Mountain Lake Acquisition Corp 8-K, filed Oct 7, 2025
Mountain Lake Acquisition Corp. (MLAC)
About this 8-K
Mountain Lake Acquisition Corp filed this 8-K on October 7, 2025, reporting on events of October 1, 2025.
Items reported
- Item 1.01: Entered into a material agreement
- Item 3.02: Unregistered sale of equity
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): October 7, 2025 (
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
(Address of principal executive offices, including zip code)
Registrant’s
telephone number, including area code: (
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| , and one Right entitling the holder to receive one-tenth of a Class A ordinary share | The Stock Market LLC | |||
| The Stock Market LLC | ||||
| The |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01. Entry into a Material Definitive Agreement.
Business Combination Agreement
On October 1, 2025, Mountain Lake Acquisition Corp. (“SPAC”) entered into a Business Combination Agreement (the “Business Combination Agreement”) with Avalanche Treasury Corporation, a Delaware corporation (“Pubco”), Avalanche SPAC Merger Sub LLC, a Delaware limited liability company (“SPAC Merger Sub”), Avalanche Company Merger Sub LLC, a Delaware limited liability company (“Company Merger Sub”, and together with SPAC Merger Sub, the “Pubco Subsidiaries”), Avalanche Treasury Company LLC, a Delaware limited liability company (the “Company”), and Dragonfly Digital Management, LLC, a Delaware limited liability company (the “Seller”). Capitalized terms used in this Current Report on Form 8-K but not otherwise defined herein have the meanings given to them in the Business Combination Agreement.
Pursuant to the Business Combination Agreement, and subject to the terms and conditions set forth therein, upon the consummation of the transactions contemplated thereby (the “Closing” and the date and time at which the Closing is actually held, the “Closing Date”), (a) prior to the Closing, SPAC will effect a domestication under Section 388 of the DGCL and the Cayman Act (the “Domestication”), pursuant to which SPAC will transfer by way of continuation to and become a Delaware corporation, (b) at least two hours after the Domestication, SPAC Merger Sub will merge with and into SPAC, with SPAC continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “SPAC Merger”) and with SPAC shareholders receiving one share of non-voting Class A common stock, par value $0.01 per share, of Pubco (“Pubco Class A Stock”) for each Class A ordinary share, par value $0.0001 per share, of SPAC (the “SPAC Class A Ordinary Shares”) held by such shareholder, and with each holder of SPAC Rights receiving one share of Pubco Class A Stock in exchange for every ten (10) SPAC Rights held by such holder and (c) Company Merger Sub will merge with and into the Company, with the Company continuing as the surviving company (the “Company Merger” and, together with the SPAC Merger, the “Mergers” and, together with the other transactions contemplated by the Business Combination Agreement, including the Foundation Transaction, the Dragonfly Contribution and the Company Unit Subscription, the “Transactions”), and with (i) each Company member other than the Seller receiving one share of Pubco Class A Stock for each Company unit held immediately prior to the effective time of the Company Merger and (ii) the Seller receiving one share of Pubco Class A Stock and one share of Pubco Class B common stock, par value $0.01 per share (“Pubco Class B Stock” and, together with the Pubco Class A Stock, the “Pubco Stock”), for each Company unit it holds. As a result of the Mergers and the other transactions contemplated by the Business Combination Agreement, Pubco will become a publicly traded company, all upon the terms and subject to the conditions set forth in the Business Combination Agreement and in accordance with applicable law.
As additional consideration for the Company Merger (the “Additional Merger Consideration”), at the Company Merger Effective Time, Pubco will also issue to the Seller 4,000,000 shares of Pubco Class A Stock and 4,000,000 shares of Pubco Class B Stock. At the Closing, 2,000,000 shares of Pubco Class A Stock and 2,000,000 shares of Pubco Class B Stock that will be issued to Seller as part of the Additional Merger Consideration (the “Seller Earnout Shares”) will be deposited into an escrow account with Continental Stock Transfer and Trust Company (or another escrow agent reasonably acceptable to the Seller and Pubco), and will be released in tranches, all as provided in the Business Combination Agreement and the escrow agreement that will be entered by and between Seller, Pubco and the escrow agent in a form to be mutually agreed upon by the parties prior to the Closing (the “Escrow Agreement”). Unless released earlier, in accordance with the Escrow Agreement and Business Combination Agreement, the Seller Earnout Shares will be held in escrow for a period commencing on the Closing Date and ending on fifth anniversary of the Closing Date (such period, the “Escrow Period”). The Seller Earnout Shares, together with any shares received upon equitable adjustment of the Seller Earnout Shares, shall be subject to potential transfer to Pubco for no consideration (the “Seller Transfer”) at the end of the Earnout Period in the event that not all of the Triggering Events are achieved by Pubco during the Earnout Period.
The Seller Earnout Shares shall vest, no longer be subject to the Seller Transfer and shall be released from the escrow account to the Seller, in the amounts specified below, upon Pubco meeting the price milestones specified below:
| (i) | on the last day of any twenty (20) consecutive trading day period after the Closing Date in which the volume weighted average price (“VWAP”) of the Pubco Class A Stock is greater than or equal to $13.00 per share (“Triggering Event I”), 666,667 shares of Pubco Class A Stock and 666,667 shares of Pubco Class B Stock; |
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| (ii) | on the last day of any twenty (20) consecutive trading day period after the Closing date in which the VWAP of the Pubco Class A Stock is greater than or equal to $15.00 per share (“Triggering Event II”), 666,667 shares of Pubco Class A Stock and 666,667 shares of Pubco Class B Stock; and |
| (iii) | on the last day of any twenty (20) consecutive trading day period after the Closing date in which the VWAP of the Pubco Class A Stock is greater than or equal to $17.00 per share (“Triggering Event III”, and together with Triggering Event I and Triggering Event II, the “Triggering Events” and each a “Triggering Event”), 666,666 shares of Pubco Class A Stock and 666,666 shares of Pubco Class B Stock. |
Each Triggering Event shall only occur once, if at all, and all Seller Earnout Shares not released by the end of the Earnout Period will be transferred to Pubco for no consideration, in each case as set forth in the Business Combination Agreement. If there is a change in control of Pubco during the earnout period, all remaining Seller Earnout Shares then in escrow will be released to the Seller.
In connection with the Closing, Pubco will issue two classes of Pubco common stock with different voting and economic rights. The Pubco Class A Stock will be entitled to economic rights, including the right to receive distributions in proportion to the number of shares held, and will be listed for trading on Nasdaq or another national securities exchange. The Pubco Class A Stock shall have no voting rights except (i) as required by the General Corporation Law of the State of Delaware or (ii) on any matter that adversely affects them relative to holders of any other class of stock of Pubco. These shares will be freely transferable subject to the terms of the Lock-Up Agreements (defined below) and any applicable legal restrictions. The Pubco Class B Stock will be entitled to one vote per share but will not have any economic rights and will not be listed for trading or transferable except in connection with the transfer of a share of Pubco Class A Stock to an affiliate of the Seller. The shares of Pubco Class B Stock will be cancelled pro rata upon any transfer of shares of Pubco Class A Stock to any third party by the Seller (other than to the Seller’s affiliates).
Immediately following the Closing, the Pubco Class A Stock will be held by the former SPAC shareholders, the former Company Members, and the Seller, while the Pubco Class B Stock will be held only by the Seller.
Representations and Warranties
The Business Combination Agreement contains customary representations and warranties of the parties, which shall not survive the Closing. Certain representations and warranties are qualified by materiality or Material Adverse Effect. “Material Adverse Effect” as used in the Business Combination Agreement means with respect to any specified person, any fact, event, occurrence, change or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on (i) the business, assets, liabilities, results of operations or condition (financial or otherwise) of such person and its subsidiaries, taken as a whole, or (ii) the ability of such person or any of its subsidiaries to consummate the Transactions, in each case subject to certain customary exceptions. Certain of the representations are subject to specified exceptions and qualifications contained in the Business Combination Agreement or in information provided pursuant to certain disclosure schedules to the Business Combination Agreement.
Covenants
The Business Combination Agreement contains pre-closing covenants of the parties, including obligations of the parties to operate their respective businesses in the ordinary course consistent with past practice, and to refrain from taking certain specified actions without the prior written consent of certain other parties, in each case, subject to certain exceptions and qualifications. Additionally, the parties have agreed not to solicit, negotiate or enter into competing transactions, as further provided in the Business Combination Agreement. The covenants do not survive the Closing (other than those that are to be performed after the Closing).
The Business Combination Agreement also contains obligations of certain of the parties to use their reasonable best efforts to consummate the Transactions contemplated by the Business Combination Agreement. This includes certain obligations of SPAC, Pubco and the Company to use reasonable best efforts to take all actions and do all things necessary, proper or advisable to consummate the transactions contemplated by the Company Unit Subscription Agreements (as defined below), on the terms and conditions described therein.
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Additionally, the Company shall purchase a number of AVAX equal to the gross cash proceeds from the Company Unit Subscription (as defined below) minus any and all reasonable and customary fees, commissions, or other charges (including network gas fees and exchange trading fees) incurred by the Company or its designated agent in connection with the purchase of AVAX on an arms’ length basis through a recognized digital asset exchange or broker, which shall be placed into a digital wallet held or operated by or on behalf of the Company.
SPAC and Pubco agreed, with the cooperation of the Company, as promptly as practicable after the execution of the Business Combination Agreement and after completion of the Company’s audited financial statements, to prepare and file with the U.S. Securities and Exchange Commission (the “SEC”), a registration statement on Form S-4 (as amended or supplemented from time to time, the “Registration Statement”) in connection with the registration under the Securities Act of 1933, as amended (the “Securities Act”) of the issuance of the Pubco Class A Stock to SPAC shareholders and certain Company securityholders, and containing a proxy statement/prospectus for the purpose of SPAC soliciting proxies from the SPAC shareholders to approve (the “SPAC Shareholder Approval”), at an extraordinary general meeting of SPAC shareholders (the “Extraordinary General Meeting”), resolutions approving the Business Combination Agreement, the Transactions and related matters (the “SPAC Shareholder Approval Matters”) and providing SPAC shareholders an opportunity, in accordance with SPAC’s organizational documents and initial public offering prospectus, to have their SPAC Class A Ordinary Shares redeemed.
The parties agreed to take all necessary action so that effective as of the Closing, the board of directors of Pubco will consist of five individuals, each of which are to be designated by the Seller.
Conditions to the Parties’ Obligations to Consummate the Merger
Under the Business Combination Agreement, the obligations of the parties to consummate (or cause to be consummated) the Transactions are subject to a number of customary conditions for special purpose acquisition companies, including, among others, the following: (i) the receipt of the SPAC Shareholder Approval; (ii) the consummation of the Transactions not being prohibited by applicable law; (iii) effectiveness of the Registration Statement; and (iv) the shares of Pubco Class A Stock having been approved for listing on Nasdaq, the New York Stock Exchange or another national stock exchange.
The obligations of SPAC to consummate (or cause to be consummated) the Transactions are also subject to, among other things (i) the representations and warranties of the Company, Pubco, Pubco Subsidiaries and the Seller being true and correct, subject to the applicable materiality standards contained in the Business Combination Agreement, (ii) material compliance by the Company, Pubco, Pubco Subsidiaries and the Seller with their respective pre-closing covenants, (iii) no occurrence of a Material Adverse Effect with respect to the Company or Pubco, and (iv) completion of the Foundation Transaction and the Dragonfly Contribution in accordance with the Token Sale Agreement and the Contribution Agreement.
The obligations of the Company, Pubco, the Pubco Subsidiaries and the Seller to consummate (and cause to be consummated) the Transactions are also subject to, among other things: (i) the representations and warranties of SPAC being true and correct, subject to the applicable materiality standards contained in the Business Combination Agreement, (ii) material compliance by SPAC with their applicable pre-closing covenants, (iii) no occurrence of a Material Adverse Effect with respect to SPAC since the date of the Business Combination Agreement which is continuing and uncured, and (iv) the Sponsor having performed in all material respects its obligations required under the Sponsor Support Agreement (as defined below).
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Termination
The Business Combination Agreement contains certain termination rights, including, among others and subject to certain conditions and limitations, the following: (i) upon the mutual written consent of SPAC and the Seller, (ii) by either SPAC or the Seller, if the conditions to closing set forth therein have not occurred or been waived by the one-year anniversary of the Business Combination Agreement (the “Outside Date”), (iii) by either SPAC or the Seller if a governmental authority issues a final, non-appealable order permanently enjoining or prohibiting the Transactions, (iv) by either SPAC or the Seller, as a result of material breach by or non-performance of the other party and such breach or non-performance gives rise to a failure of a condition precedent and cannot or has not been cured within the earlier of (a) 20 days after written notice of such breach is provided to SPAC by the Seller and (b) five business days prior to the Outside Date, (v) by the Seller if, prior to SPAC obtaining the SPAC Shareholder Approval, the SPAC board has made a change in its recommendation; and (vi) by SPAC or the Seller, if the Extraordinary General Meeting is held and has concluded, SPAC shareholders have duly voted, and the SPAC Shareholder Approval was not obtained.
None of the parties to the Business Combination Agreement is required to pay a termination fee or reimburse any other party for its expenses as a result of a termination of the Business Combination Agreement. However, each party will remain liable for willful breaches of the Business Combination Agreement or for fraud claims prior to termination. Notwithstanding the foregoing, Pubco will also bear all fees, costs and expenses incurred by any party or any of its affiliates in connection with the filing of the Registration Statement with the SEC and submitting a listing application for Pubco Class A Stock to Nasdaq.
Trust Account Waiver
The Company, Pubco, Pubco Subsidiaries and the Seller agreed that it and its affiliates will not have any right, title, interest or claim of any kind in or to any monies in SPAC’s trust account held for its public shareholders, and agreed not to, and waived any right to, make any claim against the trust account (including any distributions therefrom).
The Business Combination Agreement is filed as Exhibit 2.1 to this Current Report on Form 8-K and the foregoing description thereof does not purport to be complete and is qualified in its entirety by reference to the full text of the Business Combination Agreement and the terms of which are incorporated by reference herein. The filing of the Business Combination Agreement herewith provides investors with information regarding its terms and is not intended to provide any other factual information about the parties. In particular, the assertions embodied in the representations and warranties contained in the Business Combination Agreement were made as of the execution date of the Business Combination Agreement only and are qualified by information in confidential disclosure schedules provided by the parties to each other in connection with the signing of the Business Combination Agreement. These disclosure schedules contain information that modifies, qualifies, and creates exceptions to the representations and warranties set forth in the Business Combination Agreement. Moreover, certain representations, warranties and covenants in the Business Combination Agreement may have been used for the purpose of allocating risk between the parties rather than establishing matters of fact. Accordingly, you should not rely on the representations, warranties and covenants in the Business Combination Agreement as characterizations of the actual statements of fact about the parties.
Sponsor Support Agreement
Concurrently with the execution of the Business Combination Agreement, SPAC entered into a Sponsor Support Agreement with the Sponsor and Pubco (the “Sponsor Support Agreement”), pursuant to which, among other things, the Sponsor agreed (i) to vote its SPAC ordinary shares in favor of the Business Combination Agreement and the Transactions and each of the SPAC Shareholder Approval Matters, (ii) to vote its SPAC ordinary shares against any alternative transactions, (iii) to comply with the restrictions imposed by the letter agreement, dated as of December 12, 2024 (the “Insider Letter”), by and among SPAC, the Sponsor, and the officers and directors of SPAC at the time of its initial public offering, including the restrictions on transfer and redemption of SPAC Ordinary Shares in connection with the Transactions, and (iv) subject to and conditioned upon the Closing, to waive any anti-dilution rights that would otherwise result in the Class B ordinary shares, par value $0.0001 per share, of SPAC converting into SPAC Class A Ordinary Shares on a greater than one-for-one basis.
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In addition, the Sponsor agreed to effect certain security cancellations and to deposit certain Pubco Class A Stock issued to it at Closing into escrow in connection with the Closing. Specifically, immediately prior to the SPAC Merger Effective Time, the Sponsor will (i) deliver to SPAC for cancellation, for no consideration, 495,000 Private Placement Units and 4,387,500 Founder Shares, and (ii) 1,600,000 shares of Pubco Class A Stock to be issued to the Sponsor at Closing (of the total 2,800,000 shares to be issued to the Sponsor as a result of the SPAC share conversion) (the “Sponsor Earnout Shares”), will be deposited into an escrow account with Continental Stock Transfer and Trust Company (or another escrow agent reasonably acceptable to the Sponsor and the Company), and will be released in tranches, as provided in the Sponsor Support Agreement and an escrow agreement that shall be in a form to be mutually agreed upon by the Sponsor, Pubco and the escrow agent prior to the Closing (the “Sponsor Escrow Agreement”). The Sponsor agreed that all of the Sponsor Earnout Shares, together with any shares received upon equitable adjustment of the Sponsor Earnout Shares, shall be subject to potential transfer to Pubco for no consideration (the “Sponsor Transfer”) at the end of the Earnout Period in the event that not all of the Triggering Events are achieved by Pubco.
The Sponsor Earnout Shares shall vest, no longer be subject to the Sponsor Transfer and shall be released from the escrow account to the Sponsor, in the amounts specified below, upon Pubco meeting the price milestones specified below:
| (i) | Upon the occurrence of Triggering Event I, 533,333 Sponsor Earnout Shares shall be released from the escrow account to the Sponsor; |
| (ii) | Upon the occurrence of Triggering Event II, 533,333 Sponsor Earnout Shares shall be released from the escrow account to the Sponsor; and |
| (iii) | Upon the occurrence of Triggering Event III, 533,334 Sponsor Earnout Shares shall be released from the escrow account to the Sponsor. |
Pursuant to the Sponsor Support Agreement, the parties agreed that prior to the Closing they would enter into an amendment to the Insider Letter, to amend certain terms relating to transfer restrictions applicable to the shares held by the Sponsor. Sponsor also agreed to use its reasonable best efforts to cause BTIG, LLC (“BTIG”), the underwriter of SPAC’s initial public offering, to forfeit all deferred underwriting fees in excess of $1,000,000 and to use reasonable efforts to cause BTIG to deliver all of the 310,000 Private Placement Units it holds for cancellation. Further, the Sponsor also agreed, subject to and effective as of the Closing, to irrevocably and unconditionally release and waive any and all claims it may have against SPAC, Pubco and the Company or their respective affiliates arising on or prior to the Closing, subject to customary carve-outs.
The Sponsor Support Agreement and certain of its provisions will terminate and be of no further force or effect upon the earlier to occur of the Closing and the valid termination of the Business Combination Agreement pursuant to its terms and, if the Business Combination Agreement is terminated pursuant to its terms, all provisions of the Sponsor Support Agreement will terminate and be of no further force or effect.
The Sponsor Support Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K, and the foregoing description thereof does not purport to be complete and is qualified in its entirety by reference to the full text of the Sponsor Support Agreement and the terms of which are incorporated by reference herein.
Lock-Up Agreements
Concurrently with the Closing, the SPAC, the Sponsor and the SPAC insiders will enter into a Lock-Up Agreement with Pubco (the “Sponsor Lock-Up Agreement”), and certain holders of shares of Pubco Stock will also enter into a Lock-Up Agreement with Pubco in substantially the same form as the Sponsor Lock-Up Agreement (the “Seller Lock-Up Agreement,” collectively with the Sponsor Lock-Up Agreement, the “Lock Up Agreements”), pursuant to which such parties agree that the shares of Pubco Class A Stock received by them in connection with the Business Combination, and any other securities convertible into or exercisable or exchangeable for Pubco Stock, will be subject to transfer restrictions, as described below, with certain customary exceptions.
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Under the Lock-Up Agreements, the Restricted Securities (as defined therein) will be subject to transfer restrictions until the earlier of (i) 180 days following the date of the Closing (the “Anniversary Release”); provided, that if the VWAP of Pubco Class A Stock equals or exceeds $12.50 per share for any 20 consecutive trading days following the Closing, the Anniversary Release will be deemed to occur at 11:59 p.m. New York City time on such 20th consecutive trading day, and (ii) the date on which Pubco consummates a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all Pubco shareholders having the right to exchange their shares of Pubco Stock for cash, securities or other property (the “Lock-Up Period”). The Lock-Up Agreements include customary exceptions to the transfer restrictions, including transfers to affiliates, family members, charitable organizations and in connection with certain tax or estate planning transactions, provided that the transferee agrees to be bound by the same restrictions for the remainder of the Lock-Up Period. Any transfer in violation of the Lock-Up Agreements will be null and void, and Pubco is authorized to impose stop-transfer instructions with respect to any such Restricted Securities during the Lock-Up Period.
The form of Lock-Up Agreements are filed as Exhibit 10.2 and Exhibit 10.3 to this Current Report on Form 8-K, and the foregoing description thereof does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Lock-Up Agreements and the terms of which are incorporated by reference herein.
Amended and Restated Registration Rights Agreement
Concurrently with the Closing, Pubco, SPAC, the Sponsor, the Seller, Avalanche (BVI), Inc., a company incorporated in the British Virgin Islands (“Avalanche BVI”), Avalanche Cayman, a Cayman Islands exempted company (“Avalanche Cayman” and together with Avalanche BVI, the “Foundation”) and certain securityholders shall enter into an amended and restated registration rights agreement, which will add Pubco as a party and cover the resale of the shares of Pubco Stock held by the Sponsor, the Seller, the Foundation and such other securityholders (the “Amended and Restated Registration Rights Agreement”), which provides for customary demand registration rights, piggyback registration rights and shelf registration rights for the benefit of the holders of Pubco Stock named therein, subject to customary cutbacks and issuer suspension rights. The Amended and Restated Registration Rights Agreement also includes customary provisions relating to underwriting participation, registration expenses, indemnification and coordination of sales in underwritten offerings, and will become effective upon the Closing and will supersede SPAC’s existing registration rights agreement in its entirety.
The form of Amended and Restated Registration Rights Agreement is filed as Exhibit 10.4 to this Current Report on Form 8-K, and the foregoing description thereof does not purport to be complete and is qualified in its entirety by reference to the full text of the form of the Amended and Restated Registration Rights Agreement and the terms of which are incorporated by reference herein.
Company Unit Subscription Agreement
Concurrently with the execution of the Business Combination Agreement, Pubco, the Company and SPAC entered into subscription agreements (collectively, the “Company Unit Subscription Agreements”) with certain investors (the “Company Unit Investors”), pursuant to which the Company Unit Investors agreed to purchase, payable in cash or USD Coin (“USDC”), unlocked AVAX or locked AVAX, and the Company agreed to issue and sell, approximately $274 million worth of Company Class A units (the “Subscribed Units”) at a price of $10.00 per Subscribed Unit, in a private placement (the “Company Unit Subscription”), upon the terms and subject to the conditions set forth therein. Company Unit Investors received a number of Subscribed Units equal to the quotient of (i) the Subscription Price and (ii) $10.00 (the “Per Unit Price”). “Subscription Price” means (a) if the Company Unit Investor elected to subscribe for the Subscribed Units with cash or USDC, the amount contributed as set forth on the signature page to its Company Unit Subscription Agreement, or (b) if the Company Unit Investor elected to subscribe for the Subscribed Units with AVAX, an amount (in USD) equal to the product of (x) the amount of AVAX contributed as set forth on the signature page to its Company Unit Subscription Agreement and (y) the applicable Signing AVAX Price. “Signing AVAX Price” means the VWAP of AVAX denominated in USD as calculated from all executed trades on Binance (or its successor primary spot exchange) over the five-day period ending at 8:00 p.m. New York City time on September 29, 2025.
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The Company Unit Subscription Agreements were executed concurrently with the Business Combination Agreement. Each Company Unit Investor was required to fund its respective cash or USDC within three business days following the execution date of the Company Unit Subscription Agreement, and fund its AVAX as soon as reasonably possible after the execution date of the Company Unit Subscription Agreement, in any case on or prior to November 7, 2025, in accordance with the terms of the Company Unit Subscription Agreements.
At the Company Merger Effective Time, each Subscribed Unit held by Company Unit Investors will be converted automatically into one share of Pubco Class A Stock.
Pursuant to the Company Unit Subscription Agreement, Pubco agreed to use commercially reasonable efforts to cause the Pubco Class A Stock into which the Subscribed Units will be converted upon consummation of the Company Merger to be registered on the Registration Statement. If such securities cannot be registered on the Registration Statement, Pubco agreed to file or confidential submit a resale registration statement within 30 days following the Closing Date.
The form of Company Unit Subscription Agreement is filed as Exhibits 10.5 to this Current Report on Form 8-K, and the foregoing description thereof does not purport to be complete and is qualified in its entirety by reference to the full text of the forms of the Company Unit Subscription Agreement and the terms of which are incorporated by reference herein.
Item 3.02. Unregistered Sale of Equity Securities.
The disclosure set forth above in Item 1.01 and below in Item 8.01 of this Current Report on Form 8-K is incorporated by reference herein, to the extent applicable. Neither the Subscribed Units to be issued pursuant to the Company Unit Subscription Agreements, the Seller Units issued pursuant to the Dragonfly Contribution nor the Foundation Shares (in each case as defined below) will be registered under the Securities Act of 1933, as amended, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
Item 8.01. Other Events.
Contribution Agreement
Concurrently with the execution of the Business Combination Agreement and the TSA (as defined below), the Seller, the Company, Pubco, Avalanche BVI and Avalanche Cayman, entered into an asset sale and contribution agreement (the “Contribution Agreement”), pursuant to which, on the date of the Business Combination Agreement: (a) the Foundation agreed to sell a minimum of $200 million of AVAX tokens on a pre-discount basis to the Company on the terms and subject to the conditions set forth in a Token Sale Agreement (the “TSA”) by and between the Company and the Foundation (the “Foundation Transaction”), and (b) the Seller agreed to contribute, directly and indirectly through certain related funds, 1,960,040 AVAX tokens to the Company in exchange for 5,805,638 Company units (the “Seller Units”) (the “Dragonfly Contribution”).
The Contribution Agreement included certain covenants including (i) an 18-months exclusivity in favor of the Company on sale of AVAX by the Foundation in Competing Transactions (as defined in the Contribution Agreement), (ii) a right of first refusal in favor of the Company for AVAX sale other than in Competing Transactions during the Covered Period, (iii) a 5-year right of first refusal in favor of the Foundation for sales of AVAX sold by the Company in one or more transactions, each exceeding certain thresholds. The Foundation is also granted the right to designate a board member in Pubco for a period of 5 years from the Closing date (extendable in case of further sales on terms similar to the terms in the TSA before the expiration of the 5 years).
The Contribution Agreement may be terminated prior to the Closing as follows: (a) by the mutual written consent of the parties thereto and SPAC; or (b) automatically with no further action required by the parties thereto if the Business Combination Agreement is terminated in accordance with its terms.
The Contribution Agreement is filed as Exhibit 99.1 to this Current Report on Form 8-K, and the foregoing description thereof is qualified in its entirety by reference to the full text of the Contribution Agreement and the terms of which are incorporated by reference herein.
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Token Sale Agreement
Concurrently with the execution of the Business Combination Agreement and the Contribution Agreement, the Company, Pubco, Avalanche BVI and Avalanche Cayman entered into the TSA, pursuant to which, on the date of the Business Combination Agreement, the Foundation agreed to sell a minimum of $200 million of AVAX tokens on a pre-discount basis to the Company in exchange for (i) $50 million in cash or USDC and (ii) $30 million in the form of 3,000,000 shares of Pubco Class A Stock (the “Foundation Shares”). If at any time following the Closing Date, the Pubco Class A Stock cease to be nonvoting securities and at such time the Foundation owns a number of Foundation Shares in excess of 4.7% of the then-outstanding Pubco Class A Stock (the “Maximum Percentage”), the Foundation may request to exchange the number of Foundation Shares in excess of the Maximum Percentage for an equal number of pre-funded warrants convertible, at the Foundation’s request, into Pubco Class A Stock on a one-to-one basis. The AVAX tokens delivered pursuant to the TSA are subject to certain restrictions for 5 years following the date of the TSA. The TSA shall be terminated upon termination of the Contribution Agreement.
The TSA is filed as Exhibit 99.2 to this Current Report on Form 8-K, and the foregoing description thereof is qualified in its entirety by reference to the full text of the TSA and the terms of which are incorporated by reference herein.
Additional Information and Where to Find It
Pubco and the Company intend to file with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 (as may be amended, the “Registration Statement”), which will include a preliminary proxy statement of SPAC and a prospectus (the “Proxy Statement/Prospectus”) in connection with the Proposed Transactions. The definitive proxy statement and other relevant documents will be mailed to shareholders of SPAC as of a record date to be established for voting on the Business Combination and other matters as described in the Proxy Statement/Prospectus. SPAC and/or Pubco will also file other documents regarding the Proposed Transactions with the SEC. This Current Report on Form 8-K (this “Report”) does not contain all of the information that should be considered concerning the Proposed Transactions and is not intended to form the basis of any investment decision or any other decision in respect of the Proposed Transactions. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, SHAREHOLDERS OF SPAC AND OTHER INTERESTED PARTIES ARE URGED TO READ, WHEN AVAILABLE, THE PRELIMINARY PROXY STATEMENT/PROSPECTUS, AND AMENDMENTS THERETO, AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC IN CONNECTION WITH SPAC’S SOLICITATION OF PROXIES FOR THE EXTRAORDINARY GENERAL MEETING OF ITS SHAREHOLDERS TO BE HELD TO APPROVE THE PROPOSED TRANSACTIONS AND OTHER MATTERS AS DESCRIBED IN THE PROXY STATEMENT/PROSPECTUS BECAUSE THESE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION ABOUT SPAC, THE COMPANY, PUBCO AND THE PROPOSED TRANSACTIONS. Investors and security holders will also be able to obtain copies of the Registration Statement and the Proxy Statement/Prospectus and all other documents filed or that will be filed with the SEC by SPAC and Pubco, without charge, once available, on the SEC’s website at www.sec.gov or by directing a request to: Mountain Lake Acquisition Corp., 930 Tahoe Blvd STE 802 PMB 45, Incline Village, NV 89451; phone number: (775) 204-1489.
NEITHER THE SEC NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE PROPOSED TRANSACTIONS DESCRIBED HEREIN, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR ANY RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS REPORT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
The Company Units to be issued have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.
8
Participants in the Solicitation
SPAC, Pubco, the Company and their respective directors and executive officers may be deemed under SEC rules to be participants in the solicitation of proxies from SPAC’s shareholders in connection with the Business Combination. A list of the names of such directors and executive officers, and information regarding their interests in the Business Combination and their ownership of SPAC’s securities are, or will be, contained in SPAC’s filings with the SEC. Additional information regarding the interests of the persons who may, under SEC rules, be deemed participants in the solicitation of proxies of SPAC’s shareholders in connection with the Business Combination, including the names and interests of the Company and Pubco’s directors and executive officers, will be set forth in the Proxy Statement/Prospectus, which is expected to be filed by Pubco and the Company with the SEC. Investors and security holders may obtain free copies of these documents as described in the preceding paragraph.
No Offer or Solicitation
The information contained in this Report is for informational purposes only and is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Proposed Transactions and shall not constitute an offer to sell or exchange, or a solicitation of an offer to buy or exchange the securities of SPAC, the Company or Pubco, or any commodity or instrument or related derivative, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, sale or exchange would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act or an exemption therefrom. Investors should consult with their counsel as to the applicable requirements for a purchaser to avail itself of any exemption under the Securities Act.
Forward-Looking Statements
This Report contains certain forward-looking statements within the meaning of the U.S. federal securities laws with respect to the parties and the Proposed Transactions, including, expectations, hopes, beliefs, intentions, plans, prospects, financial results, strategies and other statements relating to SPAC, Pubco, the Company and the Proposed Transactions and statements regarding the anticipated benefits and timing of the completion of the Proposed Transactions, the assets held by the Company, the price and volatility of AVAX, AVAX’s growing prominence as a digital asset and as the foundation of a new monetary system, AVAX’s ability to hedge inflation and economic uncertainty, Pubco’s listing on an applicable securities exchange, the economic conditions surrounding AVAX, Pubco’s planned business strategy including Pubco’s ability to grow its shareholders’ ownership of AVAX over time, generate AVAX yield, partner with AVAX technology companies and produce and provide AVAX-related advisory and other services, Pubco’s ability to catalyze the fusion of AVAX into finance and capital markets, Pubco’s ability to access legacy AVAX investors, any projected outcomes or expectations of crypto treasury strategies or businesses, expectations of AVAX to perform as a superior treasury asset, Pubco’s plans and use of proceeds, objectives of management for future operations of Pubco, pro forma ownership of Pubco, the upside potential and opportunity for investors relating to participation in the Private Placement or any future securities resulting from any Proposed Transactions, any pro forma values associated with any Proposed Transactions or with Pubco, any proposed transaction structures and offering terms, plans and expectations for AVAX adoption, value creation, investor benefits and strategic advantages, market size and growth opportunities, regulatory conditions, competitive position and the interest of other corporations in similar business strategies, technological and market trends, future financial condition and performance and expected financial impacts of the Proposed Transactions, any expected benefits, future scaling and efficiency upgrades associated with AVAX and any expectations, intentions, strategies, assumptions or beliefs about future events, results of operations or performance or that do not solely relate to historical or current facts. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “potential,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.
9
Forward-looking statements are predictions, projections and other statements about future events or conditions that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this Report, including, but not limited to: the risk that the Proposed Transactions may not be completed in a timely manner or at all, which may adversely affect the price of SPAC’s securities; the risk that the Business Combination may not be completed by SPAC’s business combination deadline; the failure by the parties to the Business Combination Agreement to satisfy the conditions to the consummation of the Business Combination, including the approval of SPAC’s shareholders, or any of the Private Placement; failure to realize the anticipated benefits of the Proposed Transactions; the level of redemptions of SPAC’s public shareholders which may reduce the public float of, reduce the liquidity of the trading market of, and/or maintain the quotation, listing, or trading of the Pubco Class A Stock; the lack of a third-party fairness opinion in determining whether or not to pursue the Business Combination; the failure of Pubco to obtain or maintain the listing of its securities any stock exchange on which Pubco Class A Stock will be listed after closing of the Business Combination; costs related to the Proposed Transactions and as a result of becoming a public company; changes in business, market, financial, political and regulatory conditions; risks relating to Pubco’s anticipated operations and business, including the highly volatile nature of the price of AVAX; the risk that Pubco’s Class A Stock price will be highly correlated to the price of AVAX and the price of AVAX may decrease at any time after the closing of the Proposed Transactions; risks related to increased competition in the industries in which Pubco will operate; risks relating to significant legal, commercial, regulatory and technical uncertainty regarding AVAX; risks relating to the treatment of crypto assets for U.S. and foreign tax purposes; risks that after consummation of the Business Combination, Pubco experiences difficulties managing its growth and expanding operations; challenges in implementing Pubco’s business plan, including AVAX-related advisory services and other AVAX-related services, due to operational challenges, significant competition and regulation; being considered to be a “shell company” by any stock exchange on which Pubco Class A Stock will be listed or by the SEC, which may impact the ability to list Pubco Class A Stock and restrict reliance on certain rules or forms in connection with the offering, sale or resale of securities; the outcome of any potential legal proceedings that may be instituted against the Company, SPAC, Pubco or others following announcement of the Business Combination; and those risk factors discussed in documents of Pubco, the Company, or SPAC filed, or to be filed, with the SEC.
The foregoing list of risk factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of the final prospectus of SPAC dated as of December 12, 2024 and filed by SPAC with the SEC on December 13, 2024, SPAC’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q on file, and to be filed, with the SEC and the Proxy Statement/Prospectus that will be filed by Pubco and the Company, and other documents filed by SPAC and Pubco from time to time with the SEC. These filings do or will identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. There may be additional risks that none of SPAC, Pubco or the Company presently know or that none of SPAC, Pubco or the Company currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and none of SPAC, Pubco or the Company assumes any obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. None of SPAC, Pubco or the Company gives any assurance that any of SPAC, the Company or Pubco will achieve its expectations. The inclusion of any statement in this Report does not constitute an admission by SPAC, Pubco or the Company or any other person that the events or circumstances described in such statement are material.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| + | Certain schedules, exhibits and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. SPAC will provide a copy of such omitted materials to the Securities and Exchange Commission or its staff upon request. |
| † | Certain personally identifiable information has been omitted from this exhibit pursuant to Item 601(a)(6) of Regulation S-K. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MOUNTAIN LAKE ACQUISITION CORP. | ||
| Date: October 7, 2025 | By: | /s/ Paul Grinberg |
| Name: Paul Grinberg | ||
| Title: Chief Executive Officer and Chairman of the Board | ||
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Exhibit 2.1
Certain personally identifiable information has been omitted from this
exhibit pursuant to
item 601(a)(6) of Regulation S-K. [***] indicates that information has been redacted.
BUSINESS COMBINATION AGREEMENT
by and among
MOUNTAIN LAKE ACQUISITION CORP.
as SPAC,
AVALANCHE TREASURY CORPORATION
as Pubco,
AVALANCHE SPAC MERGER SUB LLC
as SPAC Merger Sub,
AVALANCHE COMPANY MERGER SUB LLC
as Company Merger Sub,
AVALANCHE TREASURY COMPANY LLC
as the Company,
and
DRAGONFLY DIGITAL MANAGEMENT, LLC
as the Seller
Dated as of October 1, 2025
TABLE OF CONTENTS
| Page | ||
| Article I | ||
| DEFINITIONS | ||
| 1.1 | Certain Definitions | 3 |
| 1.2 | Section References | 12 |
| 1.3 | Interpretation | 15 |
| Article II | ||
| BUSINESS COMBINATION TRANSACTIONS | ||
| 2.1 | Domestication | 17 |
| 2.2 | SPAC Merger | 17 |
| 2.3 | Company Merger | 17 |
| 2.4 | Effective Times of Mergers | 17 |
| 2.5 | Effect of the Mergers | 18 |
| 2.6 | Organizational Documents | 18 |
| 2.7 | Directors and Officers of the Surviving Subsidiaries | 18 |
| 2.8 | Company Merger Consideration | 19 |
| 2.9 | Effect of SPAC Merger on Outstanding Securities of SPAC and SPAC Merger Sub | 20 |
| 2.10 | Effect of Company Merger on Outstanding Securities of the Company and Company Merger Sub | 22 |
| 2.11 | Effect of Mergers on Outstanding Securities of Pubco | 23 |
| 2.12 | Exchange and Conversion Procedures | 23 |
| 2.13 | Intended Tax Treatment | 24 |
| 2.14 | Taking of Necessary Action; Further Action | 24 |
| 2.15 | Withholding | 24 |
| 2.16 | Seller Consent | 25 |
| Article III | ||
| CLOSING | ||
| 3.1 | Closing | 25 |
| 3.2 | Pre-Closing Statements | 25 |
| 3.3 | Closing Deliveries | 26 |
| Article IV | ||
| REPRESENTATIONS AND WARRANTIES OF SPAC | ||
| 4.1 | Organization and Standing | 27 |
| 4.2 | Authorization; Binding Agreement | 28 |
| 4.3 | Governmental Approvals | 28 |
| 4.4 | Non-Contravention | 28 |
| 4.5 | Capitalization | 29 |
| 4.6 | SEC Filings; SPAC Financials; Internal Controls | 30 |
| 4.7 | No Litigation; Orders; Permits | 32 |
| 4.8 | Absence of Certain Changes | 32 |
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| 4.9 | Compliance with Laws | 32 |
| 4.10 | Taxes and Returns | 32 |
| 4.11 | Employees and Employee Benefit Plans | 32 |
| 4.12 | Properties | 32 |
| 4.13 | Material Contracts | 32 |
| 4.14 | Transactions with Affiliates | 33 |
| 4.15 | Finders and Brokers | 33 |
| 4.16 | Certain Business Practices | 33 |
| 4.17 | Insurance | 34 |
| 4.18 | Independent Investigation | 34 |
| 4.19 | No Other Representations | 34 |
| 4.20 | Information Supplied | 35 |
| 4.21 | SPAC Trust Account | 35 |
| 4.22 | Intended Tax Treatment | 35 |
| Article V | ||
| REPRESENTATIONS AND WARRANTIES OF PUBCO AND PUBCO SUBSIDIARIES | ||
| 5.1 | Organization and Standing | 36 |
| 5.2 | Authorization; Binding Agreement | 36 |
| 5.3 | Governmental Approvals | 36 |
| 5.4 | Non-Contravention | 36 |
| 5.5 | Capitalization | 37 |
| 5.6 | Pubco and Pubco Subsidiaries Activities | 37 |
| 5.7 | Finders and Brokers | 37 |
| 5.8 | Ownership of Pubco Stock | 37 |
| 5.9 | Information Supplied | 38 |
| 5.10 | Independent Investigation | 38 |
| 5.11 | No Other Representations | 38 |
| Article VI | ||
| REPRESENTATIONS AND WARRANTIES OF THE COMPANY | ||
| 6.1 | Organization and Standing | 39 |
| 6.2 | Authorization; Binding Agreement | 39 |
| 6.3 | Capitalization | 39 |
| 6.4 | Governmental Approvals | 40 |
| 6.5 | Non-Contravention | 40 |
| 6.6 | Absence of Certain Changes | 40 |
| 6.7 | Company Activities | 41 |
| 6.8 | Title to Assets | 41 |
| 6.9 | Employees and Benefit Plans | 41 |
| 6.10 | Taxes and Returns | 41 |
| 6.11 | Certain Business Practices. | 41 |
| 6.12 | Finders and Brokers | 42 |
| 6.13 | Information Supplied | 42 |
| 6.14 | Independent Investigation | 42 |
| 6.15 | No Other Representations | 42 |
| 6.16 | Company Unit Subscription | 43 |
| 6.17 | Intended Tax Treatment | 43 |
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| Article VII | ||
| REPRESENTATIONS AND WARRANTIES OF THE SELLER | ||
| 7.1 | Organization and Standing | 43 |
| 7.2 | Authorization; Binding Agreement | 43 |
| 7.3 | Government Approvals | 44 |
| 7.4 | Non-Contravention | 44 |
| 7.5 | No Litigation | 44 |
| 7.6 | Investment Representations | 44 |
| 7.7 | Finders and Brokers | 45 |
| 7.8 | Ownership | 45 |
| 7.9 | Information Supplied | 45 |
| 7.10 | Intended Tax Treatment | 46 |
| 7.11 | No Other Representations | 46 |
| Article VIII | ||
| COVENANTS | ||
| 8.1 | Access and Information | 46 |
| 8.2 | Conduct of Business of the Company, Pubco, and | 47 |
| 8.3 | Conduct of Business of SPAC | 49 |
| 8.4 | Annual and Interim Financial Statements | 51 |
| 8.5 | SPAC Public Filings | 51 |
| 8.6 | Exclusivity | 51 |
| 8.7 | No Trading | 52 |
| 8.8 | Notification of Certain Matters | 53 |
| 8.9 | Efforts | 53 |
| 8.10 | Further Assurances | 55 |
| 8.11 | The Registration Statement | 55 |
| 8.12 | Public Announcements | 56 |
| 8.13 | Confidential Information | 57 |
| 8.14 | Post-Closing Pubco Board of Directors and Officers | 58 |
| 8.15 | Indemnification of Directors and Officers; Tail Insurance | 59 |
| 8.16 | Use of Proceeds | 59 |
| 8.17 | Dragonfly Contribution | 60 |
| 8.18 | Delisting and Deregistration | 60 |
| 8.19 | Pubco A&R Organizational Documents | 60 |
| 8.20 | Amendment and Restatement of Founder Registration Rights Agreement | 60 |
| 8.21 | Investments | 60 |
| 8.22 | Additional Permitted Financings | 60 |
| 8.23 | Pubco Incentive Plan | 61 |
| Article IX | ||
| CLOSING CONDITIONS | ||
| 9.1 | Conditions to Each Party’s Obligations | 61 |
| 9.2 | Conditions to Obligations of the Company, Pubco, the Pubco Subsidiaries and the Seller | 61 |
| 9.3 | Conditions to Obligations of SPAC | 62 |
| 9.4 | Frustration of Conditions | 63 |
iii
| Article X | ||
| TERMINATION | ||
| 10.1 | Termination | 63 |
| 10.2 | Effect of Termination | 64 |
| Article XI | ||
| WAIVERS AND RELEASES | ||
| 11.1 | Waiver of Claims Against Trust | 65 |
| 11.2 | Release and Covenant Not to Sue | 66 |
| Article XII | ||
| MISCELLANEOUS | ||
| 12.1 | Survival | 66 |
| 12.2 | Notices | 66 |
| 12.3 | Binding Effect; Assignment | 67 |
| 12.4 | Third Parties | 67 |
| 12.5 | Fees and Expenses | 67 |
| 12.6 | Governing Law; Jurisdiction; Waiver of Jury Trial | 68 |
| 12.7 | Specific Performance | 68 |
| 12.8 | Severability | 69 |
| 12.9 | Amendment | 69 |
| 12.10 | Waiver | 69 |
| 12.11 | Entire Agreement | 69 |
| 12.12 | Counterparts | 69 |
| 12.13 | Legal Representation | 69 |
| 12.14 | No Recourse | 70 |
EXHIBITS
| Exhibit A | Form of Sponsor Support Agreement |
| Exhibit B | Form of Company Unit Subscription Agreement |
| Exhibit C | Form of Amended and Restated Registration Rights Agreement |
| Exhibit D | Form of Lock-Up Agreements |
| Exhibit E | Terms of Pubco Stock |
iv
BUSINESS COMBINATION AGREEMENT
This Business Combination Agreement (this “Agreement”) is made and entered into as of October 1, 2025, by and among:
| A. | Mountain Lake Acquisition Corp., a Cayman Islands exempted company (“SPAC”), |
| B. | Avalanche Treasury Corporation, a Delaware corporation (“Pubco”), |
| C. | Avalanche SPAC Merger Sub LLC, a Delaware limited liability company (“SPAC Merger Sub”), |
| D. | Avalanche Company Merger Sub LLC, a Delaware limited liability company (“Company Merger Sub” and, together with SPAC Merger Sub, the “Pubco Subsidiaries” and each, a “Pubco Subsidiary”), |
| E. | Avalanche Treasury Company LLC, a Delaware limited liability company (the “Company”), and |
| F. | Dragonfly Digital Management, LLC, a Delaware limited liability company (the “Seller”). |
SPAC, Pubco, the Pubco Subsidiaries, the Company, and the Seller are sometimes referred to herein individually as a “Party” and, collectively, as the “Parties”.
RECITALS:
WHEREAS, the Parties desire and intend to effect a business combination transaction whereby (a) prior to the Closing, SPAC shall effectuate a domestication under Section 388 of the DGCL and the Cayman Act (the “Domestication”), pursuant to which SPAC shall transfer by way of continuation to and become a Delaware corporation (the “Domesticated SPAC” and, for the avoidance of doubt, all references herein to the SPAC shall, from and after the consummation of the Domestication, be deemed to refer to the Domesticated SPAC), with a certificate of incorporation in the form to be mutually agreed between the Parties (“SPAC Delaware Certificate of Incorporation”) and bylaws in the form to be mutually agreed between the Parties (“SPAC Delaware Bylaws”), (b) at least two (2) hours after the Domestication, the SPAC Merger Sub will merge with and into SPAC, with SPAC continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “SPAC Merger”), and with SPAC Shareholders receiving one share of Pubco Class A Stock for each SPAC Class A Ordinary Share held by such shareholder and with each holder of SPAC Rights receiving one share of Pubco Class A Stock in exchange for every ten (10) SPAC Rights held by such holder in accordance with the terms of this Agreement and (c) Company Merger Sub will merge with and into the Company, with the Company continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “Company Merger” and, together with the SPAC Merger, the “Mergers” and, together with the other transactions contemplated by this Agreement and the Ancillary Documents, including the Foundation Transaction, the Dragonfly Contribution and the Investments, the “Transactions”), and with Company Members receiving Pubco Stock (and, in the case of Seller, certain other consideration) for each Company Unit held by such Company Member in accordance with the terms of this Agreement, and upon the consummation of the Mergers, Pubco will become a publicly traded company, all upon the terms and subject to the conditions set forth in this Agreement and in accordance with applicable Law;
WHEREAS, on the date hereof, each of the Pubco Subsidiaries is a wholly owned subsidiary of Pubco;
WHEREAS, simultaneously with the execution and delivery of this Agreement, in connection with the Transactions, Pubco, SPAC and Sponsor are entering into a Sponsor Support Agreement substantially in the form set forth on Exhibit A (the “Sponsor Support Agreement”), providing that, among other things, the Sponsor will vote its SPAC Ordinary Shares in favor of the adoption and approval of this Agreement and the Transactions;
WHEREAS, on the date of this Agreement, the Company Unit Investors have agreed to make an investment in the Company by purchasing Company Units up to an aggregate amount equal to $500,000,000 payable in cash, USD Coin or Avax, on the date hereof (the “Company Unit Subscription”) pursuant to subscription agreements substantially in the form set forth on Exhibit B (the “Company Unit Subscription Agreements”);
WHEREAS, simultaneously with the execution and delivery of the Company Unit Subscription Agreements, Seller and the Company Unit Investors are entering into an amended and restated limited liability company agreement of the Company (the “First A&R Company LLCA”);
WHEREAS, in accordance herewith, following the date of this Agreement, the Company shall purchase a number of Avax (the “Company Avax”) equal to the Company Unit Subscription Net Cash Proceeds;
WHEREAS, on the date hereof, Avalanche (BVI), Inc. (“Avalanche BVI”), Avalanche Cayman (together with Avalanche BVI, the “Foundation”), the Seller, the Company and Pubco have entered into a contribution agreement (the “Contribution Agreement”), pursuant to which, on the date hereof: (a) the Foundation sold 7,317,965.61 Avax to the Company, all upon the terms and subject to the conditions set forth in that certain Token Sale Agreement (the “TSA”) by and between the Company, Pubco and the Foundation dated as of the date hereof (the “Foundation Transaction”); and (b) Seller contributed directly and/or indirectly through Dragonfly Ventures L.P., Dragonfly Ventures II, L.P., and other Seller controlled vehicles 1,960,040 Avax to the Company, all upon the terms and subject to the conditions set forth therein (the “Dragonfly Contribution”);
WHEREAS, concurrently with the Closing, Sponsor, SPAC, Pubco and the Seller shall enter into an amended and restated registration rights agreement of SPAC, which will add Pubco as a party and cover the resale of the shares of Pubco Stock held by Sponsor and the Seller substantially in the form set forth on Exhibit C (the “Amended and Restated Registration Rights Agreement”);
WHEREAS, concurrently with the Closing, each of the Seller and Mountain Lake Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”) shall enter into a Lock-Up Agreement with Pubco substantially in the form set forth on Exhibit D (each, a “Lock-Up Agreement”), pursuant to which the Seller and Sponsor shall agree not to transfer their respective shares of Pubco Stock for a period of six (6) months after the Closing, or earlier based upon the occurrence of certain events described therein;
WHEREAS, the board of directors of SPAC (the “SPAC Board”) has unanimously: (a) determined that this Agreement and the Ancillary Documents to which SPAC is a party and the Transactions are advisable and in the best interests of SPAC and the SPAC Shareholders; (b) authorized and approved the execution, delivery and performance by SPAC of this Agreement and the Ancillary Documents to which SPAC is a party and the Transactions; (c) approved the Transactions as a Business Combination; and (d) recommended the adoption and approval of this Agreement and the Ancillary Documents to which SPAC is a party and the Transactions by the SPAC Shareholders; and
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WHEREAS, the respective boards of directors of Pubco, the Pubco Subsidiaries, , the managers of the Company and the members of the Seller have each unanimously (a) determined that this Agreement and the Ancillary Documents to which their respective companies are a party and the Transactions are advisable and in the best interests of their respective companies and shareholders and (b) authorized and approved this Agreement, the Ancillary Documents to which their respective companies are a party and the Transactions, in each case upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the Parties agree as follows:
Article I
DEFINITIONS
1.1 Certain Definitions. For purpose of this Agreement, the following capitalized terms have the following meanings:
“Action” means any notice of non-compliance or violation, or any claim, demand, charge, action, suit, litigation, audit, settlement, complaint, stipulation, assessment or arbitration, or any request (including any subpoena or request for information), inquiry, hearing, proceeding or investigation, by or before any Person, including any Governmental Authority.
“Additional Permitted Financing” means the subscription or purchase by an investor after the date of this Agreement of securities to be issued or guaranteed by Pubco, the Company or SPAC, as applicable (or of securities exercisable, convertible or exchangeable into securities to be issued or guaranteed by Pubco, the Company or SPAC, as applicable), including ordinary shares, preferred shares, convertible or exchangeable bonds or notes (secured or unsecured), promissory notes, warrants or other securities, in each case, as and to the extent consented to in writing by SPAC, Pubco and the Company (which consent may be withheld in the sole and absolute discretion of the party asked to provide consent);
“Affiliate” means, with respect to any specified Person, any other Person that directly or indirectly controls, is controlled by or is under common control with such specified Person as of the date on which, or at any time during the period for which, the determination of affiliation is being made. For the purposes of this definition, the term “control,” when used with respect to any specified Person, means the power to direct or cause the direction of the management or policies of such Person, directly or indirectly, whether through the ownership of voting securities, by Contract or otherwise; and the terms “controlling,” “controlled,” or “under common control with” have correlative meanings.
“Ancillary Documents” means each agreement, instrument or document attached hereto as an Exhibit, and the other agreements, certificates and instruments to be executed or delivered by any of the Parties in connection with or pursuant to this Agreement or the Transactions, including the Contribution Agreement, the TSA, the Sponsor Support Agreement, the Lock-Up Agreements, the Amended and Restated Registration Rights Agreement, the Subscription Agreements, any agreements relating to or instruments governing any Additional Permitted Financing, the Pubco A&R Organizational Documents, and the First A&R Company LLCA.
“Benefit Plans” of any Person means any and all deferred compensation, executive compensation, incentive compensation, equity purchase or other equity-based compensation plan, employment or consulting, severance or termination pay, holiday, vacation or other bonus plan or practice, hospitalization or other medical, life or other insurance, supplemental unemployment benefits, profit sharing, pension, or retirement plan, program, agreement, commitment or arrangement, and each other employee benefit plan, program, agreement or arrangement, including each “employee benefit plan” as such term is defined under Section 3(3) of ERISA, maintained or contributed to or required to be contributed to by a Person for the benefit of any employee or terminated employee of such Person, or with respect to which such Person has any Liability, whether direct or indirect, actual or contingent, whether formal or informal, and whether legally binding or not.
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“Business Combination” has the meaning set forth in the SPAC Memorandum and Articles as in effect on the date hereof.
“Business Day” means any day other than a Saturday, Sunday or a legal holiday on which commercial banking institutions in New York, New York and the Cayman Islands are authorized to close for business.
“Cayman Act” means the Companies Act (as revised) of the Cayman Islands.
“Cayman Registrar” means the Registrar of Companies of the Cayman Islands.
“Change in Control” means (a) a purchase, sale, exchange, business combination or other transaction (including a merger or consolidation of Pubco or any of its Subsidiaries with or into any other corporation or other entity) in which equity securities of Pubco, its successor, or the surviving entity of such business combination or other transaction are not registered under the Exchange Act or listed or quoted for trading on a national securities exchange, (b) a sale, lease, exchange or other transfer (including a merger) in one transaction or a series of related transactions of assets representing fifty percent (50%) or more of the value of Pubco’s assets to a third party or (c) the transfer to or acquisition by (whether by tender offer, merger, consolidation, division or other similar transaction), in one transaction or a series of related transactions, a person or entity or group of affiliated persons or entities (other than an underwriter pursuant to an offering), of Pubco’s voting securities if, after such transfer or acquisition, such person, entity or group of affiliated persons or entities would beneficially own (as defined in Rule 13d-3 promulgated under the Exchange Act) more than fifty percent (50%) of the outstanding voting securities of Pubco; provided, however, that any transfer by Seller or any of its Affiliates to another Affiliate of Seller shall not constitute a transfer or acquisition for purposes of clause (c).
“Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code shall include such section and any valid treasury regulation promulgated thereunder.
“Company Confidential Information” means all confidential or proprietary documents and information, whether written, oral, electronic, in visual form or in any other media, concerning Pubco, the Pubco Subsidiaries, the Company or the Seller or any of their respective Affiliates or Representatives, furnished in connection with this Agreement or the Transactions; provided, however, that Company Confidential Information shall not include any information which, (a) at the time of disclosure by any Party, any Affiliates thereof or any of their respective Representatives, is generally available publicly and was not disclosed in breach of this Agreement or applicable confidentiality agreement or (b) at the time of the disclosure by any Party, any Affiliates thereof or any of their respective Representatives was previously known by such receiving party without violation of Law or any confidentiality obligation by the Person receiving such Company Confidential Information.
“Company Fundamental Representations” means the representations and warranties made by the Company pursuant to Section 6.1 (Organization and Standing), Section 6.2 (Authorization; Binding Agreement), Section 6.3 (Capitalization), and Section 6.12 (Finders and Brokers).
“Company Members” means, collectively, all Persons who hold membership interests in the Company immediately prior to the Company Merger.
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“Company Merger Sub Membership Interests” means the membership interests of Company Merger Sub.
“Company Unit Investors” means those Persons who are participating in the Company Unit Subscription pursuant to a Company Unit Subscription Agreement entered into with the Company as of the date of this Agreement.
“Company Unit Subscription Net Cash Proceeds” means the gross cash proceeds from the Company Unit Subscription minus any and all reasonable and customary fees, commissions, or other charges (including network gas fees and exchange trading fees) incurred by the Company or its designated agent in connection with the purchase of Avax on an arms’ length basis through a recognized digital asset exchange or broker.
“Consent” means any consent, approval, waiver, authorization or Permit of, or notice to or declaration or filing with, any Governmental Authority or any other Person.
“Contracts” means all legally binding contracts, agreements, arrangements, bonds, notes, indentures, mortgages, debt instruments, purchase orders, licenses (and all other contracts, agreements or binding arrangements concerning Intellectual Property), franchises, leases and other instruments or obligations of any kind, written or oral (including any amendments and other modifications thereto).
“DTC” means the Depository Trust Company.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“Exchange Act” means the Securities Exchange Act of 1934.
“Expenses” means, collectively, the SPAC Expenses and the Seller Expenses.
“Founder Registration Rights Agreement” means the Registration Rights Agreement, dated as of December 12, 2024, by and between SPAC, Sponsor, BTIG, LLC.
“Fraud” means actual and intentional fraud, with elements of scienter and reliance, under the Laws of the State of Delaware, in the making of any representations and warranties contained in this Agreement.
“Fraud Claim” means any Action to the extent based upon Fraud.
“GAAP” means generally accepted accounting principles as in effect in the United States of America.
“Governmental Authority” means any federal, state, local, foreign or other governmental, quasi-governmental or administrative body, instrumentality, department or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body with competent jurisdiction.
“IFRS” means international financial reporting standards, as adopted by the International Accounting Standards Board.
5
“Indebtedness” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money (including the outstanding principal and accrued but unpaid interest), (b) all obligations for the deferred purchase price of property or services or capitalized leases, as determined in accordance with GAAP (other than trade payables incurred in the ordinary course of business), (c) any other indebtedness of such Person that is evidenced by a note, bond, debenture, credit agreement or similar instrument, (d) all obligations of such Person for the reimbursement of any obligor on any line or letter of credit, banker’s acceptance, guarantee or similar credit transaction, in each case, that has been drawn or claimed against, (e) all obligations of such Person in respect of acceptances issued or created, (f) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically or upon the happening of a contingency, (g) all obligations secured by a Lien on any property of such Person, (h) any premiums, prepayment fees or other penalties, fees, costs or expenses associated with payment of any Indebtedness of such Person, (i) any severance costs, pension, bonus, deferred compensation, amounts due in respect of cancellation of options and other equity awards, forgivable loans (whether issued or proposed to be issued) or similar obligations (and, in each case, any employer portion of unemployment, social security, payroll or similar Tax payable in connection therewith), and (j) all obligation described in clauses (a) through (i) above of any other Person which is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss.
“Intellectual Property” means trade marks, service marks, rights in trade names, business names, logos or get-up, goodwill and the right to sue for passing off, patents, supplementary protection certificates, rights in inventions, proprietary processes, formulae, models and methodologies, registered and unregistered design rights, copyrights (including rights in software), database rights, image rights, rights to publicity and rights to personality and privacy, moral rights and rights of attribution and integrity, rights in domain names and URLs and social media presence accounts, and all other similar rights in any part of the world (including in confidential information and trade secrets) and whether registered or not, including, where such rights are obtained or enhanced by registration, any registration of such rights and applications and any rights to apply for and be granted, registrations, renewals, extensions, continuations or restorations of, and rights to claim priority from such registrations.
“Investment Company Act” means the United States Investment Company Act of 1940.
“Investments” means the Company Unit Subscription and any Additional Permitted Financing.
“Investors” means the Company Unit Investors and the Persons who participate in any Additional Permitted Financing.
“IPO” means the initial public offering of SPAC Units pursuant to the IPO Prospectus.
“IPO Prospectus” means the final prospectus of SPAC, dated as of December 12, 2024, and filed with the SEC on December 13, 2024 (File No. 333-281410).
“Knowledge” means, with respect to any Party, the actual knowledge of its directors and executive officers, after reasonable inquiry.
“Law” means any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, Order or Consent that is or has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
“Liabilities” means any and all liabilities, Indebtedness, Actions or obligations of any nature (whether absolute, accrued, contingent or otherwise, whether known or unknown, whether direct or indirect, whether matured or unmatured, whether due or to become due and whether or not required to be recorded or reflected on a balance sheet under GAAP, IFRS or other applicable accounting standards), including Tax liabilities due or to become due.
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“Lien” means any mortgage, pledge, security interest (including any created by Law), attachment, option, proxy, voting trust, encumbrance, license, covenant not to sue, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof), restriction (whether on voting, sale, transfer, disposition or otherwise), any subordination arrangement in favor of another Person, or any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar Law.
“Material Adverse Effect” means, with respect to any specified Person, any fact, event, occurrence, change or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect upon (a) the business, assets, Liabilities, results of operations, or condition (financial or otherwise) of such Person and its Subsidiaries, taken as a whole, or (b) the ability of such Person or any of its Subsidiaries to consummate the Transactions contemplated by this Agreement or the Ancillary Documents to which it is a party or bound or to perform its obligations hereunder or thereunder; provided, however, that any changes or effects directly or indirectly attributable to, resulting from, relating to or arising out of the following (by themselves or when aggregated with any other, changes or effects) shall not be deemed to be, constitute, or be taken into account when determining whether there has or may, would or could have occurred a Material Adverse Effect: (i) general changes in the financial or securities markets (including changes in interest rates) or general economic or political conditions in the country or region in which such Person or any of its Subsidiaries do business; (ii) changes, conditions or effects that generally affect the industries or markets in which such Person or any of its Subsidiaries principally operate; (iii) changes in the price or trading volume of Avax (provided that the underlying cause of any such event, occurrence, change or effect in the price or trading volume may be considered in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur to the extent not excluded by another exception herein); (iv) any proposal, enactment or change in interpretation of, or any other change in, applicable Laws, IFRS, GAAP or other applicable accounting principles or mandatory changes in the regulatory accounting requirements applicable to any industry in which such Person and its Subsidiaries principally operate; (v) conditions caused by acts of God, natural disasters, terrorism, war (whether or not declared), escalation of hostilities, geopolitical conditions, local, national or international political conditions or any outbreak or continuation of an epidemic or pandemic or the effects of the actions of any Governmental Authority or Laws or other responses with respect thereto; (vi) the taking of any action required by this Agreement or any Ancillary Document; and (vii) any failure in and of itself by such Person and its Subsidiaries to meet any internal or published budgets, projections, forecasts or predictions of financial performance for any period (provided that the underlying cause of any such failure may be considered in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur to the extent not excluded by another exception herein); provided, further, however, that any event, occurrence, fact, condition, or change referred to in clauses (i), (ii), (iii), (iv), (v) and (vii) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition, or change has a disproportionate and adverse effect on such Person or any of its Subsidiaries compared to similarly situated participants in the industries in which such Person or any of its Subsidiaries primarily conducts its businesses. Notwithstanding the foregoing, with respect to SPAC, the amount of the Redemption or the failure to obtain the Required Shareholder Approval shall not in and of itself be deemed to be a Material Adverse Effect on or with respect to SPAC (provided that the underlying causes of any such Redemption or failure to obtain the Required Shareholder Approval may be considered in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur to the extent not excluded by another exception herein; and provided, further, with respect to the failure to obtain the Required Shareholder Approval, that the SPAC has not violated its obligations under this Agreement in connection with obtaining such Required Shareholder Approval).
“Nasdaq” means the Nasdaq Global Market.
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“Order” means any order, decree, ruling, judgment, injunction, writ, determination, binding decision, verdict, judicial award or other action that is or has been made, entered, rendered, or otherwise put into effect by or under the authority of any Governmental Authority.
“Organizational Documents” means, with respect to any Person, (a) that is a corporation or company, its certificate of incorporation and bylaws, and/or memorandum and articles of association or comparable documents, (b) that is a partnership, its certificate of partnership and partnership agreement, or comparable documents, (c) that is a limited liability company, its certificate of formation and limited liability company agreement, or comparable documents, (d) that is a trust, its declaration of trust, or comparable documents and (e) that is any other Person but that is not an individual, its comparable organizational documents.
“PCAOB” means the U.S. Public Company Accounting Oversight Board (or any successor thereto).
“Permits” means all federal, state, local or foreign or other third-party permits, grants, easements, consents, approvals, authorizations, exemptions, licenses, franchises, concessions, ratifications, permissions, clearances, confirmations, endorsements, waivers, certifications, designations, ratings, registrations, qualifications or orders of any Governmental Authority.
“Permitted Liens” means (a) Liens for Taxes or assessments and similar governmental charges or levies, which either are (i) not delinquent or (ii) being contested in good faith and by appropriate proceedings, and adequate reserves have been established with respect thereto, (b) other Liens imposed by operation of Law arising in the ordinary course of business for amounts which are not due and payable and as would not in the aggregate materially adversely affect the value of, or materially adversely interfere with the use of, the property subject thereto, (c) Liens incurred or deposits made in the ordinary course of business in connection with social security, (d) Liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the ordinary course of business, or (e) Liens arising under this Agreement or any Ancillary Document.
“Person” means an individual, corporation, company, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.
“Personal Property” means any machinery, equipment, tools, vehicles, furniture, leasehold improvements, office equipment, plant, parts and other tangible personal property.
“Pubco and Pubco Subsidiaries Fundamental Representations” means the representations and warranties made by Pubco and the Pubco Subsidiaries pursuant to Section 5.1 (Organization and Standing), Section 5.2 (Authorization; Binding Agreement), Section 5.5 (Capitalization) and Section 5.7 (Finders and Brokers).
“Pubco Class A Stock” means the shares of class A common stock, par value $0.01 per share, of Pubco to be issued at the Closing in connection with the Transactions.
“Pubco Class B Stock” means the shares of class B common stock, par value $0.01 per share, of Pubco to be issued at the Closing in connection with the Transactions.
“Pubco Organizational Documents” means the certificate of incorporation and bylaws of Pubco as of the date of this Agreement, as in effect under the Laws of the State of Delaware.
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“Pubco Stock” means the shares of common stock, par value $0.01 per share, of Pubco; provided that from and after the Closing, Pubco Stock shall refer to, collectively, the Pubco Class A Stock and the Pubco Class B Stock, which shall have the terms set forth in Exhibit E.
“Redemption Amount” means the aggregate amount payable with respect to all Redemptions of the SPAC Class A Ordinary Shares pursuant to and in accordance with the SPAC Memorandum and Articles.
“Related Persons” means, as to any Person, the Affiliates of such Person, the Representatives of such Person and such Person’s Affiliates, and the immediate family members of any of the foregoing.
“Representatives” means, as to any Person, the respective managers, directors, officers, employees, independent contractors, consultants, advisors (including financial advisors, counsel and accountants), agents and other legal representatives of such Person.
“SEC” means the U.S. Securities and Exchange Commission (or any successor Governmental Authority).
“Securities Act” means the Securities Act of 1933.
“Seller Expenses” means the following out-of-pocket fees, costs and expenses paid or payable by or on behalf of the Seller, Pubco, the Company, the Pubco Subsidiaries or any of their respective Affiliates, directors, executives (excluding any remuneration for directors or executive officers) and employees in connection with the preparation, negotiation, execution or performance of this Agreement or any Ancillary Document and the Transactions contemplated hereby and thereby: (a) fees and expenses of counsel, advisors, accountants, brokers, finders, investment bankers and financial advisors to the Seller, Pubco, the Company, the Pubco Subsidiaries or any of their respective Affiliates and (b) any premiums, costs and expenses incurred under the D&O Tail Insurance, in each case as set forth on the Seller Pre-Closing Statement to be delivered by the Seller to SPAC pursuant to Section 3.2(b).
“Seller Fundamental Representations” means the representations and warranties made by the Seller pursuant to Section 7.1 (Organization and Standing), Section 7.2 (Authorization; Binding Agreement) and Section 7.7 (Finders and Brokers).
“SPAC Class A Ordinary Shares” means the class A ordinary shares, par value $0.0001 per share, of SPAC.
“SPAC Class B Ordinary Shares” means the class B ordinary shares, par value $0.0001 per share, of SPAC.
“SPAC Confidential Information” means all confidential or proprietary documents and information, whether written, oral, electronic, in visual form or in any other media, concerning SPAC or any of its Subsidiaries; provided, however, that SPAC Confidential Information shall not include any information which, (a) at the time of disclosure by any Party, any Affiliates thereof or any of their respective Representatives, is generally available publicly and was not disclosed in breach of this Agreement or (b) at the time of the disclosure by any Party, any Affiliates thereof or any of their respective Representatives, was previously known by such receiving party without violation of Law or any confidentiality obligation by the Person receiving such SPAC Confidential Information.
“SPAC Expenses” means the following out-of-pocket fees, costs and expenses paid or payable by or on behalf of SPAC in connection with the preparation, negotiation, execution or performance of this Agreement or any Ancillary Document and the Transactions contemplated hereby and thereby and SPAC’s status as a public company: (i) fees and expenses of counsel, advisors, accountants, brokers, finders, investment bankers and financial advisors to SPAC, and (ii) the SPAC Loans, in each case as set forth on the SPAC Pre-Closing Statement to be delivered by SPAC to the Seller pursuant to Section 3.2(a).
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“SPAC Fundamental Representations” means the representations and warranties made by SPAC pursuant to Section 4.1 (Organization and Standing), Section 4.2 (Authorization; Binding Agreement), Section 4.4 (Non-Contravention), Section 4.5 (Capitalization), and Section 4.15 (Finders and Brokers).
“SPAC Loans” means the loans made to SPAC by the Sponsor or any of its Affiliates for the purpose of financing costs and expenses incurred in connection with the IPO, a Business Combination or other working capital expenditures of SPAC.
“SPAC Memorandum and Articles” means the amended and restated memorandum and articles of association of SPAC as of the date of this Agreement, as in effect under the Cayman Act.
“SPAC Merger Sub Member Approval” means the vote or unanimous written resolution of the members of SPAC Merger Sub required to approve the SPAC Merger and SPAC Certificate of Merger, as determined in accordance with the Organizational Documents of SPAC Merger Sub and the DGCL and DLLCA.
“SPAC Merger Sub Membership Interests” means the membership interests of SPAC Merger Sub.
“SPAC Ordinary Shares” means the SPAC Class A Ordinary Shares and the SPAC Class B Ordinary Shares.
“SPAC Preference Shares” means preference shares, par value $0.0001 per share, of SPAC.
“SPAC Private Units” means the units issued by SPAC in a private placement transaction simultaneously with the IPO, each consisting of one (1) SPAC Class A Ordinary Share and one (1) SPAC Right.
“SPAC Public Units” means the units issued by SPAC in the IPO, each consisting of one (1) SPAC Class A Ordinary Share and one (1) SPAC Right.
“SPAC Right” means one right that was included as part of each SPAC Unit entitling the holder thereof to receive one-tenth (1/10th) of a SPAC Class A Ordinary Share upon the consummation by SPAC of its Business Combination.
“SPAC Rights Agreement” means that certain Rights Agreement, dated as of December 12, 2024, between SPAC and Continental Stock Transfer & Trust Company, as the rights agent.
“SPAC Shareholders” means the shareholders of SPAC as of immediately prior to the SPAC Merger Effective Time.
“SPAC Units” means the SPAC Public Units and the SPAC Private Units.
“Subscription Agreements” means the Company Unit Subscription Agreements, and any agreements relating to or instruments governing any Additional Permitted Financing.
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“Subsidiary” means, with respect to any Person, any other Person of which (a) if a corporation or company, a majority of the total voting power of capital stock or share capital entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (b) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons will be deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons will be allocated a majority of partnership, association or other business entity gains or losses or will be or control the managing director, managing member, general partner or other managing Person of such partnership, association or other business entity. A Subsidiary of a Person will also include any variable interest entity which is consolidated with such Person under applicable accounting rules.
“Tax Return” means any return, declaration, report, claim for refund, information return or other documents (including any related or supporting schedules, statements or information) filed or required to be filed in connection with the determination, assessment or collection of any Taxes or the administration of any Laws or administrative requirements relating to any Taxes.
“Taxes” means (a) all direct or indirect federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, value-added, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, social security and related contributions due in relation to the payment of compensation to employees, excise, severance, stamp, occupation, premium, property, windfall profits, tariffs, alternative minimum, estimated, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto, (b) any Liability for payment of amounts described in clause (a) whether as a result of being a member of an affiliated, consolidated, combined or unitary group for any period or otherwise through operation of law and (c) any Liability for the payment of amounts described in clauses (a) or (b) as a result of any tax sharing, tax group, tax indemnity or tax allocation agreement with, or any other express or implied agreement to indemnify, any other Person.
“Transfer” means the (a) sale or assignment of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act and the rules and regulations of the SEC promulgated thereunder with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b).
“Triggering Event I” means, in the period starting on the Closing Date and ending on the fifth anniversary of the Closing Date (the “Earnout Period”), the last day of any twenty (20) consecutive trading day period in which the VWAP of the Pubco Class A Stock is greater than or equal to $13.00 per share.
“Triggering Event II” means, in the Earnout Period, the last day of any twenty (20) consecutive trading day period in which the VWAP of the Pubco Class A Stock is greater than or equal to $15.00 per share.
“Triggering Event III” means, in the Earnout Period, the last day of any twenty (20) consecutive trading day period in which the VWAP of the Pubco Class A Stock is greater than or equal to $17.00 per share.
“Triggering Events” means Triggering Event I, Triggering Event II and Triggering Event III, collectively.
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“Trust Account” means the trust account established by SPAC with the proceeds from the IPO and from certain private placements occurring simultaneously with the IPO pursuant to the Trust Agreement in accordance with the IPO Prospectus.
“Trust Agreement” means that certain Investment Management Trust Agreement, dated as of December 12, 2024, by and between SPAC and the Trustee, as it may be amended, including to add Pubco to accommodate the Mergers, as well as any other agreements entered into related to or governing the Trust Account.
“Trustee” means Continental Stock Transfer & Trust Company, in its capacity as trustee under the Trust Agreement.
“VWAP” means, for any security on a relevant date, the daily Dollar volume-weighted average price for such security on the principal securities exchange or securities market on which such security is then traded during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time (or such later time after 4:00:00 p.m. as the securities are traded on such securities exchange or securities market), as reported by Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does not apply, the daily Dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time (or such later time after 4:00:00 p.m. as the securities are traded on such securities exchange or securities market), as reported by Bloomberg, or, if no daily Dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported by OTC Markets Group Inc.
1.2 Section References. The following capitalized terms, as used in this Agreement, have the respective meanings given to them in the Section as set forth below adjacent to such terms:
| $ | Section 1.3(b) |
| Acquisition Proposal | Section 8.6(a) |
| Action | Section 1.1 |
| Additional Merger Consideration Shares | Section 0 |
| Additional Permitted Financing | Section 1.1 |
| Affiliate | Section 1.1 |
| Agreement | Preamble |
| Alternative Transaction | Section 8.6(a) |
| Amended and Restated Registration Rights Agreement | Recitals |
| Ancillary Documents | Section 1.1 |
| Antitrust Laws | Section 8.9(b) |
| Avalanche BVI | Recitals |
| Benefit Plans | Section 1.1 |
| Business Combination | Section 1.1 |
| Business Combination Intended Tax Treatment | Section 2.13 |
| Business Combination Transactions | Section 2.13 |
| Business Day | Section 1.1 |
| Cayman Registrar | Section 1.1 |
| Certificate of Domestication | Section 2.1(a)(i) |
| Change in Control | Section 1.1 |
| Class A Merger Consideration Shares | Section 2.8(b)(i) |
| Class B Merger Consideration Shares | Section 2.8(b)(ii) |
| Closing | Section 3.1 |
| Closing Date | Section 3.1 |
| Closing Filing | Section 8.12(b) |
| Closing Press Release | Section 8.12(b) |
| Code | Section 1.1 |
| Company | Preamble |
| Company Avax | Recitals |
| Company Certificate of Merger | Section 2.4 |
| Company Confidential Information | Section 1.1 |
| Company Disclosure Schedules | Article VI |
| Company Fundamental Representations | Section 1.1 |
| Company Members | Section 1.1 |
| Company Merger | Recitals |
| Company Merger Effective Time | Section 2.4 |
| Company Merger Sub | Recitals |
| Company Merger Sub Membership Interests | Section 1.1 |
| Company Surviving Subsidiary | Section 2.3 |
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| Company Unit Investors | Section 1.1 |
| Company Unit Subscription | Recitals |
| Company Unit Subscription Agreements | Recitals |
| Company Unit Subscription Net Cash Proceeds | Section 1.1 |
| Company Units | Section 6.3(b) |
| Consent | Section 1.1 |
| Contracts | Section 1.1 |
| Contribution Agreement | Recitals |
| D&O Indemnified Persons | Section 8.15(a) |
| D&O Tail Insurance | Section 8.15(b) |
| Delaware Secretary of State | Section 2.1(a)(i) |
| DGCL | Section 2.2 |
| Dissenting Shareholders | Section 2.9(i) |
| Dissenting Shares | Section 2.9(i) |
| DLLCA | Section 2.3 |
| Dollars | Section 1.3(b) |
| Domesticated SPAC | Recitals |
| Domestication | Recitals |
| Domestication Effective Time | Section 2.1(b) |
| Domestication Intended Tax Treatment | Section 2.13 |
| Dragonfly Contribution | Recitals |
| DTC | Section 1.1 |
| Earnout Period | Section 1.1 |
| EGS | 12.13(a) |
| Enforceability Exceptions | Section 4.2 |
| ERISA | Section 1.1 |
| Escrow Agent | Section 2.8(d)(i) |
| Escrow Agreement | Section 2.8(d)(i) |
| Exchange Act | Section 1.1 |
| Exchange Agent | Section 2.12(a) |
| Expenses | Section 1.1 |
| Extraordinary General Meeting | Section 8.11(a) |
| Federal Securities Laws | Section 8.7 |
| First A&R Company LLCA | Recitals |
| Foundation | Recitals |
| Foundation Transaction | Recitals |
| Founder Registration Rights Agreement | Section 1.1 |
| Fraud | Section 1.1 |
| Fraud Claim | Section 1.1 |
| GAAP | Section 1.1 |
| Governmental Authority | Section 1.1 |
| IFRS | Section 1.1 |
| Indebtedness | Section 1.1 |
| Intellectual Property | Section 1.1 |
| Intended Tax Treatment | Section 2.13 |
| Interim Period | Section 8.1(a) |
| Investment Company Act | Section 1.1 |
| Investments | Section 1.1 |
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| Investors | Section 1.1 |
| IPO | Section 1.1 |
| IPO Prospectus | Section 1.1 |
| Knowledge | Section 1.1 |
| Law | Section 1.1 |
| Liabilities | Section 1.1 |
| Lien | Section 1.1 |
| Lock-Up Agreement | Recitals |
| Material Adverse Effect | Section 1.1 |
| Mergers | Recitals |
| Modification in Recommendation | Section 8.11(d) |
| Nasdaq | Section 1.1 |
| Non-Recourse Parties | Section 12.14 |
| OFAC | Section 4.16(c) |
| Order | Section 1.1 |
| Organizational Documents | Section 1.1 |
| Outside Date | Section 10.1(b) |
| Parties | Preamble |
| Party | Preamble |
| PCAOB | Section 1.1 |
| Permits | Section 1.1 |
| Permitted Liens | Section 1.1 |
| Person | Section 1.1 |
| Personal Property | Section 1.1 |
| Post-Closing Pubco Board | Section 8.14(a) |
| Post-Closing Pubco Officers | Section 8.14(a) |
| Proxy Statement | Section 8.11(a) |
| Pubco | Preamble |
| Pubco A&R Organizational Documents | Section 8.19 |
| Pubco and Pubco Subsidiaries Fundamental Representations | Section 1.1 |
| Pubco Class A Stock | Section 1.1 |
| Pubco Class B Stock | Section 1.1 |
| Pubco Incentive Plan | Section 8.23 |
| Pubco Organizational Documents | Section 1.1 |
| Pubco Stock | Section 1.1 |
| Pubco Subsidiaries | Recitals |
| Pubco Subsidiary | Recitals |
| Public Shareholders | Section 11.1 |
| Redemption | Section 8.11(a) |
| Redemption Amount | Section 1.1 |
| Registration Statement | Section 8.11(a) |
| Related Persons | Section 1.1 |
| Released Claims | Section 11.1 |
| Releasing Persons | Section 11.2 |
| Representatives | Section 1.1 |
| Required Shareholder Approval | Section 9.1(a) |
| SEC | Section 1.1 |
| SEC Reports | Section 4.6(a) |
| Securities Act | Section 1.1 |
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| Seller | Preamble |
| Seller Digital Wallet | Section 7.8(b) |
| Seller Earnout Shares | Section 2.8(d)(i) |
| Seller Escrow Account | Section 2.8(d)(i) |
| Seller Escrow Adjustment Shares | Section 2.8(d)(i) |
| Seller Expenses | Section 1.1 |
| Seller Fundamental Representations | Section 1.1 |
| Seller Pre-Closing Statement | Section 3.2(b) |
| Seller Transfer | Section 2.8(d)(iii), Section 2.8(d)(v) |
| Signing Filing | Section 8.12(b) |
| Signing Press Release | Section 8.12(b) |
| Skadden | Section 12.13(b) |
| SPAC | Preamble |
| SPAC Board | Recitals |
| SPAC Certificate of Merger | Section 2.4 |
| SPAC Class A Ordinary Shares | Section 1.1 |
| SPAC Class B Ordinary Shares | Section 1.1 |
| SPAC Confidential Information | Section 1.1 |
| SPAC Delaware Bylaws | Recitals |
| SPAC Delaware Certificate of Incorporation | Recitals |
| SPAC Disclosure Schedules | Article IV |
| SPAC Expenses | Section 1.1 |
| SPAC Financials | Section 4.6(d) |
| SPAC Fundamental Representations | Section 1.1 |
| SPAC Loans | Section 1.1 |
| SPAC Material Contract | Section 4.13(a) |
| SPAC Memorandum and Articles | Section 1.1 |
| SPAC Merger | Recitals |
| SPAC Merger Effective Time | Section 2.4 |
| SPAC Merger Sub | Preamble |
| SPAC Merger Sub Membership Interests | Section 1.1 |
| SPAC Merger Sub Member Approval | Section 1.1 |
| SPAC Ordinary Shares | Section 1.1 |
| SPAC Pre-Closing Statement | Section 3.2(a) |
| SPAC Preference Shares | Section 1.1 |
| SPAC Private Units | Section 1.1 |
| SPAC Public Units | Section 1.1 |
| SPAC Right | Section 1.1 |
| SPAC Rights Agreement | Section 1.1 |
| SPAC Shareholder Approval Matters | Section 8.11(a) |
| SPAC Shareholders | Section 1.1 |
| SPAC Surviving Subsidiary | Section 2.3 |
| SPAC Units | Section 1.1 |
| Sponsor | Recitals |
| Sponsor Support Agreement | Recitals |
| Subscription Agreements | Section 1.1 |
| Subsidiary | Section 1.1 |
| Tax Return | Section 1.1 |
| Taxes | Section 1.1 |
| Transactions | Recitals |
| Transfer | Section 1.1 |
| Triggering Event I | Section 1.1 |
| Triggering Event II | Section 1.1 |
| Triggering Event III | Section 1.1 |
| Triggering Events | Section 1.1 |
| Trust Account | Section 1.1 |
| Trust Agreement | Section 1.1 |
| Trustee | Section 1.1 |
| TSA | Recitals |
| Unit Separation | Section 2.9(a) |
| VWAP | Section 1.1 |
1.3 Interpretation.
(a) The table of contents and the Article and Section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the Parties and shall not in any way affect the meaning or interpretation of this Agreement.
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(b) In this Agreement, unless the context otherwise requires: (i) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and words in the singular, including any defined terms, include the plural and vice versa; (ii) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity; (iii) any accounting term used and not otherwise defined in this Agreement or any Ancillary Document has the meaning assigned to such term in accordance with GAAP or IFRS, as applicable, based on the accounting principles used by the applicable Person; (iv) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; (v) the words “herein,” “hereto,” and “hereby” and other words of similar import in this Agreement shall be deemed in each case to refer to this Agreement as a whole and not to any particular Section or other subdivision of this Agreement; (vi) the word “if” and other words of similar import when used herein shall be deemed in each case to be followed by the phrase “and only if”; (vii) the term “or” means “and/or” unless clearly indicated otherwise, including, by use of “either”; (viii) any reference to the term “ordinary course” or “ordinary course of business” shall be deemed in each case to be followed by the words “consistent with past practice”; (ix) any agreement, instrument, insurance policy, Law defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument, insurance policy, Law as from time to time amended, modified or supplemented as of the applicable date or during the applicable period of time, including (in the case of agreements or instruments) by waiver or consent (and in the case of agreements or instruments, in accordance with the term of the agreement or instrument, and in the case of any Ancillary Document, in accordance with the terms of this Agreement) and (in the case of statutes, regulations, rules or orders) by succession of comparable successor statutes, regulations, rules or orders and references to all attachments thereto and instruments incorporated therein; (x) unless the context of this Agreement otherwise requires, references to statutes shall include all rules and regulations promulgated thereunder; (xi) except as otherwise indicated, all references in this Agreement to the words “Section,” “Article”, “Schedule”, “Annex” and “Exhibit” are intended to refer to Sections, Articles, Schedules, Annexes and Exhibits to this Agreement; and (xii) the term “Dollars” or “$” means United States dollars.
(c) Any reference in this Agreement to a Person’s directors shall include any member of such Person’s governing body and any reference in this Agreement to a Person’s officers shall include any Person filling a substantially similar position for such Person.
(d) Any reference in this Agreement or any Ancillary Document to a Person’s shareholders or stockholders shall include any applicable owners of the equity interests of such Person, in whatever form.
(e) The Parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.
(f) The Company Disclosure Schedules and the SPAC Disclosure Schedules (including, in each case, any section thereof) referenced herein are a part of this Agreement as if fully set forth herein. All references herein to the Company Disclosure Schedules or the SPAC Disclosure Schedules (including, in each case, any section thereof) shall be deemed references to such parts of this Agreement, unless the context shall otherwise require. Any disclosure made by a Party in the Company Disclosure Schedules or the SPAC Disclosure Schedules, as applicable, or any section thereof, with reference to any section of this Agreement or section of the Company Disclosure Schedules or the SPAC Disclosure Schedules, as applicable, shall be deemed to be a disclosure with respect to such other applicable sections of this Agreement or sections of the Company Disclosure Schedules or the SPAC Disclosure Schedules, as applicable, if it is reasonably apparent on the face of such disclosure that such disclosure is responsive to such other section of this Agreement or section of the Company Disclosure Schedules or the SPAC Disclosure Schedules, as applicable. Certain information set forth in the Company Disclosure Schedules or the SPAC Disclosure Schedules, as applicable, is included solely for informational purposes and may not be required to be disclosed pursuant to this Agreement. Unless expressly contemplated by this Agreement, the disclosure of any information shall not be deemed to constitute an acknowledgment that such information is required to be disclosed in connection with the representations and warranties made in this Agreement, nor shall such information be deemed to establish a standard of materiality.
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Article II
Business Combination Transactions
2.1 Domestication.
(a) At least two (2) hours before the SPAC Merger Effective Time, SPAC shall cause the Domestication to become effective, including by:
(i) concurrently filing with the Secretary of State of the State of Delaware (the “Delaware Secretary of State”) each of (1) a certificate of domestication with respect to the Domestication (the “Certificate of Domestication”) and (2) the SPAC Delaware Certificate of Incorporation, in each case, in accordance with the provisions thereof and applicable Law;
(ii) taking all actions necessary so that the SPAC Delaware Bylaws shall become the effective bylaws of Domesticated SPAC;
(iii) completing, making and procuring all those filings required to be made with the Cayman Registrar in connection with the Domestication; and
(iv) obtaining a certificate of de-registration from the Cayman Registrar.
(b) The Domestication shall become effective at the time when the Certificate of Domestication has been duly filed with the Delaware Secretary of State or at such later time (but no later than two (2) hours before the SPAC Merger Effective Time) as may be agreed by SPAC and the Seller in writing and specified in the Certificate of Domestication (the “Domestication Effective Time”).
2.2 SPAC Merger. At the SPAC Merger Effective Time, but at least two (2) hours after the Domestication Effective Time, and subject to and upon the terms and conditions of this Agreement and the SPAC Certificate of Merger, and in accordance with the applicable provisions of the General Corporation Law of the State of Delaware (the “DGCL”) and the Limited Liability Company Act of the State of Delaware (the “DLLCA”), SPAC and SPAC Merger Sub shall consummate the SPAC Merger, pursuant to which SPAC Merger Sub shall be merged with and into SPAC, following which the separate corporate existence of SPAC Merger Sub shall cease and SPAC shall continue as the surviving company. SPAC, as the surviving company after the SPAC Merger, is hereinafter sometimes referred to as the “SPAC Surviving Subsidiary” (provided that, references to SPAC for periods after the SPAC Merger Effective Time shall include the SPAC Surviving Subsidiary). The SPAC Merger shall have the effects specified in the DGCL and DLLCA.
2.3 Company Merger. At the Company Merger Effective Time, and subject to and upon the terms and conditions of this Agreement, and in accordance with the applicable provisions of the DLLCA, the Company and Company Merger Sub shall consummate the Company Merger, pursuant to which Company Merger Sub shall be merged with and into the Company, following which the separate corporate existence of Company Merger Sub shall cease and the Company shall continue as the surviving company. The Company, as the surviving company after the Company Merger, is hereinafter sometimes referred to as the “Company Surviving Subsidiary” (provided, that references to the Company for periods after the Company Merger Effective Time shall include the Company Surviving Subsidiary). The Company Merger shall have the effects specified in the DLLCA.
2.4 Effective Times of Mergers. On the Closing Date, (a) with respect to the SPAC Merger, SPAC Merger Sub, SPAC and Pubco shall enter into and file a certificate of merger (the “SPAC Certificate of Merger”) with the Delaware Secretary of State in accordance with the DGCL and the DLLCA, and (b) with respect to the Company Merger, Company Merger Sub, the Company and Pubco shall file a certificate of merger (the “Company Certificate of Merger”) with the Delaware Secretary of State in accordance with the DLLCA. The SPAC Merger shall become effective at the time on the Closing Date when the SPAC Certificate of Merger has been duly accepted for filing by the Delaware Secretary of State in accordance with the DGCL or such other time as specified in the SPAC Certificate of Merger (the “SPAC Merger Effective Time”) and the Company Merger shall become effective at the time on the Closing Date when the Company Certificate of Merger has been duly accepted for filing by the Delaware Secretary of State in accordance with the DLLCA or such other time as specified in the Company Certificate of Merger (such time, the “Company Merger Effective Time”); provided that the SPAC Merger Effective Time shall become effective at least two (2) hours after the Domestication.
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2.5 Effect of the Mergers.
(a) At the SPAC Merger Effective Time, the effect of the SPAC Merger shall be as provided in this Agreement, and the applicable provisions of the DGCL and DLLCA. Without limiting the generality of the foregoing, and subject thereto, at the SPAC Merger Effective Time, all the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of SPAC Merger Sub and SPAC shall become the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of the SPAC Surviving Subsidiary (including all rights and obligations with respect to the Trust Account), which shall include the assumption by the SPAC Surviving Subsidiary of any and all agreements, covenants, duties and obligations of SPAC Merger Sub and SPAC set forth in this Agreement to be performed after the SPAC Merger Effective Time, and the SPAC Surviving Subsidiary shall continue its existence as a wholly owned Subsidiary of Pubco.
(b) At the Company Merger Effective Time, the effect of the Company Merger shall be as provided in this Agreement and the applicable provisions of the DGCL and DLLCA. Without limiting the generality of the foregoing, and subject thereto, at the Company Merger Effective Time, all the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of Company Merger Sub and the Company shall become the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of the Company Surviving Subsidiary which shall include the assumption by the Company Surviving Subsidiary of any and all agreements, covenants, duties and obligations of Company Merger Sub and the Company set forth in this Agreement to be performed after the Company Merger Effective Time, and the Company Surviving Subsidiary shall continue its existence as a wholly owned Subsidiary of Pubco.
2.6 Organizational Documents.
(a) At the SPAC Merger Effective Time, the memorandum and articles of association of SPAC Surviving Subsidiary shall be the memorandum and articles of association of SPAC Merger Sub, as in effect immediately prior to the SPAC Merger Effective Time.
(b) At the Company Merger Effective Time, the limited liability company agreement of the Company Surviving Subsidiary then in effect shall be amended and restated in the form of the Second A&R Company LLCA.
2.7 Directors and Officers of the Surviving Subsidiaries. At the SPAC Merger Effective Time and the Company Merger Effective Time, respectively, the board of directors and executive officers of the SPAC Surviving Subsidiary and the Company Surviving Subsidiary shall be the same as the board of directors and executive officers of Pubco, after giving effect to Section 8.14, or as otherwise determined by the Seller.
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2.8 Company Merger Consideration.
(a) Company Member Merger Consideration Shares. As consideration for the Company Merger, each Company Member other than the Seller shall be entitled to receive from Pubco one share of Pubco Class A Stock for each Company Unit held by such Company Member immediately prior to the Company Merger Effective Time.
(b) Seller Merger Consideration Shares. As consideration for the Company Merger, Seller shall be entitled to receive from Pubco:
(i) one share of Pubco Class A Stock for each Company Unit held by the Seller immediately prior to the Company Merger Effective Time (collectively with the shares of Pubco Class A Stock issued pursuant to Section 2.8(a), the “Class A Merger Consideration Shares”); and
(ii) one share of Pubco Class B Stock for each Company Unit held by the Seller immediately prior to the Company Merger Effective Time (the “Class B Merger Consideration Shares”).
(c) Additional Merger Consideration.
As additional consideration for the Company Merger, at the Company Merger Effective Time, Pubco shall issue to the Seller 4,000,000 Pubco Class A Stock and 4,000,000 Pubco Class B Stock (the “Additional Merger Consideration Shares”).
(d) Earnout.
(i) Upon the Closing, 2,000,000 Pubco Class A Stock and 2,000,000 Pubco Class B Stock issued as part of the Additional Merger Consideration pursuant to Section 2.8(c) (the “Seller Earnout Shares”), shall be placed into the Seller Escrow Account (as hereinafter defined). The Seller hereby agrees that, at the Closing, it shall enter into an escrow agreement with Pubco and Continental Stock Transfer and Trust Company (or another escrow agent reasonably acceptable to the Seller and Pubco), as escrow agent (the “Escrow Agent”), in form and substance to be mutually agreed by the parties thereto prior to the Closing (the “Escrow Agreement”), and, upon and subject to the Closing the Seller shall deposit the Seller Earnout Shares into a segregated escrow account (the “Seller Escrow Account”) with the Escrow Agent to be held, along with any equity securities placed in the Seller Escrow Account pursuant to Section 2.8(d)(vii) of this Agreement (the “Seller Escrow Adjustment Shares”), in the Seller Escrow Account and disbursed in accordance with the terms of this Agreement and the Escrow Agreement.
(ii) Except as expressly permitted hereunder, the Seller shall not transfer, directly or indirectly, the Seller Earnout Shares and the Seller Escrow Adjustment Shares (if any) during the Earnout Period. Except as otherwise set forth in this Agreement, all of the Seller Earnout Shares and Seller Escrow Adjustment Shares shall be retained in the Seller Escrow Account unless and until their release upon the achievement of a Triggering Event (as defined below) in accordance with Section 2.8(d)(v).
(iii) The Seller agrees that all of the Seller Earnout Shares, together with any Seller Escrow Adjustment Shares, shall be subject to potential transfer to Pubco for no consideration (the “Seller Transfer”) at the end of the Earnout Period in the event that not all of the Triggering Events are achieved by Pubco pursuant to Section 2.8(d)(v).
(iv) If, at the end of the Earnout Period, less than all of the Seller Earnout Shares have been released to the Seller pursuant to one or more Release Events, Pubco and Seller will as promptly as practicable instruct the Escrow Agent to complete the Seller Transfer of the unreleased Seller Earnout Shares, together with any unreleased Seller Escrow Adjustment Shares, and the Escrow Agent shall deliver such Seller Earnout Shares and Seller Escrow Adjustment Shares to Pubco. Seller and Pubco shall give joint written instructions to the Escrow Agent to release the applicable Seller Earnout Shares, together with any related Seller Escrow Adjustment Shares, to the Seller, promptly after the occurrence of a Release Event or a Change in Control.
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(v) The Seller Earnout Shares shall vest, no longer be subject to the Seller Transfer and be released from the Seller Escrow Account to the Seller, upon the occurrence of the following Triggering Events (each, a “Release Event”):
(1) Upon the occurrence of Triggering Event I, 666,667 shares of Pubco Class A Stock and 666,667 shares of Pubco Class B Stock that form part of the Seller Earnout Shares shall no longer be subject to the Seller Transfer and be released from the Seller Escrow Account to the Seller;
(2) Upon the occurrence of Triggering Event II, 666,667 shares of Pubco Class A Stock and 666,667 shares of Pubco Class B Stock that form part of the Seller Earnout Shares shall no longer be subject to the Seller Transfer and be released from the Seller Escrow Account to the Seller; and
(3) Upon the occurrence of Triggering Event III, 666,666 shares of Pubco Class A Stock and 666,666 shares of Pubco Class B Stock that form part of the Seller Earnout Shares shall no longer be subject to the Seller Transfer and be released from the Seller Escrow Account to the Seller, in each case, within then (10) Business Days after the occurrence of the relevant Release Event.
(vi) For the avoidance of doubt, each of Triggering Event I, Triggering Event II and Triggering Event III shall be capable of occurring only once, if at all; provided, further, that all Triggering Events may be achieved at the same time or on overlapping days.
(vii) The (1) Pubco Class A Stock price targets set forth in the definitions of Triggering Event I, Triggering Event II and Triggering Event III and this Section 2.7(d) and (2) number of Seller Earnout Shares (including both Pubco Class A Stock and Pubco Class B Stock) to be placed in the Seller Escrow Account pursuant to this Section 2.7(d)(i) shall, in each case, be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to Pubco Class A Stock occurring on or after the Closing.
(viii) Notwithstanding the foregoing, in the event that during the Earnout Period, Pubco is subject to a Change in Control, then all of the Seller Earnout Shares, together with any related Seller Escrow Adjustment Shares, then remaining in the Seller Escrow Account shall no longer be subject to the Seller Transfer and shall be released to Seller from the Seller Escrow Account.
2.9 Effect of SPAC Merger on Outstanding Securities of SPAC and SPAC Merger Sub. At the SPAC Merger Effective Time, by virtue of the SPAC Merger and without any action on the part of any Party or the holders of securities of SPAC, Pubco or SPAC Merger Sub:
(a) SPAC Units. Immediately prior to the SPAC Merger Effective Time, each SPAC Unit issued and outstanding immediately prior to the SPAC Merger Effective Time, that has not been forfeited in accordance with the Sponsor Support Agreement, shall be automatically detached and the holder thereof shall be deemed to hold one SPAC Class A Ordinary Share and one SPAC Right in accordance with the terms of the applicable SPAC Unit (the “Unit Separation”). The underlying SPAC Class A Ordinary Shares and SPAC Right held or deemed to be held following the Unit Separation shall be converted in accordance with the applicable terms of this Section 2.9.
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(b) SPAC Rights. At the SPAC Merger Effective Time, each issued and outstanding SPAC Right shall be automatically converted into the number of shares of Pubco Class A Stock that would have been received by the holder thereof if the SPAC Right had been converted upon the consummation of a Business Combination in accordance with SPAC’s Organizational Documents, the IPO Prospectus and the SPAC Rights Agreement into SPAC Class A Ordinary Shares, but for such purposes treating it as if such Business Combination had occurred immediately prior to the SPAC Merger Effective Time and the SPAC Class A Ordinary Shares issued upon conversion of the SPAC Rights had then automatically been converted into shares of Pubco Class A Stock in accordance with Section 2.9(c). At the SPAC Merger Effective Time, the SPAC Rights shall cease to be outstanding and shall automatically be canceled and retired and shall cease to exist. The holders of certificates previously evidencing SPAC Rights outstanding immediately prior to the SPAC Merger Effective Time shall cease to have any rights with respect to such SPAC Rights, except as provided herein or by Law. Each certificate formerly representing SPAC Rights shall thereafter represent only the right to receive shares of Pubco Class A Stock as set forth herein.
(c) SPAC Class A Ordinary Shares. At the SPAC Merger Effective Time, immediately following the Unit Separation, each issued and outstanding SPAC Class A Ordinary Share shall be converted automatically into one share of Pubco Class A Stock, following which, all such SPAC Class A Ordinary Shares (other than those described in Section 2.9(f)) shall cease to be outstanding and shall automatically be cancelled and shall cease to exist. The holders of certificates previously evidencing SPAC Class A Ordinary Shares outstanding immediately prior to the SPAC Merger Effective Time shall cease to have any rights with respect to such shares, except as provided herein or by Law. Each certificate previously evidencing SPAC Class A Ordinary Shares shall be exchanged for a certificate (if requested) representing the same number of shares of Pubco Class A Stock upon the surrender of such certificate in accordance with Section 2.12. Each certificate formerly representing SPAC Class A Ordinary Shares (other those described in Section 2.9(e), Section 2.9(f) and Section 2.9(i)) shall thereafter represent only the right to receive the same number of shares of Pubco Class A Stock.
(d) SPAC Class B Ordinary Shares. Without prejudice to the provision of the Sponsor Support Agreement, each SPAC Class B Ordinary Share issued and outstanding immediately prior to the SPAC Merger Effective Time, that has not been forfeited in accordance with the Sponsor Support Agreement, shall automatically be converted into one Pubco Class A Stock, following which, all such SPAC Class B Ordinary Shares shall cease to be outstanding and shall automatically be cancelled and shall cease to exist. The holders of SPAC Class B Ordinary Shares outstanding immediately prior to the SPAC Merger Effective Time shall cease to have any rights with respect to such shares, except as provided herein or by Law. Each certificate previously evidencing SPAC Class B Ordinary Shares shall be exchanged for a certificate (if requested) representing the same number of shares of Pubco Stock upon the surrender of such certificate in accordance with Section 2.12. Each SPAC Class B Ordinary Share (other those described in Section 2.9(f)) shall thereafter represent only the right to receive the number of shares if Pubco Class A Stock determined in accordance with this Section 2.9(d) and the Sponsor Support Agreement.
(e) Redeeming Shares. At the SPAC Merger Effective Time, each issued and outstanding SPAC Class A Ordinary Share in respect to which the holder thereof has validly exercised redemption rights pursuant to and in accordance with the SPAC Memorandum and Articles (and not waived, withdrawn or otherwise lost such rights), shall automatically be cancelled and shall cease to exist and shall thereafter represent only the right to receive a pro rata share of the Redemption Amount in accordance with the SPAC Memorandum and Articles.
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(f) Treasury Shares. Notwithstanding Sections 2.9(a) and 2.9(d) or any other provision of this Agreement to the contrary, at the SPAC Merger Effective Time, if there are any SPAC Ordinary Shares that are owned by the SPAC as treasury shares immediately prior to the SPAC Merger Effective Time, such SPAC Ordinary Shares shall be automatically cancelled and shall cease to exist without any conversion thereof or payment therefor.
(g) No Liability. Notwithstanding anything to the contrary in this Section 2.9, none of the SPAC Surviving Subsidiary, Pubco or any other Party 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.
(h) SPAC Merger Sub Membership Interests. At the SPAC Merger Effective Time, all SPAC Merger Sub Membership Interests issued and outstanding immediately prior to the SPAC Merger Effective Time shall be converted into an equal number of ordinary shares, par value $0.0001, of the SPAC Surviving Subsidiary, with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding share capital of the SPAC Surviving Subsidiary.
(i) Dissenting Shares. Notwithstanding any provision of this Agreement to the contrary and to the extent available under the DGCL, SPAC Ordinary Shares that are issued and outstanding immediately prior to the SPAC Merger Effective Time and that are held by SPAC Shareholders who have properly demanded appraisal for such SPAC Ordinary Shares in accordance with Section 262 of the DGCL and who have not effectively withdrawn or lost their appraisal rights under the DGCL (the “Dissenting Shares” and the holders thereof, the “Dissenting Shareholders”) shall not be converted into or represent the right to receive Pubco Class A Stock, but instead shall be cancelled and shall represent only the right to receive such consideration as may be determined to be due to such Dissenting Shareholders pursuant to the DGCL. If any Dissenting Shareholder fails to perfect, withdraws, or otherwise loses his, her, or its appraisal rights under the DGCL, then, as of the SPAC Merger Effective Time or the occurrence of such event, whichever is later, such SPAC Shareholder’s SPAC Ordinary Shares shall be deemed to have been converted as of the SPAC Merger Effective Time into, and to have become exchangeable for, the right to receive Pubco Class A Stock, without interest thereon, in accordance with this Section 2.9(i).
(j) Prior to the Closing, the SPAC shall give the Company and SPAC Merger Sub prompt written notice of any demands for appraisal received by the SPAC, any withdrawals of such demands, and any other instruments served pursuant to the DGCL and received by the SPAC relating to rights of appraisal. The SPAC 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.
2.10 Effect of Company Merger on Outstanding Securities of the Company and Company Merger Sub. At the Company Merger Effective Time, by virtue of the Company Merger and without any action on the part of any Party or the holders of securities of any Party:
(a) Company Units. At the Company Merger Effective Time each issued and outstanding Company Unit (other than those described in Section 2.10(c)) held by the Company Members will automatically be cancelled and cease to exist in exchange for the right to receive the Class A Merger Consideration Shares, and in case of the Seller, together with Class B Merger Consideration Shares, without interest. As of the Company Merger Effective Time, the Company Members shall cease to have any other rights in and to the Company or the Company Surviving Subsidiary; and
(b) [intentionally omitted].
(c) Treasury Interests. Notwithstanding Section 2.10(a), or any other provision of this Agreement to the contrary, at the Company Merger Effective Time, if there are any Company Units that are owned by the Company as treasury interests or any Company Units owned by any direct or indirect Subsidiary of the Company immediately prior to the Company Merger Effective Time, such Company Units shall be cancelled and shall cease to exist without any conversion thereof or payment therefor.
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(d) No Liability. Notwithstanding anything to the contrary in this Section 2.10, none of the Company Surviving Subsidiary, Pubco or any other Party 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.
(e) Company Merger Sub Membership Interests. At the Company Merger Effective Time, all of the Company Merger Sub Membership Interests issued and outstanding immediately prior to the Company Merger Effective Time shall be converted into an equal number of shares of common stock of the Company Surviving Subsidiary such that, immediately following such conversion, the aggregate number of shares of common stock of the Company Surviving Subsidiary shall be equal to the number of shares of Pubco Class A Stock outstanding immediately following the Company Merger Effective Time.
2.11 Effect of Mergers on Outstanding Securities of Pubco. At the Company Merger Effective Time, by virtue of the Mergers and without any action on the part of any Party or the holders of securities of any Party, all of the shares of Pubco Stock issued and outstanding immediately prior to the SPAC Merger Effective Time shall be cancelled and extinguished without any conversion thereof or payment therefor.
2.12 Exchange and Conversion Procedures.
(a) Prior to the SPAC Merger Effective Time, Pubco shall appoint SPAC’s transfer agent, Continental Stock Transfer & Trust Company, or another agent reasonably acceptable to the Company and SPAC (the “Exchange Agent”), as its agent for the purpose of exchanging the SPAC Ordinary Shares and the Company Units held by Company Members for shares of Pubco Stock.
(b) At or prior to the SPAC Merger Effective Time, Pubco shall deliver to the Exchange Agent written instructions to issue, at the SPAC Merger Effective Time, in uncertificated book-entry form, one share of Pubco Class A Stock in exchange for, and upon cancelation of, each issued and outstanding SPAC Class A Ordinary Share and SPAC Class B Ordinary Share; and
(c) At or prior to the Company Merger Effective Time, Pubco shall deliver to the Exchange Agent written instructions to issue, at the Company Merger Effective Time, in uncertificated book-entry form:
(i) to Company Members, except for the Seller, one share of Pubco Class A Stock in exchange for, and upon cancelation of, each issued and outstanding Company Unit held by such Company Members immediately prior to the Company Merger Effective Time; and
(ii) to the Seller, (i) one share of Pubco Class A Stock and one share of Pubco Class B Stock in exchange for, and upon cancelation of, each issued and outstanding Company Unit held by the Seller immediately prior to the Company Merger Effective Time, and (ii) the Additional Merger Consideration.
(d) Pubco Stock to be delivered pursuant to Sections 2.9(a), and 2.10(a) shall be settled through DTC and issued in uncertificated book-entry form through the procedures of DTC, unless a physical share of Pubco Stock is required by applicable Law, in which case Pubco shall cause the Exchange Agent to promptly send certificates representing such shares of Pubco Stock to such holder.
(e) Notwithstanding anything to the contrary contained herein, no fraction of a share of Pubco Stock will be issued by Pubco by virtue of this Agreement or the Transactions, and each Person who would otherwise be entitled to a fraction of a share of Pubco Stock (after aggregating all fractional shares of Pubco Stock that otherwise would be received by such holder) shall instead have the number of shares of Pubco Stock issued to such Person rounded down in the aggregate to the nearest whole share of Pubco Stock.
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(f) No dividends or other distributions declared or made after the date of this Agreement with respect to shares of Pubco Stock with a record date after the SPAC Merger Effective Time or the Company Merger Effective Time, as applicable, will be paid to the holders of any SPAC Ordinary Shares or Company Units that have not yet been surrendered to the Exchange Agent pursuant to this Section 2.12.
2.13 Intended Tax Treatment. The Parties hereby agree and acknowledge that, for U.S. federal income tax purposes, (a) the Domestication is intended to be treated as a “reorganization” described in Section 368(a)(1)(F) of the Code (the “Domestication Intended Tax Treatment”) and (b) the SPAC Merger, the Company Merger, and the Foundation Transaction, taken together (the “Business Combination Transactions”), are intended to be treated as an integrated transaction that is described in Section 351 of the Code (the “Business Combination Intended Tax Treatment” and, together with the Domestication Intended Tax Treatment, the “Intended Tax Treatment”). The Parties hereby agree to file all Tax and other informational returns on a basis consistent with the Intended Tax Treatment, unless otherwise required pursuant to a determination within the meaning of Section 1313(a) of the Code. From and after the date of this Agreement, each Party shall use its reasonable best efforts to cause the Business Combination Transactions to qualify for the Business Combination Intended Tax Treatment, and shall not take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken (in each case other than any action specifically provided for or prohibited by this Agreement), which action or failure to act could reasonably be expected to prevent the Business Combination Transactions from qualifying for the Business Combination Intended Tax Treatment. Each of the Parties acknowledge and agree that each (a) has had the opportunity to obtain independent legal and tax advice with respect to the Transactions contemplated by this Agreement, and (b) is responsible for paying its own Taxes, including any adverse Tax consequences that may result if the Domestication and/or the Business Combination Transactions do not qualify for the Intended Tax Treatment, respectively. If the SEC or any other Governmental Authority requests or requires that an opinion be provided on or prior to the Closing in respect of the Intended Tax Treatment, SPAC will use its reasonable best efforts to cause its Tax advisors to provide any such opinion, subject to customary assumptions and limitations, and each Party shall use its reasonable best efforts to reasonably cooperate with one another and their respective Tax advisors with respect to such opinion, including using reasonable best efforts to deliver to the relevant counsel certificates (dated as of the necessary date and signed by such Party or its Affiliate, as applicable) containing such customary representations as are necessary or appropriate for such counsel to render such opinion.
2.14 Taking of Necessary Action; Further Action. If, at any time after the SPAC Merger Effective Time and the Company Merger Effective Time, as applicable, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the SPAC Surviving Subsidiary or Company Surviving Subsidiary, as applicable, with full right, title and possession to all assets, property, rights, privileges, powers and franchises of SPAC and SPAC Merger Sub, on the one hand, or the Company and Company Merger Sub, on the other hand, the officers and directors of SPAC, SPAC Merger Sub, the Company and Company Merger Sub, as applicable, are fully authorized in the name of their respective entities to take, and will take, all such lawful and necessary action, so long as such action is not inconsistent with this Agreement.
2.15 Withholding. Each of Pubco, the SPAC Surviving Subsidiary, the Company Surviving Subsidiary and the Exchange Agent (without duplication) shall be entitled to deduct and withhold from the consideration otherwise payable to any Person pursuant to this Agreement such amounts as are required to be deducted and withheld with respect to the making of such payment under any applicable Law; provided, however, that the relevant payor will reasonably cooperate with the relevant payee prior to the making of such deductions and withholding payments to determine whether any such deductions or withholding payments (other than with respect to compensatory payments, if any) are required under applicable Law and in obtaining any available exemption or reduction of, or otherwise minimizing to the extent permitted by applicable Law, such deduction and withholding. Any amounts so deducted and withheld shall be paid over to the appropriate Governmental Authority in accordance with applicable Law, and to that extent shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction or withholding was made. The Parties acknowledge that no withholding is expected to be required under applicable U.S. federal income Tax Law as in effect as of the date of this Agreement with respect to any amounts payable pursuant to this Agreement. To the extent any Party becomes aware of any obligation to deduct or withhold from amounts otherwise payable, issuable or transferable pursuant to this Agreement, such Party shall notify the other Parties as soon as reasonably practicable, and the Parties shall reasonably cooperate to obtain any certificates or other documentation required in respect of such withholding obligation.
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2.16 Seller Consent. Seller, as a member of the Company, hereby approves, authorizes and consents to the Company’s execution and delivery of this Agreement and the Ancillary Documents to which it is or is required to be a party or otherwise bound, the performance by the Company of its obligations hereunder and thereunder and the consummation by the Company of the Transactions. The Seller acknowledges and agrees that the consents set forth herein are intended and shall constitute such consent of the Seller as may be required (and shall, if applicable, operate as a written member resolution of the Company) pursuant to the Organizational Documents of the Company, any other Contract in respect of the Company to which the Seller is a party or bound and all applicable Laws.
Article III
CLOSING
3.1 Closing. Subject to the satisfaction or waiver of the conditions set forth in Article IX, the consummation of the Transactions contemplated by this Agreement (the “Closing”) shall take place by electronic exchange of signatures, on a date to be agreed by SPAC and the Seller, which date shall be no later than on the fifth (5th) Business Day after all the Closing conditions in Article IX have been satisfied or waived (other than any such conditions which by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at the Closing) at 10:00 a.m. New York time, or at such other date, time or place as SPAC and the Seller may agree in writing (the date and time at which the Closing is actually held being the “Closing Date”).
3.2 Pre-Closing Statements.
(a) At least four (4) Business Days prior to the Closing Date, SPAC shall prepare and deliver to the Seller a written statement setting forth SPAC’s good faith estimate and calculation of the SPAC Expenses as of the Closing Date (in each case, in reasonable detail and with reasonable supporting documentation, including corresponding invoices therefor) and the respective amounts and wire transfer instructions for the payment or reimbursement of all such SPAC Expenses in accordance with Section 12.5 (such statement or as updated pursuant to the second sentence of this Section 3.2(a), the “SPAC Pre-Closing Statement”). SPAC shall consider in good faith any reasonable comments made by the Seller at least two (2) Business Days prior to the Closing Date with respect to the estimate and calculations included in the SPAC Pre-Closing Statement, and to the extent SPAC agrees, acting in good faith and reasonably, with any such comments, SPAC will deliver an updated SPAC Pre-Closing Statement incorporating such comments. In addition, at least two (2) Business Days prior to the Closing Date, if not already delivered, SPAC shall deliver a supplement to the SPAC Pre-Closing Statement setting forth SPAC’s good faith estimate and calculation of the (i) Redemption Amount and (ii) total cash proceeds from the Trust Account remaining following the Redemption.
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(b) At least four (4) Business Days prior to the Closing Date, the Seller shall prepare and deliver to SPAC a written statement setting forth the Seller’s good faith estimate and calculation of the Seller Expenses as of the Closing Date (in each case, in reasonable detail and with reasonable supporting documentation, including corresponding invoices therefor) and the respective amounts and wire transfer instructions for the payment or reimbursement of all the Seller Expenses in accordance with Section 12.5 (such statement or as updated pursuant to the second sentence of this Section 3.2(b), the “Seller Pre-Closing Statement”). The Seller shall consider in good faith any reasonable comments made by SPAC at least two (2) Business Days prior to the Closing Date with respect to the estimate and calculations included in the Seller Pre-Closing Statement, and to the extent the Seller agrees, acting in good faith and reasonably, with any such comments, the Seller will deliver an updated Seller Pre-Closing Statement incorporating such comments.
3.3 Closing Deliveries.
(a) At the Closing, SPAC shall deliver or cause to be delivered:
(i) to the Seller and Pubco, a certificate, dated the Closing Date, signed by an executive officer or director of SPAC in such capacity, certifying as to the satisfaction of the conditions specified in Sections 9.2(a), 9.2(b) and 9.2(c) with respect to SPAC;
(ii) to the Seller and Pubco, a certificate from its secretary, assistant secretary, director or other executive officer certifying as to, and attaching, (A) copies of the SPAC Memorandum and Articles as in effect as of the Closing Date (immediately prior to the SPAC Merger Effective Time), (B) the resolutions of the SPAC Board authorizing and approving the execution, delivery and performance of this Agreement and each of the Ancillary Documents to which it is a party or by which it is bound, and the consummation of the Transactions contemplated hereby and thereby, (C) evidence that the Required Shareholder Approval has been obtained and (D) the incumbency of directors and officers authorized to execute this Agreement or any Ancillary Document to which SPAC is or is required to be a party or otherwise bound;
(iii) to the Seller and Pubco, a certificate on behalf of SPAC, prepared in a manner consistent and in accordance with the requirements of Treasury Regulation Sections 1.897-2(g), (h) and 1.1445-2(c)(3), certifying that no interest in SPAC is, or has been during the relevant period specified in Section 897(c)(1)(A)(ii) of the Code, a “United States real property interest” within the meaning of Section 897(c) of the Code, and a form of notice to the IRS prepared in accordance with the provisions of Treasury Regulations Section 1.897-2(h)(2); and
(iv) to the Seller and Pubco, a copy of the Amended and Restated Registration Rights Agreement duly executed by SPAC and Sponsor.
(b) At the Closing, Pubco shall deliver or cause to be delivered:
(i) to SPAC, a certificate, dated the Closing Date, signed by an executive officer of Pubco, certifying as to the satisfaction of the conditions specified in Sections 9.3(a), 9.3(b) and 9.3(c) with respect to Pubco and the Pubco Subsidiaries, as applicable;
(ii) to SPAC, a certificate from its secretary or other executive officer certifying as to the validity and effectiveness of, and attaching, (A) copies of its Organizational Documents as in effect as of the Closing Date (immediately prior to the SPAC Merger Effective Time), (B) the resolutions of its board of directors and shareholders authorizing and approving the execution, delivery and performance of this Agreement and each Ancillary Document to which it is a party or bound, and the consummation of the Transactions, and (C) the incumbency of its officers authorized to execute this Agreement or any Ancillary Document to which it is or is required to be a party or otherwise bound; and
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(iii) to the Seller and SPAC, a copy of the Amended and Restated Registration Rights Agreement duly executed by Pubco.
(c) At the Closing, the Company shall deliver or cause to be delivered:
(i) to SPAC, a certificate, dated as of the Closing Date, signed by an executive officer or director of the Company, certifying as to the satisfaction of the conditions specified in Sections 9.3(a), 9.3(b) and 9.3(c) with respect to the Company;
(ii) to Pubco, (A) a certificate prepared in a manner consistent and in accordance with the requirements of Treasury Regulation Sections 1.1445-11T(d)(2) and (B) a certificate complying with the requirements of Treasury Regulation Section 1.1446(f)-2(b) that is sufficient to establish that no withholding is required under Section 1446(f) of the Code; and
(iii) to SPAC, a certificate from its secretary or other executive officer or managing member certifying as to the validity and effectiveness of, and attaching, (A) copies of its Organizational Documents as in effect as of the Closing Date (immediately prior to the Company Merger Effective Time), (B) the resolutions of its managing member authorizing and approving the execution, delivery and performance of this Agreement and each Ancillary Document to which it is a party or bound, and the consummation of the Transactions, and (C) the incumbency of its managing member and officers authorized to execute this Agreement or any Ancillary Document to which it is or is required to be a party or otherwise bound.
(d) At the Closing, the Seller shall deliver or cause to be delivered, as applicable:
(i) to SPAC, a certificate from the Seller, dated as the Closing Date, signed by the Seller, certifying as to the satisfaction of the conditions specified in Sections 9.3(a) and 9.3(b) with respect to the Seller; and
(ii) to SPAC, the Lock-Up Agreement, duly executed by the Seller and Pubco.
Article IV
REPRESENTATIONS AND WARRANTIES OF SPAC
Except as set forth in (a) the disclosure schedules delivered by SPAC to the Seller, the Company and Pubco on the date of this Agreement (the “SPAC Disclosure Schedules”), the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer, or (b) the SEC Reports that are available prior to the date hereof on the SEC’s website through EDGAR (excluding any disclosures in such SEC Reports under the headings “Risk Factors,” “Forward-Looking Statements” or “Qualitative Disclosures About Market Risk” and other disclosures that are predictive, cautionary or forward looking in nature, and excluding, for the avoidance of doubt, any content of such SEC Reports that have been redacted or omitted pursuant to applicable Law) (it being acknowledged that nothing disclosed in such SEC Reports will be deemed to modify or qualify the representations and warranties set forth in Section 4.1 (Organization and Standing), Section 4.2 (Authorization; Binding Agreement), Section 4.5 (Capitalization), Section 4.10 (Taxes and Returns), Section 4.15 (Finders and Brokers) and Section 4.21 (SPAC Trust Account)), SPAC represents and warrants to the Company, Pubco, the Pubco Subsidiaries, and the Seller as of the date of this Agreement and as of the Closing, as follows:
4.1 Organization and Standing. SPAC is a company duly incorporated, validly existing and in good standing under the Laws of its jurisdiction of incorporation, organization or formation. SPAC has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. SPAC is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary. SPAC has heretofore made available to the Seller accurate and complete copies of its Organizational Documents each as currently in effect. SPAC is not in violation of any provision of its Organizational Documents.
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4.2 Authorization; Binding Agreement. SPAC has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is a party, to perform its obligations hereunder and thereunder and to consummate the Transactions contemplated hereby and thereby, subject to obtaining the Required Shareholder Approval. The execution and delivery of this Agreement and each Ancillary Document to which it is a party and the consummation of the Transactions contemplated hereby and thereby have been duly and validly authorized by the SPAC Board and, other than obtaining the Required Shareholder Approval, no other corporate proceedings, other than as set forth elsewhere in this Agreement, on the part of SPAC are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the Transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which SPAC is a party has been or shall be when delivered, duly and validly executed and delivered by such Party and, assuming the due authorization, execution and delivery of this Agreement and such Ancillary Documents by the other Parties and other parties thereto, constitutes, or when delivered shall constitute, the valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, except to the extent that enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization and moratorium laws and other laws of general application affecting the enforcement of creditors’ rights generally and subject to general principles of equity (collectively, the “Enforceability Exceptions”). The SPAC Board, either (A) at a duly called and held meeting or (B) by way of written resolution, has unanimously (i) determined that this Agreement and the SPAC Merger and the other Transactions contemplated hereby are advisable, fair to, and in the best interests of, SPAC and its shareholders, (ii) approved this Agreement, the SPAC Merger and the other Transactions contemplated hereby and thereby in accordance with the DGCL, the DLLCA and the SPAC Delaware Bylaws, (iii) approved the Transactions as a Business Combination, (iv) directed that this Agreement and the SPAC Shareholder Approval Matters be submitted to the SPAC Shareholders for adoption and approval, and (v) resolved to recommend that the SPAC Shareholders adopt this Agreement and the SPAC Shareholder Approval Matters.
4.3 Governmental Approvals. No Consent of any Governmental Authority on the part of SPAC, is required to be obtained in connection with the execution, delivery or performance by such Party of this Agreement and each Ancillary Document to which it is a party or the consummation by such Party of the Transactions contemplated hereby and thereby, other than (a) such filings as contemplated by this Agreement, (b) any filings required with Nasdaq or the SEC with respect to the Transactions, (c) applicable requirements, if any, of the Securities Act, the Exchange Act, and/ or any state “blue sky” securities Laws, and the rules and regulations thereunder and (d) where the failure to obtain or make such Consents or to make such filings or notifications, would not reasonably be expected to have a Material Adverse Effect on SPAC.
4.4 Non-Contravention. The execution and delivery by SPAC of this Agreement and each Ancillary Document to which it is a party, the consummation by such Party of the Transactions contemplated hereby and thereby, and compliance by such Party with any of the provisions hereof and thereof, will not (a) conflict with or violate any provision of the SPAC Memorandum and Articles, in any material respect, (b) subject to obtaining the Consents from Governmental Authorities referred to in Section 4.3, and the waiting periods referred to therein having expired, and any condition precedent to such Consent or waiver having been satisfied, conflict with or violate any Law applicable to SPAC, or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by SPAC under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of SPAC under, (viii) give rise to any obligation to obtain any third-party Consent or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any SPAC Material Contract, except for any deviations from any of the foregoing clauses (b) and (c) that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on SPAC.
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4.5 Capitalization.
(a) SPAC is authorized to issue (i) 500,000,000 SPAC Ordinary Shares, consisting of (A) 445,000,000 SPAC Class A Ordinary Shares and (B) 50,000,000 SPAC Class B Ordinary Shares and (ii) 5,000,000 SPAC Preference Shares. The issued and outstanding SPAC Ordinary Shares as of the date of this Agreement consist of (A) 23,805,000 SPAC Class A Ordinary Shares (assuming the separation of all outstanding SPAC Units into underlying SPAC Class A Ordinary Shares and SPAC Rights), all of which are subject to possible redemption, and (B) 7,187,500 SPAC Class B Ordinary Shares. There are no issued or outstanding SPAC Preference Shares. All outstanding SPAC Ordinary Shares are duly authorized, validly issued, fully paid and non-assessable and are not subject to or issued in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under applicable Law, the SPAC Memorandum and Articles or any Contract to which SPAC is a party. None of the outstanding SPAC Ordinary Shares has been issued in violation of any applicable securities Laws. Prior to giving effect to the Transactions SPAC does not have any Subsidiaries or own any equity interests in any other Person. The SPAC does not own any SPAC Ordinary Shares as treasury shares.
(b) As of the date of this Agreement, 23,805,000 SPAC Rights are issued and outstanding (assuming the separation of all the outstanding SPAC Units into the underlying SPAC Class A Ordinary Shares and SPAC Rights).
(c) Except as set forth in this Section 4.5 or as contemplated by this Agreement, the SPAC Rights Agreement or the Ancillary Documents, there are no (i) outstanding options, warrants, puts, calls, convertible securities, preemptive or similar rights, (ii) bonds, debentures, notes or other Indebtedness having general voting rights or that are convertible or exchangeable into securities having such rights or (iii) subscriptions or other rights, agreements, arrangements, Contracts or commitments of any character (other than this Agreement and the Ancillary Documents), (A) relating to the issued or unissued securities of SPAC, (B) obligating SPAC to issue, transfer, deliver or sell or cause to be issued, transferred, delivered, sold or repurchased any options or shares or securities convertible into or exchangeable for any securities of SPAC, or (C) obligating SPAC to grant, extend or enter into any option, warrant, call, subscription or other right, agreement, arrangement or commitment for such securities of SPAC. Other than the Redemption or as expressly set forth in this Agreement, there are no outstanding obligations of SPAC to repurchase, redeem or otherwise acquire any securities of SPAC or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any Person. There are no shareholders agreements, voting trusts or other agreements or understandings to which SPAC is a party with respect to the voting of any securities of SPAC.
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(d) As of the date hereof, (i) SPAC does not have any Indebtedness and (ii) no Indebtedness of SPAC contains any restriction upon (A) the prepayment of any of such Indebtedness, (B) the incurrence of Indebtedness by SPAC, (C) the ability of SPAC to grant any Lien on its properties or assets, or (D) the consummation of the Transactions.
(e) Since the date of incorporation of SPAC, and except as contemplated by this Agreement, SPAC has not declared or paid any distribution or dividend in respect of its shares and has not repurchased, redeemed or otherwise acquired any of its shares, and the SPAC Board has not authorized any of the foregoing.
4.6 SEC Filings; SPAC Financials; Internal Controls.
(a) SPAC, since the IPO and through the date of this Agreement, has filed all forms, reports, schedules, statements, registration statements, prospectuses, and other documents required to be filed or furnished by SPAC with the SEC under the Securities Act and/or the Exchange Act (collectively, and together with any amendments, restatements or supplements thereto, the “SEC Reports”), which SEC Reports are all available on the SEC’s website through EDGAR, and will file all such SEC Reports required to be filed or furnished subsequent to the date of this Agreement.
(b) The SEC Reports (x) were prepared in all material respects in accordance with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act, and the rules and regulations promulgated thereunder, as applicable, and (y) did not, as of their respective effective dates (in the case of SEC Reports that are registration statements filed pursuant to the requirements of the Securities Act) and at the time they were filed with the SEC (in the case of all other SEC Reports) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. As used in this Section 4.6, the term “file” shall be broadly construed to include any manner permitted by SEC rules and regulations in which a document or information is furnished, supplied or otherwise made available to the SEC.
(c) As of the date of this Agreement, the SPAC Units, the SPAC Class A Ordinary Shares and the SPAC Rights are registered pursuant to Section 12(b) of the Exchange Act and are listed on Nasdaq under the symbols “MLACU”, “MLAC” and “MLACR”, respectively. Since the IPO, SPAC has complied in all material respects with the applicable listing and corporate governance rules and regulations of Nasdaq. There is no action or proceeding pending or, to the Knowledge of SPAC, threatened against SPAC, by Nasdaq or the SEC with respect to any intention by such entity to deregister or terminate the listing of the SPAC Units, the SPAC Class A Ordinary Shares or the SPAC Rights. None of SPAC or its Affiliates has taken any action in an attempt to terminate the registration of the SPAC Units, the SPAC Class A Ordinary Shares or the SPAC Rights under the Exchange Act except as contemplated by this Agreement.
(d) The financial statements and notes of SPAC contained or incorporated by reference in the SEC Reports (the “SPAC Financials”), fairly present in all material respects the financial position and the results of operations, changes in shareholders’ equity, and cash flows of SPAC at the respective dates of and for the periods referred to in such financial statements, all in accordance with (i) GAAP methodologies applied on a consistent basis throughout the periods involved and (ii) Regulation S-X or Regulation S-K, as applicable (except as may be indicated in the notes thereto and for the omission of notes and audit adjustments in the case of unaudited quarterly financial statements to the extent permitted by Regulation S-X or Regulation S-K, as applicable).
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(e) Except as and to the extent reflected or reserved against in the SPAC Financials, SPAC has not incurred any Liabilities or obligations not adequately reflected or reserved on or provided for in the SPAC Financials, other than (i) Liabilities incurred since SPAC’s incorporation in the ordinary course of business or (ii) Liabilities or obligations incurred pursuant to this Agreement. SPAC has no off-balance sheet arrangements that are not disclosed in the SEC Reports.
(f) Since the IPO, (i) SPAC has not received any complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of SPAC or its internal accounting controls, including any such complaint, allegation, assertion or claim that SPAC has engaged in questionable accounting or auditing practices and (ii) there have been no internal unresolved, material investigations regarding accounting or revenue recognition discussed with, reviewed by or initiated at the direction of the chief executive officer, chief financial officer, the SPAC Board or any committee thereof.
(g) SPAC has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) that are designed to ensure that material information relating to SPAC and other material information required to be disclosed by SPAC in the reports and other documents that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to SPAC’s principal executive officer and its principal financial officer as appropriate to allow timely decisions regarding required disclosure. Such disclosure controls and procedures are effective in timely alerting SPAC’s principal executive officer and principal financial officer to material information required to be included in SPAC’s periodic reports required under the Exchange Act.
(h) SPAC maintains systems of internal accounting controls that are sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including policies and procedures that are sufficient to provide reasonable assurance: (i) that SPAC maintains records that in reasonable detail accurately and fairly reflect, in all material respects, its transactions and dispositions of assets; (ii) that transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) that transactions are executed, and access to assets is permitted, in accordance with management’s general or specific authorization; and (iv) that the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Neither SPAC nor SPAC’s independent auditors identified or have been made aware of any “significant deficiencies” or “material weaknesses” (as defined by the PCAOB) in the design or operation of SPAC’s internal controls over financial reporting which would reasonably be expected to adversely affect SPAC’s ability to record, process, summarize and report financial data, in each case which has not been subsequently remediated. SPAC has no knowledge of any fraud or whistle-blower allegations, whether or not material, that involve management or other employees or consultants who have or had a significant role in the internal control over financial reporting of SPAC. Since the IPO, there have been no material changes in SPAC’s internal control over financial reporting.
(i) There are no outstanding loans or other extensions of credit made by SPAC to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of SPAC, in their capacity as such, and SPAC has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.
(j) As of the date hereof, there are no outstanding comments from the SEC with respect to the SEC Reports. To the Knowledge of SPAC, none of the SEC Reports filed on or prior to the date hereof is subject to ongoing SEC review or investigation as of the date hereof.
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4.7 No Litigation; Orders; Permits. There is no Action pending, or, to the Knowledge of SPAC, threatened Action against SPAC, or, to the Knowledge of SPAC, any of its directors or officers (in their capacity as such) or otherwise affecting SPAC or its assets nor is any Order outstanding, against or involving SPAC, whether at law or in equity, before or by any Governmental Authority, which, in each case, would reasonably be expected to have a Material Adverse Effect on SPAC. There is no unsatisfied judgment or open injunction binding upon SPAC that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on SPAC. There is no Action that SPAC has pending against any other Person. SPAC holds all Permits necessary to lawfully conduct its business as presently conducted, and to own, lease and operate its assets and properties, all of which are in full force and effect.
4.8 Absence of Certain Changes. The SPAC has, (a) since its incorporation, conducted no business other than its incorporation, the public offering of its SPAC Units (and the related private offering), public reporting and its search for an initial Business Combination as described in the IPO Prospectus (including the investigation of the Company and the negotiation and execution of this Agreement) and related activities and (b) since the IPO, not been subject to a Material Adverse Effect.
4.9 Compliance with Laws. SPAC (a) is, and has since its incorporation been, in compliance with all Laws applicable to it and the conduct of its business in all material respects, (b) has not received written notice alleging any violation of applicable Law in any material respect by SPAC and (c) is not under investigation with respect to any violation or alleged violation of any Law or judgment, Order or decree of any court or Governmental Authority.
4.10 Taxes and Returns. SPAC has timely filed, or caused to be timely filed, and will timely file or cause to be timely filed all material Tax Returns required to be filed by it, which Tax Returns are true, accurate, correct and complete in all material respects, and has paid, collected or withheld, or caused to be paid, collected or withheld, all material Taxes required to be paid, collected or withheld, other than such Taxes for which adequate reserves in the SPAC Financials have been established in accordance with GAAP. There are no audits, examinations, investigations, claims, assessments or other proceedings pending or threatened against SPAC in respect of any Tax, and SPAC has not been notified in writing of any proposed Tax claims or assessments against SPAC (other than, in each case, claims or assessments for which adequate reserves in the SPAC Financials have been established in accordance with GAAP or are immaterial in amount). There are no Liens with respect to any Taxes upon any of SPAC’s assets, other than Permitted Liens. SPAC has no outstanding waivers or extensions of any applicable statute of limitations to assess any material amount of Taxes. There are no outstanding requests by SPAC for any extension of time within which to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return. SPAC does not have material liability for the Taxes of any Person (i) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign Law), (ii) as a transferee or successor or (iii) by contract (except, in each case, for liabilities pursuant to commercial contracts not primarily relating to Taxes).
4.11 Employees and Employee Benefit Plans. SPAC has never (a) had any paid employees, (b) retained any contractors, other than consultants and advisors in the ordinary course or (c) maintained, sponsored, contributed to or otherwise had any Liability under, any Benefit Plans. Other than reimbursement of any reasonable out-of-pocket expenses incurred by SPAC’s officers and directors in connection with activities on SPAC’s behalf, neither SPAC nor its Affiliates have any material liability to any officer or director of SPAC (in their capacity as such).
4.12 Properties. SPAC does not own, license or otherwise have any right, title or interest in any material Intellectual Property. SPAC does not own or lease any material real property or Personal Property.
4.13 Material Contracts.
(a) Other than this Agreement and the Ancillary Documents to which SPAC is a party as of the date hereof or such other Ancillary Documents that SPAC shall execute after the date hereof and which are attached as exhibits hereto, Section 4.13(a) of the SPAC Disclosure Schedules set forth a true, correct and complete list of the Contracts to which SPAC is a party or by which any of its properties or assets may be bound, subject or affected, which (i) creates or imposes a Liability greater than $100,000, (ii) may not be cancelled by SPAC on less than sixty (60) days’ prior notice without payment of a material penalty or termination fee or (iii) prohibits, prevents, restricts or impairs in any material respect any business practice of SPAC as its business is currently conducted, any acquisition of material property by SPAC, or restricts in any material respect the ability of SPAC from entering into this Agreement or Ancillary Documents or consummating the Transactions (each such Contract, a “SPAC Material Contract”). All SPAC Material Contracts have been made available to the Seller.
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(b) With respect to each SPAC Material Contract: (i) the SPAC Material Contract was entered into at arms’ length and in the ordinary course of business; (ii) the SPAC Material Contract is legal, valid, binding and enforceable in all material respects against SPAC and, to the Knowledge of SPAC, the other parties thereto, and is in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability Exceptions); (iii) SPAC is not in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default in any material respect by SPAC, or permit termination or acceleration by the other party, under such SPAC Material Contract; (iv) no party to a SPAC Material Contract has given written notice of or, to the Knowledge of SPAC, threatened any potential exercise of termination rights with respect to any SPAC Material Contract; and (v) to the Knowledge of SPAC, no other party to any SPAC Material Contract is in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default by such other party, or permit termination or acceleration by SPAC under any SPAC Material Contract.
4.14 Transactions with Affiliates. Section 4.14 of the SPAC Disclosure Schedules sets forth a true, correct and complete list of the Contracts and arrangements that are in existence as of the date of this Agreement under which there are any existing or future Liabilities or obligations between SPAC and any (a) present or former director, officer, employee, direct equityholder or Affiliate of SPAC or (b) record or beneficial owner of more than five percent (5%) of outstanding SPAC Ordinary Shares as of the date hereof.
4.15 Finders and Brokers. No broker, finder, investment banker or other Person is entitled to any brokerage, finder’s or other fee or commission from SPAC, Pubco or the Company, or any of their respective Affiliates, in connection with the Transactions based upon arrangements made by or on behalf of SPAC or any of its Affiliates, including the Sponsor.
4.16 Certain Business Practices.
(a) Neither SPAC, nor any of its Representatives acting on its behalf, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977 or any other local or foreign anti-corruption or bribery Law, (iii) made any other unlawful payment or (iv) since the formation of SPAC, directly or indirectly, given or agreed to give any unlawful gift or similar benefit in any material amount to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder SPAC or assist it in connection with any actual or proposed transaction.
(b) The operations of SPAC are and have been conducted at all times in compliance with money laundering Laws in all applicable jurisdictions and no Action involving SPAC with respect to any of the foregoing is pending or, to the Knowledge of SPAC, threatened.
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(c) None of SPAC or any of its directors or officers, or, to the Knowledge of SPAC, any other Representative acting on behalf of SPAC is currently identified on the specially designated nationals or other blocked person list or otherwise currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”), and SPAC has not, directly or indirectly, used any funds, or loaned, contributed or otherwise made available such funds to any Subsidiary, joint venture partner or other Person, in connection with any sales or operations in any other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to, or otherwise in violation of, any U.S. sanctions administered by OFAC in the last five (5) fiscal years.
4.17 Insurance. Section 4.17 of the SPAC Disclosure Schedules lists all insurance policies (by policy number, insurer, coverage period, coverage amount, annual premium and type of policy) held by SPAC relating to SPAC or its business, properties, assets, directors, officers and employees, copies of which have been provided to the Seller. All premiums due and payable under all such insurance policies have been timely paid and SPAC is otherwise in material compliance with the terms of such insurance policies. All such insurance policies are in full force and effect, and to the Knowledge of SPAC, there is no threatened termination of, or material premium increase with respect to, any of such insurance policies. There have been no insurance claims made by SPAC. SPAC has reported to its insurers all claims and pending circumstances that would reasonably be expected to result in a claim, except where such failure to report such a claim would not be reasonably likely to have a Material Adverse Effect on SPAC.
4.18 Independent Investigation. SPAC has conducted its own independent investigation, review and analysis of the business, results of operations, condition (financial or otherwise) or assets of Pubco and the Company and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of Pubco and the Company for such purpose. SPAC acknowledges and agrees that, in making its decision to enter into this Agreement and the Ancillary Documents and to consummate the Transactions contemplated hereby and thereby, it has relied solely upon its own investigation and the express representations and warranties of the Company, the Seller, Pubco and SPAC Merger Sub set forth in this Agreement (including the related portions of the Company Disclosure Schedules) and in any certificate delivered to SPAC pursuant hereto, and the information provided by or on behalf of the Company, the Seller, Pubco or SPAC Merger Sub for the Registration Statement.
4.19 No Other Representations. Except for the representations and warranties expressly made by SPAC in this Article IV (as modified by the SPAC Disclosure Schedule) or as expressly set forth in any Ancillary Document, neither SPAC nor any other Person on its behalf makes any express or implied representation or warranty with respect to SPAC or its business, operations, assets or Liabilities, or the Transactions, and SPAC hereby expressly disclaims any other representations or warranties, whether implied or made by SPAC or any of its Representatives. SPAC acknowledges that, except for the representations and warranties expressly made by Pubco, on behalf of itself or the Pubco Subsidiaries, in Article V, the Company in Article VI and the Seller in Article VII, none of Pubco, the Pubco Subsidiaries, the Company or the Seller is making or has made, communicated or furnished (orally or in writing) any representation, warranty, projection, forecast, statement or information to SPAC or its Representatives (including any opinion, information or advice that may have been or may be provided to SPAC or its Representatives by any Representative of Pubco, the Pubco Subsidiaries, the Company or the Seller), including any representations or warranties regarding the probable success or profitability of the businesses of Pubco, the Pubco Subsidiaries, the Company or the Seller. SPAC specifically disclaims that it is relying upon or has relied upon any such other representations and warranties that may have been made by any Person and acknowledges and agrees that Pubco, the Pubco Subsidiaries, the Company and the Seller have specifically disclaimed any such other representations and warranties. Notwithstanding the foregoing provisions of this Section 4.19, nothing in this Section 4.19 shall limit the Seller’s remedies with respect to Fraud Claims in connection with, or arising out of this Agreement, the Ancillary Documents or the Transactions.
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4.20 Information Supplied. None of the information supplied or to be supplied by or on behalf of SPAC or any of its Affiliates (including Sponsor) expressly for inclusion or incorporation by reference: (a) in any Current Report on Form 8-K and any exhibits thereto or any other report, form, registration or other filing made with any Governmental Authority (including the SEC) with respect to the Transactions; (b) in the Registration Statement; or (c) in the mailings or other distributions to the SPAC Shareholders with respect to the consummation of the Transactions or in any amendment to any of documents identified in (a) through (c), will, when filed, made available, mailed or distributed, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. None of the information supplied or to be supplied by or on behalf of SPAC or any of its Affiliates (including Sponsor) expressly for inclusion or incorporation by reference in any of the Signing Press Release, the Signing Filing, the Closing Press Release and the Closing Filing will, when filed or distributed, as applicable, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, SPAC makes no representation, warranty or covenant with respect to any information supplied by or on behalf of Pubco, the Company, the Pubco Subsidiaries, the Seller or any of their respective Affiliates.
4.21 SPAC Trust Account. As of the date of this Agreement, there is at least $238,800,000 held 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, the SPAC Memorandum and Articles and the IPO Prospectus. Amounts in the Trust Account are invested in United States Government securities or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act. SPAC has performed all obligations required to be performed by it to date under, and is not in default, breach or delinquent in performance or any other respect (claimed or actual) in connection with, the Trust Agreement. The Trust Agreement is in full force and effect and is a legal, valid and binding obligation of SPAC, enforceable in accordance with its terms, subject to the Enforceability Exceptions. The Trust Agreement has not been terminated, repudiated, rescinded, amended or supplemented or modified, in any respect, and to the Knowledge of SPAC, no such termination, repudiation, rescission, amendment, supplement or modification is contemplated. There are no separate Contracts, side letters or other arrangements (whether written or unwritten, express or implied) that would cause the description of the Trust Agreement in the SEC Reports filed, or furnished by SPAC to the Seller, to be inaccurate or that would entitle any Person (other than Public Shareholders who shall have elected to redeem their SPAC Class A Ordinary Shares pursuant to the SPAC Memorandum and Articles) to any portion of the proceeds in the Trust Account prior to the closing of a Business Combination. There are no Actions pending with respect to the Trust Account. SPAC has not released any money from the Trust Account other than as permitted by the Trust Agreement. Following the Closing, no shareholder of SPAC is or shall be entitled to receive any amount from the Trust Account except to the extent such Public Shareholder shall have elected to redeem its SPAC Class A Ordinary Shares pursuant to the Redemption.
4.22 Intended Tax Treatment. SPAC has not taken or agreed to take any action that could reasonably be expected to prevent the Business Combination Transactions from qualifying for the Business Combination Intended Tax Treatment. SPAC does not have any knowledge of any facts or circumstances that could reasonably be expected to prevent the Business Combination Transactions from qualifying for the Business Combination Intended Tax Treatment. To the knowledge of SPAC, no SPAC Shareholder or holder of SPAC Rights has entered into any binding commitment to dispose of, or otherwise transfer (directly or indirectly) any Pubco Stock it receives in the Transactions contemplated by this Agreement.
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Article V
REPRESENTATIONS AND WARRANTIES OF PUBCO AND PUBCO SUBSIDIARIES
Pubco on behalf of itself and the Pubco Subsidiaries severally and not jointly represent and warrant to SPAC, the Company and the Seller, as of the date of this Agreement and as of the Closing, solely with respect to itself, as follows:
5.1 Organization and Standing. Pubco is duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. Each of SPAC Merger Sub and Company Merger Sub is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware. Pubco and each Pubco Subsidiary has all requisite corporate power or limited liability company power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Pubco and each Pubco Subsidiary is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary. Pubco has heretofore made available to SPAC and the Company accurate and complete copies of the Organizational Documents of Pubco , SPAC Merger Sub and Company Merger Sub, each as currently in effect. None of Pubco, SPAC Merger Sub or Company Merger Sub is in violation of any provision of its Organizational Documents.
5.2 Authorization; Binding Agreement. Subject to filing the Pubco A&R Organizational Documents and obtaining the SPAC Merger Sub Member Approval, each of Pubco and each Pubco Subsidiary has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is a party, to perform its obligations hereunder and thereunder and to consummate the Transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each Ancillary Document to which it is a party and the consummation of the Transactions contemplated hereby and thereby have been duly and validly authorized by the board of directors of Pubco and the Pubco Subsidiaries and no other corporate proceedings, other than as expressly set forth elsewhere in this Agreement (including the filing of the Pubco A&R Organizational Documents and obtaining the SPAC Merger Sub Member Approval), on the part of Pubco or the Pubco Subsidiaries are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the Transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which Pubco or a Pubco Subsidiary is a party has been or shall be when delivered, duly and validly executed and delivered by such Party and, assuming the due authorization, execution and delivery of this Agreement and any such Ancillary Documents by the other Parties and other parties thereto, constitutes, or when delivered shall constitute, the legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to the Enforceability Exceptions.
5.3 Governmental Approvals. No Consent of any Governmental Authority on the part of Pubco or any Pubco Subsidiary is required to be obtained in connection with the execution, delivery or performance by such Party of this Agreement and each Ancillary Document to which it is a party or the consummation by such Party of the Transactions contemplated hereby and thereby, other than (a) such filings as contemplated by this Agreement (including the Pubco A&R Organizational Documents), (b) any filings required with Nasdaq or the SEC with respect to the Transactions, (c) applicable requirements, if any, of the Securities Act, the Exchange Act, and/ or any state “blue sky” securities Laws, (d) requirements under Delaware Law and pursuant to any other applicable Laws, and (e) where the failure to obtain or make such Consents or to make such filings or notifications, would not reasonably be expected to have a Material Adverse Effect on Pubco or a Pubco Subsidiary.
5.4 Non-Contravention. The execution and delivery by each of Pubco and each Pubco Subsidiary of this Agreement and each Ancillary Document to which it is a party, the consummation by such Party of the Transactions contemplated hereby and thereby, and compliance by such Party with any of the provisions hereof and thereof, will not, subject to the filing of the Pubco A&R Organizational Documents and obtaining the SPAC Merger Sub Member Approval, (a) conflict with or violate any provision of such Party’s Organizational Documents in any material respect, (b) subject to obtaining the Consents from Governmental Authorities referred to in Section 5.3, the waiting periods referred to therein having expired, and any condition precedent to such Consent or waiver having been satisfied, conflict with or violate any Law applicable to such Party or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by such Party under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide material compensation under, (vii) result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of such Party under, (viii) give rise to any material obligation to obtain any third-party Consent or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of any material Contract of such Party, except for any deviations from any of the foregoing clauses (b) or (c) that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Pubco.
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5.5 Capitalization. Except as set forth in Schedule 5.5 of the Company Disclosure Schedules:
(a) as of the date of this Agreement, (i) Pubco is authorized to issue 1,000 shares of Pubco Stock, of which one (1) share of Pubco Stock is issued and outstanding, which is owned by the Seller; (ii) all issued and outstanding SPAC Merger Sub Membership Interests are owned by Pubco; and (iii) all issued and outstanding Company Merger Sub Membership Interests are owned by Pubco; and
(b) prior to giving effect to the Transactions, other than the Pubco Subsidiaries, Pubco does not have any Subsidiaries or own any equity interests in any other Person.
5.6 Pubco and Pubco Subsidiaries Activities. Since their formation, Pubco and the Pubco Subsidiaries have not engaged in any business activities other than as contemplated by this Agreement, do not own, directly or indirectly, any ownership equity, profits or voting interest in any Person (other than Pubco’s 100% ownership of Pubco Subsidiaries) and have no assets or Liabilities except those incurred in connection with this Agreement and the Ancillary Documents to which they are a party and the Transactions, and, other than this Agreement and the Ancillary Documents to which they are a party, Pubco and the Pubco Subsidiaries are not party to or bound by any Contract.
5.7 Finders and Brokers. No broker, finder or investment banker or other Person is entitled to any brokerage, finder’s or other fee or commission from SPAC, Pubco, the Company or any of their respective Affiliates in connection with the Transactions contemplated hereby based upon arrangements made by or on behalf of Pubco or the Pubco Subsidiaries or any of their Affiliates, except as set forth on Schedule 6.12 of the Company Disclosure Schedules.
5.8 Ownership of Pubco Stock. All shares of Pubco Stock to be issued and delivered to the Seller and to the SPAC Shareholders in exchange for their SPAC Class A Ordinary Shares in accordance with this Agreement shall be, upon issuance and delivery of such shares of Pubco Stock, duly authorized and validly issued and fully paid and non-assessable, free and clear of all Liens. The issuance and sale of such shares of Pubco Stock pursuant hereto will not be subject to or give rise to any preemptive rights or rights of first refusal.
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5.9 Information Supplied. None of the information supplied or to be supplied by Pubco or the Pubco Subsidiaries in writing expressly for inclusion or incorporation by reference: (a) in any Current Report on Form 8-K, and any exhibits thereto or any other report, form, registration or other filing made with any Governmental Authority (including the SEC) with respect to the Transactions; (b) in the Registration Statement; or (c) in the mailings or other distributions to SPAC’s or Pubco’s shareholders and/or prospective investors with respect to the consummation of the Transactions or in any amendment to any of documents identified in (a) through (c), will, when filed, made available, mailed or distributed, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. None of the information supplied or to be supplied by Pubco or The Pubco Subsidiaries expressly for inclusion or incorporation by reference in any of the Signing Press Release, the Signing Filing, the Closing Filing and the Closing Press Release will, when filed or distributed, as applicable, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, none of Pubco or the Pubco Subsidiaries makes any representation, warranty or covenant with respect to any information supplied by or on behalf of SPAC, the Company, the Seller or any of their respective Affiliates.
5.10 Independent Investigation. Each of Pubco and each Pubco Subsidiary has conducted its own independent investigation, review and analysis of the business, results of operations, condition (financial or otherwise) or assets of the Company and SPAC and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Company and SPAC for such purpose. Each of Pubco and each Pubco Subsidiary acknowledges and agrees that, in making its decision to enter into this Agreement and the Ancillary Documents and to consummate the Transactions contemplated hereby and thereby, it has relied solely upon its own investigation and the express representations and warranties of the Company, the Seller and SPAC set forth in this Agreement (including the related portions of the Company Disclosure Schedules and the SPAC Disclosure Schedules) and in any certificate delivered to Pubco or the Pubco Subsidiaries pursuant hereto, and the information provided by or on behalf of the Company, the Seller or SPAC for the Registration Statement.
5.11 No Other Representations. Except for the representations and warranties expressly made by Pubco and/or the Pubco Subsidiaries in Article V or as expressly set forth in any Ancillary Document, none of Pubco or the Pubco Subsidiaries nor any other Person on any of their behalves makes any express or implied representation or warranty with respect to any of Pubco or the Pubco Subsidiaries or their respective business, operations, assets or Liabilities, or the Transactions, and Pubco and each Pubco Subsidiary hereby expressly disclaims any other representations or warranties, whether implied or made by Pubco or the Pubco Subsidiaries or any of their respective Representatives. Each of Pubco and the Pubco Subsidiaries acknowledge that, except for the representations and warranties expressly made by SPAC in Article IV, the Company in Article VI and the Seller in Article VII, none of SPAC, the Company or the Seller is making or has made, communicated or furnished (orally or in writing) any representation, warranty, projection, forecast, statement or information, to Pubco and the Pubco Subsidiaries or any of their respective Representatives (including any opinion, information or advice that may have been or may be provided to Pubco and the Pubco Subsidiaries or any of their respective Representatives by any Representative of SPAC, the Company or the Seller), including any representations or warranties regarding the probable success or profitability of the business of SPAC, the Company and the Seller. Each of Pubco and the Pubco Subsidiaries specifically disclaim that they are relying upon or have relied upon any such other representations and warranties that may have been made by any Person and acknowledges and agrees that SPAC, the Company and the Seller have specifically disclaimed any such other representations and warranties. Notwithstanding the foregoing provisions of this Section 5.11 nothing in this Section 5.11 shall limit SPAC’s remedies with respect to Fraud Claims in connection with, or arising out of this Agreement, the Ancillary Documents or the Transactions.
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Article VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedules delivered by the Company to SPAC on the date of this Agreement (the “Company Disclosure Schedules”), the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer, the Company hereby represents and warrants to SPAC as of the date of this Agreement and as of the Closing, as follows:
6.1 Organization and Standing. The Company is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware, and has all requisite limited liability company power and authority to own, lease and operate its properties and to carry on its business as now being conducted. The Company is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary for the business as currently conducted. The Company has made available to SPAC accurate and complete copies of the Organizational Documents of the Company, as currently in effect. The Company is not in violation of any provision of its Organizational Documents.
6.2 Authorization; Binding Agreement. The Company has all requisite limited liability company power and authority to execute and deliver this Agreement and each Ancillary Document to which it is a party, to perform its obligations hereunder and thereunder and to consummate the Transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each Ancillary Document to which it is a party and the consummation of the Transactions contemplated hereby and thereby have been duly and validly authorized by members of the Company and no other proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the Transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which it is a party has been or shall be when delivered, duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement and any such Ancillary Document by the other Parties and other parties thereto, constitutes, or when delivered shall constitute, the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.
6.3 Capitalization.
(a) As of the date of this Agreement, the Company is authorized to issue membership interests, 100% of which are owned by Seller.
(b) Immediately upon the execution of the First A&R Company LLCA, the Company will be authorized to issue units (the “Company Units”), as allocated pursuant to (i) the Company Unit Subscription Agreements and (ii) duly authorized resolution of the Company, effective as of the date hereof, providing for the cancellation of Seller’s membership interests in exchange for one Company Unit.
(c) Prior to giving effect to the Transactions, the Company does not have any Subsidiaries or own any equity interests in any other Person.
(d) As of immediately prior to the Company Merger Effective Time (and assuming all Company Unit Investors comply with the terms of the applicable Company Unit Subscription Agreement), the capitalization of the Company will consist exclusively of Company Units issued to (A) the Company Unit Investors pursuant to the Company Unit Subscription Agreements in effect as of the date of this Agreement or otherwise consented to by SPAC and (B) Seller pursuant to the terms of the Contribution Agreement.
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(e) Except as set forth in this Section 6.3 or as contemplated by this Agreement, there are no (i) outstanding options, warrants, puts, calls, convertible securities, preemptive or similar rights, (ii) bonds, debentures, notes or other Indebtedness having general voting rights or that are convertible or exchangeable into securities having such rights or (iii) subscriptions or other rights, agreements, arrangements, Contracts or commitments of any character (other than this Agreement and the Ancillary Documents), (A) relating to the issued or unissued securities of the Company, (B) obligating the Company to issue, transfer, deliver or sell or cause to be issued, transferred, delivered, sold or repurchased any options or shares or securities convertible into or exchangeable for any securities of the Company, or (C) obligating the Company to grant, extend or enter into any option, warrant, call, subscription or other right, agreement, arrangement or commitment for such securities of the Company. There are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any securities of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any Person. There are no shareholders agreements, voting trusts or other agreements or understandings to which the Company is a party with respect to the voting of any securities of the Company.
6.4 Governmental Approvals. No Consent of any Governmental Authority on the part of the Company is required to be obtained in connection with the execution, delivery or performance by the Company of this Agreement or any Ancillary Documents or the consummation by the Company of the Transactions contemplated hereby or thereby other than (a) such filings as expressly contemplated by this Agreement, (b) pursuant to requirements under Delaware Law or any other applicable Laws and (c) those Consents, the failure of which to obtain prior to the Closing, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company.
6.5 Non-Contravention. The execution and delivery by the Company of this Agreement and each Ancillary Document to which it is a party, the consummation by the Company of the Transactions contemplated hereby and thereby, and compliance by the Company with any of the provisions hereof and thereof, will not (a) conflict with or violate any provision of the Company’s Organizational Documents in any material respect, (b) subject to obtaining the Consents required from Governmental Authorities referred to in Section 6.4, the waiting periods referred to therein having expired, and any condition precedent to such Consent or waiver having been satisfied, conflict with or violate any Law applicable to the Company or any of its properties or assets in any material respect, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a material default (or an event which, with notice or lapse of time or both, would constitute a material default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by the Company under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of any the Company under, (viii) give rise to any obligation to obtain any third-party Consent or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any material right, benefit, obligation or other term under, any of the terms, conditions or provisions of any material Contract of the Company, except for any deviations from any of the foregoing clauses (b) or (c) that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company.
6.6 Absence of Certain Changes. Except as set forth on Section 6.6 of the Company Disclosure Schedules or for actions expressly contemplated by this Agreement or any Ancillary Document, since its formation, the Company has not been subject to a Material Adverse Effect.
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6.7 Company Activities. Since its incorporation, the Company has not engaged in any business activities other than as contemplated by this Agreement, does not own, directly or indirectly, any ownership equity, profits or voting interest in any Person and has no assets or Liabilities except the assets to be received pursuant to and the Liabilities incurred in connection with this Agreement and the Ancillary Documents to which the Company is a party and the Transactions. Other than this Agreement and the Ancillary Documents to which the Company is a party, the Company is not party to or bound by any Contract. The Company does not lease or own any real property or any interest in real property.
6.8 Title to Assets. As of the Closing, and subject to the consummation of the transactions contemplated by the Contribution Agreement, the Company will have all rights, title and interest in and to the Avax contributed into the Company pursuant to the Contribution Agreement.
6.9 Employees and Benefit Plans. The Company does not have any employees and does not have any Benefit Plans.
6.10 Taxes and Returns. The Company has timely filed, or caused to be timely filed, and will timely file or cause to be timely filed all material Tax Returns required to be filed by it, which Tax Returns are true, accurate, correct and complete in all material respects, and has paid, collected or withheld, or caused to be paid, collected or withheld, all material Taxes required to be paid. There are no audits, examinations, investigations, claims, assessments or other proceedings pending or threatened against the Company in respect of any Tax, and the Company has not been notified in writing of any proposed Tax claims or assessments against the Company. There are no Liens with respect to any Taxes upon any of the Company’s assets, other than Permitted Liens. The Company has no outstanding waivers or extensions of any applicable statute of limitations to assess any material amount of Taxes. There are no outstanding requests by the Company for any extension of time within which to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return. The Company is treated as a partnership for U.S. federal income tax purposes.
6.11 Certain Business Practices.
(a) Neither the Company, nor, to the Knowledge of the Company, any of its Representatives acting on its behalf has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to government officials or employees, to political parties or campaigns or violated any provision of the applicable bribery Laws or (iii) made any other unlawful payment in violation of applicable bribery Laws. Neither the Company, nor, to the Knowledge of the Company, any of its Representatives acting on its behalf has directly or indirectly, given or agreed to give any unlawful gift or benefit in any material amount to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder the Company or assist the Company in connection with any actual or proposed transaction.
(b) To the Knowledge of the Company, the operations of the Company are and have been conducted at all times in material compliance with money laundering Laws in all applicable jurisdictions, and no Action involving the Company with respect to any of the foregoing is pending or, to the Knowledge of the Company, threatened in writing.
(c) Neither the Company, nor, to the Knowledge of the Company, any of its directors, officers or employees acting on behalf of the Company, is currently identified on the specially designated nationals or other blocked person list, and the Company has not, directly or knowingly indirectly, used any funds, or loaned, contributed or otherwise made available such funds to any other Person, in connection with any sales or operations in Cuba, Iran, North Korea, Syria, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, and the Crimea regions of Ukraine or for the purpose of financing the activities of any Person currently subject to U.S. sanctions, in each case in violation of any U.S. sanctions administered by OFAC in the last five (5) fiscal years.
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6.12 Finders and Brokers. No broker, finder or investment banker or other Person is entitled to any brokerage, finder’s or other fee or commission from SPAC, Pubco, the Company or any of their respective Affiliates in connection with the Transactions contemplated hereby based upon arrangements made by or on behalf of the Company or any of its Affiliates.
6.13 Information Supplied. None of the information supplied or to be supplied by the Company in writing expressly for inclusion or incorporation by reference: (a) in any Current Report on Form 8-K, and any exhibits thereto or any other report, form, registration or other filing made with any Governmental Authority (including the SEC) with respect to the Transactions; (b) in the Registration Statement; or (c) in the mailings or other distributions to SPAC’s or Pubco’s shareholders with respect to the consummation of the Transactions or in any amendment to any of documents identified in (a) through (c), will, when filed, made available, mailed or distributed, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. None of the information supplied or to be supplied by the Company in writing expressly for inclusion or incorporation by reference in any of the Signing Press Release, the Signing Filing, the Closing Press Release and the Closing Filing will, when filed or distributed, as applicable, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, the Company makes no representation, warranty or covenant with respect to any information supplied by or on behalf of SPAC, the Seller, the Pubco Subsidiaries, Pubco or any of their respective Affiliates.
6.14 Independent Investigation. The Company has conducted its own independent investigation, review and analysis of the business, results of operations, condition (financial or otherwise) or assets of SPAC and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of SPAC for such purpose. The Company acknowledges and agrees that in making its decision to enter into this Agreement and the Ancillary Documents and to consummate the Transactions contemplated hereby and thereby, it has relied solely upon its own investigation and the express representations and warranties of SPAC set forth in this Agreement (including the related portions of the SPAC Disclosure Schedules) and in any certificate delivered to the Company pursuant hereto, and the information provided by or on behalf of SPAC for the Registration Statement.
6.15 No Other Representations. Except for the representations and warranties expressly made by the Company in Article VI (as modified by the Company Disclosure Schedules) or as expressly set forth in any Ancillary Document, neither the Company nor any other Person on its behalf makes any express or implied representation or warranty with respect to the Company or its business, operations, assets or Liabilities, or the Transactions, and the Company hereby expressly disclaims any other representations or warranties, whether implied or made by the Company or any of its Representatives. The Company acknowledges that, except for the representations and warranties expressly made by SPAC in Article IV, Pubco and the Pubco Subsidiaries in Article V and the Seller in Article VII, none of SPAC, Pubco, the Pubco Subsidiaries or the Seller is making or has made, communicated or furnished (orally or in writing) any representation, warranty, projection, forecast, statement or information to the Company (including any opinion, information, projection or advice that may have been or may be provided to the Company or its Representatives by any Representative of SPAC, Pubco, the Pubco Subsidiaries or the Seller), including any representations or warranties regarding the probable success or profitability of the businesses of SPAC, Pubco, the Pubco Subsidiaries or the Seller. The Company specifically disclaims that it is relying upon or has relied upon any such other representations and warranties that may have been made by any Person and acknowledges and agrees that SPAC, Pubco, the Pubco Subsidiaries and the Seller have specifically disclaimed any such other representations and warranties. Notwithstanding the foregoing provisions of this Section 6.15 nothing in this Section 6.15 shall limit SPAC’s remedies with respect to Fraud Claims in connection with, or arising out of this Agreement, the Ancillary Documents or the Transactions.
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6.16 Company Unit Subscription.
(a) The Company has delivered to SPAC and Pubco true, correct and complete copies of each of the Company Unit Subscription Agreements entered into by the Company with the Company Unit Investors named therein as of the date of this Agreement. As of the date of this Agreement, other than the Company Unit Subscription Agreements, there are no other agreements, side letters or arrangements between the Company and any Company Unit Investor relating to any Company Unit Subscription Agreement that could materially and adversely affect the obligation of such Company Unit Investors to contribute to the Company the applicable portion of the Company Unit (as defined in the Company Unit Subscription Agreements) amount set forth in the Company Unit Subscription Agreement of such Company Unit Investors. As of the date of this Agreement, assuming the due authorization, execution and delivery by each other party thereto, all of the Company Unit Subscription Agreements are in full force and effect and are legal, valid and binding obligations of the Company, enforceable in accordance with its terms, except as limited by the Enforceability Exceptions. As of the date of this Agreement, to the Knowledge of the Company, no Company Unit Subscription Agreement has been withdrawn or terminated, amended or modified in writing in any respect. As of the date of this Agreement, the Company is not and, with the giving of notice, the lapse of time or both, would not be in default under any Company Unit Subscription Agreements.
(b) No fees, consideration or other discounts are payable or have been agreed to by the Company (including, from and after the Closing) to any Company Unit Investor in respect of the Company Unit Subscription, except as set forth in the Company Unit Subscription Agreements.
6.17 Intended Tax Treatment. The Company has not taken or agreed to take any action that could reasonably be expected to prevent the Business Combination Transactions from qualifying for the Business Combination Intended Tax Treatment. The Company does not have any knowledge of any facts or circumstances that could reasonably be expected to prevent the Business Combination Transactions from qualifying for the Business Combination Intended Tax Treatment. To the knowledge of Company, no Company Member has entered into any binding commitment to dispose of, or otherwise transfer (directly or indirectly) any Pubco Stock it receives in the Transactions contemplated by this Agreement.
Article VII
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Except as set forth in the Company Disclosure Schedules, the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer, with respect to each representation and warranty in this Article VII, the Seller hereby represents and warrants to SPAC, Pubco, the Pubco Subsidiaries and the Company, as of the date of this Agreement and as of the Closing, as follows:
7.1 Organization and Standing. The Seller is duly organized, validly existing and in good standing (to the extent such concept is applicable in the jurisdiction of such entity’s formation) under the Laws of the jurisdiction of its formation, and has all requisite power and authority to carry on its business as now being conducted.
7.2 Authorization; Binding Agreement. The Seller has all requisite power, authority and legal right and capacity to execute and deliver this Agreement and each Ancillary Document to which it is a party, to perform the Seller’s obligations hereunder and thereunder and to consummate the Transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which the Seller is or is required to be a party has been or shall be when delivered, duly and validly executed and delivered by the Seller and assuming the due authorization, execution and delivery of this Agreement and any such Ancillary Document by the other Parties and other parties thereto, constitutes, or when delivered shall constitute, the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to the Enforceability Exceptions.
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7.3 Government Approvals. No Consent of any Governmental Authority on the part of the Seller is required in connection with the execution, delivery or performance by the Seller of this Agreement or any Ancillary Documents or the consummation by the Seller of the Transactions contemplated hereby or thereby other than (a) such filings as expressly contemplated by this Agreement, (b) any filings required with Nasdaq or the SEC with respect to the Transactions, and (c) applicable requirements, if any, of the Securities Act, the Exchange Act, and/or other applicable securities Laws.
7.4 Non-Contravention. The execution and delivery by the Seller of this Agreement and each Ancillary Document to which it is a party or otherwise bound and the consummation by the Seller of the Transactions contemplated hereby and thereby, and compliance by the Seller with any of the provisions hereof and thereof, will not, (a) conflict with or violate any provision of the Seller’s Organizational Documents, (b) conflict with or violate any Law applicable to the Seller or any of its properties or assets or (c) (i) violate, conflict with or result in a material breach of, (ii) constitute a material default (or an event which, with notice or lapse of time or both, would constitute a material default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by the Seller under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of the Seller under, (viii) give rise to any obligation to obtain any third-party consent or provide any notice to any Person or (ix) give any Person the right to declare a material default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any Contract to which the Seller is a party or its properties or assets are bound, except for any deviations from any of the foregoing clauses (a), (b) or (c) that has not had and would not reasonably be expected to materially impair or delay the ability of the Seller to consummate the Transactions.
7.5 No Litigation. There is no Action pending or, to the Knowledge of the Seller, threatened, nor any Order is outstanding, against or involving the Seller, whether at law or in equity, before or by any Governmental Authority, which would reasonably be expected to materially and adversely affect the ability of the Seller to consummate the Transactions contemplated by, and discharge its obligations under, this Agreement and the Ancillary Documents to which the Seller is or is required to be a party.
7.6 Investment Representations. The Seller: (a) is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act; (b) is acquiring its portion of the Pubco Stock for itself for investment purposes only, and not with a view towards any resale or distribution of such Pubco Stock; (c) has been advised and understands that the Pubco Stock (i) are being issued in reliance upon one or more exemptions from the registration requirements of the Securities Act and any applicable U.S. state securities Laws, (ii) has not been and at Closing shall not be, registered under the Securities Act or any applicable U.S. state securities Laws and, therefore, must be held indefinitely and cannot be resold unless and until such Pubco Stock are registered under the Securities Act and all applicable U.S. state securities Laws, unless exemptions from registration are available, and (iii) may be subject to additional restrictions on transfer pursuant to such Seller’s Lock-Up Agreement (if applicable); (d) is aware that an investment in Pubco is a speculative investment and is subject to the risk of complete loss; and (e) (other than the Company Units held by the Seller) acknowledges that except as set forth in the Amended and Restated Registration Rights Agreement, Pubco is under no obligation hereunder to register the Pubco Stock under the Securities Act. Such Seller does not have any Contract with any Person to sell, transfer, or grant participations to such Person, or to any third Person, with respect to the Pubco Stock. By reason of the Seller’s business or financial experience, the Seller is capable of evaluating the risks and merits of an investment in Pubco and of protecting its interests in connection with this investment. The Seller has carefully read and understands all materials provided by or on behalf of SPAC or its Representatives to the Seller or the Seller’s Representatives pertaining to an investment in Pubco and has consulted, as the Seller has deemed advisable, with its own attorneys, accountants or investment advisors with respect to the investment contemplated hereby and its suitability for the Seller. The Seller acknowledges that the Pubco Stock are subject to dilution for events not under the control of the Seller. The Seller has completed its independent inquiry and has relied fully upon the advice of its own legal counsel, accountant, financial and other Representatives in determining the legal, tax, financial and other consequences of this Agreement and the Transactions contemplated hereby and the suitability of this Agreement and the Transactions contemplated hereby for the Seller and its particular circumstances, and, except as set forth herein, has not relied upon any representations or advice by Pubco or SPAC or their respective Representatives. The Seller: (A) has been represented by independent counsel (or has had the opportunity to consult with independent counsel and has declined to do so); (B) has had the full right and opportunity to consult with the Seller’s attorneys and other advisors and has availed itself of this right and opportunity; (C) has carefully read and fully understands this Agreement in its entirety and has had it fully explained to it or him by such counsel; (D) is fully aware of the contents hereof and the meaning, intent and legal effect thereof; and (E) is competent to execute this Agreement and any Ancillary Documents to which the Seller is or will be required to be a party and has executed this Agreement and such Ancillary Documents free from coercion, duress or undue influence.
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7.7 Finders and Brokers. No broker, finder or investment banker or other Person is entitled to any brokerage, finder’s or other fee or commission from Pubco, the Pubco Subsidiaries, the Company or any of their respective Affiliates in connection with the Transactions contemplated hereby directly based upon arrangements made by the Seller or any of their Affiliates, except as set forth on Schedule 6.12 of the Company Disclosure Schedules.
7.8 Ownership.
(a) The Seller has, or will have as of immediately prior to the Company Merger, good, valid and marketable title to the Company Units set forth opposite Seller’s name on Exhibit A to the First A&R Company LLCA, as amended, free and clear of any and all Liens (other than those imposed by applicable securities Laws or the Company’s Organizational Documents). There are no proxies, voting rights, shareholders’ agreements or other agreements or understandings to which the Seller is a party by which the Seller is bound with respect to the voting or transfer of any of the Seller’s Company Units other than this Agreement.
(b) As of the date of this Agreement, (i) the Seller has all rights, title and interest in and to the Avax to be contributed by it to the Company pursuant to the Contribution Agreement, (ii) such Avax is held in a digital wallet held or operated by or on behalf of the Seller (the “Seller Digital Wallet”) and neither such Avax nor such Seller Digital Wallet is subject to any Liens (other than Permitted Liens), (iii) the Seller has taken commercially reasonable steps to protect its Seller Digital Wallet and such Avax and (iv) the Seller has the exclusive ability to control such Seller Digital Wallet, including by use of “private keys” or other equivalent means or through custody arrangements or other equivalent means.
7.9 Information Supplied. None of the information supplied or to be supplied by the Seller in writing expressly for inclusion or incorporation by reference: (a) in any Current Report on Form 8-K, and any exhibits thereto or any other report, form, registration or other filing made with any Governmental Authority (including the SEC) with respect to the Transactions; (b) in the Registration Statement; or (c) in the mailings or other distributions to SPAC’s or Pubco’s shareholders and/or prospective investors with respect to the consummation of the Transactions or in any amendment to any of documents identified in (a) through (c), will, when filed, made available, mailed or distributed, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. None of the information supplied or to be supplied by the Seller in writing expressly for inclusion or incorporation by reference in any of the Signing Press Release, the Signing Filing, the Closing Filing and the Closing Press Release will, when filed or distributed, as applicable, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, the Seller makes no representation, warranty or covenant with respect to any information supplied by or on behalf of SPAC, the Pubco Subsidiaries, Pubco or any of their respective Affiliates.
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7.10 Intended Tax Treatment. Seller has not taken or agreed to take any action that could reasonably be expected to prevent the Business Combination Transactions from qualifying for the Business Combination Intended Tax Treatment. Seller does not have any knowledge of any facts or circumstances that could reasonably be expected to prevent the Business Combination Transactions from qualifying for the Business Combination Intended Tax Treatment. Seller has not entered into any binding commitment to dispose of, or otherwise transfer (directly or indirectly) any Pubco Stock it receives in the Transactions contemplated by this Agreement.
7.11 No Other Representations. Except for the representations and warranties expressly made by the Seller in this Article VII (as modified by the Company Disclosure Schedules) or as expressly set forth in any Ancillary Document, none of the Seller or any other Person on the Seller’s behalf makes any express or implied representation or warranty with respect to the Seller or any of the Seller’s business, operations, assets or Liabilities, or the Transactions, and the Seller hereby expressly disclaims any other representations or warranties, whether implied or made by the Seller or any of its Representatives. The Parties hereto (other than the Seller) acknowledge that, except for the representations and warranties expressly made by the Seller in this Article VII, the Seller is not making nor has Seller made, communicated or furnished (orally or in writing) any representation, warranty, projection, forecast, statement or information to any other Party (including any opinion, information, projection or advice that may have been or may be provided to any other Party or any Representatives thereof), including any representations or warranties regarding the probable success or profitability of the businesses of SPAC, Pubco, the Pubco Subsidiaries or the Seller. Each Party, other than the Seller, specifically disclaims that it is relying upon or has relied upon any such other representations and warranties that may have been made by any Person and acknowledges and agrees that the Seller has specifically disclaimed any such other representations and warranties. Notwithstanding the foregoing provisions of this Section 7.11, nothing in this Section 7.11 shall limit SPAC’s remedies with respect to Fraud Claims in connection with, or arising out of this Agreement, the Ancillary Documents or the Transactions.
Article VIII
COVENANTS
8.1 Access and Information.
(a) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with Section 10.1 or the Closing (the “Interim Period”), subject to Section 8.13, each of the Company, Pubco and the Pubco Subsidiaries shall give, and shall cause its Representatives to give, SPAC and its Representatives, at reasonable times during normal business hours and upon reasonable intervals and notice, reasonable access to all offices and other facilities and to all employees, properties, Contracts, agreements, commitments, books and records, financial and operating data and other information of or pertaining to Pubco, the Company or the Pubco Subsidiaries, as SPAC or its Representatives may reasonably request regarding Pubco, the Company or the Pubco Subsidiaries and their respective businesses, assets, Liabilities, financial condition, prospects, operations, management, employees and other aspects and cause each of the Representatives of the Company, Pubco and the Pubco Subsidiaries to reasonably cooperate with SPAC and its Representatives in their investigation; provided, however, that SPAC and its Representatives, in each case, shall conduct any such activities in such a manner as not to unreasonably interfere with the business or operations of Pubco, the Company or the Pubco Subsidiaries.
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(b) During the Interim Period, subject to Section 8.13, SPAC shall give, and shall cause its Representatives to give, the Seller, the Company and Pubco and their respective Representatives, at reasonable times during normal business hours and upon reasonable intervals and notice, reasonable access to all offices and other facilities and to all employees, properties, Contracts, agreements, commitments, books and records, financial and operating data and other information of or pertaining to SPAC, as the Seller, the Company or Pubco or their respective Representatives may reasonably request regarding SPAC and its businesses, assets, Liabilities, financial condition, prospects, operations, management, employees and other aspects and cause each of their respective Representatives to reasonably cooperate with the Seller, the Company and Pubco and their respective Representatives in their investigation; provided, however, that the Seller, the Company and Pubco and their respective Representatives shall conduct any such activities in such a manner as not to unreasonably interfere with the business or operations of SPAC.
8.2 Conduct of Business of the Company, Pubco, and the Pubco Subsidiaries.
(a) Unless SPAC shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the Interim Period, except as expressly contemplated, permitted or required by this Agreement or any Ancillary Document or as set forth on Schedule 8.2(a) of the Company Disclosure Schedules, or as required by the Transactions or applicable Law, Pubco, the Pubco Subsidiaries and the Company shall (i) conduct their businesses, in all material respects, in the ordinary course of business and engage in activities relating to the initial organization, commencement of their respective operations and execution of the Transaction and any capital raise contemplated by this Agreement and any other capital raise agreed by the Parties between the date of this Agreement and Closing Date, (ii) comply in all material respects with all Laws applicable to them and their respective businesses and assets, and (iii) take all commercially reasonable measures necessary or appropriate to preserve intact, in all material respects, their respective business organizations, and to preserve the possession, control and condition of their respective material assets.
(b) Without limiting the generality of Section 8.2(a) and except as contemplated, permitted or required by the terms of this Agreement or any Ancillary Document or as set forth on Schedule 8.2(b) of the Company Disclosure Schedules, or as required in connection with the Transactions and any capital raise contemplated by this Agreement and any other capital raise agreed by the Parties between the date of this Agreement and Closing Date or by applicable Law, during the Interim Period, without the prior written consent of SPAC (such consent, except in the case of sub-clause (iii) below, not to be unreasonably withheld, conditioned or delayed), none of the Company, Pubco or the Pubco Subsidiaries shall:
(i) amend, waive or otherwise change, in any respect, its Organizational Documents;
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(ii) subject to Section 8.2(c), authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for any of its shares or other equity securities or securities of any class and any other equity-based awards, or engage in any hedging transaction with a third Person with respect to such securities;
(iii) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities;
(iv) make or rescind any material election relating to Taxes (other than make an election under Section 754 of the Code), settle any Action relating to Taxes, file any amended Tax Return or claim for refund, or make any material change in its accounting or Tax policies or procedures, in each case except as required by applicable Law or in compliance with GAAP or to the extent such action would not reasonably be expected to have any adverse effect on Pubco or any of its Affiliates;
(v) incur, create, assume, prepay, repay or otherwise become liable for any Indebtedness (directly, contingently or otherwise), fees or expenses in excess of $250,000 individually or $500,000 in the aggregate, make a loan or advance to or investment in any third party (other than pursuant to the terms of a Contract (a) in existence as of the date of this Agreement and disclosed to the SPAC or (b) entered into in the ordinary course of business), or guarantee or endorse any Indebtedness, Liability or obligation of any Person in excess of $250,000 individually or $500,000 in the aggregate (provided that this Section 8.2(b)(v) shall not prevent the Company, Pubco or the Pubco Subsidiaries from borrowing funds necessary to finance their ordinary course administrative costs and expenses and Seller Expenses and to discharge such ordinary course administrative costs and expenses and Seller Expenses as they become due);
(vi) sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;
(vii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(viii) enter into any agreement, understanding or arrangement with respect to the voting of equity securities of the Company, Pubco or the Pubco Subsidiaries;
(ix) take any action that would reasonably be expected to significantly delay or impair the obtaining of any Consents of any Governmental Authority to be obtained in connection with this Agreement;
(x) establish any Subsidiary or enter into any new line of business;
(xi) enter into, amend, waive or terminate (other than terminations in accordance with their terms) any material transaction with any Related Person (other than compensation and benefits and advancement of expenses);
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(xii) amend, waive (other than a waiver of Section 6(a) thereunder) or terminate (other than in accordance with its terms) the Contribution Agreement; or
(xiii) authorize or agree to do any of the foregoing actions.
(c) Without limiting Sections 8.2(a) and 8.2(b), without the prior written consent of SPAC (such consent, solely in the case of clause (ii), not to be unreasonably withheld, conditioned or delayed), (i) the Company shall not issue any Company Units (other than pursuant to the Contribution Agreement or Company Unit Subscription Agreements, each as in effect on the date hereof), and (ii) no Company Member shall sell, transfer or dispose of any Company Units owned by the such Company Member.
8.3 Conduct of Business of SPAC.
(a) Unless the Seller shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the Interim Period, except as expressly contemplated, permitted or required by this Agreement or any Ancillary Document or as set forth on Schedule 8.3 of the SPAC Disclosure Schedules, or as required in connection with the Transactions or applicable Law, SPAC shall (i) conduct its businesses, in all material respects, in the ordinary course of business consistent with past practice, (ii) comply with all Laws applicable to it and its businesses, assets and employees, and (iii) take all commercially reasonable measures necessary or appropriate to preserve intact, in all material respects, its business organizations.
(b) Without limiting the generality of Section 8.3(a) and except as contemplated by the terms of this Agreement or any Ancillary Document or as set forth on Schedule 8.3 of the SPAC Disclosure Schedules, or as required by the Transactions or applicable Law, during the Interim Period, without the prior written consent of the Seller (such consent not to be unreasonably withheld, conditioned or delayed), SPAC shall not:
(i) amend, waive or otherwise change, in any respect, its Organizational Documents;
(ii) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for any of its equity securities or other security interests of any class and any other equity-based awards, or engage in any hedging transaction with a third Person with respect to such securities;
(iii) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its shares or other equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities;
(iv) incur, create, assume, prepay, repay or otherwise become liable for any Indebtedness (directly, contingently or otherwise), fees or expenses in excess of $250,000 individually or $500,000 in the aggregate, make a loan or advance to or investment in any third party, or guarantee or endorse any Indebtedness, Liability or obligation of any Person (provided that this Section 8.3(b)(iv) shall not prevent SPAC from borrowing funds necessary to finance its ordinary course administrative costs and expenses and SPAC Expenses and to discharge such ordinary course administrative costs and expenses and SPAC Expenses as they become due);
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(v) make or rescind any material election relating to Taxes, settle any Action relating to Taxes, file any amended Tax Return or claim for refund, or make any material change in its accounting or Tax policies or procedures, in each case except as required by applicable Law or in compliance with GAAP;
(vi) amend, waive or otherwise change the Trust Agreement;
(vii) amend or otherwise modify, terminate, waive or assign or delegate (as applicable) any right or obligation under any SPAC Material Contract (other than amendments or other modifications, terminations, waivers, assignments or delegations of or with respect to Contracts with Related Persons otherwise governed by Section 8.3(b)(viii)) or enter into any new Contract that would be a SPAC Material Contract;
(viii) enter into, renew, amend, waive or terminate (other than terminations in accordance with their terms) any Contracts, arrangements or transactions with any Related Person, including any Ancillary Document to which SPAC or any Related Person is a party;
(ix) fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;
(x) establish any Subsidiary or enter into any new line of business;
(xi) revalue any of its material assets or make any change in accounting methods, principles or practices, except to the extent required to comply with GAAP, and after consulting SPAC’s outside auditors;
(xii) waive, release, assign, settle or compromise any Action (including any Action relating to this Agreement or the Transactions), other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, SPAC) not in excess of $250,000 (individually or in the aggregate), or otherwise pay, discharge or satisfy any Actions, Liabilities or obligations, unless such amount has been reserved in the SPAC Financials;
(xiii) acquire, including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any corporation, company, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets outside the ordinary course of business;
(xiv) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than with respect to the SPAC Merger);
(xv) voluntarily incur any Liability or obligation (whether absolute, accrued, contingent or otherwise) in excess of $250,000 individually or $500,000 in the aggregate (excluding the incurrence of any SPAC Expenses) other than pursuant to the terms of a Contract (a) in existence as of the date of this Agreement and disclosed to the Seller (including in the SEC Reports) or (b) entered into in the ordinary course of business or in accordance with the terms of this Section 8.3 during the Interim Period;
(xvi) sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;
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(xvii) take any action that would reasonably be expected to significantly delay or impair the obtaining of any Consents of any Governmental Authority to be obtained in connection with this Agreement; or
(xviii) authorize or agree to do any of the foregoing actions.
8.4 Annual and Interim Financial Statements.
(a) As promptly as practicable after the date of this Agreement but in no event later than forty five (45) days after the date of this Agreement, the Company shall deliver to SPAC and the Seller, the audited and/ or reviewed financial statements of the Company and Pubco (including, in each case, any related notes thereto), that are required for the initial filing of the Registration Statement pursuant to the Securities Act and the rules and regulations promulgated thereunder. Such financial statements shall fairly present the financial position and results of operations of the Company and Pubco, as applicable, as of the dates or for the periods indicated, in accordance with GAAP. The financial statements, if required to be audited, shall be audited in accordance with PCAOB auditing standards by a PCAOB qualified auditor.
(b) During the Interim Period, as soon as reasonably practicable following the end of each three-month quarterly period of each fiscal year (other than the last three-month period), and in any event no later than forty-five (45) days thereafter, and to the extent required for the Registration Statement pursuant to the Securities Act and the rules and regulations promulgated thereunder, the Company and Pubco shall deliver to SPAC and the Seller the unaudited consolidated financial statements of the Company and Pubco, as applicable, consisting of the consolidated balance sheet of the Company and Pubco, as applicable as of the end of such three-month period (and most recent year end), and the related unaudited consolidated income statement, changes in shareholder equity and statement of cash flows for the year to date period of such fiscal year for such fiscal quarter (subject to normal and recurring year-end adjustments and the absence of footnotes).
(c) During the Interim Period, as soon as reasonably practicable following the end of each fiscal year, and in any event no later than ninety (90) days thereafter, and to the extent required for the Registration Statement pursuant to the Securities Act and the rules and regulations promulgated thereunder, the Company and Pubco shall deliver to SPAC and the Seller the audited consolidated financial statements of the Company and Pubco, consisting of the consolidated audited balance sheet of the Company or Pubco, as applicable, as of the end of such fiscal year (and prior fiscal year), and the related audited consolidated income statement, changes in shareholder equity and statement of cash flows for the fiscal year then ended (and prior two (2) fiscal years or such shorter period as the Company has been in existence). Such audited financial statements shall be audited in accordance with PCAOB auditing standards by a PCAOB qualified auditor and shall fairly present the financial position and results of operations of the Company and Pubco, as applicable, as of the dates and for the periods indicated, in accordance with GAAP.
8.5 SPAC Public Filings. During the Interim Period, SPAC will (i) keep current and timely file all of the public filings required to be filed by it with the SEC under the Exchange Act and the Securities Act 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 SPAC Units, SPAC Class A Ordinary Shares on Nasdaq; provided that the Parties acknowledge and agree that from and after the Closing, the Parties intend to list on Nasdaq only the shares of Pubco Class A Stock, and (ii) reasonably cooperate with Pubco to cause the shares of Pubco Class A Stock to be issued in connection with the Mergers to be approved for listing on Nasdaq as of the Closing Date.
8.6 Exclusivity.
(a) For purposes of this Agreement, (i) an “Acquisition Proposal” means any inquiry, proposal or offer, or any indication of interest in making an offer or proposal, from any Person or group at any time relating to an Alternative Transaction, and (ii) an “Alternative Transaction” means (A) with respect to the Company, Pubco, the Pubco Subsidiaries, the Seller and their respective Affiliates, a transaction (other than the Transactions contemplated by this Agreement and any Ancillary Document) concerning the sale of (x) all or any material part of the business or assets of Pubco or the Company (other than in the ordinary course of business consistent with past practice) or (y) any of the shares or other equity interests or profits of Pubco or the Company, in any case, whether such transaction takes the form of a sale of shares or other equity interests in Pubco or the Company, assets, merger, consolidation, issuance of debt securities, management Contract, joint venture or partnership, or otherwise, (B) with respect to the Seller, the sale of any portion of Avax that, and only if such sale, would materially prevent or impair the ability of the Seller to perform its obligations under the Contribution Agreement and (C) with respect to SPAC and its Affiliates, a transaction (other than the Transactions contemplated by this Agreement) concerning a Business Combination involving SPAC.
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(b) During the Interim Period, in order to induce the other Parties to continue to commit to expend management time and financial resources in furtherance of the Transactions contemplated hereby, each Party shall not, and shall cause its Representatives to not, without the prior written consent of the Seller and SPAC, directly or indirectly, (i) solicit, assist, initiate, continue or facilitate the making, submission or announcement of, or intentionally encourage, any Acquisition Proposal, (ii) furnish any non-public information regarding such Party or its Affiliates or their respective businesses, operations, assets, Liabilities, financial condition, prospects or employees to any Person or group (other than a Party to this Agreement or their respective Representatives) in connection with or in response to an Acquisition Proposal, (iii) engage or participate in discussions or negotiations with any Person or group with respect to, or that is intended or could reasonably be expected to lead to, an Acquisition Proposal, (iv) approve, endorse or recommend, or publicly propose to approve, endorse or recommend, any Acquisition Proposal, (v) negotiate or enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Acquisition Proposal, or (vi) release any third Person from, or waive any provision of, any confidentiality agreement to which such Party is a party.
(c) Each Party shall notify the others as promptly as practicable (and in any event within forty-eight (48) hours) orally and in writing of the receipt by such Party or any of its Representatives (or with respect to the Company, the Seller) of (i) any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations regarding or constituting any Acquisition Proposal or any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations that could reasonably be expected to result in an Acquisition Proposal, and (ii) any request for non-public information relating to such Party or its Affiliates (or with respect to the Seller, the Company), specifying in each case, the material terms and conditions thereof (including a copy thereof if in writing or a written summary thereof if oral) and the identity of the party making such inquiry, proposal, offer or request for information, subject to applicable confidentiality restrictions. Each Party shall keep the others promptly informed of the status of any such inquiries, proposals, offers or requests for information. During the Interim Period, each Party shall, and shall cause its Representatives to, immediately cease and cause to be terminated any solicitations, discussions or negotiations with any Person with respect to any Acquisition Proposal and shall, and shall direct its Representatives to, cease and terminate any such solicitations, discussions or negotiations.
8.7 No Trading. Each of the Company, Pubco, each Pubco Subsidiary, and the Seller acknowledge and agree that it is aware, and that their respective Affiliates are aware (and each of their respective Representatives is aware or, upon receipt of any material nonpublic information of SPAC, will be advised) of the restrictions imposed by U.S. federal securities laws and the rules and regulations of the SEC and Nasdaq promulgated thereunder or otherwise (the “Federal Securities Laws”) and other applicable foreign and domestic Laws on a Person possessing material nonpublic information about a publicly traded company. The Company, Pubco, the Pubco Subsidiaries and the Seller each hereby agree that, while it is in possession of such material nonpublic information, it shall not purchase or sell any securities of SPAC (other than pursuant to the Transactions), communicate such information to any third party, take any other action with respect to SPAC in violation of such Laws, or cause or encourage any third party to do any of the foregoing.
[Intentionally Omitted].
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8.8 Notification of Certain Matters. During the Interim Period, each Party shall give prompt notice to the other Parties if such Party or its Affiliates: (a) fails to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it or its Affiliates hereunder in any material respect; (b) receives any notice or other communication in writing from any third party (including any Governmental Authority or Nasdaq) alleging (i) that the Consent of such third party is or may be required in connection with the Transactions contemplated by this Agreement or (ii) any non-compliance with any Law by such Party or its Affiliates; (c) receives any notice or other communication from any Governmental Authority or Nasdaq in connection with the Transactions contemplated by this Agreement; (d) discovers any fact or circumstance that, or becomes aware of the occurrence or non-occurrence of any event the occurrence or non-occurrence of which, would reasonably be expected to cause or result in any of the conditions to set forth in Article IX not being satisfied or the satisfaction of those conditions being materially delayed; or (e) becomes aware of the commencement or threat, in writing, of any Action against such Party or any of its Affiliates, or any of their respective properties or assets, or, to the Knowledge of such Party, any officer, director, partner, member or manager, in his, her or its capacity as such, of such Party or of its Affiliates with respect to the consummation of the Transactions. No such notice shall constitute an acknowledgement or admission by the Party providing the notice regarding whether or not any of the conditions to the Closing have been satisfied or in determining whether or not any of the representations, warranties or covenants contained in this Agreement have been breached.
8.9 Efforts.
(a) Subject to the terms and conditions of this Agreement, each Party shall use its reasonable best efforts, and shall cooperate fully with the other Parties, to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable Laws and regulations to consummate the Transactions contemplated by this Agreement (including the receipt of all applicable Consents of, or termination of all applicable waiting periods by, Governmental Authorities) and to comply as promptly as practicable with all requirements or conditions of Governmental Authorities applicable to the Transactions contemplated by this Agreement.
(b) In furtherance and not in limitation of Section 8.9(a), to the extent required under any Laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade (“Antitrust Laws”), each Party agrees to make any required filing or application under Antitrust Laws, as applicable, with respect to the Transactions contemplated hereby as promptly as practicable, to supply as promptly as reasonably practicable any additional information and documentary material that may be reasonably requested pursuant to Antitrust Laws and to take all other actions reasonably necessary, proper or advisable to cause the expiration or termination of the applicable waiting periods under Antitrust Laws as soon as practicable, including by requesting early termination of the waiting period provided for under the Antitrust Laws. The Parties agree to use their reasonable best efforts to make all required filings under Antitrust Laws no later than thirty (30) days after the initial filing of the Registration Statement. Each Party shall, in connection with its efforts to obtain all requisite approvals and authorizations for the Transactions contemplated by this Agreement under any Antitrust Law, use its reasonable best efforts to: (i) cooperate in all respects with each other Party or its Affiliates in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private Person; (ii) keep the other Parties reasonably informed of any communication received by such Party or its Representatives from, or given by such Party or its Representatives to, any Governmental Authority and of any communication received or given in connection with any proceeding by a private Person, in each case regarding any of the Transactions contemplated by this Agreement; (iii) permit a Representative of the other Parties and their respective outside counsel to review any communication given by it to, and consult with each other in advance of any meeting or conference with, any Governmental Authority or, in connection with any proceeding by a private Person, with any other Person, and to the extent permitted by such Governmental Authority or other Person, give a Representative or Representatives of the other Parties the opportunity to attend and participate in such meetings and conferences; (iv) in the event a Party’s Representative is prohibited from participating in or attending any meetings or conferences, the other Parties shall keep such Party promptly and reasonably apprised with respect thereto; and (v) use reasonable best efforts to cooperate in the filing of any memoranda, white papers, filings, correspondence or other written communications explaining or defending the Transactions contemplated hereby, articulating any regulatory or competitive argument, and/or responding to requests or objections made by any Governmental Authority.
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(c) As soon as reasonably practicable following the date of this Agreement, the Parties shall reasonably cooperate with each other and use (and shall cause their respective Affiliates to use) their respective reasonable best efforts to prepare and file with Governmental Authorities requests for approval of the Transactions contemplated by this Agreement and shall use all commercially reasonable efforts to have such Governmental Authorities approve the Transactions contemplated by this Agreement. Each Party shall give prompt written notice to the other Parties if such Party or any of its Representatives (or, with respect to the Company, the Seller) receives any notice from such Governmental Authorities in connection with the Transactions contemplated by this Agreement, and shall promptly furnish the other Parties with a copy of such Governmental Authority notice. If any Governmental Authority requires that a hearing or meeting be held in connection with its approval of the Transactions contemplated hereby, whether prior to the Closing or after the Closing, each Party shall arrange for Representatives of such Party to be present for such hearing or meeting. If any objections are asserted with respect to the Transactions contemplated by this Agreement under any applicable Law or if any Action is instituted (or threatened to be instituted) by any applicable Governmental Authority or any private Person challenging any of the Transactions contemplated by this Agreement or any Ancillary Document as violative of any applicable Law or which would otherwise prevent, materially impede or materially delay the consummation of the Transactions contemplated hereby or thereby, the Parties shall use their reasonable best efforts to resolve any such objections or Actions so as to timely permit consummation of the Transactions contemplated by this Agreement and the Ancillary Documents, including in order to resolve such objections or Actions which, in any case if not resolved, could reasonably be expected to prevent, materially impede or materially delay the consummation of the Transactions contemplated hereby or thereby. In the event any Action is instituted (or threatened to be instituted) by a Governmental Authority or private Person challenging the Transactions contemplated by this Agreement, or any Ancillary Document, the Parties shall, and shall cause their respective Representatives to, reasonably cooperate with each other and use their respective reasonable best efforts to contest and resist any such Action and to have vacated, lifted, reversed or overturned any Order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the Transactions contemplated by this Agreement or the Ancillary Documents.
(d) Prior to the Closing, each Party shall use its commercially reasonable efforts to obtain any Consents of Governmental Authorities or other third Persons as may be necessary for the consummation by such Party or its Affiliates of the Transactions contemplated by this Agreement or required as a result of the execution or performance of, or consummation of the Transactions contemplated by, this Agreement by such Party or its Affiliates, and the other Parties shall provide reasonable cooperation in connection with such efforts.
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8.10 Further Assurances. The Parties shall further cooperate with each other and use their respective commercially reasonable efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on their part under this Agreement and applicable Laws to consummate the Transactions contemplated by this Agreement as soon as reasonably practicable, including preparing and filing as soon as practicable all documentation to effect all necessary notices, reports and other filings.
8.11 The Registration Statement.
(a) Following the date of this Agreement, SPAC and Pubco shall prepare with the reasonable assistance of the Company, and, as promptly as practicable after completion of the Company’s audited financial statements described in Section 8.4(a), file with the SEC a registration statement on Form S-4 (as amended or supplemented from time to time, and including the Proxy Statement contained therein, the “Registration Statement”) in connection with the registration under the Securities Act of the shares of Pubco Stock to be issued under this Agreement to the holders of SPAC Class A Ordinary Shares and to the holders of Company Units at the SPAC Merger Effective Time and the Company Merger Effective Time, respectively, which Registration Statement will also contain a proxy statement of SPAC (as amended, the “Proxy Statement”) for the purpose of soliciting proxies from SPAC Shareholders for the matters to be acted upon at the Extraordinary General Meeting and providing the Public Shareholders an opportunity in accordance with the SPAC Memorandum and Articles and the IPO Prospectus to have their SPAC Class A Ordinary Shares redeemed (the “Redemption”) in conjunction with the shareholder vote on the SPAC Shareholder Approval Matters. The Proxy Statement shall include proxy materials for the purpose of soliciting proxies from SPAC Shareholders to vote, at an extraordinary general meeting of SPAC Shareholders to be called and held for such purpose (the “Extraordinary General Meeting”), in favor of resolutions approving (i) as an ordinary resolution, the adoption and approval of this Agreement and the Transactions as a Business Combination, (ii) as a special resolution, the approval of the SPAC Merger and authorization of SPAC’s entry into the SPAC Certificate of Merger, (iii) as an ordinary resolution (or if required by applicable Law or the SPAC Memorandum and Articles, as a special resolution) the adoption and approval of such other matters as the Seller, the Company, Pubco and SPAC shall hereafter mutually determine to be necessary or appropriate in order to effect the Transactions (the approvals described in foregoing clauses (i) through (iii), collectively, the “SPAC Shareholder Approval Matters”), and (iv) as an ordinary resolution, the adjournment of the Extraordinary General Meeting, if necessary or desirable in the reasonable determination of SPAC, in each case in accordance with the SPAC Memorandum and Articles, the Cayman Act, and the rules and regulations of the SEC and Nasdaq. If on the date for which the Extraordinary General Meeting is scheduled, SPAC has not received proxies representing a sufficient number of shares to obtain the Required Shareholder Approval, whether or not a quorum is present, SPAC may make one or more successive postponements or adjournments of the Extraordinary General Meeting in accordance with Section 8.11(d). In connection with the Registration Statement, SPAC and Pubco will file with the SEC financial and other information about the Transactions in accordance with applicable Law and applicable proxy solicitation and registration statement rules set forth in the SPAC Memorandum and Articles, the Cayman Act and the rules and regulations of the SEC and Nasdaq. SPAC and Pubco shall cooperate and provide the Seller (and their counsel) with a reasonable opportunity to review and comment on the Registration Statement and any amendment or supplement thereto prior to filing the same with the SEC. The Company and the Seller shall provide SPAC and Pubco with such information concerning the Company, the Seller and their respective shareholders, officers, directors, employees, assets, Liabilities, condition (financial or otherwise), business and operations that may be reasonably required or appropriate for inclusion in the Registration Statement, or in any amendments or supplements thereto, which information provided by the Company and the Seller shall be true and correct and not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not materially misleading.
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(b) SPAC and Pubco shall take any and all reasonable and necessary actions required to satisfy the requirements of the SPAC Memorandum and Articles, the Securities Act, the Exchange Act and other applicable Laws in connection with the Registration Statement, the Extraordinary General Meeting and the Redemption. Each of SPAC, Pubco and the Company shall, and shall cause each of its Subsidiaries to, make their respective directors, officers and employees, upon reasonable advance notice, available to the Company, Pubco, SPAC, and their respective Representatives in connection with the drafting of the public filings with respect to the Transactions, including the Registration Statement, and responding in a timely manner to comments from the SEC. Each Party shall promptly correct any information provided by it for use in the Registration Statement (and other related materials) if and to the extent that such information is determined to have become false or misleading in any material respect or as otherwise required by applicable Laws. SPAC and Pubco shall amend or supplement the Registration Statement and cause the Registration Statement, as so amended or supplemented, to be filed with the SEC and to be disseminated to the SPAC Shareholders, in each case as and to the extent required by applicable Laws and subject to the terms and conditions of this Agreement and the SPAC Memorandum and Articles; provided that Pubco shall not amend or supplement the Registration Statement without the prior written consent of SPAC, which consent shall not to be unreasonably withheld, conditioned or delayed.
(c) SPAC and Pubco, with the assistance of the other Parties, shall promptly respond to any SEC comments on the Registration Statement and shall otherwise use their reasonable efforts to cause the Registration Statement to “clear” comments from the SEC and become effective. SPAC and Pubco shall provide the Seller with copies of any written comments, and shall inform the Seller of any material oral comments, that SPAC, Pubco or their respective Representatives receive from the SEC or its staff with respect to the Registration Statement, the Extraordinary General Meeting and the Redemption promptly after the receipt of such comments and shall give the Seller and their respective Representatives a reasonable opportunity under the circumstances to review and comment on any proposed written or material oral responses to such comments, including to the extent possible, participation by the Seller or their counsel in discussions with the SEC.
(d) As soon as practicable following the Registration Statement “clearing” comments from the SEC and becoming effective, SPAC shall set a record date for the Extraordinary General Meeting and distribute the Registration Statement to the SPAC Shareholders and, pursuant thereto, shall call and convene the Extraordinary General Meeting for a date no later than thirty (30) days following the effectiveness of the Registration Statement. SPAC shall, through the SPAC Board recommend to the SPAC Shareholders the approval of the SPAC Shareholder Approval Matters and include such recommendation in the Proxy Statement, with such changes as may be mutually agreed by the Parties. The SPAC Board shall not change, withdraw, withhold, qualify or modify its recommendation to the SPAC Shareholders that they vote in favor of the SPAC Shareholder Approval Matters (a “Modification in Recommendation”).
(e) SPAC shall comply with all applicable Laws, any applicable rules and regulations of Nasdaq, the SPAC Memorandum and Articles and this Agreement in the preparation, filing and distribution of the Registration Statement, any solicitation of proxies thereunder, the setting of the record date for, and the calling and holding of, the Extraordinary General Meeting and the Redemption.
8.12 Public Announcements.
(a) The Parties agree that during the Interim Period, no public release, filing or announcement concerning this Agreement or the Ancillary Documents or the Transactions contemplated hereby or thereby shall be issued by any Party or any of their Affiliates without the prior written consent (not be unreasonably withheld, conditioned or delayed) of SPAC, Pubco and the Seller, except as such release or announcement may be required by applicable Law or the rules or regulations of any securities exchange, in which case the applicable Party shall use reasonable efforts to allow the other Parties reasonable time to comment on, and arrange for any required filing with respect to, such release or announcement in advance of such issuance; provided that nothing shall prevent the Parties from issuing any press releases or making any public announcements about the Transactions containing information that has already been made public by the Parties.
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(b) The Parties shall mutually agree upon and, as promptly as practicable after the execution of this Agreement (but in any event within four (4) Business Days thereafter), issue a press release announcing the execution of this Agreement (the “Signing Press Release”). Promptly after the issuance of the Signing Press Release, SPAC shall file a Current Report on Form 8-K (the “Signing Filing”) with the Signing Press Release and a description of this Agreement as required by Federal Securities Laws, which the Seller shall review, comment upon and approve (which approval shall not be unreasonably withheld, conditioned or delayed) prior to filing (with the Seller reviewing, commenting upon and approving such Signing Filing in any event no later than the third (3rd) Business Day after the execution of this Agreement); provided that SPAC provides the Seller with a reasonable period of time to complete such review, comment and approval prior thereto. The Parties shall mutually agree upon and, as promptly as practicable after the Closing (but in any event within four (4) Business Days thereafter), issue a press release announcing the consummation of the Transactions (the “Closing Press Release”). Promptly after the issuance of the Closing Press Release, Pubco shall file a Current Report on Form 8-K (the “Closing Filing”) with the Closing Press Release and a description of the Closing as required by Federal Securities Laws which Sponsor and the Seller shall review, comment upon and approve (which approval shall not be unreasonably withheld, conditioned or delayed) prior to filing. In connection with the preparation of the Signing Press Release, the Signing Filing, the Closing Filing, the Closing Press Release, or any other report, statement, filing notice or application made by or on behalf of a Party to any Governmental Authority or other third party in connection with the Transactions contemplated hereby, each Party shall, upon request by any other Party, furnish the Parties with all information concerning themselves, their respective directors, officers and equity holders, and such other matters as may be reasonably necessary or advisable in connection with the Transactions contemplated hereby, or any other report, statement, filing, notice or application made by or on behalf of a Party to any third party and/ or any Governmental Authority in connection with the Transactions contemplated hereby. Furthermore, nothing contained in this Section 8.12 shall prevent SPAC, Pubco, the Company or the Seller from furnishing customary or other reasonable information concerning the Transactions to their investors and prospective investors that is substantively consistent with public statements previously consented to by the other Parties in accordance with this Section 8.12.
8.13 Confidential Information.
(a) The Parties (other than SPAC) hereby agree that during the Interim Period and, in the event that this Agreement is terminated in accordance with Article X, for a period of two (2) years after such termination, they shall, and shall cause their respective Representatives to: (i) treat and hold in strict confidence any SPAC Confidential Information, and will not use for any purpose (except in connection with the consummation of the Transactions contemplated by this Agreement or the Ancillary Documents, performing their obligations hereunder or thereunder or enforcing their rights hereunder or thereunder), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise make available to any third party any of the SPAC Confidential Information without SPAC’s prior written consent; and (ii) in the event that any Party (other than SPAC) or any of its Representatives, during the Interim Period or, in the event that this Agreement is terminated in accordance with Article X, for a period of two (2) years after such termination, becomes legally compelled to disclose any SPAC Confidential Information, (A) provide SPAC to the extent legally permitted with prompt written notice of such requirement so that SPAC or an Affiliate thereof may seek, at SPAC’s cost, a protective Order or other remedy or waive compliance with this Section 8.13(a), and (B) in the event that such protective Order or other remedy is not obtained, or SPAC waives compliance with this Section 8.13(a), furnish only that portion of such SPAC Confidential Information which is legally required to be provided as advised by outside counsel and to exercise its reasonable efforts to obtain assurances that confidential treatment will be accorded to such SPAC Confidential Information. In the event that this Agreement is terminated and the Transactions contemplated hereby are not consummated, the Company, Pubco, the Pubco Subsidiaries and the Seller shall, and shall cause their respective Representatives to, promptly deliver to SPAC or destroy (at the Company’s election) any and all copies (in whatever form or medium) of SPAC Confidential Information and destroy all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based thereon; provided, however, that the Company, Pubco, the Pubco Subsidiaries, the Seller and their respective Representatives shall be entitled to keep any records required by applicable Law or bona fide record retention policies; and provided, further, that any SPAC Confidential Information that is not returned or destroyed shall remain subject to the confidentiality obligations set forth in this Agreement. Notwithstanding the foregoing, Pubco and its Representatives shall be permitted to disclose any and all SPAC Confidential Information to the extent required by the Federal Securities Laws.
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(b) SPAC hereby agrees that during the Interim Period and, in the event that this Agreement is terminated in accordance with Article X, for a period of two (2) years after such termination, it shall, and shall cause its Representatives to: (i) treat and hold in strict confidence any Company Confidential Information, and will not use for any purpose (except in connection with the consummation of the Transactions contemplated by this Agreement or the Ancillary Documents, performing its obligations hereunder or thereunder or enforcing its rights hereunder or thereunder), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise make available to any third party any of the Company Confidential Information without the Seller’ prior written consent; and (ii) in the event that SPAC or any of its Representatives, during the Interim Period or, in the event that this Agreement is terminated in accordance with Article X, for a period of two (2) years after such termination, becomes legally compelled to disclose any Company Confidential Information, (A) provide the Seller to the extent legally permitted with prompt written notice of such requirement so that the Seller may seek, at the their sole expense, a protective Order or other remedy or waive compliance with this Section 8.13(b) and (B) in the event that such protective Order or other remedy is not obtained, or the Seller waive compliance with this Section 8.13(b), furnish only that portion of such Company Confidential Information which is legally required to be provided as advised by outside counsel and to exercise its reasonable efforts to obtain assurances that confidential treatment will be accorded to such Company Confidential Information. In the event that this Agreement is terminated and the Transactions contemplated hereby are not consummated, SPAC shall, and shall cause its Representatives to, promptly deliver to the Seller or destroy (at SPAC’s election) any and all copies (in whatever form or medium) of Company Confidential Information and destroy all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based thereon; provided, however, that SPAC and its Representatives shall be entitled to keep any records required by applicable Law or bona fide record retention policies; and provided, further, that any Company Confidential Information that is not returned or destroyed shall remain subject to the confidentiality obligations set forth in this Agreement. Notwithstanding the foregoing, SPAC and its Representatives shall be permitted to disclose any and all Company Confidential Information to the extent required by the Federal Securities Laws.
8.14 Post-Closing Pubco Board of Directors and Officers.
(a) The Parties shall take all necessary action so that effective as of the Closing, (i) Pubco’s board of directors (the “Post-Closing Pubco Board”) will consist of five (5) to eight (8) persons who are designated, prior to the Closing, by the Seller, at least two (2) of whom shall be required to qualify as an independent director under Nasdaq rules, and (ii) the persons listed in Schedule 8.14(a) of the Company Disclosure Schedules under the heading “Officers” and such other persons as are designated by the Seller (the “Post-Closing Pubco Officers”), are elected or appointed, as applicable, to such positions of officers of Pubco as mutually agreed, to serve in such positions, in each case until such successors are duly appointed and qualified in accordance with the Pubco A&R Organizational Documents and applicable Law.
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(b) At the Closing, Pubco will provide each member of the Post-Closing Pubco Board and each Post-Closing Pubco Officer with a customary indemnification agreement.
8.15 Indemnification of Directors and Officers; Tail Insurance.
(a) The Parties agree that all rights to exculpation, indemnification and advancement of expenses existing in favor of the current or former directors and officers of SPAC, the Company, Pubco or the Pubco Subsidiaries (the “D&O Indemnified Persons”) as provided in their respective Organizational Documents or under any indemnification, employment or other similar agreements between any D&O Indemnified Person and SPAC, any Pubco Subsidiary, the Company or Pubco, in each case as in effect on the date of this Agreement, shall survive the Closing and continue in full force and effect in accordance with their respective terms to the extent permitted by applicable Law. For a period of six (6) years after the Company Merger Effective Time, Pubco shall cause the Organizational Documents of Pubco, the Company Surviving Subsidiary and the SPAC Surviving Subsidiary to contain provisions no less favorable with respect to exculpation and indemnification of and advancement of expenses to D&O Indemnified Persons than are set forth as of the date of this Agreement in the Organizational Documents of SPAC, the Company, Pubco, and the Pubco Subsidiaries, to the extent permitted by applicable Law. In addition, from and after the Company Merger Effective Time, Pubco shall, to the fullest extent permitted by applicable Law, indemnify and hold harmless, and provide advancement of expenses to, each of the D&O Indemnified Persons against any costs, expenses (including attorneys’ fees), judgments, fines, losses, claims, damages or Liabilities incurred in connection with any Action, whether civil, criminal, administrative or investigative, arising out of or pertaining to any action or omission in such D&O Indemnified Person’s capacity as a director or officer of SPAC, the Company, Pubco or any Pubco Subsidiary, occurring or alleged to have occurred at or prior to the Company Merger Effective Time, whether asserted or claimed prior to, at or after the Company Merger Effective Time. The provisions of this Section 8.15(a) shall survive the Closing indefinitely and are intended to be for the benefit of, and shall be enforceable by, each of the D&O Indemnified Persons and their respective heirs and representatives. The provisions of this Section 8.15(a) shall be binding, jointly and severally, on Pubco and all its successors and assigns. In the event that Pubco or any of its successors or assigns consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, Pubco shall ensure that proper provision shall be made so that the successors and assigns of Pubco shall succeed to the obligations set forth in this Section 8.15(a).
(b) Prior to the SPAC Merger Effective Time, SPAC shall obtain and Pubco shall fully pay the premium for a “tail” insurance policy under SPAC’s existing insurance policy for the benefit of SPAC’s directors and officers that provides coverage for up to a six (6) year period from and after the SPAC Merger Effective Time for events occurring prior to the SPAC Merger Effective Time (the “D&O Tail Insurance”), on terms substantially equivalent to and in any event not less favorable in the aggregate than SPAC’s existing coverage (or, if substantially equivalent insurance coverage is unavailable, the best available coverage), except that in no event shall Pubco be required to pay an annual premium for such insurance in excess of three hundred percent (300%) of the aggregate annual premium currently payable by SPAC with respect to such current policy; provided that, if the annual premium of such insurance coverage exceeds such amount, SPAC shall be obligated to obtain a “tail” insurance policy with the greatest coverage available for a cost not exceeding such amount from insurance carriers with the same or better credit rating as SPAC’s current insurance provider. Pubco and its Subsidiaries shall, for a period of six (6) years after the Company Merger Effective Time, maintain the D&O Tail Insurance in effect and shall continue to honor the obligations thereunder and timely pay or cause to be paid all premiums with respect to the D&O Tail Insurance after the Closing.
8.16 Use of Proceeds.
(a) Upon satisfaction or waiver of the conditions set forth in Article IX and provision of notice thereof to the Trustee (which notice SPAC shall provide to the Trustee in accordance with the terms of the Trust Agreement), in accordance with and pursuant to the Trust Agreement, at the Closing, SPAC shall (i) cause any documents, opinions and notices required to be delivered to the Trustee pursuant to the Trust Agreement to be so delivered and (ii) cause the Trustee to, and the Trustee shall thereupon be obligated to, (x) pay as and when due all amounts payable to former SPAC Shareholders pursuant to the Redemption and (y) pay all remaining amounts, less the fees and costs incurred by the Trustee in accordance with the Trust Agreement, then available in the Trust Account in accordance with Section 8.16(b).
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(b) The Parties agree that, at the Closing, upon satisfaction or waiver of the conditions set forth in Article IX, the funds in the Trust Account (after taking into account payments for the Redemption) and the net cash proceeds of any Additional Permitted Financing shall be used to pay or reimburse (i) the Expenses pursuant to and in accordance with Section 12.5 and (ii) any premiums for the D&O Tail Insurance. Any remaining cash in the Trust Account and remaining net cash proceeds of any Additional Permitted Financing shall be disbursed to the Company or Pubco and used for working capital and general corporate purposes.
8.17 Dragonfly Contribution. During the Interim Period, the Company and the Seller shall use their reasonable best efforts to complete the Dragonfly Contribution immediately prior to the Closing, including exercising their respective rights to specifically enforce the Contribution Agreement. The Company shall not amend or waive any of its rights under the Contribution Agreement without the prior written consent of SPAC.
8.18 Delisting and Deregistration. The Parties shall take all actions necessary or reasonably requested by another Party to cause the SPAC Units, SPAC Class A Ordinary Shares and SPAC Rights to be delisted from Nasdaq (or be succeeded by the shares of Pubco Stock) as of the Closing Date and to terminate the SPAC’s registration with the SEC pursuant to Sections 12(b), 12(g) and 15(d) of the Exchange Act (or be succeeded by Pubco) as soon as possible following the Closing Date.
8.19 Pubco A&R Organizational Documents. At or prior to the Closing, Pubco shall amend and restate the Pubco Organizational Documents (the “Pubco A&R Organizational Documents”) to incorporate the terms set forth in Exhibit E and otherwise on terms that are satisfactory to the Seller and SPAC, each acting reasonably.
8.20 Amendment and Restatement of Founder Registration Rights Agreement. SPAC, Pubco and the Seller shall amend and restate the Founder Registration Rights Agreement, effective as of the Closing, substantially in the form of the Amended and Restated Registration Rights Agreement.
8.21 Investments. SPAC, Pubco and the Company shall use reasonable best efforts to take all actions and do all things necessary, proper or advisable to consummate the transactions contemplated by the Subscription Agreements on the terms and conditions described therein, including maintaining in effect the Subscription Agreements, and exercising its right to specifically enforce the Subscription Agreements pursuant to the terms thereof.
8.22 Additional Permitted Financings.
(a) SPAC, the Company and Pubco shall be permitted to negotiate and enter into Additional Permitted Financings. Notwithstanding the foregoing, it is hereby understood and agreed that the decision to negotiate any Additional Permitted Financing from any potential alternative sources of financing and the terms of any such Additional Permitted Financing and the instruments governing such Additional Permitted Financings shall be subject to the prior written consent of each of SPAC, Pubco and the Company (which consent may be withheld in the sole and absolute discretion of the party asked to provide consent), and none of the foregoing actions shall be taken, and no Additional Permitted Financings shall be entered into, without such prior written consent.
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(b) To the extent that any Additional Permitted Financings shall have been expressly consented to by SPAC, Pubco and the Company and entered into in accordance with the terms of Section 8.22(a):
(i) as of the date of entering into such Additional Permitted Financings, the Parties that are party to such Additional Permitted Financings will deliver to the other Parties to this Agreement true, correct and complete copies of each of the fully executed instruments governing such Additional Permitted Financings; and
(ii) no Party shall enter into any side letters or Contracts related to the provision or funding, as applicable, of the purchases contemplated by the instruments governing such Additional Permitted Financings or the Transactions other than as expressly set forth in this Agreement, the instruments governing such Additional Permitted Financings or any other agreement entered into (or to be entered into) in connection with the Transactions with the prior written consent of SPAC, Pubco and the Company.
8.23 Pubco Incentive Plan. In the event that Pubco determines that it will implement a new equity incentive plan (the “Pubco Incentive Plan”), such Pubco Incentive Plan will be in a form reasonably acceptable to the Seller and SPAC.
Article IX
CLOSING CONDITIONS
9.1 Conditions to Each Party’s Obligations. The obligations of each Party to consummate the Transactions shall be subject to the satisfaction or written waiver (where permissible) by the Seller and SPAC of the following conditions:
(a) Required Shareholder Approval. The SPAC Shareholder Approval Matters that are submitted to the vote of the shareholders of SPAC at the Extraordinary General Meeting in accordance with the Proxy Statement shall have been approved by the requisite vote of the shareholders of SPAC at the Extraordinary General Meeting in accordance with the SPAC Memorandum and Articles, applicable Law and the Proxy Statement (the “Required Shareholder Approval”).
(b) No Law or Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) that is then in effect and which has the effect of making the transactions or agreements contemplated by this Agreement illegal or which otherwise prevents or prohibits consummation of the Transactions.
(c) Registration Statement. The Registration Statement shall have been declared effective by the SEC and shall remain effective as of the Closing.
(d) Exchange Listing. The shares of Pubco Class A Stock shall have been approved for clearing through DTC (subject to DTC’s customary eligibility criteria) and approved for listing on Nasdaq, the New York Stock Exchange or another national exchange reasonably acceptable to Pubco, SPAC and the Seller, subject only to notice of issuance.
9.2 Conditions to Obligations of the Company, Pubco, the Pubco Subsidiaries and the Seller. In addition to the conditions specified in Section 9.1, the obligations of the Company, Pubco, the Pubco Subsidiaries and the Seller to consummate the Transactions are subject to the satisfaction or written waiver by the Seller of the following conditions:
(a) Representations and Warranties.
(i) The SPAC Fundamental Representations (other than Section 4.5(a)) shall be true and correct (without giving effect to any qualifications or limitations as to materiality or Material Adverse Effect) in all material respects on and as of the date of this Agreement and on and as of the Closing Date as if made on the Closing Date, except for those SPAC Fundamental Representations that address matters only as of a particular date (which SPAC Fundamental Representations shall have been true and correct in all material respects as of such date).
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(ii) The representations and warranties of SPAC contained in Section 4.5(a) shall be true and correct in all but de minimis respects as of the Closing Date, except for those representations and warranties that address matters only as of a particular date (which representations and warranties shall have been true and correct in all but de minimis respects as of such date).
(iii) Each of the representations and warranties of SPAC contained in this Agreement (other than the SPAC Fundamental Representations) shall be true and correct on and as of the date of this Agreement and on and as of the Closing Date as if made on the Closing Date, except for (x) those representations and warranties that address matters only as of a particular date (which representations and warranties shall have been true and correct as of such date) and (y) any failures to be true and correct that (without giving effect to any qualifications or limitations as to materiality or Material Adverse Effect), individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect on, or with respect to, SPAC, taken as a whole.
(b) Agreements and Covenants. SPAC shall have performed in all material respects all of its obligations and complied in all material respects with all of its agreements and covenants under this Agreement to be performed or complied with by it on or prior to the Closing Date.
(c) No Material Adverse Effect. No Material Adverse Effect shall have occurred with respect to SPAC, taken as a whole, since the date of this Agreement which is continuing and uncured.
(d) Sponsor Support Agreement. Each of the covenants of the Sponsor required under the Sponsor Support Agreement to be performed as of or prior to the Closing shall have been performed in all material respects.
9.3 Conditions to Obligations of SPAC. In addition to the conditions specified in Section 9.1, the obligations of SPAC to consummate the Transactions are subject to the satisfaction or written waiver by SPAC of the following conditions:
(a) Representations and Warranties.
(i) The Company Fundamental Representations (other than Section 6.3(a)), Pubco and the Pubco Subsidiaries Fundamental Representations (other than Section 5.5(a)) and Seller Fundamental Representations shall be true and correct (without giving effect to any qualifications or limitations as to materiality or Material Adverse Effect) in all material respects on and as of the date of this Agreement and on and as of the Closing Date as if made on the Closing Date, except for those Company Fundamental Representations, Pubco and the Pubco Subsidiaries Fundamental Representations or Seller Fundamental Representations that address matters only as of a particular date (which representations and warranties shall have been true and correct in all material respects as of such date).
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(ii) The representations and warranties of the Company, Pubco and the Pubco Subsidiaries contained in Section 6.3(a) and Section 5.5(a) shall be true and correct in all but de minimis respects as of the Closing Date, except for those representations and warranties that address matters only as of a particular date (which representations and warranties shall have been true and correct in all but de minimis respects as of such date).
(iii) Each of the representations and warranties of the Company, Pubco, the Pubco Subsidiaries and Seller (other than the Company Fundamental Representations, Pubco and the Pubco Subsidiaries Fundamental Representations and Seller Fundamental Representations) shall be true and correct on and as of the date of this Agreement and on and as of the Closing Date as if made on the Closing Date, except for (a) those representations and warranties that address matters only as of a particular date (which representations and warranties shall have been true and correct as of such date) and (b) any failures to be true and correct that (without giving effect to any qualifications or limitations as to materiality or Material Adverse Effect), individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect on, or with respect to, the Company, Pubco or the Seller.
(b) Agreements and Covenants. Each of the Company, Pubco, the Pubco Subsidiaries and the Seller shall have performed in all material respects all of its obligations and complied in all material respects with all of its agreements and covenants under this Agreement to be performed or complied with by it on or prior to the Closing Date.
(c) Material Adverse Effect. No Material Adverse Effect shall have occurred with respect to the Company or Pubco since the date of this Agreement.
(d) Completion of the Dragonfly Contribution and the Foundation Transaction. The Dragonfly Contribution and the Foundation Transaction shall have been completed in accordance with the terms of the Contribution Agreement and the TSA.
9.4 Frustration of Conditions. Notwithstanding anything contained herein to the contrary, no Party may rely on the failure of any condition set forth in this Article IX to be satisfied if such failure was caused by the failure of such Party or its Affiliates (or with respect to the Company, the Seller, Pubco or the Pubco Subsidiaries) to comply with or perform any of its covenants or obligations set forth in this Agreement.
Article X
TERMINATION
10.1 Termination. This Agreement may be terminated and the Transactions contemplated hereby may be abandoned at any time prior to the Closing as follows:
(a) by mutual written consent of SPAC and the Seller;
(b) by written notice by SPAC or the Seller if any of the conditions to the Closing set forth in Article IX have not been satisfied or waived by the date that is one (1) year from the date of this Agreement (the “Outside Date”); provided, however, that the right to terminate this Agreement under this Section 10.1(b) shall not be available to a Party if the breach or violation by such Party or its Affiliates (or with respect to the Seller, the Company, Pubco or the Pubco Subsidiaries) of any representation, warranty, covenant or obligation under this Agreement was the primary cause of, or directly resulted in, the failure of the Closing to occur on or before the Outside Date;
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(c) by written notice by either SPAC or the Seller if a Governmental Authority of competent jurisdiction shall have issued an Order or taken any other action permanently restraining, enjoining or otherwise prohibiting the Transactions contemplated by this Agreement, and such Order or other action has become final and non-appealable; provided, however, that the right to terminate this Agreement pursuant to this Section 10.1(c) shall not be available to a Party if the failure by such Party or its Affiliates (or with respect to the Seller, the Company, Pubco or the Pubco Subsidiaries) to comply with any provision of this Agreement has been a substantial cause of, or substantially resulted in, such action by such Governmental Authority;
(d) by written notice by the Seller to SPAC, if (i) there has been a material breach by SPAC of any of its representations, warranties, covenants or agreements contained in this Agreement, or if any representation or warranty of SPAC shall have become materially untrue or materially inaccurate, in any case, which would result in a failure of a condition set forth in Section 9.2(a) or Section 9.2(b) to be satisfied (treating the Closing Date for such purposes as the date of this Agreement or, if later, the date of such breach), and (ii) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (A) twenty (20) days after written notice of such breach or inaccuracy is provided to SPAC by the Seller or (B) five (5) Business Days prior to the Outside Date; provided that the Seller shall not have the right to terminate this Agreement pursuant to this Section 10.1(d) if at such time the Company, Pubco, the Pubco Subsidiaries or the Seller is in material uncured breach of this Agreement;
(e) by written notice by the Seller to SPAC if there has been a Modification in Recommendation;
(f) by written notice by SPAC to the Seller, if (i) there has been a material breach by the Company, Pubco, the Pubco Subsidiaries or the Seller of any of their respective representations, warranties, covenants or agreements contained in this Agreement, or if any representation or warranty of such Parties shall have become materially untrue or materially inaccurate, in any case, which would result in a failure of a condition set forth in Section 9.3(a) or Section 9.3(b) to be satisfied (treating the Closing Date for such purposes as the date of this Agreement or, if later, the date of such breach), and (ii) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (A) twenty (20) days after written notice of such breach or inaccuracy is provided to the Seller by SPAC or (B) five (5) Business Days prior to the Outside Date; provided that SPAC shall not have the right to terminate this Agreement pursuant to this Section 10.1(f) if at such time SPAC is in material uncured breach of this Agreement; or
(g) without prejudice to the SPAC’s obligations under Section 8.11(d), by written notice by either SPAC or the Seller to the other if the Extraordinary General Meeting is held (including any adjournment or postponement thereof) and has concluded, SPAC Shareholders have duly voted, and the Required Shareholder Approval was not obtained.
10.2 Effect of Termination. This Agreement may only be terminated in the circumstances described in Section 10.1 and pursuant to a written notice delivered by the applicable Party to the other applicable Parties, which sets forth the basis for such termination, including the provision of Section 10.1 under which such termination is made. In the event of the valid termination of this Agreement pursuant to Section 10.1, this Agreement shall forthwith become void, and there shall be no Liability on the part of any Party or any of their respective Representatives, and all rights and obligations of each Party shall cease, except: (i) Sections 8.12, 8.13, 11.1, Article XII and this Section 10.2 shall survive the termination of this Agreement, and (ii) nothing herein shall relieve any Party from Liability for any willful breach of any representation, warranty, covenant or obligation under this Agreement or any Fraud Claim against such Party, in either case, prior to termination of this Agreement (in each case of clauses (i) and (ii) above, subject to Section 11.1). Without limiting the foregoing, and except as provided in Section 12.5 and this Section 10.2 (but subject to Section 11.1, and subject to the right to seek injunctions, specific performance or other equitable relief in accordance with Section 12.7), the Parties’ sole right prior to the Closing with respect to any breach of any representation, warranty, covenant or other agreement contained in this Agreement by another Party or with respect to the Transactions contemplated by this Agreement shall be the right, if applicable, to terminate this Agreement pursuant to Section 10.1.
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Article XI
WAIVERS AND RELEASES
11.1 Waiver of Claims Against Trust. The Company, Pubco, the Pubco Subsidiaries and the Seller hereby represents and warrants that it has read the IPO Prospectus and understands that SPAC has established the Trust Account containing the proceeds of the IPO and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of the holders of the SPAC Class A Ordinary Shares issued and sold as part of the SPAC Units in the IPO (the “Public Shareholders”) and that, except as otherwise described in the IPO Prospectus, SPAC may disburse monies from the Trust Account only: (a) to the Public Shareholders in the event they elect to redeem their SPAC Class A Ordinary Shares in connection with the consummation of its initial Business Combination or in connection with an amendment to the SPAC Memorandum and Articles to extend SPAC’s deadline to consummate a Business Combination or with respect to any other provision relating to shareholders’ rights or pre-Business Combination activity, (b) to the Public Shareholders if SPAC fails to consummate a Business Combination within twenty four (24) months after the closing of the IPO, subject to further extension by amendment to the SPAC Memorandum and Articles, (c) with respect to any interest earned on the amounts held in the Trust Account, as necessary to pay any income taxes, and (d) to SPAC after or concurrently with the consummation of a Business Combination. For and in consideration of SPAC entering into this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company, Pubco, the Pubco Subsidiaries and the Seller hereby agree on behalf of themselves and their Affiliates, notwithstanding anything to the contrary in this Agreement, that none of the Company, Pubco, the Pubco Subsidiaries, the Seller nor any of their respective Affiliates do now or shall at any time hereafter have any right, title, interest or claim of any kind in or to any monies in the Trust Account or distributions therefrom, or make any claim against the Trust Account (including any distributions therefrom), regardless of whether such claim arises as a result of, in connection with or relating in any way to, this Agreement or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (collectively, the “Released Claims”). The Company, Pubco, the Pubco Subsidiaries and the Seller on behalf of themselves and their respective Affiliates hereby irrevocably waive any Released Claims that any such Party or any of its Affiliates may have against the Trust Account (including any distributions therefrom) now or in the future as a result of, or arising out of, any negotiations, contracts or agreements hereunder and will not seek recourse against the Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of this Agreement or any other agreement with SPAC or its Affiliates). The Company, Pubco, the Pubco Subsidiaries and the Seller each agrees and acknowledges that such irrevocable waiver is material to this Agreement and specifically relied upon by SPAC to induce SPAC to enter in this Agreement, and the Company, Pubco, the Pubco Subsidiaries and the Seller each further intends and understands such waiver to be valid, binding and enforceable against such Party and each of its Affiliates under applicable Law. To the extent the Company, Pubco, the Pubco Subsidiaries, the Seller or any of their respective Affiliates commences any action or proceeding based upon, in connection with, relating to or arising out of any matter relating to this Agreement or the Transactions, which proceeding seeks, in whole or in part, monetary relief against the Trust Account, each such Party hereby acknowledge and agree that such Party’s and its Affiliates’ sole remedy with respect to monetary relief shall be against funds held outside of the Trust Account and that such claim shall not permit such Party or any of its Affiliates (or any Person claiming on any of their behalves or in lieu of them) to have any claim against the Trust Account (including any distributions therefrom) or any amounts contained therein. Nothing in this Section 11.1 shall amend, limit, alter, change, supersede or otherwise modify the right of the Company, Pubco, the Pubco Subsidiaries and the Seller to (a) bring any action or actions for specific performance, injunctive and/or other equitable relief or (b) bring or seek a claim for damages against SPAC, or any of its successors or assigns, for any breach of this Agreement (but such claim shall not be against the Trust Account or any funds distributed from the Trust Account). This Section 11.1 shall survive termination of this Agreement for any reason.
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11.2 Release and Covenant Not to Sue. Effective as of the Closing, to the fullest extent permitted by applicable Law, the Seller, on behalf of itself and its Affiliates that owns any share or other equity interest in or of the Seller (the “Releasing Persons”), hereby releases and discharges the Company, SPAC, Pubco and the Pubco Subsidiaries from and against any and all Actions, obligations, agreements, debts and Liabilities whatsoever, whether known or unknown, both at law and in equity, which such Releasing Person now has, has ever had or may hereafter have against such Parties arising on or prior to the Closing Date or on account of or arising out of any matter occurring on or prior to the Closing Date, including any rights to indemnification or reimbursement from the Company, whether pursuant to its Organizational Documents, Contract or otherwise, and whether or not relating to claims pending on, or asserted after, the Closing Date. From and after the Closing, each Releasing Person hereby irrevocably covenants to refrain from, directly or indirectly, asserting any Action, or commencing or causing to be commenced, any Action of any kind against any of the Parties or their respective Affiliates, based upon any matter purported to be released hereby. Notwithstanding anything herein to the contrary, the releases and restrictions set forth herein shall not apply to any claims a Releasing Person may have against any Party pursuant to this Agreement or any Ancillary Document.
Article XII
MISCELLANEOUS
12.1 Survival. Except as otherwise contemplated by Section 10.2, (a) the representations and warranties of the Parties contained in this Agreement (other than those representations and warranties set forth in Sections 4.19, 5.11, 6.15 and 7.11 or in any certificate or instrument delivered by or on behalf of the Parties pursuant to this Agreement) shall not survive the Closing, and from and after the Closing, the Parties and their respective Representatives shall not have any further obligations, nor shall any claim be asserted or action be brought against any of the Parties or their respective Representatives with respect thereto and (b) the covenants and agreements made by the Parties in this Agreement or in any certificate or instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such covenants or agreements, shall not survive the Closing, except for those covenants and agreements contained herein and therein that by their terms apply or are to be performed in whole or in part after the Closing (which such covenants shall survive the Closing and continue until fully performed in accordance with their terms), including, for the avoidance of doubt, Section 2.8(a), Section 2.8(c), Section 2.15, Section 8.15, Section 11.1 and this Article XII.
12.2 Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (a) in person, (b) by facsimile, email or other electronic means, with affirmative confirmation of receipt (excluding out-of-office replies or other automatically generated responses), (c) one (1) Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (d) four (4) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable Party at the following addresses (or at such other address for a Party as shall be specified by like notice):
If to SPAC, at or prior to the Closing, to:
Mountain Lake Acquisition Corp.
930 Tahoe Blvd STE 802 PMB 45
Incline Village, NV 89451
Attn: Paul Grinberg, Chief Executive Officer
and Chairman
Email: [***]
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with a copy (which will not constitute notice) to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105, USA
| Attn: | Stuart Neuhauser, Esq. | |
| Lloyd N. Steele, Esq. | ||
| Email: | [***] |
If to the Seller, Pubco, the Company or the Pubco Subsidiaries at, prior to or after the Closing or to SPAC after the Closing, to:
Avalanche Treasury Corporation
413 W 14th Street
Floor 2, PMB 4633
New York, NY 10014
| Attn: | Gerald Batholomew Smith, President | |
| Email: | [***] |
with a copy (which will not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom
(UK) LLP
22 Bishopsgate,
EC2N 4BQ London
| Attn: | Lorenzo Corte; Maria Protopapa; and Georgian Dimopoulos | |
| Email: | [***] |
12.3 Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Other than with respect to the Mergers, this Agreement shall not be assigned by any Party by operation of Law or otherwise without the prior written consent of SPAC (in the case of Pubco, the Company, the Pubco Subsidiaries or the Seller) or the Seller (in the case of SPAC), and any assignment without such consent shall be null and void; provided that no such assignment shall relieve the assigning Party of its obligations hereunder.
12.4 Third Parties. Nothing contained in this Agreement or in any Ancillary Document shall create any rights in, or be deemed to have been executed for the benefit of, any Person that is not a Party or party thereto or a successor or permitted assign of such a Party; provided, however, that (a) in the event that the Closing occurs, the D&O Indemnified Persons are intended third-party beneficiaries of Section 8.15(a) and (b) the past, present or future directors, officers, agents, employees, equityholders or other Representatives, Affiliates, successors or assignees of any Party, are intended third-party beneficiaries of, and may enforce, Section 12.1 and Section 12.14.
12.5 Fees and Expenses.
(a) Subject to Section 11.1, all Expenses incurred in connection with this Agreement and the Transactions contemplated hereby shall be paid by the Party incurring such Expenses; provided that, if the Closing shall occur, Pubco shall reimburse or pay or cause to be reimbursed or paid, at or promptly following Closing, by wire transfer of immediately available funds, all Expenses. For the avoidance of doubt, any payments to be made (or to cause to be made) by Pubco pursuant to this Section 12.5 shall be paid upon consummation of the Transactions and release of proceeds from the Trust Account. If Pubco does not have sufficient cash to pay all Expenses, Pubco will cause the Company to sell Avax to generate cash to pay the Expenses.
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(b) Notwithstanding the terms of Section 12.5(a), regardless of whether the Closing occurs, Pubco shall bear any and all fees, costs and expenses paid or payable by any Party or any of its Affiliates as a result of or in connection with or arising from (i) filing the Registration Statement with the SEC, (ii) submitting to Nasdaq a listing application for the shares of Pubco Class A Stock (including any filing fees arising therefrom), and (iii) any filings required under Section 8.9 (including any filing fees payable to any Governmental Authority in connection therewith).
12.6 Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) Subject to Section 12.6(b), this Agreement and all claims or causes of action based upon, arising out of, or related to this Agreement or the Transactions shall be governed by, construed and enforced in accordance with the Laws of the State of Delaware, without regard to the conflict of Laws principles or rules thereof to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.
(b) Any Action based upon, arising out of or related to this Agreement or the Transactions must be brought in the Court of Chancery of the State of Delaware (or, to the extent such court does not have subject matter jurisdiction, the Superior Court of the State of Delaware), or, if it has or can acquire jurisdiction, in the United States District Court for the District of Delaware, and each Party irrevocably (i) submits to the exclusive jurisdiction of each such court in any such Action, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, (iii) agrees that all claims in respect of the Action shall be heard and determined only in any such court, and (iv) agrees not to bring any Action arising out of or relating to this Agreement or the Transactions in any other court. Nothing herein contained shall be deemed to affect the right of any Party to serve process in any manner permitted by Law or to commence Actions or otherwise proceed against any other Party in any other jurisdiction, in each case, to enforce judgments obtained in any Action brought pursuant to this Section 12.6.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
12.7 Specific Performance. Each Party acknowledges that the rights of each Party to consummate the Transactions contemplated hereby are unique, recognizes and affirms that in the event of a breach of this Agreement by any Party, money damages would be inadequate and the non-breaching Parties would not have an adequate remedy at law, and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by an applicable Party in accordance with their specific terms or were otherwise breached. Accordingly, each Party shall be entitled to seek an injunction or restraining order to prevent breaches of this Agreement and to seek to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or to prove that money damages would be inadequate, this being in addition to any other right or remedy to which such Party may be entitled under this Agreement, at law or in equity.
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12.8 Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable by any court of competent jurisdiction, such provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
12.9 Amendment. Subject to the provisions of applicable Law, this Agreement may be amended, supplemented or modified only by execution of a written instrument signed by each of SPAC, the Pubco Subsidiaries, Pubco, the Company and the Seller.
12.10 Waiver. Each Party may in its sole discretion (a) extend the time for the performance of any obligation or other act of any other non-Affiliated Party, (b) waive any inaccuracy in the representations and warranties by any other non-Affiliated Party contained herein or in any document delivered pursuant hereto and (c) waive compliance by such other non-Affiliated Party with any covenant or condition contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party or Parties to be bound thereby. Notwithstanding the foregoing, no failure or delay by a Party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder. For purposes of this Section 12.10, Pubco, the Company and the Seller shall be deemed to be Affiliated Parties.
12.11 Entire Agreement. This Agreement and the documents or instruments referred to herein, including any Exhibits, Annexes and Schedules, which Exhibits, Annexes and Schedules are incorporated herein by reference, together with the Ancillary Documents, embody the entire agreement and understanding of the Parties in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein or the documents or instruments referred to herein, which collectively supersede all prior agreements and the understandings among the Parties with respect to the subject matter contained herein.
12.12 Counterparts. This Agreement may be executed and delivered (including by facsimile, email or other electronic means or transmission) in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Copies of executed counterparts of this Agreement transmitted by electronic transmission (including by email or in .pdf format) or facsimile as well as electronically or digitally executed counterparts (such as DocuSign) shall have the same legal effect as original signatures and shall be considered original executed counterparts of this Agreement.
12.13 Legal Representation.
(a) The Parties agree that, notwithstanding the fact that Ellenoff Grossman & Schole, LLP (“EGS”) may have, prior to Closing, jointly represented SPAC and Sponsor in connection with this Agreement, the Ancillary Documents and the Transactions, and has also represented SPAC and its Affiliates in connection with matters other than the Transactions that are the subject of this Agreement, EGS will be permitted in the future, after Closing, to represent the Sponsor or its Affiliates in connection with matters in which such Persons are adverse to Pubco, SPAC or any of their respective Affiliates, including any disputes arising out of, or related to, this Agreement. The Company, Pubco, the Pubco Subsidiaries and the Seller, who are or have the right to be represented by independent counsel in connection with the Transactions contemplated by this Agreement, hereby agree, in advance, to waive (and to cause their Affiliates to waive) any actual or potential conflict of interest that may hereafter arise in connection with EGS’ future representation of one or more of the Sponsor or its Affiliates in which the interests of such Person are adverse to the interests of Pubco, the Pubco Subsidiaries, SPAC, the Company, the Seller or any of their respective Affiliates, including any matters that arise out of this Agreement or that are substantially related to this Agreement or to any prior representation by EGS of Sponsor, SPAC or any of their respective Affiliates. The Parties acknowledge and agree that, for the purposes of the attorney-client privilege, Sponsor shall be deemed the client of EGS with respect to the negotiation, execution and performance of this Agreement and the Ancillary Documents. All such communications shall remain privileged after the Closing and the privilege and the expectation of client confidence relating thereto shall belong solely to Sponsor, shall be controlled by Sponsor and shall not pass to or be claimed by Pubco or SPAC; provided that, nothing contained herein shall be deemed to be a waiver by Pubco, SPAC or any of their respective Affiliates of any applicable privileges or protections that can or may be asserted to prevent disclosure of any such communications to any third party.
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(b) The Parties agree that, notwithstanding the fact that Skadden, Arps, Slate, Meagher & Flom (UK) LLP (“Skadden”) may have, prior to Closing, jointly represented Pubco, the Pubco Subsidiaries, the Company and the Seller in connection with this Agreement, the Ancillary Documents and the Transactions, and may have also represented Pubco, the Pubco Subsidiaries, the Company, the Seller and/or their respective Affiliates in connection with matters other than the Transactions that are the subject of this Agreement, Skadden will be permitted in the future, after Closing, to represent Pubco, the Pubco Subsidiaries, the Company and the Seller or their respective Affiliates in connection with matters in which such Persons are adverse to any other party to the Agreement, or any of their respective Affiliates, including any disputes arising out of, or related to, this Agreement. The Parties acknowledge and agree that, for the purposes of the attorney-client privilege, the Seller, Pubco, the Company and the Pubco Subsidiaries shall be deemed the clients of Skadden with respect to the negotiation, execution and performance of this Agreement and the Ancillary Documents. All such communications shall remain privileged after the Closing and the privilege and the expectation of client confidence relating thereto shall belong to each such respective party, shall be controlled thereby and shall not pass to or be claimed by any other party; provided that, nothing contained herein shall be deemed to be a waiver by any party or any of their respective Affiliates of any applicable privileges or protections that can or may be asserted to prevent disclosure of any such communications to any third party.
12.14 No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, the Parties acknowledge and agree that, no recourse under this Agreement or under any Ancillary Documents shall be had against any Person that is not a Party to this Agreement or such Ancillary Document, including any past, present or future director, officer, agent, employee, equityholder or other Representative or any Affiliate or successor or assignee thereof that is not a Party (collectively, the “Non-Recourse Parties”), as such, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable Law, it being expressly agreed and acknowledged that no liability whatsoever shall attach to, be imposed on or otherwise be incurred by any Non-Recourse Party, as such, for any obligation or liability of a Party under this Agreement or Person party to such Ancillary Document under any Ancillary Document for any claim based on, in respect of or by reason of such obligations or liabilities or their creation.
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IN WITNESS WHEREOF, each Party has caused this Business Combination Agreement to be signed and delivered by its respective duly authorized signatory as of the date first written above.
| SPAC: | ||
| MOUNTAIN LAKE ACQUISITION CORP. | ||
| By: | /s/ Paul Grinberg | |
| Name: | Paul Grinberg | |
| Title: | Chief Executive Officer and Chairman of the Board | |
| Pubco: | ||
| AVALANCHE TREASURY CORPORATION | ||
| By: | /s/ Laine Mihalchick Moljo | |
| Name: | Laine Mihalchick Moljo | |
| Title: | Secretary | |
| SPAC Merger Sub: | ||
| AVALANCHE SPAC MERGER SUB LLC | ||
| By: | /s/ Gerald Bartholomew Smith | |
| Name: | Gerald Bartholomew Smith | |
| Title: | President | |
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| Company Merger Sub: | ||
| AVALANCHE COMPANY MERGER SUB LLC | ||
| By: | /s/ Gerald Bartholomew Smith | |
| Name: | Gerald Bartholomew Smith | |
| Title: | President | |
| The Company: | ||
| AVALANCHE TREASURY COMPANY LLC | ||
| By: | /s/ Gerald Bartholomew Smith | |
| Name: | Gerald Bartholomew Smith | |
| Title: | Member and Authorized Signatory | |
| The Seller: | ||
| DRAGONFLY DIGITAL MANAGEMENT, LLC | ||
| By: | /s/ Haseeb Ahmad Qureshi | |
| Name: | Haseeb Ahmad Qureshi | |
| Title: | ||
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Exhibit 10.1
Certain personally identifiable
information has been omitted from this exhibit pursuant to
item 601(a)(6) of Regulation S-K. [***] indicates that information has been redacted.
SPONSOR SUPPORT AGREEMENT
This SPONSOR SUPPORT AGREEMENT (this “Agreement”) is made and entered into as of October 1, 2025, by and among Mountain Lake Acquisition Sponsor LLC, a Delaware limited liability company (“Sponsor”), Mountain Lake Acquisition Corp., a Cayman Islands exempted company (“SPAC”) and Avalanche Treasury Corporation, a Delaware corporation (“Pubco”). Capitalized terms used but not defined herein have the meanings assigned to them in the Business Combination Agreement by and among SPAC, Pubco, Avalanche Treasury Company LLC, a Delaware limited liability company (the “Company”) and the other parties thereto, dated as of October 1, 2025 (as may be amended from time to time, the “Business Combination Agreement”).
WHEREAS, as of the date hereof, Sponsor owns 7,187,500 SPAC Class B Ordinary Shares (the “Founder Shares” and, together with the SPAC Ordinary Shares included in the Private Placement Units (as defined below) owned by Sponsor and any New Securities (as defined below) of which ownership of record or the power to vote is hereafter acquired by Sponsor prior to the termination of this Agreement, the “Sponsor Shares”) and 495,000 SPAC Private Units (the “Private Placement Units”);
WHEREAS, in connection with SPAC’s initial public offering (the “IPO”), SPAC, Sponsor and the then current officers and directors of SPAC entered into a letter agreement, dated as of December 12, 2024 (as amended, the “Insider Letter”), pursuant to which Sponsor agreed to certain voting requirements, transfer restrictions and waiver of redemption rights with respect to the SPAC Ordinary Shares and any SPAC Units, SPAC Rights or any securities convertible to, or exercisable, or exchangeable for, SPAC Ordinary Shares owned by it;
WHEREAS, Articles 56 through 63 of the SPAC Memorandum and Articles of Association provides, among other matters, that the SPAC Class B Ordinary Shares will automatically convert into SPAC Class A Ordinary Shares upon the consummation of an initial business combination, subject to adjustment if additional SPAC Class A Ordinary Shares or Equity-linked Securities (as defined in the SPAC Memorandum and Articles of Association) are issued or deemed issued in excess of the amounts sold in the IPO (the “Anti-Dilution Right”), excluding certain exempted issuances;
WHEREAS, concurrently with the execution and delivery of this Agreement, SPAC, Pubco, the Company and the other parties thereto are entering into the Business Combination Agreement, pursuant to which, subject to the terms and conditions thereof and in accordance with applicable laws, among other matters: (a) prior to consummation of the transactions contemplated by the Business Combination Agreement (the “Closing”), SPAC shall effectuate a domestication (the “Domestication”), pursuant to which SPAC shall transfer by way of continuation to and become a Delaware corporation (the “Domesticated SPAC”), all references herein to “SPAC” following the Domestication refer to the Domesticated SPAC, (b) at least two (2) hours after the Domestication, Avalanche SPAC Merger Sub LLC, a Delaware limited liability company will merge with and into SPAC, with SPAC continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “SPAC Merger”), and with SPAC shareholders receiving one share of Pubco Class A Stock for each SPAC Class A Ordinary Share held by such shareholder and with each holder of SPAC Rights receiving one share of Pubco Class A Stock in exchange for every ten (10) SPAC Rights held by such holder and (c) Avalanche Company Merger Sub LLC, a Delaware limited liability company will merge with and into the Company, with the Company continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “Company Merger” and, together with the SPAC Merger, the “Mergers” and, together with the other transactions contemplated by the Business Combination Agreement and the Ancillary Documents, the “Transactions”), and with Company Members receiving Pubco Stock (and, in the case of Seller, certain other consideration) for every Company Unit by such persons holding membership interests immediately prior to the Company Merger (collectively, the “Company Member”), and upon the consummation of the Mergers, Pubco will become a publicly traded company; and
WHEREAS, as a condition and inducement to Pubco’s willingness to enter into the Business Combination Agreement, Pubco has required that Sponsor enter into this Agreement.
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and subject to the conditions set forth herein, the parties hereto agree as follows:
1. Sponsor Voting Requirements. At any meeting of the SPAC Shareholders, however called, or at any adjournment or postponement thereof, or in any other circumstance in which the vote, consent or other approval of the SPAC Shareholders is sought, Sponsor shall (i) if a meeting is held, appear at each such meeting (in person or by proxy) or otherwise cause all of the Sponsor Shares to be counted as present thereat for purposes of calculating a quorum and (ii) vote (or cause to be voted), or execute and deliver a written consent (or cause a written consent to be executed and delivered) covering, all of the Sponsor Shares:
(a) in favor of each SPAC Shareholder Approval Matter;
(b) against any Acquisition Proposal or Alternative Transaction;
(c) against any merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by SPAC (other than the Transactions);
(d) against any change in the business of SPAC; and
(e) against any proposal, action or agreement involving SPAC that would or would reasonably be expected to (i) impede, frustrate, prevent or nullify any provision of this Agreement, the Business Combination Agreement or any Ancillary Document, (ii) result in a breach in any material respect of any covenant, representation, warranty or any other obligation or agreement of SPAC under the Business Combination Agreement or any Ancillary Document, (iii) result in any of the conditions in respect of obligations of SPAC or the Parties set forth in Article IX of the Business Combination Agreement not being fulfilled, or (iv) change in any manner the capitalization of, including the voting rights of any class of share capital of, SPAC (other than in connection with the SPAC Shareholder Approval Matters).
2. Enforcement of Insider Letter. During the Interim Period, for the benefit of Pubco, (a) Sponsor agrees that it shall fully comply with, and perform all of its obligations, covenants and agreements set forth in, the Insider Letter, including not redeeming any SPAC Ordinary Shares owned by it in connection with the Transactions and complying with the transfer restrictions with respect to the Founder Shares and Private Placement Units, (b) SPAC agrees to enforce the Insider Letter in accordance with its terms and (c) each of Sponsor and SPAC agree not to amend, modify or waive any provision of the Insider Letter without the prior written consent of Pubco (not to be unreasonably withheld, delayed or conditioned); provided, however, that notwithstanding the foregoing, Pubco acknowledges and agrees that, prior to the Closing, Pubco, SPAC, Sponsor and any other insider party thereto shall enter into an amendment to the Insider Letter to delete Section 7 of the Insider Letter effective as of the Closing Date.
3. New Shares. In the event that, during the Interim Period, (a) any SPAC Ordinary Shares or other equity securities of SPAC are issued to Sponsor in respect of the Founder Shares or the Private Placement Units pursuant to the Anti-Dilution Right or any share dividend, share split, recapitalization, reclassification, combination or exchange of SPAC Ordinary Shares owned by Sponsor or otherwise, then such SPAC Ordinary Shares or other equity securities acquired or purchased by Sponsor shall be subject to the terms of this Agreement to the same extent as if they constituted Founder Shares or Private Placement Units, as applicable, or (b) Sponsor (i) purchases or otherwise acquires beneficial ownership of any SPAC Ordinary Shares or other equity securities of SPAC, or (ii) acquires the right to vote any SPAC Ordinary Shares or other equity securities of SPAC (such SPAC Ordinary Shares or other equity securities of SPAC referred to in clauses (b)(i) and (ii), collectively the “New Securities”), then such New Securities acquired or purchased by Sponsor shall be subject to the terms set forth in Sections 1 and 2 to the same extent as if they constituted the Sponsor Shares.
4. Waiver of Anti-Dilution Protection. Subject to the consummation of the SPAC Merger, Sponsor waives (for itself and for its successors, heirs and assigns), to the fullest extent permitted by Law and the SPAC Memorandum and Articles of Association, all anti-dilution rights that would otherwise result in SPAC Class B Ordinary Shares held by Sponsor converting into shares of SPAC Class A Ordinary Shares on a greater than one-for-one basis in connection with the Transactions (including, for the avoidance of doubt, pursuant to Article 58 of the SPAC Memorandum and Articles of Association). The waiver specified in this Section 4 shall be applicable only in connection with the Transactions. If the Business Combination Agreement is terminated for any reason, the foregoing waiver shall be void and of no further force and effect.
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5. Waiver and Release of Claims. Sponsor covenants and agrees as follows:
(a) Subject to and conditioned upon the Closing, effective as of the Closing (and subject to the limitations set forth in paragraph (c) below), Sponsor, on behalf of itself and its Affiliates and its and their respective successors, assigns, representatives, administrators, executors and agents, and any other person or entity claiming by, through or under any of the foregoing (each a “Releasing Party” and, collectively, the “Releasing Parties” provided, for the avoidance of doubt, that SPAC shall not be deemed a Releasing Party hereunder), does hereby unconditionally and irrevocably release, waive and forever discharge SPAC, Pubco, the Company and each of its and their past and present directors, officers, employees, agents, predecessors, successors, assigns, and Subsidiaries, from any and all past or present claims, demands, damages, judgments, causes of action and liabilities of any nature whatsoever, whether or not known, suspected or claimed, arising directly or indirectly from any act, omission, event or transaction occurring (or any circumstances existing) at or prior to the Closing (each a “Claim” and, collectively, the “Claims”); provided, however, that the release, waiver and discharge by Sponsor’s Affiliates is limited to Claims that arise from the Transactions.
(b) Sponsor acknowledges that it may hereafter discover facts in addition to or different from those which it now knows or believes to be true with respect to the subject matter of this Agreement, and that it may hereafter come to have a different understanding of the Law that may apply to potential Claims which it is releasing hereunder, but it affirms that, except as is otherwise specifically provided herein, it is its intention to fully, finally and forever settle and release any and all Claims. In furtherance of this intention, Sponsor acknowledges that the releases contained herein shall be and remain in effect as full and complete general releases notwithstanding the discovery or existence of any such additional facts or different understandings of Law.
(c) Notwithstanding the foregoing provisions of this Section 5 or anything to the contrary set forth herein, the Releasing Parties do not release or discharge, and each Releasing Party expressly does not release or discharge, any Claims that arise under or are based upon the terms of (i) this Agreement, (ii) any Ancillary Document to which Sponsor is a party, (iii) any letter of transmittal to which Sponsor is a party, (iv) any other document, certificate or Contract executed or delivered in connection with the Business Combination Agreement to which Sponsor is a party, (v) the Amended and Restated Registration Rights Agreement, (vi) any rights a Releasing Party has to indemnification from SPAC or Pubco arising out of the Transactions, (vii) the Underwriting Agreement, dated December 12, 2024, by and between SPAC and BTIG, LLC, as representatives of the several underwriters, or (viii) the SPAC Memorandum and Articles or any indemnity agreement of any director or office of SPAC with SPAC with or for the benefit of a Releasing Party with respect to any Claims for indemnification, contribution, set-off, reimbursement or similar rights.
(d) Notwithstanding the foregoing provisions of this Section 5, nothing contained in this Agreement shall be construed as an admission by any party hereto of any liability of any kind to any other party hereto. Notwithstanding anything to the contrary contained herein, Sponsor (and each of its Affiliates other than SPAC) and SPAC shall be deemed not to be Affiliates of each other for purposes of this Section 5.
6. Forfeiture of Private Placement Units; Forfeiture of Founder Shares.
(a) Forfeiture of Private Placement Units. Immediately prior to the SPAC Merger Effective Time, the Sponsor shall deliver to Pubco for cancellation and for no consideration 495,000 Private Placement Units.
(b) Forfeiture of Founder Shares. Immediately prior to the SPAC Merger Effective Time, the Sponsor shall deliver to Pubco for cancellation 4,387,500 Founder Shares.
(c) Forfeiture of BTIG Deferred Underwriting Fees. Immediately prior to the SPAC Merger Effective Time, SPAC shall use its reasonable best efforts to cause BTIG, LLC to forfeit any deferred underwriting fees then outstanding in excess of $1,000,000.
(d) Forfeiture of BTIG Private Placement Units. Immediately prior to the SPAC Merger Effective Time, SPAC shall use its reasonable efforts to cause BTIG, LLC to deliver to Pubco for cancellation and for no consideration all its 310,000 Private Placement Units.
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7. Sponsor Earnout.
(a) Each Founder Shares issued and outstanding immediately prior to the SPAC Merger Effective Time, that has not been forfeited in accordance with Section 6 of this Agreement, shall automatically be converted into one Pubco Class A Stock, following which, all such Founder Shares shall cease to be outstanding and shall automatically be cancelled and shall cease to exist. Each certificate previously evidencing Founder Shares shall be exchanged for a certificate (if requested) representing the same number of shares of Pubco Class A Stock upon the surrender of such certificate in accordance with Section 2.12 of the Business Combination Agreement.
(b) The Sponsor hereby agrees that upon the Closing, 1,600,000 of the 2,800,000 shares of Pubco Class A Stock issued to the Sponsor pursuant to Section 7(a) of this Agreement and the Business Combination Agreement (the “Sponsor Earnout Shares”) shall be placed into the Sponsor Escrow Account (as hereinafter defined). The Sponsor hereby agrees that, at the Closing, it shall enter into an escrow agreement with Pubco, Seller and Continental Stock Transfer and Trust Company (or another escrow agent reasonably acceptable to the Sponsor and the Company), as escrow agent (the “Escrow Agent”), in form and substance to be mutually agreed by the parties thereto prior to the Closing (the “Sponsor Escrow Agreement”), and, upon and subject to the Closing the Sponsor shall deposit the Sponsor Earnout Shares into a segregated escrow account (the “Sponsor Escrow Account”) with the Escrow Agent to be held, along with any equity securities placed in the Escrow Account pursuant to Section 7(h) of this Agreement (the “Escrow Adjustment Shares”), in the Sponsor Escrow Account and disbursed in accordance with the terms of this Agreement and the Sponsor Escrow Agreement.
(c) Except as expressly permitted hereunder, the Sponsor shall not Transfer, directly or indirectly, the Sponsor Earnout Shares and the Escrow Adjustment Shares (if any) during the Earnout Period. Except as otherwise set forth in this Agreement, all of the Sponsor Earnout Shares and Escrow Adjustment Shares shall be retained in the Sponsor Escrow Account unless and until their release upon the achievement of a Triggering Event (as defined below) in accordance with Section 7(f) hereof.
(d) The Sponsor agrees that all of the Sponsor Earnout Shares, together with any Escrow Adjustment Shares, shall be subject to potential transfer to Pubco for no consideration (the “Sponsor Transfer”) at the end of the Earnout Period in the event that not all of the Triggering Events are achieved by Pubco pursuant to Section 7(f) hereof.
(e) If, at the end of the Earnout Period, less than all of the Sponsor Earnout Shares have been released to the Sponsor pursuant to one or more Release Events, the Sponsor and Seller will as promptly as practicable instruct the Escrow Agent to complete the Sponsor Transfer of the unreleased Sponsor Earnout Shares, together with any unreleased Escrow Adjustment Shares, and the Escrow Agent shall deliver such Sponsor Earnout Shares and Escrow Adjustment Shares to Pubco. Seller and the Sponsor shall give joint written instructions to the Escrow Agent to release the applicable Sponsor Earnout Shares, together with any related Escrow Adjustment Shares, to the Sponsor, promptly after the occurrence of a Release Event or a Change in Control.
(f) The Sponsor Earnout Shares shall vest, no longer be subject to the Sponsor Transfer and be released from the Sponsor Escrow Account to the Sponsor, upon the occurrence of the following Triggering Events (each, a “Release Event”):
(1) Upon the occurrence of Triggering Event I, 533,333 Sponsor Earnout Shares shall no longer be subject to the Sponsor Transfer and be released from the Sponsor Escrow Account to the Sponsor;
(2) Upon the occurrence of Triggering Event II, 533,333 Sponsor Earnout Shares shall no longer be subject to the Sponsor Transfer and be released from the Sponsor Escrow Account to the Sponsor; and
(3) Upon the occurrence of Triggering Event III, of 533,334 Sponsor Earnout Shares shall no longer be subject to the Sponsor Transfer and be released from the Sponsor Escrow Account to the Sponsor, in each case, within then (10) Business Days after the occurrence of the relevant Release Event.
(g) For the avoidance of doubt, each of Triggering Event I, Triggering Event II and Triggering Event III shall be capable of occurring only once, if at all; provided, further, that all Triggering Events may be achieved at the same time or on overlapping days.
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(h) The (1) Pubco Class A Stock price targets set forth in the definitions of Triggering Event I, Triggering Event II and Triggering Event III and this Section 7 and (2) number of Sponsor Earnout Shares to be placed in the Sponsor Escrow Account pursuant to this Section 7 shall, in each case, be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to the shares of Pubco Class A Stock occurring on or after the Closing.
(i) Notwithstanding the foregoing, in the event that during the Earnout Period, Pubco is subject to a Change in Control, then all of the Sponsor Earnout Shares, together with any related Escrow Adjustment Shares, then remaining in the Sponsor Escrow Account shall no longer be subject to the Sponsor Transfer and shall be released to Sponsor from the Sponsor Escrow Account.
8. Representations and Warranties of Sponsor. Except as set forth in the SEC Reports or in any other report filed by Sponsor with the SEC that are available on the SEC’s website through EDGAR, Sponsor represents and warrants to Pubco, as follows:
(a) Authorization. Sponsor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, has all requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby, and the execution, delivery and performance of this Agreement by Sponsor and the consummation by Sponsor of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of Sponsor and no other proceedings on the part of Sponsor or Sponsor’s equityholders are necessary to authorize the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby except as have been obtained prior to the date of this Agreement. This Agreement has been duly and validly executed and delivered by Sponsor, and assuming the due execution and delivery by Pubco and SPAC, constitutes the legal, valid and binding obligation of Sponsor, enforceable against Sponsor in accordance with its terms, subject to the Enforceability Exceptions.
(b) Consents and Approvals; No Violations.
(i) The execution, delivery and performance of this Agreement by Sponsor and the consummation by Sponsor of the transactions contemplated hereby do not and will not require any filing or registration with, notification to, or authorization, permit, license, declaration, Order, consent or approval of, or other action by or in respect of, any Governmental Authority or Nasdaq on the part of Sponsor.
(ii) The execution, delivery and performance by Sponsor of this Agreement and the consummation by Sponsor of the transactions contemplated by this Agreement do not and will not (A) conflict with or violate any provision of the Organizational Documents of Sponsor in any material respect, (B) conflict with or violate any Law applicable to Sponsor or by which any property or asset of Sponsor is bound, (C) require any material consent or notice, or result in any material violation or breach of, or materially conflict with, or constitute (with or without notice or lapse of time or both) a material default (or give rise to any right of purchase, termination, amendment, acceleration or cancellation) under, result in the loss of any material benefit under, or result in the triggering of any material payments pursuant to, any of the terms, conditions or provisions of any Contract to which Sponsor is a party or by which any of Sponsor’s properties or assets are bound or any Law applicable to Sponsor or Sponsor’s properties or assets, or (D) result in the creation of any Lien on any property or asset of Sponsor, except in the case of clauses (B) and (D) above as would not reasonably be expected, either individually or in the aggregate, to impair in any material respect the ability of Sponsor to timely perform its obligations hereunder or consummate the transactions contemplated hereby.
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(c) Ownership of Founder Shares and Private Placement Units. As of the date hereof, (i) Sponsor is the sole record and beneficial owner of the Founder Shares and the Private Placement Units, free and clear of all Liens (other than Liens arising under applicable securities Laws, this Agreement and the Insider Letter), (ii) Sponsor has the sole voting power with respect to the Founder Shares and the Private Placement Units, (iii) Sponsor has not entered into any voting agreement (other than this Agreement and the Insider Letter) with or granted any Person any proxy (revocable or irrevocable) with respect to the Founder Shares and the Private Placement Units, (iv) there is no limitation on Sponsor’s ability to sell or otherwise dispose of the Founder Shares and the Private Placement Units other than restrictions arising under applicable securities Laws, this Agreement and the Insider Letter, (v) the Founder Shares and the Private Placement Units are the only equity securities in SPAC owned of record by Sponsor and (vi) Sponsor does not hold or own any rights to acquire (directly or indirectly) any equity securities of SPAC or any equity securities convertible into, or which can be exchanged for, equity securities of SPAC, other than as set forth in this Agreement.
(d) Contracts with SPAC. Except for (i) the Contracts described in Section 5(c) or otherwise disclosed in the SPAC’s disclosure schedules to the Business Combination Agreement and (ii) any Contract filed as an exhibit to a form, report, schedule, statement or other document that is publicly filed with the SEC, none of Sponsor, any of the Affiliates of Sponsor nor, to the Knowledge of Sponsor, any Person in which Sponsor has a direct or indirect legal, contractual or beneficial ownership of five percent (5%) or greater, is a party to, or has any rights with respect to or arising from, any Contract with SPAC.
(e) Litigation. There is no Action pending, or, to the Knowledge of Sponsor, threatened Action against Sponsor, or, to the Knowledge of Sponsor, any of its directors, managers, officers or employees (in their capacity as such) or otherwise affecting Sponsor or its assets, including any condemnation or similar proceeding, nor is any Order outstanding against or involving Sponsor, whether at law or in equity, before or by any Governmental Authority, which would reasonably be expected to have a Material Adverse Effect on Sponsor. There is no unsatisfied judgment or open injunction binding upon Sponsor that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Sponsor. There is no Action that Sponsor has pending against any other Person. Sponsor is not subject to any Orders of any Governmental Authority, nor are any such Orders pending.
(f) Finders and Brokers. Except as set forth on Schedule 4.15 of the SPAC Disclosure Schedules, no broker, finder, investment banker or other Person is entitled to any brokerage, finder’s or other fee or commission from Sponsor, SPAC or Pubco, or any of their respective Affiliates, in connection with the Transactions based upon arrangements made by or on behalf of Sponsor or any of its Affiliates.
(g) Acknowledgment. Sponsor and SPAC understand and acknowledge that Pubco is entering into the Business Combination Agreement in reliance upon Sponsor and SPAC’s execution and delivery of this Agreement.
9. Further Assurances. Sponsor hereby agrees that it shall (a) execute and deliver, or cause to be executed and delivered, such Ancillary Documents as may be necessary to satisfy any condition to the Closing under the Business Combination Agreement, in substantially the form previously provided to Sponsor as of the date of this Agreement, (b) undertake commercially reasonable efforts to (i) execute and deliver, or cause to be executed and delivered, such additional or further consents, documents and other instruments and (ii) take, or cause to be taken, such actions, and do, or cause to be done, and assist and cooperate with the other parties in doing such things, in each case, as are reasonably necessary for the purpose of effectively carrying out the Transactions.
10. Other Covenants.
(a) Binding Effect of the Business Combination Agreement. Sponsor hereby agrees to be bound by and comply with Sections 8.6 (Exclusivity), 8.12 (Public Announcements) and 8.13 (Confidential Information) of the Business Combination Agreement (and any relevant definitions contained in any such Sections of the Business Combination Agreement) as if Sponsor was an original signatory to the Business Combination Agreement with respect to such provisions to the same extent as such provisions apply to SPAC.
(b) Disclosure. Sponsor hereby authorizes Pubco and SPAC to publish and disclose in any announcement or disclosure, in each case, required by the SEC or Nasdaq (including all documents and schedules filed with the SEC in connection with the foregoing, including the Registration Statement), Sponsor’s identity and ownership of the SPAC Ordinary Shares and the nature of Sponsor’s commitments and agreements under this Agreement, the Business Combination Agreement, the Ancillary Documents and any other agreements to the extent such disclosure is required by applicable securities Laws, the SEC or Nasdaq; provided that the content of any such disclosure shall require the prior written consent of Sponsor (not to be unreasonably withheld, delayed or conditioned).
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11. Waiver of Dissenters’ Rights. Sponsor hereby irrevocably waives, and agrees not to exercise or assert, any dissenters’ rights under Section 238 of the Cayman Act and any appraisal rights under Section 262 of the DGCL and any other similar statute in connection with the SPAC Merger and the Business Combination Agreement.
12. General.
(a) Termination. This Agreement shall terminate on the earlier to occur of (i) the Closing or (ii) at such time, if any, as the Business Combination Agreement is terminated in accordance with its terms prior to the Closing (the earliest of (i) and (ii), the “Expiration Time”), and upon such termination this Agreement shall be null and void and of no effect whatsoever, and the parties hereto shall have no obligations under this Agreement; provided, however, that no termination of this Agreement shall relieve or release a party from any obligations or liabilities for any willful breach of any representation, warranty, covenant or obligation under this Agreement or any Fraud Claim against such party, in either case, prior to termination of this Agreement. Notwithstanding the foregoing, Sections 4, 5, 6, 7, 9, 10, 11 and 12 shall survive any termination of this Agreement pursuant to clause (i) of the immediately preceding sentence in accordance with their terms.
(b) Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by email during normal business hours, (iii) by overnight courier service, or (iv) after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, and otherwise on the next Business Day, addressed as follows (or at such other address for a party as shall be specified by like notice):
if to SPAC (prior to Closing), to it at:
Mountain Lake Acquisition Corp.
930 Tahoe Blvd STE 802 PMB 45
Incline Village, NV 89451
| Attn: | Paul Grinberg, Chief Executive Officer and Chairman of the Board | |
| Email: | [***] |
with a copy (which will not constitute notice) to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105, USA
| Attn: | Stuart Neuhauser, Esq. | |
| Lloyd N. Steele, Esq. | ||
| Email: | [***] | |
| [***] |
if to Sponsor, to it at:
Mountain Lake Acquisition Sponsor LLC
930 Tahoe Blvd STE 802 PMB 45
Incline Village, NV 89451
| Attn: | Paul Grinberg, Member | |
| Email: | [***] |
with a copy (which will not constitute notice) to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105, USA
| Attn: | Stuart Neuhauser, Esq. | |
| Lloyd N. Steele, Esq. | ||
| Email: | [***] | |
| [***] |
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if to Pubco or Company (after Closing), to it at:
413 W 14th Street
Floor 2, PMB 4633
New York, NY 10014
| Attn: | Gerald Bartholomew Smith |
| Email: | [***] |
with a copy (which will not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
22 Bishopsgate,
EC2N 4BQ London
Email: [***]
Attention: Lorenzo Corte; Maria Protopapa; and Georgian Dimopoulos
(c) Entire Agreement. This Agreement (together with the other Ancillary Documents, the Business Combination Agreement and each of the other documents and the instruments referred to herein, to the extent incorporated herein) constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and thereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or thereof.
(d) Governing Law; Jurisdiction; Specific Performance. Sections 12.6 and 12.7 of the Business Combination Agreement shall apply to this Agreement mutatis mutandis.
(e) Remedies. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of any rights or remedies otherwise available.
(f) Amendments and Waivers. This Agreement may be amended or modified only with the written consent of SPAC, Pubco and Sponsor. The observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the party against whom enforcement of such waiver is sought. No failure or delay by a party in exercising any right hereunder shall operate as a waiver thereof. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.
(g) Severability. If any provision of this Agreement is held invalid, illegal or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The parties further agree that if any provision contained herein is, to any extent, held invalid, illegal or unenforceable in any respect under the Laws governing this Agreement, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the parties.
(h) Assignment. No party hereto may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other parties; provided, that in the event that Sponsor transfers any of the Founder Shares or the Private Placement Units to any permitted transferee in accordance with paragraph 7(c) of the Insider Letter (a “Permitted Transferee”), Sponsor shall, by providing notice to SPAC and Pubco prior to such transfer, transfer its rights and obligations under this Agreement with respect to such Founder Shares and/or Private Placement Units to such Permitted Transferee so long as such Permitted Transferee agrees in writing to be bound by the terms and conditions of this Agreement. Any purported assignment in violation of this Section 12(h) shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Agreement shall be binding on the undersigned and their respective successors and permitted assigns.
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(i) Costs and Expenses. Subject to Section 12.5 of the Business Combination Agreement, each party hereto will pay its own costs and expenses (including legal, accounting and other fees) relating to the negotiation, execution, delivery and performance of this Agreement.
(j) No Joint Venture. Nothing contained in this Agreement shall be deemed or construed as creating a joint venture or partnership between any of the parties hereto. No party is by virtue of this Agreement authorized as an agent, employee or legal representative of any other party. Without in any way limiting the rights or obligations of any party hereto under this Agreement, prior to the Closing, (i) no party shall have the power by virtue of this Agreement to control the activities and operations of any other and (ii) no party shall have any power or authority by virtue of this Agreement to bind or commit any other party. No party shall hold itself out as having any authority or relationship in contravention of this Section 12(j).
(k) Capacity as Shareholder. Sponsor signs this Agreement solely in its capacity as a shareholder of SPAC, and not in its capacity as a director (including “director by deputization”), officer or employee of SPAC, if applicable. Nothing herein shall be construed to (i) restrict, limit, prohibit or affect any actions or inactions by Sponsor or any representative of Sponsor, as applicable, serving in the capacity of a director or officer of SPAC or any Subsidiary of SPAC, acting in such person’s capacity as a director or officer of SPAC or any Subsidiary of SPAC (it being understood and agreed that the Business Combination Agreement contains provisions that govern the actions or inactions by the directors and officers of SPAC with respect to the Transactions) or (ii) prohibit, limit or restrict the exercise of any fiduciary duties as director or officer of SPAC that is otherwise permitted by, and done in compliance with, the terms of the Business Combination Agreement (and in each case of clauses (i) and (ii), without limiting Sponsor’s obligations hereunder in its capacity as a shareholder of SPAC).
(l) Affiliates. In this Agreement, the term “Affiliates”, when used with respect to a particular Person, means any other Person directly or indirectly controlling, controlled by or under common control with such Person as of the date on which, or at any time during the period for which, the determination of affiliation is being made, whether through one or more intermediaries or otherwise, and the term “control” (including the terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by Contract or otherwise. Notwithstanding the foregoing, (i) Sponsor and SPAC (and each of their respective Affiliates) shall be deemed not to be Affiliates of each other for purposes of this Agreement and (ii) no private investment fund (or similar vehicle) or business development company, or any other investment account, fund, vehicle or other client advised or sub-advised by Sponsor or by Sponsor’s Affiliates or any portfolio companies thereof shall be deemed to be an Affiliate of Sponsor, except to the extent any such Person is expressly requested or directed by Sponsor to take any action which would constitute a breach of this Agreement if taken by Sponsor, and such Person actually takes such prohibited action (it being understood and agreed that this Agreement shall not otherwise apply to, or be binding on, any Persons described in this clause (ii)).
(m) No Recourse. Neither SPAC nor any of its Subsidiaries, nor any of the past, present or future SPAC Shareholders (other than Sponsor or any Permitted Transferee thereof), nor any director, officer, employee, member, partner, shareholder or other owner (whether direct or indirect), Affiliate, agent, attorney or representative of Sponsor, shall have any obligation or liability for the obligations or liabilities of Sponsor under this Agreement. Without limiting the foregoing, this Agreement may only be enforced against the persons or entities that have executed and delivered a counterpart to this Agreement.
(n) Headings; Interpretation. The headings and subheadings in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. In this Agreement, unless the context otherwise requires: (i) any pronoun used shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (ii) the term “including” (and with correlative meaning “include”) shall be deemed in each case to be followed by the words “without limitation”; (iii) the words “hereof,” “herein,” “hereto,” and “hereby” and other words of similar import shall be deemed in each case to refer to this Agreement as a whole and not to any particular section or other subdivision of this Agreement; (iv) the term “or” means “and/or”; (v) the word “extent” in the phrase “to the extent” means the degree to which a subject or thing extends, and such phrase shall not simply mean “if”; and (vi) references to “written” or “in writing” include in electronic form. The parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
(o) Counterparts. This Agreement may be executed in two or more counterparts, and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document, but all of which together shall constitute one and the same instrument. Copies of executed counterparts of this Agreement transmitted by electronic transmission (including by email or in .pdf format) or facsimile as well as electronically or digitally executed counterparts (such as DocuSign) shall have the same legal effect as original signatures and shall be considered original executed counterparts of this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Sponsor Support Agreement as of the date first written above.
| MOUNTAIN LAKE ACQUISITION CORP. | ||
| By: | /s/ Paul Grinberg | |
| Name: | Paul Grinberg | |
| Title: | Chief Executive Officer and Chairman of the Board | |
| MOUNTAIN LAKE ACQUISITION SPONSOR LLC | ||
| By: | /s/ Douglas Horlick | |
| Name: | Douglas Horlick | |
| Title: | Managing Member | |
| AVALANCHE TREASURY CORPORATION | ||
| By: | /s/ Laine Mihalchick Moljo | |
| Name: | Laine Mihalchick Moljo | |
| Title: |
Secretary | |
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Exhibit 10.2
Certain personally identifiable information
has been omitted from this exhibit pursuant to
item 601(a)(6) of Regulation S-K. [***] indicates that information has been redacted.
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (this “Agreement”) is made and entered into as of [●] by and among Avalanche Treasury Corporation, a Delaware corporation (“Pubco”), Mountain Lake Acquisition Sponsor, LLC, a Delaware limited liability company (“Sponsor”), SPAC (as defined below), the insiders who are signatories hereto (each, an “Insider” and collectively, the “Insiders”) and the undersigned (each of the undersigned, the Insiders and Sponsor, a “Holder”). Any capitalized term used but not defined in this Agreement will have the meaning ascribed to such term in the Business Combination Agreement (as defined below).
WHEREAS, on October 1, 2025, Pubco, Mountain Lake Acquisition Corp., a Cayman Islands exempted company (“SPAC”), Avalanche Treasury Company LLC, a Delaware limited liability company (the “Company”), Avalanche SPAC Merger Sub LLC, a Delaware limited liability company (“SPAC Merger Sub”), Avalanche SPAC Merger Sub LLC, a Delaware limited liability company (“Company Merger Sub”), Dragonfly Digital Management, LLC, a Delware limited liability company (the “Seller”), and the other parties thereto entered into that certain Business Combination Agreement (as amended from time to time, the “Business Combination Agreement”);
WHEREAS, pursuant to the Business Combination Agreement, subject to the terms and conditions thereof, among other matters, pursuant to and in accordance with applicable laws: (a) prior to consummation of the transactions contemplated by the Business Combination Agreement (the “Closing” ), SPAC shall effectuate a domestication (the “Domestication” ), pursuant to which SPAC shall transfer by way of continuation to and become a Delaware corporation (the “Domesticated SPAC” ), all references herein to “SPAC” following the Domestication refer to the Domesticated SPAC, (b) at least two (2) hours after the Domestication, the SPAC Merger Sub will merge with and into SPAC, with SPAC continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “SPAC Merger”), and with SPAC shareholders receiving one share of Pubco Class A Stock for each SPAC Class A Ordinary Share held by such shareholder and with each holder of SPAC Rights receiving one share of Pubco Class A Stock in exchange for each ten (10) SPAC Rights held by such holder and (c) Company Merger Sub will merge with and into the Company, with the Company continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “Company Merger” and, together with the SPAC Merger, the “Mergers” and, together with the other transactions contemplated by the Business Combination Agreement and the Ancillary Documents, including the Foundation Transaction, the Dragonfly Contribution and the Investments, the “ Transactions” ), and with Company Members receiving Pubco Stock (and, in the case of Seller, certain other consideration) for each Company Unit held by such Company Member, and upon the consummation of the Mergers, Pubco will become a publicly traded company;
WHEREAS, immediately following the Company Merger Effective Time, Holder will be a holder of shares of Pubco Stock in such amount as set forth underneath Holder’s name on the signature page hereto; and
WHEREAS, pursuant to the Business Combination Agreement and the Transactions, and in view of the valuable consideration to be received by Holder thereunder, the receipt and sufficiency of which is hereby acknowledged, the parties hereto desire to set forth herein certain understandings between such parties with respect to restrictions on transfer of any shares of Pubco Stock held by Holder immediately after the Company Merger Effective Time and any other securities convertible into or exercisable or exchangeable for Pubco Stock held by Holder immediately after the Company Merger Effective Time (collectively, the “Restricted Securities”).
NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and intending to be legally bound hereby, the parties hereby agree as follows:
1. Lock-Up Provisions.
(a) Holder hereby agrees not to, without the prior written consent of Pubco, during the period (the “Lock-Up Period”) commencing from the Closing Date and ending on the earlier of (A) the date that is one hundred and eighty (180) days after the Closing Date (the “Anniversary Release”); provided that, if the VWAP of the shares of Pubco Class A Stock equals or exceeds $12.50 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 consecutive trading days after Closing, then the Anniversary Release will be deemed to occur at 11:59 p.m. (New York City time) on such 20th consecutive trading day, and (B) the date on which Pubco consummates a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of its stockholders having the right to exchange their shares of Pubco Stock for cash, securities or other property: (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidation with respect to or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to, any Restricted Securities, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Restricted Securities, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly announce the intention to effect any transaction specified in clause (i) or (ii) (any of the foregoing described in clauses (i), (ii) or (iii), a “Prohibited Transfer”). The foregoing sentence shall not apply to the transfer of any or all of the Restricted Securities owned by Holder (each, a “Permitted Transferee”): (I) in the case of an entity, transfers (A) to another entity that is an Affiliate of the Holder, (B) as part of a distribution to members, partners or stockholders of Holder and (C) to officers or directors of Holder, any Affiliate or family member of any of Holder’s officers or directors, or to any members, officers, directors or employees of Holder or any of its Affiliates; (II) in the case of an individual, transfers by gift to members of the individual’s immediate family or to a trust, the beneficiary of which is a member of one of the individual’s immediate family, an Affiliate of such person; (III) to a charitable organization; (IV) in the case of an individual, transfers by virtue of laws of descent and distribution upon death of the individual; (V) in the case of an individual, transfers pursuant to a qualified domestic relations order; (VI) in the case of an entity, transfers by virtue of the laws of the state of the entity’s organization and the entity’s organizational documents upon dissolution of the entity; (VII) transfers to satisfy any U.S. federal, state, or local income tax obligations of Holder (or its direct or indirect owners) to the extent necessary to cover any tax liability as a direct result of the Transactions; or (VIII) in the form of a pledge of Restricted Securities in a bona fide transaction as collateral to secure obligations pursuant to lending or other financing arrangements between a Holder (or its Affiliates), on the one hand, and a third party, on the other hand, for the benefit of such Holder and/or its Affiliates; provided, however, that during the Lock-Up Period such third party shall not be permitted to foreclose upon such Restricted Securities or otherwise be entitled to enforce its rights or remedies with respect to the Restricted Securities, including, without limitation, the right to vote, transfer or take title to or ownership of such Restricted Securities; provided, however, that it shall be a condition to any transfer pursuant to clauses (I) through (VIII) above that the Permitted Transferee (i) executes and delivers to Pubco all agreements and waivers contemplated by the Insider Letter (as defined below); and (ii) executes an agreement stating that the transferee is receiving and holding the Restricted Securities subject to the provisions of this Agreement applicable to Holder, and there shall be no further transfer of such Restricted Securities except in accordance with this Agreement. Holder further agrees to execute such agreements as may be reasonably requested by Pubco that are consistent with the foregoing or that are necessary to give further effect thereto. The restrictions set forth herein shall not restrict Holder from making a request for inclusion of its Restricted Securities in any registration statement pursuant to any registration rights agreement between Pubco and the Holder, provided that no public filing or public disclosure relating to such sale of securities is made during the Lock-Up Period.
(b) SPAC, Sponsor and the Insiders hereby agree that as of the Closing Date, Section 7of that certain letter agreement, dated as of December 12, 2024, by and among SPAC, Sponsor and the Insiders (as amended, the “Insider Letter”), is to be of no further force and effect, and further confirm that by their signature hereto they are executing a written instrument that satisfies the requirements of Section 13 of the Insider Letter to change, amend, modify or waive a particular provision of the Insider Letter.
(c) If any Prohibited Transfer is made or attempted contrary to the provisions of this Agreement, such purported Prohibited Transfer shall be null and void ab initio, and Pubco shall refuse to recognize any such purported transferee of the Restricted Securities as one of its equity holders for any purpose. In order to enforce this Section 1, Pubco may impose stop-transfer instructions with respect to the Restricted Securities of Holder (and Permitted Transferees and assigns thereof) until the end of the Lock-Up Period.
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(d) During the Lock-Up Period, each certificate evidencing any Restricted Securities shall be stamped or otherwise imprinted with a legend in substantially the following form, in addition to any other applicable legends:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A LOCK-UP AGREEMENT, DATED AS OF OCTOBER __, 2025, BY AND BETWEEN THE ISSUER OF SUCH SECURITIES (THE “ISSUER”) AND THE ISSUER’S SECURITY HOLDER NAMED THEREIN, AS AMENDED. A COPY OF SUCH LOCK-UP AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”
(e) For the avoidance of any doubt, Holder shall retain all of its rights as a stockholder of Pubco during the Lock-Up Period, including the right to vote any Restricted Securities.
2. Miscellaneous.
(a) Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns; provided that Section 1(b) shall only be binding upon and inure to the benefit of SPAC, the Sponsor and the Insiders. This Agreement and all obligations of Holder are personal to Holder and may not be transferred or delegated by Holder at any time without the prior written consent of Pubco, except in accordance with the procedures set forth for transfers of Restricted Securities to Permitted Transferees in Section 1(a), and any such purported transfer shall be null and void. Pubco may freely assign any or all of its rights under this Agreement, in whole or in part, to any successor entity (whether by merger, consolidation, equity sale, asset sale or otherwise) without obtaining the consent or approval of Holder.
(b) Third Parties. Nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any person or entity that is not a party hereto or thereto or a successor or permitted assign of such a party.
(c) Governing Law; Jurisdiction; Specific Performance. Sections 12.6 and 12.7 of the Business Combination Agreement shall apply to this Agreement mutatis mutandis.
(d) Interpretation. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement. In this Agreement, unless the context otherwise requires: (i) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neutral forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (ii) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; (iii) the words “herein,” “hereto,” and “hereby” and other words of similar import in this Agreement shall be deemed in each case to refer to this Agreement as a whole and not to any particular section or other subdivision of this Agreement; and (iv) the term “or” means “and/or”. The parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
(e) Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by facsimile, email or other electronic means, with affirmative confirmation of receipt (excluding out-of-office replies or other automatically generated responses), (iii) one Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) four (4) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be specified by like notice):
|
If to Pubco, to:
413 W 14th Street Floor 2, PMB 4633 New York, NY 10014 Attn: Gerald Bartholomew Smith Email: [***] |
With copies to (which shall not constitute notice):
Skadden, Arps, Slate, Meagher & Flom (UK) 22 Bishopsgate EC2N 4BQ London Email: [***] Attention: Lorenzo Corte; Maria Protopapa; Georgian Dimopoulos |
| If to Holder, to: the address set forth below Holder’s name on the signature page to this Agreement. | |
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|
If to SPAC, at or prior to Closing, to:
Mountain Lake Acquisition Corp. 930 Tahoe Blvd STE 802 PMB 45 Incline Village, Attn: Paul Grinberg, Chief Executive Officer Email: [***] |
With copies to (which shall not constitute notice):
Ellenoff Grossman & Schole LLP New York, New York 10105, USA Email: [***] Attention: Stuart Neuhauser, Esq; Lloyd N. Steele Esq |
|
If to Sponsor, to:
Mountain Lake Acquisition Sponsor LLC 930 Tahoe Blvd STE 802 PMB 45 Incline Village, Attn: Paul Grinberg, Member Email: [***] |
With copies to (which shall not constitute notice):
Ellenoff Grossman & Schole LLP New York, New York 10105, USA Email: [***] Attention: Stuart Neuhauser, Esq; Lloyd N. Steele Esq |
(f) Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of all parties hereto; provided, however, that if any waiver of any of the Lock-Up Agreements executed in connection with the Business Combination Agreement is granted by Pubco, Pubco will provide notice to Holder, and if Holder so elects, such waiver shall be deemed granted mutatis mutandis for this Agreement. No failure or delay by a party in exercising any right hereunder shall operate as a waiver thereof. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.
(g) Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a court of competent jurisdiction, such provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
(h) Entire Agreement. This Agreement, together with the Business Combination Agreement to the extent referred to herein, constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled; provided, that, for the avoidance of doubt, the foregoing shall not affect the rights and obligations of the parties under the Business Combination Agreement or any Ancillary Document. Notwithstanding the foregoing, nothing in this Agreement shall limit any of the rights or remedies of Pubco or any of the rights, remedies or obligations of Holder under any other agreement between Holder and Pubco or any certificate or instrument executed by Holder in favor of Pubco, and nothing in any other agreement, certificate or instrument shall limit any of the rights, remedies or obligations of Pubco or any of the rights, remedies or obligations of Holder under this Agreement.
(i) Further Assurances. From time to time, at another party’s reasonable request and without further consideration (but at the requesting party’s reasonable cost and expense), each party shall execute and deliver such additional documents and take all such further action as may be reasonably necessary to consummate the transactions contemplated by this Agreement.
(j) Counterparts. This Agreement may be executed and delivered (including by electronic signature or by email in portable document form) in two 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.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed this Lock-Up Agreement as of the date first written above.
| AVALANCHE TREASURY CORPORATION | ||
| By: | ||
| Name: | ||
| Title: | ||
| MOUNTAIN LAKE ACQUISITION SPONSOR LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
| MOUNTAIN LAKE ACQUISITION CORP. | ||
| By: | ||
| Name: | ||
| Title: | ||
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| Insiders: | ||
| By: | ||
| Name: | Paul Grinberg | |
| Address: | ||
| Telephone No.: | ||
| Email: | ||
| By: | ||
| Name: | Douglas Horlick | |
| Address: | ||
| Telephone No.: | ||
| Email: | ||
| By: | ||
| Name: | Jeffery T. Lager | |
| Address: | ||
| Telephone No.: | ||
| Email: | ||
| By: | ||
| Name: | Michael Marquez | |
| Address: | ||
| Telephone No.: | ||
| Email: | ||
| By: | ||
| Name: | Jaimer W. Vieser | |
| Address: | ||
| Telephone No.: | ||
| Email: |
6
IN WITNESS WHEREOF, the parties have executed this Lock-Up Agreement as of the date first written above.
| Holder: | ||
| Name of Holder: | ||
| By: | ||
| Name: | ||
| Title | ||
| Number and Type of Pubco Securities Owned: | ||
| Pubco Class A Stock: | ||
| Pubco Class B Stock: | ||
| Address for Notice: | ||
| Address: | ||
| Facsimile No.: | ||
| Telephone No.: | ||
| Email: | ||
7
Exhibit 10.3
Certain personally identifiable
information has been omitted from this exhibit pursuant to
item 601(a)(6) of Regulation S-K. [***] indicates that information has been redacted.
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (this “Agreement”) is made and entered into as of [●] by and between Avalanche Treasury Corporation, a Delaware corporation (“Pubco”) and the undersigned (“Holder”). Any capitalized term used but not defined in this Agreement will have the meaning ascribed to such term in the Business Combination Agreement (as defined below).
WHEREAS, on October 1, 2025, Pubco, Mountain Lake Acquisition Corp., a Cayman Islands exempted company (“SPAC”), Avalanche Treasury Company LLC, a Delaware limited liability company (the “Company”), Avalanche SPAC Merger Sub LLC, a Delaware limited liability company (“SPAC Merger Sub”), Avalanche SPAC Merger Sub LLC, a Delaware limited liability company (“Company Merger Sub”), Dragonfly Digital Management, LLC, a Delaware limited liability company (the “Seller”), and the other parties thereto entered into that certain Business Combination Agreement (as amended from time to time, the “Business Combination Agreement”);
WHEREAS, pursuant to the Business Combination Agreement, subject to the terms and conditions thereof, among other matters, pursuant to and in accordance with applicable laws: (a) prior to consummation of the transactions contemplated by the Business Combination Agreement (the “Closing”), SPAC shall effectuate a domestication (the “Domestication”), pursuant to which SPAC shall transfer by way of continuation to and become a Delaware corporation (the “Domesticated SPAC”), all references herein to “SPAC” following the Domestication refer to the Domesticated SPAC, (b) at least two (2) hours after the Domestication, the SPAC Merger Sub will merge with and into SPAC, with SPAC continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “SPAC Merger”), and with SPAC shareholders receiving one share of Pubco Class A Stock for each SPAC Class A Ordinary Share held by such shareholder and with each holder of SPAC Rights receiving one share of Pubco Class A Stock in exchange for each ten (10) SPAC Rights held by such holder and (c) Company Merger Sub will merge with and into the Company, with the Company continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “Company Merger” and, together with the SPAC Merger, the “Mergers” and, together with the other transactions contemplated by the Business Combination Agreement and the Ancillary Documents, including the Foundation Transaction, the Dragonfly Contribution and the Investments, the “Transactions”), and with Company Members receiving Pubco Stock (and, in the case of Seller, certain other consideration) for each Company Unit held by such Company Member, and upon the consummation of the Mergers, Pubco will become a publicly traded company;
WHEREAS, immediately following the Company Merger Effective Time, Holder will be a holder of shares of Pubco Stock in such amount as set forth underneath Holder’s name on the signature page hereto; and
WHEREAS, pursuant to the Business Combination Agreement and the Transactions, and in view of the valuable consideration to be received by Holder thereunder, the receipt and sufficiency of which is hereby acknowledged, the parties hereto desire to set forth herein certain understandings between such parties with respect to restrictions on transfer of any shares of Pubco Stock held by Holder immediately after the Company Merger Effective Time and any other securities convertible into or exercisable or exchangeable for Pubco Stock held by Holder immediately after the Company Merger Effective Time (collectively, the “Restricted Securities”).
NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and intending to be legally bound hereby, the parties hereby agree as follows:
1. Lock-Up Provisions.
(a) Holder hereby agrees not to, without the prior written consent of Pubco, during the period (the “Lock-Up Period”) commencing from the Closing Date and ending on the earlier of (A) the date that is one hundred and eighty (180) days after the Closing Date (the “Anniversary Release”); provided that, if the VWAP of the shares of Pubco Class A Stock equals or exceeds $12.50 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 consecutive trading days after Closing, then the Anniversary Release will be deemed to occur at 11:59 p.m. (New York City time) on such 20th consecutive trading day, and (B) the date on which Pubco consummates a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of its stockholders having the right to exchange their shares of Pubco Stock for cash, securities or other property: (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidation with respect to or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to, any Restricted Securities, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Restricted Securities, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly announce the intention to effect any transaction specified in clause (i) or (ii) (any of the foregoing described in clauses (i), (ii) or (iii), a “Prohibited Transfer”). The foregoing sentence shall not apply to the transfer of any or all of the Restricted Securities owned by Holder (each, a “Permitted Transferee”): (I) in the case of an entity, transfers (A) to another entity that is an Affiliate of the Holder, (B) as part of a distribution to members, partners or stockholders of Holder and (C) to officers or directors of Holder, any Affiliate or family member of any of Holder’s officers or directors, or to any members, officers, directors or employees of Holder or any of its Affiliates; (II) in the case of an individual, transfers by gift to members of the individual’s immediate family or to a trust, the beneficiary of which is a member of one of the individual’s immediate family, an Affiliate of such person; (III) to a charitable organization; (IV) in the case of an individual, transfers by virtue of laws of descent and distribution upon death of the individual; (V) in the case of an individual, transfers pursuant to a qualified domestic relations order; (VI) in the case of an entity, transfers by virtue of the laws of the state of the entity’s organization and the entity’s organizational documents upon dissolution of the entity; (VII) transfers to satisfy any U.S. federal, state, or local income tax obligations of Holder (or its direct or indirect owners) to the extent necessary to cover any tax liability as a direct result of the Transactions; or (VIII) in the form of a pledge of Restricted Securities in a bona fide transaction as collateral to secure obligations pursuant to lending or other financing arrangements between a Holder (or its Affiliates), on the one hand, and a third party, on the other hand, for the benefit of such Holder and/or its Affiliates; provided, however, that during the Lock-Up Period such third party shall not be permitted to foreclose upon such Restricted Securities or otherwise be entitled to enforce its rights or remedies with respect to the Restricted Securities, including, without limitation, the right to vote, transfer or take title to or ownership of such Restricted Securities; provided, however, that it shall be a condition to any transfer pursuant to clauses (I) through (VIII) above that the Permitted Transferee executes and delivers to Pubco an agreement stating that the transferee is receiving and holding the Restricted Securities subject to the provisions of this Agreement applicable to Holder, and there shall be no further transfer of such Restricted Securities except in accordance with this Agreement. Holder further agrees to execute such agreements as may be reasonably requested by Pubco that are consistent with the foregoing or that are necessary to give further effect thereto. The restrictions set forth herein shall not restrict Holder from making a request for inclusion of its Restricted Securities in any registration statement pursuant to any registration rights agreement between Pubco and the Holder, provided that no public filing or public disclosure relating to such sale of securities is made during the Lock-Up Period.
(c) If any Prohibited Transfer is made or attempted contrary to the provisions of this Agreement, such purported Prohibited Transfer shall be null and void ab initio, and Pubco shall refuse to recognize any such purported transferee of the Restricted Securities as one of its equity holders for any purpose. In order to enforce this Section 1, Pubco may impose stop-transfer instructions with respect to the Restricted Securities of Holder (and Permitted Transferees and assigns thereof) until the end of the Lock-Up Period.
(d) During the Lock-Up Period, each certificate evidencing any Restricted Securities shall be stamped or otherwise imprinted with a legend in substantially the following form, in addition to any other applicable legends:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A LOCK-UP AGREEMENT, DATED AS OF OCTOBER __, 2025, BY AND BETWEEN THE ISSUER OF SUCH SECURITIES (THE “ISSUER”) AND THE ISSUER’S SECURITY HOLDER NAMED THEREIN, AS AMENDED. A COPY OF SUCH LOCK-UP AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”
(e) For the avoidance of any doubt, Holder shall retain all of its rights as a stockholder of Pubco during the Lock-Up Period, including the right to vote any Restricted Securities.
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2. Miscellaneous.
(a) Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns. This Agreement and all obligations of Holder are personal to Holder and may not be transferred or delegated by Holder at any time without the prior written consent of Pubco, except in accordance with the procedures set forth for transfers of Restricted Securities to Permitted Transferees in Section 1(a), and any such purported transfer shall be null and void. Pubco may freely assign any or all of its rights under this Agreement, in whole or in part, to any successor entity (whether by merger, consolidation, equity sale, asset sale or otherwise) without obtaining the consent or approval of Holder.
(b) Third Parties. Except for the rights of the Sponsor (as defined below) as provided in Section 2(f), nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any person or entity that is not a party hereto or thereto or a successor or permitted assign of such a party.
(c) Governing Law; Jurisdiction; Specific Performance. Sections 12.6 and 12.7 of the Business Combination Agreement shall apply to this Agreement mutatis mutandis.
(d) Interpretation. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement. In this Agreement, unless the context otherwise requires: (i) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neutral forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (ii) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; (iii) the words “herein,” “hereto,” and “hereby” and other words of similar import in this Agreement shall be deemed in each case to refer to this Agreement as a whole and not to any particular section or other subdivision of this Agreement; and (iv) the term “or” means “and/or”. The parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
(e) Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by facsimile, email or other electronic means, with affirmative confirmation of receipt (excluding out-of-office replies or other automatically generated responses), (iii) one Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) four (4) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be specified by like notice):
| If to Pubco, to: 413 W 14th Street Floor 2, PMB 4633 New York, NY 10014 Attn: Gerald Bartholomew Smith Email: [***] |
With copies to (which shall not constitute
notice): Skadden, Arps, Slate, Meagher & Flom (UK) LLP 22 Bishopsgate EC2N 4BQ London Email: [***] Attention: Lorenzo Corte; Maria Protopapa; Georgian Dimopoulos |
| If to Holder, to: the address set forth below Holder’s name on the signature page to this Agreement. | |
3
(f) Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of Pubco, Mountain Lake Acquisition Sponsor LLC, a Delaware limited liability company (“Sponsor”) and Holder, and Sponsor shall be an express third-party beneficiary of this Agreement for purposes of this Section 2(f); provided, however, that if any waiver of any of the Lock-Up Agreements executed in connection with the Business Combination Agreement is granted by Pubco, Pubco will provide notice to Holder, and if Holder so elects, such waiver shall be deemed granted mutatis mutandis for this Agreement. No failure or delay by a party in exercising any right hereunder shall operate as a waiver thereof. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.
(g) Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a court of competent jurisdiction, such provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
(h) Entire Agreement. This Agreement, together with the Business Combination Agreement to the extent referred to herein, constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled; provided, that, for the avoidance of doubt, the foregoing shall not affect the rights and obligations of the parties under the Business Combination Agreement or any Ancillary Document. Notwithstanding the foregoing, nothing in this Agreement shall limit any of the rights or remedies of Pubco or any of the rights, remedies or obligations of Holder under any other agreement between Holder and Pubco or any certificate or instrument executed by Holder in favor of Pubco, and nothing in any other agreement, certificate or instrument shall limit any of the rights, remedies or obligations of Pubco or any of the rights, remedies or obligations of Holder under this Agreement.
(i) Further Assurances. From time to time, at another party’s reasonable request and without further consideration (but at the requesting party’s reasonable cost and expense), each party shall execute and deliver such additional documents and take all such further action as may be reasonably necessary to consummate the transactions contemplated by this Agreement.
(j) Counterparts. This Agreement may be executed and delivered (including by electronic signature or by email in portable document form) in two 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.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
4
IN WITNESS WHEREOF, the parties have executed this Lock-Up Agreement as of the date first written above.
| AVALANCHE TREASURY CORPORATION | ||
| By: | ||
| Name: | ||
| Title: | ||
{Additional Signature on the Following Page}
5
IN WITNESS WHEREOF, the parties have executed this Lock-Up Agreement as of the date first written above.
| Holder: | ||
| Name of Holder: | ||
| By: | ||
| Name: | ||
| Title | ||
| Number and Type of Pubco Securities Owned: | ||
| Pubco Class A Stock: | ||
| Pubco Class B Stock: | ||
| Address for Notice: | ||
| Address: | ||
| Facsimile No.: | ||
| Telephone No.: | ||
| Email: | ||
6
Exhibit 10.4
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of [●], 2025, is made and entered into by and among Avalanche Treasury Corporation, a Delaware corporation (“Pubco”), Mountain Lake Acquisition Corp., a Cayman Islands exempted company (“SPAC”), Mountain Lake Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”), each of the undersigned holders listed on the signature pages hereto under the heading “Specified Holders” (such persons, the “Specified Holders”) and each of the undersigned holders listed on the signature pages hereto under the heading “Other Holders” (and together with the Specified Holders, their Permitted Transferees holding Registrable Securities, the Sponsor and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 of this Agreement, each a “Holder” and collectively the “Holders”). Capitalized terms used and not otherwise defined herein shall have the same meanings set forth in the Business Combination Agreement (as defined below).
RECITALS
WHEREAS, SPAC, the Sponsor, BTIG, LLC (the “Subscriber”) and the then current directors and executive officers of SPAC entered into that certain Registration Rights Agreement, dated as of December 12, 2024 (the “Original Registration Rights Agreement”);
WHEREAS, on October 1, 2025, (a) SPAC, (b) Pubco, (c) Avalanche SPAC Merger Sub LLC, a Delaware limited liability company and a wholly-owned subsidiary of Pubco (“SPAC Merger Sub”), (d) Avalanche Treasury Company LLC, a Delaware limited liability company (the “Company”), (e) Avalanche Company Merger Sub LLC, a Delaware limited liability company and a wholly owned subsidiary of Pubco (“Company Merger Sub”) and (h) Dragonfly Digital Management LLC (the “Seller”), entered into that certain business combination agreement (as amended, modified, supplemented modified and/or restated from time to time, the “Business Combination Agreement”);
WHEREAS, pursuant to the Business Combination Agreement, subject to the terms and conditions thereof, among other matters: (a) prior to consummation of the transactions contemplated by the Business Combination Agreement (the “Closing”), SPAC shall effectuate a domestication (the “Domestication”), pursuant to which SPAC shall transfer by way of continuation to and become a Delaware corporation (the “Domesticated SPAC”), all references herein to “SPAC” following the Domestication refer to the Domesticated SPAC, (b) at least two (2) hours after the Domestication, the SPAC Merger Sub will merge with and into SPAC, with SPAC continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “SPAC Merger”), and with SPAC shareholders receiving one share of Pubco Class A Common Stock for each SPAC Class A Ordinary Share held by such shareholder and with each holder of SPAC Rights receiving one share of Pubco Class A Common Stock in exchange for each ten (10) SPAC Rights held by such holder and (c) Company Merger Sub will merge with and into the Company, with the Company continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “Company Merger” and, together with the SPAC Merger, the “Mergers” and, together with the other transactions contemplated by the Business Combination Agreement and the Ancillary Documents, the “Transactions”), and with Company Members (as defined in the Business Combination Agreement) receiving Pubco Class A Common Stock (and, in the case of Seller, certain other consideration) for each Company Unit (as defined in the Business Combination Agreement) held by such Company Member, and upon the consummation of the Mergers, Pubco will become a publicly traded company;
WHEREAS, on the date hereof, the Sponsor and each of the Specified Holders are entering into a Lock-Up Agreement with Pubco (each, a “Lock-Up Agreement”);
WHEREAS, on October 1, 2025, Pubco, the Company, Avalanche (BVI), Inc., a British Virgin Islands business company (“Avalanche BVI”) and Avalanche Cayman, a Cayman Islands exempted company (“Avalanche Cayman,” and, together with Avalanche BVI, the “Foundation”), entered into that certain AVAX Token Sale Agreement, pursuant to which, among other things, Pubco agreed to issue certain securities to the Foundation (the “Foundation Private Placement”);
WHEREAS, pursuant to Section 5.5 of the Original Registration Rights Agreement, the provisions, covenants, and conditions set forth therein may be amended or modified upon the written consent of SPAC and the holders of at least a majority in interest of the Registrable Securities (as defined in the Original Registration Rights Agreement) at the time in question (which majority must include the Subscriber if such amendment or modification is material and adverse to the Subscriber), and the Sponsor is holder of at least a majority in interest of the Registrable Securities (as defined in the Original Registration Rights Agreement) as of the date hereof; and
WHEREAS, SPAC, the Sponsor and the Subscriber desire to amend and restate the Original Registration Rights Agreement in its entirety and enter into this Agreement, pursuant to which Pubco shall grant the Holders certain registration rights with respect to certain securities of Pubco as set forth in this Agreement.
NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or principal financial officer of Pubco, after consultation with counsel to Pubco, (a) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (b) would not be required to be made at such time if the Registration Statement were not being filed, and (c) Pubco has a bona fide business purpose for not making such information public.
“Agreement” shall have the meaning given in the Preamble.
“Avalanche BVI” shall have the meaning given in the Preamble.
“Avalanche Cayman” shall have the meaning given in the Preamble.
“Board” shall mean the Board of Directors of Pubco.
“Business Combination Agreement” shall have the meaning given in the Recitals hereto.
“Closing” shall have the meaning given in the Recitals hereto.
“Closing Date” shall mean the date of the Closing.
“Commission” shall mean the Securities and Exchange Commission.
“Company” shall have the meaning given in the Recitals hereto.
“Company Merger” shall have the meaning given in the Recitals hereto.
“Company Merger Sub” shall have the meaning given to such term in the Business Combination Agreement.
“Demand Registration” shall have the meaning given in subsection 2.1.1.
“Demanding Holders” shall have the meaning given in subsection 2.1.1.
“Demanding Specified Holders” shall have the meaning given in subsection 2.1.1.
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“Demanding Sponsor Holders” shall have the meaning given in subsection 2.1.1.
“Domesticated SPAC” shall have the meaning given in the Recitals hereto.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.
“Form S-1” shall have the meaning given in subsection 2.1.1.
“Form S-3” shall have the meaning given in subsection 2.3.
“Foundation” shall have the meaning given in the Preamble.
“Foundation Private Placement” shall have the meaning given in the Preamble.
“Foundation Private Placement Shares” shall mean the shares of Pubco Class A Common Stock issued to Avalanche Cayman pursuant to the Foundation Private Placement.
“Founder Shares” shall mean the shares of Pubco Class A Common Stock issued to the Sponsor in the SPAC Merger in exchange for the SPAC Class A Ordinary Shares issued to the Sponsor upon conversion of the SPAC Class B Ordinary Shares held by the Sponsor immediately prior to the SPAC Merger in accordance with SPAC’s amended and restated memorandum and articles of association.
“Holders” shall have the meaning given in the Preamble.
“Lock-Up Agreement” shall have the meaning given in the Recitals hereto.
“Lock-Up Period” shall mean with respect to the Sponsor Holders and the Specified Holders, the lock-up period specified in the Lock-Up Agreements.
“Maximum Number of Securities” shall have the meaning given in subsection 2.1.4.
“Mergers” shall have the meaning given in the Recitals hereto.
“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading.
“Original Registration Rights Agreement” shall have the meaning given in the Recitals.
“Permitted Transferees” shall mean (a) prior to the expiration of the applicable Lock-Up Period, any person or entity to whom a Holder is permitted to transfer their Registrable Securities prior to the expiration of the applicable Lock-Up Period pursuant to, as applicable, the Lock-Up Agreement or any other applicable agreement between such Holder, on the one hand, and Pubco or SPAC, on the other hand, and (b) after the expiration of the applicable Lock-Up Period, any person or entity to whom such Holder is permitted to transfer such Registrable Securities.
“Piggyback Registration” shall have the meaning given in subsection 2.2.1.
“Private Placement Shares” shall mean the Foundation Private Placement Shares, Sponsor Private Placement Shares and Subscriber Private Placement Shares.
“Pro Rata” shall have the meaning given in subsection 2.1.4.
“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
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“Pubco” shall have the meaning given in the Preamble.
“Pubco Class A Common Stock” shall mean shares of Class A common stock of Pubco, par value $0.01 per share.
“Registrable Security” shall mean (a) the shares of Pubco Class A Common Stock issued in the Company Merger; (b) the Founder Shares; (c) the Private Placement Shares; (d) any outstanding shares of Pubco Class A Common Stock or any other equity security (including shares of Pubco Class A Common Stock issued or issuable upon the exercise of any other equity security) of Pubco, in the case of each of the preceding subclauses (a), (b), (c) and (d), to the extent held by a Holder as of the date of this Agreement or as of the Closing Date including any securities purchased in connection therewith; (e) any outstanding shares of Pubco Class A Common Stock (or any other equity security (including shares of Pubco Class A Common Stock issued or issuable upon the exercise of any other equity security) of Pubco acquired by a Holder following the date hereof to the extent that such securities are “restricted securities” as defined in Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission)) (“Rule 144”) or are otherwise held by an “affiliate” (as defined in Rule 144) of Pubco and (f) any other equity security of Pubco issued or issuable with respect to any shares of Pubco Class A Common Stock described in the preceding subclauses (a) through (e), by way of a share dividend or share split or in connection with a combination of shares, recapitalization, merger, consolidation, re-domestication, reorganization, or other similar transaction; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when: (i) 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; (ii) such securities shall have been otherwise transferred, new certificates or book entry notations for such securities not bearing a legend restricting further transfer shall have been delivered or noted by Pubco and subsequent public distribution of such securities shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; (iv) such securities have been sold without registration pursuant to Rule 144; (v) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction; or (vi) such securities have otherwise ceased to be held by a Holder or their Permitted Transferee.
“Registration” shall 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.
“Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, except for the limitations set forth in subclause (vi) below, the following:
(i) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the shares of Pubco Class A Common Stock are then listed;
(ii) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);
(iii) printing, messenger, telephone and delivery expenses;
(iv) reasonable fees and disbursements of counsel for Pubco;
(v) reasonable fees and disbursements of all independent registered public accountants of Pubco incurred specifically in connection with such Registration; and
(vi) reasonable fees and expenses of one (1) legal counsel representing the Holders, as selected by (x) the Significant Specified Holders holding a majority of the then-outstanding Registrable Securities included, or to be included, in such Registration, or, (y) in the absence of any such Significant Specified Holders, by the Holders holding a majority of the then-outstanding Registrable Securities included, or to be included, in such Registration.
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“Registration Statement” shall mean any registration statement under the Securities Act that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Requesting Holder” shall have the meaning given in subsection 2.1.1.
“Securities Act” shall mean the U.S. Securities Act of 1933, as amended from time to time.
“Significant Specified Holder” shall mean any Specified Holder holding at least 10% of the then-outstanding Registrable Securities held by all Specified Holders.
“SPAC” shall have the meaning given in the Preamble.
“SPAC Class A Ordinary Shares” shall mean Class A ordinary shares of SPAC, par value $0.0001 per share.
“SPAC Class B Ordinary Shares” shall mean Class B ordinary shares of SPAC, par value $0.0001 per share.
“SPAC Merger” shall have the meaning given in the Recitals hereto.
“SPAC Merger Sub” shall have the meaning given in the Recitals hereto.
“Specified Holders” shall have the meaning given in the Preamble hereto.
“Sponsor” shall have the meaning given in the Recitals hereto.
“Sponsor Private Placement Shares” shall mean the shares of Pubco Class A Common Stock issued to the Sponsor in the SPAC Merger in exchange for the SPAC Class A Ordinary Shares underlying the Sponsor Private Placement Units (including the SPAC Class A Ordinary Shares issuable upon conversion of the SPAC Rights) held by the Sponsor immediately prior to the SPAC Merger.
“Sponsor Private Placement Units” shall mean the shares of Pubco Class A Common Stock issuable upon the conversion, as applicable, of the 495,000 units held by Sponsor and issued by SPAC in a private placement transaction simultaneously with the IPO, each consisting of one (1) SPAC Class A Ordinary Share and one (1) SPAC Right.
“Subscriber Private Placement Shares” shall mean the shares of Pubco Class A Common Stock issued to the Subscriber in the SPAC Merger in exchange for the SPAC Class A Ordinary Shares underlying the Subscriber Private Placement Units (including the SPAC Class A Ordinary Shares issuable upon conversion of the SPAC Rights) held by the Subscriber immediately prior to the SPAC Merger.
“Subscriber Private Placement Units” shall mean the shares of Pubco Class A Common Stock issuable upon the conversion, as applicable, of the 310,000 units held by the Subscriber and issued by SPAC in a private placement transaction simultaneously with the IPO, each consisting of one (1) SPAC Class A Ordinary Share and one (1) SPAC Right.
“Sponsor Holders” shall mean the Sponsor and its Permitted Transferees who hold Registrable Securities.
“Transactions” shall have the meaning given in the Recitals hereto.
“Underwriter” shall mean 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.
“Underwritten Registration” or “Underwritten Offering” shall mean a Registration in which securities of Pubco are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
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ARTICLE II
REGISTRATIONS
2.1 Demand Registration.
2.1.1 Request for Registration. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, at any time and from time to time on or after the Closing Date, (i) the Sponsor Holders holding a majority in interest of the then-outstanding Registrable Securities held by all Sponsor Holders (the “Demanding Sponsor Holders”) or (ii) any Significant Specified Holder (a “Demanding Specified Holder” and the Demanding Sponsor Holders or Demanding Specified Holders, as applicable, being “Demanding Holders”) may make a written demand for Registration of all or part of their Registrable Securities, which written demand shall describe the amount and type of securities to be included in such Registration and the intended method(s) of distribution thereof (such written demand a “Demand Registration”). Pubco shall, within ten (10) calendar days of Pubco’s receipt of the Demand Registration, notify, in writing, all other Holders of Registrable Securities of such demand, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in a Registration pursuant to a Demand Registration (each such Holder that includes all or a portion of such Holder’s Registrable Securities in such Registration, a “Requesting Holder”) shall so notify Pubco, in writing, within five (5) calendar days after the receipt by the Holder of the notice from Pubco. Upon receipt by Pubco of any such written notification from a Requesting Holder(s) to Pubco, such Requesting Holder(s) shall be entitled to have their Registrable Securities included in a Registration pursuant to a Demand Registration and Pubco shall effect, as soon thereafter as practicable, the Registration of all Registrable Securities requested by the Demanding Holder(s) and Requesting Holder(s) pursuant to such Demand Registration, including by (x) filing or confidentially submitting a Registration Statement relating thereto as soon as practicable, but, not more than forty five (45) calendar days immediately after Pubco’s receipt of the Demand Registration, and (y) using its reasonable best efforts to have such Registration Statement become effective as soon as practicable after Pubco’s receipt of the Demand Registration but in any event no later than within ninety (90) calendar days or, if the Registration Statement is reviewed by, and comments thereto are provided from, the Commission, within one hundred twenty (120) calendar days; provided, further, that Pubco shall request the Registration Statement to be declared effective as soon as practicable but in any event no later than within five (5) business days after the date Pubco is notified (orally or in writing, whichever is earlier) by the staff of the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review. Under no circumstances shall Pubco be obligated to effect more than an aggregate of three (3) Registrations pursuant to a Demand Registration by any Sponsor Holder or more than an aggregate of two (2) Registrations in any twelve (12)-month period pursuant to a Demand Registration by any Significant Specified Holder, in each case pursuant to and under this subsection 2.1.1 with respect to any or all Registrable Securities held by such Holders; provided, further, that a Registration shall not be counted for such purposes unless a Form S-1 or any similar long-form registration statement that may be available at such time (“Form S-1”) has become effective and all of the Registrable Securities requested by the Requesting Holders to be registered on behalf of the Requesting Holders in such Form S-1 Registration have been sold, in accordance with Section 3.1 of this Agreement.
2.1.2 Effective Registration. Notwithstanding the provisions of subsection 2.1.1 above or any other part of this Agreement, a Registration pursuant to a Demand Registration shall not count as a Registration unless and until (i) the Registration Statement filed with the Commission with respect to a Registration pursuant to a Demand Registration has been declared effective by the Commission and (ii) Pubco has complied with all of its obligations under this Agreement with respect thereto; provided, further, that if, after such Registration Statement has been declared effective, an offering of Registrable Securities in a Registration pursuant to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission, federal or state court or any other governmental agency the Registration Statement with respect to such Registration shall be deemed not to have been declared effective, unless and until, (a) such stop order or injunction is removed, rescinded or otherwise terminated, and (b) a majority-in-interest of the Demanding Holders initiating such Demand Registration thereafter affirmatively elect to continue with such Registration and accordingly notify Pubco in writing, but in no event later than five (5) calendar days, of such election; and provided, further, that Pubco shall not be obligated or required to file another Registration Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant to a Demand Registration becomes effective or is subsequently terminated.
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2.1.3 Underwritten Offering. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, if (x) a majority-in-interest of the Demanding Holders or (y) a Significant Specified Holder so advise Pubco as part of their Demand Registration that the offering of the Registrable Securities pursuant to such Demand Registration shall be in the form of an Underwritten Offering, then the right of such Demanding Holder or Requesting Holder (if any) to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in such Underwritten Offering to the extent provided herein. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.1.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by (x) Pubco in consultation with the Demanding Holders initiating the Demand Registration, or (y) a Significant Specified Holder if such Holder has requested the Underwritten Offering and the aggregate gross proceeds from the sale of the Registrable Securities by all Holders requested to be included in such Underwritten Offering are reasonably expected by such Significant Specified Holder to be at least $25,000,000. Notwithstanding the foregoing, Pubco is not obligated to effect (i) more than an aggregate of three (3) Underwritten Offerings pursuant to this subsection 2.1.3 in any twelve (12)-month period; (ii) an Underwritten Offering pursuant to this subsection 2.1.3 within ninety (90) calendar days after the closing of an Underwritten Offering or (iii) an Underwritten Offering unless the aggregate gross proceeds from the sale of all Registrable Securities (regardless of Holder) requested to be included in such Underwritten Offering is reasonably expected by the Requesting Holder to be at least $25,000,000.
2.1.4 Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand Registration, in good faith, advises Pubco, the Demanding Holders and the Requesting Holders (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other shares of Pubco Class A Common Stock or other equity securities that Pubco desires to sell and shares of Pubco Class A Common Stock, if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then Pubco shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities of the Demanding Holders and the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Demanding Holder and Requesting Holder (if any) has requested be included in such Underwritten Registration and the aggregate number of Registrable Securities that the Demanding Holders and Requesting Holders have requested be included in such Underwritten Registration (such proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Holders (Pro Rata, based on the respective number of Registrable Securities that each Holder has so requested) exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof, without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), shares of Pubco Class A Common Stock or other equity securities that Pubco desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), shares of Pubco Class A Common Stock or other equity securities of other persons or entities that Pubco is obligated to register in a Registration pursuant to separate written contractual arrangements with such persons or entities and that can be sold without exceeding the Maximum Number of Securities.
2.1.5 Demand Registration Withdrawal. Prior to (i) the effectiveness of the Registration Statement filed with the Commission with respect to the Registration of their Registrable Securities pursuant to a Demand Registration under subsection 2.1.1 (other than an Underwritten Offering pursuant to subsection 2.1.3), a majority-in-interest of the Demanding Holders initiating a Demand Registration or a majority-in-interest of the Requesting Holders (if any) and (ii) the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing an Underwritten Offering pursuant to subsection 2.1.3, a majority-in-interest of the Demanding Holders initiating an Underwritten Offering, in each case of (i) and (ii), shall have the right to withdraw from a Registration pursuant to such applicable Demand Registration for any or no reason whatsoever upon written notification to Pubco and, if applicable, the Underwriter or Underwriters (if any) of their intention to withdraw from such Registration. Notwithstanding anything to the contrary in this Agreement, Pubco shall be responsible for the Registration Expenses incurred in connection with a Registration pursuant to a Demand Registration prior to any withdrawal under this subsection 2.1.5.
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2.2 Piggyback Registration.
2.2.1 Piggyback Rights. If, at any time on or after the Closing Date, Pubco proposes to file or confidentially submit 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, for its own account or for the account of stockholders of Pubco (or by Pubco and by the stockholders of Pubco including, without limitation, pursuant to Section 2.1 hereof), other than a Registration Statement (a) filed in connection with any employee share option or other benefit plan, (b) pursuant to a registration statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), (c) for an exchange offer or offering of securities solely to Pubco’s existing stockholders, (d) for an offering of debt that is convertible into equity securities of Pubco or (e) for a dividend reinvestment plan, then Pubco shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) calendar days before the anticipated filing date of such Registration Statement, which notice shall (i) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (ii) offer to all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing within (a) five (5) calendar days in the case of filing a registration statement, prospectus or prospectus supplement and (b) three (3) calendar days in the case of an Underwritten Offering (unless such offering is an overnight or bought Underwritten Offering, then one (1) calendar day), in each case after receipt of such written notice (such Registration a “Piggyback Registration”). Pubco shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use its commercially reasonable efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on the same terms and conditions as any similar securities of Pubco included in such Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. If no written request for inclusion from a Holder is received within the specified time, each such Holder shall have no further right to participate in such Piggyback Registration pursuant to this subsection 2.2.1. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.2.1 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by Pubco.
2.2.2 Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Registration that is to be a Piggyback Registration, in good faith, advises Pubco and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of shares of Pubco Class A Common Stock that Pubco desires to sell, taken together with (i) the shares of Pubco Class A Common Stock, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which registration has been requested pursuant to Section 2.2 hereof, and (iii) the shares of Pubco Class A Common Stock, if any, as to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other stockholders of Pubco, exceeds the Maximum Number of Securities, then:
(a) If the Registration is undertaken for Pubco’s account, Pubco shall include in any such Registration (i) first, the shares of Pubco Class A Common Stock or other equity securities that Pubco desires to sell, which can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof, pro rata based on the respective number of Registrable Securities that each Holder has so requested, which can be sold without exceeding the Maximum Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the shares of Pubco Class A Common Stock, if any, as to which Registration has been requested pursuant to written contractual piggy-back registration rights of other stockholders of Pubco, which can be sold without exceeding the Maximum Number of Securities;
(b) If the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then Pubco shall include in any such Registration (i) first, the shares of Pubco Class A Common Stock or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1, pro rata based on the respective number of Registrable Securities that each Holder has requested be included in such Underwritten Registration and the aggregate number of Registrable Securities that the Holders have requested be included in such Underwritten Registration, which can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the shares of Pubco Class A Common Stock or other equity securities that Pubco desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the shares Pubco Class A Common Stock or other equity securities for the account of other persons or entities that Pubco is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities.
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2.2.3 Piggyback Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to Pubco and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback Registration prior to the earlier of (x) the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration or (y) the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing the Underwritten Offering with respect to such Piggyback Registration. Pubco (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement or abandon an Underwritten Offering in connection with a Piggyback Registration at any time prior to the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing such Underwritten Offering. Notwithstanding anything to the contrary in this Agreement, Pubco shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to any withdrawal under this subsection 2.2.3.
2.2.4 Unlimited Piggyback Registration Rights. For purposes of clarity, any Registration effected pursuant to Section 2.2 hereof shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1 hereof.
2.3 Shelf Registrations.
2.3.1 Shelf Registration Rights. Any Holder of Registrable Securities may at any time, and from time to time, request in writing that Pubco, pursuant to Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale of any or all of their Registrable Securities not included on an Initial Shelf Registration Statement (as defined below) on a delayed or continuous basis on a shelf registration statement on Form S-1 or any similar registration statement that may be available at such time (a “Form S-1 Shelf”) or a shelf registration statement on Form S-3 or any similar short form registration statement that may be available at such time (a “Form S-3 Shelf”, and together with a Form S-1 Shelf, a “Shelf Registration Statement”), if Pubco is then eligible to use a Form S-3 Shelf; provided, however, Pubco shall be obligated to effect such request through an Underwritten Offering only pursuant to subsection 2.3.2. In addition, as soon as practicable but in no event later than thirty (30) calendar days following the Closing Date, Pubco will file a Form S-1 Shelf registering the resale of all Registrable Securities requested to be included therein (the “Initial Shelf Registration Statement”). Within five (5) calendar days of Pubco’s receipt of a written request from a Holder or Holders of Registrable Securities for such a Registration, Pubco shall promptly give written notice of the proposed Registration to all other Holders of Registrable Securities, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in such Registration shall so notify Pubco, in writing, within ten (10) calendar days after the receipt by the Holder of the notice from Pubco. In the case of (A) the Initial Shelf Registration Statement, Pubco shall (x) file a Form S-1 Shelf to effect the registration of all Registrable Securities as soon as practicable, but not more than thirty (30) calendar days following the Closing Date, and (y) shall use its commercially reasonable efforts to have the Initial Shelf Registration Statement declared effective as soon as practicable after the filing thereof, but in any event no later than the earlier of (i) the tenth (10th) business day after the date Pubco is notified (orally or in writing, whichever is earlier) by the Commission that the Initial Registration Statement will not be “reviewed” or will not be subject to further review and (ii) the ninetieth (90th) calendar day following the initial filing date of the Initial Shelf Registration Statement if the Commission notifies Pubco that it will review the Initial Registration Statement (the “Initial Shelf Effectiveness Deadline”); provided, that (I) if the Initial Shelf Effectiveness Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Initial Shelf Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business and (II) if the Commission is closed for operations due to a government shutdown, the Initial Shelf Effectiveness Deadline shall be extended by the same number of calendar days as the number of calendar days during which the Commission remains closed; (B) a Form S-3 Shelf, as soon as practicable thereafter, but not more than thirty (30) calendar days after Pubco’s initial receipt of such written request for a Registration on Form S-3, Pubco shall register all or such portion of such Holder’s Registrable Securities as are specified in such written request, together with all or such portion of Registrable Securities of any other Holder or Holders joining in such request as are specified in the written notification given by such Holder or Holders; provided, however, that Pubco shall not be obligated to effect any such Registration if (x) a Form S-3 is not available for such offering; or (y) the Holders of Registrable Securities, together with the Holders of any other equity securities of Pubco entitled to inclusion in such Registration, propose to sell the Registrable Securities and such other equity securities (if any) at any aggregate price to the public expected by such Holders to be less than $10,000,000; and (C) a Form S-1 Shelf, Pubco shall effect, as soon thereafter as practicable, the Registration of all Registrable Securities requested by such Holders, including by (x) filing or confidentially submitting a Form S-1 Shelf relating thereto as soon as practicable, but not more than forty five (45) calendar days immediately after Pubco’s receipt of such written request for a Registration on a Form S-1 Shelf, and (y) shall use its reasonable best efforts to have such Form S-1 Shelf become effective as soon as practicable after Pubco’s receipt of such notice but in any event no later than within ninety (90) calendar days or, if the Form S-1 Shelf is reviewed by, and comments thereto are provided from, the Commission, within one hundred twenty (120) calendar days; provided, further that Pubco shall request the Form S-1 Shelf declared effective as soon as practicable but in any event no later than within five (5) business days after the date Pubco is notified (orally or in writing, whichever is earlier) by the staff of the Commission that the Form S-1 Shelf will not be “reviewed” or will not be subject to further review; provided, however, that Pubco shall not be obligated to effect any such Registration if the Holders of Registrable Securities, together with the Holders of any other equity securities of Pubco entitled to inclusion in such Registration, propose to sell the Registrable Securities and such other equity securities (if any) at any aggregate price to the public expected by such Holders to be less than $10,000,000. For the avoidance of doubt, any Registration pursuant to this Section 2.3.1 shall not count as a Demand Registration for purposes of Section 2.1.1.
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2.3.2 Underwritten Shelf Offerings. At any time that a Shelf Registration Statement is effective, if any Significant Specified Holder delivers a notice to Pubco stating that it intends to sell all or part of such Holder’s Registrable Securities included on the Shelf Registration Statement in an Underwritten Offering, then Pubco shall promptly amend or supplement the Shelf Registration Statement, as may be necessary in order to enable such Registrable Securities to be distributed pursuant to an Underwritten Offering; provided, that subsections 2.1.3 and 2.1.4 shall apply mutatis mutandis.
2.4 Restrictions on Registration Rights. If the Holders have requested an Underwritten Registration and (a) Pubco and the Holders are unable to obtain the commitment of underwriters to firmly underwrite the offer, (b) the filing, initial effectiveness, or continued use of a Registration Statement in respect of such Underwritten Offering at any time would require the inclusion in such Registration Statement of financial statements that are unavailable to Pubco for reasons beyond Pubco’s control, or (c) in the good faith judgment of the Board such Registration would be detrimental to Pubco and the Board concludes as a result that it is essential to defer the filing of such Registration Statement at such time, then in each case Pubco shall furnish to such Holders a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board it would be detrimental to Pubco for such Registration Statement to be filed in the near future and that it is therefore essential to defer the filing of such Registration Statement. In such event, Pubco shall have the right to defer such filing for a period of not more than thirty (30) calendar days; provided, however, that Pubco shall not defer its obligation in this manner more than once in any 12-month period.
ARTICLE III
PUBCO PROCEDURES
3.1 General Procedures. If at any time on or after the Closing Date, Pubco is required to effect the Registration of Registrable Securities, Pubco shall use its commercially reasonable efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto Pubco shall, as expeditiously as possible:
3.1.1 prepare and file with the Commission, within the time frame required by Section 2.1.1, a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities covered by such Registration Statement have been sold or are no longer outstanding (such period, the “Effectiveness Period”);
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3.1.2 prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus used in connection therewith as may be necessary under applicable law to keep such Registration Statement continuously effective with respect to the disposition of all Registrable Securities thereby for its Effectiveness Period;
3.1.3 prior to filing or confidentially submitting a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and each Holder of Registrable Securities included in such Registration, and each such Holder’s legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters and each Holder of Registrable Securities included in such Registration or the legal counsel for any such Holders may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Holders; provided, that, Pubco will not have any obligation to provide any document pursuant to this clause that is available on the Commission’s EDGAR system;
3.1.4 prior to any public offering of Registrable Securities, use its commercially reasonable efforts to (a) 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 any Holder of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (b) 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 Pubco 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 Pubco shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause all such Registrable Securities to be listed on each national securities exchange on which similar securities issued by Pubco are then listed;
3.1.6 provide a transfer agent and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
3.1.7 advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;
3.1.8 at least five (5) calendar days prior to the filing or confidentially submitting of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus, furnish a copy thereof to each seller of such Registrable Securities and its counsel, including, without limitation, providing copies promptly upon receipt of any comment letters received with respect to any such Registration Statement or Prospectus;
3.1.9 notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;
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3.1.10 permit a representative of the Significant Specified Holders, the Underwriters, if any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause Pubco’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however, that such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory to Pubco, prior to the release or disclosure of any such information; and provided further, Pubco may not include the name of any Holder or Underwriter or any information regarding any Holder or Underwriter in any Registration Statement or Prospectus, any amendment or supplement to such Registration Statement or Prospectus, any document that is to be incorporated by reference into such Registration Statement or Prospectus, or any response to any comment letter, without the prior written consent of such Holder or Underwriter and providing each such Holder or Underwriter a reasonable amount of time to review and comment on such applicable document;
3.1.11 obtain a “cold comfort” letter from Pubco’s independent registered public accountants in the event of an Underwritten Registration which the participating Holders may rely on, 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 each participating Significant Specified Holder;
3.1.12 on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated such date, of counsel representing Pubco for the purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably satisfactory to each participating Significant Specified Holder;
3.1.13 in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter of such offering;
3.1.14 make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of Pubco’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission);
3.1.15 if the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $50,000,000, use its reasonable efforts to make available senior executives of Pubco to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in any Underwritten Offering; and
3.1.16 otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection with such Registration.
3.2 Registration Expenses. The Registration Expenses of all Registrations shall be borne by Pubco. It is acknowledged by the Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
3.3 Requirements for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities of Pubco pursuant to a Registration initiated by Pubco hereunder unless such person (a) agrees to sell such person’s securities on the basis provided in any underwriting arrangements in form, scope and substance customary for such offerings and approved by Pubco and such person and (b) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements.
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3.4 Suspension of Sales; Adverse Disclosure. Upon receipt of written notice from Pubco that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that Pubco hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until it is advised in writing by Pubco that the use of the Prospectus may be resumed. If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would require Pubco to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to Pubco for reasons beyond Pubco’s control, Pubco may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time, but in no event more than thirty (30) calendar days, determined in good faith by Pubco to be necessary for such purpose. In the event Pubco exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities. Pubco shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4. If so directed by Pubco, the Holders will deliver to Pubco or, in Holders’ sole discretion destroy, all copies of each Prospectus for which the Holders have suspended use pursuant to this Section 3.4 covering Registrable Securities in Holders’ possession; provided, however, that this obligation to deliver or destroy shall not apply (A) to the extent the Holders are required to retain a copy of such Prospectus (x) to comply with applicable legal, regulatory, self-regulatory or professional requirements or (y) in accordance with a bona fide pre-existing document retention policy or (B) to copies stored electronically on archival servers as a result of automatic data back-up. Notwithstanding anything to the contrary set forth herein, Pubco shall not provide any Holder with any material, nonpublic information regarding Pubco other than to the extent that providing notice under this Section 3.4 to such Holder constitutes material, nonpublic information regarding Pubco.
3.5 Reporting Obligations. As long as any Holder shall own Registrable Securities, Pubco, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by Pubco after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act. Pubco further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell the shares of Pubco Class A Common Stock held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including providing any legal opinions. Upon the request of any Holder, Pubco shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 Pubco agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its affiliates, officers and directors and each person who controls such Holder (within the meaning of the Securities Act) (collectively, the “Holder Indemnified Persons”) against all losses, claims, damages, liabilities and expenses (including reasonable outside attorneys’ fees) resulting from any Misstatement or alleged Misstatement, except insofar as the same are caused by or contained in any information furnished in writing to Pubco by such Holder Indemnified Person expressly for use therein.
4.1.2 In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to Pubco in writing such information and affidavits as Pubco reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify Pubco, its directors and officers and agents and each person who controls Pubco (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including without limitation reasonable outside attorneys’ fees) resulting from any Misstatement or alleged Misstatement, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement.
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4.1.3 Any person entitled to indemnification herein shall (a) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (b) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party if the indemnifying party provides notice of such to the indemnified party within 30 calendar days of the indemnifying party’s receipt of notice of such claim. After notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any other legal expenses except as provided below and except for the reasonable costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (ii) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (iii) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (iv) the indemnifying party has not in fact employed counsel to assume the defense of such action or counsel reasonably satisfactory to the indemnified party, in each case, within a reasonable time after receiving notice of the commencement of the action; in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction (plus local counsel) at any one time for all such indemnified party or parties. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). No indemnifying party shall, without the consent of the indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 4 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent (1) includes an express and unconditional release of each indemnified party, in form and substance reasonably satisfactory to such indemnified party, from all liability arising out of such litigation, investigation, proceeding or claim and (2) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
4.1.4 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities.
4.1.5 If the indemnification provided under Section 4.1 hereof is held by a court of competent jurisdiction to be unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall to the extent permitted by law contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this subsection 4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection 4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of such fraudulent misrepresentation.
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ARTICLE V
MISCELLANEOUS
5.1 Notices. Any notice or communication under this Agreement must be in writing and given by (a) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (b) delivery in person or by courier service providing evidence of delivery, or (c) transmission by hand delivery, electronic mail or facsimile. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed and, in the case of notices delivered by courier service, hand delivery, electronic mail or facsimile, at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation. Any notice or communication under this Agreement must be addressed, if to Pubco, to: 413 W 14th Street, Floor 2, PMB 4633, New York, NY 10014 for the attention of Gerald Bartholomew Smith, and, if to any Holder, at such Holder’s address or contact information as set forth in Pubco’s books and records. Any party may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address shall become effective thirty (30) calendar days after delivery of such notice as provided in this Section 5.1.
5.2 Assignment; No Third Party Beneficiaries.
5.2.1 This Agreement and the rights, duties and obligations of Pubco hereunder may not be assigned or delegated by Pubco in whole or in part.
5.2.2 Prior to the expiration of the applicable Lock-Up Period, no Holder may assign or delegate such Holder’s rights, duties or obligations under this Agreement, in whole or in part, except in connection with a transfer of Registrable Securities by such Holder to a Permitted Transferee but only if such Permitted Transferee agrees to become bound by the transfer restrictions set forth in this Agreement.
5.2.3 This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Holders, which shall include Permitted Transferees.
5.2.4 This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement, including Section 4.1 and Section 5.2 hereof.
5.2.5 No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate Pubco unless and until Pubco shall have received (a) written notice of such assignment as provided in Section 5.1 hereof and (b) the written agreement of the assignee, in a form reasonably satisfactory to Pubco, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 5.2 shall be null and void.
5.3 Counterparts. This Agreement may be executed in multiple counterparts (including facsimile, PDF or other electronic counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.
5.4 Governing Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT (A) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF SUCH JURISDICTION AND (B) THE VENUE FOR ANY ACTION TAKEN WITH RESPECT TO THIS AGREEMENT SHALL BE ANY STATE OR FEDERAL COURT IN NEW YORK COUNTY IN THE STATE OF NEW YORK.
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5.5 Trial by Jury. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
5.6 Amendments and Modifications. Upon the written consent of Pubco, the Sponsor and Holders of at least a majority in interest of the Registrable Securities held by all Specified Holders at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects either the Sponsor Holders as a group or the Specified Holders as a group (regardless, in each case, whether the Sponsor Holders or Specified Holders, respectively, are adversely affected (as a group) to the same extent) shall require the consent of at least (x) a majority-in-interest of the Registrable Securities held by such Sponsor Holders or (y) each Specified Holder, as applicable, at the time in question so affected; provided, further, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder or group of affiliated Holders, solely in its capacity as a holder of the shares of capital stock of Pubco, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder or group of affiliated Holders so affected. No course of dealing between any Holder or Pubco and any other party hereto or any failure or delay on the part of a Holder or Pubco in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or Pubco. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
5.7 Other Registration Rights. Except as set forth on Schedule 5.7 hereto, Pubco represents and warrants that, no person, other than a Holder of Registrable Securities, has any right to require Pubco to register any securities of Pubco for sale or to include such securities of Pubco in any Registration filed by Pubco for the sale of securities for its own account or for the account of any other person. Further, Pubco represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
5.8 Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior contracts or agreements with respect to the subject matter hereof and the matters addressed or governed hereby, whether oral or written, including, without limitation, the Original Registration Rights Agreement.
5.9 Term. This Agreement shall terminate upon the earlier of (a) the tenth anniversary of the date of this Agreement or (b) the date as of which (i) all of the Registrable Securities have been sold pursuant to a Registration Statement (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder (or any successor rule promulgated thereafter by the Commission)) or (ii) with respect to any Holder, such Holder ceasing to hold Registrable Securities.
5.10 Termination of Business Combination Agreement. This Agreement shall be binding upon each party upon such party’s execution and delivery of this Agreement, but this Agreement shall only become effective upon the Closing. In the event that the Business Combination Agreement is validly terminated in accordance with its terms prior to the Closing, this Agreement shall automatically terminate and become null and void and be of no further force or effect, and the parties shall have no obligations hereunder and the provisions of the Original Registration Rights Agreement shall be automatically reinstated and in effect.
[Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned have caused this Amended and Restated Registration Rights Agreement to be executed as of the date first written above.
| AVALANCHE TREASURY CORPORATION | ||
| By: | ||
| Name: | ||
| Title | ||
| MOUNTAIN LAKE ACQUISITION CORP. | ||
| By: | ||
| Name: | ||
| Title | ||
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MOUNTAIN LAKE ACQUISITION SPONSOR LLC | ||
| By: | ||
| Name: | ||
| Title | ||
| BTIG, LLC | ||
| By: | ||
| Name: | ||
| Title | ||
| SPECIFIED HOLDERS: | ||
| [·] | ||
| By: | ||
| Name: | ||
| Title | ||
| [·] | ||
| By: | ||
| Name: | ||
| Title | ||
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IN WITNESS WHEREOF, the undersigned have caused this Amended and Restated Registration Rights Agreement to be executed as of the date first written above.
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Exhibit 10.5
Certain personally identifiable information has been omitted from this exhibit pursuant to
item 601(a)(6) of Regulation S-K. [***] indicates
that information has been redacted.
LLC SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (this “Subscription Agreement” or “Agreement”) is entered into on October 1, 2025, by and among Avalanche Treasury Corporation, a Delaware corporation (“Pubco”), Avalanche Treasury Company LLC, a Delaware limited liability company (the “Company”), Mountain Lake Acquisition Corp., a Cayman Islands exempted company (“SPAC”) and the undersigned subscriber (“Subscriber”).
WHEREAS, on or about the date hereof, (a) SPAC, (b) Pubco, (c) Avalanche SPAC Merger Sub LLC, a Delaware limited liability company and a wholly-owned subsidiary of Pubco (“SPAC Merger Sub”), (d) the Company, (e) Avalanche Company Merger Sub, a Delaware limited liability company and a wholly-owned subsidiary of Pubco (“Company Merger Sub”) and (h) Dragonfly Digital Management, LLC (the “Seller”), entered into a business combination agreement (as amended, modified, supplemented or waived from time to time, the “BCA”);
WHEREAS, pursuant to and in accordance with the BCA, (a) prior to the Closing, SPAC shall effectuate a domestication under Section 388 of the General Corporation Law of the State of Delaware and the Cayman Islands Companies Act (As Revised) (the “Domestication”), pursuant to which SPAC shall transfer by way of continuation to and become a Delaware corporation (the “Domesticated SPAC”), (b) at least two (2) hours after the Domestication, the SPAC Merger Sub will merge with and into the SPAC, with the SPAC continuing as the surviving company (the “SPAC Merger”), and with the shareholders of the SPAC receiving one share of Class A common stock, par value $0.01 per share, of Pubco (“Pubco Class A Common Stock”) for each Class A ordinary share of the SPAC, par value $0.0001 per share (“SPAC Class A Ordinary Shares”), held by such shareholder in accordance with the terms of the BCA, and (c) Company Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity (the “Company Merger” and, together with the SPAC Merger, the “Mergers” and, together with the other transactions contemplated by the BCA, the “Transactions”), with (i) members of the Company (“Company Members”) receiving shares of Pubco Class A Common Stock in exchange for their Company Units (as defined below) and (ii) the Seller receiving Pubco Class A Common Stock, Pubco Class B Common Stock, and certain other considerations in exchange for Company Units, in each case in accordance with the terms of the BCA, and upon consummation of the Mergers, Pubco will become a publicly traded company, all upon the terms and subject to the conditions set forth in the BCA and in accordance with applicable law;
WHEREAS, in connection with the Transactions, Subscriber desires to subscribe for and purchase from the Company, on the date hereof, Class A Units in the Company (the “Company Units”), each having the rights, privileges and preferences set out in that certain Amended and Restated Limited Liability Company Agreement of the Company, dated as of the date hereof (as amended, modified, or supplemented from time to time, including pursuant to any joinder agreements executed in accordance therewith, the “LLC Agreement”) at a price of $10.00 per Company Unit (the “Per Unit Price”), payable in cash, USD Coin, the stablecoin pegged to the value of the U.S. dollar (“USDC”), or by contribution of AVAX tokens, the native cryptocurrency on the Avalanche Network (“AVAX”), in accordance with the terms of this Agreement, and the Company desires to issue to Subscriber such Company Units in consideration of the payment or contribution of the Subscription Price (as defined below) by or on behalf of Subscriber to the Company simultaneously with such acquisition;
WHEREAS, the parties hereto intend that the contribution of AVAX to the Company in exchange for the Company Units will be treated as a tax-deferred transaction described in Section 721(a) of the Internal Revenue Code of 1986, as amended (the “Code”);
WHEREAS, on or about the date of this Subscription Agreement, SPAC, the Company and Pubco are entering into subscription agreements (the “Other LLC Subscription Agreements” and, together with this Subscription Agreement, the “LLC Subscription Agreements”) with certain other investors (the “Other LLC Subscribers” and together with Subscriber, the “LLC Subscribers”), pursuant to which the Other LLC Subscribers have agreed to purchase Company Units in accordance with such Other LLC Subscription Agreements (the Company Units of the Other LLC Subscribers, the “Other LLC Subscribed Units” and, together with the Subscribed Units, the “LLC Subscribed Units”);
WHEREAS, upon the consummation of the Transactions, each Subscribed Unit shall be converted automatically into such number of shares of Pubco Class A Common Stock as calculated in accordance with Section 2.8(a) of the BCA; and
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
Section 1. Subscription. Subject to the terms and conditions hereof, Subscriber hereby irrevocably subscribes for and agrees to acquire from the Company, and the Company hereby agrees to issue to Subscriber, upon payment or contribution of the Subscription Price by or on behalf of Subscriber to the Company, the Subscribed Units free and clear of all liens, claims, or other encumbrances other than restrictions under applicable securities laws and the LLC Agreement (such subscription and issuance, the “Subscription”).
Section 2. Closing.
(a) The execution of this Subscription Agreement and the consummation of the Subscription contemplated hereby (the “Subscription Closing”) shall, subject to the provisions of this Section 2, occur simultaneously on the date hereof.
(b) The Subscription Price shall be paid in either cash, USDC or AVAX, at the Subscriber’s sole election, in such amounts as indicated in Subscriber’s signature page of this Subscription Agreement. For purposes of this Agreement:
(i) “Avalanche Network” means the decentralized application platform as described in the Platform Paper, and as amended or restated from time to time.
(ii) “Locked AVAX” means Paper Locked AVAX or Programmatically Locked AVAX.
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(iii) “Long Restricted AVAX Price” means the Unrestricted AVAX Price Multiplied by 0.75. The Long Restricted AVAX Price shall apply and be deemed the Signing AVAX Price if Subscriber elects to subscribe for the Company Units with Restricted AVAX that will become Unrestricted AVAX following the one-year anniversary of this Subscription Agreement.
(iv) “Paper Locked AVAX” means any AVAX that, as of the date of this Subscription Agreement, may only be transferred to the Company with the consent of the Avalanche Network, Avalanche (BVI), Inc., a British Virgin Islands business company, or Ava Labs, Inc., a Delaware corporation, and the Company, upon receipt of any such AVAX, may not otherwise independently transfer or dispose of, directly or indirectly, any such AVAX until it becomes Unrestricted AVAX, as such AVAX is locked pursuant to a vesting schedule.
(v) “Platform Paper” means the document produced by Ava Labs, Inc., a Delaware corporation, that describes various implementation details of the Avalanche Network, located at https://www.avalabs.org/whitepapers, as amended or restated from time to time.
(vi) “Programmatically Locked AVAX” means any AVAX that, as of the date of this Subscription Agreement, is locked in the Avalanche Network pursuant to a vesting schedule and may not be transferred or disposed of, directly or indirectly, under any circumstances until the expiration of such vesting schedule.
(vii) “Restricted AVAX” means AVAX that is either Locked AVAX or Staked AVAX.
(viii) “Short Restricted AVAX Price” means the Unrestricted AVAX Price multiplied by 0.85. The Short Restricted AVAX Price shall apply and be deemed the Signing AVAX Price if Subscriber elects to subscribe for the Company Units with Restricted AVAX that will become Unrestricted AVAX on or prior to the one-year anniversary of this Subscription Agreement.
(ix) “Signing AVAX Price” means the Unrestricted AVAX Price, the Short Restricted AVAX Price or the Long Restricted AVAX Price, as applicable, and as certified by Subscriber on Annex E.
(x) “Stake” or “Staking” means (a) staking or delegating, whether directly or through a third-party service provider, for the purposes of participating in network consensus, securing the network and receiving staking rewards; (b) participating in liquid staking protocols, including depositing AVAX into protocols that issue liquid staking derivatives or receipt tokens; (c) engaging in on-chain or off-chain yield generation activities, including but not limited to depositing AVAX into decentralized or centralized finance protocols for the purposes of lending or borrowing against; or (d) providing liquidity to decentralized or centralized exchanges, automated market makers or liquidity pools.
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(xi) “Staked AVAX” means any AVAX that the Company is, as of the date of this Subscription Agreement, unable to immediately acquire from Subscriber or otherwise Stake, lend, pledge, or transfer or dispose of, directly or indirectly because such AVAX is currently being Staked.
(xii) “Subscribed Units” means such number of Company Units equal to the quotient of (i) the Subscription Price and (ii) the Per Unit Price.
(xiii) “Subscription Price” means (A) if Subscriber elects to subscribe for the Company Units with cash, the amount of cash as is set forth on the signature page hereto, (B) if Subscriber elects to subscribe for the Company Units with USDC, the amount of USDC equal to the amount of cash as is set forth on the signature page hereto (“USDC Proceeds”) or (C) if Subscriber elects to subscribe for the Company Units with AVAX, such amount (in USD) equal to the product of (x) the amount of AVAX as is set forth on the signature page hereto (the “AVAX Amount”) and (y) the Signing AVAX Price.
(xiv) “Unrestricted AVAX” means AVAX that is neither Locked AVAX nor Staked AVAX.
(xv) “Unrestricted AVAX Price” means the volume-weighted average price (“VWAP”) of AVAX denominated in USD as calculated from all executed trades on the exchange operated by Binance Holdings Ltd. (“Binance”) (or its successor primary spot exchange) over the five-day period ending at 8:00 p.m. New York City time on September 29, 2025; such VWAP shall be calculated by dividing the sum of the products of each trade’s price and volume by the total volume of all trades during the specified five-day period. The Unrestricted AVAX Price shall apply and be deemed the Signing AVAX Price if Subscriber elects to subscribe for the Company Units with Unrestricted AVAX.
(c) No fractional Company Units will be issued. In determining such number of Company Units to be issued, such number shall be rounded down to the nearest whole share in the case of any resulting fractional number of Company Units.
(d) On the date of this Subscription Agreement or within the timelines set out below, Subscriber shall deliver to the Company:
(i) if Subscriber is delivering the Subscription Price in cash, on the date of this Subscription Agreement or within three (3) business days following the date of this Subscription Agreement, an amount equal to the total Subscription Price, in such amount as indicated in Subscriber’s signature page to this Subscription Agreement (the “Transferred Funds”) by wire transfer of immediately available funds in U.S. dollars to an escrow account specified on Annex A hereto (the “Escrow Account”);
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(ii) if Subscriber is delivering the Subscription Price in USDC, on the date of this Subscription Agreement or within three (3) business days following the date of this Subscription Agreement, an amount of USDC equal to the total Subscription Price, in such amount as indicated in Subscriber’s signature page to this Subscription Agreement, free and clear of any liens, encumbrances or other restrictions, via transfer to the wallet address maintained by Coinbase (the “Custodian”) in the name of the Company specified in Annex B hereto; and
(iii) if Subscriber is delivering the Subscription Price in Unrestricted AVAX, as soon as reasonably possible after the date of this Subscription Agreement, and in any case on or prior to November 7, 2025, the AVAX Amount, free and clear of any liens, encumbrances or other restrictions, via transfer of the AVAX Amount to the wallet address maintained by the Custodian in the name of the Company specified in Annex B hereto; and
(iv) if Subscriber is delivering the Subscription Price in Paper Locked AVAX, as soon as reasonably possible after the date of this Subscription Agreement, and in any case on or prior to November 7, 2025, the AVAX Amount, free and clear of any liens, encumbrances or other restrictions, except for the lock rendering such AVAX to be Locked AVAX, via transfer of the AVAX Amount to the wallet address maintained by the Custodian in the name of the Company specified in Annex B hereto
(v) if Subscriber is delivering the Subscription Price in Programmatically Locked AVAX, Subscriber shall use its best efforts to, as soon as soon as reasonably possible after any such Programmatically Locked AVAX becomes Unrestricted AVAX, deliver the AVAX Amount, free and clear of any liens, encumbrances or other restrictions via transfer of the AVAX Amount to the wallet address maintained by the Custodian in the name of the Company specified in Annex B hereto; and
(vi) if Subscriber is delivering the Subscription Price in Staked AVAX, Subscriber shall use its best efforts to, as soon as soon as reasonably possible after any such Staking is complete and Subscriber’s AVAX becomes Unrestricted AVAX, deliver the AVAX Amount, free and clear of any liens, encumbrances or other restrictions via transfer of the AVAX Amount to the wallet address maintained by the Custodian in the name of the Company specified in Annex B hereto.
(e) If Subscriber is delivering the Subscription Price in Restricted AVAX, Subscriber covenants and agrees that any additional AVAX yielded or earned on or by such AVAX, through Staking or otherwise, during the period from the date of this Subscription Agreement through to the date any such AVAX constituting the Subscription Price becomes Unrestricted AVAX shall be delivered to the Company and shall constitute part of the Subscription Price in consideration for the Subscribed Units. If Subscriber is delivering the Subscription Price in Programmatically Locked AVAX or Staked AVAX, Subscriber shall also provide to the Company the completed, executed questionnaire in Annex F hereto at the time such Programmatically Locked AVAX or Staked AVAX is delivered to the Company, certifying the amount of AVAX yielded or earned on or by such AVAX, through staking or otherwise, during the period from the date of this Subscription Agreement through to the date any such AVAX is delivered to the Company.
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(f) On or following the date of this Agreement, Subscriber shall deliver to the Company:
(i) a duly executed LLC Agreement in the form attached hereto as Annex C (which may be amended and restated pursuant to the BCA and as part of the Company Merger), pursuant to which Subscriber shall accept all the rights, duties and obligations set forth in the LLC Agreement and become a member of the Company;
(ii) a duly completed and executed Internal Revenue Service Form W-9 or appropriate Form W-8;
(iii) such information as is reasonably requested by the Company in order for the Company to admit Subscriber as a member and to issue the Subscribed Units to Subscriber; and
(iv) such information as the Company may reasonably request for purposes of evidencing Subscriber’s adjusted tax basis and holding period in each contributed property in exchange for Subscribed Unit, including transaction history and acquisition records sufficient to substantiate such basis and holding period for tax reporting purposes.
(g) If Subscriber elects to subscribe for the Company Units in cash or USDC, then on the date hereof or as soon as reasonably practicable, the Company shall update the Company’s books and records to reflect (x) the admission of Subscriber as a member holding such number of Subscribed Units as described herein and (y) a capital contribution under the LLC Agreement by Subscriber in the amount of the Subscription Price. If Subscriber elects to subscribe for the Company Units in AVAX, then on the date that is six (6) business days from the date hereof, the Company shall update the Company’s books and records to reflect (x) the admission of Subscriber as a member holding such number of Subscribed Units as described herein and (y) a capital contribution under the LLC Agreement by Subscriber in the amount of the Subscription Price. The Subscribed Units shall contain a legend in substantially the following form:
THE OFFER AND SALE OF THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
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(h) On or prior to the date hereof, the Company shall enter into agreements with the Custodian or one of their respective affiliates or other third-party liquidity providers and prime brokers (the “Liquidity Providers”) as necessary, for providing for the custody and purchase of AVAX. Within ten (10) business days of the date hereof (the “Funding Period”), the Company will transfer all of the Transferred Funds from the Escrow Account to the Custodian (the “AVAX Funds”). For the avoidance of doubt, the Company may cause such Transferred Funds to be transferred to the Custodian immediately upon receipt of any amount of such funds from Subscribers at any time during the Funding Period. Promptly upon receipt of any amount of such AVAX Funds and within the Funding Period, the Company shall cause the Custodian or the Liquidity Providers as the case may require, to use the AVAX Funds to purchase AVAX on behalf of the Company (the “Purchased AVAX”, together with any AVAX purchased by the Company with USDC Proceeds and the aggregate AVAX Amount paid by all Subscribers subscribing in AVAX, the “Company AVAX”) at the then-prevailing spot market price of AVAX at the time of execution of the trade(s), which shall be disclosed to the Company in advance, or in such other manner as the Company determines, acting in good faith and using its reasonable judgment to obtain fair value. The Company AVAX shall be held in an unencumbered custody account at the Custodian or its affiliates in the name of the Company, for which the Custodian or its affiliates serve as the custodian (the “Custody Account”). The Company shall cause the Custodian and the Liquidity Providers to provide prompt written confirmation to the Company upon completion of AVAX purchase, including details of the amount of the Purchased AVAX, the execution price(s), and any fees incurred.
(i) Until the closing of the Transactions, the Company and Pubco covenant that neither the AVAX contributed in respect of the Subscription Price nor the Company AVAX shall be pledged, hypothecated, or otherwise used as collateral to secure any indebtedness or obligation, and shall remain free and clear of all liens, charges, and encumbrances; provided, that the Company and Pubco may use any AVAX contributed in respect of the Subscription Price or the Company AVAX for Staking.
(j) The Company AVAX may not be released from the Custody Account until (i) the earlier of either (A) the closing of the Transactions or (B) termination of the BCA in accordance with its terms and (ii) the Authorized Persons (as defined below) authorize the release of the Company AVAX through the Custodian.
(k) If consummation of the Transactions occurs, then on the closing date of the Transactions, the Company AVAX will be released from the Custody Account and transferred to a digital asset wallet account designated in writing by the Company and SPAC upon receipt by the Custodian of the required authorization by the Authorized Persons, and the Company shall provide the Custodian with a specific instruction noting this requirement for release, along with the names of the Authorized Persons.
(l) In the event that the consummation of the Transactions does not occur prior to the Outside Date (as defined in the BCA), unless otherwise agreed to in writing by Pubco, the Company and Subscriber, the Company shall promptly (but in no event later than three (3) business days after the Outside Date) liquidate in accordance with the Company Organizational Documents (as defined below).
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(m) The Company designates either Bart Smith or Laine Litman, and SPAC designates Paul Grinberg as its representatives, respectively, who must jointly authorize the release of the Company AVAX from the Custody Account in accordance with this Section 2 (the “Authorized Persons”). Any individual designated as an Authorized Person who is convicted of, or admits to, a Disqualification Event (as defined in Section 4(n)), shall be automatically removed and shall no longer serve as an Authorized Person. Upon becoming aware of any Disqualification Event affecting one of its Authorized Persons, the applicable party shall promptly deliver written notice to the other party and to the Custodian, which notice shall identify the Authorized Person to be removed and the name and contact information of the replacement Authorized Person.
(n) As promptly as practicable after the completion of the Transactions (and, in any event no more than three (3) business days after such completion), Pubco shall deliver to each Subscriber evidence from Pubco’s transfer agent of the exchange of the Subscribed Units for such number of shares of Pubco Class A Common Stock per Subscribed Unit as calculated in accordance with Section 2.8(a) in the BCA.
(o) The parties hereby agree and acknowledge that, for U.S. federal income tax purposes, (1) the subscriptions contemplated by this agreement are intended to be contributions qualifying under section 721(a) of the Internal Revenue Code of 1986, as amended, (2) the Company Merger, the SPAC Merger, and certain other contribution(s) as contemplated by the BCA, taken together, are intended to be treated as an integrated transaction that is described in Section 351 of the Code (the “Intended Tax Treatment”). Each of the parties hereto agree to report and cause to be reported for U.S. federal income tax purposes all tax-related items in a manner consistent with such Intended Tax Treatment.
(p) The obligations of Subscriber to consummate, or cause to be consummated, the transactions contemplated by this Subscription Agreement (including the Subscription Closing) are subject to the satisfaction or waiver by Subscriber of the additional conditions that, on the date hereof, no Other LLC Subscription Agreement (or other agreements or understandings (including side letters) entered into in connection therewith or in connection with the sale of the Other LLC Subscribed Units) shall have been materially amended, modified or waived unless the Subscriber shall have been offered in writing the same benefits (other than terms particular to the legal or regulatory requirements of such Other LLC Subscriber or its affiliates or related persons).
Section 3. Subscription Adjustment. Immediately prior to the Company Merger, the Subscribed Company Units shall be adjusted as follows: (x) if the Closing AVAX Price (as defined below) is greater than the Unrestricted AVAX Price, the Company shall issue to each Subscriber such number of Company Units equal to the product of (i) the number of Subscribed Units issued to such Subscriber at the Subscription Closing and (ii) the difference between (1) the quotient of the Closing AVAX Price and the Unrestricted AVAX Price and (2) one (the “Adjustment Units”); and (y) the Company shall issue to each Subscriber such number of Company Units equal to such Subscriber’s pro rata portion of the Aggregate Staking Units, based on such Subscriber’s Company Units relative to the aggregate Company Units of all Subscribers. For purposes of this Agreement, (i) “Closing AVAX Price” means the VWAP of AVAX denominated in USD as calculated from all executed trades on Binance (or its successor primary spot exchange) over the five-day period ending at 8:00 p.m. New York City time on the day immediately prior to the closing date of the Transactions; such VWAP shall be calculated by dividing the sum of the products of each trade’s price and volume by the total volume of all trades during the specified five-day period; (ii) “Net Staking Rewards” means the total amount of AVAX generated as staking rewards from the staking of the Company AVAX from the date of this Subscription Agreement until the date immediately prior to the closing date of the Transactions and after deducting any and all applicable staking fees, network transaction fees, and operational costs directly attributable to such staking; and (iii) “Aggregate Staking Units” means such number of Company Units equal to the quotient of (x) the Net Staking Rewards multiplied by the Closing AVAX Price and (y) the Per Unit Price. For the avoidance of doubt, any adjustment pursuant to this Section 3 is intended to prevent the value of a Company Unit from exceeding the Per Unit Price, and shall be treated and reported for all tax purposes as not resulting in a “capital shift” or other taxable event, unless otherwise required by a determination within the meaning of Section 1313(a) of the Code (or any similar provision of state or local).
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Section 4. Company, Pubco and SPAC Representations and Warranties. Each of (i) the Company, solely with respect to the representations and warranties set forth below relating to the Company, (ii) Pubco, solely with respect to the representations and warranties set forth below relating to Pubco and (iii) SPAC, solely with respect to the representations and warranties set for the below relating to SPAC, represents and warrants, severally and not jointly, to Subscriber and the Placement Agents (as defined below) as of the date hereof, that:
(a) The Company (i) is validly existing under the laws of the State of Delaware, (ii) has the requisite corporate power and authority to own, lease and operate its properties and to conduct its business as it is now being conducted, and (iii) is duly licensed or qualified and in good standing (to the extent applicable) in all jurisdictions in which its ownership of property or character of its activities is such as to require it to be so licensed or qualified, except, with respect to the foregoing clause (iii), where the failure to be so licensed or qualified has not and would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. For purposes of this Subscription Agreement, a “Company Material Adverse Effect” means an event, change, development, occurrence, condition or effect with respect to Company that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on Company’s ability to consummate the transactions contemplated by this Subscription Agreement. The Company’s sole assets are cash, USDC and AVAX paid in respect of the Subscription Price, which cash and USDC will be utilized to purchase AVAX in accordance with the terms of this Agreement.
(b) Pubco (i) is validly existing under the laws of the State of Delaware, (ii) has the requisite corporate power and authority to own, lease and operate its properties and to conduct its business as it is now being conducted, and (iii) is duly licensed or qualified and in good standing (to the extent applicable) in all jurisdictions in which its ownership of property or character of its activities is such as to require it to be so licensed or qualified, except, with respect to the foregoing clause (iii), where the failure to be so licensed or qualified has not and would not, individually or in the aggregate, reasonably be expected to have a Pubco Material Adverse Effect. For purposes of this Subscription Agreement, a “Pubco Material Adverse Effect” means an event, change, development, occurrence, condition or effect with respect to Pubco that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on Pubco’s ability to consummate the transactions contemplated by this Subscription Agreement.
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(c) SPAC (i) is validly existing and in good standing under the laws of its jurisdiction of incorporation, organization or formation, (ii) has the requisite corporate power and authority to own, lease and operate its properties, to carry on its business as it is now being conducted and to enter into and perform its obligations under this Subscription Agreement, and (iii) is duly licensed or qualified to conduct its business and, if applicable, is in good standing under the laws of each jurisdiction (other than its jurisdiction of incorporation) in which the conduct of its business or the ownership of its properties or assets requires such license or qualification, except, with respect to the foregoing clause (iii), where the failure to be in good standing would not reasonably be expected to have a SPAC Material Adverse Effect. For purposes of this Subscription Agreement, a “SPAC Material Adverse Effect” means an event, change, development, occurrence, condition or effect with respect to SPAC that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on SPAC’s ability to consummate the transactions contemplated by this Subscription Agreement.
(d) The issuance and sale of the Subscribed Units, when issued pursuant to this Subscription Agreement (subject to the receipt of the Subscription Price in accordance with the terms of this Subscription Agreement), will have been duly authorized by the Company and, when issued and delivered to Subscriber (or its nominee in accordance with the Subscriber’s delivery instructions), will be validly issued, fully paid and free and clear of all liens or other restrictions (other than those arising under this Subscription Agreement or the BCA, the Company Organizational Documents or applicable securities laws), and will not have been issued in violation of, or subject to, any preemptive or similar rights created under the Company Organizational Documents (as in effect at such time of issuance) or under the Delaware Limited Liability Company Act.
(e) This Subscription Agreement has been duly authorized, validly executed and delivered by the Company, Pubco and SPAC, as applicable, and assuming the due authorization, execution and delivery of the same by the applicable counterparties, this Subscription Agreement shall constitute the valid and legally binding obligation of the Company Pubco, SPAC and Domesticated SPAC, as applicable, enforceable against each of the Company, Pubco, SPAC and Domesticated SPAC, as applicable, in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies (collectively, the “Enforceability Exceptions”).
(f) Assuming the accuracy of the representations and warranties of Subscriber set forth in Section 5, the execution and delivery of this Subscription Agreement, the issuance of the Subscribed Units hereunder and the exchange of the Subscribed Units for Pubco Class A Common Stock, as applicable, the compliance by the Company with all of the provisions of this Subscription Agreement applicable to the Company and the consummation of the transactions contemplated herein will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, (ii) conflict with or violate any provision of, or result in the breach of, the Company’s organizational documents, including the LLC Agreement (“Company Organizational Documents”), or (iii) conflict with or result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental authority with competent jurisdiction over the Company or any of its properties except, in the case of clauses (i) and (iii), for such violations, conflicts, breaches, defaults or liens, charges or encumbrances which would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
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(g) Assuming the accuracy of the representations and warranties of Subscriber set forth in Section 5, the execution and delivery of this Subscription Agreement by SPAC, the compliance by SPAC with all of the provisions of this Subscription Agreement applicable to SPAC and the consummation of the transactions contemplated herein will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of SPAC pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which SPAC is a party or by which SPAC is bound or to which any of the property or assets of SPAC is subject, (ii) conflict with or violate any provision of, or result in the breach of, SPAC’s organizational documents, or (iii) conflict with or result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental authority with competent jurisdiction over SPAC or any of its properties except, in the case of clauses (i) and (iii), for such violations, conflicts, breaches, defaults or liens, charges or encumbrances which would not, individually or in the aggregate, reasonably be expected to have a SPAC Material Adverse Effect.
(h) Assuming the accuracy of the representations and warranties of Subscriber set forth in Section 5, the execution and delivery of this Subscription Agreement, the issuance of the Subscribed Units hereunder and the exchange of the Subscribed Units for Pubco Class A Common Stock, as applicable, the compliance by Pubco with all of the provisions of this Subscription Agreement applicable to Pubco and the consummation of the transactions contemplated herein will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of Pubco pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Pubco is a party or by which Pubco is bound or to which any of the property or assets of Pubco is subject, (ii) conflict with or violate any provision of, or result in the breach of, Pubco’s organizational documents, or (iii) conflict with or result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental authority with competent jurisdiction over Pubco or any of its properties except, in the case of clauses (i) and (iii), for such violations, conflicts, breaches, defaults or liens, charges or encumbrances which would not, individually or in the aggregate, reasonably be expected to have a Pubco Material Adverse Effect.
(i) Assuming the accuracy of the representations and warranties of Subscriber set forth in Section 5, neither SPAC nor the Company is required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or governmental authority with competent jurisdiction, self-regulatory organization (including any stock exchange on which the Pubco Class A Common Stock will be listed (the “Stock Exchange”)) or other person in connection with the execution, delivery and performance of this Subscription Agreement, other than (i) filings required by applicable state securities laws, (ii) the filing of the Registration Statement (as defined below) pursuant to Section 6, (iii) filings required by the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules of the United States Securities and Exchange Commission (the “Commission”), including the registration statement on Form S-4 with respect to the Transactions and the proxy statement/prospectus included therein (the “Form S-4”), (iv) filings required by the Stock Exchange, including with respect to obtaining SPAC shareholder approval of the Transactions, (v) filings required to consummate the Transactions as provided under the BCA, (vi) filings in connection with or as a result of any publicly available written guidance, comments, requirements or requests of the SEC staff under the Securities Act (the “SEC Guidance”) and (vii) those the failure of which to obtain would not have a SPAC Material Adverse Effect or a Company Material Adverse Effect, as applicable.
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(j) Except for such matters as have not had and would not reasonably be expected to have a Company Material Adverse Effect, there is no (i) suit, action, proceeding or arbitration before a governmental authority or arbitrator with competent jurisdiction pending, or, to the knowledge of Company, threatened in writing against Company or (ii) judgment, decree, injunction, ruling or order of any governmental authority or arbitrator with competent jurisdiction outstanding against Company.
(k) Except for such matters as have not had and would not reasonably be expected to have a Pubco Material Adverse Effect, there is no (i) suit, action, proceeding or arbitration before a governmental authority or arbitrator with competent jurisdiction pending, or, to the knowledge of Pubco, threatened in writing against Pubco or (ii) judgment, decree, injunction, ruling or order of any governmental authority or arbitrator with competent jurisdiction outstanding against Pubco.
(l) Assuming the accuracy of Subscriber’s representations and warranties set forth in Section 5, no registration under the Securities Act or any state securities (or Blue Sky) laws is required for the offer and sale of the Subscribed Units.
(m) None of the Company, Pubco or any person acting on their behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Subscribed Units. The Subscribed Units are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act or any state securities laws. None of the Company, Pubco or any person acting on their behalf has, directly or indirectly, at any time within the past thirty (30) calendar days, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Subscribed Units as contemplated hereby or the Other LLC Subscribed Units as contemplated by the Other LLC Subscription Agreements or (ii) cause the offering of the Subscribed Units pursuant to this Subscription Agreement or the Other LLC Subscribed Units pursuant to the Other LLC Subscription Agreements to be integrated with prior offerings for purposes of the Securities Act or any applicable stockholder approval provisions. None of the Company, Pubco or any person acting on their behalf (other than the Placement Agents and their respective persons acting on their behalf in such capacity, as to whom neither SPAC nor Pubco make any representations) has offered or sold or will offer or sell any securities, or has taken or will take any other action, which would reasonably be expected to subject the offer, issuance or sale of the Subscribed Units or the Other LLC Subscribed Units, as contemplated hereby, to the registration provisions of the Securities Act.
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(n) No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”) is applicable to the Company, except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3) of the Securities Act is applicable.
(o) Pubco is in compliance in all material respects with, and has not received any written communication from, a governmental authority with competent jurisdiction that alleges that Pubco is not in compliance in all material respects with, or is in default or violation of, the applicable provisions of (i) the Securities Act and the Exchange Act, (ii) the rules and regulations of the Commission, and (iii) the rules of the Stock Exchange, except, in each case, where such non-compliance, default, or violation would not, individually or in the aggregate, reasonably be expected to have a Pubco Material Adverse Effect. For the avoidance of doubt, this representation and warranty shall not apply to the extent any of the foregoing matters arise from or relate to the SEC Guidance.
(p) The Company is in compliance in all material respects with, and has not received any written communication from, a governmental authority with competent jurisdiction that alleges that the Company is not in compliance in all material respects with, or is in default or violation of, the applicable provisions of (i) the Securities Act and the Exchange Act, (ii) the rules and regulations of the Commission, and (iii) the rules of the Stock Exchange, except, in each case, where such non-compliance, default, or violation would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. For the avoidance of doubt, this representation and warranty shall not apply to the extent any of the foregoing matters arise from or relate to the SEC Guidance.
(q) SPAC is in compliance in all material respects with, and has not received any written communication from, a governmental authority with competent jurisdiction that alleges that SPAC is not in compliance in all material respects with, or is in default or violation of, the applicable provisions of (i) the Securities Act and the Exchange Act, (ii) the rules and regulations of the Commission, and (iii) the rules of the Stock Exchange, except, in each case, where such non-compliance, default, or violation would not, individually or in the aggregate, reasonably be expected to have a SPAC Material Adverse Effect. For the avoidance of doubt, this representation and warranty shall not apply to the extent any of the foregoing matters arise from or relate to the SEC Guidance.
(r) Upon consummation of the Transactions, the Pubco Class A Common Stock will be registered pursuant to Section 12(b) of the Exchange Act and will be approved for listing on the Stock Exchange or another national securities exchange, subject to official notice of issuance.
(s) Other than compensation to be paid to Barclays Capital Inc. and PJT Partners LP, as placement agents to the Company (the “Placement Agents”), no broker or finder is entitled to any brokerage or finder’s fee or commission solely in connection with the sale of the Subscribed Units to Subscriber.
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(t) When issued, all issued and outstanding Company Units will have been duly authorized and validly issued, will be fully paid and non-assessable and will not be subject to preemptive or similar rights. The Company has no subsidiaries and does not own, directly or indirectly, interests or investments (whether equity or debt) in any person, whether incorporated or unincorporated. There are no shareholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any Company Units or other membership interests in the Company, other than as contemplated by the Company Organizational Documents, the BCA or as described in the forms, reports, schedules, statements, registration statements, prospectuses, and other documents filed or furnished as of the date hereof by SPAC with the Commission under the Securities Act and/or the Exchange Act (collectively, and together with any amendments, restatements or supplements thereto, the “SEC Documents”). There are no securities or instruments issued by or to which SPAC is a party containing anti-dilution or similar provisions that will be triggered, and not fully waived by the holder of such securities or instruments pursuant to a written agreement or consent, by the issuance of the LLC Subscribed Units.
(u) All LLC Subscription Agreements in respect of LLC Subscribed Units reflect the same Per Unit Price and substantially the same other material terms and conditions with respect to the purchase of Company Units that are no more favorable in the aggregate to the Other LLC Subscribers than the material terms of this Subscription Agreement are to the Subscriber (other than any terms particular to the regulatory requirements of such investor or its affiliates or related funds that are mutual funds or are otherwise subject to regulations related to the timing of funding and the issuance of the related Company Units).
(v) The Company is not, and immediately after receipt of payment for the Subscribed Units and consummation of the Transactions, will not be, an “investment company” within the meaning of the Investment Company Act.
(w) None of the Company, Pubco and any of their respective controlled affiliates (i) is, or will be at or immediately after the closing of the Transactions, a person of a country of concern, as such term is defined in 31 C.F.R. § 850.221 (a “Covered Person”), (ii) directly or indirectly hold, or will hold at or immediately after the closing of the Transactions, a board seat on, a voting or equity interest in, or any contractual power to direct or cause the direction of the management or policies of, any Covered Person, or (iii) is engaged, or has plans to engage, or will be engaged at or immediately after the closing of the Transactions, directly or indirectly, in a “covered activity,” as such term is defined in 31 C.F.R. § 850.208.
(x) As of the date hereof and as of the date of the closing of the Transactions, Pubco does not have, and will not have, any indebtedness, liabilities or obligations, whether actual or contingent, accrued or unaccrued, matured or unmatured, known or unknown, other than such indebtedness, liabilities or obligations as have been, or will be, (i) disclosed in filings of the kind referenced in Section 4(i)(iii) or any other public filings, or (ii) obligations under the BCA or any other documents to which it is a party that are entered into in connection with the Transactions.
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Section 5. Subscriber Representations and Warranties. Subscriber represents and warrants to Pubco, the Company, SPAC and the Placement Agents, as of the date hereof, that:
(a) If Subscriber is a legal entity, Subscriber (i) has been duly formed and is validly existing and in good standing under the laws of its jurisdiction of formation or incorporation and (ii) has the requisite power and authority to enter into, and perform its obligations under, this Subscription Agreement and the LLC Agreement. If Subscriber is an individual, Subscriber has the legal competence and capacity to enter into and perform its obligations under this Subscription Agreement and the LLC Agreement.
(b) If Subscriber is a legal entity, this Subscription Agreement and the LLC Agreement has been duly authorized, validly executed and delivered by Subscriber. If Subscriber is an individual, Subscriber’s signature is genuine and the signatory has the legal competence and capacity to execute this Subscription Agreement and the LLC Agreement. Assuming the due authorization, execution and delivery of the same by the applicable counterparties, this Subscription Agreement and the LLC Agreement shall constitute the valid and legally binding obligation of Subscriber, enforceable against Subscriber in accordance with its terms, subject to the Enforceability Exceptions.
(c) If Subscriber is paying the Subscription Price in AVAX, (i) Subscriber has all rights, title and interest in and to the AVAX to be contributed by it to the Company pursuant to this Subscription Agreement, (ii) such AVAX is held in a digital wallet held or operated by or on behalf of Subscriber at or by an appropriately regulated custodian and/or in accordance with industry-standard security practices (the “Subscriber Digital Wallet”) and neither such AVAX nor such Subscriber Digital Wallet is subject to any liens, encumbrances or other restrictions, other than under the user agreement and/or terms and conditions associated with such Subscriber Digital Wallet, (iii) Subscriber has taken commercially reasonable steps to protect its Subscriber Digital Wallet and such AVAX and (iv) Subscriber has the exclusive ability to control such Subscriber Digital Wallet, including by use of “private keys” or other equivalent means or through custody arrangements or other equivalent means.
(d) The execution, delivery and performance of this Subscription Agreement and the LLC Agreement, the purchase of the Subscribed Units hereunder, the compliance by Subscriber with all of the provisions of this Subscription Agreement and the LLC Agreement applicable to such Subscriber and consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of Subscriber pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Subscriber is a party or by which Subscriber is bound or to which any of the property or assets of Subscriber is subject; (ii) if Subscriber is a legal entity, the organizational documents of Subscriber; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental authority with competent jurisdiction over Subscriber or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Subscriber Material Adverse Effect. For purposes of this Subscription Agreement, a “Subscriber Material Adverse Effect” means an event, change, development, occurrence, condition or effect with respect to the Subscriber that, individually or in the aggregate, would reasonably be expected to materially impair or materially delay the Subscriber’s performance of its obligations under this Subscription Agreement, including the purchase of the Subscribed Units.
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(e) Subscriber (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3), or (7) under the Securities Act) satisfying the applicable requirements set forth in Annex D hereto, (ii) is an “institutional investor” (as defined in FINRA Rule 2111), (iii) if located or resident in a member state of the European Economic Area, is a “qualified investor” within the meaning of Article 2 of Regulation (EU) 2017/1129 (as amended, the “EU Prospectus Regulation”), (iv) if located or resident in the United Kingdom, is a “qualified investor” within the meaning of Article 2 of Regulation (EU) 2017/1129 as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (the “UK Prospectus Regulation”) who is also (x) an investment professional falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”); (y) a high net worth entity falling within Article 49(2)(a) to (d) of the Order; or (z) a person to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (as amended, the “FSMA”)) in connection with the issue or sale of the Subscribed Units may be lawfully communicated or caused to be communicated, (v) is acquiring the Subscribed Units only for its own account and not for the account of others, or if Subscriber is subscribing for the Subscribed Units as a fiduciary or agent for one or more investor accounts, each owner of such account is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) and Subscriber has sole investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account, and (vi) is not acquiring the Subscribed Units with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or other applicable securities laws; provided, that with respect to Subscribed Shares subscribed for by the Subscriber (subject to the securities laws of the United States or any other jurisdiction) disposition of Subscriber’s property shall at all times be within Subscriber’s control (and has provided Pubco and the Company with the requested information on Annex D following the signature page hereto). Subscriber is not an entity formed for the specific purpose of acquiring the Subscribed Units. Subscriber acknowledges that the offering meets the exemptions from filing under FINRA Rule 5123(b)(1)(A), (C) or (J).
(f) Subscriber acknowledges and agrees that the Subscribed Units are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Subscribed Units have not been registered under the Securities Act and that Pubco, the Company and SPAC are not required to register the Subscribed Units except as set forth in Section 6. Subscriber acknowledges and agrees that the Subscribed Units may not be offered, resold, transferred, pledged or otherwise disposed of by Subscriber absent an effective registration statement under the Securities Act, except (i) to the Company or a subsidiary thereof, or (ii) pursuant to an applicable exemption from the registration requirements of the Securities Act, and, in each of clauses (i)-(ii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates or account entries representing the Subscribed Units shall contain a restrictive legend to such effect. Subscriber acknowledges and agrees that the Subscribed Units will be subject to these securities law transfer restrictions, and as a result of these transfer restrictions, Subscriber may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Subscribed Units and may be required to bear the financial risk of an investment in the Subscribed Units for an indefinite period of time. Subscriber acknowledges and agrees that, unless the Subscribed Units (or the Pubco Class A Common Stock issued in exchange for such Subscribed Units) are earlier registered on the Form S-4 or a Registration Statement, the Subscribed Units (or the Pubco Class A Common Stock issued in exchange for such Subscribed Units) will not be eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act (“Rule 144”) until at least (x) if the issuer is the Company, one year following the date hereof; or (y) if the issuer is Pubco, one year from the date Pubco is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, among other requirements. Subscriber acknowledges and agrees that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Subscribed Units (or the Pubco Class A Common Stock issued in exchange for such Subscribed Units).
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(g) Subscriber understands and agrees that Subscriber is purchasing the Subscribed Units directly from the Company. Subscriber further acknowledges that there have not been, and Subscriber hereby agrees that it is not relying on, any representations, warranties, covenants or agreements made to Subscriber by Pubco, the Company, SPAC or the Placement Agents or any of their respective affiliates or any of such person’s or its or their respective affiliates’ control persons, officers, directors, partners, members, managing members, managers, agents, employees or other representatives, legal counsel, financial advisors, accountants or agents (collectively, “Representatives”), any other party to the Transactions or any other person or entity, expressly or by implication, other than those representations, warranties, covenants and agreements of the Company or Pubco set forth in this Subscription Agreement and the LLC Agreement, and Subscriber is not relying on any other purported representations, warranties, covenants, agreements or statements (including by omission), which are hereby disclaimed by Subscriber.
(h) In making its decision to purchase the Subscribed Units, Subscriber has relied solely upon an independent investigation made by Subscriber and the Company’s, Pubco’s and SPAC’s respective representations in this Subscription Agreement. Subscriber has not relied on any statements or other information provided by or on behalf of the Company or Pubco (including the Placement Agents) concerning the Company, SPAC, Pubco, the Subscribed Units or the Subscription, and has been offered the opportunity to ask questions of the Company and has received answers thereto, including on the financial information, as Subscriber deemed necessary in connection with its decision to purchase the Subscribed Units. Subscriber acknowledges and agrees that Subscriber has had access to, has received, and has had an adequate opportunity to review, such information as Subscriber deems necessary in order to make an investment decision with respect to the Subscribed Units, including with respect to the Company, SPAC, Pubco and the Transactions, and Subscriber has made its own assessment and is satisfied concerning the relevant financial, tax and other economic considerations relevant to Subscriber’s investment in the Subscribed Units. Without limiting the generality of the foregoing, Subscriber acknowledges that it has reviewed SPAC’s filings with the Commission. Subscriber represents and agrees that Subscriber and Subscriber’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as Subscriber and Subscriber’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Subscribed Units, including but not limited to information concerning the Company, SPAC, Pubco, the BCA, and the Subscription. Subscriber acknowledges that certain information provided to it by the Company was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections. Subscriber further acknowledges that such information and projections were prepared without participation of the Placement Agents and that the Placement Agents do not assume responsibility for independent verification of, or the accuracy or completeness of, such information or projections. Subscriber also acknowledges that the information provided to Subscriber was preliminary and subject to change, including in the registration statement and the proxy statement and/or prospectus that will be filed with the Commission in connection with the Transactions.
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(i) Subscriber acknowledges and agrees that none of the Company, SPAC, Pubco, the Placement Agents nor their respective affiliates or any of such person’s or its or their respective affiliates’ Representatives has provided Subscriber with any advice with respect to the Subscribed Units. Other than as set forth herein, none of the Company, SPAC, Pubco, the Placement Agents or any of their respective affiliates or Representatives has made or makes any representation or warranty, whether express or implied, of any kind or character as to the Company, SPAC, Pubco or the quality or value of the Subscribed Units.
(j) Subscriber acknowledges that (i) the Company, SPAC, Pubco and their respective Representatives hereafter may come into possession of, information regarding the Company, SPAC or Pubco that is material non-public information and is not known to Subscriber (“Excluded Information”), (ii) Subscriber has determined to enter into this Subscription Agreement to purchase the Subscribed Units notwithstanding Subscriber’s lack of knowledge of the Excluded Information, and (iii) none of the Company, SPAC, Pubco nor the Placement Agents shall have liability to Subscriber, and Subscriber hereby waives and releases any claims Subscriber may have against the Company, SPAC, Pubco and/or the Placement Agents, to the maximum extent permitted by law, with respect to the nondisclosure of the Excluded Information
(k) Subscriber became aware of this offering of the Subscribed Units solely by means of direct contact between Subscriber, on the one hand, and the Company (and its Representatives, including the Placement Agents), on the other, and the Subscribed Units were offered to Subscriber solely by direct contact between Subscriber, on the one hand, and the Company (and its Representatives, including the Placement Agents), on the other, or their respective affiliates. Subscriber did not become aware of this offering of the Subscribed Units, nor were the Subscribed Units offered to Subscriber, by any other means, and none of the Company, SPAC or Pubco or their respective Representatives (including the Placement Agents) acted as investment advisor, broker or dealer to Subscriber. Subscriber acknowledges that the Subscribed Units (i) were not offered by any form of general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.
(l) Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Subscribed Units, including those set forth in the SEC Documents and other materials provided by the Company to Subscriber. Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Subscribed Units, and Subscriber has had an opportunity to seek, and has sought, such accounting, legal, business and tax advice as Subscriber has considered necessary to make an informed investment decision. Subscriber (i) is an institutional account as defined in FINRA Rule 4512(c) and an institutional “accredited investor” as defined in Rule 501(a) under the Securities Act, (ii) is a sophisticated institutional investor, experienced in investing in business transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, and (iii) has exercised independent judgment in evaluating its participation in the purchase of the Subscribed Units. Subscriber understands and acknowledges that the purchase and sale of the Subscribed Units hereunder meets (i) the exemptions from filing under FINRA Rule 5123(b)(1)(A) and (ii) the institutional customer exemption under FINRA Rule 2111(b).
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(m) Subscriber has adequately analyzed and fully considered the risks of an investment in the Subscribed Units and determined that the Subscribed Units are a suitable investment for Subscriber and that Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of Subscriber’s investment in the Company and Pubco. Subscriber acknowledges specifically that a possibility of total loss exists.
(n) Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Subscribed Units or made any findings or determination as to the fairness of this investment.
(o) Neither the Subscriber nor any of its affiliates, officers, directors, managers, managing members, general partners or any other person acting in a similar capacity or carrying out a similar function is (i) a person (including individual or entity) that is the target or the subject of economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by relevant governmental authorities with competent jurisdiction, including, but not limited to those administered by the U.S. government through the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) and the U.S. Department of State, the United Nations Security Council, the European Union or any EU member state, or the United Kingdom (including His Majesty’s Treasury of the United Kingdom) (collectively, “Sanctions”), (ii) a person or entity listed on the List of Specially Designated Nationals and Blocked Persons administered by OFAC, or in any Executive Order issued by the President of the United States and administered by OFAC, or any other any Sanctions-related list of sanctioned persons maintained by OFAC, the Department of Commerce or the U.S. Department of State, the United Nations Security Council, the European Union, any EU member state, or the United Kingdom (collectively, “Sanctions Lists”), (iii) organized, incorporated, established, located, resident or the government, including any political subdivision, agency, or instrumentality thereof, of, Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine, the so-called Donetsk People’s Republic, or the so-called Luhansk People’s Republic regions of Ukraine, as well as the non-controlled regions of the oblasts of Zaporizhzhia and Kherson or any other country or territory embargoed or subject to substantial trade restrictions by the United States, the European Union or any individual European Union member state, or the United Kingdom; (iv) directly or indirectly owned or controlled (as ownership and control are defined and interpreted under applicable sanctions), or acting on behalf or at the direction of, any such person or persons described in any of the foregoing clauses (i) through (iv), except in each case as permitted under Sanctions laws; or (v) a non-U.S. institution that accepts currency for deposit and that has no physical presence in the jurisdiction in which it is incorporated or in which it is operating, as the case may be, and is unaffiliated with a regulated financial group that is subject to consolidated supervision (a “non-U.S. shell bank”) or providing banking services indirectly to a non-U.S. shell bank (collectively, clauses (i) through (v), a “Prohibited Investor”). Subscriber agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law; provided that Subscriber is permitted to do so under applicable law. Subscriber represents that (i) if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001, and its implementing regulations (collectively, the “BSA/PATRIOT Act”), that Subscriber, directly or indirectly through a third-party administrator, maintains policies and procedures to ensure compliance with its obligations under the BSA/PATRIOT Act, and (ii) to the extent required, directly or indirectly through a third-party administrator, it maintains policies and procedures reasonably designed to ensure compliance with the anti-corruption and anti-money laundering-related laws administered and enforced by other governmental authorities with competent jurisdiction. Subscriber also represents that it maintains policies and procedures reasonably designed to ensure compliance with Sanctions. Subscriber further represents and warrants that, to its knowledge, (i) none of the funds held by Subscriber and used to purchase the Subscribed Units are or will be derived from transactions directly or indirectly with or for the benefit of any Prohibited Investor, (ii) such funds are from legitimate sources and do not constitute the proceeds of criminal conduct or criminal property, (iii) such funds do not originate from and have not been routed through an account maintained at a non-U.S. shell bank and (iv) it maintains policies and procedures reasonably designed to ensure the funds held by Subscriber and used to purchase the Subscribed Units were legally derived and were not obtained, directly or indirectly, from a Prohibited Investor or from or through a non-U.S. shell bank.
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(p) No foreign person (as defined in 31 C.F.R. Part 800.224) in which the national or subnational governments of a single foreign state have a substantial interest (as defined in 31 C.F.R. Part 800.244) will acquire a substantial interest in the Company as a result of the purchase and sale of Subscribed Units hereunder, and no foreign person will have control (as defined in 31 C.F.R. Part 800.208) over the Company from and after the date hereof as a result of the purchase and sale of Subscribed Units hereunder.
(q) If Subscriber is an employee benefit plan that is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Code or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, Subscriber represents and warrants that (i) it has not relied on SPAC, the Company, Pubco, the Placement Agents or any of their respective affiliates (the “Transaction Parties”) for investment advice or as the Plan’s fiduciary with respect to its decision to acquire and hold the Subscribed Units, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Subscribed Units and (ii) the acquisition and holding of the Subscribed Units will not result in a non-exempt prohibited transaction under ERISA or section 4975 of the Code.
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(r) Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Company or SPAC, or any of their respective affiliates or Representatives, including the Placement Agents), other than the representations and warranties of SPAC, the Company and Pubco contained in Section 4, in making its investment or decision to invest in the Company. Subscriber agrees that none of (i) any Other LLC Subscriber pursuant to an Other LLC Subscription Agreement or any other agreement related to the private placement of Pubco Class A Common Stock (including the controlling persons, officers, directors, partners, agents or employees of any such Subscriber) nor (ii) the Placement Agents shall be liable (including, without limitation, for or with respect to any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements incurred by such person or entity), whether in contract, tort or otherwise, or have any liability or obligation to Subscriber or any Other LLC Subscriber, or any person claiming through Subscriber or any Other LLC Subscriber, pursuant to this Subscription Agreement or related to the private placement under the Other LLC Subscription Agreements, the negotiation hereof or the subject matter hereof, or the transactions contemplated hereby, for any action heretofore or hereafter taken or omitted to be taken by any of the foregoing in connection with the purchase of the Subscribed Units. Subscriber agrees not to commence any litigation or bring any claim against the Placement Agents in any court or any other forum which relates to, may arise out of, or is in connection with, this offering of the Subscribed Units. This undertaking is given freely and after obtaining independent legal advice.
(s) Subscriber acknowledges and agrees that (i) the Placement Agents are acting solely as the Company’s placement agents in connection with the private placement of the Subscribed Units and are not acting as an underwriter or in any other capacity and are not and shall not be construed as a fiduciary of the Subscriber, SPAC or any other person or entity in connection with the private placement of the Subscribed Units, (ii) the Placement Agents have not made or will not make any representation or warranty, whether express or implied, of any kind or character and has not provided any advice or recommendation in connection with the private placement of the Subscribed Units, and (iii) the Placement Agents will not have any responsibility with respect to (x) any representations, warranties or agreements made by any person or entity under or in connection with the private placement of the Subscribed Units or any of the documents furnished pursuant thereto or in connection therewith, or the execution, legality, validity or enforceability (with respect to any person) or any thereof, or (y) the business, affairs, financial condition, operations, properties or prospects of, or any other matter concerning the Company, Pubco, the SPAC or the private placement of the Subscribed Units.
(t) Subscriber acknowledges that the Placement Agents are also acting as exclusive capital markets advisor to the Company and Pubco in connection with the Transactions.
(u) No broker or finder is entitled to any brokerage or finder’s fee or commission to be paid by Subscriber solely in connection with the sale of the Subscribed Units to Subscriber.
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(v) At all times on or prior to the closing of the Transactions, Subscriber has no binding commitment to dispose of, or otherwise transfer (directly or indirectly), (i) any of the Subscribed Units, other than in exchange for Pubco Class A Common Stock pursuant to the Transactions, or (ii) any Pubco Class A Common Stock received in exchange for the Subscribed Units pursuant to the Transactions.
(w) Subscriber hereby agrees that neither it, nor any person or entity acting on its behalf or pursuant to any understanding with Subscriber, shall, directly or indirectly, engage in any hedging activities or execute any Short Sales with respect to the securities of SPAC or Pubco from the date of this Subscription Agreement until the Closing or the earlier termination of this Subscription Agreement in accordance with its terms. “Short Sales” shall mean all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act and all short positions effected through any direct or indirect stock pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), short sales or other short transactions through non-U.S. broker dealers or foreign regulated brokers. Notwithstanding the foregoing, (i) nothing herein shall prohibit other entities under common management with Subscriber from entering into any Short Sales and (ii) in the case of a Subscriber that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Subscriber’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to enter into the Subscription, subject in each of clauses (i) and (ii), to the obligations of Subscriber and such other entities under applicable law.
(x) Subscriber is not currently (and at all times through the closing of the Transactions will refrain from being or becoming) a member of a “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of equity securities of SPAC or Pubco (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any “group” consisting solely of the Subscriber and one or more of its affiliates.
(y) Subscriber will not acquire a substantial interest (as defined in 31 C.F.R. Part 800.244) in the Company or Pubco (or their affiliates) as a result of the purchase and sale of the Subscribed Units.
(z) Subscriber acknowledges its obligations under applicable securities laws with respect to the treatment of non-public information relating to the Company, SPAC and Pubco.
(aa) In making its decision to purchase the Subscribed Units, Subscriber has relied solely upon independent investigation made by Subscriber and the representations and warranties of the SPAC, Company and Pubco set forth herein. Without limiting the generality of the foregoing, Subscriber has not relied on any statements or other information provided by the Placement Agents concerning the SPAC, the Company, Pubco or the Subscribed Units or the offer and sale of the Subscribed Units except for the representations and warranties of SPAC and Pubco set forth herein. No disclosure or offering document has been prepared by the Placement Agents in connection with the offer and sale of the Subscribed Units. The Placement Agents and each of their members, directors, officers, employees, representatives and controlling persons have made no independent investigation with respect to the Company, Pubco or the Subscribed Units or the accuracy, completeness or adequacy of any information supplied to the Subscriber by or on behalf of the Company and Pubco. In connection with the issue and purchase of the Subscribed Units the Placement Agents have not made any recommendations regarding an investment in the Company, Pubco, the Subscribed Units or shares of Pubco Class A Common Stock or acted as the Subscriber’s financial advisor or fiduciary.
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(bb) Subscriber covenants that neither it, nor any affiliate acting on its behalf or pursuant to any understanding with it, has executed or will execute any purchases or sales of any of securities of SPAC during the period that commenced at the time that Subscriber first learned of the transactions contemplated hereunder and ending at such time that the transactions contemplated by this Subscription Agreement are first publicly announced pursuant to the initial press release as described in Section 9(u). Subscriber covenants that until such time as the transactions contemplated by this Subscription Agreement are publicly disclosed by SPAC pursuant to the initial press release as described in Section 9(u), Subscriber will maintain the confidentiality of the existence and terms of the Subscription and the Transactions and the transactions contemplated hereby. Notwithstanding the foregoing and notwithstanding anything contained in this Subscription Agreement to the contrary, SPAC and Pubco expressly acknowledge and agree that Subscriber shall have no duty of confidentiality as set forth in this Section 5(bb) to Pubco after the issuance of the initial press release as described in Section 9(u). Notwithstanding the foregoing, in the case that Subscriber is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of Subscriber’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of Subscriber’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Subscribed Units covered by this Subscription Agreement.
(cc) Subscriber acknowledges and understands that AVAX is a volatile asset and the value of the Company AVAX that may be returned to Subscriber hereunder may be less than the value of the Subscription Price initially transferred.
(dd) If Subscriber elects to subscribe for the Company Units with AVAX, Subscriber acknowledges that it has provided Pubco and the Company with the requested certification on Annex E following the signature page hereto concerning the status of any Unrestricted AVAX or Restricted AVAX, which shall form a part of this Subscription Agreement.
Section 6. Registration Matters.
(a) Pubco agrees to use commercially reasonable efforts to cause the Pubco Class A Common Stock into which the Subscribed Units held by Subscribers will be converted upon consummation of the Company Merger (such securities, the “Registrable Securities”) to be registered on the Form S-4.
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(b) To the extent that any Registrable Securities are unable to be included on the Form S-4, then, subject to Section (c), Pubco agrees that, as soon as practicable but in no event later than thirty (30) calendar days following the consummation of the Transactions Pubco will file or confidentially submit with the Commission (at Pubco’s sole cost and expense) a registration statement registering the resale of such Registrable Securities (such registration statement, the “Registration Statement”), and Pubco shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing or confidential submission thereof, but in any event no later than ninety (90) calendar days after the closing of the Transactions (the “Effectiveness Deadline”); provided, that the Effectiveness Deadline shall be extended by a maximum of an additional ninety (90) calendar days if the Registration Statement is reviewed by, and comments thereto are provided from, the Commission; provided, further, that Pubco shall request the Registration Statement declared effective promptly after the date Pubco is notified (orally or in writing, whichever is earlier) by the staff of the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review; provided, further, that (i) if the Effectiveness Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Deadline shall be extended to the next business day on which the Commission is open for business and (ii) if the Commission is closed for operations due to a government shutdown, the Effectiveness Deadline shall be extended by the same number of calendar days as the number of calendar days during which the Commission remains closed. Pubco will provide a draft of the Registration Statement to Subscriber at least two (2) business days in advance of the date of filing the Registration Statement with the Commission. Unless otherwise agreed to in writing by Subscriber prior to the filing of the Registration Statement, Subscriber shall not be identified as a statutory underwriter in the Registration Statement unless the Commission requests that Subscriber be identified as a statutory underwriter; provided, that if the Commission requests that Subscriber be identified as a statutory underwriter in the Registration Statement, Subscriber will have the opportunity to withdraw from the Registration Statement upon its prompt written request to Pubco. Notwithstanding the foregoing, if the Commission or its regulations prevent Pubco from including any or all of the Registrable Securities proposed to be registered under the Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale of the Registrable Securities by the applicable stockholders or otherwise, such Registration Statement shall register for resale such number of Registrable Securities which is equal to the maximum number of Registrable Securities as is permitted by the Commission. In such event, the number of Registrable Securities shall be reduced pro rata among all such selling stockholders and as promptly as practicable after being permitted to register additional Registrable Securities under Rule 415 under the Securities Act, Pubco shall amend the Registration Statement or file one or more new Registration Statement(s) (with such amendment or new Registration Statement also being deemed to be a “Registration Statement” hereunder) to register such additional Registrable Securities and use commercially reasonable efforts to cause such amendment or Registration Statement(s) to become effective as promptly as practicable after the filing thereof, but in any event no later than thirty (30) calendar days after the filing of such Registration Statement (the “Additional Effectiveness Deadline”); provided, that the Additional Effectiveness Deadline shall be extended to ninety (90) calendar days after the filing of such Registration Statement, including any new Registration Statement or amended Registration Statement, if such Registration Statement is reviewed by, and comments thereto are provided from, the Commission; provided, further, that Pubco shall request that such Registration Statement be declared effective promptly after the date Pubco is notified (orally or in writing, whichever is earlier) by the staff of the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review; provided, further, that (i) if such day falls on a Saturday, Sunday or other day that the Commission is closed for business, the Additional Effectiveness Deadline shall be extended to the next business day on which the Commission is open for business and (ii) if the Commission is closed for operations due to a government shutdown, the Effectiveness Deadline shall be extended by the same number of calendar days as the number of calendar days during which the Commission remains closed. Any failure by Pubco to file or confidentially submit a Registration Statement by the Effectiveness Deadline or Additional Effectiveness Deadline shall not otherwise relieve Pubco of its obligations to file, confidentially submit or effect a Registration Statement as set forth in this Section 6.
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(c) Pubco agrees that, except for such times as Pubco is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, Pubco will use its commercially reasonable efforts to cause such Registration Statement to remain effective with respect to Subscriber, including to prepare and file any post-effective amendment to such Registration Statement or a supplement to the related prospectus such that the prospectus will not include any untrue statement or a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, until the earliest to occur of (i) the date on which Subscriber ceases to hold any Registrable Securities issued pursuant to this Subscription Agreement and (ii) the first date on which Subscriber can sell all of its Registrable Securities issued pursuant to this Subscription Agreement (or shares received in exchange therefor) under Rule 144 of the Securities Act without limitation as to the manner of sale or the amount of such securities that may be sold and without the requirement for Pubco to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable) (the earliest of clauses (i) and (ii), the “End Date”). Prior to the End Date, Pubco (i) will use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable; (ii) file all reports, and provide all customary and reasonable cooperation, necessary to enable Subscriber to resell Registrable Securities pursuant to the Registration Statement; and (iii) qualify the Registrable Securities for listing on the Stock Exchange and update or amend the Registration Statement as necessary to include Registrable Securities. Pubco will use its commercially reasonable efforts to (A) for so long as Subscriber holds Registrable Securities, make and keep public information available (as those terms are understood and defined in Rule 144) and file with the Commission in a timely manner all reports and other documents required of Pubco under the Exchange Act so long as Pubco remains subject to such requirements to enable Subscriber to resell the Registrable Securities pursuant to Rule 144, (B) at the reasonable request of Subscriber, deliver all the necessary documentation to cause Pubco’s transfer agent to remove all restrictive legends from any Registrable Securities being sold under the Registration Statement or pursuant to Rule 144 at the time of sale of the Registrable Securities, and (C) cause its legal counsel to deliver to the transfer agent the necessary legal opinions required by the transfer agent, if any, in connection with the instruction under clause (B) upon the receipt of Subscriber representation letters and such other customary supporting documentation as requested by (and in a form reasonably acceptable to) such counsel. Subscriber agrees to disclose its beneficial ownership, as determined in accordance with Rule 13d-3 of the Exchange Act, of Registrable Securities to Pubco (or its successor) as may be reasonably required to enable Pubco to make the determination described above.
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(d) Pubco’s obligations to include the Registrable Securities in the Registration Statement are contingent upon Subscriber furnishing in writing to Pubco a completed selling stockholder questionnaire in customary form that contains such information regarding Subscriber, the securities of Pubco held by Subscriber and the intended method of disposition of the Registrable Securities as shall be reasonably requested by Pubco to effect the registration of the Registrable Securities, and Subscriber shall execute such documents in connection with such registration as Pubco may reasonably request that are customary of a selling stockholder in similar situations, including providing that Pubco shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement (i) during any customary blackout or similar period or as permitted hereunder and (ii) as may be necessary in connection with the preparation and filing of a post-effective amendment to the Registration Statement following the filing of Pubco’s Annual Report on Form 10-K for its first completed fiscal year following the effective date of the Registration Statement; provided that Pubco shall request such information from Subscriber, including the selling stockholder questionnaire, at least five (5) business days prior to the anticipated date of filing the Registration Statement with the Commission. In the case of the registration effected by Pubco pursuant to this Subscription Agreement, Pubco shall, upon reasonable request, inform Subscriber as to the status of such registration. Subscriber shall not be entitled to use the Registration Statement for an underwritten offering of Registrable Securities. Notwithstanding anything to the contrary contained herein, Pubco may from time to time require Subscriber not to sell under the Registration Statement or suspend the use or effectiveness of any such Registration Statement if (A) it determines in good faith that in order for the registration statement to not contain a material misstatement or omission, an amendment thereto would be needed, including as a result of any request by the Commission for any amendment or supplement to such Registration Statement or any prospectus relating thereto or for additional information, (B) such filing or use would materially affect a bona fide business or financing transaction of Pubco or would require premature disclosure of information that would materially adversely affect Pubco, (C) in the good faith judgment of the majority of the members of Pubco’s board of directors, such filing or effectiveness or use of such Registration Statement would be seriously detrimental to Pubco, (D) the majority of the members of Pubco’s board of directors determines to delay the filing or initial effectiveness of, or suspend use of, a Registration Statement and such delay or suspension arises out of, or is a result of, or is related to or is in connection with the SEC Guidance or future Commission guidance directed at special purpose acquisition companies or companies that have consummated a business combination with a special purpose acquisition company, or any related disclosure or related matters, (E) as may be necessary in connection with the preparation and filing of a post-effective amendment to the Registration Statement following the filing of Pubco’s Annual Report on Form 10-K for its first completed fiscal year following the effective date of the Registration Statement, or (F) Subscriber agrees that (1) it will immediately discontinue offers and sales of the Registrable Securities under the Registration Statement until Subscriber receives copies of a supplemental or amended prospectus (which Pubco agrees to use commercially reasonable efforts to promptly prepare) that corrects the misstatement(s) or omission(s) referred to in Section 6(d)(A) and receives notice that any post-effective amendment has become effective or unless otherwise notified by Pubco that it may resume such offers and sales and (2) it will maintain the confidentiality of any information included in such written notice delivered by Pubco unless otherwise required by law, subpoena or regulatory request or requirement (each such circumstance, a “Suspension Event”); provided that (w) Pubco shall not so delay filing or so suspend the use of the Registration Statement for a period of more than forty-five (45) consecutive days or more than ninety (90) total calendar days in any consecutive three hundred sixty (360) day period, or more than two (2) times in any consecutive three hundred sixty (360) day period and (x) Pubco shall use commercially reasonable efforts to make such registration statement available for the sale by Subscriber of such securities as soon as practicable thereafter.
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(e) Upon receipt of any written notice from Pubco of the happening of (i) an issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for such purpose, which notice shall be given no later than three (3) business days from the date of such event, (ii) any Suspension Event during the period that the Registration Statement is effective, which notice shall be given no later than three (3) business days from the date of such Suspension Event, or (iii) if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, Subscriber agrees that (1) it will immediately discontinue offers and sales of the Registrable Securities under the Registration Statement until Subscriber receives copies of a supplemental or amended prospectus (which Pubco agrees to use commercially reasonable efforts to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by Pubco that it may resume such offers and sales and (2) it will maintain the confidentiality of any information included in such written notice delivered by Pubco unless otherwise required by law, subpoena or regulatory request or requirement. If so directed by Pubco, Subscriber will deliver to Pubco or, in Subscriber’s sole discretion destroy, all copies of the prospectus covering the Registrable Securities in Subscriber’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Registrable Securities shall not apply (w) to the extent Subscriber is required to retain a copy of such prospectus (A) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (B) in accordance with a bona fide pre-existing document retention policy or (x) to copies stored electronically on archival servers as a result of automatic data back-up.
(f) For purposes of this Section 6, (i) “Registrable Securities” shall mean, as of any date of determination, the Registrable Securities and any other equity security issued or issuable with respect to the Registrable Securities by way of share split, dividend, distribution, recapitalization, merger, exchange, or replacement, and (ii) “Subscriber” shall include any person to which the rights under this Section 6 shall have been duly assigned.
(g) Pubco shall indemnify, defend and hold harmless Subscriber (to the extent Subscriber is a seller under the Registration Statement), the officers, directors, members, managers, partners, agents and employees of Subscriber, each person who controls Subscriber (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, members, managers, partners, agents and employees of each such controlling person, to the fullest extent permitted by applicable law, from and against any and all out-of-pocket and reasonably documented losses, claims, damages, liabilities, costs (including reasonable and documented external attorneys’ fees) and expenses (collectively, “Losses”) arising out of or caused by or based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any prospectus included in the Registration Statement or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent that such untrue statements, alleged untrue statements, omissions or alleged omissions (1) are based upon information regarding Subscriber furnished in writing to Pubco by or on behalf of Subscriber expressly for use therein or Subscriber has omitted a material fact from such information or (2) result from or are in connection with any offers or sales effected by or on behalf of Subscriber in violation of Section 6(d). Notwithstanding the foregoing, Pubco’s indemnification obligations shall not apply to amounts paid in settlement of any Losses or action if such settlement is effected without the prior written consent of Pubco. Pubco shall provide Subscriber with an update on any threatened or asserted proceedings arising from or in connection with the transactions contemplated by this Section 6 of which Pubco receives notice whether oral or in writing.
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(h) Subscriber shall, severally and not jointly with any other subscriber in the offering contemplated by this Subscription Agreement, indemnify, defend and hold harmless Pubco, its directors, officers, members, managers, partners, agents and employees, each person who controls Pubco (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, members, managers, partners, agents or employees of such controlling persons, to the fullest extent permitted by applicable law, from and against all Losses arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement any prospectus included in the Registration Statement, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading to the extent, but only to the extent, that such untrue statements, alleged untrue statements, omissions or alleged omissions are based upon information regarding Subscriber furnished in writing to Pubco by or on behalf of Subscriber expressly for use therein. In no event shall the liability of Subscriber be greater in amount than the United States dollars amount of the net proceeds received by Subscriber upon the sale of the Registrable Securities giving rise to such indemnification obligation. Notwithstanding the forgoing, Subscriber’s indemnification obligation shall not apply to amounts paid in settlement of any Losses or action if such settlement is effected without the prior written consent of Subscriber (which consent shall not be unreasonably withheld or delayed).
(i) Any person or entity entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s or entity’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld, conditioned or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement), which settlement shall not include a statement or admission of fault and culpability on the part of such indemnified party, and which settlement shall include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
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(j) The indemnification provided for under this Subscription Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person or entity of such indemnified party and shall survive the transfer of the Registrable Securities pursuant to this Subscription Agreement.
(k) If the indemnification provided under this Section 6 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any Losses, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations; provided, however, that the liability of Subscriber shall be limited to the net proceeds received by such Subscriber from the sale of Registrable Securities giving rise to such indemnification obligation. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by (or not made by, in the case of an omission), or relates to information supplied by (or not supplied by, in the case of an omission), or on behalf of such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Losses shall be deemed to include, subject to the limitations set forth in this Section 6, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 6(k) from any person or entity who was not guilty of such fraudulent misrepresentation. Notwithstanding anything to the contrary herein, in no event will any party be liable for punitive damages in connection with this Subscription Agreement or the transactions contemplated hereby.
(l) At any time and from time to time in connection with a bona-fide sale of Registrable Securities effected in compliance with the requirements of Rule 144 under the Securities Act or through any broker-dealer sale transactions described in the plan of distribution set forth within any prospectus and pursuant to the Registration Statement, Pubco shall use its commercially reasonable efforts, subject to the receipt of customary documentation required from the holder of the applicable Registrable Securities and broker in connection therewith and compliance with applicable laws, (i) promptly instruct its transfer agent to remove any restrictive legends applicable to the Registrable Securities being sold and (ii) in connection with any sale made pursuant to Rule 144, cause its legal counsel to deliver reasonably requested legal opinions, if any, to the transfer agent in connection with the instruction under subclause (i). Subscriber may request that Pubco remove any legend from the book entry position evidencing its Registrable Securities following the earliest of such time as such Registrable Securities (i) (x) are subject to or (y) have been or are about to be sold or transferred pursuant to an effective registration statement (including the Registration Statement), or (ii) have been sold pursuant to Rule 144. Pubco shall be responsible for the fees of its transfer agent, its legal counsel (including for purposes of giving the opinion referenced herein) and all DTC fees associated with such issuance and the Subscriber shall be responsible for its fees or costs associated with such removal of the legend (including its legal fees or costs of its legal counsel).
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(m) With a view to making available to Subscriber the benefits of Rule 144 that permit Subscriber to sell securities of Pubco to the public without registration, Pubco agrees, for so long as Subscriber holds Registrable Securities, to:
(i) use commercially reasonable efforts to make and keep current public information available, as those terms are understood and defined in Rule 144; and
(ii) use commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of Pubco under the Exchange Act so long as Pubco remains subject to such requirements and the filing of such reports and other documents as may be required pursuant to the applicable provisions of Rule 144.
(n) Upon request, Pubco shall provide the Subscriber with contact information for the person responsible for Pubco’s account at the transfer agent to facilitate transfers made pursuant to this Section 6 and provide reasonable assistance to facilitate transfers. Pubco shall be responsible for the fees of its transfer agent and its legal counsel (including for purposes of giving the opinion referenced herein) associated with such issuance and the Subscriber shall be responsible for its fees or costs associated with such removal of the legend (including its legal fees or costs of its legal counsel).
Section 7. Termination. The obligations and restrictions of Section 6 and Section 9(u) of this Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earliest to occur of (a) such date and time as the BCA is terminated in accordance with its terms; (b) the mutual written agreement of the parties hereto to terminate this Subscription Agreement or (c) twelve (12) months after the date hereof; provided that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach. The Company shall notify Subscriber of the termination of the BCA promptly after the termination thereof.
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Section 8. Trust Account Waiver. Subscriber hereby acknowledges that SPAC is a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Subscriber further acknowledges that, as described in the final prospectus relating to SPAC’s initial public offering (“IPO”) filed with the SEC (File No. 333-280719) on November 21, 2024 (the “Prospectus”), substantially all of SPAC’s assets consist of the cash proceeds of SPAC’s IPO and a private placement of its securities and substantially all of those proceeds (including interest accrued from time to time thereon) have been deposited into a trust account (the “Trust Account”) for the benefit of SPAC and its public shareholders. As described in the Prospectus, the funds held from time to time in the Trust Account may only be released upon certain conditions. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Subscriber hereby agrees (on its own behalf and on behalf of its related parties) that it does not now and shall not at any time hereafter have any right, title, interest or claim of any kind (“Claim”) to, or to any monies or other assets in, the Trust Account, and hereby irrevocably waives (on its own behalf and on behalf of its related parties) any Claim to, or to any monies or other assets in, the Trust Account that it may have now or in the future as a result of, or arising out of, this Subscription Agreement, the transactions contemplated hereby or the Subscribed Units, in or to any monies held in the Trust Account (or any distributions therefrom directly or indirectly to SPAC’s public shareholders). In the event that Subscriber has any Claim against SPAC as a result of, or arising out of, this Subscription Agreement, the Other LLC Subscription Agreements, the transactions contemplated hereby and thereby, or the Subscribed Units or Pubco Class A Common Stock, Subscriber agrees not to seek recourse against the Trust Account or any funds distributed therefrom (it being clarified that such waiver shall not apply following the closing of the Transactions to the Trust Account funds that are released from the Trust Account to SPAC or Pubco in connection with the Transactions). Subscriber acknowledges and agrees that such irrevocable waiver is a material inducement to SPAC to enter into this Subscription Agreement, and further intends and understands such waiver to be valid, binding, and enforceable against Subscriber in accordance with applicable law. To the extent Subscriber commences any action or proceeding based upon, in connection with, relating to or arising out of any matter relating to SPAC or its Representatives, which proceeding seeks, in whole or in part, monetary relief against SPAC or its Representatives, Subscriber hereby acknowledges and agrees that its sole remedy shall be against funds held outside of the Trust Account and that such claim shall not permit Subscriber (or any person claiming on Subscriber’s behalf or in lieu of Subscriber) to have any claim against the Trust Account (including any distributions therefrom) or any amounts contained therein. Nothing in this Section 8 shall be deemed to limit Subscriber’s right to distributions from the Trust Account in accordance with SPAC’s organizational documents in respect of any redemptions by Subscriber in respect of SPAC Class A Ordinary Shares acquired by any means other than pursuant to this Subscription Agreement. Notwithstanding anything in this Subscription Agreement to the contrary, the provisions of this Section 8 shall survive termination of this Subscription Agreement.
Section 9. Miscellaneous.
(a) Subscriber hereby acknowledges that it shall be solely responsible for and bear the cost of all transfer, stamp, issue, registration, documentary or other similar taxes, duties, fees or charges arising in any jurisdiction in connection with the Subscription contemplated in this Subscription Agreement as well as the execution of this Subscription Agreement.
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(b) Notwithstanding any other provision of this Subscription Agreement, the Company, Pubco and any of their Representatives, as applicable, shall be entitled to deduct and withhold from the Registrable Securities and any other amount payable pursuant to this Subscription Agreement (in connection with a future share split, dividend, distribution, recapitalization, merger, exchange, or replacement) any such taxes as may be required to be deducted and withheld from such amounts (and any other amounts treated as paid for applicable tax law) under the Internal Revenue Code of 1986, as amended, or any other applicable tax law (as determined in good faith by the party so deducting or withholding in its sole discretion). To the extent that any amounts are so deducted and withheld, such deducted and withheld amounts shall be treated for all purposes of this Subscription Agreement as having been paid to the person in respect of which such deduction and withholding was made.
(c) All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient, (ii) when sent by electronic mail, with no mail undeliverable or other rejection notice, on the date of transmission to such recipient, if sent on a business day prior to 5:00 p.m. New York City time, or on the business day following the date of transmission, if sent on a day that is not a business day or after 5:00 p.m. New York City time on a business day, (iii) one (1) business day after being sent to the recipient via overnight mail by reputable overnight courier service (charges prepaid), or (iv) four (4) business days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and, in each case, addressed to the intended recipient at its address specified on the signature page hereof or to such electronic mail address or address as subsequently modified by written notice given in accordance with this Section 9(c). A courtesy electronic copy of any notice sent by methods (i), (iii), or (iv) above shall also be sent to the recipient via electronic mail if an electronic mail address is provided in the applicable signature page hereof or to an electronic mail address as subsequently modified by written notice given in accordance with this Section 9(c).
(d) Subscriber acknowledges that Pubco, the Placement Agents and others, including SPAC and the Company, will rely on the acknowledgments, understandings, agreements, representations and warranties of Subscriber contained in this Subscription Agreement; provided, however, that the foregoing clause of this Section 9(d) shall not give the Company, Pubco or SPAC any rights other than those expressly set forth herein. Prior to the closing of the Transactions, Subscriber agrees to promptly notify the Company, Pubco, SPAC and the Placement Agents if it becomes aware that any of the acknowledgments, understandings, agreements, representations and warranties of Subscriber set forth herein are no longer accurate in all material respects. Pubco acknowledges that Subscriber will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement. Prior to the closing of the Transactions, the Company and Pubco agree to promptly notify Subscriber, if they become aware that any of the acknowledgments, understandings, agreements, representations and warranties of the Company or Pubco, as applicable, set forth herein are no longer accurate in all material respects.
(e) Each of the Company, Pubco, SPAC, the Placement Agents and Subscriber is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party as required by applicable law in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
(f) Each party hereto shall pay all of its own expenses in connection with this Subscription Agreement and the transactions contemplated herein.
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(g) Neither this Subscription Agreement nor any rights that may accrue to Subscriber hereunder (other than the Subscribed Units acquired hereunder, the Pubco Class A Common Stock acquired upon exchange of the Subscribed Units and the rights set forth in Section 6) may be transferred or assigned by Subscriber. Neither this Subscription Agreement nor any rights or obligations that may accrue to the Company or Pubco hereunder may be transferred or assigned by the Company or Pubco without the prior written consent of Subscriber, other than in connection with the Transactions. Notwithstanding the foregoing, Subscriber may assign all or a portion of its rights and obligations under this Subscription Agreement to one or more of its affiliates (including other investment funds or accounts managed or advised by the investment manager who acts on behalf of Subscriber) upon written notice to the Company, Pubco and SPAC or, with the Company, Pubco and SPAC’s prior written consent, to another person; provided that in the case of any such assignment, the assignee(s) shall become a Subscriber hereunder and have the rights and obligations and be deemed to make the representations and warranties of Subscriber provided for herein to the extent of such assignment; and provided, further, that no such assignment shall relieve the assigning Subscriber of its obligations hereunder if any such assignee fails to perform such obligations, unless the Company, Pubco and SPAC have given their prior written consent to such relief. Any purported assignment or transfer in violation of this Section 9(g) shall be null and void. In the event of such a transfer or assignment, Subscriber shall complete the form of assignment attached as Annex G hereto.
(h) All the agreements, representations and warranties made by each party hereto in this Subscription Agreement shall survive the Subscription Closing.
(i) The Company and Pubco may request from Subscriber such additional information as the Company or Pubco may reasonably determine to be necessary to evaluate the eligibility of Subscriber to acquire the Subscribed Units and to register for resale Pubco Class A Common Stock into which the Subscribed Units are exchangeable, and Subscriber shall promptly provide such information as may be reasonably requested, to the extent readily available and to the extent consistent with its internal policies and procedures; provided that each of the Company and Pubco agrees to keep any such information provided by Subscriber confidential, except (A) as required by the federal securities laws, rules or regulations and (B) to the extent such disclosure is required by other laws, rules or regulations, at the request of the staff of the Commission or regulatory agency or under the regulations of the Stock Exchange. Subscriber acknowledges that SPAC or Pubco may file a form of this Subscription Agreement with the Commission as an exhibit to a current or periodic report of SPAC or Pubco, an annex to a proxy statement of SPAC or Pubco or as an exhibit to a registration statement of Pubco.
(j) This Subscription Agreement may not be amended, modified or waived except by an instrument in writing, signed by each of the parties hereto; provided that no provision of this Subscription Agreement that references the Placement Agents may be amended, modified, terminated or waived in any manner that is adverse to the Placement Agents without the written consent of the Placement Agents.
(k) This Subscription Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof.
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(l) Except with respect to the Placement Agents (who are third-party beneficiaries of the representations, warranties and covenants that reference the Placement Agents set forth herein) or as otherwise provided herein, this Subscription Agreement is intended for the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns and, except with respect to the Placement Agents or as otherwise as provided herein, is not for the benefit of, nor may any provision hereof be enforced by, any other person.
(m) The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached and that money or other legal remedies would not be an adequate remedy for such damage. It is accordingly agreed that the parties shall be entitled to seek equitable relief, including in the form of an injunction or injunctions to prevent breaches or threatened breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise. The parties hereto acknowledge and agree that the Company and Pubco shall be entitled to specifically enforce Subscriber’s obligations to fund the Subscription and the provisions of the Subscription Agreement, in each case, on the terms and subject to the conditions set forth herein. The parties hereto further acknowledge and agree: (x) to waive any requirement for the security or posting of any bond in connection with any such equitable remedy; (y) not to assert that a remedy of specific enforcement pursuant to this Section 9(m) is unenforceable, invalid, contrary to applicable law or inequitable for any reason; and (z) to waive any defenses in any action for specific performance, including the defense that a remedy at law would be adequate.
(n) If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
(o) No failure or delay by a party hereto in exercising any right, power or remedy under this Subscription Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of such party. No single or partial exercise of any right, power or remedy under this Subscription Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy by a party hereto shall not constitute a waiver of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required under this Subscription Agreement shall entitle the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand.
(p) This Subscription Agreement may be executed and delivered in one or more counterparts (including by electronic mail, in .pdf or other electronic submission) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
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(q) This Subscription Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the principles of conflicts of laws that would otherwise require the application of the law of any other state.
(r) EACH PARTY AND ANY PERSON ASSERTING RIGHTS AS A THIRD PARTY BENEFICIARY HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OR RELATED TO THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY OR ANY AFFILIATE OF ANY OTHER SUCH PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE PARTIES AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS SUBSCRIPTION AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS SUBSCRIPTION AGREEMENT.
(s) The parties agree that all disputes, legal actions, suits and proceedings arising out of or relating to this Subscription Agreement must be brought exclusively in the courts of the State of New York or the courts of the United States located in the Borough of Manhattan, New York City, New York (collectively, the “Designated Courts”). Each party hereby consents and submits to the exclusive jurisdiction of the Designated Courts. No legal action, suit or proceeding with respect to this Subscription Agreement may be brought in any other forum. Each party hereby irrevocably waives all claims of immunity from jurisdiction, and any objection which such party may now or hereafter have to the laying of venue of any suit, action or proceeding in any Designated Court, including any right to object on the basis that any dispute, action, suit or proceeding brought in the Designated Courts has been brought in an improper or inconvenient forum or venue. Each of the parties also agrees that delivery of any process, summons, notice or document to a party hereof in compliance with Section 9(c) of this Subscription Agreement shall be effective service of process for any action, suit or proceeding in a Designated Court with respect to any matters to which the parties have submitted to jurisdiction as set forth above.
(t) This Subscription Agreement may only be enforced against, and any claim, action, suit or other legal proceeding based upon, arising out of, or related to this Subscription Agreement, or the negotiation, execution or performance of this Subscription Agreement, may only be brought against the entities that are expressly named as parties hereto; except with respect to the provisions of this Subscription Agreement for which the Placement Agents are express third party beneficiaries.
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(u) (i) SPAC and Pubco shall by 9:00 a.m., New York City time, on the first (1st) business day immediately following the date of this Subscription Agreement, issue a press release disclosing the material terms of the transactions contemplated hereby, and (ii) following the execution of the BCA, SPAC shall file with the Commission a “Current Report” on Form 8-K disclosing all material terms of the BCA, this Subscription Agreement, the Other LLC Subscription Agreements and the transactions contemplated hereby and thereby, and the Transactions, and including as exhibits thereto, the BCA, and the form of this Subscription Agreement, within the time required by the Exchange Act. From and after the issuance of such press release, each of SPAC and Pubco represents to the Subscriber that it shall have publicly disclosed all material, non-public information regarding SPAC or Pubco delivered to the Subscriber by or on behalf of the SPAC, Pubco or any of its officers, directors, employees or agents (including the Placement Agents) in connection with the transactions contemplated by this Subscription Agreement. Prior to the closing under the BCA, Subscriber shall not issue any press release or make any other similar public statement with respect to the transactions contemplated hereby without the prior written consent of SPAC, the Company and Pubco (such consent not to be unreasonably withheld or delayed). Notwithstanding anything in this Subscription Agreement to the contrary, each of SPAC, the Company and Pubco (i) shall not publicly disclose the name of Subscriber or any of its affiliates or advisers, or include the name of Subscriber or any of its affiliates or advisers in any press release, without the prior written consent of Subscriber and (ii) shall not publicly disclose the name of Subscriber or any of its affiliates or advisers, or include the name of Subscriber or any of its affiliates or advisers in any filing with the Commission or any regulatory agency or trading market, without the prior written consent of Subscriber, except (A) as required by the federal securities laws, rules or regulations, including in connection with the filing of a Registration Statement pursuant to Section 6(a), and (B) to the extent such disclosure is required by other laws, rules or regulations, at the request of the staff of the Commission or regulatory agency or under the regulations of the Stock Exchange, in which case of clause (A) or (B), the Company, SPAC or Pubco, as applicable, shall provide Subscriber with prior written notice (including by e-mail) of such permitted disclosure, and shall reasonably consult with Subscriber regarding such disclosure. Subscriber will promptly provide any information reasonably requested by the Company, SPAC or Pubco for any regulatory application or filing made or approval sought in connection with the Transactions (including filings with the Commission). To the extent that any such information is publicly disclosed pursuant to the provisions hereunder, the parties agree that no further notice or consent is required for SPAC or Pubco to further disclose such information.
(v) The obligations of Subscriber under this Subscription Agreement are several and not joint with the obligations of any Other LLC Subscriber or any other investor under the Other LLC Subscription Agreements, and Subscriber shall not be responsible in any way for the performance of the obligations of any Other LLC Subscriber under this Subscription Agreement or any Other LLC Subscriber under the Other LLC Subscription Agreements. The decision of Subscriber to purchase Subscribed Units pursuant to this Subscription Agreement has been made by Subscriber independently of any Other LLC Subscriber or any other investor and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company, SPAC, Pubco or any of their respective affiliates or subsidiaries which may have been made or given by any Other LLC Subscriber or investor or by any agent or employee of any Other LLC Subscriber or investor, and neither Subscriber nor any of its agents or employees shall have any liability to any Other LLC Subscriber or investor (or any other person) relating to or arising from any such information, materials, statements or opinions. Nothing contained herein or in any Other LLC Subscription Agreement, and no action taken by Subscriber or Other LLC Subscriber or other investor pursuant hereto or thereto, shall be deemed to constitute Subscriber and any Other LLC Subscribers or other investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that Subscriber and any Other LLC Subscribers or other investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Subscription Agreement and the Other LLC Subscription Agreements. Subscriber acknowledges that no Other LLC Subscriber has acted as agent for Subscriber in connection with making its investment hereunder and no Other LLC Subscriber will be acting as agent of Subscriber in connection with monitoring its investment in the Subscribed Units or enforcing its rights under this Subscription Agreement. Subscriber shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Subscription Agreement, and it shall not be necessary for any Other LLC Subscriber or investor to be joined as an additional party in any proceeding for such purpose.
(w) The headings herein are for convenience only, do not constitute a part of this Subscription Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Subscription Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rules of strict construction will be applied against any party. Unless the context otherwise requires, (i) all references to Sections or Annexes are to Sections or Annexes contained in or attached to this Subscription Agreement, (ii) each accounting term not otherwise defined in this Subscription Agreement has the meaning assigned to it in accordance with United States generally accepted accounting principles, (iii) words in the singular or plural include the singular and plural and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter, (iv) the use of the word “including” in this Subscription Agreement shall be by way of example rather than limitation, and (v) the word “or” shall not be exclusive (i.e., unless context requires otherwise “or” shall be interpreted to mean “and/or” rather than “either/or”).
[Signature pages follow]
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IN WITNESS WHEREOF, Pubco has accepted this Subscription Agreement as of the date first set forth above.
| AVALANCHE TREASURY CORPORATION | ||
| By: | ||
| Name: | ||
| Title: | ||
Address for Notices:
Avalanche Treasury Corporation
413 W 14th Street
Floor 2, PMB 4633
New York, NY 10014
Attn: Gerald Batholomew Smith, President
Email: [***]
with a copy (not to constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Manhattan West
New York NY 10001
Email: [***]
Attention: Lorenzo Corte; Ryan Dzierniejko
[Signature Page to Subscription Agreement – Equity]
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IN WITNESS WHEREOF, the Company has accepted this Subscription Agreement as of the date first set forth above.
| AVALANCHE TREASURY COMPANY LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
Address for Notices:
Avalanche Treasury Company LLC
413 W 14th Street
Floor 2, PMB 4633
New York, NY 10014
Attn: Gerald Batholomew Smith, President
Email: [***]
with a copy (not to constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
22 Bishopsgate
London EC2N 4BQ, UK
Email: [***]
Attention: Lorenzo Corte; Maria Protopapa
and
Barclays Capital Inc.
745 Seventh Avenue
New York, NY 10019
Attention: Warren Fixmer, Managing Director
PJT Partners LP
280 Park Avenue
New York, NY 10017
United States
Attention: David Travin, General Counsel
[Signature Page to Subscription Agreement – Equity]
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IN WITNESS WHEREOF, SPAC has accepted this Subscription Agreement as of the date first set forth above.
| MOUNTAIN LAKE ACQUISITION CORP. | ||
| By: | ||
| Name: | ||
| Title: | ||
Address for Notices:
930 Tahoe Blvd STE 802 PMB 45
Incline Village, NV 89451
Email: [***]
Attention: Chief Executive Officer
with a copy (not to constitute notice) to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York NY 10105
| Email: | [***] | |
| [***] |
| Attention: | Stuart Neuhauser, Esq. | |
| Lloyd N. Steele, Esq. |
[Signature Page to Subscription Agreement – Equity]
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IN WITNESS WHEREOF, Subscriber has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date set forth below.
| Name of Subscriber: ______________________________ | State/Country of Formation or Domicile: ____ | |
| By: ____________________________________________ | ||
| Name: __________________________________________ | ||
| Title: ___________________________________________ | ||
| Name in which Subscribed Units are to be registered (if different): | Date: ________________ | |
| ________________________________________________ | ||
| Subscriber’s EIN: _________________________________ | ||
| Entity Type (e.g., corporation, partnership, trust, etc.): ___________________________________________ | ||
| Business Address-Street: | Mailing Address-Street (if different): | |
| _________________________________________________ | ______________________________________________ | |
| City, State, Zip: ____________________________________ | City, State, Zip: _________________________________ | |
| Attn: ____________________________________________ | Attn: __________________________________________ | |
| Telephone No.: ____________________________________ | Telephone No.: __________________________________ | |
| Email for notices: __________________________________ | Email for notices (if different): _____________________ | |
| Number of Company Units subscribed for: _____________ |
Form of Payment:
| ☐ | Cash: $_______ |
| ☐ | USDC: $_______ |
| ☐ | AVAX: ______ AVAX |
| Signing AVAX Price: ______________ |
[Signature Page to Subscription Agreement – Equity]
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ANNEX A
ESCROW ACCOUNT WIRE INSTRUCTIONS
[●]
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ANNEX B
WALLET ADDRESS OF THE COMPANY
[●] Custody Account
[●]
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ANNEX C
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
[To come]
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ANNEX D
ELIGIBILITY REPRESENTATIONS OF SUBSCRIBER
This Annex D should be completed and signed by Subscriber and constitutes a part of the Subscription Agreement.
| 1. | QUALIFIED INSTITUTIONAL BUYER STATUS (Please check the box, if applicable) |
| ☐ | Subscriber is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) (a “QIB”) |
| ☐ | We are subscribing for the Subscribed Units as a fiduciary or agent for one or more investor accounts, and each owner of such account is a QIB. |
**OR**
| 2. | INSTITUTIONAL ACCREDITED INVESTOR STATUS (Please check the box, if applicable) |
| ☐ | Subscriber is an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) or an entity in which all of the equity holders are accredited investors within the meaning of Rule 501(a) under the Securities Act, and has marked and initialed the appropriate box below indicating the provision under which it qualifies as an institutional “accredited investor.” |
**AND**
| 3. | FINRA INSTITUTIONAL INVESTOR STATUS (Please check the box) |
| ☐ | Subscriber is a “institutional investor” (as defined in FINRA Rule 2111). |
**AND**
| 4. | AFFILIATE STATUS (Please check the applicable box) |
SUBSCRIBER
| ☐ | is: |
| ☐ | is not: |
an “affiliate” (as defined in Rule 144 under the Securities Act) of SPAC, the Company or Pubco or acting on behalf of an affiliate of SPAC, the Company or Pubco.
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Rule 501(a), in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Subscriber has indicated, by marking and initialing the appropriate box(es) below, the provision(s) below which apply to Subscriber and under which Subscriber accordingly qualifies as an “accredited investor.”
| ☐ | Any bank, registered broker or dealer, insurance company, registered investment company, business development company, small business investment company, private business development company, or rural business investment company; |
| ☐ | Any investment adviser registered pursuant to section 203 of the Investment Advisers Act or registered pursuant to the laws of a state; |
| ☐ | Any investment adviser relying on the exemption from registering with the Commission under section 203(l) or (m) of the Investment Advisers Act; |
| ☐ | Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; |
| ☐ | Any employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”), if (i) the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, which is either a bank, a savings and loan association, an insurance company, or a registered investment adviser, (ii) the employee benefit plan has total assets in excess of $5,000,000 or, (iii) such plan is a self-directed plan, with investment decisions made solely by persons that are “accredited investors”; |
| ☐ | Any (i) corporation, limited liability company or partnership, (ii) Massachusetts or similar business trust, or (iii) organization described in section 501(c)(3) of the Internal Revenue Code, in each case that was not formed for the specific purpose of acquiring the securities offered and that has total assets in excess of $5,000,000; |
| ☐ | Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Section 230.506(b)(2)(ii) of Regulation D under the Securities Act; |
| ☐ | Any entity, other than an entity described in the categories of “accredited investors” above, not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000; |
| ☐ | Any “family office,” as defined under the Investment Advisers Act that satisfies all of the following conditions: (i) with assets under management in excess of $5,000,000, (ii) that is not formed for the specific purpose of acquiring the securities offered, and (iii) whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment; |
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| ☐ | Any “family client,” as defined under the Investment Advisers Act, of a family office meeting the requirements in the previous paragraph and whose prospective investment in the issuer is directed by such family office pursuant to the previous paragraph; or |
| ☐ | Any entity in which all of the equity owners are “accredited investors”. |
Specify which tests:
| ☐ | Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer; |
| ☐ | Any natural person whose individual net worth, or joint net worth with that person’s spouse or spousal equivalent, exceeds $1,000,000. For purposes of calculating a natural person’s net worth: (a) the person’s primary residence shall not be included as an asset; (b) indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability; |
| ☐ | Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse or spousal equivalent in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; |
| ☐ | Any natural person holding in good standing one or more professional certifications or designations or credentials from an accredited educational institution that the Commission has designated as qualifying an individual for accredited investor status; or |
| ☐ | Any natural person who is a “knowledgeable employee,” as defined in the Investment Company Act, of the issuer of the securities being offered or sold where the issuer would be an investment company, as defined in section 3 of such act, but for the exclusion provided by either section 3(c)(1) or section 3(c)(7) of such act. |
**AND**
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| 5. | FINRA INSTITUTIONAL ACCOUNT STATUS (Please check the box) |
| ☐ | Subscriber is an “institutional account” under FINRA Rule 4512(c). |
**AND**
| 6. | EEA QUALIFIED INVESTOR (Please check the applicable box) |
| ☐ | Subscriber is a “qualified investor” (within the meaning of Article 2 of the EU Prospectus Regulation). |
| ☐ | Subscriber is not a resident in a member state of the European Economic Area. |
**AND**
| 7. | UK QUALIFIED INVESTOR (Please check the applicable box) |
| ☐ | Subscriber is a “qualified investor” (within the meaning of Article 2 of the UK Prospectus Regulation) who is also (i) an investment professional falling within Article the Order; (ii) a high net worth entity falling within Article 49(2)(a) to (d) of the Order; or (iii) a person to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) in connection with the issue or sale of the Subscribed Units may be lawfully communicated or caused to be communicated. |
| ☐ | Subscriber is not resident in the United Kingdom. |
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This page should be completed by Subscriber
and constitutes a part
of the Subscription Agreement.
| SUBSCRIBER: | ||
| Print Name: | ||
| By: | ||
| Name: | ||
| Title: | ||
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ANNEX E
SIGNING AVAX PRICE REPRESENTATIONS OF SUBSCRIBER
This Annex E should be completed and signed by Subscriber if Subscriber elects to Subscribe for Company Units with AVAX. This Annex E constitutes a part of the Subscription Agreement. For purposes of this Subscription Agreement and this Annex E:
“Locked AVAX” means Paper Locked AVAX or Programmatically Locked AVAX.
“Paper Locked AVAX” means any AVAX that, as of the date of this Subscription Agreement, may only be transferred to the Company with the consent of the Avalanche Network, Avalanche (BVI), Inc., a British Virgin Islands business company, or Ava Labs, Inc., a Delaware corporation, and the Company, upon receipt of any such AVAX, may not otherwise independently transfer or dispose of, directly or indirectly, any such AVAX until it becomes Unrestricted AVAX, as such AVAX is locked pursuant to a vesting schedule.
“Programmatically Locked AVAX” means any AVAX that, as of the date of this Subscription Agreement, is locked in the Avalanche Network pursuant to a vesting schedule and may not be transferred or disposed of, directly or indirectly, under any circumstances until the expiration of such vesting schedule.
“Restricted AVAX” means AVAX that is either Locked AVAX or Staked AVAX.
“Stake” or “Staking” means (a) staking or delegating, whether directly or through a third-party service provider, for the purposes of participating in network consensus, securing the network and receiving staking rewards; (b) participating in liquid staking protocols, including depositing AVAX into protocols that issue liquid staking derivatives or receipt tokens; (c) engaging in on-chain or off-chain yield generation activities, including but not limited to depositing AVAX into decentralized or centralized finance protocols for the purposes of lending or borrowing against; or (d) providing liquidity to decentralized or centralized exchanges, automated market makers or liquidity pools.
“Staked AVAX” means any AVAX that the Company is, as of the date of this Subscription Agreement, unable to immediately acquire from Subscriber or otherwise Stake, lend, pledge, or transfer or dispose of, directly or indirectly because such AVAX is currently being Staked.
“Unrestricted AVAX” means AVAX that is neither Locked AVAX nor Staked AVAX.
AVAX STATUS (If Subscribing for Company Units with AVAX, please check one of the following boxes, as applicable):
| ☐ | Unrestricted AVAX. Subscriber certifies that Subscriber is delivering the Subscription Price in Unrestricted AVAX, free and clear of any liens, encumbrances or other restrictions. |
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| ☐ | Locked AVAX. Subscriber certifies that Subscriber is delivering the Subscription Price in Locked AVAX, free and clear of any liens, encumbrances or other restrictions, except for the lock rendering such AVAX to be Locked AVAX. |
| ☐ | Staked AVAX. Subscriber certifies that Subscriber is delivering the Subscription Price in Staked AVAX. |
RESTRICTED AVAX (If Subscribing for Company Units with Restricted AVAX, please check one of the following boxes, as applicable)
| ☐ | Short Restricted AVAX. Subscriber certifies that Subscriber elects to subscribe for the Company Units with Restricted AVAX that will become Unrestricted AVAX on or prior to the one-year anniversary of this Subscription Agreement, and accordingly the Short Restricted AVAX Price shall apply. |
| ☐ | Long Restricted AVAX. Subscriber certifies that Subscriber elects to subscribe for the Company Units with Restricted AVAX that will become Unrestricted AVAX following the one-year anniversary of this Subscription Agreement, and accordingly the Long Restricted AVAX Price shall apply. |
PROGRAMMATICALLY LOCKED AVAX OR STAKED AVAX HORIZON (If Subscribing for Company Units with Programmatically Locked AVAX or Staked AVAX, please indicate below the timeline for either (i) the vesting schedule pursuant to which the Programmatically Locked AVAX is locked or (ii) when such Staking activities for the Staked AVAX will end, and, in either case such AVAX will be eligible to transfer to the Company):
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ANNEX F
FORM OF PROGRAMMATICALLY LOCKED OR STAKED AVAX CERTIFICATION
This Programmatically Locked or Staked AVAX Certificate (this “Certificate”) is made as of [●] by [●] (“Subscriber”). Reference is made to that certain subscription agreement (the “LLC Subscription Agreement”), dated as of [●], 2025, by and among, inter alios, Avalanche Treasury Company LLC (the “Company”) and Subscriber. Capitalized terms used, but not defined, herein shall have the meaning ascribed to such terms in the LLC Subscription Agreement.
1. Subscriber is delivering the Subscription Price on the date of this Certificate in Unrestricted AVAX.
2. The Subscription Price for the Subscribed Units shall include any additional AVAX yielded or earned on or by, through Staking or otherwise, the Programmatically Locked AVAX or Staked AVAX, as applicable, originally constituting the Subscription Price, from the date of the Subscription Agreement through to the date of this Certificate (such additional yielded or earned AVAX, the “Yield AVAX”).
3. As of the date of the LLC Subscription Agreement, the AVAX Amount constituting the Subscription Price was [●].
4. As of the date of this Certificate, the number of Yield AVAX is [●], representing a [●]% increase on the AVAX Amount.
5. Subscriber will deliver the Subscription Price, including the AVAX Amount and the Yield AVAX, on the date of this Certificate.
6. This Certificate shall form a part of the LLC Subscription Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the date written above.
| [●] | ||
| [By: [●]] | ||
| By: | ||
| Name: | ||
| Title: | ||
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ANNEX G
FORM OF ASSIGNMENT
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ASSIGNMENT, ASSUMPTION & JOINDER
TO
LLC SUBSCRIPTION AGREEMENT
[●], 2025
This Assignment, Assumption & Joinder Agreement (this “Agreement”) is made as of the date written above by [●] (“Assignor”) and [●] (“Assignee”). Reference is made to that certain subscription agreement (the “LLC Subscription Agreement”), dated as of [●], 2025, by and among, inter alios, Avalanche Treasury Company LLC (the “Company”) and Assignor. Capitalized terms used, but not defined, herein shall have the meaning ascribed to such terms in the LLC Subscription Agreement.
1. Each of Assignee and Assignor, by their execution and delivery of this Agreement, agrees to the assignment to and assumption by Assignee of all of Assignor’s rights and benefits as the “Subscriber” or equivalent term under the LLC Subscription Agreement and any other related documents as they apply to the “Subscriber” or equivalent term, including, for the avoidance of doubt, the right to purchase from the Company at the closing of the Subscription of [all of the Company Units][a portion of the units] initially subscribed for by Assignor.
2. Assignee hereby acknowledges, agrees and confirms that, by its execution of this Agreement, Assignee shall be bound by all of the terms, obligations, provisions and conditions contained in the LLC Subscription Agreement as they apply to the “Subscriber” thereunder and as if an original signatory thereto in such capacity.
3. Assignee hereby acknowledges, agrees and confirms that, by its execution of this Agreement, Assignee makes all of the representation and warranties of the Subscriber set forth in the LLC Subscription Agreement as of the date hereof.
4. Assignor hereby acknowledges, agrees and confirms that, in accordance with Section 9(g) of the LLC Subscription Agreement, nothing in this Agreement shall limit the obligations of Assignor under the LLC Subscription Agreement, or the rights of any party thereto, to the extent that Assignee fails to comply with its obligations under the LLC Subscription Agreement.
5. This Agreement shall be governed by the governing law applicable to the LLC Subscription Agreement.
6. This Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date written above.
| [●] | ||
| [By: [●]] | ||
| By: | ||
| Name: | ||
| Title: | ||
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ASSIGNEE:
| Name of Assignee: | State/Country of Formation or Domicile: [●] | |
| [●] | ||
| [By: [●]] | ||
| By: __________________________________ | ||
| Name: ________________________________ | ||
| Title: _________________________________ | ||
| Name in which Transferred Interest is to be registered (if different): | Date: [●], 2025 | |
| Assignee’s EIN: [●] | ||
| Business Address | Mailing Address (if different): | |
| [●] | ||
| [●] | ||
| Attn: [●] | Attn: ______________________________ | |
| Telephone No.: [●] | Telephone No.: | |
| Facsimile No.: [●] | Facsimile No.: | |
| Number of Company Units in Transferred Interest: [●] | ||
| Price Per Company Unit: $[●] |
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Exhibit 99.1
Certain personally identifiable
information has been omitted from this exhibit pursuant to
item 601(a)(6) of Regulation S-K. [***] indicates that information has been redacted.
ASSET PURCHASE AND CONTRIBUTION AGREEMENT
October 1, 2025
THIS PURCHASE AND CONTRIBUTION AGREEMENT (this “Agreement”) is made as of the date first written above, by and between Avalanche (BVI), Inc., a company incorporated in the British Virgin Islands (“Avalanche BVI”), Avalanche Cayman, a Cayman Islands exempted company (“Avalanche Cayman” and together with Avalanche BVI, the “Foundation”), Dragonfly Digital Management, LLC, a Delaware limited liability company (“Sponsor”), Avalanche Treasury Company LLC, a Delaware limited liability company (the “Vehicle”) and Avalanche Treasury Corporation, a Delaware corporation (“Pubco”). The Foundation, the Sponsor and the Vehicle are referred to herein individually as a “Party” and collectively as the “Parties.”
WHEREAS, the Sponsor intends to publicly list the Vehicle or a newly established company (“Pubco”) that will enter into a business combination agreement with the Vehicle, by way of a business combination with an existing special purpose acquisition company (de-SPAC) for the purposes of: (i) holding and managing AVAX tokens (the “Tokens”), (ii) offering equity investors public market exposure to the long-term value of the Avalanche ecosystem, (iii) supporting the visibility and liquidity of ecosystem tokens in regulated capital markets, and (iv) promoting, through long-term governance and capital deployment, the development and adoption of the Avalanche ecosystem (the “Transaction”);
WHEREAS, the Parties intend to enter into this Agreement and the Token Sale Agreement (as defined below) to effect the sale and/or contribution of Tokens by each of Avalanche BVI, Avalanche Cayman and the Contributors (as defined below), as applicable, to the Vehicle; and
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein, and intending to be legally bound, the Parties hereby agree as follows:
Article
I
contributions
Section 1.1 Foundation Token Sale. Subject to the terms and conditions of this Agreement, the Foundation hereby sells, conveys, assigns, transfers, and delivers for the benefit of the Vehicle, and the Vehicle purchases and assumes from the Foundation, all of the Foundation’s right, title and interest in and to, a minimum of $200 million of Tokens on a pre-discount basis (the “Foundation Tokens” and their sale, the “Foundation Token Sale”) pursuant to the Token Sale Agreement entered into between the Vehicle and the Foundation on the date hereof (the “Token Sale Agreement”).
Section 1.2 Sponsor Contribution. Subject to the terms and conditions of this Agreement, the Sponsor hereby, directly and/or indirectly through Dragonfly Ventures L.P., Dragonfly Ventures II, L.P., and/or other Sponsor controlled vehicles (the “Contributors”), sells, conveys, assigns, transfers and delivers for the benefit of the Vehicle, and the Vehicle purchases and assumes from the relevant Contributors, all of the Contributors’ rights, titles and interests in and to 1,960,040 Tokens (the “Contributed Tokens”), at a price per Token equal to the Sponsor Token Price free and clear of all liens, claims, encumbrances, charges, security interests, or any restrictions of any kind, but, for the avoidance of doubt, not including the Excluded Assets (the “Sponsor Contributions”). The “Sponsor Token Price” shall be equal to the volume weighted average price (VWAP) of the Tokens denominated in U.S. dollars as calculated from all executed trades on the exchange operated by Binance Holdings Ltd. (or its successor primary spot exchange) over the five-day period ending at 8:00 pm New York City time on September 29, 2025; such VWAP shall be calculated by dividing the sum of the products of each trade’s price and volume by total volume of all trades during the specified thirty-day period. If the Contributors are unable to contribute the total amount of Contributed Tokens on the date hereof due to part or all of the Contributed Tokens being subject to lock-up restrictions, fund regulatory restrictions or consent requirements (the “Restricted Tokens”), the Contributors holding such Restricted Tokens shall sell, convey, assign, transfer and deliver for the benefit of the Vehicle, and the Vehicle shall purchase and assume from the relevant Contributors any such number of Restricted Tokens as soon as commercially practicable after expiration of the relevant lock-up or fund regulatory restrictions, or receipt of the required consent, provided that the consideration to be paid by the Vehicle to the relevant Contributor for such Restricted Tokens pursuant to Section 1.4 below shall be reduced by (i) 15% if the relevant restrictions expire, or the required consent is received, on or before the date that is the one (1) year anniversary of the Token Closing, or (ii) 25% if the relevant restrictions expire, or the required consent is received, after the date that is the one (1) year anniversary of the Token Closing.
Section 1.3 Excluded Assets. Notwithstanding anything to the contrary in this Agreement, in no event shall any Contributor and the Foundation be deemed to sell, transfer, assign, convey or deliver, and each Contributor and the Foundation shall retain all right, title and interest in and to all other properties, rights, interests and other assets of such Contributor or the Foundation that are not Contributed Tokens or Foundation Tokens, as applicable, including the following (collectively, the “Excluded Assets”):
(a) all cash and cash equivalents, all bank accounts, and all deposits or prepaid or deferred charges and expenses that have been prepaid by any Contributor and the Foundation, and any retainers or similar amounts paid to advisors or other professional service providers, in each case in respect of the Contributed Tokens or Foundation Tokens, as applicable;
(b) any Contributor’s and the Foundation’s claims or other rights under this Agreement; and
(c) any claims of any Contributor and the Foundation for any Tax refunds in respect of the Contributed Tokens or Foundation Tokens, as applicable, accrued prior to the Token Closing Date (as defined below) or any recoveries under any insurance policies in respect of the Contributed Tokens or Foundation Tokens, as applicable, that are paid out prior to the Token Closing Date.
Section 1.4 Consideration. Subject to the terms and conditions of this Agreement in consideration for:
(a) the Foundation Tokens, the Vehicle shall pay to the Foundation the consideration set forth in the Token Sale Agreement as and when set out in such Token Sale Agreement and Section 1.8 of this Agreement;
(b) the Sponsor Contribution, at Token Closing, the Vehicle shall issue to the relevant Contributors a number of Vehicle units equal to 5,805,638.
Section 1.5 Contributors and Foundation Representations and Warranties. Without prejudice to the representation and warranties included in the Token Sale Agreement, each Contributor and the Foundation hereby represents and warrants to the Vehicle as follows:
(a) Each Contributor and the Foundation have all rights, title and interest in and to the Contributed Tokens and the Foundation Tokens, respectively;
(b) the Contributed Tokens and the Foundation Tokens are held in a digital wallet or digital wallets, held or operated by or on behalf of a Contributor or the Foundation, as applicable. With respect to a Contributor, such wallets are maintained at or by an appropriately regulated custodian and/or in accordance with industry-standard security practices (the “Contributor Digital Wallets”). With respect to the Foundation, such wallets are maintained directly by or on behalf of the Foundation (the “Foundation Digital Wallets”). Neither the Contributed Tokens nor the Foundation Tokens or such Contributor Digital Wallets or Foundation Digital Wallets are subject to any liens, encumbrances or other restrictions;
(c) Each Contributor and the Foundation have taken commercially reasonable steps to protect its Contributor Digital Wallets and the Contributed Tokens or its Foundation Digital Wallets and the Foundation Tokens, respectively; and
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(d) Each Contributor and the Foundation have the exclusive ability to control such Contributor Digital Wallets or such Foundation Digital Wallets, respectively, including by use of “private keys” or other equivalent means or through custody arrangements or other equivalent means.
Section 1.6 Vehicle and Pubco Representations and Warranties. Without prejudice to the representation and warranties included in the Token Sale Agreement, the Vehicle and Pubco each hereby represents and warrants to the Foundation that neither the Vehicle, Pubco nor any person acting on its or their behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of either the Consideration Shares or the Consideration Warrants (each as described in Exhibit A). Neither the Consideration Shares nor the Consideration Warrants are being offered in a manner involving a public offering under, or in a distribution in violation of, the U.S Securities Act of 1933 or any state securities laws.
Section 1.7 Closing Dates. The delivery of the Tokens contemplated by this Agreement (the “Token Closing”) shall occur on the date hereof. The transactions contemplated by Section 1.8(b) including, for the avoidance of doubt, the delivery of the Consideration Shares by Pubco to Avalanche Cayman shall occur on the same date as the closing of the Transaction (the “BCA Closing”). The date on which the Token Closing occurs is referred to as the “Token Closing Date.” The date on which the BCA Closing occurs is referred to as the “BCA Closing Date.”
Section 1.8 Closing Deliverables.
(a) At Token Closing:
(i) the Vehicle shall deliver (x) to Avalanche BVI, the Cash Consideration (as defined in the Token Sale Agreement) and (y) to each Contributor, the applicable consideration as set forth in Section 1.4(b);
(ii) Sponsor shall effectuate the series of steps, conditions, and actions described in Annex A attached hereto (the “Contribution Process”); and
(iii) the Foundation shall effectuate the series of steps, conditions and actions set forth in the Token Sale Agreement.
(b) At BCA Closing:
(i) Pubco shall deliver to Avalanche Cayman the Consideration Shares (as defined in the Token Sale Agreement), as specified in the Token Sale Agreement;
(ii) Pubco and Avalanche Cayman shall execute a registration rights agreement (the “Registration Rights Agreement”), substantially in the form attached hereto as Exhibit B, with respect to the Consideration Shares; and
(iii) Pubco and Avalanche Cayman shall agree to a form of warrant agreement (the “Pubco Warrant Agreement”) which, upon execution by the relevant Parties, shall govern the issuance of any Consideration Warrants after the BCA Closing Date, as further described in Section 2.3 of the Token Sale Agreement.
(c) No later than thirty (45) days after Token Closing, the Foundation and each Contributor shall deliver to the Vehicle Contributor’s tax files sufficient documentation to enable the Vehicle to accurately determine the holding period, tax basis and other relevant tax information in regard to the Foundation Tokens and the Contributed Tokens, as applicable.
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Section 1.9 Conditions to Token Closing. The obligation of the Foundation to deliver Foundation Tokens under this Agreement is subject to satisfaction, on or prior to the date hereof, of the following conditions (which may be waived by the Foundation in whole or in part to the extent permitted by applicable Law):
(i) the signing of a definitive agreement (the “Definitive Agreement”) to effectuate the Transaction; and
(ii) the signing of the Token Sale Agreement.
Article
II
certain covenants
Section 2.1 Outreach. The Sponsor undertakes to reach out to potential targets, additional advisory board members, co-asset managers and prospective management team members for the Vehicle.
Section 2.2 CEO Identification. The Parties agree that the CEO of the Vehicle will be Bart Smith.
Section 2.3 Feedback on Materials. The Sponsor and the Vehicle agree to ensure that all marketing materials and investment documents relating to the Vehicle, the Avalanche ecosystem, and to the Foundation shall be consistent with the terms and conditions of this Agreement and any and all information made publicly available by the Foundation. The Sponsor shall consider in good faith any comment or observation received from the Foundation on the narrative, marketing, and materials developed by the Sponsor and its bankers in connection with the Transaction, provided that any such comment or observation is provided promptly upon receipt of the relevant materials by the Foundation.
Section 2.4 Exclusivity and Vehicle Right of First Refusal.
(a) For a period of 18 months commencing from the Token Closing Date (the “Covered Period”), the Foundation shall not directly or indirectly, and will direct its directors, officers and employees (collectively, “Representatives”) not to, enter into any binding agreement to enter into a Competing Transaction. “Competing Transaction” means any sale of Tokens to any digital asset treasury vehicle (or a subsidiary or affiliate of any such vehicle) that has taken substantial steps to be listed (including by way of a reverse takeover of, or private investment into, an existing public company or a de-SPAC) on a U.S. national stock exchange with the sole operations or primary business model being dependent on owning Tokens (a “DAT”) or to any vehicle that is intended to be combined with or in the formation of a DAT.
(b) During the Covered Period, in respect of sales of Tokens that are not Competing Transactions, the Vehicle shall have a right of first refusal with respect to any such proposed sale of Tokens in one single transaction or a series of related transactions in each case to a single purchaser or group of affiliated purchasers (other than any sales of Tokens to a bona fide Business Strategic Partner) with an aggregate value to such purchaser or group of affiliated purchasers exceeding $75 million at a price representing a discount greater than 30% (based on the then-current/weighted 30-day trailing market price of the Token) (such proposed sale, the “Offer”). In such event, the Foundation shall furnish a written notice of such Offer (a “ROFR Offer Notice”) to the Vehicle within five (5) days from receipt of the Offer. For the purposes of this Section 2.4(b) “Business Strategic Partner” means any person or entity entering into an arrangement with a Foundation entity to acquire or utilize Tokens in connection with a strategic, business or operational purpose, and, to the best of the such Foundation entity’s knowledge, not to purchase Tokens primarily for investment, capital markets related or market making purposes.
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(c) The ROFR Offer Notice shall include: (i) the number of Tokens that are the subject of the Offer (the “ROFR Tokens”); and (ii) the aggregate consideration for the ROFR Tokens (and per-ROFR Token consideration) as offered by or to the buyer (“ROFR Offer Price”). The ROFR Offer Notice may not be withdrawn after it has been given.
(d) The Vehicle shall have ten (10) calendar days following receipt of the ROFR Offer Notice (the “ROFR Period”) to do any of the following, in its sole discretion:
(i) Accept the offer to purchase all, but not less than all, of the ROFR Tokens on the terms set forth in the ROFR Offer Notice by furnishing a written notice to the Foundation (the “ROFR Acceptance Notice”);
(ii) elect not to issue a ROFR Acceptance Notice during such ten (10) calendar days period, in which case it shall be deemed not to have exercised its rights under this Section 2.4;
(iii) reject the offer to purchase all of the ROFR Tokens on the terms set forth in the ROFR Offer Notice (“ROFR Rejection Notice”).
(e) If a ROFR Acceptance Notice is given, within ten (10) calendar days following receipt of the ROFR Acceptance Notice, Avalanche BVI and the Vehicle shall enter into a token sale agreement for the sale of the ROFR Tokens to the Vehicle (the “ROFR Token Sale”) in a form materially similar to the Token Sale Agreement.
(f) If either: (i) a ROFR Rejection Notice is given in respect of the ROFR Offer Notice; or (ii) no ROFR Acceptance Notice or ROFR Rejection Notice is given by the Vehicle within the ROFR Period (in which case a ROFR Rejection Notice shall be deemed to have been given), then the Foundation shall thereafter be free to sell the ROFR Tokens to the buyer at a purchase price not less than the ROFR Offer Price.
(g) The Foundation shall have a commercially reasonable amount of time after the date on which the token sale agreement for the ROFR Token Sale is executed to complete such sale, failing which it shall be necessary for a separate ROFR Offer Notice to be furnished to the Vehicle, and the terms and provisions of Section 2.4(b) through Section 2.4(f) and this Section 2.4(g) shall be separately complied with, in order to complete a sale of such ROFR Tokens.
(h) If Vehicle fails to list on a U.S. national stock exchange by April 30, 2026 with assets of at least $300 million in Tokens plus $100 million in cash or cash equivalents, the rights and obligations under this Section 2.4, shall automatically terminate, without prejudice to, and without limiting or waiving, any other rights, remedies, or obligations of the parties under this Agreement (other than those expressly terminated pursuant to this Section 2.4).
(i) Notwithstanding the above, the Foundation may contribute and/or sell, in a one-off transaction, Tokens in connection with the launch of: (i) Project Snowball; or (ii) in case Project Snowball does not close, another project. For the avoidance of doubt, the Foundation shall only contribute and/or sell Tokens in one single transaction.
Section 2.5 Confidentiality. The parties acknowledge and agree that the terms of this Agreement, as well as any information disclosed or provided by either party in connection with this Agreement, are subject to the terms and conditions of that certain Mutual Non-Disclosure Agreement entered into between the parties, dated September 5, 2025 (the “NDA”). All information exchanged pursuant to this Agreement shall be deemed “Confidential Information” as defined in the NDA and shall be handled in accordance with the provisions of the NDA. In the event of any conflict between the terms of this Agreement and the NDA with respect to the treatment of Confidential Information, the terms of the NDA shall govern.
Section 2.6 Vehicle Board.
(a) The Parties agree that the Foundation shall for a period of five (5) years from the BCA Closing Date (the “Initial Period”) be entitled to designate an individual to be appointed to the board of directors of Pubco at BCA Closing (the “Foundation Designee”). The Sponsor, Pubco and the Vehicle shall take all actions necessary to cause the appointment of the Foundation Designee to the board of directors of Pubco at BCA Closing.
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(b) In addition, if after the expiration of the Covered Period but prior to the expiration of the Initial Period, the Foundation sells, conveys, assigns, transfers, and delivers for the benefit of the Vehicle additional Tokens to Pubco, the Vehicle or any of its affiliates on mutually agreed terms in a transaction that is comparable in Token size and discount to the Foundation Token Sale (a “Subsequent Token Sale”), the right of the Foundation to designate an individual to be appointed to the board of directors of Pubco as described above shall be extended for an additional three (3) years from the expiration of the Initial Period (the “Extended Period”). Each Subsequent Token Sale made before the expiration of the then-current Extended Period shall further extend this right for an additional three (3) years from the expiration of such Extended Period.
Section 2.7 Foundation Right of First Refusal.
(a) For a period of five (5) years commencing from the Token Closing Date, if the Vehicle receives a bona fide binding offer to sell directly any Foundation Token in one single transaction or a series of related transactions in each case with an aggregate value greater than $1,000,000 (the “Vehicle Offer”), the Vehicle shall furnish a written notice of such Vehicle Offer (a “Vehicle ROFR Offer Notice”) to the Foundation within five (5) days from receipt of the Vehicle Offer. The term “Vehicle Offer” shall not include sales resulting from forfeitures of pledges of Foundation Tokens (where otherwise permitted) and, for the avoidance of doubt, sales or subscriptions of securities in the Vehicle or Pubco.
(b) The Vehicle ROFR Offer Notice shall include: (i) the number of Foundation Tokens that are the subject of such proposed sale (the “Vehicle ROFR Tokens”); and (ii) the aggregate consideration for the Vehicle ROFR Tokens (and per-Vehicle ROFR Token consideration) as offered by the buyer (“Vehicle ROFR Offer Price”).
(c) The Foundation shall have ten (10) calendar days following receipt of the Vehicle ROFR Offer Notice (the “Vehicle ROFR Period”) to do any of the following, in its sole discretion:
(i) Accept the offer to purchase all, but not less than all, of the Vehicle ROFR Tokens on the terms set forth in the Vehicle ROFR Offer Notice by furnishing a written notice to the Vehicle (the “Vehicle ROFR Acceptance Notice”);
(ii) elect not to issue a Vehicle ROFR Acceptance Notice during such ten (10) calendar days period, in which case it shall be deemed not to have exercised its rights under this Section 2.7;
(iii) reject the offer to purchase all of the Vehicle ROFR Tokens on the terms set forth in the Vehicle ROFR Offer Notice (“Vehicle ROFR Rejection Notice”);
(d) If a Vehicle ROFR Acceptance Notice is given, within ten (10) calendar days following receipt of such Vehicle ROFR Acceptance Notice, the Vehicle and Avalanche BVI shall enter into an agreement for the sale of the Vehicle ROFR Tokens to the Foundation (the “Vehicle ROFR Token Sale”);
(e) If either: (i) a Vehicle ROFR Rejection Notice is given in respect of the Vehicle ROFR Offer Notice; or (ii) no Vehicle ROFR Acceptance Notice or Vehicle ROFR Rejection Notice is given by the Foundation within the Vehicle ROFR Period (in which case a Vehicle ROFR Rejection Notice shall be deemed to have been given), then the Vehicle shall thereafter be free to sell the Vehicle ROFR Tokens to the buyer at a purchase price not less than the Vehicle ROFR Offer Price; and
(f) The Vehicle shall have a commercially reasonable amount of time after the date on which the token sale agreement is executed in connection with the Vehicle ROFR Token Sale to complete such sale, failing which it shall be necessary for a separate Vehicle ROFR Offer Notice to be furnished to the Foundation, and the terms and provisions of Section 2.7(b) through Section 2.7(e) and this Section 2.7(f) shall be separately complied with, in order to complete a sale of such Vehicle ROFR Tokens.
Section 2.8 Tokenization. If either the Vehicle or Pubco sells, issues, creates or distributes, or causes or permits any affiliate, foundation or nominee to sell, issue, sponsor, create or distribute any cryptoassets relating to any shares or assets of either the Vehicle or Pubco or network, protocol or application developed by or on behalf of either the Vehicle or Pubco, the Vehicle and Pubco, as applicable, shall conduct such activities solely on the Avalanche blockchain.
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Article
III
MISCELLANEOUS
Section 3.1 Termination.
(a) This Agreement may be terminated prior to the BCA Closing:
(i) by the mutual written consent of the Parties; or
(ii) by the Foundation, if the Transaction fails to close or the Vehicle fails to list on a U.S. national stock exchange by September 30, 2026, in each case with assets of at least $300 million in Tokens plus $100 million in cash or cash equivalents.
(b) If the Definitive Agreement in connection with the Transaction is terminated, this Agreement shall automatically terminate.
(c) If this Agreement is terminated in accordance with this Section 3.1 or if the actions contemplated under Section 1.8(a)(i) and Section 1.8(b)(i) are not completed (unless waived in whole or in part by the Foundation to the extent permitted by Applicable Law), this Agreement and the Token Sale Agreement shall become void and of no further force and effect. To the extent Tokens have been sold or contributed to the Vehicle, all the Foundation Tokens and Contributed Tokens shall be returned to Avalanche BVI and Avalanche Cayman, as applicable, or relevant Contributor, as applicable, in the same form in which they were sold or contributed and any consideration received by the Foundation or each Contributor pursuant to Section 1.4 shall be returned to the Vehicle.
Section 3.2 Further Assurances. Each Party hereto shall execute and deliver, or cause to be executed and delivered, such other instruments as may be reasonably requested by the other Parties or reasonably required to effectuate the transactions contemplated hereby and to otherwise carry out the purposes of the Foundation Tokens, Contributed Tokens and this Agreement.
Section 3.3 Costs, Expenses, Fees and Taxes. Each Party shall pay its own costs, expenses, fees and taxes relating to the evaluation, negotiation, preparation, execution and performance by such Party of this Agreement and the transactions contemplated hereby.
Section 3.4 Foundation Indemnity. SPONSOR, THE VEHICLE AND PUBCO (EACH, AN “INDEMNIFYING PARTY,” AND TOGETHER, THE “INDEMNIFYING PARTIES”) SHALL DEFEND AND HOLD HARMLESS AVALANCHE BVI, AVALANCHE CAYMAN AND THEIR AGENTS AND ADVISORS, AND THE SUCCESSORS AND ASSIGNS OF THE FOREGOING (“FOUNDATION INDEMNIFIED PARTIES”), FROM AND AGAINST, ALL OR ANY PART OF ANY CAUSES OF ACTION, CLAIMS BROUGHT BY A THIRD PARTY ARISING OUT OF OR RESULTING FROM ANY BREACH OR VIOLATION BY SUCH INDEMNIFYING PARTY OF THIS AGREEMENT (WHICH, FOR THE AVOIDANCE OF DOUBT, SHALL NOT INCLUDE ANY THIRD PARTY CLAIMS ARISING OUT OF OR RELATING TO THE TOKEN SALE AGREEMENT) (COLLECTIVELY, “FOUNDATION CLAIMS”), AND INDEMNIFY THE FOUNDATION INDEMNIFIED PARTIES FOR ANY LIABILITIES, LOSSES, COSTS, DAMAGES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES) INCURRED BY THE INDEMNIFIED PARTIES. THE FOREGOING SHALL NOT APPLY TO THE EXTENT SUCH FOUNDATION CLAIMS ARISE FROM THE BAD FAITH, GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT OF A FOUNDATION INDEMNIFIED PARTY. ALL INDEMNITY FOUNDATION CLAIMS SHALL BE PAID ON AN “AS INCURRED” BASIS.
Section 3.5 Sponsor Indemnity. THE FOUNDATION SHALL DEFEND AND HOLD HARMLESS THE SPONSOR, THE VEHICLE AND THEIR RESPECTIVE AGENTS AND ADVISORS, AND THE SUCCESSORS AND ASSIGNS OF THE FOREGOING (“SPONSOR INDEMNIFIED PARTIES”), FROM AND AGAINST, ALL OR ANY PART OF ANY CAUSES OF ACTION OR CLAIMS BROUGHT BY A THIRD PARTY ARISING OUT OF, RESULTING FROM ANY BREACH OR VIOLATION BY THE FOUNDATION OF ITS REPRESENTATIONS AND WARRANTIES UNDER THIS AGREEMENT (WHICH, FOR THE AVOIDANCE OF DOUBT, SHALL NOT INCLUDE ANY THIRD PARTY CLAIMS ARISING OUT OF OR RELATING TO THE TOKEN SALE AGREEMENT) (THE “SPONSOR CLAIMS”), AND INDEMNIFY THE SPONSOR INDEMNIFIED PARTIES FOR ANY LIABILITIES, LOSSES, COSTS, DAMAGES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES) INCURRED BY THE SPONSOR INDEMNIFIED PARTIES. THE FOREGOING SHALL NOT APPLY TO THE EXTENT SUCH SPONSOR CLAIMS ARISE FROM THE BAD FAITH, GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT OF THE SPONSOR INDEMNIFIED PARTIES. ALL INDEMNITY SPONSOR CLAIMS SHALL BE PAID ON AN “AS INCURRED” BASIS.
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Section 3.6 Limitation of Liability. NONE OF THE PARTIES OR ANY OF ITS AFFILIATES OR SERVICE PROVIDERS WILL BE LIABLE FOR ANY INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOST PROFITS, LOST REVENUES, LOST SAVINGS, LOST BUSINESS OPPORTUNITY, LOSS OF DATA OR GOODWILL, SERVICE INTERRUPTION, COMPUTER DAMAGE OR SYSTEM FAILURE OR THE COST OF SUBSTITUTE ACTIVITIES OF ANY KIND ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, WHETHER BASED ON WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY OR ANY OTHER LEGAL THEORY, AND WHETHER OR NOT THE RELEVANT PARTY OR ANY OF ITS AFFILIATES HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGE, EVEN IF A LIMITED REMEDY SET FORTH HEREIN IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, SO THE ABOVE LIMITATION MAY NOT APPLY. IN NO EVENT WILL THE FOUNDATION’S TOTAL LIABILITY TO SPONSOR, PUBCO OR THE VEHICLE ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EXCEED $2,500,000 (AS DENOMINATED IN USD). IN NO EVENT WILL PUBCO, THE SPONSOR AND THE VEHICLE’S TOTAL LIABILITY TO THE FOUNDATION ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EXCEED $5,000,000 (AS DENOMINATED IN USD). THE EXCLUSIONS AND LIMITATIONS OF DAMAGES SET FORTH ABOVE ARE FUNDAMENTAL ELEMENTS OF THE BASIS OF THE BARGAIN BETWEEN THE PARTIES.
Section 3.7 Successors and Assigns. This Agreement shall be binding upon, and inure to the benefit of, the Parties and their respective successors and permitted assigns.
Section 3.8 Amendments, Supplements, etc. This Agreement may be amended or supplemented only with the prior written consent of each Party. No term of this Agreement, nor performance hereof or compliance herewith, may be waived except by a writing signed by the Party giving such waiver.
Section 3.9 Governing Law; Jurisdiction.
(a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to conflicts of law principles.
(b) The Parties agree that all disputes, legal actions, suits and proceedings arising out of or relating to this Agreement must be brought exclusively in the Court of Chancery of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any federal court within the State of Delaware or, in the event each federal court within the State of Delaware declines to accept jurisdiction over a particular matter, any state court within the State of Delaware) (collectively the “Designated Courts”). Each Party hereby consents and submits to the exclusive jurisdiction of the Designated Courts. No legal action, suit or proceeding with respect to this Agreement may be brought in any other forum. Each Party hereby irrevocably waives all claims of immunity from jurisdiction, and any objection which such party may now or hereafter have to the laying of venue of any suit, action or proceeding in any Designated Court, including any right to object on the basis that any dispute, action, suit or proceeding brought in the Designated Courts has been brought in an improper or inconvenient forum or venue.
Section 3.10 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
Section 3.11 Entire Agreement. This Agreement, together with the Token Sale Agreement and any other documents, instruments and writings that are or will be delivered pursuant hereto or referenced herein, embodies the complete agreement and understanding among the Parties and supersedes and preempts any prior understandings or agreements by or among the Parties, written or oral, that may relate to the subject matter hereof.
Section 3.12 Severability. If any provision of this Agreement or the application of any such provision to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Parties have executed and delivered this Asset Purchase and Contribution Agreement as of the date first written above.
| Avalanche (BVI), Inc. | ||
| By: | ||
| Name: | ||
| Title: | ||
| Avalanche Cayman | ||
| By: | ||
| Name: | ||
| Title: | ||
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IN WITNESS WHEREOF, the Parties have executed and delivered this Asset Purchase and Contribution Agreement as of the date first written above.
| Dragonfly Digital Management, LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
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IN WITNESS WHEREOF, the Parties have executed and delivered this Asset Purchase and Contribution Agreement as of the date first written above.
| Avalanche Treasury Company LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
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IN WITNESS WHEREOF, the Parties have executed and delivered this Asset Purchase and Contribution Agreement as of the date first written above.
| Avalanche Treasury Corporation | ||
| By: | ||
| Name: | ||
| Title: | ||
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EXHIBIT A
The Consideration Shares and Consideration Warrants
THE OFFER AND SALE OF THE CONSIDERATION SHARES AND CONSIDERATION WARRANTS DESCRIBED HEREIN HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OR FOREIGN JURISDICTION. THIS TRANSACTION IS BEING MADE ONLY WITHIN THE UNITED STATES TO “ACCREDITED INVESTORS” (AS DEFINED IN SECTION 501 OF THE SECURITIES ACT). THE CONSIDERATION SHARES AND THE CONSIDERATION WARRANTS MAY NOT BE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER APPLICABLE STATE AND FOREIGN LAWS.
Avalanche Cayman hereby agrees and represents to the Vehicle as follows:
1. Avalanche Cayman understands that the Consideration Shares and the Consideration Warrants will bear the following legend:
THE [CONSIDERATION SHARES / CONSIDERATION WARRANTS] PURCHASED HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OR FOREIGN JURISDICTION. THIS SALE IS BEING MADE ONLY TO “ACCREDITED INVESTORS” (AS DEFINED IN SECTION 501 OF THE SECURITIES ACT). THE [CONSIDERATION SHARES / CONSIDERATION WARRANTS] MAY NOT BE TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE AND FOREIGN SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, UNLESS SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT. THE [CONSIDERATION SHARES / CONSIDERATION WARRANTS] HAVE BEEN ACQUIRED TO HOLD FOR THE LONG TERM AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
2. Avalanche Cayman is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act (i.e., (a) a natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his or her purchase exceeds $1,000,000, (b) a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those two years and has a reasonable expectation of reaching the same income level in the current year, (c) a corporation, limited liability company or partnership having total assets in excess of $5,000,000 that was not formed for the purpose of purchasing the Consideration Shares and the Consideration Warrants pursuant to this Contribution Agreement, or (d) otherwise meets the requirements for an “accredited investor” under Regulation D promulgated by the Securities and Exchange Commission under the Securities Act). Avalanche Cayman has accurately and completely completed the accredited investor verification process required by the Vehicle, if any.
3. Neither Avalanche Cayman nor any person acting on its behalf has undertaken or carried out any activity for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the Consideration Shares and Consideration Warrants. Avalanche Cayman agrees not to cause any advertising of the Consideration Shares and Consideration Warrants to be published in any publication or posted in any public space and not to issue any circular relating to the Consideration Shares and Consideration Warrants in the United States.
4. Neither (i) Avalanche Cayman, (ii) any of its directors, executive officers, other officers that may serve as director or officer of any company in which it invests, general partners or managing partners, nor (iii) any beneficial owner of the voting equity securities of the Vehicle (in accordance with Rule 262 of the Securities Act) is subject to the disqualifying events listed in Rule 506(d)(1) of Regulation D under the Securities Act (a “Company Event”), and there is no proceeding or investigation pending or, to the knowledge of Avalanche Cayman, threatened by any governmental authority, that would reasonably be expected to become the basis for a Company Event.
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Exhibit B
Form of Registration Rights Agreement
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AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of [●], 2025, is made and entered into by and among Avalanche Treasury Corporation, a Delaware corporation (“Pubco”), Mountain Lake Acquisition Corp., a Cayman Islands exempted company (“SPAC”), Mountain Lake Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”), each of the undersigned holders listed on the signature pages hereto under the heading “Specified Holders” (such persons, the “Specified Holders”) and each of the undersigned holders listed on the signature pages hereto under the heading “Other Holders” (and together with the Specified Holders, their Permitted Transferees holding Registrable Securities, the Sponsor and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 of this Agreement, each a “Holder” and collectively the “Holders”). Capitalized terms used and not otherwise defined herein shall have the same meanings set forth in the Business Combination Agreement (as defined below).
RECITALS
WHEREAS, SPAC, the Sponsor, BTIG, LLC (the “Subscriber”) and the then current directors and executive officers of SPAC entered into that certain Registration Rights Agreement, dated as of December 12, 2024 (the “Original Registration Rights Agreement”);
WHEREAS, on [●], 2025, (a) SPAC, (b) Pubco, (c) Avalanche SPAC Merger Sub LLC, a Delaware limited liability company and a wholly-owned subsidiary of Pubco (“SPAC Merger Sub”), (d) Avalanche Treasury Company LLC, a Delaware limited liability company (the “Company”), (e) Avalanche Company Merger Sub LLC, a Delaware limited liability company and a wholly owned subsidiary of Pubco (“Company Merger Sub”) and (h) Dragonfly Digital Management LLC (the “Seller”), entered into that certain business combination agreement (as amended, modified, supplemented modified and/or restated from time to time, the “Business Combination Agreement”);
WHEREAS, pursuant to the Business Combination Agreement, subject to the terms and conditions thereof, among other matters: (a) prior to consummation of the transactions contemplated by the Business Combination Agreement (the “Closing”), SPAC shall effectuate a domestication (the “Domestication”), pursuant to which SPAC shall transfer by way of continuation to and become a Delaware corporation (the “Domesticated SPAC”), all references herein to “SPAC” following the Domestication refer to the Domesticated SPAC, (b) at least two (2) hours after the Domestication, the SPAC Merger Sub will merge with and into SPAC, with SPAC continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “SPAC Merger”), and with SPAC shareholders receiving one share of Pubco Class A Common Stock for each SPAC Class A Ordinary Share held by such shareholder and with each holder of SPAC Rights receiving one share of Pubco Class A Common Stock in exchange for each ten (10) SPAC Rights held by such holder and (c) Company Merger Sub will merge with and into the Company, with the Company continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “Company Merger” and, together with the SPAC Merger, the “Mergers” and, together with the other transactions contemplated by the Business Combination Agreement and the Ancillary Documents, the “Transactions”), and with Company Members (as defined in the Business Combination Agreement) receiving Pubco Class A Common Stock (and, in the case of Seller, certain other consideration) for each Company Unit (as defined in the Business Combination Agreement) held by such Company Member, and upon the consummation of the Mergers, Pubco will become a publicly traded company;
WHEREAS, on the date hereof, the Sponsor and each of the Specified Holders are entering into a Lock-Up Agreement with Pubco (each, a “Lock-Up Agreement”);
WHEREAS, on [●], Pubco, the Company, Avalanche (BVI), Inc., a British Virgin Islands business company (“Avalanche BVI”) and Avalanche Cayman, a Cayman Islands exempted company (“Avalanche Cayman,” and, together with Avalanche BVI, the “Foundation”), entered into that certain AVAX Token Sale Agreement, pursuant to which, among other things, Pubco agreed to issue certain securities to the Foundation (the “Foundation Private Placement”);
WHEREAS, pursuant to Section 5.5 of the Original Registration Rights Agreement, the provisions, covenants, and conditions set forth therein may be amended or modified upon the written consent of SPAC and the holders of at least a majority in interest of the Registrable Securities (as defined in the Original Registration Rights Agreement) at the time in question (which majority must include the Subscriber if such amendment or modification is material and adverse to the Subscriber), and the Sponsor is holder of at least a majority in interest of the Registrable Securities (as defined in the Original Registration Rights Agreement) as of the date hereof; and
WHEREAS, SPAC, the Sponsor and the Subscriber desire to amend and restate the Original Registration Rights Agreement in its entirety and enter into this Agreement, pursuant to which Pubco shall grant the Holders certain registration rights with respect to certain securities of Pubco as set forth in this Agreement.
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NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or principal financial officer of Pubco, after consultation with counsel to Pubco, (a) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (b) would not be required to be made at such time if the Registration Statement were not being filed, and (c) Pubco has a bona fide business purpose for not making such information public.
“Agreement” shall have the meaning given in the Preamble.
“Avalanche BVI” shall have the meaning given in the Preamble.
“Avalanche Cayman” shall have the meaning given in the Preamble.
“Board” shall mean the Board of Directors of Pubco.
“Business Combination Agreement” shall have the meaning given in the Recitals hereto.
“Closing” shall have the meaning given in the Recitals hereto.
“Closing Date” shall mean the date of the Closing.
“Commission” shall mean the Securities and Exchange Commission.
“Company” shall have the meaning given in the Recitals hereto.
“Company Merger” shall have the meaning given in the Recitals hereto.
“Company Merger Sub” shall have the meaning given to such term in the Business Combination Agreement.
“Demand Registration” shall have the meaning given in subsection 2.1.1.
“Demanding Holders” shall have the meaning given in subsection 2.1.1.
“Demanding Specified Holders” shall have the meaning given in subsection 2.1.1.
“Demanding Sponsor Holders” shall have the meaning given in subsection 2.1.1.
“Domesticated SPAC” shall have the meaning given in the Recitals hereto.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.
“Form S-1” shall have the meaning given in subsection 2.1.1.
“Form S-3” shall have the meaning given in subsection 2.3.
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“Foundation” shall have the meaning given in the Preamble.
“Foundation Private Placement” shall have the meaning given in the Preamble.
“Foundation Private Placement Shares” shall mean the shares of Pubco Class A Common Stock issued to Avalanche Cayman pursuant to the Foundation Private Placement.
“Founder Shares” shall mean the shares of Pubco Class A Common Stock issued to the Sponsor in the SPAC Merger in exchange for the SPAC Class A Ordinary Shares issued to the Sponsor upon conversion of the SPAC Class B Ordinary Shares held by the Sponsor immediately prior to the SPAC Merger in accordance with SPAC’s amended and restated memorandum and articles of association.
“Holders” shall have the meaning given in the Preamble.
“Lock-Up Agreement” shall have the meaning given in the Recitals hereto.
“Lock-Up Period” shall mean with respect to the Sponsor Holders and the Specified Holders, the lock-up period specified in the Lock-Up Agreements.
“Maximum Number of Securities” shall have the meaning given in subsection 2.1.4.
“Mergers” shall have the meaning given in the Recitals hereto.
“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading.
“Original Registration Rights Agreement” shall have the meaning given in the Recitals.
“Permitted Transferees” shall mean (a) prior to the expiration of the applicable Lock-Up Period, any person or entity to whom a Holder is permitted to transfer their Registrable Securities prior to the expiration of the applicable Lock-Up Period pursuant to, as applicable, the Lock-Up Agreement or any other applicable agreement between such Holder, on the one hand, and Pubco or SPAC, on the other hand, and (b) after the expiration of the applicable Lock-Up Period, any person or entity to whom such Holder is permitted to transfer such Registrable Securities.
“Piggyback Registration” shall have the meaning given in subsection 2.2.1.
“Private Placement Shares” shall mean the Foundation Private Placement Shares, Sponsor Private Placement Shares and Subscriber Private Placement Shares.
“Pro Rata” shall have the meaning given in subsection 2.1.4.
“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Pubco” shall have the meaning given in the Preamble.
“Pubco Class A Common Stock” shall mean shares of Class A common stock of Pubco, par value $0.01 per share.
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“Registrable Security” shall mean (a) the shares of Pubco Class A Common Stock issued in the Company Merger; (b) the Founder Shares; (c) the Private Placement Shares; (d) any outstanding shares of Pubco Class A Common Stock or any other equity security (including shares of Pubco Class A Common Stock issued or issuable upon the exercise of any other equity security) of Pubco, in the case of each of the preceding subclauses (a), (b), (c) and (d), to the extent held by a Holder as of the date of this Agreement or as of the Closing Date including any securities purchased in connection therewith; (e) any outstanding shares of Pubco Class A Common Stock (or any other equity security (including shares of Pubco Class A Common Stock issued or issuable upon the exercise of any other equity security) of Pubco acquired by a Holder following the date hereof to the extent that such securities are “restricted securities” as defined in Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission)) (“Rule 144”) or are otherwise held by an “affiliate” (as defined in Rule 144) of Pubco and (f) any other equity security of Pubco issued or issuable with respect to any shares of Pubco Class A Common Stock described in the preceding subclauses (a) through (e), by way of a share dividend or share split or in connection with a combination of shares, recapitalization, merger, consolidation, re-domestication, reorganization, or other similar transaction; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when: (i) 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; (ii) such securities shall have been otherwise transferred, new certificates or book entry notations for such securities not bearing a legend restricting further transfer shall have been delivered or noted by Pubco and subsequent public distribution of such securities shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; (iv) such securities have been sold without registration pursuant to Rule 144; (v) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction; or (vi) such securities have otherwise ceased to be held by a Holder or their Permitted Transferee.
“Registration” shall 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.
“Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, except for the limitations set forth in subclause (vi) below, the following:
(i) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the shares of Pubco Class A Common Stock are then listed;
(ii) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);
(iii) printing, messenger, telephone and delivery expenses;
(iv) reasonable fees and disbursements of counsel for Pubco;
(v) reasonable fees and disbursements of all independent registered public accountants of Pubco incurred specifically in connection with such Registration; and
(vi) reasonable fees and expenses of one (1) legal counsel representing the Holders, as selected by (x) the Significant Specified Holders holding a majority of the then-outstanding Registrable Securities included, or to be included, in such Registration, or, (y) in the absence of any such Significant Specified Holders, by the Holders holding a majority of the then-outstanding Registrable Securities included, or to be included, in such Registration.
“Registration Statement” shall mean any registration statement under the Securities Act that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Requesting Holder” shall have the meaning given in subsection 2.1.1.
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“Securities Act” shall mean the U.S. Securities Act of 1933, as amended from time to time.
“Significant Specified Holder” shall mean any Specified Holder holding at least 10% of the then-outstanding Registrable Securities held by all Specified Holders.
“SPAC” shall have the meaning given in the Preamble.
“SPAC Class A Ordinary Shares” shall mean Class A ordinary shares of SPAC, par value $0.0001 per share.
“SPAC Class B Ordinary Shares” shall mean Class B ordinary shares of SPAC, par value $0.0001 per share.
“SPAC Merger” shall have the meaning given in the Recitals hereto.
“SPAC Merger Sub” shall have the meaning given in the Recitals hereto.
“Specified Holders” shall have the meaning given in the Preamble hereto.
“Sponsor” shall have the meaning given in the Recitals hereto.
“Sponsor Private Placement Shares” shall mean the shares of Pubco Class A Common Stock issued to the Sponsor in the SPAC Merger in exchange for the SPAC Class A Ordinary Shares underlying the Sponsor Private Placement Units (including the SPAC Class A Ordinary Shares issuable upon conversion of the SPAC Rights) held by the Sponsor immediately prior to the SPAC Merger.
“Sponsor Private Placement Units” shall mean the shares of Pubco Class A Common Stock issuable upon the conversion, as applicable, of the 495,000 units held by Sponsor and issued by SPAC in a private placement transaction simultaneously with the IPO, each consisting of one (1) SPAC Class A Ordinary Share and one (1) SPAC Right.
“Subscriber Private Placement Shares” shall mean the shares of Pubco Class A Common Stock issued to the Subscriber in the SPAC Merger in exchange for the SPAC Class A Ordinary Shares underlying the Subscriber Private Placement Units (including the SPAC Class A Ordinary Shares issuable upon conversion of the SPAC Rights) held by the Subscriber immediately prior to the SPAC Merger.
“Subscriber Private Placement Units” shall mean the shares of Pubco Class A Common Stock issuable upon the conversion, as applicable, of the 310,000 units held by the Subscriber and issued by SPAC in a private placement transaction simultaneously with the IPO, each consisting of one (1) SPAC Class A Ordinary Share and one (1) SPAC Right.
“Sponsor Holders” shall mean the Sponsor and its Permitted Transferees who hold Registrable Securities.
“Transactions” shall have the meaning given in the Recitals hereto.
“Underwriter” shall mean 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.
“Underwritten Registration” or “Underwritten Offering” shall mean a Registration in which securities of Pubco are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
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ARTICLE II
REGISTRATIONS
2.1 Demand Registration.
2.1.1 Request for Registration. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, at any time and from time to time on or after the Closing Date, (i) the Sponsor Holders holding a majority in interest of the then-outstanding Registrable Securities held by all Sponsor Holders (the “Demanding Sponsor Holders”) or (ii) any Significant Specified Holder (a “Demanding Specified Holder” and the Demanding Sponsor Holders or Demanding Specified Holders, as applicable, being “Demanding Holders”) may make a written demand for Registration of all or part of their Registrable Securities, which written demand shall describe the amount and type of securities to be included in such Registration and the intended method(s) of distribution thereof (such written demand a “Demand Registration”). Pubco shall, within ten (10) calendar days of Pubco’s receipt of the Demand Registration, notify, in writing, all other Holders of Registrable Securities of such demand, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in a Registration pursuant to a Demand Registration (each such Holder that includes all or a portion of such Holder’s Registrable Securities in such Registration, a “Requesting Holder”) shall so notify Pubco, in writing, within five (5) calendar days after the receipt by the Holder of the notice from Pubco. Upon receipt by Pubco of any such written notification from a Requesting Holder(s) to Pubco, such Requesting Holder(s) shall be entitled to have their Registrable Securities included in a Registration pursuant to a Demand Registration and Pubco shall effect, as soon thereafter as practicable, the Registration of all Registrable Securities requested by the Demanding Holder(s) and Requesting Holder(s) pursuant to such Demand Registration, including by (x) filing or confidentially submitting a Registration Statement relating thereto as soon as practicable, but, not more than forty five (45) calendar days immediately after Pubco’s receipt of the Demand Registration, and (y) using its reasonable best efforts to have such Registration Statement become effective as soon as practicable after Pubco’s receipt of the Demand Registration but in any event no later than within ninety (90) calendar days or, if the Registration Statement is reviewed by, and comments thereto are provided from, the Commission, within one hundred twenty (120) calendar days; provided, further, that Pubco shall request the Registration Statement to be declared effective as soon as practicable but in any event no later than within five (5) business days after the date Pubco is notified (orally or in writing, whichever is earlier) by the staff of the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review. Under no circumstances shall Pubco be obligated to effect more than an aggregate of three (3) Registrations pursuant to a Demand Registration by any Sponsor Holder or more than an aggregate of two (2) Registrations in any twelve (12)-month period pursuant to a Demand Registration by any Significant Specified Holder, in each case pursuant to and under this subsection 2.1.1 with respect to any or all Registrable Securities held by such Holders; provided, further, that a Registration shall not be counted for such purposes unless a Form S-1 or any similar long-form registration statement that may be available at such time (“Form S-1”) has become effective and all of the Registrable Securities requested by the Requesting Holders to be registered on behalf of the Requesting Holders in such Form S-1 Registration have been sold, in accordance with Section 3.1 of this Agreement.
2.1.2 Effective Registration. Notwithstanding the provisions of subsection 2.1.1 above or any other part of this Agreement, a Registration pursuant to a Demand Registration shall not count as a Registration unless and until (i) the Registration Statement filed with the Commission with respect to a Registration pursuant to a Demand Registration has been declared effective by the Commission and (ii) Pubco has complied with all of its obligations under this Agreement with respect thereto; provided, further, that if, after such Registration Statement has been declared effective, an offering of Registrable Securities in a Registration pursuant to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission, federal or state court or any other governmental agency the Registration Statement with respect to such Registration shall be deemed not to have been declared effective, unless and until, (a) such stop order or injunction is removed, rescinded or otherwise terminated, and (b) a majority-in-interest of the Demanding Holders initiating such Demand Registration thereafter affirmatively elect to continue with such Registration and accordingly notify Pubco in writing, but in no event later than five (5) calendar days, of such election; and provided, further, that Pubco shall not be obligated or required to file another Registration Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant to a Demand Registration becomes effective or is subsequently terminated.
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2.1.3 Underwritten Offering. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, if (x) a majority-in-interest of the Demanding Holders or (y) a Significant Specified Holder so advise Pubco as part of their Demand Registration that the offering of the Registrable Securities pursuant to such Demand Registration shall be in the form of an Underwritten Offering, then the right of such Demanding Holder or Requesting Holder (if any) to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in such Underwritten Offering to the extent provided herein. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.1.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by (x) Pubco in consultation with the Demanding Holders initiating the Demand Registration, or (y) a Significant Specified Holder if such Holder has requested the Underwritten Offering and the aggregate gross proceeds from the sale of the Registrable Securities by all Holders requested to be included in such Underwritten Offering are reasonably expected by such Significant Specified Holder to be at least $25,000,000. Notwithstanding the foregoing, Pubco is not obligated to effect (i) more than an aggregate of three (3) Underwritten Offerings pursuant to this subsection 2.1.3 in any twelve (12)-month period; (ii) an Underwritten Offering pursuant to this subsection 2.1.3 within ninety (90) calendar days after the closing of an Underwritten Offering or (iii) an Underwritten Offering unless the aggregate gross proceeds from the sale of all Registrable Securities (regardless of Holder) requested to be included in such Underwritten Offering is reasonably expected by the Requesting Holder to be at least $25,000,000.
2.1.4 Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand Registration, in good faith, advises Pubco, the Demanding Holders and the Requesting Holders (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other shares of Pubco Class A Common Stock or other equity securities that Pubco desires to sell and shares of Pubco Class A Common Stock, if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then Pubco shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities of the Demanding Holders and the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Demanding Holder and Requesting Holder (if any) has requested be included in such Underwritten Registration and the aggregate number of Registrable Securities that the Demanding Holders and Requesting Holders have requested be included in such Underwritten Registration (such proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Holders (Pro Rata, based on the respective number of Registrable Securities that each Holder has so requested) exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof, without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), shares of Pubco Class A Common Stock or other equity securities that Pubco desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), shares of Pubco Class A Common Stock or other equity securities of other persons or entities that Pubco is obligated to register in a Registration pursuant to separate written contractual arrangements with such persons or entities and that can be sold without exceeding the Maximum Number of Securities.
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2.1.5 Demand Registration Withdrawal. Prior to (i) the effectiveness of the Registration Statement filed with the Commission with respect to the Registration of their Registrable Securities pursuant to a Demand Registration under subsection 2.1.1 (other than an Underwritten Offering pursuant to subsection 2.1.3), a majority-in-interest of the Demanding Holders initiating a Demand Registration or a majority-in-interest of the Requesting Holders (if any) and (ii) the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing an Underwritten Offering pursuant to subsection 2.1.3, a majority-in-interest of the Demanding Holders initiating an Underwritten Offering, in each case of (i) and (ii), shall have the right to withdraw from a Registration pursuant to such applicable Demand Registration for any or no reason whatsoever upon written notification to Pubco and, if applicable, the Underwriter or Underwriters (if any) of their intention to withdraw from such Registration. Notwithstanding anything to the contrary in this Agreement, Pubco shall be responsible for the Registration Expenses incurred in connection with a Registration pursuant to a Demand Registration prior to any withdrawal under this subsection 2.1.5.
2.2 Piggyback Registration.
2.2.1 Piggyback Rights. If, at any time on or after the Closing Date, Pubco proposes to file or confidentially submit 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, for its own account or for the account of stockholders of Pubco (or by Pubco and by the stockholders of Pubco including, without limitation, pursuant to Section 2.1 hereof), other than a Registration Statement (a) filed in connection with any employee share option or other benefit plan, (b) pursuant to a registration statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), (c) for an exchange offer or offering of securities solely to Pubco’s existing stockholders, (d) for an offering of debt that is convertible into equity securities of Pubco or (e) for a dividend reinvestment plan, then Pubco shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) calendar days before the anticipated filing date of such Registration Statement, which notice shall (i) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (ii) offer to all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing within (a) five (5) calendar days in the case of filing a registration statement, prospectus or prospectus supplement and (b) three (3) calendar days in the case of an Underwritten Offering (unless such offering is an overnight or bought Underwritten Offering, then one (1) calendar day), in each case after receipt of such written notice (such Registration a “Piggyback Registration”). Pubco shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use its commercially reasonable efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on the same terms and conditions as any similar securities of Pubco included in such Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. If no written request for inclusion from a Holder is received within the specified time, each such Holder shall have no further right to participate in such Piggyback Registration pursuant to this subsection 2.2.1. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.2.1 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by Pubco.
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2.2.2 Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Registration that is to be a Piggyback Registration, in good faith, advises Pubco and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of shares of Pubco Class A Common Stock that Pubco desires to sell, taken together with (i) the shares of Pubco Class A Common Stock, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which registration has been requested pursuant to Section 2.2 hereof, and (iii) the shares of Pubco Class A Common Stock, if any, as to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other stockholders of Pubco, exceeds the Maximum Number of Securities, then:
(a) If the Registration is undertaken for Pubco’s account, Pubco shall include in any such Registration (i) first, the shares of Pubco Class A Common Stock or other equity securities that Pubco desires to sell, which can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof, pro rata based on the respective number of Registrable Securities that each Holder has so requested, which can be sold without exceeding the Maximum Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the shares of Pubco Class A Common Stock, if any, as to which Registration has been requested pursuant to written contractual piggy-back registration rights of other stockholders of Pubco, which can be sold without exceeding the Maximum Number of Securities;
(b) If the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then Pubco shall include in any such Registration (i) first, the shares of Pubco Class A Common Stock or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1, pro rata based on the respective number of Registrable Securities that each Holder has requested be included in such Underwritten Registration and the aggregate number of Registrable Securities that the Holders have requested be included in such Underwritten Registration, which can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the shares of Pubco Class A Common Stock or other equity securities that Pubco desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the shares Pubco Class A Common Stock or other equity securities for the account of other persons or entities that Pubco is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities.
2.2.3 Piggyback Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to Pubco and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback Registration prior to the earlier of (x) the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration or (y) the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing the Underwritten Offering with respect to such Piggyback Registration. Pubco (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement or abandon an Underwritten Offering in connection with a Piggyback Registration at any time prior to the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing such Underwritten Offering. Notwithstanding anything to the contrary in this Agreement, Pubco shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to any withdrawal under this subsection 2.2.3.
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2.2.4 Unlimited Piggyback Registration Rights. For purposes of clarity, any Registration effected pursuant to Section 2.2 hereof shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1 hereof.
2.3 Shelf Registrations.
2.3.1 Shelf Registration Rights. Any Holder of Registrable Securities may at any time, and from time to time, request in writing that Pubco, pursuant to Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale of any or all of their Registrable Securities not included on an Initial Shelf Registration Statement (as defined below) on a delayed or continuous basis on a shelf registration statement on Form S-1 or any similar registration statement that may be available at such time (a “Form S-1 Shelf”) or a shelf registration statement on Form S-3 or any similar short form registration statement that may be available at such time (a “Form S-3 Shelf”, and together with a Form S-1 Shelf, a “Shelf Registration Statement”), if Pubco is then eligible to use a Form S-3 Shelf; provided, however, Pubco shall be obligated to effect such request through an Underwritten Offering only pursuant to subsection 2.3.2. In addition, as soon as practicable but in no event later than thirty (30) calendar days following the Closing Date, Pubco will file a Form S-1 Shelf registering the resale of all Registrable Securities requested to be included therein (the “Initial Shelf Registration Statement”). Within five (5) calendar days of Pubco’s receipt of a written request from a Holder or Holders of Registrable Securities for such a Registration, Pubco shall promptly give written notice of the proposed Registration to all other Holders of Registrable Securities, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in such Registration shall so notify Pubco, in writing, within ten (10) calendar days after the receipt by the Holder of the notice from Pubco. In the case of (A) the Initial Shelf Registration Statement, Pubco shall (x) file a Form S-1 Shelf to effect the registration of all Registrable Securities as soon as practicable, but not more than thirty (30) calendar days following the Closing Date, and (y) shall use its commercially reasonable efforts to have the Initial Shelf Registration Statement declared effective as soon as practicable after the filing thereof, but in any event no later than the earlier of (i) the tenth (10th) business day after the date Pubco is notified (orally or in writing, whichever is earlier) by the Commission that the Initial Registration Statement will not be “reviewed” or will not be subject to further review and (ii) the ninetieth (90th) calendar day following the initial filing date of the Initial Shelf Registration Statement if the Commission notifies Pubco that it will review the Initial Registration Statement (the “Initial Shelf Effectiveness Deadline”); provided, that (I) if the Initial Shelf Effectiveness Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Initial Shelf Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business and (II) if the Commission is closed for operations due to a government shutdown, the Initial Shelf Effectiveness Deadline shall be extended by the same number of calendar days as the number of calendar days during which the Commission remains closed; (B) a Form S-3 Shelf, as soon as practicable thereafter, but not more than thirty (30) calendar days after Pubco’s initial receipt of such written request for a Registration on Form S-3, Pubco shall register all or such portion of such Holder’s Registrable Securities as are specified in such written request, together with all or such portion of Registrable Securities of any other Holder or Holders joining in such request as are specified in the written notification given by such Holder or Holders; provided, however, that Pubco shall not be obligated to effect any such Registration if (x) a Form S-3 is not available for such offering; or (y) the Holders of Registrable Securities, together with the Holders of any other equity securities of Pubco entitled to inclusion in such Registration, propose to sell the Registrable Securities and such other equity securities (if any) at any aggregate price to the public expected by such Holders to be less than $10,000,000; and (C) a Form S-1 Shelf, Pubco shall effect, as soon thereafter as practicable, the Registration of all Registrable Securities requested by such Holders, including by (x) filing or confidentially submitting a Form S-1 Shelf relating thereto as soon as practicable, but not more than forty five (45) calendar days immediately after Pubco’s receipt of such written request for a Registration on a Form S-1 Shelf, and (y) shall use its reasonable best efforts to have such Form S-1 Shelf become effective as soon as practicable after Pubco’s receipt of such notice but in any event no later than within ninety (90) calendar days or, if the Form S-1 Shelf is reviewed by, and comments thereto are provided from, the Commission, within one hundred twenty (120) calendar days; provided, further that Pubco shall request the Form S-1 Shelf declared effective as soon as practicable but in any event no later than within five (5) business days after the date Pubco is notified (orally or in writing, whichever is earlier) by the staff of the Commission that the Form S-1 Shelf will not be “reviewed” or will not be subject to further review; provided, however, that Pubco shall not be obligated to effect any such Registration if the Holders of Registrable Securities, together with the Holders of any other equity securities of Pubco entitled to inclusion in such Registration, propose to sell the Registrable Securities and such other equity securities (if any) at any aggregate price to the public expected by such Holders to be less than $10,000,000. For the avoidance of doubt, any Registration pursuant to this Section 2.3.1 shall not count as a Demand Registration for purposes of Section 2.1.1.
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2.3.2 Underwritten Shelf Offerings. At any time that a Shelf Registration Statement is effective, if any Significant Specified Holder delivers a notice to Pubco stating that it intends to sell all or part of such Holder’s Registrable Securities included on the Shelf Registration Statement in an Underwritten Offering, then Pubco shall promptly amend or supplement the Shelf Registration Statement, as may be necessary in order to enable such Registrable Securities to be distributed pursuant to an Underwritten Offering; provided, that subsections 2.1.3 and 2.1.4 shall apply mutatis mutandis.
2.4 Restrictions on Registration Rights. If the Holders have requested an Underwritten Registration and (a) Pubco and the Holders are unable to obtain the commitment of underwriters to firmly underwrite the offer, (b) the filing, initial effectiveness, or continued use of a Registration Statement in respect of such Underwritten Offering at any time would require the inclusion in such Registration Statement of financial statements that are unavailable to Pubco for reasons beyond Pubco’s control, or (c) in the good faith judgment of the Board such Registration would be detrimental to Pubco and the Board concludes as a result that it is essential to defer the filing of such Registration Statement at such time, then in each case Pubco shall furnish to such Holders a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board it would be detrimental to Pubco for such Registration Statement to be filed in the near future and that it is therefore essential to defer the filing of such Registration Statement. In such event, Pubco shall have the right to defer such filing for a period of not more than thirty (30) calendar days; provided, however, that Pubco shall not defer its obligation in this manner more than once in any 12-month period.
ARTICLE III
PUBCO PROCEDURES
3.1 General Procedures. If at any time on or after the Closing Date, Pubco is required to effect the Registration of Registrable Securities, Pubco shall use its commercially reasonable efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto Pubco shall, as expeditiously as possible:
3.1.1 prepare and file with the Commission, within the time frame required by Section 2.1.1, a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities covered by such Registration Statement have been sold or are no longer outstanding (such period, the “Effectiveness Period”);
3.1.2 prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus used in connection therewith as may be necessary under applicable law to keep such Registration Statement continuously effective with respect to the disposition of all Registrable Securities thereby for its Effectiveness Period;
3.1.3 prior to filing or confidentially submitting a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and each Holder of Registrable Securities included in such Registration, and each such Holder’s legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters and each Holder of Registrable Securities included in such Registration or the legal counsel for any such Holders may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Holders; provided, that, Pubco will not have any obligation to provide any document pursuant to this clause that is available on the Commission’s EDGAR system;
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3.1.4 prior to any public offering of Registrable Securities, use its commercially reasonable efforts to (a) 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 any Holder of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (b) 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 Pubco 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 Pubco shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause all such Registrable Securities to be listed on each national securities exchange on which similar securities issued by Pubco are then listed;
3.1.6 provide a transfer agent and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
3.1.7 advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;
3.1.8 at least five (5) calendar days prior to the filing or confidentially submitting of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus, furnish a copy thereof to each seller of such Registrable Securities and its counsel, including, without limitation, providing copies promptly upon receipt of any comment letters received with respect to any such Registration Statement or Prospectus;
3.1.9 notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;
3.1.10 permit a representative of the Significant Specified Holders, the Underwriters, if any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause Pubco’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however, that such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory to Pubco, prior to the release or disclosure of any such information; and provided further, Pubco may not include the name of any Holder or Underwriter or any information regarding any Holder or Underwriter in any Registration Statement or Prospectus, any amendment or supplement to such Registration Statement or Prospectus, any document that is to be incorporated by reference into such Registration Statement or Prospectus, or any response to any comment letter, without the prior written consent of such Holder or Underwriter and providing each such Holder or Underwriter a reasonable amount of time to review and comment on such applicable document;
3.1.11 obtain a “cold comfort” letter from Pubco’s independent registered public accountants in the event of an Underwritten Registration which the participating Holders may rely on, 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 each participating Significant Specified Holder;
3.1.12 on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated such date, of counsel representing Pubco for the purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably satisfactory to each participating Significant Specified Holder;
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3.1.13 in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter of such offering;
3.1.14 make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of Pubco’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission);
3.1.15 if the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $50,000,000, use its reasonable efforts to make available senior executives of Pubco to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in any Underwritten Offering; and
3.1.16 otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection with such Registration.
3.2 Registration Expenses. The Registration Expenses of all Registrations shall be borne by Pubco. It is acknowledged by the Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
3.3 Requirements for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities of Pubco pursuant to a Registration initiated by Pubco hereunder unless such person (a) agrees to sell such person’s securities on the basis provided in any underwriting arrangements in form, scope and substance customary for such offerings and approved by Pubco and such person and (b) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements.
3.4 Suspension of Sales; Adverse Disclosure. Upon receipt of written notice from Pubco that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that Pubco hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until it is advised in writing by Pubco that the use of the Prospectus may be resumed. If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would require Pubco to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to Pubco for reasons beyond Pubco’s control, Pubco may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time, but in no event more than thirty (30) calendar days, determined in good faith by Pubco to be necessary for such purpose. In the event Pubco exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities. Pubco shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4. If so directed by Pubco, the Holders will deliver to Pubco or, in Holders’ sole discretion destroy, all copies of each Prospectus for which the Holders have suspended use pursuant to this Section 3.4 covering Registrable Securities in Holders’ possession; provided, however, that this obligation to deliver or destroy shall not apply (A) to the extent the Holders are required to retain a copy of such Prospectus (x) to comply with applicable legal, regulatory, self-regulatory or professional requirements or (y) in accordance with a bona fide pre-existing document retention policy or (B) to copies stored electronically on archival servers as a result of automatic data back-up. Notwithstanding anything to the contrary set forth herein, Pubco shall not provide any Holder with any material, nonpublic information regarding Pubco other than to the extent that providing notice under this Section 3.4 to such Holder constitutes material, nonpublic information regarding Pubco.
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3.5 Reporting Obligations. As long as any Holder shall own Registrable Securities, Pubco, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by Pubco after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act. Pubco further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell the shares of Pubco Class A Common Stock held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including providing any legal opinions. Upon the request of any Holder, Pubco shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 Pubco agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its affiliates, officers and directors and each person who controls such Holder (within the meaning of the Securities Act) (collectively, the “Holder Indemnified Persons”) against all losses, claims, damages, liabilities and expenses (including reasonable outside attorneys’ fees) resulting from any Misstatement or alleged Misstatement, except insofar as the same are caused by or contained in any information furnished in writing to Pubco by such Holder Indemnified Person expressly for use therein.
4.1.2 In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to Pubco in writing such information and affidavits as Pubco reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify Pubco, its directors and officers and agents and each person who controls Pubco (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including without limitation reasonable outside attorneys’ fees) resulting from any Misstatement or alleged Misstatement, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement.
4.1.3 Any person entitled to indemnification herein shall (a) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (b) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party if the indemnifying party provides notice of such to the indemnified party within 30 calendar days of the indemnifying party’s receipt of notice of such claim. After notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any other legal expenses except as provided below and except for the reasonable costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (ii) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (iii) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (iv) the indemnifying party has not in fact employed counsel to assume the defense of such action or counsel reasonably satisfactory to the indemnified party, in each case, within a reasonable time after receiving notice of the commencement of the action; in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction (plus local counsel) at any one time for all such indemnified party or parties. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). No indemnifying party shall, without the consent of the indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 4 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent (1) includes an express and unconditional release of each indemnified party, in form and substance reasonably satisfactory to such indemnified party, from all liability arising out of such litigation, investigation, proceeding or claim and (2) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
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4.1.4 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities.
4.1.5 If the indemnification provided under Section 4.1 hereof is held by a court of competent jurisdiction to be unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall to the extent permitted by law contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this subsection 4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection 4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of such fraudulent misrepresentation.
ARTICLE V
MISCELLANEOUS
5.1 Notices. Any notice or communication under this Agreement must be in writing and given by (a) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (b) delivery in person or by courier service providing evidence of delivery, or (c) transmission by hand delivery, electronic mail or facsimile. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed and, in the case of notices delivered by courier service, hand delivery, electronic mail or facsimile, at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation. Any notice or communication under this Agreement must be addressed, if to Pubco, to: 413 W 14th Street, Floor 2, PMB 4633, New York, NY 10014 for the attention of Gerald Bartholomew Smith, and, if to any Holder, at such Holder’s address or contact information as set forth in Pubco’s books and records. Any party may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address shall become effective thirty (30) calendar days after delivery of such notice as provided in this Section 5.1.
5.2 Assignment; No Third Party Beneficiaries.
5.2.1 This Agreement and the rights, duties and obligations of Pubco hereunder may not be assigned or delegated by Pubco in whole or in part.
5.2.2 Prior to the expiration of the applicable Lock-Up Period, no Holder may assign or delegate such Holder’s rights, duties or obligations under this Agreement, in whole or in part, except in connection with a transfer of Registrable Securities by such Holder to a Permitted Transferee but only if such Permitted Transferee agrees to become bound by the transfer restrictions set forth in this Agreement.
5.2.3 This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Holders, which shall include Permitted Transferees.
5.2.4 This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement, including Section 4.1 and Section 5.2 hereof.
5.2.5 No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate Pubco unless and until Pubco shall have received (a) written notice of such assignment as provided in Section 5.1 hereof and (b) the written agreement of the assignee, in a form reasonably satisfactory to Pubco, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 5.2 shall be null and void.
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5.3 Counterparts. This Agreement may be executed in multiple counterparts (including facsimile, PDF or other electronic counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.
5.4 Governing Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT (A) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF SUCH JURISDICTION AND (B) THE VENUE FOR ANY ACTION TAKEN WITH RESPECT TO THIS AGREEMENT SHALL BE ANY STATE OR FEDERAL COURT IN NEW YORK COUNTY IN THE STATE OF NEW YORK.
5.5 Trial by Jury. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
5.6 Amendments and Modifications. Upon the written consent of Pubco, the Sponsor and Holders of at least a majority in interest of the Registrable Securities held by all Specified Holders at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects either the Sponsor Holders as a group or the Specified Holders as a group (regardless, in each case, whether the Sponsor Holders or Specified Holders, respectively, are adversely affected (as a group) to the same extent) shall require the consent of at least (x) a majority-in-interest of the Registrable Securities held by such Sponsor Holders or (y) each Specified Holder, as applicable, at the time in question so affected; provided, further, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder or group of affiliated Holders, solely in its capacity as a holder of the shares of capital stock of Pubco, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder or group of affiliated Holders so affected. No course of dealing between any Holder or Pubco and any other party hereto or any failure or delay on the part of a Holder or Pubco in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or Pubco. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
5.7 Other Registration Rights. Except as set forth on Schedule 5.7 hereto, Pubco represents and warrants that, no person, other than a Holder of Registrable Securities, has any right to require Pubco to register any securities of Pubco for sale or to include such securities of Pubco in any Registration filed by Pubco for the sale of securities for its own account or for the account of any other person. Further, Pubco represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
5.8 Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior contracts or agreements with respect to the subject matter hereof and the matters addressed or governed hereby, whether oral or written, including, without limitation, the Original Registration Rights Agreement.
5.9 Term. This Agreement shall terminate upon the earlier of (a) the tenth anniversary of the date of this Agreement or (b) the date as of which (i) all of the Registrable Securities have been sold pursuant to a Registration Statement (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder (or any successor rule promulgated thereafter by the Commission)) or (ii) with respect to any Holder, such Holder ceasing to hold Registrable Securities.
5.10 Termination of Business Combination Agreement. This Agreement shall be binding upon each party upon such party’s execution and delivery of this Agreement, but this Agreement shall only become effective upon the Closing. In the event that the Business Combination Agreement is validly terminated in accordance with its terms prior to the Closing, this Agreement shall automatically terminate and become null and void and be of no further force or effect, and the parties shall have no obligations hereunder and the provisions of the Original Registration Rights Agreement shall be automatically reinstated and in effect.
[Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned have caused this Amended and Restated Registration Rights Agreement to be executed as of the date first written above.
| AVALANCHE TREASURY CORPORATION | ||
| By: | ||
| Name: | ||
| Title | ||
| MOUNTAIN LAKE ACQUISITION CORP. | ||
| By: | ||
| Name: | ||
| Title | ||
| MOUNTAIN LAKE ACQUISITION SPONSOR LLC | ||
| By: | ||
| Name: | ||
| Title | ||
| BTIG, LLC | ||
| By: | ||
| Name: | ||
| Title | ||
| SPECIFIED HOLDERS: | ||
| [·] | ||
| By: | ||
| Name: | ||
| Title | ||
| [·] | ||
| By: | ||
| Name: | ||
| Title | ||
IN WITNESS WHEREOF, the undersigned have caused this Amended and Restated Registration Rights Agreement to be executed as of the date first written above.
| OTHER HOLDERS: | ||
| [·] | ||
| By: | ||
| Name: | ||
| Title | ||
Annex A
Contribution Process
Exhibit 99.2
Certain personally identifiable
information has been omitted from this exhibit pursuant to
item 601(a)(6) of Regulation S-K. [***] indicates that information has been redacted.
A PURCHASE OF THE TOKENS INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY REVIEW THIS AGREEMENT AND THE INFORMATION CONTAINED IN THIS AGREEMENT, AS WELL AS ALL PUBLICLY AVAILABLE INFORMATION ON THE AVAX.NETWORK WEBSITE AND ELSEWHERE BEFORE MAKING A PURCHASE DECISION. PLEASE READ THIS IMPORTANT NOTICE AT https://www.avax.network/important-notice.
AVAX TOKEN SALE AGREEMENT
Dated October 1, 2025
| A. Purchaser Information | |
| Name | Avalanche Treasury Company LLC |
| Address | 1209 Orange Street, Wilmington, Delaware 19801 |
| Main Contact | Laine Litman |
| Main Contact Email Address | [***] |
| Notice Address | 413 W 14th Street, Floor 2, PMB 4633, New York, NY 10014 |
| Notice Email Address | [***] |
| B. Purchase and Sale Information | |
| Discount: | 60% |
| Cash Consideration: | USD $50,000,000 (post-discount) or USD Coins (USDC) |
| Consideration Shares: | USD $30,000,000 (post-discount) in the form of up to 3,000,000 Class A Shares in Pubco |
| Total Purchase Price: | USD $80,000,000 (post-discount) (the “Total Purchase Price”) |
| Lockup: | 5 years as set forth in Section 4. |
This AVAX Token Sale Agreement (“Agreement”) is made as of the date first written above (the “Effective Date”), between Avalanche (BVI), Inc., a British Virgin Islands business company (“Avalanche BVI”), Avalanche Cayman, a Cayman Islands exempted company (“Avalanche Cayman” and together with Avalanche BVI, the “Company”), purchaser whose information is set forth in Table A above (the “Purchaser”) and Avalanche Treasury Corporation, a Delaware corporation (“Pubco”). The Company, the Purchaser and Pubco are referred to herein individually as a “Party” and collectively as the “Parties.”
| Avalanche (BVI) - Form Token Sale Agreement (U.S.) | ||
WHEREAS, Pubco is a company established to (together with Purchaser) carry out a business combination with an existing special purpose acquisition company (de-SPAC) for the purposes of: (i) holding and managing AVAX tokens, (ii) offering equity investors public market exposure to the long-term value of the Avalanche Network, (iii) supporting the visibility and liquidity of ecosystem tokens in regulated capital markets, and (iv) promoting, through long-term governance and capital deployment, the development and adoption of the Avalanche network (the “Transaction”).
WHEREAS, as a result of the Transaction the Purchaser will be an indirect subsidiary of Pubco.
WHEREAS, on the date hereof the Avalanche BVI, Avalanche Cayman, the Purchaser and Dragonfly Digital Management, LLC (“Dragonfly”) entered into an Asset Purchase and Contribution Agreement (“Contribution Agreement”) pursuant to which, among other things, the Company agreed to sell a number of AVAX tokens, the native cryptocurrency on the Avalanche Network (the “Tokens”) to the Purchaser.
THIS CERTIFIES THAT on the Effective Date, each of Avalanche BVI and Avalanche Cayman shall sell to the Purchaser and the Purchaser shall purchase (the “Token Closing”) the number of Tokens from each of Avalanche BVI and Avalanche Cayman as set forth on Exhibit B in exchange for: (i) the payment by the Purchaser to Avalanche BVI of the Cash Consideration on the Effective Date; and (ii) the issuance by Pubco to Avalanche Cayman of the Consideration Shares, as specified in Section 2 of this Agreement on the date of closing of the Transaction (the “BCA Closing Date”), in each case as set forth in Table B, on the conditions and subject to the terms set forth below and in the Contribution Agreement (collectively, the “Token Purchase ”).
| 1 | PURCHASE AND SALE INFORMATION |
1.1 SALE OF TOKENS. The Purchaser acknowledges that other purchasers may acquire Tokens directly from the Company on different terms and conditions, including at prices below or above the Purchase Price Per Token (calculated in accordance with, and defined in Section 1.2 below), all as determined from time to time by the Company in its sole discretion. The Purchaser has no right to a different Purchase Price Per Tokens for any Tokens sold hereunder under any circumstances.
1.2 DETERMINATION OF PRICE PER TOKEN. The number of Tokens that the Purchaser is eligible to receive shall be determined by (a) first calculating the price of each Token in accordance with the following formula: (i) $27.33 multiplied by (ii) 40% (“Purchase Price Per Token”) and (b) then dividing the Total Purchase Price by the Purchase Price Per Token.
| 2 | OFFER AND SALE |
2.1 Payment. The Purchaser covenants and agrees to pay the Cash Consideration to Avalanche BVI on the Effective Date and Pubco covenants and agrees to issue the Consideration Shares to Avalanche Cayman on the BCA Closing Date. To the Purchaser’s knowledge, the funds, including any fiat, virtual or crypto currency, Purchaser uses to purchase Tokens are not derived from or related to any unlawful activities, including but not limited to money laundering and terrorist financing, and the Purchaser will not use the Tokens to finance, engage in, or otherwise support any unlawful activities. The Purchaser confirms that it is not, and has not been involved in any type of activity associated with money laundering or terror financing, nor violated any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any other applicable anti-corruption or anti-bribery legislation, nor was ever subject to any investigation by, or has received a request for information from any governmental body relating to corruption or bribery under any statute and the Purchaser hereby consents to the Company running any checks or enquiries with third parties.
| Avalanche (BVI) - Form Token Sale Agreement (U.S.) | ||
| 2 |
2.2 Form of Payment. The Purchaser shall deliver on the Effective Date, $50,000,000 in cash in United States dollars or USD Coins (USDC) (the “Cash Consideration”). Pubco shall deliver on the BCA Closing Date, $30,000,000 in the form of 3,000,000 Class A Shares in Pubco (each, a “Consideration Share”, and collectively, the “Consideration Shares”).
2.3 Consideration Warrants in Lieu of Consideration Shares. Notwithstanding anything to the contrary in this Agreement, the Parties acknowledge that if, at any time following the BCA Closing Date, the Class A Shares of Pubco cease to be nonvoting securities (including, without limitation, as a result of the conversion of Class A Shares of Pubco into voting securities following the cancellation of all the then outstanding Class B shares of Pubco), Avalanche Cayman may become the beneficial owner, as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules promulgated thereunder, of a number of Consideration Shares in excess of 4.7% (the “Maximum Percentage”) of the then-outstanding Class A Shares of Pubco. If, at any time following the BCA Closing Date, the Consideration Shares issued by Pubco to Avalanche Cayman under Section 2.1, in the form of payment specified in Section 2.2 (i) become voting securities of Pubco (the “Conversion”) and (ii) at the time of such Conversion, Avalanche Cayman’s beneficial ownership of Pubco, as determined in accordance with Section 13(d) of the Exchange Act, and the rules promulgated thereunder, exceeds the Maximum Percentage, Avalanche Cayman may request in writing that Pubco exchanges the number of Consideration Shares in excess of the Maximum Percentage (the “Excess Shares”) for an equal number of pre-funded warrants convertible, at the Foundation’s request, into Pubco Class A Shares on a one-to-one basis (the “Consideration Warrants”). Within five (5) calendar days of the later of (i) Pubco’s receipt of Avalanche Cayman’s written request, and (ii) the return of the Excess Shares by Avalanche Cayman to Pubco for cancellation, Pubco shall issue to Avalanche Cayman a number of Consideration Warrants equal to the number of Excess Shares returned to Pubco. For the avoidance of doubt, the total consideration paid by Pubco to Avalanche Cayman on the BCA Closing Date shall equal $30,000,000.
2.4 Transfer of Title. The Parties agree that title to the Foundation Tokens shall pass on the Effective Date from the Company to the Purchaser upon (i) confirmation of receipt of Cash Consideration, (ii) the satisfaction of the Conditions to Token Delivery in Section 3.2, and (iii) the Company’s initiation of the transfer of Foundation Tokens to the Purchaser’s designated Wallet address and such transfer of title shall be deemed to occur at the Company’s principal place of business located outside the United States.
| 3 | TOKEN DELIVERY |
3.1 Delivery. Subject to the terms and conditions set forth herein, the delivery of Tokens contemplated by this Agreement (the “Delivery”) shall occur on the Effective Date.
3.2 Conditions to Token Delivery. The Token Closing is subject to the satisfaction or waiver in writing by the Company of the conditions below:
3.2.1 Each of the conditions set forth in Section 1.9 of the Contribution Agreement shall be satisfied; and
3.2.2 The Purchaser shall provide to the Company, in writing, a network wallet address on the Avalanche Network as set forth on the signature page hereto (“Wallet”) to which the number of Tokens will be delivered; provided that any proposed change to the Wallet address after the Effective Date will require the prior written consent of the Company, not to be unreasonably withheld.
| Avalanche (BVI) - Form Token Sale Agreement (U.S.) | ||
| 3 |
| 4 | RESTRICTIONS ON TOKENS |
4.1 Acknowledgement. Notwithstanding anything to the contrary herein, the Purchaser, Pubco and the Company acknowledge and agree that the Tokens delivered to the Purchaser pursuant to this TSA (as applicable as of the applicable date of determination, the “Restricted Tokens”) shall be subject to the restrictions set forth in this Section 4 and may be subject to further restrictions on transferability as required by applicable laws and regulations as determined by the Company in its reasonable discretion. Each of the Purchaser and Pubco acknowledges and agrees that a breach of Section 4 may result in substantial injury and irreparable harm to the Company and that money damages may not be a sufficient remedy for such breach or may be impossible to compute. Therefore, in the event that either the Purchaser or Pubco engages in any act that violates or breaches any provision of this Section 4, the Company shall serve a notice to either Purchaser or Pubco, as applicable, specifying the details of such alleged violation or breach and, the Purchaser and/or Pubco, as applicable, shall have a period of thirty (30) calendar days following delivery of such notice (the “Cure Period”) to cure any such alleged violation or breach; provided that, prior to the first anniversary of the Effective Date the Purchaser and Pubco shall only be entitled to benefit from the Cure Period in connection with breaches of this Section 4, if (i) such alleged violation or breach was not intentional and did not arise from willful misconduct; and (ii), the alleged violation or breach was solely the result of an error on the part of the Purchaser, Pubco or their employees, directors and officers. If either the Purchaser or Pubco fails to cure such alleged violation or breach by the end of the Cure Period, then the Company shall be entitled to rescind this TSA, effectuating the return of the Restricted Tokens to the relevant Company as soon as reasonably practicable, and the Purchaser or Pubco, as applicable, shall forfeit fifteen per cent (15%) of the Total Purchase Price as liquidated damages in the form of cash. Upon the Company’s receipt of Restricted Tokens rescinded under this Section 4, the Company shall transfer to Purchaser (i) all Consideration Shares or Consideration Warrants acquired by the Company pursuant to this Agreement and that are then owned by the Company at the time of the Company’s receipt of Restricted Tokens pursuant to this Section 4.1 (for the avoidance of doubt, excluding any Pubco shares or Pubco warrants acquired by the Company outside of this Agreement, whether in open-market purchases, at-the-market offerings, or otherwise) and (ii) an amount of cash in United States dollars or USDC equal to the Total Purchase Price less the number of Consideration Shares and Consideration Warrants returned pursuant to clause (i) multiplied by $10.00 less $12,000,000. The Company shall also be entitled, in addition to all other available remedies under law, to injunctive relief (including, without limitation, temporary restraining orders, and/or preliminary or permanent injunctions) and specific enforcement of the terms of this Section 4. The Company shall not be required to post a bond or other security in connection with the granting of any such relief. In addition, each of the Purchaser and Pubco acknowledges and agrees that its violation or breach of this Section 4 may cause the Company substantial economic damages and losses of types and in amounts that may be impossible to compute and ascertain with certainty as a basis for recovery by the Company of actual damages, and that the Company would not have entered into this TSA without this Section 4. In the event that rescission is an impractical or impossible remedy, in lieu of actual damages for such a violation or breach, and without limiting the Company’s entitlement to injunctive relief and specific enforcement, each of the Purchaser and Pubco agrees that liquidated damages may be assessed and recovered by the Company as against the Purchaser and/or Pubco in an amount equal to the fair market value of the portion of the Restricted Tokens for which rescission is an impossible or impracticable remedy on the date of breach; provided, however, that the remaining portion of the Restricted Tokens shall continue to be subject to rescission. The Parties acknowledge and agree that such liquidated damages represent a fair, reasonable and appropriate estimate of actual damages and are not intended as a penalty.
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4.2 Lockup.
4.2.1 Subject to Section 4.2.2 and Section 4.2.3 below, each of the Purchaser and Pubco hereby agrees not to, without the prior written consent of the Company, during the period commencing on the Effective Date and ending the fifth (5th) anniversary of the Effective Date (the “Lockup Period”): (i) lend; offer; pledge; hypothecate; place any lien, mortgage, deed of trust or security interest on or otherwise use any Restricted Tokens as collateral to secure any indebtedness or obligation (in each case, other than a Permitted Collateral Pledge); (ii) sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise Transfer or dispose of, directly or indirectly, any Restricted Tokens or (iii) enter into any swap or other arrangement that Transfers to another Person, in whole or in part, any of the economic consequences of ownership of any Restricted Tokens, whether any such transaction described in clause (i), (ii) or (iii) above is to be settled by delivery of such Restricted Tokens, other assets, virtual currencies or virtual mediums of exchange, in cash, or otherwise; provided that, during the Lockup Period, the Purchaser may use the Restricted Tokens for Protocol Staking and Limited Pledging (each as defined below) as long as both the No Transfer Condition and Restriction Condition are satisfied at all times (the “Restrictions”).
4.2.2 Notwithstanding the foregoing, commencing on the first month after the first anniversary of the Effective Date and for each month thereafter, on a pro-rata monthly basis over the remaining four (4) years of the Lockup Period, an additional 1/48 of the Restricted Tokens per month may be partially released (e.g., after 2 months, 2/48 of the Restricted Tokens may be used for the Permitted Activities and after 3 months, an additional 1/48 totaling 3/48 of the Restricted Tokens may be used for the Permitted Activities) to be used, for legitimate business purposes, for the following activities (each, a “Permitted Activity”, and the Restricted Tokens that may be used in the Permitted Activities, the “Unlocked Tokens”): (a) staking or delegating Restricted Tokens, whether directly or through a third-party service provider, for the purposes of participating in network consensus, securing the network and receiving staking rewards (“Protocol Staking”); (b) participating in liquid staking protocols, including depositing Restricted Tokens into protocols that issue liquid staking derivatives or receipt tokens; provided that, any such receipt tokens or derivative tokens shall themselves be deemed Restricted Tokens and remain subject to the Restrictions until the earlier of the expiration of the Lockup Period or the completion of the activity; (c) engaging in on-chain or off-chain yield generation activities, including but not limited to depositing Restricted Tokens into decentralized or centralized finance protocols for the purposes of lending, borrowing against or, so long as (i) such activities are structured such that Purchaser retains full beneficial ownership and the unconditional right to reclaim the Restricted Tokens any time upon demand and (ii) the borrower, custodian or counterparty has no right to transfer, rehypothecate, foreclose upon or otherwise dispose of the Restricted Tokens; (d) providing liquidity to decentralized or centralized exchanges, automated market makers or liquidity pools; provided that (i) the Purchaser retains the right to withdraw the Unlocked Tokens from such arrangements at any time and (ii) the Purchaser shall not commit, deposit, provide or otherwise use greater than 20% of all Unlocked Tokens at any time in connection with such Permitted Activity (such limit not applicable to any market making, liquidity pools or other trading mechanism that pairs the Token with a derivative or receipt tokens relating to the Token); (e) pledging Restricted Tokens in a bona fide transaction as collateral for asset management for the benefit of the Purchaser; provided that no pledgee shall have the right to foreclose upon, transfer or otherwise take ownership of the Restricted Tokens during the Lockup Period (“Limited Pledging”); and (f) any other activities expressly approved in writing by the Company; provided, however, that during the Lockup Period such Permitted Activities shall not result in the permanent transfer of ownership of the underlying Restricted Tokens and the third-party who is receiving the Restricted Tokens in connection with a Permitted Activity shall not be permitted to foreclose upon such Restricted Tokens or otherwise be entitled to enforce its rights or remedies with respect to the Restricted Tokens, including without limitation, the right to transfer or take title to or ownership of such Restricted Tokens (the “No Transfer Condition”). Any Permitted Activity shall be subject to (x) the permitted transferee executing and delivering to the Purchaser an agreement providing that the transferee is receiving and holding the Restricted Tokens subject to the Restrictions and agreeing to the Restrictions set forth herein; and (y) the Purchaser delivering a copy of such agreement to the Company (collectively, the “Restriction Condition”). For the avoidance of doubt, (i) all Restricted Tokens delivered hereunder shall remain subject to the Restrictions until the expiration of the Lockup Period and (ii) any derivative or receipt token relating to the Token received by the Purchaser when the Purchaser deposits or otherwise provides Tokens shall be deemed a Restricted Token, subject to Section 4.
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4.2.3 The foregoing restrictions on transferability shall not prohibit Purchaser from Transferring Tokens to an Affiliate wholly owned, directly or indirectly, by Pubco which will not be sold, transferred or conveyed outside of Pubco’s consolidated group; provided that such Transfer is made in compliance with applicable laws and such Affiliate agrees to be bound by the terms herein and shall apply only to the Tokens purchased or otherwise acquired by Purchaser pursuant to this TSA.
| 5 | DEFINITIONS |
5.1 “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, where “control” is defined as directly or indirectly possessing the power to direct or cause the direction of the management and policies of the Affiliate, whether through ownership of voting securities, by contract or otherwise.
5.2 “Ava Labs” means Ava Labs, Inc., a Delaware corporation engaged in research and development of various technologies, including without limitation, technologies leveraging the Avalanche Network.
5.3 “Avalanche Network” means the decentralized application platform as described in the Platform Paper, and as amended or restated from time to time.
5.4 “Foundation” means Avalanche Foundation Limited, a Singaporean Company Limited by Guarantee, and the series of related entities, subsidiaries and affiliates, including Avalanche BVI and Avalanche Cayman, which helps steward the open source development of the Avalanche Network and its ecosystem.
5.5 “Foundation Tokens” means the up to $200 million of Tokens (on a pre-discount basis) to be sold, conveyed, assigned, transferred, and delivered for the benefit of the Purchaser by the Company pursuant to this Agreement and the Contribution Agreement;
5.6 “Governmental Authority” means any nation or government, any state or other political subdivision thereof, any entity exercising legislative, judicial or administrative functions of or pertaining to government, including, without limitation, any government authority, agency, department, board, commission or instrumentality, and any court, tribunal or arbitrator(s) of competent jurisdiction, and any self-regulatory organization.
5.7 “Money Laundering Laws” means the applicable laws, rules and regulations of all jurisdictions in which the Company and Purchaser are located, resident, organized or operates concerning or related to anti-money laundering, including but not limited to those contained in the Bank Secrecy Act of 1970 and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”), each as amended and including the rules and regulations thereunder, and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority.
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5.8 “Permitted Collateral Pledge” means a pledge, lien, mortgage, deed of trust or security interest on up to 80% of the Foundation Tokens outstanding at any time, granted solely to secure any indebtedness or obligation of Pubco (or one of its subsidiaries) incurred for the purpose of acquiring Tokens or Purchaser’s own equity shares, subject to satisfaction of the following conditions: (i) no pledgee shall have the right to foreclose upon, transfer, or otherwise take ownership of the Foundation Tokens during the Lockup Period, except upon the occurrence of an event of default by the pledgor under such arrangement, provided that such arrangement shall have been entered into in good faith and not for the purpose of circumventing the Lockup Period; (ii) Pubco shall provide written notice to the Company at least 10 business days prior to any foreclosure, transfer, disposition or rehypothecation with respect to the Foundation Tokens that occurs during the Lockup Period; (iii) the Company shall be permitted to purchase or to bid at any foreclosure sale, transfer or other disposition of Foundation Tokens related to the Permitted Collateral Pledge; (iv) any foreclosure, transfer or other disposition of the Foundation Tokens in connection with the exercise of remedies by the pledgee will be limited to the number of Foundation Tokens required to be foreclosed upon, transferred or liquidated to satisfy the terms of outstanding secured obligations of the pledgee; (v) none of the pledgor, the pledgee or any transferee shall change the Wallet address of the pledged Foundation Tokens without the prior written consent of the Company, not to be unreasonably withheld; and (vi) at least 5 business days prior the effectiveness of such Permitted Collateral Pledge the pledgor and pledgee shall have delivered written notice of such Permitted Collateral Pledge to the Company together with evidence reasonably satisfactory to the Company confirming that the pledge is a Permitted Collateral Pledge. For the avoidance of doubt, a “Permitted Collateral Pledge” shall not include any arrangement that transfers or permits the transfer of ownership, title, possession, or legal or practical control (other than legal or practical control required by applicable law to perfect the security interest of the pledgee relating to the secured obligation) of the Foundation Tokens prior to an event of default under such arrangement.
5.8.1 “Person” means any individual or legal entity, including a government or political subdivision or an agency or instrumentality thereof.
5.9 “Platform Paper” means the Ava Labs document that describes various implementation details of the Avalanche Network, located at https://www.avalabs.org/whitepapers, as amended or restated from time to time.
5.10 “Smart Contract” means pre-programmed coded functions that allow for self-execution at specified times or based on reference to the occurrence or non-occurrence of an action or event (including data external to the network provided by third-party sources, known as “oracles”).
5.11 “Transfer,” “Transferred” or “Transferring” means, with respect to any instrument, the direct or indirect assignment, sale, transfer, tender, pledge, charge, hypothecation or the grant, creation or suffrage of a lien or encumbrance in or upon, or the gift, placement in trust, or other disposition of such instrument or any right, title or interest therein or the record or beneficial ownership thereof, the offer to make such a sale, transfer or other disposition, and each agreement, arrangement or understanding, whether or not in writing, to effect any of the foregoing.
| 6 | BACKGROUND; DECENTRALIZATION |
6.1 As outlined in the Platform Paper and elsewhere, the Avalanche Network is a platform designed for building decentralized applications. AVAX is the native token of the Avalanche Network. No single entity or group of affiliated entities or individuals, including the Company, Ava Labs, the Foundation, or their employees or Affiliates, has control of the Avalanche Network. The Avalanche Network operates using Smart Contracts that operate and run autonomously from any entity, subject to governance decisions and updates as may be adopted by nodes on the Avalanche Network and holders of AVAX, and as a result, may be deemed decentralized and fully functional. Changes to the Avalanche Network may be proposed by third parties, and such proposals may gain traction and be implemented, without the Company, or any single developer on the Avalanche Network, including Ava Labs, or the Foundation’s approval.
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| 7 | COMPANY REPRESENTATIONS & COVENANTS |
7.1 Avalanche BVI is an entity duly incorporated and organized, validly existing and in good standing under the laws of the British Virgin Islands (“BVI”). Avalanche Cayman is an entity duly incorporated and organized, validly existing and in good standing under the laws of the Cayman Islands. Each of Avalanche BVI and Avalanche Cayman has all necessary power and authority to enter into this TSA, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by the Company of this TSA, the performance by the Company of its obligations hereunder and the consummation by the Company of the transactions contemplated hereby have been duly authorized on the part of each of Avalanche BVI and Avalanche Cayman.
7.2 This TSA has been duly executed and delivered by the Company and constitutes a valid and legally binding obligation of each of Avalanche BVI and Avalanche Cayman, enforceable against the Company in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraud, and any other laws of general application affecting enforcement of creditors’ rights generally.
7.3 To the Company’s knowledge, neither the execution and delivery of this TSA, nor the consummation of the transactions contemplated hereby, does or will violate any statute, regulation, rule, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency, or court to which the Company is subject or conflict with, violate or constitute a default under any agreement, debt or other instrument to which the Company is a party.
7.4 To the Company’s knowledge, the Company owns or possesses (or can obtain on commercially reasonable terms) sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, processes and other intellectual property rights necessary for its business as now conducted and as currently proposed to be conducted, without any conflict with, or infringement of the rights of, others.
7.5 Upon the sale and transfer of the Tokens and payment therefor, in accordance with the provisions of this TSA, the Purchaser will acquire valid marketable title to the Tokens, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest other than as set forth herein.
| 8 | PURCHASER AND PUBCO REPRESENTATIONS, ACKNOWLEDGEMENTS & COVENANTS |
8.1 Authorization. The Purchaser and Pubco has full power and authority to enter into this TSA. This TSA, when executed and delivered by the Purchaser, will constitute valid and legally binding obligations of the Purchaser and Pubco, as applicable, enforceable in accordance with their terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
8.2 Purchase Entirely for Own Account. This TSA is made with the Purchaser and Pubco in reliance upon the Purchaser’s and Pubco’s representations to the Company, which by the Purchaser’s and Pubco’s execution of this TSA, the Purchaser and Pubco each hereby confirms, that the Tokens to be acquired by the Purchaser will be acquired for the Purchaser’s and/or Pubco’s use on the Avalanche Network and related activities and not as a nominee or agent. By executing this TSA, the Purchaser and Pubco each further represents that the Purchaser and Pubco each do not presently have any contract, undertaking, agreement or arrangement with any Person to sell, Transfer or grant participations to such Person or to any third Person, with respect to any of the Tokens, except for a Permitted Collateral Pledge. If a legal entity, neither the Purchaser nor Pubco has been formed for the specific purpose of acquiring the Tokens.
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8.3 Disclosure of Information. Each of the Purchaser and Pubco has sufficient knowledge of and experience in blockchain, the Avalanche Network, as well as broader cryptocurrency, business and financial matters to be able to evaluate the risks and merits of its purchase of the Tokens and is able to utilize the Tokens on the Avalanche Network notwithstanding the risks thereof. Each of the Purchaser and Pubco has read and familiarized itself with the Avalanche Network, the use of the Tokens and related matters. Each of the Purchaser and Pubco has not relied on any representations or warranties made by the Company outside of this instrument, including, but not limited to, conversations of any kind, whether through oral or electronic communication or any platform paper.
8.4 Independent Assessment and Non-Solicitation. Each of the Purchaser and Pubco has evaluated the merits and risks of purchasing the Tokens based exclusively on its own independent review and consultations with its own advisers as it deemed necessary, and each of the Purchaser and Pubco has made its own decision concerning such purchase without reliance on any representation or warranty of, or advice from, the Company or its Affiliates. Neither the Purchaser nor Pubco was not directly or indirectly, including through a broker or finder, contacted or engaged by any form of general solicitation or general advertising in connection with this Token Purchase.
8.5 Compliance with Securities Laws, if Applicable. Each of the Purchaser and Pubco understands that there remains some risk that the Tokens and/or the transactions may be deemed securities by the U.S. Securities and Exchange Commission or by a court of competent jurisdiction. Each of the Purchaser and Pubco further understands that the Tokens or the transactions have not been, and will not be, registered under the Securities Act or any applicable state securities laws. Were the Tokens or the transactions ever to be deemed to be securities, their qualification for a specific exemption from the registration provisions of the Securities Act and other applicable state securities laws would depend upon, among other things, the bona fide nature of the purchase intent and the accuracy of the Company’s, the Purchaser’s, and Pubco’s representations as expressed herein. Each of the Purchaser and Pubco understands that there is a risk that the Tokens or the transactions could be deemed “restricted securities” under applicable United States federal and state securities laws and that, pursuant to these laws, either the Purchaser or Pubco, as applicable, would be required to hold the Tokens indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities or an exemption from such registration and qualification requirements is available. Each of the Purchaser and Pubco acknowledges that none of the Company, the Foundation or any other Person has any obligation to register or qualify the Tokens for resale, and exemptions from registration and qualification may not be available or may not permit the Purchaser or Pubco to transfer all or any of the Tokens in the amounts or at the times proposed by the Purchaser or Pubco, if the Tokens or the transactions are deemed to be securities. Each of the Purchaser and Pubco further acknowledges that, in the event the Tokens or the transactions are deemed to be securities, if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Tokens, and on requirements relating to the Company, the Foundation, or other third parties which are outside of the Purchaser’s and Pubco’s control, and which the Company and the Foundation are under no obligation, and may not be able, to satisfy. In light of the foregoing, each of the Purchaser and Pubco hereby makes the representations and warranties and acknowledges the matters contained in Exhibit A, which is hereby incorporated by reference herein.
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8.6 Residence. Each of the Purchaser and Pubco maintains its domicile at the address shown in ist respective signature page of this TSA and neither the Purchaser nor Pubco is merely transient or temporarily resident there.
8.7 Waiver of Warranties; Assumption of Risks. THE RISK OF LOSS IN BUYING, HOLDING AND TRADING DIGITAL ASSETS AND RIGHTS THEREIN, INCLUDING THE TOKENS, CAN BE IMMEDIATE AND SUBSTANTIAL. THERE IS NO GUARANTEE AGAINST LOSSES FROM ENTERING INTO THIS TSA, POSSESSING OR USING THE TOKENS OR UTILIZING THE AVALANCHE NETWORK. EACH OF PURCHASER AND PUBCO SHOULD THEREFORE CAREFULLY CONSIDER WHETHER ACQUIRING, USING AND HOLDING THE TOKENS IS SUITABLE FOR THE PURCHASER OR PUBCO, RESPECTIVELY, IN LIGHT OF ITS LEVEL OF KNOWLEDGE AND FINANCIAL CONDITION. Each of the Purchaser and Pubco understands that the Tokens involve risks, all of which each of the Purchaser and Pubco fully and completely assumes, including, but not limited to, the risks that (i) the technology and economic models associated with the Avalanche Network will not function as intended; (ii) the Avalanche Network will fail, now or in the future, to attract sufficient interest from users; and (iii) the Company, the Foundation and/or third parties involved in the development of the Avalanche Network may be subject to investigation and regulatory actions from Governmental Authorities. Each of the Purchaser and Pubco understands and expressly accepts that the Tokens will be delivered to the Purchaser at the sole risk of the Purchaser on an “AS IS” and “UNDER DEVELOPMENT” basis. NEITHER OF THE COMPANY NOR THE FOUNDATION, NOR ANY OTHER PERSON, MAKES ANY REPRESENTATION, WARRANTY, GUARANTEE OR UNDERTAKING WHATSOEVER WITH RESPECT TO THE TOKENS, INCLUDING WITHOUT LIMITATION ANY (i) WARRANTY OF MERCHANTABILITY; (ii) WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; (iii) WARRANTY OF TITLE; OR (iv) WARRANTY AGAINST INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF A THIRD PARTY; WHETHER ARISING BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE. EXCEPT AS EXPRESSLY SET FORTH HEREIN, EACH OF THE PURCHASER AND PUBCO ACKNOWLEDGES THAT IT HAS NOT RELIED UPON ANY REPRESENTATION OR WARRANTY MADE BY THE COMPANY, THE FOUNDATION OR ANY OTHER PERSON. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH OF THE PURCHASER AND PUBCO ASSUMES ALL RISKS, DAMAGES, LOSSES AND LIABILITIES RELATED TO OR ARISING OUT OF ACQUIRING, USING AND/OR HOLDING ANY TOKENS AND REGARDLESS OF ANY ORAL OR WRITTEN STATEMENTS MADE BY THE COMPANY, THE FOUNDATION OR ANY OTHER PERSON, BY WAY OF TECHNICAL ADVICE OR OTHERWISE, RELATED TO THE USE OF THE TOKENS.
8.8 Other Applicable Law. Each of the Purchaser and Pubco represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with entering into this TSA and the purchase of the Tokens, including (a) the legal requirements within each of the Purchaser’s and Pubco’s jurisdiction for entering into this TSA and the purchase of the Tokens, (b) any foreign exchange restrictions applicable to such agreements and purchase, (c) any governmental or other consents that may need to be obtained, and (d) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption and sale or transfer of the Tokens. The Purchaser’s purchase and payment for and each of the Purchaser’s and Pubco’s, as applicable, continued beneficial ownership of the Tokens will not violate any applicable laws of either the Purchaser’s or the Pubco’s jurisdiction, as applicable.
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8.9 OFAC. Neither the Purchaser, Pubco, nor, if applicable, any of their affiliates or direct or indirect beneficial owners: (i) appears on the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”), the EU consolidated list of persons, groups and entities subject to financial sanctions, the UK Consolidated List of Financial Sanctions Targets, nor are they otherwise a party with which the Company is prohibited to deal under the laws of the United States, the EU (or any of its Member States), the British Virgin Islands or the Cayman Islands; (ii) is a person identified as a terrorist organization on any other relevant lists maintained by any Governmental Authority; or (iii) unless otherwise disclosed in writing to the Company prior to the date of this TSA, is a senior foreign political figure, or any immediate family member or close associate of a senior foreign political figure. Each of the Purchaser and Pubco further represents and warrants that, if applicable, each of the Purchaser and Pubco: (a) has conducted thorough due diligence with respect to all of its beneficial owners; (b) has established the identities of all direct and indirect beneficial owners and the source of each beneficial owners’ funds; and (c) will retain evidence of those identities, any source of funds and any due diligence.
8.10 Sources and Uses of Funds. Each of the Purchaser and Pubco further represents, warrants and agrees as follows:
8.10.1 No payment or other transfer of value to the Company and no payment or other transfer of value to the Company shall cause the Company to be in violation of applicable U.S. federal or state or non-U.S. laws or regulations, including, without limitation Money Laundering Laws, economic sanctions and trade controls, anti-bribery or anti-boycott laws or regulations, the Patriot Act or the various statutes, regulations and executive orders administered by OFAC (“OFAC Regulations”), the EU (and its Member States), or the UK (“Sanctions Regulations”).
8.10.2 No payment or other transfer of value to the Company is or will be derived from, pledged for the benefit of, or related in any way to, (i) the government of any country designated by the U.S. Secretary of State or other Governmental Authority as a country supporting international terrorism, (ii) property that is blocked or frozen under any Sanctions Regulations or that would be blocked under OFAC Regulations if it were in the custody of a U.S. national, (iii) persons to whom U.S. nationals cannot lawfully export services, or with whom U.S. nationals cannot lawfully engage in transactions under OFAC Regulations, (iv) the government of any country that has been designated as a non-cooperative country or designated by the U.S. Secretary of the Treasury or other Governmental Authority as a money laundering jurisdiction, (v) directly or indirectly, any illegal activities or (vi) activity in breach of any Sanctions Regulations. Each of the Purchaser and Pubco acknowledges that Money Laundering Laws may require the Company to have collected documentation verifying the identity and the source of funds used to acquire the Tokens before, and from time to time after, the date of this TSA.
8.10.3 All payments or other transfer of value to the Company by each of the Purchaser and Pubco will be made through an account (or virtual currency public address whose associated balance, either directly or indirectly, has been funded by such an account) located in a jurisdiction that does not appear on the list of boycotted countries published by the U.S. Department of Treasury pursuant to § 999(a)(3) of the Code as in effect at the time of the payment or other transfer of value. In the event that the Purchaser is, receives deposits from, makes payments to or conducts transactions relating to a non-U.S. banking institution (a “Non-U.S. Bank”) in connection with the acquisition of the Tokens, the Non-U.S. Bank: (i) has a fixed address, other than an electronic address or a post office box, in a country in which it is authorized to conduct banking activities, (ii) employs one or more individuals on a full-time basis, (iii) maintains operating records related to its banking activities, (iv) is subject to inspection by the banking authority that licensed it to conduct banking activities and (v) does not provide banking services to any other Non-U.S. Bank that does not have a physical presence in any country and that is not a registered affiliate.
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8.11 Additional Information. Each of the Purchaser and Pubco will cooperate in good faith to provide to the Company any information that the Company from time to time reasonably determines to be necessary (a) to comply with Money Laundering Laws, anti-terrorism laws, rules and regulations and or any similar laws and regulations of any applicable jurisdiction and (b) to respond to requests for information concerning the identity and or source of funds of each of the Purchaser and Pubco from any Governmental Authority, self-regulatory organization or financial institution in connection with its anti-money laundering compliance procedures, or to update that information. Each of the Purchaser and Pubco understands and acknowledges that the Company may be required to report any action or failure to comply with information requests and to disclose the identity to Governmental Authorities, self-regulatory organizations and financial institutions, in certain circumstances without notifying either the Purchaser and/or Pubco that the information has been so provided. Each of the Purchaser and Pubco further understands and agrees that any failure on its part to comply with this Section would, if not cured within fifteen (15) business days of receiving notice of such failure, allow the Company to terminate this TSA and require the forfeiture of any Tokens previously delivered to the Purchaser.
8.12 Suspicious Activity Reports. Each of the Purchaser and Pubco acknowledges and agrees that the Company, in complying with anti-money laundering statutes, regulations and goals, may file voluntarily or as required by law, a suspicious activity report (“SAR”) or any other information with governmental and law enforcement agencies that identify transactions and activities that the Company reasonably determines to be suspicious, or is otherwise required by law. Each of the Purchaser and Pubco acknowledges that the Company is prohibited by law from disclosing to third parties, including the Purchaser and Pubco, any SAR filing itself or the fact that a SAR has been filed.
8.13 Voluntary Compliance. Each of the Purchaser and Pubco understands and agrees that, even if the Company is not obligated to comply with any U.S. anti-money laundering requirements, the Company may nevertheless choose to voluntarily comply with such requirements as the Company deems appropriate in its sole discretion. Each of the Purchaser and Pubco agrees to cooperate with the Company as may be required in the reasonable opinion of the Company in connection with such compliance.
8.14 Taxes. EACH OF THE PURCHASER AND PUBCO ACKNOWLEDGES AND AGREES THAT IT MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PURCHASING, HOLDING, EXCHANGING, SELLING, STAKING, TRANSFERRING OR OTHERWISE USING THE TOKENS IN ANY WAY. EACH OF PURCHASER AND PUBCO HEREBY REPRESENTS THAT (A) IT HAS CONSULTED WITH A TAX ADVISER THAT IT DEEMS ADVISABLE IN CONNECTION WITH ANY USE OF THE TOKENS, OR THAT IT HAS HAD THE OPPORTUNITY TO OBTAIN TAX ADVICE BUT HAVE CHOSEN NOT TO DO SO, (B) THE COMPANY HAS NOT PROVIDED EITHER THE PURCHASER NOR PUBCO WITH ANY TAX OR RELATED ADVICE, AND (C) EACH PARTY SHALL BE RESPONSIBLE FOR ITS RESPECTIVE TAX OBLIGATIONS DERIVING FROM THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
8.15 Advice and Guidance. From time to time, the Company and its Affiliates may request advice, guidance, or support, in an unofficial capacity, from either the Purchaser or Pubco with regard to matters in which either the Purchaser or Pubco is knowledgeable or well-connected. Each of the Purchaser and Pubco agrees to use best efforts to provide such advice, guidance, and support as reasonably requested to promote the growth and development of the Avalanche Network.
8.16 Accredited Investor. The Purchaser is an “accredited investor” as such term is defined in Rule 501 of Regulation D under the Securities Act and have delivered to Company documentation to verify Purchaser’s status as an accredited investor.
8.17 AML/KYC Compliance. Each of the Purchaser an Pubco represents and warrants that all information provided to the Foundation, its Affiliates and/or third-party designees for purposes of the Foundation’s required “know-your customer” (KYC), anti-money laundering (AML), and other compliance checks is accurate and current as of the Effective Date.
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8.18 Purchaser Performance. Each of the Purchaser and Pubco represents and warrants that it has performed and will continue to perform all such further acts and things, including the execution and delivery of all such other agreements, certificates, instruments and documents, as the Company has reasonably requested or may reasonably request in order to carry out the intent hereunder or as necessary to comply with applicable laws and regulations.
8.19 Digital Asset Treasury Vehicle. The Purchaser is and shall be at all times, a digital asset treasury vehicle (or a subsidiary or Affiliate of any such vehicle) listed on a U.S. national stock exchange with the sole operations or primary business model being dependent on owning Tokens.
| 9 | DISCLAIMERS, INDEMNITY & LIMITATIONS OF LIABILITY |
9.1 Wallet. The Purchaser assumes full responsibility and liability for any losses resulting from any intentional or unintentional misuse of the Purchaser’s Wallet including, without limitation, the loss of the Purchaser’s private keys associated with the Wallet, any loss resulting from designating a non-Token compliant wallet for the receipt of the Tokens, depositing one type of digital asset to a wallet intended for another type of digital wallet, failing to properly maintain the Wallet, or any third party gaining access to the Wallet and misappropriating the Tokens. The Company assumes no responsibility or liability in connection with any such misuse by the Purchaser or any third party or any loss of the Purchaser’s private keys associated with the Wallet.
9.2 Indemnity.
9.2.1 THE PURCHASER AND PUBCO SHALL DEFEND AND HOLD HARMLESS AVALANCHE BVI, AVALANCHE CAYMAN, THE FOUNDATION AND THEIR RESPECTIVE AGENTS AND ADVISORS, AND THE SUCCESSORS AND ASSIGNS OF THE FOREGOING (“FOUNDATION INDEMNIFIED PARTIES”), FROM AND AGAINST, ALL OR ANY PART OF ANY CAUSES OF ACTION OR CLAIMS BROUGHT BY A THIRD PARTY ARISING OUT OF, RESULTING FROM OR RELATING TO THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING (I) ANY BREACH OR VIOLATION BY THE PURCHASER OR PUBCO OF THIS TSA AND (II) ANY ACT OR OMISSION OF EITHER THE PURCHASER OR PUBCO (INCLUDING ANY MISREPRESENTATION BY EITHER THE PURCHASER OR PUBCO CONCERNING AVALANCHE BVI, AVALANCHE CAYMAN, THE FOUNDATION, THE TOKENS OR TRANSACTIONS CONTEMPLATED HEREIN) (COLLECTIVELY, “FOUNDATION CLAIMS”), AND INDEMNIFY THE FOUNDATION INDEMNIFIED PARTIES FOR ANY LIABILITIES, LOSSES, COSTS, DAMAGES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES) INCURRED BY THE FOUNDATION INDEMNIFIED PARTIES. THE FOREGOING SHALL NOT APPLY TO THE EXTENT SUCH FOUNDATION CLAIMS ARISE FROM THE BAD FAITH, GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT OF AVALANCHE BVI, AVALANCHE CAYMAN OR THE FOUNDATION. ALL INDEMNITY FOUNDATION CLAIMS SHALL BE PAID ON AN “AS INCURRED” BASIS.
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9.3 Limitation of Liability. NONE OF THE PARTIES OR ANY OF THEIR AFFILIATES OR SERVICE PROVIDERS WILL BE LIABLE FOR ANY INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOST PROFITS, LOST REVENUES, LOST SAVINGS, LOST BUSINESS OPPORTUNITY, LOSS OF DATA OR GOODWILL, SERVICE INTERRUPTION, COMPUTER DAMAGE OR SYSTEM FAILURE OR THE COST OF SUBSTITUTE ACTIVITIES OF ANY KIND ARISING OUT OF OR IN CONNECTION WITH THIS TSA OR THE PURCHASER’S PARTICIPATION IN, OR INABILITY TO PARTICIPATE IN, THE PURCHASE OF TOKENS PURSUANT TO THIS TSA, WHETHER BASED ON WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY OR ANY OTHER LEGAL THEORY, AND WHETHER OR NOT THE PARTIES OR ANY OF THEIR RESPECTIVE AFFILIATES HAVE BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGE, EVEN IF A LIMITED REMEDY SET FORTH HEREIN IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, SO THE ABOVE LIMITATION MAY NOT APPLY. IN NO EVENT WILL THE COMPANY’S AND THE FOUNDATION’S COLLECTIVE TOTAL LIABILITY TO THE PURCHASER AND PUBCO ARISING OUT OF OR IN CONNECTION WITH THIS TSA OR FROM THE PURCHASER’S AND PUBCO’S RESPECTIVE PARTICIPATION IN, OR INABILITY TO PARTICIPATE IN, THE PURCHASE OF TOKENS PURSUANT TO THIS TSA, EXCEED THE TOTAL PURCHASE PRICE (AS DENOMINATED IN USD). THE EXCLUSIONS AND LIMITATIONS OF DAMAGES SET FORTH ABOVE ARE FUNDAMENTAL ELEMENTS OF THE BASIS OF THE BARGAIN BETWEEN THE PARTIES HERETO.
9.4 RESERVED.
9.5 Not Registered. Avalanche BVI is not registered with or licensed by the BVI Financial Services Commission (the “BVI FSC”) under the Securities and Investment Business Act, 2010 of the British Virgin Islands (“SIBA”) or otherwise. Avalanche Cayman is not registered with or licensed by the Cayman Islands Monetary Authority (“CIMA”). None of the BVI FSC, the CIMA, nor any other governmental authority in the BVI, Cayman Islands or elsewhere, has passed judgment upon or approved the terms or merits of this TSA or the Token Purchase. There is no investment compensation scheme available in the BVI or the Cayman Islands. Tokens are not being, and may not be, offered to the public or to any person in the BVI or the Cayman Islands for purchase or subscription. Tokens may be offered to companies incorporated under the BVI Business Companies Act, 2004, but only where the offer is made to, and received by, the relevant BVI company entirely outside of the BVI.
| 10 | MISCELLANEOUS |
10.1 Entire Agreement. This TSA, together with the Contribution Agreement and any other documents, instruments and writings that are delivered pursuant hereto or referenced herein, sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior or contemporaneous disclosures, discussions, understandings and agreements, whether oral or written, between them. Other than the update to Exhibit B as set forth in Section 1.2, after the Effective Date this Agreement may not be amended, modified or altered except by a written instrument signed by both parties.
10.2 Termination. In the event the Contribution Agreement is terminated pursuant to Section 3.1 thereof (a) this TSA shall automatically terminate, (b) all Tokens previously delivered to the Purchaser shall be returned to the Company and (c) the Company shall, upon receipt of such returned Tokens, return to the Purchaser the portion of the Total Purchase Price received by the Company as of the date of termination of this Agreement.
10.3 Notices. All notices and other communications given or made pursuant to this TSA shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or (i) personal delivery to the party to be notified; (ii) when sent, if sent by electronic mail or facsimile during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the Purchaser at the address set forth in Table A above and to the Company at the address set forth on the signature page hereto. If notice is given to the Company, it shall be sent to [***], Attention: Legal Department; and a copy (which shall not constitute notice) shall also be sent to Sidley Austin LLP Attention: Lilya Tessler, [***].
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10.4 Confidentiality. The parties acknowledge and agree that the terms of this Agreement, as well as any information disclosed or provided by either party in connection with this Agreement, are subject to the terms and conditions of that certain Mutual Non-Disclosure Agreement entered into between the parties, dated September 5, 2025 (the “NDA”). All information exchanged pursuant to this Agreement shall be deemed “Confidential Information” as defined in the NDA and shall be handled in accordance with the provisions of the NDA. In the event of any conflict between the terms of this Agreement and the NDA with respect to the treatment of Confidential Information, the terms of the NDA shall govern.
10.5 No Rights of a Securityholder. Neither the Purchaser nor Pubco is entitled, as a holder of this TSA or the Tokens, to any rights of a holder of any type of security, including without limitation rights to votes or receive dividends, interest or other distributions or be deemed an equity or debt holder of Avalanche BVI, Avalanche Cayman, the Foundation, or any other Person, including without limitation Ava Labs, for any purpose, nor will anything contained herein be construed to confer on the Purchaser, as such, any such rights any right to vote for the election of directors or upon any matter submitted to the board of directors at any meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings, or to receive subscription rights or otherwise. In addition, the Purchaser is not acquiring any rights to capital appreciation, in the profits or losses of any entity, or an option, futures contract or derivative or swap related to any instrument, and the Purchaser acknowledges that it is solely purchasing the rights to the Tokens to be used as technologically permissible on the Avalanche Network.
10.6 No Rights in any Third Party. Each of the Purchaser and Pubco understands and agrees that this TSA is executed by and among the Purchaser, Pubco and the Company and provides no rights or remedies with respect to any other Person, including without limitation Ava Labs and its Affiliates, any multi-signature wallets securing value on the Avalanche Network, any bridge or similar functionality to or from the Avalanche Network, or any other party developing protocols or products on the Avalanche Network (collectively “Third Parties”). Given the nature of open, decentralized networks including the Avalanche Network, the Purchaser recognizes that it could suffer losses with respect to the Tokens purchased under this TSA and the use of the Avalanche Network because of the acts or omissions of certain Third Parties. Each of the Purchaser and Pubco hereby agrees that no Third Parties shall be liable to either the Purchaser or Pubco, and each of the Purchaser and Pubco will indemnify, defend and hold harmless any Third Parties from and against any Claims for damages to or loss of property arising out of or resulting from the Token Purchase or this TSA. Further, each of the Purchaser and Pubco agrees that no Third Parties will be liable for any incidental, special, exemplary or consequential damages whatsoever arising out of or in connection with the Token Purchase or this TSA.
10.7 Transfers and Assigns. Neither this TSA nor the rights contained herein may be Transferred, by operation of law or otherwise, by a party without the prior written consent of the non-transferring party, such consent not to be unreasonably withheld, provided that the parties may assign this TSA and the rights contained herein to any of its Affiliates without the non-transferring party’s consent.
10.8 Severability. In the event any one or more of the provisions of this TSA is for any reason held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in the event that any one or more of the provisions of this TSA operate or would prospectively operate to invalidate this TSA, then and in any such event, such provision(s) only will be deemed null and void and will not affect any other provision of this TSA and the remaining provisions of this TSA will remain operative and in full force and effect and will not be affected, prejudiced or disturbed thereby.
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10.9 Counterpart. This TSA may be executed in one or more counterparts, each of which shall be deemed an original and all of which taken together shall constitute the one and the same instrument.
10.10 Governing Law. This TSA shall be governed by, and all Disputes shall be resolved in accordance with, the laws of the State of New York (to the exclusion of its conflict of laws rules). The United Nations Convention on Contracts for the International Sale of Goods (“CISG”) shall not apply to this TSA and the Company, the Purchaser and Pubco expressly waive the application of the CISG with respect to this TSA or the Tokens. For purposes of this TSA, “Dispute” means all disputes, differences, causes of action, controversies or claims (whether based on contract, tort, statutory concepts or any other common law or civil law doctrine) arising out of, in connection with or relating to (a) this TSA or any Related Agreement, (b) the Tokens, or (c) the subject matter of this TSA or any Related Agreement, and “Related Agreement” means any other written agreement entered into by and among the Company, Pubco and the Purchaser relating to this TSA or the Tokens.
10.10.1 Dispute Resolution. Any dispute or difference arising between the parties as to the construction of this TSA or as to any matter of whatsoever nature arising hereunder or in connection herewith, including any question regarding its existence, validity or termination, shall first be discussed in good faith with a view to reaching an amicable resolution. Any dispute, controversy or claim arising out of or relating to this contract, including the formation, interpretation, breach or termination thereof, including whether the claims asserted are arbitrable, will be referred to and finally determined by arbitration administered by JAMS in accordance with the JAMS International Arbitration Rules. The Tribunal will consist of three arbitrators. The place of arbitration will be New York. The language to be used in the arbitral proceedings will be English. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.
10.10.2 Within fifteen (15) days after the commencement of arbitration, each party shall select one person to act as arbitrator, and the two so selected shall select a third arbitrator within thirty (30) days of the commencement of the arbitration. If the arbitrators selected by the parties are unable or fail to agree upon the third arbitrator within the allotted time, the third arbitrator shall be appointed by JAMS in accordance with its rules. All arbitrators shall serve as neutral, independent, and impartial arbitrators.
10.10.3 In any arbitration arising out of or related to this TSA, the arbitrator(s) are not empowered to award punitive or exemplary damages against the Company, the Foundation or their affiliates or service providers, except where permitted by statute, and each of the Purchaser and Pubco waives any right to recover any such damages.
10.10.4 In any arbitration arising out of or related to this TSA, the arbitrators may not award any incidental, indirect, or consequential damages, including damages for lost profits, against the Company, the Foundation, their affiliates or service providers, and each of the Purchaser an Pubco waives any right to recover such damages.
10.10.5 In any arbitration arising out of or related to this TSA, the arbitrators shall award to the prevailing party, if any, the costs and attorneys’ fees reasonably incurred by the prevailing party in connection with the arbitration. If the arbitrators determine a party to be the prevailing party under circumstances where the prevailing party won on some but not all of the claims and counterclaims, the arbitrators may award the prevailing party an appropriate percentage of the costs and attorneys’ fees reasonably incurred by the prevailing party in connection with the arbitration.
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10.10.6 The parties shall maintain the confidential nature of the arbitration proceeding and the award, including the hearing, except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as may be necessary in connection with a court application for a preliminary remedy, a judicial challenge to an Award or its enforcement, or unless otherwise required by law or judicial decision.
10.10.7 Consent to Jurisdiction of Specified Courts in Limited Circumstances. The Company, Pubco and the Purchaser unconditionally and irrevocably consent to (a) the exclusive jurisdiction of the courts of the State of New York (the “Specified Courts”) in any action, suit or proceeding (an “Action”) for the enforcement of the arbitration agreement or any provisional remedies or relief, including a preliminary injunction, temporary restraining order, specific performance, attachment or other provisional, preliminary or temporary equitable relief and (b) the non-exclusive jurisdiction of the Specified Courts with respect to the enforcement of any award. The Company, Pubco and the Purchaser unconditionally and irrevocably agree that it shall not bring any Action in any court other than the Specified Court. The Company, Pubco and the Purchaser further expressly waive any objection, and they agree not to plead or claim, that (i) the Specified Courts do not possess personal jurisdiction over the Company, Pubco and the Purchaser, (ii) any such action or proceeding has been brought in an inconvenient forum, or (iii) an injunction or other judicial order (interlocutory or final) should be issued that would have the effect (directly or indirectly) of restraining or impeding the maintenance or prosecution by either Company, Pubco and the Purchaser. The Company, Pubco and the Purchaser further agree that any arbitral award may be enforced by Avalanche BVI or Avalanche Cayman, on the one hand, or Pubco or the Purchaser on the other hand, against the assets of the other party wherever those assets are located, and that any award may be entered into and enforced by any court or tribunal of competent jurisdiction, and that no claim of immunity from such proceedings shall be claimed on behalf of such party or its assets.
10.10.8 Waiver of Jury Trial (If Applicable). Avalanche BVI, Avalanche Cayman, Pubco and the Purchaser each expressly, unconditionally and irrevocably waive their respective rights to a jury trial, if a jury trial would have otherwise been available under applicable law.
10.10.9 No Class Arbitrations, Class/Collective Actions or Representative Actions. Any Dispute arising out of or related to this TSA or the Tokens is personal to the Purchaser, Pubco, Avalanche BVI and Avalanche Cayman and shall be resolved solely through individual arbitration and shall not be brought as a class arbitration, consolidated arbitration, collective action or any other type of representative proceeding. There shall be no class arbitration, consolidated arbitration or arbitration in which an individual attempts to resolve a Dispute as a representative of another individual or group of individuals. Further, a Dispute cannot be brought as a class or other type of representative action, whether within or outside of arbitration, or on behalf of any other individual or group of individuals.
10.10.10 Fees, Costs and Expenses in Connection with the Dispute. Subject to the final adjudication of the Arbitral Tribunal on costs and expenses, each of the Company, on the one hand, and the Purchaser and Pubco on the other hand, shall (a) share equally all fees, costs and expenses of the International Chamber of Commerce and the Arbitral Tribunal, and (b) bear their own attorneys’ fees.
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10.10.11 Confidentiality. Each of the Company, Pubco and the Purchaser shall keep any Arbitration confidential and shall not disclose to any person other than those necessary to the conduct of those proceedings (i) the existence of the Arbitration, (ii) any document, testimony, transcripts or other information submitted, exchanged or created for the Arbitration, or (iii) any decisions, orders or awards of the Arbitral Tribunal, unless such disclosure is (a) required by law or a governmental authority, (b) necessary for a party to seek legal, accounting or other professional services, (d) where such information is already in the public domain other than as a result of a breach of this clause, (d) by order of the Arbitral Tribunal upon application of a party or (e) for the purpose of making a bona fide application to any court of competent jurisdiction relating to any aspect of the Arbitration, including motions to recognize, enforce or challenge an award or interim measure, provided that, in all of the circumstances (a) to (c) above, the producing party takes reasonable measures to ensure that the recipient preserves the confidentiality of the information provided.
10.10.12 Notice. Each of the Company, Pubco and the Purchaser shall notify the other parties in writing of any Dispute within 90 days of the date it arises, so that the Company, Pubco and the Purchaser can attempt in good faith to resolve the Dispute informally. Each of the Purchaser’s and Pubco’s notice must include (1) the Purchaser’s or Pubco’s, as applicable, name, postal address, email address and telephone number, (2) a description in reasonable detail of the nature or basis of the Dispute, and (3) the specific relief that the Purchaser or Pubco, as applicable, is seeking. The Company’s notice must include (1) a description in reasonable detail of the nature or basis of the Dispute, and (2) the specific relief that the Company is seeking. If the Purchaser, Pubco and the Company cannot resolve the Dispute within thirty (30) days after the date notice is received by the applicable party, then either the Purchaser or Pubco, on the one hand, or the Company on the other hand, shall be permitted to avail itself of the procedures set forth in this Section 10.10.
10.10.13 Application of the New York Convention. This TSA, the Tokens and the resulting obligations and relationships are commercial, and the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) applies to this TSA and to any order or arbitral award resulting from any Dispute. Any proceeding in a court of the United States of America shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 to 307, as amended or restated from time to time, and not by the of any U.S. state or local statute or ordinance.
10.10.14 Severability of Dispute Resolution and Arbitration Provisions. If any term, clause or provision of this Section 10.10 is deemed to be illegal, invalid or unenforceable, such provision shall be severed and the remainder of this Section 10.10 shall remain valid, enforceable and of full force and effect. Further, any waivers set forth in this Section 10.10 are severable from the other provisions of this Section 10.10 and shall remain valid and enforceable, except as prohibited by applicable law.
10.11 Additional Assurances. Each of the Purchaser and Pubco shall, and shall cause its affiliates to, from time to time, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably requested by Company or are necessary for the Company, upon the advice of counsel, to carry out the provisions of this TSA and give effect to the transactions contemplated hereby, including, without limitation, to enable the Company to register the Tokens, to enable the Tokens to qualify for or maintain an exemption from registration (to the extent any such exemptions are available), to comply with Money Laundering Laws, or to otherwise complete the transactions contemplated hereby and to comply with applicable laws as then in effect.
10.12 Force Majeure. Without limitation of anything else in this TSA, no Party shall be liable or responsible to any other Party, nor be deemed to have defaulted under or breached this TSA, for any failure or delay in fulfilling or performing any term of this instrument, including without limitation, delivering the Tokens, when and to the extent such failure or delay is caused by or results from acts beyond the affected party’s reasonable control, including, without limitation: (a) acts of God; (b) flood, fire, earthquake or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts or other civil unrest; (d) changes to applicable law; or (e) action by any Governmental Authority.
[signature page follows]
| Avalanche (BVI) - Form Token Sale Agreement (U.S.) | ||
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IN WITNESS WHEREOF, the undersigned have caused this instrument to be duly executed and delivered.
| AVALANCHE (BVI), INC | ||
| By: | ||
| Name: | ||
| Title: | ||
| Email: | [***] | |
| AVALANCHE CAYMAN | ||
| By: | ||
| Name: | ||
| Title: | ||
| Email: | [***] | |
| Avalanche (BVI) - Form Token Sale Agreement (U.S.) | ||
IN WITNESS WHEREOF, the undersigned have caused this instrument to be duly executed and delivered.
| AVALANCHE TREASURY COMPANY LLC | ||
| By: | ||
Wallet Address: 0x7f74475783a0c8586cC469D10B2f4afC280a0a08
| Avalanche (BVI) - Form Token Sale Agreement (U.S.) | ||
IN WITNESS WHEREOF, the undersigned have caused this instrument to be duly executed and delivered.
| AVALANCHE TREASURY CORPORATION | ||
| By: | ||
| Avalanche (BVI) - Form Token Sale Agreement (U.S.) | ||
EXHIBIT A
THE OFFER AND SALE OF THE TOKENS DESCRIBED HEREIN HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OR FOREIGN JURISDICTION. THIS TRANSACTION IS BEING MADE ONLY WITHIN THE UNITED STATES TO “ACCREDITED INVESTORS” (AS DEFINED IN SECTION 501 OF THE SECURITIES ACT). THE TOKENS MAY NOT BE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER APPLICABLE STATE AND FOREIGN LAWS.
The Purchaser hereby agrees and represents to the Company as follows:
1. The Purchaser understands that the Tokens may be deemed to bear the following legend (and even without this legend the restrictions imposed by Section 4 above continue to apply):
THE TOKENS PURCHASED HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OR FOREIGN JURISDICTION. THIS SALE IS BEING MADE ONLY TO “ACCREDITED INVESTORS” (AS DEFINED IN SECTION 501 OF THE SECURITIES ACT). THE TOKENS MAY NOT BE TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE AND FOREIGN SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, UNLESS SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT. THE TOKENS HAVE BEEN ACQUIRED TO HOLD FOR THE LONG TERM AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
2. The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act (i.e., (a) a natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his or her purchase exceeds $1,000,000, (b) a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those two years and has a reasonable expectation of reaching the same income level in the current year, (c) a corporation, limited liability company or partnership having total assets in excess of $5,000,000 that was not formed for the purpose of purchasing the Tokens pursuant to this TSA, or (d) otherwise meets the requirements for an “accredited investor” under Regulation D promulgated by the Securities and Exchange Commission under the Securities Act). The Purchaser has accurately and completely completed the accredited investor verification process required by the Company, if any.
3. The Purchaser is acquiring the Tokens solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof.
4. The Purchaser has been advised that, to the extent applicable, Rule 144 promulgated under the Securities Act, which permits certain limited sales of unregistered securities, is not presently available with respect to the Tokens, were they to be deemed securities, and in any event requires that the Tokens generally be held for a minimum of one (1) year after they have been purchased and paid for (within the meaning of Rule 144), before they may be resold under Rule 144.
5. Neither (i) the Purchaser, (ii) any of its directors, executive officers, other officers that may serve as director or officer of any company in which it invests, general partners or managing partners, nor (iii) any beneficial owner of the voting equity securities of the Purchaser (in accordance with Rule 262 of the Securities Act) is subject to of the disqualifying events listed in Rule 506(d)(1) of Regulation D under the Securities Act (a “Purchaser Event”), and there is no proceeding or investigation pending or, to the knowledge of Purchaser, threatened by any governmental authority, that would reasonably be expected to become the basis for a Purchaser Event.
| Avalanche (BVI) - Form Token Sale Agreement (U.S.) | ||
EXHIBIT B
|
|
Number of Tokens |
| Avalanche BVI | 4,573,728.51 |
| Avalanche Cayman | 2,744,237.10 |
| Total | 7,317,965.61 |
| Avalanche (BVI) - Form Token Sale Agreement (U.S.) | ||