KVACF 8-K
Keen Vision Acquisition Corp. (KVACF)
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
Current Report
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Item 1.01. Entry into a Material Definitive Agreement.
Merger Agreement
On September 3, 2024, Keen Vision Acquisition Corporation, a British Virgin Islands business company limited by shares (“KVAC” or “Parent”), entered into a merger agreement (as it may be amended, supplemented, or otherwise modified from time to time, the “Merger Agreement”), with Medera Inc., a Cayman Islands exempted company (“Medera” or “Company”).
Pursuant to the terms of the Merger Agreement, KVAC will incorporate a Cayman Islands exempted company (“Acquirer”) to be a direct wholly-owned subsidiary of KVAC for the purpose of the merger of KVAC with and into the Acquirer (the “Reincorporation Merger”), in which Acquirer will be the surviving entity. Acquirer upon its incorporation will form a Cayman Islands exempted company to be a direct wholly-owned subsidiary of Acquirer (“Merger Sub”, together with KVAC and Acquirer, the “Parent Parties” and each a “Parent Party”) for the purpose of effectuating the Acquisition Merger (as defined below).
Upon the terms and subject to the conditions of the Merger Agreement, (a) KVAC will reincorporate by merging with and into the Acquirer, in which the Acquirer will be the surviving company and KVAC will cease to exist, and (b) promptly after the Reincorporation Merger, the parties intend to effect a merger of Merger Sub with and into Medera, in which Medera will be the surviving entity (the “Acquisition Merger”, together with the Reincorporation Merger, the “Mergers” and together with the other transactions related thereto, the “Proposed Business Combination”).
Merger Consideration
Conversion of Medera Ordinary Shares
At the effective time of the Acquisition Merger, each outstanding Medera Ordinary Share (excluding treasury shares and dissenting shares) will be canceled and converted into the right to receive a number of Acquirer Ordinary Shares equal to the Exchange Ratio, as outlined in the Merger Agreement. The number of Acquirer Ordinary Shares to be delivered by Acquirer to shareholders of Medera at the Closing is based on a net value of $622,560,00 for 100% of Medera’s issued and outstanding ordinary shares, with each Acquirer Ordinary Share valued at $10.00. The number of Acquirer Ordinary Shares to be delivered at Closing is subject to certain adjustments as further set forth in the Merger Agreement. Upon Closing, shareholders of Medera will no longer hold any rights in the Medera Ordinary Shares they held prior to the Closing except the right to receive their portion of the Merger Consideration pursuant to the Merger Agreement.
Treatment of Medera RSUs
Prior to the Closing, all outstanding restricted stock units of Medera, including those issued to Medera’s employees or service providers under the Company Equity Incentive Plan (as defined in the Merger Agreement) (whether vested or unvested) (the “Medera RSUs”), will be adjusted to convert into restricted stock units of Acquirer, based on the Exchange Ratio (as defined in the Merger Agreement), and will remain subject to the same terms and conditions as the original Medera RSUs. The Acquirer will assume all obligations under the Company Equity Incentive Plan and the agreements related to the Converted RSU (as defined in the Merger Agreement).
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Issuance of Merger Consideration
In connection with the Mergers, fractional shares of the Acquirer Ordinary Shares that would otherwise be issued to Medera’s shareholders will be rounded to the nearest whole share. Specifically, any fractional share amounting to 0.50 or greater will be rounded up to the nearest whole number, while those less than 0.50 will be rounded down to the nearest whole number.
Representations and Warranties
In the Merger Agreement, the Company makes certain representations and warranties generally subject to customary materiality qualifers (with certain exceptions set forth in the disclosure schedules to the Merger Agreement) relating to, among other things: (1) corporate existence and power of the Company and its subsidiaries (together, the “Company Group”) and similar corporate matters; (2) authorization, execution, delivery and enforceability of the Merger Agreement and other transaction documents; (3) no need for governmental authorization for the execution, delivery or performance of the Merger Agreement and additional agreements thereto (“Ancillary Agreements”); (4) absence of conflicts; (5) capital structure of the Company; (6) accuracy of the list of each subsidiary of the Company; (7) accuracy of corporate records; (8) required consents and approvals; (9) financial statements; (10) internal accounting controls; (11) absence of certain changes or events; (12) title to assets and properties; (13) litigation threatened against or affecting the Company and its subsidiaries; (14) material contracts; (15) material licenses and permits; (16) compliance with laws; (17) intellectual property and privacy; (18) employees and employment matters; (19) withholding of obligations of the Company and its subsidiaries applicable to its employees; (20) employee benefits; (21) real property; (22) tax matters; (23) environmental laws; (24) finders’ fees; (25) accuracy of the list of directors and officers; (26) anti-money laundering laws; (27) insurance; (28) related party transactions; (29) that no trading or any short sale of Parent’s voting stock or securities; (30) that the Company is not an investment company; (31) regulatory permits and compliance with healthcare laws; and (32) that none of the information supplied by the Company in the filings with the Securities and Exchange Commission (“SEC”) contain any untrue statement of a material fact or omit to state any material fact required to be stated therein.
In the Merger Agreement, each of Parent Parties makes certain representations and warranties generally subject to customary materiality qualifers, relating to, among other things: (1) proper corporate existence and power; (2) that the Merger Sub will be formed solely for the purpose of engaging in the transactions and activities contemplated by the Merger Agreement; (3) authorization, execution, delivery and enforceability of the Merger Agreement and Ancillary Agreements; (4) no need for governmental authorization for the execution, delivery or performance of the Merger Agreement and Ancillary Agreements; (5) absence of conflicts; (6) finders’ fees; (7) issuance of the Merger Consideration; (8) capital structure; (9) that none of the information supplied by the Parent Parties in the filings with the SEC contain any untrue statement of a material fact or omit to state any material fact required to be stated therein; (10) trust fund; (11) validity of Nasdaq Stock Market (“Nasdaq”) listing; (12) board approval; (13) Parent’s filing documents with the SEC and financial statements; (14) certain business practices; (15) anti-money laundering laws; (16) no affiliate transactions; (17) compliance with laws; (18) absence of certain changes; (19) absence of litigation; (20) brokers and other advisors; (21) tax matters; and (22) employees and employee benefit plans.
Covenants
The Merger Agreement includes customary pre-closing covenants of the parties with respect to the operation of their respective businesses, including a covenant of Medera relating to conducting its business in the ordinary course, consistent with past practices and use its commercially reasonable efforts to preserve intact its business, subject to certain exceptions, and covenants of Medera to refrain from taking certain actions without KVAC’s consent. KVAC and Medera have also agreed to use their reasonable best efforts to satisfy conditions to the consummation of the Mergers. The Merger Agreement also contains additional covenants of the parties, including among others, covenants providing for (i) KVAC and Medera will jointly cause a registration statement to be filed to register the Acquirer Ordinary Shares to be issued in the Proposed Business Combination (the “Registration Statement”) in compliance with SEC rules and regulations, to have the Registration Statement declared effective under the Securities Act of 1933, as amended, as promptly as possible after filing and will keep the Registration Statement effective for as long as necessary to consummate the Mergers, (ii) KVAC shall cause each of Acquirer and Merger Sub to be incorporated under the laws of Cayman Islands, upon incorporation each of the Acquirer and Merger Sub shall sign a joinder agreement to the Merger Agreement, (iii) KVAC will seek shareholder approval for several proposals at the Parent Shareholder Meeting, including the adoption of the Merger Agreement and Ancillary Agreements, the Reincorporation Merger, amendments to Organizational Documents, approval of the members of the Board of Directors of Reincorporation Merger Surviving Corporation, issuance of Acquirer Ordinary Shares, the Acquirer Equity Incentive Plan and other necessary approvals under Nasdaq rules and for financing related to the transactions, (iv) Medera’s consolidated interim financial information for each semi-annual period after the Balance Sheet Date shall be delivered to KVAC no later than sixty (60) calendar days following the end of each semi-annual period.
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Conditions to Closing
General Conditions to Closing
The Closing is conditioned on, among other things, (1) no provisions of any applicable law or order that has the effect of preventing or prohibiting consummation of the Merger; (2) the expiration or termination of any waiting period under any applicable antitrust law relating to the Merger; (3) no governmental authority shall have enacted, or entered any law or order that has the effect of prohibiting the Merger or making the Merger illegal; (4) each of Acquirer and Merger Sub shall have been formed or incorporated and shall have executed a joinder to the Merger Agreement; (5) the Company Shareholder Approval shall have been obtained; (6) each of the Required Parent Proposals shall have been approved at the Parent Shareholder Meeting; (7) Acquirer’s initial listing application with Nasdaq shall have been conditionally approved and Acquirer shall not have received any notice of non-compliance therewith; (8) the SEC shall have declared effective the Registration Statement with respect to the Merger Agreement and no stop order shall have been issued in respect thereof; and (9) certain shareholders of Medera shall have entered into and delivered to Parent a lock-up agreement.
Parent Parties’ Conditions to Closing
The obligations of the Parent Parties to consummate the Closing, in addition to the conditions described above in the paragraph above entitled “General Conditions to Closing”, are conditioned upon, among others, each of the following, in addition to customary certificates, instruments and documents, the Ancillary Agreements referenced below and other customary closing deliveries: (1) the Company complying with all of its obligations under the Merger Agreement in all material respects; (2) the representations and warranties of the Company being true on and as of the date of the Merger Agreement and the date of the Closing except as would not be expected to have a Material Adverse Effect; (3) the Fundamental Representations of the Company being true on and as of the date of the Merger Agreement and the date of the Closing except as would not be expected to have a Material Adverse Effect; (4) the material representations of the Company being true on and as of the date of the Merger Agreement and the date of the Closing except as would not be expected to have a Material Adverse Effect; (5) there having been no Material Adverse Effect to the Company Group which is continuing; and (6) the Company having addressed certain matters set forth in a schedule to the Merger Agreement.
Company’s Conditions to Closing
The obligations of the Company to consummate the Proposed Business Combination, in addition to the conditions described above in the paragraph above entitled “General Conditions to Closing”, are conditioned upon, among others, each of the following, in addition to customary certificates, instruments and documents, the Ancillary Agreements referenced below and other customary closing deliveries: (1) the Parent Parties complying with all of their obligations under the Merger Agreement in all material respects; (2) the representations and warranties of the Parent Parties being true on and as of the date of the Merger Agreement and the date of the Closing except as would not be expected to have a Material Adverse Effect; (3) the Fundamental Representations of the Parent Parties being true on and as of the date of the Merger Agreement and the date of the Closing except as would not be expected to have a Material Adverse Effect; (4) the material Representations of the Parent Parties being true on and as of the date of the Merger Agreement and the date of the Closing except as would not be expected to have a Material Adverse Effect; (5) there having been no Material Adverse Effect to the Parent which is continuing; (6) the size and composition of the post-Closing Acquirer Board of Directors shall be as set forth in the Merger Agreement; and (7) Available Liquidity shall equal or exceed $40,000,000.
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Termination
The Merger Agreement may be terminated without default by either Parent or Company under the following circumstances:
| (i) | If the Closing has not occurred by the latest of (A) April 24, 2025, or (B) if Parent’s board of directors has extended the timeline to consummate an initial business combination beyond April 24, 2025, in accordance with the amended and restated memorandum and articles of association of Parent, the last date for Parent to consummate a Business Combination as per such extensions (the “Outside Closing Date”), and the material breach or violation of any representation, warranty, covenant, or obligation under the Merger Agreement by the party seeking termination was not the cause of, or did not result in, the failure of the Closing to occur by the Outside Closing Date, then the terminating party may do so without liability by providing written notice to the other party after the Outside Closing Date. |
| (ii) | If an authority issues an order or enacts a law that prohibits the Mergers or makes it illegal, and such order or law is final and non-appealable, the terminating party may terminate the Merger Agreement without liability. This right is not available if the failure to comply with the Merger Agreement by the terminating party or its Affiliates substantially caused or resulted in the order or law. |
| (iii) | If the Parent Shareholder Meeting has been held and the holders of Parent Ordinary Shares have voted but the Parent Shareholder Approval was not obtained, either Parent or the Company may terminate the Merger Agreement without liability. |
| (iv) | The Merger Agreement may be terminated at any time by mutual written consent of both the Company and Parent, duly authorized by their respective boards of directors. |
The Merger Agreement, may be terminated upon default by either Parent or Company under the following circumstances:
| (i) | Parent may terminate Merger Agreement by providing written notice to the Company, without prejudice to any rights or obligations, if: |
| ● | The Company breaches any representation, warranty, agreement, or covenant to be performed on or prior to the Closing Date and such breach cannot be cured or is not cured by the earlier of the Outside Closing Date or thirty (30) days following receipt of written notice from Parent describing the breach, provided, however, that Parent is not then in material breach of the Merger Agreement. |
| ● | the Company Shareholder Approval is not received by the Company Shareholder Approval Deadline (subject to the condition that if the approval is subsequently received, Parent can no longer terminate). |
| ● | The Acquisition Merger does not close before April 27, 2025. |
| (ii) | The Company may terminate the Merger Agreement by giving written notice to Parent, without prejudice to any rights or obligations, if: |
| ● | Parent breaches any covenants, agreements, representations, or warranties that would make the satisfaction of any conditions in Section 10.3(a) or 10.3(b) of the Merger Agreement impossible. |
| ● | Such breach cannot be cured or is not cured by the earlier of the Outside Closing Date or thirty (30) days following receipt of written notice from the Company describing the breach, provided, however, that the Company is not then in material breach of the Merger Agreement. |
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Related Agreements
Company Support Agreement
In connection with the execution of the Merger Agreement, certain shareholders of the Company each entered into a shareholder support agreement (the “Company Shareholder Support Agreement”) with Parent and the Company, pursuant to which each such shareholder agrees to vote the shares of the Company they beneficially own in favor of each of the proposals to be included in the applicable written consent of the Company’s shareholders, to take all actions reasonably necessary to consummate the Proposed Business Combination and to vote against any proposal that would prevent the satisfaction of the conditions to the Proposed Business Combination set forth in the Merger Agreement.
The foregoing description of the Company Shareholder Support Agreement is qualified in its entirety by reference to the full text of the actual agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and incorporated herein by reference.
Sponsor Support Agreement
Contemporaneously with the execution of the Merger Agreement, certain shareholders of Parent have entered into a support agreement (the “Sponsor Support Agreement”), pursuant to which such shareholders agreed to, among other things, approve the Merger Agreement and the Mergers and other transactions contemplated hereby, and not transfer their Parent securities prior to the Closing.
The foregoing description of the Sponsor Support Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the actual agreement, a copy of which is filed as Exhibit 10.2 hereto.
Registration Rights Agreement
At the closing of the Proposed Business Combination, Parent will enter into a registration rights agreement (the “Registration Rights Agreement”) with certain existing shareholders of Keen Vision and with the shareholders of Medera with respect to certain shares, units, private units (and the private shares and private warrants) to the extent they own at the Closing. The Registration Rights Agreement will provide certain demand registration rights and piggyback registration rights to the shareholders, subject to underwriter cutbacks and issuer blackout periods. Parent will agree to pay certain fees and expenses relating to registrations under the Registration Rights Agreement.
The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the actual agreement, a form of which is filed as Exhibit 10.3 hereto.
Lock-up Agreements
Certain Company Shareholders (“Holders”) will enter into and deliver to Parent lock-up agreements (“Lock-up Agreements”) prior to Closing.
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Pursuant to the Lock-Up Agreements, these Holders will, subject to certain customary exceptions, agree not to (i) sell, offer to sell, contract or agree to sell, pledge or otherwise dispose of, directly or indirectly, Acquirer Ordinary Shares held by them (the “Lock-Up Shares”), (ii) enter into a transaction that would have the same effect, (iii) enter into any swap, hedge, or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Shares, or otherwise engage in any short sales or other arrangements with respect to the Lock-Up Shares, or (iv) publicly announce any intention to effect any transaction specified in clauses (i) or (ii), until the date that is nine (9) months after the date of the Closing (the “Lock-Up Period”), subject to the following:
| (i) | if at any time subsequent to the date of the Lock-up Agreement, the share price of the Company Ordinary Shares equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period, then the Lock-Up Period shall be deemed to have expired as of such date with respect to 25% of the Lock-up Shares of each Holder (the “25% Tranche”); it being understood that if this clause (i) is not triggered before the expiration of the Lock-Up Period then the full 25% Tranche of each Holder will be subject to the full nine (9) month Lock-Up Period; and |
| (ii) | with respect to the remaining 75% of the Lock-Up Shares of each Holder (the “75% Tranche”), the Lock-Up Period will be as follows: |
| ● | for 15% of the 75% Tranche, the Lock-Up Period will be three (3) months after the date of Closing; |
| ● | for 35% of the 75% Tranche, the Lock-Up Period will be six (6) months after the date of Closing; and |
| ● | for 50% of the 75% Tranche, the Lock-Up Period will be nine (9) months after the date of Closing. |
The foregoing description of the Lock-Up Agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the actual agreements, a form of which is filed as Exhibit 10.4 hereto.
Item 7.01 Regulation FD Disclosure.
Press Release
On September 5, 2024, KVAC and the Company issued a joint press release announcing the execution of the Merger Agreement and related information, a copy of which is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
The press release shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in this Item 7.01, including Exhibit 99.1, shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act regardless of any general incorporation language in the filing.
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Forward-Looking Statements
This Form 8-K contains, and certain oral statements made by representatives of KVAC and Medera and their respective affiliates, from time to time may contain, “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. KVAC’s and Medera’s actual results may differ from their expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are also forward-looking statements. Words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “strategy,” “future,” “opportunity,” “may,” “target,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” “preliminary,” or similar expressions that predict or indicate future events or trends or that are not statements of historical matters, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements include, without limitation, KVAC’s, Medera’s, or their respective management teams’ expectations concerning the outlook for their or Medera’s business, productivity, plans, and goals for future operational improvements and capital investments, operational performance, future market conditions, or economic performance and developments in the capital and credit markets and expected future financial performance, including expected net proceeds, expected additional funding, the percentage of redemptions of KVAC’s public shareholders, growth prospects and outlook of Medera’s operations, individually or in the aggregate, including the achievement of project milestones, commencement and completion of commercial operations of certain of Medera’s projects, as well as any information concerning possible or assumed future results of operations of Medera. Forward-looking statements also include statements regarding the expected benefits of the Proposed Business Combination. The forward-looking statements are based on the current expectations of the respective management teams of Medera and KVAC, as applicable, and are inherently subject to uncertainties and changes in circumstance and their potential effects. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: (i) the risk that the Proposed Business Combination may not be completed in a timely manner or at all, which may adversely affect the price of KVAC’s securities; (ii) the risk that the Proposed Business Combination may not be completed by KVAC’s business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by KVAC; (iii) the failure to satisfy the conditions to the consummation of the Proposed Business Combination, including the adoption of the Merger Agreement by the shareholders of KVAC and the receipt of certain regulatory approvals; (iv) market risks; (v) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; (vi) the effect of the announcement or pendency of the Proposed Business Combination on Medera’s business relationships, performance, and business generally; (vii) the outcome of any legal proceedings that may be instituted against Medera or KVAC related to the Merger Agreement or the Proposed Business Combination; (viii) failure to realize the anticipated benefits of the Proposed Business Combination; (ix) the inability to maintain the listing of KVAC’s securities or to meet listing requirements and maintain the listing of Medera’s securities on Nasdaq; (x) the inability to implement business plans, forecasts, and other expectations after the completion of the Proposed Business Combination, identify and realize additional opportunities, and manage its growth and expanding operations; (xi) risks related to Medera’s ability to develop, license or acquire new therapeutics; (xii) the risk that Medera will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all; (xiii) the risk of product liability or regulatory lawsuits or proceedings relating to Medera’s business; (xiv) uncertainties inherent in the execution, cost, and completion of preclinical studies and clinical trials; (xv) risks related to regulatory review, and approval and commercial development; (xvi) risks associated with intellectual property protection; (xvii) Medera’s limited operating history and risk that it may never successfully commercialise its products; (xviii) Medera expects to continue to incur significant losses and may never achieve or maintain profitability; and (xix) the risk that additional financing in connection with the Proposed Business Combination may not be raised on favorable terms. The foregoing list is not exhaustive, and there may be additional risks that neither KVAC nor Medera presently knows or that KVAC and Medera currently believe are immaterial. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. There may be additional risks that neither KVAC nor Medera presently know, or that KVAC and Medera currently believe are immaterial, that could cause actual results to differ from those contained in the forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements, which reflect current beliefs and are based on information currently available as of the date a forward-looking statement is made. KVAC and Medera undertake no obligation to revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs. In the event that any forward-looking statement is updated, no inference should be made that Medera or KVAC will make additional updates with respect to that statement, related matters, or any other forward-looking statements. Any corrections or revisions and other important assumptions and factors that could cause actual results to differ materially from forward-looking statements, including discussions of significant risk factors, may appear, up to the consummation of the Proposed Business Combination, in KVAC’s public filings with the SEC, and which readers are advised to review carefully.
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There may be additional risks that neither KVAC nor Medera presently know or that KVAC and Medera currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect KVAC’s and Medera’s expectations, plans or forecasts of future events and views as of the date of this Form 8-K. KVAC and Medera anticipate that subsequent events and developments will cause KVAC’s and Medera’s assessments to change. However, while KVAC and Medera may elect to update these forward-looking statements at some point in the future, KVAC and Medera specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing KVAC’s and Medera’s assessments as of any date subsequent to the date of this Form 8-K. Accordingly, undue reliance should not be placed upon the forward-looking statements.
Additional Information About the Proposed Business Combination and Where to Find It
In connection with the Proposed Business Combination, KVAC intends to file relevant materials with the SEC, including the Registration Statement, which will include a proxy statement/prospectus of KVAC, and a prospectus for the registration of Acquirer Ordinary Shares in connection with the Proposed Business Combination. THE PARTIES URGE ITS INVESTORS, SHAREHOLDERS, AND OTHER INTERESTED PERSONS TO READ, WHEN AVAILABLE, THE PRELIMINARY PROXY STATEMENT/PROSPECTUS AND DEFINITIVE PROXY STATEMENT/PROSPECTUS, IN EACH CASE WHEN FILED WITH THE SEC AND DOCUMENTS INCORPORATED BY REFERENCE THEREIN BECAUSE THESE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION ABOUT KVAC, MEDERA AND THE PROPOSED BUSINESS COMBINATION. After the registration statement is declared effective by the SEC, the definitive proxy statement/prospectus and other relevant documents will be mailed to the shareholders of KVAC as of the record date in the future to be established for voting on the Proposed Business Combination and will contain important information about the Proposed Business Combination and related matters. Shareholders of KVAC and other interested persons are advised to read, when available, these materials (including any amendments or supplements thereto) and any other relevant documents in connection with KVAC’s solicitation of proxies for the meeting of shareholders to be held to approve, among other things, the Proposed Business Combination, because they will contain important information about KVAC, Medera and the Proposed Business Combination. Shareholders and other interested persons will also be able to obtain copies of the preliminary proxy statement/prospectus, the definitive proxy statement/prospectus, and other relevant materials in connection with the Proposed Business Combination, without charge, once available, at the SEC’s website at www.sec.gov or by directing a request to: Keen Vision Acquisition Corp., Attention: Alex Davidkhanian, telephone: +1 203 609 1394. The information contained on, or that may be accessed through, the websites referenced in this Form 8-K in each case is not incorporated by reference into, and is not a part of, this Form 8-K.
Participants in a Solicitation
KVAC and their respective directors, executive officers and other members of management and employees may, under the rules of the SEC, be deemed to be participants in the solicitations of proxies in connection with the Proposed Business Combination. For more information about the names, affiliations and interests of KVAC’s directors and executive officers, please refer to KVAC’s annual report on Form 10-K filed with the SEC on March 29, 2024, which can be found at https://www.sec.gov/ix?doc=/Archives/edgar/data/1889983/000121390024027973/ea0201104-10k_keenvision.htm and registration statement, proxy statement/prospectus and other relevant materials filed with the SEC in connection with the Proposed Business Combination when they become available. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, which may, in some cases, be different than those of KVAC’s shareholders generally, will be included in the registration statement and the proxy statement/prospectus and other relevant materials when they are filed with the SEC when they become available. Shareholders, potential investors and other interested persons should read the registration statement and the proxy statement/prospectus and other such documents carefully, when they become available, before making any voting or investment decisions. Free copies of these documents may be obtained from the sources indicated above.
No Offer or Solicitation
This Form 8-K is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Proposed Business Combination and shall not constitute an offer to sell or a solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended, or an exemption therefrom.
Item 9.01 Exhibits.
(d) Exhibits
The following exhibits are being filed herewith:
| Exhibit No. | Description | |
| 2.1* | Merger Agreement dated as of September 3, 2024, by and between Medera Inc., and Keen Vision Acquisition Corporation | |
| 10.1 | Company Support Agreement dated as of September 3, 2024 | |
| 10.2 | Sponsor Support Agreement dated as of September 3, 2024 | |
| 10.3 | Form of Registration Rights Agreement | |
| 10.4 | Form of Lock-up Agreement | |
| 99.1 | Press Release dated September 5, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Certain exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). KVAC agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request. |
8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: September 5, 2024 | ||
| KEEN VISION ACQUISITION CORPORATION | ||
| By: | /s/ WONG, Kenneth K.C. | |
| Name: | WONG, Kenneth K.C. | |
| Title: | Chief Executive Officer | |
9
Exhibit 2.1
Execution Version
MERGER AGREEMENT
dated
September 3, 2024
by and between
Medera Inc.,
and
Keen Vision Acquisition Corporation
Table of Contents
| Page | |||
| ARTICLE I DEFINITIONS | 3 | ||
| 1.1 | Definitions | 3 | |
| 1.2 | Construction | 20 | |
| ARTICLE II REINCORPORATION MERGER | 21 | ||
| 2.1 | Reincorporation Merger | 21 | |
| 2.2 | Reincorporation Merger Effective Time | 21 | |
| 2.3 | Effect of the Reincorporation Merger | 21 | |
| 2.4 | Charter Documents | 21 | |
| 2.5 | Directors and Officers of the Reincorporation Merger Surviving Company | 21 | |
| 2.6 | Effect on Issued Shares of Parent | 22 | |
| 2.7 | Surrender of Parent Ordinary Shares | 23 | |
| 2.8 | Effect on Issued Shares of Acquirer | 23 | |
| 2.9 | Lost, Stolen or Destroyed Certificates | 23 | |
| 2.10 | Taking of Necessary Action; Further Action | 23 | |
| 2.11 | Dissenter’s Rights | 23 | |
| ARTICLE III THE ACQUISITION MERGER | 24 | ||
| 3.1 | The Acquisition Merger | 24 | |
| 3.2 | Closing | 24 | |
| 3.3 | Effective Time | 24 | |
| 3.4 | Effects of the Acquisition Merger | 25 | |
| 3.5 | Memorandum and Articles of Association of the Surviving Corporation | 25 | |
| 3.6 | Post-Closing Board of Directors and Officers | 25 | |
| 3.7 | Directors and Officers of the Surviving Corporation | 25 | |
| 3.8 | No Further Ownership Rights in Company Ordinary Shares | 25 | |
i
Table of Contents continued
| Page | |||
| 3.9 | Rights Not Transferable | 25 | |
| 3.10 | Taking of Necessary Action; Further Action | 25 | |
| 3.11 | Dissenter’s Rights | 26 | |
| ARTICLE IV MERGER CONSIDERATION | 26 | ||
| 4.1 | Conversion of Company Ordinary Shares | 26 | |
| 4.2 | Treatment of Company RSUs | 27 | |
| 4.3 | Issuance of the Merger Consideration | 27 | |
| 4.4 | Closing Calculations | 28 | |
| ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 29 | ||
| 5.1 | Corporate Existence and Power | 29 | |
| 5.2 | Authorization | 29 | |
| 5.3 | Governmental Authorization | 30 | |
| 5.4 | Non-Contravention | 30 | |
| 5.5 | Capitalization | 31 | |
| 5.6 | Subsidiaries | 32 | |
| 5.7 | Corporate Records | 32 | |
| 5.8 | Consents | 32 | |
| 5.9 | Financial Statements | 32 | |
| 5.10 | Internal Accounting Controls | 33 | |
| 5.11 | Absence of Certain Changes | 33 | |
| 5.12 | Properties; Title to the Company Group’s Assets | 33 | |
| 5.13 | Litigation | 34 | |
| 5.14 | Contracts | 34 | |
| 5.15 | Licenses and Permits | 36 | |
| 5.16 | Compliance with Laws | 36 | |
| 5.17 | Intellectual Property and Privacy | 37 | |
ii
Table of Contents continued
| Page | |||
| 5.18 | Employees; Employment Matters | 40 | |
| 5.19 | Withholding | 42 | |
| 5.20 | Employee Benefits | 42 | |
| 5.21 | Real Property | 43 | |
| 5.22 | Tax Matters | 44 | |
| 5.23 | Environmental Laws | 46 | |
| 5.24 | Finders’ Fees | 46 | |
| 5.25 | Directors and Officers | 46 | |
| 5.26 | Anti-Money Laundering Laws | 47 | |
| 5.27 | Insurance | 48 | |
| 5.28 | Related Party Transactions | 48 | |
| 5.29 | No Trading or Short Position | 48 | |
| 5.30 | Not an Investment Company | 48 | |
| 5.31 | Regulatory Permits; Compliance With Healthcare Laws | 48 | |
| 5.32 | Information Supplied | 50 | |
| ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PARENT AND PARENT PARTIES | 51 | ||
| 6.1 | Corporate Existence and Power | 51 | |
| 6.2 | Merger Sub | 51 | |
| 6.3 | Corporate Authorization | 51 | |
| 6.4 | Governmental Authorization | 52 | |
| 6.5 | Non-Contravention | 52 | |
| 6.6 | Finders’ Fees | 52 | |
| 6.7 | Issuance of Shares | 52 | |
| 6.8 | Capitalization | 53 | |
iii
Table of Contents continued
| Page | |||
| 6.9 | Information Supplied | 54 | |
| 6.10 | Trust Fund | 54 | |
| 6.11 | Listing | 55 | |
| 6.12 | Board Approval | 55 | |
| 6.13 | Parent SEC Documents and Financial Statements | 55 | |
| 6.14 | Certain Business Practices | 57 | |
| 6.15 | Anti-Money Laundering Laws | 57 | |
| 6.16 | Affiliate Transactions | 57 | |
| 6.17 | Compliance with Laws | 58 | |
| 6.18 | Absence of Certain Changes | 58 | |
| 6.19 | Litigation | 58 | |
| 6.20 | Brokers and Other Advisors | 58 | |
| 6.21 | Tax Matters | 58 | |
| 6.22 | Employees; Benefit Plans | 60 | |
| ARTICLE VII COVENANTS OF THE PARTIES PENDING CLOSING | 61 | ||
| 7.1 | Conduct of the Business | 61 | |
| 7.2 | Acquirer Nasdaq Listing | 66 | |
| 7.3 | No trading in Parent Ordinary Shares | 66 | |
| 7.4 | Exclusivity | 66 | |
| 7.5 | Access to Information | 67 | |
| 7.6 | Formation of Parent Parties | 67 | |
| 7.7 | Notices of Certain Events | 67 | |
| 7.8 | Registration Statement/Proxy Statement; Other Filings | 68 | |
| 7.9 | Trust Account | 71 | |
iv
Table of Contents continued
| Page | |||
| 7.10 | Payment of Sponsor Allocated Deferred Underwriting Discount | 72 | |
| 7.11 | Obligations of Acquirer and Merger Sub | 72 | |
| 7.12 | Cooperation with Regulatory Approvals | 72 | |
| ARTICLE VIII COVENANTS OF THE COMPANY | 73 | ||
| 8.1 | Reporting; Compliance with Laws; No Insider Trading | 73 | |
| 8.2 | Company’s Shareholder Approval | 73 | |
| 8.3 | Additional Financial Information | 74 | |
| ARTICLE IX COVENANTS OF ALL PARTIES HERETO | 74 | ||
| 9.1 | Commercially Reasonable Efforts; Further Assurances; Governmental Consents | 74 | |
| 9.2 | Compliance with SPAC Agreements | 75 | |
| 9.3 | Confidentiality | 76 | |
| 9.4 | Directors’ and Officers’ Indemnification and Liability Insurance | 76 | |
| 9.5 | Parent Public Filings; Nasdaq | 77 | |
| 9.6 | Certain Tax Matters | 77 | |
| 9.7 | Incentive Plan | 79 | |
| 9.8 | PIPE Investment | 80 | |
| 9.9 | Section 16 Matters | 80 | |
| ARTICLE X CONDITIONS TO CLOSING | 80 | ||
| 10.1 | Condition to the Obligations of the Parties | 80 | |
| 10.2 | Conditions to Obligations of Parent, Acquirer, and Merger Sub | 81 | |
| 10.3 | Conditions to Obligations of the Company | 83 | |
| ARTICLE XI TERMINATION | 84 | ||
| 11.1 | Termination Without Default | 84 | |
| 11.2 | Termination Upon Default | 84 | |
| 11.3 | Effect of Termination | 85 | |
v
Table of Contents continued
| Page | |||
| ARTICLE XII MISCELLANEOUS | 85 | ||
| 12.1 | Non-Survival | 85 | |
| 12.2 | Notices | 86 | |
| 12.3 | Amendments; No Waivers; Remedies | 86 | |
| 12.4 | Arm’s Length Bargaining; No Presumption Against Drafter | 87 | |
| 12.5 | Publicity | 87 | |
| 12.6 | Expenses | 87 | |
| 12.7 | No Assignment or Delegation | 87 | |
| 12.8 | Governing Law | 88 | |
| 12.9 | Counterparts; Electronic Signatures | 88 | |
| 12.10 | Entire Agreement | 88 | |
| 12.11 | Severability | 88 | |
| 12.12 | Further Assurances | 88 | |
| 12.13 | Third Party Beneficiaries | 89 | |
| 12.14 | Waiver | 89 | |
| 12.15 | No Other Representations; No Reliance | 89 | |
| 12.16 | Waiver of Jury Trial | 91 | |
| 12.17 | Submission to Jurisdiction | 91 | |
| 12.18 | Attorneys’ Fees | 91 | |
| 12.19 | Remedies | 91 | |
| 12.20 | Non-Recourse | 91 | |
| Exhibit A | – | Form of Company Support Agreement |
| Exhibit B | – | Form of Sponsor Support Agreement |
| Exhibit C | – | Form of Registration Rights Agreement |
| Exhibit D | – | Form of Lock-up Agreement |
| Exhibit E | – | Form of Reincorporation Merger Surviving Company Memorandum and Articles |
| Exhibit F | – | Form of BVI Plan of Merger and BVI Articles of Merger |
| Exhibit G | – | Form of Cayman Plan of Reincorporation Merger |
| Exhibit H | – | Form of Cayman Plan of Acquisition Merger |
vi
MERGER AGREEMENT
MERGER AGREEMENT dated as of September 3, 2024 (this “Agreement”), by and between Medera Inc., a Cayman Islands exempted company (the “Company”) and Keen Vision Acquisition Corporation, a British Virgin Islands business company limited by shares (“Parent”). Parent and the Company are sometimes referred to herein as a “Party” or collectively as the “Parties”.
W I T N E S E T H:
A. The Company is a clinical stage company focusing on the development of next-generation therapeutics for difficult-to-treat and incurable diseases (the “Business”);
B. Parent is a blank check company incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities;
C. As soon as practicable after the date hereof, Parent will incorporate a Cayman Islands exempted company (“Acquirer”) to be a direct wholly-owned subsidiary of Parent for the purpose of the merger of Parent with and into Acquirer (the “Reincorporation Merger”), in which Acquirer will be the surviving entity; and as soon as practicable upon its incorporation, Acquirer shall execute a joinder to this Agreement which shall evidence its agreement to be bound by the terms of this Agreement;
D. Acquirer upon its incorporation will form a Cayman Islands exempted company to be a direct wholly-owned subsidiary of Acquirer (“Merger Sub”, together with Parent and Acquirer, the “Parent Parties” and each a “Parent Party”) for the purpose of effectuating the Acquisition Merger (as defined below); and as soon as practicable upon its formation, Merger Sub shall execute a joinder to this Agreement which shall evidence its agreement to be bound by the terms of this Agreement;
E. Upon the terms and subject to the conditions of this Agreement, and in accordance with applicable laws, (a) Parent will reincorporate by merging with and into Acquirer, in which Acquirer will be the surviving company and Parent will cease to exist, and (b) promptly after the Reincorporation Merger, the Parties hereto intend to effect a merger of Merger Sub with and into the Company, in which the Company will be the surviving entity (the “Acquisition Merger”, together with the Reincorporation Merger, the “Mergers”);
F. For U.S. federal income Tax purposes, the Parties intend, and the Company acknowledges, that the Reincorporation Merger qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder (the “Reincorporation Intended Tax Treatment”), and the Boards of Directors of Parent and Acquirer have approved this Agreement and intend that it constitute a “plan of reorganization” within the meaning of Treasury Regulation Sections 1.368-2(g) and 1.368-3;
G. For U.S. federal income Tax purposes, the Parties intend that the Acquisition Merger qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder (the “Acquisition Intended Tax Treatment”), and the Company’s Board of Directors and the Boards of Directors of Acquirer and Merger Sub have approved this Agreement and intend that it constitute a “plan of reorganization” within the meaning of Treasury Regulation Sections 1.368-2(g) and 1.368-3;
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H. Upon consummation of the Acquisition Merger, Merger Sub will cease to exist, the Company will become a wholly owned subsidiary of Acquirer and all of the issued and outstanding Company Ordinary Shares will be converted into the right to receive the consideration described in this Agreement;
I. Contemporaneously with the execution of, and as a condition and an inducement to Parent and the Company entering into this Agreement, certain Company Shareholders are entering into and delivering the Company Support Agreement, substantially in the form attached hereto as Exhibit A (the “Company Support Agreement”), pursuant to which each such Company Shareholder has agreed to vote in favor of this Agreement and the Acquisition Merger and the other transactions contemplated hereby;
J. Contemporaneously with the execution of, and as a condition and an inducement to Parent and the Company entering into this Agreement, the Sponsor and certain other shareholders of Parent are entering into and delivering the Sponsor Support Agreement, substantially in the form attached hereto as Exhibit B (the “Sponsor Support Agreement”), pursuant to which the Sponsor and each such Parent shareholder have agreed (i) not to transfer or redeem any Parent Ordinary Shares held by such Parent shareholder, (ii) to vote in favor of this Agreement and the Mergers and the other transactions contemplated hereby at the Parent Shareholder Meeting, and (iii) to subject certain of its founder equity securities of Parent to surrender and forfeiture, subject to the terms and conditions set forth therein;
K. In connection with the transactions contemplated by this Agreement, it is expected that Parent will use commercially reasonable efforts to enter into subscription agreements, in the form and substance as reasonably agreed upon by Parent and the Company (the “Subscription Agreements”), with certain investors providing for aggregate investments in Parent Ordinary Shares in a private placement on or prior to the Closing, at $10.00 per Parent Ordinary Share (the “PIPE Investment”);
L. The Boards of Directors of each of the Company, Parent, Acquirer and Merger Sub (i) have unanimously approved or (in the case of Acquirer and Merger Sub) will unanimously approve and have declared advisable or will declare advisable this Agreement and the transactions contemplated by this Agreement and the Ancillary Agreements to which they are or will be party, including the Mergers, and the performance of their respective obligations hereunder or thereunder, on the terms and subject to the conditions set forth herein or therein, (ii) have determined or will determine that this Agreement and such transactions are in the best interests of, each such company, (iii) (to the extent that shareholders' approval is required under the applicable laws and regulation) have resolved to recommend or will resolve to recommend that their respective shareholders approve the Acquisition Merger and/or Reincorporation Merger (as the case may be), the relevant plan (and articles) of merger and such other transactions contemplated hereby and adopt this Agreement and the Ancillary Agreements to which they are or will be a party and the performance of such party of their obligations hereunder and thereunder and (iv) have resolved, in the case of Parent, to recommend that its shareholders approve each of the Parent Proposals.
2
In consideration of the mutual covenants and promises set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
“2024 Loan Conversion” means the conversion of the 2024 Loan Conversion Amount into an aggregate of 63,711 Company Ordinary Shares which was effectuated on the 2024 Loan Conversion Dates.
“2024 Loan Conversion Amount” means $22,560,000, which is comprised of the principal amount of, and the accrued and unpaid interest on, the Former Company Convertible Loans.
“2024 Loan Conversion Dates” means June 5, 2024, August 16, 2024 and August 26, 2024.
“Action” means any legal action, litigation, suit, claim, hearing, proceeding or investigation by or before any Authority.
“Acquirer Equity Incentive Plan” has the meaning set forth in Section 9.7.
“Acquirer Ordinary Shares” or “Reincorporation Merger Surviving Company Ordinary Shares” means the ordinary shares, par value US$0.0001 per share, of Acquirer.
“Acquisition Intended Tax Treatment” has the meaning set forth in the recitals to this Agreement.
“Acquisition Merger” has the meaning set forth in Recital (E) to this Agreement.
“Additional Parent SEC Documents” has the meaning set forth in Section 6.13(a).
“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with such Person.
“Aggregate Number of Fully Diluted Company Ordinary Shares” means the sum, without duplication, of (a) all Company Ordinary Shares that are issued and outstanding immediately prior to the Effective Time; plus (b) all Company Ordinary Shares that would be issuable if all Company RSUs (whether vested or unvested) were settled in full for Company Ordinary Shares immediately prior to the Effective Time.
“Agreement” has the meaning set forth in the preamble.
“Alternate Exchange” means NYSE, NYSE American, or any successor thereto.
“Alternative Proposal” has the meaning set forth in Section 7.4(b).
“Alternative Transaction” has the meaning set forth in Section 7.4(a).
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“Ancillary Agreements” means the Company Support Agreement, the Sponsor Support Agreement, the Lock-Up Agreement and the Registration Rights Agreement.
“Annual Financial Statements” has the meaning set forth in Section 5.9(a).
“Antitrust Laws” means any applicable domestic or foreign, supranational, national, federal, state, municipality or local Laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade, including the HSR Act.
“Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority exercising executive, legislative, judicial, regulatory or administrative functions (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.
“Available Liquidity” means, as of immediately prior the Closing, an amount equal to: the sum of (i) the funds in the Trust Account following the exercise of all redemption rights by the shareholders of Parent, plus (ii) Cash available from any other sources, including, without limitation, (x) 50% of the Cash proceeds of any equity and/or debt financing arrangement from investors introduced by the Company, and which investors have, prior to the date hereof, indicated investment commitments (with investment amounts) (in connection therewith, the Company shall provide the Parent with a list of such investors (the “Commitment List”) within 10 days after the date hereof); (y) 100% of the Cash proceeds of any equity financing provided by any investor not on the Commitment List; and (z) revenues reasonably expected to be received by the Company during the 12-month period following the Closing Date from any binding licensing agreements arising out of, relating to or resulting from the Company’s technology or clinical asset platforms. For the avoidance of doubt, “Available Liquidity” excludes any new financing provided by Company Shareholders from and after the date of this Agreement.
“Balance Sheet” means the audited consolidated balance sheet of the Company as of December 31, 2023.
“Balance Sheet Date” has the meaning set forth in Section 5.9(a).
“Books and Records” means all books and records, ledgers, employee records, customer lists, files, correspondence, and other records of every kind (whether written, electronic, or otherwise embodied) owned or controlled by a Person in which a Person’s assets, the business or its transactions are otherwise reflected, other than stock books and minute books.
“Business” has the meaning set forth in the recitals to this Agreement.
“Business Data” means all business information and data, including that which constitutes Personal Information (whether of employees, contractors, consultants, customers, consumers, or other persons and whether in electronic or any other form or medium) or Confidential Information, that is collected, used, stored, shared, distributed, transferred, disclosed, or otherwise processed in the course of the conduct of the business of the Company Group.
4
“Business Day” means any day other than a Saturday, Sunday or a legal holiday on which commercial banking institutions in New York, New York, the British Virgin Islands and the Cayman Islands are authorized or required by Law to close for business, excluding as a result of “stay at home,” “shelter-in-place,” “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental Authority so long as the electronic funds transfer systems, including for wire transfers, of commercially banking institutions in New York, New York are generally open for use by customers on such day.
“BVI Articles of Merger” means the articles of merger relating to the Reincorporation Merger substantially in the form set out at Exhibit F to this Agreement containing such information as is prescribed by Section 172(5) of the BVI Business Companies Act and as further described in Section 2.2.
“BVI Business Companies Act” means BVI Business Companies Act, as amended to date.
“BVI Plan of Merger” means the plan of merger relating to the Reincorporation Merger substantially in the form set out at Exhibit F to this Agreement containing such information as is prescribed by Section 172(2) of the BVI Business Companies Act and as further described in Section 2.2.
“BVI Registry” has the meaning specified in Section 2.2.
“Cash” of any Person means the cash and cash equivalents required to be reflected as cash and cash equivalents on a balance sheet of such Person and its Subsidiaries prepared in accordance with U.S. GAAP.
“Cayman Companies Act” means the Companies Act (Revised) of the Cayman Islands.
“Cayman Plan of Acquisition Merger” has the meaning set forth in Section 3.3.
“Cayman Plan of Reincorporation Merger” has the meaning set forth in Section 2.2.
“Cayman Registrar” means the Registrar of Companies in the Cayman Islands.
“Closing” has the meaning set forth in Section 3.2.
“Closing Date” has the meaning set forth in Section 3.2.
“COBRA” means collectively, the requirements of Sections 601 through 606 of ERISA and Section 4980B of the Code or other similar state Law.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company” has the meaning set forth in the preamble.
“Company Allocated Deferred Underwriting Discounts” means the pro rata portion of the $2,990,000 of deferred underwriting fees payable pursuant to the Parent Underwriting Agreement, equal to (A) $2,990,000 multiplied by (B) the fraction obtained by dividing (i) the funds in the Trust Account following the exercise of all redemption rights by the shareholders of Parent by (ii) $149,500,000.
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“Company Board Recommendation” has the meaning set forth in Section 8.2(a).
“Company Capital Stock” means any shares, capital stock of, or other ownership, membership, partnership, voting, joint venture, equity interest, preemptive right, stock or share appreciation, phantom stock, profit participation or similar rights in, such Person or any indebtedness, securities, options, warrants, call, subscription or other rights or entitlements of, or granted by, such Person or any of its Affiliates that are convertible into, or are exercisable or exchangeable for, or give any person any right or entitlement to acquire any such shares, capital stock or other ownership, partnership, voting, joint venture, equity interest, preemptive right, stock or share appreciation, phantom stock, profit participation or similar rights, in all cases, whether vested or unvested, of such Person or any of its Affiliates or any similar security or right that is derivative or provides any economic benefit based, directly or indirectly, on the value or price of any such shares, capital stock or other ownership, partnership, voting, joint venture, equity interest, preemptive right, stock or share appreciation, phantom stock, profit participation or similar rights, in all cases, whether vested or unvested, of the Company.
“Company Charter” means the Memorandum and Articles of Association of the Company as adopted by special resolution on May 16, 2022 as amended and as in effect on the date of this Agreement.
“Company Closing Cash” means, as of the Measuring Time, the aggregate amount of Cash of the Company and its Subsidiaries, provided, however, that (a) such amount shall not include any (i) Company Future Converted Loan Value and/or (ii) Company Equity Financing Value, and (b) such amount shall never be less than zero.
“Company Closing Indebtedness” means, as of the Measuring Time, the aggregate amount of Indebtedness of the Company and its Subsidiaries.
“Company Consent” has the meaning set forth in Section 5.8.
“Company Future Converted Loan Value” means for all Company Future Convertible Loans (if any) that are converted to Company Capital Stock after the date hereof and prior to the Effective Time, the aggregate principal amount of such converted Company Future Convertible Loans and converted accrued interest (if any) as of immediately prior to such conversion.
“Company Future Convertible Loans” means any convertible debt incurred by the Company after the date hereof and prior to the Effective Date, in each instance in compliance with this Agreement.
“Company Equity Financing Value” means the aggregate amount of gross Cash proceeds received by the Company from the sale of Company Capital Stock after the date hereof and prior to the Effective Time.
“Company Equity Incentive Plan” means the Medera Inc. 2024 Omnibus Incentive Plan.
“Company Exclusively Licensed IP” means all Company Licensed IP that is exclusively licensed to or purported to be exclusively licensed to the Company.
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“Company Fundamental Representations” means the representations and warranties of the Company set forth in Section 5.1(a) (Corporate Existence and Power), Section 5.2 (Authorization), Section 5.5(a) (Capitalization) and Section 5.24 (Finders’ Fees).
“Company Group” has the meaning set forth in Section 5.1(b).
“Company Information Systems” has the meaning set forth in Section 5.17(n).
“Company IP” means, collectively, all Company Owned IP and Company Licensed IP.
“Company Licensed IP” means all Intellectual Property owned by a third Person and licensed to or purported to be licensed to the Company Group.
“Company Material Representations” means the representations and warranties of the Company set forth in Section 5.9 (Financial Statements), Section 5.16 (Compliance with Laws), Section 5.17 (Intellectual Property and Privacy) and Section 5.22 (Tax Matters).
“Company Net Value” means an amount equal to the sum of (a) the Purchase Price, plus (b) the Company Future Converted Loan Value, plus (c) Company Closing Cash, plus (d) the Company Equity Financing Value, minus (e) Company Closing Indebtedness.
“Company Option” means each option (whether vested or unvested) (if any) to purchase Company Capital Stock granted, and that remains outstanding, under the Company Equity Incentive Plan.
“Company Ordinary Shares” means the ordinary shares of the Company, $0.0001 par value per share.
“Company Owned IP” means all Intellectual Property owned or purported to be owned by the Company Group, in each case, whether exclusively, jointly with another Person or otherwise.
“Company Products” means all drugs, medical products, or other articles intended to support the development of such drugs or medical products, including data and other supporting services, that are owned, developed, and/or marketed by the Company.
“Company RSUs” means the restricted stock units of the Company, including those issued to Company employees or service providers under the Company Equity Incentive Plan.
“Company Securities” means all Company Capital Stock, all Company Options, all Company RSUs and all Company Future Convertible Loans.
“Company Securityholder” means each Person who holds Company Securities.
“Company Shareholders” means, at any given time, the holders of Company Capital Stock.
“Company Shareholder Approval” has the meaning set forth in Section 5.2(b).
“Company Shareholder Approval Deadline” has the meaning set forth in Section 8.2(a).
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“Company Support Agreement” has the meaning set forth in the recitals to this Agreement.
“Company Transaction Expenses” means the aggregate amount of fees, costs, expenses, commissions or other amounts incurred by or on behalf of, or otherwise payable by, whether or not due, the Company or any of its Subsidiaries in connection with the negotiation, preparation and execution of this Agreement, the Ancillary Agreements, the performance and compliance with this Agreement and the Ancillary Agreements and conditions contained herein or therein to be performed or complied with by the Company at or before Closing, and the consummation of the transactions contemplated hereby or thereby, that remain unpaid as of immediately prior to the Closing, including (a) the fees and expenses of outside legal counsel, accountants, advisors, brokers, investment bankers, consultants, or other agents or service providers of the Company, (b) the cost of any directors’ and officers’ “tail” insurance policy obtained by the Company, (c) any transaction, retention, change in control or similar bonuses, severance payments and other employee-related change of control payments payable by the Company as of or after the Closing Date (including the employer portion of any withholding, payroll, employment or similar Taxes, if any, associated therewith) as a result of the consummation of the transactions contemplated hereby and (d) any and all filing fees payable by the Company or any of its Subsidiaries to any Authority in connection with the transactions contemplated hereby, (e) the Company Allocated Deferred Underwriting Discounts and (f) any other fees, expenses, commissions or other amounts that are expressly allocated to the Company pursuant to this Agreement or any Ancillary Agreement.
“Confidential Information” means any confidential information, knowledge or data concerning the businesses and affairs of the Company, or any suppliers, customers or agents of the Company that is not already generally available to the public.
“Confidentiality Agreement” means the Confidentiality Agreement, dated as of March 14, 2024, by and between the Company and Parent.
“Continental” has the meaning set forth in Section 4.3(b).
“Contracts” means all contracts, agreements, leases (including equipment leases, car leases and capital leases), licenses, Permits, commitments, client contracts, statements of work (SOWs), sales and purchase orders and similar instruments, oral or written, to which the Company is a party or by which any of its respective properties or assets is bound.
“Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled,” “Controlling” and “under common Control with” have correlative meanings.
“Copyleft Licenses” means all licenses or other Contracts for use of Software that require as a condition of use, modification, or distribution of such Software that other Software incorporated into, derived from, or distributed with such Software (i) be disclosed or distributed in source code form, (ii) be licensed for the purpose of making derivative works or (iii) be redistributable at no or minimal charge.
“Copyrights” has the meaning set forth in the definition of “Intellectual Property.”
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“COVID-19” means SARS CoV-2 or COVID-19, and any evolutions thereof.
“COVID-19 Measures” means any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester, safety or similar Law, governmental Order, Action, directive, guidelines or recommendations promulgated by any Authority that has jurisdiction over the Company, Parent or their Subsidiaries, as applicable, including the Centers for Disease Control and Prevention and the World Health Organization, in each case, in connection with or response to COVID-19, including the Coronavirus Aid, Relief, and Economic Security Act and the Families First Coronavirus Response Act.
“Data Protection Laws” means all applicable Laws in any applicable jurisdiction governing the Processing, privacy, security, or protection of Personal Information, and all regulations or guidance issued thereunder.
“Deferred Underwriting Discounts” means the sum of $2,990,000, payable as deferred underwriting discounts pursuant to the Parent Underwriting Agreement.
“Domain Names” has the meaning set forth in the definition of “Intellectual Property.”
“Effective Time” has the meaning set forth in Section 3.3.
“Enforceability Exceptions” has the meaning set forth in Section 5.2(a).
“Environmental Laws” shall mean all applicable Laws that prohibit, regulate or control any Hazardous Material or any Hazardous Material Activity, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, the Resource Recovery and Conservation Act of 1976, the Federal Water Pollution Control Act, the Clean Air Act, the Hazardous Materials Transportation Act and the Clean Water Act.
“Equityholder Allocation Schedule” has the meaning set forth in Section 4.1(c).
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means each entity, trade or business that is, or was at the relevant time, a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the Company, or that is, or was at the relevant time, a member of the same “controlled group” as the Company pursuant to Section 4001(a)(14) of ERISA.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Ratio” means the quotient obtained by dividing (a) the Per Share Value by (b) $10.00.
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“Excluded Matter” means any one or more of the following: (a) general economic or political conditions; (b) conditions generally affecting the industries in which such Person or its Subsidiaries operates; (c) any changes in financial, banking or securities markets in general, including any disruption thereof and any decline in the price of any security or any market index or any change in prevailing interest rates; (d) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (e) any action required or permitted by this Agreement or any action or omission taken by the Company with the written consent or at the request of Parent or any action or omission taken by Parent or Merger Sub with the written consent or at the request of the Company; (f) any changes in applicable Laws (including any COVID-19 Measures) or accounting rules (including U.S. GAAP) or the enforcement, implementation or interpretation thereof; (g) the announcement, pendency or completion of the transactions contemplated by this Agreement; (h) any natural or man-made disaster, acts of God or epidemic, pandemic or other disease outbreak (including COVID-19 and any COVID-19 Measures) or the worsening thereof; or (i) any failure by a party to meet any internal or published projections, forecasts or revenue or earnings predictions (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise excluded from the definition of a “Material Adverse Effect” may be taken into account in determining whether there has been a Material Adverse Effect).
“FDA” means the U.S. Food and Drug Administration, or any successor agency thereto.
“Former Company Convertible Loans” means, as of the date hereof, the “Loan” or “Loans” as defined in (i) Loan Agreement relating to a term loan of USD 5,484,600 by and between Medera Biopharmaceutical Limited and Dragon Era Enterprises Limited, dated as of April 23, 2021, as amended pursuant to an Amendment Agreement relating to a term loan of USD 16,340,641.13, dated as of October 20, 2023; (ii) Loan Agreement relating to a term loan of USD 3,886,600 by and between Medera Biopharmaceutical Limited and Regemedera Holdings Limited, dated as of April 23, 2021 as amended pursuant to an Amendment Agreement relating to a term loan of USD 15,950,841.49, dated as of October 20, 2023; (iii) Loan Agreement relating to a term loan of USD 6,000,000 by and between Medera Biopharmaceutical Limited and Dragon Era Enterprises Limited, dated as of September 5, 2022, as amended pursuant to an Amendment Agreement relating to a term loan of USD 6,000,000, dated as of October 20, 2023; (iv) Loan Agreement relating to a term loan of USD 5,000,000 by and between Medera Inc. and Dragon Era Enterprises Limited, dated as of October 20, 2023, as amended pursuant to an Amendment Agreement relating to a term loan of USD 11,000,000, dated as of February 1, 2024, and further amended pursuant to a Supplemental Agreement relating to a term loan of USD 19,000,000, dated as of July 25, 2024; (v) Loan Agreement relating to a term loan of USD 5,000,000 by and between Medera Inc. and Regemedera Holdings Limited, dated as of October 20, 2023, as amended pursuant to an Amendment Agreement relating to a term loan of USD 5,000,000, dated as of February 1, 2024; and (vi) Loan Agreement relating to a term loan of USD 628,800 by and between Medera Biopharmaceutical Limited and Year Ahead International Limited, dated as of April 23, 2021, as amended pursuant to an Amendment Agreement relating to a term loan of USD 374,953.47, dated as of October 20, 2023. All Former Company Convertible Loans have been converted into Company Ordinary Shares and as of the date hereof, there are no Former Company Convertible Loans (or related accrued interest) outstanding.
“Fraud” means fraud, intentional breach, intentional misrepresentation, or willful misconduct.
“Good Clinical Practices” or “GCP” mean the current standards for the conduct and monitoring of clinical trials involving human subjects that ensure their quality, safety, and reliability as set forth in the FDCA and applicable regulations promulgated thereunder, as amended from time to time, including applicable requirements contained in the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (“ICH”) E6(R2) Guidelines and 21 C.F.R. Parts 50, 54, and 56.
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“Good Laboratory Practices” mean the then current standards for conducting nonclinical laboratory studies, as set forth in the FDCA and applicable regulations promulgated thereunder, as amended from time to time, including applicable requirements contained in 21 C.F.R. Part 58, and such applicable standards of good laboratory practices as are required by Governmental Entities in any other countries in which the Company Products are intended to be sold.
“Governmental Entity” means any United States or non-United States (a) federal, state, local, municipal or other government, (b) governmental or quasi-governmental entity of any nature (including any governmental agency, branch, department, official or entity and any court or other tribunal), or (c) body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature, including any arbitral tribunal (public or private).
“Hazardous Material” shall mean any material, emission, chemical, substance or waste that has been designated by any Authority to be radioactive, toxic, hazardous, a pollutant or a contaminant.
“Hazardous Material Activity” shall mean the transportation, transfer, recycling, storage, use, treatment, manufacture, removal, remediation, release, exposure of others to, sale, labeling, or distribution of any Hazardous Material or any product or waste containing a Hazardous Material, or product manufactured with ozone depleting substances, including any required labeling, payment of waste fees or charges (including so-called e-waste fees) and compliance with any recycling, product take-back or product content requirements.
“Healthcare Laws” means all Laws and regulations relating to patient care or human health and safety, including, as amended from time to time, any such Law pertaining to the research (including preclinical, nonclinical and clinical research or studies), development, testing, production, manufacture, transfer, storing, distribution, approval, labeling, marketing, pricing, third-party reimbursement or sale of pharmaceuticals, biological products, cellular or gene therapies, or medical devices including without limitation (i) the Federal Food, Drug and Cosmetic Act (FDCA) (21 U.S.C. § 201 et seq., as amended) and the Public Health Service Act (42 U.S.C. §201 et seq., as amended), (ii) the Health Insurance Portability and Accountability Act of 1996 (HIPAA), (42 U.S.C. §§1320d et seq.) as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH Act), (iii) the applicable requirements of Medicare, Medicaid and other Governmental Entity healthcare programs, including the Veterans Health Administration and U.S. Department of Defense healthcare and contracting programs, and the analogous laws of any federal, state, local, or foreign jurisdiction applicable to the Company; (iv) applicable state licensing, disclosure and transparency reporting requirements; (v) all Laws relating to any federal health care program (as such term is defined in 42 U.S.C. § 1320a-7b(f)), including the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), the Stark Anti-Self-Referral Law (42 U.S.C. § 1395nn), the Federal Civil Monetary Penalties Law (42 U.S.C. §1320a-7(a)), the civil False Claims Act (31 U.S.C. § 3729 et seq.), the administrative False Claims Law (42 U.S.C. § 1320a-7b(a)), Sections 1320a-7, 1320a-7a, and 1320a-7b of Title 42 of the United States Code and any comparable self-referral or fraud and abuse laws promulgated by any Governmental Entity, the 21st Century Cures Act (Pub. L. 114-255), and any state or federal Law the purpose of which is to protect the privacy of individually-identifiable patient information, Medicare (Title XVIII of the Social Security Act) and Medicaid (Title XIX of the Social Security Act), the Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010, TRICARE (10 U.S.C. Section 1071 et seq.), the Physician Payments Sunshine Act (42 U.S.C. § 1320a-7h) and similar state or foreign Laws related to the reporting of manufacturer payments or transfers of value to health care professionals, in each case including the associated rules and regulations promulgated thereunder and all of their foreign equivalents, and any other requirements of Law relating to the Business; and (vi) any Laws of any other country in which the Company Products are tested, manufactured, marketed or distributed, or in which country the Company does business, which Laws are similar, analogous, or comparable to any item set forth hereinabove.
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“HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any rules or regulations promulgated thereunder.
“Indebtedness” means with respect to any Person, (a) all obligations of such Person for borrowed money, including with respect thereto, all interests, fees and costs, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person, (d) all obligations of such Person issued or assumed as the deferred purchase price of property or services (other than accounts payable to creditors for goods and services incurred in the ordinary course of business consistent with past practices), (e) all obligations of others secured by (or for which the holder of such obligations has an existing right, contingent or otherwise, to be secured by) any lien or security interest on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (f) all liability of such Person with respect to any hedging obligations, including interest rate or currency exchange swaps, collars, caps or similar hedging obligations, (g) any unfunded or underfunded liabilities pursuant to any pension or nonqualified deferred compensation plan for any period prior to the Closing Date, (h) all guarantees by such Person of the foregoing items (a) through (g) of another Person, and (i) any agreement to incur any of the same. For the avoidance of any doubt, “Indebtedness” includes, as to the Company, the principal amount plus accrued and unpaid interest on the Company Future Convertible Loans.
“Intellectual Property” means all of the worldwide intellectual property rights and proprietary rights associated with any of the following, whether registered, unregistered or registrable, to the extent recognized in a particular jurisdiction: discoveries, inventions, ideas, technology, trade secrets, and Software, in each case whether or not patentable or copyrightable (including proprietary or confidential information, systems, methods, processes, procedures, practices, algorithms, formulae, techniques, knowledge, results, protocols, models, designs, drawings, specifications, materials, technical data or information, and other information related to the development, marketing, pricing, distribution, cost, sales and manufacturing); trade names, trademarks, service marks, trade dress, product configurations, other indications of origin, registrations thereof or applications for registration therefor, together with the goodwill associated with the foregoing (collectively, “Trademarks”); patents, patent applications, utility models, industrial designs, supplementary protection certificates, and certificates of inventions, including re-issues, continuations, divisionals, continuations-in-part, re-examinations, renewals, counterparts, extensions, and validations (collectively, “Patents”); works of authorship, copyrights, copyrightable materials, copyright registrations and applications for copyright registration (collectively, “Copyrights”); domain names registrations (collectively, “Domain Names”), social media accounts, and other intellectual property.
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“IP Contracts” means, collectively, any and all Contracts to which the Company is a party or by which any of its properties or assets are bound, in any case under which the Company (i) is granted a license (including option rights, rights of first offer, first refusal, first negotiation, etc. as to a license) in or to any Intellectual Property of a third Person, (ii) grants a license (including option rights, rights of first offer, first refusal, first negotiation, etc. as to a license) to a third Person in or to any Intellectual Property owned or purported to be owned by the Company or (iii) has entered into an agreement not to assert or sue with respect to any Intellectual Property (including settlement agreements and co-existence arrangements), in each of cases (i) through (iii), other than (A) “shrink wrap” or other licenses for generally commercially available software (including Publicly Available Software), other technology or services, (B) customer, distributor or channel partner Contracts with non-exclusive licenses, (C) Contracts with the Company’s employees or contractors on Company’s standard forms or substantially similar agreements in the ordinary course of business, (D) licenses granted to service providers or other third parties in the ordinary course of business, for purposes of performing services or other activities for or on behalf of the Company Group, and (E) non-disclosure agreements entered into in the ordinary course of business (subparts (A)-(E) collectively, the “Standard Contracts”).
“IPO” means the initial public offering of Parent pursuant to the Prospectus.
“IRS” means the United States Internal Revenue Service.
“Key Employee” means the individuals listed on Schedule 1.1(b).
“Knowledge of the Company” or “to the Company’s Knowledge” means the actual knowledge, after reasonable inquiry, of Ronald Li, Camie Chan, Allen Ma and Roger Hajjar.
“Knowledge of Parent” or “to Parent’s Knowledge” means the actual knowledge, after reasonable inquiry, of Kenneth Ka Chun Wong and Alex Davidkhanian.
“Law” means any domestic or foreign, supranational, national, federal, state, municipality or local law, statute, ordinance, code, rule, or regulation.
“Leases” means, collectively, the leases described on Schedule 1.1(c).
“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, claim, security interest or encumbrance of any kind in respect of such property or asset, and any conditional sale or voting agreement or proxy, including any agreement to give any of the foregoing.
“Material Adverse Effect” means any fact, effect, event, development, change, state of facts, condition, circumstance or occurrence (an “Effect”) that, individually or together with one or more other contemporaneous Effect, (i) has or would reasonably be expected to have a materially adverse effect on the financial condition, assets, liabilities, business or results of operations of the Company Group, taken as a whole, on the one hand, or on Parent and Merger Sub, on the other hand, taken as a whole; or (ii) prevents or materially impairs or would reasonably be expected to prevent or materially impair the ability of the Company Securityholders and the Company, on the one hand, or on Parent and Merger Sub, on the other hand to consummate the Merger and the other transactions contemplated by this Agreement in accordance with the terms and conditions of this Agreement; provided, however, that a Material Adverse Effect shall not be deemed to include Effects (and solely to the extent of such Effects) resulting from an Excluded Matter.
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“Material Contracts” has the meaning set forth in Section 5.14(a). “Material Contracts” shall not include any Contracts that are also Plans.
“Measuring Time” means 11:59 PM on the date immediately preceding the Closing Date.
“Mergers” has the meaning set forth in Recital (E) to this Agreement.
“Merger Consideration” means the aggregate number of Acquirer Ordinary Shares issuable to the holders of Company Ordinary Shares pursuant to the terms this Agreement.
“Merger Sub” has the meaning set forth in the preamble.
“Merger Sub Ordinary Share” has the meaning set forth in Section 6.8(b).
“Nasdaq” means The Nasdaq Stock Market LLC.
“Offer Documents” has the meaning set forth in Section 7.8(a).
“Order” means any decree, order, judgment, writ, award, injunction, stipulation, determination, award, rule or consent of or by an Authority.
“Organizational Documents” means organizational documents, including the memorandum and articles of association of the applicable Party, as may be amended and restated from time to time.
“Other Filings” means any filings to be made by Parent required under the Exchange Act, Securities Act or any other United States federal, foreign or blue sky laws, other than the SEC Statement and the other Offer Documents.
“Outside Closing Date” has the meaning set forth in Section 11.1(a).
“Parent” has the meaning set forth in the preamble.
“Parent Articles” means the amended and restated memorandum and articles of association of Parent, as amended and as in effect on the date of this Agreement.
“Parent Excluded Shares” has the meaning set forth in Section 2.6(c).
“Parent Ordinary Shares” means the ordinary shares, with a par value of US$0.0001 per share, of Parent.
“Parent Board Recommendation” has the meaning set forth in Section 6.12(a).
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“Parent Financial Statements” means all of the financial statements of Parent included in the Parent SEC Documents and any amendments to such financial statements.
“Parent Fundamental Representations” means the representations and warranties of Parent set forth in Section 6.1 (Corporate Existence and Power), Section 6.3 (Corporate Authorization), Section 6.6 (Finders’ Fees), Section 6.7 (Issuance of Shares), and Section 6.8 (Capitalization).
“Parent Parties” has the meaning set forth in the recitals to this Agreement.
“Parent Private Warrant” means a warrant to purchase one (1) Parent Ordinary Share at an exercise price of $11.50 per share that was sold to the Sponsor in a private placement at the time of the consummation of the IPO.
“Parent Proposals” has the meaning set forth in Section 7.8(e).
“Parent Public Warrant” means a warrant to purchase one (1) Parent Ordinary Share at an exercise price of $11.50 per share that was included in the Parent Units sold in the IPO.
“Parent SEC Documents” has the meaning set forth in Section 6.13(a).
“Parent Shareholder Approval” means the approval in accordance with Parent’s Organizational Documents and the Nasdaq listing rules of those Parent Proposals identified in Section 7.8(e) at the Parent Shareholder Meeting duly called by the Board of Directors of Parent and held for such purpose.
“Parent Shareholder Meeting” has the meaning set forth in Section 7.8(a).
“Parent Transaction Expenses” means all fees, costs and expenses of Parent incurred prior to and through the Closing Date in connection with the negotiation, preparation and execution of this Agreement, the Ancillary Agreements, the performance and compliance with this Agreement and the Ancillary Agreements and conditions contained herein to be performed or complied with by Parent at or before the Closing, and the consummation of the transactions contemplated hereby, including any and all (i) filing fees payable by Parent or any of its Subsidiaries to any Authority in connection with the transactions contemplated hereby and (ii) fees, costs, expenses and disbursements of counsel, accountants, advisors and consultants of Parent.
“Parent Underwriting Agreement” means the Underwriting Agreement, dated as of July 24, 2023, by and between Parent and EF Hutton, division of Benchmark Investments, LLC, as representative of the underwriters thereto.
“Parent Unit” means each unit of Parent consisting of one Parent Ordinary Share and one Parent Warrant, which units were sold in the IPO.
“Parent Warrant” shall mean each Parent Private Warrant and Parent Public Warrant.
“Parent Warrant Agreement” means the Warrant Agreement, dated as of July 24, 2023, between Parent and Continental Stock Transfer & Trust Company, as warrant agent.
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“Patents” has the meaning set forth in the definition of “Intellectual Property.”
“PCAOB” means the Public Company Accounting Oversight Board.
“PEO Sponsored Plan” means any Plan sponsored by a professional employer organization.
“Per Share Value” means the quotient obtained by dividing (a) the Company Net Value by (b) the Aggregate Number of Fully Diluted Company Ordinary Shares.
“Permit” means each license, franchise, permit, order, approval, consent or other similar authorization, including Regulatory Permits, required to be obtained and maintained by the Company or under applicable Law to carry out or otherwise affecting, or relating in any way to, the Business and/or Company Products.
“Permitted Liens” means (a) all defects, exceptions, restrictions, easements, rights of way and encumbrances disclosed in policies of title insurance which have been made available to Parent; (b) mechanics’, carriers’, workers’, repairers’ and similar statutory Liens arising or incurred in the ordinary course of business consistent with past practices for amounts (i) that are not delinquent, (ii) that are not material to the business, operations and financial condition of the Company so encumbered, either individually or in the aggregate, and (iii) not resulting from a breach, default or violation by the Company of any Contract or Law; (c) liens for Taxes (i) not yet due and delinquent or (ii) which are being contested in good faith by appropriate proceedings (and for which adequate accruals or reserves have been established on the Financial Statements in accordance with U.S. GAAP); and (d) the Leases set forth on Schedule 1.1(c); and (e) non-exclusive Intellectual Property licenses granted, or non-exclusive or exclusive Intellectual Property licenses received, in the ordinary course of business.
“Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.
“Personal Information” means any data or information that constitutes personal data including information that identifies or could reasonably be used to identify an identifiable individual or household (e.g., name, address, telephone number, email address, financial account number, government-issued identifier), personal health information, protected health information, personally identifiable information, personal information or similar defined term or data regulated under any Data Protection Law.
“PIPE Investment” has the meaning set forth in the recitals to this Agreement.
“Plan” means each “employee benefit plan” within the meaning of Section 3(3) of ERISA and all other compensation and benefits plans, policies, programs, arrangements or payroll practices, including multiemployer plans within the meaning of Section 3(37) of ERISA, and each other stock purchase, stock option, restricted stock, severance, retention, employment (other than any employment offer letter in such form as previously provided to Parent that is terminable “at will” without any contractual obligation on the part of the Company to make any severance, termination, change of control, or similar payment), consulting, change-of-control, collective bargaining, bonus, incentive, deferred compensation, employee loan, fringe benefit and other benefit plan, agreement, program, policy, commitment or other arrangement, whether or not subject to ERISA, whether formal or informal, oral or written, in each case, that is sponsored, maintained, contributed or required to be contributed to by the Company, or under which the Company has any current or potential liability, but excluding in each case any statutory plan, program or arrangement that is required under applicable law and maintained by any Authority.
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“Process,” “Processed” or “Processing” means any operation or set of operations performed upon Personal Information or sets of Personal Information, whether or not by automated means, such as collection, recording, organization, structuring, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination, or otherwise making available, alignment or combination, restriction, erasure, or destruction.
“Prospectus” means the final prospectus of Parent, dated July 24, 2023.
“Proxy Statement” has the meaning set forth in Section 7.8(a).
“Publicly Available Software” means any Software that is distributed as free software, “copyleft,” or open source software (e.g. Linux), including but not limited to any of the following: (A) the GNU General Public License (GPL) or Lesser/Library GPL (LGPL), (B) the Artistic License (e.g., PERL), (C) the Mozilla Public License, (D) the Netscape Public License, (E) the Sun Community Source License (SCSL), (F) the Sun Industry Source License (SISL) and (G) the Apache Server License, including for the avoidance of doubt all Software licensed under a Copyleft License.
“Purchase Price” means $622,560,000.
“Real Property” means, collectively, all real properties and interests therein (including the right to use), together with all buildings, fixtures, trade fixtures, plant and other improvements located thereon or attached thereto; all rights arising out of use thereof (including air, water, oil and mineral rights); and all subleases, franchises, licenses, permits, easements and rights-of-way which are appurtenant thereto.
“Registered Exclusively Licensed IP” means all Company Exclusively Licensed IP that is a patent or patent application.
“Registered IP” means collectively, all Registered Owned IP and Registered Exclusively Licensed IP.
“Registered Owned IP” means all Company Owned IP that is a registration or an application for registration with an Authority, including issued patents and patent applications.
“Registration Rights Agreement” means the registration rights agreement, in substantially the form attached hereto as Exhibit C.
“Registration Statement” has the meaning set forth in Section 7.8(a).
“Regulatory Permits” means all Permits granted by the FDA, or any comparable Governmental Entity, to the Company or any of its Subsidiaries, including Investigational New Drug Exemption applications (INDs) or other forms of clinical trial authorizations, New Drug Applications (NDAs), Biologics License Applications (BLAs), manufacturing approvals and authorizations, permits for the manufacture (including the preparation, propagation, compounding, processing, manipulation, sampling, testing, relabeling, repackaging, and/or salvaging) of drugs or other medical products, and ethical reviews as issued or granted by Institutional Review Boards (IRBs), or their state, national or foreign equivalents.
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“Reincorporation Merger” has the meaning set forth in Recital (C) to this Agreement.
“Reincorporation Merger Effective Time” has the meaning set forth in Section 2.2.
“Reincorporation Merger Filing Documents” has the meaning set forth in Section 2.2.
“Reincorporation Merger Surviving Company” has the meaning set forth in Section 2.1.
“Reincorporation Merger Surviving Company Memorandum and Articles” has the meaning set forth in Section 2.4.
“Reincorporation Intended Tax Treatment” has the meaning set forth in the recitals to this Agreement.
“Representatives” means a Party’s officers, directors, Affiliates, members, partners, managers, attorneys, accountants, consultants, employees, representatives and agents.
“Required Financial Statements” has the meaning set forth in Section 8.3.
“Required Parent Proposals” has the meaning set forth in Section 7.8(e).
“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.
“SEC” means the Securities and Exchange Commission.
“SEC Statement” means the Registration Statement, including the Proxy Statement/Prospectus, whether in preliminary or definitive form, and any amendments or supplements thereto.
“Securities Act” means the Securities Act of 1933, as amended.
“Software” means computer software and programs (including development tools, libraries, and compilers) in any form, including in or as Internet Web sites, source code, object code, operating systems, database management code or utilities.
“Sponsor” means KVC Sponsor LLC, a Delaware limited liability company.
“Sponsor Allocated Deferred Underwriting Discounts” means the difference between Deferred Underwriting Discounts minus Company Allocated Deferred Underwriting Discounts.
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“Sponsor Support Agreement” has the meaning set forth in the recitals to this Agreement.
“Standard Contracts” has the meaning set forth in the definition of IP Contracts.
“Standards Organization” has the meaning set forth in Section 5.17(g).
“Subsidiary” means, with respect to any Person, each entity of which at least fifty percent (50%) of the capital stock or other equity or voting securities are Controlled or owned, directly or indirectly, by such Person.
“Surviving Corporation” has the meaning set forth in Section 3.1.
“Tangible Personal Property” means all tangible personal property and interests therein, including machinery, computers and accessories, furniture, office equipment, communications equipment, automobiles, laboratory equipment and other equipment owned or leased by the Company and other tangible property.
“Tax Return” means any return, information return, declaration, claim for refund of Taxes, report or any similar statement, and any amendment thereto, including any attached schedule and supporting information, whether on a separate, consolidated, combined, unitary or other basis, that is filed or required to be filed with any Taxing Authority in connection with the determination, assessment, collection or payment of a Tax or the administration of any Law relating to any Tax.
“Tax(es)” means any U.S. federal, state or local or non-U.S. taxes, or other imposts, duties, fees and charges, in each case, that are in the nature of a tax, imposed by any Taxing Authority including any income (net or gross), gross receipts, profits, windfall profit, sales, use, goods and services, ad valorem, franchise, license, withholding, employment, social security, workers compensation, unemployment compensation, employment, payroll, transfer, excise, import, real property, personal property, intangible property, occupancy, recording, minimum, alternative minimum, customs duties and other taxes of any kind whatsoever imposed by a Taxing Authority, together with any interest, penalty, additions to tax or additional amount imposed with respect thereto.
“Taxing Authority” means the IRS and any other Authority responsible for the collection, assessment or imposition of any Tax or the administration of any Law relating to any Tax.
“Trade Secrets” means any information that is a trade secret under applicable law.
“Trademarks” has the meaning set forth in the definition of “Intellectual Property.”
“Trading Day” means (a) for so long as the Parent Ordinary Shares are listed or admitted for trading on Nasdaq or any other national securities exchange, days on which such securities exchange is open for business; (b) when and if the Parent Ordinary Shares are quoted on Nasdaq or any similar system of automated dissemination of quotations of securities prices, days on which trades may be made on such system; or (c) if the Parent Ordinary Shares are not listed or admitted to trading on any national securities exchange or quoted on Nasdaq or similar system, days on which the Parent Ordinary Shares are traded regular way in the over-the-counter market and for which a closing bid and a closing asked price for the Parent Ordinary Shares are available.
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“Transactions” refers collectively to the transactions contemplated by this Agreement and the other transaction documents, including the Mergers.
“Transaction Litigation” has the meaning set forth in Section 9.1(c).
“Transfer Taxes” means any and all transfer, documentary, sales, use, real property, stamp, excise, recording, registration, value added and other similar Taxes, fees and costs (including any associated penalties and interest) incurred in connection with the Reincorporation Merger or the Acquisition Merger.
“Trust Account” has the meaning set forth in Section 6.10.
“Trust Agreement” has the meaning set forth in Section 6.10.
“Trust Fund” has the meaning set forth in Section 6.10.
“Trustee” has the meaning set forth in Section 6.10.
“U.S. GAAP” means U.S. generally accepted accounting principles, consistently applied.
1.2 Construction.
(a) References to particular sections and subsections, schedules, and exhibits not otherwise specified are cross-references to sections and subsections, schedules, and exhibits of this Agreement. Captions are not a part of this Agreement, but are included for convenience, only.
(b) The words “herein,” “hereof,” “hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement; and, unless the context requires otherwise, “party” means a party signatory hereto.
(c) Any use of the singular or plural, or the masculine, feminine or neuter gender, includes the others, unless the context otherwise requires; the word “including” means “including without limitation”; the word “or” means “and/or”; the word “any” means “any one, more than one, or all”; and, unless otherwise specified, any financial or accounting term has the meaning of the term under United States generally accepted accounting principles as consistently applied heretofore by the Company. Any reference in this Agreement to a Person’s directors shall include any member of such Person’s governing body.
(d) Unless otherwise specified, any reference to any agreement (including this Agreement), instrument, or other document includes all schedules, exhibits, or other attachments referred to therein, and any reference to a statute or other law means such law as amended, restated, supplemented or otherwise modified from time to time and includes any rule, regulation, ordinance or the like promulgated thereunder, in each case, as amended, restated, supplemented or otherwise modified from time to time.
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(e) Any reference to a numbered schedule means the same-numbered section of the disclosure schedule. Any reference in a schedule contained in the disclosure schedules delivered by a party hereunder shall be deemed to be an exception to (or, as applicable, a disclosure for purposes of) the applicable representations and warranties (or applicable covenants) that are contained in the section or subsection of this Agreement that corresponds to such schedule and any other representations and warranties of such party that are contained in this Agreement to which the relevance of such item thereto is reasonably apparent on its face. The mere inclusion of an item in a schedule as an exception to (or, as applicable, a disclosure for purposes of) a representation or warranty shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item would have a Material Adverse Effect or establish any standard of materiality to define further the meaning of such terms for purposes of this Agreement. Nothing in the disclosure schedules constitutes an admission of any liability or obligation of the disclosing party to any third party or an admission to any third party, including any Authority, against the interest of the disclosing party, including any possible breach of violation of any Contract or Law. Summaries of any written document in the disclosure schedules do not purport to be complete and are qualified in their entirety by the written document itself. The disclosures schedules and the information and disclosures contained therein are intended only to qualify and limit the representations and warranties of the parties contained in this Agreement, and shall not be deemed to expand in any way the scope or effect of any of such representations and warranties.
(f) If any action is required to be taken or notice is required to be given within a specified number of days following a specific date or event, the day of such date or event is not counted in determining the last day for such action or notice. If any action is required to be taken or notice is required to be given on or before a particular day which is not a Business Day, such action or notice shall be considered timely if it is taken or given on or before the next Business Day.
(g) To the extent that any Contract, document, certificate or instrument is represented and warranted to by the Company to be given, delivered, provided or made available by the Company, such Contract, document, certificate or instrument shall be deemed to have been given, delivered, provided and made available to Parent or its Representatives, if such Contract, document, certificate or instrument shall have been posted not later than two (2) days prior to the date of this Agreement to the electronic data site maintained on behalf of the Company for the benefit of the Parent and its Representatives and the Parent and its Representatives have been given access to the electronic folders containing such information.
ARTICLE II
REINCORPORATION MERGER
2.1 Reincorporation Merger. At the Reincorporation Merger Effective Time, and subject to and upon the terms and conditions of this Agreement, and in accordance with the applicable provisions of the BVI Business Companies Act and the Cayman Companies Act, Parent shall be merged with and into Acquirer, the separate corporate existence of Parent shall cease and Acquirer shall continue as the surviving company pursuant to the Reincorporation Merger. Acquirer as the surviving company of the Reincorporation Merger is hereinafter sometimes referred to as the “Reincorporation Merger Surviving Company”.
2.2 Reincorporation Merger Effective Time. On a date no later than three (3) Business Days after the satisfaction or waiver of all the conditions set forth in ARTICLE X that are required to be satisfied prior to the Closing Date, the Parties hereto shall cause Reincorporation Merger to be consummated by (a) filing the executed BVI Articles of Merger (which shall contain the executed BVI Plan of Merger and any other documents required by the BVI Business Companies Act), (collectively, the “Reincorporation Merger Filing Documents”) with the Registry of Corporate Affairs of British Virgin Islands (the “BVI Registry”), in accordance with the relevant provisions of the BVI Business Companies Act and (b) by executing a plan of merger substantially in the form attached as Exhibit G (the “Cayman Plan of Reincorporation Merger”) and filing the executed Cayman Plan of Reincorporation Merger (and any other documents required by the Cayman Companies Act) to effect the Reincorporation Merger as provided by Sections 233 and 237 of the Cayman Companies Act with the Cayman Registrar. The effective time of Reincorporation Merger shall be the time that the Cayman Plan of Reincorporation Merger is duly registered by the Cayman Registrar, or such later date or time as may be agreed by the Parent and Acquirer in writing and specified in the BVI Articles of Merger in accordance with the BVI Business Companies Act and specified in the Cayman Plan of Reincorporation Merger in accordance with the Cayman Companies Act, being the “Reincorporation Merger Effective Time.”
2.3 Effect of the Reincorporation Merger. At the Reincorporation Merger Effective Time, the effect of the Reincorporation Merger shall be as provided in this Agreement, the BVI Plan of Merger, the BVI Articles of Merger, the Cayman Plan of Reincorporation Merger and the applicable provisions of the BVI Business Companies Act and the Cayman Companies Act. At the Reincorporation Merger Effective Time, all assets of every description of Parent and Acquirer shall vest in the Reincorporation Merger Surviving Company which shall have the right to all property, rights, privileges, agreements, powers and franchises and which shall have responsibility for all debts, liabilities, duties and obligations of Parent and Acquirer and which shall include the assumption by the Reincorporation Merger Surviving Company of any and all agreements, covenants, duties and obligations of Parent set forth in this Agreement or any other outstanding agreement to which Parent is a party to be performed after the Closing, and all securities of the Reincorporation Merger Surviving Company issued and outstanding as a result of the conversion under Section 2.6 hereof shall be listed on Nasdaq (on which the Parent Ordinary Shares were trading prior to Reincorporation Merger).
2.4 Charter Documents. At or immediately following the Reincorporation Merger Effective Time, the Memorandum and Articles of Association of Acquirer shall be amended and restated, substantially in the form set out in Exhibit E of this Agreement (the “Reincorporation Merger Surviving Company Memorandum and Articles”) and as so amended and restated, shall become the Memorandum and Articles of Association of the Reincorporation Merger Surviving Company. The new name of the Reincorporation Merger Surviving Company will be “Medera Inc.” or such other name as provided by Acquirer and as shall be stated in the BVI Plan of Merger and the Cayman Plan of Reincorporation Merger and/or otherwise as filed with the BVI Registry and/or the Cayman Registrar immediately following the Reincorporation Merger Effective Time.
2.5 Directors and Officers of the Reincorporation Merger Surviving Company. As of the Reincorporation Merger Effective Time, the Persons constituting the officers and directors of Parent prior to the Reincorporation Merger Effective Time shall continue to be the officers and directors of the Reincorporation Merger Surviving Company (and holding the same title as held at Parent) until the Effective Time.
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2.6 Effect on Issued Shares of Parent.
(a) Cancellation of Parent Ordinary Shares in exchange for Reincorporation Merger Surviving Company Ordinary Shares.
(i) At the Reincorporation Merger Effective Time, each issued and outstanding Parent Ordinary Share (other than the Parent Excluded Shares, the Parent Dissenting Shares and Parent Ordinary Shares redeemed pursuant to the Offer) immediately prior to the Reincorporation Merger Effective Time shall be automatically canceled, extinguished and converted into one Reincorporation Merger Surviving Company Ordinary Share. The holders of issued Parent Ordinary Shares immediately prior to the Reincorporation Merger Effective Time, as evidenced by the register of members of Parent (the “Parent ROM”), shall cease to have any rights with respect to such Parent Ordinary Shares, except as provided herein or by Law. Each certificate (if any) previously evidencing Parent Ordinary Shares (other than the Parent Excluded Shares, the Parent Dissenting Shares and Parent Ordinary Shares redeemed pursuant to the Offer) shall be exchanged for a certificate representing the same number of Acquirer Ordinary Shares upon the surrender of such certificate in accordance with Section 2.9 (or, if Parent Ordinary Shares are not certificated, such the exchange of such certificates shall be reflected on the register of members of Acquirer).
(ii) Each holder of Parent Ordinary Shares (other than the Parent Excluded Shares, the Parent Dissenting Shares and Parent Ordinary Shares redeemed pursuant to the Offer) listed on the Parent ROM shall thereafter have the right to receive the same number of Reincorporation Merger Surviving Company Ordinary Shares only.
(b) Conversion of Parent Warrants; Treatment of Parent Units. At the Reincorporation Merger Effective Time, (i) all Parent Units will separate into their individual components of Parent Ordinary Shares and Parent Warrants, and will cease separate existence and trading and (ii) each issued and outstanding Parent Warrant shall cease to be a warrant with respect to Parent Ordinary Shares and shall be converted into one Reincorporation Merger Surviving Company Warrant, and will cease separate existence and trading. Each of the Reincorporation Merger Surviving Company Warrants shall have, and be subject to, the same terms and conditions set forth in the applicable agreements governing the Parent Warrants that are outstanding immediately prior to the Reincorporation Merger Effective Time. At or prior to the Reincorporation Merger Effective Time, Acquirer shall take all corporate action necessary to reserve for future issuance, and shall maintain such reservation for so long as any of the Reincorporation Merger Surviving Company Warrants remain outstanding, a sufficient number of Reincorporation Merger Surviving Company Ordinary Shares for delivery upon the exercise of the Reincorporation Merger Surviving Company Warrants after the Reincorporation Merger Effective Time.
(c) Cancellation of Parent Ordinary Shares Owned by Parent. At the Reincorporation Merger Effective Time, if there are any Parent Ordinary Shares that are owned by Parent as treasury shares or any Parent Ordinary Shares owned by any direct or indirect wholly owned subsidiary of Parent immediately prior to the Reincorporation Merger Effective Time (the “Parent Excluded Shares”), such shares shall be canceled and extinguished without any conversion thereof or payment therefor.
(d) No Liability. Notwithstanding anything to the contrary in this Section 2.6, none of the Reincorporation Merger Surviving Company, Parent or any other Party hereto shall be liable to any person for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.
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2.7 Surrender of Parent Ordinary Shares. All securities issued upon the surrender of the Parent Ordinary Shares in accordance with the terms hereof, shall be deemed to have been issued in full satisfaction of all rights pertaining to such securities, provided that any restrictions on the sale and transfer of the Parent Ordinary Shares shall also apply to the Reincorporation Merger Surviving Company Ordinary Shares so issued in conversion.
2.8 Effect on Issued Shares of Acquirer. At the Reincorporation Merger Effective Time, the one (1) share of Acquirer owned by Parent immediately prior to the Reincorporation Merger Effective Time shall be automatically cancelled and extinguished without any conversion or consideration delivered in exchange therefor.
2.9 Lost, Stolen or Destroyed Certificates. In the event any certificates shall have been lost, stolen or destroyed, Acquirer shall issue in exchange for such lost, stolen or destroyed certificates or securities as the case may be, upon the affidavit of that fact by the holder thereof, such securities, as may be required pursuant to Section 2.6; provided, however, that the Reincorporation Merger Surviving Company may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificates to execute and deliver a deed of indemnity in respect of such lost, stolen or destroyed certificates in the form required by the Reincorporation Merger Surviving Company as indemnity against any claim that may be made against it with respect to the certificates alleged to have been lost, stolen or destroyed.
2.10 Taking of Necessary Action; Further Action. If, at any time after the Reincorporation Merger Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Reincorporation Merger Surviving Company with full right, title and possession to all assets, property, rights, privileges, powers and franchises of Parent and Acquirer, the officers and directors of Parent and Acquirer are fully authorized in the name of their respective companies or otherwise to take, and will take, all such lawful and necessary action, so long as such action is not inconsistent with this Agreement.
2.11 Dissenter’s Rights. No holder of Parent Ordinary Shares who has validly exercised their dissenters’ rights in respect of the Reincorporation Merger pursuant to Section 179 of the BVI Business Companies Act (each a “Parent Dissenting Shareholder”) shall be entitled to receive the Reincorporation Merger Surviving Company Ordinary Shares in accordance with Section 2.6(a) in exchange for such Parent Ordinary Shares (“Parent Dissenting Shares”) unless and until such Person shall have effectively withdrawn or lost such Person’s dissenters’ rights under the BVI Business Companies Act. Each Parent Dissenting Shareholder shall only be entitled to such rights as are granted by Section 179 of the BVI Business Companies Act, being the right to fair value in respect of the Parent Dissenting Shares owned by such Parent Dissenting Shareholder. If any Parent shareholder gives to Parent, before the Parent Shareholder Approval is obtained at the Parent Shareholder Meeting, written objection to the Reincorporation Merger (each, an “RC Written Objection”) in accordance with Section 179 of the BVI Business Companies Act:
(a) Parent shall, in accordance with Section 179(4) of the BVI Business Companies Act, promptly, and in any event within 20 days immediately following the date that the Parent Shareholder Approval is obtained, give written notice of the authorization of the Reincorporation Merger, the BVI Plan of Merger and the BVI Articles of Merger (the “RC Authorization Notice”) to each such Parent shareholder who has made a RC Written Objection, and
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(b) unless Parent and the Company elect by agreement in writing to waive this Section 2.11, no party shall be obligated to commence the Reincorporation Merger, and the Reincorporation Merger Filing Documents shall not be filed with the BVI Registry, until at least twenty (20) days shall have elapsed since the date on which the RC Authorization Notice is given (being the period allowed for written notice of an election to dissent under Section 179(5) of the BVI Business Companies Act, but in any event subject to the satisfaction or waiver of all of the conditions set forth in ARTICLE X).
(c) each of Parent and Acquirer, shall give the Company (i) prompt notice of any demands for dissenters’ rights in connection with the Reincorporation Merger received by such party and any withdrawals of such demands. Each of Parent and Acquirer, shall not, except with the prior written consent of the Company make any payment with respect to any demands for appraisal or offer to settle or settle any such demands.
ARTICLE III
THE ACQUISITION MERGER
3.1 The Acquisition Merger. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the Cayman Companies Act, at the Effective Time (as defined below), (a) Merger Sub shall be merged with and into the Company, (b) the separate corporate existence of Merger Sub shall thereupon cease, and the Company shall be the surviving company in the Acquisition Merger (the “Surviving Corporation”), and (c) the Surviving Corporation shall become a wholly-owned Subsidiary of Acquirer.
3.2 Closing. The closing of the Acquisition Merger (“Closing”) shall take place by means of telecommunication at such other date, time or place as Parent (or, after the Reincorporation Merger, Acquirer) and the Company may agree in writing, but in no event later than the third (3rd) Business Day following the satisfaction or waiver (to the extent permitted by applicable Law and the Reincorporation Merger Surviving Company Memorandum and Articles) of the conditions set forth in ARTICLE X (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions at such time), unless another time or date, or both, are agreed in writing by the Company and Parent (or, after the Reincorporation Merger, Acquirer). The date on which the Closing is held is herein referred to as the “Closing Date”. The Closing will take place remotely via exchange of documents and signature pages via electronic transmission.
3.3 Effective Time. Subject to the provisions of this Agreement, after the Reincorporation Merger, the Company and Merger Sub shall execute a plan of merger substantially in the form attached as Exhibit H (the “Cayman Plan of Acquisition Merger”) and the Parties shall file the Cayman Plan of Acquisition Merger (and any other documents required by the Cayman Companies Act) to effect the Acquisition Merger with the Cayman Registrar as provided by Section 233 of the Cayman Companies Act. The effective time of the Acquisition Merger shall be the date that the Cayman Plan of Acquisition Merger has been duly registered by the Cayman Registrar, or such later time may be agreed in writing by Merger Sub and the Company and specified in the Cayman Plan of Acquisition Merger in accordance with the Cayman Companies Act (the time at which the Acquisition Merger becomes effective is herein referred to as the “Effective Time”).
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3.4 Effects of the Acquisition Merger. The Acquisition Merger shall have the effects set forth herein and in the Cayman Companies Act.
3.5 Memorandum and Articles of Association of the Surviving Corporation.
(a) From and after the Effective Time and until further amended in accordance with applicable Law, the memorandum and articles of association of Merger Sub as in effect immediately prior to the Effective Time shall be the memorandum and articles of association of the Surviving Corporation provided, that such memorandum and articles of association shall be amended to reflect that the name of the Surviving Corporation shall be “Medera Global Inc.”
3.6 Post-Closing Board of Directors and Officers.
(a) Immediately after the Closing, the initial slate of directors of Acquirer’s board of directors after the Closing (the “Post-Closing Board of Directors”) will consist of 6 directors designated by the Company, who shall be the individuals set forth on Schedule 3.6(a). At least three of the Post-Closing Board of Directors shall qualify as independent directors under the Securities Act and the Nasdaq rules.
(b) Acquirer shall take all action necessary, including causing the executive officers of Acquirer to resign, so that the individuals serving as executive officers of Acquirer immediately after the Closing will be the individuals set forth on Schedule 3.6(b) (or such other Persons as designated by the Company prior to the Closing).
3.7 Directors and Officers of the Surviving Corporation. From and after the Effective Time, the directors and the officers of the Surviving Corporation shall be those persons as designated by the Company prior to the Closing. The directors and officers of the Surviving Corporation shall hold office for the term specified in, and subject to the provisions contained in, the Surviving Corporation’s Organizational Documents and applicable Law.
3.8 No Further Ownership Rights in Company Ordinary Shares. At the Effective Time, the share transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers of Company Ordinary Shares on the records of the Company.
3.9 Rights Not Transferable. The rights of the Company Shareholders as of immediately prior to the Effective Time are personal to each such holder and shall not be assignable or otherwise transferable for any reason (except (i) in the case of an entity, by operation of Law or (ii) in the case of a natural person, by will or the Laws of descent and distribution). Any attempted transfer of such right by any holder thereof (otherwise than as permitted by the immediately preceding sentence) shall be null and void.
3.10 Taking of Necessary Action; Further Action. Parent, Acquirer, Merger Sub, and the Company, respectively, shall each use its respective best efforts to take all such action as may be necessary or appropriate to effectuate the Acquisition Merger under the Cayman Companies Act at the time specified in Section 3.3. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all properties, rights, privileges, immunities, powers and franchises of either of the constituent corporations, the officers of Reincorporation Merger Surviving Company and the Surviving Corporation are fully authorized in the name of each constituent corporation or otherwise to take, and shall take, all such lawful and necessary action.
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3.11 Dissenter’s Rights3.12. No Person who has validly exercised their dissenters’ rights in respect of the Acquisition Merger pursuant to Section 238 of the Cayman Companies Act (each a “Company Dissenting Shareholder”) shall be entitled to receive the securities of Acquirer in accordance with Section 3.6(a) and (b), as applicable with respect to the shares of the Company owned by such Person (“Company Dissenting Shares”) unless and until such Person shall have effectively withdrawn or lost such Person’s dissenters’ rights under the Cayman Companies Act. Each Company Dissenting Shareholder shall be entitled to receive only the cash payment resulting from the procedure in Section 238 of the Cayman Companies Act with respect to the Company Dissenting Shares owned by such Company Dissenting Shareholder. If any Company Shareholder gives to Company written objection to the Acquisition Merger (each, a “Written Objection”) in accordance with Section 238(2) of the Cayman Companies Act:
(a) The Company shall, in accordance with Section 238(4) of the Cayman Companies Act, promptly give written notice of the authorization of the Acquisition Merger (the “Authorization Notice”) to each such Company Shareholder who has made a Written Objection, and
(b) unless the Company elects by agreement in writing to waive this Section 3.11, no party shall be obligated to commence the Acquisition Merger, and the Cayman Plan of Acquisition Merger shall not be filed with the Cayman Registrar, until at least twenty (20) days shall have elapsed since the date on which the Authorization Notice is given (being the period allowed for written notice of an election to dissent under Section 238(5) of the Cayman Companies Act, as referred to in Section 239(1) of the Cayman Companies Act), but in any event subject to the satisfaction or waiver of all of the conditions set forth in ARTICLE X.
ARTICLE IV
MERGER CONSIDERATION
4.1 Conversion of Company Ordinary Shares.
(a) At the Effective Time, by virtue of the Acquisition Merger and without any action on the part of any holder of Company Ordinary Shares, each Company Ordinary Share issued and outstanding immediately prior to the Effective Time (other than (i) any Company Ordinary Shares held in the treasury of the Company, which treasury shares shall be canceled as part of the Acquisition Merger and shall no longer constitute “Company Ordinary Shares” hereunder, and (ii) any Company Dissenting Shares), shall be canceled and converted into the right to receive a number of Acquirer Ordinary Shares equal to the Exchange Ratio, subject and in accordance with Section 4.3.
(b) For avoidance of any doubt, at the Effective Time, each Company Shareholder as of the Closing will cease to have any rights with respect to the Company Ordinary Shares it held prior to the Closing, except the right to receive in respect of each Company Ordinary Share it held prior to the Closing, a portion of the Merger Consideration pursuant to the terms hereof.
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(c) Two Business Days prior to the anticipated Closing Date (by 8:00 PM Eastern Time), the Company shall deliver to Parent a schedule setting forth (i) each Company Shareholder as of the Closing, and (ii) such Company Shareholder’s respective percentage of the Merger Consideration (the “Equityholder Allocation Schedule”). If there is any change to the Equityholder Allocation Schedule between the time of such delivery and the Closing, the Company shall promptly deliver an updated Equityholder Allocation Schedule to Parent.
4.2 Treatment of Company RSUs.
(a) Treatment of Company RSUs. Prior to the Closing, the Company’s Board of Directors (or, if appropriate, any committee thereof administering the Company Equity Incentive Plan) shall adopt such resolutions or take such other actions as may be required to adjust the terms of all Company RSUs (whether vested or unvested) as necessary to provide that, at the Effective Time, each Company RSU shall be converted into a restricted stock unit of Acquirer, subject to substantially the same terms and conditions as were applicable under such Company RSU (including expiration date, vesting conditions, and exercise provisions), for the number of Acquirer Ordinary Shares (rounded down to the nearest whole share), equal to the product of (i) the number of Company Ordinary Shares subject to such Company RSU as of immediately prior to the Effective Time, multiplied by (ii) the Exchange Ratio (a “Converted RSU”); provided, however, that the number of Acquirer Ordinary Shares covered by each Converted RSU shall be determined in a manner consistent with the requirements of Section 409A and 424(a) of the Code and the applicable regulations promulgated thereunder.
(b) At the Effective Time, Acquirer shall assume all obligations of the Company under the Company Equity Incentive Plan, each outstanding Converted RSU and the agreements evidencing the grants thereof. As soon as practicable after the Effective Time, Acquirer shall deliver to the holders of Converted RSUs appropriate notices setting forth such holders’ rights, and the agreements evidencing the grants of such Converted RSUs shall continue in effect on substantially the same terms and conditions (subject to the adjustments required by Section 4.2(a) after giving effect to the Merger).
4.3 Issuance of the Merger Consideration.
(a) No Issuance of Fractional Shares. No certificates or scrip representing fractional Acquirer Ordinary Shares will be issued pursuant to the Merger, and instead any such fractional share that would otherwise be issued will be rounded to the nearest whole Acquirer Ordinary Share, such that if a Company Shareholder would be entitled to a number of Acquirer Ordinary Shares that would result in a fractional share of 0.50 or greater, such number of Acquirer Ordinary Shares shall be rounded up to the nearest whole number of Acquirer Ordinary Shares, and if a Company Shareholder would be entitled to a number of Acquirer Ordinary Shares that would result in a fractional share of less than 0.50, such number of Acquirer Ordinary Shares shall be rounded down to the nearest whole number of Parent Ordinary Shares.
(b) Exchange Fund. At least two Business Days prior to the Closing Date (but no earlier than the Reincorporation Merger Effective Time), Acquirer shall deposit, or shall cause to be deposited, with Continental Stock Transfer & Trust Company (“Continental”) for the benefit of the Company Shareholders, for exchange in accordance with this ARTICLE IV, the number of Acquirer Ordinary Shares sufficient to deliver the Merger Consideration (such Acquirer Ordinary Shares, the “Exchange Fund”). Acquirer shall cause Continental, pursuant to irrevocable instructions, to pay the Merger Consideration out of the Exchange Fund in accordance with the Equityholder Allocation Schedule and the other applicable provisions contained in this Agreement. The Exchange Fund shall not be used for any other purpose other than as contemplated by this Agreement.
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(c) Exchange Procedures. As soon as practicable following the Effective Time, and in any event within two Business Days following the Effective Time (but in no event prior to the Effective Time), Acquirer shall cause Continental to deliver to each Company Shareholder, as of immediately prior to the Effective Time, represented by certificate or book-entry, a letter of transmittal and instructions for use in exchanging such Company Shareholder’s Company Ordinary Shares for such Company Shareholder’s applicable portion of the Merger Consideration from the Exchange Fund (a “Letter of Transmittal”), and promptly following receipt of a Company Shareholder’s properly executed Letter of Transmittal, deliver such Company Shareholder’s applicable portion of the Merger Consideration to such Company Shareholder.
(d) Adjustments. The Merger Consideration shall be adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Acquirer Ordinary Shares occurring prior to the date that any portion of the Merger Consideration is issued.
(e) Termination of Exchange Fund. Any portion of the Exchange Fund relating to the Merger Consideration that remains undistributed to the Company Shareholders for one year after the Effective Time shall be delivered to Acquirer, upon demand, and any Company Shareholders who have not theretofore complied with this Section 4.3 shall thereafter look only to Acquirer for their portion of the Merger Consideration. Any portion of the Exchange Fund remaining unclaimed by Company Shareholders as of a date which is immediately prior to such time as such amounts would otherwise escheat to or become property of any Governmental Entity shall, to the extent permitted by applicable Law, become the property of Acquirer free and clear of any claims or interest of any person previously entitled thereto.
4.4 Closing Calculations. At least five (5) Business Days prior to the Closing Date, the Company shall deliver to Parent a statement certified by the Company’s chief executive officer (the “Estimated Closing Statement”) setting forth a good faith calculation of the Company’s estimate of the Available Liquidity, Company Future Converted Loan Value, Company Equity Financing Value, Company Closing Cash, and Company Closing Indebtedness, and the resulting Company Net Value and the Merger Consideration based on such estimates, in reasonable detail including for each component thereof, along with the amount owed to each creditor of any of Company and its Subsidiaries, and bank statements and other evidence reasonably necessary to confirm such calculations. Promptly upon delivery of the Estimated Closing Statement to Parent, if requested by Parent, the Company will meet with Parent to review and discuss the Estimated Closing Statement and the Company will consider in good faith Parent’s comments to the Estimated Closing Statement and make any appropriate adjustments to the Estimated Closing Statement prior to the Closing, which adjusted Estimated Closing Statement, as mutually approved in writing by the Company and Parent both acting reasonably and in good faith, shall thereafter become the Estimated Closing Statement for all purposes of this Agreement. The Estimated Closing Statement and the determinations contained therein shall be prepared in accordance with GAAP and otherwise in accordance with this Agreement. As between the Parties, Parent shall be entitled to rely conclusively on the information set forth in the Equityholder Allocation Schedule.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedules delivered by the Company to Parent prior to the execution of this Agreement with specific reference to the particular section or subsection of this Agreement to which the information set forth in such disclosure letter relates (which qualify (a) the correspondingly numbered representation, warranty or covenant 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 cross-referenced), the Company hereby represents and warrants to Parent that:
5.1 Corporate Existence and Power.
(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization.
(b) Each of the Company’s Subsidiaries (the Company and its Subsidiaries, collectively, the “Company Group”) is a corporation or legal entity duly organized, validly existing and in good standing (with respect to jurisdictions that recognize that concept) under the laws of the jurisdiction of its incorporation or organization, as applicable.
(c) Each member of the Company Group has all requisite power and authority, corporate or otherwise, to own, lease or otherwise hold and operate its properties and other assets and to carry on the Business as presently conducted and as proposed to be conducted. Each member of the Company Group is duly licensed or qualified to do business and is in good standing (with respect to jurisdictions that recognize that concept) in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties or other assets makes such qualification, licensing or good standing necessary, except where the failure to be so qualified, licensed or in good standing, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect in respect of the Company Group. The Company has made available to Parent, prior to the date of this Agreement, complete and accurate copies of the Organizational Documents of the Company Group, in each case as amended to the date hereof. Neither the Company nor any Subsidiary has taken any action in material violation or derogation of its Organizational Documents.
5.2 Authorization.
(a) The Company has all requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby, in the case of the Acquisition Merger, subject to receipt of the Company Shareholder Approval. The execution and delivery by the Company of this Agreement and the Ancillary Agreements to which it is a party and the consummation by the Company of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company. No other corporate proceedings on the part of the Company are necessary to authorize this Agreement or the Ancillary Agreements to which it is a party or to consummate the transactions contemplated by this Agreement (other than, in the case of the Acquisition Merger, the receipt of the Company Shareholder Approval) or the Ancillary Agreements. This Agreement and the Ancillary Agreements to which the Company is a party have been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery by each of the other parties hereto and thereto, this Agreement and the Ancillary Agreements to which the Company is a party constitute a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or similar Laws affecting the rights of creditors generally and the availability of equitable remedies (the “Enforceability Exceptions”).
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(b) By resolutions duly adopted (and not thereafter modified or rescinded) by the requisite vote of the Board of Directors of the Company, the Board of Directors of the Company has (i) approved the execution, delivery and performance by the Company of this Agreement, the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby, including the Acquisition Merger and the Cayman Plan of Acquisition Merger, on the terms and subject to the conditions set forth herein and therein; (ii) determined that this Agreement, the Ancillary Agreements to which it is a party, and the transactions contemplated hereby and thereby, upon the terms and subject to the conditions set forth herein, are advisable and fair to and in the best interests of the Company and the Company Shareholders; (iii) directed that the adoption of this Agreement be submitted to the Company Shareholders for consideration and recommended that all of the Company Shareholders vote in favor of a resolution to approve and adopt this Agreement and the Cayman Plan of Acquisition Merger. A special resolution passed by the affirmative vote of Company Shareholders holding at least two-thirds (2/3) (on an as-converted basis) of the issued and outstanding shares of Company Ordinary Shares who are present in person or by proxy at such meeting and voting thereon, is required to approve this Agreement, the Acquisition Merger and the transactions contemplated hereby (the “Company Shareholder Approval”). The Company Shareholder Approval is the only vote or consent of any of the holders of Company Capital Stock necessary to adopt this Agreement and approve the Acquisition Merger and the consummation of the other transactions contemplated hereby.
5.3 Governmental Authorization. None of the execution, delivery or performance by the Company of this Agreement or any Ancillary Agreement to which the Company is or will be a party, or the consummation of the transactions contemplated hereby or thereby, requires any consent, approval, license, Order or other action by or in respect of, or registration, declaration or filing with, any Authority other than the filing (i) of the Cayman Plan of Reincorporation Merger and Cayman Plan of Acquisition Merger, (ii) of the memorandum and articles of association of the Surviving Corporation, (iii) in respect of the change of name of the Surviving Corporation and (iv) in respect of the change of directors and officers of the Surviving Corporation pursuant to Section 3.7 with the Cayman Registrar in the Cayman Islands pursuant to the Cayman Companies Act, except for SEC or Nasdaq approval required to consummate the transactions contemplated hereunder.
5.4 Non-Contravention(a). None of the execution, delivery or performance by the Company of this Agreement or any Ancillary Agreement to which the Company is or will be a party or the consummation by the Company of the transactions contemplated hereby and thereby does or will (a) contravene or conflict with the Company Group’s Organizational Documents, (b) contravene or conflict with or constitute a violation of any provision of any Law or Order binding upon or applicable to the Company Group or to any of its respective properties, rights or assets, except as set forth in Schedule 5.4 of this Agreement, (c) except for the Contracts listed on Schedule 5.8 requiring Company Consents (but only as to the need to obtain such Company Consents), (i) require consent, approval or waiver under, (ii) constitute a default under or breach of (with or without the giving of notice or the passage of time or both), (iii) violate, (iv) give rise to any right of termination, cancellation, amendment or acceleration of any right or obligation of the Company Group or to a loss of any material benefit to which the Company Group is entitled, in the case of each of clauses (i) – (iv), under any provision of any Permit, Contract binding upon the Company Group or any of its respective properties, rights or assets, (d) result in the creation or imposition of any Lien (except for Permitted Liens) on any of the Company Group’s properties, rights or assets, or (e) require any consent, approval or waiver from any Person pursuant to any provision of the Organizational Documents of the Company Group, except for such consent, approval or waiver which shall be obtained (and a copy provided to Parent) prior to the Closing, except in the case of clauses (c) – (e) as would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.
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5.5 Capitalization.
(a) The authorized share capital of the Company consists of 500,000,000 Company Ordinary Shares, $0.0001 par value per share. As of the date of this Agreement, (i) there are (A) 1,152,055 Company Ordinary Shares issued and outstanding and (ii) no other shares of capital stock or other voting securities of the Company are authorized, issued, reserved for issuance or outstanding. All issued and outstanding Company Ordinary Shares are duly authorized, validly issued, fully paid and non-assessable and were issued in compliance with all applicable Laws (including any applicable securities laws) and in compliance with the Company Charter. No Company Ordinary Share is subject to or were issued in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right (including under any provision of the Cayman Companies Act, the Company Charter or any Contract to which the Company is a party or by which the Company or any of its properties, rights or assets are bound). As of the date of this Agreement, all outstanding shares of Company Capital Stock are owned of record by the Persons set forth on Schedule 5.5(a) in the amounts set forth opposite their respective names; and all such shares are comprised of Company Ordinary Shares.
(b) Except for the Company RSUs, there are no (i) outstanding warrants, options, agreements, convertible securities, performance units or other commitments or instruments pursuant to which the Company Group is or may become obligated to issue or sell any of its shares of Company Capital Stock or other securities, (ii) outstanding obligations of the Company Group to repurchase, redeem or otherwise acquire outstanding capital stock of the Company Group or any securities convertible into or exchangeable for any shares of capital stock of the Company Group, (iii) treasury shares of capital stock of the Company Group, (iv) bonds, debentures, notes or other Indebtedness of the Company Group having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which shareholders of the Company Group may vote, are issued or outstanding, (v) preemptive or similar rights to purchase or otherwise acquire shares or other securities of the Company Group (including pursuant to any provision of Law, the Company Group’s Organizational Documents or any Contract to which the Company Group is a party), or (vi) Liens (including any right of first refusal, right of first offer, proxy, voting trust, voting agreement or similar arrangement) with respect to the sale or voting of shares or securities of the Company Group (whether outstanding or issuable). There are no issued, outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the Company Group.
(c) The Company has never granted or issued any Company Options.
(d) Each Company RSU (i) was granted in compliance in all material respects with (A) all applicable Laws and (B) to the extent granted pursuant to the Equity Incentive Plan, all of the terms and conditions of the Equity Incentive Plan and (ii) has a grant date not before the date on which the Board of Directors of the Company or compensation committee actually awarded such Company RSU.
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5.6 Subsidiaries. Schedule 5.6 sets forth the name of each Subsidiary of the Company, and with respect to each Subsidiary, its jurisdiction of organization, its authorized shares or other equity interests (if applicable), and the number of issued and outstanding shares or other equity interests and the record holders thereof. Except as set forth on Schedule 5.6, all of the outstanding equity securities of each Subsidiary of the Company are duly authorized and validly issued, duly registered, fully paid and non-assessable (if applicable), were offered, sold and delivered in compliance with all applicable securities Laws and such Subsidiary’s Organizational Documents in force at the relevant time, and are owned by the Company or one of its Subsidiaries free and clear of all Liens (other than those, if any, imposed by such Subsidiary’s organizational documents). Except as otherwise provided in Schedule 5.6, the Company either directly or indirectly wholly owns each Subsidiary.
5.7 Corporate Records. The corporate minute books, registers, accounts, ledgers, records and supporting documents of the Company Group are up to date and contain complete and accurate records in all material respects of all matters since January 1, 2020, which were required to be dealt with in such documents pursuant to the relevant applicable Law, the Organizational Documents of the Company Group and made available to Parent.
5.8 Consents. The Contracts listed on Schedule 5.8 are the only Contracts requiring a consent, approval, authorization, order or other action of or filing with any Person as a result of the execution, delivery and performance of this Agreement or any Ancillary Agreement to which the Company is or will be a party or the consummation of the transactions contemplated hereby or thereby (each of the foregoing, a “Company Consent”).
5.9 Financial Statements.
(a) The Company has delivered to Parent the audited consolidated balance sheets of the Company as of each of December 31, 2022 and December 31, 2023, and the respective related statements of operations, changes in shareholders’ equity and cash flows for the fiscal years then ended, including the notes thereto (collectively, the “Annual Financial Statements”). The Annual Financial Statements have been prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods involved. The Annual Financial Statements fairly present, in all material respects, the financial position and results of operations of the Company as of the dates and for the periods indicated in such Annual Financial Statements, in accordance with U.S. GAAP, and are derived from the books and records of the Company. Since December 31, 2023 (the “Balance Sheet Date”), except as required by applicable Law or U.S. GAAP, there has been no change in any accounting principle, procedure or practice followed by the Company or in the method of applying any such principle, procedure or practice.
(b) The Annual Financial Statements present fairly, in all material respects, the consolidated financial position, results of operations, income (loss), changes in equity and cash flows of the Company as of the dates and for the periods indicated in such Annual Financial Statements in conformity with U.S. GAAP and have been audited in accordance with PCAOB accounting standards by a PCAOB qualified auditor.
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(c) Except: (i) as specifically disclosed, reflected or fully reserved against on the Balance Sheet; (ii) for liabilities and obligations incurred in the ordinary course of business consistent with past practices since the Balance Sheet Date that are not material; (iii) for liabilities that are executory obligations arising under Contracts to which the Company is a party (none of which, with respect to the liabilities described in clause (ii) and this clause (iii) results from, arises out of, or relates to any breach or violation of, or default under, a Contract or applicable Law); (iv) for expenses incurred in connection with the negotiation, execution and performance of this Agreement, any Ancillary Agreement or any of the transactions contemplated hereby or thereby; and (v) for liabilities set forth on Schedule 5.9(c), the Company does not have any material liabilities, debts or obligations of any nature (whether accrued, fixed or contingent, liquidated or unliquidated, asserted or unasserted or otherwise).
(d) Except as reflected on the Balance Sheet or set forth on Schedule 5.9(d), the Company Group does not have any Indebtedness.
5.10 Internal Accounting Controls. The Company Group has established a system of internal accounting controls sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP, including policies and procedures sufficient to provide reasonable assurance that: (a) transactions are executed in accordance with management’s general or specific authorizations; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. GAAP, and the Company Group’s historical practices and to maintain asset accountability; and (c) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
5.11 Absence of Certain Changes. From the Balance Sheet Date until the date of this Agreement, (a) the Company Group has conducted its Business in the ordinary course and in a manner consistent with past practice; (b) there has not been any Material Adverse Effect in respect of the Company Group; and (c) the Company Group has not taken any action that, if taken after the date of this Agreement and prior to the consummation of the Acquisition Merger, would require the consent of Parent pursuant to Section 7.1(a) and for which Parent has not given such consent.
5.12 Properties; Title to the Company Group’s Assets.
(a) All items of Tangible Personal Property that are material to the Business are in good operating condition and repair in all necessary respects and function in accordance with their intended uses (ordinary wear and tear excepted), have been properly maintained in all material respects and are suitable for their present uses and meet all specifications and warranty requirements with respect thereto so as not to constitute a Material Adverse Effect.
(b) The Company Group has good, valid and marketable title in and to, or in the case of the Leases and the assets which are leased or licensed pursuant to Contracts, a valid leasehold interest or license in or a right to use all of the tangible assets reflected on the Balance Sheet, other than any such tangible assets which have been disposed of since the Balance Sheet Date in the ordinary course of business. Except as set forth on Schedule 5.12, no such tangible asset is subject to any Lien other than Permitted Liens. The Company Group’s assets constitute all of the rights, properties, and tangible assets of any kind or description whatsoever necessary for the Company Group to operate the Business immediately after the Closing in substantially the same manner as the Business is currently being conducted.
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5.13 Litigation.
(a) There is no Action pending or, to the Knowledge of the Company, threatened against or affecting the Company Group, any of the officers or directors of the Company Group, the Business, any of the Company Group’s rights, properties or assets or any Contract before any Authority or which in any manner challenges or seeks to prevent, enjoin, alter or delay the transactions contemplated by this Agreement or any Ancillary Agreement. There are no outstanding judgments against the Company Group or any of its rights, properties or assets. The Company Group or any of its rights, properties or assets is not, nor has been since January 1, 2022.
(b) There is no Action pending or, to the Knowledge of the Company, threatened against or affecting the Company Group, any of the officers or directors of the Company Group which in any manner challenges or seeks to prevent, enjoin, alter or delay the transactions contemplated by this Agreement or any Ancillary Agreement.
5.14 Contracts.
(a) Schedule 5.14(a) sets forth a true, complete and accurate list, as of the date of this Agreement, of all of the following Contracts as amended to date which are currently in effect (collectively, “Material Contracts”):
(i) all Contracts that require annual payments or expenses incurred by, or annual payments or income to, the Company Group of $1,000,000 or more (other than standard purchase and sale orders entered into in the ordinary course of business consistent with past practices);
(ii) all sales, advertising, agency, sales promotion, market research, marketing or similar Contracts;
(iii) each Contract with any current employee of the Company Group (A) which has continuing obligations for payment of an annual compensation of at least $250,000, and which is not terminable for any reason or no reason upon reasonable notice without payment of any penalty, severance or other obligation; (B) providing for severance or post-termination payments or benefits to such employee (other than COBRA obligations or similar requirements under applicable local Law); or (C) providing for a payment or benefit in excess of $250,000 upon the consummation of the transactions contemplated by this Agreement or any Ancillary Agreement or as a result of a change of control of the Company;
(iv) all Contracts creating a joint venture, strategic alliance, limited liability company or partnership arrangement to which a member of the Company Group is a party;
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(v) all Contracts relating to any acquisitions or dispositions of assets of value in excess of $500,000 by the Company Group (other than acquisitions or dispositions of inventory in the ordinary course of business consistent with past practices);
(vi) all material IP Contracts, separately identifying all such IP Contracts under which the Company is obligated to pay royalties thereunder and all such IP Contracts under which the Company is entitled to receive royalties thereunder;
(vii) all Contracts limiting the freedom of the Company Group to compete in any line of business or industry, with any Person or in any geographic area;
(viii) all Contracts providing for guarantees, indemnification arrangements and other hold harmless arrangements made or provided by the Company, including all ongoing agreements for repair, warranty, maintenance, service, indemnification or similar obligations, other than Standard Contracts;
(ix) all Contracts with or pertaining to the Company Group to which any Affiliate of the Company Group is a party, other than any Contracts relating to such Affiliate’s status as a Company Securityholder;
(x) all Contracts relating to property or assets (whether real or personal, tangible or intangible), other than IP Contracts or Standard Contracts, in which the Company Group holds a leasehold interest (including the Lease) and which involve payments to the lessor thereunder in excess of $250,000 per year;
(xi) all Contracts creating or otherwise relating to outstanding Indebtedness (other than intercompany Indebtedness) in the aggregate that are valued at $1,000,000 or greater;
(xii) all Contracts relating to the voting or control of the equity interests of the Company Group or the election of directors of the Company Group (other than the organizational or constitutive documents of the Company Group);
(xiii) all Contracts not cancellable by the Company Group with no more than ninety (90) days’ notice if the effect of such cancellation would result in monetary penalty to the Company Group in excess of $300,000 per the terms of such contract;
(xiv) all research and development contracts with annual payments in excess of $300,000;
(xv) all Contracts under which any of the benefits, compensation or payments (or the vesting thereof) will be increased or accelerated by the consummation of the transactions contemplated by this Agreement or any Ancillary Agreement, or the amount or value thereof will be calculated on the basis of, the transactions contemplated by this Agreement or any Ancillary Agreement; and
(xvi) all collective bargaining agreements or other agreement with a labor union, labor organization or works council.
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(b) Each Material Contract is (i) a valid and binding agreement, (ii) in full force and effect and (iii) enforceable by and against the Company Group and, to the Company’s Knowledge, each counterparty that is party thereto, subject, in the case of this clause (iii), to the Enforceability Exceptions. Neither the Company Group nor, to the Company’s Knowledge, any other party to a Material Contract is in material breach or default (whether with or without the passage of time or the giving of notice or both) under the terms of any such Material Contract. The Company Group has not assigned, delegated or otherwise transferred any of its rights or obligations under any Material Contract or granted any power of attorney with respect thereto.
(c) The Company Group is in compliance in all material respects with all covenants, including all financial covenants, in all notes, indentures, bonds and other instruments or Contracts establishing or evidencing any Indebtedness. The consummation and closing of the transactions contemplated by this Agreement shall not cause or result in an event of default under any instruments or Contracts establishing or evidencing any Indebtedness.
5.15 Licenses and Permits. Schedule 5.15 sets forth a true, complete and correct list of each material license, franchise, permit, order or approval or other similar material authorization required under applicable Law to carry out or conduct the Business as currently conducted, together with the name of the Authority issuing the same (the “Permits”). Such Permits are valid and in full force and effect, and none of the Permits will be terminated or materially impaired or become terminable as a result of the transactions contemplated by this Agreement or any Ancillary Agreement. The Company Group has all Permits necessary to operate the Business, and each of the Permits is in full force and effect. The Company Group is not in material breach or violation of, or material default under, any such Permit, and, to the Company’s Knowledge, no basis (including the execution of this Agreement and the other Ancillary Agreements to which the Company is a party and the consummation of the transactions contemplated by this Agreement or any Ancillary Agreement) reasonably exists which, with notice or lapse of time or both, would reasonably constitute any such breach, violation or default or give any Authority grounds to suspend, revoke or terminate any such Permit. The Company Group has not received any written (or, to the Company’s Knowledge, oral) notice from any Authority regarding any material violation of any Permit. There has not been and there is not any pending or, to the Company’s Knowledge, threatened Action, investigation or disciplinary proceeding by or from any Authority against the Company Group involving any Permit and that is reasonably likely to give rise to a Material Adverse Effect.
5.16 Compliance with Laws.
(a) Neither the Company Group nor, to the Knowledge of the Company, any Representative or other Person acting on behalf of the Company Group, is in violation in any material respect of, and, since January 1, 2022, no such Person has failed to be in compliance in all material respects with, all applicable Laws and Orders applicable to the Company Group and the Business. Since January 1, 2022, (i) no event has occurred or circumstance exists that (with or without notice or due to lapse of time) would reasonably constitute or be likely to result in a violation by the Company Group of, or failure on the part of the Company Group to comply with, or any material liability suffered or incurred by the Company Group in respect of any violation of or material noncompliance with, any Laws, Orders or policies by Authority that are or were applicable to it or the conduct or operation of its Business or the ownership or use of any of its assets and (ii) no Action is pending, or to the Knowledge of the Company, threatened, alleging any such violation or noncompliance by the Company Group. Since January 1, 2022, the Company Group has not been threatened in writing or, to the Company’s Knowledge, orally to be charged with, or given written or, to the Company’s Knowledge, oral notice of any violation of any Law or any judgment, order or decree entered by any Authority against any member of the Company Group.
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(b) Neither the Company Group nor, to the Knowledge of the Company, any Representative or other Person acting on behalf of the Company Group is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.
5.17 Intellectual Property and Privacy.
(a) The Company Group is the sole and exclusive owner of each item of Company Owned IP, free and clear of any Liens (except for Permitted Liens). The Company is the exclusive licensee of each item of Company Exclusively Licensed IP, free and clear of any Liens (except for Permitted Liens). The Company Group has a valid right to use the Company Licensed IP.
(b) Schedule 5.17(b) sets forth a true, correct and complete list of all (i) Registered IP; (ii) Domain Names constituting Company Owned IP; and (iii) all social media handles constituting Company Owned IP; accurately specifying as to each of the foregoing, as applicable: (A) the filing number, issuance or registration number, or other identify details; (B) the owner and nature of the ownership; (C) the jurisdictions by or in which such Registered Owned IP has been issued, registered, or in which an application for such issuance or registration has been filed; and (D) any liens or security interests that apply.
(c) To the Knowledge of the Company, all Registered Owned IP that constitute issued Patents are valid and enforceable. All Registered Exclusively Licensed IP that constitute issued Patents are subsisting and, to the Knowledge of the Company, valid and enforceable. No Registered Owned IP, and to the Knowledge of the Company no Registered Exclusively Licensed IP, that is a patent or patent application is or has been involved in any interference, opposition, reissue, reexamination or revocation proceeding, and to the Knowledge of the Company, no such proceeding has been threatened in writing with respect thereto. In the past three (3) years, there have been no claims filed, served or threatened in writing, or to the Knowledge of the Company orally threatened, against the Company Group contesting the validity, use, ownership, enforceability, patentability, registrability, or scope of any Registered IP. All registration, maintenance and renewal fees currently due in connection with any Registered Owned IP, and to the Knowledge of the Company all Registered Exclusively Licensed IP, have been paid and all recordations in connection with any assignments of patents that are Registered Owned IP have been filed with the authorities in the United States or foreign jurisdictions as necessary to perfect the Company Group’s ownership thereof.
(d) In the past three (3) years, there have been no claims filed, served or threatened in writing, or to the Knowledge of the Company orally threatened, against the Company Group alleging any infringement, misappropriation, or other violation of any Intellectual Property of a third Person (including any unsolicited written offers to license any such Intellectual Property). There are no Actions pending against the Company Group that include a claim against the Company Group by a third Person alleging infringement or misappropriation of such third Person’s Intellectual Property. To the Knowledge of the Company, in the past three (3) years no third Person has infringed, misappropriated, or otherwise violated any material Company Owned IP.
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(e) Except as disclosed on Schedule 5.17(e), in the past three (3) years the Company Group has not filed, served, or threatened a third Person with any claims alleging any infringement, misappropriation, or other violation of any Company IP. There are no Actions pending by the Company that include a claim against a third Person by the Company alleging infringement or misappropriation of Company IP. The Company Group is not subject to any Order that adversely restricts the use, transfer, registration or licensing of any Company Owned IP by the Company Group.
(f) Except as disclosed on Schedule 5.17(f), each employee or independent contractor who has contributed to or participated in the creation or development of any Registered Owned IP on behalf of the Company Group has executed a form of proprietary information and/or inventions agreement or similar written Contract with the Company Group under which such Person: (i) has assigned all right, title and interest in and to such Intellectual Property to the Company Group; and (ii) is obligated to maintain the confidentiality of the Company Group’s confidential information both during and after the term of such Person’s employment or engagement.
(g) No government funding or facility of a university, college, other educational institution or research center was used in the development of any item of Registered Owned IP or to the Knowledge of the Company any item of Company Exclusively Licensed IP, in each case that has resulted in material commercial rights in such Intellectual Property being granted to the source of such funding or facility. The Company is not and has never been a member of, a contributor to, or affiliated with, any industry standards organization, body, working group, project, or similar organization (a “Standards Organization”) that has resulted in material commercial rights in such Intellectual Property being granted to such Standards Organization or members thereof.
(h) None of the execution, delivery or performance by the Company of this Agreement or any of the Ancillary Agreements to which the Company is or will be a party or the consummation by the Company of the transactions contemplated hereby or thereby will (i) cause any material item of Company Owned IP, or any material item of Company Licensed IP immediately prior to the Closing, to not be owned, licensed or available for use by the Company Group on substantially the same terms and conditions immediately following the Closing (including with respect to fees, royalties, or payments that the Company would otherwise be required to pay had the Transactions not occurred) or (ii) result in the granting by Company to any third party of any rights in any material Company Owned IP. To the Knowledge of the Company, the Company owns or has valid licenses or other rights to use all material Intellectual Property that is necessary to conduct its business as currently operated.
(i) Schedule 5.14(a)(vi) contains a list of all material IP Contracts. Except under the agreements listed on Schedule 5.14(a)(vi), the Company Group is not obligated under any Contract to make any royalty payments to any owner or licensor of, or other claimant to, any applicable Intellectual Property for use thereof. The consummation of the Merger will neither violate nor result in the breach, modification, cancellation, termination, or suspension of, or acceleration of any payments with respect to, any Company IP Contract.
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(j) The Company Group has exercised reasonable efforts to maintain and protect the secrecy and confidentiality of all material Trade Secrets and all other material Confidential Information that is Company Owned IP. No Company Owned IP is subject to any technology escrow arrangement or obligation pursuant to a Contract.
(k) The Company Group has taken commercially reasonable steps to scan for or otherwise prevent the introduction of viruses, worms, Trojan horses or other malicious contaminants into material Software that constitutes Company Owned IP.
(l) In connection with its Processing of any Personal Information, the Company Group is in material compliance with all (1) contractual commitments that the Company Group has entered into, or by which it is otherwise bound with respect to privacy and/or data security; (2) all applicable Data Protection Laws; (3) the terms of all published privacy notices and consents governing the collection of Personal Information by the Company Group (collectively “Data Privacy Obligations”). To the Knowledge of the Company, there are no written complaints or audits, proceedings, investigations or claims pending against the Company Group by any Authority, or by any Person, in respect of Processing of Personal Information by or on behalf of the Company Group. No Person has accused the company Group of violating any Data Privacy Obligations.
(m) The Company Group has implemented and maintains a comprehensive information security program that (i) enforces commercially reasonable physical, technical, organizational and administrative security measures and policies to protect all Business Data Processed or maintained by the Company Group from unauthorized physical or virtual access, use, modification, acquisition, disclosure or other misuse consistent with all Data Privacy Obligations and applicable industry standards, (ii) is reflected in policies and procedures consistent with all Data Privacy Obligations and applicable industry standards, and (iii) maintains incident response and notification procedures in compliance with applicable Data Privacy Obligations in the case of any breach of security compromising Personal Information. Since January 1, 2020, the Company Group has not experienced any material loss, damage or unauthorized access, use, disclosure or modification, or breach of security of Business Data maintained by or on behalf of the Company Group (including by any agent, subcontractor or vendor of the Company Group) for which the Company Group would be required to provide notice to any Authority, data subject, or any other Person.
(n) To the Knowledge of the Company, the Company Group is not subject to any Data Privacy Obligations, including based on the transactions contemplated under this Agreement, that would prohibit the retention or use of any Personal Information or other material Business Data after the Closing Date, in the manner in which the Company Group has used such Personal Information and other applicable Business Data prior to the Closing Date.
(o) The Company Group has implemented and maintained (or, where applicable, has required its vendors to maintain) in material compliance with its contractual obligations to other Persons, reasonable security measures designed to protect, preserve and maintain the performance, security and integrity of all computers, servers, equipment, hardware, networks, Software and systems used, owned, leased or licensed by the Company Group in connection with the operation of the Business (the “Company Information Systems”). There has been no unauthorized access to or use of the Company Information Systems, nor has there been any downtime, failure, or unavailability of the Company Information Systems that resulted in a material disruption or impact to the Business. The Company Information Systems are adequate and sufficient (including with respect to working condition and capacity) for the operations of the Business.
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5.18 Employees; Employment Matters.
(a) The Company has made available to Parent or its counsel a true, correct and complete list of the employees of the Company as of the date hereof, setting forth the employee location, title, current base salary or hourly rate for each such person and total compensation (including bonuses and commissions) paid to each such person for the fiscal years ended December 31, 2022 and 2023, if applicable, hire date, exempt or non-exempt status under applicable laws, accrued paid time off or vacation, and leave status.
(b) The Company has made available to Parent or its counsel a true, correct and complete list of each of the independent contractors or consultants of the Company as of the date hereof, setting forth the name, principal location, engagement or start date, compensation structure, average monthly hours worked (if known), and nature of services provided.
(c) The Company Group is not a party to any collective bargaining agreement or similar labor agreement with respect to any employees of the Company, and, since January 1, 2022, to the Knowledge of the Company, there has been no proceeding by a labor union, labor organization, employee representative, or group of employees seeking to organize or represent any employees of the Company Group. There is no labor strike, slowdown or work stoppage or lockout pending or, to the Knowledge of the Company, threatened against the Company Group, and, since January 1, 2022, the Company Group has not experienced any strike, slowdown, work stoppage or lockout by or with respect to its employees. There is no unfair labor practice charge or complaint pending or, to the Knowledge of the Company, threatened, before any applicable Authority relating to employees of the Company.
(d) There are no pending or, to the Knowledge of the Company, threatened Actions against the Company Group under any worker’s compensation policy or long-term disability policy.
(e) Since January 1, 2022, the Company Group has been in compliance with notice and other requirements under the Workers’ Adjustment Retraining and Notification Act of 1988, as amended, or any similar state or local or applicable foreign statute, rule or regulation relating to plant closings and layoffs (collectively, the “WARN Act”). Since January 1, 2022, the Company has not implemented any “mass layoff” or “plant closing” or engaged in any other layoffs or employee reductions that resulted in obligations under the WARN Act. There is no ongoing or contemplated location closing, employee layoff, or relocation activities that would trigger notice or any other requirements under the WARN Act.
(f) The Company Group is, and for the past six (6) years has been, in compliance in all material respects with all applicable Laws relating to employment or the engagement of labor, including but not limited to all applicable Laws relating to wages, hours, overtime, collective bargaining, equal employment opportunity, discrimination, harassment (including, but not limited to sexual harassment), retaliation, immigration, verification of identity and employment authorization of individuals employed in the United States, leave, disability rights or benefits, employment and reemployment rights of members and veterans of the uniformed services, paid time off/vacation, unemployment insurance, safety and health, COVID-19, workers’ compensation, pay equity, restrictive covenants, whistleblower rights, child labor, classification of employees and independent contractors, meal and rest breaks, and reimbursement of business expenses. Each individual currently engaged by the Company as an independent contractor or consultant is, and for the past three (3) years has been, correctly classified by the Company as an independent contractor, and the Company has not received any notice from any Authority or Person disputing such classification. Each of the employees of the Company classified by the Company as “exempt” is, and for the past three (3) years has been, correctly classified by the Company as “exempt” under applicable Law.
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(g) For the past three (3) years, the Company has complied with all laws relating to the verification of identity and employment authorization of individuals employed in the United States. No audit or investigation by any Authority is currently being conducted, is pending or is threatened to be conducted, in respect to any workers employed by any member of the Company Group. Schedule 5.18(g) discloses each individual who is employed by the Company pursuant to a visa or other work permit or authorization and the expiration date of such visa or other work permit or authorization.
(h) To the Knowledge of the Company, no Key Employee is a party to or bound by any enforceable confidentiality agreement, non-competition agreement or other restrictive covenant (with any Person) that would materially interfere with: (i) the performance by such Key Employee of his or her duties or responsibilities as an officer or employee of the Company Group or (ii) the Company Group’s business or operations. Except as set forth on Schedule 5.18(h), no Key Employee has given written notice of his or her intent to terminate his or her employment with the Company Group, nor has the Company Group provided notice of its present intention to terminate the employment of any of the foregoing.
(i) Since January 1, 2022, the Company Group is not and has not been engaged in or, to the Knowledge of the Company, threatened with, any claim with respect to payment of wages, salary or overtime pay or violation of any other federal state, or local labor or employment Laws with respect to any current or former employee, independent contractor, or other service provider.
(j) Since January 1, 2022, the Company Group has not received notice of any claim or litigation relating to an allegation of discrimination, retaliation, harassment (including sexual harassment), or sexual misconduct; nor is there any outstanding obligation for the Company Group under any settlement relating to such matters and to the Knowledge of the Company, no such claim or litigation has been threatened. Since January 1, 2022, the Company has investigated all workplace harassment (including sexual harassment), discrimination, retaliation, and workplace violence claims or complaints reported to the Company relating to current and/or former employees of the Company or third-parties who interacted with current and/or former employees of the Company. With respect to each such claim or complaint found to have potential merit, the Company has taken reasonable corrective action. Further, to the Knowledge of the Company, since January 1, 2022, no allegations of sexual harassment have been made against any individual in his or her capacity as director or an employee of the Company.
(k) As of the date hereof and since January 1, 2022, there have been no material audits of the Company Group by any Authority, under any applicable federal, state or local occupational safety and health Law and Orders (collectively, “OSHA”) against the Company Group, nor have there been any related charges, fines, or penalties, and the Company Group has been in compliance in all material respects with OSHA.
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5.19 Withholding. Except as disclosed on Schedule 5.19, all reasonably anticipated obligations of the Company Group with respect to employees of the Company Group (except for those related to wages during the pay period immediately prior to the Closing Date and arising in the ordinary course of business consistent with past practices), whether arising by operation of Law, or by contract, for salaries, bonuses and vacation pay/paid time off to such employees in respect of the services rendered by any of them prior to the date hereof have been or will be paid by the Company or accrued on the Required Financial Statements prior to the Closing Date.
5.20 Employee Benefits.
(a) Schedule 5.20(a) sets forth a correct and complete list of all Plans and indicates which Plans are PEO Sponsored Plans. With respect to each Plan that is not a PEO Sponsored Plan, the Company has made available to Parent or its counsel a true and complete copy, to the extent applicable, of: (i) each writing constituting a part of such Plan and all amendments thereto, including all plan documents, material employee communications, benefit schedules, trust agreements, and insurance contracts and other funding vehicles; (ii) the three (3) most recent annual reports on Form 5500 and accompanying schedules, if any; (iii) the current summary plan description and any material modifications thereto; (iv) the most recent annual financial and actuarial reports; (v) the most recent determination or advisory letter received by the Company from the Internal Revenue Service regarding the tax-qualified status of such Plan and (vi) the three (3) most recent written results of all required compliance testing.
(b) No Plan is (i) subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code, (ii) a “multiemployer plan” as defined in Section 3(37) of ERISA, or (iii) a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA, and none of the Company, or any ERISA Affiliate has withdrawn at any time within the preceding six years from any multiemployer plan, or incurred any withdrawal liability which remains unsatisfied, and no events have occurred and no circumstances exist that could reasonably be expected to result in any such liability to the Company or any of its Subsidiaries.
(c) With respect to each Plan that is intended to qualify under Section 401(a) of the Code, such Plan, and with respect to each PEO Sponsored Plan, to the Knowledge of the Company, including its related trust, has received a determination letter (or may rely upon opinion letters in the case of any prototype plans) from the Internal Revenue Service that it is so qualified and that its trust is exempt from Tax under Section 501(a) of the Code, and nothing has occurred with respect to the operation of any such Plan that could cause the loss of such qualification or exemption.
(d) There are no pending or, to the Knowledge of the Company, threatened Actions against or relating to the Plans, the assets of any of the trusts under such Plans or the Plan sponsor or the Plan administrator, or against any fiduciary of any Plan with respect to the operation of such Plan (other than routine benefits claims). No Plan, and with respect to each PEO Sponsored Plan, to the Knowledge of the Company, is presently under audit or examination (nor has written notice been received of a potential audit or examination) by any Authority.
(e) Each Plan, and with respect to each PEO Sponsored Plan, to the Knowledge of the Company has been established, administered and funded in accordance with its terms and in compliance in all material respects with the applicable provisions of ERISA, the Code and other applicable Laws. There is not now, nor, to the Knowledge of the Company, do any circumstances exist that could give rise to, any requirement for the posting of security with respect to a Plan or the imposition of any lien on the assets of the Company under ERISA or the Code. All premiums due or payable with respect to insurance policies funding any Plan have been made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected on the Annual Financial Statements.
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(f) None of the Plans, and with respect to each PEO Sponsored Plan, with respect to employees, provide retiree health or life insurance benefits, except as may be required by COBRA. There has been no violation of the “continuation coverage requirement” of “group health plans” as set forth in COBRA with respect to any Plan, and with respect to each PEO Sponsored Plan, to the Knowledge of the Company, to which such continuation coverage requirements apply.
(g) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in combination with another event) (i) result in any payment becoming due, or increase the amount of any compensation or benefits due, to any current or former employee of the Company with respect to any Plan; (ii) increase any benefits otherwise payable under any Plan; (iii) result in the acceleration of the time of payment or vesting of any such compensation or benefits; or (iv) result in the payment of any amount that would, individually or in combination with any other such payment, be an “excess parachute payment” within the meaning of Section 280G of the Code. No Person is entitled to receive any additional payment (including any tax gross-up or other payment) from the Company as a result of the imposition of the excise taxes required by Section 4999 of the Code or any taxes required by Section 409A of the Code.
(h) Each Plan that is a “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of the Code) is in all material respects in documentary compliance with, and has been administered in all material respects in compliance with, Section 409A of the Code and all applicable regulatory guidance (including, notices, rulings and proposed and final regulations) thereunder.
(i) Each Plan, and with respect to each PEO Sponsored Plan, to the Knowledge of the Company, that is subject to the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”) has been established, maintained and administered in compliance with the requirements of the Affordable Care Act and no circumstances of noncompliance exist that could result in the imposition of any tax, penalty or fine thereunder.
(j) All Plans subject to the laws of any jurisdiction outside of the United States (i) if they are intended to qualify for special tax treatment, meet all requirements for such treatment, and (ii) if they are intended to be funded and/or book-reserved, are fully funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions.
5.21 Real Property.
(a) Except as set forth on Schedule 5.21, the Company Group does not own, or otherwise have an interest in, any Real Property, including under any Real Property lease, sublease, space sharing, license or other occupancy agreement. The Leases are the only Contracts pursuant to which the Company Group leases any real property or right in any Real Property. The Company Group has provided to Parent accurate and complete copies of all Leases for the main offices in each country that it operates. The Company Group has good, valid and subsisting title to its respective leasehold estates in the research, manufacturing, and office facilities described on Schedule 5.21, free and clear of all Liens. The Company Group has not materially breached or violated any local zoning ordinance, and no notice from any Person has been received by the Company Group or served upon the Company Group claiming any violation of any local zoning ordinance.
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(b) With respect to each Lease: (i) it is valid, binding and enforceable in accordance with its terms and in full force and effect; (ii) all rents and additional rents and other sums, expenses and charges due thereunder have been paid; (iii) the Company Group has been in peaceable possession of the premises leased thereunder since the commencement of the original term thereof; (iv) no waiver, indulgence or postponement of the Company Group’s obligations thereunder has been granted by the lessor; (v) the Company Group has performed all material obligations imposed on it under such Lease and there exist no default or event of default thereunder by the Company Group or, to the Company’s Knowledge, by any other party thereto; (vi) there exists, to the Company’s Knowledge, no occurrence, condition or act which, with the giving of notice, the lapse of time or the happening of any further event or condition, would reasonably be expected to become a material default or event of default by the Company Group thereunder; (vii) there are no outstanding claims of breach or indemnification or notice of default or termination thereunder and (viii) the Company Group has not exercised early termination options, if any, under such Lease. The Company Group holds the leasehold estate established under the Leases free and clear of all Liens, except for Liens of mortgagees of the Real Property on which such leasehold estate is located or other Permitted Liens. The Real Property leased by the Company Group is in a state of maintenance and repair in all material respects adequate and suitable for the purposes for which it is presently being used, and there are no material repair or restoration works likely to be required in connection with such leased Real Property. The Company Group is in physical possession and actual and exclusive occupation of the whole of the leased premises, none of which is subleased or assigned to another Person. Each Lease leases all useable square footage of the premises located at each leased Real Property. To the Knowledge of the Company, the Company Group does not owe any brokerage commission with respect to any Real Property.
5.22 Tax Matters. Except as set forth on Schedule 5.22,
(a) Each member of the Company Group (i) has filed (or caused to be filed) all income and other material Tax Returns which were required to have been filed by it under applicable Law, and all such Tax Returns are true, correct and complete in all material respects, and (ii) has paid all material Taxes (whether or not shown on such Tax Returns) which have become due and payable by it under applicable Law.
(b) There is no Action that is ongoing or proposed in writing to any member of the Company Group by a Taxing Authority with respect to a material amount of Taxes of any member of the Company Group. No statute of limitations in respect of the assessment or collection of any Taxes of any member of the Company Group for which a Lien may be imposed on any of the Company Group’s assets has been waived or extended (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business), which waiver or extension is still in effect.
(c) Each member of the Company Group has withheld or collected and paid over to the applicable Taxing Authority all material Taxes required to have been withheld or collected by it in connection with any amounts paid or owing to any employee, creditor, independent contractor or other third party.
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(d) No member of the Company Group has requested any private letter ruling from the IRS (or any comparable ruling from any other Taxing Authority).
(e) There are no Liens (other than Permitted Liens) for a material amount of Taxes upon any of the assets of any member of the Company Group.
(f) No member of the Company Group has received any written claim from a Taxing Authority in a jurisdiction where it has not paid any Tax or filed Tax Returns asserting that it is or may be subject to Tax in such jurisdiction, which claim has not been resolved, and no member of the Company Group has a permanent establishment (within the meaning of an applicable Tax treaty) or other fixed place of business in a country other than the country in which it is organized.
(g) No member of the Company Group is a party to any Tax sharing, Tax indemnity or Tax allocation Contract (other than a Contract (i) of which only members of the Company Group are parties or (ii) that was entered into in the ordinary course of business, the primary purpose of which is not related to Taxes).
(h) The Company has not been a member of an “affiliated group” within the meaning of Section 1504(a) of the Code filing a consolidated federal income Tax Return (other than a group the common parent of which was the Company).
(i) No member of the Company Group has any material liability for the Taxes of any other Person (other than any member of the Company Group): (i) under Treasury Regulation Section 1.1502-6 (or any similar provision of applicable Law), (ii) as a transferee or successor or (iii) otherwise by operation of applicable Law (other than liabilities in respect of any Contract entered into in the ordinary course of business and the primary purpose of which does not relate to Taxes).
(j) No member of the Company Group has been a party to any “listed transaction” as defined in Section 6707A(c)(2) of the Code and Treasury Regulation Section 1.6011-4(b)(2).
(k) No member of the Company Group will be required to include any material item of income in, or exclude any material item of deduction from, the determination of taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) adjustment under Section 481 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law) by reason of a change in method of accounting prior to the Closing; (ii) any “closing agreement” described in Section 7121 of the Code (or similar provision of state, local or non-U.S. Tax Law) executed prior to the Closing; (iii) any installment sale or open sale transaction disposition made prior to the Closing; or (iv) any prepaid amount received prior to the Closing outside the ordinary course of business.
(l) No member of the Company Group has, in any year for which the applicable statute of limitations remains open, distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 or Section 361 of the Code.
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(m) The Company currently conducts a business. Such business is the Company’s “historic business” within the meaning of Treasury Regulation Section 1.368-1(d), and no assets of the Company have been sold, transferred, or otherwise disposed of that would prevent the Surviving Corporation from continuing the “historic business” of the Company or from using a “significant portion” of the Company’s “historic business assets” in a business following the Acquisition Merger, as such terms are used in Treasury Regulation Section 1.368-1(d).
(n) The Company is not an “investment company” as such term is used in Section 368(a)(2)(F) of the Code.
(o) To the Knowledge of the Company, there are no facts, circumstances or plans, and no member of the Company Group has taken or agreed to take any action, in each case not contemplated by this Agreement or any Ancillary Agreement, that, either alone or in combination, would reasonably be expected to prevent the Acquisition Merger from qualifying for the Acquisition Intended Tax Treatment.
(p) The Company is properly treated as an association taxable as a corporation for U.S. federal income Tax purposes.
5.23 Environmental Laws. The Company Group has complied and is in compliance with all Environmental Laws in all material respects, and there are no Actions pending or, to the Knowledge of the Company, threatened against the Company Group alleging any failure to so comply. The Company Group has not (a) received any written notice of any alleged claim, violation of or liability under any Environmental Law nor any written claim of potential liability with regard to any Hazardous Material, which has not heretofore been cured or for which there is any remaining liability; (b) disposed of, emitted, discharged, handled, stored, transported, used or released any Hazardous Material; arranged for the disposal, discharge, storage or release of any Hazardous Material; or exposed any employee or other individual or property to any Hazardous Material so as to give rise to any liability or corrective or remedial obligation under any Environmental Laws; or (c) entered into any agreement that may require it to guarantee, reimburse, pledge, defend, hold harmless or indemnify any other Person with respect to liabilities arising out of Environmental Laws or the Hazardous Material Activity. There are no Hazardous Materials in, on or under any properties owned, leased or used at any time by the Company Group that could give rise to any liability or corrective or remedial obligation of the Company Group under any Environmental Laws.
5.24 Finders’ Fees. Except as set forth on Schedule 5.24, there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of the Company Group or any of its respective Affiliates who might be entitled to any fee or commission from the Company Group, Merger Sub, Parent or any of its respective Affiliates upon consummation of the transactions contemplated by this Agreement or any of the Ancillary Agreements.
5.25 Directors and Officers. Schedule 5.25 sets forth a true, correct and complete list of all directors and officers of the Company as of the date hereof.
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5.26 Anti-Money Laundering Laws.
(a) The Company Group currently is and, since January 1, 2022, has been, in compliance with applicable Laws related to (i) anti-corruption or anti-bribery, including the U.S. Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§ 78dd-1, et seq., and any other equivalent or comparable Laws of other countries (collectively, “Anti-Corruption Laws”), (ii) economic sanctions administered, enacted or enforced by any Authority (collectively, “Sanctions Laws”), (iii) export controls, including the U.S. Export Administration Regulations, 15 C.F.R. §§ 730, et seq., and any other equivalent or comparable Laws of other countries (collectively, “Export Control Laws”), (iv) anti-money laundering, including the Money Laundering Control Act of 1986, 18 U.S.C. §§ 1956, 1957, and any other equivalent or comparable Laws of other countries; (v) anti-boycott regulations, as administered by the U.S. Department of Commerce; and (vi) importation of goods, including Laws administered by the U.S. Customs and Border Protection, Title 19 of the U.S.C. and C.F.R., and any other equivalent or comparable Laws of other countries (collectively, “International Trade Control Laws”).
(b) Neither the Company Group nor, to the Knowledge of the Company, any Representative of the Company Group (acting on behalf of the Company Group), is or is acting under the direction of, on behalf of or for the benefit of a Person that is, (i) the subject of Sanctions Laws or identified on any sanctions or similar lists administered by an Authority, including the U.S. Department of the Treasury’s Specially Designated Nationals List, the U.S. Department of Commerce’s Denied Persons List and Entity List, the U.S. Department of State’s Debarred List, HM Treasury’s Consolidated List of Financial Sanctions Targets and the Investment Bank List, or any similar list enforced by any other relevant Authority, as amended from time to time, or any Person owned or controlled by any of the foregoing (collectively, “Prohibited Party”); (ii) the target of any Sanctions Laws; (iii) located, organized or resident in a country or territory that is, or whose government is, the target of comprehensive trade sanctions under Sanctions Laws, including, as of the date of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and Syria; or (iv) an officer or employee of any Authority or public international organization, or officer of a political party or candidate for political office. Neither the Company Group nor, to the Knowledge of the Company, any Representative of the Company Group (acting on behalf of the Company Group), (A) has participated in any transaction involving a Prohibited Party, or a Person who is the target of any Sanctions Laws, or any country or territory that was during such period or is, or whose government was during such period or is, the target of comprehensive trade sanctions under Sanctions Laws, (B) to the Knowledge of the Company, has exported (including deemed exportation) or re-exported, directly or indirectly, any commodity, software, technology, or services in violation of any applicable Export Control Laws or (C) has participated in any transaction in violation of or connected with any purpose prohibited by Anti-Corruption Laws or any applicable International Trade Control Laws, including support for international terrorism and nuclear, chemical, or biological weapons proliferation.
(c) The Company Group has not received written notice of, nor, to the Knowledge of the Company, any of its Representatives is or has been the subject of, any investigation, inquiry or enforcement proceedings by any Authority regarding any offense or alleged offense under Anti-Corruption Laws, Sanctions Laws, Export Control Laws or International Trade Control Laws (including by virtue of having made any disclosure relating to any offense or alleged offense) and, to the Knowledge of the Company, there are no circumstances likely to give rise to any such investigation, inquiry or proceeding.
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5.27 Insurance. All insurance policies owned or held by and currently insuring the Company Group are set forth on Schedule 5.27, and such policies are in full force and effect. All premiums with respect to such policies covering all periods up to and including the Closing Date have been or will be paid when due, no notice of cancellation or termination has been received with respect to any such policy which was not replaced on substantially similar terms prior to the date of such cancellation or termination and there is no claim by the Company Group or, to the Company’s Knowledge, any other Person pending under any of such insurance policies as to which coverage has been denied or disputed by the underwriters or issuers of such policies. There is no existing default or event which, with or without the passage of time or the giving of notice or both, would constitute noncompliance with, or a default under, any such policy or entitle any insurer to terminate or cancel any such policy. Such policies will not in any way be affected by or terminate or lapse by reason of the transactions contemplated by this Agreement or the Ancillary Agreements. The insurance policies to which the Company Group is a party are of at least like character and amount as are carried by like businesses similarly situated and sufficient for compliance with all requirements of all Material Contracts to which the Company Group is a party or by which the Company Group is bound. Since January 1, 2022, the Company Group has not been refused any insurance with respect to its assets or operations or had its coverage limited by any insurance carrier to which it has applied for any such insurance or with which it has carried insurance. The Company Group does not have any self-insurance arrangements. No fidelity bonds, letters of credit, performance bonds or bid bonds have been issued to or in respect of the Company Group.
5.28 Related Party Transactions. Except as set forth on Schedule 5.28, as contemplated by this Agreement or as provided in the Annual Financial Statements, no Affiliate of the Company Group, current or former director, manager, officer or employee of any Person in the Company Group or any immediate family member or Affiliate of any of the foregoing (a) is a party to any Contract, or has otherwise entered into any transaction, understanding or arrangement, with the Company Group, (b) owns any asset, property or right, tangible or intangible, which is used by the Company Group, or (c) is a borrower or lender, as applicable, under any Indebtedness owed by or to the Company Group since January 1, 2022, in each case in excess of $120,000.
5.29 No Trading or Short Position. None of the Company Group or any of its managers and officers, members and employees has engaged in any short sale of Parent’s voting stock or any other type of hedging transaction involving Parent’s securities (including, without limitation, depositing shares of Parent’s securities with a brokerage firm where such securities are made available by the broker to other customers of the firm for purposes of hedging or short selling Parent’s securities).
5.30 Not an Investment Company. The Company is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.
5.31 Regulatory Permits; Compliance With Healthcare Laws.
(a) The Company, its Subsidiaries, its Representatives, and the Company Products are in compliance in all material respects with all Healthcare Laws, and the Company and its Subsidiaries holds all Regulatory Permits, if any, which are necessary for the operation of its business currently conducted. All Regulatory Permits are valid and in full force and effect. To the knowledge of the Company, (i) no Governmental Entity is considering limiting, suspending or revoking any Regulatory Permit held by the Company or any of its Subsidiaries, if any, and (ii) each third party that is a manufacturer, contractor or agent for the Company or any of its Subsidiaries is in compliance in all material respects with all Regulatory Permits, if any, and all applicable Healthcare Laws insofar as they pertain to the Company Products.
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(b) Neither the Company nor any of its Subsidiaries has, nor, to the Company’s knowledge, have any of their Representatives acting on their behalf, received any written notice that the FDA or any other Governmental Entity responsible for oversight or enforcement of any applicable Healthcare Law, or any institutional review board (or similar body responsible for oversight of human subjects research) or institutional animal care and use committee (or similar body responsible for oversight of animal research), has initiated, or threatened to initiate, any Action to restrict or suspend preclinical or nonclinical research on, or clinical study of, any Company Product or in which the Governmental Entity alleges or asserts a failure to comply with any applicable Healthcare Laws.
(c) Neither the Company nor any of its Subsidiaries is a business associate, as such term is defined in 45 C.F.R. § 160.103, as amended. Neither the Company nor any of its Subsidiaries or Representatives is, or in the last five (5) years has been, in material violation of HIPAA. To the knowledge of the Company, neither the Company nor any of its Subsidiaries is, or has been, under investigation by any Governmental Entity for a violation of HIPAA, including receiving any notices from the United States Department of Health and Human Services Office for Civil Rights relating to any such violations.
(d) The Company is, and for the last three (3) years has been, in material compliance with, and each Company Product subject to regulation by the FDA or other similar Governmental Entity, has been researched, developed, tested, manufactured, prepared, assembled, packaged, labeled, stored, handled, advertised, promoted, marketed, distributed, imported, procured, exported, and/or processed, in each case, to the extent such activities are conducted by the Company, in material compliance with all applicable Healthcare Laws.
(e) There are no Actions pending or, to the Company’s knowledge, threatened, with respect to any alleged violation by the Company or any of its Subsidiaries or, to the Company’s knowledge, any of their Representatives acting for or on their behalf, of the United States Federal Food, Drug, and Cosmetic Act (the “FDCA”) or any other applicable Healthcare Law as it relates to the Company or a Company Product, and neither the Company nor any of its Subsidiaries, nor to the Company’s knowledge, any of their Representatives acting on their behalf, is party to or subject to any corporate integrity agreement, monitoring agreement, consent decree, deferred prosecution agreement, settlement order or similar Contract with or imposed by any Governmental Entity related to any applicable Healthcare Law that applies to the transactions contemplated by this Agreement or any Ancillary Agreement.
(f) Neither the Company nor any of its Subsidiaries or Representatives has, nor as it relates to the Company or its Subsidiaries or any Company Product, to the Company’s knowledge, has any Person engaged by the Company or any of its Subsidiaries for contract research, consulting or other collaboration services with respect to any Company Product, made any untrue statement of a material fact or a fraudulent statement to the FDA or any other Governmental Entity responsible for enforcement or oversight with respect to applicable Healthcare Laws, or failed to disclose a material fact required to be disclosed to the FDA or such other Governmental Entity including adverse events or other safety information related to Company Products.
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(g) All non-clinical, preclinical and clinical investigations conducted or being conducted with respect to all Company Products by or at the direction of the Company or any of its Subsidiaries have been and are being conducted in material compliance with all applicable Law, including all applicable Healthcare Laws, including the applicable requirements of Good Laboratory Practices and Good Clinical Practices. For the past three (3) years, no such trials or investigations conducted by or on behalf of the Company has been subject to any clinical hold or any other proceeding or action requiring or requesting termination, suspension, or material modification of such investigations by the FDA or other Governmental Entity. All data and services the Company generates from its non-clinical, preclinical, and clinical investigations and the data and services the Company provides for purposes of research or development of pharmaceutical, biological, or medical device products are in material compliance with applicable Law, including, as applicable, 21 C.F.R. Part 11 and other laws pertaining to data security and data standards.
(h) None of the Company, its Subsidiaries or any of their directors, officers or employees, and, to the Company’s knowledge, none of the Company’s or its Subsidiaries’ individual independent contractors or other service providers, including clinical trial investigators, coordinators, or monitors, (i) have been or are currently disqualified, excluded or debarred under; (ii) to the Company’s knowledge, are currently subject to an investigation or Action that would reasonably be expected to result in disqualification, exclusion or debarment, the assessment of civil monetary penalties for violation of any health care programs of any Governmental Entity under, or (iii) have been convicted of any crime regarding health care products or services, or engaged in any conduct that would reasonably be expected to result in any such debarment, exclusion, disqualification, or ineligibility under: applicable Healthcare Laws, including, (A) debarment under 21 U.S.C. Section 335a or any similar Law (B) exclusion under 42 U.S.C. Section 1320a-7 or any similar Law, or (C) exclusion under 48 CFR Subpart Section 9.4, the System for Award Management Nonprocurement Common Rule. None of the Company, its Subsidiaries or any of their current or former directors, officers or employees, and, to the Company’s knowledge, none of the Company’s or its Subsidiaries’ individual independent contractors or other service providers to the extent acting on behalf of the Company or any of its Subsidiaries have been subject to any consent decree of, or criminal or civil fine or penalty imposed by, any Governmental Entity related to fraud, theft, embezzlement, breach of fiduciary responsibility, financial misconduct, or obstruction of an investigation of controlled substances.
(i) All material reports, documents, claims, permits, fees, and notices required to be filed, maintained, paid, or furnished to the FDA or any similar foreign Governmental Entity by the Company or any of its Subsidiaries have been so filed, maintained, paid or furnished on a timely basis, except as would not, individually or in the aggregate, have a Company Material Adverse Effect. To the knowledge of the Company, all such reports, documents, claims, permits, fees and notices were complete and accurate in all material respects on the date submitted (or were corrected or supplemented by a subsequent submission).
5.32 Information Supplied. None of the information supplied or to be supplied by the Company expressly for inclusion or incorporation by reference in the filings with the SEC and mailings to Parent’s shareholders with respect to the solicitation of proxies to approve the transactions contemplated by this Agreement and the Ancillary Agreements, if applicable, will, at the time of the Parent Shareholder Meeting or at the effective date of the Registration Statement, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading (subject to the qualifications and limitations set forth in the materials provided by the Company or included in the Parent SEC Documents, the Additional Parent SEC Documents, the SEC Statement or any Other Filing).
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND PARENT PARTIES
Except as disclosed in the Parent SEC Documents filed with or furnished to the SEC and publicly available in unredacted form no later than the second day prior to the date of this Agreement (to the extent the qualifying nature of such disclosure is reasonably apparent from the content of such Parent SEC Documents, but excluding any risk factor disclosures or other similar cautionary or predictive statements therein), it being acknowledged that nothing disclosed in such Parent SEC Documents shall be deemed to modify or qualify the representations and warranties set forth in Sections 6.1, 6.3, 6.8 or 6.12, Parent and each of Parent Parties when formed, hereby represent and warrant to the Company that:
6.1 Corporate Existence and Power. Parent is a company duly incorporated, validly existing and in good standing under the Laws of the British Virgin Islands. Acquirer, when formed, will be an exempted company duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands. Merger Sub, when formed, will be an exempted company duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands. Acquirer and Merger Sub will not hold any material assets or incurred any material liabilities, and will not carry on any business activities other than in connection with the Mergers. Each of the Parent Parties has all power and authority, corporate and otherwise, and all governmental licenses, franchises, Permits, authorizations, consents and approvals required to own and operate its properties and assets and to carry on its business as presently conducted and as proposed to be conducted. The Parent has made and, in the case of the Acquirer and Merger Sub, will, upon its formation, make available to Company, prior to the date of this Agreement, complete and accurate copies of the Organizational Documents of the Parent Parties, in each case as amended to the date hereof.
6.2 Merger Sub. Merger Sub will be formed solely for the purpose of engaging in the transactions and activities contemplated by this Agreement. Either Acquirer or a wholly owned (direct or indirect) Subsidiary of Acquirer will, upon the formation of Merger Sub, own, beneficially and of record, all of the outstanding shares of Merger Sub.
6.3 Corporate Authorization. Each of the Parent Parties has (and in the case of the Acquirer and Merger Sub, upon execution of a joinder to this Agreement, will have) all requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby, in the case of the Mergers, subject to receipt of the Parent Shareholder Approval. The execution and delivery by each of the Parent Parties of this Agreement and the Ancillary Agreements to which it is a party and the consummation by each of the Parent Parties of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of such Parent Party, save for the receipt of the Parent Shareholder Approval. No other corporate proceedings on the part of such Parent Party are necessary to authorize this Agreement or the Ancillary Agreements to which it is a party or to consummate the transactions contemplated by this Agreement (other than the Parent Shareholder Approval) or the Ancillary Agreements. This Agreement and the Ancillary Agreements to which such Parent Party is a party have been duly executed and delivered by such Parent Party and, assuming the due authorization, execution and delivery by each of the other parties hereto and thereto (other than a Parent Party), this Agreement and the Ancillary Agreements to which such Parent Party is a party constitute a legal, valid and binding obligation of such Parent Party, enforceable against such Parent Party in accordance with their respective terms, subject to the Enforceability Exceptions.
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6.4 Governmental Authorization. None of the execution, delivery or performance of this Agreement or any Ancillary Agreement by a Parent Party or the consummation by a Parent Party of the transactions contemplated hereby and thereby requires any consent, approval, license or other action by or in respect of, or registration, declaration or filing with any Authority except for (a) any SEC or Nasdaq filings and approval required to consummate the transactions contemplated hereunder, (b) the filing of the BVI Articles of Merger (and any other documents required by the BVI Business Companies Act) with the BVI Registry in connection with the Reincorporation Merger, (c) the filing of the Cayman Plan of Reincorporation Merger and Cayman Plan of Acquisition Merger (and any other documents required by the Cayman Companies Act in connection with the Reincorporation Merger and Acquisition Merger, respectively), and the filing of the Reincorporation Merger Surviving Company Memorandum and Articles and in respect of the change of name of the Reincorporation Merger Surviving Company, in each case, with the Cayman Registrar, and (d) any filing required pursuant to the HSR Act.
6.5 Non-Contravention. The execution, delivery and performance by a Parent Party of this Agreement or the consummation by a Parent Party of the transactions contemplated hereby and thereby do not and will not (a) contravene or conflict with the organizational or constitutive documents of the Parent Parties, (b) contravene or conflict with or constitute a violation of any provision of any Law or any Order binding upon the Parent Parties, (c) (i) require consent, approval or waiver under, (ii) constitute a default under or breach of (with or without the giving of notice or the passage of time or both), (iii) violate, (iv) give rise to any right of termination, cancellation, amendment or acceleration of any right or obligation of a Parent Party or to a loss of any material benefit to which a Parent Party is entitled, in the case of each of clauses (i) – (iv), under any provision of any Permit, Contract or other instrument or obligations binding upon a Parent Party or any of its respective properties, rights or assets, (d) result in the creation or imposition of any Lien (except for Permitted Liens) on any Parent Party’s properties, rights or assets, or (e) require any consent, approval or waiver from any Person pursuant to any provision of the Organizational Documents of any Parent Party, except for such consent, approval or waiver which shall be obtained (and a copy provided to the Company) prior to the Closing, except in the case of clauses (c) – (e) as would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.
6.6 Finders’ Fees. Except for the Persons identified on Schedule 6.6, there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of the Parent Parties or their Affiliates who might be entitled to any fee or commission from the Company or any of its Affiliates upon consummation of the transactions contemplated by this Agreement or any of the Ancillary Agreements.
6.7 Issuance of Shares. The Merger Consideration, when issued in accordance with this Agreement, will be duly authorized and validly issued, and will be fully paid and nonassessable, and each such share comprising the Merger Consideration shall be issued free and clear of preemptive rights and all Liens, other than transfer restrictions under applicable securities laws and the organizational or constitutive documents of Acquirer. The Merger Consideration shall be issued in compliance with all applicable securities Laws and other applicable Laws and without contravention of any other person’s rights therein or with respect thereto.
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6.8 Capitalization.
(a) As of the date of this Agreement, Parent is authorized to issue a maximum of 500,000,000 Parent Ordinary Shares, with a par value of US$0.0001 each of a single class, of which 19,366,075 Parent Ordinary Shares (inclusive of Parent Ordinary Shares included in any outstanding Parent Units) are issued and outstanding. As of the date of this Agreement, 14,950,000 Parent Public Warrants (inclusive of Parent Public Warrants included in any outstanding Parent Units) are issued and outstanding. No other shares of Parent or other voting securities of Parent are issued, reserved for issuance or outstanding. All issued and outstanding Parent Ordinary Shares are duly authorized, validly issued, fully paid and nonassessable and are not subject to, and were not issued in violation of, any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the BVI Business Companies Act, Parent’s Organizational Documents or any contract to which Parent is a party or by which Parent is bound. All outstanding Parent Warrants have been duly authorized and validly issued and constitute valid and binding obligations of Parent, enforceable against Parent in accordance with their terms, subject to the Enforceability Exceptions and are not subject to, and were not issued in violation of, any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the BVI Business Companies Act, Parent’s Organizational Documents or any contract to which Parent is a party or by which Parent is bound. Except as set forth in Parent’s Organizational Documents, there are no outstanding contractual obligations of Parent to repurchase, redeem or otherwise acquire any Parent Ordinary Shares or any capital equity of Parent. There are no outstanding contractual obligations of Parent to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person. All outstanding Parent Units, Parent Ordinary Shares, and Parent Warrants have been issued in compliance with all applicable securities and other applicable Laws and were issued free and clear of all Liens other than transfer restrictions under applicable securities Laws and the organizational or constitutional documents of Parent.
(b) Upon formation, Merger Sub shall have an authorized share capital of US$50,000 divided into 500,000,000 ordinary shares, par value $0.0001 per share (the “Merger Sub Ordinary Share”), of which one (1) Merger Sub Ordinary Share will be issued and outstanding at such time. No other shares or other voting securities of Merger Sub are issued, reserved for issuance or outstanding. All issued and outstanding Merger Sub Ordinary Share(s) will be duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of Merger Sub’s Organizational Documents or any contract to which Merger Sub will be a party or by which Merger Sub will be bound. Except as will be set forth in Merger Sub’s Organizational Documents, there will be no outstanding contractual obligations of Merger Sub to repurchase, redeem or otherwise acquire any Merger Sub Ordinary Share(s) or any share capital or equity of Merger Sub. There will be no outstanding contractual obligations of Merger Sub to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person.
(c) Upon formation, Acquirer shall have an authorized share capital of US$50,000 divided into 500,000,000 Acquirer Ordinary Shares, of which one (1) Acquirer Ordinary Share will be issued and outstanding at such time. No other shares or other voting securities of Acquirer will be issued, reserved for issuance or outstanding. All issued and outstanding Acquirer Ordinary Shares will be duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of Acquirer’s Organizational Documents or any contract to which Acquirer will be a party or by which Acquirer will be bound. Except as will be set forth in Acquirer’s Organizational Documents, there will be no outstanding contractual obligations of Acquirer to repurchase, redeem or otherwise acquire any Acquirer Ordinary Shares or any capital equity of Acquirer. There will be no outstanding contractual obligations of Acquirer to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person.
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6.9 Information Supplied. None of the information supplied or to be supplied by the Parent Parties expressly for inclusion or incorporation by reference in the filings with the SEC and mailings to Parent’s shareholders with respect to the solicitation of proxies to approve the transactions contemplated by this Agreement and the Ancillary Agreements, if applicable, will, at the date of filing or mailing, at the time of the Parent Shareholder Meeting or at the Effective Time, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading (subject to the qualifications and limitations set forth in the materials provided by Parent or included in the Parent SEC Documents, the Additional Parent SEC Documents, the SEC Statement or any Other Filing).
6.10 Trust Fund. As of August 28, 2024, Parent has at least $160,166,724.15 in the trust fund established by Parent for the benefit of its public shareholders (the “Trust Fund”) in a trust account (the “Trust Account”) maintained by Continental Stock Transfer & Trust Company (the “Trustee”), and such monies are invested in “government securities” (as such term is defined in the Investment Company Act of 1940) and held in trust by the Trustee pursuant to the Investment Management Trust Agreement dated as of July 24, 2023, between Parent and the Trustee (as amended, the “Trust Agreement”). The Trust Agreement is valid and in full force and effect and enforceable in accordance with its terms, except as may be limited by the Enforceability Exceptions, 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 Trust Agreement in the Parent SEC Documents to be inaccurate in any material respect or that would entitle any Person (other than public shareholders of Parent holding Parent Ordinary Shares sold in Parent’s IPO who shall have elected to redeem their Ordinary Shares pursuant to the Parent Articles) to any portion of the proceeds in the Trust Account. Prior to the Closing, none of the funds held in the Trust Account may be released except in accordance with the Trust Agreement and the Parent Articles. Parent has performed all material obligations required to be performed by it to date under, and is not in material default or delinquent in performance or any other respect (claimed or actual) in connection with, the Trust Agreement, and, to the Knowledge of Parent, no event has occurred which, with due notice or lapse of time or both, would reasonably be expected to constitute such a material default thereunder. There are no claims or proceedings pending with respect to the Trust Account. Parent has not released any money from the Trust Account (other than as permitted by the Trust Agreement). As of the Effective Time and subject to the approval by Parent and the holders of Parent Ordinary Shares, (i) the obligations of Parent to dissolve or liquidate pursuant to the Parent Articles shall terminate, and (ii) Parent shall have no obligation whatsoever pursuant to the Parent Articles to dissolve and liquidate the assets of Parent by reason of the consummation of the transactions contemplated by this Agreement. Following the Effective Time, no shareholder of Parent (other than the underwriters of the IPO or Authority for Taxes) shall be entitled to receive any amount from the Trust Account except to the extent a Parent’s public shareholder shall have elected to tender its Parent Ordinary Shares for redemption pursuant to the Parent Articles (or in connection with an extension of Parent’s deadline to consummate a “Business Combination” as such term is defined in the Parent Articles).
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6.11 Listing. The Parent Ordinary Shares, Parent Units, and Parent Warrants are listed on Nasdaq, with trading tickers “KVAC,” “KVACU” and “KVACW.”
6.12 Board Approval.
(a) Parent’s Board of Directors (including any required committee or subgroup of such board) has unanimously (i) declared the advisability of the transactions contemplated by this Agreement, (ii) determined that the transactions contemplated hereby are in the best interests of Parent and its shareholders, (iii) determined that the transactions contemplated hereby constitutes a “Business Combination” as such term is defined in the Parent Articles and (iv) recommended to the Parent’s shareholders to adopt and approve each of the Parent Proposals (“Parent Board Recommendation”). Such resolutions have not been modified or rescinded by Parent’s Board of Directors.
(b) Each of the Board of Directors of Acquirer and of Merger Sub will, on or shortly after the date of each such company’s formation, unanimously (i) declare the advisability of the transactions contemplated by this Agreement and (ii) determine that the transactions contemplated hereby are in the best interests of its sole shareholder. Once adopted, such resolutions will not be modified or rescinded by the respective Acquirer's Board of Directors and Merger Sub’s Board of Directors.
6.13 Parent SEC Documents and Financial Statements.
(a) Parent has filed all forms, reports, schedules, statements and other documents, including any exhibits thereto, required to be filed or furnished by Parent with the SEC since July 24, 2023 under the Exchange Act or the Securities Act, together with any amendments, restatements or supplements thereto, and will use reasonable best efforts to file all such forms, reports, schedules, statements and other documents required to be filed subsequent to the date of this Agreement (the “Additional Parent SEC Documents”). Parent has made available to the Company true and complete copies in the form filed with the SEC of all of the following, except to the extent available in full without redaction on the SEC’s website through EDGAR for at least two (2) Business Days prior to the date of this Agreement: (i) Parent’s Annual Reports on Form 10-K for each fiscal year of Parent beginning with the first year that Parent was required to file such a form, (ii) Parent’s Quarterly Reports on Form 10-Q for each fiscal quarter of Parent beginning with the first quarter Parent was required to file such a form, (iii) all proxy statements relating to Parent’s meetings of shareholders (whether annual or special) held, and all information statements relating to shareholder consents, since the beginning of the first fiscal year referred to in clause (i) above, (iv) its Form 8-Ks filed since the beginning of the first fiscal year referred to in clause (i) above, and (v) all other forms, reports, registration statements and other documents (other than preliminary materials if the corresponding definitive materials have been provided to the Company pursuant to this Section 6.13) filed by Parent with the SEC since July 24, 2023 (the forms, reports, registration statements and other documents referred to in clauses (i) through (v) above, whether or not available through EDGAR, collectively, as they have been amended, revised or superseded by a later filing, the “Parent SEC Documents”).
(b) Parent SEC Documents were, and the Additional Parent SEC Documents will be, prepared in all material respects in accordance with the requirements of the Securities Act, the Exchange Act, and the Sarbanes-Oxley Act, as the case may be, and the rules and regulations thereunder. Parent SEC Documents did not, and the Additional Parent SEC Documents will not, at the time they were or are filed, as the case may be, with the SEC (except to the extent that information contained in any Parent SEC Document or Additional Parent SEC Document has been or is revised or superseded by a later filed Parent SEC Document or Additional Parent SEC Document, then on the date of such filing) 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; provided, however, that the foregoing does not apply to statements in or omissions in any information supplied or to be supplied by the Company expressly for inclusion or incorporation by reference in the SEC Statement or Other Filing.
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(c) As used in this Section 6.13, 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 in accordance with applicable SEC rules.
(d) Except as not required in reliance on exemptions from various reporting requirements by virtue of Parent’s status as an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, or “smaller reporting company” within the meaning of the Exchange Act, since its IPO, (i) Parent has established and maintained a system of internal controls over financial reporting (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) sufficient to provide reasonable assurance regarding the reliability of Parent’s financial reporting and the preparation of Parent’s financial statements for external purposes in accordance with U.S. GAAP and (ii) Parent has established and maintained disclosure controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) designed to ensure that material information relating to Parent is made known to Parent’s principal executive officer and principal financial officer by others within Parent.
(e) Parent has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.
(f) Since its IPO, Parent has complied in all material respects with all applicable listing and corporate governance rules and regulations of Nasdaq. The classes of securities representing issued and outstanding Parent Ordinary Shares are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq. As of the date of this Agreement, there is no material Action pending or, to the Knowledge of Parent, threatened against Parent by Nasdaq or the SEC with respect to any intention by such entity to deregister Parent Ordinary Shares or prohibit or terminate the listing of Parent Ordinary Shares on Nasdaq or prohibit the transfer of the listing to Nasdaq. Parent has not taken any action that is designed to terminate the registration of Parent Ordinary Shares under the Exchange Act.
(g) The Parent SEC Documents contain true and complete copies of the applicable Parent Financial Statements. Except as disclosed in the Parent SEC Documents, the Parent Financial Statements (i) are complete and accurate and fairly present, in conformity with U.S. GAAP under the standards of the PCAOB applied on a consistent basis in all material respects and Regulation S-X or Regulation S-K, as applicable, the financial position of Parent as at the respective dates thereof, and the results of its operations, shareholders’ equity and cash flows for the respective periods then ended (subject, in the case of any unaudited interim financial statements, to normal year-end audit adjustments (none of which is material) and the absence of footnotes), (ii) were prepared in conformity with U.S. GAAP under the standards of the PCAOB applied on a consistent basis during the periods involved (subject, in the case of any unaudited financial statements, to normal year-end audit adjustments (none of which is material) and the absence of footnotes), (iii) in the case of the audited Parent Financial Statements, were audited in accordance with the standards of the PCAOB and (iv) comply in all material respects with the applicable accounting requirements and with the rules and regulations of the SEC, the Exchange Act and the Securities Act in effect as of the respective dates thereof (including Regulation S-X or Regulation S-K, as applicable).
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(h) Except (i) as specifically disclosed, reflected or fully reserved against in the Parent Financial Statements or disclosed in Parent SEC Documents, (ii) for liabilities and obligations incurred in the ordinary course of business since Parent’s incorporation and (iii) liabilities that would not reasonably be expected to have a Material Adverse Effect in respect of Parent Parties, there are no liabilities, debts or obligations (whether accrued, fixed or contingent, liquidated or unliquidated, asserted or unasserted or otherwise) relating to Parent.
(i) Parent has established and maintains systems of internal accounting controls that are designed to provide, in all material respects, reasonable assurance that (i) all transactions are executed in accordance with management’s authorization and (ii) all transactions are recorded as necessary to permit preparation of proper and accurate financial statements in accordance with U.S. GAAP and to maintain accountability for Parent’s and its Subsidiaries’ assets. Parent maintains and, for all periods covered by the Parent Financial Statements, has maintained books and records of Parent in the ordinary course of business that are accurate and complete and reflect the revenues, expenses, assets and liabilities of Parent in all material respects.
(j) Since its incorporation, Parent has not received any written complaint, allegation, assertion or claim that there is (i) a “significant deficiency” in the internal controls over financial reporting of Parent to Parent’s Knowledge, (ii) a “material weakness” in the internal controls over financial reporting of Parent to Parent’s Knowledge or (iii) Fraud, whether or not material, that involves management or other employees of Parent who have a significant role in the internal controls over financial reporting of Parent.
6.14 Certain Business Practices. Neither Parent nor any Representative of Parent has (a) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (b) made any unlawful payment to foreign or domestic government officials, employees or political parties or campaigns, (c) violated any provision of the Foreign Corrupt Practices Act of 1977 or (d) made any other unlawful payment. Neither Parent nor any director, officer, agent or employee of Parent (nor any Person acting on behalf of any of the foregoing, but solely in his or her capacity as a director, officer, employee or agent of Parent) has, since the IPO, directly or indirectly, given or agreed to give any gift or similar benefit in any material amount to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder Parent or assist Parent in connection with any actual or proposed transaction, which, if not given or continued in the future, would reasonably be expected to (i) adversely affect the business of Parent and (ii) subject Parent to suit or penalty in any private or governmental Action.
6.15 Anti-Money Laundering Laws. The operations of Parent are and have at all times been conducted in compliance with the Money Laundering Laws, and no Action involving Parent with respect to the Money Laundering Laws is pending or, to the Knowledge of Parent, threatened.
6.16 Affiliate Transactions. Except as described in Parent SEC Documents, there are no transactions, agreements, arrangements or understandings between Parent or any of its Subsidiaries, on the one hand, and any director, officer, employee, shareholder, warrant holder or Affiliate of Parent or any of its Subsidiaries, on the other hand.
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6.17 Compliance with Laws.
(a) No Parent Party nor, to the Knowledge of Parent, any Representative or other Person acting on behalf of a Parent Party, is in violation in any material respect of, and, to the Knowledge of Parent, since the IPO, no such Person has failed to be in compliance in all material respects with, all material Laws and Orders. Since the IPO, (i) to the Knowledge of Parent, no event has occurred or circumstance exists that (with or without notice or due to lapse of time) would reasonably constitute or be likely to result in a violation by any Parent Party of, or failure on the part of the Parent Party to comply with, or any material liability suffered or incurred by any Parent Party in respect of any violation of or material noncompliance with, any Laws, Orders or policies by Authority that are or were applicable to it or the conduct or operation of its business or the ownership or use of any of its assets and (ii) no Action is pending, or to the Knowledge of Parent, threatened, alleging any such violation or noncompliance by a Parent Party. Since the IPO, the Parent Parties have not been threatened in writing or, to Parent’s Knowledge, orally to be charged with, or given written or, to Parent’s Knowledge, oral notice of any material violation of any Law or any judgment, order or decree entered by any Authority.
(b) Neither of the Parent Parties nor, to the Knowledge of Parent, any Representative or other Person acting on behalf of the Parent Parties is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.
6.18 Absence of Certain Changes. From the date of the latest balance sheet included in the Parent Financial Statements until the date of this Agreement, (a) the Parent Parties have conducted their respective businesses in the ordinary course and in a manner consistent with past practices; and (b) there has not been any Material Adverse Effect in respect of Parent Parties.
6.19 Litigation. There is no (a) Action pending or, to the Knowledge of Parent, threatened against Parent or any of its Subsidiaries or that affects its or their assets or properties, or (b) Order outstanding against Parent or any of its Subsidiaries or that affects its or their assets or properties. Neither Parent nor any of its Subsidiaries is party to a settlement or similar agreement regarding any of the matters set forth in the preceding sentence that contains any ongoing obligations, restrictions or liabilities (of any nature) that are material to Parent and its Subsidiaries.
6.20 Brokers and Other Advisors. No broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Parent or any of its Subsidiaries except for Persons, if any, whose fees and expenses shall be paid by Parent.
6.21 Tax Matters.
(a) Each Parent Party (i) has filed (or caused to be filed) all income and other material Tax Returns which were required to have been filed by it under applicable Law, and all such Tax Returns are true, correct and complete in all material respects, and (ii) has paid all material Taxes (whether or not shown on such Tax Returns) which have become due and payable by it under applicable Law.
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(b) There is no Action that is ongoing or proposed in writing to any Parent Party by a Taxing Authority with respect to a material amount of Taxes of any Parent Party. No statute of limitations in respect of the assessment or collection of any Taxes of any Parent Party for which a Lien may be imposed on any assets of any Parent Party has been waived or extended (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business), which waiver or extension is still in effect.
(c) Each Parent Party has withheld or collected and paid over to the applicable Taxing Authority all material Taxes required to have been withheld or collected by it in connection with any amounts paid or owing to any employee, creditor, independent contractor or other third party.
(d) No Parent Party has requested any private letter ruling from the IRS (or any comparable ruling from any other Taxing Authority).
(e) There are no Liens (other than Permitted Liens) for a material amount of Taxes upon any of the assets of any Parent Party.
(f) No Parent Party has received any written claim from a Taxing Authority in a jurisdiction where it has not paid any Tax or filed Tax Returns asserting that it is or may be subject to Tax in such jurisdiction, which claim has not been resolved, and no Parent Party has a permanent establishment (within the meaning of an applicable Tax treaty) or other fixed place of business in a country other than the country in which it is organized or incorporated.
(g) No Parent Party is a party to any Tax sharing, Tax indemnity or Tax allocation Contract (other than a Contract entered into in the ordinary course of business, the primary purpose of which is not related to Taxes).
(h) Parent has not been a member of an “affiliated group” within the meaning of Section 1504(a) of the Code filing a consolidated federal income Tax Return (other than a group the common parent of which was Parent). No Parent Party has any material liability for the Taxes of any other Person (other than any other Parent Party): (1) under Treasury Regulation Section 1.1502-6 (or any similar provision of applicable Law), (2) as a transferee or successor or (3) otherwise by operation of applicable Law (other than liabilities in respect of any Contract entered into in the ordinary course of business and the primary purpose of which does not relate to Taxes).
(i) No Parent Party has been a party to any “listed transaction” as defined in Section 6707A(c)(2) of the Code and Treasury Regulation Section 1.6011-4(b)(2).
(j) No Parent Party will be required to include any material item of income in, or exclude any material item of deduction, from the determination of taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) adjustment under Section 481 of the Code (or any corresponding or similar provision of state, local or non-US. income Tax Law) by reason of a change in method of accounting prior to the Closing; (ii) any “closing agreement” described in Section 7121 of the Code (or similar provision of state, local or non-U.S. Law) executed prior to the Closing; (iii) any installment sale or open sale transaction disposition made prior to the Closing; or (iv) any prepaid amount received prior to the Closing outside the ordinary course of business.
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(k) No Parent Party has, in any year for which the applicable statute of limitations remains open, distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 or Section 361 of the Code.
(l) Merger Sub will be formed solely to effect the Acquisition Merger. From its formation until the Closing, Merger Sub at all times will be a wholly-owned, first-tier subsidiary of Acquirer.
(m) No Parent Party has any present plan or intention to sell or otherwise dispose of any material assets of the Company acquired in the Acquisition Merger, except for dispositions made in the ordinary course of business or transfers described in Section 368(a)(2)(C) of the Code and the Treasury Regulations promulgated thereunder.
(n) No Parent Party has a present plan or intention to (i) to discontinue or cause the discontinuation of every significant “historic business” line (within the meaning of Treasury Regulation Section 1.368-1(d)(2)) of the Company and (ii) to discontinue the use or cause the discontinuation of the use of a significant portion of the Company’s “historic business assets” (within the meaning of Treasury Regulation Section 1.368-1(d)(3)) in a business.
(o) Each of the Parent Parties is properly treated as an association taxable as a corporation for U.S. federal income Tax purposes.
(p) To the Knowledge of each Parent Party, there are no facts, circumstances or plans, and no Parent Party has taken or agreed to take any action, in each case not contemplated by this Agreement or any Ancillary Agreement, that, either alone or in combination, would reasonably be expected to prevent the Reincorporation Merger from qualifying for the Reincorporation Intended Tax Treatment or the Acquisition Merger from qualifying for the Acquisition Intended Tax Treatment.
6.22 Employees; Benefit Plans (a). Except as set forth on Schedule 6.22, Parent does not have and has never had any employees. Parent has no unsatisfied material liability with respect to any employee. Parent has never and does not currently maintain, sponsor, contribute to or have any direct or indirect liability under any Plan, and neither the execution and delivery of this Agreement or the Ancillary Agreements nor the consummation of the transactions contemplated hereby and thereby will: (a) result in or trigger any payment (including severance, unemployment compensation, bonus or otherwise) becoming due to any director, officer or employee of Parent; or (b) result in the acceleration of the time of payment or vesting of any such employee benefits. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby shall, either alone or in connection with any other event(s) give rise to any amount that would not be deductible by Parent by reason of Section 280G of the Code with respect to any amount paid or payable under a Plan or any other arrangement entered into by Parent or its Affiliates prior to the Closing Date.
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ARTICLE VII
COVENANTS OF THE PARTIES PENDING CLOSING
7.1 Conduct of the Business.
(a) The Company covenants and agrees that, except as expressly contemplated by this Agreement or the Ancillary Agreements or as set forth on Schedule 7.1(a), from the date hereof until the earlier of the Closing Date and the termination of this Agreement in accordance with its terms (the “Interim Period”), the Company Group shall conduct its business only in the ordinary course (including the payment of accounts payable and the collection of accounts receivable), consistent with past practices and use its commercially reasonable efforts to preserve intact its business and assets. Without limiting the generality of the foregoing, and except as expressly contemplated by this Agreement or the Ancillary Agreements or as set forth on Schedule 7.1(a) or as required by applicable Law, from the date hereof until the earlier of the Closing Date and the termination of this Agreement in accordance with its terms, without Parent’s prior written consent (which shall not be unreasonably conditioned, withheld or delayed), neither the Company shall nor shall the Company permit any of its Subsidiaries to:
(i) amend, modify or supplement its certificate of incorporation, memorandum and articles of association, or bylaws or other organizational or governing documents except as contemplated hereby, or engage in any reorganization, reclassification, liquidation, dissolution or similar transaction;
(ii) other than in the ordinary course of business, amend, waive any provision of, terminate prior to its scheduled expiration date, or otherwise compromise in any material way or relinquish any material right under, any Material Contract;
(iii) other than in the ordinary course of business consistent with past practice, modify, amend or enter into any contract, agreement, lease, license or commitment, including for capital expenditures, that extends for a term of one year or more or obligates the payment by the Company of more than $1,500,000 individually;
(iv) make any capital expenditures in excess of $1,000,000 (individually or in the aggregate);
(v) sell, lease, license, or otherwise dispose of any of the Company’s material assets (other than Intellectual Property), except pursuant to existing contracts or commitments disclosed herein or in the ordinary course of business consistent with past practice;
(vi) other than in the ordinary course of business, sell, lease, license or otherwise dispose of any Company Owned IP;
(vii) (A) pay, declare or promise to pay any dividends, distributions or other amounts with respect to its capital stock or other equity securities; (B) pay, declare or promise to pay any other amount to any shareholder or other equityholder in its capacity as such; and (C) except as contemplated hereby or by any Ancillary Agreement, amend any material term, right or obligation with respect to any outstanding shares of its capital stock or other equity securities;
(viii) modify the Company’s currently existing capitalization table other than (1) grants of any new Company Options or Company RSUs or (2) pursuant to a Plan as in existence as of the date hereof;
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(ix) subject to Section 7.1(a)(xvii) (A) make any loan, advance or capital contribution to any Person; (B) incur any Indebtedness including drawings under the lines of credit in excess of an aggregate principal amount of $5,000,000 or such lesser amount if the aggregate principal amount of such new Indebtedness together with the aggregate principal amount all other Indebtedness of the Company would exceed $5,000,000 other than intercompany Indebtedness; or (C) repay or satisfy any Indebtedness, other than the repayment of Indebtedness in accordance with the terms thereof;
(x) suffer or incur any new Lien, except for Permitted Liens, on the Company’s assets;
(xi) delay, accelerate or cancel, or waive any material right with respect to, any receivables or Indebtedness owed to the Company, or write off or make reserves against the same (other than in the ordinary course of business consistent with past practice);
(xii) merge or consolidate or enter a similar transaction with, or acquire all or substantially all of the assets or business of, any other Person; make any material investment in any Person; or be acquired by any other Person;
(xiii) terminate or allow to lapse any insurance policy protecting any of the Company’s material assets, unless simultaneously with such termination or lapse, a replacement policy underwritten by an insurance company of nationally recognized standing having comparable deductions and providing coverage equal to or greater than the coverage under the terminated or lapsed policy for substantially similar premiums or less is in full force and effect;
(xiv) institute, settle or agree to settle any Action before any Authority, in each case in excess of $500,000 (exclusive of any amounts covered by insurance) or that imposes material injunctive or other material non-monetary relief on such party;
(xv) except as required by U.S. GAAP, make any material change in its accounting principles, methods or practices or write down in any material respect the value of its assets;
(xvi) change its principal place of business or, except as contemplated herein, jurisdiction of organization;
(xvii) (A) issue, redeem or repurchase any shares of Company Capital Stock or other securities of the Company, or any securities exchangeable for or convertible into any shares of Company Capital Stock or other securities of the Company, or (B) enter into any agreement with any Person with respect to the sale or issuance of any Company Capital Stock or other securities of the Company or any securities exchangeable for or convertible into any shares of Company Capital Stock or other securities of the Company, except in each case, in connection with the (1) exercise of rights under the terms of any of the Company Future Convertible Loans or Company RSUs, or (2) any Company equity financing of up to $50,000,000 in the aggregate;
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(xviii) (A) make, change or revoke any material Tax election; (B) compromise any material claim, notice, audit report or assessment in respect of Taxes; (C) enter into any Tax allocation, Tax sharing or Tax indemnity Contract (other than a Contract entered into in the ordinary course of business consistent with past practices, the primary purpose of which is not related to Taxes); (D) surrender or forfeit any right to claim a material Tax refund; or (E) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Acquisition Intended Tax Treatment;
(xix) enter into any material transaction with or distribute or advance any material assets or property to any of its Affiliates, other than the payment of salary and benefits in the ordinary course;
(xx) other than as required by Law or by a Plan, (A) materially increase the compensation or benefits of any employee of the Company at the level of manager or above, except for annual compensation increases in the ordinary course of business consistent with past practices, (B) accelerate the vesting or payment of any compensation or benefits of any employee or service provider of the Company, (C) enter into, amend or terminate any Plan (or any plan, program, agreement or arrangement that would be a Plan if in effect on the date hereof), (D) make any loan to any present or former employee or other individual service provider of the Company, other than advancement of expenses in the ordinary course of business consistent with past practices, (E) enter into, amend or terminate any collective bargaining agreement or other agreement with a labor union or labor organization; or (F) adopt any severance or retention Plan or policy;
(xxi) fail to duly observe and conform to any applicable Laws and Orders; or
(xxii) agree or commit to do any of the foregoing.
(b) Each Parent Party covenants and agrees that, except as expressly contemplated by this Agreement or the Ancillary Agreements or as set forth on Schedule 7.1(b), during the Interim Period, Parent shall conduct its business only in the ordinary course (including the payment of accounts payable and the collection of accounts receivable), consistent with past practices and use its commercially reasonable efforts to preserve intact its business and assets. Without limiting the generality of the foregoing, and except as expressly contemplated by this Agreement or the Ancillary Agreements, or as required by applicable Law, from the date hereof until the earlier of the Closing Date and the termination of this Agreement in accordance with its terms, without the Company’s prior written consent (which shall not be unreasonably conditioned, withheld or delayed), no Parent Party shall:
(i) amend, modify or supplement the Parent Articles or the Trust Agreement except as contemplated hereby or to extend the time Parent has to complete a business combination (including, in connection therewith, to amend the amount of any extension fee to be paid to the Trust Account in the future), or engage in any reorganization, reclassification, liquidation, dissolution or similar transaction;
(ii) amend, waive any provision of, terminate prior to its scheduled expiration date, or otherwise compromise in any material way or relinquish any material right under, any material contract, agreement, lease, license or other right or asset of Parent, as applicable;
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(iii) modify, amend or enter into any contract, agreement, lease, license or commitment, that extends for a term of one year or more or obligates the payment by of more than $150,000 (individually or in the aggregate);
(iv) make any capital expenditures;
(v) except for redemption by Parent of Parent Ordinary Shares and Parent Units held by its public shareholders pursuant to the Parent Articles, (A) pay, declare or promise to pay any dividends, distributions or other amounts with respect to its capital stock or other equity securities; (B) pay, declare or promise to pay any other amount to any shareholder or other equityholder in its capacity as such; and (C) except as contemplated hereby or by any Ancillary Agreement, amend any material term, right or obligation with respect to any outstanding shares of its capital stock or other equity securities;
(vi) (A) make any loan, advance or capital contribution to any Person; (B) incur any Indebtedness from and after the date of this Agreement including drawings under lines of credit in excess of an aggregate principal amount of $1,500,000, provided that any such Indebtedness shall provide that any amounts due thereunder, including principal and interest, shall be repaid solely by the issuance of capital stock, other than (1) loans evidenced by promissory notes made to Parent as working capital advances as described in the Prospectus and (2) intercompany Indebtedness; or (C) repay or satisfy any Indebtedness, other than the repayment of Indebtedness in accordance with the terms thereof;
(vii) merge or consolidate or enter a similar transaction with, or acquire all or substantially all of the assets or business of, any other Person; make any material investment in any Person; or be acquired by any other Person;
(viii) institute, settle or agree to settle any Action before any Authority, in each case in excess of $100,000 (exclusive of any amounts covered by insurance) or that imposes material injunctive or other material non-monetary relief on such party;
(ix) except as required by U.S. GAAP, make any material change in its accounting principles, methods or practices or write down in any material respect the value of its assets;
(x) except as contemplated herein, change its jurisdiction of organization;
(xi) issue, redeem or repurchase any capital stock, shares, membership interests or other securities, or issue any securities exchangeable for or convertible into any shares of its capital stock, shares or other securities, other than any redemption by Parent of Parent Ordinary Shares and Parent Units held by its public shareholders pursuant to the Parent Articles or as otherwise contemplated herein or in any Ancillary Agreement, or in connection with any PIPE Investment;
(xii) (A) make, change or revoke any material Tax election; (B) compromise any material claim, notice, audit report or assessment in respect of Taxes; (C) enter into any Tax allocation, Tax sharing or Tax indemnity Contract (other than a Contract entered into in the ordinary course of business consistent with past practices, the primary purpose of which is not related to Taxes); (D) surrender or forfeit any right to claim a material Tax refund, or (E) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Reincorporation Intended Tax Treatment or the Acquisition Intended Tax Treatment;
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(xiii) except as contemplated herein, enter into any material transaction with any of its Affiliates, other than the payment of salary and benefits in the ordinary course;
(xiv) hire or offer to hire any additional employees, or engage or offer to engage any consultant, independent contractor, or service provider (except for such employees, independent contractors, or service providers who will exclusively perform services for the Parent before and after the Closing);
(xv) fail to duly observe and conform to any applicable Laws and Orders;
(xvi) except in connection with the PIPE Investment or as otherwise contemplated herein or in any Ancillary Agreement, issue any shares, execute agreement with equity investors or otherwise seek additional financing from potential equity or equity-linked investors;
(xvii) engage in any activities or business, other than activities or business (i) currently conducted by Parent of the date of this Agreement (ii) in connection with or incident or related to Parent’s organization, incorporation or formation, as applicable, or continuing corporate (or similar) existence or as contemplated by the Parent SEC Documents, (iii) contemplated by, or incident or related to, this Agreement or the other Ancillary Agreements, the performance of covenants or agreements hereunder or thereunder or the consummation of the transactions contemplated by this Agreement or (iv) that are (A) administrative or ministerial and (B) immaterial in nature; or
(xviii) agree or commit to do any of the foregoing.
(c) Notwithstanding the foregoing, the Company and Parent, and its Subsidiaries, shall be permitted to take any and all actions required to comply in all material respects with any applicable COVID-19 Measures or any changes thereto.
(d) Nothing in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the Company’s operations prior to the Outside Closing Date, and nothing in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations prior to the Outside Closing Date. Prior to the Outside Closing Date, each of the Company, Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
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7.2 Acquirer Nasdaq Listing. From the date of this Agreement through the Closing, Acquirer shall apply for, and shall use reasonable best efforts to cause, Acquirer Ordinary Shares to be issued in connection with the Transactions to be approved for listing on Nasdaq or Alternate Exchange and accepted for clearance by the DTC, subject to official notice of issuance, prior to the Closing Date.
7.3 No trading in Parent Ordinary Shares. The Company acknowledges and agrees that each of the Company and its Subsidiaries is aware of the restrictions imposed by U.S. federal securities Laws and the rules and regulations of the SEC and Nasdaq promulgated thereunder or otherwise and other applicable Laws on a Person possessing material nonpublic information about a publicly traded company. The Company hereby agrees that, while it is in possession of such material nonpublic information, it shall not purchase or sell any securities of Parent (except with the prior written consent of Parent), take any other action with respect to Parent in violation of such Laws, or cause or encourage any third party to do any of the foregoing.
7.4 Exclusivity.
(a) During the Interim Period, neither the Company, on the one hand, nor Parent, on the other hand, shall, and such Persons shall cause each of their respective Representatives not to, without the prior written consent of the other party (which consent may be withheld in the sole and absolute discretion of the party asked to provide consent), directly or indirectly, (i) encourage, solicit, initiate, engage or participate in negotiations with any Person concerning any Alternative Transaction, (ii) take any other action intended or designed to facilitate the efforts of any Person relating to a possible Alternative Transaction, (iii) approve, recommend or enter into any Alternative Transaction or any contract or agreement related to any Alternative Transaction or (iv) otherwise cooperate in any way with, or assist or participate in, or knowingly facilitate or encourage any effort or attempt by any Person to do or seek to do any of the foregoing; provided, however, that the act of informing Persons of the provisions of this Section 7.4, or of the existence of this Agreement, will not be deemed to “encourage,” “solicit,” “initiate,” “engage” or “participate” for purposes of, or otherwise constitute a violation of this Section 7.4(a). Immediately following the execution of this Agreement, the Company, on the one hand, and Parent, on the other hand, shall, and shall cause each of their Representatives, to terminate any existing discussion or negotiations with any Persons other than the Company or Parent, as applicable, concerning any Alternative Transaction. Each of the Company and Parent shall be responsible for any acts or omissions of any of its respective Representatives that, if they were the acts or omissions of the Company or Parent, as applicable, would be deemed a breach of such party’s obligations hereunder (it being understood that such responsibility shall be in addition to and not by way of limitation of any right or remedy the Company or Parent, as applicable, may have against such Representatives with respect to any such acts or omissions). For purposes of this Agreement, the term “Alternative Transaction” means any of the following transactions involving the Company or Parent, or Parent’s Subsidiaries, (other than the transactions contemplated by this Agreement or the Ancillary Agreements): (A) any merger, consolidation, share exchange, business combination or other similar transaction, (B) with respect to the Company, any sale, lease, exchange, transfer or other disposition of all or a material portion of the assets of the Company or its Subsidiaries (other than sales of inventory in the ordinary course of business) or any of the capital stock or other equity interests of the Company or its Subsidiaries in a single transaction or series of transactions or (C) with respect to Parent, any other Business Combination.
(b) In the event that there is an unsolicited proposal for, or an indication of interest in entering into, an Alternative Transaction, communicated in writing to the Company or Parent or any of their respective Representatives (each, an “Alternative Proposal”), such party shall as promptly as practicable (and in any event within three (3) Business Days after receipt thereof) advise the other parties to this Agreement, orally and in writing, of such Alternative Proposal and the material terms and conditions thereof (including any changes thereto) and the identity of the Person making any such Alternative Proposal. The Company and Parent shall keep each other informed on a reasonably current basis of material developments with respect to any such Alternative Proposal. As used herein with respect to Parent, the term “Alternative Proposal” shall not include the receipt by Parent of any unsolicited communications (including the receipt of draft non-disclosure agreements) in the ordinary course of business inquiring as to Parent’s interest in a potential target for a business combination; provided, however, that Parent shall inform the person initiating such communication of the existence of this Agreement.
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7.5 Access to Information. During the Interim Period, the Company and Parent shall each, use its commercially reasonable efforts to, (a) upon reasonable prior written notice and during regular business hours, continue to give the other party, its legal counsel and its other Representatives full access to the offices, properties and Books and Records, (b) furnish to the other party, its legal counsel and its other Representatives such information relating to the business of the Company or Parent as such Persons may reasonably request and (c) cause its employees, legal counsel, accountants and other Representatives to reasonably cooperate with the other party in its investigation of the Business (in the case of the Company) or the business of Parent (in the case of Parent); provided, that no investigation pursuant to this Section 7.5 (or any investigation made prior to the date hereof) shall affect any representation or warranty given by the Company or Parent; and provided, further, that any investigation pursuant to this Section 7.5 shall be conducted in such manner as not to interfere unreasonably with the conduct of the Business of the Company. Notwithstanding anything to the contrary expressed or implied in this Agreement, neither party shall be required to provide the access described above or disclose any information to the other party if doing so is, in such party’s reasonable judgement, reasonably likely to (i) result in a waiver of attorney-client privilege, work product doctrine or similar privilege or (ii) violate any Contract to which it is a party or to which it is subject or applicable Law. During the Interim Period, Parent, Acquirer and Merger Sub each hereby agree to not, and to not permit any of its respective Representatives or Affiliates to, contact or communicate with the employees, customers, providers, licensors, collaborators, service providers or suppliers of the Company Group without the prior consultation with and prior written approval of an executive officer of the Company, which prior written approval shall not be unreasonably withheld, delayed or conditioned.
7.6 Formation of Parent Parties. As promptly as practicable after the date hereof, Parent shall cause each of Acquirer and Merger Sub to be incorporated under the Laws of the Cayman Islands. Upon incorporation, each of Acquirer and Merger Sub shall sign a joinder agreement to this Agreement in form and substance reasonably agreed by the parties, agreeing to be bound by this Agreement as if parties hereto on the date hereof.
7.7 Notices of Certain Events. During the Interim Period, each of Parent and the Company shall promptly notify the other party of:
(a) any notice from any Person alleging or raising the possibility that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement or that the transactions contemplated by this Agreement might give rise to any Action or other rights by or on behalf of such Person or result in the loss of any rights or privileges of the Company (or Parent, post-Closing) to any such Person or create any Lien on any of the Company’s or Parent’s assets;
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(b) any notice or other communication from any Authority in connection with the transactions contemplated by this Agreement or the Ancillary Agreements;
(c) any Actions commenced or, to the Knowledge of Parent or the Company, as applicable, threatened against, relating to or involving or otherwise affecting either party or any of their shareholders or their equity, assets or business or that relate to the consummation of the transactions contemplated by this Agreement or the Ancillary Agreements;
(d) any written notice from Nasdaq with respect to the listing of the Acquirer Securities;
(e) if it obtains Knowledge of the occurrence of any fact or circumstance which constitutes or results, or would reasonably be expected to constitute or result in a Material Adverse Effect; and
(f) if it obtains Knowledge of any inaccuracy of any representation or warranty of such party contained in this Agreement at any time during the term hereof, or any failure of such party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder, that would reasonably be expected to cause any of the conditions set forth in ARTICLE X not to be satisfied.
7.8 Registration Statement/Proxy Statement; Other Filings.
(a) As promptly as practicable after the execution of this Agreement, Parent and the Company shall jointly prepare and cause to be filed with the SEC, and with all other applicable regulatory bodies, mutually acceptable proxy materials for the purpose of soliciting proxies from holders of Parent Ordinary Shares sufficient to obtain Parent Shareholder Approval at a meeting of holders of Parent Ordinary Shares to be called and held for such purpose (the “Parent Shareholder Meeting”). Such proxy materials shall be in the form of a proxy statement (the “Proxy Statement”), which shall be included in a Registration Statement on Form F-4, or other appropriate form, including any pre-effective or post-effective amendments or supplements thereto (the “Registration Statement”), filed by Parent with the SEC, which shall also include a prospectus (such prospectus, together with the Proxy Statement and any amendments or supplements thereto, the “Proxy Statement/Prospectus”) pursuant to which the Acquirer Ordinary Shares issuable in the Mergers shall be registered. Parent shall promptly respond to any SEC comments on the Registration Statement. Parent also agrees to use its best efforts to obtain all necessary state securities law or “Blue Sky” permits and approvals required to carry out the transactions contemplated hereby, and the Company shall furnish all information concerning the Company, its Subsidiaries and any of their respective members or shareholders as may be reasonably requested in connection with any such action. Each of Parent and the Company agrees, as promptly as reasonably practicable, to furnish to the other party all information concerning itself, its Subsidiaries, officers, directors, managers, shareholders, and other equityholders and information regarding such other matters as may be reasonably necessary or advisable or as may be reasonably requested in connection with the preparation of the Proxy Statement/Prospectus, a Current Report on Form 8-K pursuant to the Exchange Act in connection with the transactions contemplated by this Agreement, or any other statement, filing, notice or application made by or on behalf of Parent, the Company or their respective Subsidiaries to any regulatory authority (including Nasdaq) in connection with the Merger and the other transactions contemplated hereby (the “Offer Documents”).
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(b) Parent (i) shall permit the Company and its counsel to review and comment on the Registration Statement and Proxy Statement/Prospectus and any exhibits, amendments or supplements thereto (or other related documents); (ii) shall consider any such comments reasonably and in good faith; and (iii) shall not file the Registration Statement and Proxy Statement/Prospectus or any exhibit, amendment or supplement thereto without giving reasonable and good faith consideration to the comments of the Company. As promptly as practicable after receipt thereof, Parent shall provide to the Company and its counsel notice and a copy of all correspondence (or, to the extent such correspondence is oral, a summary thereof), including any comments from the SEC or its staff, between Parent or any of its Representatives, on the one hand, and the SEC or its staff or other government officials, on the other hand, with respect to the Registration Statement and Proxy Statement/Prospectus, and, in each case, shall consult with the Company and its counsel concerning any such correspondence. Parent shall not file any response letters to any comments from the SEC without consulting reasonably and in good faith with the Company. Parent will use its reasonable best efforts to permit the Company’s counsel to participate in any calls, meetings or other communications with the SEC or its staff. Parent will advise the Company, promptly after it receives notice thereof, of the time when the Registration Statement and Proxy Statement/Prospectus or any amendment or supplement thereto has been filed with the SEC and the time when the Registration Statement declared effective or any stop order relating to the Registration Statement is issued.
(c) As soon as practicable following the date on which the Registration Statement is declared effective by the SEC, Parent shall distribute the Proxy Statement/Prospectus to the holders of Parent Ordinary Shares and, pursuant thereto, shall call the Parent Shareholder Meeting in accordance with its Organizational Documents, the applicable Nasdaq rules and the applicable Laws of the British Virgin Islands and, subject to the other provisions of this Agreement, solicit proxies from such holders to vote in favor of the adoption of this Agreement and the approval of the transactions contemplated hereby and the other proposals presented to the holders of Parent Ordinary Shares for approval or adoption at the Parent Shareholder Meeting.
(d) Parent shall comply with all applicable provisions of and rules under the Securities Act and Exchange Act, the applicable Nasdaq rules and all applicable Laws of the British Virgin Islands, in the preparation, filing and distribution of the Registration Statement and the Proxy Statement/Prospectus (or any amendment or supplement thereto), as applicable, the solicitation of proxies under the Proxy Statement/Prospectus and the calling and holding of the Parent Shareholder Meeting. Without limiting the foregoing, Parent shall ensure that each of the Registration Statement, as of the effective date of the Registration Statement, and the Proxy Statement/Prospectus, as of the date on which it is first distributed to the holders of Parent Ordinary Shares, and as of the date of the Parent Shareholder Meeting, does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading (provided, that Parent shall not be responsible for the accuracy or completeness of any information relating to the Company (or any other information) that is furnished by the Company expressly for inclusion in the Proxy Statement/Prospectus). The Company represents and warrants that the information relating to the Company supplied by the Company for inclusion in the Registration Statement or the Proxy Statement/Prospectus, as applicable, will not as of the effective date of the Registration Statement and the date on which the Proxy Statement/Prospectus (or any amendment or supplement thereto) is first distributed to the holders of Parent Ordinary Shares or at the time of the Parent Shareholder Meeting contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in light of the circumstances under which they were made, not misleading. If at any time prior to the Effective Time, a change in the information relating to Parent or the Company or any other information furnished by Parent, Acquirer, Merger Sub or the Company for inclusion in the Registration Statement or the Proxy Statement/Prospectus, which would make the preceding two sentences incorrect, should be discovered by Parent, Acquirer, Merger Sub or the Company, as applicable, such party shall promptly notify the other parties of such change or discovery and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC and, to the extent required by Law, disseminated to the holders of Parent Ordinary Shares (provided that notwithstanding any provision of this Agreement, the Company shall not be responsible for, nor have any obligation to Parent or any other Person with respect to, the accuracy or completeness of anything set forth in the Registration Statement or the Proxy Statement/Prospectus, other than information exclusively relating to the Company (or any other information) that is furnished by the Company expressly for inclusion in the Proxy Statement/Prospectus). In connection therewith, Parent, Acquirer, Merger Sub and the Company shall instruct their respective employees, counsel, financial advisors, auditors and other authorized representatives to reasonably cooperate with Parent as relevant if required to achieve the foregoing.
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(e) In accordance with the Parent Articles and applicable securities laws, rules and regulations, including the BVI Business Companies Act and rules and regulations of Nasdaq, in the Proxy Statement/Prospectus, Parent shall seek from the holders of Parent Ordinary Shares the approval the following proposals: (i) the adoption and approval of this Agreement and the Ancillary Agreements to which the Parent is a party and the transactions contemplated hereby or thereby and other related matters; (ii) the Reincorporation Merger and the relevant plan of merger in accordance with the BVI Business Companies Act and the Cayman Companies Act; (iii) adoption and approval of the amendment and restatement of the Organizational Documents, including the change of Reincorporation Merger Surviving Corporation's name to “Medera Inc.” and any separate or unbundled proposals as are required to implement the foregoing; (iv) approval of the members of the Board of Directors of Reincorporation Merger Surviving Corporation immediately after the Closing; (v) approval of the issuance of Acquirer Ordinary Shares in connection with the Mergers under applicable exchange listing rules; (vi) approval of the Acquirer Equity Incentive Plan; (the proposals set forth in the foregoing clauses (i) through (vii), the “Required Parent Proposals”); (viii) all required approvals under Nasdaq rules of the issuance of Acquirer Ordinary Shares in connection with any financing in connection with the transactions contemplated hereunder; (ix) approval to adjourn the Parent Shareholder Meeting, if necessary; and (x) approval to obtain any and all other approvals necessary or advisable to effect the consummation of the Mergers as reasonably determined by the Company and Parent (the proposals set forth in the forgoing clauses (i) through (x) collectively, the “Parent Proposals”).
(f) Parent, with the assistance of the Company, shall use its reasonable best efforts to cause the Registration Statement and the Proxy Statement/Prospectus to “clear” comments from the SEC and the Registration Statement to become effective as promptly as reasonably practicable thereafter. As soon as practicable after the Proxy Statement is “cleared” by the SEC, Parent shall cause the Proxy Statement, together will all other Offer Documents, to be disseminated to holders of Parent Ordinary Shares (but in any event within twenty (20) Business Days of the later of (i) the receipt and resolution of SEC comments with respect to the Proxy Statement/Prospectus and (ii) the expiration of the ten (10)-day waiting period provided in Rule 14a-6(a) promulgated under the Exchange Act). The Offer Documents shall provide the public shareholders of Parent with the opportunity to redeem all or a portion of their Parent Ordinary Shares, at a price per share equal to the pro rata share of the funds in the Trust Account, all in accordance with and as required by the Parent Articles, the Trust Agreement, applicable Law and any applicable rules and regulations of the SEC (the “Offer”). In accordance with the Parent Articles, the proceeds held in the Trust Account will first be used for the redemption of the Parent Ordinary Shares held by Parent’s public shareholders who have elected to redeem such shares.
(g) Parent shall call and hold the Parent Shareholder Meeting as promptly as practicable after the effective date of the Registration Statement for the purpose of seeking the approval of each of the Parent Proposals, and Parent shall consult in good faith with the Company with respect to the date on which such meeting is to be held. Parent shall use reasonable best efforts to solicit from its shareholders proxies in favor of the approval and adoption of the Reincorporation Merger and this Agreement and the other Parent Proposals. Parent’s Board of Directors shall recommend that the holders of Parent Ordinary Shares vote in favor of the Parent Proposals. Parent may postpone or adjourn the Parent Shareholder Meeting (A) to solicit additional proxies for the purpose of obtaining the Parent Shareholder Approvals or (B) for the absence of a quorum.
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(h) The Company acknowledges that a substantial portion of the Proxy Statement/ Prospectus shall include disclosure regarding the Company and its management, operations and financial condition. Accordingly, the Company agrees to as promptly as reasonably practical provide Parent with such information as shall be reasonably requested by Parent for inclusion in or attachment to the Proxy Statement/ Prospectus, and that such information is accurate in all material respects and complies as to form in all material respects with the requirements of the Exchange Act and the rules and regulations promulgated thereunder. The Company understands that such information shall be included in the Proxy Statement/ Prospectus or responses to comments from the SEC or its staff in connection therewith. In connection with the preparation and filing of the Registration Statement and any amendments thereto, the Company shall reasonably cooperate with the Parent and shall make their directors, officers and appropriate senior employees reasonably available to Parent and its counsel in connection with the drafting of such filings and mailings and responding in a timely manner to comments from the SEC.
(i) Except as otherwise required by applicable Law, Parent covenants that none of Parent, Parent’s Board of Directors nor any committee thereof shall withdraw or modify, or propose publicly or by formal action of Parent, Parent’s Board of Directors or any committee thereof to withdraw or modify, in any manner adverse to the Company, the Parent Board Recommendation.
(j) Notwithstanding anything else to the contrary in this Agreement or any Ancillary Agreements, Parent may make any public filing with respect to the Merger to the extent required by applicable Law, provided that prior to making any filing that includes information regarding the Company, Parent shall provide a copy of the filing to the Company and permit the Company to make revisions to protect confidential or proprietary information of the Company.
7.9 Trust Account. Upon satisfaction or waiver of the conditions set forth in ARTICLE X and provision of notice thereof to the Trustee (which notice Parent shall provide to the Trustee in accordance with the terms of the Trust Agreement), (i) in accordance with and pursuant to the Trust Agreement, Parent (a) shall cause any documents, opinions and notices required to be delivered to the Trustee pursuant to the Trust Agreement to be so delivered and (b) shall use its reasonable best efforts to cause the Trustee to, and the Trustee shall thereupon be obligated to (1) pay as and when due all amounts payable to public holders of Parent Ordinary Shares, (2) at the Closing, pay any unpaid Company Transaction Expenses and Parent Transaction Expenses to the applicable Persons entitled thereto and (3) pay all remaining amounts then available in the Trust Account to Parent or the Surviving Corporation for immediate use, subject to this Agreement and the Trust Agreement, and (ii) thereafter, the Trust Account shall terminate, except as provided therein. To the extent the amounts available in the Trust Account are not sufficient to pay any of the amounts described in subparagraphs (1) through (3) of this Section 7.9 Parent will pay such amounts with such funds as it shall have obtained through financing arrangements obtained as contemplated by this Agreement.
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7.10 Payment of Sponsor Allocated Deferred Underwriting Discount. Upon satisfaction or waiver of the conditions set forth in ARTICLE X, Sponsor shall have paid the Sponsor Allocated Deferred Underwriting Discount.
7.11 Obligations of Acquirer and Merger Sub. Parent shall take all action necessary to cause Acquirer and Merger Sub to perform their obligations under this Agreement and to consummate the transactions contemplated under this Agreement, upon the terms and subject to the conditions set forth in this Agreement.
7.12 Cooperation with Regulatory Approvals. Parent and the Company each will, and Parent and the Company will cause each of their respective Affiliates to, use reasonable best efforts to comply as promptly as practicable with all legal requirements which may be imposed on it under any applicable Antitrust Laws in connection with the transactions contemplated by this Agreement. Each party will promptly furnish to the other such information and assistance as the other may reasonably request in connection with its preparation of any filing or submission that is necessary under the HSR Act and any other applicable Antitrust Laws and will use reasonable best efforts to cause the expiration or termination of the applicable waiting periods as soon as practicable. Parent and the Company agree not to, and Parent and the Company agree to cause each of its Affiliates not to, extend any waiting period under the HSR Act and other applicable Antitrust Laws or enter into any agreement with any Governmental Entity to delay, or otherwise not to consummate as soon as practicable, any of the Transactions contemplated by this Agreement except with the prior written consent of the non-requesting party, which consent may be withheld in the sole discretion of the non-requesting party. Without limiting the foregoing, Parent and the Company shall: (i) promptly inform the other of any communication to or from the U.S. Federal Trade Commission, the U.S. Department of Justice or any other Authority with respect to Antitrust Laws regarding the transactions contemplated by this Agreement; (ii) permit each other to review reasonably in advance any proposed substantive written communication to any such Authority and incorporate reasonable comments thereto; (iii) give the other prompt written notice of the commencement of any Action with respect to such transactions under Antitrust Laws; (iv) not agree to participate in any substantive meeting or discussion with any such Authority in respect of any filing, investigation or inquiry concerning this Agreement or the transactions contemplated by this Agreement with respect to Antitrust Laws unless, to the extent reasonably practicable, it consults with the other party in advance and, to the extent permitted by such Authority, gives the other party the opportunity to attend; (v) keep the other reasonably informed as to the status of any such Action; and (vi) promptly furnish each other with copies of all correspondence, filings (except for filings made under the HSR Act) and written communications (and memoranda setting forth the substance of all substantive oral communications) between such party and, and in the case of Parent, its Subsidiaries (if applicable) and their respective Representatives and advisors, on one hand, and any such Authority, on the other hand, in each case, with respect to this Agreement and the transactions contemplated by this Agreement with respect to Antitrust Laws; provided that materials required to be supplied pursuant to this section may be redacted (1) to remove references concerning the valuation of the Company, (2) as necessary to comply with contractual arrangements, (3) as necessary to comply with applicable Law, and (4) as necessary to address reasonable privilege or confidentiality concerns; provided further, that a party may reasonably designate any competitively sensitive material provided to another party under this Section 7.11 as “Outside Counsel Only”. In no event shall a party be obligated to bear any material expense, pay any material fee or grant any material concession in connection with obtaining any such approvals; provided, however, that (A) Parent and the Company shall be equally responsible for any HSR Act filing fee and any filing required under any other Antitrust Laws; and (B) each party shall bear its own out-of-pocket costs and expenses in connection with the preparation of any such approvals. Nothing in this Section 7.11 obligates any party or any of its Affiliates to agree to (i) sell, license, or otherwise dispose of, or hold separate and agree to sell, license or otherwise dispose of, any entities, assets or facilities of the Company or any of its Subsidiaries or any entity, facility or asset of such party or any of its Affiliates, (ii) terminate, amend or assign existing relationships and contractual rights or obligations, (iii) amend, assign, or terminate existing licenses or other agreements, or (iv) enter into new licenses or other agreements. No party shall agree to any of the foregoing measures with respect to any other Party or any of its Affiliates, except (i) as expressly contemplated by this Agreement or the Ancillary Agreements, (ii) as required by applicable Law, (iii) as set forth in the disclosure schedules delivered by the Company to Parent, or (iv) with such other parties’ prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).
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ARTICLE VIII
COVENANTS OF THE COMPANY
8.1 Reporting; Compliance with Laws; No Insider Trading.
(a) During the Interim Period, the Company shall duly observe and conform in all material respects to all applicable Law and Orders.
(b) The Company shall not, and it shall direct its Representatives to not, directly or indirectly, (i) purchase or sell (including entering into any hedge transaction with respect to) any Parent Ordinary Shares, Parent Units, or Parent Warrants, except in compliance with all applicable securities Laws, including Regulation M under the Exchange Act; (ii) use or disclose or permit any other Person to use or disclose any information that Parent or its Affiliates has made or makes available to the Company and its Representatives in violation of the Exchange Act, the Securities Act or any other applicable securities Law; or (iii) disclose to any third party any non-public information about the Company, Parent, the Merger or the other transactions contemplated hereby or by any Ancillary Agreement.
8.2 Company’s Shareholder Approval.
(a) The Company’s Board of Directors shall recommend that the Company Shareholders vote in favor of this Agreement, the Ancillary Agreements to which the Company is or will be a party, the transactions contemplated hereby and thereby and other related matters (the “Company Board Recommendation”), and neither the Company’s Board of Directors, nor any committee thereof, shall withhold, withdraw, amend, modify, change or propose or resolve to withhold, withdraw, amend, modify or change, in each case in a manner adverse to Parent, the Company Board Recommendation.
(b) As promptly as reasonably practicable after the effective date of the Registration Statement, and in any event within twenty five (25) Business Days following such date (the “Company Shareholder Approval Deadline”), the Company shall use all commercially reasonable efforts to obtain and deliver to Parent evidence of the Company Shareholder Approval.
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8.3 Additional Financial Information. The Company’s consolidated interim financial information for each semi-annual period after the Balance Sheet Date shall be delivered to Parent no later than sixty (60) calendar days following the end of each semi-annual period (the “Required Financial Statements”). All of the financial statements to be delivered pursuant to this Section 8.3 shall be prepared in conformity with U.S. GAAP applied on a consistent basis and in accordance with the standards of the PCAOB for public companies. The Required Financial Statements shall be accompanied by a certificate of the Chief Executive, Financial or Accounting Officer of the Company to the effect that all such financial statements fairly present, in all material respects, the financial position and results of operations of the Company as of the date and for the periods indicated in each such Required Financial Statements, in accordance with U.S. GAAP, and are derived from the books and records of the Company, except as otherwise indicated in such statements and subject to year-end audit adjustments. The Company will promptly provide additional Company financial information reasonably requested by Parent for inclusion in the Registration Statement, the Proxy Statement/Prospectus and any Other Filings to be made by Parent with the SEC.
ARTICLE IX
COVENANTS OF ALL PARTIES HERETO
9.1 Commercially Reasonable Efforts; Further Assurances; Governmental Consents.
(a) Subject to the terms and conditions of this Agreement, including, without limitation, Section 9.1 each party shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable Laws, or as reasonably requested by the other parties, to consummate and implement expeditiously each of the transactions contemplated by this Agreement, including using its reasonable best efforts to (i) obtain all necessary actions, nonactions, waivers, consents, approvals and other authorizations from all applicable Authorities prior to the Effective Time; (ii) avoid an Action by any Authority, and (iii) execute and deliver any additional instruments necessary to consummate the transactions contemplated by this Agreement. The parties shall execute and deliver such other documents, certificates, agreements and other writings and take such other actions as may be necessary or desirable in order to consummate or implement expeditiously each of the transactions contemplated by this Agreement.
(b) Subject to applicable Law, each of the Company and Parent agrees to (i) reasonably cooperate and consult with the other regarding obtaining and making all notifications and filings with Authorities, (ii) furnish to the other such information and assistance as the other may reasonably request in connection with its preparation of any notifications or filings, (iii) keep the other reasonably apprised of the status of matters relating to the completion of the transactions contemplated by this Agreement, including promptly furnishing the other with copies of notices and other communications received by such party from, or given by such party to, any third party or any Authority with respect to such transactions, (iv) permit the other party to review and incorporate the other party’s reasonable comments in any communication to be given by it to any Authority with respect to any filings required to be made with, or action or nonactions, waivers, expirations or terminations of waiting periods, clearances, consents or orders required to be obtained from, such Authority in connection with execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement and (v) to the extent reasonably practicable, consult with the other in advance of and not participate in any meeting or discussion relating to the transactions contemplated by this Agreement, either in person or by telephone, with any Authority in connection with the proposed transactions unless it gives the other party the opportunity to attend and observe; provided, however, that, in each of clauses (iii) and (iv) above, that materials may be redacted (A) to remove references concerning the valuation of such party and its Affiliates, (B) as necessary to comply with contractual arrangements or applicable Laws, and (C) as necessary to address reasonable attorney-client or other privilege or confidentiality concerns.
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(c) During the Interim Period, Parent, on the one hand, and the Company, on the other hand, shall each notify the other in writing promptly after learning of any shareholder demands or other shareholder Action (including derivative claims) relating to this Agreement, any of the Ancillary Agreements or any matters relating thereto commenced against Parent, any of the Parent Parties or any of its or their respective Representatives in their capacity as a representative of a Parent Party or against the Company (collectively, the “Transaction Litigation”). Parent shall control the negotiation, defense and settlement of any such Transaction Litigation brought against Parent, Acquirer, Merger Sub or members of the boards of directors of Parent, Acquirer, or Merger Sub and the Company shall control the negotiation, defense and settlement of any such Transaction Litigation brought against the Company or the members of its board of directors; provided, however, that in no event shall the Company or Parent settle, compromise or come to any arrangement with respect to any Transaction Litigation, or agree to do the same, without the prior written consent of the other party not to be unreasonably withheld, conditioned or delayed; provided, that it shall be deemed to be reasonable for Parent (if the Company is controlling the Transaction Litigation) or the Company (if Parent is controlling the Transaction Litigation) to withhold, condition or delay its consent if any such settlement or compromise (A) does not provide for a legally binding, full, unconditional and irrevocable release of each Parent Party (if the Company is controlling the Transaction Litigation) or the Company and related parties (if the Parent is controlling the Transaction Litigation) and its respective Representative that is the subject of such Transaction Litigation, (B) provides for any non-monetary, injunctive, equitable or similar relief against any Parent Party (if the Company is controlling the Transaction Litigation) or the Company and related parties (if Parent is controlling the Transaction Litigation) or (C) contains an admission of wrongdoing or liability by a Parent Party (if the Company is controlling the Transaction Litigation) or the Company and related parties (if Parent is controlling the Transaction Litigation) and its respective Representative that is the subject of such Transaction Litigation. Parent and the Company shall each (i) keep the other reasonably informed regarding any Transaction Litigation, (ii) give the other the opportunity to, at its own cost and expense, participate in the defense, settlement and compromise of any such Transaction Litigation and reasonably cooperate with the other in connection with the defense, settlement and compromise of any such Transaction Litigation, (iii) consider in good faith the other’s advice with respect to any such Transaction Litigation and (iv) reasonably cooperate with each other.
9.2 Compliance with SPAC Agreements. Parent shall (a) comply with the Trust Agreement, the Parent Warrant Agreement, and the Parent Underwriting Agreement, and (b) enforce the terms of the letter agreement, dated as of July 24, 2023, by and among Parent, the Sponsor and each of the officers and directors of Parent named therein.
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9.3 Confidentiality. Except as necessary to complete the SEC Statement, the other Offer Documents or any Other Filings, the Company, on the one hand, and Parent, Acquirer, and Merger Sub, on the other hand, shall comply with the Confidentiality Agreement.
9.4 Directors’ and Officers’ Indemnification and Liability Insurance.
(a) All rights to indemnification for acts or omissions occurring through the Closing Date now existing in favor of the current directors and officers of the Company, or has been at any time prior to the date hereof or who becomes prior to the Effective Time an officer or director, of the Company or its Subsidiaries, or Parent and Parent Parties and Persons who served as a director, officer, member, trustee or fiduciary of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise at the request of the Company or Parent, as provided in their respective Organizational Documents or in any indemnification agreements shall survive the Mergers and shall continue in full force and effect in accordance with their terms. For a period of six (6) years after the Effective Time, Acquirer shall cause the Organizational Documents of Acquirer and its Subsidiaries to contain provisions no less favorable with respect to exculpation and indemnification of and advancement of expenses than are set forth as of the date of this Agreement in the Organizational Documents of, with respect to Parent, Parent, and with respect to the Surviving Corporation, the Company, as applicable, to the extent permitted by applicable Law.
(b) Prior to the Closing, the Company shall work with Parent to obtain directors’ and officers’ liability insurance for Parent, Acquirer and the Company that shall be effective as of Closing through Parent’s insurance broker. And will cover (i) those Persons who were directors and officers of the Company and Parent prior to the Closing and (ii) those Persons who will be the directors and officers of Acquirer and its Subsidiaries (including the Surviving Corporation after the Effective Time) at and after the Closing on terms not less favorable than the better of (x) the terms of the current directors’ and officers’ liability insurance in place for the Company’s directors and officers and (y) the terms of a typical directors’ and officers’ liability insurance policy for a company whose equity is listed on Nasdaq or an Alternate Exchange, as applicable, which policy has a scope and amount of coverage that is reasonably appropriate for a company of similar characteristics (including the line of business and revenues) as the Company.
(c) The provisions of this Section 9.4 are intended to be for the benefit of, and shall be enforceable by, each Person who will have been a director or officer of the Company or Parent for all periods ending on or before the Closing Date and may not be changed with respect to any officer or director without his or her written consent.
(d) Prior to the Effective Time, the Company shall obtain and fully pay the premium for a six year prepaid “tail” policy for the extension of the directors’ and officers’ liability coverage of the Company’s existing directors’ and officers’ liability insurance policies, for claims reporting or discovery period of six years from and after the Effective Time, on terms and conditions providing coverage retentions, limits and other material terms (other than premiums payable) substantially equivalent to the current policies of directors’ and officers’ liability insurance maintained by the Company with respect to matters arising on or before the Effective Time, covering without limitation the transactions contemplated hereby.
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9.5 Parent Public Filings; Nasdaq. During the Interim Period, Parent will keep current and timely file all of its public filings with the SEC and otherwise comply in all material respects with applicable securities Laws, and shall use its reasonable best efforts prior to the Closing to maintain the listing of the Parent Ordinary Shares, the Parent Units and the Parent Warrants on Nasdaq. During the Interim Period, Parent shall use its reasonable best efforts to cause (a) Parent’s initial listing application with Nasdaq or an Alternate Exchange, to be agreed mutually by Parent and the Company, in connection with the transactions contemplated by this Agreement to have been approved; (b) all applicable initial and continuing listing requirements of Nasdaq or an Alternate Exchange, as applicable, to be satisfied; and (c) the Parent Ordinary Shares, including the shares comprising the Merger Consideration, and the Parent Warrants to be approved for listing on Nasdaq or an Alternate Exchange, as applicable, subject to official notice of issuance, in each case, as promptly as reasonably practicable after the date of this Agreement and in any event prior to the Effective Time. The Company shall provide information reasonably requested by Parent with respect to such Nasdaq or Alternate Exchange application and otherwise cooperate with Parent to obtain and maintain such listing.
9.6 Certain Tax Matters.
(a) Each of Parent and Acquirer (i) shall use its reasonable best efforts to cause the Reincorporation Merger to qualify for the Reincorporation Intended Tax Treatment, and (ii) has not taken and will not take (and will not permit or cause any of its Affiliates to take), any action not contemplated by this Agreement or any Ancillary Agreement (or knowingly fail to take, or fail to cause any Affiliate to take, any action required by this Agreement or any Ancillary Agreement), if such action (or failure to act), whether before or after the Effective Time, would reasonably be expected to prevent or impede the Reincorporation Merger from qualifying for the Reincorporation Intended Tax Treatment. Each of Parent, Acquirer, Merger Sub, the Company and the Surviving Corporation (i) shall use its reasonable best efforts to cause the Acquisition Merger to qualify for the Acquisition Intended Tax Treatment, and (ii) has not taken and will not take (and will not permit or cause any of its Affiliates to take) any action not contemplated by this Agreement or any Ancillary Agreement (or knowingly fail to take, or fail to cause any Affiliate to take, any action required by this Agreement or any Ancillary Agreement), if such action (or failure to act), whether before or after the Effective Time, would reasonably be expected to prevent or impede the Acquisition Merger from qualifying for the Acquisition Intended Tax Treatment. For avoidance of doubt, nothing in this Section (a) shall be interpreted to override, or require any Party to modify, the economic or commercial terms contemplated by this Agreement or any Ancillary Agreement or to take other similar actions.
(b) Each of Parent, Acquirer, Merger Sub, the Company and the Surviving Corporation and their respective Affiliates shall cause all applicable Tax Returns to be filed consistent with (i) the Reincorporation Intended Tax Treatment and (ii) the Acquisition Intended Tax Treatment (including, in each case, attaching the statement described in Treasury Regulation Section 1.368-(a) on or with its Tax Return for the taxable year of the Reincorporation Merger and of the Acquisition Merger, as applicable), and shall take no position inconsistent with the Reincorporation Intended Tax Treatment or the Acquisition Intended Tax Treatment, as applicable (whether in audits, Tax Returns or otherwise), in each case, unless otherwise required by a Taxing Authority as a result of a “determination” within the meaning of Section 1313(a) of the Code. Each of the Parties agrees to (x) promptly notify all other Parties of any challenge to the Reincorporation Intended Tax Treatment or Acquisition Intended Tax Treatment by any Taxing Authority and (y) reasonably cooperate with each other and their respective counsel to document and provide factual support for the Reincorporation Intended Tax Treatment or Acquisition Intended Tax Treatment, as applicable, including by reasonably cooperating to provide customary representation letters.
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(c) This Agreement is intended to constitute, and the Parties hereto hereby adopt this Agreement as, a “plan of reorganization” within the meaning of Sections 354 and 361 of the Code and Treasury Regulation Sections 1.368-2(g) and 1.368-3(a).
(d) Notwithstanding the foregoing provisions of this Section 9.6 or anything else to the contrary contained in this Agreement, the Parties acknowledge and agree that no Party is making any representation or warranty as to the qualification of the Reincorporation Merger for the Reincorporation Intended Tax Treatment or the Acquisition Merger for the Acquisition Intended Tax Treatment or as to the effect, if any, that any transaction consummated on, after or prior to the Reincorporation Merger Effective Time or the Effective Time of the Acquisition Merger has or may have on any such reorganization status. Each of the Parties acknowledge and agree that each (i) has had the opportunity to obtain independent legal and tax advice with respect to the transactions contemplated by this Agreement, and (ii) is responsible for paying its own Taxes, including any adverse Tax consequences that may result if the Reincorporation Merger is determined not to qualify for the Reincorporation Intended Tax Treatment or the Acquisition Merger is determined not to qualify for the Acquisition Intended Tax Treatment.
(e) Notwithstanding anything to the contrary contained herein, all Transfer Taxes shall be paid by Acquirer, unless the Transfer Taxes are imposed in connection with the Acquisition Merger and are an obligation of Company shareholders under applicable Law, in which case such Transfer Taxes shall be borne by the applicable Company shareholders. The Party required by Law to do so shall file all necessary Tax Returns and other documentation with respect to all such Transfer Taxes, and if required by applicable Law, the other Parties shall, and shall cause their respective Affiliates to, join in the execution of any such Tax Returns and other document. Notwithstanding any other provision of this Agreement, the Parties shall (and shall cause their respective Affiliates to) cooperate in good faith to use commercially reasonable efforts to minimize the amount of any such Transfer Taxes.
(f) In the event the SEC requires a tax opinion regarding: (i) the Reincorporation Intended Tax Treatment, Acquirer shall use its reasonable best efforts to cause Loeb & Loeb LLP (or such other counsel as may be reasonably acceptable to Parent) to deliver such tax opinion to Acquirer, or (ii) the Acquisition Intended Tax Treatment, the Company shall use its reasonable best efforts to cause Hogan Lovells US LLP (or such other counsel as may be reasonably acceptable to the Company and Acquirer) to deliver such tax opinion to the Company, in each case, subject to customary representations, covenants, assumptions and limitations. Each Party shall use its reasonable best efforts to execute and deliver customary factual representation letters as the applicable tax advisor may reasonably request in form and substance satisfactory to such tax advisor. Notwithstanding anything to the contrary in this Agreement, Loeb & Loeb LLP shall not be required to provide any opinion to any Party regarding the Acquisition Intended Tax Treatment and Hogan Lovells US LLP shall not be required to provide any opinion to any Party regarding the Reincorporation Intended Tax Treatment.
(g) Acquirer shall provide to each Company shareholder who is required to file a gain recognition agreement under Section 367(a) of the Code and the regulations thereunder in order to avoid gain recognition on the Acquisition Merger for U.S. federal income tax purposes any information or assistance reasonably requested by such Company shareholder to enable such Company shareholder to prepare and file such gain recognition agreement and any related forms or returns.
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(h) Following the Closing, Acquirer shall use commercially reasonable efforts to make available to those shareholders of Parent prior to the Mergers who are U.S. taxpayers such information that is reasonable available to Acquirer and is reasonably necessary for any such shareholder (or former shareholder) to compute the income (if any) of such shareholder (or former shareholder), or its direct or indirect owners, arising, if applicable, as a result of a determination by Acquirer that either Parent or Acquirer was a “passive foreign investment company” within the meaning of Section 1297(a) of the Code for any Tax year of Parent or Acquirer beginning on or before the date of the Acquisition Merger, and each subsequent Tax year of Acquirer, including any information reasonably necessary to file IRS Form 8621 (including, if applicable, any information reasonably necessary to make a qualified electing fund election), if applicable, with respect to any such Tax year; provided, however, (i) there can be no assurance of, and Acquirer makes no representation as to, the accuracy of any such termination, and (ii) there can be no assurance that Acquirer will timely provide such required information.
(i) Each Party shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing or amendment of Tax Returns and any Tax proceedings of the Surviving Corporation, Parent, Acquirer, Merger Sub or the Company. Such cooperation shall include the retention and (upon the other Party’s request) the making available (with the right to make copies) of records and information reasonably relevant to any such Tax Return or Tax proceeding and the use of commercially reasonably efforts to make employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, in each case at the cost of the requesting Party.
(j) Notwithstanding anything to the contrary in this Agreement, Parent, Acquirer, the Company, the Surviving Corporation, their respective Affiliates and any other applicable withholding agent shall be entitled to deduct and withhold (or cause to be deducted and withheld) from the consideration or other amounts otherwise payable to any Person pursuant to this Agreement (whether payable in cash or otherwise) such amounts as are required to be deducted or withheld with respect to the making of such payment under the Code, or under any provision of state, local or non-U.S. Tax Law (as reasonably determined by the applicable withholding agent). Any such amounts so deducted and withheld shall be properly remitted to, and in the form required by, the appropriate Taxing Authority. To the extent that amounts are so deducted and withheld and are paid over to the appropriate Taxing Authorities in accordance with applicable Law, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person in respect of which such deduction and withholding was made. Without limiting the foregoing, other than with respect to compensatory payments, Parent and Acquirer shall use, and shall cause the Company, the Surviving Corporation, any respective Affiliates and any other applicable withholding agents to use, commercially reasonable efforts to provide recipients of consideration or other payments under this Agreement a reasonable opportunity to provide documentation establishing exemptions from or reductions of such withholding.
9.7 Incentive Plan. Prior to the effective date of the Registration Statement, Acquirer shall adopt a new equity incentive plan in a form mutually agreed to by the Company and Parent (the “Acquirer Equity Incentive Plan”). The Acquirer Equity Incentive Plan shall have such number of shares available for issuance equal to fifteen percent (15%) of the Acquirer Ordinary Shares to be issued and outstanding immediately after the Closing.
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9.8 PIPE Investment.
(a) The parties shall use commercially reasonable efforts to obtain the PIPE Investment and consummate the transactions contemplated by the Subscription Agreements on the terms described therein.
(b) The Company agrees, and shall cause the appropriate officers and employees thereof, to use commercially reasonable efforts to cooperate in connection with (x) the arrangement of any PIPE Investment, and (y) the marketing of the transactions contemplated by this Agreement and the Ancillary Agreements in the public markets and with existing equityholders of Parent (including in the case of clauses (x) with respect to the satisfaction of the relevant conditions precedent), in each case as may be reasonably requested by Parent, including by (i) upon reasonable prior notice, participating in meetings, calls, drafting sessions, presentations, and due diligence sessions (including accounting due diligence sessions) and sessions with prospective investors at mutually agreeable times and locations and upon reasonable advance notice (including the participation in any relevant “roadshow”), (ii) assisting with the preparation of customary materials, (iii) providing the financial statements and such other financial information regarding the Company as is reasonably requested in connection therewith, subject to confidentiality obligations reasonably acceptable to the Company, (iv) taking all corporate actions that are necessary or customary to obtain the PIPE Investment and market the transactions contemplated by this Agreement, and (v) otherwise reasonably cooperating in Parent’s efforts to obtain the PIPE Investment and market the transactions contemplated by this Agreement.
9.9 Section 16 Matters. Prior to the Effective Time, each of the Company and Parent and their respective Boards of Directors (or any duly formed committee thereof consisting of non-employee directors (as such term is defined for purposes of Rule 16b-3 promulgated under the Exchange Act)) shall take all such steps as may be required or as may be reasonably necessary or advisable (to the extent permitted under applicable Law) to cause any dispositions of shares of the Company Capital Stock or acquisitions of Parent Ordinary Shares (including, in each case, securities deliverable upon exercise, vesting or settlement of any derivative securities) resulting from the transactions contemplated hereby by each individual who may become subject to the reporting requirements of Section 16 of the Exchange Act to the extent necessary for such issuance to be an exempt acquisition pursuant to Rule 16b-3 promulgated under the Exchange Act.
ARTICLE X
CONDITIONS TO CLOSING
10.1 Condition to the Obligations of the Parties. The obligations of all of the parties to consummate the Closing are subject to the satisfaction or written waiver (where permissible) by Parent and the Company of all the following conditions:
(a) No provisions of any applicable Law and no Order shall restrain or prohibit or impose any condition on the consummation of the transactions contemplated hereby, including the Merger.
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(b) (i) All applicable waiting periods, if any, under the HSR Act with respect to the Merger shall have expired or been terminated, and (ii) each consent, approval or authorization of any Authority required of Parent, its Subsidiaries, or the Company to consummate the Merger set forth on Schedule 10.1(b) shall have been obtained and shall be in full force and effect.
(c) No Authority shall have issued an Order or enacted a Law, having the effect of prohibiting the Merger or making the Merger illegal, which Order or Law is final and non-appealable.
(d) Each of Acquirer and Merger Sub shall have been formed or incorporated and shall have executed a joinder to this Agreement;
(e) The Company Shareholder Approval shall have been obtained;
(f) Each of the Required Parent Proposals shall have been approved at the Parent Shareholder Meeting;
(g) Acquirer’s initial listing application with Nasdaq or an Alternate Exchange, as applicable, in connection with the transactions contemplated by this Agreement shall have been conditionally approved and, immediately following the Effective Time, Acquirer shall satisfy any applicable initial and continuing listing requirements of Nasdaq or an Alternate Exchange, as applicable, and Acquirer shall not have received any notice of non-compliance therewith, and the shares comprising the Merger Consideration shall have been approved for listing on Nasdaq or an Alternate Exchange, as applicable.
(h) The Registration Statement shall have become effective in accordance with the provisions of the Securities Act, no stop order suspending the effectiveness of the Registration Statement shall have been issued by the SEC that remains in effect and no proceeding seeking such a stop order shall have been initiated by the SEC and not withdrawn.
(i) Certain Company Shareholders shall have entered into and delivered to Parent a lock-up agreement, substantially in the form attached hereto as Exhibit D (the “Lock-Up Agreement”), pursuant to which each such Company Shareholder has agreed to a lock up on the Acquirer Ordinary shares held by such holder, as further provided in the Lock-Up Agreement.
10.2 Conditions to Obligations of Parent, Acquirer, and Merger Sub. The obligation of Parent, Acquirer, and Merger Sub to consummate the Closing is subject to the satisfaction, or the waiver in Parent’s sole and absolute discretion, of all the following further conditions:
(a) The Company shall have duly performed or complied with, in all material respects, all of its obligations hereunder required to be performed or complied with (without giving effect to any materiality or similar qualifiers contained therein) by the Company at or prior to the Closing Date.
(b) The representations and warranties of the Company contained in this Agreement (disregarding all qualifications contained therein relating to materiality or Material Adverse Effect), other than the Company Fundamental Representations and the Company Material Representations, shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date, as if made at and as of such date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct at and as of such earlier date) except, in each case, for any failure of such representations and warranties (disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect) to be so true and correct that would not in the aggregate have or reasonably be expected to have a Material Adverse Effect in respect of the Company.
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(c) The Company Fundamental Representations (disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect) shall be true and correct in all respects at and as of the date of this Agreement and as of the Closing Date, as if made as of such date (except to the extent that any such representation and warranty is expressly made as of a specific date, in which case such representation and warranty shall be true and correct at and as of such specific date), other than de minimis inaccuracies.
(d) The Company Material Representations (disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect) shall be true and correct in all material respects at and as of the date of this Agreement and as of the Closing Date, as if made as of such date (except to the extent that any such representation and warranty is expressly made as of a specific date, in which case such representation and warranty shall be true and correct at and as of such specific date).
(e) Since the date of this Agreement, there shall not have occurred a Material Adverse Effect in respect of the Company that is continuing.
(f) Parent shall have received a certificate, dated as of the Closing Date, signed by the Chief Executive Officer of the Company certifying the accuracy of the provisions of the foregoing clauses (a), (b), (c), (d) and (e) of this Section 10.2.
(g) Parent shall have received a certificate, dated as of the Closing Date, signed by the Secretary or director of the Company attaching true, correct and complete copies of (i) the Company Charter; (ii) copies of resolutions duly adopted by the Board of Directors of the Company authorizing this Agreement, the Cayman Plan of Acquisition Merger, the Ancillary Agreements to which the Company is a party and the transactions contemplated hereby and thereby and evidence of the Company Shareholder Approval; and (iii) a certificate of good standing of the Company, issued by the Cayman Registrar.
(h) Each of the Company and the Company Securityholders, as applicable, shall have executed and delivered to Parent a copy of each Ancillary Agreement to which the Company or such Company Securityholder, as applicable, is a party.
(i) The Company shall have obtained each Company Consent set forth on Schedule 10.2(i).
(j) Each of the employees of the Company listed in Schedule 10.2(j) shall have entered into employment agreements, effective as of the Closing Date, in form and substance as reasonably agreed upon by Parent and the Company.
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10.3 Conditions to Obligations of the Company. The obligations of the Company to consummate the Closing is subject to the satisfaction, or the waiver in the Company’s sole and absolute discretion, of all of the following further conditions:
(a) Parent, Acquirer, and Merger Sub shall each have duly performed or complied with, in all material respects, all of its respective obligations hereunder required to be performed or complied with (without giving effect to any materiality or similar qualifiers contained therein) by Parent or Merger Sub, as applicable, at or prior to the Closing Date.
(b) The representations and warranties of Parent, Acquirer, and Merger Sub contained in this Agreement (disregarding all qualifications contained therein relating to materiality or Material Adverse Effect), other than the Parent Fundamental Representations, shall be true and correct as of the date of this Agreement and as of the Closing Date, as if made at and as of such date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct at and as of such earlier date), except, in each case, for any failure of such representations and warranties (disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect) to be so true and correct would not in the aggregate have or be reasonably expected to have a Material Adverse Effect in respect of Parent, Acquirer, or Merger Sub and their ability to consummate the transactions contemplated by this Agreement and the Ancillary Agreements.
(c) The Parent Fundamental Representations shall be true and correct in all respects at and as of the date of this Agreement and as of the Closing Date, as if made as of such date (except to the extent that any such representation and warranty is expressly made as of a specific date, in which case such representation and warranty shall be true and correct at and as of such specific date), other than de minimis inaccuracies.
(d) Since the date of this Agreement, there shall not have occurred a Material Adverse Effect in respect of Parent that is continuing.
(e) The Company shall have received a certificate, dated as of the Closing Date, signed by the Chief Executive Officer of Parent accuracy of the provisions of the foregoing clauses (a), (b), (c) and (d) of this Section 10.3.
(f) The Company shall have received a certificate, dated as of the Closing Date, signed by a director or officer of Parent attaching true, correct and complete copies of resolutions duly adopted by the Board of Directors of Parent authorizing this Agreement, the Ancillary Agreements to which Parent is a party and the transactions contemplated hereby and thereby and the Parent Proposals.
(g) The Company shall have received a certificate, dated as of the Closing Date, signed by a director of Acquirer and Merger Sub attaching true, correct and complete copies of (i) copies of resolutions duly adopted by the Board of Directors and sole shareholder of Acquirer and Merger Sub authorizing this Agreement, the Ancillary Agreements to which Merger Sub is a party and the transactions contemplated hereby and thereby and (ii) a certificate of good standing of Acquirer and Merger Sub.
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(h) Each of Parent, Sponsor or other shareholder of Parent, as applicable, shall have executed and delivered to the Company a copy of each Ancillary Agreement to which Parent, Sponsor or such other shareholder of Parent, as applicable, is a party.
(i) The size and composition of the post-Closing Acquirer Board of Directors shall be as set forth in Section 3.7.
(j) Available Liquidity shall equal or exceed $40,000,000.
ARTICLE XI
TERMINATION
11.1 Termination Without Default.
(a) In the event that (i) the Closing of the transactions contemplated hereunder has not occurred on or before the latest of (A) April 24, 2025 and (B) if Parent’s board of directors has extended the timeline to consummate an initial business combination to a date following April 24, 2025, in accordance with the Parent Articles, the last date for Parent to consummate a Business Combination pursuant to such extensions (the “Outside Closing Date”); and (ii) the material breach or violation of any representation, warranty, covenant or obligation under this Agreement by the party (i.e., Parent, Acquirer or Merger Sub, on one hand, or the Company, on the other hand) seeking to terminate this Agreement was not the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Closing Date, then Parent or the Company, as applicable, shall have the right, at its sole option, to terminate this Agreement without liability to the other party. Such right may be exercised by Parent or the Company, as the case may be, giving written notice to the other at any time after the Outside Closing Date.
(b) In the event an Authority shall have issued an Order or enacted a Law, having the effect of prohibiting the Merger or making the Merger illegal, which Order or Law is final and non-appealable, Parent or the Company shall have the right, at its sole option, to terminate this Agreement without liability to the other party; provided, however, that the right to terminate this Agreement pursuant to this Section shall not be available to the Company or Parent if the failure by such party or its Affiliates to comply with any provision of this Agreement has been a substantial cause of, or substantially resulted in, such action by such Authority.
(c) In the event that the Parent Shareholder Meeting has been held (including any adjournment thereof) and has concluded, and the holders of Parent Ordinary Shares have duly voted, and the Parent Shareholder Approval was not obtained, Parent or the Company shall have the right, at its sole option, to terminate this Agreement.
(d) This Agreement may be terminated at any time by mutual written consent of the Company and Parent duly authorized by each of their respective boards of directors.
11.2 Termination Upon Default.
(a) Parent may terminate this Agreement by giving written notice to the Company, without prejudice to any rights or obligations Parent, Acquirer or Merger Sub may have: (i) at any time prior to the Closing Date if (x) the Company shall have breached any representation, warranty, agreement or covenant contained herein to be performed on or prior to the Closing Date; and (y) such breach cannot be cured or is not cured by the earlier of the Outside Closing Date and thirty (30) days following receipt by the Company of a written notice from Parent describing in reasonable detail the nature of such breach, provided, however, that Parent is not then in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement; (ii) at any time after the Company Shareholder Approval Deadline if the Company has not previously received the Company Shareholder Approval (provided, that upon the Company receiving the Company Shareholder Approval, Parent shall no longer have any right to terminate this Agreement under this clause (ii)); or (iii) the Acquisition Merger does not close before April 27, 2025.
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(b) The Company may terminate this Agreement by giving written notice to Parent, without prejudice to any rights or obligations the Company may have, if: (i) Parent shall have breached any of its covenants, agreements, representations, and warranties contained herein to be performed on or prior to the Closing Date, which has rendered or reasonably would render the satisfaction of any of the conditions set forth in Section 10.3(a) or 10.3(b) impossible; and (ii) such breach cannot be cured or is not cured by the earlier of the Outside Closing Date and thirty (30) days following receipt by Parent of a written notice from the Company describing in reasonable detail the nature of such breach, provided, however, that the Company is not then in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement.
11.3 Effect of Termination. If this Agreement is terminated pursuant to this ARTICLE XI, then this Agreement shall become void and of no further force or effect without liability of any party (or any shareholder, director, officer, employee, Affiliate, agent, consultant or representative of such party) to the other parties hereto. The provisions of Section 9.3, this Section 11.3, and ARTICLE XI, and the Confidentiality Agreement, shall survive any termination hereof pursuant to this ARTICLE XI.
ARTICLE XII
MISCELLANEOUS
12.1 Non-Survival. Other than as otherwise provided in the last sentence of this Section 12.1, each of the representations and warranties, and each of the agreements and covenants (to the extent such agreement or covenant contemplates or requires performance at or prior to the Effective Time), of the Parties set forth in this Agreement, shall terminate at the Effective Time, such that no claim for breach of any such representation, warranty, agreement or covenant, detrimental reliance or other right or remedy (whether in contract, in tort, at law, in equity or otherwise) may be brought with respect thereto after the Effective Time against any Party or its Representatives, except for claims based on Fraud. Each covenant and agreement contained herein that, by its terms, expressly contemplates performance after the Effective Time shall so survive the Effective Time in accordance with its terms, and each covenant and agreement contained in any Ancillary Agreement that, by its terms, expressly contemplates performance after the Effective Time shall so survive the Effective Time in accordance with its terms and any other provision in any Ancillary Agreement that expressly survives the Effective Time shall so survive the Effective Time in accordance with the terms of such Ancillary Agreement.
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12.2 Notices. Any notice hereunder shall be sent in writing, addressed as specified below, and shall be deemed given: (a) if by hand, electronic mail, or nationally recognized overnight courier service, by 5:00 PM on a Business Day, addressee’s day and time, on the date of delivery, and if delivered after 5:00 PM on the first Business Day, addressee’s day and time, after such delivery; (b) if by email, on the date of transmission with affirmative confirmation of receipt; or (c) three (3) Business Days after mailing by prepaid certified or registered mail, return receipt requested. Notices shall be addressed to the respective parties as follows (excluding telephone numbers, which are for convenience only), or to such other address as a party shall specify to the others in accordance with these notice provisions:
if to the Company (or, following the Closing, the Surviving Corporation or Acquirer), to:
Medera Inc.
6 Tide Street, 2nd Floor
Boston, Massachusetts 02210
Attention: Ronald Li, Chief Executive Officer
E-mail: [email protected]
with a copy (which shall not constitute notice) to:
Hogan Lovells US LLP
390 Madison Avenue
New York, NY 10017
Attn: Richard Aftanas
E-mail: [email protected]
if to Parent, Acquirer or Merger Sub (prior to the Closing):
Keen Vision Acquisition Corporation
37 Greenbriar Drive
Summit, New Jersey 07901
Attention: DAVIDKHANIAN Alex, Chief Financial Officer
E-mail: [email protected]
with a copy (which shall not constitute notice) to:
Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
Attention: Lawrence Venick
E-mail: [email protected]
12.3 Amendments; No Waivers; Remedies.
(a) This Agreement cannot be amended, except by a writing signed by each party, and cannot be terminated orally or by course of conduct. No provision hereof can be waived, except by a writing signed by the party against whom such waiver is to be enforced, and any such waiver shall apply only in the particular instance in which such waiver shall have been given.
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(b) Neither any failure or delay in exercising any right or remedy hereunder or in requiring satisfaction of any condition herein nor any course of dealing shall constitute a waiver of or prevent any party from enforcing any right or remedy or from requiring satisfaction of any condition. No notice to or demand on a party waives or otherwise affects any obligation of that party or impairs any right of the party giving such notice or making such demand, including any right to take any action without notice or demand not otherwise required by this Agreement. No exercise of any right or remedy with respect to a breach of this Agreement shall preclude exercise of any other right or remedy, as appropriate to make the aggrieved party whole with respect to such breach, or subsequent exercise of any right or remedy with respect to any other breach.
(c) Except as otherwise expressly provided herein, no statement herein of any right or remedy shall impair any other right or remedy stated herein or that otherwise may be available.
(d) Notwithstanding anything to the contrary contained herein, no party shall seek, nor shall any party be liable for, punitive or exemplary damages under any tort, contract, equity or other legal theory with respect to any breach (or alleged breach) of this Agreement or any provision hereof or any matter otherwise relating hereto or arising in connection herewith.
12.4 Arm’s Length Bargaining; No Presumption Against Drafter. This Agreement has been negotiated at arm’s-length by parties of equal bargaining strength, each represented by counsel or having had but declined the opportunity to be represented by counsel and having participated in the drafting of this Agreement. This Agreement creates no fiduciary or other special relationship between the parties, and no such relationship otherwise exists. No presumption in favor of or against any party in the construction or interpretation of this Agreement or any provision hereof shall be made based upon which Person might have drafted this Agreement or such provision.
12.5 Publicity. Except as required by Law or applicable stock exchange rules and except with respect to the Additional Parent SEC Documents, the parties agree that neither they nor their Representatives shall issue any press release or make any other public disclosure concerning the transactions contemplated hereunder without the prior approval of the other party hereto. If a party is required to make such a disclosure as required by Law or applicable stock exchange rules, the party making such determination will, if practicable in the circumstances, use reasonable commercial efforts to allow the other party reasonable time to comment on such disclosure in advance of its issuance.
12.6 Expenses. The accrued but unpaid Parent Transaction Expenses and Company Transaction Expenses shall be paid by Acquirer at or soon after the Closing and the Sponsor Allocated Deferred Underwriting Discount shall be paid by, and shall be the sole obligation of, the Sponsor. The anticipated Parent Transaction Expenses and Company Transaction Expenses are set forth on Schedule 12.6. Each of Parent and the Company shall prepare and deliver updated Parent Transaction Expenses and Company Transaction Expenses at least five (5) Business Days prior to the Closing Date. If the Closing does not take place, each party shall be responsible for its own expenses.
12.7 No Assignment or Delegation. No party may assign any right or delegate any obligation hereunder, including by merger, consolidation, operation of law or otherwise, without the written consent of the other party. Any purported assignment or delegation without such consent shall be void, in addition to constituting a material breach of this Agreement.
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12.8 Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby, including the applicable statute of limitations, shall be governed by and construed in accordance with the Laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware, save that (i) the provisions of the BVI Business Companies Act and Cayman Companies Act applicable to the authorization, effectiveness and effects of the Reincorporation Merger; and (ii) the applicable law of the British Virgin Islands and Cayman Islands with respect to the statutory and fiduciary duties of the Parent and Acquirer directors, respectively, shall apply. Notwithstanding the foregoing, the following matters arising out of or relating to this Agreement shall be construed, performed and enforced in accordance with the Laws of the Cayman Islands: the Acquisition Merger, the vesting of the rights, property, choses in action, business, undertaking, goodwill, benefits, immunities and privileges, contracts, obligations, claims, debts and liabilities of Merger Sub in the Company, the cancellation of shares pursuant to the Acquisition Merger, the rights provided in Section 238 of the Cayman Companies Act, the fiduciary duties and other obligations of the Company and the boards of directors of Company and Merger Sub and the internal corporate affairs of the Company and Merger Sub.
12.9 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which shall constitute one agreement. This Agreement shall become effective upon delivery to each party of an executed counterpart or the earlier delivery to each party of original, photocopied, or electronically transmitted signature pages that together (but need not individually) bear the signatures of all other parties (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com).
12.10 Entire Agreement. This Agreement, together with the Ancillary Agreements, sets forth the entire agreement of the parties with respect to the subject matter hereof and thereof and supersedes all prior and contemporaneous understandings and agreements related thereto (whether written or oral), all of which are merged herein. No provision of this Agreement or any Ancillary Agreement may be explained or qualified by any agreement, negotiations, understanding, discussion, conduct or course of conduct or by any trade usage. Except as otherwise expressly stated herein or in any Ancillary Agreement, there is no condition precedent to the effectiveness of any provision hereof or thereof. Notwithstanding the foregoing, the Confidentiality Agreement is not superseded by this Agreement or merged herein and shall continue in accordance with its terms, including in the event of any termination of this Agreement.
12.11 Severability. A determination by a court or other legal authority that any provision that is not of the essence of this Agreement is legally invalid shall not affect the validity or enforceability of any other provision hereof. The parties shall cooperate in good faith to substitute (or cause such court or other legal authority to substitute) for any provision so held to be invalid a valid provision, as alike in substance to such invalid provision as is lawful.
12.12 Further Assurances. Each party shall execute and deliver such documents and take such action, as may reasonably be considered within the scope of such party’s obligations hereunder, necessary to effectuate the transactions contemplated by this Agreement.
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12.13 Third Party Beneficiaries. Except as provided in Section 9.4 and Section 12.20, neither this Agreement nor any provision hereof confers any benefit or right upon or may be enforced by any Person not a signatory hereto.
12.14 Waiver. The Company has read the Prospectus and understands that Parent has established the Trust Account for the benefit of the public shareholders of Parent and the underwriters of the IPO pursuant to the Trust Agreement and that, except for a portion of the interest earned on the amounts held in the Trust Account, Parent may disburse monies from the Trust Account only for the purposes set forth in the Trust Agreement. For and in consideration of Parent agreeing to enter into this Agreement, the Company, for itself and on behalf of the Company Securityholders, hereby agrees that it does not now and shall not at any time hereafter prior to the Closing have any right, title, interest or claim of any kind in or to any monies in the Trust Account as a result of, or arising out of, any negotiations, contracts or agreements with Parent and hereby agrees that it will not seek recourse against the Trust Account for any reason.
12.15 No Other Representations; No Reliance.
(a) NONE OF THE COMPANY, ANY OF ITS AFFILIATES, ANY COMPANY SECURITYHOLDER NOR ANY OF THEIR RESPECTIVE REPRESENTATIVES HAS MADE ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER RELATING TO THE COMPANY OR THE BUSINESS OR OTHERWISE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, OTHER THAN THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN ARTICLE V, IN EACH CASE, AS MODIFIED BY THE SCHEDULES TO THIS AGREEMENT. Without limiting the generality of the foregoing, neither the Company, any of its Affiliates, any Company Securityholder nor any of their respective Representatives has made, and shall not be deemed to have made, any representations or warranties in the materials relating to the Company made available to Parent and its Representatives, including due diligence materials, or in any presentation of the business of the Company by management of the Company or others in connection with the transactions contemplated hereby, and no statement contained in any of such materials or made in any such presentation shall be deemed a representation or warranty hereunder or otherwise or deemed to be relied upon by Parent, Acquirer or Merger Sub in executing, delivering and performing this Agreement, the Ancillary Agreements or the transactions contemplated hereby or thereby, in each case except for the representations and warranties set forth in ARTICLE V as modified by the Schedules to this Agreement. It is understood that any cost estimates, projections or other predictions, any data, any financial information or any memoranda or offering materials or presentations, including any offering memorandum or similar materials made available by the Company, any Company Securityholder or their respective Representatives are not and shall not be deemed to be or to include representations or warranties of the Company or any Company Securityholder, and are not and shall not be deemed to be relied upon by Parent, Acquirer or Merger Sub in executing, delivering and performing this Agreement, the Ancillary Agreement and the transactions contemplated hereby or thereby, in each case except for the representations and warranties set forth in ARTICLE V, in each case, as modified by the Schedules to this Agreement. Except for the specific representations and warranties expressly made by the Company in ARTICLE V, in each case as modified by the Schedules: (a) Parent acknowledges and agrees that: (i) neither the Company, the Company Securityholders nor any of their respective Representatives is making or has made any representation or warranty, express or implied, at law or in equity, in respect of the Company, the business, assets, liabilities, operations, prospects or condition (financial or otherwise) of the Company, the nature or extent of any liabilities of the Company, the effectiveness or the success of any operations of the Company or the accuracy or completeness of any confidential information memoranda, projections, forecasts or estimates of earnings, or other information (financial or otherwise) regarding the Company furnished to Parent, Acquirer, Merger Sub or their respective Representatives or made available to Parent and its Representatives in any “data rooms,” “virtual data rooms,” management presentations or any other form in expectation of, or in connection with, the transactions contemplated hereby, or in respect of any other matter or thing whatsoever; and (ii) no Representative of any Company Securityholder or the Company has any authority, express or implied, to make any representations, warranties or agreements not specifically set forth in ARTICLE V and subject to the limited remedies herein provided; (b) each of Parent, Acquirer and Merger Sub specifically disclaims that it is relying upon or has relied upon any such other representations or warranties that may have been made by any Person, and acknowledges and agrees that the Company Securityholders and the Company have specifically disclaimed and do hereby specifically disclaim any such other representation or warranty made by any Person; and (c) none of the Company, the Company Securityholders nor any other Person shall have any liability to Parent, Acquirer, Merger Sub or any other Person with respect to any such other representations or warranties, including projections, forecasts, estimates, plans or budgets of future revenue, expenses or expenditures, future results of operations, future cash flows or the future financial condition of the Company or the future business, operations or affairs of the Company.
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(b) NONE OF PARENT, ACQUIRER, MERGER SUB NOR ANY OF THEIR RESPECTIVE REPRESENTATIVES HAS MADE ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER RELATING TO PARENT, ACQUIRER, MERGER SUB OR OTHERWISE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, OTHER THAN THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN ARTICLE VI, IN EACH CASE, AS MODIFIED BY THE SCHEDULES TO THIS AGREEMENT AND THE PARENT SEC DOCUMENTS. Without limiting the generality of the foregoing, neither Parent, Acquirer, Merger Sub nor any of their respective Representatives has made, and shall not be deemed to have made, any representations or warranties in the materials relating to Parent, Acquirer and Merger Sub made available to the Company and the Company Securityholders and their Representatives, including due diligence materials, or in any presentation of the business of Parent by management of Parent or others in connection with the transactions contemplated hereby, and no statement contained in any of such materials or made in any such presentation shall be deemed a representation or warranty hereunder or otherwise or deemed to be relied upon by the Company and the Company Securityholders in executing, delivering and performing this Agreement, the Ancillary Agreements or the transactions contemplated hereby or thereby, in each case except for the representations and warranties set forth in ARTICLE VI as modified by the Schedules to this Agreement and the Parent SEC Documents. It is understood that any cost estimates, projections or other predictions, any data, any financial information or any memoranda or offering materials or presentations, including any offering memorandum or similar materials made available by Parent, Acquirer, Merger Sub or their respective Representatives are not and shall not be deemed to be or to include representations or warranties of Parent, Acquirer and Merger Sub, and are not and shall not be deemed to be relied upon by the Company or Company Securityholders in executing, delivering and performing this Agreement, the Ancillary Agreement and the transactions contemplated hereby or thereby, in each case except for the representations and warranties set forth in ARTICLE VI, in each case, as modified by the Schedules to this Agreement and the Parent SEC Documents. Except for the specific representations and warranties expressly made by Parent, Acquirer and Merger Sub in ARTICLE VI, in each case as modified by the Schedules and the Parent SEC Documents: (a) the Company acknowledges and agrees that: (i) neither Parent, Merger Sub nor any of their respective Representatives is making or has made any representation or warranty, express or implied, at law or in equity, in respect of Parent, Acquirer, Merger Sub, the business, assets, liabilities, operations, prospects or condition (financial or otherwise) of Parent, Acquirer or Merger Sub, the nature or extent of any liabilities of Parent, Acquirer or Merger Sub, the effectiveness or the success of any operations of Parent, Acquirer or Merger Sub or the accuracy or completeness of any confidential information memoranda, projections, forecasts or estimates of earnings, or other information (financial or otherwise) regarding Parent, Acquirer or Merger Sub furnished to the Company, the Company Securityholders or their respective Representatives or made available to the Company, the Company Securityholders and their Representatives in any “data rooms,” “virtual data rooms,” management presentations or any other form in expectation of, or in connection with, the transactions contemplated hereby, or in respect of any other matter or thing whatsoever; and (ii) no Representative of Parent, Acquirer or Merger Sub has any authority, express or implied, to make any representations, warranties or agreements not specifically set forth in ARTICLE VI and ARTICLE VI and subject to the limited remedies herein provided; (b) the Company specifically disclaims that it is relying upon or has relied upon any such other representations or warranties that may have been made by any Person, and acknowledges and agrees that Parent, Acquirer and Merger Sub have specifically disclaimed and do hereby specifically disclaim any such other representation or warranty made by any Person; and (c) none of Parent, Acquirer, Merger Sub nor any other Person shall have any liability to the Company, the Company Securityholders or any other Person with respect to any such other representations or warranties, including projections, forecasts, estimates, plans or budgets of future revenue, expenses or expenditures, future results of operations, future cash flows or the future financial condition of Parent or the future business, operations or affairs of Parent.
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12.16 Waiver of Jury Trial. THE PARTIES EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY PROCEEDING (I) ARISING UNDER THIS AGREEMENT OR UNDER ANY ANCILLARY AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES IN RESPECT OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO OR THERETO OR ANY FINANCING IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. THE PARTIES EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH PROCEEDING SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.16.
12.17 Submission to Jurisdiction. Each of the Parties irrevocably and unconditionally submits to the exclusive jurisdiction of the Chancery Court of the State of Delaware (or, if the Chancery Court of the State of Delaware does not have jurisdiction, a federal court sitting in Wilmington, Delaware) (or any appellate courts thereof), for the purposes of any Action (a) arising under this Agreement or under any Ancillary 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 Ancillary Agreement or any of the transactions contemplated hereby or thereby, and irrevocably and unconditionally waives any objection to the laying of venue of any such Action in any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Action has been brought in an inconvenient forum. Each Party hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Action (i) arising under this Agreement or under any Ancillary Agreement or (ii) in any way connected with or related or incidental to the dealings of the Parties in respect of this Agreement or any Ancillary Agreement or any of the transactions contemplated hereby or thereby, (A) any claim that it is not personally subject to the jurisdiction of the courts as described in this Section 12.17 for any reason, (B) that it or its property is exempt or immune from the jurisdiction of any such court or from any Action commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) that (x) the Action in any such court is brought in an inconvenient forum, (y) the venue of such Action is improper or (z) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. Each Party agrees that service of any process, summons, notice or document by registered mail to such Party’s respective address set forth in Section 12.2 shall be effective service of process for any such Action.
12.18 Attorneys’ Fees. In the event of any legal action initiated by any party arising under or out of, in connection with or in respect of, this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and expenses incurred in such action, as determined and fixed by the court.
12.19 Remedies. Except as otherwise expressly provided herein, any and all remedies provided herein will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy. The Parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the Parties do not perform their respective obligations under the provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate the transactions contemplated by this Agreement) in accordance with their specific terms or otherwise breach such provisions. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case, without posting a bond or undertaking and without proof of damages and this being in addition to any other remedy to which they are entitled at law or in equity. Each of the Parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief when expressly available pursuant to the terms of this Agreement on the basis 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.
12.20 Non-Recourse. This Agreement may be enforced only against, and any dispute, claim or controversy based upon, arising out of or related to this Agreement or the transactions contemplated hereby may be brought only against, the entities that are expressly named as parties hereto and then only with respect to the specific obligations set forth in this Agreement with respect to such party. No past, present or future director, officer, employee, incorporator, member, partner, shareholder, agent, attorney, advisor, lender or representative or Affiliate of any named party to this Agreement (which Persons are intended third party beneficiaries of this Section 12.20) shall have any liability (whether in contract or tort, at law or in equity or otherwise, or based upon any theory that seeks to impose liability of an entity party against its owners or Affiliates) for any one or more of the representations, warranties, covenants, agreements or other obligations or liabilities of such named party or for any dispute, claim or controversy based on, arising out of, or related to this Agreement or the transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
| Parent: | ||
| KEEN VISION ACQUISITION CORPORATION | ||
| By: | /s/ WONG, Kenneth K.C. | |
| Name: | WONG, Kenneth K.C. | |
| Title: | Chief Executive Officer | |
| Company: | ||
| MEDERA INC. | ||
| By: | /s/ Ronald Li | |
| Name: | Ronald Li | |
| Title: | Chief Executive Officer | |
| Solely as to Sections 7.10 and 12.6: | ||
| Sponsor: | ||
| KVC Sponsor LLC | ||
| By: | /s/ WONG, Kenneth K.C. | |
| Name: | WONG, Kenneth K.C. | |
| Title: | Chief Executive Officer | |
Exhibit 10.1
Execution Version
COMPANY SUPPORT AGREEMENT
This COMPANY SUPPORT AGREEMENT, dated as of September 3, 2024 (this “Agreement”), is entered into by and among the shareholder(s) listed on Exhibit A hereto (each, a “Shareholder”), Medera Inc., a Cayman Islands company (the “Company”), and Keen Vision Acquisition Corporation, a British Virgin Islands exempted company limited by shares (“Parent”). Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Merger Agreement (as defined below).
WHEREAS, Parent and the Company propose to enter into, concurrently herewith, that certain Agreement and Plan of Merger (as may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), pursuant to which (a) Parent will form a Cayman Islands exempted company as its wholly owned subsidiary (“Acquirer”), (b) Acquirer will form a Cayman Islands exempted company as its wholly owned subsidiary (“Merger Sub”), (c) Parent will be merged with and into Acquirer (the “Reincorporation Merger”), with Acquirer surviving the Reincorporation Merger, and (d) Merger Sub will be merged with and into the Company (the “Acquisition Merger”), with the Company surviving the Acquisition Merger as a direct wholly owned subsidiary of Acquirer (collectively, the “Business Combination”). Following the Business Combination, Acquirer will be a publicly traded company listed on a stock exchange in the United States;
WHEREAS, as of the date hereof, each Shareholder owns of record or has the power to vote the number of ordinary shares, par value $0.0001, of Company set forth on Exhibit A all such shares, and/or any successor shares of Company of which ownership of record or the power to vote is hereafter acquired by the Shareholder prior to the termination of this Agreement being referred to herein as the “Shares”); and
WHEREAS, in order to induce Parent to enter into the Merger Agreement, each Shareholder is executing and delivering this Agreement to Parent.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Agreement to Vote.
(a) During the period commencing on the date hereof and ending on the earlier to occur of (i) the Effective Time, and (ii) such date and time as the Merger Agreement shall be terminated in accordance with Article 11 thereof (the “Expiration Time”), each Shareholder, with respect to its Shares, hereby irrevocably agrees to (1) appear at any meeting of the shareholders of the Company (a “Company Shareholders’ Meeting”), and at every adjournment or postpone thereof, in person or proxy or otherwise cause the Shares to be counted as present thereat for the purpose of establishing a quorum, and (2) vote, or cause to be voted or consented at a Company Shareholders’ Meeting, or in any action by written consent of the shareholders, all of the Shares owned as of the record date for such meeting (a) in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby, (b) in favor of any other matter reasonably necessary to the consummation of the transactions contemplated by the Merger Agreement and considered and voted upon at any Company Shareholders’ Meeting, (c) against the approval of any Alternative Transaction, or against any proposal, action or agreement that would reasonably be expected to (i) impede, frustrate, prevent or nullify any provision of this Agreement, the Merger Agreement or the Acquisition Merger, (ii) result in a breach in any respect of any covenant, representation, warranty or any other obligation or agreement of the Company under the Merger Agreement, or (iii) result in any of the conditions set forth in Article X of the Merger Agreement not being fulfilled, and (d) against any amendment of the organizational documents of the Company or any change in the Company’s capitalization, corporate structure or business other than as contemplated by the Merger Agreement. Each Shareholder acknowledges receipt and review of a copy of the Merger Agreement. The obligations of each Shareholder specified in this Section 1 shall apply whether or not the Acquisition Merger or any action described above is recommended by the Company’s Board of Directors. Each Shareholder hereby irrevocably agrees that it shall not commit or agree to take any action inconsistent with the foregoing.
(b) Notwithstanding anything in this Agreement to the contrary, (i) each Shareholder shall not be required to vote (or cause to be voted) any of its Shares to amend the Merger Agreement (including any schedule or exhibit thereto), or take any action that would reasonably be expected to result in the amendment or modification, that: (A) imposes any additional conditions on the consummation of the Acquisition Merger; (B) alters or changes the amount or kind of consideration to be paid to the holders of Shares in connection with the Acquisition Merger; (C) impedes or delays the consummation of the Acquisition Merger or (D) from and after the adoption of the Merger Agreement by the holders of Shares, requires further approval of the Company’s shareholders under the Cayman Companies Act (each of the foregoing, an “Adverse Amendment”) and (ii) each Shareholder shall remain free to vote (or execute proxies with respect to) its Shares with respect to any matter not covered by Section 1.01(a) in any manner such Shareholder deems appropriate.
2. Redemptions Rights; Waiver Conversion Ratios. Each Shareholder irrevocably agrees that it will (i) not exercise its right to redeem all or a portion of such Shareholder’s Shares (in connection with the transactions contemplated by this Agreement or the Merger Agreement or otherwise) as set forth in the organizational documents of the Company and (ii) waive any adjustment to the conversion ratio set forth in the Company’s organizational documents.
3. Transfer of Shares. Until the Expiration Time, each Shareholder irrevocably agrees that it shall not, directly or indirectly, (a) sell, assign, transfer (including by operation of law), allow the creation of a lien, pledge, distribute, dispose of or otherwise encumber any of the Shares, either voluntarily or involuntarily (collectively, “Transfer”), or otherwise agree or offer to do any of the foregoing, (b) deposit any Shares into a voting trust or enter into a voting agreement or arrangement or grant any proxy or power of attorney with respect thereto that is inconsistent with this Agreement, (c) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect acquisition or sale, assignment, transfer (including by operation of law) or other disposition of any Shares, (d) establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, with respect to any Shares, (e) 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 Share, (f) take any action that would have the effect of preventing or disabling Shareholder from performing its obligations hereunder or (g) publicly announce any intention to effect any transaction specified in this Section 3; provided, that, Transfers by Shareholder are permitted to an Affiliate or to a direct or indirect owner of equity or other interest in such Shareholder (a “Permitted Transfer”); provided, further, that any Permitted Transfer shall be permitted only if, as a precondition to such Transfer, the transferee also agrees in a writing, reasonably satisfactory in form and substance to Parent, to assume all of the obligations of the Shareholder under, and be bound by all of the terms of, this Agreement; provided, further, that any Transfer permitted under this Section 3 shall not relieve the Shareholder of its obligations under this Agreement. Any Transfer in violation of this Section 3 with respect to the Shareholder’s Shares shall be null and void.
4. Representations and Warranties. Each Shareholder, severally and not jointly, represents and warrants for and on behalf of itself to Parent as follows:
(a) The execution, delivery and performance by Shareholder of this Agreement and the consummation by Shareholder of the transactions contemplated hereby do not and will not (i) conflict with or violate any Law applicable to Shareholder, (ii) require any consent, approval or authorization of, declaration, filing or registration with, or notice to, any person or entity, (iii) result in the creation of any Lien on any Shares (other than pursuant to this Agreement or transfer restrictions under applicable securities laws or the organization documents of Shareholder), or (iv) conflict with or result in a breach of or constitute a default under any provision of Shareholder’s organizational documents.
(b) Shareholder is the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of and has good, valid and marketable title to the Shares free and clear of any Lien (other than (i) pursuant to this Agreement or (ii) transfer restrictions under applicable securities Laws) and has the sole power (as currently in effect) to vote the Shares and has not entered into any voting agreement or voting trust with respect to any of the Shares that is inconsistent with the Shareholder’s obligations pursuant to this Agreement. Shareholder has the full right, power and authority to sell, transfer and deliver such Shares, and Shareholder does not own, directly or indirectly, any other Shares, other than Company warrants held by Shareholder (if any).
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(c) Shareholder is a natural person or a legal entity duly organized, validly existing and, to the extent such concept is applicable, in good standing under the Laws of the jurisdiction of its organization, has the power, authority and capacity to execute, deliver and perform this Agreement, has not entered into any agreement or undertaking that would interfere with, or prohibit or prevent it from satisfying, its obligations pursuant to this Agreement and that this Agreement has been duly authorized, executed and delivered by Shareholder. This Agreement, assuming due authorization, execution and delivery hereof by the Company and Parent, constitutes a legal, valid and binding obligation of Shareholder in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights and to general equitable principles).
(d) As of the date of this Agreement, there is no action, proceeding or, to the Shareholder’s knowledge, investigation pending against the Shareholder or, to the knowledge of the Shareholder, threatened against the Shareholder that questions the beneficial or record ownership of the Shareholder’s Shares, the validity of this Agreement or the performance by the Shareholder of its obligations under this Agreement.
(e) Shareholder understands and acknowledges that Parent is entering into the Merger Agreement in reliance upon the Shareholder’s execution and delivery of this Agreement.
(f) Shareholder has not entered into, and shall not enter into, any agreement that would prevent it from performing any of its obligations under this Support Agreement.
(g) No investment banker, broker, finder or other intermediary is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission for which Parent, Acquirer, Merger Sub or the Company is or will be liable in connection with the transactions contemplated hereby based upon arrangements made by or, to the knowledge of the Shareholder, on behalf of the Shareholder.
5. New Shares. In the event that, during the period commencing on the date hereof and ending at the Expiration Time, (a) any Shares are issued to Shareholder after the date of this Agreement pursuant to any share dividend, share split, recapitalization, reclassification, combination or exchange of Shares or otherwise, (b) a Shareholder purchases or otherwise acquires beneficial ownership of any Shares, or (c) a Shareholder acquires the right to vote or share in the voting of any Shares (collectively the “New Securities”), then such New Securities acquired or purchased by such Shareholder shall be subject to the terms of this Agreement to the same extent as if they constituted the Shares owned by such Shareholder as of the date hereof.
6. No Challenges. Each Shareholder agrees not to commence, join in, facilitate, assist or encourage, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Parent, Acquirer, Merger Sub, the Company or any of their respective successors or directors (a) challenging the validity of, or seeking to enjoin the operation of, any provision of this Agreement or the Merger Agreement or (b) alleging a breach of any fiduciary duty of any person in connection with the evaluation, negotiation or entry into the Merger Agreement); provided, that this Section 6 shall not be deemed a waiver of any rights of the Shareholder or its Affiliates for any breach of this Agreement or the Merger Agreement by the Company; provided, further, that the foregoing shall not limit any actions taken by such Shareholder in response to any claims commenced against such Shareholder, its Affiliates or any of their respective representatives for any breach of this Agreement.
7. Termination. This Agreement and the obligations of Shareholder under this Agreement shall automatically terminate upon the earliest of: (a) the Effective Time; (b) the termination of the Merger Agreement in accordance with its terms; (c) the delivery of written notice of termination by the Shareholder to the Company following an Adverse Amendment made without the consent of such Shareholder; and (d) the mutual written agreement of the Company and Parent. Upon termination or expiration of this Agreement, no party shall have any further obligations or liabilities under this Agreement; provided, however, such termination or expiration shall not relieve any party from liability for any willful breach of this Agreement occurring prior to its termination.
8. Miscellaneous.
(a) Except as otherwise provided herein or in the Merger Agreement or any other transaction document, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the transactions contemplated hereby or thereby are consummated.
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(b) All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by telecopy or e-mail or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8(b)):
If to Shareholder:
To such Shareholder’s address set forth in Exhibit A.
with copies to (which shall not constitute notice):
Loeb & Loeb
345 Park Avenue, 19th Floor
New York, NY 10154
Attention: Lawrence Venick, Esq.
E-mail: [email protected]
If to the Company, to:
Medera Inc.
6 Tide Street, 2nd Floor
Boston, Massachusetts 02210
Attention: Ronald Li, Chief Executive Officer
E-mail: [email protected]
with a copy (which shall not constitute notice) to:
Hogan Lovells US LLP
390 Madison Avenue
New York, NY 10017
Attn: Richard Aftanas
E-mail: [email protected]
If to Parent or Acquirer, to:
Keen Vision Acquisition Corporation
37 Greenbriar Drive
Summit, New Jersey 07901
Attention: DAVIDKHANIAN Alex, Chief Financial Officer
E-mail: [email protected]
with a copy to (which shall not constitute notice):
Loeb & Loeb
345 Park Avenue, 19th Floor
New York, NY 10154
Attention: Lawrence Venick, Esq.
E-mail: [email protected]
(c) If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
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(d) This Agreement and the Merger Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. This Agreement shall not be assigned (whether pursuant to a merger, by operation of law or otherwise).
(e) This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
(f) This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York applicable to contracts executed in and to be performed in that State without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction. All actions, suits or proceedings (collectively, “Action”) arising out of or relating to this Agreement shall be heard and determined exclusively in any federal or state court having jurisdiction within the State of New York. The parties hereto hereby (i) submit to the exclusive jurisdiction of federal or state courts within the State of New York for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto, and (ii) irrevocably waive, and agree 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 hereunder may not be enforced in or by any of the above-named courts.
(g) The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof, and accordingly, that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in any federal or state court within the State of New York without proof of actual damages or otherwise, in addition to any other remedy to which they are entitled at law or in equity as expressly permitted in this Agreement. Each of the parties further waives (i) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement to post security or a bond as prerequisite to obtaining equitable relief.
(h) This 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 hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
(i) Each Shareholder shall execute and deliver, or cause to be delivered, such additional documents, and take, or cause to be taken, all such further actions and do, or cause to be done, all things reasonably necessary (including under applicable Laws), or reasonably requested by Parent or the Company, to effect the actions and consummate the Merger and the other transactions contemplated by this Agreement and the Merger Agreement (including the transactions contemplated hereby and thereby), in each case, on the terms and subject to the conditions set forth therein and herein, as applicable.
(j) This Agreement may not be amended, changed, supplemented, waived or otherwise modified or terminated, except upon the execution and delivery of a written agreement executed by Parent, the Company and each Shareholder.
(k) This Agreement shall not be effective or binding upon Shareholder until such time as the Merger Agreement is executed by each of the parties thereto.
(l) If, and as often as, there are any changes in the Company by way of share split, share dividend, combination or reclassification, or through merger, consolidation, reorganization, recapitalization or business combination, or by any other means, equitable adjustment shall be made to the provisions of this Agreement as may be required so that the rights, privileges, duties and obligations hereunder shall continue with respect to Shareholder and the Shares as so changed.
(m) Each of the parties hereto hereby waives to the fullest extent permitted by applicable law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement. Each of the parties hereto (i) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (ii) acknowledges that it and the other parties hereto have been induced to enter into this Agreement and the transactions contemplated hereby, as applicable, by, among other things, the mutual waivers and certifications in this Paragraph (m).
(n) Shareholder hereby authorizes Parent and the Company to publish and disclose in any disclosure required by the United States Securities and Exchange Commission the Shareholder’s identity and beneficial ownership of the Shares and the nature of the Shareholder’s obligations under this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
| SHAREHOLDERS: | ||
|
Regemedera Holdings Limited |
||
| By: | ||
| Name: | ||
| Title: | ||
|
Dragon Era Enterprises Limited |
||
| By: | ||
| Name: | ||
| Title: | ||
| COMPANY: | ||
| MEDERA INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| PARENT: | ||
| KEEN VISION ACQUISITION CORP. | ||
| By: | ||
| Name: | ||
| Title: | ||
Signature Page to Company Support Agreement
Exhibit A
Shareholders
| Shareholder | Number of Ordinary Shares | % of Total Shares | Address for Notices | ||||
| Regemedera Holdings Limited | 295,459 | 25.65 | % | Flat B, 2/F, Block B, 192 Villa Cecil, Phase 2, Tower 2, Hong Kong | |||
| Dragon Era Enterprises Limited | 539,759 | 46.85 | % | Room 901-2, 9/F, East Ocean Centre, 98 Granville Road, Tsim Sha Tsui East, Kowloon, Hong Kong | |||
| TOTAL: | 835,218 | 72.50 | % |
Exhibit 10.2
Execution Version
SPONSOR SUPPORT AGREEMENT
This SPONSOR SUPPORT AGREEMENT, dated as of September 3, 2024 (this “Agreement”), is entered into by and among the shareholder(s) listed on Exhibit A hereto (each, a “Shareholder”), Medera Inc., a Cayman Islands company (the “Company”), and Keen Vision Acquisition Corporation, a British Virgin Islands exempted company limited by shares (“Parent”). Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Merger Agreement (as defined below).
WHEREAS, Parent and the Company propose to enter into, concurrently herewith, that certain Agreement and Plan of Merger (as may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), pursuant to which (a) Parent will form a British Virgin Islands exempted company as its wholly owned subsidiary (“Acquirer”), (b) Acquirer will form a Cayman Islands exempted company as its wholly owned subsidiary (“Merger Sub”), (c) Parent will be merged with and into Acquirer (the “Reincorporation Merger”), with Acquirer surviving the Reincorporation Merger, and (d) Merger Sub will be merged with and into the Company (the “Acquisition Merger”), with the Company surviving the Acquisition Merger as a direct wholly owned subsidiary of Acquirer (collectively, the “Business Combination”). Following the Business Combination, Acquirer will be a publicly traded company listed on a stock exchange in the United States;
WHEREAS, as of the date hereof, each Shareholder owns of record or has the power to vote the number of ordinary shares, par value $0.0001, of Parent set forth on Exhibit A (all such shares, and/or any successor shares of Parent (including, upon the effectiveness of the Reincorporation Merger, any shares of Acquirer issued in exchange therefor) of which ownership of record or the power to vote is hereafter acquired by the Stockholder prior to the termination of this Agreement being referred to herein as the “Shares”); and
WHEREAS, in order to induce the Company to enter into the Merger Agreement, each Stockholder is executing and delivering this Agreement to the Company.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Agreement to Vote.
(a) During the period commencing on the date hereof and ending on the earlier to occur of (i) the Effective Time, and (ii) such date and time as the Merger Agreement shall be terminated in accordance with Article 11 thereof (the “Expiration Time”), each Shareholder, with respect to its Shares, hereby irrevocably agrees to (1) appear at any meeting of the shareholders of Parent (a “Parent Shareholders’ Meeting”), and at every adjournment or postpone thereof, in person or proxy or otherwise cause the Shares to be counted as present thereat for the purpose of establishing a quorum, and (2) vote, or cause to be voted or consented at a Parent Shareholders’ Meeting, or in any action by written consent of the shareholders, all of the Shares owned as of the record date for such meeting (a) in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby, (b) in favor of any other matter reasonably necessary to the consummation of the transactions contemplated by the Merger Agreement and considered and voted upon at any Parent Shareholders’ Meeting, (c) in favor of the approval of the Parent Proposals, (d) against the approval of any Alternative Transaction, or against any proposal, action or agreement that would reasonably be expected to (i) impede, frustrate, prevent or nullify any provision of this Agreement, the Merger Agreement, the Reincorporation Merger or the Acquisition Merger, (ii) result in a breach in any respect of any covenant, representation, warranty or any other obligation or agreement of Parent, Acquirer or Merger Sub under the Merger Agreement, or (iii) result in any of the conditions set forth in Article X of the Merger Agreement not being fulfilled, and (e) against any amendment of the organizational documents of Parent or any change in Parent’s capitalization, corporate structure or business other than as contemplated by the Merger Agreement. Each Shareholder acknowledges receipt and review of a copy of the Merger Agreement. The obligations of each Shareholder specified in this Section 1 shall apply whether or not the Reincorporation Merger or the Acquisition Merger or any action described above is recommended by Parent’s Board of Directors.
Each Shareholder hereby irrevocably agrees that it shall not commit or agree to take any action inconsistent with the foregoing.
(b) Notwithstanding anything in this Agreement to the contrary, (i) each Shareholder shall not be required to vote (or cause to be voted) any of its Shares to amend the Merger Agreement (including any schedule or exhibit thereto), or take any action that would reasonably be expected to result in the amendment or modification, that: (A) imposes any additional conditions on the consummation of the Reincorporation Merger or the Acquisition Merger; (B) alters or changes the amount or kind of consideration to be paid to the holders of Shares in connection with the Acquisition Merger; (C) impedes or delays the consummation of Reincorporation Merger or the Acquisition Merger or (D) from and after the adoption of the Merger Agreement by the holders of Shares, requires further approval of the Parent’s shareholders under [the BVI Business Companies Act] (each of the foregoing, an “Adverse Amendment”) and (ii) each Shareholder shall remain free to vote (or execute proxies with respect to) its Shares with respect to any matter not covered by Section 1.01(a) in any manner such Shareholder deems appropriate.
2. Redemptions Rights; Waiver Conversion Ratios. Each Shareholder irrevocably agrees that it will (i) not exercise its right to redeem all or a portion of such Shareholder’s Shares (in connection with the transactions contemplated by this Agreement or the Merger Agreement or otherwise) as set forth in the organizational documents of Parent and (ii) waive any adjustment to the conversion ratio set forth in Parent’s organizational documents.
3. Transfer of Shares. Until the Expiration Time, each Shareholder irrevocably agrees that it shall not, directly or indirectly, (a) sell, assign, transfer (including by operation of law), allow the creation of a lien, pledge, distribute, dispose of or otherwise encumber any of the Shares, either voluntarily or involuntarily (collectively, “Transfer”), or otherwise agree or offer to do any of the foregoing, (b) deposit any Shares into a voting trust or enter into a voting agreement or arrangement or grant any proxy or power of attorney with respect thereto that is inconsistent with this Agreement, (c) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect acquisition or sale, assignment, transfer (including by operation of law) or other disposition of any Shares, (d) establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, with respect to any Shares, (e) 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 Share, (f) take any action that would have the effect of preventing or disabling Shareholder from performing its obligations hereunder or (g) publicly announce any intention to effect any transaction specified in this Section 3; provided, that, Transfers by Shareholder are permitted to an Affiliate or to a direct or indirect owner of equity or other interest in such Shareholder (a “Permitted Transfer”); provided, further, that any Permitted Transfer shall be permitted only if, as a precondition to such Transfer, the transferee also agrees in a writing, reasonably satisfactory in form and substance to the Company, to assume all of the obligations of the Shareholder under, and be bound by all of the terms of, this Agreement; provided, further, that any Transfer permitted under this Section 3 shall not relieve the Shareholder of its obligations under this Agreement. Any Transfer in violation of this Section 3 with respect to the Shareholder’s Shares shall be null and void.
4. Representations and Warranties. Each Shareholder, severally and not jointly, represents and warrants for and on behalf of itself to the Company as follows:
(a) The execution, delivery and performance by Shareholder of this Agreement and the consummation by Shareholder of the transactions contemplated hereby do not and will not (i) conflict with or violate any Law applicable to Shareholder, (ii) require any consent, approval or authorization of, declaration, filing or registration with, or notice to, any person or entity, (iii) result in the creation of any Lien on any Shares (other than pursuant to this Agreement or transfer restrictions under applicable securities laws or the organization documents of Shareholder), or (iv) conflict with or result in a breach of or constitute a default under any provision of Shareholder’s organizational documents.
(b) Shareholder is the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of and has good, valid and marketable title to the Shares free and clear of any Lien (other than (i) pursuant to this Agreement or (ii) transfer restrictions under applicable securities Laws) and has the sole power (as currently in effect) to vote the Shares and has not entered into any voting agreement or voting trust with respect to any of the Shares that is inconsistent with the Shareholder’s obligations pursuant to this Agreement. Shareholder has the full right, power and authority to sell, transfer and deliver such Shares, and Shareholder does not own, directly or indirectly, any other Shares, other than Parent warrants held by Shareholder (if any).
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(c) Shareholder is a natural person or a legal entity duly organized, validly existing and, to the extent such concept is applicable, in good standing under the Laws of the jurisdiction of its organization, has the power, authority and capacity to execute, deliver and perform this Agreement, has not entered into any agreement or undertaking that would interfere with, or prohibit or prevent it from satisfying, its obligations pursuant to this Agreement and that this Agreement has been duly authorized, executed and delivered by Shareholder. This Agreement, assuming due authorization, execution and delivery hereof by the Company and Parent, constitutes a legal, valid and binding obligation of Shareholder in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights and to general equitable principles).
(d) As of the date of this Agreement, there is no action, proceeding or, to the Shareholder’s knowledge, investigation pending against the Shareholder or, to the knowledge of the Shareholder, threatened against the Shareholder that questions the beneficial or record ownership of the Shareholder’s Shares, the validity of this Agreement or the performance by the Shareholder of its obligations under this Agreement.
(e) Shareholder understands and acknowledges that the Company is entering into the Merger Agreement in reliance upon the Shareholder’s execution and delivery of this Agreement.
(f) Shareholder has not entered into, and shall not enter into, any agreement that would prevent it from performing any of its obligations under this Support Agreement.
(g) No investment banker, broker, finder or other intermediary is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission for which Parent, Acquirer, Merger Sub or the Company is or will be liable in connection with the transactions contemplated hereby based upon arrangements made by or, to the knowledge of the Shareholder, on behalf of the Shareholder.
5. New Shares. In the event that, during the period commencing on the date hereof and ending at the Expiration Time, (a) any Shares are issued to Shareholder after the date of this Agreement pursuant to any share dividend, share split, recapitalization, reclassification, combination or exchange of Shares or otherwise, (b) a Shareholder purchases or otherwise acquires beneficial ownership of any Shares, or (c) a Shareholder acquires the right to vote or share in the voting of any Shares (collectively the “New Securities”), then such New Securities acquired or purchased by such Shareholder shall be subject to the terms of this Agreement to the same extent as if they constituted the Shares owned by such Shareholder as of the date hereof.
6. No Challenges. Each Shareholder agrees not to commence, join in, facilitate, assist or encourage, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Parent, Acquirer, Merger Sub, the Company or any of their respective successors or directors (a) challenging the validity of, or seeking to enjoin the operation of, any provision of this Agreement or the Merger Agreement or (b) alleging a breach of any fiduciary duty of any person in connection with the evaluation, negotiation or entry into the Merger Agreement); provided, that this Section 6 shall not be deemed a waiver of any rights of the Shareholder or its Affiliates for any breach of this Agreement or the Merger Agreement by Parent, Acquirer or Merger Sub; provided, further, that the foregoing shall not limit any actions taken by such Shareholder in response to any claims commenced against such Shareholder, its Affiliates or any of their respective representatives for any breach of this Agreement.
7. Termination. This Agreement and the obligations of Shareholder under this Agreement shall automatically terminate upon the earliest of: (a) the Effective Time; (b) the termination of the Merger Agreement in accordance with its terms; (c) the delivery of written notice of termination by the Shareholder to Parent following an Adverse Amendment made without the consent of such Shareholder; and (d) the mutual written agreement of the Company and Parent. Upon termination or expiration of this Agreement, no party shall have any further obligations or liabilities under this Agreement; provided, however, such termination or expiration shall not relieve any party from liability for any willful breach of this Agreement occurring prior to its termination.
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8. Miscellaneous.
(a) Except as otherwise provided herein or in the Merger Agreement or any other transaction document, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the transactions contemplated hereby or thereby are consummated.
(b) All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by telecopy or e-mail or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8(b)):
If to Shareholder:
To such Shareholder’s address set forth in Exhibit A.
with copies to (which shall not constitute notice):
Loeb & Loeb
345 Park Avenue, 19th Floor
New York, NY 10154
Attention: Lawrence Venick, Esq.
E-mail: [email protected]
If to the Company, to:
Medera Inc.
6 Tide Street, 2nd Floor
Boston, Massachusetts 02210
Attention: Ronald Li, Chief Executive Officer
E-mail: [email protected]
with a copy (which shall not constitute notice) to:
Hogan Lovells US LLP
390 Madison Avenue
New York, NY 10017
Attn: Richard Aftanas
E-mail: [email protected]
If to Parent or Acquirer, to:
Keen Vision Acquisition Corporation
37 Greenbriar Drive
Summit, New Jersey 07901
Attention: DAVIDKHANIAN Alex, Chief Financial Officer
E-mail: [email protected]
with a copy to (which shall not constitute notice):
Loeb & Loeb
345 Park Avenue, 19th Floor
New York, NY 10154
Attention: Lawrence Venick, Esq.
E-mail: [email protected]
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(c) If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
(d) This Agreement and the Merger Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. This Agreement shall not be assigned (whether pursuant to a merger, by operation of law or otherwise).
(e) This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
(f) This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York applicable to contracts executed in and to be performed in that State without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction. All actions, suits or proceedings (collectively, “Action”) arising out of or relating to this Agreement shall be heard and determined exclusively in any federal or state court having jurisdiction within the State of New York. The parties hereto hereby (i) submit to the exclusive jurisdiction of federal or state courts within the State of New York for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto, and (ii) irrevocably waive, and agree 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 hereunder may not be enforced in or by any of the above-named courts.
(g) The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof, and accordingly, that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in any federal or state court within the State of New York without proof of actual damages or otherwise, in addition to any other remedy to which they are entitled at law or in equity as expressly permitted in this Agreement. Each of the parties further waives (i) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement to post security or a bond as prerequisite to obtaining equitable relief.
(h) This 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 hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
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(i) Each Shareholder shall execute and deliver, or cause to be delivered, such additional documents, and take, or cause to be taken, all such further actions and do, or cause to be done, all things reasonably necessary (including under applicable Laws), or reasonably requested by Parent or the Company, to effect the actions and consummate the Merger and the other transactions contemplated by this Agreement and the Merger Agreement (including the transactions contemplated hereby and thereby), in each case, on the terms and subject to the conditions set forth therein and herein, as applicable.
(j) This Agreement may not be amended, changed, supplemented, waived or otherwise modified or terminated, except upon the execution and delivery of a written agreement executed by Parent, the Company and each Shareholder.
(k) This Agreement shall not be effective or binding upon Shareholder until such time as the Merger Agreement is executed by each of the parties thereto.
(l) If, and as often as, there are any changes in Parent by way of share split, share dividend, combination or reclassification, or through merger, consolidation, reorganization, recapitalization or business combination, or by any other means, equitable adjustment shall be made to the provisions of this Agreement as may be required so that the rights, privileges, duties and obligations hereunder shall continue with respect to Shareholder and the Shares as so changed.
(m) Each of the parties hereto hereby waives to the fullest extent permitted by applicable law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement. Each of the parties hereto (i) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (ii) acknowledges that it and the other parties hereto have been induced to enter into this Agreement and the transactions contemplated hereby, as applicable, by, among other things, the mutual waivers and certifications in this Paragraph (m).
(n) Shareholder hereby authorizes Parent and the Company to publish and disclose in any disclosure required by the United States Securities and Exchange Commission the Shareholder’s identity and beneficial ownership of the Shares and the nature of the Shareholder’s obligations under this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
| SHAREHOLDERS: | ||
|
KVC SPONSOR LLC | ||
| By: | ||
| Name: | Wong, Kenneth K.C. | |
| Title: | Manager | |
| Wong, Kenneth K.C. | ||
| DAVIDKHANIAN, Alex | ||
| DING, Peter | ||
| William Chu | ||
| YU, Albert Cheung-Hoi | ||
| COMPANY: | ||
| MEDERA INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| PARENT: | ||
| KEEN VISION ACQUISITION CORP. | ||
| By: | ||
| Name: | ||
| Title: | ||
Signature Page to Sponsor Support Agreement
Exhibit A
Shareholders
| Shareholder | Number of Ordinary Shares | Address for Notices | ||||
| KVC Sponsor LLC | 3,597,500 | c/o Keen Vision Acquisition Corporation, 37 Greenbriar Drive, Summit, NJ 07901-3257 | ||||
| Wong, Kenneth K.C. | 45,000 | |||||
| DAVIDKHANIAN, Alex | 32,500 | |||||
| DING, Peter | 22,500 | |||||
| Chu, William | 20,000 | |||||
| YU, Albert Cheung-Hoi | 20,000 | |||||
| TOTAL: | 3,737,500 | |||||
Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of [ ], 2024, by and among Medera Inc., a Cayman Islands exempted company (the “Company”) and the undersigned parties listed under Investor on the signature page hereto (each, an “Investor” and collectively, the “Investors”).
WHEREAS, the Investors and the Company desire to enter into this Agreement to provide the Investors with certain rights relating to the registration of the securities held by them as of the date hereof;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. The following capitalized terms used herein have the following meanings:
“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with such Person.
“Agreement” means this Agreement, as amended, restated, supplemented, or otherwise modified from time to time.
“Business Combination” means the business combination between and among Parent, Medera, the Company, and Merger Sub.
“Closing” means the consummation of the Business Combination.
“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.
“Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled,” “Controlling” and “under common Control with” have correlative meanings.
“Controlling Holders” means Regemedera Holdings Limited, a company incorporated in British Virgin Islands, and Dragon Era Enterprises Limited, a company incorporated in British Virgin Islands or their permitted transferees.
“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.
“Form F-3” is defined in Section 2.2.4.
“Indemnified Party” is defined in Section 4.3.
“Indemnifying Party” is defined in Section 4.3.
“Initial Shares” means all of the outstanding Ordinary Shares issued to the Investors prior to or upon the consummation of the Business Combination including (i) the Sponsor Founder Shares; (ii) the Sponsor Private Shares; (iii) the Sponsor Working Capital Shares; and (iv) the Merger Consideration Shares.
“Investor” is defined in the preamble to this Agreement.
“Investor Indemnified Party” is defined in Section 4.1.
“Maximum Number of Shares” is defined in Section 2.1.4.
“Medera” means Medera Inc., a Cayman Islands exempted company.
“Merger Agreement” means a certain agreement dated September [3], 2024 (as may be amended from time to time) between and between Parent and Medera.
“Merger Consideration Shares” means 62,256,000 Ordinary Shares issued to shareholders of Medera immediately prior to the Closing in exchange of their shares of Medera, as such number of shares may be adjusted pursuant to the terms of the Merger Agreement.
“Merger Sub” means [ ], a Cayman Islands exempted a direct wholly-owned subsidiary of the Company.
“Notices” is defined in Section 6.3.
“Ordinary Shares” means the ordinary shares of the Company, with US$0.0001 par value.
“Parent” means Keen Vision Acquisition Corporation, a British Virgin Islands business company limited by shares.
“Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.
“Piggy-Back Registration” is defined in Section 2.2.1.
“Register,” “Registered” and “Registration” mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
“Registrable Securities” means (i) the Initial Shares, and (ii) the Sponsor Warrants (and underlying securities). Registrable Securities include any warrants, rights, shares or other securities of the Company issued as a dividend or other distribution with respect to or in exchange for or in replacement of such Initial Shares and Sponsor Warrants (and underlying 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 Company and subsequent public distribution of them shall not require registration under the Securities Act; or (c) such securities shall have ceased to be outstanding.
“Registration Statement” means a registration statement filed by the Company 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, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities (other than a registration statement on Form F-4, S-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).
“Release Date” means the date, (i) with respect to the Sponsor Founder Shares, on which the Sponsor Founder Shares are disbursed from escrow pursuant to Section 3 of that certain Stock Escrow Agreement dated as of July 24, 2023 by and among Parent, initial securityholders, and Continental Stock Transfer & Trust Company; and (ii) with respect to the Merger Consideration Shares, on which the Merger Consideration Shares are released from lock-up pursuant to certain Lock-up Agreement dated [ ] by and among the holders of Merger Consideration Shares and the Company.
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“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.
“Sponsor” means KVC Sponsor LLC, a Delaware limited liability company.
“Sponsor Founder Shares” means 3,737,500 Ordinary Shares issued to the Sponsor and its affiliates or designees and directors and officers of Parent in exchange for their 2,156,250 founder shares of Parent.
“Sponsor Private Shares” means 678,575 Ordinary Shares issued to the Sponsor and its Affiliates or designees in exchange of their private shares included in the 678,575 private units of Parent.
“Sponsor Warrants” means 678,575 Warrants issued to Sponsor, each entitling the holder to purchase one Ordinary Share at a price of $11.50 per share, subject to adjustments.
“Sponsor Working Capital Shares” means [ ]1 Ordinary Shares issued to the Sponsor and its Affiliates or designees upon conversion of outstanding promissory notes Parent issued to the Sponsor at or prior to the Closing.
“Underwriter” means a securities dealer who purchases any Registrable Securities as principal in an underwritten offering and not as part of such dealer’s market-making activities.
“Warrants(s)” means the warrants of the Company.
2. REGISTRATION RIGHTS.
2.1 Demand Registration.
2.1.1 Request for Registration. (a) (i) At any time with respect to the Sponsor Private Shares and Sponsor Warrants (including underlying securities), and (ii) at any time and from time to time on or after three months prior to the applicable Release Date with to the Sponsor Founder Shares and the Merger Consideration Shares, (x) the holders of a majority-in-interest of the Registrable Securities that have been released or to be released during such three-month period, as the case may be, held by the Investors or the permitted transferees of the Investors, or (y) the Controlling Holders, may make a written demand (the party making such demand, the “Initiating Holder”), for registration under the Securities Act of all or part of their Registrable Securities, as the case may be (a “Demand Registration”). Any demand for a Demand Registration shall specify the number of shares of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. The Company will notify, in writing, all holders of Registrable Securities of the demand, provided that such Registrable Securities have been released or to be released during the three-month period, within ten (10) days of the Company’s receipt of such demand, and each holder of Registrable Securities who wishes to include all or a portion of such holder’s Registrable Securities in the Demand Registration (each such holder including shares of Registrable Securities in such registration, a “Demanding Holder”) shall so notify the Company within ten (10) days after the receipt by the holder of the notice from the Company. Upon any such request, the Demanding Holders shall be entitled to have their Registrable Securities included in the Demand Registration, subject to Section 2.1.4 and the provisions set forth in Section 3.1.1.
(b) (i) Until such time as the Controlling Holders beneficially own less than 20% of the outstanding Ordinary Shares, the Controlling Holders shall have unlimited rights to effect a Demand Registration, at any time and from time to time as set forth in Section 2.1.1(a).
(ii) Except as otherwise provided in Section 2.1.1(b)(i), under no circumstances shall the Company be obligated to effect more than an aggregate of two (2) Registrations pursuant to a Demand Registration under this subsection 2.1.1 with respect to any or all Registrable Securities.
| 1 | To be inserted immediately prior to Closing |
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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 and the Company has 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) the Initiating Holder thereafter elects to continue the offering; provided, further, that the Company shall not be obligated to file a second 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 the Initiating Holder so elects and so advises the Company as part of their written demand for a Demand Registration, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. The Controlling Holders (if they are Demanding Holders) or the Initiating Holder (if the Controlling Holders are not Demanding Holders), shall, subject to the consent of the Company’s Board of Directors (such consent not to be unreasonably withheld, conditioned or delayed), select any managing underwriter(s), which shall be nationally recognized, in connection with such Demand Registration. 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.
2.1.4 Reduction of Offering. If the managing Underwriter or Underwriters for a Demand Registration that is to be an underwritten offering advises the Company in writing that the dollar amount or number of shares of Registrable Securities which the Demanding Holders desire to sell, taken together with all other Ordinary Shares or other securities which the Company desires to sell and the Ordinary Shares, if any, as to which registration has been requested pursuant to written contractual piggy-back registration rights held by other shareholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number of shares 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 shares, as applicable, the “Maximum Number of Shares”), then the Company shall include in such registration: (i) first, the Registrable Securities as to which Demand Registration has been requested by the Demanding Holders (pro rata in accordance with the number of shares that each such Person has requested be included in such registration, regardless of the number of shares held by each such Person (such proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Shares; (ii) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (i), the Ordinary Shares or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; and (iii) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (i) and (ii), the Ordinary Shares or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Shares.
2.1.5 Withdrawal. If the Controlling Holders (if they are Demanding Holders) or the Initiating Holder (if the Controlling Holders are not Demanding Holders), disapprove of the terms of any underwriting or are not entitled to include all of their Registrable Securities in any offering, such Demanding Holders may elect to withdraw from such offering by giving written notice to the Company 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 Initiating Holder 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. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable Securities in connection with such Demand Registration as provided in Section 3.3.
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2.2 Piggy-Back Registration.
2.2.1 Piggy-Back Rights. If at any time on or after the date the Company consummates a Business Combination the Company proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities, by the Company for its own account or for shareholders of the Company for their account (or by the Company and by shareholders of the Company 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 on Forms F-4 or S-4 or any similar successor forms or another form used for a purpose similar to the intended use for such forms, (iii) for an offering of debt that is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan, then the Company 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) days before the anticipated filing date, which notice shall describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, 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 shares of Registrable Securities as such holders may request in writing within five (5) days following receipt of such notice (a “Piggy-Back Registration”). The Company 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 the Company 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 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 the Company in writing that the dollar amount or number of Ordinary Shares which the Company desires to sell, taken together with the Ordinary Shares, if any, as to which registration has been demanded pursuant to written contractual arrangements with persons other than the holders of Registrable Securities hereunder, the Registrable Securities as to which registration has been requested under this Section 2.2, and the Ordinary Shares, if any, as to which registration has been requested pursuant to the written contractual piggy-back registration rights of other shareholders of the Company, exceeds the Maximum Number of Shares, then the Company shall include in any such registration:
(a) If the registration is undertaken for the Company’s account: (A) first, the Ordinary Shares or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the Ordinary Shares or other securities, if any, comprised of Registrable Securities, as to which registration has been requested pursuant to the applicable written contractual piggy-back registration rights of such security holders, Pro Rata, that can be sold without exceeding the Maximum Number of Shares; and (C) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A) and (B), the Ordinary Shares or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights with such persons and that can be sold without exceeding the Maximum Number of Shares;
(b) If the registration is a “demand” registration undertaken at the demand of persons other than either the holders of Registrable Securities, (A) first, the Ordinary Shares or other securities for the account of the demanding persons that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the Ordinary Shares or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (C) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A) and (B), collectively the Ordinary Shares or other securities comprised of Registrable Securities, Pro Rata, as to which registration has been requested pursuant to the terms hereof, that can be sold without exceeding the Maximum Number of Shares; and (D) fourth, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A), (B) and (C), the Ordinary Shares or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons, that can be sold without exceeding the Maximum Number of Shares.
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2.2.3 Withdrawal. Any holder of Registrable Securities may elect to withdraw such holder’s request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the Registration Statement. The Company (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. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable Securities in connection with such Piggy-Back Registration as provided in Section 3.3.
2.2.4 Registrations on Form F-3. The holders of Registrable Securities may at any time and from time to time, request in writing that the Company register the resale of any or all of such Registrable Securities on Form F-3 or S-3 or any similar short-form registration which may be available at such time (“Form F-3”); provided, however, that except as otherwise requested by the Controlling Holders, the Company shall not be obligated to effect such request through an underwritten offering. Upon receipt of such written request, the Company will promptly give written notice of the proposed registration to all other holders of Registrable Securities, and, as soon as practicable thereafter, 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 the Company, if any, of any other holder or holders joining in such request as are specified in a written request given within five (5) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration pursuant to this Section 2.2: (i) if Form F-3 is not available for such offering; or (ii) if the holders of the Registrable Securities, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at any aggregate price to the public of less than $1,000,000. Registrations effected pursuant to this Section 2.2 shall not be counted as Demand Registrations effected pursuant to Section 2.1.
3. REGISTRATION PROCEDURES.
3.1 Filings; Information. Whenever the Company is required to effect the registration of any Registrable Securities pursuant to Section 2, the Company shall 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. The Company shall, 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 the Company then qualifies or which counsel for the Company 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 to keep it effective for the period required by Section 3.1.3; provided, however, that the Company shall have the right to defer any Demand Registration for up to ninety (90) 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 the Company determines, in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its shareholders for such Registration Statement to be effected at such time; provided further, however, that the Company shall not have the right to exercise the right set forth in this provision more than once in any 365-day period in respect of a Demand Registration hereunder.
3.1.2 Copies. The Company shall, prior to filing a Registration Statement or prospectus, 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.
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3.1.3 Amendments and Supplements. The Company 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 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 such securities have been withdrawn.
3.1.4 Notification. After the filing of a Registration Statement, the Company shall promptly, and in no event more than two (2) 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 two (2) 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 the Company shall take all actions required to prevent the entry of such stop order or to remove it if entered); and (iv) any request by the Commission for any amendment or supplement to such Registration Statement or any prospectus relating thereto or for additional information or of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of the securities covered by such Registration Statement, such prospectus will not contain an 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 the case of the prospectus, in the light of the circumstances under which they were made), not misleading, and 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, the Company 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, and the Company shall not file any Registration Statement or prospectus or amendment or supplement thereto, including documents incorporated by reference, to which such holders or their legal counsel shall object.
3.1.5 State Securities Laws Compliance. The Company 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 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 the Company and do any and all other acts and things that may be necessary or advisable to enable the holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph or subject itself to taxation in any such jurisdiction.
3.1.6 Agreements for Disposition. The Company shall enter into 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. No holder of 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 holder’s organization, good standing, authority, title to Registrable Securities, lack of conflict of such sale with such holder’s material agreements and organizational documents, and with respect to written information relating to such holder that such holder has furnished in writing expressly for inclusion in such Registration Statement.
3.1.7 Cooperation. The principal executive officer of the Company, the principal financial officer of the Company, the principal accounting officer of the Company and all other officers and members of the management of the Company shall cooperate fully in any offering of Registrable Securities hereunder, which cooperation shall include, without limitation, 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.
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3.1.8 Records. The Company 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 the Company, as shall be necessary to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information requested by any of them in connection with such Registration Statement.
3.1.9 Opinions and Comfort Letters. In the case of any underwritten offering or if reasonably requested by any participant in any other offering pursuant to a Registration Statement filed pursuant to this Agreement, the Company shall obtain opinions of counsel representing the Company for the purposes of a registration pursuant to this Agreement, addressed to the placement agent or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to such registration in respect of which such opinion is being given as such holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably satisfactory to the Controlling Holders (if they are Demanding Holders) or the Initiating Holder (if the Controlling Holders are not Demanding Holders). In the case of any underwritten offering or if reasonably requested by any participant in any other offering pursuant to a Registration Statement filed pursuant to this Agreement, the Company shall obtain a “cold comfort” letters from the Company’s independent registered public accountants in the event of an underwritten public offering pursuant to this Agreement, in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the managing Underwriter may reasonably request, and reasonably satisfactory to the Controlling Holders (if they are Demanding Holders) or the Initiating Holder (if the Controlling Holders are not Demanding Holders). The Company shall furnish to each holder of Registrable Securities included in any Registration Statement a signed counterpart of (i) any opinion of counsel to the Company delivered to any Underwriter and (ii) any comfort letter from the Company’s independent public accountants delivered to any Underwriter.
3.1.10 Earnings Statement. The Company shall comply with all applicable rules and regulations of the Commission and the Securities Act, and make available to its shareholders, as soon as 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.
3.1.11 Listing. The Company 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 the Company 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 $5,000,000, the Company shall use its reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in any underwritten offering.
3.2 Obligation to Suspend Distribution. Upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.1.4(iv), or, in the case of a resale registration on Form F-3 pursuant to Section 2.2.4 hereof, upon any suspension by the Company, pursuant to a written insider trading compliance program adopted by the Company’s Board of Directors, of the ability of all “insiders” covered by such program to transact in the Company’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(iv) or the restriction on the ability of “insiders” to transact in the Company’s securities is removed, as applicable, and, if so directed by the Company, each such holder will deliver to the Company 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.
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3.3 Registration Expenses. The Company 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 Form F-3 effected pursuant to Section 2.2.4, and all 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 expenses; (iv) the Company’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 as required by Section 3.1.11; (vi) Financial Industry Regulatory Authority fees; (vii) fees and disbursements of counsel for the Company and fees and expenses for independent certified public accountants retained by the Company (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 the Company in connection with such registration and (ix) the reasonable fees and expenses of one legal counsel selected by the Controlling Holders (if they are Demanding Holders) or the Initiating Holder (if the Controlling Holders are not Demanding Holders). The Company 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. Additionally, in an underwritten offering, all selling shareholders and the Company shall bear the expenses of the Underwriter pro rata in proportion to the respective amount of shares each is selling in such offering.
3.4 Information. The holders of Registrable Securities shall provide such information as may reasonably be requested by the Company, or the managing Underwriter, if any, in connection with the preparation of any 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 Company’s obligation to comply with Federal and applicable state securities laws.
4. INDEMNIFICATION AND CONTRIBUTION.
4.1 Indemnification by the Company. The Company 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 (or allegedly untrue statement) of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, 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 (or alleged omission) to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration; and the Company 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; provided, however, that the Company 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 the Company, in writing, by such selling holder expressly for use therein. The Company 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. Each selling holder of Registrable Securities will, in the event that any registration is being effected under the Securities Act pursuant to this Agreement of any Registrable Securities held by such selling holder, indemnify and hold harmless the Company, each of its directors and officers and each Underwriter (if any), and each other selling holder and each other person, if any, who controls another selling holder or such Underwriter within the meaning of the Securities Act, against any losses, claims, judgments, damages or liabilities, whether joint or several, insofar as such losses, claims, judgments, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or allegedly untrue statement of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to the Registration Statement, or arise out of or are based upon any omission or the alleged 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 the Company by such selling holder expressly for use therein, and shall reimburse the Company, its directors and officers, and each other selling holder or controlling person for any legal or other expenses reasonably incurred by any of them in connection with investigation or defending any such loss, claim, damage, liability or action. Each 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.
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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, 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, 4.2 and 4.3 is 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 hereto 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) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
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5. RULE 144.
5.1 Rule 144. The Company 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 under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rules may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission. Upon the request of any holder of Registrable Securities, the Company shall deliver to such holder a written certification of a duly authorized officer as to (A) whether the Company has filed (i) all reports and other materials required to be filed pursuant to Sections 13(a) or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the Company was required to file such reports and materials), other than Current Reports on Forms 6-K or 8-K and (ii) current “Form 10 information” (within the meaning of Rule 144 under the Securities Act) with the Commission reflecting the Company’s status as an entity that is no longer an issuer described in paragraph (i)(1)(i) of Rule 144 under the Securities Act and (B) the first date that the Company filed “Form 10 information” (within the meaning of Rule 144 under the Securities Act) with the Commission.
6. MISCELLANEOUS.
6.1 Other Registration Rights. The Company represents and warrants that, except as disclosed in the Company’s registration statement on Form S-1 (File No. 333-259031), no person, other than the holders of the Registrable Securities, has any right to require the Company to register any of the Company’s share capital for sale or to include the Company’s share capital in any registration filed by the Company for the sale of share capital for its own account or for the account of any other person.
6.2 Assignment; No Third Party Beneficiaries. This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part. 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. This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties, to the permitted assigns of the Investors or holder of Registrable Securities or of any assignee of the Investors or holder of Registrable Securities. This Agreement is not intended to confer any rights or benefits on any persons that are not party hereto other than as expressly set forth in Article 4 and this Section 6.2. Any additional holder of Registrable Securities may become party to this Agreement by executing and delivering a joinder to the Company and the Sponsor in form and substance reasonably satisfactory to the Company.
6.3 Notices. All notices, demands, requests, consents, approvals or other communications (collectively, “Notices”) required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be personally served, delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice. Notice shall be deemed given on the date of service or transmission if personally served or transmitted by telegram, telex or facsimile; provided, that if such service or transmission is not on a business day or is after normal business hours, then such notice shall be deemed given on the next business day. Notice otherwise sent as provided herein shall be deemed given on the next business day following timely delivery of such notice to a reputable air courier service with an order for next-day delivery.
To the Company:
Medera Inc.
6 Tide Street, 2nd Floor
Boston, Massachusetts 02210
Attention: Ronald Li, Chief Executive Officer
E-mail: [email protected]
Hogan Lovells US LLP
390 Madison Avenue
New York, NY 10017
Attention: Richard Aftanas, Esq.
Email: [email protected]
To an Investor, to the address set forth below such Investor’s name on Exhibit A hereto.
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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 hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible that is valid and enforceable.
6.5 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument.
6.6 Entire Agreement. This Agreement (including all agreements entered into pursuant hereto and all certificates and instruments delivered pursuant hereto and thereto) constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties, whether oral or written.
6.7 Modifications and Amendments. No amendment, modification or termination of this Agreement shall be binding upon the Company unless executed in writing by the Company. No amendment, modification or termination of this Agreement shall be binding upon the holders of the Registrable Securities unless executed in writing by the holders of the majority Registrable Securities.
6.8 Titles and Headings. Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.
6.9 Waivers and Extensions. Any party to this Agreement may waive any right, breach or default which such party has the right to waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement. Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.
6.10 Remedies Cumulative. In the event that the Company fails to observe or perform any covenant or agreement to be observed or performed under this Agreement, the Investor or any other holder of Registrable Securities 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.
6.11 Governing Law. This Agreement shall be governed by, interpreted under, and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed within the State of New York, without giving effect to any choice-of-law provisions thereof that would compel the application of the substantive laws of any other jurisdiction. The venue for any action taken with respect to the Agreement shall be any state or federal court in New York County in the State of New York.
6.12 Waiver of Trial by Jury. Each party hereby irrevocably and unconditionally waives the right to a trial by jury in any action, suit, counterclaim or other proceeding (whether based on contract, tort or otherwise) arising out of, connected with or relating to this Agreement, the transactions contemplated hereby, or the actions of the Investor in the negotiation, administration, performance or enforcement hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.
| COMPANY: | ||
| MEDERA INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| INVESTORS: | ||
| Regemedera Holdings Limited | ||
| By: | ||
| Name: | ||
| Title: | ||
| New Bioera Holdings Limited | ||
| By: | ||
| Name: | ||
| Title: | ||
| Dragon Era Enterprises Limited | ||
| By: | ||
| Name: | ||
| Title: | ||
| LI, Ronald | ||
| NGAN, Katherine | ||
| HAJJAR, Roger | ||
| CHAN, Camie | ||
| KVC SPONSOR LLC | ||
| By: | ||
| Name: | WONG, Kenneth K.C. | |
| Title: | Manager | |
| WONG, Kenneth K.C. | ||
| DAVIDKHANIAN, Alex | ||
| DING, Peter | ||
| CHU, William | ||
| YU, Albert Cheung-Hoi | ||
EXHIBIT A
Name and Address of Investors
To the Sponsor, affiliates and designees, and directors and officers of Parent:
c/o Keen Vision Acquisition Corporation
37 Greenbriar Drive
Summit, New Jersey 07901
Attn: WONG, Kenneth K.C., Chief Executive Officer
E-mail: [email protected]
To the Investors, affiliates and designees, and directors and officers of the Company:
c/o Medera Inc.
Address: 6 Tide Street, 2nd Floor
Boston, Massachusetts 02210
Attention: LI, Ronald, Chief Executive Officer
E-mail: [email protected]
Exhibit 10.4
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (this “Agreement”) is dated as of [ ], 2024, by and between the undersigned (each, the “Holder”) and [Medera Inc.], a British Virgin Islands business company limited by shares (the “Company”). Capitalized terms used and not otherwise defined herein shall have the meanings given such terms in the Merger Agreement (as defined below).
BACKGROUND
A. Keen Vision Acquisition Corporation, a British Virgin Islands business company limited by shares (“Parent”), the Company (previously known as [ ], a Cayman Islands business company limited by shares and wholly owned subsidiary of the Parent (the predecessor of the Company prior to the Business Combination, “Purchaser”), [ ], a Cayman Islands exempted company and wholly owned subsidiary of Purchaser (“Merger Sub”), and Medera Inc., a Cayman Islands exempted company (“Medera”) have entered into that certain Merger Agreement dated as of August [*], 2024 (as supplemented by joinders and as it may further be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), pursuant to which (a) Parent will be merged with and into Purchaser (the “Reincorporation Merger”), with Purchaser surviving the Reincorporation Merger, and (b) Merger Sub will be merged with and into the Company (the “Acquisition Merger”), with the Company surviving the Acquisition Merger as a direct wholly owned subsidiary of Purchaser (collectively, the “Business Combination”). Following the Business Combination, Purchaser will be a publicly traded company listed on a stock exchange in the United States. All capitalized terms not otherwise defined in this Agreement shall have the meanings ascribed to them in the Merger Agreement.
B. Each Holder is the record owner of certain ordinary shares of the Company, par value $0.0001 per share (the “Company Ordinary Shares”).
C. As a condition of, and as a material inducement for Parent to enter into and consummate the transactions contemplated by the Merger Agreement, the Holder has agreed to execute and deliver this Agreement upon the consummation of the Business Combination.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, agree as follows:
AGREEMENT
1. Lock-Up.
(a) For purposes hereof, “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-US broker dealers or foreign regulated brokers.
(b) For purpose of this Agreement, the “Lock-up Period” means with respect to the Lock-up Shares, the period commencing on the Closing Date and ending on the date that is nine (9) months thereafter, subject to the following:
(i) if at any time subsequent to the date hereof, the share price of the Company Ordinary Shares equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period, then the Lock-Up Period shall be deemed to have expired as of such date with respect to 25% of the Lock-up Shares of each Holder (the “25% Tranche”); it being understood that if this clause (i) is not triggered before the expiration of the Lock-Up Period then the full 25% Tranche of each Holder will be subject to the full nine (9) month Lock-Up Period; and
(ii) with respect to the remaining 75% of the Lock-Up Shares of each Holder (the “75% Tranche”), the Lock-Up Period will be as follows:
(A) for 15% of the 75% Tranche, the Lock-Up Period will be three (3) months after the Closing Date;
(B) for 35% of the 75% Tranche, the Lock-Up Period will be six (6) months after the Closing Date; and
(C) for 50% of the 75% Tranche, the Lock-Up Period will be nine (9) months after the Closing Date.
(c) During the Lock-up Period, the Holder irrevocably agrees that it will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any of the Lock-up Shares (as defined below), enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such Lock-up Shares, whether any of these transactions are to be settled by delivery of any such Lock-up Shares, in cash or otherwise, publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or engage in any Short Sales (as defined below) with respect to any security of the Company.
(d) In furtherance of the foregoing, the Company will (i) place an irrevocable stop order on all Lock-up Shares, including those which may be covered by a registration statement, and (ii) notify the Company’s transfer agent in writing of the stop order and the restrictions on such Lock-up Shares under this Agreement and direct the Company’s transfer agent not to process any attempts by the Holder to resell or transfer any Lock-up Shares, except in compliance with this Agreement.
The restrictions set forth herein shall not apply to: (1) transfers or distributions to the Holder’s current or former general or limited partners, or members, stockholders, other equity holders or direct or indirect affiliates (within the meaning of Rule 405 under the Securities Act of 1933, as amended) or to the estates of any of the foregoing; (2) transfers by bona fide gift or to a member of the Holder’s immediate family or to a trust, the beneficiary of which is the Holder or a member of the Holder’s immediate family for estate planning purposes; (3) by virtue of the laws of descent and distribution upon death of the Holder; (4) pursuant to a qualified domestic relations order, in each case where such transferee agrees to be bound by the terms of this Agreement in writing, in form and substance reasonably satisfactory to Parent. In addition, restrictions set forth herein shall not apply to transactions relating to (1) shares of Company Ordinary Shares or other securities acquired in open market transactions after the completion of the Business Combination; (2) the transfer to the Company of Company Ordinary Shares or any securities convertible into or exercisable or exchangeable for Company Ordinary Shares to satisfy any tax, including estimated tax, remittance, or other payment obligations of the undersigned arising in connection with a vesting event of the Company’s securities, upon the settlement of restricted stock units or the payment due for the exercise of options or other rights to purchase securities of the Company (including, in each case, by way of a “cashless” or “net exercise” basis and any transfer to the Company necessary in respect of such amount needed for the payment of taxes, including estimated taxes, and remittance payments due as a result of such vesting, settlement or exercise including by means of a “net settlement” or otherwise), in all such cases pursuant to equity awards granted under a stock incentive plan or other equity award plan of the Company described in the Merger Agreement; provided that any remaining shares of Common Stock received upon such vesting, settlement or exercise shall be subject to the terms of this Agreement; (3) the transfer of Company Ordinary Shares or any security convertible into or exercisable or exchangeable for Common Stock pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction that is approved by the board of directors of the Company, made to all holders of Company Ordinary Shares involving a Change of Control (as defined below), provided that, in the event that the tender offer, merger, consolidation or other such transaction is not completed, the Company Ordinary Shares owned by the undersigned shall remain subject to the restrictions contained in this Agreement.
In addition, after the Closing Date, if there is a Change of Control, then upon the consummation of such Change of Control (or, to the extent required to effect such Change of Control in accordance with it terms, immediately prior to such consummation), all Lock-up Shares shall be released from the restrictions contained herein. A “Change of Control” means: (a) the sale of all or substantially all of the consolidated assets of the Company and the Company’s subsidiaries to a third-party purchaser; (b) a sale resulting in no less than a majority of the voting power of the Company being held by person that did not own a majority of the voting power prior to such sale; or (c) a merger, consolidation, recapitalization or reorganization of the Company with or into a third-party purchaser that results in the inability of the pre-transaction equity holders to designate or elect a majority of the board of directors (or its equivalent) of the resulting entity or its parent company.
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2. Representations and Warranties. Each of the parties hereto, by their respective execution and delivery of this Agreement, hereby represents and warrants to the others and to all third party beneficiaries of this Agreement that (a) such party has the full right, capacity and authority to enter into, deliver and perform its respective obligations under this Agreement, (b) this Agreement has been duly executed and delivered by such party and is the binding and enforceable obligation of such party, enforceable against such party in accordance with the terms of this Agreement, and (c) the execution, delivery and performance of such party’s obligations under this Agreement will not conflict with or breach the terms of any other agreement, contract, commitment or understanding to which such party is a party or to which the assets or securities of such party are bound.
3. Beneficial Ownership. The Holder hereby represents and warrants that it does not beneficially own, directly or through its nominees (as determined in accordance with Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder), any Company Ordinary Shares, or any economic interest in or derivative of such stock, other than those securities specified on the signature page hereto. For purposes of this Agreement, the Company Ordinary Shares beneficially owned by the Holder as specified on the signature page hereto are collectively referred to as the “Lock-up Shares.”
4. No Additional Fees/Payment. Other than the consideration specifically referenced herein, the parties hereto agree that no fee, payment or additional consideration in any form has been or will be paid to the Holder in connection with this Agreement.
5. Notices. Any notices required or permitted to be sent hereunder shall be sent in writing, addressed as specified below, and shall be deemed given: (a) if by hand or recognized courier service, by 4:00 PM on a business day, addressee’s day and time, on the date of delivery, and otherwise on the first business day after such delivery; (b) if by fax or email, on the date that transmission is confirmed electronically, if by 4:00 PM on a business day, addressee’s day and time, and otherwise on the first business day after the date of such confirmation; or (c) five days after mailing by certified or registered mail, return receipt requested. Notices shall be addressed to the respective parties as follows (excluding telephone numbers, which are for convenience only), or to such other address as a party shall specify to the others in accordance with these notice provisions:
| (a) | If to the Company, to: | |
| Medera Inc. | ||
|
6 Tide Street, 2nd Floor Boston, Massachusetts 02210 Attention: Ronald Li, Chief Executive Officer E-mail: [email protected] | ||
| with a copy to (which shall not constitute notice): | ||
| Hogan Lovells US LLP | ||
| 390 Madison Avenue | ||
| New York, NY 10017 | ||
| Attention: Richard Aftanas, Esq. | ||
| Email: [email protected] |
| (b) | If to the Holder, to the address set forth on the Holder’s signature page hereto, with a copy, which shall not constitute notice, to: | |
| Hogan Lovells US LLP | ||
| 390 Madison Avenue | ||
| New York, NY 10017 | ||
| Attention: Richard Aftanas, Esq. | ||
| Email: [email protected] |
or to such other address as any party may have furnished to the others in writing in accordance herewith.
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6. Enumeration and Headings. The enumeration and headings contained in this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any of the provisions of this Agreement.
7. Counterparts. This Agreement may be executed in facsimile and in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all of which shall together constitute one and the same agreement.
8. Successors and Assigns. This Agreement and the terms, covenants, provisions and conditions hereof shall be binding upon, and shall inure to the benefit of, the respective heirs, successors and assigns of the parties hereto. The Holder hereby acknowledges and agrees that this Agreement is entered into for the benefit of and is enforceable by Parent and its successors and assigns.
9. Severability. If any provision of this Agreement is held to be invalid or unenforceable for any reason, such provision will be conformed to prevailing law rather than voided, if possible, in order to achieve the intent of the parties and, in any event, the remaining provisions of this Agreement shall remain in full force and effect and shall be binding upon the parties hereto.
10. Amendment. This Agreement may be amended or modified by written agreement executed by each of the parties hereto.
11. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
12. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
13. Governing Law. The terms and provisions of this Agreement shall be construed in accordance with the laws of the State of New York.
[Signature Page Follows]
4
IN WITNESS WHEREOF, the parties hereto have caused this Lock-up Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
| Medera Inc. | ||
| By: | ||
| Name: | ||
| Title: | ||
IN WITNESS WHEREOF, the parties hereto have caused this Lock-up Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
| By: | ||
| Name: | ||
| Title: | ||
| Email: | ||
| Address: | ||
| NUMBER OF LOCK-UP SHARES: [*] | ||
| By: | ||
| Name: | ||
| Title: | ||
| Email: | ||
| Address: | ||
| NUMBER OF LOCK-UP SHARES: [*] | ||
| By: | ||
| Name: | ||
| Title: | ||
| Email: | ||
| Address: | ||
| NUMBER OF LOCK-UP SHARES: [*] | ||
Schedule A
KVC Sponsor LLC
Alex Davidkhanian
Peter Ding
William Chu
Albert Cheung-Hoi Yu
Regemedera Holdings Limited
Dragon Era Enterprises Limited
Year Ahead International Limited
One Supreme Investment Limited
Exhibit 99.1
Medera Inc. to be Listed on NASDAQ Through a Merger Agreement with Keen Vision Acquisition Corporation
| ● | Medera is a clinical-stage biotechnology company focused on targeting difficult-to-treat cardiovascular diseases using a range of next-generation gene- and cell-based approaches in combination with bioengineered human mini-heart drug discovery and screening technology platforms |
| ● | Transaction proceeds to accelerate three most advanced clinical programs for the adeno-associated virus (AAV)-based gene therapy candidates |
| ● | The combined company to have an implied initial enterprise value of approximately $622.6 million |
| ● | Medera’s founders and key shareholders have committed approximately $22.6 million (via conversion of all shareholders loans) for this merger, with all existing Medera shareholders rolling 100% of their equity |
| ● | As a closing condition to the business combination, Medera shall have at least $40 million in available liquidity |
| ● | Anticipated closing of transaction in fourth quarter of 2024 |
SUMMIT, N.J. and BOSTON, Sept. 5, 2024 /PRNewswire/ -- Keen Vision Acquisition Corporation (“KVAC”) (Nasdaq: KVAC, KVACW) and Medera Inc., (“Medera”), a clinical-stage biotechnology company, announced today that they have entered into a definitive merger agreement. Upon closing of the merger, which is expected to occur in the fourth quarter of 2024, the combined company is to be named Medera Inc.
Company Overview
Medera Inc. is a clinical-stage biopharmaceutical company, focused on targeting difficult-to-treat and currently incurable diseases by developing next-generation gene- and cell-based approaches in combination with bioengineered human-based (including the exclusively available mini-Heart®) screening technology platform for disease modeling and drug discovery. Medera operates through its two business units, Sardocor and Novoheart.
Sardocor executes clinical development of novel next-generation therapies for Medera. Leveraging the Novoheart human-based drug discovery and validation platforms, as described below, Sardocor aims to expedite the drug development and regulatory timelines for its gene therapy and cell therapy pipeline. Sardocor has been granted Investigational New Drug (IND) clearances from the US Food and Drug Administration (FDA) for three ongoing adeno-associated virus (AAV)-based cardiac gene therapy clinical trials for Heart Failure with Reduced Ejection Fraction (HFrEF), Heart Failure with Preserved Ejection Fraction (HFpEF) and Duchenne Muscular Dystrophy-induced Cardiomyopathy (DMD-CM). In addition, Sardocor’s pipeline also includes four preclinical gene therapy and three preclinical small molecule candidates for a range of cardiac, pulmonary and vascular diseases.
Sardocor is currently focused on its three most advanced clinical programs, which are AAV-based gene therapy candidates:
| ● | SRD-001 is intended to treat patients with HFrEF, a prevalent form of heart disease that accounts for half of an estimated 64.3 million heart failure cases worldwide. With an open IND clearance from the FDA, SRD-001 is being evaluated in an ongoing Phase 1/2a clinical trial (called MUSIC-HFrEF; NCT0470384). To date, six patients have been infused with SRD-001 in Cohort A (low-dose 3x1013 vg per patient) and one patient has been infused in Cohort B (high-dose 4.5x1013 vg per patient). A clinical update of this trial was featured in a late-breaking oral presentation at the American Society of Gene & Cell Therapy (ASGCT) in May 2024. Clinically meaningful improvements in multiple metrics of heart function and patient health were observed following delivery of SRD-001 (e.g., NYHA class, 6MW, LVEF and pro-BNP). Sardocor expects to complete the Phase ½a portion of the ongoing trial in the fourth quarter and commence an international randomized Phase 2b portion shortly after. |
| ● | SRD-002 is intended to treat patients with HFpEF, another prevalent form of heart failure accounting for the remaining half of all heart failure cases that currently still lack disease-modifying therapeutics. With an open IND and Fast Track Designation from the FDA, SRD-002 is being evaluated in an ongoing First-In-Human Phase ½a clinical trial (called MUSIC-HFpEF; NCT06061549). To date, five patients have been infused with SRD-002 in Cohort A (low-dose 3x1013 vg per patient) and Sardocor has been cleared to dose patients in Cohort B (high-dose 4.5x1013 vg per patient). Improvements in cardiovascular performance were observed in the first three patients at six months with additional data being collected. Sardocor expects to complete patient enrolment in both cohorts of the Phase 1/2a clinical trial by the end of 2024 and to provide an interim data readout in the first half of 2025. |
| ● | SRD-003 is intended to treat patients (aged 18 or above) with DMD-CM, for which there is still no cure. Almost all DMD patients eventually die from DMD-CM. With the FDA’s IND clearance and Orphan Drug Designation, SRD-003 is currently being evaluated in an ongoing First-In-Human Phase 1/2a clinical trial (called MUSIC-DMD; NCT06224660). Sardocor expects to dose the first patient in the fourth quarter of 2024. |
Using its proprietary intracoronary infusion methodology, Sardocor delivers its gene therapy candidates directly via blood vessels to the cardiac ventricular muscle cells as an out-patient procedure. This minimally invasive technique allows the delivery of optimal and least amount of drug products to achieve efficient transduction and improved efficacy while avoiding side effects (such as those typically seen with systemic delivery of very large AAV doses).
With its proprietary, award-winning human mini-Heart® screening technology platform, Novoheart conducts preclinical disease modelling and drug discovery for Medera, aiming to create, expand, validate, and optimize Medera’s therapeutic pipeline (under Sardocor). Novoheart’s versatile technology platform provides a range of state-of-the-art automation hardware and software as well as screening services, for human-specific disease modelling, therapeutic target discovery and validation, drug toxicity and efficacy screening, and dosage optimization carried out in the context of healthy and/or diseased human heart chambers and tissues. These are free from species-specific differences and in 3D configurations that accurately reflect the native human heart’s physiology or pathophysiology. These properties substantially improve success rates and reduce development cost and time in accordance with the FDA Modernization Act 2.0. Global pharmaceutical and academic leaders are using Novoheart’s technology platform their drug discovery and development purposes. The Novoheart platform has facilitated and accelerated the development and regulatory approvals of Sardocor’s lead therapeutic candidates that are currently in clinical trials.
Management Comments
“Medera is uniquely positioned for sustainable growth with its one-of-a-kind technology platform and a broad portfolio of clinical and preclinical candidates, three of which are leading gene therapy candidates with ongoing FDA clinical trials. In line with FDA’s Modernization Act 2.0, Medera’s use of its bioengineered human-based technology in drug discovery and development processes promotes more accurate drug testing and fewer animal killings, which are environmentally and socially responsible. Medera’s collaboration and licensing arrangements now in place with global pharmaceutical leaders provide validation for its achievements,” remarked Kenneth KC Wong, Chairman and Chief Executive Officer of KVAC.
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“Achieving a Nasdaq listing will allow Medera to be better positioned for advancing our various clinical and preclinical programs, enabling more efficient development aimed at bringing novel therapeutic solutions to patients with unmet needs,” stated Ronald Li, PhD, Chief Executive Officer and Founder of Medera.
“With this business combination, Sardocor will be well positioned to potentially expediate its three clinical trials for our lead gene therapy candidates in HFrEF, HFpEF and DMD-CM. By utilizing our intra-coronary methodology to directly deliver our gene therapy candidates into the heart, our approach has the potential to significantly lower the dosage compared other therapies that typically utilize systemic delivery. We also plan to accelerate our timetable to apply for an Investigational New Drug (IND) and the start of the Phase 1 trial for our next gene therapy candidate,” said Roger Hajjar, MD, President, Chief Medical Officer and co-Founder of Medera.
Transaction Overview
This merger values Medera at a pre-money valuation of $622.6 million. Cash proceeds from the transactions contemplated by the merger agreement may consist of up to approximately $149.50 million of cash currently held in KVAC’s trust account (before any redemptions by KVAC’s stockholders).
The transaction includes a management incentive plan that the parties intend to tie to the successful commercialization of the three clinical stage assets, reflecting an alignment of interest with shareholders
The transaction, which has been unanimously approved by the each of the boards of directors of KVAC and Medera, is subject to, among other customary closing conditions, approval by the shareholders of KVAC and of Medera, with the holders of a majority of the votes of both companies required to approve the transaction having provided commitments to approve the transaction. The transaction is expected to close in the fourth quarter of 2024.
A more detailed description of the transaction terms and a copy of the merger agreement will be included in a current report on Form 8-K to be filed by KVAC with the United States Securities and Exchange Commission (the “SEC”). A registration statement (which will contain a proxy statement/ prospectus) will be filed with the SEC in connection with the transaction.
About Keen Vision Acquisition Corporation
Keen Vision Acquisition Corp (“KVAC”), listed on Nasdaq, is a blank check company incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. KVAC is focused on biotechnology, consumer goods or agriculture opportunities, which are also evaluated on their sustainability, environmental, social, and corporate governance (“ESG”) imperatives. EF Hutton LLC and Brookline Capital Markets, a division of Arcadia Securities, LLC, are serving as Capital Markets Advisors for KVAC.
www.kv-ac.com
About Medera Inc.
Medera is a clinical-stage biopharmaceutical company focused on eradicating difficult-to-treat cardiovascular diseases with significant unmet needs, using a range of next-generation gene- and cell-based approaches in combination with bioengineered human-based technology (including mini-Heart®) platform. Medera operates via two business units Sardocor and Novoheart.
www.medera.bio
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Forward-Looking Statements
Certain statements included in this press release are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release are forward-looking statements. Any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are also forward-looking statements. In some cases, you can identify forward-looking statements by words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “strategy,” “future,” “opportunity,” “may,” “target,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” “preliminary,” or similar expressions that predict or indicate future events or trends or that are not statements of historical matters, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements include, without limitation, KVAC’s, Medera’s, or their respective management teams’ expectations concerning the outlook for their or Medera’s business, productivity, plans, and goals for future operational improvements and capital investments, operational performance, future market conditions, or economic performance and developments in the capital and credit markets and expected future financial performance, including expected net proceeds, expected additional funding, the percentage of redemptions of KVAC’s public shareholders, growth prospects and outlook of Medera’ operations, individually or in the aggregate, including the achievement of project milestones, commencement and completion of commercial operations of certain of Medera’s projects, as well as any information concerning possible or assumed future results of operations of Medera. Forward-looking statements also include statements regarding the expected benefits of the transactions contemplated by the merger (“Transaction”). The forward-looking statements are based on the current expectations of the respective management teams of Medera and KVAC, as applicable, and are inherently subject to uncertainties and changes in circumstance and their potential effects. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, (i) the risk that the Transaction may not be completed in a timely manner or at all, which may adversely affect the price of KVAC’s securities; (ii) the risk that the Transaction may not be completed by KVAC’s business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by KVAC; (iii) the failure to satisfy the conditions to the consummation of the Transaction, including the adoption of the Merger Agreement by the shareholders of KVAC and the receipt of certain regulatory approvals; (iv) market risks; (v) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; (vi) the effect of the announcement or pendency of the Transaction on Medera’s business relationships, performance, and business generally; (vii) the outcome of any legal proceedings that may be instituted against Medera or KVAC related to the Merger Agreement or the Transaction; (viii) failure to realize the anticipated benefits of the Transaction; (ix) the inability to maintain the listing of KVAC’s securities or to meet listing requirements and maintain the listing of Medera’s securities on Nasdaq; (x) the inability to implement business plans, forecasts, and other expectations after the completion of the Transaction, identify and realize additional opportunities, and manage its growth and expanding operations; (xi) risks related to Medera’s ability to develop, license or acquire new therapeutics; (xii) the risk that Medera will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all; (xiii) the risk of product liability or regulatory lawsuits or proceedings relating to Medera’s business; (xiv) uncertainties inherent in the execution, cost, and completion of preclinical studies and clinical trials; (xv) risks related to regulatory review, and approval and commercial development; (xvi) risks associated with intellectual property protection; (xvii) Medera’s limited operating history and risk that it may never successfully commercialise its products; (xviii) Medera expects to continue to incur significant losses and may never achieve or maintain profitability; and (xix) the risk that additional financing in connection with the Transaction may not be raised on favorable terms. The foregoing list is not exhaustive, and there may be additional risks that neither KVAC nor Medera presently knows or that KVAC and Medera currently believe are immaterial. You should carefully consider the foregoing factors, any other factors discussed in this press release and the other risks and uncertainties described in the “Risk Factors” section of KVAC’s Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 29, 2024, the risks to be described in the registration statement, which will include a preliminary proxy statement/prospectus, and those discussed and identified in filings made with the SEC by KVAC from time to time. Medera and KVAC caution you against placing undue reliance on forward-looking statements, which reflect current beliefs and are based on information currently available as of the date a forward-looking statement is made. Forward-looking statements set forth in this press release speak only as of the date of this press release. Neither Medera nor KVAC undertakes any obligation to revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs. In the event that any forward-looking statement is updated, no inference should be made that Medera or KVAC will make additional updates with respect to that statement, related matters, or any other forward-looking statements. Any corrections or revisions and other important assumptions and factors that could cause actual results to differ materially from forward-looking statements, including discussions of significant risk factors, may appear, up to the consummation of the Transaction, in KVAC’s public filings with the SEC, and which you are advised to review carefully.
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Important Information for Investors and Shareholders
In connection with the Transaction, KVAC and Medera intend to file with the SEC a registration statement, which will include a prospectus with respect to the securities to be issued in connection with the Transaction and a proxy statement to be distributed to holders of KVAC’s common shares in connection with KVAC’s solicitation of proxies for the vote by KVAC’s shareholders with respect to the Transaction and other matters to be described in the Registration Statement (the “Proxy Statement”). After the SEC declares the registration statement effective, KVAC plans to mail copies to shareholders of KVAC as of a record date to be established for voting on the Transaction. This press release does not contain all the information that should be considered concerning the Transaction and is not a substitute for the registration statement, Proxy Statement or for any other document that KVAC may file with the SEC. Before making any investment or voting decision, investors and security holders of KVAC are urged to read the registration statement and the Proxy Statement, and any amendments or supplements thereto, as well as all other relevant materials filed or that will be filed with the SEC in connection with the Transaction as they become available because they will contain important information about, Medera, KVAC and the Transaction.
Investors and security holders will be able to obtain free copies of the registration statement, the Proxy Statement and all other relevant documents filed or that will be filed with the SEC by KVAC through the website maintained by the SEC at www.sec.gov. In addition, the documents filed by KVAC may be obtained free of charge from KVAC’s website at https://www.kv-ac.com or by directing a request to [email protected]. The information contained on, or that may be accessed through, the websites referenced in this press release is not incorporated by reference into, and is not a part of, this press release.
Participants in the Solicitation
KVAC, Medera and their respective directors, executive officers and other members of management and employees may, under the rules of the SEC, be deemed to be participants in the solicitations of proxies in connection with the Transaction. For more information about the names, affiliations and interests of KVAC’s directors and executive officers, please refer to KVAC’s annual report on Form 10-K filed with the SEC on March 29, 2024, which can be found at https://www.sec.gov/ix?doc=/Archives/edgar/data/1889983/000121390024027973/ea0201104-10k_keenvision.htm and registration statement, Proxy Statement and other relevant materials filed with the SEC in connection with the Transaction when they become available. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, which may, in some cases, be different than those of KVAC’s shareholders generally, will be included in the registration statement and the Proxy Statement and other relevant materials when they are filed with the SEC when they become available. Shareholders, potential investors and other interested persons should read the registration statement and the Proxy Statement and other such documents carefully, when they become available, before making any voting or investment decisions. You may obtain free copies of these documents from the sources indicated above.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale 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. No offering of securities in the Transaction shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Contacts: Keen Vision Acquisition Corporation: Alex Davidkhanian, Chief Financial Officer, Email: [email protected]; MederaInvestor Relations: Stephanie Carrington, ICR Westwicke, [email protected], (646) 277-1282; Media Relations: Sean Leous, ICR Westwicke, [email protected], (646) 866-4012
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