Nexentis Technologies Inc 8-K, filed Apr 6, 2023
Nexentis Technologies Inc. (NXTS)
About this 8-K
Nexentis Technologies Inc filed this 8-K on April 6, 2023.
Items reported
- Item 1.01: Entered into a material agreement
- Item 3.02: Unregistered sale of equity
- Item 5.02: Director or officer change, or executive pay
- 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):
(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) | (Zip Code) |
(Registrant’s telephone number, including area code)
N/A
(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) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||
| 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.
| -2- |
Item 1.01 Entry into a Material Definitive Agreement.
On March 31, 2023, Save Foods, Inc. (the “Company” or “Save Foods”), entered into a securities exchange agreement (the “Agreement”), with Plantify Foods, Inc., a British Columbia company (“Plantify”), pursuant to which each of the respective parties agreed to issue to the opposite party 19.99% of its issued and outstanding capital stock. The Company and Plantify each determined that the anticipated synergy of the opposite party presented a mutual benefit, primarily through certain potential collaborative efforts in both R&D and sales and marketing. The parties closed the Agreement on April 5, 2023 (the “Closing”).
The Agreement contained customary representations, warranties and agreements by each of the Company and Plantify. The representations, warranties and covenants contained in the Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement and were subject to limitations agreed upon by the contracting parties.
Upon the Closing, Save Foods issued 1,164,374 shares of common stock of Save Foods to Plantify, which amount represented 19.99% of Save Foods’ outstanding capital stock as of immediately prior to the Closing (and 16.66% of Save Foods’ outstanding capital stock as of immediately following the Closing), and Plantify issued 30,004,349 common shares of Plantify to Save Foods.
The Agreement is filed as Exhibit 1.1 hereto and is incorporated herein by reference. The foregoing descriptions of the terms of the Agreement are qualified in their entirety by reference to such exhibits.
In connection with, and contingent upon, the execution of the Agreement, Save Foods and Plantify executed a debenture (the “Debenture”), whereby Save Foods agreed to lend C$1,500,000 to Plantify (the “Principal”), which Principal will accrue interest at a rate of 8% annually and will be repayable by Plantify over approximately 18 months. The Debenture has a maturity date of October 4, 2024. The Principal may be converted, at the sole discretion of Save Foods, into common shares of Plantify at a price of C$0.05 per share until the first anniversary of the Debenture issuance date and C$0.10 per share thereafter. The accrued interest may be converted at the market price of Plantify’s common shares, subject to TSXV approval at the time of conversion. Plantify will execute a general security agreement in favor of Save Foods and will specifically pledge to Save Foods the shares of Plantify’s subsidiary, Peas of Bean Ltd.
If the Principal under the Debenture is converted in the first year into 30,000,000 Plantify common shares, and assuming no further Plantify common shares are issued following the Agreement, Save Foods will hold approximately 28.56% of Plantify’s outstanding common shares. Accordingly, closing of the Debenture is subject to the approval of Plantify’s shareholders.
The Debenture is filed as Exhibit 1.2 hereto and is incorporated herein by reference. The foregoing descriptions of the terms of the Debenture are qualified in their entirety by reference to such exhibits.
Item 3.02 Unregistered Sales of Securities Convertible or Exercisable into Equity Securities
The information regarding the issuance of securities set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
In accordance with the terms of the Agreement, Save Foods issued to Plantify 1,164,374 shares of common stock, par value $0.0001 per share, upon the Closing.
The shares of common stock described in this Item 3.02 of this Current Report on Form 8-K have been or will be issued in reliance upon the exemption from the registration requirements in Regulation S under the Securities Act.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
In connection with the terms of the Agreement, Save Foods agreed to appoint, effective upon the Closing of the Agreement, Dr. Roy Borochov, Chief Executive Officer of Plantify, as a Class II director of the Company.
| -3- |
The biographical information for Dr. Borochov appears below:
Dr. Roy Borochov, age 48, has served as a Class II director of the Company since April 5, 2023. Since December 2020, Dr. Borochov has also served as the chief executive officer of Mercury Investment Fund and the founder and owner of OLEA since 2000. Dr. Borochov has also served as chairman of ParaZone Drone Safety Systems since February 2022 and as a member of the board of directors of Peas of Bean since March 2021. Prior to that, from September 2018 to September 2020, Dr. Borochov was the Head of Agriculture at Prospera Technologies Ltd., and from November 2016 to September 2017, he served as chief technology officer and project co-lead of Forrest Innovations Ltd. Prior to that, from January 2015 to September 2017, Dr. Borochov served as the president of Forrest Innovations USA Inc., and from 2009 to 2015, he served in various roles at the Israeli Bio Organic Agriculture Association, including as its chief executive officer and chief orchard instructor. Dr. Borochov holds a Ph.D, M.Sc. and B.Sc. in Plant Science from the Hebrew University of Jerusalem.
Other than that which is disclosed herein, there are no arrangements or understandings between Dr. Borochov and any other persons pursuant to which he was appointed to serve as a Class II director of the Company and there are no family relationships between Dr. Borochov and any director or executive officer of the Company. Dr. Borochov has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Item 8.01 Other Events
On March 31, 2023, the Company issued a press release announcing the signing of the Agreement. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
Exhibit Description | |
| 1.1 | Securities Exchange Agreement, by and between Save Foods, Inc. and Plantify Foods, Inc., dated March 31, 2023 | |
| 1.2 | Debenture, by and between Save Foods, Inc. and Plantify Foods, Inc. | |
| 99.1 | Press Release dated March 31, 2023 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Save Foods, Inc. | ||
| Date: April 6, 2023 | By: | /s/ David Palach |
| Name: | David Palach | |
| Title: | Chief Executive Officer | |
Exhibit 1.1
SECURITIES EXCHANGE AGREEMENT
This SECURITIES EXCHANGE AGREEMENT (the “Agreement”) is entered into as of March 31, 2023 by and among Save Foods, Inc., a Delaware corporation, with an office address of HaPardes 134 (Meshek Sander), Neve Yarak, Israel (“Save Foods”) and Plantify Foods, Inc., a British Columbia company, with an office address of 2264 East 11th Avenue, Vancouver, Canada (“Plantify”). Save Foods and Plantify are each a “Party” and collectively, the “Parties”.
WHEREAS, each of the Parties has evaluated the opposite Party’s business and operations, and has determined that the anticipated synergy of the two Parties presents a mutual benefit to each of the Parties and their respective stockholders, primarily through certain collaborative efforts in both research and development as well as sales and marketing, which the Parties anticipate to occur following, and contingent upon, the Closing (as defined herein) of the transactions contemplated hereunder; and
WHEREAS, each of the Parties believes that it is in its best interests, and the best interests of its respective stockholders, to exchange (the “Exchange”) such number of shares of common stock of each respective party, such that, and in consideration thereof, immediately upon the Closing Date, Save Foods shall be issued 19.99% of the issued and outstanding capital stock of Plantify as of immediately prior to the Closing (as defined herein) (the “Plantify Exchange Shares”) and Plantify shall be issued 19.99% of the issued and outstanding capital stock of Save Foods as of immediately prior to the Closing (the “Save Foods Exchange Shares” and together with the Plantify Exchange Shares, the “Exchange Shares”), all upon the terms and subject to the conditions set forth in this Agreement.
NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the Parties to be derived herefrom, and intending to be legally bound hereby, the Parties hereby agree as follows:
ARTICLE I
SECURITIES EXCHANGE
Section 1.01 The Exchange. On the terms and subject to the conditions set forth in this Agreement, on the Closing Date, Save Foods shall issue to Plantify, and Plantify shall issue to Save Foods, the Exchange Shares.
Section 1.02 Closing. The closing (the “Closing”) of the transactions contemplated by this Agreement (the “Transactions”) shall take place on such date that all conditions precedent and obligations of the Parties to consummate such Transactions contemplated hereby, including as set forth in Section 1.03, are satisfied or waived by the respective Party, at such location to be determined by the Parties (the “Closing Date”). Either Party may terminate this Agreement in the event that the Closing Date shall not have occurred within thirty (30) days of the date hereof (such date referred to herein as the “Outside Date”); provided, however, that the right to terminate this Agreement pursuant to this Section shall not be available to any party hereto (i) whose actions or omissions have been a principal cause of, or primarily resulted in, the failure of the Closing to occur on or before such date and such action or failure to act constitutes a breach of this Agreement or (ii) that is in material breach of this Agreement.
Section 1.03 Conditions to Closing. The respective obligations of each of the Parties to effect the Closing shall be subject to the satisfaction at or prior to the Closing of each of the following conditions:
(a) Board Appointment. Effective as of the Closing Date, a designee of Save Foods shall be appointed to the board of directors of Plantify, and a designee of Plantify shall be appointed to the board of directors of Save Foods (which shall be subject to the ratification of such by the stockholders of Save Foods following the Closing).
(b) Public Reports. Each of the Parties shall have filed all reports and other documents required to be filed by it under the securities laws of the United States or Canada, as applicable, through the Closing Date.
(c) Continued Listing. Save Foods shall have maintained its listing on the Nasdaq Capital Market (Nasdaq: SVFD) and Plantify shall have maintained its listing on the TSX Venture Exchange (TSXV: PTFY), and no reason shall exist as to why such status shall not continue immediately following the Closing, unless otherwise disclosed in writing to the opposite Party prior to the Closing.
| - 2 - |
(d) No Suspensions of Trading. Trading in the shares of common stock of each of Save Foods and Plantify shall not have been suspended by federal regulators, or the jurisdictional equivalent, or any trading market at any time prior to the Closing.
(e) Good Standing Certificate. Save Foods shall have delivered to Plantify a certificate of good standing and Plantify shall have delivered a certificate of good standing (or the jurisdictional equivalent thereof), issued within two (2) business days of Closing, which certificate shall have been issued by the governing entity of the relevant jurisdiction.
(f) No Injunctions. In connection with each of Save Foods and Plantify, no statute, rule, regulation, order, decree, ruling or injunction shall have been enacted, entered, promulgated, endorsed or threatened or is pending by or before any governmental authority of competent jurisdiction which in any material respect restricts, prohibits or threatens to restrict or prohibit the consummation of any of the transactions contemplated herein.
(g) Regulation S Questionnaire. Plantify shall have delivered to Save Foods a duly completed and executed Annex “A” – Regulation S Questionnaire, and Save Foods shall have delivered to Plantify a duly completed and executed Annex “B” – Accredited Investor Certificate (Canada).
(h) Stock Exchange Approval. Plantify shall have received TSX Venture Exchange approval with respect to the (i) issuance of the Plantify Exchange Shares and (ii) the filing of this Agreement.
(i) Advancement of Loan Proceeds. Save Foods shall have advanced to Plantify the loan proceeds, being the sum of C$1,500,000, pursuant to a convertible debenture to be delivered by Plantify to Save Foods at the Closing.
(j) Representations and Warranties. The representations and warranties made by each of the Parties herein shall be true and correct in all material respects as of the date hereof and as of the Closing with the same effect as if the representations and warranties were made as of the date hereof and as of the Closing.
(k) Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by either Party on or prior to the Closing shall have been performed or complied with in all material respects.
With respect to the closing conditions listed in (j) and (k) above, the Parties shall deliver at the Closing an executed officer’s certificate to such effect.
Section 1.04 Taxes. Save Foods and Plantify shall separately bear the tax consequences arising from the issuances of common stock.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SAVE FOODS
Save Foods represents and warrants to, and covenants with, Plantify that, as of the date hereof, except for those representations and warranties and covenants that speak of a different date:
Section 2.01 Save Foods Exchange Shares. The Save Foods Exchange Shares shall represent 19.99% of the issued and outstanding share capital of Save Foods as of the Closing Date (on a pre-Closing basis immediately prior to the Closing).
Section 2.02 Organization, Standing and Corporate Power of Save Foods. Save Foods is duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to own, lease and operate its properties and other assets and to carry on its business as now being conducted. Save Foods is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a Material Adverse Effect with respect to Save Foods. As used in this Agreement, the term “Material Adverse Effect” or “Material Adverse Change” shall mean any change or effect that either individually or in the aggregate with all other such changes or effects is materially adverse to the business, assets, properties, condition (financial or otherwise) or results of operations of each of the Parties taken as a whole.
| - 3 - |
Section 2.03 Capital Structure. The authorized capital stock of Save Foods consists of (i) 495,000,000 shares of common stock, $0.0001 par value, of which (a) 5,806,219 shares are issued and outstanding as of the date of the hereof and (b) 286,261 shares of common stock underlying options or warrants of which are outstanding as of the date hereof and (c) 178,000 shares of common stock that Save Foods has committed to issue to certain recipients following the date hereof, and (ii) 5,000,000 shares of preferred stock, $0.0001 par value, of which none are issued and outstanding. Except as disclosed in the Save Foods Reports (as defined below) and as set forth herein, there are no outstanding bonds, debentures, notes or other indebtedness or other securities of Save Foods having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters of which stockholders of Save Foods are entitled to vote on. Except as disclosed in Save Foods Reports and as set forth herein, there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which Save Foods is a party or by which it is bound obligating Save Foods to issue, deliver or sell, or cause to be issued, delivered or sold, additional common stock of Save Foods or other equity or voting securities of Save Foods or obligating Save Foods to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of Save Foods to repurchase, redeem or otherwise acquire or make any payment in respect of any common stock of Save Foods or any other securities of Save Foods. There are no agreements or arrangements pursuant to which Save Foods is or could be required to register Save Foods’ common stock or other securities under the Securities Act of 1933, as amended (the “Securities Act”) or other agreements or arrangements with or among any holders of Save Foods or with respect to any securities of Save Foods. The issuance of the Save Foods Exchange Shares will not trigger any anti-dilution rights of any existing securities of Save Foods.
Section 2.04 Authority; Non-Contravention. Save Foods has all requisite authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Save Foods and the consummation by Save Foods of the transactions contemplated by this Agreement have been (or at Closing will have been) duly authorized by all necessary corporate action on the part of Save Foods. This Agreement has been duly executed and delivered by and constitutes a valid and binding obligation of Save Foods, enforceable in accordance with its terms. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions of this Agreement will not, conflict with, or result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of Save Foods under, (i) the charter documents of Save Foods, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to Save Foods or their respective properties or assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule, regulation or arbitration award applicable to Save Foods or their respective properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, defaults, rights, losses or liens that individually or in the aggregate could not have a Material Adverse Effect with respect to Save Foods or could not prevent, hinder or materially delay the ability of Save Foods to consummate the transactions contemplated by this Agreement. No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any governmental entity is required by or with respect to Save Foods in connection with the execution and delivery of this Agreement by Save Foods or the consummation by Save Foods, as the case may be, of any of the transactions contemplated by this Agreement.
Section 2.05 Company Reports. Since January 1, 2021, Save Foods has filed all forms, reports and documents with the U.S. Securities and Exchange Commission (“SEC”) that have been required to be filed by it under applicable laws prior to the date hereof (all such forms, reports and documents, together with all documents filed or furnished on a voluntary basis and all exhibits and schedules thereto, the “Save Foods Reports”). As of its filing date (or, if amended or superseded by a filing prior to the date of this Agreement, on the date of such amended or superseded filing), (i) each Save Foods Report complied as to form in all material respects with the applicable requirements of the Securities Act, the Exchange Act, and/or the Sarbanes-Oxley Act, as the case may be, each as in effect on the date such Save Foods Report was filed, and (ii) each Save Foods Report did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. To the knowledge of Save Foods, none of the Save Foods Reports is the subject of ongoing SEC review or investigation. The financial statements included in the Save Foods Reports comply in all material respects with the applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. The financial statements included in the Save Foods Reports have been prepared in accordance with generally accepted accounting principles in the United States applied on a consistent basis (“GAAP”), and fairly represent the financial position of Save Foods and as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments and the omission of certain footnotes. Except as set forth in the Save Foods Reports, Save Foods has no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a balance sheet of Save Foods or in the notes thereto. As of the Closing, all liabilities of Save Foods shall have been paid off and shall in no event remain liabilities of Save Foods following the Closing, other than immaterial liabilities that will be scheduled prior to the Closing Date.
| - 4 - |
Section 2.06 Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or, to the knowledge of Save Foods, threatened against Save Foods. Save Foods is not subject to any order, writ, judgment, injunction, decree or award of any court or any governmental authority.
Section 2.07 Compliance. Save Foods has not been advised, nor does Save Foods have reason to believe, that it is not conducting its business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting its business.
Section 2.08 Material Agreements. All material agreements to which Save Foods is a party are included as part of or specifically identified in the Save Foods Reports to the extent required by the rules and regulations of the SEC as in effect at the time of filing (“Save Foods Material Agreements”). Except for the Save Foods Material Agreements, Save Foods has no material contracts. To Save Foods’ Knowledge, neither Save Foods nor any other party to the Save Foods Material Agreements, is in breach of or default under any of such contracts.
Section 2.9 Taxes. Except as disclosed in the Save Foods Reports, Save Foods has filed all necessary federal, state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and Save Foods has no knowledge of a tax deficiency which has been or might be asserted or threatened against it.
Section 2.10 Conformity of Descriptions. The Save Foods Exchange Shares, when issued, will conform in all material respects to the descriptions of Save Foods’ shares of common stock contained in the Save Foods Reports and other filings with the SEC.
Section 2.11 Disclosure Controls. Save Foods has disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934, as amended) that are designed to ensure that material information relating to Save Foods is made known to Save Foods’ principal executive officer and Save Foods’ principal financial officer or persons performing similar functions.
Section 2.12 Acquisition of Plantify Capital Stock for Investment.
(a) Purchase Entirely for Own Account. Plantify Exchange Shares proposed to be acquired by Save Foods hereunder will be acquired for investment for Save Foods’ own account and not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and Save Foods has no present intention of selling, granting any participation in or otherwise distributing the Plantify Exchange Shares, except in compliance with applicable securities laws. Save Foods further represents that it does not have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participation to such Person with respect to the Plantify Exchange Shares. For purposes of this Agreement, “Person” means any individual, partnership, corporation, association, joint stock company, trust, joint venture, unincorporated organization or governmental entity (or any department, agency or political subdivision thereof) or other entity.
(b) Save Foods (i) can bear the economic risk of its investment and (ii) possesses such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its investment in Plantify and its securities.
(c) Save Foods understands that the Plantify Exchange Shares will be issued pursuant to an exemption from the requirement to provide Save Foods with a prospectus and as a result (i) certain protections, rights and remedies provided by BC Securities Laws, including statutory rights of rescission and certain statutory remedies against an issuer, auditors, directors and officers that are available to investors who acquire securities offered by a prospectus, will not be available to Save Foods, (ii) the common law may not provide investors with an adequate remedy in the event that they suffer investment losses in connection with securities acquired in a private placement, (iii) Save Foods may not receive information that would otherwise be required to be given under BC Securities Laws, and (iv) Plantify is relieved from certain obligations that would otherwise apply under BC Securities Laws. Save Foods represents and warrants that it is an “accredited investor,” as such term is defined in the National Instrument 45-106 Prospectus Exemptions. The certificates or direct registration system ownership statement representing the Plantify Exchange Shares issued to Save Foods shall be endorsed with the following legends, in addition to any other legend required to be placed thereon by applicable securities laws:
| - 5 - |
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [INSERT THE DATE WHICH IS FOUR MONTHS AND ONE DAY AFTER THE CLOSING DATE WILL BE INSERTED].”
And may also bear a legend substantially in the following form:
“WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL [INSERT DATE THAT IS 4 MONTHS AND A DAY AFTER THE DISTRIBUTION DATE]”.
(d) Save Foods acknowledges that neither Plantify nor any of its directors, employees, officers, affiliates or agents has made any written or oral representations (i) that any person will resell or repurchase the Plantify Exchange Shares, (ii) that any person will refund all or any part of the consideration paid by Save Foods for the Plantify Exchange Shares, (iii) as to the future price or value of the Plantify Exchange Shares, or (iv) there are risks associated with the purchase of the Plantify Exchange Shares and no securities commission, agency, governmental authority, regulatory body, stock exchange or similar authority has reviewed or passed on the merits of the Plantify Exchange Shares or made any recommendations or endorsement with respect to the Plantify Exchange Shares.
(e) Save Foods acknowledges that it has carefully reviewed such information as it has deemed necessary to evaluate an investment in Plantify and its securities. To the full satisfaction of Save Foods, it has been furnished all materials that it has requested relating to Plantify and the issuance of the Plantify Exchange Shares hereunder.
(f) Save Foods’ ability to transfer the Plantify Exchange Shares is limited by, among other things, applicable securities laws and the policies of the TSX Venture Exchange. In particular, Save Foods acknowledges having been informed that the Securities are subject to resale restrictions under National Instrument 45-102 Resale of Securities (“NI 45-102”) and may not be sold or otherwise disposed of in Canada for a period of four months and one day from the date of distribution of the Plantify Exchange Shares, unless a statutory exemption is available or a discretionary order is obtained from the applicable securities commission allowing the earlier resale thereof, and may be subject to additional resale restrictions if such sale or other disposition would be a “control distribution”, as that term is defined in NI 45-102.
(g) Save Foods acknowledges that the Plantify Exchange Shares have not been and will not be registered under the Securities Act or the securities laws of any state of the United States and that the Plantify Exchange Shares may not be offered, pledged, sold, assigned or otherwise transfered, directly or indirectly, to, or for the account or benefit of, a person in the United States or a U.S. person without registration under the Securities Act and applicable state securities laws or compliance with the requirements of an exemption from such registration, and it acknowledges that Plantify has no present intention of filing or obligation to file a registration statement under the Securities Act or applicable state securities laws in respect of the issuance or resales of such securities. “United States” and “U.S. person” have the respective meanings assigned to such terms in Rule 902 of Regulation S (“Regulation S”) under the Securities Act.
Section 2.13 [intentionally left blank]
Section 2.14 Additional Financing. Save Foods is aware that: (i) Plantify may complete additional financings in the future in order to develop its business and to fund its ongoing development; (ii) there is no assurance that such financings will be available and, if available, on reasonable terms; (iii) any such future financings may have a dilutive effect on Plantify’s securityholders, including Save Foods; and (iv) if such future financings are not available, Plantify may be unable to fund its on-going development and the lack of capital resources may result in the failure of Plantify’s business.
| - 6 - |
Section 2.15 Disclosure. All disclosure provided to Plantify regarding Save Foods, its business and the transactions contemplated hereby, including the exhibits to this Agreement, furnished by Save Foods with respect to the representations and warranties made herein are true and correct with respect to such representations and warranties and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PLANTIFY
Plantify represents and warrants to Save Foods that, as of the date hereof, except for those representations and warranties that speak of a different date:
Section 3.01 Plantify Exchange Shares. The Plantify Exchange Shares shall represent 19.99% of the issued and outstanding share capital of Plantify as of the Closing Date (on a pre-Closing basis immediately prior to the Closing).
Section 3.02 Organization, Standing and Corporate Power of Plantify. Plantify is duly incorporated, validly existing and in good standing under the laws of British Columbia with respect to the filing of annual reports with the Registrar of Companies for British Columbia and has the requisite corporate power and authority to own, lease and operate its properties and other assets and to carry on its business as now being conducted. Plantify is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a Material Adverse Effect with respect to the Company. Plantify is a “reporting issuer” in the Provinces of British Columbia, Alberta and Ontario, and its common shares are listed and posted for trading on the TSX Venture Exchange.
Section 3.03 Capital Structure. The authorized capital stock of Plantify consists of an unlimited number of common shares without par value, of which 150,096,794 shares are issued and outstanding as of the date hereof. Except as disclosed in the Plantify Reports (as defined below), there are no outstanding bonds, debentures, notes or other indebtedness or other securities of Plantify having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters of which stockholders of Plantify are entitled to vote on. Except as disclosed in Plantify Reports, there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which Plantify is a party or by which it is bound obligating Plantify to issue, deliver or sell, or cause to be issued, delivered or sold, additional common stock of Plantify or other equity or voting securities of Plantify or obligating Plantify to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of Plantify to repurchase, redeem or otherwise acquire or make any payment in respect of any common stock of Plantify or any other securities of Plantify. There are no agreements or arrangements pursuant to which Plantify is or could be required to register Plantify’s common stock or other securities under the Securities Act or other agreements or arrangements with or among any holders of Plantify or with respect to any securities of Plantify. The issuance of the Plantify Exchange Shares will not trigger any anti-dilution rights of any existing securities of Plantify. The Plantify Exchange Shares will, at the time of issue, be duly allotted, validly issued, fully paid and non-assessable and will be free of all liens, charges and encumbrances.
| - 7 - |
Section 3.04 Authority; Non-Contravention. Plantify has all requisite authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The individual signing this Agreement on behalf of Plantify has been duly authorized by Plantify to do so. The execution and delivery of this Agreement by Plantify and the consummation by Plantify of the transactions contemplated by this Agreement have been (or at Closing will have been) duly authorized by all necessary corporate action on the part of Plantify. This Agreement has been duly executed and delivered by and constitutes a valid and binding obligation of Plantify, enforceable in accordance with its terms. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions of this Agreement will not, conflict with, or result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of Plantify under, (i) the charter documents of Plantify, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to Plantify or their respective properties or assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule, regulation or arbitration award applicable to Plantify or their respective properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, defaults, rights, losses or liens that individually or in the aggregate could not have a Material Adverse Effect with respect to the Company or could not prevent, hinder or materially delay the ability of Plantify to consummate the transactions contemplated by this Agreement. No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any governmental entity is required by or with respect to Plantify in connection with the execution and delivery of this Agreement by Plantify or the consummation by Plantify, as the case may be, of any of the transactions contemplated by this Agreement.
Section 3.05 Company Reports. Since January 1, 2021, Plantify (or any preceding entity) has filed all forms, reports and documents with the securities regulatory authorities pursuant to the requirements of the applicable securities laws (all such forms, reports and documents, together with all documents filed or furnished on a voluntary basis and all exhibits and schedules thereto, the “Plantify Reports”). As of its filing date (or, if amended or superseded by a filing prior to the date of this Agreement, on the date of such amended or superseded filing), (i) each Plantify Report complied as to form in all material respects with the applicable requirements of securities laws of British Columbia and the respective rules and regulations under such laws together with applicable published instruments, policy statements, notices and orders of the British Columbia Securities Commission (collectively, “BC Securities Laws”) as in effect on the date such Plantify Report was filed, and (ii) each Plantify Report did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. To the knowledge of Plantify, none of the Plantify Reports is the subject of ongoing review or investigation by the British Columbia Securities Commission (the “BCSC”). The financial statements included in the Plantify Reports comply in all material respects with the applicable accounting requirements and the rules and regulations of the BCSC with respect thereto as in effect at the time of filing. The financial statements included in the Plantify Reports have been prepared in accordance with IFRS and fairly represent the financial position of Plantify and as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments and the omission of certain footnotes. Except as set forth in the Plantify Reports, Plantify has no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by IFRS to be set forth on the statements of financial position of Plantify or in the notes thereto. Schedule 3.05 of this Agreement sets forth an exhaustive list of all liabilities of Plantify as of the time of Closing.
Section 3.06 Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or, to the knowledge of Plantify, threatened against Plantify. Plantify is not subject to any order, writ, judgment, injunction, decree or award of any court or any governmental authority.
Section 3.07 Compliance. Plantify has not been advised, nor does Plantify have reason to believe, that it is not conducting its business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting its business.
Section 3.08 Material Agreements. All material agreements to which Plantify is a party are included as part of or specifically identified in the Plantify Reports to the extent required by BC Securities Laws as in effect at the time of filing (“Plantify Material Agreements”). Except for the Plantify Material Agreements, Plantify has no material contracts. To Plantify’s Knowledge, neither Plantify nor any other party to the Plantify Material Agreements, is in breach of or default under any of such contracts.
Section 3.9 Taxes. Except as disclosed in the Plantify Reports, Plantify has filed all necessary federal, state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and Plantify has no knowledge of a tax deficiency which has been or might be asserted or threatened against it.
Section 3.10 Conformity of Descriptions. The Plantify Exchange Shares, when issued, will conform in all material respects to the descriptions of Plantify’s common shares stock contained in the Plantify Reports.
| - 8 - |
Section 3.11 [intentionally left blank]
Section 3.12 [intentionally left blank]
Section 3.13 Acquisition of Save Foods Capital Stock for Investment.
(a) Purchase Entirely for Own Account. Save Foods Exchange Shares proposed to be acquired by Plantify hereunder will be acquired for investment for Plantify’s own account and not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and Plantify has no present intention of selling, granting any participation in or otherwise distributing the Save Foods Exchange Shares, except in compliance with applicable securities laws. Plantify further represents that it does not have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participation to such Person with respect to the Save Foods Exchange Shares.
(b) Plantify (i) can bear the economic risk of its investment and (ii) possesses such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its investment in Save Foods and its securities.
(c) Plantify understands that the sale of the Save Foods Exchange Shares is not registered under the Securities Act and that the issuance hereof to Plantify is intended to be exempt from registration under the Securities Act pursuant to Regulation S promulgated thereunder (“Regulation S”). Plantify is, and on each date on which it exercises any warrants to purchase shares of Save Foods common stock, it will be either (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8), (a)(9) or (a)(12) under the Securities Act or, if not an accredited investor, otherwise meets the suitability requirements of Regulation D and Section 4(a)(2) of the Securities Act; (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act; or (iii) a “non-US person,” as such term is defined in Regulation S and as set forth in Annex A hereto. The certificates representing the Save Foods Exchange Shares issued to Plantify shall be endorsed with the following legends, in addition to any other legend required to be placed thereon by applicable securities laws:
“[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE] HAS [NOT] BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES [AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY] NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT, AND BASED ON AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT THE PROVISIONS OF REGULATION S HAVE BEEN SATISFIED, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (3) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES [OR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY] MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”
(d) Plantify acknowledges that neither the SEC, nor the securities regulatory body of any state or other jurisdiction, has received, considered or passed upon the accuracy or adequacy of the information and representations made in this Agreement.
(e) Plantify acknowledges that it has carefully reviewed such information as it has deemed necessary to evaluate an investment in Save Foods and its securities. To the full satisfaction of Plantify, it has been furnished all materials that it has requested relating to Save Foods and the issuance of the Save Foods Exchange Shares hereunder.
| - 9 - |
(f) Plantify understands that the Save Foods Exchange Shares may not be sold, transferred, or otherwise disposed of without registration under the Securities Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Save Foods Exchange Shares or any available exemption from registration under the Securities Act, the Save Foods Exchange Shares may have to be held indefinitely and Plantify further acknowledges that the Save Foods Exchange Shares may not be sold pursuant to Rule 144 promulgated under the Securities Act unless all of the conditions of Rule 144 are satisfied, including, without limitation, Plantify’s compliance with the reporting requirements under the Exchange Act.
(g) Plantify has conducted its own investigation with respect to Save Foods, its business and the Save Foods Exchange Shares; has received or otherwise had access to all information regarding Save Foods that it believes is necessary or appropriate in connection with the purchase of the Save Foods Exchange Shares, including financial and other information which has been publicly filed by Save Foods with the SEC through EDGAR; (c) has made its own assessment and has satisfied itself concerning the relevant tax, legal, currency and other considerations relevant to its investment in Save Foods; and (d) has such knowledge and experience in financial and business matters in order to evaluate the merits and risks of its prospective investment in Save Foods.
(h) Plantify is a British Columbia company, and:
| (i) | is not a U.S. Person and is not purchasing the Save Foods Exchange Shares for the account of or benefit of a U.S. Person or a person within the United States; | |
| (ii) | was not offered the Save Foods Exchange Shares in the United States; | |
| (iii) | did not execute or deliver this Agreement, in the United States; | |
| (iv) | did not cause any buy order for the Save Foods Exchange Shares to originate in the United States; | |
| (v) | has no intention to distribute either directly or indirectly any of the Save Foods Exchange Shares in the United States, and Plantify will not offer, sell or otherwise transfer, directly or indirectly, any of the Save Foods Exchange Shares in the United States or to, or for the account or benefit of, a U.S. Person or person in the United States except pursuant to registration under the 1933 Act and the securities laws of all applicable states, or pursuant to available exemptions therefrom; | |
| (vi) | did not receive the offer to purchase the Save Foods Exchange Shares as a result of, nor will it engage in, any directed selling efforts (as defined in Regulation S); | |
| (vii) | is a “non-US person” as defined in Regulation S as promulgated under the Securities Act. |
Section 3.14 Additional Legend; Consent. Additionally, the Save Foods Exchange Shares will bear any legend required by the “blue sky” laws of any state to the extent such laws are applicable to the securities represented by the certificate so legended and Plantify consents to Save Foods making a notation on its records or giving instructions to any transfer agent of the Save Foods Exchange Shares in order to implement the restrictions on transfer of the Save Foods Exchange Shares.
Section 3.15 Disclosure. All disclosure provided to Save Foods regarding Plantify, its business and the transactions contemplated hereby, including the exhibits to this Agreement, furnished by Plantify with respect to the representations and warranties made herein are true and correct with respect to such representations and warranties and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
| - 10 - |
ARTICLE IV
COVENANTS
Section 4.01 Securities Law Compliance. Each of Save Foods and Plantify understand and agree that the consummation of this Agreement, including the issuance of the Save Foods Exchange Shares to Plantify in exchange for the issuance of the Plantify Exchange Shares to Save Foods upon Closing as contemplated hereby, constitutes the offer and sale of securities under the Securities Act, applicable state statutes and BC Securities Laws. Each of Save Foods and Plantify agree that such transactions shall be consummated in reliance on exemptions from the registration requirements of such laws, which depend, among other items, on the circumstances under which such securities are acquired. Furthermore, in connection with the transactions contemplated by this Agreement, Save Foods and Plantify shall each file, with the assistance of the other and their respective legal counsel, such notices, applications, reports or other instruments as may be deemed by them to be necessary or appropriate in an effort to document reliance on, as applicable, registration and prospectus exemptions, all to the extent and in the manner as may be deemed by the Parties to be appropriate.
Section 4.02 Access to Information; Confidentiality.
(a) The Parties hereto shall, and shall cause its officers, employees, counsel, financial advisors and other representatives to, afford to any other party and its representatives reasonable access during normal business hours during the period prior to the Closing Date of the Agreement to its properties, books, contracts, commitments, personnel and records and, during such period, the parties shall, and shall cause each of its officers, employees and representatives to, furnish promptly to any other party all information concerning its business, properties, financial condition, operations and personnel as such other party may from time to time reasonably request. For the purposes of determining the accuracy of the representations and warranties of each Party set forth herein and compliance by each Party of its obligations hereunder, during the period prior to the Closing Date of the Exchange, each party shall provide each other party and its representatives with reasonable access during normal business hours to its properties, books, contracts, commitments, personnel and records as may be necessary to enable each party to confirm the accuracy of the representations and warranties of each other party set forth herein and compliance by each party of their obligations hereunder, and, during such period, cause its, officers, employees and representatives to, furnish promptly to each party upon its request (i) a copy of each report, schedule, registration statement and other document filed by it during such period pursuant to the requirements of federal or state securities laws and (ii) all other information concerning its business, properties, financial condition, operations and personnel as such other party may from time to time reasonably request. Except as required by law or the policies of the TSX Venture Exchange, each party will hold, and will cause its respective directors, officers, employees, accountants, counsel, financial advisors and other representatives to hold, any nonpublic information concerning another party in strict confidence.
(b) No investigation pursuant to this Section shall affect any representations or warranties of the parties herein or the conditions to the obligations of the parties hereto.
(c) Save Foods acknowledges and consents to the collection, use and disclosure of personal information by the TMX Group Limited and its affiliates, authorized agents, subsidiaries and divisions, including the TSX Venture Exchange for the following purposes: (i) to verify personal information that has been provided about an individual, (ii) to provide disclosure to market participants as to the security holdings of directors, officers, other insiders and promoters of an issuer or its associates or affiliates, (iii) to conduct enforcement proceedings, and (iv) to perform other investigations as required by and to ensure compliance with all applicable rules, policies, rulings and regulations of the TSX Venture Exchange, BC Securities Laws and other legal and regulatory requirements governing the conduct and protection of the public markets in Canada. Save Foods further acknowledges that as part of this process, the TSX Venture Exchange also collects additional personal information from other sources, including but not limited to, securities regulatory authorities in Canada or elsewhere, investigative, law enforcement or self-regulatory organizations, regulations services providers and each of their subsidiaries, affiliates, regulators and authorized agents, to ensure that the purposes set out above can be accomplished. The personal information collected by the TSX Venture Exchange may also be disclosed (i) to the aforementioned agencies and organizations or as otherwise permitted or required by law and may be used for the purposes described above for their own investigations, and (ii) on the TSX Venture Exchange’s website or through printed materials published by or pursuant to the directions of the TSX Venture Exchange. The TSX Venture Exchange may from time to time use third parties to process information and/or provide other administrative services and may share information with such third-party services providers.
(d) The Parties hereby agree that any filings with the respective regulatory authorities or stock exchanges in connection with the transactions contemplated under this Agreement shall be subject to the prior written approval of the opposite Party prior to the submission of any such filing.
| - 11 - |
(e) Certain information, including among other things, the name, address, telephone number and email address of Save Foods, the number of Plantify Exchange Shares, the consideration payable for the Plantify Exchange Shares, the Closing Date and the prospectus exemption under which the Plantify Exchange Shares will be issued to Save Foods will be disclosed to the Canadian securities regulatory authorities, and such information is being indirectly collected by the Canadian securities regulatory authorities under the authority granted to them under Canadian securities legislation. This information is being collected for the purposes of the administration and enforcement of Canadian securities legislation. Save Foods hereby authorizes the indirect collection of such information by the Canadian securities regulatory authorities. In the event Save Foods has any questions with respect to the indirect collection of such information, it should contact the British Columbia Securities Commission as follows:
P.O. Box 10142, Pacific Centre
701 West Georgia Street
Vancouver, British Columbia
V7Y 1L2 Canada
Inquiries: (604) 899-6854
Toll free in Canada: 1-800-373-6393
Facsimile: (604) 899-6581
Email: FOI-privacy@bcsc.bc.ca
Public official contact: FOI Inquiries
Section 4.03 Commercially Reasonable Best Efforts. Upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use its commercially reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Exchange and the other transactions contemplated by this Agreement. The Parties hereto will use their commercially reasonable best efforts and cooperate with one another (i) in promptly determining whether any filings are required to be made or consents, approvals, waivers, permits or authorizations are required to be obtained (or, which if not obtained, would result in an event of default, termination or accel eration of any agreement or any put right under any agreement) under any applicable law or regulation or from any governmental authorities or third parties in connection with the transactions contemplated by this Agreement, and (ii) in promptly making any such filings, in furnishing information required in connection therewith and in timely seeking to obtain any such consents, approvals, permits or authorizations. The Parties hereto shall mutually cooperate in order to facilitate the achievement of the benefits reasonably anticipated from the Exchange.
Section 4.04 Valid Issuances. Each of Save Foods and Plantify covenant and agree that upon issuances, all of the Exchange Shares issued pursuant to this Agreement shall be duly authorized, validly issued, fully paid and nonassessable.
Section 4.05 Further Assurances. Subject to the terms and conditions herein provided, each Party shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective this Agreement and the transactions contemplated herein.
ARTICLE V
MISCELLANEOUS
Section 5.01 Brokers. Plantify has agreed to pay a finder’s fee, in the maximum amount permitted by the TSX Venture Exchange, for which it is solely responsible, payable in Plantify common shares, in respect of the Exchange. For the avoidance of any doubt, Save Foods shall not pay any finder’s fee, or similar arrangement, pursuant to transactions contemplated under this Agreement. Each Party agrees to indemnify the other against any claim by any third Person for any other commission, brokerage or finder’s fee arising from the transactions contemplated hereby based on any alleged agreement or understanding between the indemnifying party and such third Person, whether express or implied, from the actions of the indemnifying party.
| - 12 - |
Section 5.02 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement, other than matters relating to the laws of British Columbia applicable to the issuance of securities by Plantify (which shall be subject to the laws of British Columbia), shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Other than matters relating to the laws of British Columbia applicable to the issuance of securities by Plantify (in respect of each Party hereby irrevocably submits to the jurisdiction of the courts of British Columbia), each Party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the State of New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each Party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such Party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
Section 5.03 Notices. All notices or other communications required or permitted by this Agreement shall be in writing and addressed as follows:
| If to Save Foods: | Attn: David Palach | |
Address: HaPardes 134 (Meshek Sander) Neve Yarak 4994500 Israel | ||
| Tel: (347) 468 9583 | ||
| Email: david@savefoods.co | ||
| If to Plantify: | Attn: Gabi Kabazo | |
Address: 2264 East 11th Avenue Vancouver, British Columbia V5N 1Z6 Canada | ||
| Tel: 604 833 6820 | ||
| Email: gabi@plantifyfoods.com |
or such other addresses as shall be furnished in writing by any Party in the manner for giving notices hereunder.
Notice shall be deemed to have been duly received: (a) if given email, when transmitted and the appropriate confirmation received, as applicable, if transmitted on a business day and during normal business hours of the recipient, and otherwise on the next business day following transmission; (b) if given by certified or registered mail, return receipt requested, postage prepaid, three business days after being deposited in the U.S. mail; and (c) if given by courier, messenger or other means, when received or personally delivered and, in any such case, addressed as indicated herein, or to such other addresses as may be specified by any Party to the other Parties pursuant to notice given by such Party in accordance with the provisions of this Section 5.03.
Section 5.04 Attorneys Fees. In the event that any Party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing Party shall be reimbursed by the losing Party for all costs, including, without limitation, reasonable attorneys’ fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.
Section 5.05 Third Party Beneficiaries. This contract is strictly between Save Foods and Plantify and, except as specifically provided, no other Person shall be deemed to be a third party beneficiary of this Agreement.
Section 5.06 Expenses. Each Party shall bear the expenses, including legal, accounting and professional fees, incurred in connection with this Agreement and any other agreements in connection therewith, the Exchange or any of the other transactions contemplated hereby.
Section 5.07 Entire Agreement. This Agreement and the related documents referenced herein represent the entire agreement between the Parties relating to the subject matter hereof, and supersedes all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter.
Section 5.08 Survival; Termination. The representations, warranties and covenants of the respective Parties shall survive the consummation of the transactions herein contemplated for a period of two years.
Section 5.09 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which taken together shall be but a single instrument. Signatures delivered by email shall be deemed original signatures.
Section 5.10 Amendment or Waiver. Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law or in equity, and may be enforced concurrently therewith, and no waiver by any Party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore or thereafter occurring or existing. This Agreement may by amended by a writing signed by all Parties, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance may only be extended by a writing signed by the Party or Parties for whose benefit the provision is intended.
[Signature pages follow]
| - 13 - |
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first written above.
| SAVE FOODS, INC. | ||
| By | /s/ David Palach | |
| Name: | David Palach | |
| Title: | Chief Executive Officer | |
| PLANTIFY FOODS, INC. | ||
| By: | /s/ Roy Borochov | |
| Name: | Roy Borochov | |
| Title: | Chief Executive Officer | |
[Signature page to Securities Exchange Agreement]
| - 14 - |
SCHEDULE 3.05
Plantify’s Liabilities
In USD$ thousands
| Convertible Debentures | 393 | |
| Trade Payables | 430 | |
| Other Payables | 387 | |
| Shareholders Loan | 165 | |
| Bank Loans | 225 | |
| Total | 1,300 |
| - 15 - |
ANNEX A
Regulation S Questionnaire
The information contained herein is being furnished to the Company in order for the Save Foods Inc. (the “Company”) to determine whether the undersigned’s receipt of the Company’s common stock (the “Securities”) in connection with an exchange of common stock with the Company may be accepted pursuant to Rule 903 of Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The undersigned understands that (i) the Company will rely upon the following information for purposes of complying with Federal and applicable state securities laws, (ii) the Securities will not be registered under the Securities Act in reliance upon the exemption from registration provided by Rule 903 of Regulation S of the Securities Act, and (iii) this representation letter is not an offer to sell nor the solicitation of an offer to buy any Securities, or any other securities, to the undersigned. Capitalized terms used herein but not otherwise defined shall have the meanings assigned to them in that certain Securities Exchange Agreement dated March 31 2023, by and among the undersigned and the Company (the “Agreement”).
| 1. | At the time of (a) the offer by the Company and (b) the acceptance of the offer by such person or entity, of the Securities, such person or entity was outside the United States. | |
| 2. | Such person or entity is acquiring the Securities for such Purchaser’s own account, for investment and not for distribution or resale to others and is not purchasing the Securities for the account or benefit of any U.S. person, or with a view towards distribution to any U.S. person, in violation of the registration requirements of the Securities Act. | |
| 3. | Such person or entity will make all subsequent offers and sales of the Securities either (x) outside of the United States in compliance with Regulation S; (y) pursuant to a registration under the Securities Act; or (z) pursuant to an available exemption from registration under the Securities Act. Specifically, such person or entity will not resell the Securities to any U.S. person or within the United States prior to the expiration of a period commencing on the Closing Date and ending on the date that is one year thereafter (the “Distribution Compliance Period”), except pursuant to registration under the Securities Act or an exemption from registration under the Securities Act. | |
| 4. | Such person or entity has no present plan or intention to sell the Securities in the United States or to a U.S. person at any predetermined time, has made no predetermined arrangements to sell the Securities and is not acting as a distributor of such securities. | |
| 5. | Neither such person or entity, its affiliates nor any person acting on behalf of such person or entity, has entered into, has the intention of entering into, or will enter into any put option, short position or other similar instrument or position in the U.S. with respect to the Securities at any time after the Closing Date through the Distribution Compliance Period except in compliance with the Securities Act. | |
| 6. | Such person or entity consents to the placement of a restrictive legend on any certificate or other document evidencing the Securities, relating to the fact that the Securities are not registered under the Securities Act. | |
| 7. | Such person or entity is not acquiring the Securities in a transaction (or an element of a series of transactions) that is part of any plan or scheme to evade the registration provisions of the Securities Act. | |
| 8. | Such person or entity has sufficient knowledge and experience in finance, securities, investments and other business matters to be able to protect such person’s or entity’s interests in connection with the transactions contemplated by the Agreement. | |
| 9. | Such person or entity has consulted, to the extent that it has deemed necessary, with its tax, legal, accounting and financial advisors concerning its investment in the Securities. | |
| 10. | Such person or entity understands the various risks of an investment in the Securities and can afford to bear such risks for an indefinite period of time, including, without limitation, the risk of losing its entire investment in the Securities. |
| - 16 - |
| 11. | Such person or entity has had access to the Company’s publicly filed reports with the Securities and Exchange Commission and has been furnished with all other public information regarding the Company that such person or entity has requested and all such public information is sufficient for such person or entity to evaluate the risks of investing in the Securities. | |
| 12. | Such person or entity has been afforded the opportunity to ask questions of and receive answers concerning the Company and the terms and conditions of the issuance of the Securities. | |
| 13. | Such person or entity is not relying on any representations and warranties concerning the Company made by the Company or any officer, employee or agent of the Company, other than those contained in the Agreement. | |
| 14. | Such person or entity will not sell or otherwise transfer the Securities unless either (A) the transfer of such securities is registered under the Securities Act or (B) an exemption from registration of such securities is available. | |
| 15. | Such person or entity understands and acknowledges that the Securities have not been recommended by any federal or state securities commission or regulatory authority, that the foregoing authorities have not confirmed the accuracy or determined the adequacy of any information concerning the Company that has been supplied to such person or entity and that any representation to the contrary is a criminal offense. |
| Date: ______________, 2023 | |
| Plantify Foods, Inc. | |
| (Signature of Authorized Signatory) | |
| (Name of Authorized Signatory) | |
| (Title) |
| - 17 - |
ANNEX B
Accredited Investor Certificate (Canada)
This certificate contains certain specifically defined terms, highlighted in boldface and defined herein. If you are unsure as to the meanings of those terms, or are unsure as to the applicability of any provision below to you, please contact a representative of the Corporation (as defined herein), your dealer and/or legal advisor before completing this certificate.
TO: Plantify Foods, Inc. (the “Corporation” or the “issuer”)
In connection with the purchase by the undersigned purchaser (the “Purchaser” or “you”) of securities of the Corporation pursuant to the Subscription Agreement to which this Certificate is attached, the Purchaser or the undersigned on behalf of the Purchaser, as the case may be, certifies that the Purchaser is purchasing securities of the Corporation as principal and is (and at the time of acceptance of the subscription will be) an “accredited investor” within the meaning of National Instrument 45-106 Prospectus Exemptions and Section 73.3 of the Securities Act (Ontario), as applicable, because the Purchaser is:
**If you check box (j), (k) or (l), you must also complete the below FORM 45-106F9 - Risk Acknowledgement Form**
| ☐ | (a) | except in Ontario, a Canadian financial institution, or a Schedule III bank; |
| ☐ | (a.1) | in Ontario, a financial institution that is (i) a bank listed in Schedule I, II or III of the Bank Act (Canada); (ii) an association to which the Cooperative Credit Associations Act (Canada) applies or a central cooperative credit society for which an order has been made under subsection 473(1) of that Act; or (iii) a loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative or credit union league or federation that is authorized by a statute of Canada or Ontario to carry on business in Canada or Ontario, as the case may be; |
| ☐ | (b) | the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); |
| ☐ | (c) | a subsidiary of any person or company referred to in paragraphs (a), (a.1) or (b), if the person or company owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary; |
| ☐ | (d) | a person or company registered under the securities legislation of a jurisdiction (province or territory) of Canada as an adviser or dealer; |
| ☐ | (e) | an individual registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d); |
| ☐ | (e.1) | an individual formerly registered under the securities legislation of a jurisdiction of Canada, other than an individual formerly registered solely as a representative of a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador); |
| ☐ | (f) | the Government of Canada or a jurisdiction (province or territory) of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction (province or territory) of Canada; |
| ☐ | (g) | a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l’île de Montréal or an intermunicipal management board in Québec; |
| - 18 - |
| ☐ | (h) | any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government; |
| ☐ | (i) | a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction (province or territory) of Canada; |
| ☐ | (j) | an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that, before taxes, but net of any related liabilities, exceeds $1,000,000; [PLEASE ALSO COMPLETE SECTIONS 2-4 OF FORM 45-106F9 BELOW] |
| ☐ | (j.1) | an individual who beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $5,000,000; |
| ☐ | (k) | an individual whose net income before taxes exceeded $200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; [PLEASE ALSO COMPLETE SECTIONS 2-4 OF FORM 45-106F9 BELOW] |
| ☐ | (l) | an individual who, either alone or with a spouse, has net assets of at least $5,000,000; [PLEASE ALSO COMPLETE SECTIONS 2-4 OF FORM 45-106F9 BELOW] |
| ☐ | (m) | a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements; |
| ☐ | (n) | an investment fund that distributes or has distributed its securities only to (i) a person that is or was an accredited investor at the time of the distribution, (ii) a person that acquires or acquired securities in the circumstances referred to in sections 2.10 [Minimum amount investment] or 2.19 [Additional investment in investment funds] of NI 45-106, or (iii) a person described in sub-paragraph (i) or (ii) that acquires or acquired securities under section 2.18 [Investment fund reinvestment] of NI 45-106; |
| ☐ | (o) | an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt; |
| ☐ | (p) | a trust company or trust corporation registered or authorized to carry on business under the Corporation and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be; |
| ☐ | (q) | a person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction; |
| ☐ | (r) | a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded; |
| ☐ | (s) | an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function; |
| ☐ | (t) | a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors; |
| - 19 - |
| ☐ | (u) | an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser; |
| ☐ | (v) | (i) a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, the regulator as an accredited investor; or (ii) in Ontario, a person that is recognized or designated by the Ontario Securities Commission as an accredited investor; or |
| ☐ | (w) | a trust established by an accredited investor for the benefit of the accredited investor’s family members of which a majority of the trustees are accredited investors and all of the beneficiaries are the accredited investor’s spouse, a former spouse of the accredited investor or a parent, grandparent, brother, sister, child or grandchild of that accredited investor, of that accredited investor’s spouse or of that accredited investor’s former spouse. |
For the purposes hereof, the following definitions are included for convenience:
| (a) | “bank” means a bank named in Schedule I or II of the Bank Act (Canada); |
| (b) | “Canadian financial institution” means (i) an association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative credit society for which an order has been made under section 473(1) of that Act, or (ii) a bank, loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative, or league that, in each case, is authorized by an enactment of Canada or a jurisdiction of Canada to carry on business in Canada or a jurisdiction of Canada; |
| (c) | “company” means any corporation, incorporated association, incorporated syndicate or other incorporated organization; |
| (d) | “director” means: (a) a member of the board of directors of a company or an individual who performs similar functions for a company, and (b) with respect to a person that is not a company, an individual who performs functions similar to those of a director of a company; |
| (e) | “eligibility adviser” means: (a) a person that is registered as an investment dealer and authorized to give advice with respect to the type of security being distributed, and (b) in Saskatchewan or Manitoba, also means a lawyer who is a practicing member in good standing with a law society of a jurisdiction of Canada or a public accountant who is a member in good standing of an institute or association of chartered accountants, certified general accountants or certified management accountants in a jurisdiction of Canada provided that the lawyer or public accountant must not (i) have a professional, business or personal relationship with the issuer, or any of its directors, executive officers, founders, or control persons, and (ii) have acted for or been retained personally or otherwise as an employee, executive officer, director, associate or partner of a person that has acted for or been retained by the issuer or any of its directors, executive officers, founders or control persons within the previous 12 months; |
| (f) | “financial assets” means (i) cash, (ii) securities, or (iii) a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation; |
| (g) | “fully managed account” means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client’s express consent to a transaction; |
| (h) | “foreign jurisdiction” means a country other than Canada or a political subdivision of a country other than Canada; |
| (i) | “investment fund” has the same meaning as in National Instrument 81-106 Investment Fund Continuous Disclosure; |
| (j) | “person” includes |
| (i) | an individual, |
| - 20 - |
| (ii) | a corporation, | |
| (iii) | a partnership, trust, fund and an association, syndicate, organization or other organized group of persons whether incorporated or not, and | |
| (iv) | an individual or other person in that person’s capacity as a trustee, executor, administrator or personal or other legal representative. |
| (k) | “related liabilities” means (i) liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or (ii) liabilities that are secured by financial assets; |
| (l) | “Schedule III bank” means an authorized foreign bank named in Schedule III of the Bank Act (Canada); |
| (m) | “spouse” means, an individual who, (i) is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual, (ii) is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender, or (iii) in Alberta, is an individual referred to in paragraph (i) or (ii), or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta); and |
| (n) | “subsidiary” means an issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary. |
In NI 45-106 a person or company is considered to be an affiliated entity of another person or company if one is a subsidiary entity of the other, or if both are subsidiary entities of the same person or company, or if each of them is controlled by the same person or company.
In NI 45-106 a person (first person) is considered to control another person (second person) if (a) the first person, directly or indirectly, beneficially owns or exercises control or direction over securities of the second person carrying votes which, if exercised, would entitle the first person to elect a majority of the directors of the second person, unless that first person holds the voting securities only to secure an obligation, (b) the second person is a partnership, other than a limited partnership, and the first person holds more than 50% of the interests of the partnership, or (c) the second person is a limited partnership and the general partner of the limited partnership is the first person.
In NI 45-106 a trust company or trust corporation described in paragraph (p) above of the definition of “accredited investor” (other than in respect of a trust company or trust corporation registered under the laws of Prince Edward Island that is not registered or authorized under the Corporation and Loan Companies Act (Canada) or under comparable legislation in another jurisdiction of Canada) is deemed to be purchasing as principal.
In NI 45-106 a person described in paragraph (q) above of the definition of “accredited investor” is deemed to be purchasing as principal.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
| - 21 - |
The foregoing representations contained in this certificate are true and accurate as of the date of this certificate and will be true and accurate as of the Closing Date. If any such representations shall not be true and accurate prior to the Closing Date, the undersigned shall give immediate written notice of such fact to the Corporation.
| Date: | If this document is being executed on behalf of the | ||
| Purchaser by an agent, complete the information below: |
| Save Foods, Inc. | Print name of Agent |
| X | X | |||
| David Palach, Chief Executive Officer | Signature of agent of Purchaser or authorized signatory of Agent |
| Print name of authorized signatory of Purchaser (if applicable) | Print name of authorized signatory of agent (if applicable) | |
| Print title of authorized signatory of Purchaser (if applicable) | Print title of authorized signatory of agent (if applicable) |
Exhibit 1.2
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY; (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT; (C) IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS; OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF PARAGRAPH (C) OR (D), THE HOLDER FURNISHES TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY TO SUCH EFFECT. A NEW CERTIFICATE NOT BEARING THIS LEGEND MAY BE OBTAINED UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT THE SALE OF SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT.
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE AUGUST 5, 2023.
WITHOUT PRIOR WRITTEN APPROVAL OF TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITY REPRESENTED BY THIS CERTIFICATE AND ANY COMMON SHARES ISSUED UPON EXERCISE OF THE CONVERSION RIGHT HEREUNDER MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL AUGUST 5, 2023.
PLANTIFY FOODS, INC.
SECURED DEBENTURE
SERIES 2023-I
Cert. No.: 1
CDN$1,500,000 |
Due: OCTOBER 4, 2024 |
FOR VALUE RECEIVED, the undersigned, PLANTIFY FOODS, INC. (the “Corporation”) hereby promises to pay to or to the order of Save Foods, Inc. (the “Holder” or “Lender”) on OCTOBER 4, 2024 (the “Maturity Date”), the sum of CDN$1,500,000 (the “Principal”), together with interest as hereinafter provided for.
Terms used in this Debenture and not otherwise defined in this Debenture are defined in Appendix A hereto.
| -2- |
ARTICLE
1
INTEREST AND PAYMENT OF INTEREST AND PRINCIPAL
| 1.1 | Interest |
Subject to ARTICLE 3, the Corporation shall pay interest on the Principal from and including the issue date of this Debenture at a rate of 8% per annum (“Interest”), such Interest to be calculated (but not compounded) daily and payable monthly in arrears on the day that is five Business Days following: (a) the last day of each month prior to the Maturity Date; and (b) the Maturity Date (each an “Interest Payment Date”).
| 1.2 | Method of Payment of Interest |
| (a) | Subject to Section 1.2(b), the Corporation shall pay and satisfy Interest by and when due by sending by prepaid ordinary mail a cheque or other transfer of funds to the Holder for such Interest payable to the order of the Holder or as the Holder may otherwise in writing direct. Subject to Section 1.2(b), in the event of non-receipt of any cheque or other transfer of funds for Interest by the Holder, the Corporation will cause to be issued to the Holder a replacement cheque or replacement transfer of funds for like amount upon the Corporation being furnished with such evidence of non-receipt as the Corporation shall reasonably require and upon being indemnified to its satisfaction, acting reasonably. |
| (b) | Provided that: (i) no fact, circumstance or event has occurred and is continuing that constitutes an Event of Default; (ii) all applicable regulatory approvals have been obtained, including without limitation any required approval of the TSXV or any other recognized North American stock exchange or quotation system (the “Other Exchange”) on which the common shares in the capital of the Corporation (the “Common Shares”) are then listed if the Common Shares are not then listed on the TSXV; and (iii) at least three Business Days prior to an Interest Payment Date the Holder has provided the Corporation with written notice (“Interest Share Notice”) of its intention to receive Interest Shares (as hereinafter defined), the Corporation shall have the obligation, to pay and satisfy 100% of the Interest due and payable on any such Interest Payment Date in Common Shares (the “Interest Shares”). The number of Interest Shares shall be the number determined by dividing the dollar amount of Interest to be satisfied by the issuance of Interest Shares by the greater of (x) the Interest Conversion Price , and (y) the volume weighted average trading price of the Common Shares for the five (5) trading days prior to the issuance of the Interest Shares less an amount equal to the maximum discount permitted under the rules of the TSXV or the Other Exchange. |
| -3- |
Thereupon, the Holder shall be entitled to be entered in the books of the Corporation as at the date of issuance of the Interest Shares as the holder of the number of Common Shares into which such Interest is convertible. As soon as practicable, the Corporation shall deliver to the Holder a certificate or certificates, or a DRS Notice, representing the Interest Shares. Any Interest Shares issued pursuant to this ARTICLE 1 shall have the applicable legend(s) included on the certificates or DRS Notice representing such Interest Shares required pursuant to Section 9.8.
If the Common Shares are not listed on the TSXV or the Other Exchange, then the payment of Interest shall be paid and satisfied in accordance with Section 1.2(a).
| 1.3 | Method of Payment of Principal |
| (a) | Subject to ARTICLE 3, the full amount of the Principal is due and payable on or before the Maturity Date. |
| (b) | Subject to Section 1.3(c), the Corporation shall pay and satisfy the Principal on the Maturity Date by sending by prepaid ordinary mail a cheque or other transfer of funds to the Holder for such Principal payable to the order of the Holder or as the Holder may otherwise in writing direct. Subject to Section 1.3(c), in the event of non-receipt of any cheque or other transfer of funds for Principal by the Holder, the Corporation will cause to be issued to the Holder a replacement cheque or replacement transfer of funds for like amount upon the Corporation being furnished with such evidence of non-receipt as the Corporation shall reasonably require and upon being indemnified to its satisfaction, acting reasonably. |
| (c) | Provided that: (i) no fact, circumstance or event has occurred and is continuing that constitutes an Event of Default; (ii) all applicable regulatory approvals have been obtained, including without limitation any required approval of the TSXV or the Other Exchange on which the Common Shares are then listed if the Common Shares are not then listed on the TSXV; and (iii) at least three Business Days prior to the issuance of Principal Shares (as defined below) the Holder has provided the Corporation with written notice of the intention (“Principal Share Notice”) to receive Principal Shares, the Corporation shall have the obligation to pay and satisfy 100% of the Principal on or before the Maturity Date by the issuance of Common Shares (the “Principal Shares”). The number of Principal Shares shall be the number determined by dividing the dollar amount of Principal to be satisfied by the issuance of Principal Shares by the Principal Conversion Price. |
Thereupon, the Holder shall be entitled to be entered in the books of the Corporation as at the date of issuance of the Principal Shares as the holder of the number of Common Shares into which such Principal is convertible. As soon as practicable, the Corporation shall deliver to the Holder a certificate or certificates, or a DRS Notice, representing the Principal Shares. Any Principal Shares issued pursuant to this ARTICLE 1 shall have the applicable legend included on the certificates or DRS Notice representing such Principal Shares required pursuant to Section 9.8.
If the Common Shares are not listed on the TSXV or the Other Exchange, then the payment of Principal shall be paid and satisfied in accordance with Section 1.3(b).
| -4- |
|
1.4 | Application of Consideration |
Any consideration paid in satisfaction of the indebtedness evidenced by this Debenture (whether paid in cash or in Interest Shares or Principal Shares) shall be applied first in satisfaction of any accrued and unpaid Interest which is due and payable, with the remaining portion of such amount applied in satisfaction of the Principal then owing.
| 1.5 | Judgment Interest |
If the Holder obtains judgment on this Debenture or in respect of any amount owing hereunder, interest at the rate of 25% per annum, calculated monthly, not in advance, shall be payable on the amount which is outstanding under the said judgment.
ARTICLE
2
ADJUSTMENTS TO PRINCIPAL CONVERSION PRICE
| 2.1 | Adjustment of Conversion Price on Corporate Events |
Subject to Sections 2.3 and 4.1(l), the Principal Conversion Price in effect at any date shall be adjusted from time to time if and whenever the Corporation shall:
| (a) |
| (i) | declare a dividend in Common Shares or make a distribution of Common Shares on all or substantially all of its outstanding Common Shares, |
| (ii) | subdivide its outstanding Common Shares into a larger number of Common Shares, or |
| (iii) | combine its outstanding Common Shares into a smaller number of Common Shares, |
(collectively, “Common Share Reorganization”) then, in each case:
| (A) | for the purposes of clause (B) of this paragraph, the number of Common Shares issuable upon conversion of Principal and/or Interest under this Debenture immediately after the occurrence of any such event shall be adjusted to equal the number of Common Shares which a record holder of the same number of Common Shares that would have been issuable under this Debenture immediately prior to the record date for such dividend or distribution or the effective date of such subdivision or combination would own or be entitled to receive after such record date or the effective date of such subdivision or combination, as applicable, and |
| -5- |
| (B) | the Principal Conversion Price shall be adjusted to equal: |
| (1) | the Principal Conversion Price in effect at the time of the record date for such dividend or distribution or of the effective date of such subdivision or combination, multiplied by the number of Common Shares into which Principal and/or Interest is convertible immediately prior to the adjustment, divided by |
| (2) | the number of Common Shares into which Principal and/or Interest (as applicable) is convertible immediately after such adjustment. |
Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution, and any adjustment pursuant to clauses (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.
| (b) | fix a record date for the issuance of rights, options or warrants to all or substantially all the holders of Common Shares entitling them, for a period expiring not more than 45 days after the record date, to subscribe for or purchase Common Shares or Convertible Securities at a price per Common Share (or having a conversion price per Common Share) less than the Minimum Exercise Price as at the record date (the issuance of any such rights, options or warrants being a “Rights Offering”), then the Principal Conversion Price shall be adjusted effective immediately after the record date so that it shall equal the price determined by multiplying the Principal Conversion Price in effect on the record date of such Rights Offering by a fraction: |
| (i) | the numerator of which shall be the number of Common Shares outstanding on the record date plus a number of Common Shares equal to the number arrived at by dividing the aggregate price of the total number of additional Common Shares offered for subscription or purchase (or the aggregate conversion price of the Convertible Securities so offered) by the Current Market Price; and |
| (ii) | the denominator shall be the number of Common Shares outstanding on the record date plus the total number of additional Common Shares offered by subscription or purchase (or into which the Convertible Securities so offered are convertible); |
to the extent that any such rights, options or warrants are not so issued or are not exercised prior to the expiration thereof, the Principal Conversion Price shall be readjusted to the Principal Conversion Price which would then be in effect if the record date had not been fixed or the Principal Conversion Price which would then be in effect based upon the number of Common Shares (or Convertible Securities) actually issued upon the exercise of such rights, options and warrants, as the case may be, but subject to any other adjustment required hereunder by reason of any event arising after the record date.
| -6- |
| (c) | issue or distribute to all or substantially all the holders of Common Shares: |
| (i) | shares of any class other than Common Shares, or |
| (ii) | rights, options or warrants (other than (i) pursuant to a stock option plan or share purchase plan or other employment incentive, (ii) rights, options or warrants exercisable not more than 45 days from the date of issue to purchase Common Shares at a price per Common Share equal to or greater than the Minimum Exercise Price or to purchase Convertible Securities having a conversion price per Common Share equal to or greater than the Minimum Exercise Price or (iii) as provided in Section 1.1(b)), or |
| (iii) | evidences of indebtedness, or |
| (iv) | any other assets (other than a cash dividend payable out of earnings or earned surplus legally available for the payment of dividends under the laws of the jurisdiction of incorporation of the Corporation) |
and, in any of those cases, the issuance or distribution does not constitute a distribution to which Sections 2.1(a) or 2.1(b) applies (any of such events being herein called a “Special Distribution”), then the Principal Conversion Price shall be adjusted effective immediately after the record date at which the holders of Common Shares are determined for purposes of the Special Distribution to a price which is the product of:
| (A) | the Principal Conversion Price in effect on such record date; and |
| (B) | a fraction: |
| (1) | the numerator shall be the number of Common Shares outstanding on the record date multiplied by the Current Market Price on the record date, less the fair market value (as determined by the directors acting in good faith with a view to the interests of all of the security holders of the Corporation, including the Holders) of the shares, evidences of indebtedness, assets or property, or rights, options or warrants so distributed; and |
| -7- |
| (2) | the denominator shall be the number of Common Shares outstanding on the record date multiplied by such Current Market Price; |
to the extent that the Special Distribution is not so made or to the extent that any rights, options or warrants so distributed are not exercised, the Principal Conversion Price shall be readjusted to the Principal Conversion Price which would then be in effect based upon such shares, rights, options, warrants, evidences of indebtedness or assets actually distributed or based upon the number of Common Shares or Convertible Securities actually delivered upon the exercise of such rights, options or warrants, as the case may be, but subject to any other adjustment required hereunder by reason of any event arising after the record date.
| 2.2 | Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. |
| (a) | If there shall occur a Change of Control and, pursuant to the terms of such Change of Control, common shares of the successor or acquiring corporation, or any cash, shares or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common shares of the successor or acquiring corporation (any such consideration other than Common Shares, the “Other Property”), are to be received by or distributed to the holders of Common Shares, then the Holder shall thereafter receive, upon conversion of Principal and any accrued and unpaid Interest, the number of Common Shares and the Other Property receivable upon or as a result of such Change of Control by a holder of the number of Common Shares into which this Debenture is convertible immediately prior to such event. |
| (b) | In case of any such Change of Control described in Section 2.2(a) above where Other Property is received or distributed to holders of Common Shares, the successor or acquiring corporation (if other than the Corporation) shall expressly assume the due and punctual observance and performance of each and every covenant and condition contained in this ARTICLE 2 to be performed and observed by the Corporation, subject to such modifications as may be deemed appropriate (as determined by resolution of the board of directors of the Corporation) in order to provide for adjustments of the common shares of the successor or acquiring corporation into which this Debenture is convertible which shall be as nearly equivalent as practicable to the adjustments provided for in ARTICLE 2. For purposes of ARTICLE 2, common shares of the successor or acquiring corporation shall include shares of such corporation of any class which is not preferred as to dividends or assets on liquidation over any other class of shares of such corporation and which is not subject to redemption and shall also include any evidences of indebtedness, shares or other securities which are convertible into or exchangeable for any such shares, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such shares. The foregoing provisions of this ARTICLE 2 shall similarly apply to successive Change of Control transactions. |
| -8- |
| 2.3 | Other Provisions Applicable to Adjustments |
The following provisions shall be applicable to the making of adjustments of the number of Common Shares into which the Principal and/or Interest under this Debenture is convertible and the Principal Conversion Price provided for in this ARTICLE 2:
| (a) | The adjustments required by this ARTICLE 2 shall be made whenever and as often as any specified event requiring an adjustment shall occur, except that any that would otherwise be required may be postponed (except in the case of a subdivision or combination of shares of the Common Shares, as provided for in Section 2.1(a)) if such adjustment either by itself or with other adjustments not previously made adds or subtracts less than 1% of the Common Shares into which the Principal or Interest is convertible immediately prior to the making of such adjustment. Any adjustment representing a change of less than such minimum amount (except as aforesaid) which is postponed shall be carried forward and made as soon as such adjustment, together with other adjustments required by this ARTICLE 2 and not previously made, would result in a minimum adjustment. For the purpose of any adjustment, any specified event shall be deemed to have occurred at the close of business on the date of its occurrence. |
| (b) | In computing adjustments under this ARTICLE 2, fractional interests in Common Shares shall be taken into account to the nearest whole share. |
| (c) | If the Corporation undertakes a transaction contemplated under this ARTICLE 2 and as a result takes a record of the holders of its Common Shares for the purpose of entitling them to receive a dividend or distribution or subscription or purchase rights or other benefits contemplated under this ARTICLE 2 and shall, thereafter and before the distribution to shareholders thereof, legally abandon its plan to pay or deliver such dividend, distribution, subscription or purchase rights or other benefits contemplated under this ARTICLE 2, then thereafter no adjustment shall be required by reason of the taking of such record and any such adjustment previously made in respect thereof shall be rescinded and annulled. |
| (d) | If after any property becomes distributable pursuant to this ARTICLE 2 by reason of the taking of any record of the holders of Common Shares, but prior to the occurrence of the event for which such record is taken, the Corporation exercises its right to satisfy the payment of Principal and/or Interest by issuing Common Shares during such time, then the Holder shall continue to be entitled to receive any Common Shares or other property issuable upon conversion hereunder by reason of such adjustment and such shares or other property shall be held in escrow for the Holder by the Corporation to be issued to the Holder upon and to the extent that the event actually takes place. Notwithstanding any other provision to the contrary herein, if the event for which such record was taken fails to occur or is rescinded, then such escrowed shares shall be cancelled by the Corporation and escrowed property returned to the Corporation. |
| -9- |
| (e) | No adjustment in the Principal Conversion Price shall be made in respect of any event described in Section 2.1 or 2.4 if the Holder is entitled to participate in such event on the same terms, mutatis mutandis, as if the Principal amount of this Debenture and any accrued and unpaid Interest thereon had been converted into Common Shares immediately prior to the effective date or record date of such event. Any such participation by a Holder in any event described in Sections 2.1 or 2.4 will be subject to the prior approval of the TSXV. |
| 2.4 | Other Action Affecting Common Shares. |
Subject to Section 4.1(l), in case at any time or from time to time the Corporation shall take any action in respect of its Common Shares, other than any action described in this ARTICLE 2 or the payment of cash dividends payable out of earnings or earned surplus legally available for the payment of dividends under the laws of the jurisdiction of incorporation of the Corporation, then, unless such action will not have a materially adverse effect upon the rights of the Holder, the number of Common Shares or other shares into which Principal and/or Interest is convertible into and/or the Principal Conversion Price thereof shall be adjusted in such manner as may be equitable in the circumstances as determined in good faith by the Board of Directors of the Corporation. Any such adjustments made under this Section 2.4 will be subject to the prior approval of the TSXV.
| 2.5 | Common Share Transfer Taxes. |
The issue of share certificates or DRS Statements upon conversion of Principal and/or Interest under this Debenture shall be made without charge to the Holder for any stamp or issuance tax in respect of such issue. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares in any name other than that of the Holder, and the Corporation shall not be required to issue or deliver any such share certificate unless and until the person or persons requesting the issue thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.
ARTICLE 3
Redemption
| 3.1 | Amount Paid on Redemption |
At any time prior to the Maturity Date, provided that: (i) no fact, circumstance or event has occurred and is continuing that constitutes an Event of Default; and (ii) not more than 60 days nor less than 30 days prior to the date fixed for redemption the Corporation has provided the Holder with written notice of the intention to redeem this Debenture (“Redemption Notice”), the Corporation shall have the right, but not the obligation, in its sole and absolute discretion, to redeem, either in whole or in part, this Debenture, at a price payable in cash equal to 150% of Principal, plus accrued and unpaid Interest thereon up to and including the date set forth for redemption (the “Redemption Price”).
| -10- |
|
3.2 | Notice of Redemption |
Every Redemption Notice shall specify the Redemption Price and the date on which the Redemption is to occur (the “Redemption Date”). Interest upon the Principal called for redemption shall cease to be payable from and after the Redemption Date.
| 3.3 | Partial Redemption |
| (a) | If less than all the Debentures outstanding are at any time to be redeemed, the Debentures to be so redeemed shall be selected by the Corporation on a pro rata basis to the nearest multiple of $1,000 in accordance with the principal amount of the Debentures registered in the name of the Holder. |
| (b) | In the event that one or more of such Debentures becomes subject to redemption in part, upon surrender of any such Debentures for payment of the Redemption Price, the Corporation shall execute one or more new Debentures for the unredeemed part of the principal amount of the Debenture or Debentures so surrendered. |
| 3.4 | Debentures Due on Redemption Dates |
Provided that the Redemption Notice has been delivered to the Holder, the Debenture when so called for redemption shall thereupon be and become due and payable at the Redemption Price, in the same manner and with the same effect as if it were the Maturity Date.
| 3.5 | Method of Payment of Redemption Price |
The Corporation shall pay and satisfy the Redemption Price on the Redemption Date by sending by prepaid ordinary mail a cheque or other transfer of funds to the Holder for such Redemption Price payable to the order of the Holder or as the Holder may otherwise in writing direct. In the event of non-receipt of any cheque or other transfer of funds for the Redemption Price by the Holder, the Corporation will cause to be issued to the Holder a replacement cheque or replacement transfer of funds for like amount upon the Corporation being furnished with such evidence of non-receipt as the Corporation shall reasonably require and upon being indemnified to its satisfaction, acting reasonably.
| 3.6 | Failure to Surrender Debentures Called for Redemption |
In case the Holder for redemption shall fail on or before the Redemption Date to surrender this Debenture, or shall not within such time accept payment of the Redemption Price payable, the Redemption Price may be set aside in trust, in a chartered bank or with counsel to the Corporation in a bank account with interest, if any, accruing thereon and shall be deemed to be payment in full to the Holder. To that extent the Debenture shall thereafter not be considered as outstanding hereunder, the Holder shall have no other right except to receive payment out of the Redemption Price so paid and deposited together with any accrued interest thereon, which amount the Corporation shall request to be paid upon surrender and delivery of such holder’s Debenture. In the event that any money required to be deposited hereunder and any interest earned thereon shall remain so deposited for a period of five years less one day from the Redemption Date, then such monies shall at the end of such period be paid over to the Corporation on its written demand.
| -11- |
| 3.7 | Cancellation of Debentures Redeemed |
Subject to the provisions of Sections 3.3 as to the Debentures redeemed in part, all Debentures redeemed and paid in full under this ARTICLE 3 shall forthwith be delivered to the Corporation and cancelled and no Debentures shall be issued in substitution for those redeemed.
ARTICLE
4
Events of Default
| 4.1 | Events of Default |
Any of the following shall constitute an event of default under this Debenture (each an “Event of Default”):
| (a) | failure by the Corporation to pay: |
| (i) | the applicable Interest amount within five Business Days of an Interest Payment Date; |
| (ii) | the full amount of the Principal and any accrued and unpaid Interest owing thereon within five Business Days after the Maturity Date; or |
| (iii) | the Redemption Price within five Business Days after the Redemption Date; |
| (b) | if any representation or warranty made by the Corporation in that certain Securities Exchange Agreement between the Corporation and the Holder dated the date hereof (the “Exchange Agreement”) or the certificate delivered thereunder is found to be untrue or incorrect in any material respect as of the date when made so as to cause a Material Adverse Effect; |
| (c) | the Corporation becomes unable to satisfy its liabilities as they become due or otherwise commits an act of bankruptcy or admits that it is insolvent; |
| (d) | the Corporation, any creditor of the Corporation or any other Person institutes any proceeding (or the Corporation takes any corporate action or executes any agreement in connection with the commencement of any proceeding) which the Corporation is not contesting in good faith and by appropriate proceedings to the satisfaction of the Holder, acting reasonably, and such proceedings are not permanently stayed or dismissed within 45 days from the date of commencement thereof: |
| -12- |
| (i) | seeking to adjudicate the Corporation a bankrupt or insolvent; |
| (ii) | seeking liquidation, dissolution, winding-up, reorganization, arrangement, protection, relief or composition of the Corporation or any material part of its property or debt, or making a proposal with respect to the Corporation, under any law relating to bankruptcy, insolvency, reorganization or compromise of debts or other similar laws; or |
| (iii) | seeking appointment of a receiver, receiver and manager, trustee, agent, custodian, monitor, liquidator or similar official for the Corporation or for any material part of its assets, business or operations or for any material part of the Secured Property; |
| (e) | there occurs any distress or other similar such enforcement process in respect of any material part of the Secured Property, whether by court order or other formal or informal proceeding; |
| (f) | any resolution is passed for the winding up, dissolution or liquidation of the Corporation (other than with or into the Corporation of any subsidiary wholly owned by the Corporation) or if the Corporation loses its charter by expiration, cancellation, forfeiture or otherwise; |
| (g) | a Person obtains a judgment, decree or order against the Corporation, any of the Corporation’s assets, business or operations for an amount in excess of $200,000 that remains outstanding for more than 30 days unless such judgment, decree or order is appealed within 15 Business Days from the date of the issuance of such judgment, decree or order; or |
| (h) | this Debenture or any of the Security shall cease to create a valid and perfected Lien or are otherwise cancelled, terminated or revoked, other than in accordance with the terms hereof; |
| (i) | if the Corporation breaches any of the covenants contained in ARTICLE 6 and fails to cure such breach within five Business Days, provided that in the case of breaches of Section 6.1 (other than subsections (e), (f) and (g)) the aforementioned five Business Days shall commence on the day after the Corporation has received notice of the specifics of such breach; |
| (j) | the Corporation shall default in any material respect (subject to any grace or cure period provided in the applicable Material Agreement) under any Material Agreement or any obligation imposed by any Material Agreement and fails to cure such breach within five Business Days; |
| -13- |
| (k) | the payment or distribution of Common Shares, options (including pursuant to the Corporation’s omnibus equity incentive plan approved by the shareholders of the corporation at the corporation’s annual and special meeting held on December 12, 2022) or warrants of the Corporation is made to the Corporation’s senior management or any affiliate of senior management of the Corporation (other than where such person participates in a financing by the Corporation on the same terms and conditions as the remaining participants in such financing for consideration in cash equal to fair market value) without the prior approval of the Holder or the representative of Safe Foods, Inc. on the Corporation’s board of directors; |
| (l) | if the Corporation makes any payment or distributions of cash (other than a rights offering) to holders of the Common Shares; |
| (m) | if the Corporation is subject to a cease trade order that remains in effect for a period of more than 30 days as a result of a default of any material requirements of any applicable securities regulatory filings or delisted (excluding a move to an Other Exchange) by the TSXV; |
| (n) | [intentionally omitted]; |
| (o) | the Corporation enters into any agreement, covenant or instrument in breach of the provisions of this Debenture, the Exchange Agreement or the Pari Passu Agreement; |
| (p) | the Corporation enters into any long term joint venture or similar transaction in respect of any of its assets, business or operations, other than with the Holder or an associate or affiliate (as such terms are defined in the Securities Act (Ontario)) of the Holder as contemplated by any Material Agreement; |
| (q) | the Corporation breaches its obligations stipulated in Section 9.17; and |
| (r) | the occurrence of a Change of Control of the Corporation. |
| 4.2 | Actions in an Event of Default |
| (a) | The Corporation shall promptly give notice in writing to the Holder of the occurrence of any Event of Default or other event which, with the lapse of time or giving of notice, would be an Event of Default. Such written notice shall specify the nature of such default or Event of Default and the steps taken to remedy the same and shall be delivered in accordance with Section 8.1 hereof. |
| (b) | Upon the occurrence of an Event of Default, this Debenture shall, at the option of the Holder, be immediately due and payable in whole or in part 30 days after the Holder provides written notice of such default to the Corporation in accordance with Section 8.1 if such default has not been cured during such 30 day period. In addition, the Security (as defined below) shall immediately following the thirty day period referred to in the preceding sentence become enforceable if (i) such default has not been cured, and (ii) the Principal and any accrued and unpaid Interest has not been repaid if so demanded by the Holder during such 30 day period (or alternatively at the Holder’s request been satisfied by the issuance of Interest Shares and Principal Shares at the then applicable Principal Conversion Price), and the Holder may upon the Security becoming enforceable, forthwith or at any time thereafter and without notice to the Corporation except as required by: |
| (i) | any applicable Bankruptcy Law; |
| -14- |
| (ii) | other applicable legislation; or |
| (iii) | this Agreement, |
enjoy and exercise all of the rights and remedies of a secured party thereunder including, without limitation, the sale, transfer and/or assignment of all, or less than all, of the Security. Notwithstanding the preceding provisions of this clause 4.2(b), the 30 day cure period shall not apply to an Event of Default set forth in Sections 4.1(c) and (f).
ARTICLE 5
Security
| 5.1 | Security and Security Documents |
| (a) | Continuous Obligation to Grant and Maintain Security. As security for the due and punctual payment and performance in full of all obligations of the Corporation towards the Holder incurred under this Debenture, the Corporation shall grant the Holder, in favour of the Holder, and maintain security for the benefit of the Holder on all its property and assets, both present and future and of every nature and kind and wherever situated, including for greater certainty all the shares and convertible securities owned by the Corporation in its subsidiary Peas of Bean Ltd. Equity Securities (collectively, the “Secured Property”), to the extent and pursuant to such documents (the “Security Documents”) as the Lender may reasonably require (the “Security”). The Security shall create, in favour of the Holder, a first-ranking Lien on all property and assets of the Corporation subject only to Permitted Liens. |
| (b) | Security as Condition Precedent. As a condition precedent to the Holder’s obligation to make available the Principal under this Debenture, the Corporation shall have delivered to the Holder, in form and substance satisfactory to the Holder, in its sole unfettered discretion, a general security agreement and in respect of the Peas of Beans Ltd Equity Securities a pledge of shares or such other documents as the Holder’s counsel shall request. |
| 5.2 | Publication of Security |
The Corporation shall cause the Security to be continuously registered, recorded or otherwise perfected or published wherever and however necessary to enforce and set up the rights created thereunder against third persons.
| -15- |
ARTICLE 6
Covenants of the CORPORATION
| 6.1 | Positive Covenants |
For as long as this Debenture remains outstanding, the Corporation declares, covenants and agrees as follows:
| (a) | that the Corporation shall maintain its corporate existence and conduct its business in a proper and business-like manner and take all commercially reasonable action to: (i) carry on its business as currently conducted; and (ii) comply with all applicable legal requirements; |
| (b) | that all Common Shares which shall be so issuable pursuant to this Debenture shall be duly and validly issued as fully-paid and non-assessable common shares in the capital of the Corporation; |
| (c) | that the Corporation will seek all necessary regulatory approvals required for the issuance of the Principal Shares and Interest Shares and the listing of such shares on the TSXV; |
| (d) | to use its reasonable commercial efforts to maintain the listing and posting for trading of its Common Shares on the TSXV or the Other Exchange, provided that this obligation shall cease in the event of any takeover bid, merger, amalgamation, business combination or other transaction involving a change of control or sale of all or substantially all of the Corporation’s assets; |
| (e) | to promptly notify the Holder orally and in writing of any material change in the Corporation’s financial position within two Business Days of such change; |
| (f) | to pay all Taxes of the Corporation promptly as they become due; |
| (g) | to promptly notify the Holder orally and in writing after receiving notice of any Litigation Claim involving a sum greater than $10,000 and the Corporation shall provide the Holder with updates of any material changes to such Litigation Claims for which the Corporation has knowledge within three Business Days of the Corporation becoming aware of such change; and |
| (h) | to, from time to time at its expense, promptly and duly authorize, execute and deliver such further instruments and documents, and take such further action, as the Holder may reasonably request for the purpose of preserving the Security, and full benefits of, and the rights and powers granted by, the Security (including the filing of any registration form, financing statements or financing change statements under any applicable legislation, application for the registration or an application for the registration of a rectification with respect to the Security and including any steps required to register security on any immovable or real property if necessary). |
| -16- |
| 6.2 | Negative Covenants |
For as long as this Debenture remains outstanding, without the prior written consent of the Primary Holder, the Corporation declares, covenants and agrees that the Corporation shall not:
| (a) | incur, issue or permit to exist Debt, or to commit to such incurring, issuance or existence of Debt, except for the Permitted Debt; |
| (b) | entering into any instrument, contract document or agreement which grants any Lien or assignment by way of security in the assets, business or operations of the Corporation, except for the Permitted Liens; |
| (c) | make any amendment to its articles or the fundamental nature of the Corporation’s business without the consent of the Holder or the representative of Safe Foods, Inc. on the Corporation’s board of directors; |
| (d) | dispose of, or commit to dispose of, any Material Assets of the Corporation without the consent of the Holder; and |
| (e) | take any action that would in any material respect adversely affect the validity, adequacy or enforcement of the Security. |
| 6.3 | Certain Litigation |
Notwithstanding any other provision of this Debenture, if:
| (a) | the Corporation becomes subject to or initiates a judicial or administrative proceeding (the “Proceeding”) involving a Litigation Claim (other than a Permitted Litigation Claim) whereby there is a reasonable possibility that the Losses claimed against the Corporation would exceed $200,000 (as determined in good faith by the board of directors of the Corporation) and after seeking advice from counsel (the “Specified Claim”); and |
| (b) | the board of directors of the Corporation has, acting in good faith and after seeking advice from counsel, not concluded that the Specified Claim does not have a reasonable chance of success, |
then unless otherwise agreed to in writing by the Holder, Section 1.3(c) shall not be applicable to permit the satisfaction of the Principal in Principal Shares and Section 1.1(b) shall not be applicable to permit the satisfaction of Interest in Interest Shares, and the Maturity Date of this Debenture and the Liens related to this Debenture shall be extended until the earliest of (w) three years after the commencement of the Proceeding, (x) the date on which a final non-appealable judgment is rendered in respect of the Specified Claim, and (y) the date on which the Specified Claim is withdrawn or finally settled. If the Maturity Date is extended in the circumstances described above, the Corporation shall have the right, but not the obligation, to repay (without premium or penalty) the Principal and any accrued but unpaid Interest on the Debenture in cash at any time prior to the extended Maturity Date, and Section 1.3(c) and Section 1.1(b) shall again apply if and when the Specified Claim is withdrawn or resolved substantially in favour of the Corporation.
| -17- |
ARTICLE 7
USE OF DEBENTURE FOR PAYMENTS TO THE CORPORATION
| 7.1 | Use of Debenture for Payments to the Corporation |
The Holder shall have the right, in its sole and absolute discretion, to satisfy any payment due by the Holder to the Corporation, whether for the payment of the subscription price for other securities of the Corporation or otherwise, by delivering to the Corporation this Debenture, valued at par plus any accrued and unpaid Interest thereon.
| 7.2 | Fractional Debenture |
If any one or more of the payments contemplated in Section 7.1 are less than the full amount of the Principal and accrued and unpaid Interest thereon, the Corporation shall, at its own expense, execute one or more new Debentures for the remaining portion of the Principal remaining outstanding after satisfaction of such payment(s).
ARTICLE 8
Notices
| 8.1 | Notices and Demands |
All notices and demands required by and referred to in this Debenture shall be in writing and shall be personally delivered or mailed by prepaid registered mail to the Corporation at 2264 East 11th Avenue, Vancouver, British Columbia V5N 1Z6 Canada or to the Holder at the address set out on page 1 of this Debenture or to such other address as either party may from time to time designate to the other party by notice in the aforesaid manner. Any notice or demand so personally delivered shall be deemed to have been validly and effectively given and received on the date of such delivery. Any notice or demand so mailed shall be deemed to have been validly and effectively given and received on the fifth Business Day following the date of mailing.
ARTICLE 9
Interpretation
| 9.1 | Currency |
All amounts referred to or payable under this Debenture are in Canadian dollars.
| 9.2 | Non Waiver |
The extension of the time for making any payment which is due and payable hereunder at any time or times or the failure, delay or omission on the part of the Holder to exercise or enforce any rights or remedies of the Holder hereunder or under any instrument securing payment of the indebtedness evidenced by this Debenture shall not constitute a waiver of the right of the Holder to enforce such rights and remedies thereafter.
| -18- |
| 9.3 | Amendments |
No amendment, modification or waiver of any provision of this Debenture or consent to any departure by the Corporation from any provision of this Debenture is in any event effective unless it is in writing. Any amendments to this Debenture, other than any amendments to Articles 4 and 6, will be subject to the prior approval of the TSXV.
| 9.4 | Governing Law |
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and enforced in accordance with the laws of the Province of British Columbia, Canada, and the federal laws of Canada applicable therein, without reference to the conflicts of laws principles thereof.
| 9.5 | Jurisdiction and Venue |
This Debenture shall be subject to the exclusive jurisdiction of the courts of Vancouver, British Columbia. The Parties hereby agree that any breach of any term or condition of this Debenture shall be deemed to be a breach occurring in the Province of British Columbia by virtue of a failure to perform an act required to be performed in the Province of Quebec and irrevocably and expressly agree to submit to the jurisdiction of the courts of Vancouver, British Columbia for the purpose of resolving any disputes relating to this Debenture or the transactions contemplated hereby. The Parties irrevocably waive, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Debenture, or any judgment entered by any court in respect hereof brought in Vancouver, British Columbia, and further irrevocably waive any claim that any suit, action or proceeding brought in Vancouver, British Columbia has been brought in an inconvenient forum. Each Party hereto consents to process being served in any such suit, action or proceeding, by mailing a copy thereof to such Party at the address in effect for notices to it under this Debenture and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 9.5 shall affect or limit any right to serve process in any other manner permitted by law.
| 9.6 | Further Assurances |
Each party agrees to cooperate fully with the other party and to execute such further instruments, documents and agreements and to give such further written assurances as may be reasonably requested by any other party to better evidence and reflect the transactions described herein and contemplated hereby and to carry into effect the intents and purposes of this Debenture, and further agrees to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, all things necessary, proper or advisable under applicable law to consummate and make effective the transactions contemplated hereby, to obtain all necessary waivers, consents and approvals, to effect all necessary registrations and filings, and to remove any injunctions or other impediments or delays, legal or otherwise, in order to consummate and make effective the transactions contemplated by this Debenture for the purpose of securing to the parties hereto the benefits contemplated by this Debenture. Without limiting the generality of the foregoing, the Holder Foods shall promptly following its execution of this Agreement deliver to Plantify a completed and executed TSX Venture Exchange Form 4C Corporate Placee Registration Form in the form attached as Appendix A hereto.
| -19- |
| 9.7 | No Requirement to Issue Fractional Shares |
The Corporation shall not be required to issue fractional Common Shares, including Interest Shares and Principal Shares pursuant to this Debenture. If any fractional interest in Common Shares would, except for the provisions of this Section 9.7, be deliverable pursuant to this Debenture, the Corporation shall, in lieu of delivering any certificate or DRS Statement representing such fractional interest, satisfy such fractional interest by paying to the Holder an amount of lawful money of Canada equal (computed to the nearest whole cent, and one-half of a cent being rounded up) to the value of such fractional interest.
| 9.8 | Legend |
If required by applicable law, a legend substantially in the form of the following legend shall be placed on the certificates representing the Interest Shares and the Principal Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (the U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT; (C) IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF PARAGRAPH (C) OR (D), THE SELLER FURNISHES TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY TO SUCH EFFECT. THE PRESENCE OF THIS LEGEND MAY IMPAIR THE ABILITY OF THE HOLDER HEREOF TO EFFECT “GOOD DELIVERY” OF THE SECURITIES REPRESENTED HEREBY ON A CANADIAN STOCK EXCHANGE. A NEW CERTIFICATE NOT BEARING THIS LEGEND MAY BE OBTAINED UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT THE SALE OF SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT.
| -20- |
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE AUGUST 5, 2023.
WITHOUT PRIOR WRITTEN APPROVAL OF TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITY REPRESENTED BY THIS CERTIFICATE AND ANY COMMON SHARES ISSUED UPON EXERCISE OF THE CONVERSION RIGHT HEREUNDER MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL AUGUST 5, 2023.
| 9.9 | Time of the Essence |
Time shall in all respects be of the essence of this Debenture.
| 9.10 | Waiver of Benefits |
The Corporation hereby waives the benefits of demand and presentment for payment, notice of nonpayment, protest and notice of protest of this Debenture.
| 9.11 | Compliance with Directions, etc. |
The Holder may at any time direct the Corporation to make any payment which is due and payable hereunder or to become due and payable hereunder to any person and the Corporation shall comply with such direction. The Corporation shall, upon the written demand of the Holder, confirm to any third party specified by the Holder that such direction has been received and that no prepayments have been made hereunder and that the Corporation has not been directed to make payments hereunder to any other person.
| 9.12 | Negotiability |
This Debenture may be assigned, discounted, pledged or hypothecated by the Holder and by any subsequent holder of this Debenture; provided, however, this Debenture is not intended by the parties to be, and is not, a negotiable instrument.
| 9.13 | Reimbursement of Expenses |
The Corporation shall reimburse the Holder upon demand for any reasonable costs and expenses actually incurred by the Holder, including without limitation, reasonable attorney fees provided that such attorney fees represent only the fees of one law firm retained jointly by all the Holders (as selected by the Primary Holder), in exercising any right, power, or remedy provided by this Debenture.
| -21- |
|
9.14 | Counterparts |
This Debenture may be executed in any number of counterparts, each of which shall be an original as against a party whose signature appears thereon and all of which together shall constitute one and the same instrument. This Debenture shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of the parties reflected hereon as signatories. In the event that any signature is delivered by facsimile transmission or electronic pdf, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or electronic pdf signature page, as applicable, were an original thereof.
| 9.15 | No Third party Beneficiary |
Nothing expressed or implied in this Debenture is intended, or shall be construed, to confer upon or give any Person other than the parties hereto and their respective heirs, personal representatives, legal representatives, successors and permitted assigns, any rights or remedies under or by reason of this Debenture.
| 9.16 | Right of First Refusal |
The Corporation will notify the Holder (the “Financing Notice”) of the terms of any further financing that it requires or proposes to obtain during the 12 months from the date of the first to occur of the repayment of all amounts owing to the Holder hereunder or the conversion of all amounts owing hereunder into Principal Shares or Interest Shares, as the case may be (the “ROFR Expiry Date”), and the Holder will have the right of first refusal (the “ROFR”) to provide such financing, subject to any applicable securities laws or rules of the TSXV or Other Exchange. The said right of first refusal must be exercised by the Holder within five Business Days following the receipt of the Financing Notice by notifying the Corporation that it will provide such financing on the terms set out in the Financing Notice. If the Holder fails to give the applicable notice with the time specified, the Corporation will then be free to make other arrangements to obtain financing from another source on the same terms or on terms no less favourable to the Corporation than that specified in the Financing Notice. For greater certainty and without derogating from the foregoing, the ROFR shall be a recurring right in respect of every Financing Notice until the ROFR Expiry Date.
| 9.17 | Language |
The parties hereto confirm that they have expressly agreed that this Debenture and all ancillary documents be drawn up in the English language. Les parties aux présentes confirment qu’elles ont expressément convenu que cette convention et tout document connexe soient rédigés en langue anglaise.
[Signature Page Follows]
IN WITNESS WHEREOF the parties hereto have executed this Debenture this 4th day of April, 2023.
| PLANTIFY FOODS, INC. | ||
| Per: | /s/ Gabriel Kabazo | |
| Name: | Gabriel Kabazo | |
| Title: | Chief Financial Officer | |
| I have authority to bind the Corporation | ||
| SAVE FOODS, INC. | ||
| Per: | /s/ David Palach | |
| Name: | David Palach | |
| Title: | Chief Executive Officer | |
| I have authority to bind the company | ||
APPENDIX A
DEFINITIONS
The following terms when used in this Debenture shall have the respective meanings ascribed to them below:
“Bankruptcy Law” means the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), any provision in applicable United States federal, Canadian, state, provincial, territorial or foreign corporate law with respect to arrangements or reorganizations, in each case, as amended, or any similar United States federal, Canadian, provincial, territorial or foreign law for the relief of debtors.
“Business Day” means a day other than a Saturday, Sunday or any other day on which Canadian chartered banks located in the City of Vancouver, Province of British Columbia are not open for business.
“Change of Control” means with respect to the Corporation any of the following to which the Holder or an associate or affiliate (as such terms are defined in the Securities Act (Ontario)) of the Holder is not a party, directly or indirectly:
| (a) | any merger, tender offer, take-over bid, amalgamation, plan of arrangement, business combination or consolidation in respect of the Corporation; | |
| (b) | the direct or indirect sale, transfer, assignment, exchange, lease, release, licence or other disposition to a third party of all or substantially all of its assets, business, operations or undertaking out of the ordinary course of business; | |
| (c) | any purchase or other acquisition by a Person of such number of Equity Securities or any rights or interests therein or thereto, which together with the Equity Securities over which such Person directly or indirectly maintains legal control or direction over, and the holdings of any other Person or Persons with whom such first Person may be acting jointly or in concert (as such term is defined in the Securities Act (Ontario)): |
| (i) | constitutes at least 50.01% of the outstanding Common Shares; or | |
| (ii) | permits such Person to appoint the majority of the board of directors of the Corporation; and |
| (d) | any similar business combination or transaction, of or involving the Corporation. |
“Convertible Securities” means Securities that are exchangeable, convertible or exercisable into Common Shares.
“Current Market Price” of the Common Shares at any date means the price per share equal to the volume weighted average trading price of the Common Shares on the TSXV during the twenty consecutive trading days ending three Business Days before such date or, if the Common Shares are not then listed on the TSXV, on such Other Exchange on which the Common Shares trade as may be selected by the directors of the Corporation for such purpose or, if the Common Shares are not then listed on any Other Exchange, in the over-the-counter market, during the twenty consecutive trading days ending three Business Days before such date; provided that if the Common Shares are not then listed on the TSXV, any Other Exchange or traded in the over-the counter market, then the Current Market Price shall be determined by such firm of independent chartered accountants as may be selected by the directors of the Corporation.
“Debenture” means this Series 2011-I secured debenture issued by the Corporation.
“Debt” means with respect to the Corporation, without duplication:
| (a) | any of its indebtedness for or in respect of borrowed money, including liabilities and obligations with respect to letters of credit, letters of guarantee, bankers’ acceptances or similar instruments issued or accepted by banks and other financial institutions for the account of the Corporation; |
| (b) | any of its indebtedness for or in respect of the purchase or acquisition price of property, whether or not recourse is limited to the repossession and sale of any such property; |
| (c) | any obligations under any lease entered into as lessee which would be classified as a capital lease in accordance with GAAP; |
| (d) | any obligations of it to purchase, redeem, retract or otherwise acquire any securities issued by the Corporation where such obligation has been exercised or otherwise become payable; and |
| (e) | any debt of another Person which is directly or indirectly guaranteed by the Corporation or which the Corporation has agreed to purchase or otherwise acquire or in respect of which the Corporation has otherwise assured a creditor against loss, |
but for greater certainty, “Debt” shall not include unsecured trade debt incurred in the ordinary course of business, nor any contingent liabilities.
“DRS Notice” means a direct registration system ownership statement.
“Equity Securities” means, together, Common Shares and Convertible Securities.
“GAAP” means generally accepted accounting principles in Canada or International Financial Reporting Standards, as the case may be, as from time to time in effect.
“governmental authority” means any international, supranational, national, provincial, regional, federal, state, municipal or local government, any instrumentality, subdivision, court, administrative or regulatory agency, tribunal or commission or other authority, or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority.
“Interest Conversion Price” means the Market Price (as defined in Policy 1.1 of the TSXV Corporate Finance Manual) of the Common Shares as of each applicable Interest Payment Date.
“Lien” means any hypothec, security interest, mortgage, lien, pledge, assignment by way of security or any other agreement or encumbrance or charge of any nature that secures the performance of an obligation, and a person is deemed to own subject to a Lien any property or assets that it has acquired or holds subject to the right of a vendor or lessor under any conditional sale agreement, capital or synthetic lease or similar agreement (other than an operating lease) relating to such property or assets.
“Litigation Claim” means any claim for Losses adverse to the Corporation commenced in a court of competent jurisdiction.
“Losses” means any and all actual damages, fines, fees, penalties, deficiencies, liabilities, claims, losses (including loss of value), demands, claims, suits, judgments, awards, settlements, actions, obligations, costs and expenses.
“Material Adverse Effect” means, with respect to the Corporation, a material adverse effect on the condition (financial or otherwise), business, properties, assets or liabilities (including contingent liabilities) of the Corporation taken as a whole, or on the ability of the Corporation to perform its obligations under this Debenture or the Pari Passu Agreement.
“Material Agreement” means an agreement, lease, document or instruments relating to Debt with an outstanding principal face amount of at least $50,000.
“Material Assets” means the Peas of Beans Ltd. Equity Securities.
“Minimum Exercise Price” at any time means the greater of (i) 75% of the Current Market Price at that time and (ii) the price which is at the maximum discount permitted at that time for Common Shares under the rules of the TSXV or the Other Exchange.
“Obligations” means the Principal, Interest and all other amounts owing hereunder.
“Pari Passu Agreement” means the agency and pari passu priority agreement dated the date hereof between, among others, the Holder and the Corporation.
“Peas Of Beans Ltd. Equity Securities” means all of the shares and convertible securities owned by the Corporation in its subsidiary Peas of Bean Ltd., a company existing pursuant to the laws of the State of Israel.
“Permitted Debt” means:
| (a) | the Obligations; |
| (b) | other indebtedness secured by Permitted Liens; |
| (c) | accounts payable incurred in the ordinary course of business and professional fees; |
| (d) | accrued liabilities, Taxes, deferred revenues and operating leases incurred in the ordinary course of business; |
| (e) | obligations in respect of capital leases and purchase money security interests incurred in the ordinary course of business (subject to any limits which may be established hereunder), and obligations under the Corporation’s immovable or real property leases or subleases (including under or in connection with any municipal bonds in respect of the purchase of such immovable or real property) and mining claims, mining rights, and mining interests; |
| (f) | any other Debt the Holder or the representative of Safe Foods, Inc. on the Corporation’s board of directors may declare in writing to be Permitted Debt; and |
| (g) | any other Debt not to exceed $250,000 in the aggregate. |
“Permitted Liens” means any of the following:
| (a) | Liens for Taxes and assessments or governmental charges or levies provided that payment thereof is not overdue or, if overdue, is being contested in good faith by appropriate actions or proceedings and that adequate reserves are maintained to the extent required by GAAP; |
| (b) | Liens resulting from the judgment of any court provided that the time for appeal of such judgment has not expired or that the Corporation is in good faith prosecuting an appeal and a stay of execution pending such appeal has been secured and provided further that adequate reserves are maintained to the extent required by GAAP; |
| (c) | Rights reserved to or vested in any municipality or governmental or other public authority by the terms of any lease, licence, franchise, grant or permit, or by any statutory provision, including without limitation, to terminate the same or to require annual or other periodic payments as a condition to the continuance thereof; |
| (d) | Liens incidental to the conduct of the Corporation’s business including, without limitation, prior claims and other inchoate or indeterminate Liens, Liens of any warehouseman, repairman or builder, Liens to secure payment of premiums on insurance purchased in the usual course of business, Liens arising in connection with worker’s compensation, unemployment insurance or pension and employee benefits legislation, Liens to secure statutory obligations, Liens created under surety or appeal bonds, deposits or pledges to secure bids, tenders or contracts in the ordinary course of the Corporation’s business and other Liens of like general nature provided in each case, the obligation secured is not overdue or, if overdue, is being contested in good faith by appropriate actions or proceedings and that adequate reserves are maintained to the extent required by GAAP; |
| (e) | minor title defects, minor survey exceptions or minor encumbrances, servitudes, easements or reservations of, or rights of others for rights-of-way, utilities and other similar purposes, security given to a public utility or municipality when required by such Governmental Authority in connection with the operation of the Corporation’s business or zoning or other restrictions as to the use of immovable or real properties, which Liens do not in the aggregate materially detract from the value of said properties or materially impair their use in the operation of the Corporation’s business as currently conducted; |
| (f) | Liens created under the Security; |
| (g) | security given in the ordinary course of business to a public utility or any municipality or government or other public authority when required by such utility or municipality or governmental or other authority in connection with the operations of the Corporation; |
| (h) | Liens securing obligations incurred in connection with the purchase or the lease of any real or immovable property, improvements thereto and equipment or securing any renewal, extension or replacement of such obligations, provided that any such Lien charges only the property purchased or leased and for an amount not in excess of the related obligations and that the aggregate of all outstanding amounts secured by such Liens does not at any time exceed $20,000; |
| (i) | any other encumbrances or Liens the Holder declares in writing to be Permitted Liens; and |
| (j) | such other Liens in respect of Permitted Debt. |
“Person” includes any individual, firm, partnership, limited partnership, limited liability partnership, joint venture, venture capital fund, limited liability company, unlimited liability company, association, trust, trustee, executor, administrator, legal personal representative, estate, body corporate, corporation, company, unincorporated association or organization, governmental authority, syndicate or other entity, whether or not having legal status.
“Principal Conversion Price” means $0.05 until the first anniversary of the date of this Debenture and $0.10 thereafter.
“Securities” has the meaning ascribed thereto in the Securities Act (Ontario).
“Taxes” includes any and all income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental, customs, capital stock, franchise, employees’ withholding, foreign or domestic withholding, social security, unemployment, disability, Canadian Pension Plan premiums, workers’ compensation payments, employer health payments, real property, personal property, sales, use, transfer, valued added, goods and services, alternative, add-on minimum and other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever, and any interest, penalties, addition to or additional amount thereon imposed, assessed or collected by or under the authority of any Government Authority or other taxing authority (including of Canada or any province or jurisdiction contained therein) or payable under any tax sharing or any other contracts.
“TSXV” means the TSX Venture Exchange.
Exhibit 99.1
Save Foods, Inc. Announces Signing of Securities Exchange Agreement with Plantify Foods, Inc.
Plantify to issue CA$1,500,000 convertible debenture to Save Foods in a private placement, subject to the approval of Plantify’s shareholders
Neve Yarak, Israel, March 31, 2023 – Save Foods, Inc. (Nasdaq: SVFD) (“Save Foods” or the “Company”) is pleased to announce that it has signed a securities exchange agreement (the “Agreement”) with Plantify Foods, Inc. (TSXV: PTFY) (“Plantify”), a Canadian corporation traded on the TSX Venture Exchange (“TSXV”).
The Agreement provides that the parties will issue to each other such number of common shares representing 19.99% of the respective company’s issued and outstanding capital stock on a non-diluted basis, which percentage will be calculated immediately prior to the closing of the Agreement (the “Securities Exchange”).
The Agreement also provides that, effective as of the closing date of the Agreement (and subject to the required corporate approvals), each party will appoint one director of the other party. Save Foods has designated Mr. Amitai Weiss, Chairman of the Board of Save Foods, as its appointee to the board of directors of Plantify, and Plantify has designated Dr. Roy Borochov, Chief Executive Officer of Plantify, as its appointee to the board of directors of Save Foods.
The completion of the Securities Exchange is subject to certain customary closing conditions, as well as receipt of TSXV’s acceptance, and the concurrent closing of Plantify’s issuance to Save Foods of a convertible debenture (the “Debenture”) in the principal sum of CA$1,500,000 (the “Debenture Financing”), which is also subject to TSXV acceptance.
The Debenture will bear interest at the rate of 8% per annum and will be repayable by Plantify over approximately 18 months. The principal may be converted, at the sole discretion of Save Foods, into common shares of Plantify at a price of CA$0.05 per share until the first anniversary of the debenture issuance date and CA$0.10 per share thereafter. The accrued interest may be converted at the market price of Plantify’s common shares, subject to TSXV approval at the time of conversion. Plantify will execute a general security agreement in favor of Save Foods and will specifically pledge to Save Foods the shares of Plantify’s subsidiary, Peas of Bean Ltd.
If the principal under the Debenture is converted in the first year into 30,000,000 Plantify common shares, and assuming no further Plantify common shares are issued following the Securities Exchange, Save Foods will hold approximately 28.56 % of Plantify’s outstanding common shares. Accordingly, closing of the Debenture Financing is subject to the approval of Plantify’s shareholders.
“We are thrilled to announce that Plantify and Save Foods have agreed to undertake the Securities Exchange and the Debenture Financing” David Palach, CEO of Save Foods, and Roy Borochov commented together in a joint statement “This cross-ownership has the potential to introduce game-changing advancements to the Food Tech and Agro Tech industries, paving the way for growth and progress. Both companies are confident that working together will bring new and exciting opportunities to our respective businesses. Save Foods’ innovative treatments present an opportunity for Plantify to introduce a new line of fresh-cut products, making the relationship mutually beneficial, and Save Foods can benefit from Plantify’s extensive relationships with retailers to expand its market reach and grow its distribution channels. We are confident that this move will enable both Save Foods and Plantify to continue to mutually grow and thrive together.”
About Save Foods:
Save Foods is an innovative, dynamic company addressing two of the most significant challenges in the agri-food tech industry: food waste and loss and food safety. We are dedicated to delivering integrated solutions for improved safety, freshness and quality, every step of the way from field to fork. Collaborating closely with our customers, we develop new solutions that benefit the entire supply chain and improve the safety and quality of life of both the workers and the consumers alike. Our initial applications are in post-harvest treatments in fruit and vegetable packing houses processing produce including citrus, avocado, pears, apples and mangos.
By controlling and preventing pathogen contamination and significantly reducing the use of hazardous chemicals and their residues, Save Foods treatment not only prolong fresh produce shelf life and reduce food loss and waste, but they also ensure a safe, natural, and healthy product.
For more information, visit our website: www.savefoods.co
About Plantify Foods, Inc.
Plantify Foods, Inc. is an Israeli food tech company focused on the development and production of “clean-label” plant-based products. Plantify’s unique technology allows for the production of plant-based meat alternatives, dips, and snacks, with natural ingredients familiar to consumers that are free of preservatives, free of common food allergens, are GMO-free and enjoy the same or longer shelf life than most preservative-containing products of the same category. Plantify is also engaged in developing functional foods with health benefits supported by independent testing that it anticipates will enable it to make health claims under US Food and Drug Administration and Canadian Food Inspection Agency regulations. Plantify currently sells its products in Israel and North America.
For more information, visit Plantify’s website: www.plantifyfoods.com
Plantify Foods, Inc.
Gabriel Kabazo - Chief Financial Officer and Corporate Secretary
Phone: 1 604 8336820
Forward-looking Statements:
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. Because such statements deal with future events and are based on our current expectations, they are subject to various risks and uncertainties. For example, the Company is using forward-looking statements when it discusses the potential synergies between Save Foods and Plantify, operational and business opportunities available to Save Foods following the contemplated completion of the share exchange with Plantify, and the potential benefits Plantify can present to Save Foods, including through its relationships with retailers and expansion of Save Foods’ market reach and growth of its distribution channels. Additional examples of forward-looking statements relate to the possibility of securing additional business opportunities and pursuing new pilot programs and commercial sales opportunities with members of the LATAM delegation. Actual results, performance or achievements could differ materially from those described in or implied by the statements in this press release. The forward-looking statements contained or implied in this press release are subject to other risks and uncertainties, including market conditions and the satisfaction of all conditions to, and the closing of, the offering, as well as those discussed under the heading “Risk Factors” in Save Foods’ annual report on Form 10-K filed with the SEC on March 27, 2023, and in any subsequent filings with the SEC. Except as otherwise required by law, we undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release. We are not responsible for the contents of third-party websites.
Media Contact:
IR@savefoods.co