not reasonably be expected to have a Company Material Adverse Effect:
(a) the Company has timely filed (taking into account all applicable extensions) all Tax Returns in all jurisdictions in which Tax Returns are required to be filed by it and all such Tax Returns are true, correct, and complete in all respects;
(b) all Taxes of the Company (whether or not shown on any Tax Returns) that are due have been fully and timely paid;
(c) the Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, shareholder, independent contractor or other third party;
(d) there are no Liens for Taxes (except Taxes not yet due and payable) on any of the assets of the Company;
(e) there are no pending or threatened in writing disputes, claims, audits, examinations or other proceedings regarding any Taxes of the Company or the assets of the Company; and
(f) no deficiency with respect to an amount of Taxes has been proposed, asserted or assessed against the Company.
Notwithstanding any other provision in this Agreement, the representations and warranties in this Section 2.20 are the only representations and warranties in this Agreement with respect to the Tax matters of the Company.
2.21 Legal Requirements and Permits.
(a) the Company is in compliance in all material respects with all applicable Legal Requirements. As of the date hereof, the Company is not under investigation by any Governmental Entity with respect to any alleged material violation of any applicable Legal Requirements.
(b) the Company has been granted all Permits necessary for and material to the conduct of its business as conducted as of the date hereof, taken as a whole. Such Permits are valid and in full force and effect and each Group Company is in material compliance with all of such Permits. There is no lawsuit or similar proceeding pending or, to the Knowledge of the Company, threatened, to revoke, suspend, withdraw or terminate any such Permit.
2.22 Insurance. Except as set forth on Schedule 2.22 of the Company Disclosure Letter, the Company does not own or maintain any insurance policies, nor is any insurance necessary for the operation of its business.
2.23 Vote Required. The affirmative vote of a majority of at least two-thirds (2/3s) of the holders of the Company Shares present in person or by proxy at the Company Shareholders’ Meeting and entitled to vote is required to approve the Merger and the entry into the Plan of Merger. The affirmative vote of the holders of a majority of the Company Shares and present in person or by proxy at the Company Shareholders’ Meeting and entitled to vote is required to approve the entry into this Agreement and the transaction contemplated hereby (said votes, collectively, the “Company Required Vote”). The Company Required Vote is the only vote of any class or series of shares of the Company that is required to obtain approval of the Merger, the entry into the Plan of Merger, this Agreement and the transactions contemplated hereby.
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2.24 Intentionally Omitted.
2.25 Investment Company. The Company is not an “investment company,” a company controlled by an “investment company,” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.
2.26 Intentionally Omitted.
2.27 Absence of Certain Payments. As of the date of this Agreement, to the Knowledge of the Company, no employee of the Company has, and no agent or other Representative when acting on behalf of the Company has, in violation of Law (i) used any corporate funds for any contribution, gift, entertainment or other expense relating to political activity; (ii) made any direct or indirect payment to any foreign or domestic government official or employee from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other payment.
2.28 Company Investigations. The Company acknowledges that it and its Representatives have received access to such books and records, facilities, equipment, contracts and other assets of the Group Companies which it and its Representatives have desired or requested to review, and that they and their Representatives have had full opportunity to meet with the management of PubCo and to discuss the business and assets of the Group Companies. The Company acknowledges and agrees that it has made its own inquiry and investigation into, and, based thereon, has formed an independent judgment concerning, the Group Companies and their respective businesses and operations.
NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY MADE BY THE COMPANY IN THIS ARTICLE II, THE COMPANY IS NOT MAKING ANY REPRESENTATION OR WARRANTY TO PUBCO OR MERGER SUB WITH RESPECT TO THE COMPANY, ITS AFFILIATES OR ANOTHER PERSON OR THEIR RESPECTIVE BUSINESSES, OPERATIONS, ASSETS, LIABILITIES, CONDITION (FINANCIAL OR OTHERWISE) OR PROSPECTS, THIS, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE BY ANY PERSON TO PUBCO OR MERGER SUB OF ANY DOCUMENTATION, FORECASTS, PROJECTIONS OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING. NEITHER PUBCO NOR MERGER SUB MAY RELY ON ANY SUCH OTHER DOCUMENTATION, FORECASTS, PROJECTIONS ORNOTHER INFORMATION AS A REPRESENTATION OF THE COMPANY, ITS AFFILIATES OR SHAREHOLDERS IN DETERMINING TO ENTER INTO THIS AGREEMENT. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NONE OF THE COMPANY, ITS AFFILIATES OR ITS SHAREHOLDERS SHALL HAVE, OR BE SUBJECT TO, ANY LIABILITY UNDER THE TRANSACTION DOCUMENTS TO PUBCO OR MERGER SUB, OR THEIR RESPECTIVE SHAREHOLDERS OR AFFILIATES RESULTING FROM THE DISTRIBUTION TO, OR USE BY ANY OF THEM OF ANY SUCH DOCUMENTATION, FORECASTS, PROJECTIONS OR OTHER INFORMATION FURNISHED OR MADE AVAILABLE TO ANY OF THEM OR THEIR RESPECTIVE REPRESENTATIVES, INCLUDING ANY INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE TO ANY OF THEM IN ANY DATA ROOM, MANAGEMENT PRESENTATIONS OR IN ANY OTHER FORM IN EXPECTATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT IN THE CASE OF FRAUD. ALL OTHER REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, ARE EXPRESSLY DISCLAIMED BY THE COMPANY.
ARTICLE
III
REPRESENTATIONS AND WARRANTIES OF PUBCO AND MERGER SUB
Except as set forth in the sections of the disclosure letter prepared by PubCo and dated as of the date of this Agreement (as supplemented or modified by mutual agreement of the Parties prior to Closing, the “PubCo Disclosure Letter” (each of which qualifies (a) the correspondingly numbered representation, warranty or covenant if specified therein and (b) such other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representation, warranty or covenant is reasonably apparent on its face), each of PubCo and Merger Sub represents and warrants to the Company as follows:
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3.01 Existence and Good Standing.
(a) Each of the Group Companies is duly organized, validly existing and, to the extent applicable in the respective jurisdiction is in good standing under the Laws of the jurisdiction in which it is incorporated or organized to the extent applicable in such jurisdiction. Each of the Group Companies has all requisite corporate power and authority to own, lease and operate the properties and assets it owns, leases and operates and to carry on its business as such business is conducted, as of the date hereof.
(b) Each of the Group Companies is qualified to do business as a foreign entity in each jurisdiction in which its ownership of property or the conduct of business as now conducted requires it to qualify, except where failure to be so duly qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. PubCo has made available to the Company an accurate and complete copy of each Governing Document of each Group Company, in each case, as in effect as of the date of this Agreement. Such Governing Documents (as amended to the date of this Agreement) are in full force and effect.
3.02 Authority; Enforceability. Each of PubCo and Merger Sub has the full corporate power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party, and to perform its obligations under this Agreement and the other Transaction Documents to which it is a party, subject (in the case of performance) to obtaining the PubCo Shareholders Approval. Subject to receipt of the PubCo Shareholders Approval and the other consent or approvals described in Section 3.03, the execution, delivery and performance of this Agreement by the Company and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all requisite corporate action, and no other proceedings on their part are necessary to authorize the execution, delivery or performance of this Agreement and the other Transaction Documents to which it is a party. This Agreement and the other Transaction Documents to which it is a party have been duly executed and delivered by the PubCo and, assuming that this Agreement is a valid and binding obligation of the Company, this Agreement and each of the other Transaction Documents to which PubCo or Merger Sub is a party (or shall be a party at the Closing) constitutes (or shall constitute) the valid and binding obligation of PubCo and Merger Sub, as applicable, enforceable against PubCo and Merger Sub, as applicable, in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other legal requirements relating to or affecting creditors’ rights generally or by equitable principles (regardless of whether enforcement is sought at law or in equity).
3.03 No Violations. Except for (i) the registration of the Merger Documents (including the Plan of Merger) by the Cayman Registrar, (ii) compliance with and filings under the U.S. federal securities Laws, any U.S. state or foreign securities or “blue sky” laws and the rules and regulations of Nasdaq, the execution and delivery of this Agreement by PubCo or Merger Sub and the execution and delivery of the other Transaction Documents to which PubCo or Merger Sub is a party does not and shall not, and the performance and compliance with the terms and conditions hereof and thereof by PubCo or Merger Sub and the consummation of the transactions contemplated hereby and thereby by PubCo or Merger Sub shall not (with or without notice or passage of time, or both):
(a) violate, conflict with, result in a breach or constitute a default under any of the provisions of the memorandum and articles of association, certificate of incorporation or bylaws (or equivalent organizational documents) of any Group Company;
(b) (i) violate or conflict with any provision of, (ii) cause a default under, or (iii) give rise to, or result in, a right of termination, cancellation, or acceleration of any obligation under any Legal Requirement applicable to a Group Company, except in each case as would not reasonably be expected to have a Material Adverse Effect;
(c) (i) violate any provision of or result in a breach, default or acceleration of, or require a consent under, any Material Contract to which a Group Company is party or terminate or result in the termination of any Material Contract to which a Group Company is party, or result in the creation of any Lien under any Material Contract to which a Group Company is party or upon any of the properties or assets of any of the Group Companies, or constitute an event which, after notice or lapse of time or both, would result in any such violation, breach, default, acceleration, termination or creation of a Lien; or (ii) result in a violation or revocation of any required approvals, except to the extent that the occurrence of any of the foregoing items set forth in clauses (i) or (ii) would not, individually or in the aggregate, reasonably be expected to have a PubCo Material Adverse Effect; or
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(d) require the (i) filing under the Financial Investment Services and Capital Markets Act of the Republic of Korea and its Enforcement Decrees, the KOADAQ Market Listing Regulations and its Detailed Enforcement Rules and the KOSDAQ Market Disclosure Regulations and its Detailed Enforcement Rules (the “KOSDAQ”) or (ii) approval from any Governmental Entity or other Person that regulates the KOSDAQ Market.
3.04 Capitalization; Subsidiaries.
(a) As of the date hereof, the authorized share capital of PubCo is Fifty Thousand Dollars (US$50,000) divided into two classes of ordinary shares, (i) 430,000,000 Class A Ordinary Shares, each with a par value of US$0.0001 each and (ii) 70,000,000 Class B Ordinary Shares, each with a par value of US$0.0001, out of which 10,000,000 Class A Ordinary Shares and 30,000,000 Class B Ordinary Shares are outstanding as of the date of this Agreement (collectively, the “Outstanding PubCo Shares”). Each Class A Ordinary Share shall entitle the holder to one (1) vote on all matters of the PubCo, and each Class B Ordinary Share shall entitle the holder to ten (10) votes on all matters of the PubCo.
As of the date hereof, the Outstanding PubCo Shares are the only shares of PubCo issued and outstanding and no PubCo Ordinary Shares are held as treasury shares. All the Outstanding PubCo Ordinary Shares have been duly and validly issued and are fully paid, and were issued in accordance with the PubCo’s Governing Documents and the Cayman Companies Act, and have not been issued in violation of any preemptive or similar rights. Schedule 3.04(a) of the PubCo Disclosure Letter accurately sets forth the name and ownership amount of the holders of the Outstanding PubCo Shares as of the date of this Agreement.
(b) The authorized share capital of the Merger Sub is Fifty Thousand Dollars (US$50,000) divided into 50,000,000 Merger Sub Shares, each with a nominal or par value of US$0.001. As of the execution of this Agreement, only one Merger Sub Share is issued and outstanding. The sole outstanding Merger Sub Share has been duly authorized, validly issued, fully paid and is non-assessable and is not subject to preemptive rights and is held by the PubCo.
(c) The PubCo Class A Ordinary Shares to be issued as Merger Consideration, when issued in accordance with the terms hereof, shall be duly authorized and validly issued, fully paid and issued in compliance with the Cayman Companies Act, all applicable state and U.S. federal securities Laws and not subject to, and not issued in violation of, any Lien, purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of applicable Law, the memorandum and articles of association or any contract to which PubCo is a party or otherwise bound. There are no outstanding bonds, debentures, notes or other indebtedness of PubCo having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter for which the PubCo’s Shareholders may vote. To the Knowledge of PubCo, other than pursuant to the Lock-Up Agreements dated as of the date of this Agreement, none of the PubCo Ordinary Shares are subject to any proxies, voting agreements, voting trusts or other similar arrangements which affect the rights of holder(s) to vote such securities, nor are any shareholder agreements, buy-sell agreements, restricted share purchase agreements, share purchase agreements, warrant purchase agreements, share issuance agreements, share option agreements, rights of first refusal or other similar agreements, in each case, to which PubCo is a party, existing as of the date hereof with respect to such securities which in any manner would affect the title of any holder(s) to such securities or the rights of any holder(s) to sell the same free and clear of all Liens.
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(d) Schedule 3.04(d) of the PubCo Disclosure Letter accurately sets forth the name and place of incorporation or formation of each Subsidiary of PubCo as of the date hereof and the ownership structure of each Group Company. As of the date hereof, except as provided for in Section 3.04(d) of the PubCo Disclosure Letter, the majority ownership of each such Subsidiary is either directly or indirectly owned or controlled by PubCo either via equity or contractual arrangement in the manner set forth in Section 3.04(d) of the PubCo Disclosure Letter. Each Group Company’s issued and outstanding shares, nominal share capital or other equity securities have been, to the extent applicable, duly authorized and validly issued and are fully paid and non-assessable. As of the date hereof, no Group Company has granted or issued any outstanding options, share appreciation rights, phantom stock, warrants, rights or other securities convertible into or exchangeable or exercisable for PubCo Ordinary Shares and there are no outstanding stock-based performance units, profit participations, restricted stock awards, restricted stock units or other equity-based compensation awards or similar rights with respect to the PubCo, options, warrants, rights or other securities convertible into or exchangeable or exercisable for PubCo Ordinary Shares or other commitments or agreements providing for the issuance of additional shares (or other equity interests), the sale of treasury shares, or for the repurchase or redemption of PubCo Ordinary Shares. There are no agreements requiring any Group Company to issue, purchase, register, redeem or otherwise acquire, or transfer, sell or otherwise dispose of any shares of capital stock or other securities of any Group Company, including any options, subscriptions, rights, warrants, calls or other similar commitments or agreements relating thereto, or any share appreciation rights or securities convertible into or exchangeable or exercisable for PubCo Ordinary Shares, or any commitments or agreements the value of which is determined by reference to the PubCo Ordinary Shares. Unless disclosed in Schedule 3.04(d) of the PubCo Disclosure Letter, other than pursuant to the Lock-Up Agreements, no shares or other securities of any Group Company, are subject to any proxies, voting agreements, voting trusts or other similar arrangements which affect the rights of holder(s) to vote such securities, nor are any stockholder agreements, buy-sell agreements, restricted share purchase agreements, equity purchase agreements, warrant purchase agreements, stock issuance agreements, stock option agreements, rights of first refusal or other similar agreements, in each case, to which the PubCo or Merger Sub is a party, existing as of the date hereof with respect to such securities which in any manner would affect the title of any holder(s) to such securities or the rights of any holder(s) to sell the same free and clear of all Liens.
(e) Merger Sub is a newly incorporated company, formed solely for the purpose of engaging in the transactions contemplated by this Agreement. Merger Sub has not engaged in any business activities or conducted any operations other than in connection with the transactions contemplated by this Agreement. Merger Sub is a direct wholly owned Subsidiary of PubCo. Merger Sub has no Subsidiaries.
(f) Except for the obligations or liabilities incurred in connection with its organization, and the transactions contemplated by this Agreement, Merger Sub has not, and shall not have prior to the Effective Time, incurred, directly or indirectly through any subsidiary or Affiliate, any obligations or liabilities or engaged in any business activities of any type or kind whatsoever or entered into any agreements or arrangements with any Person.
(g) Except as provided for in this Agreement, the other Transaction Documents, or pursuant to the PIPE Investment, as a result of the consummation of the Merger, no shares of capital stock, warrants, options or other securities of the Group Companies are issuable and no rights in connection with any shares, warrants, options or other securities of the Group Companies accelerate or otherwise become triggered (whether as to vesting, exercisability, convertibility or otherwise).
3.05 PubCo Disclosures and Notifications; Financial Position
(a) Each Group Company, as applicable and required, has timely filed or furnished all forms, reports, schedules, statements and other documents required to be filed by it with KOSDAQ.
(b) The financial statements of PubCo and the Group Companies were prepared in accordance with all Relevant Accounting Standards (except as disclosed or stated in the relevant accounts) and gave a true and fair view of the state of affairs of PubCo and the Group Companies at the end of each of the relevant financial periods, subject to any qualifications contained in the report of the auditors on such accounts and of the profits and cashflows of the Group Companies for each such period.
(c) PubCo and each Group Company has established procedures which provide a reasonable basis for its respective directors to make proper judgments as to the financial position of the Group Companies.
(d) In the last 12 months, there has been no change in the internal control over financial reporting of the PubCo or Group Companies that has affected, or is reasonably likely to affect, in any material respect, PubCo’s internal control over financial reporting of the Group Companies.
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(e) The Group Companies keep books, records and accounts which accurately and fairly reflect its transactions, assets and liabilities.
3.06 Financial Statements and Other Financial Matters; No Undisclosed Liabilities.
(a) Set forth in Schedule 3.06 of the PubCo Disclosure Letter are the following financial consolidated statements of the Group Companies (the “Group Companies’ Financial Statements”):
(i) the unaudited consolidated balance sheet of each of the Group Companies as of December 31, 2024 and the related unaudited consolidated statement of comprehensive income (loss) for the six-month period then ended (such statements of operations collectively, the “Latest Statement of Operations”); and
(ii) the audited, consolidated balance sheets of the Group Companies as of June 30, 2023 and June 30, 2024 and the related consolidated statements of income, changes in deficit and cash flows for the years ended June 30, 2023 and June 30, 2024 (and which include the notes thereto and the report of PubCo’s independent auditor).
(b) The Group Companies’ Financial Statements are true and correct in all material respects and (i) were prepared based upon the books and records of the Group Companies as of the times and for the periods referred to therein, (ii) were prepared in accordance with the applicable accounting standards of the Group Companies, consistently applied throughout and among the periods involved (except that the unaudited statements exclude the footnote disclosures and other presentation items required under its applicable accounting standards and exclude year-end adjustments which shall not be material in amount), and (iii) fairly present in all material respects the consolidated financial position of the Group Companies as of the respective dates thereof and the consolidated results of the operations and cash flows of the Group Companies for the periods indicated, except as otherwise noted therein and subject to recurring adjustments normally made at year-end, including accounting for the Company’s preferred stock, warrants, and share-based awards.
(c) Since the Latest Balance Sheet Date, none of the Group Companies has incurred any obligation or liability of any nature (whether accrued, absolute, contingent or otherwise) of the type required to be reflected on a consolidated balance sheet prepared in accordance with GAAP applied on a basis consistent with Group Companies’ past practices, other than any such liabilities or obligations (i) incurred in the Ordinary Course of Business since the Latest Balance Sheet Date, (ii) that are described in Schedule 3.06 of the PubCo Disclosure Letter, (iii) incurred in connection with the transactions contemplated by this Agreement, (iv) for performance of obligations of any Group Company under the Material Contracts, (v) otherwise disclosed in the Group Companies’ Financial Statements, this Agreement or the PubCo Disclosure Letter or (vi) that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(d) Except as set forth in the Group Companies’ Financial Statements, no Group Company is subject to any liabilities or obligations (whether or not required to be reflected on a balance sheet prepared in accordance with GAAP), including any off-balance sheet obligations or any “variable interest entities” (within the meaning Accounting Standards Codification 810), except for those that are either (i) adequately reflected or reserved on or provided for in the consolidated balance sheet of the Group Companies as of the balance sheet date contained in the Group Companies’ Financial Statements or (ii) not material and that were incurred after the balance sheet date in the Ordinary Course of Business consistent with past practice.
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(e) The PubCo has in place disclosure controls and procedures that are designed to reasonably ensure that material information relating to the Group Companies (including any fraud that involves management or other employees who have a significant role in the internal controls of the Group Companies) is made known to the management of the PubCo by others within any of the Group Companies and are effective in recording, processing, summarizing and reporting financial data. The PubCo and each Group Company maintains and shall continue to maintain a standard system of accounting established and administered in accordance with GAAP. The PubCo and each Group Company has designed and maintains a system of internal controls over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Each Group Company maintains books and records reflecting its assets and liabilities and maintains proper and adequate internal accounting controls that are designed to provide reasonable assurance that (i) such Group Company does not maintain any off-the-book accounts and that such Group Company’s assets are used only in accordance with such Group Company’s management directives, (ii) transactions are executed in accordance with management’s authorization, (iii) transactions are recorded as necessary to permit preparation of the financial statements of such Group Company in accordance with GAAP and to maintain accountability for such Group Company’s assets, (iv) access to such Group Company’s assets is permitted only in accordance with management’s authorization, and (v) adequate procedures are implemented to effect the collection of accounts, notes and other receivables on a timely basis. All of the financial books and records of the Group Companies are complete and accurate in all material respects and have been maintained in the ordinary course consistent with past practice and in accordance with applicable Laws. No Group Company has been subject to or involved in any material fraud that involves management or other employees who have a significant role in the internal controls over financial reporting of any Group Company. For the past three (3) years, no Group Company or its Representatives has received any written complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of any Group Company or its internal accounting controls, including any material written complaint, allegation, assertion or claim that any Group Company has engaged in questionable accounting or auditing practices.
(f) Except as set forth on Schedule 3.06(f) of the PubCo Disclosure Letter, none of the Group Companies nor, to the Knowledge of the Company, an independent auditor of the Group Companies has identified or been made aware of (i) any significant deficiency or material weakness in the system of internal accounting controls utilized by the Group Companies, (ii) any fraud, whether or not material, that involves the Group Companies’ management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilized by the Company, or (iii) to the Knowledge of the Company, any claim or allegation regarding any of the foregoing.
3.07 Absence of Certain Changes. During the period from the Latest Balance Sheet Date to the date hereof, each Group Company has conducted its business in the ordinary course substantially consistent with past practices and:
(a) there has not been a Material Adverse Effect;
(b) none of the Group Companies has declared, set aside or paid any dividend or other distribution or payment in respect of its securities other than intercompany distributions;
(c) none of the Group Companies has sold, assigned, transferred, conveyed, leased or otherwise disposed of any material portion of its assets or incurred any Indebtedness, except in the Ordinary Course of Business;
(d) none of the Group Companies has made any loans, advances, or capital contributions to, or investments in, any Person other than another Group Company;
(e) none of the Group Companies has (i) increased the base salary or base wages payable to any of its officers or employees other than increases made in the Ordinary Course of Business, (ii) increased severance obligations payable to any of its officers or employees or (iii) made or committed to make any bonus payment to any of its employees or agents other than payments or arrangements in the Ordinary Course of Business;
(f) none of the Group Companies has acquired by merger, consolidation or otherwise any business of any Person or division thereof;
(g) there has not been any casualty event that has resulted in or is reasonably likely to result in a loss in excess of $500,000, whether or not covered by insurance;
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(h) there has not been any material change by any of the Group Companies in accounting or Tax reporting principles, methods or policies;
(i) none of the Group Companies has made or rescinded any material election relating to Taxes, settled or compromised any material Claim relating to Taxes, or amended any material Tax Return;
(j) none of the Group Companies has settled any material Legal Proceedings; and
(k) none of the Group Companies has agreed or committed, whether orally or in writing, to do any of the foregoing.
3.08 Real Property; Tangible Property.
(a) Schedule 3.08(a) of the PubCo Disclosure Letter sets forth the address and legal description of each parcel of Owned Real Property and the applicable Group Companies that is the owner thereof. Except as set forth on Schedule 3.08(a) of the PubCo Disclosure Letter, PubCo or one of its Subsidiaries has good, valid and marketable title to all Owned Real Property free and clear of all Liens, except Permitted Liens. Neither PubCo nor any of its Subsidiaries has leased or otherwise granted to any Person the right to use or occupy such Owned Real Property or any portion thereof. To the Knowledge of PubCo, there are no facts, circumstances, or conditions that are reasonably likely to result in any Liens, except Permitted Liens, against, any possession or occupancy of, or claims to a right or interest in, any of the Owned Real Property. There are no Actions, rights of first refusal or options to acquire, lease, sell or dispose of any Owned Real Property or any portion thereof. Except as otherwise disclosed in Schedule 3.08(a) of the PubCo Disclosure Letter, PubCo or one of its Subsidiaries has exclusive possession of each Owned Real Property.
(b) Schedule 3.08(b) of the PubCo Disclosure Letter lists all real property in which any of the Group Companies owns a leasehold interest as of the date hereof that are material to the operations of PubCo (the “Leased Real Property”) and a complete list of the Real Property Leases applicable thereto. A true and complete copy of each of the written Real Property Leases, as in effect as of the date hereof, has been delivered to PubCo and none of the written Real Property Leases has been modified in any respect, except to the extent that such modifications are disclosed by the copies delivered to PubCo. The title in and to the leasehold interests in the Leased Real Property of each of the Group Companies is free and clear of Liens, except for Permitted Liens. Each of the Real Property Leases is in full force and effect and the Group Companies hold valid and existing leasehold interests thereunder as of the date hereof and enjoys peaceful and undisturbed possession of all Leased Real Property. Other than assignments or security interests that have been or shall be terminated and released on or prior to the Closing Date, no Group Company has previously assigned its interest or granted any other security interest in any of the Real Property Leases. None of the Group Companies nor, to the Knowledge of the Company, any other party thereto, is in material breach of or default under, and no event has occurred which with notice or lapse of time or both would become a breach of or default under, any of the leases for the Leased Real Property, and no party to any Leased Real Property has given any written or, to the Knowledge of the Company, oral, claim or notice of any such material breach, default or event, which individually or in the aggregate, would be reasonably likely to be material to the Group Companies, taken as a whole. No Leased Real Property, or any portion thereof, is currently leased, sublet or sublicensed by any Group Company to a third party. No condemnation proceeding is pending or, to the Knowledge of the Company, threatened in writing with respect to any Leased Real Property, which individually or in the aggregate, would be reasonably likely to be material to the Group Companies, taken as a whole.
(c) The Owned Real Property and the Leased Real Property constitute all of the material real property used as of the date hereof in the conduct of the business as conducted by the Group Companies as of the date hereof.
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(d) The Group Companies own and have good and marketable title to, or a valid leasehold interest in or right to use, all of its material tangible assets or personal property, free and clear of all Liens other than: (i) Permitted Liens; and (ii) the rights of lessors under any leases. The material tangible assets or personal property of the Group Companies: (A) constitute all of the assets, rights and properties (other than the Intellectual Property of the Group Companies) that are necessary for the operation of the businesses of the Group Companies as they are now conducted, and taken together, are adequate and sufficient for the operation of the businesses of the Group Companies as currently conducted; and (B) have been maintained in all material respects in accordance with generally applicable accepted industry practice, are in good working order and condition, except for ordinary wear and tear and as would not, individually or in the aggregate, reasonably be expected to be material to the business of the Group Companies, taken as a whole.
3.09 Tax Matters. Except as set forth on Schedule 3.09 of the PubCo Disclosure Letters:
(a) each of the Group Companies has timely filed (taking into account all applicable extensions) all Tax Returns in all jurisdictions in which Tax Returns are required to be filed by it and all such Tax Returns are true, correct, and complete in all respects;
(b) all Taxes of the Group Companies (whether or not shown on any Tax Returns) that are due have been fully and timely paid;
(c) each of the Group Companies has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, shareholder, independent contractor or other third party;
(d) there are no Liens for Taxes (except Taxes not yet due and payable) on any of the assets of the Group Companies;
(e) there are no pending or threatened in writing disputes, claims, audits, examinations or other proceedings regarding any Taxes of the Group Companies or the assets of the Group Companies;
(f) no deficiency with respect to an amount of Taxes has been proposed, asserted or assessed against the Group Companies;
(g) no Group Company has any outstanding waivers or extensions of any applicable statute of limitations to assess any material amount of Taxes and there are no outstanding requests by a Group Company for any extension of time within which to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return outside the Ordinary Course of Business;
(h) there are no Tax indemnification agreements or Tax sharing agreements under which any Group Company could be liable after the Closing Date for any material Tax liability of any Person other than one or more of the Group Companies, except for customary agreements or arrangements entered into in the Ordinary Course of Business with customers, vendors, lessors, lenders and the like or other agreements, in each case, that do not relate primarily to Taxes;
(i) none of the Group Companies have constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code in the past two years; and
(j) no Group Company: (i) has any material liability for the Taxes of another Person (other than any Group Company) pursuant to Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Tax law) or as a transferee or a successor; nor (ii) in the last two (2) years has been a member of an affiliated, consolidated, combined or unitary group filing for U.S. federal, state or local income Tax purposes, other than a group the common PubCo of which was and is the PubCo (or another Group Company).
Notwithstanding any other provision in this Agreement, the representations and warranties in Section 1.09, this Section 3.09 and Section 3.14 are the only representations and warranties in this Agreement with respect to the Tax matters of the Group Companies and no representation or warranty is given under this Agreement with respect to any taxable period (or part thereof) that begins after the Closing Date.
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3.10 Contracts.
(a) Schedule 3.10 of the PubCo Disclosure Letter sets forth a true, correct and complete list of each Material Contract (as defined below) of the Group Companies that is in effect as of the date of this Agreement. For purposes of this Agreement: “Material Contract” shall mean each of the following contracts to which any of the Group Companies is a party or bound as of the date hereof, other than those that have expired or terminated or have been fully performed in accordance with their terms or that have no material, continuing rights or obligations thereunder, in each case as amended to date:
(i) each lease or agreement under which a Group Company is lessee of, or holds or operates any personal property owned by any other party, for which the annual rental exceeds $200,000 (excluding the Real Property Leases);
(ii) each contract (other than those entered into by the Group Companies in the Ordinary Course of Business and contracts that can be terminated on not more than 90 days’ notice) that involves future payments, performance or services to or by any of the Group Companies of any amount or value reasonably expected to exceed $500,000 in the 2025 calendar year or $1,000,000 in the aggregate;
(iii) each contract by which any Intellectual Property is licensed to or licensed from any of the Group Companies and that involves annual individual license or maintenance fees in excess of $200,000, other than pursuant to licenses to a Group Company with respect to off-the-shelf or other unmodified commercially available software, including software licensed under “click-wrap” or “shrink-wrap” agreements;
(iv) each material joint venture, profit-sharing, partnership, limited liability company or other similar agreement relating to the formation, operation, management or control of any joint venture, partnership or similar arrangement or licensing arrangement with a third party involving the sharing of profits of any of the Group Companies with such third party;
(v) each contract that prohibits any Group Company from competing in the business of the Group Companies as conducted as of the date hereof or in any geographic area or that restricts any Group Company’s ability to solicit or hire any person as an employee;
(vi) each contract with any director, officer, employee or equity holder of any Group Company (other than contracts relating to any person’s employment with a Group Company);
(vii) each contract under which any Group Company has made advances or loans to another Person, other than to another Group Company or with respect to employee advances for business expenses in the Ordinary Course of Business;
(viii) each contract relating to the incurrence, assumption or guarantee by any Group Company of any Indebtedness under which the principal amount outstanding thereunder payable by any Group Company is greater than $200,000, other than contracts solely between or among the Group Companies;
(ix) each contract with any labor union or collective bargaining association representing any employee of a Group Company;
(x) each contract for any merger, consolidation or business combination with another Person or the acquisition or sale of any Group Company or another entity or any material assets of a Group Company other than in the Ordinary Course of Business or for the grant to any Person of any preferential purchase rights to purchase any of its material assets;
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(xi) each contract evidencing an outstanding obligation of a Group Company to make payments, contingent or otherwise, arising out of the prior acquisition of the business, assets or stock of other Persons;
(xii) involves payment by the Group Companies in excess of $200,000 and is with any of the top five (5) suppliers of the Group Companies ranked by dollar volume of payment by the Group Companies;
(xiii) relates to a settlement of any Legal Proceeding for an amount greater than $200,000 entered into within three (3) years prior to the date of this Agreement or under which any Group Company has outstanding obligations (other than customary confidentiality or non-disparagement obligations);
(xiv) in the PubCo’s determination shall be required to be filed with the Form F-4 under applicable SEC requirements pursuant to Items 601(b)(1), (2), (4), (9) or (10) of Regulation S-K under the Securities Act if the PubCo was the registrant; or
(xv) provides another Person (other than another Group Company) with a power of attorney other than in the Ordinary Course of Business.
(b) With respect to each Material Contract, as of the date hereof (i) such Material Contract is the legal and valid obligation of the Group Company party thereto, and, to the Knowledge of PubCo, of each other party thereto, enforceable against each of the Group Companies and, to the Knowledge of PubCo, each other party thereto, in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other legal requirements relating to or affecting creditors’ rights generally or by equitable principles (regardless of whether enforcement is sought at law or in equity), (ii) no Group Company has given a written notice of its intent to terminate, materially modify, materially amend or otherwise materially alter the terms and conditions of any Material Contract or has received any written claim of default under any Material Contract, other than defaults that have been cured or waived in writing or would not reasonably be expected to have a Material Adverse Effect, and (iii) neither any Group Company thereto nor, to PubCo’s Knowledge, any other party to any Material Contract is in material breach of or in material default under any Material Contract.
3.11 Intellectual Property and Data Security.
(a) Schedule 3.11(a) of the PubCo Disclosure Letter sets forth: as of the date hereof, (i) all Group Company Registered Intellectual Property, specifying as to each item, as applicable: (A) the title of the item, (B) the owner of the item, (C) the jurisdictions in which the item is issued or registered or in which an application for issuance or registration has been filed and (D) the issuance, registration or application numbers and dates (if applicable). Schedule 3.11(a) of the PubCo Disclosure Letter sets forth all Intellectual Property licenses, sublicenses and other agreements or permissions that are material to the Group Companies’ main businesses as currently conducted (“Group Company IP Licenses”) (other than (i) “shrink wrap,” “click wrap,” and “off the shelf” software agreements and other agreements for Software commercially available to the public generally (collectively, “Off-the-Shelf Software”) and (ii) licenses, sublicenses and other agreements for any Group Company to use Intellectual Property owned by any third party specified in commercial agreements entered into in the Ordinary Course of Business of the Group Companies), under which a Group Company is a licensee or otherwise is authorized to use or practice any material Intellectual Property. Each item of Registered Intellectual Property that is (i) necessary and material for the Group Company’s material business or operations as conducted as of the Closing (the “Group Company Business”) and (ii) owned by any Group Company (“Group Company Registered Intellectual Property”) is subsisting. Each Group Company owns, free and clear of all Liens (other than Permitted Liens) all Group Company Registered Intellectual Property, and where applicable, all assignments have been duly recorded with any governmental agencies or other Intellectual Property offices reflecting the correct ownership of such Group Company Registered Intellectual Property in the applicable Group Company name(s). Each Group Company has a valid and enforceable license to use all material Intellectual Property that is the subject of the Group Company IP Licenses applicable to such Group Company. To the Knowledge of the PubCo, the Group Company IP Licenses include all of the licenses, sublicenses and other agreements or permissions for material Intellectual Property necessary to operate the Group Companies as presently conducted. Each Group Company has performed all material obligations imposed on it in the applicable Group Company IP Licenses, and such Group Company is not in material breach or material default thereunder in any material respect by any Group Company thereunder.
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(b) As of the date hereof, no Group Company is currently infringing, or has, in the past five (5) years received any written notice that the conduct of the Group Company Business violates or infringes any Intellectual Property rights of any other Person, nor, to the Knowledge of PubCo, does the conduct of Group Company Business violate or infringe any valid and enforceable Registered Intellectual Property of any other Person. To the Knowledge of PubCo, no third party is infringing, in any material respect, any of the Group Company Registered Intellectual Property. No Legal Proceeding is pending, and, to the PubCo’s Knowledge, no Legal Proceeding is threatened against a Group Company that challenges the validity, enforceability, ownership, or right to use, sell, license or sublicense any material Intellectual Property currently owned, licensed, used or held for use by the Group Companies for the Group Company Business. There are no Orders to which any Group Company is a party, or is otherwise materially affected thereby, that restrict the rights of a Group Company to use, transfer, license or enforce any material Intellectual Property owned by a Group Company or restrict the conduct of the Group Company Business in any material respects.
(c) Each of the employees, consultants or contractors of the Group Companies who have contributed to or participated in the discovery, creation or development of any material Group Company Registered Intellectual Property (“Personnel”) (i) has assigned to PubCo, or is under a valid obligation to assign to the Group Companies by contract or otherwise, all right, title and interest in such Intellectual Property, or (ii) is a party to a valid “work for hire” agreement under which the Group Companies are deemed to be the original author/owner of all subject matter included in such Group Company Registered Intellectual Property; or (iii) to the extent the Personnel do not have the ability to take any of the actions described in the foregoing clauses (i) or (ii), has granted to the Group Companies a license or other legally enforceable right granting the Group Companies to use such Group Company Registered Intellectual Property.
(d) The Group Companies have taken commercially reasonable measures to maintain and protect the secrecy, confidentiality and value of the Trade Secrets of Group Company Business. To the Knowledge of the PubCo, no unauthorized disclosure of any such Trade Secret has been made as of the date hereof. The Group Companies have taken commercially reasonable efforts to maintain, protect and enforce the Intellectual Property owned or licensed by them.
(e) Subject to any necessary notices and consents, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and thereby shall not result in the forfeiture, cancellation, termination or other material impairment of, or give rise to any right of any Person to cancel, terminate or otherwise impair the right of the Group Companies to own or use or otherwise exercise any other rights that the Group Companies currently have with respect to any Intellectual Property that is, individually or in the aggregate, material to the Group Companies.
(f) The Group Company Registered Intellectual Property is sufficient for the Group Companies to carry on the business in all material respects from and after the Effective Date as presently carried on by the Group Companies, consistent with past practice. After the Effective time, the Group Companies shall continue to have the right to use all Group Company IP Licenses on identical terms and conditions as the Group Companies enjoyed immediately prior to the Closing. To the Knowledge of the PubCo, no funding, facilities, material, information, Intellectual Property or personnel of a university, college, other educational institution or research center or Governmental Entity were used, directly or indirectly, in the development or commercialization, in whole or in part, of any Group Company Registered Intellectual Property and no such entity has any right, title or interest in or to any Group Company Registered Intellectual Property.
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(g) To the Knowledge of the PubCo, each of the Group Companies, and any Processor, to the extent that such Processor was Processing Personal Information on behalf of any Group Company, has at all times during the past two (2) years materially complied with: (i) all applicable Privacy Laws; and (ii) all of the Group Companies’ obligations regarding Personal Information under any contracts; in each case other than any non-compliance that, individually or in the aggregate, would not reasonably be expected to have a PubCo Material Adverse Effect. To the Knowledge of the PubCo, none of the Group Companies has received in the two (2) years prior to the date of this Agreement any written notice of any investigations or claims relating to, or been charged with, any violation of, any Privacy Laws, other than any such investigation, claims or charges that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. To the Knowledge of the PubCo, each of the Group Companies has implemented and maintained commercially reasonable business continuity and security, including back-ups, disaster recovery and security plans, procedures and facilities, regarding the confidentiality, integrity and availability of PubCo IT Systems and Personal Information, in its possession, custody, or under its control, including against loss, theft, misuse or unauthorized Processing, access, use, modification or disclosure. To the Knowledge of the PubCo during the past two (2) years, (i) there have been no material breaches, security incidents, misuse of, or unauthorized Processing of, access to, or disclosure of, any Personal Information in the possession, custody, or control of any of the Group Companies, Processed by the Group Companies (each, a “Personal Information Breach”); (ii) none of the Group Companies have experienced any material information security incident that has materially compromised the integrity or availability of the PubCo IT Systems or the data thereon; and (iii) none of the Group Companies have provided or been legally required to provide any notices to any Person in connection with any Personal Information Breach; in each case, other than any Personal Information Breaches that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
3.12 Legal Proceedings; Orders. Except as disclosed in Schedule 3.12 of the PubCo Disclosure Letter, there are no Legal Proceedings pending and, to the Knowledge of PubCo, there are no Legal Proceeding threatened orally or in writing, against any of the Group Companies or any of its officers or directors, other than any such Legal Proceeding that does not involve an amount in controversy in excess of $100,000 and does not seek material injunctive or other material non-monetary relief. There is no Order outstanding as of the date hereof (whether rendered by a Governmental Entity or by arbitration) against any Group Company or by which any Group Company is bound that involves an unsatisfied monetary obligation in excess of $100,000 or would reasonably be expected to have a Material Adverse Effect. To the Knowledge of PubCo, there are (a) no facts or circumstances that would reasonably be expected to give rise to any material Legal Proceeding, (b) no pending or threatened in writing Legal Proceedings by any of the Group Companies against any third party; and (c) no settlement or similar agreement that imposes any material ongoing obligations or restrictions on any of the Group Companies.
3.13 Consents. Except as disclosed in Schedule 3.13 of the PubCo Disclosure Letter, no additional approval, consent, waiver or authorization of, no Order or filing with, and no notice to, any Governmental Entity or Real Property Lease is or shall be required to be obtained or made by or on behalf of any Group Company in connection with the execution, delivery or performance of this Agreement or the consummation of the Merger, except (a) for the registration of the Merger Documents (including the Plan of Merger) by the Cayman Registrar and (b) as would not result in a Material Adverse Effect.
3.14 Employee Benefits.
(a) Set forth on Schedule 3.14 of the PubCo Disclosure Letter is a true and complete list of China Social Insurance Benefits that each Group Company maintains and makes required contributions to for the full-time employees of the Group Companies. No Group Company is subject to ERISA and for the purposes of ERISA, China Social Insurance Benefits may be deemed to be a Foreign Plan. Other than the China Social Insurance Benefits on Schedule 3.14 of the PubCo Disclosure Letter, no Group Company has within the past ten (10) years maintained or contributed to (or had an obligation to contribute to) any PubCo Employee Benefit Plan.
(b) Except as set forth on Schedule 3.14 of the PubCo Disclosure Letter, with respect to such China Social Insurance Benefits: (i) such China Social Insurance Benefits have been administered and enforced in all material respects in accordance with its terms and the requirements of all applicable Laws, and has been maintained, where required, in good standing in all material respects with applicable regulatory authorities and Governmental Authorities; (ii) no breach of fiduciary duty that would result in material Liability to any Group Company has occurred; (iii) no action that would result in a material Liability to any Group Company is pending, or to the PubCo’s Knowledge, threatened (other than routine claims for benefits arising in the ordinary course of administration); and (iv) all required contributions with respect to such China Social Insurance Benefits have been timely made. The Group Companies are, and have since their respective incorporation been, in compliance in all material respects with all applicable Laws regarding the China Social Insurance Benefits.
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(c) The consummation of the transactions contemplated by this Agreement and the Transaction Agreements will not: (i) entitle any individual to severance pay, unemployment compensation or other benefits or compensation under any applicable Law; or (ii) accelerate the time of payment or vesting, or increase the amount of any compensation due, or in respect of, any director, employee or independent contractor of a Group Company.
3.15 Insurance. The Group Companies have in full force and effect all material policies or binders of property, fire and casualty, product liability, cyber security, workers’ compensation, and other forms of insurance held by, or for the benefit of, the Group Companies as of the date of this Agreement. With respect to each insurance policy all policies of insurance maintained by, or for the benefit of, each Group Company as of the date hereof, no Group Company or, to the Knowledge of PubCo, insurer, is in material breach or material default (including with respect to the payment of premiums or the giving of notices), under such policy and all premiums on such insurance policies due and payable as of the date hereof have been paid. All such policies as set forth in Schedule 3.15 of the PubCo Disclosure Letter and are in full force and effect and no written notice of early cancellation or early termination has been received by any Group Company as of the date hereof with respect to any such policy and the policy limits have not been exhausted. All claims, occurrences, litigation and circumstances that could reasonably expected by any Group Company lead to a claim what would be covered by insurance policies have been properly reported to the applicable insurer in a timely fashion, except where the failure to report such a claim, occurrence, litigation or circumstance would not reasonably be expected to have a Material Adverse Effect. There is no pending material claim by any Group Company against any insurance carrier for which coverage has been denied or disputed by the applicable insurance carrier (other than a customary reservation of rights notice), which individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect.
3.16 Legal Requirements and Permits.
(a) Each of the Group Companies has during the past three (3) years complied in all material respects with, and is in compliance in all material respects with all applicable Legal Requirements. No written, or to the Knowledge of the PubCo, oral notice of material non-compliance with any applicable Legal Requirements has been received during the past two (2) years by any of the Group Companies. To the Knowledge of PubCo, as of the date hereof no Group Company is under investigation by any Governmental Entity with respect to any alleged material violation of any applicable legal requirements.
(b) Except for such failures or non-compliance as would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect, (i) the Group Companies have been granted all licenses, permits, consents, approvals, franchises and other authorizations required to be obtained under any Legal Requirement (each a “Permit”) necessary for and material to the conduct of the business taken as a whole (collectively, the “Material Permits”), (ii) the Material Permits are valid and in full force and effect and each Group Company is in compliance with all of its Material Permits in all material respects and (iii) as of the date hereof there is no lawsuit or similar proceeding pending or, to the Knowledge of PubCo, threatened, to revoke, suspend, withdraw or terminate any Material Permit. Except as set forth on Schedule 3.16 of the PubCo Disclosure Letter, no Legal Proceeding is pending or, to the Knowledge of the Company, threatened, to suspend, revoke, withdraw, modify or limit any such Permit, except where the failure to have such Permits would not, individually or in the aggregate, reasonably be expected to have a PubCo Material Adverse Effect.
3.17 Environmental Matters.
(a) Each of the Group Companies is in compliance with all Environmental Laws, which compliance includes the possession by the Group Companies of all Permits, licenses, consents, approvals and other governmental authorizations required under Environmental Laws except as would not result in a Material Adverse Effect. Schedule 3.17(a) of the PubCo Disclosure Letter sets forth each license or certificate held by the Group Companies required under applicable Environment Laws.
(b) (i) There is no Environmental Claim pending as of the date hereof or, to the Knowledge of the PubCo, threatened against any of the Group Companies that has not been fully resolved and (ii) to the Knowledge of PubCo, there has been no release of any Hazardous Materials at any Leased Real Property that would reasonably be expected to result in any material liability against the Group Companies, including any cleanup liability, under Environmental Laws and no handling, storage or generation of wastes containing Hazardous Materials by the Group Companies against the Group Companies under Environmental Laws, except, in each case, as would not result in a Material Adverse Effect.
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(c) No Group Company is subject to any Order issued specifically with respect to the Group Companies or the Leased Real Property that has not been fully resolved relating to compliance with, or the Release or cleanup of Hazardous Materials under, any Environmental Laws.
3.18 Relationships with Related Persons. Other than those disclosed in Schedule 3.18 of the PubCo Disclosure Letter, the Group Companies are not parties to any contracts with any Affiliate, shareholder, employee, member, manager, officer or director of any Group Company other than contracts governing an individual’s provision of services to the Group Companies and employee benefits and contracts between Group Companies. No Group Company has loaned or advanced any amounts that remain outstanding to or received any loans or advancement of any amounts from, any Affiliate, shareholder, employee, member, manager, officer or director of any Group Company, other than in the Ordinary Course of Business or intercompany loans between Group Companies, and no Group Company has borrowed funds from any of the foregoing that remains outstanding other than intercompany loans between Group Companies. No Affiliate, shareholder, employee, member, manager, officer or director of a Group Company (other than another Group Company) (a) owns any material property right, tangible or intangible, which is used by a Group Company in the conduct of its business or (b) owns, directly or, to the Knowledge of PubCo, indirectly, any Person that is a material customer, supplier, competitor or lessor of any Group Company. As of the date hereof there is no pending or, to the Knowledge of PubCo, threatened charge, complaint, arbitration, audit, investigation or other action brought by or on behalf of, or otherwise involving, any current or former employee, any person alleged to be a current or former employee, any applicant for employment, or any class of the foregoing, or any Governmental Entity, that involves the labor or employment relations and practices of any Group Company that would reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect.
3.19 Employees; Employment Matters and Independent Contractors.
(a) As of the date hereof, neither the PubCo nor any of the other Group Companies is or ever has been a party to or bound by any collective bargaining agreement, nor have any of them experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes. There has been no organizational effort made or, to the knowledge of PubCo, threatened, either currently or since the beginning of the calendar year that is seven years prior to the date of this Agreement, by or on behalf of any labor union with respect to the service providers of the PubCo or any of the Group Companies. Except as would not reasonably be expected to have a Material Adverse Effect, (i) each Group Company is in compliance with all applicable Laws respecting labor, employment, fair employment practices (including equal employment opportunity laws), terms and conditions of employment, classification of employees, workers’ compensation, occupational safety and health, immigration, affirmative action, employee and data privacy, plant closings, and wages and hours, (ii) all payments due from a Group Company on account of wages have been paid or properly accrued as a liability on the books of PubCo or the appropriate Group Company; and (iii) no Group Company is liable for any material payment to any Governmental Entity with respect to unemployment compensation benefits, social security or other benefits or obligations for employees, independent contractors or consultants (other than routine payments to be made in the Ordinary Course of Business and consistent with past practice).
(b) No current officer of a Group Company has provided any Group Company written notice of his or her plan to terminate his or her employment with such Group Company. Additionally, none of the ten-highest paid employees or officers of a Group Company has, to the Knowledge of the PubCo, given oral notice of his or her plan to terminate his or her employment with any Group Company.
(c) During the past two (2) years, to the Knowledge of the PubCo, there have been no employment discrimination or employment or sexual harassment or sexual misconduct allegations raised, brought, threatened, or settled, in each case in writing, relating to any current or former appointed officer or director or employee at the level of vice president or above of any Group Company involving or relating to his or her services provided to any Group Company. During the past two (2) years, none of the Group Companies has entered into any material settlement agreements resolving, in whole or in part, allegations of sexual harassment or sexual misconduct by any current or former appointed officer or director or employee at the level of vice president or above. There are no pending, or to the PubCo’s Knowledge, threatened or reasonably anticipated, claims or actions against any of the Group Companies by any employee in connection with such employee’s employment or termination of employment by the Group Companies.
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(d) Schedule 3.19(d) of the PubCo Disclosure Letter contains a list of all independent contractors (including consultants) currently engaged by any Group Company and its agreement relating to their engagement. All of such independent contractors are a party to a written contract with a Group Company. For the purposes of applicable Law, including the Code, all independent contractors who are currently, or within the last six (6) years have been, engaged by a Group Company are bona fide independent contractors and not employees of a Group Company. For the purpose of this section, “independent contracts” means the individuals who are currently engaged by any Group Company to provide services and who are not full-time employees of any Group Company.
(e) Each employee and consultant of the Group Companies is terminable “at will” subject to applicable notice periods as set forth by law or in the employment agreement, but in any event not more than ninety (90) days, and there are no agreements or understandings between any Group Company and any of its employees or consultants that their employment or services shall be for any particular period. The Group Companies are in compliance in all material respects and, to the PubCo’s Knowledge, each of its employees and consultants is in compliance in all material respects, with the terms of the respective employment and consulting agreements between the Group Companies and such individuals. The Group Companies’ obligations to provide statutory severance pay to its employees are fully funded or accrued on the most recent PubCo Financial Statements and the PubCo has no Knowledge of any circumstance that could give rise to any valid claim by a current or former employee for compensation on termination of employment (beyond the statutory severance pay to which employees are entitled).
3.20 Brokers’ Fees. Other than those disclosed in Schedule 3.20 of the PubCo Disclosure Letter, no Group Company is liable for any investment banking fee, finder’s fee, brokerage payment or other like payment in connection with the origination, negotiation or consummation of the transactions contemplated herein that shall be the obligation of PubCo or any of the other Group Companies (following the Closing).
3.21 Absence of Certain Payments. As of the date of this Agreement, to the Knowledge of the PubCo, no employee of a Group Company has, and no agent or other Representative when acting on behalf of a Group Company has, in violation of Law (i) used any corporate funds for any contribution, gift, entertainment or other expense relating to political activity; (ii) made any direct or indirect payment to any foreign or domestic government official or employee from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other payment. No Group Company or, to the Knowledge of the PubCo, any of their respective directors, officers acting on behalf of a Group Company, is currently (i) identified on the specially designated nationals or other blocked person list or otherwise currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”), the U.S. Department of State, or other applicable Governmental Entity; (ii) incorporated, organized, resident, or located in, or a national of a comprehensively sanctioned country (currently, the Balkans, Belarus, Burma, Cote D’Ivoire (Ivory Coast), Cuba, Democratic Republic of Congo, Iran, Iraq, Liberia, North Korea, Sudan, Syria, and Zimbabwe); or (iii) in the aggregate, fifty (50) percent or greater owned, directly or indirectly, or otherwise controlled, by a person identified in clause (i) or (ii); and no Group Company has, directly or, knowingly, indirectly, used any funds, or loaned, contributed or otherwise made available such funds to any Subsidiary, joint venture partner or other Person, in connection with any sales or operations in any country comprehensively sanctioned by OFAC (as specified in clause (ii) of this Section), or for the purpose of financing the activities of any Person currently subject to, or otherwise in violation of, any U.S. sanctions administered by OFAC or the U.S. Department of State in the last five (5) fiscal years.
3.22 Books and Records. All books and records of the Group Companies are accurate and are maintained in accordance with applicable Laws, in each case, in all material respects.
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3.23 Company Investigations. Each of PubCo and Merger Sub acknowledges that it and its Representatives have received access to such books and records, facilities, equipment, contracts and other assets of the Company which it and its Representatives have desired or requested to review, and that they and their Representatives have had full opportunity to meet with the management of the Company and to discuss the business and assets of the Company. Each of PubCo and Merger Sub acknowledges and agrees that it has made its own inquiry and investigation into, and, based thereon, have formed an independent judgment concerning, the Company and their respective businesses and operations.
3.24 Takeover Statutes and Charter Provisions. The PubCo’s board of directors has made commercially reasonable efforts to cause that the restrictions on a “business combination” contained under any Laws that would otherwise be applicable to the PubCo and that are in effect as of the date of this Agreement are inapplicable to this Agreement. As of the date of this Agreement, no “fair price,” “moratorium,” “control share acquisition” or other antitakeover statute or similar Law applies with respect to any of the Group Companies in connection with this Agreement. As of the date of this Agreement, there is no stockholder rights plan, “poison pill” or similar antitakeover agreement or plan in effect to which any of the Group Companies is subject, party or otherwise bound.
3.25 Powers of Attorney. None of the Group Companies have any general or special powers of attorney outstanding (whether as grantor or grantee thereof) or any obligation or liability (whether actual, accrued, accruing, contingent, or otherwise) as guarantor, surety, co-signer, endorser, co-maker, indemnitor or otherwise in respect of the obligation of any Person.
3.26 Shareholder Approval and Board Approval. The sole director of the PubCo has, as of the date of this Agreement, (a) declared the advisability of the transactions contemplated by this Agreement, (b) determined that the transactions contemplated hereby are in the best interests of the PubCo Shareholders, and (c) subject to the effectiveness of the Form F-4 and receipt of the Regulatory Approvals, recommended that the PubCo Shareholders approve, authorize and adopt this Agreement, the Merger and the other transactions and vote in favor of the PubCo Proposals. The approval of a special resolution of PubCo Shareholders is the only vote of any class or series of shares of PubCo that is required to approve the PubCo Proposals (the “PubCo Required Vote”).
3.27 Investment Company. PubCo is not an “investment company,” a company controlled by an “investment company,” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.
NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY MADE BY THE PUBCO AND THE MERGER SUB IN THIS ARTICLE III, NEITHER PUBCO NOR MERGER SUB IS MAKING ANY REPRESENTATION OR WARRANTY TO COMPANY WITH RESPECT TO PUBCO, MERGER SUB, THEIR RESPECTIVE AFFILIATES OR ANOTHER PERSON OR THEIR RESPECTIVE BUSINESSES, OPERATIONS, ASSETS, LIABILITIES, CONDITION (FINANCIAL OR OTHERWISE) OR PROSPECTS, THIS, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE BY ANY PERSON TO COMPANY OF ANY DOCUMENTATION, FORECASTS, PROJECTIONS OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING. COMPANY MAY NOT RELY ON ANY SUCH OTHER DOCUMENTATION, FORECASTS, PROJECTIONS ORNOTHER INFORMATION AS A REPRESENTATION OF PUBCO, MERGER SUB, THEIR RESPECTIVE AFFILIATES OR SHAREHOLDERS IN DETERMINING TO ENTER INTO THIS AGREEMENT. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NONE OF THE PUBCO, MERGER SUB, THEIR RESPECTIVE AFFILIATES OR THEIR RESPECTIVE SHAREHOLDERS SHALL HAVE, OR BE SUBJECT TO, ANY LIABILITY UNDER THE TRANSACTION DOCUMENTS TO COMPANY, ITS SHAREHOLDERS OR AFFILIATES RESULTING FROM THE DISTRIBUTION TO, OR USE BY, ANY OF THEM OF ANY SUCH DOCUMENTATION, FORECASTS, PROJECTIONS OR OTHER INFORMATION FURNISHED OR MADE AVAILABLE TO ANY OF THEM OR THEIR RESPECTIVE REPRESENTATIVES, INCLUDING ANY INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE TO ANY OF THEM IN ANY DATA ROOM, MANAGEMENT PRESENTATIONS OR IN ANY OTHER FORM IN EXPECTATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT IN THE CASE OF FRAUD. ALL OTHER REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, ARE EXPRESSLY DISCLAIMED BY THE PUBCO AND THE MERGER SUB.
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ARTICLE IV
COVENANTS OF THE COMPANY
4.01 Operations of the Company Prior to the Closing.
(a) From the date hereof until the earlier of the termination of this Agreement and the Closing Date, and except as contemplated by this Agreement or with the prior written approval of PubCo (which approval shall not be unreasonably withheld, conditioned or delayed), the Company shall (i) conduct its business, in all material respects, in the Ordinary Course of Business, (ii) comply with all applicable Laws, (iii) use commercially reasonable efforts to keep available the services of their respective officers and employees and (iv) not take any of the following actions:
(i) take any action in violation or contravention of any of the Company’s Governing Documents, applicable Law or any applicable rules and regulations of the SEC and Nasdaq;
(ii) split, combine or reclassify the Company Shares;
(iii) except pursuant to promissory notes issued for working capital purposes (the “Working Capital Loans”) or in connection with any extension of the time period within which the Company must complete its initial business combination in accordance with its Governing Documents (the “Extension Loans”), authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other security interests, including any securities convertible into or exchangeable for any of its equity securities or other security interests of any class and any other equity-based awards, or engage in any hedging transaction with a third Person with respect to such equity securities or other security interests;
(iv) make any redemption or purchase of its equity interests, except pursuant to the Offer or as otherwise required under its Governing Documents;
(v) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its equity securities;
(vi) effect any recapitalization, reclassification, equity split or like change in its capitalization;
(viii) make any amendment or modification to the Company Trust Agreement, except pursuant to the Offer or in connection with the Extension;
(ix) make or allow to be made any reduction or increase in the Company Trust Amount, other than as expressly permitted by the Company’s Governing Documents or the Company Trust Agreement;
(x) incur any indebtedness, expenses or any other financial obligations that shall become the obligations of the Surviving Company at or following the Effective Time or issue or sell any debt securities or warrants or rights to acquire any debt securities of the Company or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any Person for indebtedness, except for any Extension Loans, Working Capital Loans, or Company Transaction Costs;
(xi) intentionally omitted;
(xii) establish any Subsidiary or acquire any interest in any asset;
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(xiii) prepare or file any Tax Return materially inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is materially inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods (including materially inconsistent positions, elections or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions to periods ending on or before the Closing Date);
(xiv) settle or otherwise compromise any material Claim relating to Taxes, enter into any closing agreement or similar agreement relating to Taxes, otherwise settle any material dispute relating to Taxes, or request any ruling or similar guidance with respect to Taxes;
(xv) except in connection with an Extension, amend, waive or terminate, in whole or in part, any other material agreement to which the Company is a party;
(xvi) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(xvii) adopt any Company Employee Benefit Plan; or
(xviii) enter into any agreement or commitment to do any of the foregoing, or any action or omission that would result in any of the foregoing.
(b) Notwithstanding anything to the contrary in this Section 4.01, nothing in this Agreement shall prohibit or restrict the Company from extending one or more times, in accordance with the Company’s Governing Documents, or by amendment to the Company’s Governing Documents, the deadline by which it must complete its initial business combination (each, an “Extension”), and no consent of any other Party shall be required in connection therewith.
(c) Nothing contained in this Agreement shall give the PubCo or Merger Sub, directly or indirectly, the right to control or direct the Company’s operations prior to the Closing.
4.02 Access to Books and Records. Subject to Section 4.01(a)(xi), from the date hereof until the earlier of the termination of this Agreement and the Closing Date, the Company shall provide PubCo and its authorized Representatives reasonably acceptable to the Company (the “PubCo’s Representatives”) with reasonable access during normal business hours, and upon reasonable notice, to the offices, properties, senior personnel, and all financial books and records (including Tax records) of the Company in order for PubCo to have the opportunity to make such investigation as it shall reasonably desire in connection with the consummation of the transactions contemplated hereby; provided, however, that in exercising access rights under this Section 4.02, PubCo and the PubCo’s Representatives shall not be permitted to interfere unreasonably with the conduct of the business of the Company and such access shall be subject, at all times, to the terms and conditions of the Non-Disclosure Agreement signed by PubCo and the Company and dated July 8, 2024. Notwithstanding anything contained herein to the contrary, no such access or examination shall be permitted to the extent that it would require the Company to disclose information subject to attorney-client privilege or attorney work-product privilege, conflict with any third-party confidentiality obligations to which the Company is bound, or violate any applicable Law. Notwithstanding anything contained herein to the contrary, no access or examination provided pursuant to this Section 4.02 shall qualify or limit any representation or warranty set forth herein or the conditions to the Closing set forth in Section 7.03(a).
4.03 Company Confidentiality. Prior to the Closing, the Company shall not disclose any Confidential Information of PubCo and Merger Sub, except to the Company’s (i) legal and financial advisors who are subject to a duty to maintain the confidentiality of any such information and (ii) employees and contractors who need to know such information for the evaluation, negotiation and consummation of the transactions contemplated hereby and have signed confidentiality agreements or are otherwise bound by confidentiality obligations at least as restrictive as those contained herein, provided that the Company shall remain responsible for each such person’s compliance with this Section 4.03. The Company shall not be in violation of this Section 4.03 with regard to any disclosure in response to a valid Order or other Legal Requirement, provided that the Company (i) gives PubCo prompt written notice of such requirement prior to disclosure and provides reasonable assistance to PubCo in efforts to obtain an order protecting such Confidential Information from public disclosure or (ii) if such notice is prohibited by law, uses reasonable efforts to seek to obtain confidential treatment for, and otherwise prevent disclosure of, such Confidential Information. The Company shall notify PubCo in writing promptly upon any unauthorized use or disclosure of Confidential Information of PubCo or Merger Sub of which it becomes aware. Notwithstanding the foregoing, however, the provisions of that certain Non-Disclosure Agreement signed by PubCo and the Company and dated July 8, 2024 shall remain in full force effect and to the extent that any part of this Section 4.03 is in conflict with such Non-Disclosure Agreement, the provisions of this Section 4.03 shall control.
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4.04 Efforts to Consummate. Subject to the terms and conditions herein provided, from the date hereof until the earlier of the termination of this Agreement and the Closing Date, the Company shall use commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement (including the satisfaction, but not a waiver, of the closing conditions set forth in Section 7.01 and Section 7.03); provided, that such efforts shall not require agreeing to any obligations or accommodations (financial or otherwise) binding on the Company in the event the Closing does not occur. The Parties acknowledge and agree that nothing contained in this Section 4.04 shall limit, expand or otherwise modify in any way any efforts standard explicitly applicable to any of the Company’s obligations under this Agreement.
4.05 Exclusive Dealing. During the period from the date hereof through the Closing or the earlier termination of this Agreement, the Company shall not take any action to knowingly initiate, solicit or engage in discussions or negotiations with, or knowingly provide any information to, any Person (other than PubCo and Merger Sub and their respective Representatives or as contemplated by this Agreement and the other Transaction Documents) concerning any alternative business combination transaction involving the Company, including any purchase or sale of equity or assets of the Company by any other Person, any purchase or sale of equity or assets of any other Person by the Company, any merger, combination or recapitalization of the Company or any Subsidiary thereof or any merger, combination or recapitalization of any other Person in a transaction to which the Company or any Subsidiary thereof is a party (each such transaction, a “Company Acquisition Transaction”); provided that this Section 4.05 shall not apply to the Company in connection with communications to its shareholders related to the transactions contemplated by this Agreement. The Company shall, and shall cause its Subsidiaries to, cease and cause to be terminated any existing discussions, communications or negotiations with any Person (other than PubCo and Merger Sub and their respective Representatives) conducted heretofore with respect to any Company Acquisition Transaction. In the event that any unsolicited inquiry is made by a potential party to a Company Acquisition Transaction, whether formal or informal, Company shall promptly notify PubCo that such contact has occurred and provide the name of the Person who made such contact and if terms were proposed, what terms were so proposed.
4.06 Notification. From the date hereof until the earlier of the termination of this Agreement and the Closing Date, if the Company becomes aware of any fact or condition arising after the date hereof that constitutes a breach of any representation or warranty made by the Company in ARTICLE II or of any covenant, in each case that would cause the conditions set forth in Section 7.02(a) or Section 7.02(b), as applicable, not to be satisfied as of the Closing Date, the Company shall disclose in writing to PubCo such breach.
ARTICLE
V
COVENANTS OF PUBCO AND MERGER SUB
5.01 Operations of PubCo and Merger Sub Prior to Closing.
(a) From the date hereof until the earlier of the termination of this Agreement and the Closing Date, except (i) if the Company shall have consented (which consent shall not be unreasonably withheld, conditioned or delayed) after notice has been provided by PubCo or (ii) as otherwise contemplated by this Agreement, PubCo (A) shall conduct its business and the businesses of the other Group Companies in the Ordinary Course of Business and use commercially reasonable efforts to keep available the services of its and the other Group Companies’ officers and employees; and (B) shall and shall cause the Group Companies to, keep all insurance policies currently in effect, or policies that are substantially similar in all material aspects with the terms, conditions, retentions, and limits of liability under the insurance in effect as of the date hereof, provided that, notwithstanding the foregoing or clause (A) or (B) of this Section 5.01, PubCo may use available cash to repay up to $500,000 of any Indebtedness outstanding as of the date of this Agreement; and (C) shall not, and shall not permit any Group Company to:
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(i) except for issuances of (A) replacement certificates for PubCo Ordinary Shares, (B) new certificates for PubCo Ordinary Shares in connection with a transfer of PubCo Ordinary Shares by the holder thereof, or (C) securities in connection with a PIPE Investment, sell or deliver any of its or any of its Subsidiaries’ equity securities or issue or sell any securities convertible into, or options with respect to, or warrants to purchase or rights to subscribe for, any of its or any of its Subsidiaries’ equity securities;
(ii) effect any recapitalization, reclassification, equity split or like change in its capitalization;
(iii) except for any amendments necessary to consummate the transactions contemplated by this Agreement and the other Transaction Documents, amend the PubCo’s Governing Documents or any of its Subsidiaries’ organizational documents;
(iv) make any distribution of cash or property or otherwise declare or pay any dividend on, or make any payment on account of, the purchase, redemption, defeasance, retirement or other acquisition of, any of its common shares, as applicable, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property.
(v) (A) sell, assign or transfer any material portion of its tangible assets, except in the Ordinary Course of Business for (1) inventory assets and (2) non-inventory assets having an aggregate value of less than $200,000 and except for sales of obsolete assets or assets with de minimis or no book value; or (B) mortgage, encumber, pledge, or impose any Lien upon any of its assets, except for Permitted Liens or in the Ordinary Course of Business;
(vi) materially amend or voluntarily terminate any Material Contract or Real Property Leases other than in the Ordinary Course of Business;
(vii) make any capital investment in, or any advance or loan to, any other Person (other than among the Group Companies);
(viii) enter into any other transaction with any of its directors, officers or employees outside the Ordinary Course of Business;
(ix) cancel any material third-party indebtedness owed to any Group Company;
(x) make or change any material election in respect of Taxes or material method of accounting or accounting policies of any Group Company, in each case unless required by Law or GAAP;
(xi) file any Tax Return materially inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is materially inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods (including materially inconsistent positions, elections or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions to periods ending on or before the Closing Date);
(xii) make any acquisition of a business or a division thereof, or consummate any merger or similar business combination or enter into any binding agreement for such an acquisition, merger or similar business combination with any Person (provided that (A) non-binding letters of interests shall not be considered a binding agreement solely due to binding provisions related to exclusivity, expenses, confidentiality, choice of law or other similar matters, and (B) licenses of intellectual property rights (whether exclusive or non-exclusive) shall not be deemed to be an acquisition, merger or similar business combination);
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(xiii) incur any Indebtedness or issue or sell any debt securities or warrants or rights to acquire any debt securities of PubCo or any of its Subsidiaries or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any Person (other than a wholly owned Subsidiary of PubCo for Indebtedness) (except for (A) in connection with refinancing of existing Indebtedness on terms no less favorable to PubCo than, and in an aggregate principal amount not in excess of, such existing Indebtedness or (B) borrowings under or permitted by the existing credit facilities of the Group Companies set forth on Schedule 3.10(a)(viii) of the PubCo Disclosure Letter; or
(xiv) agree, whether orally or in writing, to do any of the foregoing, or agree, whether orally or in writing, to any action or omission that would result in any of the foregoing.
(b) Nothing contained in this Agreement shall give the Company, directly or indirectly, the right to control or direct PubCo’s or any of its Subsidiaries’ operations prior to the Closing
5.02 Access to Books and Records. During the period from the date hereof through the Closing or the earlier termination of this Agreement and the Closing Date, PubCo shall provide the Company and its authorized Representatives reasonably acceptable to the Company (the “Company’s Representatives”) with reasonable access, during normal business hours, and upon reasonable notice, to the books and records (including Tax records) of the Group Companies all financial books and records (including Tax records) of the Group Companies in order for Company to have the opportunity to make such investigation as it shall reasonably desire in connection with the consummation of the transactions contemplated hereby; provided, however, that in exercising access rights under this Section 5.02 Company’s Representatives shall not be permitted to interfere unreasonably with the conduct of the business of the PubCo or any of its Subsidiaries and such access shall be subject, at all times, to the terms and conditions of the Non-Disclosure Agreement signed by Great Rich Technologies Limited and the Company and dated July 8, 2024. Notwithstanding anything contained herein to the contrary, no such access or examination shall be permitted to the extent that it would require the PubCo to disclose information subject to attorney-client privilege or attorney work-product privilege, conflict with any third-party confidentiality obligations to which the Company is bound, or violate any applicable Law. Notwithstanding anything contained herein to the contrary, no access or examination provided pursuant to this Section 5.02 shall qualify or limit any representation or warranty set forth herein or the conditions to the Closing set forth in Section 7.02(a).
5.03 PubCo Confidentiality. Prior to the Closing, PubCo shall not disclose any Confidential Information of the Company, except to PubCo’s (i) legal and financial advisors who are subject to a duty to maintain the confidentiality of any such information and (ii) employees and contractors who need to know such information for the evaluation, negotiation and consummation of the transactions contemplated hereby and have signed confidentiality agreements or are otherwise bound by confidentiality obligations at least as restrictive as those contained herein; provided that PubCo shall remain responsible for each such person’s compliance with this Section 5.03. PubCo shall not be in violation of this Section 5.03 with regard to any disclosure in response to a valid Order or other Legal Requirement, provided that PubCo (i) gives the Company prompt written notice of such requirement prior to disclosure and provides reasonable assistance to the Company in efforts to obtain an order protecting such Confidential Information from public disclosure or (ii) if such notice is prohibited by law, uses reasonable efforts to seek to obtain confidential treatment for, and otherwise prevent disclosure of, such Confidential Information. PubCo shall notify the Company in writing promptly upon any unauthorized use or disclosure of the Confidential Information of the Company of which it becomes aware. Notwithstanding the foregoing, however, the provisions of that certain Non-Disclosure Agreement signed by Great Rich Technologies Limited, the subsidiary in which PubCo indirectly has 50.6% ownership (via equity or contractual arrangement), and the Company and dated July 8, 2024 shall remain in full force effect, PubCo hereby agrees the terms and conditions of such Non-Disclosure Agreement shall be binding on it as if it were a direct signatory thereto, and to the extent that any part of this Section 5.03 is in conflict with such Non-Disclosure Agreement, the provisions of this Section 5.03 shall control.
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5.04 Exclusive Dealing. During the period from the date hereof through the Closing or the earlier termination of this Agreement, none of PubCo or Merger Sub shall take any action to knowingly initiate, solicit or engage in discussions or negotiations with, or knowingly provide any information to, any Person (other than the Company and the Company’s Representatives) concerning an initial public offering, recapitalization or refinancing of any member of the Group Companies (other than as contemplated by this Agreement and the other Transaction Documents), any purchase of a majority of the outstanding PubCo Ordinary Shares or any merger, sale of a majority of the assets of the Group Companies or similar transactions involving the Group Companies or their respective securities (other than assets sold in the Ordinary Course of Business and licenses (whether exclusive or non-exclusive) of the intellectual property rights of a third Person) (each such transaction, an “Alternative Transaction”); provided that this Section 5.04 shall not apply to PubCo or PubCo’s Representatives in connection with shareholder communications related to the transactions contemplated by this Agreement and the other Transaction Documents or the execution, delivery and performance thereof. PubCo shall, and shall cause its Subsidiaries to, cease and cause to be terminated (a) any existing discussions, communications or negotiations with any Person (other than the Company and the Company’s Representatives) conducted heretofore with respect to any Alternative Transaction and (b) any such Person’s and its authorized Representatives’ access to any electronic data room granted in connection with any acquisition transaction.
5.05 Notification. From the date hereof until the earlier of the termination of this Agreement and the Closing Date, if after the date hereof PubCo has Knowledge of any fact or condition that constitutes a breach of any representation or warranty made in ARTICLE III or any covenant that would cause the conditions set forth in Section 7.03(a) or Section 7.03(b) as applicable, not to be satisfied as of the Closing Date, PubCo shall disclose in writing to the Company such breach.
5.06 Efforts to Consummate. Subject to the terms and conditions herein provided, from the date hereof until the earlier of the termination of this Agreement and the Closing Date, PubCo and Merger Sub shall use and cause each Group Company to use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement (including the satisfaction, but not waiver, of the Closing conditions set forth in ARTICLE VII). The Parties acknowledge and agree that nothing contained in this Section 5.06 shall limit, expand or otherwise modify in any way any efforts standard explicitly applicable to any of PubCo’s or Merger Sub’s respective obligations under this Agreement.
5.07 Audited Financial Statements. As promptly as reasonably practicable following the date hereof, PubCo shall deliver to the Company (i) the audited consolidated balance sheets of the Group Companies as of June 30, 2024 and 2023 and consolidated statement of comprehensive income, statement of shareholders’ equity and convertible preferred shares and consolidated statements of cash flows of the Group Companies for each of the periods then ended, audited in accordance with the standards of the U.S. Public Company Accounting Oversight Board (the “PCAOB”) and containing an unqualified report of the Company’s auditors (the “Closing Company Audited Financial Statements”) and (ii) an unaudited consolidated balance sheet of the Group Companies and consolidated statement of comprehensive income, statement of shareholders’ equity and convertible preferred shares and consolidated statements of 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 Form F-4, Proxy Statement, and any other filings to be made by the Company or PubCo with the SEC in connection with the Merger. 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 Form F-4, Proxy Statement, and any other filings to be made by the Company or PubCo with the SEC in connection with the Merger, (A) shall 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) shall 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) shall, in the case of the Closing Company Audited Financial Statements, have been audited in accordance with the standards of the PCAOB.
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ARTICLE
VI
ACTIONS PRIOR TO THE CLOSING
The Parties covenant and agree to take the following actions:
6.01 The Registration Statements and Proxy Statement.
(a) As soon as reasonably practicable following the date of this Agreement, (i) the Company shall prepare (with PubCo’s reasonable cooperation) and cause to be furnished to the SEC a proxy statement to be sent or otherwise made available to the Company Shareholders relating to the Company Shareholders’ Meeting (together with any amendments or supplements thereto, the “Proxy Statement”); and (ii) PubCo shall prepare (with the Company’s reasonable cooperation) and cause to be filed with the SEC (x) the Registration Statement on Form F-4 (the “Form F-4”) relating to the registration of the offer and sale of PubCo Ordinary Shares to be issued in connection with the Merger, in which the Proxy Statement shall be included, and (y) the Form 8-A (the “Form 8-A”) in connection with the registration under the Exchange Act of the PubCo Ordinary Shares contemplated pursuant to the Merger. PubCo and the Company shall use their respective reasonable best efforts to have the Form F-4 and the Form 8-A declared effective under the Securities Act as soon as reasonably practicable after such filing. Each of the Company and PubCo shall furnish all information concerning such Person and its Affiliates to the other, and provide such other assistance, as may be reasonably requested in connection with the preparation, filing and distribution of the Form F-4, the Form 8-A and Proxy Statement, and the Form F-4 the Form 8-A, and Proxy Statement shall include all information reasonably requested by such other Party to be included therein. Each of the Company and PubCo shall promptly notify the other upon the receipt of any comments from the SEC or any request from the SEC for amendments or supplements to the Form F-4 the Form 8-A or Proxy Statement and shall provide the other with copies of all correspondence between it and its Representatives, on the one hand, and the SEC, on the other hand, with respect to the Form F-4, the Form 8-A or the Proxy Statement, as applicable. Each of the Company and PubCo shall use its reasonable best efforts to respond as soon as reasonably practicable to any comments from the SEC with respect to the Form F-4, the Form 8-A or Proxy Statement. Notwithstanding the foregoing, prior to filing or causing to be filed the Form F-4, the Form 8-Aor the Proxy Statement (or any amendment or supplement thereto) to the SEC and making it available to the shareholders of the Company or responding to any comments of the SEC with respect thereto, each of the Company and PubCo shall (A) provide the other an opportunity to review and comment on such document or response (including the proposed final version of such document or response) and (B) consider in good faith all comments reasonably proposed by the other. Each of the Company and PubCo shall advise the other, promptly after receipt of notice thereof, of the time of effectiveness of the Form F-4 and the Form 8-A, the issuance of any stop order relating thereto or the suspension of the qualification of the Merger Consideration for offering or sale in any jurisdiction, and each of the Company and PubCo shall use its reasonable best efforts to have any such stop order or suspension lifted, reversed or otherwise terminated. Each of the Company and PubCo shall also take any other action required to be taken under the Securities Act, the Exchange Act or any applicable non-U.S. or U.S. state securities or “blue sky” Laws in connection with the Merger and the issuance of the Merger Consideration. PubCo shall use its reasonable best efforts to keep the Form F-4 and the Form 8-A effective as long as necessary to consummate the Merger and the other transactions contemplated by this Agreement.
(b) The Company, on the one hand, and PubCo, on the other hand, covenant that none of the information supplied or to be supplied by PubCo or the Company, as applicable, for inclusion or incorporation by reference in (i) the Form F-4 or the Form 8-A shall, at the time the such filing or any amendment or supplement thereto is declared 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; or (ii) the Proxy Statement shall, at the date it is first filed with the SEC in definitive form or mailed or otherwise made available to the Company’s shareholders or at the time of the Company Shareholders’ Meeting, 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. The Form F-4 and the Form 8-A shall comply as to form in all material respects with the requirements of the Securities Act and the rules and regulations thereunder, it being understood that no covenant is made by PubCo or Merger Sub with respect to statements or omissions made or incorporated by reference therein based on information supplied by the Company for inclusion or incorporation by reference therein. The Proxy Statement shall comply as to form in all material respects with the applicable requirements of the Exchange Act and the rules and regulations thereunder, it being understood that no covenant is made by the Company with respect to statements or omissions made or incorporated by reference therein based on information supplied by PubCo or Merger Sub for inclusion or incorporation by reference therein.
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(c) If prior to the Effective Time, any event occurs with respect to PubCo or any of its Subsidiaries, or any change occurs with respect to other information supplied by PubCo for inclusion in the Proxy Statement, the Form F-4 or the Form 8-A, in each case that is required to be described in an amendment of, or a supplement to, the Proxy Statement, the Form F-4 or the Form 8-A, then PubCo shall promptly notify the Company of such event, and PubCo and the Company shall cooperate in the prompt filing with the SEC of any necessary amendment or supplement to the Proxy Statement, the Form F-4 or the Form 8-A and, as required by applicable Law, in disseminating the information contained in such amendment or supplement to the Company’s shareholders.
(d) If prior to the Effective Time, any event occurs with respect to the Company or any of it is Subsidiaries, or any change occurs with respect to other information supplied by the Company for inclusion in the Proxy Statement, the Form F-4 or the Form 8-A, in each case that is required to be described in an amendment of, or a supplement to, the Proxy Statement, the Form F-4 or the Form 8-A, then the Company shall promptly notify PubCo of such event, and the Company and PubCo shall cooperate in the prompt filing with the SEC of any necessary amendment or supplement to the Proxy Statement, the Form F-4 or the Form 8-A and, as required by applicable Law, in disseminating the information contained in such amendment or supplement to the Company’s shareholders.
6.02 Regulatory Filings. The Parties shall make, or cause to be made, as promptly as practicable, all filings necessary to obtain all Regulatory Approvals. The Parties shall use their reasonable best efforts to: (a) respond to any requests for additional information made by any Governmental Entity; (b) provide the other Party with a reasonable opportunity to review and comment on any filing, submission, response to an information request or other (oral or written) communication to be submitted or made to any Governmental Entity and such receiving Party shall consider any such received comments in good faith; (c) advise the other Party (and, where applicable, provide a copy) of any written or oral communications that it receives from any Governmental Entity in respect of such filings (including in respect of any supplementary filings or submissions) and otherwise in connection with satisfying the Regulatory Approvals; and (d) provide the other Party with a reasonable opportunity to participate in any meetings with any Governmental Entity (subject to any opposition by a Governmental Entity to a particular party’s participation in such meeting) and participate in, or review, any material communication before it is made to any Governmental Entity. Notwithstanding the foregoing, each Party has the right to redact or otherwise exclude a Party from receiving any confidential competitively sensitive information otherwise required to be shared under this Section 6.02, provided that such other Party’s external counsel shall be entitled to receive such confidential competitively sensitive information on an external counsel only basis. The Parties shall: (i) not agree to an extension of any waiting period or review being undertaken by a Governmental Entity without the other Party’s prior written consent; (ii) cause any applicable waiting periods to terminate or expire at the earliest possible date; and (iii) resist vigorously, at their respective cost and expense, any Order challenging the completion of the Merger or any temporary or permanent injunction which could delay or prevent the Closing, all to the end of expediting consummation of the Merger contemplated herein. Notwithstanding anything in this Agreement to the contrary, it is expressly understood and agreed that: (i) none of the Company, PubCo or Merger Sub shall have any obligation to litigate or contest any administrative or judicial action or proceeding or any decree, judgment, injunction or other order, whether temporary, preliminary or permanent; and (ii) neither PubCo nor Merger Sub shall be under any obligation to make proposals, execute or carry out agreements, enter into consent decrees or submit to orders providing for (A) the sale, divestiture or other disposition or holding separate (through the establishment of a trust or otherwise) of any assets or categories of assets of PubCo or any of its Affiliates or the Company or any of its Subsidiaries, or (B) the imposition of any license or condition or the commitment to take any action (or to refrain from taking any action) that limits in any manner its freedom of action with respect to, or its ability to operate, any of the assets or businesses of PubCo or the Company or any of their respective Subsidiaries (any of (A) or (B) a “Regulatory Restraint”). The Company (x) shall not, in connection with obtaining regulatory approval of the transactions contemplated by this Agreement, take or agree to take any action identified in clauses (i) or (ii) of the immediately preceding sentence without the prior written consent of PubCo and (y) if so requested by PubCo, shall use reasonable best efforts to effect any license, divestiture, disposition or holding separate of any of the Company’s assets or businesses necessary to obtain Regulatory Approvals; provided that any such action shall be conditioned on the consummation of the Merger and no such action shall be effective prior to the Closing.
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6.03 Shareholder Vote; Recommendation of the Company Board. The Company, through the Company Board, shall recommend that the Company Shareholders vote in favor of adopting and approving this Agreement and the transactions contemplated hereby and in the other Transaction Documents, including the Merger, and the Company shall include such recommendation in the Proxy Statement. Prior to the termination of this Agreement in accordance with ARTICLE IX, neither the Company Board nor any committee or agent or other Representative thereof shall (i) withdraw (or modify in any manner adverse to PubCo), or propose to withdraw (or modify in any manner adverse to PubCo), the Company Board’s recommendation in favor of the Merger, (ii) approve, recommend or declare advisable, or propose publicly to approve, recommend or declare advisable, any Company Acquisition Transaction, (iii) approve, recommend or declare advisable, or propose to approve, recommend or declare advisable, or allow the Company to execute or enter into, any agreement related to a Company Acquisition Transaction, (iv) enter into any agreement, letter of intent, or agreement in principle requiring the Company to abandon, terminate or fail to consummate the transactions contemplated hereby or breach its obligations hereunder, (v) fail to recommend against any Company Acquisition Transaction, (vi) fail to re-affirm the aforementioned Company Board recommendation of the Merger at the written request of PubCo within five (5) Business Days or (vii) resolve or agree to do any of the foregoing (the foregoing actions may be referred to herein as a “Change in Recommendation”). Notwithstanding the foregoing, however, the board of directors of the Company may make a Change Recommendation prior to receipt of the Company Required Vote if it determines in good faith, after consultation with its outside legal counsel, that a failure to make a Change in Recommendation would constitute a breach by the directors of their fiduciary duties under applicable Legal Requirements; provided, however, the board of directors of the Company shall not be entitled to make, or agree or resolve to make, a Change in Recommendation unless (1) the Company has provided at least five (5) Business Days’ prior written notice to PubCo advising that the board of directors of the Company proposes to take such action and which notice contains the material facts underlying the board of directors’ determination to make, or agree or resolve to make, a Change in Recommendation (a “Change in Recommendation Notice”), (2) during such five (5) Business Day period following the PubCo’s receipt of a Change in Recommendation Notice, the board of directors of the Company has engaged in good faith negotiations with the PubCo and its Representatives (to the extent that the PubCo desires to so negotiate) to make such adjustments in the terms and conditions of this Agreement so as to obviate the need for a Change in Recommendation and (3) following expiration of such five (5) Business Day period, the board of directors of the Company reaffirms in good faith, after consultation with its outside legal counsel, that the failure to make a Change in Recommendation would constitute a breach by the directors of the Company of their fiduciary duties under applicable Legal Requirements.
6.04 Company Shareholders’ Meeting.
(a) The Company shall take all action necessary under applicable Law to, in consultation with PubCo, establish a record date for, call, give notice of and hold a meeting of the holders of Company Shares to (i) provide the Company Shareholders with the opportunity to redeem their Company Shares and (ii) consider and vote on the Merger and any other Transaction Proposals set forth in the Proxy Statement (such meeting, the “Company Shareholders’ Meeting”). The Company Shareholders’ Meeting shall be held as promptly as practicable, in accordance with applicable Law and the Company’s Governing Documents, after the Form F-4, is declared effective by the SEC. PubCo and the Company shall use commercial reasonably efforts to hold the Company Shareholders Meeting and the PubCo Shareholders’ Meeting on the same day. The Company shall take reasonable measures to ensure that all proxies solicited in connection with the Company Shareholders’ Meeting are solicited in compliance with all applicable Law. Notwithstanding anything to the contrary contained herein, if on the date of the Company Shareholders’ Meeting, or a date preceding the date on which the Company Shareholders’ Meeting is scheduled, the Company reasonably believes that (i) such adjournment is required by applicable Legal Requirements, (ii) to ensure that any supplement or amendment to the Proxy Statement that the board of directors of the Company has determined in good faith is required by applicable Legal Requirements is disclosed to Company Shareholders and for such supplement or amendment to be promptly disseminated to the Company Shareholders with sufficient time prior to the Company Shareholders’ Meeting; (iii) it shall not receive proxies sufficient to obtain the Company Required Vote, whether or not a quorum would be present or (iv) it shall not have sufficient Company Shares represented (whether in person or by proxy) to constitute a quorum necessary to conduct the business of the Company Shareholders’ Meeting, the Company may adjourn, or make one or more successive adjournments of, the Company Shareholders’ Meeting as long as the date of the Company Shareholders’ Meeting is not adjourned more than an aggregate of 20 Clear Days in connection with any adjournments.
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(b) the Company’s obligation to call, give notice of and hold the Company Shareholders’ Meeting in accordance with Section 6.04(a) shall not be limited or otherwise affected by any breach by the Company of Section 6.03.
6.05 Listing.
(a) From the date of this Agreement through the Closing,
(i) The Company shall use all reasonable efforts that are necessary or desirable for the Company to remain listed as a public company on, and for Company Shares to be tradable over, the applicable Nasdaq market(s);
(ii) PubCo shall use all reasonable efforts that are necessary or desirable for PubCo to apply for a new listing of PubCo Ordinary Shares on, and for the PubCo Ordinary Shares to be tradeable over, the applicable Nasdaq market(s); and
(iii) PubCo shall use all reasonable efforts that are necessary or desirable for the Ordinary Shares of Great Rich Technologies Limited, its indirectly owned Subsidiary, it to remain tradable over the KOSDAQ.
6.06 PubCo Shareholder Approval. Upon the terms set forth in this Agreement, PubCo shall seek the irrevocable written consent, of such holders of the PubCo Ordinary Shares as is required to obtain the PubCo Shareholders Approval of the adoption of this Agreement, the Merger and all other transactions contemplated by this Agreement, including the authority to allot the necessary PubCo Class A Ordinary Shares for the Merger Consideration (collectively, the “PubCo Proposals”) as soon as reasonably practicable after the Form F-4/Proxy Statement becomes effective, and in any event within ten (10) business days after the Form F-4/Proxy Statement becomes effective. PubCo, through the PubCo Board, shall recommend that the PubCo Shareholders vote to approve resolutions necessary to give effect to the PubCo Proposals. Except as required by applicable Law, prior to the termination of this Agreement in accordance with ARTICLE IX, neither the PubCo Board nor any committee or agent or other Representative thereof shall (i) withdraw (or modify in any manner adverse to the Company), or propose to withdraw (or modify in any manner adverse to the Company), the PubCo Board’s recommendation in favor approval of the PubCo Proposals, (ii) fail to re-affirm the aforementioned PubCo Board recommendation of the PubCo Proposals at the written request of PubCo within five (5) Business Days or (iii) resolve or agree to do any of the foregoing.
6.07 No Claim Against Company Trust. Each of PubCo and Merger Sub acknowledges that it has read the Prospectus and that the Company has established the Company Trust from the proceeds of its initial public offering (“IPO”) and from certain private placements occurring simultaneously with the IPO for the benefit of the holders of Company Public Shares (the “Public Shareholders”) and certain parties (including the underwriters of the IPO) and that, except for a portion of the interest earned on the amounts held in the Company Trust, the Company may disburse monies from the Company Trust only: (a) to the Public Shareholders in the event they elect to redeem Company Shares in connection with the consummation of the Company’s initial business combination (as such term is used in the Prospectus) (“Business Combination”), (b) to the Public Shareholders if the Company fails to consummate a Business Combination by June 20, 2025, subject to the Extension, (c) to the Public Shareholders in the event they elect to redeem Company Shares in accordance with the requirements of the Company’s Governing Documents, (d) any amounts necessary to pay any Taxes or (e) to, or on behalf of, the Company after or concurrently with the consummation of a Business Combination. Each of PubCo and the Merger Sub hereby agrees that, it does not now and shall not at any time hereafter have (other than its rights upon and after Closing) any right, title, interest or claim of any kind in or to any monies in the Company Trust or distributions therefrom, or make any claim prior to Closing against the Company Trust, 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 “Claims”). Each of PubCo and the Merger Sub hereby irrevocably waives any Claims it may have against the Company Trust (including any distributions therefrom) now or in the future as a result of, or arising out of, any negotiations, contracts or agreements with the Company and shall not, prior to the Closing, seek recourse against the Company Trust (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of this Agreement). For the avoidance of doubt, notwithstanding anything to the contrary contained herein, the waivers under this Section 6.07
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shall continue to apply at and after the Closing or termination of this Agreement (as applicable) to distributions made to redeeming Public Shareholders and for transaction expenses paid. Each of PubCo and Merger Sub agrees and acknowledges that such irrevocable waiver is material to this Agreement and specifically relied upon by the Company to induce it to enter into this Agreement. This Section 6.07 shall not limit the PubCo’s or Merger Sub’s right to seek specific performance against the Company pursuant to Section 11.18, including the right to seek specific performance against the Company to require the Company to take such actions contemplated by this Agreement subject to the satisfaction of the Company’s conditions to the Closing in Section 7.02, and to comply with the terms of the Company Trust Agreement, including distribution of funds from the Company Trust upon the Closing in accordance with the terms of this Agreement. Upon satisfaction or waiver of the conditions set forth in Article VII and provision of notice thereof to the Company Trust (which notice the Company shall provide in accordance with the terms of the Company Trust Agreement): (a) in accordance with and pursuant to the Company Trust Agreement, at the Closing, the Company: (i) shall cause the documents, opinions and notices required to be delivered to the Company Trust pursuant to the Company Trust Agreement to be so delivered; and (ii) shall make all appropriate arrangements to cause the Company Trust to distribute the funds on deposit in the Company Trust Account as directed in the letter substantially in the applicable form attached to the Company Trust Agreement, including all amounts payable: (A) to holders of Company Shares pursuant to the Company Shareholder Redemptions; (B) for income tax or other tax obligations of the Company prior to the Closing; (C) for any Company Transaction Costs; and (D) following the payments made in (A) through (C), to PubCo, all remaining amounts then available in the Company Trust Account in accordance with the Company Trust Agreement; and (b) thereafter, the Company Trust Account shall terminate, except as otherwise provided therein.
6.08 Other Filings; Press Release. As promptly as practicable after execution of this Agreement, the Company shall prepare and file a Current Report on Form 8-K pursuant to the Exchange Act to report the execution of this Agreement. Promptly after the execution of this Agreement, Purchaser and the Company shall also issue a mutually agreed joint press release announcing the execution of this Agreement. Prior to Closing, the Company shall prepare a press release announcing the consummation of the Merger, the form and substance of which shall be approved in advance by the Company (the “Closing Press Release”). Concurrently with the Closing, the Company shall issue the Closing Press Release.
6.09 Transaction Litigation. In the event that any shareholder litigation related to this Agreement or the other Transaction Documents or the Merger or other transactions contemplated hereby or thereby is brought or threatened in writing against either the Company or PubCo, or any of the respective members of their boards of directors, after the date of this Agreement and prior to the Effective Time (the “Transaction Litigation”), the Company or PubCo, as applicable, shall promptly notify the other Party in writing of any such Transaction Litigation and shall keep such other Party reasonably informed with respect to the status thereof. The Party subject to the Transaction Litigation shall give the other Party the opportunity to participate in the defense of any Transaction Litigation (at the other Party’s own cost and expense) and keep the other Party reasonably apprised of, and consult with such other Party (and consider in good faith such Party’s advice), with respect to, proposed strategy and any material decisions related thereto. Neither the Company nor PubCo shall settle or agree to settle any Transaction Litigation without the other Party’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned).
6.10 Tax Matters. The Parties hereby agree and acknowledge that for U.S. federal income Tax purposes, the Merger is intended to qualify as a reorganization in accordance with Section 368(a) of the Code. Each of the Parties shall use its respective reasonable best efforts to cause the Merger to qualify, and agree not to, and not to permit or cause any of their Affiliates or Subsidiaries to, take any action which to its Knowledge could reasonably be expected to prevent or impede the Merger from qualifying, for the Intended Tax Treatment. Each of the Parties acknowledges and agrees that each is responsible for paying its own Taxes. Each of the Parties shall report the Merger consistently with the Intended Tax Treatment and as reorganizations within the meaning of Section 368(a) of the Code unless otherwise required pursuant to a “determination” within the meaning of Section 1313(a) of the Code, including attaching the statement described in Treasury Regulations Section 1.368-3(a) on or with its Tax Return for the taxable year of the Merger. In the event the SEC requests or requires tax opinions, each Party shall use reasonable best efforts to execute and deliver customary tax representation letters as the applicable tax advisor may reasonably request in form and substance reasonably satisfactory to such advisor. Each of the Parties hereto agrees to promptly notify all other Parties of any challenge to the Intended Tax Treatment by any Governmental Entity. Notwithstanding anything to the contrary herein, if, after the date hereof the Company or PubCo, in its sole discretion, determines that the Merger is not reasonably expected to qualify for the Intended Tax Treatment or it may result in extreme inconvenience or undue burden to it, the Parties shall use their commercially reasonable best efforts to restructure the transactions contemplated hereby in a manner that is reasonably expected to cause the Merger, as revised, to so qualify for a mutually preferred tax treatment.
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ARTICLE
VII
CONDITIONS TO CLOSING
7.01 Mutual Conditions to the Parties’ Obligations. The obligations of the Company, PubCo and Merger Sub to consummate the transactions contemplated by this Agreement are subject to the satisfaction (or, if permitted by applicable Law, waiver by the Company, PubCo and Merger Sub in writing) of the following conditions as of the Closing Date:
(a) The Form F-4 and the Form 8-A shall have been declared effective by the SEC under the Securities Act and shall not be the subject of any stop order or proceedings seeking a stop order.
(b) All Regulatory Approvals required to consummate the Merger and the transactions contemplated hereby, including without limitation, the PRC Approvals, shall have been obtained and any mandatory waiting periods related thereto (including any extension thereof) shall have expired.
(c) The Company Shareholder Approval shall have been obtained;
(d) The PubCo Shareholders Approval and Merger Sub Shareholder Approval shall have been obtained;
(e) No Order shall have been entered and no Law shall be in effect that prevents or makes illegal the performance of this Agreement or the consummation of any of the transactions contemplated hereby, declares unlawful the transactions contemplated by this Agreement or causes such transactions to be rescinded;
(f) The PubCo Class A Ordinary Shares to be issued as the Merger Consideration shall have been approved for listing on Nasdaq, subject to official notice of issuance;
(g) There shall not be pending any Legal Proceeding by a Governmental Entity (i) seeking to enjoin, restrain or prohibit the consummation of the Merger pursuant to any applicable Antitrust Laws, or (ii) seeking to impose any Regulatory Restraint; and
(h) The PubCo shall have received written approval from Nasdaq that PubCo has been admitted for listing on Nasdaq and the PubCo Ordinary Shares have been approved for trading on Nasdaq.
If the Closing occurs, all Closing conditions set forth in this Section 7.01 that have not been fully satisfied as of the Closing shall be deemed to have been waived (as permitted by applicable Law) by the Company, PubCo and Merger Sub.
7.02 Conditions to PubCo’s and Merger Sub’s Obligations. The obligations of PubCo and Merger Sub to consummate the transactions contemplated by this Agreement are subject to the satisfaction (or, if permitted by applicable Law, waiver by PubCo and Merger Sub in writing) of the following conditions as of the Closing Date:
(a) All representations and warranties of the Company contained in ARTICLE II of this Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” set forth therein, other than (x) with respect to Section 2.08(a), (y) to the extent that such “materiality” or “Company Material Adverse Effect” qualifier defines the scope of items or matters disclosed in the Disclosure Letters, or (z) to the extent that the term “material” or a variation thereof is used in any defined terms or the definitions of any defined terms hereunder) at and as of the Closing Date as though made at and as of the Closing Date (except to the extent expressly made as of an earlier date, in which case only as of such date), except, in the case of this clause (a), where the failure of such representations and warranties to be so true and correct (giving effect to the applicable exceptions set forth in the Disclosure Letters but without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” set forth therein (other than with respect to Section 2.08(a) and other than to the extent that such “materiality” or “Company Material Adverse Effect” qualifier defines the scope of items or matters disclosed in the Disclosure Letters)) has not had, and would not have, a Company Material Adverse Effect;
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(b) The Company shall have performed and complied with in all material respects all of the covenants and agreements required to be performed by it under this Agreement at or prior to the Closing;
(c) There shall not have been a Company Material Adverse Effect since the date hereof;
(d) The Company shall have delivered to PubCo each of the following:
(i) a certificate of an authorized officer of the Company, solely in his or her capacity as such and not in his or her personal capacity, dated as of the Closing Date, stating that the conditions specified in Section 7.02(a) and Section 7.02(b), as they relate to the Company, have been satisfied; and
(ii) written resignations, in forms satisfactory to PubCo, dated as of the Closing Date and effective as of the Closing, executed by (A) all officers of the Company and (B) all persons serving as directors of the Company immediately prior to the Closing.
(e) PubCo shall have received a fully executed Lock-Up Agreement from Sponsor as of immediately prior to the Effective Time;
(f) The PubCo shall have received a duly executed counterpart signature page(s) of the Registration Rights Agreement; and
(g) The Company shall make arrangements for (i) the payments required to be made in connection with the Company Redemptions and (ii) all Company Transaction Costs to the extent not paid prior to the Closing or allocated for payment to the PubCo.
If the Closing occurs, all Closing conditions set forth in this Section 7.02 that have not been fully satisfied as of the Closing shall be deemed to have been waived by PubCo and Merger Sub.
7.03 Conditions to the Company’s Obligations. The obligation of the Company to consummate the transactions contemplated by this Agreement is subject to the satisfaction (or, if permitted by applicable Law, waiver by the Company in writing) of the following conditions as of the Closing Date:
(a) All representations and warranties contained in ARTICLE III of this Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” set forth therein, other than with respect to Section 3.07(a)) at and as of the Closing Date as though made at and as of the Closing Date (except to the extent expressly made as of an earlier date, in which case only as of such date), except, in the case of this clause (a), where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” set forth therein, other than with respect to Section 3.07(a)) has not had, and would not have, a PubCo Material Adverse Effect;
(b) PubCo and Merger Sub shall have performed and complied with in all material respects all the covenants and agreements required to be performed by them under this Agreement at or prior to the Closing;
(c) The Company shall have received a duly executed counterpart signature pages for the PubCo Lock-Up Shareholders to the PubCo Shareholder Lock-Up and Support Agreements;
(d) The Company shall have received a duly executed counterpart signature page of the Registration Rights Agreement;
(e) There shall not have been a PubCo Material Adverse Effect since the date hereof;
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(f) The Company shall have received a filed copy of the Governing Documents of the Surviving Company in the form annexed to the Plan of Merger as in effect as of the Closing Date, the form of special resolutions of the Surviving Company approving the change of name of the Surviving Company and the adoption of the amended and restated memorandum and articles of association of the Surviving Company to be filed with the Registrar immediately after Closing, and copies of resolutions duly adopted by the board of directors of the PubCo and Merger Sub authorizing this Agreement and the transaction contemplated hereby and evidencing the required approval of the shareholders of the Merger Sub; and
(g) PubCo shall have delivered to the Company a certificate of an authorized officer of each of PubCo and Merger Sub in his or her capacity as such, dated as of the Closing Date, stating that the conditions specified in Section 7.03(a), Section 7.03(b), and Section 7.03(e), as they relate to such entity, have been satisfied.
If the Closing occurs, all closing conditions set forth in this Section 7.03 that have not been fully satisfied as of the Closing shall be deemed to have been waived by the Company.
ARTICLE
VIII
INDEMNIFICATION OF OFFICERS AND DIRECTORS OF THE COMPANY
8.01 Indemnification of Officers and Directors of the Company. If the Closing occurs, PubCo shall cause all rights to indemnification and advancement of expenses and all limitations on liability existing in favor of any employee, officer or director of any of the Company (collectively, the “Company Indemnitees”), as provided in the Memorandum and Articles of Association, to survive the consummation of the transactions contemplated hereby and continue in full force and effect and be honored by the Surviving Company and PubCo after the Closing for a period of six (6) years from the Closing Date. After the Effective Time, PubCo and the Surviving Company shall maintain in effect for such six (6) year period, the exculpation, indemnification and advancement of expenses provisions of (i) the Memorandum and Articles of Association as in effect immediately prior to the Effective Time and (ii) any indemnification agreements of the Company with any of their respective directors, officers or employees as in effect immediately prior to the Effective Time, and in each case of clauses (i) and (ii) shall not amend or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any individuals who at the Effective Time were current or former directors, officers or employees of the Company. The rights of each of the Company Indemnitees hereunder shall be in addition to, and not in limitation of, any other rights such person may have under the Company’s Governing Documents, any other indemnification arrangement, any applicable Legal Requirement or otherwise. The obligations of PubCo and the Surviving Company under this Section 8.01 shall not be terminated or modified in such a manner as to adversely affect any Company Indemnitee to whom this Section 8.01 applies without the consent of such affected Company Indemnitee (it being expressly agreed that the Company Indemnitees to whom this Section 8.01 applies shall be intended third party beneficiaries of this Section 8.01).
8.02 Indemnification by Successors and Assigns. In the event PubCo, the Surviving Company or any of their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets or stock or other equity interests to any Person, then and in each such case, PubCo shall ensure that proper provision shall be made so that the successors and assigns of PubCo or the Surviving Company, as the case may be (or their respective successors and assigns), shall assume the obligations set forth in this Article VIII.
8.03 Tail Policy. At or prior to the Closing, the Company shall, or shall cause its Affiliates to, obtain at its expense a “tail” directors’ and officers’ liability insurance policy, effective for a period of at least six (6) years from the Closing Date, for the benefit of the Company and of its officers and directors, with respect to claims arising from facts or events that occurred on or before the Closing Date. PubCo shall cause such “tail” policy to be maintained in full force and effect, for its full term, and cause the Surviving Company to honor all obligations thereunder. Such “tail” policy shall provide for terms with respect to coverage, deductibles and amounts no less favorable than those of such policy in effect on the date of this Agreement for the six-year period following the Closing.
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ARTICLE
IX
TERMINATION
9.01 Termination. This Agreement may be terminated at any time prior to the Closing:
(a) by the mutual written consent of PubCo and the Company;
(b) by PubCo by written notice to the Company, if any of the representations or warranties of the Company set forth in ARTICLE II shall not be true and correct, or if the Company 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 any condition to the Closing set forth in either Section 7.02(a) or Section 7.02(b) would not be satisfied at or prior to the Outside Date and the breach or breaches causing such representations or warranties not to be true and correct, or the failure to perform any covenant or agreement, as applicable, are not cured (if capable of being cured) within 30 days after written notice thereof is delivered to the Company; provided that PubCo or Merger Sub is not then in breach of this Agreement so as to cause any condition to the Closing set forth in either Section 7.03(a) or Section 7.03(b) to not be satisfied at or prior to the Outside Date;
(c) by the Company by written notice to PubCo, if any of the representations or warranties of PubCo or Merger Sub set forth in ARTICLE III shall not be true and correct, or if PubCo or Merger Sub has failed to perform any covenant or agreement on the part of PubCo or Merger Sub, respectively, set forth in this Agreement (including an obligation to consummate the Closing), such that any condition to the Closing set forth in either Section 7.03(a) or Section 7.03(b) would not be satisfied at or prior to the Outside Date 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, are not cured (if capable of being cured) within 30 days after written notice thereof is delivered to PubCo or Merger Sub; provided that the Company is not then in breach of this Agreement so as to cause any condition to the Closing set forth in Section 7.02(a) or Section 7.02(b) from being satisfied at or prior to the Outside Date;
(d) by PubCo or the Company by written notice to the opposing party, as applicable, if the Closing has not occurred on or prior to the Outside Date and the Party seeking to terminate this Agreement pursuant to this Section 9.01(d) (including, in the case of PubCo, Merger Sub) shall not have breached in any material respect its obligations under this Agreement in any manner that shall have proximately caused the failure to consummate the transactions contemplated by this Agreement on or prior to the Outside Date;
(e) by PubCo or the Company, by written notice from PubCo or the Company to the opposing party, as applicable, if any Governmental Entity of competent jurisdiction shall have issued an Order, enacted any Law or taken any other action restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby and, in the case of Orders and other actions, such Order or other action shall have become final and non-appealable; provided, however, that the right to terminate this Agreement pursuant to this Section 9.01(e) shall not be available to the party seeking to terminate if any action of such party or any failure of such party to act has contributed to such Order or other action and such action or failure constitutes a breach of this Agreement;
(f) by PubCo by written notice to the Company if the Company Board withdraws (or modifies in any manner adverse to PubCo), or proposes to withdraw (or modify in any manner adverse to PubCo), the Company Board’s recommendation in favor of the proposals set forth in the Proxy Statement, or fails to reaffirm such recommendation as promptly as practicable (and in any event within five Business Days) after receipt of any written request to do so by PubCo;
(g) by the Company by written notice to PubCo if the independent directors of PubCo Board withdraws (or modifies in any manner adverse to the Company), or proposes to withdraw (or modify in any manner adverse to the Company), the PubCo Board’s recommendation in favor of the PubCo Proposals in the Circular, or fails to reaffirm such recommendation as promptly as practicable (and in any event within five Business Days) after receipt of any written request to do so by the Company;
(h) by either the Company or PubCo, if the Company Shareholder Approval shall not have been obtained at the meeting of Company Shareholders to be held in accordance with the Proxy Statement (or at any adjournment thereof); and
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(i) by either the Company or PubCo, if the PubCo Shareholder Approval shall not have been obtained at the meeting of PubCo Shareholders to be held in accordance with the Circular (or at any adjournment or postponement thereof);
9.02 Effect of Termination. In the event of the termination of this Agreement pursuant to Section 9.01, all obligations of the Parties hereunder (other than the last sentence of Section 4.02, Section 5.02, Section 6.07, this Section 9.02 and ARTICLE XI, which shall survive the termination of this Agreement) shall terminate without any liability of any Party to any other Party; provided, further, that no termination shall relieve a Party from any liability arising from or relating to any knowing or intentional breach of a representation, a warranty or a covenant by such Party prior to termination.
ARTICLE
X
DEFINITIONS
10.01 Definitions. For purposes hereof, the following terms when used herein shall have the respective meanings set forth below:
“Affiliate” or “Affiliates” of any particular Person means any other Person controlling, controlled by, or under common control with, such particular Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, contract or otherwise.
“Agreement” has the meaning set forth in specified in the preamble.
“Alternative Transaction” has the meaning specified in Section 5.05.
“Antitrust Laws” means any federal, state or foreign Law, regulation or decree designed to prohibit, restrict or regulate actions for the purpose or effect of monopolization or restraint of trade or the significant impediment of effective competition.
“Business Combination” has the meaning specified in Section 6.07.
“Business Day” means a day that is neither a Saturday or a Sunday nor any other day on which banking institutions in New York, New York and the Cayman Islands are authorized or obligated by Law to close.
“Cayman Companies Act” means the Companies Act (as Revised) of the Cayman Islands, as amended from time to time.
“Cayman Registrar” means the Registrar of Companies in the Cayman Islands.
“China” or the “PRC” means the People’s Republic of China.
“China Social Insurance Benefits” means social insurances (including pension insurance, medical insurance, work related insurance, unemployment insurance and maternity insurance) regulated under the Social Security Law of the PRC, and housing provident fund regulated under the PRC Regulations on the Housing Provident Fund.
“Claims” has the meaning specified in Section 6.07.
“Clear Days” in relation to a period of notice, means that period excluding:
(a) the day when the notice is given or deemed to be given; and
(b) the day for which it is given or on which it is to take effect.
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“Closing” has the meaning specified in Section 1.08.
“Closing Date” has the meaning specified in Section 1.08.
“Code” means the Internal Revenue Code of 1986, as amended or now in effect or as hereafter amended, including, but not limited to, any successor or substitute federal Tax codes or legislation.
“Company Board” means the board of directors of the Company.
“Company Disclosure Letter” has the meaning specified in ARTICLE II.
“Company Employee Benefit Plan” means each “employee benefit plan” within the meaning of Section 3(3) of ERISA (whether or not subject to ERISA) and all other stock purchase, stock option, restricted stock, severance, retention, employment, individual consulting, change-of-control, bonus, incentive, deferred compensation, employee loan, welfare, medical, health, disability, fringe benefit and other benefit plan, agreement, program or policy (i) that is sponsored, maintained, contributed to, or required to be contributed to, by any of the Company for the benefit of any officer, employee, consultant or director of Company or (ii) with respect to which the Company has any liability (including contingent liability through any ERISA Affiliate).
“Company Lock-Up Shareholders” means Sponsor.
“Company Material Adverse Effect” means any change, effect, event, occurrence, state of facts, circumstance or development that, individually or in the aggregate, has had, or would be reasonably likely to have, a materially adverse effect on (a) the business, assets, properties or condition (financial or otherwise) of the Company, or (b) the ability of the Company to consummate the transactions contemplated hereby.
“Company Ordinary Shares” means the ordinary shares of par value USD 0.001 of the Company, having the rights and being subject the restrictions, set out in the Memorandum and Articles of Association.
“Company Public Shares” means the Company Ordinary Shares issued in the IPO, and any securities into which such Company Ordinary Shares are converted or for which such Company Ordinary Shares are exchanged
“Company Right” means a right of a holder thereof to receive one-tenth (1/10) of a Company Ordinary Share at the consummation of a business combination.
“Company Right Holder(s)” means a holder of Company Rights immediately prior to the Effective Time.
“Company Shareholder(s)” means a holder of Company Shares immediately prior to the Effective Time.
“Company Shares” has the meaning specified in Section 2.04(a).
“Company Shareholder Approval” means the requisite affirmative vote of the shareholders of the Company, in each case obtained in accordance with the Memorandum and Articles of Association, the Cayman Companies Act, the rules and regulations of the SEC and Nasdaq and the Proxy Statement, in favor of all Transaction Proposals.
“Company Shareholders’ Meeting” has the meaning specified in Section 6.04(a).
“Company Subject Balance Sheet” has the meaning specified in Section 2.07(c).
“Company Transaction Costs” shall mean, as of any determination time, the aggregate amount of all out-of-pocket fees, commissions, costs, finder’s fees, expenses and other amounts incurred by or on behalf of, or otherwise payable by, whether or not due, Company in connection with the negotiation, preparation or execution of this Agreement or the other Transaction Documents, the consummation of the Merger or the consummation of the Company’s initial public offering, including (a) the fees and expenses of outside legal counsel, accountants, brokers, investment bankers, consultants, or other agents or service providers, (b) deferred underwriting fees, costs and expenses from the Company’s initial public offering and (c) any other fees, filing fees, transfer taxes, expenses, commissions or other amounts that are expressly allocated to the Company pursuant to this Agreement or any other Transaction Documents, in each case, whether paid or unpaid prior to the Closing.
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“Company Trust” means that certain United States-based trust account of the Company maintained by Wilmington Trust, National Association, acting as trustee, established under the Company Trust Agreement.
“Company Trust Agreement” means that certain Investment Management Trust Agreement, dated as of June 17, 2024, by and between the Company, Vstock Transfer LLC and Wilmington Trust, National Association.
“Company Unit” means a unit of the Company, each consisting of one Company Ordinary Share and one Company Right.
“Confidential Information” means any information that one party discloses, directly or indirectly, to the other party, whether embodied in tangible form or disclosed visually or orally and whether or not designated as “confidential” or “proprietary” or by some similar designation, relating to the prior, current or prospective business of the disclosing party, including, without limitation, business models, business opportunities, business plans, financial information, market research, marketing plans, pricing and cost data, customers, suppliers, employees, contractors, ideas, improvements, products and product plans, technologies, research activities and results, information regarding genetic or other biological materials, gene sequences, cell lines, viruses, plasmids, vectors, compounds, protocols, assays and clinical trials, and any other information that should be reasonably understood by the receiving party to be the confidential or proprietary information of the disclosing party. Confidential Information shall not include information (i) that has entered the public domain through no fault of the receiving party, (ii) rightfully known by the receiving party without obligation of confidentiality to any third party prior to receipt of same from the disclosing party, (iii) independently developed by the receiving party without using any Confidential Information of the disclosing party, and (iv) generally made available by the disclosing party without obligation of confidentiality.
“Date hereof” has the meaning set forth in specified in the preamble.
“Disclosures Schedules” means collectively the Company Disclosure Letter and the PubCo Disclosure Letter.
“Dissenting Share” has the meaning specified in Section 1.05.
“Effective Time” has the meaning specified in Section 1.01(b).
“Encumbrance” means any lease, pledge, option, easement, deed of trust, right of way, encroachment, conditional sales agreement, security interest, mortgage, adverse claim, encumbrance, covenant, condition, restriction of record, charge or restriction of any kind (except for restrictions on transfer under the Securities Act and applicable U.S. state securities laws), including any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership, whether voluntarily incurred or arising by operation of Law, and includes any agreement to give any of the foregoing in the future.
“Environmental Claim” means any claim, action, cause of action, written notice or demand by any Person or investigation by any Governmental Entity alleging potential liability (including potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, or penalties) arising out of, based on or resulting from (a) the presence, Release or threatened Release of, or any exposure to, any Hazardous Materials at any location, whether or not owned or operated by the Company, or (b) circumstances forming the basis of any violation or alleged violation of any Environmental Law.
“Environmental Laws” means all applicable federal, state, local and foreign laws and regulations relating to pollution or protection of human health (to the extent relating to exposure to Hazardous Materials) or the environment, including laws relating to Releases or threatened Releases of Hazardous Materials or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, transport or handling of Hazardous Materials.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
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“ERISA Affiliate” means any entity, trade or business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(l) of ERISA that includes the Group Companies or the Company or its Subsidiaries, as applicable.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exchange Agent” means a nationally recognized bank or transfer agent reasonably acceptable to PubCo and the Company.
“Exchange Agent Agreement” has the meaning specified in Section 1.07 (a).
“Excluded Shares” has the meaning specified in Section 1.02(c).
“Extension” has the meaning specified in Section 4.01(b).
“Extension Loan” has the meaning specified in Section 4.01(a)(iv).
“Foreign Plan” means any PubCo Employee Benefit Plan or other plan, fund (including any superannuation fund) or other similar program or arrangement, established or maintained outside the United States by a Group Company primarily for the benefit of employees of the PubCo or its Subsidiaries residing outside the United States, which plan, fund or other similar program or arrangement provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.
“GAAP” means United States generally accepted accounting principles, consistently applied, as in effect as of the Reference Time.
“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 corporation are its certificate of incorporation and by-laws or memorandum and articles of association, the “Governing Documents” of a limited partnership are its limited partnership agreement and certificate of limited partnership and the “Governing Documents” of a limited liability company are its operating agreement and certificate of formation.
“Governmental Entity” means any federal, national, state, foreign, provincial, local or other government or any governmental, regulatory, administrative or self-regulatory authority, agency, bureau, board, commission, court, judicial or arbitral body, department, political subdivision, tribunal or other instrumentality thereof.
“Group Company(ies)” means PubCo and its Subsidiaries listed on Schedule 3.04 of the PubCo Disclosure Letter, including Merger Sub and Great Rich Technologies, Limited.
“Hazardous Materials” means any chemical, material, waste or substance regulated under applicable Environmental Law as a hazardous waste, hazardous material, hazardous substance, extremely hazardous waste, restricted hazardous waste, pollutant, contaminant, toxic substance or toxic waste.
“Indebtedness” means, as of any time of determination, without duplication, (a) the unpaid principal amount of, and accrued and unpaid interest on, all indebtedness for borrowed money of the Group Companies, including liabilities of the Group Companies evidenced by bonds, debentures, notes or other similar instruments or debt securities, (b) all obligations of the Group Companies under leases required in accordance with the PubCo’s historic accounting principles to be capitalized on a balance sheet of the Group Companies, (c) any costs associated with termination of any of the Group Companies’ interest rate, hedge and currency swap arrangements and any other arrangement of the Group Companies designed to provide protection against fluctuations in interest or currency rates that is being terminated as of the Closing Date, and (d) any obligation of the Group Companies to any Person (other than another Group Company) for the deferred purchase price of property or services (other than trade payables incurred in the Ordinary Course of Business) or otherwise secured by a Lien (other than a Permitted Lien), including any promissory notes, contractual payment obligations, earn-outs, contingent payment obligations, non-compete or other restrictive covenant payments, including any such obligation arising from the acquisition of a business.
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“Intellectual Property” means: (a) patents and patent applications, including utility, utility model, and design patents, including all issued claims therein, whether published or unpublished, including provisional, national, regional and international applications as well as continuations, continuations-in-part, divisional, reissues, renewals and re-examination applications, (b) trademarks, service marks, trade names, trade dress, and logos, whether registered or unregistered, together with the goodwill of the business thereunder, (c) internet domain name registrations and applications for registration thereof together with all of the goodwill associated therewith, (d) copyrights (registered or unregistered) and registrations and applications for registration thereof, and copyrightable subject matter, including copyrights in software and (e) Trade Secrets, including know-how and proprietary technology.
“Intended Tax Treatment” means the qualification of the Merger as a reorganization in accordance with Section 368(a) of the Code.
“IPO” has the meaning specified in Section 6.07.
“Knowledge” means, with respect to the Company, the actual knowledge of Matthew Chen or Luhuan Zhong, and, with respect to PubCo, the actual knowledge of Yongnan Zhou.
“Latest Balance Sheet Date” means December 31, 2024.
“Latest Statement of Operations” has the meaning specified in Section 3.06(a)(i).
“Law(s)” means any law, rule, regulation, judgment, injunction, order, decree or other restriction of any Governmental Entity.
“Leased Real Property” has the meaning specified in Section 3.08(b).
“Legal Proceeding” means any judicial, administrative or arbitral actions, suits, hearings, inquiries, investigations or other proceedings (public or private) commenced, brought, conducted or heard before, or otherwise involving, any Governmental Entity or arbitrator.
“Legal Requirement” means, with respect to any Party, all applicable laws, statutes, rules, regulations, codes, ordinances, bylaws, variances, judgments, injunctions, orders, conditions and licenses of a Governmental Entity having jurisdiction over the assets or the properties of such Party or its Subsidiaries and the operations thereof, including the rules of any exchange on which any of the Parties is or intends to be listed.
“Letter of Transmittal” has the meaning specified in Section 1.07(b).
“Liabilities” means all indebtedness, obligations and other liabilities of a Person required under GAAP to be accrued on the financial statements of such Person.
“Liens” means liens, security interests, charges or Encumbrances.
“Lock-Up Agreements” mean Sponsor Lock-Up Agreement and the PubCo Shareholder Lock-Up and Support Agreement.
“Lock-Up Period” has the meaning given to this term in the PubCo Shareholders Lock-Up and Support Agreement.
“Lock-Up Shareholders” means, collectively, (i) the shareholders of the Company party to the Sponsor Lock-Up Agreement and (ii) the shareholder of PubCo party to the PubCo Shareholder Lock-Up and Support Agreement.
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“Material Adverse Effect” means any change, effect, event, occurrence, state of facts, circumstance or development that, individually or in the aggregate, has had, or would be reasonably likely to have, a materially adverse effect on (a) the business, assets, properties or condition (financial or otherwise) of the Group Companies, taken as a whole, or (b) the ability of the Group Companies to consummate the transactions contemplated hereby; provided, however, that none of the following shall be deemed, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been, or shall be, a Material Adverse Effect: any adverse change, effect, event, occurrence, state of facts, circumstance or development attributable to: (i) operating, business, regulatory or other conditions in the industry in which the Group Companies operate; (ii) general economic conditions, including changes in the credit, debt or financial, capital markets, in each case anywhere in the world; (iii) conditions in the securities markets, capital markets, credit markets, currency markets or other financial markets in any country or region in the world and any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter market operating in any country or region in the world; (iv) any stoppage or shutdown of any Governmental Entity applicable to any Group Company (including any default by any such Governmental Entity or delays in payments by any such Governmental Entity or delays or failures to act by any such Governmental Entity); (v) the announcement or pendency or consummation of the transactions contemplated by this Agreement (including the identity of PubCo or any of its Affiliates) or compliance with the terms of, taking any action permitted by, or refraining from taking any action prohibited by, this Agreement, including the impact thereof on relationships, contractual or otherwise, with, or actual or potential loss or impairment of, and any other negative development (or potential negative development) of any Group Company with, any clients, customers, suppliers, distributors, partners, financing sources, directors, officers or other employees or consultants or on revenue, profitability and cash flows; (vi) changes in GAAP or other accounting requirements or principles or any changes in applicable Laws or the interpretation thereof or other legal or regulatory conditions; (vii) actions required to be taken under applicable Laws or contracts; (viii) the failure of any Group Company to meet or achieve the results set forth in any budget, plan, projection or forecast (it being understood that the underlying causes of any such decline, change, decrease or failure may, if they are not otherwise excluded from the definition of Material Adverse Effect, be taken into account in determining whether a Material Adverse Effect has occurred); (ix) global, national or regional political, financial, economic or business conditions, including hostilities, acts of war, sabotage or terrorism or military actions or any escalation, worsening or diminution of any such hostilities, acts of war, sabotage or terrorism or military actions existing or underway; and (x) epidemics, pandemics or disease outbreaks (including any escalation or general worsening of any such epidemic, pandemic or disease outbreak, including the COVID-19 virus) and hurricanes, earthquakes, floods, tsunamis, tornadoes, mudslides, wild fires or other natural disasters and other force majeure events in the United States or any other country or region in the world; provided, however, that with respect to each of clauses (i) through (iv), (vi), (ix) and (x), any change, effect, event, occurrence, state of facts, circumstance or development referred to above shall be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur to the extent that such change, effect, event, occurrence, state of facts, circumstance or development has a disproportionate effect on the Group Companies compared to other participants in the industries in which such Group Companies primarily conduct their businesses.
“Material Contract” has the meaning specified in Section 3.10(a).
“Material Permits” has the meaning specified in Section 3.16(b).
“Memorandum and Articles of Association” means the Company’s Amended and Restated Memorandum and Articles of Association, registered by the Cayman Registrar on June 17, 2024, as may be thereafter amended and/or restated from time to time.
“Merger” has the meaning specified in Section 1.01(a).
“Merger Consideration” has the meaning specified in Section 1.07(b).
“Merger Sub” has the meaning specified in the preamble.
“Merger Sub Shares” means the ordinary shares of the Merger Sub of par value USD 0.001 each.
“Merger Documents’ has the meaning specified in Section 1.01(b).
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“Nasdaq” means The NASDAQ Global Market.
“Offer” has the meaning specified in the recitals.
“Order” means any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award of a Governmental Entity. For clarification, a Permit is not an Order.
“Ordinary Course of Business” means, with respect to any Person, actions that are consistent in all material respects with the past practices of such Person, taken in the ordinary course of the normal day-to-day operations of such Person.
“Outside Date” means December 31, 2025.
“PubCo” has the meaning specified in the preamble.
“PubCo Board” means the board of directors of PubCo.
“PubCo Disclosure Letter” has the meaning specified in ARTICLE III.
“PubCo Employee Benefit Plan” means each “employee benefit plan” within the meaning of Section 3(3) of ERISA (whether or not subject to ERISA) and all other stock purchase, stock option, restricted stock, severance, retention, employment, individual consulting, change-of-control, bonus, incentive, deferred compensation, employee loan, welfare, medical, health, disability, fringe benefit and other benefit plan, agreement, program or policy (i) that is sponsored, maintained, contributed to, or required to be contributed to, by a Group Company for the benefit of any officer, employee, consultant or director of a Group Company or (ii) with respect to which any Group Company has any liability (including contingent liability through any ERISA Affiliate).
“PubCo Financial Statements” has the meaning specified in Section 3.06(a).
“PubCo IT Systems” shall mean all computer systems, hardware, servers, networks, data communication lines, and other information technology and telecommunications equipment and tangible assets, in each case, owned, leased, licensed, or outsourced, or otherwise used or held for use by or for any Group Company in connection with the business of the Group Companies.
“PubCo Proposals” has the meaning specified in Section 6.06.
“PubCo Ordinary Shares” means the ordinary shares of PubCo consisting of (i) 430,000,000 Class A Ordinary Shares, each with a par value of US$0.0001 and (ii) 70,000,000 Class B Ordinary Shares, each with a par value of US$0.0001, having the rights and being subject the restrictions as set out in its memorandum and articles of association.
“PubCo Shareholders” mean (i) Genesis River Technology Limited, a company incorporated under the laws of British Virgin Island, record holder of 4,800,000 Class A Ordinary Share of PubCo; and (ii) InnoValley Holdings Limited (Cayman), an exempted company organized under the laws of the Cayman Islands, recorded as the shareholder holding 5,200,000 Class A Ordinary Shares, each with a par value of US$0.0001 each and 30,000,000 Class B Ordinary Shares of PubCo, as of immediately prior to the Effective Time.
“PubCo Shareholders Approval” means the requisite affirmative vote of the shareholders of PubCo, in each case obtained in accordance with its memorandum and articles of association and the laws of the Cayman Islands, in favor of all proposals set forth by PubCo with respect to this Agreement and the transactions contemplated hereby.
“Party” or “Parties” has the meaning specified in the preamble.
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“Per Share Merger Consideration” means the right receive one (1) PubCo Class A Ordinary Share for each Company Share issued and outstanding immediately prior to the Effective Time.
“Permit” has the meaning specified in Section 3.16(b).
“Permitted Liens” means (a) statutory liens for current Taxes or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings by the Group Companies and for which adequate reserves have been established; (b) mechanics’, carriers’, workers’, repairers’ and similar statutory liens arising or incurred in the Ordinary Course of Business for amounts that are not delinquent, unless being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established; (c) zoning, entitlement, building and other land use regulations or ordinances imposed by Governmental Entities having jurisdiction over the Leased Real Property that are not violated in any material respect by the use and operation as of the date hereof of the Leased Real Property; (d) covenants, conditions, restrictions, easements and other similar Liens of record that do not materially impair the occupancy or use of the Leased Real Property for the purposes for which it is used as of the date hereof in connection with the Group Companies’ and their Subsidiaries’ businesses; (e) liens arising under workers’ compensation, unemployment insurance, social security, retirement and similar legislation; (f) liens arising in connection with sales of foreign receivables; (g) liens on goods in transit incurred pursuant to documentary letters of credit; (h) purchase money liens; (i) title to any portion of the premises lying within the right of way or boundary of any public road or private road which, individually or in the aggregate, do not materially adversely affect the value or the continued use of the Leased Real Property as it is used as of the date hereof; (j) rights of parties in possession without options to purchase or rights of first refusal; (k) liens securing Indebtedness of the Group Companies set forth on Schedule 3.10(a)(viii) of the PubCo Disclosure Letter; and (l) rights of lessors or landlords to the Leased Real Property.
“Permitted Releases” has the meaning specified in Section 2.09.
“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a Governmental Entity.
“Personal Information” shall mean, to the extent regulated by Privacy Laws, “personal data”, “personally identifiable information”, “PII” or all information that identifies or could be used to, directly or indirectly, identify an individual person.
“Personnel” has the meaning specified in Section 3.11(c).
“PRC Approvals” means, to the extent applicable, that the Group Companies have obtained all approvals necessary from the China Securities Regulatory Commission (the “CSRC”) in connection with the transactions contemplated by the Transaction Documents, pursuant to the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, as promulgated on February 17, 2023, and none of the Group Companies has received any notification from any Government Authorities of the PRC, including the CSRC, that any of the Group Companies or other Parties are obligated to make any filings or obtain approvals regarding the transactions contemplated by the Transaction Documents pursuant to the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, as promulgated on February 17, 2023 by the CSRC.
“Privacy Laws” shall mean applicable Legal Requirements relating to the Processing of Personal Information, including the Personal Information Protection Law of the People’s Republic of China and its related rules; Federal Trade Commission Act, the California Consumer Privacy Act, Regulation (EU) 2016/679 and any laws implementing that Regulation, the UK Data Protection Act 2018; the UK General Data Protection Regulation as defined by the UK Data Protection Act 2018 as amended by the Data Protection, Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations 2019.
“Processing” shall mean any operation or set of operations which is performed upon Personal Information, whether or not by automatic means, including but not limited to: collection, recording, organization, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, blocking, erasure or destruction. “Process” and “Processed” shall be construed accordingly.
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“Processor” shall mean any Person that Processes any Personal Information on behalf of any Group Company.
“Prospectus” means that certain final prospectus (file number 333-261028), dated as of June 17, 2024, of the Company.
“Proxy Statement” has the meaning specified in Section 6.01(a).
“Public Shareholders” has the meaning specified in Section 6.09.
“Real Property Leases” means all leases, subleases, licenses, and other contracts or agreements for the use or occupancy of the Leased Real Property, and any ancillary documents pertaining thereto, including, for example, amendments, modifications, supplements, exhibits, Schedules, addenda and restatements thereto and thereof.
“Reference Time” means 11:59 p.m. local time on the day immediately preceding the day the Effective Time occurs.
“Registered Intellectual Property” means all United States, international and foreign: (i) patents and patent applications; (ii) registered trademarks, applications to register trademarks, intent-to-use applications, or other registrations or applications related to trademarks; (iii) registered copyrights and applications for copyright registration; and (iv) any other Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded by any state, government or other public legal authority.
“Registration Rights Agreement” means a registration rights agreement, substantially in the same form with the same conditions and terms as provided in a registration right agreement dated June 17, 2024, by and between the Company, Sponsor and the holders party thereto, to be entered by and between the PubCo on the one hand, and the same holders on the other hand, immediately prior to the Effective Time, provided that the registrable securities under the Registration Rights Agreement shall be the registerable securities of the PubCo issued or issuable in connection with the Merger.
“Regulatory Approvals” means any clearance, consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity, including without limitation, any clearance, consent, approval, authorization, permit, filing, or notification contemplated by Section 3.03(d) of this Agreement.
“Related Claims” means all claims or causes of action (whether in contract or tort, in law or in equity, or granted by statute or otherwise) that may be based upon, arise out of or relate to this Agreement and any other document or instrument delivered pursuant to this Agreement, or the negotiation, execution, termination, validity, interpretation, construction, enforcement, performance or nonperformance of this Agreement or otherwise arising from the transactions contemplated hereby or the relationship among the Parties (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with, or as an inducement to enter into, this Agreement).
“Release” means any release, spill, emission, discharge, leak, pumping, injection, deposit, disposal, dispersal, leaching or migration into the environment (including ambient air, surface water, groundwater and surface or subsurface strata) or into or out of any real property, including the movement of Hazardous Materials through or in the ambient air, soil, surface water, groundwater or real property.
“Released Party” has the meaning specified in Section 11.18.
“Relevant Accounting Standards” means U.S. GAAP and all relevant statements and recommendations from professional accountancy bodies.
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“Representatives” means the officers, directors, managers, employees, attorneys, accountants, advisors, representatives, consultants and agents of a Person.
“Rights Shares” has the meaning specified in Section 1.07(a).
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Sponsor” has the meaning specified in the recitals.
“Sponsor Lock-Up Agreement” has the meaning given to this term in the recitals to this Agreement.
“Sponsor Voting Agreement” has the meaning specified in the recitals to this Agreement.
“Subsidiary” means, with respect to any Person, any corporation of which a majority of the total voting power of shares 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 any partnership, limited liability company, association or other business entity of which a majority of the partnership, limited liability company or other similar ownership interest 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. For purposes of this definition, a Person is deemed to have a majority ownership interest in a partnership, limited liability company, association or other business entity if such Person is allocated a majority of the gains or losses of such partnership, limited liability company, association or other business entity or is or controls the managing member or general partner or similar position of such partnership, limited liability company, association or other business entity.
“Substitute Right” has the meaning specified in Section 1.02(d).
“Surviving Company” has the meaning specified in Section 1.01(a).
“Tax” or “Taxes” means (i) any federal, state, local or foreign net income, gross income, gross receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer, real property gains, registration, value added, excise, natural resources, severance, stamp, occupation, premium, windfall profit, environmental, including under Section 59A of the Code, customs, duties, real property, special assessment, personal property, capital stock, social security, unemployment, disability, payroll, license, employee or other withholding, or other tax, of any kind whatsoever, including any interest, penalties or additions to tax or additional amounts in respect of the foregoing and (ii) any liability for the payment of amounts determined by reference to amounts described in clause (i) as a result of being or having been a member of any group of corporations that files, shall file, or has filed Tax Returns on a combined, consolidated or unitary basis, as a result of any obligation under any agreement or arrangement (including any Tax sharing arrangement), as a result of being a transferee or successor, or by contract (other than a contract the principal subject matter of which is not Taxes).
“Tax Returns” means any return, report, information return or other document (including Schedules or any related or supporting information) filed or required to be filed with any Governmental Entity or other authority in connection with the determination, assessment or collection of any Tax or the administration of any Laws or administrative requirements relating to any Tax.
“Trade Secrets” means confidential and proprietary information, trade secrets and know-how, including confidential processes, schematics, databases, formulae, drawings, prototypes, models, designs, know-how, concepts, methods, devices, technology, research and development results and records, inventions, compositions, reports, data, mailing lists, business plans, and customer lists, in each case, to the extent protectable under applicable Law as a trade secret.
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“Transaction Documents” means, collectively, this Agreement and all of the certificates, instruments, agreements and other documents referenced herein as required to be delivered by any of the Parties at the Closing or otherwise necessary for the consummation of the transactions contemplated by this Agreement.
“Transaction Proposals” shall mean (i) the approval of this Agreement and of the Merger and the other transactions contemplated by the Proxy Statement and this Agreement, (ii) the adoption and approval of the Merger Documents, including the Plan of Merger; (iii) the adoption and approval of any 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; (iv) the adoption and approval of each other proposal reasonably agreed to by PubCo and the Company as necessary or appropriate in connection with the consummation of the Merger and the other transactions contemplated by the Proxy Statement, this Agreement and the other Transaction Documents; and (v) the adoption and approval of a proposal for the adjournment of the Company Shareholders’ Meeting, if necessary, to permit further solicitation of proxies because there is no quorum or there are not sufficient votes to approve and adopt any of the foregoing.
“Treasury Regulations” means the regulations issued by the U.S. Department of Treasury interpreting the Code, as amended.
10.02 Other Definitional Provisions.
(a) Accounting Terms. Accounting terms that are not otherwise defined in this Agreement have the meanings given to them under GAAP. To the extent that the definition of an accounting term defined in this Agreement is inconsistent with the meaning of such term under GAAP, the definition set forth in this Agreement shall control.
(b) Successor Laws. Any reference to any particular Code, Section or Law shall be interpreted to include any revision of or successor to that Section regardless of how it is numbered or classified.
ARTICLE XI
MISCELLANEOUS
11.01 Press Releases and Public Announcements. No Party shall issue any press release or make any similar public announcement relating to the subject matter of this Agreement without the prior written approval of the Company and PubCo; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable law (in which case the disclosing Party shall use its commercially reasonable efforts to advise the other Parties in writing prior to making the disclosure).
11.02 Expenses. Except as otherwise expressly set forth in this Agreement, all fees and expenses incurred in connection with this Agreement and the Merger shall be paid by the Party incurring such fees and expenses whether or not the Merger is consummated. For the avoidance of doubt, PubCo or the Surviving Company shall be responsible for all fees and expenses of the Exchange Agent. If the Merger is consummated, PubCo shall pay or cause to be paid all (i) transfer, stamp and documentary Taxes or fees; and (ii) sales, use, gains, real property transfer and other similar Taxes or fees, in each case arising out of or in connection with entering into this Agreement and the consummation of the Merger.
11.03 Survival. The representations, warranties and covenants of the Company, PubCo and Merger Sub contained in this Agreement shall terminate at the Effective Time, and only the covenants that by their terms survive the Effective Time shall so survive the Effective Time.
11.04 Notices. Unless otherwise provided herein, all notices, requests, demands, claims, consents, approvals and other communications hereunder shall be in writing. Any notice, request, demand, claim, consent, approval or other communication hereunder shall be deemed duly given (a) when delivered personally to the recipient, (b) when signed for by the recipient if sent to the recipient by reputable international courier service (charges prepaid), and (c) on the date delivered in the place of delivery if sent by email or facsimile (with a written or electronic confirmation of delivery) prior to 5:00 p.m. local time at the recipient’s location, and otherwise on the next succeeding Business Day, in each case addressed to the intended recipient as set forth below:
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Notices to PubCo or Merger Sub:
Great
Future Technology Inc.
71 Fort Street, PO Box 500
George Town
Grand Cayman KY1-1106
Cayman Islands
Attention: Yongnan Zhou, Chairman
Email: zyn888@tonglioptech.com
with a copy to (which shall not constitute notice):
Miller Canfield Paddock and Stone, P.L.C.
1100 Superior Avenue E
Suite 1750
Cleveland, Ohio 44114
United States
Attn: Yanping Wang, Esq.
Email: wangy@millercanfield.com
Notices to the Company:
Flag Ship Acquisition Corporation
26 Broadway, Suite 934
New York, New York 10004
Attn: Matthew Chen, Chairman and Chief Executive Officer
Email: mchen@flagshipac.com
with a copy to (prior to the Closing) (which shall not constitute notice):
Bill Huo, Esq.
Becker & Poliakoff, P.A.
45 Broadway, 17th Floor
New York, NY 10006
(212) 599-3322
Attention: Bill Huo
Email: BHuo@beckerlawyers.com
Any Party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.
11.05 Succession and Assignment. This Agreement shall inure to the benefit of, and be binding upon, the successors and assigns of the Parties. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assignable by PubCo, Merger Sub or the Company; provided, however, that PubCo may (a) assign its rights, but not its obligations, under this Agreement to any Affiliate of PubCo or to any future purchaser of PubCo or the Surviving Company or its respective assets or (b) collaterally assign any or all of their rights and interests hereunder to one or more lenders of PubCo or the Surviving Company.
11.06 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.
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11.07 References. The table of contents and the section and other headings and subheadings contained in this Agreement and the exhibits hereto are solely for the purpose of reference, are not part of the agreement of the Parties, and shall not in any way affect the meaning or interpretation of this Agreement or any Exhibit hereto. All references to days (excluding Business Days) or months shall be deemed references to calendar days or months. All references to “$” shall be deemed references to United States dollars. Unless the context otherwise requires, any reference to a “Section,” “Exhibit,” “Disclosure Schedule” or “Schedule” shall be deemed to refer to a section of this Agreement, an Exhibit to this Agreement or a Schedule to this Agreement, as applicable. The words “hereof,” “herein” and “hereunder” and words of similar import referring to this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “including”, or any variation thereof means “including, without limitation” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it. Any reference to any federal, state, local or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term.
11.08 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 shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
11.09 Amendment and Waiver. Any provision of this Agreement or the Disclosure Letters hereto may be amended only in a writing signed by the Company (or the Surviving Company following the Closing), PubCo and the Merger Sub. At any time prior to the Closing, the PubCo (on behalf of itself, and Merger Sub), on the one hand, and Company may, to the extent not prohibited by applicable Legal Requirements: (a) extend the time for the performance of any of the obligations or other acts of the other Party; (b) waive any inaccuracies in the representations and warranties made to the other Party contained herein or in any document delivered pursuant hereto; and (c) waive compliance with any of the agreements or conditions for the benefit of such Party contained herein. Any agreement on the part of a Party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party. Delay in exercising any right under this Agreement shall not constitute a waiver of such right.
11.10 Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties, and supersedes any prior understandings, agreements or representations by or among the Parties, written or oral, in each case, to the extent they relate to the subject matter hereof. The exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof as if set forth in full herein.
11.11 Third-Party Beneficiaries. Except as set forth in or contemplated by Article VIII, this Agreement is not intended to confer upon any other Person any rights or remedies hereunder.
11.12 WAIVER OF TRIAL BY JURY. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY 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 OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION WILL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE 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.
11.13 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one agreement. Execution and delivery of this Agreement by exchange of electronically transmitted counterparts bearing the signature of a Party shall be equally as effective as delivery of a manually executed counterpart of such Party.
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11.14 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without regard to principles of conflicts of law that would result in the application of the substantive law of another jurisdiction, except to the extent that the laws of the Cayman Islands are mandatorily applicable.
11.15 Submission to Jurisdiction; Consent to Service of Process.
(a) Each Party hereby irrevocably submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any federal court within the State of Delaware, or, if no federal court in the State of Delaware accepts jurisdiction, any state court within the State of Delaware) over all Related Claims, and each Party hereby irrevocably agrees that all Related Claims may be heard and determined in such courts. Each Party hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable Law, any objection which it may now or hereafter have to the laying of venue of any such Related Claim brought in any such court or any defense of inconvenient forum for the maintenance of such dispute. Each Party agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.
(b) Each Party hereby consents to process being served by any other Party in any Related Claim by the delivery of a copy thereof in accordance with the provisions of Section 11.04 (other than by email) along with a notification that service of process is being served in conformance with this Section 11.15(b). Nothing in this Agreement shall affect the right of any Party to serve process in any other manner permitted by Law.
11.16 Remedies Cumulative. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a Party shall be deemed cumulative with, and not exclusive of, any other remedy conferred hereby, or by Law or equity upon such Party, and the exercise by a Party of any one remedy shall not preclude the exercise of any other remedy.
11.17 Specific Performance.
(a) Each Party agrees that irreparable damage would occur and that the Parties would not have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, in addition to any other remedies available under this Agreement, the Parties agree that, prior to the Closing or the valid termination of this Agreement, each Party shall be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent the other Party’s breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement (including the Company’s or PubCo’s obligation to consummate the transactions contemplated by this Agreement if required to do so hereunder). Each Party agrees that it shall not oppose the granting of an injunction, specific performance and other equitable relief when expressly available pursuant to the terms of this Agreement, and hereby waives (i) any defenses in any Legal Proceeding for an injunction, specific performance or other equitable relief, including the defense that the other Parties have an adequate remedy at law or an award of specific performance is not an appropriate remedy for any reason at law or equity and (ii) any requirement under Law to post a bond, undertaking or other security as a prerequisite to obtaining equitable relief.
(b) To the extent any Party brings any Legal Proceeding to enforce specifically the performance of the terms and provisions of this Agreement prior to the Closing, the Outside Date shall automatically be extended to (i) the 20th (twentieth) Business Day after such Legal Proceeding is no longer pending or (ii) such other date established by the court presiding over such Legal Proceeding.
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11.18 No Recourse. Except in the case of fraud, all actions, claims, obligations, liabilities or causes of actions (whether in contract or in tort, in law or in equity, or granted by statute whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to: (a) this Agreement, (b) the negotiation, execution or performance of this Agreement (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement), (c) any breach of this Agreement and (d) any failure of the Merger to be consummated, may be made only against (and, without prejudice to the rights of any express third party beneficiary to whom rights under this Agreement inure pursuant to Section 11.11), are those solely of the Persons that are expressly identified as parties to this Agreement and not against any Released Party. Except in the case of fraud, no other Person, including any director, officer, employee, incorporator, member, partner, manager, stockholder, option holder, Affiliate, agent, attorney or representative of, or any financial advisor or lender to, any party to this Agreement, or any director, officer, employee, incorporator, member, partner, manager, stockholder, Affiliate, agent, attorney or other Representative of, or any financial advisor or lender (each of the foregoing, a “Released Party”) to any of the foregoing shall have any liabilities (whether in contract or in tort, in law or in equity, or granted by statute whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil) for any claims, causes of action, obligations or liabilities arising under, out of, in connection with or related in any manner to the items in the immediately preceding clauses (a) through (d) and each Party, on behalf of itself and its Affiliates, hereby irrevocably releases and forever discharges each of the Released Parties from any such liability or obligation.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have executed this Agreement and Plan of Merger on the day and year first above written.
| Parent: | Great Future Technology Inc. | |
| By: | /s/ Yongnan Zhou | |
| Name: | Yongnan Zhou | |
| Title: | Director | |
| Merger Sub: | GFT MERGER SUB LIMITED | |
| By: | /s/ Jiangzhe Xiang | |
| Name: | Jiangzhe Xiang | |
| Title: | Director | |
| the Company: | FLAG SHIP ACQUISITION CORPORATION | |
| By: | /s/ Matthew Chen | |
| Name: | Matthew Chen | |
| Title: | Chairman and Chief Executive Officer | |
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Exhibit 10.1
Pubco sHaREHOLDER LOCK-UP AND SUPPORT AGREEMENT
THIS PARENT SHAREHOLDER LOCK-UP AND SUPPORT AGREEMENT (this “Agreement”) is made and entered into as of April 18, 2025, by and among Great Future Technology Inc., an exempted company incorporated in the Cayman Islands with limited liability (the “PubCo”), Flag Ship Acquisition Corporation, a Cayman Islands exempted company (the “Company”), Genesis River Technology Limited, a company incorporated in the British Virgin Islands (“Genesis River”), InnoValley Holdings Limited, an exempted company incorporated in the Cayman Islands with limited liabilities (“InnoValley”). Genesis River and InnoValley may each be referred to herein as a “PubCo Shareholder”, and together as “PubCo Shareholders”. The PubCo, the Company and each of the PubCo Shareholders shall each be referred to herein from time to time as a “Party” and, collectively, as the “Parties.”
WHEREAS, capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed thereto in the Agreement and Plan of Merger (the “Merger Agreement”) entered into by and among the PubCo, GFT Merger Sub Limited, a Cayman Islands exempted company and wholly owned subsidiary of the PubCo (the “Merger Sub”), and the Company, pursuant to which, among other things, Company will be merged with and into the Merger Sub (the “Merger”), with the Merger Sub surviving the Merger as a wholly owned subsidiary of the PubCo.
WHEREAS, each PubCo Shareholder is, as of the date of this Agreement, the sole legal and beneficial owner of the number of PubCo Ordinary Shares, set forth opposite such PubCo Shareholder’s name on Schedule A hereto (such PubCo Ordinary Shares being collectively referred to herein as the “Subject Shares”).
WHEREAS, as a condition to their willingness to enter into the Merger Agreement, the PubCo and the Company have requested that the PubCo Shareholders enter into this Agreement.
NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated into this Agreement as if fully set forth below, and intending to be legally bound hereby, the Parties agree as follows:
ARTICLE I
Definitions
1.1. Definitions. The terms defined in this Section 1.1 shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Business Combination” means a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination, between the PubCo and one or more businesses.
“Locked-Up Shares” means, with respect to each PubCo Shareholder, any PubCo Ordinary Shares held by the PubCo Shareholder immediately after the Closing, any PubCo Ordinary Shares acquirable upon the conversion, exercise or exchange of any securities convertible into or exercisable or exchangeable for PubCo Ordinary Shares held by the PubCo Shareholder immediately after the Closing (along with such securities themselves), and any New Securities (as defined below) acquired by the PubCo Shareholder with respect his, her or its PubCo Ordinary Shares.
“PubCo Ordinary Shares” means, collectively, the PubCo Class A Ordinary Shares and the PubCo Class B Ordinary Shares
“PubCo Per Share Trading Price” means, at any given time, the trading price per share of PubCo Class A Ordinary Shares as reported by Bloomberg or, if not available on Bloomberg, as reported by Morningstar.
“Trading Day” means any day on which PubCo Class A Ordinary Shares are actually traded on the principal securities exchange or securities market on which PubCo Class A Ordinary Shares are then traded.
“Transfer” means, for purposes of Article V, with respect to any Subject Shares, and for purposes of Article VI, with respect to any Locked-Up Shares, any (a) sale of, offer to sell, contract or agreement to sell, hypothecation of, pledge of, grant of any option, right or warrant to purchase or other transfer or disposition of, or agreement to transfer or dispose of, directly or indirectly, or establishment or increase of a put equivalent position in respect of, or liquidation or decrease of a call equivalent position in respect of, within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder, any such securities, (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 such securities, 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).
ARTICLE II
Representations and Warranties of the PUBCO Shareholders
Each PubCo Shareholder severally and not jointly hereby represents and warrants to the PubCo and the Company during the period starting from the date hereof until the earlier of (1) the Closing and (2) the termination of the Merger Agreement in accordance with its terms (the “Exclusivity Period”) as follows:
2.1. Organization and Standing. Such PubCo Shareholder, if an entity, has been duly organized and is validly existing and in good standing under the Laws of its jurisdiction of organization and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Such PubCo Shareholder, if an entity, is duly qualified or licensed and in good standing to do business (to the extent such concept is applicable in such PubCo Shareholder’s jurisdiction of formation) in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary.
2.2. Authorization; Binding Agreement. Such PubCo Shareholder has all requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized and no other proceedings on the part of such PubCo Shareholder are necessary to authorize the execution and delivery of this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by such PubCo Shareholder and, assuming the due authorization, execution and delivery of this Agreement by the other Parties, constitutes the valid and binding obligation of such PubCo Shareholder, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting or relating to creditors’ rights generally and subject, as to enforceability, to general principles of equity, whether such enforceability is considered in a proceeding in equity or at Law (the “Enforceability Exceptions”).
2.3. Governmental Approvals. No consent of or with any Governmental Authority on the part of such PubCo Shareholder is required to be obtained or made in connection with the execution, delivery or performance by such PubCo Shareholder of this Agreement or the consummation by such PubCo Shareholder of the transactions contemplated hereby, other than (a) applicable requirements, if any, of the Securities Act, the Exchange Act, and/or any state “blue sky” securities Laws, and the rules and regulations thereunder and (b) where the failure to obtain or make such consents or to make such filings or notifications would not prevent, impede or, in any material respect, delay or adversely affect the performance by such PubCo Shareholder of its obligations under this Agreement.
2.4. Non-Contravention. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and compliance with any of the provisions hereof by such PubCo Shareholder will not (a) if such PubCo Shareholder is a legal entity, conflict with or violate any provision of the Governing Documents of such PubCo Shareholder, (b) conflict with or violate any Law, permit, Order or consent applicable to such PubCo Shareholder or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by such PubCo Shareholder under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien upon any of the properties or assets of such PubCo Shareholder under, (viii) give rise to any obligation to obtain any third party consent from any Person or (ix) give any Person the right to declare a default, exercise any remedy, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any material contract of such PubCo Shareholder, except for any deviations from any of the foregoing clauses (b) or (c) that would not prevent, impede or, in any material respect, delay or adversely affect the performance by such PubCo Shareholder of its obligations under this Agreement.
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2.5. Subject Shares. Such PubCo Shareholder is the sole legal and beneficial owner of the PubCo Ordinary Shares set forth opposite such PubCo Shareholder’s name on Schedule A hereto, and all such Subject Shares are owned by such PubCo Shareholder free and clear of all Liens, other than Liens pursuant to this Agreement, the Governing Documents of the PubCo, the Merger Agreement or applicable U.S. federal or state securities laws. Such PubCo Shareholder does not legally or beneficially own any shares of the PubCo other than the Subject Shares. Such PubCo Shareholder has the sole right to vote the Subject Shares, and none of the Subject Shares is subject to any voting trust or other agreement, arrangement or restriction with respect to the voting of the Subject Shares, except as contemplated by this Agreement, the Governing Documents of the PubCo or the Merger Agreement.
2.6. Merger Agreement. Such PubCo Shareholder understands and acknowledges that the PubCo and the Company are entering into the Merger Agreement in reliance upon the PubCo Shareholders’ execution and delivery of this Agreement. Such PubCo Shareholder has received a copy of the Merger Agreement and is familiar with the provisions of the Merger Agreement.
ARTICLE III
Representations and Warranties of THE COMPANY
The Company hereby represents and warrants to each PubCo Shareholder and the PubCo during the Exclusivity Period as follows:
3.1. Organization and Standing. The Company is an exempted company duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands. The Company has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. The Company is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary.
3.2. Authorization; Binding Agreement. The Company has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized and no other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement by the other Parties, constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.
3.3. Non-Contravention. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and compliance with any of the provisions hereof by the Company will not (a) conflict with or violate any provision of the Governing Documents of the Company, (b) conflict with or violate any Law, permit, Order or consent applicable to the Company or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by the Company under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of the Company under, (viii) give rise to any obligation to obtain any third party consent from any Person or (ix) give any Person the right to declare a default, exercise any remedy, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any material contract of the Company, except for any deviations from any of the foregoing clauses (b) or (c) that would not prevent, impede or, in any material respect, delay or adversely affect the performance by the Company of its obligations under this Agreement.
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ARTICLE IV
Representations and Warranties of PUBCO
The PubCo hereby represents and warrants to each PubCo Shareholder and the Company during the Exclusivity Period as follows:
4.1. Organization and Standing. The PubCo is a company duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands. The PubCo has all requisite corporate power and authority to carry on its business as now being conducted.
4.2. Authorization; Binding Agreement. The PubCo has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized and no other corporate proceedings on the part of the PubCo are necessary to authorize the execution and delivery of this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the PubCo and, assuming the due authorization, execution and delivery of this Agreement by the other Parties, constitutes the valid and binding obligation of the PubCo, enforceable against the PubCo in accordance with its terms, subject to the Enforceability Exceptions.
4.3. Non-Contravention. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and compliance with any of the provisions hereof by the PubCo will not (a) conflict with or violate any provision of the Governing Documents of the PubCo, (b) conflict with or violate any Law, permit, Governmental Order or consent applicable to the PubCo or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by the PubCo under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien (other than Permitted Lien) upon any of the properties or assets of the PubCo under, (viii) give rise to any obligation to obtain any third party consent from any Person or (ix) give any Person the right to declare a default, exercise any remedy, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any material contract of the PubCo, except for any deviations from any of the foregoing clauses (b) or (c) that would not prevent, impede or, in any material respect, delay or adversely affect the performance by the PubCo of its obligations under this Agreement.
ARTICLE V
Agreement Regarding Voting; Certain Other Covenants of the PUBCO ShareholderS
Each PubCo Shareholder covenants and agrees during the Exclusivity Period:
5.1. Agreement Regarding Voting.
(a) In Favor of the Merger. At any meeting of the shareholders of the PubCo called to seek the PubCo Shareholder Approval, or at any adjournment thereof, or in connection with any written consent of the shareholders of the PubCo or in any other circumstances upon which a vote, consent or other approval with respect to the Merger and the other PubCo Proposals and any other transactions contemplated by the Merger Agreement and any other Transaction Documents, such PubCo Shareholder shall (i) if a meeting is held, appear at such meeting or otherwise cause the Subject Shares to be counted as present at such meeting for purposes of establishing a quorum, and (ii) vote or cause to be voted (including by class vote and/or written consent, if applicable) the Subject Shares in favor of granting the PubCo Shareholder Approval or, if there are insufficient votes in favor of granting the PubCo Shareholder Approval, in favor of the adjournment of such meeting of the shareholders of the PubCo to a later date.
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(b) Against Other Transactions. At any meeting of shareholders of the PubCo, or at any adjournment thereof, or in connection with any written consent of the shareholders of the PubCo or in any other circumstances upon which such PubCo Shareholder’s vote, consent or other approval is sought, such PubCo Shareholder shall (i) attend any such meeting of shareholders (in person or by proxy) or otherwise cause the Subject Shares to be counted as present thereat for the purposes of determining whether a quorum is present and (ii) vote (or cause to be voted) the Subject Shares (including by written consent, if applicable) against (w) other than in connection with the Merger, any business combination agreement, merger agreement or merger (other than the Merger Agreement and the Merger), scheme of arrangement, business combination, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by the PubCo or any public offering of any equity securities of the PubCo, any of its material Subsidiaries, or, in case of a public offering only, a newly-formed holding company of the PubCo or such material Subsidiaries, (x) any Alternative Transaction (as defined in the Merger Agreement) proposal and (y) other than any amendment to the Governing Documents of the PubCo in furtherance of Section 2.01 of the Merger Agreement, any amendment of the Governing Documents of the PubCo or other proposal or transaction involving the PubCo or any of its Subsidiaries and (z) any proposal or effort to revoke (in whole or in part) any approval set forth in any written consent made by such shareholders of the PubCo, which, in each of cases (w) and (y) of this sentence, would be reasonably likely to in any material respect impede, interfere with, delay or attempt to discourage, frustrate the purposes of, result in a breach by the PubCo of, prevent or nullify any provision of the Merger Agreement or any other Transaction Documents, the Merger or change in any manner the voting rights of any class of the PubCo’s share capital.
(c) Revoke Other Proxies. Each PubCo Shareholder represents and warrants that any proxies or powers of attorney heretofore given in respect of the Subject Shares that may still be in effect are not irrevocable, and such proxies or powers of attorney have been or are hereby revoked, other than the voting and other arrangements under the Governing Documents of the PubCo.
(d) Irrevocable Proxy and Power of Attorney. Each PubCo Shareholder hereby unconditionally and irrevocably grants to, and appoints, the PubCo and any individual designated in writing by the PubCo, as such PubCo Shareholder’s proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of such PubCo Shareholder, to vote the Subject Shares, or grant a written consent or approval in respect of the Subject Shares in a manner consistent with Section 5.1(a) of this Agreement. Each PubCo Shareholder understands and acknowledges that the PubCo is entering into the Merger Agreement in reliance upon such PubCo Shareholder’s execution and delivery of this Agreement. Each PubCo Shareholder hereby affirms that the irrevocable proxy and power of attorney set forth in this Section 5.1(d) are given in connection with the execution of the Merger Agreement, and that such irrevocable proxy and power of attorney are given to secure the performance of the duties of such PubCo Shareholder under this Agreement. Each PubCo Shareholder hereby further affirms that the irrevocable proxy and power of attorney are given to secure a proprietary interest and may under no circumstances be revoked. Each PubCo Shareholder hereby ratifies and confirms all that such irrevocable proxy and power of attorney may lawfully do or cause to be done by virtue hereof. The irrevocable proxy and power of attorney granted hereunder shall only terminate upon the expiration of the Exclusivity Period.
(e) Notwithstanding the provisions of Section 5.1(a) and Section 5.1(b), however, PubCo Shareholder shall not be required to vote or provide consent or take any other action pursuant to Section 5.1(a) or Section 5.1(b), in each case to the extent any such vote, consent or other action would preclude SEC registration of the securities of the PubCo being issued to the Company Shareholders as contemplated by the Merger Agreement.
5.2. No Transfer. During the Exclusivity Period, other than (w) upon the consent of both the PubCo and the Company, (x) permitted by this Agreement, or (y) to an Affiliate of such PubCo Shareholder (provided that, in each case of the foregoing clauses (x) and (y), such transferee shall enter into a written agreement, in form and substance reasonably satisfactory to the PubCo and the Company, agreeing to be bound by this Agreement, and shall have the same rights and benefits under this Agreement, to the same extent as such transferring PubCo Shareholder), such PubCo Shareholder shall not, directly or indirectly, (i) Transfer any Subject Shares, other than pursuant to the Merger, (ii) grant any proxies or powers of attorney or enter into any voting arrangement, whether by proxy, voting agreement, voting trust, voting deed or otherwise (including pursuant to any loan of Subject Shares), with respect to any Subject Shares, in each case, other than as set forth in this Agreement, the Merger Agreement, Transaction Documents or the voting and other arrangements under the Governing Documents of the PubCo, (iii) take any action that would reasonably be expected to make any representation or warranty of such PubCo Shareholder herein untrue or incorrect, or would reasonably be expected to have the effect of preventing or disabling such PubCo Shareholder from performing its obligations hereunder, or (iv) commit or agree to take any of the foregoing actions. Any action attempted to be taken in violation of the preceding sentence will be null and void. Each PubCo Shareholder agrees with, and covenants to, the PubCo and the Company that such PubCo Shareholder shall not request that the PubCo register the Transfer (by book-entry or otherwise) of any certificated or uncertificated interest representing any of the Subject Shares.
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5.3. New Shares. In the event that prior to the Closing (i) PubCo Ordinary Shares or other securities are issued or otherwise distributed to a PubCo Shareholder pursuant to any stock dividend or distribution, or any change in any of the PubCo Ordinary Shares or other share capital of the PubCo by reason of any stock split-up, recapitalization, combination, exchange of shares or the like, (ii) a PubCo Shareholder acquires legal or beneficial ownership of any PubCo Ordinary Shares after the date of this Agreement, including upon exercise of options or settlement of restricted share units or (iii) a PubCo Shareholder acquires the right to vote or share in the voting of any PubCo Ordinary Share after the date of this Agreement (collectively, the “New Securities”), the terms “Subject Shares” shall be deemed to refer to and include such New Securities (including all such stock dividends and distributions and any securities into which or for which any or all of the Subject Shares may be changed or exchanged into).
5.4. Exclusivity; Confidentiality. Each PubCo Shareholder shall be bound by and comply with Sections 5.04 (Exclusive Dealing) and 5.03 (PubCo Confidentiality) of the Merger Agreement (and any relevant definitions contained in any such sections) as if (a) PubCo Shareholder was an original signatory to the Merger Agreement with respect to such provisions, and (b) each reference to the “PubCo” contained in Section 5.04 of the Merger Agreement (other than for purposes of the definition of Alternative Transaction) and “Affiliates” contained in Article X of the Merger Agreement also referred to PubCo Shareholder.
5.5. Consent to Disclosure. Each PubCo Shareholder consents to and authorizes the PubCo or the Company, as applicable, to publish and disclose in all documents and schedules filed with the SEC or any other Governmental Entity or applicable securities exchange, and any press release or other disclosure document that the Company or PubCo, as applicable, reasonably determines to be necessary or advisable in connection with the Merger or any other transactions contemplated by the Merger Agreement or this Agreement, such PubCo Shareholder’s identity and ownership of such PubCo Shareholder’s Subject Shares, the existence of this Agreement and the nature of such PubCo Shareholder’s commitments and obligations under this Agreement, and such PubCo Shareholder acknowledges that the PubCo and the Company may, in their sole discretion, file this Agreement or a form hereof with the SEC or any other Governmental Entity or securities exchange. Each PubCo Shareholder agrees to promptly give the PubCo or the Company, as applicable, any information that is in its possession that the PubCo or the Company, as applicable, may reasonably request for the preparation of any such disclosure documents, and such PubCo Shareholder agrees to promptly notify the PubCo and the Company of any required corrections with respect to any written information supplied by it specifically for use in any such disclosure document, if and to the extent that such PubCo Shareholder shall become aware that any such information shall have become false or misleading in any material respect.
5.6. Restricted Activities. Each PubCo Shareholder shall not revoke (in whole or in part) or seek to revoke (in whole or in part), or adopt any resolution, consent or vote that would have the effect of revoking (in whole or in part), any approval set forth in any written consent made by such PubCo Shareholder without the prior written consent of the Company. Each PubCo Shareholder shall not adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization without the prior written consent of the PubCo and the Company.
5.7. Additional Matters. Each PubCo Shareholder shall, from time to time, (i) execute and deliver, or cause to be executed and delivered, such additional or further consents, documents and other instruments as the PubCo and the Company may reasonably request for the purpose of effectively carrying out the transactions contemplated by this Agreement, the Merger Agreement and the other Transaction Documents and (ii) refrain from exercising any veto right, consent right or similar right (whether under the Governing Documents of the PubCo or the BVI Business Companies Act) which would prevent, impede or, in any material respect, delay or adversely affect the consummation of the Merger.
5.8. Waiver of Certain PubCo Shareholders’ Rights. Each PubCo Shareholder hereby irrevocably waives and agrees not to exercise any rights it may have under the Amended and Restated Memorandum and Articles of Association of the PubCo to be adopted by a special resolution of shareholders of the PubCo in connection with the Merger and other transactions contemplated by the Merger Agreement and the other Transaction Documents.
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ARTICLE VI
Other Agreements
6.1. Lock-Up Provisions.
(a) Subject to the exceptions set forth herein, during the applicable Lock-Up Period (as defined below), each PubCo Shareholder agrees not to Transfer any Locked-Up Shares held by such PubCo Shareholder. As used herein, the “Lock-Up Period” shall mean, (i) with respect to 50% of the Locked-Up Shares held by such PubCo Shareholder, the period of time commencing on the Closing Date and expiring on the earlier of (A) the date that is six (6) months following the Closing Date or (B) the date on which the closing PubCo Per Share Trading Price equals or exceeds $12.50 per share (as adjusted for share splits, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 Trading Days within any thirty (30)-Trading Day period commencing after the Closing Date, and (ii) with respect to the remaining 50% of the Locked-Up Shares held (rounded up to the nearest whole share) held by such PubCo Shareholder, the period of time commencing on the Closing Date and expiring on the date this six (6) months following the Closing Date; or earlier in either case, if subsequent to the Closing Date, the PubCo completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the PubCo’s shareholders having the right to exchange their PubCo Ordinary Shares for cash, securities or other property (such periods set forth in the foregoing clauses (i) and (ii), as applicable, the “Lock-Up Period”), with the percentages set forth in this sentence applying to the aggregate holdings of Locked-Up Shares held by all entities constituting such PubCo Shareholder (to the extent two (2) or more entities constitute such PubCo Shareholder), and calculated on an aggregated basis. For the avoidance of doubt, the Locked-Up Shares shall be measured on an as-exercised or as-converted basis, as applicable.
(b) The restrictions set forth in Section 6.1(a) (the “Lock-Up Restrictions”) with respect to the Transfer of Locked-Up Shares shall not apply to:
(i) Transfers to the PubCo’s officers or directors, any affiliates (as defined below) or family members of any of the PubCo’s officers or directors, any members of such PubCo Shareholder, or any Affiliates of such PubCo Shareholder;
(ii) in the case of an individual, Transfers by gift to a member of the individual’s immediate family, to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such person, or to a charitable organization;
(iii) in the case of an individual, Transfers by virtue of laws of descent and distribution upon death of the individual;
(iv) in the case of an individual, Transfers pursuant to a qualified domestic relations order;
(v) Transfers of title by private sales or Transfers made in connection with the consummation of a Business Combination at prices no greater than the price at which the securities were originally purchased;
(vi) Transfers in the event of the PubCo’s liquidation prior to the completion of an initial Business Combination;
(vii) Transfers by virtue of the laws of the Cayman Islands or if such PubCo Shareholder is a legal entity, such PubCo Shareholder’s Governing Documents upon dissolution of such PubCo Shareholder;
(viii) in the event of the PubCo’s liquidation, merger, share exchange, reorganization or other similar transaction which results in all of the PubCo’s shareholders having the right to exchange their PubCo Ordinary Shares for cash, securities or other property subsequent to the completion of the PubCo’s initial Business Combination; and
(ix) Transfers in connection with a Business Combination with the PubCo’s consent to any third party;
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provided, however, that in the case of clauses (i) through (v), (viii) and (ix), these permitted transferees must enter into a written agreement, in substantially the form of this Agreement, agreeing to be bound by the Lock-Up Restrictions and shall have the same rights and benefits under this Agreement. A copy of such agreement as so executed shall be promptly delivered by the Principal Shareholder to the PubCo. For purposes of this paragraph, “immediate family” shall mean a spouse, domestic partner, child, grandchild or other lineal descendant (including by adoption), father, mother, brother or sister of an individual; and “affiliate” shall have the meaning set forth in Rule 405 under the Securities Act of 1933, as amended.
(c) For the avoidance of doubt, each PubCo Shareholder shall retain all of its rights as a shareholder of the PubCo during the Lock-Up Period, including the right to vote any Locked-Up Shares.
(d) In furtherance of the foregoing, the PubCo, and any duly appointed transfer agent for the registration or transfer of the Locked-Up Shares, are hereby authorized to decline to make any transfer of securities if such Transfer would constitute a violation or breach of the Lock-Up Restrictions.
(e) The PubCo shall remove, and shall cause to be removed (including by causing its transfer agent and The Depository Trust Company (as applicable) to remove), any legends, marks, stop-transfer instructions or other similar notations pertaining to the lock-up arrangements herein from the book-entries evidencing any Locked-Up Shares at the time any such Locked-Up Shares are no longer subject to the Lock-Up Restrictions (any Locked-Up Share at such time, a “Free Share”), and shall take all such actions (and shall cause to be taken all such actions) necessary or proper to cause each Free Share to be consolidated under the CUSIP(s) and/or ISIN(s) applicable to the unrestricted PubCo Ordinary Shares or so that the Free Share is in a like position. Any holder of a Locked-Up Share is an express third-party beneficiary of this Section 6.1(e) and entitled to enforce specifically the obligations of the Company set forth in this Section 6.1(e) directly against the PubCo.
ARTICLE VII
General Provisions
7.1. Termination. This Agreement shall be effective the date hereof and shall immediately terminate upon the earlier of (x) the termination of the Merger Agreement pursuant to its terms and (y) the date on which none of the PubCo and the Company and any holder of a Locked-Up Share has any rights or obligations hereunder; provided that, in the event that the Merger Agreement is not terminated pursuant to its terms prior to the Closing, Article II, Article III, Article IV and Article V (other than Section 5.3, Section 5.5, Section 5.6 (solely with respect to Section 5.05 (PubCo Confidentiality) of the Merger Agreement) and Section 5.8, which shall survive indefinitely) shall terminate upon the Closing. The termination of this Agreement shall not relieve any Party from any liability arising in respect of any willful and material breach of this Agreement prior to such termination. Despite n the termination of this Agreement (or any portion thereof), this Article VII shall survive indefinitely.
7.2. Capacity as a PubCo Shareholder. Each PubCo Shareholder signs this Agreement solely in such PubCo Shareholder’s capacity as a shareholder of the PubCo, and not in such PubCo Shareholder’s capacity as a director or officer of the PubCo, if applicable.
7.3. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) to the PubCo and the Company in accordance with Section 11.04 of the Merger Agreement and to each PubCo Shareholder at its address set forth on Schedule A hereto (or at such other address for a Party as shall be specified by like notice).
7.4. Entire Agreement; Amendment. This Agreement constitutes the entire agreement and understanding between the Parties relating to the subject matter hereof and the transactions contemplated hereby and supersedes any other agreements and understandings, whether written or oral, that may have been made or entered into by or between the Parties relating to the subject matter hereof or the transactions contemplated hereby. This 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.
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7.5. Assignment. No Party shall assign this Agreement or any part hereof without the prior written consent of the other Parties, provided, however, that the PubCo may (a) assign its rights, but not its obligations, under this Agreement to any Affiliate of the PubCo or to any future purchaser of the PubCo or its assets or (b) collaterally assign any or all of their rights and interests hereunder to one or more lenders of the PubCo. Notwithstanding the foregoing restrictions on assignment in this Section, in connection with a Transfer of title of any Subject Shares or Locked-Up Shares (as applicable) in accordance with the terms of this Agreement, the transferee to whom such Subject Shares or Locked-Up Shares (as applicable) are transferred shall thenceforth be entitled to all the rights and be subject to all the obligations under this Agreement; provided, that no such Transfer shall relieve the assigning party of its obligations hereunder. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Any attempted assignment in violation of the terms of this Section 7.5 shall be null and void, ab initio. For the avoidance of doubt, no transfer of PubCo Ordinary Shares, Locked-Up Shares or Free Shares shall be (or be deemed to be) an assignment of this Agreement or the rights or obligations hereunder.
7.6. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without regard to principles of conflicts of law that would result in the application of the substantive law of another jurisdiction. Each party hereby irrevocably submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any federal court within the State of Delaware, or, if no federal court in the State of Delaware accepts jurisdiction, any state court within the State of Delaware) (the “Delaware Courts”) over all claims or causes of action (whether in contract or tort, in law or in equity, or granted by statute or otherwise) that may be based upon, arise out of or relate to this Agreement and any other document or instrument delivered pursuant to this Agreement, or the negotiation, execution, termination, validity, interpretation, construction, enforcement, performance or nonperformance of this Agreement or otherwise arising from the transactions contemplated hereby or the relationship among the parties (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with, or as an inducement to enter into, this Agreement) (collectively, “Related Claims”), and each party hereby irrevocably agrees that all Related Claims may be heard and determined in such courts. Each party hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable Law, any objection which it may now or hereafter have to the laying of venue of any such Related Claim brought in any such court or any defense of inconvenient forum for the maintenance of such dispute. Each party agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party hereby consents to process being served by any other party in any Related Claim by the delivery of a copy thereof in accordance with the provisions of Section 11.04 of the Merger Agreement (other than by email) along with a notification that service of process is being served in conformance with this Section 7.6. Nothing in this Agreement will affect the right of any party to serve process in any other manner permitted by law. EACH OF THE PARTIES HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY 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 RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH OF THE PARTIES NT HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION WILL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT THE PARTIES MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
7.7. Enforcement. Each of the Parties acknowledges that its obligations under this Agreement are unique, recognizes and affirms that in the event of a breach of this Agreement by it, money damages will be inadequate and the other Party will have no adequate remedy at law, and agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by it in accordance with their specific terms or were otherwise breached. Accordingly, in addition to all such monetary remedies it may be entitled under Law for the other Party’s breaches of this Agreement, the non-breaching party shall be entitled to an injunction or restraining order to prevent breaches of this Agreement by the other Party and to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or to prove that money damages would be inadequate, this being in addition to any other right or remedy to which the non-breaching Party may be entitled under this Agreement, at law or in equity.
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7.8. Counterparts. This Agreement may be executed in two or more counterparts (any of which may be executed in .PDF format or a secure electronic signature platform (e.g., Docusign), and delivered by electronic transmission), each of which shall constitute an original, and all of which taken together shall constitute one and the same instrument.
[Signature pages follow]
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IN WITNESS WHEREOF, the Parties have hereunto caused this Agreement to be duly executed as of the date first set forth above.
| GREAT FUTURE TECHNOLOGY INC. | ||
| By: | /s/ Yongnan Zhou | |
| Name: | Yongnan Zhou | |
| Title: | Director and CEO | |
[Signature Page to PubCo Shareholder Lock-Up and Support Agreement]
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IN WITNESS WHEREOF, the Parties have hereunto caused this Agreement to be duly executed as of the date first set forth above.
| FLAG SHIP ACQUISITION CORPORATION | ||
| By: | /s/ Matthew Chen | |
| Name: | Matthew Chen | |
| Title: | Chairman | |
[Signature Page to PubCo Shareholder Lock-Up and Support Agreement]
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IN WITNESS WHEREOF, the Parties have hereunto caused this Agreement to be duly executed as of the date first set forth above.
| GENESIS RIVER TECHNOLOGY LIMITED | ||
| By: | /s/ Wang Hou-Hsun | |
| Name: | Wang Hou-Hsun | |
| Title: | Director | |
[Signature Page to PubCo Shareholder Lock-Up and Support Agreement]
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IN WITNESS WHEREOF, the Parties have hereunto caused this Agreement to be duly executed as of the date first set forth above.
| INNOVALLEY HOLDINGS LIMITED | ||
| By: | /s/ Yongnan Zhou | |
| Name: | Yongnan Zhou | |
| Title: | Director | |
[Signature Page to PubCo Shareholder Lock-Up and Support Agreement]
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Schedule A
| Name of PubCo Shareholder |
Number of PubCo Ordinary Shares Held by such Shareholder |
Ownership Percentages in PubCo |
| Genesis River Technology Limited | 4,800,000 Class A Ordinary Shares | 12% |
| InnoValley Holdings Limited | 5,200,00 Class A Ordinary Shares; 30,000,000 Class B Ordinary Shares | 88% |
| Total | 100% |
Note: The percentage is calculated based on the total number of the issued and outstanding PubCo Ordinary Shares as the date of this Agreement.
Sch. A-1
Exhibit 10.2
SPONSOR LOCK-UP AGREEMENT
THIS SPONSOR LOCK-UP AGREEMENT (this “Agreement”) is made and entered into as of April 18, 2025, by and between (i) Great Future Technology Inc., an exempted company incorporated in the Cayan Islands with limited liability (the “Parent”), and Whale Management Corporation, a British Virgin Islands exempted company (“Sponsor”). The Parent and Sponsor shall each be referred to herein from time to time as a “Party” and, collectively, as the “Parties.”
WHEREAS, capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed thereto in the Agreement and Plan of Merger (the “Merger Agreement”) entered into by and among the Parent, GRT Merger Sub Limited, a Cayman Islands exempted company and wholly owned subsidiary of the Parent (the “Merger Sub”), and Flag Ship Acquisition Corporation (the “Company”), a Cayman Islands exempted company, pursuant to which, among other things, the Company will be merged with and into the Merger Sub (the “Merger”), with the Merger Sub surviving the Merger as a wholly owned subsidiary of the Parent.
WHEREAS, Sponsor is the record owner of the Founder Company Shares (defined below) and the Private Placement Company Units (defined below) and, pursuant to the Merger Agreement will receive Parent Ordinary Shares (defined below) in consideration of the Founder Company Shares and securities underlying the Private Placement Company Units.
WHEREAS, in connection with the transactions contemplated by the Merger Agreement, and in view of the valuable consideration to be received by the parties thereunder, the Parent and the Sponsor desire to enter into this Agreement, pursuant to which the Locked-Up Securities (as defined below) shall become subject to limitations as set forth herein.
NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated into this Agreement as if fully set forth below, and intending to be legally bound hereby, the Parties agree as follows:
1. Definitions. The terms defined in this Section 1 shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Business Combination” means a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination between the Company and one or more businesses, including the transactions contemplated by the Merger Agreement.
“Founder Company Shares” means, the 1,725,000 Company Ordinary Shares, par value $0.001 per share, initially issued to Sponsor for an aggregate purchase price of $25,000, pursuant to certain Securities Subscription Agreement dated November 29, 2022 and its subsequent amendment between Sponsor and the Company.
“Locked-Up Securities” means, Locked-Up Founder Securities and Locked-Up Private Placement Securities.
“Locked-Up Founder Securities” means the Parent Class A Ordinary Shares Sponsor receives in respect of the Founder Company Shares pursuant to the Merger Agreement.
“Locked-Up Private Placement Securities” means the Parent Class A Ordinary Shares Sponsor receives pursuant to the Merger Agreement in respect of the Private Placement Company Shares and the Private Placement Company Rights comprising the Private Placement Company Units.
“Parent Class A Ordinary Shares” means the Class A ordinary shares of the Parent with a par value of $0.0001.
“Parent Per Share Trading Price” means, at any given time, the trading price per share of the Parent Class A Ordinary Shares as reported by Bloomberg or, if not available on Bloomberg, as reported by Morningstar.
“Private Placement Company Rights” means the 238,000 Company Rights underlying the Private Placement Company Units, with each Private Placement Company Right entitling Sponsor to receive one-tenth (1/10) of one Company Ordinary Share at the consummation of a Business Combination.
“Private Placement Company Shares” means the 238,000 Company Ordinary Shares, par value $0.001 per share, underlying the Private Placement Company Units.
“Private Placement Company Units” means the 238,000 Company Units purchased by Sponsor in that certain private placement that occurred simultaneously with the consummation of the initial public officer of the Company, with each such purchased unit comprised of one Private Placement Company Share and one Private Placement Company Right.
“Trading Day” means any day on which Parent Ordinary Shares are actually traded on the principal securities exchange or securities market on which Parent Ordinary Shares are then traded.
“Transfer” means, with respect to any securities, any (a) sale of, offer to sell, contract or agreement to sell, hypothecation of, pledge of, grant of any option, right or warrant to purchase or other transfer or disposition of, or agreement to transfer or dispose of, directly or indirectly, or establishment or increase of a put equivalent position in respect of, or liquidation or decrease of a call equivalent position in respect of, within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder, any such securities, (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 such securities, 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).
2. Lock-Up Provisions.
(a)(i) Subject to the exceptions set forth herein, during the applicable Private Placement Securities Lock-up Period, Sponsor agrees not to Transfer any Locked-Up Private Placement Securities. As used herein, the “Private Placement Securities Lock-up Period” shall mean, the period of time commencing on the Closing Date and expiring at 11:59 p.m. (Eastern time) on the thirtieth (30) day following the Closing Date.
(ii) Subject to the exceptions set forth herein, during the applicable Founder Securities Lock-Up Period, Sponsor agrees not to Transfer any Locked-Up Founder Securities. As used herein, the “Founder Securities Lock-up Period” shall mean, (y) with respect to 50% of the Locked-Up Founder Securities, the period of time commencing on the Closing Date and expiring on the earlier of (A) the date that is six (6) months following the Closing Date or (B) the date on which the closing Parent Per Share Trading Price equals or exceeds $12.50 per share (as adjusted for share splits, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 Trading Days within any thirty (30)-Trading Day period commencing after the Closing Date, and (z) with respect to 50% of the Locked-Up Founder Securities (rounded up to the nearest whole share) the period of time commencing on the Closing Date and expiring on the date that is six (6) months following the Closing Date; or earlier in either case, if subsequent to the Closing Date, the Parent completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Parent’s shareholders having the right to exchange their Parent Ordinary Shares for cash, securities or other property (and together with the Private Placement Securities Lock-up Period, the “Lock-up Periods”), with the percentages set forth in this sentence applying to the aggregate holdings of Locked-Up Founder Securities held by all entities constituting Sponsor, and calculated on an aggregated basis. For the avoidance of doubt, the Locked-Up Founder Securities shall be measured on an as-exercised or as-converted basis, as applicable.
(b) The restrictions on the Locked-Up Securities set forth in Section 2(a) (the “Lock-Up Restrictions”) shall not apply to:
(i) Transfers to the Company’s officers or directors, any affiliates (as defined below) or family members of any of the Company’s officers or directors, any members of Sponsor, or any affiliates of Sponsor;
(ii) in the case of an individual, Transfers by gift to a member of the individual’s immediate family, to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such person, or to a charitable organization;
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(iii) in the case of an individual, Transfers by virtue of laws of descent and distribution upon death of the individual;
(iv) in the case of an individual, Transfers pursuant to a qualified domestic relations order;
(v) Transfers by private sales or Transfers made in connection with the consummation of a Business Combination at prices no higher than the per share price at which such securities were originally purchased;
(vi) Transfers in the event of the Company’s liquidation prior to the completion of an initial Business Combination;
(vii) Transfers by virtue of the laws of the Cayman Islands or Transfers of title pursuant to Sponsor’s limited liability company agreement upon dissolution of Sponsor;
(viii) Transfers pursuant to the Parent’s liquidation, merger, share exchange, reorganization or other similar transaction whereby all of the Parent’s shareholders have the right to exchange their Parent Ordinary Shares for cash, securities or other property; and
(ix) Transfers in connection with the Company’s initial Business Combination with the Company’s consent to any third party,
provided, however, that in the case of clauses (i) through (v), (viii) and (ix), these permitted transferees must enter into a written agreement, in substantially in the form of this Agreement, agreeing to be bound by the Lock-Up Restrictions and shall have the same rights and benefits under this Agreement. A copy of such Agreement as so executed shall be promptly delivered by Sponsor to the Parent. For purposes of this paragraph, “immediate family” shall mean a spouse, domestic partner, child, grandchild or other lineal descendant (including by adoption), father, mother, brother or sister of an individual; and “affiliate” shall have the meaning set forth in Rule 405 under the Securities Act of 1933, as amended.
(c) For the avoidance of doubt, Sponsor shall retain all of its rights as a shareholder of the Parent during the Lock-Up Periods, including the right to vote any Locked-Up Securities.
(d) In furtherance of the foregoing, the Parent, and any duly appointed transfer agent for the registration or transfer of the Locked-Up Securities, are hereby authorized to decline to make any transfer of securities if such Transfer would constitute a violation or breach of the Lock-Up Restrictions.
(e) For the purposes of clarity, Locked-up Securities shall not include any Parent Ordinary Shares which are purchased by Sponsor in the open market following the Closing Date.
3. Miscellaneous.
(a) If, during the Lock-Up Periods, the Parent Ordinary Shares outstanding as of immediately following the Effective Time shall have been changed into a different number of shares or a different class by reason of any share capitalization, dividend, distribution, combination, reverse share split, share consolidation, split, subdivision, conversion, exchange, transfer, sale, cancelation, repurchase, redemption or reclassification, or any similar event shall have occurred, then the Parent Per Share Trading Price specified in Section 2(a)(ii)(B) shall be equitably adjusted to reflect such change.
(b) The Parent shall remove, and shall cause to be removed (including by causing its transfer agent and The Depository Trust Company (as applicable) to remove), any legends, marks, stop-transfer instructions or other similar notations pertaining to the lock-up arrangements herein from the book-entries evidencing any Locked-Up Securities at the time any such Locked-Up Securities are no longer subject to the Lock-Up Restrictions (any Locked-Up Security at such time, a “Free Security”), and shall take all such actions (and shall cause to be taken all such actions) necessary or proper to cause the Free Security to be consolidated under the CUSIP(s) and/or ISIN(s) applicable to the unrestricted Parent Ordinary Shares or so that the Free Security is in a like position. Any holder of a Locked-Up Security is an express third-party beneficiary of this Section 3(b) and entitled to enforce specifically the obligations of the Parent set forth in this Section 3(b) directly against the Parent.
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(c) This Agreement shall be effective the date hereof and shall immediately terminate upon the earlier of (x) the termination of the Merger Agreement pursuant to its terms, and (y) the date on which none of the Parent, Sponsor or any holder of a Locked-Up Security has any rights or obligations hereunder.
(d) Each of Sponsor and the Parent hereby represents and warrants that it has full power and authority to enter into this Agreement and that this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other legal requirements relating to or affecting creditors’ rights generally or by equitable principles (regardless of whether enforcement is sought at law or in equity). Upon the other Party’s request, Sponsor or the Parent, as applicable, will execute any additional documents necessary in connection with the enforcement hereof.
(e) This Agreement constitutes the entire agreement and understanding between the Parties relating to the subject matter hereof and the transactions contemplated hereby and supersedes any other agreements and understandings, whether written or oral, that may have been made or entered into by or between the Parties relating to the subject matter hereof or the transactions contemplated hereby. This 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.
(f) No Party shall assign this Agreement or any part hereof without the prior written consent of the other Party; provided, that no such assignment shall relieve the assigning party of its obligations hereunder. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Any attempted assignment in violation of the terms of this paragraph shall be null and void, ab initio. For the avoidance of doubt, no Transfer of Parent Ordinary Shares, Locked-Up Securities or Free Securities shall be (or be deemed to be) an assignment of this Agreement or the rights or obligations hereunder.
(g) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without regard to principles of conflicts of law that would result in the application of the substantive law of another jurisdiction. Each party hereby irrevocably submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any federal court within the State of Delaware, or, if no federal court in the State of Delaware accepts jurisdiction, any state court within the State of Delaware) (the “Delaware Courts”) over all claims or causes of action (whether in contract or tort, in law or in equity, or granted by statute or otherwise) that may be based upon, arise out of or relate to this Agreement and any other document or instrument delivered pursuant to this Agreement, or the negotiation, execution, termination, validity, interpretation, construction, enforcement, performance or nonperformance of this Agreement or otherwise arising from the transactions contemplated hereby or the relationship among the parties (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with, or as an inducement to enter into, this Agreement) (collectively, “Related Claims”), and each party hereby irrevocably agrees that all Related Claims may be heard and determined in such courts. Each party hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable Law, any objection which it may now or hereafter have to the laying of venue of any such Related Claim brought in any such court or any defense of inconvenient forum for the maintenance of such dispute. Each party agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party hereby consents to process being served by any other party in any Related Claim by the delivery of a copy thereof in accordance with the provisions of Section 3(h) (other than by email) along with a notification that service of process is being served in conformance with this Section 3(g). Nothing in this Agreement will affect the right of any party to serve process in any other manner permitted by law. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY 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 OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION WILL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE 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.
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(h) Unless otherwise provided herein, all notices, requests, demands, claims, consents, approvals and other communications hereunder will be in writing. Any notice, request, demand, claim, consent, approval or other communication hereunder will be deemed duly given (a) when delivered personally to the recipient, (b) when signed for by the recipient if sent to the recipient by reputable international courier service (charges prepaid), and (c) on the date delivered in the place of delivery if sent by email or facsimile (with a written or electronic confirmation of delivery) prior to 5:00 p.m. local time at the recipient’s location, and otherwise on the next succeeding business day, in each case addressed to the intended recipient as set forth below:
Notices to Parent:
Great Future Technology Inc. George Town Grand Cayman KY1-106 Cayman Islands Attention: Yongnan Zhou, Director Email: zyn888@tonglioptech.com |
Notices to Sponsor:
Whale Management Corporation 26 Broadway, Suite 934 New York, New York 10004 Attn: Matthew Chen, Director Email: mchen@flagshipac.com | |
with a copy to (which will not constitute notice):
Miller Canfield Paddock and Stone, P.L.C. 1100 Superior Avenue E, Suite 1750 Cleveland, Ohio 44114 United States Attn: Yanping Wang, Esq. Email: wangy@millercanfield.com |
with a copy to (which will not constitute notice):
Bill Huo, Esq. Becker & Poliakoff, P.A. 45 Broadway, 17th Floor New York, NY 10006 Attention: Bill Huo Email: BHuo@beckerlawyers.com |
Any Party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.
(i) Each of the Parties acknowledges that its obligations under this Agreement are unique, recognizes and affirms that in the event of a breach of this Agreement by it, money damages will be inadequate and the other party will have no adequate remedy at law, and agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by it in accordance with their specific terms or were otherwise breached. Accordingly, in addition to all such monetary remedies it may be entitled under Law for the other Party’s breaches of this Agreement, the non- breaching party shall be entitled to an injunction or restraining order to prevent breaches of this Agreement by the other party and to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or to prove that money damages would be inadequate, this being in addition to any other right or remedy to which the non-breaching party may be entitled under this Agreement, at law or in equity.
(j) This Agreement may be executed in two or more counterparts (any of which may be executed in .PDF format or a secure electronic signature platform (e.g. Docusign), and delivered by electronic transmission), each of which shall constitute an original, and all of which taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Parties have hereunto caused this Agreement to be duly executed as of the date first set forth above.
| Great Future Technology Inc. | ||
| By: | /s/ Yongnan Zhou | |
| Name: | Yongnan Zhou | |
| Title: | Director | |
[Signature Page to Sponsor Lock-Up Agreement]
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IN WITNESS WHEREOF, the Parties have hereunto caused this Agreement to be duly executed as of the date first set forth above.
| Whale Management Corporation | ||
| By: | /s/ Matthew Chen | |
| Name: | Matthew Chen | |
| Title: | Director | |
[Signature Page to Sponsor Lock-Up Agreement]
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Exhibit 10.3
SPONSOR VOTING AND SUPPORT AGREEMENT
SPONSOR VOTING AND SUPPORT AGREEMENT (this “Agreement”) is made and entered into as of April 18, 2025, by and among Great Future Technology Inc., an exempted company incorporated in the Cayman Islands with limited liability (the “Parent”), Flag Ship Acquisition Corporation, a Cayman Islands exempted company (the “Company”), and Whale Management Corporation, a British Virgin Islands company (“Sponsor”). The Parent, the Company and Sponsor shall each be referred to herein from time to time as a “Party” and, collectively, as the “Parties.”
WHEREAS, capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed thereto in the Agreement and Plan of Merger (the “Merger Agreement”) entered into by and among the Parent, GRT Merger Sub Limited, a Cayman Islands exempted company and wholly owned subsidiary of the Parent (the “Merger Sub”), and the Company, pursuant to which, among other things, the Company will be merged with and into the Merger Sub (the “Merger”), with the Merger Sub surviving the Merger as a wholly owned subsidiary of the Parent; and
WHEREAS, Sponsor is, as of the date of this Agreement, the sole legal owner of (a) 1,725,000 Company Ordinary Shares, (b) 238,000 Company Ordinary Shares underlying Company Units, (c) 23,800 Company Ordinary Shares issuable upon the conversion of 238,000 Company Rights underlying Company Units, (all such shares set forth in clauses (a) through (c), being collectively referred to herein as the “Owned Shares”; and the Owned Shares and any other Company Ordinary Shares (or any securities convertible into or exercisable or exchangeable for Company Ordinary Shares) acquired by Sponsor after the date of this Agreement and during the term of this Agreement, being collectively referred to herein as the “Subject Shares”); and
WHEREAS, as a condition to their willingness to enter into the Merger Agreement, the Parent and the Company have requested that Sponsor enter into this Agreement.
NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated into this Agreement as if fully set forth below, and intending to be legally bound hereby, the Parties agree as follows:
ARTICLE I
Representations and Warranties of Sponsor
Sponsor hereby represents and warrants to the Parent and the Company as follows:
1.1 Organization and Good Standing. Sponsor has been duly organized and is validly existing and in good standing under the Laws of the British Virgin Islands and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Sponsor is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary.
1.2 Authorization; Binding Agreement. Sponsor has all requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized and no other proceedings on the part of Sponsor are necessary to authorize the execution and delivery of this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Sponsor and, assuming the due authorization, execution and delivery of this Agreement by the other Parties, constitutes the valid and binding obligation of Sponsor, enforceable against Sponsor in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting or relating to creditors’ rights generally and subject, as to enforceability, to general principles of equity, whether such enforceability is considered in a proceeding in equity or at Law (the “Enforceability Exceptions”).
1.3 Governmental Approvals. No consent of or with any Governmental Entity on the part of Sponsor is required to be obtained or made in connection with the execution, delivery or performance by Sponsor of this Agreement or the consummation by Sponsor of the transactions contemplated hereby, other than (a) applicable requirements, if any, of the Securities Act, the Exchange Act, and/ or any U.S. state “blue sky” securities Laws, and the rules and regulations thereunder and (b) where the failure to obtain or make such consents or to make such filings or notifications would not prevent, impede or, in any material respect, delay or adversely affect the performance by Sponsor of its obligations under this Agreement.
1.4 Non-Contravention. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and compliance with any of the provisions hereof by Sponsor will not (a) conflict with or violate any provision of the Governing Documents of Sponsor, (b) conflict with or violate any Law, permit, Order or consent applicable to Sponsor or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by Sponsor under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien) upon any of the properties or assets of Sponsor under, (viii) give rise to any obligation to obtain any third party consent from any Person or (ix) give any Person the right to declare a default, exercise any remedy, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any material contract of Sponsor, except for any deviations from any of the foregoing clauses (b) or (c) that would not prevent, impede or, in any material respect, delay or adversely affect the performance by Sponsor of its obligations under this Agreement.
1.5 Owned Shares. Sponsor is the sole legal owner of the Owned Shares, and all such Owned Shares are owned by Sponsor free and clear of all Liens, other than Liens pursuant to this Agreement, the Governing Documents of the Company, the Letter Agreement (as defined below), the Merger Agreement or applicable U.S. federal or state securities laws. Sponsor does not legally own any shares of the Company other than the Owned Shares. Sponsor has the sole right to vote the Owned Shares, and none of the Owned Shares is subject to any voting trust or other agreement, arrangement or restriction with respect to the voting of the Owned Shares, except as contemplated by this Agreement, that certain Letter Agreement, dated as of June 17, 2024, among the Company, Sponsor and the Company’s officers and directors (the “Letter Agreement”), the Merger Agreement or the Governing Documents of the Company.
1.6 Merger Agreement. Sponsor understands and acknowledges that the Parent and the Company are entering into the Merger Agreement in reliance upon Sponsor’s execution and delivery of this Agreement. Sponsor has received a copy of the Merger Agreement and is familiar with the provisions of the Merger Agreement.
1.7 Certain Definitions. As used in this Agreement, the terms defined in this Section 1.7 shall have the respective meanings set forth below:
(a) “Company Rights” means the 238,000 rights of the Company underlying the Company Units, with each Company Right entitling the holder thereof to receive one-tenth (1/10) of one Company Ordinary Share.
(b) “Company Units” means the 238,000 units of securities of the Company purchased by Sponsor in a private placement that occurred simultaneously with the consummation of the initial public officer of the Company, with each unit of securities so purchased comprised of one Company Ordinary Share and one Company Right.
ARTICLE II
Representations and Warranties of the Company
The Company hereby represents and warrants to Sponsor and the Parent as follows:
2.1 Organization and Good Standing. The Company is an exempted company duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands. The Company has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. The Company is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary.
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2.2 Authorization; Binding Agreement. The Company has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized and no other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement by the other Parties, constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.
2.3 Non-Contravention. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and compliance with any of the provisions hereof by the Company will not (a) conflict with or violate any provision of the Governing Documents of the Company, (b) conflict with or violate any Law, permit, Order or consent applicable to the Company or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by the Company under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of the Company under, (viii) give rise to any obligation to obtain any third party consent from any Person or (ix) give any Person the right to declare a default, exercise any remedy, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any material contract of the Company, except for any deviations from any of the foregoing clauses (b) or (c) that would not prevent, impede or, in any material respect, delay or adversely affect the performance by the Company of its obligations under this Agreement.
ARTICLE III
Representations and Warranties of the parent
The Parent hereby represents and warrants to Sponsor and the Company as follows:
3.1 Organization and Good Standing. The Parent is a company duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands. The Parent has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. The Parent is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary.
3.2 Authorization; Binding Agreement. The Parent has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized and no other corporate proceedings on the part of the Parent are necessary to authorize the execution and delivery of this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Parent and, assuming the due authorization, execution and delivery of this Agreement by the other Parties, constitutes the valid and binding obligation of the Parent, enforceable against the Parent in accordance with its terms, subject to the Enforceability Exceptions.
3.3 Non-Contravention. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and compliance with any of the provisions hereof by the Parent will not (a) conflict with or violate any provision of the Governing Documents of the Parent, (b) conflict with or violate any Law, permit, Order or consent applicable to the Parent or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by the Parent under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of the Parent under, (viii) give rise to any obligation to obtain any third party consent from any Person or (ix) give any Person the right to declare a default, exercise any remedy, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any material contract of the Parent, except for any deviations from any of the foregoing clauses (b) or (c) that would not prevent, impede or, in any material respect, delay or adversely affect the performance by the Parent of its obligations under this Agreement.
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ARTICLE IV
Agreement to Vote; Certain Other Covenants of Sponsor
Sponsor covenants and agrees during the term of this Agreement as follows:
4.1 Agreement to Vote.
(a) In Favor of the Merger. At any meeting of Company Shareholders called to seek the Company Shareholder Approval, or at any adjournment thereof, or in connection with any written consent of Company Shareholders or in any other circumstances upon which a vote, consent or other approval with respect to the Transaction Proposals and any other transactions contemplated by the Merger Agreement and any other Transaction Documents, Sponsor shall (i) if a meeting is held, appear at such meeting or otherwise cause the Subject Shares to be counted as present at such meeting for purposes of establishing a quorum, and (ii) vote or cause to be voted (including by class vote and/or written consent, if applicable) the Subject Shares in favor of granting the Company Shareholder Approval or, if there are insufficient votes in favor of granting the Company Shareholder Approval, in favor of the adjournment of such meeting of Company Shareholders to a later date.
(b) Against Other Transactions. At any meeting of Company Shareholders or at any adjournment thereof, or in connection with any written consent of Company Shareholders or in any other circumstances upon which Sponsor’s vote, consent or other approval is sought, Sponsor shall vote (or cause to be voted) the Subject Shares (including by withholding class vote and/or written consent, if applicable) against (i) other than in connection with the Merger, any business combination agreement, merger agreement or merger (other than the Merger Agreement and the Merger), scheme of arrangement, business combination, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by the Company or any public offering of any shares of the Company or, in case of a public offering only, a newly-formed holding company of the Company, (ii) any proposal for a Company Acquisition Transaction (as defined in the Merger Agreement), and (iii) any amendment of the Governing Documents of the Company or other proposal or transaction involving the Company, which, in each of cases (i) and (iii) of this sentence, would be reasonably likely to in any material respect impede, interfere with, delay or attempt to discourage, frustrate the purposes of, result in a breach by the Company of, prevent or nullify any provision of the Merger Agreement or any other Transaction Document, the Merger or change in any manner the voting rights of any class of Company’s share capital.
(c) Revoke Other Proxies. Sponsor represents and warrants that any proxies or powers of attorney heretofore given in respect of the Subject Shares that may still be in effect are not irrevocable, and such proxies or powers of attorney have been or are hereby revoked, other than the voting and other arrangements under the Governing Documents of the Company and the Letter Agreement.
(d) Irrevocable Proxy and Power of Attorney. Sponsor hereby unconditionally and irrevocably grants to, and appoints, the Company and any individual designated in writing by the Company, and each of them individually, as Sponsor’s proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of Sponsor, to vote the Subject Shares, or grant a written consent or approval in respect of the Subject Shares, in a manner consistent with Section 4.1(a) of this Agreement. Sponsor understands and acknowledges that the Company is entering into the Merger Agreement in reliance upon Sponsor’s execution and delivery of this Agreement. Sponsor hereby affirms that the irrevocable proxy and power of attorney set forth in this Section 4.1(d) are given in connection with the execution of the Merger Agreement, and that such irrevocable proxy and power of attorney are given to secure the performance of the duties of Sponsor under this Agreement. Sponsor hereby further affirms that the irrevocable proxy and power of attorney are given to secure a proprietary interest and may under no circumstances be revoked. Sponsor hereby ratifies and confirms all that such irrevocable proxy and power of attorney may lawfully do or cause to be done by virtue hereof. SUCH IRREVOCABLE PROXY AND POWER OF ATTORNEY ARE EXECUTED AND INTENDED TO BE IRREVOCABLE IN ACCORDANCE WITH THE PROVISIONS OF THE POWERS OF ATTORNEY ACT OF THE CAYMAN ISLANDS (REVISED). The irrevocable proxy and power of attorney granted hereunder shall only terminate upon the termination of this Agreement.
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4.2 No Transfer. Other than (x) pursuant to this Agreement, (y) upon the consent of both the Parent and the Company or (z) to an Affiliate of Sponsor (provided that, in each case of the foregoing clauses (x) and (z), such transferee shall enter into a written agreement, in form and substance reasonably satisfactory to the Parent and the Company, agreeing to be bound by this Agreement to the same extent as Sponsor was with respect to such transferred Subject Shares), from the date of this Agreement until the date of termination of this Agreement, Sponsor shall not, directly or indirectly, (i) (a) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option, right or warrant to purchase or otherwise transfer, dispose of or agree to transfer or dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder, any Subject Share, (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Subject Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) publicly announce any intention to effect any transaction specified in clause (a) or (b) (the actions specified in clauses (a)-(c), collectively, “Transfer”), other than pursuant to the Merger, (ii) grant any proxies or powers of attorney or enter into any voting arrangement, whether by proxy, voting agreement, voting trust, voting deed or otherwise (including pursuant to any loan of Subject Shares), or enter into any other agreement, with respect to any Subject Shares, in each case, other than as set forth in this Agreement, the Merger Agreement, Transaction Documents or the voting and other arrangements under the Governing Documents of the Company, (iii) take any action that would reasonably be expected to make any representation or warranty of Sponsor herein untrue or incorrect, or would reasonably be expected to have the effect of preventing or disabling Sponsor from performing its obligations hereunder, or (iv) commit or agree to take any of the foregoing actions. Any action attempted to be taken in violation of the preceding sentence will be null and void. Sponsor agrees with, and covenants to, the Parent and the Company that Sponsor shall not request that the Company register the Transfer (by book-entry or otherwise) of any certificated or uncertificated interest representing any of the Subject Shares.
4.3 Waiver of Dissenters’ Rights. Sponsor hereby irrevocably waives, and agrees not to exercise or assert, any dissenters’ rights under Section 238 of the Cayman Companies Law and any other similar statute in connection with the Merger and the Merger Agreement.
4.4 No Redemption. Sponsor irrevocably and unconditionally agrees that, from the date hereof and until the termination of this Agreement, Sponsor shall not elect to cause the Company to redeem any Subject Shares now or at any time legally or beneficially owned by Sponsor, or submit or surrender any of its Subject Shares for redemption, in connection with the Merger.
4.5 New Shares. In the event that prior to the Closing (i) any Company Ordinary Shares or other securities are issued or otherwise distributed to Sponsor pursuant to any stock dividend or distribution, or any change in any of the Company Ordinary Shares or other share capital of the Company by reason of any stock split-up, recapitalization, combination, exchange of shares or the like, (ii) Sponsor acquires legal or beneficial ownership of any Company Ordinary Shares after the date of this Agreement, including upon exercise of options, settlement of restricted share units or capitalization of working capital loans or (iii) Sponsor acquires the right to vote or share in the voting of any Company Ordinary Share after the date of this Agreement (collectively, the “New Securities”), the terms “Subject Shares” shall be deemed to refer to and include such New Securities (including all such stock dividends and distributions and any securities into which or for which any or all of the Subject Shares may be changed or exchanged into).
4.6 Sponsor Letter Agreement. Each of Sponsor and the Company hereby agree that from the date hereof until the termination of this Agreement, none of them shall, or shall agree to, amend, modify or vary the Letter Agreement, except with the prior consent of the Parent in connection with the Merger.
4.7 Termination. This Agreement shall terminate upon the earliest of (i) the Closing (provided, however, that upon termination at the Closing, Section 4.3, this Section 4.7, Section 4.8, Section 4.9, Section 5.1,Section 5.2, Section 5.3, Section 5.4, Section 5.5, Section 5.6 and Section 5.7 shall survive indefinitely) and (ii) the termination of the Merger Agreement in accordance with its terms, and upon such termination, no party shall have any liability hereunder other than for its willful and material breach of this Agreement prior to such termination.
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4.8 Additional Matters. Sponsor shall, from time to time, (i) execute and deliver, or cause to be executed and delivered, such additional or further consents, documents and other instruments as the Parent and the Company may reasonably request for the purpose of effectively carrying out the transactions contemplated by this Agreement, the Merger Agreement and the other Transaction Documents and (ii) refrain from exercising any veto right, consent right or similar right (whether under the Governing Documents of the Company or the Cayman Companies Law) which would prevent, impede or, in any material respect, delay or adversely affect the consummation of the Merger.
4.9 Exclusivity; Confidentiality. Sponsor shall be bound by and comply with Sections 4.05 (Exclusive Dealing) and 4.03 (Company Confidentiality) of the Merger Agreement (and any relevant definitions contained in any such sections) as if (a) Sponsor was an original signatory to the Merger Agreement with respect to such provisions, and (b) each reference to the “Company” contained in Section 4.05 of the Merger Agreement (other than for purposes of the definition of Company Acquisition Transaction) and “Affiliates” contained in Article X of the Merger Agreement also refers to Sponsor.
4.10 Consent to Disclosure. Sponsor consents to and authorizes the Parent and the Company, as applicable, to publish and disclose in all documents and schedules filed with the SEC or any other Governmental Entity or applicable securities exchange, and any press release or other disclosure document that the Parent or the Company, as applicable, reasonably determines to be necessary or advisable in connection with the Merger or any other transactions contemplated by the Merger Agreement or this Agreement, Sponsor’s identity and ownership of the Subject Shares, the existence of this Agreement and the nature of Sponsor’s commitments and obligations under this Agreement, and Sponsor acknowledges that the Parent and the Company may, in their sole discretion, file this Agreement or a form hereof with the SEC or any other Governmental Entity or securities exchange. Sponsor agrees to promptly give the Parent and the Company, as applicable, any information that is in its possession that the Parent or the Company, as applicable, may reasonably request for the preparation of any such disclosure documents, and Sponsor agrees to promptly notify the Parent and the Company of any required corrections with respect to any written information supplied by it specifically for use in any such disclosure document, if and to the extent that Sponsor shall become aware that any such information shall have become false or misleading in any material respect.
ARTICLE V
General Provisions.
5.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) to the Parent and the Company in accordance with Section 11.04 of the Merger Agreement and to Sponsor at the address set forth below (or at such other address for a Party as shall be specified by like notice):
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Notices to Sponsor:
Whale Management Corporation 26 Broadway, Suite 934 New York, New York 10004 Attn: Matthew Chen, Director Email: mchen@flagshipac.com |
with a copy to (which will not constitute notice):
Bill Huo, Esq. Becker & Poliakoff, P.A. 45 Broadway, 17th Floor New York, NY 10006 Attention: Bill Huo Email: BHuo@beckerlawyers.com |
5.2 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without regard to principles of conflicts of law that would result in the application of the substantive law of another jurisdiction. Each Party hereby irrevocably submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any federal court within the State of Delaware, or, if no federal court in the State of Delaware accepts jurisdiction, any state court within the State of Delaware) (the “Delaware Courts”) over all claims or causes of action (whether in contract or tort, in law or in equity, or granted by statute or otherwise) that may be based upon, arise out of or relate to this Agreement and any other document or instrument delivered pursuant to this Agreement, or the negotiation, execution, termination, validity, interpretation, construction, enforcement, performance or nonperformance of this Agreement or otherwise arising from the transactions contemplated hereby or the relationship among the parties (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with, or as an inducement to enter into, this Agreement) (collectively, “Related Claims”), and each Party hereby irrevocably agrees that all Related Claims may be heard and determined in such courts. Each Party hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable Law,
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any objection which it may now or hereafter have to the laying of venue of any such Related Claim brought in any such court or any defense of inconvenient forum for the maintenance of such dispute. Each Party agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each Party hereby consents to process being served by any other Party in any Related Claim by the delivery of a copy thereof in accordance with the provisions of Section 5.1 (other than by email) along with a notification that service of process is being served in conformance with this Section 5.2. Nothing in this Agreement will affect the right of any Party to serve process in any other manner permitted by law. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY 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 RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION WILL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY
5.3 Survival. The representations, warranties and covenants of the Parties contained in this Agreement shall terminate at upon the termination of this Agreement as contemplated in Section 4.7, and only the provisions set forth therein to survive the termination of this Agreement, shall so survive its termination.
5.4 Succession and Assignment. This Agreement shall inure to the benefit of, and be binding upon, the successors and assigns of the Parties. Neither this Agreement nor any of the rights, interests or obligations of a Party hereunder shall be assignable by such Party; provided, however, that the Parent may assign its rights, but not its obligations, under this Agreement to any Affiliate of the Parent or to any future purchaser of the Parent or the Surviving Company or its respective assets or (b) collaterally assign any or all of their rights and interests hereunder to one or more lenders of the Parent or the Surviving Company.
5.5 Amendment and Waiver. Any provision of this Agreement may be amended only in a writing signed by the Parties. At any time prior to the Closing, any Party may, to the extent not prohibited by applicable Legal Requirements: (a) extend the time for the performance of any of the obligations or other acts of another Party; (b) waive any inaccuracies in the representations and warranties made to the other Party contained herein or in any document delivered pursuant hereto; and (c) waive compliance with any of the agreements or conditions for the benefit of the waiving Party contained herein. Any agreement on the part of a Party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such extending or waiving Party. Delay in exercising any right under this Agreement shall not constitute a waiver of such right.
5.6 Third-Party Beneficiaries. This Agreement is not intended to confer upon any Person not a Party any rights or remedies hereunder (other than the Merger Sub as third-party beneficiary of the rights of the Parent in this Agreement).
5.7 Incorporation by Reference. The provisions of Sections 11.06, 11.08, 11.10, 11.13, 11.16 and 11.17(a) of the Merger Agreement are incorporated herein by reference, mutatis mutandis, as if set forth in full herein.
[Signature pages follow]
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IN WITNESS WHEREOF, each Party has duly executed and delivered this Agreement as a deed, all as of the date first written above.
| Great Future Technology Inc. | ||
| By: | /s/ Yongnan Zhou | |
| Name: | Yongnan Zhou | |
| Title: | Director and CEO | |
[Signature Page to Sponsor Voting and Support Agreement]
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IN WITNESS WHEREOF, each party has duly executed and delivered this Agreement as a deed, all as of the date first written above.
| Flag Ship Acquisition Corporation | ||
| By: | /s/ Matthew Chen | |
| Name: | Matthew Chen | |
| Title: | Chairman | |
[Signature Page to Sponsor Voting and Support Agreement]
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IN WITNESS WHEREOF, each party has duly executed and delivered this Agreement as a deed, all as of the date first written above.
| Whale Management Corporation | ||
| By: | /s/ Matthew Chen | |
| Name: | Matthew Chen | |
| Title: | Director | |
[Signature Page to Sponsor Voting and Support Agreement]
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Exhibit 10.4
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (as amended, restated, supplemented, or otherwise modified from time to time, this “Agreement”) is made and entered into as of April 18, 2025, and shall be effective as of the Closing (defined below), by and among (i) Flag Ship Acquisition Corporation, an exempted company incorporated with limited liability in the Cayman Islands (the “Company”), (ii) Great Future Technologies Limited, an exempted company incorporated in the Cayman Islands with limited liability (“Parent”), and (iii) the individuals and entities listed under “Investors” on the signature page hereto, (individually, an “Investor” and collectively, the “Investors”). Capitalized terms used but not otherwise defined herein shall have the respective meanings assigned to such terms in the Original Agreement (as defined below) (and if such term is not defined in the Original Agreement, then the Merger Agreement (as defined below)). The Parent, the Company and each Investor shall each be referred to herein from time to time as a “Party” and, collectively, as the “Parties.”
RECITALS
WHEREAS, the Company and the Investors are parties to that certain Registration Rights Agreement, dated as of June 17, 2024 (the “Original Agreement”), pursuant to which the Company granted certain registration rights to the Investors with respect to the Company’s securities;
WHEREAS, on the date hereof, (i) the Company, (ii) Parent, and (iii) GFT Merger Sub Limited, a Cayman Islands exempted company and a wholly-owned subsidiary of Parent (the “Merger Sub”), entered into that certain Agreement and Plan of Merger (as amended from time to time, the “Merger Agreement”);
WHEREAS, pursuant to the Merger Agreement, subject to the terms and conditions thereof, upon the consummation of the transactions contemplated thereby (the “Closing”), among other matters, (i) Company will merge with and into Merger Sub, as a wholly-owned subsidiary of Parent (the “Merger”) and with the Company Shareholders receiving Parent Class A Ordinary Shares, all upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the provisions of applicable law;
WHEREAS, the Parties desire to amend and restate the Original Agreement to add Parent as a party to the Original Agreement; to reflect the transactions contemplated by the Merger Agreement, including the issuance of Parent Class A Ordinary Shares; and to provide the Investors thereto certain Registration rights with respect to Registrable Securities, as set forth in this Agreement; and
WHEREAS, pursuant to Section 6.7 of the Original Agreement, the Original Agreement can be amended and binding on each party thereto when such amendment is executed in writing by all parties thereto.
NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties and covenants herein contained, and intending to be legally bound hereby, the Parties hereby amend and restate the Original Agreement to read, as hereby amended and restated, as follows:
1. DEFINITIONS. The following capitalized terms used herein have the following meanings:
“Agreement” is defined in the preamble hereto.
“Closing” is defined in the recitals to this Agreement.
“Commission” means the Securities and Exchange Commission, or any other Federal agency then administering the Securities Act or the Exchange Act.
“Company” is defined in the preamble to this Agreement.
“Company Ordinary Shares” has the meaning given to this term in the Merger Agreement.
“Company Rights” has the meaning given to this term in the Merger Agreement.
“Company Units” has the meaning given to this term in the Merger Agreement.
“Demand Registration” is defined in Section 2.1.1.
“Demanding Holder” is defined in Section 2.1.1.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.
“Indemnified Party” is defined in Section 4.3.
“Indemnifying Party” is defined in Section 4.3.
“Investor Indemnified Party” is defined in Section 4.1.
“Maximum Number of Shares” is defined in Section 2.1.4.
“Merger” is defined in the recitals to this Agreement.
“Merger Agreement” is defined in the recitals to this Agreement.
“Notices” is defined in Section 6.3.
“Parent” is defined in the preamble to this Agreement.
“Parent Indemnified Party” is defined in Section 4.2.
“Parent Ordinary Shares” the meaning given to this term in the Merger Agreement.
“Per Share Merger Consideration” has the meaning given to this term in the Merger Agreement.
“Piggy-Back Registration” is defined in Section 2.2.1.
“Private Placement Company Units” means the 238,000 Company Units sold and issued to Whale Management Corporation (or its designees or affiliates) which Whale Management Corporation (or its designees) privately purchased under an exemption from registration under the Securities Act simultaneously with the consummation of the Company’s initial public offering of Company Units.
“Pro Rata” is defined in Section 2.1.4.
“Register,” “Registered” and “Registration” mean a registration or offering effected by preparing and filing a Registration Statement, and such Registration Statement becoming effective.
“Registrable Securities” means, collectively, (i) the Parent Class A Ordinary Shares issued to Investors (x) as their Per Share Merger Consideration and (y) upon the conversion of their Substitute Rights in accordance with the Merger Agreement and (ii) any equity securities of Parent issuable upon conversion of convertible loans from Investors (or their designees or affiliates) made prior to Closing to the Company for the Company’s use as working capital, if any (the “Working Capital Loan Securities”). Registrable Securities include any warrants, shares of capital stock (including American Depository Receipts) or other equity securities of Parent issued as a dividend or other distribution with respect to or in exchange for or in replacement of such Parent Class A Ordinary Shares or Working Capital Loan Securities. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when: (a) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (b) such securities shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Parent, and subsequent public distribution of them shall not require Registration; (c) such securities shall have ceased to be outstanding; or (d) the Registrable Securities are freely saleable under Rule 144 under the Securities Act without volume limitations.
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“Registration Statement” means a registration statement filed by Parent with the Commission in compliance with the Securities Act and the rules and regulations promulgated thereunder for a public offering and sale of equity securities of Parent, or securities or other obligations of Parent exercisable or exchangeable for, or convertible into, equity securities of Parent, including all amendments thereto, including post-effective amendments (other than a registration statement on Form S-4, F-4 or Form S-8, or their successors, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another entity).
“Rule 144” means Rule 144 promulgated under the Securities Act.
“Substitute Rights” has the meaning given to this term in the Merger Agreement.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.
“Short Form Registration” is defined in Section 2.3.
“Specified Courts” is defined in Section 6.9.
“Transaction Documents” has the meaning given to this term in the Merger Agreement.
“Underwriter” means a securities dealer who purchases any Registrable Securities as principal in an underwritten offering, including an offering pursuant to a Piggy-Back Registration, and not as part of such dealer’s market-making activities.
2. REGISTRATION RIGHTS.
2.1 Demand Registration.
2.1.1 Request for Registration. At any time and from time to time after the Closing, the holders of a majority-in-interest of Registrable Securities then issued and outstanding held by the Investors or the transferees of the Investors, may make a written demand for Registration of all or part of their Registrable Securities (a “Demand Registration”). Any Demand Registration shall specify the number of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. Parent will notify, in writing, all holders of Registrable Securities of the demand within fifteen (15) calendar days of Parent’s receipt of such Demand Registration, and each holder of Registrable Securities who wishes to include all or a portion of his, her or its Registrable Securities in the Demand Registration (each such holder including Registrable Securities in such Registration, including the holder(s) making the initial demand, a “Demanding Holder”) shall so notify Parent, in writing, within fifteen (15) calendar days after the receipt by the holder of the notice from Parent. Upon any such request, the Demanding Holders shall be entitled to have their Registrable Securities included in the Demand Registration, subject to Sections 2.1.4 and the provisos set forth in Section 3.1.1. Parent shall not be obligated to effect more than an aggregate of three (3) Demand Registrations under this Section 2.1.1 in respect of all Registrable Securities. Notwithstanding anything in this Section 2.1 to the contrary, Parent shall not be obligated to effect a Demand Registration, (i) if a Piggy-Back Registration had been available to the Demanding Holder(s) within the one hundred twenty (120) calendar days preceding the date of request for the Demand Registration, (ii) within sixty (60) calendar days after the effective date of a previous Registration effected with respect to the Registrable Securities pursuant this Section 2.1, or (iii) during any period (not to exceed one hundred eighty (180) calendar days) following the closing of the completion of an offering of securities of Parent by Parent if such Demand Registration would cause Parent to breach a “lock-up” or similar provision contained in any Transaction Document or the underwriting agreement for such offering.
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2.1.2 Effective Registration. A Registration will not count as a Demand Registration until the Registration Statement filed with the Commission with respect to such Demand Registration has been declared effective by the Commission and Parent has materially complied with all of its obligations under this Agreement with respect thereto; provided, however, that if, after such Registration Statement has been declared effective, the offering of Registrable Securities pursuant to a Demand Registration is interfered with by any stop order or injunction of the Commission or any other governmental agency or court, the Registration Statement with respect to such Demand Registration will be deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding Holders thereafter elect to continue the offering; provided, further, that Parent shall not be obligated to file another Registration Statement until a Registration Statement that has been filed is counted as a Demand Registration or is terminated.
2.1.3 Underwritten Offering. If a majority-in-interest of the Demanding Holders so elect and such holders so advise Parent as part of their Demand Registration, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. In such event, the right of any holder to include its Registrable Securities in such Registration shall be conditioned upon such holder’s participation in such underwriting and the inclusion of such holder’s Registrable Securities in the underwriting to the extent provided herein. All Demanding Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such underwriting by a majority-in-interest of the holders initiating the Demand Registration and reasonably acceptable to Parent.
2.1.4 Reduction of Offering. If the managing Underwriter or Underwriters for a Demand Registration that is to be an underwritten offering advises Parent and the Demanding Holders in writing that the dollar amount or number of Registrable Securities which the Demanding Holders desire to sell, taken together with all other Parent Ordinary Shares or other securities of Parent which Parent desires to sell, and all other Parent Ordinary Shares or other securities of Parent, if any, as to which Registration by Parent has been requested pursuant to written contractual piggy-back Registration rights held by other security holders of Parent who desire to sell, exceeds the maximum dollar amount or maximum number of securities that can be sold in such 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 Parent shall include in such Registration: (i) first, the Registrable Securities as to which Demand Registration has been requested by the Demanding Holders (all pro rata in accordance with the number of securities of Parent that each applicable Person has requested be included in such Registration, regardless of the number of securities of Parent held by each such Person, as long as they do not request to include more securities of Parent than they own (such proportion, whether with respect to the securities of a Person that is a Demanding Holder or another Person with Registration rights, is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Parent Ordinary Shares or other securities of Parent that Parent desires to sell that can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the Registrable Securities of Investors as to which Registration has been requested pursuant to Section 2.2 and the securities of Parent as to which Registration has been requested pursuant to the applicable written contractual piggy-back Registration rights, Pro Rata among the holders thereof based on the number of securities of Parent requested by such holders to be included in such Registration, that can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the Parent Ordinary Shares or other securities of Parent for the account of other Persons that Parent is obligated to Register pursuant to written contractual arrangements with such Persons that can be sold without exceeding the Maximum Number of Securities. In the event that securities of the Parent that are convertible into Parent Ordinary Shares are included in the offering, the calculations under this Section 2.1.4 shall include such securities of Parent on an as-converted to Parent Ordinary Share basis.
2.1.5 Withdrawal. If a majority-in-interest of the Demanding Holders disapprove of the terms of any underwriting or are not entitled to include all of their Registrable Securities in any offering, such majority-in-interest of the Demanding Holders may elect to withdraw from such offering by giving written notice to Parent and the Underwriter or Underwriters of their request to withdraw prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Demand Registration. If the majority-in-interest of the Demanding Holders withdraws from a proposed offering relating to a Demand Registration, then such Registration shall not count as a Demand Registration provided for in Section 2.1.
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2.2 Piggy-Back Registration.
2.2.1 Piggy-Back Rights. If at any time after the Closing, Parent proposes to file a Registration Statement with respect to a Registration or an offering of equity securities of Parent, or securities or other obligations of Parent exercisable or exchangeable for, or convertible into, equity securities of Parent, by Parent for its own account or for the account of holders of securities of Parent (or by Parent and by holders of securities of Parent including, without limitation, pursuant to Section 2.1), other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to Parent’s existing shareholders, (iii) for an offering of debt that is convertible into equity securities of Parent, (iv) for a dividend reinvestment plan, or (v) an exchange offer or offering of securities in connection with a merger or other form of acquisition of a business entity to the equity owners thereof, then Parent shall (x) give written notice of such proposed filing to the holders of Registrable Securities as soon as practicable but in no event less than ten (10) calendar days before the anticipated filing date, which notice shall describe the amount and type of securities to be included in such Registration or offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, of the offering, and (y) offer to the holders of Registrable Securities in such notice the opportunity to Register the sale of such number of Registrable Securities as such holders may request in writing within five (5) calendar days following receipt of such notice (a “Piggy-Back Registration”). To the extent permitted by applicable securities laws with respect to such Registration by Parent or another demanding holder of securities of Parent, Parent shall cause such Registrable Securities to be included in such Registration and shall use its reasonable best efforts to cause the managing Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration on the same terms and conditions as any similar securities of Parent and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All holders of Registrable Securities proposing to distribute their securities of Parent through a Piggy-Back Registration that involves an Underwriter or Underwriters shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such Piggy-Back Registration.
2.2.2 Reduction of Offering. If the managing Underwriter or Underwriters for a Piggy-Back Registration that is to be an underwritten offering advises Parent and Investors holding Registrable Securities proposing to distribute their Registrable Securities through such Piggy-Back Registration in writing that the dollar amount or number of Parent Ordinary Shares or other securities of Parent which Parent desires to sell, taken together with the Parent Ordinary Shares or other securities of Parent, if any, as to which Registration has been demanded pursuant to written contractual arrangements with Persons other than the Investors holding Registrable Securities hereunder, the Registrable Securities as to which Registration has been requested under this Section 2.2, and the Parent Ordinary Shares or other securities of Parent, if any, as to which Registration has been requested pursuant to the written contractual piggy-back Registration rights of other security holders of Parent, exceeds the Maximum Number of Securities, then Parent shall include in any such Registration:
(a) If the Registration is undertaken for Parent’s account: (i) first, the Parent Ordinary Shares or other securities of Parent that Parent desires to sell that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Investors as to which Registration has been requested pursuant to this Section 2.2, Pro Rata among the holders thereof based on the number of securities of Parent requested by such holders to be included in such Registration, that can be sold without exceeding the Maximum Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the Parent Ordinary Shares or other equity securities of Parent for the account of other Persons that Parent is obligated to Register pursuant to separate written contractual arrangements with such Persons that can be sold without exceeding the Maximum Number of Securities;
(b) If the Registration is a “demand” Registration undertaken at the demand of Demanding Holders pursuant to Section 2.1: (i) first, the Parent Ordinary Shares or other Registrable Securities for the account of the Demanding Holders, Pro Rata among the holders thereof based on the number of Registrable Securities r requested by such holders to be included in such Registration, that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Parent Ordinary Shares or other securities of Parent that Parent desires to sell that can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the Registrable Securities of Investors as to which Registration has been requested pursuant to this Section 2.2, Pro Rata among the holders thereof based on the number of securities of Parent requested by such holders to be included in such Registration, that can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the Parent Ordinary Shares or other equity securities of Parent for the account of other Persons that Parent is obligated to Register pursuant to separate written contractual arrangements with such Persons that can be sold without exceeding the Maximum Number of Securities; and
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(c) If the Registration is a “demand” Registration undertaken at the demand of Persons other than either Demanding Holders under Section 2.1: (i) first, the Parent Ordinary Shares or other securities of Parent for the account of the demanding Persons that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Parent Ordinary Shares or other securities of Parent that Parent desires to sell that can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the Registrable Securities of Investors as to which Registration has been requested pursuant to this Section 2.2, Pro Rata among the holders thereof based on the number of securities requested by such holders to be included in such Registration, that can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the Parent Ordinary Shares or other equity securities for the account of other Persons that Parent is obligated to Register pursuant to separate written contractual arrangements with such Persons that can be sold without exceeding the Maximum Number of Securities.
In the event that securities of Parent that are convertible into Parent Ordinary Shares are included in the offering, the calculations under this Section 2.2.2 shall include such securities of Parent on an as-converted to Parent Ordinary Share basis. Notwithstanding anything to the contrary above, to the extent that the Registration of an Investor’s Registrable Securities would prevent Parent or the demanding shareholders from effecting such Registration and offering, such Investor shall not be permitted to exercise Piggy-Back Registration rights with respect to such Registration and offering.
2.2.3 Withdrawal. Any Investor holding Registrable Securities may elect to withdraw such Investor’s request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written notice to Parent of such request to withdraw prior to the effectiveness of the Registration Statement. Parent (whether on its own determination or as the result of a withdrawal by Persons making a demand pursuant to written contractual obligations) may withdraw a Registration Statement at any time prior to the effectiveness of such Registration Statement without any liability to the applicable Investor, subject to the next sentence and the provisions of Section 4. Notwithstanding any such withdrawal, Parent shall pay all expenses incurred in connection with such Piggy-Back Registration as provided in Section 3.3 (subject to the limitations set forth therein) by Investors holding Registrable Securities that requested to have their Registrable Securities included in such Piggy-Back Registration.
2.3 Short Form Registrations. The holders of Registrable Securities may at any time and from time to time, request in writing that Parent Register the resale of any or all of such Registrable Securities on Form S-3 or Form F-3 or any similar short-form Registration which may be available at such time (“Short Form Registration”); provided, however, that Parent shall not be obligated to effect such request through an underwritten offering. Upon receipt of such written request, Parent will promptly give written notice of the proposed Registration to all other holders of Registrable Securities, and, as soon as practicable thereafter, use its reasonable best efforts to effect the Registration of all or such portion of such holder’s or holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities or other securities of Parent, if any, of any other holder or holders joining in such request as are specified in a written request given within fifteen (15) calendar days after receipt of such written notice from Parent; provided, however, that Parent shall not be obligated to effect any such Registration pursuant to this Section 2.3: (i) if Short Form Registration is not available for such offering; or (ii) if the holders of the Registrable Securities, together with the holders of any other securities of Parent entitled to inclusion in such Registration, propose to sell Registrable Securities and such other securities of Parent (if any) at any aggregate price to the public of less than $500,000. Registrations effected pursuant to this Section 2.3 shall not be counted as Demand Registrations effected pursuant to Section 2.1.
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3. REGISTRATION PROCEDURES.
3.1 Filings; Information. Whenever Parent is required to effect the Registration of any Registrable Securities pursuant to Section 2, Parent shall be obligated and use its reasonable best efforts to effect the Registration and sale of such Registrable Securities in accordance with the intended method(s) of distribution thereof as expeditiously as practicable, and in connection with any such request:
3.1.1 Filing Registration Statement. Parent shall be obligated and use its reasonable best efforts to, as expeditiously as possible after receipt of a request for a Demand Registration pursuant to Section 2.1, prepare and file with the Commission a Registration Statement on any form for which Parent then qualifies or which counsel for Parent shall deem appropriate and which form shall be available for the sale of all Registrable Securities to be Registered thereunder in accordance with the intended method(s) of distribution thereof, and shall use its reasonable best efforts to cause such Registration Statement to become effective and use its reasonable best efforts to keep it effective for the period required by Section 3.1.3; provided, however, that Parent shall have the right to defer any Demand Registration for up to sixty (60) calendar days, and any Piggy-Back Registration for such period as may be applicable to deferment of any demand Registration to which such Piggy-Back Registration relates, in each case if Parent shall furnish the Investors requesting to include their Registrable Securities in such Registration Statement a certificate signed by the Chief Executive Officer, Chief Financial Officer or Chairman of Parent stating that, in the good faith judgment of the Board of Directors of Parent, it would be materially detrimental to Parent and its shareholders for such Registration Statement to be effected at such time or the filing would require premature disclosure of material information which is not in the interests of Parent to disclose at such time; provided further, however, that Parent shall not have the right to exercise the right set forth in the immediately preceding proviso more than twice in any 365-day period in respect of a Demand Registration hereunder.
3.1.2 Copies. Parent shall, prior to filing a Registration Statement or any prospectus relating thereto, or any amendment or supplement thereto, furnish without charge to 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 holders of Registrable Securities included in such Registration or legal counsel for any such holders may request in order to facilitate the disposition of the Registrable Securities owned by such holders.
3.1.3 Amendments and Supplements. Parent shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and in compliance with the provisions of the Securities Act until all Registrable Securities and other securities of Parent covered by such Registration Statement have been disposed of in accordance with the intended method(s) of distribution set forth in such Registration Statement or have been withdrawn or until such time as the Registrable Securities cease to be Registrable Securities as defined by this Agreement.
3.1.4 Notification. After the filing of any Registration Statement pursuant to this Agreement, any prospectus related thereto or any amendment or supplement to such Registration Statement or prospectus relating thereto, Parent shall promptly, and in no event more than three (3) Business Days after such filing, notify the holders of Registrable Securities included in such Registration Statement of such filing, and shall further notify such holders promptly and confirm such advice in writing in all events within three (3) Business Days of the occurrence of any of the following: (i) when such Registration Statement becomes effective; (ii) when any post-effective amendment to such Registration Statement becomes effective; (iii) the issuance or threatened issuance by the Commission of any stop order (and Parent shall take all actions required to prevent the entry of such stop order or to remove it if entered); (iv) any request by the Commission for any amendment or supplement to such Registration Statement or any prospectus relating thereto or for additional information; and (v) the occurrence of an event requiring the preparation of a supplement or amendment to such Registration Statement or prospectus relating thereto so that, after such amendment is filed or prospectus delivered to the purchasers of the securities of Parent covered by such Registration Statement, such Registration Statement or prospectus will not 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 the case of the prospectus, in light of the circumstances under which they were made), not misleading, and Parent shall promptly make available to the holders of Registrable Securities included in such Registration Statement any such supplement or amendment; except that before filing with the Commission a Registration Statement or prospectus or any amendment or supplement thereto, including documents incorporated by reference, Parent shall furnish to the holders of Registrable Securities included in such Registration Statement and to the legal counsel for any such holders, copies of all such documents proposed to be filed sufficiently in advance of filing to provide such holders and legal counsel with a reasonable opportunity to review such documents and comment thereon, provided that such Investors and their legal counsel must provide any comments promptly (and in any event within three (3) Business Days) after receipt of such documents.
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3.1.5 State Securities Laws Compliance. Parent shall use its reasonable best efforts to (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 reasonably request 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 Parent 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 Parent shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph or take any action which would subject it to general service of process or taxation in any such jurisdiction where it is not then otherwise subject.
3.1.6 Agreements for Disposition. To the extent required by the underwriting agreement or similar agreements, Parent shall enter into reasonable customary agreements (including, if applicable, an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities. The representations, warranties and covenants of Parent in any underwriting agreement which are made to or for the benefit of any Underwriters, to the extent applicable, shall also be made to and for the benefit of Investors holding Registrable Securities included in such Registration Statement. No Investor holding Registrable Securities included in such Registration Statement shall be required to make any representations or warranties in the underwriting agreement except, if applicable, with respect to such Investor’s organization, good standing, authority, title to Registrable Securities, lack of conflict of such sale with such Investor’s material agreements and organizational documents, and with respect to written information relating to such Investor that such Investor has furnished in writing expressly for inclusion in such Registration Statement.
3.1.7 Cooperation. The principal executive officer of Parent, the principal financial officer of Parent, the principal accounting officer of Parent and all other officers and members of the management of Parent shall cooperate fully in any offering of Registrable Securities hereunder, which cooperation shall include the preparation of the Registration Statement with respect to such offering and all other offering materials and related documents, and participation in meetings with Underwriters, attorneys, accountants and potential investors.
3.1.8 Records. Parent shall make available for inspection by the holders of Registrable Securities included in such Registration Statement, any Underwriter participating in any disposition pursuant to such Registration Statement and any attorney, accountant or other professional retained by any holder of Registrable Securities included in such Registration Statement or any Underwriter, all financial and other records, pertinent corporate documents and properties of Parent, as shall be necessary to enable them to exercise their due diligence responsibility, and cause Parent’s officers, directors and employees to supply all information reasonably requested by any of them in connection with such Registration Statement; provided that Parent may require execution of a reasonable confidentiality agreement prior to sharing any such information.
3.1.9 Opinions and Comfort Letters. Parent shall request its counsel and accountants to provide customary legal opinions and customary comfort letters, to the extent so reasonably required by any underwriting agreement.
3.1.10 Earnings Statement. Parent shall comply with all applicable rules and regulations of the Commission and the Securities Act, and make available to its shareholders, if reasonably required, as soon as reasonably practicable, an earnings statement covering a period of twelve (12) months, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
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3.1.11 Listing. Parent shall use its reasonable best efforts to cause all Registrable Securities included in any Registration to be listed on such exchanges or otherwise designated for trading in the same manner as similar securities issued by Parent are then listed or designated or, if no such similar securities are then listed or designated, in a manner satisfactory to the holders of a majority of the Registrable Securities included in such Registration.
3.1.12 Road Show. If the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $15,000,000, Parent shall use its reasonable efforts to make available senior executives of Parent to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in any underwritten offering.
3.2 Obligation to Suspend Distribution. Upon receipt of any notice from Parent of the happening of any event of the kind described in Section 3.1.4(iv) or (v), or, in the event that the financial statements contained in the Registration Statement become stale, or in the event that the Registration Statement or prospectus included therein contains a misstatement of material fact or omits to state a material fact due to a bona fide business purpose, or in the case of a resale Registration on Short Form Registration pursuant to Section 2.3 hereof, upon any suspension by Parent, pursuant to a written insider trading compliance program adopted by the Parent’s Board of Directors, of the ability of all “insiders” covered by such program to transact in Parent’s securities because of the existence of material non-public information, each holder of Registrable Securities included in any Registration shall immediately discontinue disposition of such Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such holder receives the supplemented or amended prospectus contemplated by Section 3.1.4 or the Registration Statement is updated so that the financial statements are no longer stale, or the restriction on the ability of “insiders” to transact in Parent’s securities is removed, as applicable, and, if so directed by Parent, each such holder will deliver to Parent all copies, other than permanent file copies then in such holder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice.
3.3 Registration Expenses. Parent shall bear all costs and expenses incurred in connection with any Demand Registration pursuant to Section 2.1, any Piggy-Back Registration pursuant to Section 2.2, and any Registration on Short Form Registration effected pursuant to Section 2.3, and all reasonable expenses incurred in performing or complying with its other obligations under this Agreement, whether or not the Registration Statement becomes effective, including, without limitation: (i) all Registration and filing fees; (ii) fees and expenses of compliance with securities or “blue sky” laws (including fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities); (iii) printing, messenger, telephone and delivery expenses; (iv) Parent’s internal expenses (including, without limitation, all salaries and expenses of its officers and employees); (v) the fees and expenses incurred in connection with the listing of the Registrable Securities (including as required by Section 3.1.11); (vi) Financial Industry Regulatory Authority fees; (vii) fees and disbursements of counsel for Parent and fees and expenses for independent certified public accountants retained by Parent (including the expenses or costs associated with the delivery of any opinions or comfort letters requested pursuant to Section 3.1.9); (viii) the reasonable fees and expenses of any special experts retained by Parent in connection with such Registration; and (ix) the reasonable fees and expenses (up to a maximum of $15,000 in the aggregate in connection with such Registration) of one legal counsel selected by the holders of a majority-in-interest of the Registrable Securities included in such Registration for such legal counsel’s review, comment and finalization of the proposed Registration Statement and other relevant documents. Parent shall have no obligation to pay any underwriting discounts or selling commissions attributable to the Registrable Securities being sold by the holders thereof, which underwriting discounts or selling commissions shall be borne by such holders in proportion to the number of Registrable Securities included in such offering for each such holder. Additionally, in an underwritten offering, all selling security holders and Parent shall bear the expenses of the Underwriter pro rata in proportion to the respective amount of securities each is selling in such offering.
3.4 Information. Investors holding Registrable Securities included in any Registration Statement shall provide such information as may reasonably be requested by Parent, or the managing Underwriter, if any, in connection with the preparation of such Registration Statement, including amendments and supplements thereto, in order to effect the Registration of any Registrable Securities under the Securities Act pursuant to Section 2 and in connection with the obligation to comply with federal and applicable state securities laws. Investors selling Registrable Securities in any offering must provide all questionnaires, powers of attorney, custody agreements, stock powers, and other documentation reasonably requested by Parent or the managing Underwriter.
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4. INDEMNIFICATION AND CONTRIBUTION.
4.1 Indemnification by Parent. Subject to the provisions of this Section 4.1, Section 4.3 and Section 4.4.3 hereof, Parent agrees to indemnify and hold harmless each Investor and each other holder of Registrable Securities, and each of their respective officers, employees, affiliates, directors, partners, members, attorneys and agents, and each person, if any, who controls an Investor and each other holder of Registrable Securities (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, an “Investor Indemnified Party”), from and against any expenses, losses, judgments, claims, damages or liabilities, whether joint or several, arising out of or based upon any untrue statement of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was Registered, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to such Registration Statement, or arising out of or based upon any omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by Parent of the Securities Act or any rule or regulation promulgated thereunder applicable to Parent and relating to action or inaction required of Parent in connection with any such Registration (provided, however, that the indemnity agreement contained in this Section 4.1 shall not apply to amounts paid in settlement of any such claim, loss, damage, liability or action if such settlement is effected without the consent of Parent, such consent not to be unreasonably withheld, delayed or conditioned); and Parent shall promptly reimburse the Investor Indemnified Party for any legal and any other expenses reasonably incurred by such Investor Indemnified Party in connection with investigating and defending any such expense, loss, judgment, claim, damage, liability or action whether or not any such person is a party to any such claim or action and including any and all legal and other expenses incurred in giving testimony or furnishing documents in response to a subpoena or otherwise; provided, however, that Parent will not be liable in any such case to the extent that any such expense, loss, claim, damage or liability arises out of or is based upon any untrue statement or allegedly untrue statement or omission or alleged omission made in such Registration Statement, preliminary prospectus, final prospectus, or summary prospectus, or any such amendment or supplement, in reliance upon and in conformity with information furnished to Parent, in writing, by such selling holder or Investor Indemnified Party expressly for use therein. Parent also shall indemnify any Underwriter of the Registrable Securities, their officers, affiliates, directors, partners, members and agents and each Person who controls such Underwriter on substantially the same basis as that of the indemnification provided above in this Section 4.1.
4.2 Indemnification by Holders of Registrable Securities. Subject to the provisions of this Section 4.2, Section 4.3 and Section 4.4.3 hereof, each selling holder of Registrable Securities, in the event that any Registration is being effected pursuant to this Agreement of any Registrable Securities held by such selling holder of Registrable Securities, agrees to indemnify and hold harmless Parent, each other holder of Registrable Securities and each Underwriter, and their respective officers, employees, affiliates, directors, partners, members, attorneys and agents, and each person, if any, who controls Parent, such other holder of Registrable Securities or Underwriter (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, a “Parent Indemnified Party”), from and against any expenses, losses, judgments, claims, damages or liabilities, whether joint or several, arising out of or based upon any untrue statement of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was Registered, any preliminary prospectus, final prospectus or summary prospectus contained in such Registration Statement, or any amendment or supplement to the Registration Statement, or arising out of or based upon any omission to state a material fact required to be stated therein or necessary to make the statement therein not misleading, if the statement or omission was made in reliance upon and in conformity with information furnished in writing to Parent by such selling holder or an authorized representative of such selling holder, expressly for use therein (provided, however, that the indemnity agreement contained in this Section 4.2 shall not apply to amounts paid in settlement of any such claim, loss, damage, liability or action if such settlement is effected without the consent of the indemnifying selling holder of Registrable Securities, such consent not to be unreasonably withheld, delayed or conditioned), and the indemnifying selling holder of Registrable Securities shall promptly reimburse the Parent Indemnified Party for any legal and any other expenses reasonably incurred by the Parent Indemnified Party in connection with investigating and defending any such expense, loss, judgment, claim, damage, liability or action whether or not any such person is a party to any such claim or action and including any and all legal and other expenses incurred in giving testimony or furnishing documents in response to a subpoena or otherwise. Each such selling holder’s indemnification obligations hereunder shall be several and not joint and shall be limited to the amount of any net proceeds actually received by such selling holder in the offering.
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4.3 Conduct of Indemnification Proceedings. Promptly after receipt by any Person of any notice of any loss, claim, damage or liability or any action in respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such Person (the “Indemnified Party”) shall, if a claim in respect thereof is to be made against any other Person for indemnification hereunder, notify such other Person (the “Indemnifying Party”) in writing of the loss, claim, judgment, damage, liability or action; provided, however, that the failure by the Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which the Indemnifying Party may have to such Indemnified Party hereunder, except and solely to the extent the Indemnifying Party is actually prejudiced by such failure. If the Indemnified Party is seeking indemnification with respect to any claim or action brought against the Indemnified Party, then the Indemnifying Party shall be entitled to participate in such claim or action, and, to the extent that it wishes, jointly with all other Indemnifying Parties, to assume control of the defense thereof with counsel satisfactory to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume control of the defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that in any action in which both the Indemnified Party and the Indemnifying Party are named as defendants, the Indemnified Party shall have the right to employ separate counsel (but no more than one such separate counsel) to represent the Indemnified Party and its controlling Persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Indemnified Party against the Indemnifying Party, with the fees and expenses of such counsel to be paid by such Indemnifying Party if, based upon the written opinion of counsel of such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. No Indemnifying Party shall, without the prior written consent of the Indemnified Party (acting reasonably), consent to entry of judgment or effect any settlement of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such judgment or settlement includes an unconditional release of such Indemnified Party from all liability arising out of such claim or proceeding.
4.4 Contribution.
4.4.1 If the indemnification provided for in the foregoing Sections 4.1 or 4.2is unavailable to any Indemnified Party in respect of any loss, claim, damage, liability or action referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnified Parties and the Indemnifying Parties in connection with the actions or omissions which resulted in such loss, claim, damage, liability or action, as well as any other relevant equitable considerations. The relative fault of any Indemnified Party and any Indemnifying Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such Indemnified Party or such Indemnifying Party and the Parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
4.4.2 The Parties agree that it would not be just and equitable if contribution pursuant to this Section 4.4 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 the immediately preceding Section 4.4.1.
4.4.3 The amount paid or payable by an Indemnified Party as a result of any loss, claim, damage, liability or action referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 4.4, no holder of Registrable Securities shall be required to contribute any amount in excess of the dollar amount of the net proceeds (after payment of any underwriting fees, discounts, commissions or taxes) actually received by such holder from the sale of Registrable Securities which gave rise to such contribution obligation. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) with respect to any action shall be entitled to contribution in such action from any person who was not guilty of such fraudulent misrepresentation.
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5. RULE 144.
5.1 Rule 144. Parent covenants that it shall file any reports required to be filed by it under the Securities Act and the Exchange Act and shall take such further action as the holders of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holders to sell Registrable Securities without Registration within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission.
6. MISCELLANEOUS.
6.1 Other Registration Rights. Parent represents and warrants that as of the date of this Agreement, no Person, other than the holders of Registrable Securities has any right to require Parent to Register any of Parent’s share capital for sale or to include Parent’s share capital in any Registration filed by Parent for the sale of share capital for its own account or for the account of any other Person. Nothing in this Agreement shall be deemed to prevent any such grant of rights by Parent (i) at or prior to Closing to investors in the PIPE Investment or other transactions or other equity or debt financing arrangements mutually acceptable to the Parties in furtherance of the satisfaction of the condition precedent to Closing set forth in Section 7.01(j) of the Merger Agreement, or (ii) after Closing to any individual or entity that is at such time a shareholder of Parent.
6.2 Assignment; No Third-Party Beneficiaries. This Agreement and the rights, duties and obligations of Parent hereunder may not be assigned or delegated by Parent in whole or in part. This Agreement and the rights, duties and obligations of the holders of Registrable Securities hereunder may be freely assigned or delegated by such holder of Registrable Securities in conjunction with and to the extent of any transfer of Registrable Securities by any such holder that is permitted under the Governing Documents of Parent, the Transaction Documents and applicable law; provided that no assignment by any Investor of its rights, duties and obligations hereunder shall be binding upon or obligate Parent unless and until Parent shall have received (i) written notice of such assignment and (ii) the written agreement of the assignee, in a form reasonably satisfactory to Parent, 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). This Agreement shall inure to the benefit of, and be binding upon, the successors (including by merger, acquisition or reorganization or otherwise), and permitted assigns of the Parties. This Agreement is not intended to confer any rights or benefits on any persons that are not Parties other than as expressly set forth in Section 4 and this Section 6.2.
6.3 Notices. All Demand Registrations shall be in writing and given in person or via reputable, internationally recognized overnight courier service during regular business hours of Parent at the physical address of Parent set forth below in this Section 6.3. A Demand Registration shall be deemed to have been duly given as of the date and time actually received by Parent. Except as aforesaid, notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by facsimile or other electronic means, with affirmative confirmation of receipt, (iii) one Business Day after being sent, if sent by reputable, internationally recognized overnight courier service or (iv) three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable Party at the following addresses (or at such other address for a party as shall be specified by like notice):
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If to Parent, to:
Great Future Technology Limited 71 Fort Street, PO Box 500, George Town Grand Cayman KY1-106 Cayman Islands Attention: Yongnan Zhou, Director Email: zyn888@tonglioptech.com |
With copies to (which shall not constitute notice):
Miller Canfield Paddock and Stone, P.L.C. 1100 Superior Avenue E Suite 1750 Cleveland, Ohio 44114 Attn: Yanping Wang, Esq. Email: wangy@millercanfield.com |
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If to the Company, to:
Flag Ship Acquisition Corporation 26 Broadway, Suite 934 New York, New York 10004 Attn: Matthew Chen, Chief Executive Officer Email: mchen@flagshipac.com |
With copies to (which shall not constitute notice):
Becker & Poliakoff, P.A. 45 Broadway, 17th Floor New York, NY 10006 Attn: Bill Huo, Esq. Email: bhuo@beckerlawyers.com | |
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If to Whale Management Corporation, to:
Whale Management Corporation c/o Flag Ship Acquisition Corporation 26 Broadway, Suite 934 New York, New York 10004 Attention: Matthew Chen Email: mchen@flagshipac.com |
With copies to (which shall not constitute notice):
Becker & Poliakoff, P.A. 45 Broadway, 17th Floor New York, NY 10006 Attn: Bill Huo, Esq. Email: bhuo@beckerlawyers.com | |
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If to Investors other than Sponsor, to:
c/o Great Future Technology Limited 71 Fort Street, PO Box 500, George Town Grand Cayman KY1-106 Cayman Islands Attention: Yongnan Zhou, Chairman Email: zyn888@tonglioptech.com |
6.4 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the Parties intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible that is valid and enforceable. Notwithstanding anything to the contrary contained in this Agreement, in the event that a duly executed copy of this Agreement is not delivered to Parent by an Investor, such Investor failing to provide such signature shall not be a Party or have any rights or obligations hereunder, but such failure shall not affect the rights and obligations of the other Parties as amongst such other Parties.
6.5 Entire Agreement. This Agreement (together with the Merger Agreement, including all agreements entered into pursuant hereto or thereto or referenced herein or therein and all certificates and instruments delivered pursuant hereto and thereto) constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations, understandings, negotiations and discussions among the Parties, whether oral or written, relating to the subject matter hereof; provided, that, for the avoidance of doubt, the foregoing shall not affect the rights and obligations of the Parties under the Merger Agreement or any other Transaction Document.
6.6 Interpretation. Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement. In this Agreement, unless the context otherwise requires: (i) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (ii) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; (iii) the words “herein,” “hereto,” and “hereby” and other words of similar import in this Agreement shall be deemed in each case to refer to this Agreement as a whole and not to any particular section or other subdivision of this Agreement; and (iv) the term “or” means “and/or”. The Parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.
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6.7 Amendments; Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written agreement or consent of Parent and Investors holding a majority-in-interest of the Registrable Securities; provided, that any amendment or waiver of this Agreement which affects an Investor in a manner materially and adversely disproportionate to other Investors will also require the consent of such Investor. No failure or delay by a Party in exercising any right hereunder shall operate as a waiver thereof. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.
6.8 Remedies Cumulative. In the event a Party fails to observe or perform any covenant or agreement to be observed or performed under this Agreement, the other Parties may proceed to protect and enforce its rights by suit in equity or action at law, whether for specific performance of any term contained in this Agreement or for an injunction against the breach of any such term or in aid of the exercise of any power granted in this Agreement or to enforce any other legal or equitable right, or to take any one or more of such actions, without being required to post a bond. None of the rights, powers or remedies conferred under this Agreement shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to any other right, power or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.
6.9 Governing Law; Jurisdiction. This Agreement and any dispute or controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the Laws of the State of New York, without regard to the conflict of law principles thereof. All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court located in New York (or in any appellate courts thereof) (the “Specified Courts”). Each Party hereby (i) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any Party and (ii) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Specified Court. Each Party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law. Each Party irrevocably consents to the service of the summons and complaint and any other process in any other action or proceeding relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such Party at the applicable address set forth in Section 6.3. Nothing in this Section 6.9 shall affect the right of any Party to serve legal process in any other manner permitted by applicable Law.
6.10 WAIVER OF TRIAL BY JURY. EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.10.
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6.11 Effectiveness of Agreement; Termination of Merger Agreement. This Agreement shall be binding upon each Party upon such Party’s execution and delivery of this Agreement, but this Agreement shall only become effective upon the Closing. In the event that the Merger Agreement is validly terminated in accordance with its terms prior to the Closing, this Agreement shall automatically terminate and become null and void and be of no further force or effect, and the Parties shall have no obligations hereunder.
6.12 Counterparts; Electronic Signatures. This Agreement may be executed and delivered (including by facsimile, email or other electronic transmission) in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. The words “execution,” signed,” “signature,” and words of like import in this Agreement or in any other certificate, agreement or document related to this Agreement shall include images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”, “tif” or “jpg”) and other electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
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IN WITNESS WHEREOF, each Party has signed or has caused to be signed, if an entity, by its officer thereunto duly authorized, this Amended and Restated Registration Rights Agreement as of the date first above written.
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Flag Ship Acquisition Corporation, an exempted company organized under the laws of the Cayman Islands | ||
| By: | /s/ Matthew Chen | |
| Name: | Matthew Chen | |
| Title: | Chief Executive Officer | |
[Signature Page to Amended and Restated Registration Rights Agreement]
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IN WITNESS WHEREOF, each Party has signed or has caused to be signed, if an entity, by its officer thereunto duly authorized, this Amended and Restated Registration Rights Agreement as of the date first above written.
| PARENT: | ||
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Great Future Technology Limited an exempted company incorporated in the Cayan Islands with limited liability | ||
| By: | /s/ Yongnan Zhou | |
| Name: | Yongnan Zhou | |
| Title: | Director | |
[Signature Page to Amended and Restated Registration Rights Agreement]
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IN WITNESS WHEREOF, each Party has signed or has caused to be signed, if an entity, by its officer thereunto duly authorized, this Amended and Restated Registration Rights Agreement as of the date first above written.
| INVESTOR: | ||
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Whale Management Corporation, a British Virgin Islands business company | ||
| By: | /s/ Matthew Chen | |
| Name: | Matthew Chen | |
| Title: | Director | |
[Signature Page to Amended and Restated Registration Rights Agreement]
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IN WITNESS WHEREOF, each Party has signed or has caused to be signed, if an entity by its officer thereunto duly authorized, this Amended and Restated Registration Rights Agreement as of the date first above written.
| INVESTOR: | ||
| Genesis River Technology Limited | ||
| By: | /s/ Wang Hou-Hsun | |
| Name: |
Wang Hou-Hsun, its Director | |
[Signature Page to Amended and Restated Registration Rights Agreement]
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IN WITNESS WHEREOF, each Party has signed or has caused to be signed, if an entity, by its officer thereunto duly authorized, this Amended and Restated Registration Rights Agreement as of the date first above written.
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INVESTOR:
InnoValley Holdings Limited | ||
| By: | /s/ Yongnan Zhou | |
| Name: | Yongnan Zhou | |
| Title: | Director | |
[Signature Page to Amended and Restated Registration Rights Agreement]
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Exhibit 10.5
MUTUAL TERMINATION AGREEMENT
This Mutual Termination Agreement and (this “Termination Agreement”) is dated as of April 18, 2025, by and among Great Rich Technologies Limited, a public limited company incorporated under the laws of Hong Kong (the “Company”), GRT Merger Star Limited, a Cayman Islands exempted company and wholly-owned subsidiary of the Company (“Merger Sub”), and Flag Ship Acquisition Corporation, a Cayman Islands exempted company (“SPAC”). The Company, Merger Sub and SPAC are collectively referred to herein as the “Parties” and individually as a “Party.” Capitalized terms used herein without definition shall have the meanings ascribed to them in the Merger Agreement (as hereinafter defined).
RECITALS
WHEREAS, the Parties entered into that certain Agreement and Plan of Merger, dated as of October 21, 2024, as amended on February 28, 2025 (the “Merger Agreement”); and
WHEREAS, the Parties desire to terminate the Merger Agreement in accordance with Section 9.01(a) thereof as more fully set forth herein.
NOW THEREFORE, in consideration of the mutual agreements contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
TERMINATION
1. Termination of Merger Agreement. In accordance with Section 9.01(a) of the Merger Agreement, SPAC and Company hereby agree by mutual consent to terminate the Merger Agreement effective as of the date hereof. Pursuant to and in accordance with Section 9.02 of the Merger Agreement, the Merger Agreement is void and no Party shall have any further rights, remedies, liabilities or obligations thereunder, except as set forth in Section 9.02 of the Merger Agreement. The Company and SPAC also acknowledge and agree that each of the ancillary agreement among the Parties, as contemplated by the Merger Agreement, including, without limitation, the Parent Shareholder Lock-up and Support Agreement, the Sponsor Lock-up Agreement, the Sponsor Voting and Support Agreement and the Amended and Restated Registration Rights Agreement, and each other document entered into in connection with the Merger Agreement (such agreements, instruments and documents, the “Ancillary Documents”), shall be automatically terminated, without further action on the part of the parties thereto, concurrent with the termination of the Merger Agreement pursuant hereto.
2. Waiver; Release.
(a) SPAC for itself and on behalf of its affiliates, equity holders, partners, lenders, administrators, representatives, shareholders, parents, subsidiaries, officers, directors, attorneys, agents, employees, predecessors, successors, and assigns, hereby forever and fully release and discharge the Company, Merger Sub and their affiliates and each of their respective present and former direct and indirect equity holders, directors, officers, employees, predecessors, partners, shareholders, administrators, representatives, affiliates, attorneys, agents, parent entities, subsidiary entities, successors, and assigns, and each of them, from all claims, contentions, rights, debts, liabilities, demands, accounts, reckonings, obligations, duties, promises, costs, expenses (including, without limitation, attorneys’ fees and costs), liens, indemnification rights, damages, losses, actions, and causes of action, of any kind whatsoever, whether due or owing in the past, present or future and whether based upon contract, tort, statute or any other legal or equitable theory of recovery, and whether known or unknown, suspected or unsuspected, asserted or unasserted, fixed or contingent, matured or unmatured, with respect to, pertaining to, based on, arising out of, resulting from, or relating to the Merger Agreement, the Ancillary Documents, and the Merger (the “SPAC Released Claims”); provided, however, that this Section 2(a) shall not impact, limit, restrict, or waive any terms, provisions, rights or obligations (i) that expressly survive the termination of the Merger Agreement pursuant to Section 9.02 thereof; (ii) any agreements entered into following the date of this Termination Agreement; or (iii) set forth in this Termination Agreement (collectively, the “SPAC Excluded Claims”).
(b) Company and Merger Sub for themselves and on behalf of each of their respective affiliates, equity holders, partners, lenders, administrators, representatives, shareholders, parents, subsidiaries, officers, directors, attorneys, agents, employees, predecessors, successors, and assigns, hereby forever and fully release and discharge SPAC and its affiliates and each of their respective present and former direct and indirect equity holders, directors, officers, employees, predecessors, partners, shareholders, administrators, representatives, affiliates, attorneys, agents, parent entities, subsidiary entities, successors, and assigns, and each of them, from all claims, contentions, rights, debts, liabilities, demands, accounts, reckonings, obligations, duties, promises, costs, expenses (including, without limitation, attorneys’ fees and costs), liens, indemnification rights, damages, losses, actions, and causes of action, of any kind whatsoever, whether due or owing in the past, present or future and whether based upon contract, tort, statute or any other legal or equitable theory of recovery, and whether known or unknown, suspected or unsuspected, asserted or unasserted, fixed or contingent, matured or unmatured, with respect to, pertaining to, based on, arising out of, resulting from, or relating to the Merger Agreement, the Ancillary Documents, and the Merger (the “Company Released Claims;” and together with the SPAC Released Claims, the “Released Claims”); provided, however, that this Section 2(b) shall not impact, limit, restrict, or waive any terms, provisions, rights or obligations (i) that expressly survive the termination of the Merger Agreement pursuant to Section 9.02 thereof; (ii) any agreements entered into following the date of this Termination Agreement; or (iii) set forth in this Termination Agreement (collectively, the “Company Excluded Claims,” and together with the SPAC Excluded Claims, the “Excluded Claims”).
(c) Each Party acknowledges and understands that there is a risk that subsequent to the execution of this Termination Agreement, each Party may discover, incur or suffer Released Claims that were unknown or unanticipated at the time of the execution of this Termination Agreement, and which, if known on the date of the execution of this Termination Agreement, might have materially affected such Party’s decision to enter into and execute this Termination Agreement. Each Party further agrees that by reason of the releases contained herein, each Party is assuming the risk of such unknown Released Claims and agrees that this Termination Agreement applies thereto, except to the extent that such unknown claim would be an Excluded Claim. Further each Party and each person released pursuant to this Termination Agreement, hereby irrevocably covenants not to assert any claim or demand, or commence, institute or voluntarily aid in any way, or cause to be commenced or instituted any proceeding of any kind against any Party and each other Person released pursuant to this Agreement, based upon any Released Claim, except for any Excluded Claims.
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3. Public Announcements. The SPAC shall file a Current Report on Form 8-K relating to this Termination Agreement hereto no later than the fourth (4th) Business Day after the date hereof (the “Form 8-K”). Prior to filing the Form 8-K, SPAC shall reasonably consult with Company and provide the Company with an opportunity to review and comment on such Form 8-K and shall consider any such comments in good faith. Thereafter, and except for such Form 8-K filing and except for disclosure or communications required by applicable Law or Nasdaq rule, or in response to any request by any Governmental Authority, no Party shall issue any press release, public statement or public filing with respect to the other Parties, the transactions contemplated by the Merger Agreement and/or this Termination Agreement, without the prior written consent of the SPAC, in the case of the Company or Merger Sub, or their respective representatives, or the Company and Merger Sub in the case of the SPAC; provided that, prior to any disclosure or communication required by applicable Law or Nasdaq rule or in response to a request by a Governmental Authority, SPAC or the Company, as applicable, shall (i) use their respective reasonable best efforts to consult with each other before making any such disclosure, communication or response; and (ii) to the fullest extent permitted by applicable Law, first allow the other to review such disclosure, communication or response and the opportunity to comment thereon, and shall consider such comments in good faith. Notwithstanding the above, nothing set forth in this Section 3 shall prohibit SPAC from making similar disclosures as set forth in the Form 8-K in other future filings, proxy statements or other documents filed with, or disclosed with, the Securities and Exchange Commission.
4. No Claim Against the Trust Account; Notices; Waiver; Third-Party Beneficiaries; Waiver of Jury Trial; Governing Law; Submission to Jurisdiction; Specific Performance; and No Recourse. Section 6.09, Section 11.04, Section 11.08, Section 11.09, Section 11.11, Section 11.12, Section 11.14, Section 11.15, Section 11.17 and Section 11.18 of the Merger Agreement are hereby incorporated by reference into this Termination Agreement, mutatis mutandis.
5. Headings. The descriptive headings contained in this Termination Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Termination Agreement.
6. Severability. If any term or other provision of this Termination Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Termination Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Termination Agreement are not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Termination 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 by this Termination Agreement be consummated as originally contemplated to the fullest extent possible.
7. Execution and Counterparts. This Termination Agreement may be executed and delivered (including by facsimile or portable document format (.pdf transmission) in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
8. Amendment. This Termination Agreement may only be amended in writing by the Parties.
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9. Expenses. Each Party hereby agrees to pay the expenses (including the fees and expenses of counsel, accountants, investment bankers, experts and consultants) incurred by such Party in connection with this Termination Agreement and the matters described herein. Each party further acknowledges and agrees that in accordance with Section 11.02 of the Merger Agreement, all fees and expenses incurred in connection with the Merger Agreement and the Merger shall be paid by the Party incurring such fees and expenses whether or not the Merger is consummated, except as otherwise expressly set forth in the Merger Agreement.
10. Entire Agreement. This Termination Agreement is the entire agreement and understanding between and among the Parties with respect to the termination of the Merger Agreement.
11. Successors and Assigns. shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided, however, that no Party may assign, delegate or otherwise transfer any of its rights or obligations pursuant to this Agreement without the prior written consent of the other Parties. Any attempted assignment of this Agreement not in accordance with the terms of this Section 11 shall be void ab initio.
12. Representations and Warranties. Each Party represents and warrants to the other Parties that: (a) such Party has all requisite power and authority to enter into this Termination Agreement and to take the actions contemplated hereby; (b) the execution and delivery of this Termination Agreement and the actions contemplated hereby have been duly authorized by all necessary corporate or other action on the part of such Party; and (c) this Termination Agreement has been duly executed and delivered by such Party and, assuming the due authorization, execution and delivery by the other Parties, constitutes a legal, valid and binding obligation of such, enforceable against such Party in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other legal requirements relating to or affecting creditors’ rights generally or by equitable principles (regardless of whether enforcement is sought at law or in equity).
[Signature Pages Follow]
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IN WITNESS WHEREOF, the Parties have caused this Termination Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
| The SPAC: | ||
| FLAG SHIP ACQUISITION CORPORATION | ||
| By: | /s/ Matthew Chen | |
| Name: | Mathew Chen | |
| Title: | CEO | |
| Merger Sub: | ||
| GRT MERGER STAR LIMITED | ||
| By: | /s/ Xiangzhe Jiang | |
| Name: | Xiangzhe Jiang | |
| Title: | Director | |
| The Company: | ||
| GREAT RICH TECHNOGOIES LIMITED | ||
| By: | /s/ Yongnan Zhou | |
| Name: | Yongnan Zhou | |
| Title: | Chairman and CEO | |
[Signature Page to Termination of Agreement and Plan of Merger]
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