Proem Acquisition Corp. I 8-K, filed Sep 28, 2026
Proem Acquisition Corp. I (PAAC)
About this 8-K
Proem Acquisition Corp. I filed this 8-K on September 28, 2026, reporting on events of September 26, 2026.
Items reported
- Item 1.01: Entered into a material agreement
- Item 3.02: Unregistered sale of equity
- Item 7.01: Regulation FD disclosure
- 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
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Item 1.01. Entry into a Material Definitive Agreement.
Merger Agreement
On September 26, 2026, Proem Acquisition Corp I, a Cayman Islands exempted company (“PAAC” or “Parent”), entered into a merger agreement, by and among PAAC, PAAC Merger Sub I, Inc., a Delaware corporation and a wholly-owned subsidiary of PAAC (“Merger Sub I”), PAAC Merger Sub II, LLC, a Delaware limited liability company and a wholly-owned subsidiary of PAAC (“Merger Sub II”), and Astro Digital US, Inc., a Delaware corporation (“Astro Digital” or the “Company”) (as it may be amended and/or restated from time to time, the “Merger Agreement”). Capitalized terms used in this Current Report on Form 8-K but not otherwise defined herein have the meanings given to them in the Merger Agreement.
Astro Digital is an aerospace company that provides modular satellite technology infrastructure and mission support services.
The board of directors of PAAC has unanimously approved and declared advisable the Merger Agreement and the Business Combination (as defined below) and resolved to recommend approval of the Merger Agreement and related matters to PAAC’s shareholders. Pursuant to the Merger Agreement, (a) PAAC will domesticate from the Cayman Islands to Delaware (the “Domestication”), and (b) at least one (1) Business Day following the Domestication, (i) Merger Sub I will merge with and into Astro Digital (the “First Company Merger”), after which Astro Digital will be the surviving corporation (the “Initial Surviving Corporation”), and (ii) immediately following the First Company Merger, the Initial Surviving Corporation will merge with and into Merger Sub II (the “Second Company Merger” and, together with the First Company Merger, the “Company Mergers”), with Merger Sub II continuing as the surviving entity (the “Surviving Company”) and a wholly-owned subsidiary of Parent. In connection with the Domestication, Parent will change its name to “Astro Digital, Inc.” or a name to be mutually agreed by the Company and Parent.
Contemporaneously with the execution of the Merger Agreement, Parent, the Company and the Selling Company Stockholders (as defined in the Merger Agreement and party to the Lock-Up Agreement) have acknowledged and agreed that Parent will, on the Business Day immediately following the Second Effective Time (as defined below), use an amount equal to twenty percent (20%) of the gross proceeds of the PIPE Investment Amount (as defined below) to repurchase each Selling Company Stockholder’s Pro Rata Share (as defined in the Merger Agreement) of such number of Parent Common Shares at a purchase price of $10.00 per Parent Common Share (the “Repurchase”).
The Domestication and Company Mergers
In accordance with the Merger Agreement, and subject to the satisfaction or waiver of the conditions set forth therein, on the day that is at least one (1) Business Day prior to the First Effective Time, Parent will de-register from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation.
In connection with the Domestication, Parent will (i) file a certificate of domestication with respect to the Domestication with the Secretary of State of the State of Delaware, in form and substance reasonably acceptable to Parent and the Company, together with a certificate of incorporation, in each case, in accordance with the provisions thereof and Section 388 of the DGCL and (ii) make all those filings required to be made with the Cayman Registrar under the Cayman Companies Act in connection with the Domestication.
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In connection with the Domestication, (i) each then issued and outstanding ordinary share of PAAC, par value $0.0001 per share (each, a “Parent Ordinary Share”), will convert automatically, on a one-for-one basis, into one share common stock, par value $0.0001 per share, of Parent following the Domestication (each, a “Parent Common Share”); (ii) each then issued and outstanding warrant of PAAC will convert automatically into a warrant to purchase one Parent Common Share at the Closing, pursuant to the Warrant Agreement, dated as of February 11, 2026, between Parent and Continental Stock Transfer & Trust Company, as warrant agent; and (iii) each then issued and outstanding unit of PAAC will separate and convert automatically into one Parent Common Share and one-half of one warrant, with each whole warrant entitling the holder to purchase one Parent Common Share at the Closing.
Upon the terms and subject to the conditions of the Merger Agreement, at least one (1) Business Day following the Domestication, Merger Sub I will merge with and into Astro Digital in the First Company Merger, after which Astro Digital will be the Initial Surviving Corporation and a wholly-owned subsidiary of Parent. Immediately following the First Company Merger, the Initial Surviving Corporation will merge with and into Merger Sub II in the Second Company Merger, after which Merger Sub II will be the Surviving Company and a wholly-owned subsidiary of Parent.
The First Company Merger will become effective upon the filing of a certificate of merger with the Secretary of State of the State of Delaware or at such later time as is agreed to by the parties to the Merger Agreement and specified in the certificate of merger (the “First Effective Time”), and the Second Company Merger will become effective upon the filing of a certificate of merger with the Secretary of State of the State of Delaware or at such later time as is agreed to by the parties to the Merger Agreement and specified in the certificate of merger (the “Second Effective Time”). The Domestication, the Company Mergers, and the other transactions contemplated by the Merger Agreement are collectively referred to herein as the “Business Combination,” the consummation of the Company Mergers is referred to as the “Closing” and the date of the Closing is referred to as the “Closing Date.”
Merger Consideration and Structure
Pursuant to the Merger Agreement, Parent has agreed to acquire all of the equity interests of the Company for the sum of $525,000,000 plus the Aggregate Exercise Price (the “Base Purchase Price”), comprising of a number of Parent Common Shares equal to the quotient obtained by dividing (a) the Base Purchase Price, by (b) US$10.00 (the “Aggregate Merger Consideration”). “Aggregate Exercise Price” means the aggregate dollar amount payable to the Company upon the exercise or conversion of all vested in-the-money Company Options and all vested in-the-money Company Warrants that are outstanding immediately prior to the First Effective Time.
Effect of the Company Mergers
At the First Effective Time, (i) each share of Company Capital Stock (as defined below), if any, that is owned by Parent, Merger Sub I, Merger Sub II or the Company (as treasury stock or otherwise), will automatically be canceled; (ii) each share of Company Preferred Stock issued and outstanding immediately prior to the First Effective Time (other than any such shares canceled pursuant to clause (i) and any Dissenting Shares) will be converted into the right to receive a number of Parent Common Shares equal to the Conversion Ratio multiplied by the number of shares of Company Common Stock issuable upon conversion of such share of Company Preferred Stock as of immediately prior to the First Effective Time; and (iii) each share of Company Common Stock issued and outstanding immediately prior to the First Effective Time (other than any such shares canceled pursuant to clause (i) and any Dissenting Shares) will be converted into the right to receive a number of Parent Common Shares equal to the Conversion Ratio. At the First Effective Time, all shares of Company Capital Stock converted pursuant to clauses (ii) and (iii) will no longer be outstanding and will automatically be canceled and cease to exist, and each holder of such Company Capital Stock will thereafter cease to have any rights with respect to such securities, except the right to receive a portion of the Aggregate Merger Consideration.
“Company Capital Stock” means the common stock of the Company, $0.0001 par value per share (“Company Common Stock”), and the Series A Preferred Stock of the Company, $0.0001 par value per share (“Company Preferred Stock”).
“Conversion Ratio” means the quotient obtained by dividing (a) the number of Parent Common Shares constituting the Aggregate Merger Consideration, by (b) the number of shares constituting the Aggregate Fully Diluted Company Common Stock.
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“Aggregate Fully Diluted Company Common Stock” means the sum, without duplication, of (a) all shares of Company Common Stock that are issued and outstanding immediately prior to the First Effective Time; plus (b) the aggregate number of shares of Company Common Stock issuable upon full conversion of all Company Preferred Stock outstanding as of immediately prior to the First Effective Time; plus (c) the aggregate number of shares of Company Common Stock issuable upon exercise of all Company Options that are vested as of immediately prior to the First Effective Time; plus (d) the aggregate number of shares of Company Common Stock directly or indirectly issuable upon exercise of all Company Warrants; plus (e) the aggregate number of shares of Company Common Stock issuable upon full conversion, exercise or exchange of any other securities of the Company (other than Company Options and Company Warrants) outstanding immediately prior to the First Effective Time directly or indirectly convertible into or exchangeable or exercisable for shares of Company Common Stock (including the Company Convertible Notes).
Each share of common stock, par value $0.0001 per share, of Merger Sub I issued and outstanding immediately prior to the First Effective Time shall be converted into and become one newly issued, fully paid and nonassessable share of common stock of the Initial Surviving Corporation.
At the Second Effective Time, each share of capital stock of the Initial Surviving Corporation issued and outstanding immediately prior to the Second Effective Time will be canceled, and all limited liability company interests of Merger Sub II outstanding immediately prior to the Second Effective Time will be converted into an equal number of limited liability company interests of the Surviving Company, which will constitute 100% of the outstanding equity of the Surviving Company, all owned by Parent.
Treatment of Options, Convertible Notes and Company Warrants.
At the First Effective Time, each Company Option will be converted into an option to acquire, subject to substantially the same terms and conditions as were applicable under such Company Option (including expiration date, vesting conditions and exercise provisions), the number of Parent Common Shares (rounded down to the nearest whole share) determined by multiplying the number of shares of Company Common Stock subject to such Company Option as of immediately prior to the First Effective Time by the Conversion Ratio, at an exercise price per Parent Common Share (rounded up to the nearest whole cent) equal to the exercise price per share of Company Common Stock of such Company Option divided by the Conversion Ratio.
At the First Effective Time, each Company Convertible Note will be converted into the right to receive a number of Parent Common Shares equal to the Conversion Ratio multiplied by the number of shares of Company Common Stock issuable upon conversion of such Company Convertible Note as of immediately prior to the First Effective Time.
Prior to the Closing, the Company will take all actions necessary to cause each Company Warrant outstanding immediately prior to the First Effective Time to be exercised on a “cashless” or “net” exercise basis into shares of Company Common Stock immediately prior to the First Effective Time, and each share of Company Common Stock so issued will be converted into the right to receive a portion of the Aggregate Merger Consideration in accordance with the Merger Agreement.
Post-Closing Board of Directors and Executive Officers
At the Second Effective Time, Parent’s board of directors will consist of seven directors, of which the Company will have the right to designate four directors, including one director designated as the initial “Chairperson,” and the remaining three directors will be jointly designated by the Company and Proem SPAC Partners I LLC (the “Sponsor”). At least a majority of the board of directors shall qualify as independent directors under Nasdaq or Approved Exchange rules, as applicable.
At the Second Effective Time, the initial managers of the Surviving Company will consist of the same persons serving on Parent’s Board of Directors and certain identified officers of the Company will become the initial officers of the Surviving Company.
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Representations, Warranties and Covenants
The parties to the Merger Agreement have made customary representations, warranties and covenants in the Merger Agreement, including, among other things, covenants with respect to the conduct of the Company and Parent and their respective subsidiaries prior to the Closing, including the Company’s covenant to provide to Parent its audited financial statements for the years ended December 31, 2025 and 2024 and unaudited interim financial statements for inclusion in the registration statement on Form S-4 (the “Registration Statement”) to be filed by PAAC and the Company with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the Business Combination. Parent and the Company shall jointly prepare and file with the SEC mutually acceptable proxy materials which shall be included in the Registration Statement. The representations, warranties, covenants and agreements generally will not survive the Closing, except for certain post-Closing covenants and specified provisions.
Conditions to Closing
The Closing of the Business Combination is subject to certain customary conditions of the respective parties, including, among other things: (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of PAAC and the Company, including approval of each Required Parent Proposal at the Parent Shareholder Meeting; (ii) effectiveness of the Registration Statement; (iii) Parent’s initial listing application shall have been conditionally approved for listing on Nasdaq or another national stock exchange; (iv) there shall not have occurred a respective Material Adverse Effect in respect of the Company and Parent that is continuing; (v) the representations and warranties of the parties shall satisfy the applicable accuracy standards set forth in the Merger Agreement, including that the respective fundamental representations be true and correct in all but de minimis respects and that the remaining representations and warranties satisfy the applicable Material Adverse Effect standard; (vi) the Parent Certificate of Incorporation shall have been filed with the Secretary of State of the State of Delaware; (vii) all required officer certificates of the Company and Parent shall have been delivered; (viii) all parties shall have executed and delivered a copy of each Ancillary Agreement to which they are a party; (ix) the PIPE Financing, as defined below, shall have been consummated immediately prior to the Closing in accordance with the PIPE Subscription Agreements, as defined below, resulting in gross proceeds in an amount not less than the PIPE Investment Amount, as defined below; (x) the amount of Parent Closing Cash at the Closing shall equal or exceed $30,000,000 (the “Minimum Cash Condition”), with Parent Closing Cash calculated based on the amount of cash remaining in the Trust Account after giving effect to redemptions, plus the PIPE Financing and any other permitted equity or debt financing received by Parent or the Company prior to or substantially concurrently with the Closing, less accrued but unpaid Parent Transaction Expenses and Company Transaction Expenses; and (xi) all consents, approvals or authorizations of any governmental authority required of Parent, the Company or their respective subsidiaries to consummate the Business Combination shall have been obtained and shall be in full force and effect.
Termination
The Merger Agreement may be terminated by Parent or the Company under certain circumstances, including:
| (i) | by mutual written agreement of Parent and the Company; |
| (ii) | by either Parent or the Company, if (a) the Closing has not occurred on or before April 26, 2027 (the “Outside Closing Date”) and (b) the material breach or violation of any representation, warranty, covenant or obligation under the Merger Agreement by the party seeking to terminate was not the proximate and primary cause of the failure of the Closing to occur on or before such date; provided, that the Outside Closing Date will be automatically extended for an additional two months to the extent there is any delay to the applicable waiting or review periods, or any extension thereof, by any Authority, Nasdaq or any Approved Exchange, including any request for additional time to review the transactions contemplated by the Merger Agreement, that would or would reasonably be expected to delay, impede, hinder or prevent such review or the issuance of any required clearance or approval; |
| (iii) | by either Parent or the Company, if the Domestication or either Company Merger is prohibited or made illegal by a final, non-appealable governmental order or Law and the failure to comply with any provision of the Merger Agreement by the party seeking to terminate was not a substantial cause of, or did not substantially result in, such order or Law; |
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| (iv) | by Parent, (a) at any time prior to the Closing, if the Company has breached any of its covenants, agreements, representations or warranties contained in the Merger Agreement or the Ancillary Agreements, or (b) at any time after the Company Stockholder Written Consent Deadline, if the Company has not delivered the Company Stockholder Approval to Parent; |
| (v) | by the Company, at any time prior to the Closing, if Parent, Merger Sub I or Merger Sub II has breached any of its covenants, agreements, representations or warranties contained in the Merger Agreement or the Ancillary Agreements; or | |
| (vi) | by Parent or the Company, if the Parent Shareholder Meeting is held and the Required Parent Proposals have not been approved by the requisite vote of the holders of Parent Ordinary Shares in accordance with the Parent Articles and applicable Law. |
The Merger Agreement also provides for (a) a Company Termination Fee of $400,000 if the Company terminates due to the Closing having not occurred on or before the Outside Closing Date at a time when Parent has provided a reasonable basis to extend the Outside Closing Date or $200,000 if Parent terminates due to a Company breach, and (b) a Parent Termination Fee of $300,000 if the Company terminates due to failure of the Minimum Cash Condition or failure of the Required Parent Proposals to be approved at the Parent Shareholder Meeting.
The foregoing description of the Merger Agreement and the Business Combination does not purport to be complete and is qualified in its entirety by the terms and conditions of the Merger Agreement, a copy of which is filed hereto as Exhibit 2.1 and is incorporated herein by reference.
Certain Related Agreements
Company Support Agreement
In connection with the execution of the Merger Agreement, Parent entered into a support agreement (the “Company Support Agreement”) with the Company and certain stockholders of the Company (the “Company Supporting Shareholders”), pursuant to which the Company Supporting Shareholders agreed to, among other things, (i) vote to adopt and approve the Merger Agreement and the transactions contemplated thereby, (ii) vote against any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by the Company other than the Merger Agreement, the Ancillary Agreements, the Company Mergers and the other transactions contemplated thereby, (iii) vote against any change in the business, management or board of directors of the Company other than in connection with the Merger Agreement and the transactions contemplated thereby, including the Company Mergers, and (iv) vote against any proposal, action or agreement that would impede, interfere with, delay, postpone, frustrate, prevent or nullify any provision of the Company Support Agreement, the Merger Agreement, the Ancillary Agreements or the Company Mergers or any of the transactions contemplated thereby, result in a breach of any covenant, representation, warranty or other obligation of the Company or the Company Stockholders under the Merger Agreement or the Company Support Agreement, result in any of the conditions set forth in the Merger Agreement not being fulfilled, or change in any manner the dividend policy or capitalization of the Company.
In addition, the Company Supporting Shareholders agreed that during the period commencing on the date of entry into the Company Support Agreement until the earliest of (a) the Second Effective Time and (b) such date and time as the Merger Agreement shall be validly terminated in accordance with its terms, each Company Supporting Shareholder agrees to not, without the prior written consent of Parent, directly or indirectly, (i) sell, offer to sell, contract or agree to sell, hypothecate, transfer, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of or transfer, any shares of Company Capital Stock or other securities of the Company owned by such Company Supporting Shareholder, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any such shares or securities or (iii) publicly announce any intention to effect any such transaction; provided, however, that the foregoing restrictions shall not apply to any Permitted Transfer (as defined in the Company Support Agreement).
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The foregoing description of the Company Support Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Company Support Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
Parent Support Agreement
In connection with the execution of the Merger Agreement, Parent, the Company, the Sponsor and certain other shareholders of Parent entered into a support agreement (the “Parent Support Agreement”), pursuant to which such shareholders agreed to, among other things, (i) vote all of their Parent Ordinary Shares or Parent Common Shares, as applicable, and other voting securities of Parent in favor of the various proposals related to the Business Combination and the Merger Agreement and any other matters requested by Parent for consummation of the Business Combination, (ii) vote against any alternative proposal or alternative transaction or any proposal relating to a business combination transaction other than the Merger Agreement, the Company Mergers or any of the transactions contemplated thereby, (iii) vote against any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by Parent other than the Merger Agreement, the Ancillary Agreements, the Company Mergers and the other transactions contemplated thereby, (iv) vote against any change in the business, management or board of directors of Parent other than in connection with the Merger Agreement, the Company Mergers or any of the transactions contemplated thereby, (v) vote against any proposal, action or agreement that would impede, interfere with, delay, postpone, frustrate, prevent or nullify any provision of the Parent Support Agreement, the Merger Agreement, the Ancillary Agreements or the Company Mergers or any of the transactions contemplated thereby, result in a breach of any covenant, representation, warranty or other obligation of Parent, Merger Sub I, Merger Sub II or the Sponsor under the Merger Agreement or the Parent Support Agreement, result in any of the conditions set forth in the Merger Agreement not being fulfilled, or change in any manner the dividend policy or capitalization of Parent, including the voting rights of any class of capital stock of Parent, (vi) vote in favor of any proposal to extend the period of time Parent is afforded under its organizational documents to consummate an initial business combination, and (vii) not redeem, sell or tender, or request to redeem, sell or tender, any Parent Shares, Parent Units or other Subject Securities (in each case, as defined in the Parent Support Agreement) in connection with the transactions contemplated by the Merger Agreement, in each case subject to the terms and conditions of the Parent Support Agreement.
During the period commencing on the date hereof and ending on the earliest of (a) the Second Effective Time, (b) such date and time as the Merger Agreement shall be validly terminated in accordance with its terms and (c) the liquidation of Parent, the shareholders of Parent, including the Sponsor, agreed not to, without the prior written consent of the Company, directly or indirectly, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, file (or participate in the filing of) a registration statement with the SEC (other than the Proxy Statement/Prospectus) or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, with respect to any Parent Ordinary Shares or Parent Common Shares, as applicable, or other Subject Securities owned by them, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities or (iii) publicly announce any intention to effect any such transaction; provided, however, that the foregoing restrictions shall not apply to any Permitted Transfer (as defined in the Parent Support Agreement).
The foregoing description of the Parent Support Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Parent Support Agreement, a copy of which is filed as Exhibit 10.2 hereto and incorporated by reference herein.
Lock-Up Agreements
On or before the Closing Date, Parent and the Company will enter into lock-up agreements (the “Lock-Up Agreements”) with certain stockholders of the Company, the Sponsor and other applicable holders, pursuant to which the Parent Common Shares (other than any Parent Common Shares repurchased by Parent in the Repurchase) and any other equity securities convertible into or exchangeable for or representing the right to receive Parent Common Shares held by such holders immediately following the Closing will be subject to lock-up until the earlier of (i) six months after the Closing Date and (ii) subsequent to the Closing Date, (x) the date on which the last reported sale price of the Parent Common Shares equals or exceeds $12.50 per share (as adjusted for stock splits, reverse stock splits, stock dividends or distributions, recapitalizations, reclassifications, combinations, subdivisions, exchanges of shares or other similar events) for any 20 trading days within any 30-trading day period after the Closing Date, or (y) the date on which Parent completes a liquidation, merger, share exchange or other similar transaction that results in all of its holders of Parent Common Shares having the right to exchange their Parent Common Shares for cash, securities or other property.
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The foregoing description of the Lock-Up Agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the Lock-Up Agreements, a form of which is filed as Exhibit 10.3 hereto and incorporated by reference herein.
Investors’ Rights Agreement
The Merger Agreement contemplates that, at the Closing, Parent, the Company, the Sponsor and certain stockholders of the Company (collectively, the “Holders”) will enter into an investors’ rights agreement (the “Investors’ Rights Agreement”), pursuant to which Parent will provide customary registration rights, governance and voting rights and other customary significant investor rights with respect to certain Parent Common Shares held by the Holders from time to time, including Parent Common Shares issued or issuable upon the exercise, conversion or exchange of other equity securities of Parent held by a Holder.
The foregoing description of the form of Investors’ Rights Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Investors’ Rights Agreement, a form of which is filed as Exhibit 10.4 hereto and incorporated by reference herein.
Executive Employment Agreements
Simultaneously with the execution of the Merger Agreement, certain key executives entered into employment agreements with Parent providing for their continued employment with Parent and the Company Group effective as of the Closing.
The foregoing description of the form of Executive Employment Agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the Executive Employment Agreements, a form of which is filed as Exhibit 10.5 hereto and incorporated by reference herein.
PIPE Subscription Agreements
Contemporaneously with the execution of the Merger Agreement, Parent entered into subscription agreements (the “PIPE Subscription Agreements”), with certain affiliates of Parent or Sponsor (collectively, the “PIPE Investors”), pursuant to which the PIPE Investors agreed to subscribe for, and Parent agreed to issue to the PIPE Investors, an aggregate of 5,000,000 Parent Common Shares at a purchase price of $10.00 per share (the “PIPE Financing”) for aggregate gross proceeds of $50,000,000 (the “PIPE Investment Amount”). As provided for in the Merger Agreement, affiliates of the Sponsor invested $25,000,000 in the PIPE Financing. Additionally, the Sponsor agreed to transfer at the closing of the PIPE Financing an amount of Founder Shares held by the Sponsor to the third-party PIPE Investors in an amount equal to 15% of the aggregate amount of Parent Common Shares purchased such third-party PIPE Investors in the PIPE Financing, pursuant to a written agreement. The PIPE Financing is expected to close on the Closing Date.
The foregoing description of the PIPE Subscription Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the PIPE Subscription Agreements, a form of which is filed as Exhibit 10.6 hereto and incorporated by reference herein.
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Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K with respect to the issuance of Parent Common Shares to the PIPE Investors pursuant to the PIPE Subscription Agreements is incorporated by reference herein. The Parent Common Shares issuable to the PIPE Investors pursuant to the PIPE Subscription Agreements will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
Item 7.01 Regulation FD Disclosure.
On September 28, 2026, PAAC and the Company issued a joint press release relating to, among other things, the Business Combination. A copy of the joint press release is furnished as Exhibit 99.1. In addition, a copy of the final publicly used Investor Presentation is furnished as Exhibit 99.2.
The information furnished pursuant to this Item 7.01, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act.
Important Information About the Business Combination and Where to Find It
The Business Combination will be submitted to shareholders of PAAC for their consideration. PAAC and Astro Digital intend to jointly file a registration statement on Form S-4 (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”), which will include a preliminary proxy statement/prospectus (a “Proxy Statement/Prospectus”). A definitive Proxy Statement/Prospectus will be mailed to PAAC’s shareholders as of a record date to be established for voting on the Business Combination and other proposals. PAAC may also file other relevant documents regarding the Business Combination with the SEC. PAAC’s shareholders and other interested persons are advised to read, once available, the preliminary Proxy Statement/Prospectus and any amendments thereto and, once available, the definitive Proxy Statement/Prospectus, in connection with PAAC’s solicitation of proxies for its extraordinary general meeting of shareholders to be held to approve, among other things, the Business Combination, because these documents will contain important information about PAAC, Astro Digital and the Business Combination. Shareholders may also obtain a copy of the preliminary or definitive Proxy Statement/Prospectus, once available, as well as other documents filed with the SEC regarding the Business Combination and other documents filed with the SEC by PAAC, without charge, at the SEC’s website located at www.sec.gov or by directing a request to PAAC’s Chief Executive Officer at 3860 W. Northwest Hwy, Suite 470, Dallas, TX.
Participants in the Solicitation
PAAC and Astro Digital and certain of their respective directors, executive officers and other members of management and employees may be considered participants in the solicitation of proxies with respect to the Business Combination under the rules of the SEC. Information about (i) the directors and executive officers of PAAC is set forth in PAAC’s Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 26, 2026, and (ii) a description of the interests of the directors and executive officers of PAAC and Astro Digital and the Business Combination will be contained in the Registration Statement and the Proxy Statement/Prospectus when available, which documents can be obtained free of charge from the sources indicated above.
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Forward-Looking Statements
The disclosure herein includes certain statements that are not historical facts but are forward-looking statements. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “project,” “forecast,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters, but the absence of these words does not mean that a statement is not forward looking. These forward-looking statements include, but are not limited to, (1) statements regarding estimates and forecasts of other financial, performance and operational metrics and projections of market opportunity; (2) references with respect to the anticipated benefits of the proposed Business Combination and the projected future financial performance of Astro Digital following the proposed Business Combination; (3) changes in the market for Astro Digital’s satellite technology infrastructure and mission support services, expansion plans and opportunities; (4) Astro Digital’s aerospace business, including modular satellite technology infrastructure and mission support services; (5) the sources and uses of cash in connection with the proposed Business Combination; (6) the anticipated capitalization and enterprise value of PAAC following the consummation of the proposed Business Combination; (7) the projected technological developments of Astro Digital; (8) current and future potential commercial and customer relationships; (9) the ability to operate efficiently at scale; (10) anticipated investments in capital resources and research and development, and the effect of these investments; (11) the amount of redemption requests made by PAAC’s public shareholders; (12) the ability of Astro Digital to issue equity or equity-linked securities in the future; (13) the failure to achieve the Minimum Cash Condition; (14) the inability to obtain or maintain the listing of the combined company’s common stock on Nasdaq following the proposed Business Combination, including but not limited to redemptions exceeding anticipated levels or the failure to meet Nasdaq’s initial listing standards in connection with the consummation of the proposed Business Combination; and (15) expectations related to the terms and timing of the proposed Business Combination. Additional risks include the use of a portion of the PIPE Financing proceeds to fund the Repurchase and the resulting reduction in cash available to Parent following the Closing; the availability and funding of the PIPE Financing, including the risk that any PIPE Investor may fail to satisfy its obligations; the level of redemptions and the resulting effect on Parent Closing Cash and the Minimum Cash Condition; delays in resolving SEC comments on, or obtaining effectiveness of, the Registration Statement; the failure to obtain required shareholder approvals or Nasdaq listing approval; and risks relating to Astro Digital’s aerospace, satellite, remote-sensing, communications and government-contract businesses, including export-control, sanctions, and other national-security regulatory requirements. These statements are based on various assumptions, whether or not identified in this Current Report, and on the current expectations of PAAC’s and Astro Digital’s management and are not predictions of actual performance. Any projections or other forward-looking information included in this Current Report, any Investor Presentation or other transaction communications are provided for illustrative purposes only, were prepared for purposes of evaluating the proposed Business Combination and related financing, and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability; no representation or warranty is made as to their achievability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of PAAC and Astro Digital. These forward-looking statements are subject to a number of risks and uncertainties, as set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the final prospectus of PAAC filed with the SEC on February 13, 2026 (File No. 333-292217), and/or will be contained in the Registration Statement and the Proxy Statement/Prospectus when available, and in those other documents that PAAC and Astro Digital have filed, or will file, with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. The risks and uncertainties above are not exhaustive, and there may be additional risks that neither PAAC nor Astro Digital presently know or that PAAC and Astro Digital currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect PAAC’s and Astro Digital’s expectations, plans or forecasts of future events and views as of the date of this Current Report on Form 8-K. PAAC and Astro Digital anticipate that subsequent events and developments will cause PAAC’s and Astro Digital’s assessments to change. However, while PAAC and Astro Digital may elect to update these forward-looking statements at some point in the future, PAAC and Astro Digital specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing PAAC’s and Astro Digital’s assessments as of any date subsequent to the date of this release. Accordingly, undue reliance should not be placed upon the forward-looking statements.
9
No Offer or Solicitation
This Current Report on Form 8-K shall not constitute an offer to sell, or a solicitation of an offer to buy, or a recommendation to purchase, any securities in any jurisdiction, or the solicitation of any vote, consent or approval in any jurisdiction in connection with the Business Combination, nor shall there be any sale, issuance or transfer of any securities in any jurisdiction where, or to any person to whom, such offer, solicitation or sale may be unlawful under the laws of such jurisdiction. This Current Report on Form 8-K does not constitute either advice or a recommendation regarding any securities. No offering of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act, or an exemption therefrom.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PROEM ACQUISITION CORP I | |||
| By: | /s/ Imran Khan | ||
| Name: | Imran Khan | ||
| Title: | Chief Executive Officer | ||
| Date: September 28, 2026 | |||
11
Exhibit 2.1
Execution Version
MERGER AGREEMENT
dated
September 26, 2026
by and among
Astro Digital US, Inc.
Proem Acquisition Corp I
PAAC Merger Sub I, Inc.
and
PAAC Merger Sub II, LLC
Table of Contents
| Page | ||
| ARTICLE I DEFINITIONS | 3 | |
| 1.1 | Definitions | 3 |
| 1.2 | Construction | 19 |
| ARTICLE II THE DOMESTICATION AND THE COMPANY MERGERS | 20 | |
| 2.1 | Domestication | 20 |
| 2.2 | Company Mergers | 21 |
| 2.3 | Company Merger Effective Times | 21 |
| 2.4 | Effect of the Company Mergers | 21 |
| 2.5 | U.S. Tax Treatment | 22 |
| 2.6 | Governing Documents Relating to the Company Mergers | 22 |
| 2.7 | Closing | 22 |
| 2.8 | Directors and Officers of Surviving Company | 23 |
| 2.9 | Directors and Officers of Parent | 23 |
| 2.10 | Taking of Necessary Action; Further Action | 23 |
| 2.11 | No Further Ownership Rights in Company Capital Stock | 24 |
| ARTICLE III EFFECT OF THE COMPANY MERGERS | 24 | |
| 3.1 | Effect of the Company Mergers | 24 |
| 3.2 | Treatment of Company Options, Company Convertible Notes and Company Warrants | 25 |
| 3.3 | Dissenting Shares | 26 |
| 3.4 | Surrender and Payment | 27 |
| 3.5 | Consideration Spreadsheet | 27 |
| 3.6 | Adjustment | 29 |
| 3.7 | [Reserved] | 29 |
| 3.8 | No Fractional Shares | 29 |
| 3.9 | Lost or Destroyed Certificates | 29 |
| 3.10 | Withholding | 29 |
| ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 29 | |
| 4.1 | Corporate Existence and Power | 29 |
| 4.2 | Authorization | 30 |
| 4.3 | Governmental Authorization | 31 |
| 4.4 | Non-Contravention | 31 |
| 4.5 | Capitalization | 31 |
| 4.6 | Subsidiaries | 32 |
| 4.7 | Corporate Records | 32 |
| 4.8 | Consents | 33 |
| 4.9 | Financial Statements | 33 |
| 4.10 | Internal Accounting Controls | 33 |
| 4.11 | Absence of Certain Changes | 33 |
| 4.12 | Properties; Title to the Company Group’s Assets | 34 |
| 4.13 | Litigation | 34 |
| 4.14 | Contracts | 34 |
| 4.15 | Licenses and Permits | 37 |
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Table of Contents continued
| Page | ||
| 4.16 | Compliance with Laws | 37 |
| 4.17 | Intellectual Property | 37 |
| 4.18 | Employees; Employment Matters | 42 |
| 4.19 | Withholding | 43 |
| 4.20 | Employee Benefits | 44 |
| 4.21 | Real Property | 45 |
| 4.22 | Taxes | 46 |
| 4.23 | Environmental Laws | 48 |
| 4.24 | Finders’ Fees | 48 |
| 4.25 | Directors and Officers | 48 |
| 4.26 | Certain Business Practices | 48 |
| 4.27 | Insurance | 49 |
| 4.28 | Related Party Transactions | 50 |
| 4.29 | No Trading or Short Position | 50 |
| 4.30 | Exchange Act | 50 |
| 4.31 | Top Customers and Top Suppliers | 50 |
| 4.32 | No Additional Representations or Warranties | 50 |
| ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PARENT PARTIES | 51 | |
| 5.1 | Corporate Existence and Power | 51 |
| 5.2 | Merger Subs | 51 |
| 5.3 | Corporate Authorization | 51 |
| 5.4 | Governmental Authorization | 52 |
| 5.5 | Non-Contravention | 52 |
| 5.6 | Finders’ Fees | 52 |
| 5.7 | Issuance of Shares | 52 |
| 5.8 | Capitalization | 53 |
| 5.9 | Information Supplied | 54 |
| 5.10 | Trust Fund | 54 |
| 5.11 | Listing | 54 |
| 5.12 | Board Approval | 55 |
| 5.13 | Parent SEC Documents and Financial Statements | 55 |
| 5.14 | Absence of Certain Changes | 57 |
| 5.15 | Licenses and Permits | 57 |
| 5.16 | Properties | 57 |
| 5.17 | Employees and Employment Matters | 57 |
| 5.18 | Material Contracts | 57 |
| 5.19 | Compliance with Laws | 58 |
| 5.20 | Certain Business Practices | 58 |
| 5.21 | Anti-Money Laundering Laws | 59 |
| 5.22 | CFIUS Foreign Person Status | 59 |
| 5.23 | Affiliate Transactions | 59 |
| 5.24 | Litigation | 59 |
| 5.25 | Insurance | 59 |
| 5.26 | Expenses, Indebtedness and Other Liabilities. | 60 |
| 5.27 | Brokers and Other Advisors | 60 |
| 5.28 | Taxes | 60 |
| 5.29 | PIPE Financing | 61 |
ii
Table of Contents continued
| Page | ||
| ARTICLE VI COVENANTS OF THE PARTIES PENDING CLOSING | 62 | |
| 6.1 | Conduct of the Business | 62 |
| 6.2 | Exclusivity | 66 |
| 6.3 | Access to Information | 67 |
| 6.4 | Notices of Certain Events | 67 |
| 6.5 | Registration Statement/Proxy Statement; Other Filings | 68 |
| 6.6 | Trust Account | 71 |
| 6.7 | Obligations of Merger Subs | 72 |
| 6.8 | Joinders to Parent Support Agreement | 72 |
| 6.9 | PIPE Financing | 72 |
| 6.10 | Repurchase | 72 |
| ARTICLE VII COVENANTS OF THE COMPANY | 73 | |
| 7.1 | Reporting; Compliance with Laws; No Insider Trading | 73 |
| 7.2 | Company’s Shareholders Approval | 73 |
| 7.3 | Additional Financial Information | 73 |
| 7.4 | Financial Projections | 74 |
| ARTICLE VIII COVENANTS OF ALL PARTIES HERETO | 75 | |
| 8.1 | Reasonable Best Efforts; Further Assurances | 75 |
| 8.2 | Compliance with SPAC Agreements | 76 |
| 8.3 | Confidentiality | 76 |
| 8.4 | Directors’ and Officers’ Indemnification and Liability Insurance | 76 |
| 8.5 | Parent Public Filings; Nasdaq | 77 |
| 8.6 | Certain Tax Matters | 78 |
| 8.7 | Section 16 Matters | 79 |
| 8.8 | Executive Employment Agreements | 79 |
| ARTICLE IX CONDITIONS TO CLOSING | 79 | |
| 9.1 | Condition to the Obligations of the Parties | 79 |
| 9.2 | Conditions to Obligations of Parent and Merger Subs | 80 |
| 9.3 | Conditions to Obligations of the Company | 81 |
| 9.4 | Frustration of Closing Conditions | 82 |
| ARTICLE X TERMINATION | 83 | |
| 10.1 | Termination Without Default | 83 |
| 10.2 | Termination Upon Default | 83 |
| 10.3 | Effect of Termination | 84 |
iii
Table of Contents continued
| Page | ||
| ARTICLE XI NO SURVIVAL | 84 | |
| 11.1 | No Survival of Representations and Warranties | 84 |
| ARTICLE XII MISCELLANEOUS | 85 | |
| 12.1 | Notices | 85 |
| 12.2 | Amendments; No Waivers; Remedies | 85 |
| 12.3 | Arm’s Length Bargaining; No Presumption Against Drafter | 86 |
| 12.4 | Publicity | 86 |
| 12.5 | Expenses | 87 |
| 12.6 | No Assignment or Delegation | 88 |
| 12.7 | Governing Law | 88 |
| 12.8 | Counterparts; Electronic Signatures | 88 |
| 12.9 | Entire Agreement | 89 |
| 12.10 | Severability | 89 |
| 12.11 | Further Assurances | 89 |
| 12.12 | Third Party Beneficiaries | 89 |
| 12.13 | Trust Account Waiver | 89 |
| 12.14 | No Other Representations; No Reliance | 90 |
| 12.15 | Waiver of Jury Trial | 91 |
| 12.16 | Submission to Jurisdiction | 92 |
| 12.17 | Remedies | 92 |
| 12.18 | Non-Recourse | 92 |
| 12.19 | Conflicts and Privilege. | 93 |
| Exhibit A | – | Form of Parent Certificate of Incorporation |
| Exhibit B | – | Form of Parent Bylaws |
| Exhibit C | – | Form of Company Support Agreement |
| Exhibit D | – | Form of Parent Support Agreement |
| Exhibit E | – | Form of Lock-Up Agreement |
| Exhibit F | – | Form of Investors Rights Agreement |
| Exhibit G | – | Form of PIPE Subscription Agreement |
iv
MERGER AGREEMENT
MERGER AGREEMENT, dated as of September 26, 2026 (this “Agreement”), by and among Astro Digital US, Inc., a Delaware corporation (the “Company”), Proem Acquisition Corp I, a Cayman Islands exempted company limited by shares (which shall de-register from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation prior to the Closing (as defined below)) (“Parent”), PAAC Merger Sub I, Inc., a Delaware corporation (“Merger Sub I”), and PAAC Merger Sub II, LLC, a Delaware limited liability company (“Merger Sub II”). Parent, Merger Sub I, Merger Sub II and the Company shall be referred to herein from time to time each as, a “Party” and, collectively as the “Parties”. Capitalized terms used but not otherwise defined herein have the meanings set forth in Section 1.1.
W I T N E S S E T H:
A. The Company is an aerospace company that provides modular satellite technology infrastructure and mission support services (the “Business”);
B. Parent is a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities, and Merger Sub I and Merger Sub II are wholly-owned subsidiaries of Parent and were formed for the purpose of the Company Mergers;
C. On the day that is at least one (1) Business Day prior to the First Effective Time and subject to the conditions of this Agreement, Parent shall de-register from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation in accordance with the Parent Articles and any other relevant organizational documents of Parent, Section 388 of the Delaware General Corporation Law, as amended (the “DGCL”), and Part XII of the Companies Act (As Revised) of the Cayman Islands (the “Cayman Companies Act”) (the “Domestication”);
D. Concurrently with the Domestication, Parent shall file a certificate of incorporation with the Secretary of State of the State of Delaware substantially in the form attached as Exhibit A hereto (the “Parent Certificate of Incorporation”) and adopt bylaws substantially in the form attached as Exhibit B (the “Parent Bylaws”) in each case, with such changes as may be agreed in writing by Parent and the Company;
E. Upon the terms and subject to the conditions of this Agreement, and in accordance with the DGCL and the Delaware Limited Liability Company Act, as amended (the “DLLCA”), as applicable, (i) Merger Sub I will merge with and into the Company (the “First Company Merger”), after which the Company will be the surviving corporation (the “Initial Surviving Corporation”); and (ii) immediately following the First Company Merger, the Initial Surviving Corporation will merge with and into Merger Sub II (the “Second Company Merger” and together with the First Company Merger, the “Company Mergers”), with Merger Sub II continuing as the surviving entity (the “Surviving Company”) and a wholly-owned subsidiary of Parent;
F. Contemporaneously with the execution of, and as a condition and an inducement to Parent and the Company entering into this Agreement, the Selling Company Stockholders are entering into and delivering the Company Support Agreement, in the form attached hereto as Exhibit C (the “Company Support Agreement”), pursuant to which each such Selling Company Stockholder has agreed to vote in favor of this Agreement and the Company Mergers and the other transactions contemplated hereby;
1
G. Contemporaneously with the execution of, and as a condition and an inducement to Parent and the Company entering into this Agreement, the Sponsor and certain other Parent shareholders are entering into and delivering the Parent Support Agreement, in the form attached hereto as Exhibit D (the “Parent Support Agreement”), pursuant to which the Sponsor and each such Parent shareholder have agreed (i) not to transfer or redeem any Parent Shares held by the Sponsor or such Parent shareholder, as applicable, (ii) waive any anti-dilution or other adjustments with respect to Sponsor’s Parent Shares in connection with the transactions contemplated hereunder (as set forth more fully therein), and (iii) to vote in favor of this Agreement, the Domestication and the Company Mergers and the other transactions contemplated hereby at the Parent Shareholder Meeting;
H. Contemporaneously with the execution of this Agreement, Parent and the Company are entering into a subscription agreement, in the form attached hereto as Exhibit G (each, a “PIPE Subscription Agreement” and collectively, the “PIPE Subscription Agreements”), with certain Affiliates of Parent or Sponsor (together with any Affiliate of any such investor to whom the applicable PIPE Subscription Agreement with such investor is assigned in accordance with its terms after the date hereof, the “PIPE Investors”) pursuant to which, among other things, such PIPE Investors have agreed to subscribe for, and Parent has agreed to issue to such PIPE Investors, an aggregate of 5,000,000 Parent Common Shares at a purchase price of $10.00 per share for aggregate gross proceeds of $50 million (the “PIPE Investment Amount”) on the terms and subject to the conditions set forth in the PIPE Subscription Agreements (such purchases, the “PIPE Financing”);
I. As a condition and an inducement to Parent and the Company entering into this Agreement, on or before the Closing Date, the Selling Company Stockholders, the Sponsor and certain other Parent shareholders will each execute a lock-up agreement, substantially in the form attached hereto as Exhibit E (the “Lock-Up Agreement”), under which the Parent Common Shares beneficially owned by such Persons, as applicable, will be subject to the lock-up provisions provided therein;
J. Each of the Parties hereto intends that, (A) for United States federal and applicable state income tax purposes, (i) the Domestication qualify as a “reorganization” within the meaning of Section 368(a)(1)(F) of the Code and the Treasury Regulations promulgated thereunder (the “Domestication Intended Tax Treatment”), and (ii) the Company Mergers, taken together, qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder (the “Mergers Intended Tax Treatment” and, together with the Domestication Intended Tax Treatment, the “Intended Tax Treatment”), and (B) this Agreement constitute a “plan of reorganization” within the meaning of Section 368 of the Code and Treasury Regulations Sections 1.368-2(g) and 1.368-3(a) (a “Plan of Reorganization”) with respect to each of the Domestication and the Company Mergers; and
K. The boards of directors or managers of each of the Company, Parent, Merger Sub I and Merger Sub II have unanimously (i) approved and declared advisable this Agreement and the transactions contemplated by this Agreement and the Ancillary Agreements to which they are or will be party, including the Domestication and the Company Mergers, as applicable, and the performance of their respective obligations hereunder or thereunder, on the terms and subject to the conditions set forth herein or therein, (ii) determined that this Agreement and such transactions are fair to, and in the best interests of, them and their respective shareholders, (iii) resolved to recommend that their respective shareholders approve the Domestication and the Company Mergers, as applicable, and such other transactions contemplated hereby and adopt this Agreement and the Ancillary Agreements to which they are or will be a party and the performance of such Party of their obligations hereunder and thereunder and (iv) in the case of Parent, resolved to recommend that its shareholders approve each of the Parent Proposals.
2
In consideration of the mutual covenants and promises set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE
I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms have the respective meanings set forth below.
“Action” means any legal action, litigation, suit, claim, hearing, Proceeding or formal governmental investigation by or before any Authority.
“Additional Parent SEC Documents” has the meaning set forth in Section 5.13(a).
“Adjournment Proposal” has the meaning set forth in Section 6.5(e).
“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with such Person, whether through one or more intermediaries or otherwise.
“Aggregate Exercise Price” means the aggregate dollar amount payable to the Company upon the exercise or conversion of all vested in-the-money Company Options and all vested in-the-money Company Warrants that are outstanding immediately prior to the First Effective Time.
“Aggregate Fully Diluted Company Common Stock” means the sum, without duplication, of (a) all shares of Company Common Stock that are issued and outstanding immediately prior to the First Effective Time; plus (b) the aggregate number of shares of Company Common Stock issuable upon full conversion of all Company Preferred Stock outstanding as of immediately prior to the First Effective Time; plus (c) the aggregate number of shares of Company Common Stock issuable upon exercise of all Company Options that are vested as of immediately prior to the First Effective Time; plus (d) the aggregate number of shares of Company Common Stock directly or indirectly issuable upon exercise of all Company Warrants outstanding as of immediately prior to the First Effective Time; plus (e) the aggregate number of shares of Company Common Stock issuable upon full conversion, exercise or exchange of any other securities of the Company (other than Company Options and Company Warrants) outstanding immediately prior to the First Effective Time directly or indirectly convertible into or exchangeable or exercisable for shares of Company Common Stock (including any Company Convertible Notes outstanding as of immediately prior to the First Effective Time).
“Aggregate Merger Consideration” means a number of Parent Common Shares equal to the quotient obtained by dividing (a) the Base Purchase Price, by (b) US$10.00.
“Agreement” has the meaning set forth in the preamble.
“AI/ML” means any and all deep learning, machine learning, generative artificial intelligence, large language model, foundation model, automated decision-making, and other artificial intelligence technologies, including any and all (i) algorithms, heuristics, models, and methodologies, whether in source code, object code, human readable form or other form, proprietary algorithms, software or other IT Systems, in each case, that make use of or employ expert systems, natural language processing, computer vision, automated speech recognition, automated planning and scheduling, neural networks, statistical learning algorithms (like linear and logistic regression, support vector machines, random forests, k-means clustering), or reinforcement learning, and (ii) proprietary embodied artificial intelligence and related hardware or equipment; provided, that AI/ML does not include general-purpose information technology systems, ordinary data analytics, spreadsheet models, rules-based automation or standard statistical techniques, in each case, that do not incorporate or deploy artificial intelligence or machine learning functionality in any material product, service or externally deployed system.
3
“Alternative Proposal” has the meaning set forth in Section 6.2(c).
“Alternative Transaction” has the meaning set forth in Section 6.2(a).
“Alternative Transaction Structure” has the meaning set forth in Section 8.6(c).
“Ancillary Agreements” means the Company Support Agreement, the Parent Support Agreement, the Lock-Up Agreements, the Investors’ Rights Agreement, the Exchange Agreement, the Executive Employment Agreements, the Letter of Transmittal and the PIPE Subscription Agreements.
“Anti-Money Laundering Laws” has the meaning set forth in Section 4.26(a).
“Approved Exchange” means The Nasdaq Stock Exchange or The New York Stock Exchange, or any successor thereto.
“Astro Group” has the meaning set forth in Section 12.19(b).
“Authority” means any federal, state, provincial, municipal, local, foreign, multinational or supra-national government, governmental authority or regulatory body thereof, or political subdivision thereof, or any commission, department, board, bureau, authority, agency or instrumentality of such government, governmental authority, regulatory body or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority exercising executive, legislative, judicial, regulatory or administrative functions (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, arbitration panel, court, or tribunal of competent jurisdiction.
“Balance Sheet” means the unaudited consolidated balance sheet of the Company as of June 30, 2026.
“Balance Sheet Date” has the meaning set forth in Section 4.9(a).
“Base Purchase Price” means the sum of $525,000,000 plus the Aggregate Exercise Price.
“Board Proposal” has the meaning set forth in Section 6.5(e).
“Books and Records” means all books and records, ledgers, employee records, customer lists, files, correspondence, and other records of every kind (whether written, electronic, or otherwise embodied) owned or controlled by a Person in which a Person’s assets, liabilities, operations, the business or its transactions are otherwise reflected, excluding attorney-client privileged communications, attorney work product and other materials subject to legal privilege or similar protection upon the advice of outside legal counsel, other than stock books and minute books.
“Broadfield” has the meaning set forth in Section 12.19(b).
“Business” has the meaning set forth in the recitals to this Agreement.
4
“Business Day” means any day other than a Saturday, Sunday or a legal holiday on which commercial banking institutions in New York, New York are authorized or required by Law to close for business, excluding as a result of “stay at home,” “shelter-in-place,” “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any Authority so long as the electronic funds transfer systems, including for wire transfers, of commercial banking institutions in New York, New York are generally open for use by customers on such day.
“Cayman Companies Act” has the meaning set forth in the recitals to this Agreement.
“Cayman Registrar” has the meaning specified in Section 2.1(a).
“Certificate of Domestication” has the meaning set forth in Section 2.1(a).
“Closing” has the meaning set forth in Section 2.7.
“Closing Consideration Spreadsheet” has the meaning set forth in Section 3.5(a).
“Closing Date” has the meaning set forth in Section 2.7.
“Closing Filing” has the meaning set forth in Section 12.4(b).
“Closing Press Release” has the meaning set forth in Section 12.4(b).
“COBRA” means collectively, the requirements of Sections 601 through 606 of ERISA and Section 4980B of the Code.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company” has the meaning set forth in the preamble.
“Company AI Products” means all products and services of the Company Group that employ or make use of any AI/ML technologies and are material to the Company Group, taken as a whole.
“Company Bylaws” means the Bylaws of the Company, as amended and as in effect on the date of this Agreement.
“Company Capital Stock” means Company Common Stock and Company Preferred Stock.
“Company Charter” means the Second Amended and Restated Certificate of Incorporation of the Company as filed with the Secretary of State of the State of Delaware on July 10, 2020, as amended and in effect on the date of this Agreement.
“Company Common Stock” means the common stock, $0.0001 par value per share, of the Company.
“Company Convertible Notes” means each Senior Convertible Promissory Note between the Company and the holder thereof as set forth on Schedule 4.5(a).
“Company Exclusively Licensed IP” means any and all Company Licensed IP that is exclusively licensed to a member of the Company Group, and includes Registered Exclusively Licensed IP.
5
“Company Financial Statements” has the meaning set forth in Section 4.9(a).
“Company Fundamental Representations” means the representations and warranties of the Company set forth in Section 4.1 (Corporate Existence and Power), Section 4.2 (Authorization), Section 4.5(a) (other than the last sentence of Section 4.5(a)) (Capitalization), Section 4.5(b) (Capitalization), Section 4.6 (Subsidiaries) and Section 4.24 (Finders’ Fees).
“Company Group” has the meaning set forth in Section 4.1.
“Company Information Systems” means any and all IT Systems that are owned, licensed, leased, used or held for use by or for a member of the Company Group.
“Company IP” means, collectively, any and all Company Owned IP and Company Licensed IP and includes any and all Intellectual Property set forth in Schedule 4.17(b).
“Company Licensed IP” means any and all Intellectual Property owned by a third Person and licensed to, in whole or in part, to a member of the Company Group or that a member of the Company Group otherwise has a right to use.
“Company Mergers” has the meaning set forth in the recitals to this Agreement.
“Company Option” means each option (whether vested or unvested) to purchase Company Common Stock granted, and that remains outstanding, under the Equity Incentive Plan.
“Company Owned IP” means any and all Intellectual Property owned or purported to be owned, in whole or in part, by the Company Group, in each case, whether exclusively, jointly with another Person or otherwise, and includes all Registered Owned IP and Company Software.
“Company Preferred Stock” means the Series A Preferred Stock, par value $0.0001 per share, of the Company.
“Company Software” means any and all proprietary Software that is owned (or purported to be owned), in whole or in part, by the Company Group and includes all proprietary AI/ML currently owned (or purported to be owned) by the Company Group.
“Company Stockholder Approval” has the meaning set forth in Section 4.2(b).
“Company Stockholder Written Consent” has the meaning set forth in Section 7.2(a).
“Company Stockholder Written Consent Deadline” has the meaning set forth in Section 7.2(a).
“Company Stockholders” means, as of immediately prior to the First Effective Time, the holders of Company Capital Stock or securities directly or indirectly convertible into or exchangeable or exercisable for Company Capital Stock (other than any Company Options).
“Company Support Agreement” has the meaning set forth in the recitals to this Agreement.
“Company Termination Fee” has the meaning set forth in Section 12.5(b).
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“Company Transaction Expenses” means, without duplication, all fees, costs and expenses of the Company Group incurred prior to and through the Closing Date in connection with the negotiation, preparation and execution of this Agreement, the Ancillary Agreements, the performance and compliance with this Agreement and the Ancillary Agreements, and the consummation of the transactions contemplated hereby and thereby, including any and all (i) filing fees payable by the Company Group to any Authority in connection with the transactions contemplated hereby and thereby and (ii) fees, costs, expenses and disbursements of counsel, accountants, advisors and consultants of the Company Group and (iii) premiums, costs, expenses and disbursements relating to the Company Tail Policy.
“Company Warrants” means the warrants to purchase Company Capital Stock or other equity securities of the Company directly or indirectly convertible into or exchangeable or exercisable for Company Capital Stock that are outstanding immediately prior to the First Effective Time.
“Confidentiality Agreement” means the Reciprocal Non-Disclosure Agreement, dated as of May 7, 2026, by and between the Company and Parent.
“Contracts” means the Leases and all legally binding contracts, agreements, leases (including equipment leases, car leases and capital leases), licenses, commitments, client contracts, statements of work (SOWs), sales and purchase orders and similar instruments, whether oral or written, to which any member of the Company Group is a party or by which any of their respective properties or assets is bound.
“Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled,” “Controlling” and “under common Control with” have correlative meanings.
“Conversion Ratio” means the quotient obtained by dividing (a) the number of Parent Common Shares constituting the Aggregate Merger Consideration, by (b) the number of shares constituting the Aggregate Fully Diluted Company Common Stock.
“Converted Stock Option” has the meaning set forth in Section 3.2(a).
“Copyleft Licenses” means all licenses of Publicly Available Software (including any Software licensed under the GNU General Public License, GNU Lesser General Public License, Mozilla Public License, Affero General Public License, Eclipse Software License, or any other public source code license arrangement) or any similar license, or other Contracts to Software, in each case, that requires as a condition of use or in connection with any use, modification, reproduction, or distribution of any Software licensed thereunder (or any Company Software or other Company IP or other Software or technology that is used by, incorporated into or includes, relies on, is linked to or with, is derived from, or distributed with such Software) any of the following: (i) be disclosed, made available, distributed, offered or delivered in source code form or any information regarding such Company Software, Company IP or other Software or technology for no or minimal charge, (ii) be granted permission or licensed for creating modifications to or making derivative works of such Company Software, Company IP, or other Software or technology; (iii) be granted a royalty-free license, whether express, implied, by virtue of estoppel or otherwise, to any third party under Intellectual Property rights (including patents) regarding such Company Software, Company IP, or other Software or technology (whether alone or in combination with other hardware or Software); or (iv) be imposed of restrictions on future patent licensing terms, or other abridgement or restriction of exercise or enforcement of any Intellectual Property rights through any means.
“Copyrights” has the meaning set forth in the definition of “Intellectual Property.”
“Data” means any and all data and collections of data, whether machine readable or otherwise.
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“Data Protection Laws” means all applicable Laws, regulations, directives, executive orders, or binding guidance issued thereunder, in any applicable jurisdiction governing (a) the privacy, security, confidentiality or Processing of Personal Information, including such information insofar as it applies to employees and contractors, (b) the use or disclosure of Personal Information in connection with online marketing or advertising, or (c) the purposes for which Personal Information may be Processed.
“Deferred Underwriting Commissions” means any and all deferred underwriting commissions payable by the Parent Parties, including the amount set forth in the Underwriting Agreement, dated February 11, 2026, by and between Parent and Clear Street LLC, as representative of the underwriters thereto.
“DGCL” has the meaning set forth in the recitals to this Agreement.
“Dissenting Shares” has the meaning set forth in Section 3.3.
“DLLCA” has the meaning set forth in the recitals to this Agreement.
“Domain Names” has the meaning set forth in the definition of “Intellectual Property.”
“Domestication” has the meaning specified in the recitals to this Agreement.
“Domestication Intended Tax Treatment” has the meaning specified in the recitals to this Agreement.
“DPA” means the Defense Production Act of 1950, as amended (including by the Foreign Investment Risk Review Modernization Act of 2018), 50 U.S.C. § 4565, and all rules and regulations promulgated thereunder, including 31 C.F.R. Parts 800 and 802.
“DPA Triggering Rights” means, with respect to any “foreign person” (as defined in 31 C.F.R. Part 800), any right (other than through purely passive equity ownership) to (i) access any “material nonpublic technical information” (as defined in 31 C.F.R. § 800.232) of any member of the Company Group, (ii) membership or observer rights on the board of directors or equivalent governing body of the Company or the right to nominate an individual to such governing body, (iii) any “involvement,” other than through the voting of shares, in “substantive decision-making” (as such terms are defined in the DPA) of the Company regarding the use, development, acquisition or release of any “critical technology” (as defined in 31 C.F.R. § 800.215), or (iv) “control” (as defined in 31 C.F.R. § 800.208) of the Company.
“Enforceability Exceptions” has the meaning set forth in Section 4.2(a).
“Environmental Laws” means all applicable Laws that prohibit, regulate or control any Hazardous Material or any Hazardous Material Activity, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, the Resource Recovery and Conservation Act of 1976, the Federal Water Pollution Control Act, the Clean Air Act, the Hazardous Materials Transportation Act and the Clean Water Act.
“Equity Incentive Plan” means the Company’s 2016 Stock Option Plan.
“ERISA” means the Employee Retirement Income Security Act of 1974.
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“ERISA Affiliate” means each entity, trade or business that is, or was at the relevant time, a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the Company, or that is, or was at the relevant time, a member of the same “controlled group” as the Company pursuant to Section 4001(a)(14) of ERISA.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Agent” has the meaning set forth in the Section 3.4.
“Exchange Agreement” has the meaning set forth in the Section 3.4.
“Exchange Fund” has the meaning set forth in the Section 3.4.
“Excluded Matter” means any one or more of the following Effects: (a) any general national or international economic or political conditions; (b) conditions generally affecting the industries or markets in which such Person or its Subsidiaries operates; (c) any changes in financial, banking, capital, credit, debt, securities or other financial markets in general, or any change in prevailing interest rates; (d) acts of war (whether or not declared), armed hostilities, terrorism, or cyberwarfare, or the escalation thereof; (e) the taking of any action expressly required or expressly permitted by this Agreement or any action taken, or omitted to be taken, by the Company at the written request of or with the written consent of any Parent Party or any action taken, or omitted to be taken, by any Parent Party at the written request of or with the written consent of the Company; (f) any changes in applicable Laws or accounting rules (including U.S. GAAP) or the interpretation thereof following the date of this Agreement; (g) the announcement or completion of the transactions contemplated by this Agreement, including the identity of Parent, Sponsor or the Company and the impact thereof on relationships with customers, suppliers, vendors, partners, employees, service providers, financing sources, governmental authorities or other third parties; (h) any hurricane, tornado, flood, earthquake, tsunami, natural disaster, act of God, epidemic, disease outbreak, pandemic, public health emergency, widespread occurrence of infectious disease or other comparable events; (i) any failure by the Company Group to meet any internal or published projections, forecasts, budgets, plans, milestones, bookings, backlog or revenue or earnings predictions (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise an Excluded Matter pursuant to clauses (a) through (f) may be taken into account in determining whether there has been a Material Adverse Effect); (j) any change in the trading price or trading volume of Parent Ordinary Shares, Parent Units or Parent Warrants, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such change that are not otherwise excluded from the definition of “Material Adverse Effect” may be taken into account in determining whether there has been a Material Adverse Effect); or (k) any matter disclosed in the Schedules delivered by the Parties pursuant to this Agreement; provided, however, that the exclusions provided in the foregoing clauses (a) through (d) and clauses (f) and (h) shall not apply to the extent that the Company Group, taken as a whole, is disproportionately affected by any such exclusions or any change, event or development to the extent resulting from any such exclusions relative to all other similarly situated companies that participate in the industries or markets in the geographies in which they operate.
“First Certificate of Merger” has the meaning set forth in Section 2.3(a).
“First Effective Time” has the meaning set forth in Section 2.3(a).
“Fraud” means the actual fraud of a Party in the making of a representation or warranty expressly set forth in ARTICLE IV, ARTICLE V or in any certificate delivered pursuant to Section 9.2(e) or Section 9.3(e) which involves a knowing and intentional misrepresentation with the intent that the other Party rely thereon (as opposed to the making of a representation or warranty (affirmatively or by omission) negligently, recklessly or without actual knowledge of its truthfulness).
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“Hazardous Material” means any material, emission, chemical, substance or waste that has been designated to be radioactive, toxic, hazardous, a pollutant or a contaminant under any Environmental Law.
“Hazardous Material Activity” means the transportation, transfer, recycling, storage, use, treatment, manufacture, removal, remediation, release, exposure of others to, sale, labeling, or distribution of any Hazardous Material or any product or waste containing a Hazardous Material, in each case to the extent regulated under Environmental Laws.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any rules or regulations promulgated thereunder.
“Indebtedness” means, without duplication, with respect to any Person, (a) all obligations of such Person for borrowed money, including accrued and unpaid interest, fees, premiums, penalties and other amounts payable in connection therewith, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person, (d) all obligations of such Person issued or assumed as the deferred purchase price of property or services (other than accounts payable to creditors for goods and services incurred in the ordinary course of business consistent with past practices), (e) all Indebtedness of others secured by any lien or security interest on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, or limited, in the case of any such Indebtedness that has not been assumed, to the fair market value of the property subject to such lien or security interest, (f) all obligations of such Person under leases required to be accounted for as capital leases under U.S. GAAP, excluding operating leases, (g) all guarantees by such Person of the Indebtedness of another Person, (h) all liability of such Person with respect to any hedging obligations, including interest rate or currency exchange swaps, collars, caps or similar hedging obligations, valued at the net amount payable by such Person upon termination thereof, (i) any outstanding obligations of the Company Group pursuant to the U.S. Small Business Administration Paycheck Protection Program, (j) any unfunded or underfunded liabilities pursuant to any pension, retirement, or nonqualified deferred compensation plan or arrangement, and (k) any binding agreement to incur any of the same.
“Initial Surviving Corporation” has the meaning set forth in the recitals to this Agreement.
“Intellectual Property” means any and all of the worldwide intellectual property rights and proprietary rights associated with any of the following, whether registered, unregistered or registrable, to the extent recognized in a particular jurisdiction: (a) trade secrets and other confidential or proprietary information, including discoveries, inventions (whether or not patentable), ideas, technology, systems, methods, processes, procedures, practices, algorithms, formulae, techniques, knowledge, results, protocols, models, designs, drawings, specifications, materials, technical data or information, know-how, research, methodologies, customer lists, business plans, databases, collections of data, and other confidential or proprietary information related to the development, marketing, pricing, distribution, cost, sales and manufacturing (collectively, “Trade Secrets”); (b) trade names, trademarks, service marks, trade dress, product configurations, other indications of origin, registrations thereof or applications for registration therefor, together with the goodwill associated with the foregoing (collectively, “Trademarks”); (c) patents, patent applications, invention disclosures, utility models, industrial designs, supplementary protection certificates, and certificates of inventions, including all re-issues, continuations, divisionals, continuations-in-part, re-examinations, renewals, counterparts, extensions, substitutions, counterparts, and validations thereof (collectively, “Patents”); (d) works of authorship, copyrights (including copyrights in Software), copyrightable materials, copyright registrations and applications for copyright registration including rights in Software (collectively, “Copyrights”); (e) domain names and URLs (collectively, “Domain Names”), (f) rights of privacy and publicity and rights in social media accounts, and (g) other intellectual property, and (h) all embodiments and fixations thereof and related documentation and registrations and all additions, improvements and accessions thereto.
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“Intended Tax Treatment” has the meaning specified in the recitals to this Agreement.
“Investors Rights Agreement” means the Investors’ Rights Agreement of Parent, substantially in the form attached hereto as Exhibit F, which shall be entered into and effective as of the Closing.
“IP Contracts” means, collectively, any and all Contracts pursuant to which a member of the Company Group is a party or by which any of its properties or assets are bound (including any settlement, coexistence, co-existence, covenant not to sue or other agreement), in any case under which a member of the Company Group (i) is granted any assignment, license, sublicense, immunity, covenant not to assert or other right (including option rights, rights of first offer, first refusal, first negotiation, etc.) in or to any Intellectual Property of a third Person that is material to a member of the Company Group or the conduct of the Business, (ii) grants any assignment, license, sublicense, immunity, covenant not to assert or other right (including option rights, rights of first offer, first refusal, first negotiation, etc.) to a third Person in or to any Company Owned IP that is material to a member of the Company Group or the conduct of the Business or (iii) is restricted in its right to enforce, use, or otherwise exploit any Company Owned IP that is material to a member of the Company Group or the conduct of the Business.
“IPO” means the initial public offering of Parent pursuant to the Prospectus.
“IRS” means the United States Internal Revenue Service.
“Issuance Proposal” has the meaning set forth in Section 6.5(e).
“IT Systems” means any and all Software, information technology and systems, computers, servers, networks, workstations, routers, hubs, switches, data communication lines, interfaces, platforms, databases, websites, computer hardware and all other information technology rights, assets, or equipment used to process, store, generate, analyze, maintain and operate data or information, including any of the foregoing accessed pursuant to outsourced or cloud computing arrangements.
“Key Employee” means the individuals listed on Schedule 1.1(b).
“Key Executives” means the individuals listed on Schedule 8.8.
“Knowledge of Parent” or “to Parent’s Knowledge” means the actual knowledge after reasonable inquiry of the Chief Executive Officer and Chief Financial Officer of Parent as of the date hereof.
“Knowledge of the Company” or “to the Company’s Knowledge” means the actual knowledge after reasonable inquiry of the individuals listed on Schedule 1.1(c).
“Law” means any domestic or foreign, supranational, national, federal, state, municipal or local law, statute, ordinance, code, rule, or regulation having the force of law.
“Leases” means, collectively, the leases, subleases, space sharing, licenses or other occupancy agreements described on Schedule 1.1(d) attached hereto, together with all amendments thereto and guarantees thereof, which Schedule includes the parties to such documents and the address for each Real Property subject thereto.
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“Lien” means, with respect to any property or asset, any mortgage, lien, deed of trust, pledge, charge, security interest or encumbrance of any kind in respect of such property or asset, and any option, right of first offer or right of first refusal in respect of such property or asset, including any agreement to give any of the foregoing.
“Loeb” has the meaning set forth in Section 12.19(b).
“Material Adverse Effect” means any fact, effect, event, development, change, state of facts, condition, circumstance, or occurrence (an “Effect”) that, individually or in the aggregate with any other Effects, (i) has or would reasonably be expected to have a materially adverse effect on the financial condition, assets, business or results of operations of the Company Group, taken as a whole, on the one hand, or on Parent, Merger Sub I and Merger Sub II, on the other hand, taken as a whole; or (ii) prevents or materially delays or would reasonably be expected to prevent or materially delay the ability of the Company Group, on the one hand, or on Parent, Merger Sub I and Merger Sub II, on the other hand to consummate the Domestication, the Company Mergers and the transactions contemplated by this Agreement and the Ancillary Agreements; provided, however, that, solely in the case of the foregoing clause (i) and with respect to the Company Group, a Material Adverse Effect shall not be deemed to include Effects (and solely to the extent of such Effects) resulting from an Excluded Matter.
“Material Contracts” has the meaning set forth in Section 4.14(a). “Material Contracts” shall not include any Contracts that are also Plans.
“Merger Sub I” has the meaning set forth in the preamble.
“Merger Sub I Common Stock” has the meaning set forth in Section 5.8(b).
“Merger Sub II” has the meaning set forth in the preamble.
“Mergers Intended Tax Treatment” has the meaning specified in the recitals to this Agreement.
“Nasdaq” means The Nasdaq Stock Market LLC.
“New Incentive Plan” has the meaning set forth in Section 6.5(e).
“Non-Party Affiliate” means, with respect to any Person, any Person who is not party to this Agreement, including any equity holders, partners, members, controlling persons, directors, officers, employees, incorporators, managers, agents, Representatives, or Affiliates of the Parent Parties, the Sponsor, the Company, or the Company Stockholders or the heirs, executors, administrators, successors or assigns of any of the foregoing (or any Affiliate of any of the foregoing) that is not a party to this Agreement.
“Non-U.S. Plans” has the meaning set forth in Section 4.20(j).
“Offer Documents” has the meaning set forth in Section 6.5(a).
“Order” means any outstanding decree, order, judgment, writ, injunction, settlement, stipulation, verdict, determination, award, rule or consent issued, made or rendered by an Authority.
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“Other Filings” means any filings to be made by Parent required under the Exchange Act, Securities Act or any other United States federal, foreign or blue sky laws, other than the Registration Statement and the other Offer Documents.
“Outside Closing Date” has the meaning set forth in Section 10.1(a).
“PAAC Group” has the meaning set forth in Section 12.19(a).
“Parent” has the meaning set forth in the preamble.
“Parent Articles” means the Amended and Restated Memorandum and Articles of Association of Parent, adopted by special resolution dated February 11, 2026 and effective on February 11, 2026, as amended.
“Parent Board Recommendation” has the meaning set forth in Section 5.12(a).
“Parent Bylaws” has the meaning set forth in the recitals to this Agreement.
“Parent Certificate of Incorporation” has the meaning set forth in the recitals to this Agreement.
“Parent Closing Cash” means: (a) the amount of cash available in the Trust Account immediately prior to the First Effective Time after deducting the amount required to satisfy the Parent Redemption Amount; plus (b) the amount of any PIPE Financing or any Alternative PIPE Financing permitted by this Agreement (as such amounts are finally delivered to Parent at or prior to the Closing by investors in such PIPE Financing or Alternative PIPE Financing); plus (c) the proceeds of any other equity investments or any debt financing facilities on terms mutually agreed by the Company and Parent that are or will be received by Parent (or the Company) prior to or substantially concurrently with the Closing; minus (d) the accrued but unpaid Parent Transaction Expenses and Company Transaction Expenses as of the Closing Date. For the avoidance of doubt, the incurrence of Indebtedness by the Company in the ordinary course permitted by or consented to under Section 6.1(a)(viii), including drawings under the Company’s lines of credit, shall not be included in the determination of Parent Closing Cash.
“Parent Common Shares” means from and following the Domestication, the shares of voting common stock, par value $0.0001 per share, of Parent.
“Parent Financial Statements” means all of the financial statements of Parent included in the Parent SEC Documents and any amendments to such financial statements.
“Parent Fundamental Representations” means the representations and warranties of Parent set forth in Section 5.1 (Corporate Existence and Power), Section 5.3 (Corporate Authorization), Section 5.6 (Finders’ Fees), Section 5.7 (Issuance of Shares), and Section 5.8 (Capitalization).
“Parent Ordinary Shares” means prior to the Domestication, the ordinary shares, par value $0.0001 per share, of Parent.
“Parent Parties” has the meaning set forth in ARTICLE V.
“Parent Proposals” has the meaning set forth in Section 6.5(e).
“Parent Redemption Amount” has the meaning set forth in Section 6.6.
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“Parent SEC Documents” has the meaning set forth in Section 5.13(a).
“Parent Shareholder Approval” means the requisite approval under the Parent Articles, the Cayman Companies Act or any other applicable Law, by holders of Parent Ordinary Shares at the Parent Shareholder Meeting of this Agreement, the Domestication and the Company Mergers and the other Parent Proposals.
“Parent Shareholder Meeting” has the meaning set forth in Section 6.5(a).
“Parent Shares” means (a) prior to the Domestication, the Parent Ordinary Shares, and (b) from and following the Domestication, the Parent Common Shares.
“Parent Support Agreement” has the meaning set forth in the recitals to this Agreement.
“Parent Termination Fee” has the meaning set forth in Section 12.5(c).
“Parent Transaction Expenses” means, without duplication, all fees, costs and expenses of Parent incurred prior to and through the Closing Date in connection with the negotiation, preparation and execution of this Agreement, the Ancillary Agreements, the performance and compliance with this Agreement and the Ancillary Agreements, and the consummation of the transactions contemplated hereby and thereby, including any and all (i) filing fees payable by Parent or any of its Subsidiaries to any Authority in connection with the transactions contemplated hereby and thereby, (ii) fees, costs, expenses and disbursements of counsel, accountants, advisors and consultants of Parent or any of its Subsidiaries, (iii) deferred IPO fees and Deferred Underwriting Commissions, and (iv) premiums, costs, expenses and disbursements relating to the Parent Tail Policy.
“Parent Unit” means each unit of Parent consisting of one Parent Ordinary Share and one-half of one Parent Warrant, which units were sold in the IPO and in a private placement at the time of the consummation of the IPO.
“Parent Warrant” means each whole warrant to purchase one Parent Ordinary Share at a purchase price of $11.50 per share, subject to adjustment, which warrants were included in the Parent Units sold in the IPO and in a private placement at the time of the consummation of the IPO.
“Parent Warrant Agreement” means the Warrant Agreement, dated as of February 11, 2026, between Parent and Continental Stock Transfer & Trust Company, as warrant agent.
“Patents” has the meaning set forth in the definition of “Intellectual Property.”
“Per Convertible Note Merger Consideration” has the meaning set forth in Section 3.2(c).
“Per Preferred Share Merger Consideration” has the meaning set forth in Section 3.1(a)(ii).
“Permit” means each license, franchise, permit, order, approval, consent or other similar authorization required to be obtained and maintained by any member of the Company Group under applicable Law to carry out or conduct the Business as currently conducted.
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“Permitted Liens” means all (a) defects, exceptions, restrictions, easements, rights of way, covenants, conditions, encroachments and encumbrances disclosed in policies of title insurance which have been made available to Parent or that do not materially impair the current use or occupancy of the affected property; (b) mechanics’, materialmens’, carriers’, workers’, repairers’ and other similar statutory Liens arising or incurred in the ordinary course of business consistent with past practices for amounts (i) that are not yet due and payable, or (ii) are being contested in good faith by appropriate proceedings (and for which adequate accruals or reserves have been established on the Company Financial Statements in accordance with U.S. GAAP); (c) liens for Taxes (i) not yet due and payable or (ii) which are being contested in good faith by appropriate proceedings (and for which adequate accruals or reserves have been established on the Company Financial Statements in accordance with U.S. GAAP); (d) encumbrances and restrictions of record on real property (including easements, covenants, conditions, rights of way and similar restrictions) that do not or would not prohibit or materially interfere with the Company Group’s use or occupancy of such real property or the operation of the business of the Company Group, taken as a whole; (e) zoning, building codes and other land use Laws regulating the use or occupancy of real property or the activities conducted thereon which are imposed by any Authority having jurisdiction over such real property and which are not violated by the use or occupancy of such real property or the operation of the businesses of the Company Group and do not prohibit or materially interfere with any of the Company Group’s use or occupancy of such real property or the operation of the business of the Company Group; (f) other than with respect to Intellectual Property, any right, interest, Lien or title of a licensor, sublicensor, licensee, sublicensee, lessor or sublessor under any license, lease or other similar agreement or in the property being leased or licensed, including the Leases; (g) Liens, licenses or restrictions on transfer of equity or debt securities resulting from applicable securities Laws or the Company’s organizational documents; (h) Liens incurred in connection with capital lease obligations of any of the Company Group; (i) Liens set forth on Schedule 1.1(i); and (j) non-exclusive licenses to Intellectual Property entered into in the ordinary course of business.
“Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust, Authority or other entity or organization of any other kind.
“Personal Information” means any data or information that relates to, describes, is capable of being associated with, or could reasonably be linked to, directly or indirectly, an identified or identifiable natural person or device, and that constitutes personal data, personal health information, protected health information, personally identifiable information, personal information or similar defined term under any Data Protection Laws.
“PIPE Financing” has the meaning set forth in the recitals to this Agreement.
“PIPE Investment Amount” has the meaning set forth in the recitals to this Agreement.
“Plan” means each “employee benefit plan” within the meaning of Section 3(3) of ERISA and all other compensation and benefits plans, policies, programs, arrangements or payroll practices, including multiemployer plans within the meaning of Section 3(37) of ERISA, and each other stock purchase, stock option, restricted stock, severance, retention, employment (other than any employment offer letter in such form as previously provided to Parent that is terminable “at will” without any contractual obligation on the part of the Company to make any severance, termination, change of control, or similar payment), consulting, change-of-control, collective bargaining, bonus, incentive, deferred compensation, employee loan, fringe benefit and other benefit plan, agreement, program, policy, commitment or other arrangement, whether or not subject to ERISA, whether formal or informal, oral or written, in each case, that is sponsored, maintained, contributed or required to be contributed to by a member of the Company Group, or under which a member of the Company Group has any current or potential liability, but excluding in each case any statutory plan, program or arrangement that is required under applicable law and maintained by any Authority.
“Plan of Reorganization” has the meaning set forth in the recitals to this Agreement.
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“Privacy Obligations” has the meaning set forth in Section 4.17(m).
“Privacy Policies” has the meaning set forth in Section 4.17(m).
“Proceeding” means any lawsuit, litigation, Action, audit, demand, examination, hearing, claim, charge, complaint, audit, investigation, inquiry, proceeding, suit or arbitration (in each case, whether civil, criminal or administrative and whether public or private) pending by or before or otherwise involving any Authority or arbitrator.
“Process,” “Processed” or “Processing” means any operation or set of operations performed upon Personal Information or sets of Personal Information, whether or not by automated means, such as collection, recording, organization, structuring, storage, adaptation or alteration, retrieval, consultation, use, disclosure, dissemination, or otherwise making available, alignment or combination, restriction, securing, erasure, or destruction.
“Prospectus” means the final IPO prospectus of Parent, dated February 12, 2026.
“Proxy Statement” has the meaning set forth in Section 6.5(a).
“Pro Rata Share” means the percentage set forth opposite each Selling Company Stockholder’s name set forth on Schedule 6.10.
“Publicly Available Software” means each of any Software that contains, or is derived in any manner (in whole or in part) from, any Software that is distributed as free software, “copyleft,” open source software (e.g. Linux), or under any license meeting the Open Source Definition (as promulgated by the Open Source Initiative) or the Free Software Definition (as promulgated by the Free Software Foundation) or substantially similar licensing and distribution models, including but not limited to any of the following: (A) the GNU General Public License (GPL) or Lesser/Library GPL (LGPL), (B) the Artistic License (e.g., PERL), (C) the Mozilla Public License, (D) the Netscape Public License, (E) the Sun Community Source License (SCSL), (F) the Sun Industry Source License (SISL) and (G) the Apache Server License, including for the avoidance of doubt all Software licensed under a Copyleft License.
“Real Property” means, collectively, all real properties and interests therein (including the right to use), together with all buildings, fixtures, trade fixtures, plant and other improvements located thereon or attached thereto; all rights arising out of use thereof (including air, water, oil and mineral rights); and all subleases, franchises, licenses, permits, easements and rights-of-way which are appurtenant thereto.
“Registered Exclusively Licensed IP” means any and all Company Exclusively Licensed IP that is the subject of a registration or an application for registration, including issued patents and patent applications.
“Registered Owned IP” means any and all Intellectual Property constituting Company Owned IP, that in each instance is the subject of a registration or an application for registration, including issued patents and patent applications.
“Registration Statement” has the meaning set forth in Section 6.5(a).
“Representatives” means, with respect to any Person, such Person’s Affiliates, and its and such Affiliates’ respective officers, directors, Affiliates, members, partners, managers, attorneys, accountants, advisors, consultants, employees, representatives and agents of such Person.
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“Repurchase” has the meaning set forth in Section 6.10.
“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.
“Schedules” means, individually and collectively, the disclosure schedules and other schedules relating to this Agreement delivered by the applicable Parties hereto on the date hereof in connection with this Agreement and the transactions contemplated hereby and concurrently with the execution and delivery of this Agreement by the Parties.
“SEC” means the U.S. Securities and Exchange Commission.
“Second Certificate of Merger” has the meaning set forth in Section 2.3(b).
“Second Effective Time” has the meaning set forth in Section 2.3(b).
“Securities Act” means the Securities Act of 1933, as amended.
“Selling Company Stockholders” means those Company Stockholders set forth on Schedule 6.10.
“Signing Filing” has the meaning set forth in Section 12.4(b).
“Signing Press Release” has the meaning set forth in Section 12.4(b).
“Software” means any and all (a) computer software, firmware, middleware, operating systems, applications, computer programs (including any and all algorithms, heuristics, models and methodologies, whether in source code, object code, human readable form or other form), (b) databases and compilations (including any and all data and collections of data), whether machine readable or otherwise, (c) descriptions, flow charts and other documentation used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons, (d) AI/ML, (e) all versions, updates, corrections, enhancements and modifications of any of the foregoing, and (f) all related specifications, documentation, developer notes, instructions, comments, annotations, user manuals, and other training documentation relating to any of the foregoing.
“Sponsor” means Proem SPAC Partners I LLC, a Cayman Islands limited liability company.
“Standard Contracts” means any of the following: (a) licenses for Publicly Available Software or non-exclusive end user in-licenses of commercially available, “off-the-shelf” or “shrink wrap” Software for fees of less than $250,000 annually, (b) non-exclusive licenses of Company IP implied by and ancillary to customer, distributor or channel partner Contracts on Company’s standard forms made available to Parent with no material exclusions or deviations, (c) agreements with the Company’s consultants or contractors on Company’s standard forms made available to Parent with no material exclusions or deviations, (d) invention assignment agreements with the Company’s employees on Company’s standard forms made available to Parent with no material exclusions or deviations, (e) non-exclusive licenses that are not material to the applicable business and merely incidental to the transactions contemplated in such agreement, the commercial purpose of which is primarily for something other than such license (such as (i) sales or marketing or similar contract that includes a non-exclusive license to use the trademarks of the Company for purposes of promoting the Company, (ii) vendor contracts under which Company Owned IP is licensed to a vendor of the Company for the benefit of the Company, or (iii) non-exclusive licenses to Intellectual Property granted by a third party for the purpose of allowing the Company Group to provide services to such third party), and (f) customary non-disclosure agreements entered into in the ordinary course of business consistent with past practices.
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“Subsidiary” means, with respect to any Person, each entity of which at least fifty percent (50%) of the capital stock or other equity or voting securities are Controlled or owned, directly or indirectly, by such Person.
“Tangible Personal Property” means all tangible personal property and interests therein, including machinery, computers and accessories, furniture, office equipment, communications equipment, automobiles, laboratory equipment and other equipment owned or leased by a member of the Company Group and other tangible property.
“Tax(es)” means (a) any U.S. federal, state or local or non-U.S. taxes imposed by any Taxing Authority including any income (net or gross), gross receipts, profits, windfall profit, sales, use, goods and services, ad valorem, franchise, license, withholding, employment, social security, workers compensation, unemployment compensation, employment, payroll, transfer, excise, import, real property, escheat, personal property, intangible property, occupancy, recording, minimum, alternative minimum, and other taxes (including any governmental charge, fee, levy, or custom duty imposed by an Authority that is in the nature of a tax), together with any interest, penalty, additions to tax or additional amount imposed with respect thereto and including any secondary liability for any of the aforementioned, (b) any liability for payment of amounts described in clause (a) whether as a result of being a member of an affiliated, consolidated, combined or unitary group for any period or otherwise through operation of law, and (c) any liability for the payment of amounts described in clauses (a) or (b) as a result of any tax sharing, tax group, tax indemnity or tax allocation agreement (excluding commercial agreements entered into in the ordinary course of business the primary purpose of which is not the sharing of Taxes) with, or any other express or implied agreement to indemnify, any other Person.
“Tax Return” means any return, information return, declaration, claim for refund of Taxes, report or any similar statement, and any amendment thereto, including any attached schedule and supporting information, whether on a separate, consolidated, combined, unitary or other basis, that is filed or required to be filed with any Taxing Authority in connection with the determination, assessment, collection or payment of a Tax or the administration of any Law relating to any Tax.
“Taxing Authority” means the IRS and any other Authority responsible for the collection, assessment or imposition of any Tax or the administration of any Law relating to any Tax.
“Terminating Company Breach” has the meaning specified in Section 10.2(a).
“Terminating Parent Breach” has the meaning specified in Section 10.2(b).
“Top Customer” has the meaning specified in Section 4.31(a).
“Top Supplier” has the meaning specified in Section 4.31(a).
“Trade Secrets” has the meaning set forth in the definition of “Intellectual Property.”
“Trademarks” has the meaning set forth in the definition of “Intellectual Property.”
“Transaction Litigation” has the meaning set forth in Section 8.1(d).
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“Transfer Taxes” means any and all transfer, documentary, sales, use, real property, stamp, excise, recording, registration, value added and other similar Taxes, fees and costs (including any associated penalties and interest) incurred in connection with the transactions contemplated by this Agreement.
“Treasury Regulations” means the regulations promulgated by the United States Department of the Treasury under the Code, including all temporary and final, as amended.
“Trust Account” has the meaning set forth in Section 5.8(c).
“Trust Agreement” has the meaning set forth in Section 5.8(c).
“Trustee” has the meaning set forth in Section 5.8(c).
“U.S. GAAP” means U.S. generally accepted accounting principles, consistently applied.
1.2 Construction.
(a) References to particular sections and subsections, schedules, and exhibits not otherwise specified are cross-references to sections and subsections, schedules, and exhibits of this Agreement. Captions are not a part of this Agreement, but are included for convenience, only.
(b) The words “herein,” “hereof,” “hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement; and, unless the context requires otherwise, “party” means a party signatory hereto.
(c) Any use of the singular or plural, or the masculine, feminine or neuter gender, includes the others, unless the context otherwise requires; the word “including” means “including without limitation”; the word “or” means “and/or”; the word “any” means “any one, more than one, or all”; and, unless otherwise specified, any financial or accounting term has the meaning of the term under United States generally accepted accounting principles as consistently applied heretofore by the Company. Any reference in this Agreement to a Person’s directors shall include any member of such Person’s governing body.
(d) Unless otherwise specified, any reference to any agreement (including this Agreement), instrument, or other document includes all schedules, exhibits, or other attachments referred to therein, and any reference to a statute or other law means such law as amended, restated, supplemented or otherwise modified from time to time and includes any rule, regulation, ordinance or the like promulgated thereunder, in each case, as amended, restated, supplemented or otherwise modified from time to time.
(e) Any reference to a numbered schedule means the same-numbered section of the Schedules. Any reference in a schedule contained in the Schedules delivered by a Party hereunder shall be deemed to be an exception to (or, as applicable, a disclosure for purposes of) the applicable representations and warranties (or applicable covenants) that are contained in the section or subsection of this Agreement that corresponds to such schedule and any other representations and warranties of such Party that are contained in this Agreement to which the relevance of such item thereto is reasonably apparent on its face. The mere inclusion of an item in a schedule as an exception to (or, as applicable, a disclosure for purposes of) a representation or warranty shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item would have a Material Adverse Effect or establish any standard of materiality to define further the meaning of such terms for purposes of this Agreement. Nothing in the Schedules constitutes an admission of any liability or obligation of the disclosing Party to any third party or an admission to any third party, including any Authority, against the interest of the disclosing Party, including any possible breach of violation of any Contract or Law. Summaries of any written document in the Schedules do not purport to be complete and are qualified in their entirety by the written document itself. The Schedules and the information and disclosures contained therein are intended only to qualify and limit the representations and warranties of the Parties contained in this Agreement and shall not be deemed to expand in any way the scope or effect of any of such representations and warranties.
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(f) If any action is required to be taken or notice is required to be given within a specified number of days following a specific date or event, the day of such date or event is not counted in determining the last day for such action or notice. If any action is required to be taken or notice is required to be given on or before a particular day which is not a Business Day, such action or notice shall be considered timely if it is taken or given on or before the next Business Day.
(g) To the extent that any Contract, document, certificate or instrument is represented and warranted to by the Company to be given, delivered, provided or made available by the Company, such Contract, document, certificate or instrument shall be deemed to have been given, delivered, provided and made available to Parent or its Representatives, if such Contract, document, certificate or instrument shall have been posted not later than two days prior to the date of this Agreement to the “Project Orchid Data Room” electronic data room maintained on behalf of the Company for the benefit of Parent and its Representatives and Parent and its Representatives have been given access to the electronic folders containing such information.
ARTICLE
II
THE DOMESTICATION AND THE COMPANY MERGERS
2.1 Domestication.
(a) Subject to receipt of the Parent Shareholder Approval, at least one (1) Business Day prior to the date of the First Effective Time, Parent shall cause the Domestication to become effective, including by (i) filing with the Secretary of State of the State of Delaware a certificate of domestication with respect to the Domestication, in form and substance reasonably acceptable to Parent and the Company (the “Certificate of Domestication”), together with the Parent Certificate of Incorporation, in each case, in accordance with the provisions thereof and Section 388 of the DGCL, (ii) completing and making and procuring all those filings required to be made with the Registrar of Companies in the Cayman Islands (the “Cayman Registrar”) under the Cayman Companies Act in connection with the Domestication, and (iii) changing its name to “Astro Digital, Inc.” or a name to be mutually agreed by the Company and Parent prior to the Closing.
(b) In accordance with applicable Law, the Certificate of Domestication shall provide that at the effective time of the Domestication, by virtue of the Domestication, and without any action on the part of any shareholder of Parent: (i) each then issued and outstanding Parent Ordinary Share shall convert automatically into one Parent Common Share; (ii) each then issued and outstanding Parent Warrant shall convert automatically into a warrant to purchase one Parent Common Share at the Closing, pursuant to the Parent Warrant Agreement; and (iii) each then issued and outstanding Parent Unit shall separate into one Parent Ordinary Share and one half of one Parent Warrant and each such Parent Ordinary Share and one half of one Parent Warrant shall convert automatically into one Parent Common Share and one half of one warrant, respectively, with each whole warrant entitling the holder to purchase one Parent Common Share at the Closing.
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2.2 Company Mergers.
(a) Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, at the First Effective Time, Merger Sub I shall be merged with and into the Company, following which the separate corporate existence of Merger Sub I shall cease and the Company shall continue as the Initial Surviving Corporation a wholly-owned Subsidiary of Parent.
(b) Immediately following the First Effective Time, upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL and DLLCA, as applicable, at the Second Effective Time, the Initial Surviving Corporation shall be merged with and into Merger Sub II, following which the separate corporate existence of Initial Surviving Corporation shall cease and Merger Sub II shall continue as the Surviving Company and a wholly-owned Subsidiary of Parent.
2.3 Company Merger Effective Times.
(a) Subject to the provisions of this Agreement, at least one (1) Business Day after the consummation of the Domestication, the Company shall file with the Secretary of State of the State of Delaware a certificate of merger, in form and substance reasonably acceptable to Company and Parent, executed in accordance with the relevant provisions of the DGCL (the “First Certificate of Merger”). The First Company Merger shall become effective upon the filing of the First Certificate of Merger or at such later time as is agreed to by the Company and Parent and specified in the First Certificate of Merger (the time at which the First Company Merger becomes effective is herein referred to as the “First Effective Time”).
(b) Subject to and upon the terms and conditions of this Agreement, immediately following the First Effective Time, at the Closing, the Company shall file with the Secretary of State of the State of Delaware a certificate of merger, in form and substance reasonably acceptable to Company and Parent, executed in accordance with the relevant provisions of the DGCL and the DLLCA, as applicable (the “Second Certificate of Merger”) and make such other filings or recordings, in each case in accordance with the relevant provisions of the DGCL and DLLCA, as applicable. The Second Company Merger shall become effective upon the filing of the Second Certificate of Merger or at such later time as is agreed to by the Company and Parent and specified in the Second Certificate of Merger (the time at which the Second Company Merger becomes effective is herein referred to as the “Second Effective Time”).
2.4 Effect of the Company Mergers.
(a) At the First Effective Time, the effect of the First Company Merger shall be as provided in this Agreement, the First Certificate of Merger and the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the First Effective Time, all the assets, property, rights, privileges, immunities, powers and franchises of the Company and Merger Sub I shall vest in the Initial Surviving Corporation and all debts, liabilities and duties of the Company and Merger Sub I shall become the debts, liabilities and duties of the Initial Surviving Corporation.
(b) At the Second Effective Time, the effect of the Second Company Merger shall be as provided in this Agreement, the Second Certificate of Merger and the applicable provisions of the DGCL and the DLLCA, as applicable. Without limiting the generality of the foregoing, and subject thereto, at the Second Effective Time, all the assets, property, rights, privileges, immunities, powers and franchises of the Initial Surviving Corporation and Merger Sub II shall vest in Merger Sub II and all debts, liabilities and duties of the Initial Surviving Corporation and Merger Sub II shall become the debts, liabilities and duties of the Surviving Company.
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2.5 U.S. Tax Treatment.
(a) For U.S. federal income tax purposes (and for purposes of any applicable state or local income Tax Law that follows U.S. federal income Tax Law), each of the Parties intends that (a) the Domestication qualify for the Domestication Intended Tax Treatment, (b) the Company Mergers qualify for the Mergers Intended Tax Treatment. The Parties to this Agreement hereby (i) adopt this Agreement as a Plan of Reorganization with respect to each of the Domestication and the Company Mergers, (ii) agree to file and retain such information as shall be required under Treasury Regulations Section 1.368-3, and (iii) agree to file all Tax Returns on a basis consistent with the Intended Tax Treatment and not otherwise to take any position or action inconsistent with the Intended Tax Treatment unless required as a result of a “determination” within the meaning of Section 1313(a) of the Code (or any similar provision of applicable state, local or non-U.S. Tax Law) or otherwise required by an Authority. None of the Parties has knowingly taken or will knowingly take any action (or knowingly fail to take any action), if such action (or failure to act) would be reasonably expected to prevent or impede the Domestication Intended Tax Treatment or the Mergers Intended Tax Treatment, and each of the Parties shall use its reasonable best efforts to cause the Domestication to qualify for the Domestication Intended Tax Treatment and the Company Mergers to qualify for the Mergers Intended Tax Treatment. Each of the Parties acknowledges and agrees that (i) it has had the opportunity to obtain independent legal and tax advice with respect to the transactions contemplated by this Agreement, and (ii) it shall be responsible for paying its own Taxes, including any adverse Tax consequences that may result if the Domestication does not qualify for the Domestication Intended Tax Treatment or the Company Mergers do not qualify for the Mergers Intended Tax Treatment.
2.6 Governing Documents Relating to the Company Mergers.
(a) At the First Effective Time, the certificate of incorporation of the Company shall, in accordance with the terms thereof and the DGCL, be amended and restated in its entirety as set forth in an exhibit to the First Certificate of Merger, and, as so amended and restated, shall be the certificate of incorporation of the Initial Surviving Corporation until thereafter duly amended in accordance with the terms thereof and the DGCL.
(b) At the Second Effective Time, the certificate of formation of Merger Sub II shall, in accordance with the terms thereof and the DLLCA, be amended and restated in the form agreed by the parties prior to the effectiveness of the Registration Statement, and, as so amended and restated, shall be the certificate of formation of the Surviving Company, until thereafter duly supplemented or amended in accordance with terms thereof and the DLLCA.
(c) At the Second Effective Time, the limited liability company agreement of Merger Sub II as in effect immediately prior to the Second Effective Time, shall be amended and restated in the form agreed by the Company and Parent prior to the effectiveness of the Registration Statement, and, as so amended and restated, shall be the limited liability company agreement of the Surviving Company, until thereafter duly supplemented or amended in accordance with the terms thereof, the certificate of formation and the DLLCA.
2.7 Closing. Unless this Agreement is earlier terminated in accordance with ARTICLE X, the closing of the Company Mergers (the “Closing”) shall take place virtually on the second (2nd) Business Day after the satisfaction or waiver (to the extent permitted by applicable Law) of the conditions set forth in ARTICLE IX (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver thereof), or at such other time, date and location as Parent and Company agree in writing. The Parties may participate in the Closing via the exchange of signature pages via email or other electronic means. The date on which the Closing actually occurs is hereinafter referred to as the “Closing Date”. For the avoidance of doubt, the Closing and the First Effective Time shall occur after the completion of the Domestication.
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2.8 Directors and Officers of Surviving Company.
(a) At the Second Effective Time, the initial managers of the Surviving Company shall consist of the same persons serving on Parent’s Board of Directors in accordance with Section 2.9, and such directors shall hold office until their successors shall have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Surviving Company’s organizational documents.
(b) At the Second Effective Time, the officers of the Company identified on Schedule 2.9 shall become the initial officers of the Surviving Company, with such individuals holding the titles set forth opposite their names until their respective successors are duly elected or appointed and qualified, or until their earlier death, resignation or removal.
2.9 Directors and Officers of Parent.
(a) At the Second Effective Time, Parent’s Board of Directors will consist of seven directors. The Company shall have the right to designate four directors (including one director designated as the initial “Chairperson”) and the remaining three directors shall be jointly designated by the Company and the Sponsor. At least a majority of the Board of Directors shall qualify as independent directors under Nasdaq or Approved Exchange rules, as applicable.
(b) The four individuals identified on Schedule 2.9(a) as directors shall be the directors of Parent designated by the Company; provided, that the Company may, replace any such individual with any other individual prior to the filing of the Registration Statement and Proxy Statement/Prospectus by notifying Parent in writing of such replaced individual and replacement individual. Within thirty (30) days of the date hereof, the Company and Parent shall jointly agree on the individuals designated as the remaining three directors, which shall include the individual identified on Schedule 2.9(b).
(c) The individuals identified on Schedule 2.9(c) as officers of Parent shall be the officers of Parent, with such individuals holding the titles set forth opposite their names until their respective successors are duly elected or appointed and qualified, or until their earlier death, resignation or removal, in each case, as of immediately after the Second Effective Time.
2.10 Taking of Necessary Action; Further Action.
(a) If, at any time after the First Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Initial Surviving Corporation with full right, title and interest in, to and under, or possession of, all assets, property, rights, privileges, powers and franchises of the Company and Merger Sub I, the officers and directors of the Initial Surviving Corporation are fully authorized in the name and on behalf of the Company and Merger Sub I, to take all lawful action necessary or desirable to accomplish such purpose or acts, so long as such action is not inconsistent with this Agreement.
(b) If, at any time after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Company with full right, title and interest in, to and under, or possession of, all assets, property, rights, privileges, powers and franchises of the Initial Surviving Corporation and Merger Sub II, the officers and directors of the Surviving Company are fully authorized in the name and on behalf of the Initial Surviving Corporation and Merger Sub II, to take all lawful action necessary or desirable to accomplish such purpose or acts, so long as such action is not inconsistent with this Agreement.
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2.11 No Further Ownership Rights in Company Capital Stock. All consideration paid or payable in respect of shares of Company Capital Stock hereunder, or upon the exercise of the appraisal rights described in Section 3.3, shall be deemed to have been paid or payable in full satisfaction of all rights pertaining to such shares of Company Capital Stock and from and after the First Effective Time, there shall be no further registration of transfers of shares of Company Capital Stock on the stock transfer books of the Initial Surviving Corporation. If, after the First Effective Time, certificates formerly representing shares of Company Capital Stock (each, a “Company Stock Certificate”) are presented to the Initial Surviving Corporation, subject to the terms and conditions set forth herein, they shall be cancelled and exchanged for the consideration provided for, and in accordance with the procedures set forth, in ARTICLE III.
ARTICLE
III
EFFECT OF THE COMPANY MERGERS
3.1 Effect of the Company Mergers.
(a) Effect of First Company Merger. At the First Effective Time, as a result of the First Company Merger and without any action on the part of Parent, Merger Sub I, the Company or the holders of any shares of capital stock of any of them:
(i) Cancellation of Certain Shares of Company Capital Stock. Each share of Company Capital Stock, if any, that is owned by Parent, Merger Sub I or Merger Sub II (or any other Subsidiary of Parent) or the Company (as treasury stock or otherwise), will automatically be cancelled and retired without any conversion thereof and will cease to exist, and no consideration will be delivered in exchange therefor. Each share of Company Capital Stock, if any, held immediately prior to the First Effective Time by the Company as treasury stock shall be automatically canceled and extinguished, and no consideration shall be paid with respect thereto.
(ii) Conversion of Shares of Company Preferred Stock. Each share of Company Preferred Stock issued and outstanding immediately prior to the First Effective Time (other than any such shares of Company Preferred Stock cancelled pursuant to Section 3.1(a)(i) and any Dissenting Shares) shall, in accordance with the Company Charter, be converted into the right to receive a number of Parent Common Shares equal to: (i) the Conversion Ratio multiplied by (ii) the number of shares of Company Common Stock issuable upon conversion of such share of Company Preferred Stock as of immediately prior to the First Effective Time (the “Per Preferred Share Merger Consideration”).
(iii) Conversion of Shares of Company Common Stock. Each share of Company Common Stock issued and outstanding immediately prior to the First Effective Time (other than any such shares of Company Common Stock cancelled pursuant to Section 3.1(a)(i) and any Dissenting Shares) shall be converted into the right to receive a number of Parent Common Shares equal to the Conversion Ratio.
(iv) Effect on Company Capital Stock. At the First Effective Time, all shares of Company Capital Stock converted pursuant to Section 3.1(a)(ii) or Section 3.1(a)(iii) shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of Company Capital Stock shall thereafter cease to have any rights with respect to such securities, except the right to receive a portion of the Aggregate Merger Consideration.
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(v) Conversion of Merger Sub I Capital Stock. Each share of common stock, par value $0.0001 per share, of Merger Sub I issued and outstanding immediately prior to the First Effective Time shall be converted into and become one newly issued, fully paid and nonassessable share of common stock of the Initial Surviving Corporation.
(b) Effect of the Second Company Merger. At the Second Effective Time, by virtue of the Second Company Merger and without any action on the part of any Party:
(i) Cancellation of Initial Surviving Corporation Capital Stock. Each share of capital stock of the Initial Surviving Corporation issued and outstanding immediately prior to the Second Effective Time shall automatically be cancelled and retired without any conversion thereof and will cease to exist.
(ii) Conversion of Merger Sub II LLC Interests. All limited liability company interests of Merger Sub II outstanding immediately prior to the Second Effective Time shall be converted into an equal number of limited liability company interests of the Surviving Company, which shall constitute 100% of the outstanding equity of the Surviving Company, all of which shall be owned by Parent, which shall continue as the sole member of the Surviving Company, and the Surviving Company shall be classified as an entity disregarded as separate from Parent for U.S. federal income tax purposes.
3.2 Treatment of Company Options, Company Convertible Notes and Company Warrants.
(a) Treatment of Options. Prior to the Closing, the Company’s Board of Directors (or, if appropriate, any committee thereof administering the Equity Incentive Plan) shall adopt such resolutions or take such other actions as may be required to adjust the terms of all Company Options (whether vested or unvested) as necessary to provide that, at the First Effective Time, each Company Option shall be converted into an option to acquire, subject to substantially the same terms and conditions as were applicable under such Company Option (including expiration date, vesting conditions, and exercise provisions), the number of Parent Common Shares (rounded down to the nearest whole share), determined by multiplying the number of shares of Company Common Stock subject to such Company Option as of immediately prior to the First Effective Time by the Conversion Ratio, at an exercise price per Parent Common Share (rounded up to the nearest whole cent) equal to (i) the exercise price per share of Company Common Stock of such Company Option divided by (ii) the Conversion Ratio (each a “Converted Stock Option”); provided, however, that the exercise price and the number of Parent Common Shares covered by each Converted Stock Option shall be determined in a manner consistent with the requirements of Sections 422 and 409A of the Code and the applicable regulations promulgated thereunder such that such conversion will not constitute a “modification” of such Company Options for purposes of Section 409A or Section 424 of the Code.
(b) Assumption of Converted Stock Options by Parent. At the First Effective Time, Parent shall assume all obligations of the Company under the Equity Incentive Plan, each outstanding Converted Stock Option and the agreements evidencing the grants thereof. As soon as practicable after the First Effective Time, Parent shall deliver to the holders of Converted Stock Options appropriate notices setting forth such holders’ rights, and the agreements evidencing the grants of such Converted Stock Options shall continue in effect on substantially the same terms and conditions (subject to the adjustments required by Section 3.2(a) and Section 3.2(b) after giving effect to the First Company Merger). As soon as practicable following the expiration of the sixty (60) day period following the date Parent has filed current Form 10 information with the SEC reflecting its status as an entity that is not a shell company, Parent shall file an effective registration statement on Form S-8 (or any successor form, or if Form S-8 is not available, other appropriate forms) with respect to the Parent Common Shares subject to the Converted Stock Options and shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as the Converted Stock Options remain outstanding and are required to be registered.
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(c) Treatment of Convertible Notes. Prior to the Closing, the Company’s Board of Directors shall adopt such resolutions or take such other actions as may be required to adjust the terms of all Company Convertible Notes as necessary to provide that, at the First Effective Time, each Company Convertible Note shall be converted into the right to receive a number of Parent Common Shares equal to (i) the Conversion Ratio multiplied by (ii) the number of shares of Company Common Stock issuable upon conversion of such Company Convertible Note as of immediately prior to the First Effective Time (the “Per Convertible Note Merger Consideration”).
(d) Effect on Convertible Notes. At the First Effective Time, all Company Convertible Notes converted pursuant to Section 3.2(c) shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of Company Convertible Notes shall thereafter cease to have any rights with respect to such securities, except the right to receive a portion of the Aggregate Merger Consideration.
(e) Treatment of Company Warrants. Prior to the Closing, the Company shall take all actions necessary to cause each Company Warrant outstanding immediately prior to the First Effective Time to be exercised on a “cashless” or “net” exercise basis into shares of Company Common Stock immediately prior to the First Effective Time, and each share of Company Common Stock so issued shall be converted into the right to receive a portion of the Aggregate Merger Consideration in accordance with Section 3.1(a)(iii).
3.3 Dissenting Shares. Notwithstanding any provision of this Agreement to the contrary, shares of Company Capital Stock issued and outstanding immediately prior to the First Effective Time (other than shares of Company Capital Stock cancelled in accordance with Section 3.1(a)(i)) and held by a holder who has not voted in favor of adoption of this Agreement or consented thereto in writing and who has properly exercised and perfected appraisal rights for such shares in accordance with Section 262 of the DGCL (such shares of Company Capital Stock being referred to collectively as the “Dissenting Shares” until such time as such holder fails to perfect or otherwise waives, withdraws, or loses such holder’s appraisal rights under the DGCL with respect to such shares) shall not be converted into a right to receive a portion of the Aggregate Merger Consideration, but instead shall be entitled to only such rights as are granted by Section 262 of the DGCL; provided, however, that if, after the First Effective Time, such holder fails to perfect, waives, withdraws, or loses such holder’s right to appraisal pursuant to Section 262 of the DGCL or if a court of competent jurisdiction shall determine that such holder is not entitled to the relief provided by Section 262 of the DGCL, such shares of Company Capital Stock shall be treated as if they had been converted as of the First Effective Time into the right to receive a portion of the Aggregate Merger Consideration to which such holder is entitled in accordance with Section 3.1(a)(ii), without interest thereon, upon transfer of such shares. The Company shall promptly provide Parent with written notice of any intent to dissent, demand for payment or any demands received by the Company for appraisal of shares of Company Capital Stock, any withdrawal of any such demand and any other demand, notice or instrument delivered to the Company prior to the First Effective Time pursuant to the DGCL that relates to such demand, and Parent shall have the opportunity to participate in all negotiations and proceedings with respect to such demands.
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3.4 Surrender and Payment.
(a) Exchange Fund. Prior to the First Effective Time, Parent and the Company shall enter into an agreement (the “Exchange Agreement”) in form and on terms and conditions reasonably acceptable to Parent and the Company, with Continental Stock Transfer & Trust Company (the “Exchange Agent”) for the purpose of exchanging Company Common Stock held by the Company Stockholders for the Aggregate Merger Consideration. Immediately prior to the First Effective Time, Parent shall deposit, or shall cause to be deposited, with the Exchange Agent, for the benefit of the Company Stockholders, for exchange in accordance with the Exchange Agreement and this ARTICLE III, the number of Parent Common Shares sufficient to deliver the Aggregate Merger Consideration payable pursuant to this Agreement (such Parent Common Shares, the “Exchange Fund”). Parent shall cause the Exchange Agent, pursuant to irrevocable instructions, to pay the Aggregate Merger Consideration out of the Exchange Fund in accordance with the Closing Consideration Spreadsheet and the other applicable provisions contained in this Agreement and the Exchange Agreement. The Exchange Fund shall not be used for any other purpose other than as contemplated by this Agreement.
(b) Exchange Procedures. Prior to the Closing Date and as promptly as practicable but following delivery of the Company Stockholder Written Consent in accordance with Section 7.2(a), the Company shall cause the Exchange Agent to deliver to each Company Stockholder represented by certificate or book-entry, a letter of transmittal together with a request to have such Company Stockholder deliver an executed Letter of Transmittal to the Company and the Exchange Agent no less than five (5) Business Days prior to the Closing for use in exchanging such Company Stockholder’s shares of Company Common Stock for such Company Stockholder’s applicable portion of the Aggregate Merger Consideration from the Exchange Fund in accordance with the Closing Consideration Spreadsheet, and which shall be in form and on terms and conditions reasonably acceptable to Parent and the Company (a “Letter of Transmittal”), and promptly following receipt of a Company Stockholder’s properly executed Letter of Transmittal, deliver such Company Stockholder’s applicable portion of the Aggregate Merger Consideration to such Company Stockholder.
(c) Termination of Exchange Fund. Any portion of the Exchange Fund relating to the Aggregate Merger Consideration that remains undistributed to the Company Stockholders for two years after the First Effective Time shall be delivered to Parent, upon demand, and any Company Stockholders who have not theretofore complied with this Section 3.4 shall thereafter look only to Parent for their portion of the Aggregate Merger Consideration. Any portion of the Exchange Fund remaining unclaimed by Company Stockholders as of a date which is immediately prior to such time as such amounts would otherwise escheat to or become property of any Authority shall, to the extent permitted by applicable Law, become the property of Parent free and clear of any claims or interest of any person previously entitled thereto.
3.5 Consideration Spreadsheet.
(a) At least three (3) Business Days prior to the Closing, the Company shall deliver to Parent a spreadsheet (the “Closing Consideration Spreadsheet”), prepared by the Company in good faith and detailing the following, in each case, as of immediately prior to the First Effective Time:
(i) the name and address of record of each Company Stockholder and the number and class, type or series of shares of Company Capital Stock held by each, and in the case of shares of each series of Company Preferred Stock, the number of shares of Company Common Stock into which such shares of Company Preferred Stock are convertible;
(ii) the names of record of each holder of Company Options, and the exercise price, number of shares of Company Common Stock subject to each Company Options held by such holder (including, in the case of unvested Company Options, the vesting schedule, vesting commencement date, date fully vested);
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(iii) the name and address of record of each holder of Company Convertible Notes and the number of shares of Company Common Stock into which such Company Convertible Notes are convertible;
(iv) the names of record of each holder of Company Warrants, and the exercise price, number of shares of Company Capital Stock subject to each Company Warrant held by such holder (including, in the case of unvested Company Warrant, the vesting schedule, vesting commencement date, date fully vested);
(v) the number of Aggregate Fully Diluted Company Common Stock;
(vi) the aggregate number of shares subject to Company Options;
(vii) the aggregate number of shares subject to Company Convertible Notes;
(viii) the aggregate number of shares subject to Company Warrants;
(ix) detailed calculations of each of the following (in each case, determined without regard to withholding):
(A) the Aggregate Merger Consideration;
(B) the Conversion Ratio;
(C) the Per Preferred Share Merger Consideration;
(D) the specific portion of the Aggregate Merger Consideration payable to each Company Stockholder (including, for the avoidance of doubt, the Company Common Stock issuable to holders of Company Warrants);
(E) the Per Convertible Note Merger Consideration;
(F) for each Company Convertible Note outstanding immediately prior to the First Effective Time, (1) the outstanding principal amount (and accrued interest, if applicable) thereof, (2) the number of shares of Company Common Stock into which such Company Convertible Note is convertible, and (3) the portion of the Aggregate Merger Consideration payable in respect thereof;
(G) the Aggregate Exercise Price;
(H) for each Converted Stock Option, (1) the exercise price therefor and (2) the number of Parent Common Shares subject to such Converted Stock Option; and
(I) for each Company Warrant outstanding immediately prior to the First Effective Time, (1) the exercise price therefor and (2) the number of shares of Company Common Stock issuable upon cashless exercise thereof in accordance with Section 3.2(e).
(b) The contents of the Closing Consideration Spreadsheet delivered by the Company hereunder shall be subject to reasonable review and comment by Parent, but the Company shall, in all events, remain solely responsible for the contents of the Closing Consideration Spreadsheet. The Parties agree that Parent shall be entitled to rely on the Closing Consideration Spreadsheet in making payments under ARTICLE III.
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3.6 Adjustment. The shares comprising the Aggregate Merger Consideration and Conversion Ratio shall be adjusted to reflect appropriately the effect of any stock split, subdivision, reverse stock split, consolidation, stock dividend, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Parent Common Shares occurring prior to the date the shares comprising the Aggregate Merger Consideration are issued.
3.7 [Reserved].
3.8 No Fractional Shares. No fractional Parent Common Shares, or certificates or scrip representing fractional Parent Common Shares, will be issued upon the conversion of the Company Capital Stock pursuant to the First Company Merger, and such fractional share interests will not entitle the owner thereof to vote or to any rights of a shareholder of Parent. No Company Stockholder shall be entitled to receive any fraction of a Parent Common Share and the number of Parent Common Shares to be received by such Company Stockholder shall be rounded down to the nearest whole number.
3.9 Lost or Destroyed Certificates. Notwithstanding the foregoing, if any Company Stock Certificate, shall have been lost, stolen or destroyed, then upon the making of a customary affidavit of that fact by the Person claiming such Company Stock Certificate to be lost, stolen or destroyed in a form reasonably acceptable to Parent, the Exchange Agent shall issue, in exchange for such lost, stolen or destroyed Company Stock Certificate, the portion of the Aggregate Merger Consideration to be paid in respect of the shares of Company Capital Stock formerly represented by such Company Stock Certificate as contemplated under this ARTICLE III.
3.10 Withholding. The Parties shall be entitled to deduct and withhold from any amount payable pursuant to this Agreement such Taxes that are required to be deducted and withheld from such amounts under the Code, Treasury Regulations, or any other applicable Law (as reasonably determined by the Parties). To the extent that any amounts are so deducted and withheld, such deducted and withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made and paid to the applicable Authority. The Parties shall use commercially reasonable efforts to reduce or eliminate any such withholding, including providing recipients of consideration a reasonable opportunity to provide documentation establishing exemptions from or reductions of such withholdings.
ARTICLE
IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Schedules delivered by the Company to Parent concurrently with the execution of this Agreement (it being understood that any disclosure set forth in any schedule shall be deemed to qualify the section or subsection of this Article IV to which it corresponds and each other section or subsection of this Article IV to the extent the relevance of such disclosure to such other section or subsection is reasonably apparent on its face), the Company hereby represents and warrants to Parent, as of the date of this Agreement and as of the Closing Date (except for representations and warranties that are made as of a specific date, which are made only as of such date), as follows:
4.1 Corporate Existence and Power. Each of the Company and its Subsidiaries is a corporation or legal entity duly organized, validly existing and in good standing (with respect to jurisdictions that recognize that concept) under the laws of the jurisdiction of its incorporation (the Company and its Subsidiaries, collectively, the “Company Group”). Each member of the Company Group has all requisite power and authority, corporate and otherwise, to own, lease or otherwise hold and operate its properties and other assets and to carry on the Business as presently conducted, except where the failure to have such power or authority would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect in respect of the Company Group. Each member of the Company Group is duly licensed or qualified to do business and is in good standing (with respect to jurisdictions that recognize that concept) in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties or other assets makes such qualification, licensing or good standing necessary, except where the failure to be so qualified, licensed or in good standing, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect in respect of the Company Group. The Company has made available to Parent, prior to the date of this Agreement, complete and accurate copies of the organizational documents of each member of the Company Group, in each case as amended to the date hereof. The organizational documents of each member of the Company Group are in full force and effect. No member of the Company Group is in violation of its organizational documents, except any such violations that would not have or reasonably be expected to have a Material Adverse Effect.
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4.2 Authorization.
(a) The Company has all requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby, in the case of the Company Mergers, subject to receipt of the Company Stockholder Approval. The execution and delivery by the Company of this Agreement and the Ancillary Agreements to which it is a party and the consummation by the Company of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company, subject, in the case of the Company Mergers, to receipt of the Company Stockholder Approval. No other corporate proceedings on the part of the Company are necessary to authorize this Agreement or the Ancillary Agreements to which it is a party or to consummate the transactions contemplated by this Agreement (other than, in the case of the Company Mergers, the receipt of the Company Stockholder Approval) or the Ancillary Agreements. This Agreement and the Ancillary Agreements to which the Company is a party have been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery by each of the other parties hereto and thereto, this Agreement and the Ancillary Agreements to which the Company is a party constitute a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or similar Laws affecting the rights of creditors generally and the availability of equitable remedies (the “Enforceability Exceptions”).
(b) By resolutions duly adopted (and not thereafter modified or rescinded) by the requisite vote of the Board of Directors of the Company, the Board of Directors of the Company has (i) approved the execution, delivery and performance by the Company of this Agreement, the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby, including the Company Mergers, on the terms and subject to the conditions set forth herein and therein; (ii) determined that this Agreement, the Ancillary Agreements to which it is a party, and the transactions contemplated hereby and thereby, upon the terms and subject to the conditions set forth herein, are advisable and fair to and in the best interests of the Company and the Company Stockholders; (iii) directed that the adoption of this Agreement be submitted to the Company Stockholders for consideration and recommended that the Company Stockholders adopt this Agreement. Either (x) the affirmative vote of (A) Persons holding a majority (on an as-converted basis) of the voting power of the Company Stockholders and (B) Persons holding a majority of the outstanding shares of Company Preferred Stock, voting as a separate class, who are present in person or by proxy at such meeting and voting thereon or (y) the affirmative written consent, signed by the Company Stockholders having not less than the minimum number of votes that would be necessary to authorize or take such action under clause (x) at a meeting at which all shares entitled to vote were present and voted, is required to, and shall be sufficient to, approve this Agreement and the transactions contemplated hereby (the “Company Stockholder Approval”). The Company Stockholder Approval is the only vote or consent of any of the holders of Company Capital Stock necessary to adopt this Agreement and approve the Company Mergers and the consummation of the other transactions contemplated hereby.
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4.3 Governmental Authorization. None of the execution, delivery or performance by the Company of this Agreement or any Ancillary Agreement to which the Company is or will be a party, or the consummation of the transactions contemplated hereby or thereby, requires any consent, approval, license, Order or other action by or in respect of, or registration, declaration or filing with, any Authority other than the filing of the First Certificate of Merger and the Second Certificate of Merger with the Secretary of State of the State of Delaware pursuant to the DGCL and the DLLCA, as applicable, any SEC, Nasdaq or Approved Exchange approval required to consummate the transactions contemplated hereunder, any filings, notices, approvals or waiting period expirations required under any applicable Laws as set forth on Schedule 4.3, and any such items the failure of which to obtain or make would not reasonably be expected to be material to the Company Group, taken as a whole, or materially impair or materially delay the Company’s ability to consummate the transactions contemplated hereby.
4.4 Non-Contravention. None of the execution, delivery or performance by the Company of this Agreement or any Ancillary Agreement to which the Company is or will be a party or the consummation by the Company of the transactions contemplated hereby and thereby does or will, subject to receipt of the Company Stockholder Approval and the consents, approvals, notices, filings and other requirements set forth in Section 4.3 and except as set forth in Schedule 4.4, (a) contravene or conflict with the Company Charter or the Company Bylaws or the organizational documents of any Subsidiary, (b) contravene or conflict with or constitute a violation of any provision of any Law or Order binding upon or applicable to any member of the Company Group or to any of their respective properties, rights or assets, (c) require any consent, approval, waiver or notice under, constitute a default under or breach of, violate, or give rise to any right of termination, cancellation, amendment or acceleration of any right or obligation of the Company Group or to a loss of any material benefit to which the Company Group is entitled, under any provision of any Permit, Contract or other instrument or obligations binding upon the Company Group or any of its respective properties, rights or assets, (d) result in the creation or imposition of any Lien (except for Permitted Liens) on any of the Company Group’s properties, rights or assets, or (e) require any consent, approval or waiver from any Person pursuant to any provision of the organizational documents of the Company Group, except for such consent, approval or waiver which shall be obtained (and a copy provided to Parent) prior to the Closing, except, in the case of clauses (b) through (e), as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect in respect of the Company Group or materially impair or materially delay the Company’s ability to consummate the transactions contemplated hereby.
4.5 Capitalization.
(a) As of the date of this Agreement, the authorized capital stock of the Company consists of 1,250,000 shares of common stock, $0.0001 par value per share, and 87,629 shares of preferred stock, $0.0001 par value per share, of which 355,769 shares of Company Common Stock and 87,629 shares of Series A Preferred Stock of the Company are issued and outstanding. As of the date of this Agreement, there are (i) 380,000 shares of Company Common Stock reserved for issuance under the Equity Incentive Plan, (ii) options to purchase 257,064 shares of Company Common Stock are outstanding, and (iii) warrants to purchase 12,600 shares of Company Capital Stock are outstanding. Except as set forth on Schedule 4.5(a), no other shares of capital stock or other voting securities of the Company are issued, reserved for issuance or outstanding. All issued and outstanding shares of Company Capital Stock are duly authorized, validly issued, fully paid and non-assessable and were issued in compliance in all material respects with all applicable Laws (including any applicable securities laws) and in compliance with the Company Charter and the Company Bylaws. No shares of Company Capital Stock are subject to or were issued in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right (including under any provision of the DGCL, the Company Charter or any Contract to which the Company is a party or by which the Company or any of its properties, rights or assets are bound). As of the date of this Agreement, all outstanding shares of Company Capital Stock are owned of record by the Persons set forth on Schedule 4.5(a) in the amounts set forth opposite their respective names. Schedule 4.5(a) contains a true, correct and complete list of each Company Option and Company Warrant outstanding as of the date of this Agreement, the holder thereof, the number of shares of Company Capital Stock issuable thereunder or otherwise subject thereto, the grant date thereof and the exercise price, if any, and expiration date thereof and whether such Company Option is intended to qualify as an “incentive stock option”.
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(b) Except as set forth on Schedule 4.5(a) or arising under the Equity Incentive Plan or the Company Support Agreement, there are no (i) outstanding warrants, options, agreements, convertible securities, performance units or other commitments or instruments pursuant to which the Company is or may become obligated to issue or sell any of its shares of Company Capital Stock or other securities, (ii) outstanding obligations of the Company to repurchase, redeem or otherwise acquire outstanding capital stock of the Company or any securities convertible into or exchangeable for any shares of capital stock of the Company, (iii) treasury shares of capital stock of the Company, (iv) bonds, debentures, notes or other Indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which shareholders of the Company may vote, are issued or outstanding, (v) preemptive or similar rights to purchase or otherwise acquire shares or other securities of the Company (including pursuant to any provision of Law, the Company Charter or any Contract to which the Company is a party), (vi) Liens (including any right of first refusal, right of first offer, proxy, voting trust, voting agreement or similar arrangement) with respect to the sale or voting of shares or securities of the Company (whether outstanding or issuable) or (vii) any stock appreciation, phantom stock or similar rights with respect to the Company.
(c) Each Company Option (i) was granted in compliance in all material respects with (A) all applicable Laws and (B) all of the terms and conditions of the Equity Incentive Plan pursuant to which it was issued, (ii) has an exercise price per share of Company Common Stock equal to or greater than the fair market value of such share as determined by the Board of Directors of the Company in good faith on the date of such grant, and (iii) does not trigger any liability for the holder thereof under Section 409A of the Code.
4.6 Subsidiaries. Schedule 4.6 sets forth the name of each Subsidiary of the Company, and with respect to each Subsidiary, its jurisdiction of incorporation, formation or organization, its authorized shares or other equity interests (if applicable), and the number of issued and outstanding shares or other equity interests and the record holders thereof. Except as set forth on Schedule 4.6, the Company does not own, directly or indirectly, any equity interest in any other Person. All of the outstanding equity securities of each Subsidiary of the Company are duly authorized and validly issued, fully paid and non-assessable (if applicable), were offered, sold and delivered in compliance in all material respects with all applicable securities Laws and such Subsidiary’s organizational documents in force at the relevant time, and are owned by the Company or one of its Subsidiaries free and clear of all Liens (other than Permitted Liens, restrictions on transfer arising under applicable securities Laws, and those, if any, imposed by such Subsidiary’s organizational documents).
4.7 Corporate Records. All material proceedings occurring since January 1, 2022 of the Board of Directors of the Company, including all committees thereof, and of the Company Stockholders, and all consents to material actions taken thereby that are required by Law, the Company Charter or the Company Bylaws, are accurately reflected in all material respects in the minutes and records contained in the corporate minute books of the Company and made available to Parent. The shareholder ledger of the Company in the form maintained by the Company is true, correct and complete.
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4.8 Consents. The Contracts listed on Schedule 4.8 are the only Material Contracts requiring a consent, approval, authorization, order or other action of or filing with any Person as a result of the execution, delivery and performance of this Agreement or any Ancillary Agreement to which the Company is or will be a party or the consummation of the transactions contemplated hereby or thereby.
4.9 Financial Statements.
(a) The Company has made available to Parent (i) the audited consolidated balance sheets of the Company as of December 31, 2025 and December 31, 2024, and the related statements of operations, changes in stockholders’ equity and cash flows, for the fiscal years ended December 31, 2025 and December 31, 2024, including the notes thereto (collectively, the “Annual Financial Statements”), and (ii) the unaudited consolidated balance sheet of the Company as of June 30, 2026 and June 30, 2025 and the related statements of operations and cash flows for the three-month periods ended June 30, 2026 and June 30, 2025 (collectively, the “Unaudited Financial Statements” and, together with the Annual Financial Statements, the “Company Financial Statements”). The Company Financial Statements have been prepared in conformity with U.S. GAAP applied on a consistent basis during the periods indicated, except as may be indicated in the notes thereto and, in the case of the Unaudited Financial Statements, subject to normal year-end adjustments and the absence of footnotes. The Company Financial Statements fairly present, in all material respects, the financial position of the Company as of the dates thereof and the results of operations of the Company for the periods reflected therein. The Company Financial Statements were prepared from the Books and Records of the Company in all material respects. Since June 30, 2026 (the “Balance Sheet Date”), except as required by applicable Law or U.S. GAAP, there has been no change in any accounting principle, procedure or practice followed by the Company or in the method of applying any such principle, procedure or practice.
(b) The Company Group has no material liabilities, debts or obligations of the type that would be required to be set forth on a balance sheet prepared in accordance with GAAP, except for (i) liabilities arising in the ordinary course of business consistent with past practice since the Balance Sheet Date, (ii) to the extent specifically disclosed, reflected or fully reserved for on the Balance Sheet, (iii) liabilities specifically set forth on Schedule 4.9(b), and (iv) liabilities arising under this Agreement, any Ancillary Agreement or incurred in connection with the transactions contemplated hereby or thereby.
(c) Except as set forth on Schedule 4.9(c), the Company Group does not have any Indebtedness.
4.10 Internal Accounting Controls. The Company maintains a system of internal accounting controls designed to provide reasonable assurance that: (a) transactions are executed in all material respects in accordance with management’s general or specific authorizations, and (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. GAAP, and to maintain accountability for the Company’s assets.
4.11 Absence of Certain Changes. From the Balance Sheet Date until the date of this Agreement, except as set forth on Schedule 4.11 or as expressly contemplated by this Agreement or any Ancillary Agreement, (a) the Company has conducted its businesses in all material respects in the ordinary course consistent with past practices; (b) there has not been any Material Adverse Effect in respect of the Company; and (c) the Company has not taken any action that, if taken after the date of this Agreement and prior to the consummation of the Company Mergers, would require the consent of Parent pursuant to Section 6.1 and Parent has not given consent.
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4.12 Properties; Title to the Company Group’s Assets.
(a) All items of material Tangible Personal Property as set forth on Schedule 4.12 are in good operating condition and repair and function in accordance with their intended uses (ordinary wear and tear excepted), except as would not reasonably be expected to have a Material Adverse Effect with respect to the Company Group, taken as a whole.
(b) The Company Group has good, valid and marketable title in and to, or in the case of the Lease and the assets which are leased or licensed pursuant to Contracts, a valid leasehold interest or license in or a right to use all of the material tangible assets reflected on the Balance Sheet, except for assets sold, consumed or otherwise disposed of in the ordinary course of business consistent with past practices since the Balance Sheet Date. Except as set forth on Schedule 4.12, no such tangible asset is subject to any Lien other than Permitted Liens. The Company’s assets constitute, in all material respects, the assets necessary for the Company Group to operate the Business immediately after the Closing in substantially the same manner as the Business is currently being conducted, assuming receipt of all consents, approvals, notices, filings and other requirements contemplated by this Agreement.
4.13 Litigation. There is no Action pending or, to the Knowledge of the Company, threatened against the Company Group, any of the current officers or directors of the Company Group in their capacities as such, the Business, or any of the Company Group’s rights, properties or assets before any Authority that would reasonably be expected to be material to the Company Group, taken as a whole, or which challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement or any Ancillary Agreement. There are no outstanding judgments against the Company Group or any of its rights, properties or assets that would reasonably be expected to be material to the Company Group, taken as a whole, or that would reasonably be expected to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement or any Ancillary Agreement. To the Knowledge of the Company, there is no pending investigation (or threatened material investigation), audit or examination by any Authority against the Company Group.
4.14 Contracts.
(a) Schedule 4.14(a) sets forth a true, complete and accurate list, as of the date of this Agreement, of all of the following Contracts as amended to date which are currently in effect (other than any Plans and other than purchase orders, statements of work or similar instruments entered into in the ordinary course of business that do not materially modify the terms of a master agreement otherwise disclosed on Schedule 4.14(a)) (collectively, “Material Contracts”):
(i) all Contracts that require annual payments or expenses incurred by, or annual payments or income to, the Company Group of $250,000 or more (other than Contracts entered into in the ordinary course of business consistent with past practices);
(ii) each Contract with any of the Top Customers or the Top Suppliers;
(iii) each Contract with any current employee of the Company Group (A) which has continuing obligations for payment of an annual compensation of at least $500,000, and which is not terminable for any reason or no reason upon reasonable notice without payment of any penalty, severance or other obligation; (B) providing for severance or post-termination payments or benefits to such employee (other than COBRA obligations); or (C) providing for a material payment or benefit upon the consummation of the transactions contemplated by this Agreement or any Ancillary Agreement or as a result of a change of control of the Company;
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(iv) all Contracts creating a joint venture, strategic alliance, limited liability company or partnership arrangement to which the Company or any Subsidiary is a party;
(v) all currently effective Contracts relating to any acquisitions or dispositions of material assets by the Company Group (other than acquisitions or dispositions of inventory in the ordinary course of business consistent with past practices);
(vi) all IP Contracts, separately identifying all such IP Contracts under which the Company is obligated to pay royalties thereunder and all such IP Contracts under which the Company is entitled to receive royalties thereunder, provided, however, that no Standard Contracts shall be required to be disclosed on Schedule 4.14(a)(vi), but shall constitute Material Contracts for purposes of this Agreement if they otherwise qualify;
(vii) Contracts containing covenants of the Company or any of the Company’s Subsidiaries (other than customary confidentiality, non-disclosure, non-solicitation, non-disparagement, assignment of work product or similar restrictions entered into in the ordinary course of business) (A) materially prohibiting or limiting the right of the Company or any of the Company’s Subsidiaries to engage in or compete with any Person in any line of business or (B) materially prohibiting or restricting the Company’s and the Company’s Subsidiaries’ ability to conduct their business with any Person in any geographic area;
(viii) all Contracts that (A) grant to any Person any “most favored nation” or similar rights, (B) grant exclusivity to any Person in respect of any geographic location, any customer, or any product or service, (C) require the purchase of all or a given portion of the Company’s or any of its Subsidiaries’ requirements for products or services from any Person, or any other similar provision, or (D) grant to any Person price guarantees for a period greater than one year from the date of this Agreement and requires aggregate future payments to the Company Group in excess of $250,000 in any calendar year;
(ix) Contracts granting to any Person (other than the Company or its Subsidiaries) a right of first refusal, first offer or similar right to purchase or acquire exclusive rights or ownership with respect to any material service, product or Intellectual Property of the Company Group or to purchase or acquire equity interests in the Company or any of the Company’s Subsidiaries;
(x) all Contracts (other than Contracts entered into in the ordinary course of business consistent with past practices and other than indemnification or hold harmless provisions ancillary to commercial Contracts entered into in the ordinary course of business consistent with past practices) providing for material guarantees, indemnification arrangements and other hold harmless arrangements made or provided by the Company Group;
(xi) all Contracts (other than employment agreements, employee confidentiality and invention assignment agreements, equity or equity incentive documents, governing documents, Contracts relating to such Affiliate’s status as a Company Stockholder) between a member of the Company Group, on the one hand, and Affiliates of the Company or any of the Company’s Subsidiaries (other than the Company or any of the Company’s Subsidiaries), the officers and managers (or equivalents) of the Company or any of the Company’s Subsidiaries, the members or shareholders of the Company or any of the Company’s Subsidiaries, or, to the knowledge of the Company, a member of the immediate family of the foregoing Persons, on the other hand;
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(xii) all Contracts relating to property or assets (whether real or personal, tangible or intangible) in which the Company holds a leasehold interest and which involve payments to the lessor thereunder in excess of $200,000 per year;
(xiii) all Contracts relating to the voting or control of the equity interests of the Company Group or the election of directors of the Company of any of its Subsidiaries (other than the organizational or constitutive documents of the Company or its Subsidiaries, the Company Support Agreement or any Ancillary Agreement);
(xiv) all Contracts not cancellable by the Company Group with no more than 60 days’ notice if the effect of such cancellation would result in monetary penalty to the Company in excess of $250,000 per the terms of such contract, other than payment for goods or services already provided;
(xv) all contracts and agreements with any Authority that involve aggregate payments to or by the Company Group reasonably expected to exceed $250,000 (other than purchase orders entered into in the ordinary course of business consistent with past practices);
(xvi) all Contracts creating or otherwise relating to outstanding Indebtedness (other than intercompany Indebtedness) in the aggregate that are valued at $500,000 or greater;
(xvii) all material Contracts that, to the Knowledge of the Company, may be terminated, or the provisions of which may be altered, as a result of the consummation of the transactions contemplated by this Agreement or any Ancillary Agreement;
(xviii) all Contracts under which any benefits, compensation or payments (or the vesting thereof) will be increased or accelerated by the consummation of the transactions contemplated by this Agreement or any Ancillary Agreement, or the amount or value thereof will be calculated on the basis of, the transactions contemplated by this Agreement or any Ancillary Agreement; and
(xix) any outstanding written commitment to enter into any Contract of the type described in clauses (a) through (xviii) of this Section 4.14(a).
(b) Each Material Contract is (i) a valid and binding agreement of the applicable member of the Company Group, and to the Knowledge of the Company, each other party thereto, (ii) in full force and effect and (iii) enforceable by and against the applicable member of the Company Group and, to the Knowledge of the Company, each counterparty that is party thereto in accordance with its terms, subject, in the case of this clause (iii), to the Enforceability Exceptions. Except, in each case, as would not reasonably be expected to have a Material Adverse Effect with respect to the Company Group, taken as a whole, (w) neither the Company Group nor, to the Company’s Knowledge, any other party to a Material Contract is in breach or default (whether with or without the passage of time or the giving of notice or both) under the terms of any such Material Contract, (x) each member of the Company Group has performed in all respects all respective obligations required to be performed by it to date under each Material Contract, (y) no member of the Company Group has received any written claim or written notice of termination or breach of or default under any such Material Contract that remains unresolved, and (z) to the Knowledge of the Company, no event has occurred which, individually or together with other events, would reasonably be expected to result in a breach of or a default under any such Material Contract by a member of the Company Group or any other party thereto (in each case, with or without notice or lapse of time or both).
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(c) Each member of the Company Group is in compliance in all material respects with all covenants, including all financial covenants, in all notes, indentures, bonds and other instruments or Material Contracts establishing or evidencing any Indebtedness. The consummation and closing of the transactions contemplated by this Agreement shall not cause or result in an event of default under any instruments or Material Contracts establishing or evidencing any Indebtedness.
4.15 Licenses and Permits. Schedule 4.15 sets forth a true, complete and correct list of each material Permit held by a member of the Company Group that is required under applicable Law to permit the Company Group to own, operate, use and maintain their assets in the manner in which they are now operated and maintained and to carry out or conduct the Business as currently conducted, together with the name of the Authority issuing the same. Such Permits are valid and in full force and effect, and none of the Permits will be terminated or impaired or become terminable as a result of the transactions contemplated by this Agreement or any Ancillary Agreement except as would not reasonably be expected to have a Material Adverse Effect with respect to the Company Group, taken as a whole. The Company Group holds all Permits necessary to operate the Business as currently conducted, and each such Permit is in full force and effect except as would not reasonably be expected to have a Material Adverse Effect with respect to the Company Group, taken as a whole. No member of the Company Group is in material breach or violation of, or material default under, any such Permit. The Company Group has not received any written (or, to the Company’s Knowledge, oral) notice from any Authority regarding any material violation of any such Permit. There is no pending or, to the Company’s Knowledge, threatened material Action, investigation or disciplinary Proceeding by or from any Authority against any member of the Company Group involving any such Permit.
4.16 Compliance with Laws. Neither the Company nor, to the Knowledge of the Company, any Representative or other Person acting on behalf of the Company, is in violation in any material respect of, and, since January 1, 2024, no such Person has failed to be in compliance in all material respects with, all applicable Laws and Orders. Since January 1, 2024, no Action is pending, or to the Knowledge of the Company, threatened, alleging any such material violation or noncompliance by the Company. Since January 1, 2024, the Company has not been given written or, to the Company’s Knowledge, oral notice of any material violation of any Law or any judgment, order or decree entered by any Authority.
4.17 Intellectual Property.
(a) (i) Except as set forth on Schedule 4.17(b), the Company or one of its Subsidiaries possesses and is the sole and exclusive owner of all right, title, and interest in and to each item of Company Owned IP, and owns or has a valid license to use all other Intellectual Property and IT Systems used or practiced (or held for use or practice) in or necessary for the conduct of the Business, in each case, free and clear of any Liens (except for Permitted Liens) and (ii) the Company or one of its Subsidiaries has a valid right and license to use all Company Licensed IP. None of the foregoing (i) – (ii) will be adversely affected in any material respect by (nor will require the payment or grant of additional amounts or consideration as a result of) the execution, delivery, or performance of this Agreement nor the consummation of the transactions contemplated hereby.
(b) Schedule 4.17(b) sets forth a true, correct and complete list of all (i) Registered Owned IP; (ii) Domain Names constituting Company Owned IP; and (iii) all social media handles constituting Company Owned IP and material unregistered Trademarks, in each case, accurately specifying as to each of the foregoing, as applicable: (A) in the case of Registered Owned IP, the filing number, issuance or registration number, or other identifying details; (B) the owner and any other person other than the Company Group that has an ownership interest and the nature of such other person’s ownership interest; (C) the jurisdictions by or in which such Registered Owned IP has been issued, registered, or in which an application for such issuance or registration has been filed; and (D) the status and expiration date and (E) any liens or security interests that apply.
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(c) (i) All Registered Owned IP material for the Business is subsisting, and, to the Knowledge of the Company, valid and enforceable; (ii) each item of Registered Owned IP material for the Business is and has been at all times prosecuted, recorded, filed, and maintained, as applicable, in all material respects in compliance with applicable Law or the rules of the applicable registrar, and none of the Registered Owned IP material for the Business has been cancelled, abandoned, rejected, repudiated or otherwise terminated other than in the ordinary course of business; (iii) no Registered Owned IP material for the Business is or has been involved in any interference, opposition, reissue, reexamination, revocation or equivalent Proceeding, and no such Proceeding has been threatened in writing with respect thereto; (iv) in the past six years, there have been no claims filed, served or threatened in writing, or orally threatened, against the Company Group contesting the validity, use, ownership, enforceability, patentability, registrability, or scope of any Registered Owned IP material for the Business; and (v) all registration, maintenance and renewal fees currently due in connection with any Registered Owned IP material for the Business have been paid in all material respects and all documents, recordations and certificates in connection therewith have been filed with the Authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of prosecuting, maintaining and perfecting such rights and recording the Company Group’s ownership or interests therein.
(d) (i) The use of the Company Owned IP, and the conduct of the Business (including the manufacturing, development, marketing, licensing, sale, use, or distribution of the Company’s products and services) have not in the past three years infringed, misappropriated, or otherwise violated and do not infringe, misappropriate, or otherwise violate any Intellectual Property rights of any Person and no member of the Company Group has any current outstanding liability for any of the foregoing and (ii) there is no Action pending (and in the past six years, there have been no claims filed, served or threatened in writing, or orally threatened, against any member of the Company Group) either (x) alleging any conflict with, infringement, misappropriation, unauthorized use, or other violation of any Intellectual Property of a third Person (including any unsolicited written offers to license any such Intellectual Property), or (y) challenging the use, ownership, validity or enforceability of any Company Owned IP, and in each case, no member of the Company Group knows of any valid basis therefor.
(e) (i) To the Knowledge of the Company, in the past six years no third Person has conflicted with, infringed, misappropriated, used without authorization, or otherwise violated any Company Owned IP, (ii) in the past six years the Company Group has not filed, served, or threatened a third Person in writing with any claims alleging any conflict with, infringement, misappropriation, use without authorization, or other violation of any Company IP, (iii) there are no Actions pending that involve a claim against a third Person by the Company Group alleging infringement, misappropriation, use without authorization, or other violation of Company IP and (iv) the Company Group is not subject to any Order that adversely restricts the use, transfer, registration or licensing of any Company IP by any member of the Company Group.
(f) Each past and present employee, agent, consultant, and contractor who is or who has contributed to or participated in the creation or development of any material Intellectual Property on behalf of any member of the Company Group or any predecessor in interest thereto has executed a valid and enforceable written form of proprietary information and/or inventions agreement or similar written Contract with the Company Group under which such Person has validly and presently assigned all right, title and interest in and to such Intellectual Property to the Company (or such predecessor in interest, as applicable) (or, to the Knowledge of the Company, all such rights, title and interest have vested or will vest in the Company or one of its Subsidiaries by operation of Law).
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(g) Each past and present employee, agent, consultant, and contractor having access to Trade Secrets or other confidential or non-public information of the Company Group have entered into agreements with the Company Group under which such Person is obligated to maintain the confidentiality of the Company Group’s confidential information and other Trade Secrets. To the Knowledge of the Company, no party thereto is in default or breach of such confidentiality obligations.
(h) No government funding or facility of a university, college, other educational institution or research center was used in the development of any item of Registered Owned IP material to the Business that adversely affects the Company Group’s rights in such Intellectual Property. The Company is not part of any standards group which would require sharing Registered Owned IP material to the Business with members of the standards group.
(i) None of the execution, delivery or performance by the Company of this Agreement or any of the Ancillary Agreements to which the Company is or will be a party or the consummation by the Company of the transactions contemplated hereby or thereby will (i) cause any item of Company Owned IP, or any material item of Company Licensed IP immediately prior to the Closing, to not be owned, licensed or available for use by the Company Group on substantially the same terms and conditions immediately following the Closing or (ii) require any additional payment obligations by the Company Group in order to use or exploit any other such Intellectual Property to the same extent as the Company Group was permitted immediately before the Closing.
(j) (i) Except with respect to the agreements listed on Schedule 4.14(a)(vi), the Company Group is not obligated under any material Contract to make any material payments by way of royalties, fees, or otherwise to any owner or licensor of, or other claimant to, any Intellectual Property.
(k) The Company Group has taken commercially reasonable steps to maintain, protect and enforce the secrecy, confidentiality and value of all material Trade Secrets held by them or otherwise used in the Business (including all source code for Company Software and all proprietary AI/ML), in each instance that are at least consistent with efforts undertaken by third Persons in the industry within which the Business is a part. To the Knowledge of the Company, no such Trade Secret has been disclosed by the Company Group to any third Person other than pursuant to the terms of a valid, written confidentiality agreement with such Person that (i) obligates such Person to maintain the confidentiality thereof, (ii) imposes perpetual confidentiality obligations with respect to Trade Secrets, and (iii) is in full force and effect, not breached, and legally enforceable by the Company Group.
(l) No Company Owned IP material to the Business is subject to any technology or source code escrow arrangement or obligation. No person other than the Company Group (and its employees and contractors bound by reasonable confidentiality obligations and who have a need-to-know) has been granted by the Company Group an actual or contingent right to access or possess (including pursuant to escrow), a copy in any form of the source code of the Company Software material to the Business, or will be entitled to obtain access to or possession of such source code as a result of the execution, delivery and performance of by the Company of this Agreement. To the Knowledge of the Company, the Company Group is in actual possession and control of the source code of Company Software material to the Business and all related documentation and materials.
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(m) In the past three years, the Company Group has complied in all material respects with all (i) applicable Data Protection Laws, (ii) Contracts to which the Company is a party regarding the Processing, privacy, security, and confidentiality of Personal Information; and (iii) policies and notices regarding the Processing of Personal Information established by the Company Group regarding the operation of the business as currently conducted (the “Privacy Policies” and, collectively (i)-(iii) the “Privacy Obligations”) that are made available to all visitors to the Sites. For purposes of this subsection (m), “Sites” shall mean, any websites or applications made available by the Company Group to the general public. The Privacy Policies accurately describe the Company Group’s collection, disclosure and use of Personal Information in all material respects, and materially comply with all applicable Data Protection Laws. In the past three years, none of the marketing materials and/or advertisements provided by the Company Group have been in material violation of applicable Data Protection Laws.
(n) Since January 1, 2024, there have been no written complaints, audits, Proceedings, investigations, or claims pending or that have been made against the Company Group by any Authority, or by any Person, in respect of Processing of Personal Information by the Company Group or relating to Security Incidents. The Company Group (i) has implemented commercially reasonable physical, technical, organizational and administrative security measures and policies designed to protect the confidentiality, integrity and availability of all Personal Information Processed or maintained by the Company Group and confidential information, including from unauthorized physical or virtual access, use, modification, acquisition, disclosure or other misuse, and (ii) except as would not be material to the Company Group, requires by written contract all third party providers who Process Personal Information on the Company Group’s behalf to implement commercially reasonable security and adequate policies consistent with applicable Data Protection Laws. In the past three years, the Company Group has not experienced any unauthorized access, use, disclosure or modification of Personal Information maintained by the Company Group (a “Security Incident”). To the Knowledge of the Company, in the past three years, no service provider (in the course of providing services for or on behalf of the Company Group) has suffered any material Security Incident relating to its Processing of Personal Information on the Company Group’s behalf, and each such service provider is in compliance with the terms of its Contracts with the Company Group in all material respects.
(o) The execution, delivery and performance of this Agreement, including the transfer of any material Personal Information and the consummation of the transactions contemplated hereby materially comply with all Data Protection Laws. Except as would not be material to the Company Group, the Company Group has all necessary authority and lawful basis, and has at all times made all disclosures to, and obtained any necessary consents from, users, customers, employees, contractors and other applicable Persons required by all Data Protection Laws.
(p) The Company Information Systems and Company Software and all Software that is used by the Company Group, to the Knowledge of the Company, are free of all viruses, worms, keylogger software, “time bombs,” “back doors,” “trap doors,” Trojan horses and other material known contaminants and do not contain any bugs, errors, faults, malicious code, disabling devices, or problems of a material nature that would disrupt their operation or have an adverse impact on the functionality of or permit unauthorized access to or to disable or otherwise harm any computer, Software or other IT Systems. None of the Company Software is subject to any Copyleft Licenses. To the Knowledge of the Company, the Company Group is in material compliance with all Publicly Available Software license terms applicable to any Publicly Available Software licensed to or used by the Company Group. The Company Group has used commercially reasonable efforts to maintain the confidentiality of the source code and confidential system documentation relating to all Company Software, including proprietary AI/ML, material to the Business.
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(q) The Company Information Systems constitute all IT Systems used in or necessary for the operation of the Business of the Company Group. The Company Group has implemented and maintained (or, where applicable, has required its vendors to maintain) in material compliance with the Company’s internal standards as well as its contractual obligations to other Persons (including any applicable warranties or other user instructions from vendors), commercially reasonable security, and adequate policies and procedures regarding the performance, security, confidentiality, availability, and integrity of the Company Information Systems from unauthorized physical or virtual access, use, modification, acquisition, disclosure or other misuse. To the Knowledge of the Company, there has been no material breach, intrusion, unauthorized access to or use of the Company Information Systems or other security incident that has impacted the integrity or availability of the Company Information Systems, nor has there been any downtime or unavailability of the Company Information Systems that resulted in a material disruption of the Business, in each case, in the past three years. The Company Information Systems and Company Software (i) are adequate and sufficient (including with respect to working condition and capacity) for the operations of the Business and perform in all material conformance with their documentation and functional specifications, (ii) operate and perform in all material respects as currently required to conduct and operate the Business; and (iii) are free from any material software defect. Aside from the outages described in Schedule 4.17(q), there are currently no known and unresolved malfunctions, misconfigurations, vulnerabilities, or failures with respect to any Company Information System that has had a material effect on the operations of the Company Group. The Company Group has implemented commercially reasonable backup, anti-virus, malware protection, server patch, intrusion detection, and disaster recovery technology, policies and procedures and all other security and incident detection and response measures (including commercially reasonable access control protocols and capabilities for proprietary AI/ML).
(r) The Company Group maintains commercially reasonable access control protocols and capabilities that secure access to the Company AI Products and the material Data owned or controlled by the Company Group and used to train, teach, or improve any Company AI Product and there has been, to the Knowledge of the Company, (A) no unauthorized access to the Company Software used in a Company AI Product, or to such Data used to train, teach, or improve any Company AI Product; (B) no unauthorized access to the IT Systems owned or controlled by the Company Group and used in the development, improvement or operation of Company AI Products; and (C) no notice received by the Company alleging use of any Company AI Product by a third party to engage in unlawful activity. The Company AI Products and, to the Knowledge of the Company, other material AI/ML used (or held for use) by the Company Group in the Business do not permit or cause unauthorized access to, or disruption, impairment, modification, recordation, misuse, transmission, disablement or destruction of any Software, Data, systems or other materials.
(s) The Company Group maintains, to the extent within the Company Group’s possession or control, a technical description of any neural networks owned or controlled by the Company Group and used in or with any Company AI Products that is sufficiently detailed so that the neural network can be modified, debugged and improved from time to time by programmers skilled in the development of AI/ML. To the Knowledge of the Company, for each Company AI Product that is used to make (or facilitate the making of) decisions, the Company Group has materially complied with all the Laws applicable to such Company AI Product.
(t) The Company Group is in material compliance with commercially reasonable policies and procedures adopted by the Company Group and applicable to the Business relating to the ethical or responsible use of AI/ML. There has been, to the Knowledge of the Company, (i) no material non-compliance alleged in writing against the Company Group with any such policies or procedures challenging the Company Group’s ethical use of AI/ML; (ii) no material failure alleged in writing against the Company Group of a Company AI Product failing to satisfy the ethical or responsible use requirements or guidelines specified in any such policies or procedures; (iii) no written complaint, claim, Proceeding or litigation against the Company Group alleging that training Data used in the development, training, improvement or testing of any Company AI Product was falsified, biased, untrustworthy or manipulated in an unethical or unscientific way; and to the Knowledge of the Company, no report, finding or impact assessment received in writing by the Company Group from any internal or external auditor, technology review committee, independent technology consultant, whistle-blower, transparency or privacy advocate, labor union, journalist or academic that makes any such allegation; and (iv) no written request to the Company Group from regulators or legislators concerning any Company AI Product or its proprietary AI/ML.
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(u) The Company Group has complied in all material respects with all license terms by which it is bound and that are applicable to material third-party Data used by the Company Group to train, teach or improve any proprietary AI/ML that is owned by the Company Group and material to the Business.
4.18 Employees; Employment Matters.
(a) The Company has made available to Parent or its counsel a true, correct and complete list of each person currently employed by the Company Group and each such person’s principal location of employment, employer, hire date, status as exempt or non-exempt from overtime Laws, base or hourly wage or other compensation rate (as applicable), commission, bonus or other incentive opportunity, leave status and accrued vacation and paid-time-off as of the date such schedule was made available (which date shall be within 10 days of the date of this Agreement).
(b) The Company has made available to Parent or its counsel a true, correct and complete list of each person currently engaged by the Company Group as a consultant or an independent contractor, such person’s principal location of engagement, date of retention, and the compensation arrangement for the person as of the date such schedule was made available (which date shall be within 10 days of the date of this Agreement). The Company Group has, since January 1, 2024, to the Knowledge of the Company, properly classified all current service providers as either self-employed, employees or independent contractors and as exempt or non-exempt, in each case in all material respects and has made all necessary filings required under applicable employment and labor Laws in connection with services provided by, and compensation paid to, such service providers in all material respects.
(c) The Company Group is not a party to, bound by, negotiating or required to negotiate any collective bargaining agreement or other agreement with a labor union or other labor organization. No employees of the Company Group or any of its Subsidiaries are represented by any labor union or other labor organization, and, since January 1, 2024, to the Knowledge of the Company, there has been no activities or proceeding by a labor union or other labor organization seeking to organize any employees of the Company Group and no demand for recognition or certification as the exclusive bargaining representative of any employees has been made by or on behalf of any labor union or other labor organization. There is no labor strike, material slowdown or material work stoppage or lockout pending or, to the Knowledge of the Company, threatened in writing against the Company Group, and, since January 1, 2024, the Company Group has not experienced any strike, material slowdown, material work stoppage or lockout, grievance or labor dispute or similar activity in respect of the business of the Company Group that may, individually or in the aggregate, interfere in any material respect with the respective business activities of the Company.
(d) There are no pending or, to the Knowledge of the Company, threatened in writing material Actions against the Company Group (including, without limitation, any such Actions under any worker’s compensation policy or long-term disability policy) by any of its current or former employees, independent contractors or job applicants. There is no material unfair labor practice charge or complaint pending or, to the Knowledge of the Company, threatened in writing before any applicable Authority relating to employees of the Company Group. Since January 1, 2024, the Company Group has been in compliance in all material respects with notice and other requirements under the Workers’ Adjustment Retraining and Notification Act of 1988, as amended, or any similar state or local statute, rule or regulation relating to plant closings and layoffs (collectively, the “WARN Act”). There is no ongoing location closing, employee layoff, or relocation activities that would trigger notice or any other requirements under the WARN Act.
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(e) The Company Group is, and since January 1, 2024, has been, to the Knowledge of the Company, in compliance in all material respects with all applicable Laws relating to employment, including all applicable Laws relating to wages, hours, overtime, collective bargaining, equal employment opportunity, discrimination, harassment (including, but not limited to sexual harassment), retaliation, immigration, verification of identity and employment authorization of individuals employed in the United States, employee leave, disability rights or benefits, employment and reemployment rights of members and veterans of the uniformed services, paid time off, unemployment insurance, safety and health, workers’ compensation, pay equity, restrictive covenants, whistleblower rights, child labor, classification of employees and independent contractors, meal and rest breaks, reimbursement of business expenses, benefits continuation, and the collection and payment of withholding or social security Taxes.
(f) Schedule 4.18(f) discloses each individual who is employed by the Company pursuant to a visa and the expiration date of such visa.
(g) To the Knowledge of the Company, no Key Employee is a party to or bound by any enforceable confidentiality agreement, non-competition agreement or other restrictive covenant (with any Person) that materially interferes with: (i) the performance by such Key Employee of his or her duties or responsibilities as an officer or employee of the Company Group or (ii) the Company Group’s business or operations. No Key Employee has given notice (written or oral) of his or her definite intent to terminate his or her employment with the Company Group, nor has the Company Group provided notice (written or oral) of the termination of the employment of any of the foregoing.
(h) Since January 1, 2024, the Company Group has not received written notice of any material claim or litigation relating to an allegation of discrimination, retaliation, harassment (including sexual harassment), or sexual misconduct; nor is there any outstanding obligation for the Company Group under any settlement relating to such matters and to the Knowledge of the Company, no such claim or litigation has been threatened in writing.
(i) As of the date hereof and since January 1, 2024, there have been no material audits of the Company Group by any Authority, under any applicable federal, state or local occupational safety and health Law and Orders (collectively, “OSHA”) against the Company Group, nor have there been any related charges, fines, or penalties, and the Company Group has been in compliance in all material respects with OSHA.
(j) All employees of the Company Group are legally authorized to work in the location in which they work, and the Company Group maintains accurate records concerning all I-9 filings for employees working in the United States in compliance in all material respects with applicable Law.
4.19 Withholding. Except as disclosed on Schedule 4.19, all reasonably anticipated obligations of the Company Group with respect to employees of the Company Group for salaries, wages, bonuses, vacation pay and paid time off that are due and payable, or required to be accrued in accordance with the Company Group’s policies and applicable Law, to such employees in respect of the services rendered by any of them prior to the date hereof have been or will be paid by the Company or accrued on the Company Financial Statements prior to the Closing Date.
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4.20 Employee Benefits.
(a) Schedule 4.20(a) sets forth a correct and complete list of all material Plans. With respect to each Plan, the Company has made available to Parent or its counsel a true and complete copy, to the extent applicable, of: (i) each writing constituting a part of such Plan and all amendments thereto, including all plan documents, material employee communications, benefit schedules, trust agreements, and insurance contracts and other funding vehicles; (ii) a written description of such Plan if such Plan is not set forth in a written document; (iii) the current summary plan description and any material modifications thereto; (iv) the most recent annual financial and actuarial reports; (v) the most recent determination or advisory letter received by the Company from the IRS regarding the tax-qualified status of such Plan; (vi) the most recent written results of all required compliance testing since January 1, 2024; and (vii) all material correspondence to or from the IRS, the United States Department of Labor, the Pension Benefit Guaranty Corporation or any other Authority received in the last three years with respect to any Plan.
(b) No Plan is or has at any time been (i) subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code, (ii) a “multiemployer plan” (as defined in Section 3(37) of ERISA), (iii) a “multiple employer plan” (within the meaning of the Code or ERISA), (iv) a “multiple employer welfare arrangement” (within the meaning of Section 3(40) of ERISA), (v) a “funded welfare plan” within the meaning of Section 419 of the Code or (iv) sponsored by a human resources or benefits outsourcing entity, professional employer organization or other similar vendor or provider. Neither the Company nor any ERISA Affiliate has ever maintained, established, participated in or contributed to, or is or has been obligated to contribute to, or has otherwise incurred any obligation or liability (including any contingent liability) under, any multiemployer plan or has withdrawn at any time since January 1, 2024 from any multiemployer plan or incurred any withdrawal liability which remains unsatisfied.
(c) With respect to each Plan that is intended to qualify under Section 401(a) of the Code, such Plan, including its related trust, has received a determination letter (or may rely upon opinion letters in the case of any prototype plans) from the IRS that it is so qualified and that its trust is exempt from Tax under Section 501(a) of the Code, and, to the Knowledge of the Company, nothing has occurred with respect to the operation of any such Plan that could reasonably be expected to cause the loss of such qualification or exemption.
(d) There are no pending or, to the Knowledge of the Company, threatened material Actions against or relating to the Plans, the assets of any of the trusts under such Plans or the Plan sponsor or the Plan administrator, or against any fiduciary of any Plan with respect to the operation of such Plan (other than routine benefits claims). No Plan is presently under audit or examination (nor has written notice been received of a potential audit or examination) by any Authority.
(e) Each Plan has been established, administered, maintained and funded in accordance with its terms and in compliance in all material respects with the applicable provisions of ERISA, the Code and other applicable Laws. There is not now, nor, to the Knowledge of the Company, do any circumstances exist that could give rise to, any requirement for the posting of security with respect to a Plan or the imposition of any lien on the assets of the Company under ERISA or the Code. All premiums due or payable with respect to insurance policies funding any Plan have been made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected on the Company Financial Statements.
(f) None of the Plans provide retiree or post-employment health, disability, life insurance or other welfare benefits and no member of the Company Group has any obligation to provide such benefits, except as may be required by Section 4980B of the Code, Section 601 of ERISA or any other applicable Law. There has been no material violation of the “continuation coverage requirement” of “group health plans” as set forth in Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA with respect to any Plan to which such continuation coverage requirements apply.
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(g) Except as set forth on Schedule 4.20(g), neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in combination with another event) (i) result in any payment becoming due, or increase the amount of any compensation or benefits due, to any current or former employee of the Company with respect to any Plan; (ii) increase any benefits otherwise payable under any Plan; (iii) result in the acceleration of the time of payment or vesting of any such compensation or benefits; or (iv) result in the payment of any amount that would, individually or in combination with any other such payment, be an “excess parachute payment” within the meaning of Section 280G of the Code. No Person is entitled to receive any additional payment (including any tax gross-up or other payment) from the Company as a result of the imposition of the excise taxes required by Section 4999 of the Code or any taxes required by Section 409A of the Code.
(h) Each Plan that is a “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of the Code) is in all respects in documentary compliance with, and has been administered in all respects in compliance with, Section 409A of the Code.
(i) Each Plan that is subject to the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”) has been established, maintained and administered in compliance with the requirements of the Affordable Care Act.
(j) All Plans subject to the laws of any jurisdiction outside of the United States (“Non-U.S. Plans”) are listed on Schedule 4.20(j). All Non-U.S. Plans comply in all material respects with applicable local Law, and all such plans that are intended to be funded and/or book-reserved are funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions, and if they are intended to qualify for special tax treatment, meet all requirements for such treatment. As of the date hereof, there is no pending or, to the Knowledge of the Company, threatened material litigation relating to any Non-U.S. Plan.
4.21 Real Property.
(a) The Company Group does not own nor has it ever owned, or otherwise have an interest in, any Real Property, other than pursuant to the Leases. The Leases are the only Contracts pursuant to which the Company leases, subleases or otherwise occupies any Real Property. The Company Group has made available to Parent, Merger Sub I and Merger Sub II accurate and complete copies of all Leases. The Company Group has good, valid and subsisting leasehold interests in all the Real Property it Leases, which Real Property consists of the research, manufacturing, and office facilities described on Schedule 4.21, free and clear of all Liens other than Permitted Liens, Liens of mortgagees made by the owners of the Real Property and Liens arising under the applicable Lease. The Company Group has not materially breached or violated any local zoning ordinance, and no written notice from any Person has been received by the Company Group or served upon the Company Group claiming any violation of any local zoning ordinance.
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(b) With respect to each Lease: (i) it is valid, binding and enforceable in accordance with its terms and in full force and effect, subject to the Enforceability Exceptions; (ii) all rents and additional rents and other sums, expenses and charges due thereunder have been paid in all material respects; (iii) the Company Group has been in peaceable possession of the premises leased thereunder since the commencement of the original term thereof; (iv) no waiver, indulgence or postponement of the Company Group’s obligations thereunder has been granted by the lessor; (v) the Company Group has performed all material obligations imposed on it under such Lease and there exist no material default or event of default thereunder by the Company Group or, to the Company’s Knowledge, by any other party thereto; (vi) there exists, to the Company’s Knowledge, no occurrence, condition or act which, with the giving of notice, the lapse of time or the happening of any further event or condition, would reasonably be expected to become a material default or event of default by the Company Group thereunder or by the counterparty thereunder; (vii) to the Company’s Knowledge, there are no outstanding claims of breach or indemnification or notice of default or termination thereunder; and (viii) the Company Group has not exercised early termination options, if any, under any such Lease. The Company Group holds the leasehold estate established under the Leases free and clear of all Liens, except for Liens of mortgagees made by the owners of the Real Property on which such leasehold estate is located, Liens arising under the applicable Lease or other Permitted Liens. The Real Property leased by the Company Group is in a state of maintenance and repair in all material respects adequate and suitable for the purposes for which it is presently being used, and there are no material repair or restoration works likely to be required in connection with such leased Real Property. The Company Group is in physical possession and actual and exclusive occupation of the whole of the leased Real Property subject to such Leases, none of which is subleased or assigned to another Person. Each Lease is a lease of all useable square footage of the premises located at each leased Real Property. To the Knowledge of the Company, the Company does not owe any brokerage commission with respect to any Real Property. To the Company’s Knowledge, there is no condemnation or similar Proceeding pending or threatened with respect to any Real Property leased by the Company Group or any portion thereof.
4.22 Taxes. Except as set forth on Schedule 4.22,
(a) The Company and each of its Subsidiaries have duly and timely filed all income and other material Tax Returns which are required to be filed by it, and have paid all material Taxes (whether or not shown on such Tax Returns) which have become due, and all such Tax Returns of the Company and each of its Subsidiaries are true, correct and complete and accurate in all material respects.
(b) There is no Action, assessment, deficiency or proposed adjustment relating to Taxes that has been asserted or assessed, or that is pending or proposed in writing, by any Authority against any member of the Company Group that remains unresolved or unpaid.
(c) No statute of limitations in respect of the assessment or collection of any Taxes of any member of the Company Group has been waived or extended (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business), which waiver or extension is in effect.
(d) Each member of the Company Group has duly withheld or collected and paid over to the applicable Taxing Authority in a timely manner all material Taxes required to be withheld or collected by such member of the Company Group in connection with any amounts paid or owing to any employee, creditor, independent contractor or other third party and has otherwise complied in all material respects with all applicable withholding and related reporting requirements with respect to such Taxes.
(e) Each member of the Company Group has collected and remitted to the applicable Taxing Authority all material sales Taxes required to be collected by such member of the Company Group.
(f) No member of the Company Group has requested any letter ruling, technical advice, a change of any method of accounting, or any similar request that is in progress or pending with any Authority with respect to any Taxes.
(g) There is no Lien (other than Permitted Liens) for Taxes upon any of the assets of any member of the Company Group.
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(h) No member of the Company Group has received any written request from a Taxing Authority in a jurisdiction where a member of the Company Group has not paid any Tax or filed Tax Returns asserting that a member of the Company Group is or may be subject to Tax in such jurisdiction. To the knowledge of the Company, no member of the Company Group has, or could reasonably be considered to have, a permanent establishment (within the meaning of any applicable Tax treaty) or other fixed place of business in any jurisdiction other than a jurisdiction in which such member is organized, tax resident, or otherwise subject to Tax on a net income basis.
(i) No member of the Company Group is a party to any Tax sharing, Tax indemnity or Tax allocation Contract (other than a contract entered into in the ordinary course of business the principal purpose of which is not related to Taxes).
(j) No member of the Company Group has been a member of an affiliated, consolidated, combined or unitary group filing for U.S. federal, state or local income Tax purposes (other than a group the common parent of which was the Company or any of its Subsidiaries).
(k) No member of the Company Group has any liability for the Taxes of any other Person (other than the Company Group): (1) under Treasury Regulations Section 1.1502-6 (or any similar provision of applicable Law), (2) as a transferee or successor or (3) otherwise by operation of applicable Law.
(l) No member of the Company Group is a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(m) No member of the Company Group has been a party to any “listed transaction” or failed to report any “reportable transaction” as such terms are defined in Section 6707A(c) of the Code and Treasury Regulations Section 1.6011-4(b) and as such reporting is required pursuant thereto.
(n) No member of the Company Group has been a party to any transaction treated by the Parties as a distribution of stock qualifying for tax-free treatment under Section 355 of the Code in the five years prior to the date of this Agreement.
(o) No member of the Company Group is a “controlled foreign corporation” as defined in Section 957 of the Code or is a “passive foreign investment company” within the meaning of Section 1297 of the Code.
(p) No member of the Company Group will be required to include any material item of income or exclude any material item of deduction for any taxable period ending after the Closing Date as a result of: (i) adjustment under Section 481 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law) by reason of a change in method of accounting for a taxable period ending on or before the Closing Date; (ii) any “closing agreement” described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law) executed on or before the Closing Date; (iii) any installment sale or open transaction disposition made on or before the Closing Date; (iv) any prepaid amount or deferred revenue realized or received on or before the Closing Date; (v) any intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law); or (vi) election under Section 965 of the Code.
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(q) The Company is and has been treated as a C corporation for U.S. federal, state and local income tax purposes since the date of its formation. Schedule 4.22(q) sets forth the U.S. federal income tax classification of each Subsidiary of the Company.
(r) No member of the Company Group is aware of any fact or circumstance (without conducting independent inquiry or diligence of the other relevant party), and has not knowingly taken or agreed to take any action (or failed to take any action), that would reasonably be expected to prevent or impede the Domestication from qualifying for the Domestication Intended Tax Treatment or the Company Mergers from qualifying for the Mergers Intended Tax Treatment.
(s) Less than fifty percent (50%) of the value of the Company’s total assets (after excluding cash, cash items (including receivables), and government securities for purposes of computing total assets) consists of stock or securities (within the meaning of Section 368(a)(2)(F)(vii) of the Code). For purposes of this representation, any stock and securities of any Subsidiary of the Company is disregarded and the Company is deemed to own its ratable share of such Subsidiary’s assets. The Company is not otherwise an “investment company” within the meaning of Section 368(a)(2)(F) of the Code.
4.23 Environmental Laws. The Company Group has complied in all material respects and is in material compliance with all Environmental Laws, and there are no material Actions pending or, to the Knowledge of the Company, threatened against the Company Group alleging any failure to so comply. The Company Group has not (i) received any written notice of any alleged material claim, violation of or liability under any Environmental Law nor any claim of potential liability with regard to any Hazardous Material, which has not heretofore been cured or for which there is any remaining liability; (ii) to the Knowledge of the Company, disposed of, emitted, discharged, handled, stored, transported, used or released any Hazardous Material, arranged for the disposal, discharge, storage or release of any Hazardous Material or exposed any employee or other individual or property to any Hazardous Material so as to give rise to any material liability or corrective or remedial obligation under any Environmental Laws; or (iii) entered into any agreement that may require it to guarantee, reimburse, pledge, defend, hold harmless or indemnify any other Person with respect to liabilities arising out of Environmental Laws or the Hazardous Material Activity, other than pursuant to Leases or commercial Contracts entered into in the ordinary course of business. To the Knowledge of the Company, there are no Hazardous Materials in, on or under any properties currently leased or operated by the Company Group that could give rise to any material liability or corrective or remedial obligation of the Company Group under any Environmental Laws.
4.24 Finders’ Fees. Except as set forth on Schedule 4.24, there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of the Company or any of its respective Affiliates who might be entitled to any fee or commission for which the Company Group, Parent, Merger Sub I, Merger Sub II or any of its respective Affiliates would be liable upon consummation of the transactions contemplated by this Agreement or any of the Ancillary Agreements.
4.25 Directors and Officers. Schedule 4.25 sets forth a true, correct and complete list of all directors and officers of the Company and each Subsidiary as of the date of this Agreement.
4.26 Certain Business Practices.
(a) The Company currently is and has at all times been, in material compliance with applicable Laws related to (i) anti-corruption or anti-bribery, including the U.S. Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§78dd-1, et seq., and any other equivalent or comparable Laws of other countries (collectively, “Anti-Corruption Laws”), (ii) economic sanctions administered, enacted or enforced by any Authority (collectively, “Sanctions Laws”), (iii) export controls, including the U.S. Export Administration Regulations, 15 C.F.R. §§730, et seq., and any other equivalent or comparable Laws of other countries (collectively, “Export Control Laws”), (iv) anti-money laundering, including the Money Laundering Control Act of 1986, 18 U.S.C. §§1956, 1957, and any other equivalent or comparable Laws of other countries (collectively, “Anti-Money Laundering Laws”), (v) anti-boycott regulations, as administered by the U.S. Department of Commerce, and (vi) importation of goods, including Laws administered by the U.S. Customs and Border Protection, Title 19 of the U.S.C. and C.F.R., and any other equivalent or comparable Laws of other countries (collectively, “International Trade Control Laws”).
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(b) Neither the Company nor, to the Knowledge of the Company, any Representative of the Company (acting on behalf of the Company), is or is acting under the direction of, on behalf of or for the benefit of a Person that is, (i) the subject of Sanctions Laws or identified on any sanctions or similar lists administered by an Authority, including the U.S. Department of the Treasury’s Specially Designated Nationals List, the U.S. Department of Defense’s 1260H List, the U.S. Department of Commerce’s Denied Persons List and Entity List, the U.S. Department of State’s Debarred List, HM Treasury’s Consolidated List of Financial Sanctions Targets and the Investment Bank List, or any similar list enforced by any other relevant Authority, as amended from time to time, or any Person owned or controlled by any of the foregoing (collectively, “Prohibited Party”); (ii) the target of any Sanctions Laws; (iii) located, organized or resident in a country or territory that is, or whose government is, the target of comprehensive trade sanctions under Sanctions Laws, including, as of the date of this Agreement, Cuba, Iran, North Korea, Russia, and Sudan; or (iv) an officer or employee of any Authority or public international organization, or officer of a political party or candidate for political office. Neither the Company nor, to the Knowledge of the Company, any Representative of the Company (acting on behalf of the Company), (A) has participated in any transaction involving a Prohibited Party, or a Person who is the target of any Sanctions Laws, or any country or territory that was during such period or is, or whose government was during such period or is, the target of comprehensive trade sanctions under Sanctions Laws, (B) to the Knowledge of the Company, has exported (including deemed exportation) or re-exported, directly or indirectly, any commodity, software, technology, or services in violation of any applicable Export Control Laws or (C) has participated in any transaction in violation of or connected with any purpose prohibited by Anti-Corruption Laws or any applicable International Trade Control Laws, including support for international terrorism and nuclear, chemical, or biological weapons proliferation.
(c) The Company has not received written notice of, nor, to the Knowledge of the Company, any of its Representatives is or has been the subject of, any investigation, inquiry or enforcement Proceedings by any Authority regarding any offense or alleged offense under Anti-Corruption Laws, Sanctions Laws, Anti-Money Laundering Laws, Export Control Laws or International Trade Control Laws (including by virtue of having made any disclosure relating to any offense or alleged offense) and, to the Knowledge of the Company, there are no circumstances likely to give rise to any such investigation, inquiry or Proceeding.
4.27 Insurance. Schedule 4.27 sets forth a true, correct and complete list of all material policies or binders of insurance owned or held by and insuring the Company Group, and such policies are in full force and effect. All premiums due and payable with respect to such policies covering all periods up to and including the Closing Date have been paid. No member of the Company Group has received notice of cancellation or termination with respect to any such policy, other than any such policy that has been replaced on substantially similar terms prior to the date of such cancellation or termination. There is no material claim by the Company Group pending under any of such insurance policies as to which coverage has been questioned, denied or disputed by the underwriters or issuers of such policies. Such policies will not in any way be affected by or terminate or lapse by reason of the transactions contemplated by this Agreement or the Ancillary Agreements. No member of the Company Group is in material default under any such policy. The insurance policies to which the Company Group is a party are sufficient for compliance in all material respects with the insurance requirements of all Material Contracts to which the Company Group is a party or by which the Company Group is bound. No member of the Company Group has any material self-insurance arrangements. No fidelity bonds, letters of credit, performance bonds or bid bonds have been issued to or in respect of any member of the Company Group other than pursuant to commercial Contracts in the ordinary course of business consistent with past practice made available to Parent.
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4.28 Related Party Transactions. Except as set forth in Schedule 4.28 or as contemplated by this Agreement, and except for employment agreements, employee confidentiality and invention assignment agreements, equity or equity incentive documents, governing documents, indemnification arrangements, benefit plans, compensation arrangements and expense reimbursement arrangements entered into in the ordinary course of business, no Affiliate of the Company or any of its Subsidiaries, Company Stockholder holding 5% or more of the Company Capital Stock, current director, manager or officer of any member of the Company Group or, to the Knowledge of the Company, any immediate family member or Affiliate of any of the foregoing (a) is a party to any material Contract, or has otherwise entered into any material transaction, understanding or arrangement, with a member of the Company Group, (b) owns any material asset, property or right, tangible or intangible, which is used by a member of the Company Group, or (c) is a borrower or lender, as applicable, under any Indebtedness owed by or to a member of the Company Group since January 1, 2024.
4.29 No Trading or Short Position. Neither the Company Group, nor, to the Knowledge of the Company, any of their respective directors, managers, officers or employees has engaged in any short sale of Parent’s voting stock or any other type of hedging transaction involving Parent’s securities.
4.30 Exchange Act. No member of the Company Group is currently (nor has any member of the Company Group previously been) subject to the requirements of Section 12 of the Exchange Act.
4.31 Top Customers and Top Suppliers.
(a) Schedule 4.31(a) sets forth, as of the date of this Agreement, the top 10 customers based on aggregate dollar value of the Company Group’s transaction volume with such counterparty (a “Top Customer”) and the top 10 vendors of the Company Group based on aggregate spend with such counterparty (a “Top Supplier”), in each case, during the twelve-month period ending December 31, 2025.
(b) Except as set forth in Schedule 4.31(b), none of the Top Customers or Top Suppliers has, as of the date of this Agreement, informed in writing any of the Company or any of the Company’s Subsidiaries that it will, or, to the Knowledge of the Company, has threatened in writing to, terminate, cancel or materially limit or materially and adversely modify any of its existing business with a member of the Company Group (other than due to the expiration of an existing contractual arrangement), and to the Knowledge of the Company, none of the Top Customers or Top Supplier is, as of the date of this Agreement, otherwise involved in or threatening a material dispute against a member of the Company Group or their respective businesses.
4.32 No Additional Representations or Warranties. Except for the representations and warranties expressly set forth in this Article IV (as modified by the Schedules), neither the Company nor any other Person has made or is making any representation or warranty (express, implied or otherwise) with respect to the Company, the Company Group, or their respective businesses, operations, assets, liabilities or condition (financial or otherwise), whether in connection with the transactions contemplated by this Agreement or otherwise, and the Company hereby disclaims any such other representations or warranties (express, implied or otherwise). In particular, without limiting the foregoing disclaimer, except as expressly provided in this Article IV, neither the Company nor any other Person makes or has made any representation or warranty (express, implied or otherwise) to any Parent Party or any of its Affiliates or Representatives with respect to (i) any financial projection, forecast, estimate, forward-looking statement, budget or prospect information relating to the Company or its Subsidiaries or their respective businesses, or (ii) any oral or written information made available or otherwise presented to any Parent Party or any of its Affiliates or Representatives, whether in the course of their due diligence investigation of the Company, the negotiation of this Agreement, or in the course of the transactions contemplated hereby or otherwise.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PARENT PARTIES
Except as disclosed in the Parent SEC Documents filed with or furnished to the SEC prior to the date of this Agreement (to the extent the qualifying nature of such disclosure is reasonably apparent on the face of such disclosure, but excluding any risk factor disclosures or other similar cautionary, forward-looking, predictive or generic statements therein), it being acknowledged that nothing disclosed in such Parent SEC Documents shall be deemed to modify or qualify the representations and warranties set forth in Sections 5.1, 5.3 or 5.8, Parent, Merger Sub I and Merger Sub II (the “Parent Parties”) hereby represent and warrant to the Company, as of the date of this Agreement and as of the Closing Date (except for representations and warranties that are made as of a specific date, which are made only as of such date), as follows:
5.1 Corporate Existence and Power. Parent is a company duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands. Merger Sub I is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. Merger Sub II is a limited liability company duly formed, validly existing and in good standing under the Laws of the State of Delaware. Merger Sub I and Merger Sub II do not hold and have not held any material assets or incurred any material liabilities, and have not conducted any business activities other than in connection with the Company Mergers. Each of the Parent Parties has all requisite power and authority, corporate and otherwise, to own, lease and operate its properties and assets and to carry on its business as presently conducted.
5.2 Merger Subs. Merger Sub I and Merger Sub II were formed solely for the purpose of engaging in the transactions contemplated hereby and activities incidental thereto. Either Parent or a wholly owned (direct or indirect) Subsidiary of Parent owns beneficially and of record all of the outstanding equity interests of Merger Sub I and Merger Sub II, free and clear of all Liens other than transfer restrictions under applicable securities Laws and their respective organizational documents.
5.3 Corporate Authorization. Each of the Parent Parties has all requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby, in the case of the Domestication and the Company Mergers, subject to receipt of the Parent Shareholder Approval. The execution and delivery by each of the Parent Parties of this Agreement and the Ancillary Agreements to which it is a party and the consummation by each of the Parent Parties of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of such Parent Party. No other corporate proceedings on the part of such Parent Party are necessary to authorize this Agreement or the Ancillary Agreements to which it is a party or to consummate the transactions contemplated by this Agreement (other than, in the case of the Domestication and the Company Mergers, the receipt of the Parent Shareholder Approval) or the Ancillary Agreements. This Agreement and the Ancillary Agreements to which such Parent Party is a party have been duly executed and delivered by such Parent Party and, assuming the due authorization, execution and delivery by each of the other parties hereto and thereto (other than a Parent Party), this Agreement and the Ancillary Agreements to which such Parent Party is a party constitute a legal, valid and binding obligation of such Parent Party, enforceable against such Parent Party in accordance with their respective terms, subject to the Enforceability Exceptions. Approval of (i) the Parent Certificate of Incorporation and Parent Bylaws requires a special resolution under Cayman Islands Law, being an affirmative vote of the holders of at least two-thirds of the outstanding Parent Ordinary Shares entitled to vote, who attend and vote thereupon (as determined in accordance with the Parent Articles), (ii) this Agreement, the Domestication, the Company Mergers, the Issuance Proposal, the New Incentive Plan Proposal, the Board Proposal and the Adjournment Proposal are subject to the passing of, in each case, an ordinary resolution under Cayman Islands Law, being an affirmative vote of the holders of at least a majority of the outstanding Parent Ordinary Shares entitled to vote, who attend and vote thereupon (as determined in accordance with the Parent Articles), (iii) the Domestication, a special resolution of the holders of the Parent Ordinary Shares, and (iv) with respect to any other proposal proposed to the holders of Parent Ordinary Shares, the requisite approval required under the Parent Articles, the Cayman Companies Act or any other applicable Law, in each case, at Parent’s Shareholder Meeting. The affirmative vote or written consent of the sole stockholder of Merger Sub I is the only vote of the holders of any of Merger Sub I’s capital stock necessary to adopt this Agreement and approve the Company Mergers and the consummation of the other transactions contemplated hereby. The affirmative vote or written consent of the sole member of Merger Sub II is the only vote of the holders of any of Merger Sub II’s equity interests necessary to adopt this Agreement and approve the Company Mergers and the consummation of the other transactions contemplated hereby.
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5.4 Governmental Authorization. Assuming the accuracy of the representations and warranties of the Company set forth in Section 4.3, none of the execution, delivery or performance of this Agreement or any Ancillary Agreement by a Parent Party or the consummation by a Parent Party of the transactions contemplated hereby and thereby requires any consent, approval, license, Order or other action by or in respect of, or registration, declaration or filing with any Authority except for (a) any SEC or Nasdaq filings and approval required to consummate the transactions contemplated hereunder, (b) filing with the Secretary of State of the State of Delaware a Certificate of Domestication with respect to the Domestication and the Parent Certificate of Incorporation, (c) filings required to be made with the Cayman Registrar in connection with the Domestication, (d) the filing of the First Certificate of Merger and the Second Certificate of Merger with the Secretary of State of the State of Delaware pursuant to the DGCL and the DLLCA, as applicable, (e) any filings, notices, approvals or waiting period expirations required under any applicable Laws as set forth on Schedule 5.4.
5.5 Non-Contravention. The execution, delivery and performance by a Parent Party of this Agreement or any Ancillary Agreement to which such Parent Party is or will be a party or the consummation by a Parent Party of the transactions contemplated hereby and thereby do not and will not (a) contravene or conflict with the organizational or constitutive documents of the Parent Parties, (b) contravene or conflict with or constitute a violation of any provision of any Law or any Order binding upon the Parent Parties, or (c) require any consent, approval, waiver or notice under, constitute a default under or breach of, or give rise to any right of termination, cancellation, amendment or acceleration under, any material Contract to which any Parent Party is a party, except, in the case of clause (c), as would not reasonably be expected to be material to the Parent Parties, taken as a whole, or materially impair or materially delay any Parent Party’s ability to consummate the transactions contemplated hereby.
5.6 Finders’ Fees. Except for the Persons identified on Schedule 5.6, there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of the Parent Parties, the Sponsor or any of their respective Affiliates who might be entitled to any fee or commission from the Company or any of its Affiliates for which any member of the Company Group, any Parent Party or the Surviving Company would be liable upon consummation of the transactions contemplated by this Agreement or any of the Ancillary Agreements.
5.7 Issuance of Shares. The Aggregate Merger Consideration, when issued in accordance with this Agreement, will be duly authorized and validly issued, and will be fully paid and nonassessable, and each such share comprising the Aggregate Merger Consideration shall be issued free and clear of preemptive rights and all Liens, other than transfer restrictions under applicable securities laws and the organizational or constitutive documents of Parent. The Aggregate Merger Consideration shall be issued in compliance with all applicable securities Laws and other applicable Laws and without contravention of any other person’s rights therein or with respect thereto.
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5.8 Capitalization.
(a) The authorized share capital of Parent is US$20,100 divided into 200,000,000 Parent Ordinary Shares and 1,000,000 preference shares, par value $0.0001 per share, of which 17,723,333 Parent Ordinary Shares (inclusive of Parent Ordinary Shares included in any outstanding Parent Units), and no preference shares are issued and outstanding. In addition, 6,646,250 Parent Warrants (inclusive of Parent Warrants included in any outstanding Parent Units), exercisable for 6,646,250 Parent Ordinary Shares, are issued and outstanding. No other share capital or other voting securities of Parent are issued, reserved for issuance or outstanding, other than Parent Ordinary Shares reserved for issuance upon exercise of the Parent Warrants and any securities issuable upon conversion of any working capital loans in accordance with the Parent SEC Documents. All issued and outstanding Parent Ordinary Shares are duly authorized, validly issued, fully paid and nonassessable and are not subject to, and were not issued in violation of, any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Cayman Companies Act, the Parent Articles, other organizational documents of Parent or any contract to which Parent is a party or by which Parent is bound. All outstanding Parent Warrants have been duly authorized and validly issued and constitute valid and binding obligations of Parent, enforceable against Parent in accordance with their terms, subject to the Enforceability Exceptions and are not subject to, and were not issued in violation of, any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Cayman Companies Act, the Parent Articles, other organizational documents of Parent or any contract to which Parent is a party or by which Parent is bound. Except as set forth in the Parent Articles, the Parent Warrant Agreement, the Trust Agreement, the Parent SEC Documents or hereunder, there are no outstanding contractual obligations of Parent to repurchase, redeem or otherwise acquire any Parent Common Shares or any share capital of Parent. There are no outstanding contractual obligations of Parent to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person. All outstanding Parent Units, Parent Common Shares and Parent Warrants have been issued in compliance with all applicable securities and other applicable Laws and were issued free and clear of all Liens other than transfer restrictions under applicable securities Laws and the organizational or constitutive documents of Parent.
(b) Merger Sub I is authorized to issue 100 shares of common stock, par value $0.0001 per share (“Merger Sub I Common Stock”), all of which are issued and outstanding as of the date hereof. No other shares of capital stock or other voting securities of Merger Sub I are issued, reserved for issuance or outstanding. All issued and outstanding shares of Merger Sub I Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to, and were not issued in violation of, any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, Merger Sub I’s organizational documents or any contract to which Merger Sub I is a party or by which Merger Sub I is bound. There are no outstanding contractual obligations of Merger Sub I to repurchase, redeem or otherwise acquire any shares of Merger Sub I Common Stock or any equity capital of Merger Sub I. There are no outstanding contractual obligations of Merger Sub I to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person.
(c) All of the membership interests of Merger Sub II issued and outstanding as of the date hereof are beneficially held (and held of record), directly or indirectly, by Parent. No other equity interests or voting securities of Merger Sub II are issued, reserved for issuance or outstanding. All issued and outstanding membership interests of Merger Sub II are duly authorized and validly issued and are not subject to, and were not issued in violation of, any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DLLCA, Merger Sub II’s organizational documents or any contract to which Merger Sub II is a party or by which Merger Sub II is bound. There are no outstanding contractual obligations of Merger Sub II to repurchase, redeem or otherwise acquire any membership interests of Merger Sub II or any other equity interests of Merger Sub II. There are no outstanding contractual obligations of Merger Sub II to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person.
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5.9 Information Supplied. None of the information supplied or to be supplied by the Parent Parties expressly for inclusion, or for mailing with, the Registration Statement, Proxy Statement/Prospectus or other Offer Documents will, (a) when the Registration Statement is first filed, (b) on the effective date of the Registration Statement, (c) on the date when the Proxy Statement/Prospectus is mailed to Parent’s shareholders and (d) at the time of the Parent Shareholder Meeting, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading (subject to the qualifications and limitations set forth in the materials provided by Parent or included in the Parent SEC Documents, the Additional Parent SEC Documents, the Registration Statement or any Other Filing).
5.10 Trust Fund. As of the date of this Agreement, Parent has approximately $130,000,000 (including, if applicable, any Deferred Underwriting Commissions being held in the Trust Account) in the trust account established by Parent for the benefit of its public shareholders (the “Trust Account”) maintained by Continental Stock Transfer & Trust Company (the “Trustee”) and held in trust by the Trustee pursuant to the Investment Management Trust Agreement dated as of February 11, 2026, between Parent and the Trustee (the “Trust Agreement”). The Trust Agreement is valid and in full force and effect and enforceable in accordance with its terms, except as may be limited by the Enforceability Exceptions, and has not been amended or modified except as set forth in the Parent SEC Documents. There are no separate agreements, side letters or other agreements or understandings (whether written or unwritten, express or implied) that would cause the description of the Trust Agreement in the Parent SEC Documents to be inaccurate in any material respect or that would entitle any Person (other than public shareholders of Parent holding Parent Ordinary Shares sold in Parent’s IPO who shall have elected to redeem their Parent Ordinary Shares pursuant to the Parent Articles or the underwriters of the IPO) to any portion of the proceeds in the Trust Account. The funds held in the Trust Account are not subject to any Lien or claim, other than as set forth in the Trust Agreement and the Parent Articles. Prior to the Closing, none of the funds held in the Trust Account may be released except in accordance with the Trust Agreement and the Parent Articles. Parent has performed all material obligations required to be performed by it to date under, and is not in material default or delinquent in performance or any other respect (claimed or actual) in connection with, the Trust Agreement, and no event has occurred which, with due notice or lapse of time or both, would reasonably be expected to constitute such a material default thereunder. There are no claims or Proceedings pending or, to the Knowledge of Parent, threatened with respect to the Trust Account. Since February 11, 2026, Parent has not released any money from the Trust Account (other than as permitted by the Trust Agreement). As of the Second Effective Time, (i) the obligations of Parent to dissolve or liquidate pursuant to the Parent Articles shall terminate, and (ii) Parent shall have no obligation whatsoever pursuant to the Parent Articles to dissolve and liquidate the assets of Parent by reason of the consummation of the transactions contemplated by this Agreement. Following the Second Effective Time, no shareholder of Parent shall be entitled to receive any amount from the Trust Account except to the extent a Parent’s public shareholder shall have elected to tender its Parent Ordinary Shares for redemption pursuant to the Parent Articles.
5.11 Listing. The issued and outstanding Parent Units sold in the IPO are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol “PAACU.” The issued and outstanding Parent Ordinary Shares are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol “PAAC.” The issued and outstanding Parent Warrants included in the Parent Units sold in the IPO are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol “PAACW.” Since its initial public offering, Parent has complied in all material respects with all applicable listing and corporate governance rules and regulations of Nasdaq and has not received any written notice from Nasdaq of any material non-compliance with such rules or regulations that remains unresolved. As of the date of this Agreement, there is no Action or Proceeding pending or, to the Knowledge of Parent, threatened against Parent by Nasdaq or the SEC with respect to any intention by such entity to deregister the Parent Units, the Parent Ordinary Shares, or the Parent Warrants or prohibit, suspend, delist or terminate the listing of the Parent Units, the Parent Ordinary Shares, or the Parent Warrants on Nasdaq or prohibit the transfer of the listing to an Approved Exchange. None of Parent, Merger Sub I, Merger Sub II or their respective Affiliates has taken any action in an attempt to terminate the registration of the Parent Units, the Parent Ordinary Shares, or the Parent Warrants under the Exchange Act except as contemplated by this Agreement.
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5.12 Board Approval.
(a) Parent’s Board of Directors (including any required committee or subgroup of such board) has unanimously (i) approved the execution, delivery and performance by Parent of this Agreement and the Ancillary Agreements to which Parent is or will be a party and the consummation of the transactions contemplated hereby and thereby, including the Domestication and the Company Mergers, (ii) declared the advisability of the transactions contemplated by this Agreement, (iii) determined that the transactions contemplated hereby are in the best interests of the shareholders of Parent, (iv) determined that the transactions contemplated hereby constitutes a “Business Combination” as such term is defined in the Parent Articles and (v) recommended that Parent’s shareholders adopt and approve each of the Parent Proposals (“Parent Board Recommendation”). The Parent Board Recommendation has not been withdrawn, rescinded or modified and remains in full force and effect.
(b) Merger Sub I’s board of directors has, as of the date of this Agreement, unanimously (i) approved the execution, delivery and performance by Merger Sub I of this Agreement and the Ancillary Agreements to which Merger Sub I is or will be a party and the consummation of the transactions contemplated hereby and thereby, including the Company Mergers, (ii) declared the advisability of the transactions contemplated by this Agreement and (iii) determined that the transactions contemplated hereby are in the best interests of its sole stockholder.
(c) Merger Sub II’s managers have, as of the date of this Agreement, unanimously (i) approved the execution, delivery and performance by Merger Sub II of this Agreement and the Ancillary Agreements to which Merger Sub II is or will be a party and the consummation of the transactions contemplated hereby and thereby, including the Company Mergers, (ii) declared the advisability of the transactions contemplated by this Agreement and (iii) determined that the transactions contemplated hereby are in the best interests of its sole member.
5.13 Parent SEC Documents and Financial Statements.
(a) Parent has filed all forms, reports, schedules, statements and other documents, including any exhibits thereto, required to be filed or furnished by Parent with the SEC since Parent’s formation under the Exchange Act or the Securities Act, together with any amendments, restatements or supplements thereto, and will use reasonable best efforts to timely file or furnish all such forms, reports, schedules, statements and other documents required to be filed subsequent to the date of this Agreement (the “Additional Parent SEC Documents”). Parent has made available to the Company copies in the form filed with the SEC of all of the following, except to the extent available in full without redaction on the SEC’s website through EDGAR for at least two Business Days prior to the date of this Agreement: (i) Parent’s Annual Reports on Form 10-K for each fiscal year of Parent beginning with the first year that Parent was required to file such a form, (ii) all proxy statements relating to Parent’s meetings of shareholders (whether annual or special) held, and all information statements relating to shareholder consents, since the beginning of the first fiscal year referred to in clause (i) above, (iii) its Form 8-Ks filed since the beginning of the first fiscal year referred to in clause (i) above, and (iv) all other forms, reports, registration statements and other documents (other than preliminary materials if the corresponding definitive materials have been provided to the Company pursuant to this Section 5.13) filed by Parent with the SEC since Parent’s formation (the forms, reports, registration statements and other documents referred to in clauses (i) through (iv) above, whether or not available through EDGAR, collectively, as they have been amended, revised or superseded by a later filing, the “Parent SEC Documents”).
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(b) Parent SEC Documents complied, and the Additional Parent SEC Documents will comply, in all material respects with the requirements of the Securities Act, the Exchange Act, and the Sarbanes-Oxley Act, as the case may be, and the rules and regulations thereunder. Parent SEC Documents did not, and the Additional Parent SEC Documents will not, at the time they were or are filed, as the case may be, with the SEC (except to the extent that information contained in any Parent SEC Document or Additional Parent SEC Document has been or is amended, revised or superseded by a later filed Parent SEC Document or Additional Parent SEC Document, then on the date of such filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the foregoing does not apply to statements in or omissions in any information supplied or to be supplied by the Company expressly for inclusion in the Registration Statement or Other Filing.
(c) As used in this Section 5.13, the term “file” shall be broadly construed to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC.
(d) Except as not required in reliance on exemptions from various reporting requirements by virtue of Parent’s status as an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, or “smaller reporting company” within the meaning of the Exchange Act, since its initial public offering, (i) Parent has established and maintained a system of internal controls over financial reporting (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) sufficient to provide reasonable assurance regarding the reliability of Parent’s financial reporting and the preparation of Parent’s financial statements for external purposes in accordance with GAAP and (ii) Parent has established and maintained disclosure controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act) designed to ensure that material information relating to Parent is made known to Parent’s principal executive officer and principal financial officer by others within Parent. Parent maintains and, for all periods covered by the Parent Financial Statements, has maintained Books and Records of Parent in the ordinary course of business in accordance with GAAP in all material respects and other applicable legal and accounting requirements.
(e) Parent has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.
(f) The Parent SEC Documents contain true and complete copies of the applicable Parent Financial Statements. Except as disclosed in the Parent SEC Documents, the Parent Financial Statements (i) fairly present in all material respects the financial position of Parent as at the respective dates thereof, and the results of its operations, shareholders’ equity and cash flows for the respective periods then ended (subject, in the case of any unaudited interim financial statements, to normal year-end audit adjustments (none of which is material) and the absence of footnotes), (ii) were prepared in conformity with GAAP applied on a consistent basis during the periods involved (subject, in the case of any unaudited financial statements, to normal year-end audit adjustments (none of which is material) and the absence of footnotes), (iii) in the case of the audited Parent Financial Statements, were audited in accordance with the standards of the PCAOB and (iv) comply in all material respects with the applicable accounting requirements and with the rules and regulations of the SEC, the Exchange Act and the Securities Act in effect as of the respective dates thereof (including Regulation S-X or Regulation S-K, as applicable).
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(g) Except as disclosed in the Parent SEC Documents, Parent has not received any written complaint, allegation, assertion or claim regarding (i) any “significant deficiency” in the internal controls over financial reporting of Parent, (ii) any “material weakness” in the internal controls over financial reporting of Parent or (iii) fraud, whether or not material, that involves management or other employees of Parent who have a significant role in the internal controls over financial reporting of Parent.
(h) As of the date of this Agreement, there are no outstanding or unresolved comments from the SEC with respect to the Parent SEC Documents. To the Knowledge of Parent, none of the Parent SEC Documents is the subject of ongoing SEC review or investigation.
(i) Parent has no off-balance sheet arrangements (as defined in Item 303(a)(4) of Regulation S-K) that are not disclosed in the Parent SEC Documents.
5.14 Absence of Certain Changes(a) . Except as expressly contemplated by this Agreement, as of the date of this Agreement: (a) since its formation, Parent has conducted no business other than its formation, the public offering of its securities (and the related private placements), public reporting under the Exchange Act, its search for an initial business combination as described in the prospectus relating to the IPO (including the investigation of the Company and the negotiation and execution of this Agreement) and related activities; (b) since February 13, 2026, there has not been any Material Adverse Effect in respect of Parent; and (c) Parent has not taken any action that would constitute a material breach of any of the covenants set forth in Section 6.1 applicable to Parent if such action were taken after the date hereof without the consent of the Company.
5.15 Licenses and Permits(a) . Each of the Parent Parties holds all material Permits necessary to lawfully conduct its business as presently conducted and to own, lease and operate its assets and properties, all of which are in full force and effect, except where the failure to hold such Permits or for such Permits to be in full force and effect would not, individually or in the aggregate, reasonably be expected to be material to Parent.
5.16 Properties(a) . None of the Parent Parties owns, licenses or otherwise has any right, title or interest in any material Intellectual Property. Except as disclosed in the Parent SEC Documents, none of the Parent Parties owns or leases any real property or material personal property.
5.17 Employees and Employment Matters(a) . None of the Parent Parties (a) has any paid employees or (b) maintains, sponsors, contributes to or otherwise has any liability under any employee benefit plan (as defined in Section 3(3) of ERISA) or any other compensation or benefit plan, program, agreement or arrangement.
5.18 Material Contracts.
(a) Except as disclosed in the Parent SEC Documents, other than this Agreement and the Ancillary Agreements, there are no Contracts to which any Parent Party is a party or by which any of its properties or assets may be bound, subject or affected, which (i) creates or imposes a liability greater than $250,000, (ii) may not be cancelled by such Parent Party on less than sixty (60) days’ prior notice without payment of a material penalty or termination fee, or (iii) prohibits, prevents, restricts or impairs in any material respect any business practice of a Parent Party as its business is currently conducted, or restricts in any material respect the ability of any Parent Party to engage in business as currently conducted by it or compete with any other Person (each, a “Parent Material Contract”). All Parent Material Contracts have been filed with the SEC or otherwise made available to the Company.
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(b) With respect to each Parent Material Contract: (i) such Parent Material Contract is legal, valid, binding and enforceable in all material respects against the applicable Parent Party and, to the Knowledge of Parent, the other parties thereto, and is in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability Exceptions); (ii) no Parent Party is in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default in any material respect by any Parent Party, or permit termination or acceleration by the other party, under such Parent Material Contract; and (iii) to the Knowledge of Parent, no other party to any Parent Material Contract is in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default by such other party, or permit termination or acceleration by any Parent Party, under any Parent Material Contract.
5.19 Compliance with Laws(a) . Each of the Parent Parties is, and has since its formation been, in compliance with all Laws applicable to it and the conduct of its business, except for such noncompliance which would not, individually or in the aggregate, reasonably be expected to be material to Parent. None of the Parent Parties has received written notice from any Authority alleging any violation of applicable Law in any material respect. None of the Parent Parties is under investigation with respect to any violation or alleged violation of any Law, Order or decree entered by any court, arbitrator or Authority, and none of the Parent Parties has received any subpoena from any Authority.
5.20 Certain Business Practices.
(a) Neither Parent nor, to the Knowledge of Parent, any Representative of Parent (acting on behalf of Parent), has: (a) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (b) made any unlawful payment to foreign or domestic government officials, employees or political parties or campaigns, (c) violated any provision of the Foreign Corrupt Practices Act of 1977 or (d) made any other unlawful payment. Neither Parent nor any director, officer, or to the Knowledge of Parent, any agent or employee of Parent (nor any Person acting on behalf of any of the foregoing, but solely in his or her capacity as a director, officer, employee or agent of Parent) has, since the IPO, directly or indirectly, given or agreed to give any gift or similar benefit in any material amount to any customer, supplier, governmental employee or other Person in order to assist Parent in connection with any actual or proposed transaction, which, if not given or continued in the future, would reasonably be expected to (i) adversely affect the business of Parent and (ii) subject Parent to suit or penalty in any private or governmental Action.
(b) The operations of Parent are and have been conducted at all times in material compliance with the Anti-Corruption Laws, Sanction Laws, Export Control Laws, Anti-Money Laundering Laws, anti-boycott regulations, as administered by the U.S. Department of Commerce, and International Trade Control Laws, and no Action involving Parent with respect to any of the foregoing is pending or, to the Knowledge of Parent, threatened.
(c) None of Parent, Merger Sub I, Merger Sub II or any of their respective directors or officers, or, to the Knowledge of Parent, any other Representative acting on behalf of Parent, is currently (i) identified on the Specially Designated Nationals and Blocked Persons List or any other sanctions-related list maintained by OFAC, the U.S. Department of State, or the U.S. Department of Defense, (ii) otherwise the subject or target of any Sanctions Laws, (iii) located, organized or resident in any country or territory that is the subject of comprehensive economic sanctions maintained by OFAC (which includes, as of the date of this Agreement, Cuba, Iran, North Korea, the Crimea, so-called Donetsk People’s Republic, and so-called Luhansk People’s Republic regions of Ukraine), or (iv) 50% or more owned, directly or indirectly, or otherwise controlled by any of the foregoing.
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5.21 Anti-Money Laundering Laws. The operations of Parent are and have been at all times conducted in compliance with the Anti-Money Laundering Laws, and no Action involving Parent with respect to the Anti-Money Laundering Laws is pending or, to the Knowledge of Parent, threatened.
5.22 CFIUS Foreign Person Status.
(a) Neither Parent nor the Sponsor is a “foreign person” or is controlled by a “foreign person,” as those terms are defined in 31 C.F.R. Part 800 promulgated under Section 721 of the DPA. As of the date of this Agreement, neither Parent nor, to the Knowledge of Parent, the Sponsor has agreed to grant, in connection with the transactions contemplated by this Agreement, any rights to any “foreign person” (as defined in 31 C.F.R. Part 800) that would constitute a “covered transaction” subject to mandatory filing requirements under the DPA.
(b) Neither Parent nor, to the Knowledge of Parent, the Sponsor permits any “foreign person” affiliated with Parent or the Sponsor, whether affiliated as a limited partner, shareholder or equivalent, to obtain, through Parent or the Sponsor as a result of that foreign person’s investment, any of the following with respect to the Company: (i) access to any “material nonpublic technical information” (as defined in 31 C.F.R. § 800.232) in the possession of the Company; (ii) membership or observer rights on the Board of Directors or equivalent governing body of the Company or the right to nominate an individual to a position on such governing body; (iii) any “involvement,” other than through the voting of shares, in the “substantive decision-making” of the Company (as such terms are defined in the DPA) regarding the use, development, acquisition or release of any “critical technology” (as defined in 31 C.F.R. § 800.215); or (iv) “control” of the Company (as defined in 31 C.F.R. § 800.208).
5.23 Affiliate Transactions. Except as described in Parent SEC Documents, there are no transactions, agreements, arrangements or understandings between Parent or any of its Subsidiaries, on the one hand, and Sponsor or any director, officer, employee, shareholder, warrant holder or Affiliate of Parent or any of its Subsidiaries, on the other hand.
5.24 Litigation. There is no (a) Action pending or, to the Knowledge of Parent, threatened against Parent or any of its Subsidiaries or that affects its or their assets or properties, or that challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement or any Ancillary Agreement, or (b) Order outstanding against Parent or any of its Subsidiaries or that affects its or their assets or properties or that would reasonably be expected to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement or any Ancillary Agreement. Neither Parent nor any of its Subsidiaries is party to a settlement or similar agreement regarding any of the matters set forth in the preceding sentence that contains any ongoing obligations, restrictions or liabilities (of any nature) that are material to Parent and its Subsidiaries.
5.25 Insurance. Schedule 5.25 lists all insurance policies (by policy number, insurer, coverage period, coverage amount, annual premium and type of policy) held by any Parent Party relating to such Parent Party or its business, properties, assets, directors, officers and employees, copies of which have been provided or made available to the Company. All premiums due and payable under all such insurance policies have been timely paid and the Parent Parties are otherwise in material compliance with the terms of such insurance policies. All such insurance policies are in full force and effect, and to the Knowledge of Parent, there is no threatened termination of, or material premium increase with respect to, any of such insurance policies. There have been no insurance claims made by any Parent Party. Each Parent Party has reported to its insurers all claims and pending circumstances that would reasonably be expected to result in a claim, except where such failure to report such a claim would not reasonably be expected to be material to Parent.
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5.26 Expenses, Indebtedness and Other Liabilities.
(a) Except as set forth on Schedule 5.26 or as disclosed in the Parent SEC Documents, none of the Parent Parties has any Indebtedness. No Indebtedness of any Parent Party contains any restriction upon (i) the prepayment of any of such Indebtedness, (ii) the incurrence of additional Indebtedness by any Parent Party, or (iii) the ability of any Parent Party to grant any Lien on its properties or assets.
(b) Except as and to the extent reflected or reserved against in the Parent Financial Statements or as disclosed in the Parent SEC Documents, none of the Parent Parties has any liabilities or obligations of the type required to be reflected on a balance sheet in accordance with U.S. GAAP that are not adequately reflected or reserved on or provided for in the Parent Financial Statements, other than liabilities incurred since the date of the most recent Parent Financial Statements in the ordinary course of business or in connection with the transactions contemplated by this Agreement.
(c) Schedule 5.26 sets forth all accrued and estimated Parent Transaction Expenses as of the date of this Agreement.
5.27 Brokers and Other Advisors. Except as set forth on Schedule 5.27, no broker, investment banker, financial advisor, underwriter or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of Parent or any of its Subsidiaries and any such fees and expenses shall be paid by Parent.
5.28 Taxes.
(a) Parent has duly and timely filed all income and other material Tax Returns which are required to be filed by it, and has paid all material Taxes (whether or not shown on such Tax Returns) which have become due and all such Tax Returns are true, correct and complete and accurate in all material respects.
(b) There is no Action, assessment, deficiency or proposed adjustment relating to Taxes that has been asserted or assessed, or that is pending or proposed in writing, by any Authority against Parent that remains unresolved or unpaid.
(c) No statute of limitations in respect of the assessment or collection of any Taxes of Parent has been waived or extended (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business), which waiver or extension is in effect.
(d) Parent has collected and remitted to the applicable Taxing Authority all material sales Taxes required to be collected by Parent.
(e) Parent has duly withheld or collected and paid over to the applicable Taxing Authority in a timely manner all material Taxes required to be withheld or collected by Parent in connection with any amounts paid or owing to any employee, creditor, independent contractor or other third party and has otherwise complied in all material respects with all applicable withholding and related reporting requirements with respect to such Taxes.
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(f) Parent has not requested any letter ruling, technical advice, a change of any method of accounting, or any similar request that is in progress or pending with any Authority with respect to any Taxes.
(g) There is no Lien (other than Permitted Liens) for Taxes upon any of the assets of Parent.
(h) Parent has not received any written request from a Taxing Authority in a jurisdiction where Parent has not paid any Tax or filed Tax Returns asserting that Parent is or may be subject to Tax in such jurisdiction, and Parent does not have a permanent establishment (within the meaning of an applicable Tax treaty) or other fixed place of business in a country other than the country in which it is organized.
(i) Parent is not a party to any Tax sharing, Tax indemnity or Tax allocation Contract (other than a contract entered into in the ordinary course of business consistent with past practices, the primary purpose of which is not related to Taxes).
(j) Parent has not been a member of an affiliated, consolidated, combined or unitary group filing for U.S. federal, state or local income Tax purposes (other than a group the common parent of which was Parent).
(k) Parent does not have any liability for the Taxes of any other Person: (1) under Treasury Regulations Section 1.1502-6 (or any similar provision of applicable Law), (2) as a transferee or successor or (3) otherwise by operation of applicable Law.
(l) Parent has not been a party to any listed transaction or failed to report any “reportable transaction” as such terms are defined in Section 6707A(c)(1) of the Code and Treasury Regulations Section 1.6011-4(b) and as such reporting is required pursuant thereto.
(m) Parent has not been a party to any transaction treated by the parties as a distribution of stock qualifying for tax-free treatment under Section 355 of the Code in the five years prior to the date of this Agreement.
(n) Merger Sub I is, and has been at all times since its formation, a C corporation for U.S. federal income tax purposes or, prior to the First Effective Time, will have timely and validly elected such classification effective as of the date of its formation. Merger Sub II is, and has been at all times since its formation, an entity disregarded as separate from Parent for U.S. federal income tax purposes.
5.29 PIPE Financing. Attached hereto as Schedule 5.29 are true, correct and complete copies of the executed PIPE Subscription Agreements, dated as of the date hereof, pursuant to which, and on the terms and subject to the conditions therein, the PIPE Investors have agreed to provide the PIPE Financing to Parent. Each PIPE Subscription Agreement is a legal, valid, and binding agreement of Parent and, to the Knowledge of Parent, the other parties thereto, enforceable against such Person in accordance with their terms (except, in each case, as such enforcement may be limited by the Enforceability Exceptions). As of the date hereof, each PIPE Subscription Agreement is in full force and effect and no commitment of PIPE Financing has been withdrawn, rescinded, amended, modified or terminated, and no withdrawal, rescindment, amendment, modification or termination is contemplated by Parent. Parent is not in breach of any of the terms or conditions in the PIPE Subscription Agreements nor has any PIPE Investor party thereto notified Parent in writing of its own breach of any of the terms or conditions under any PIPE Subscription Agreement. As of the date hereof, Parent has no reason to believe that it will be unable to satisfy on a timely basis any material term or condition of closing to be satisfied by it contained in any PIPE Subscription Agreement. There are no conditions precedent or contingencies to the obligations of the parties under any PIPE Subscription Agreement to fund the PIPE Investment Amount, other than as set forth in the PIPE Subscription Agreements. There are no other agreements, side letters or arrangements between Parent and any PIPE Investor relating to any PIPE Subscription Agreement which could adversely affect the obligation of the PIPE Investors to contribute to Parent the applicable portion of the PIPE Investment Amount set forth in the PIPE Subscription Agreements, and, as of the date hereof, Parent does not know of any facts or circumstances that may reasonably be expected to result in any of the conditions set forth in any PIPE Subscription Agreement not being satisfied, or the PIPE Financing not being available to Parent as of the Closing.
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ARTICLE VI
COVENANTS OF THE PARTIES PENDING CLOSING
6.1 Conduct of the Business. Each of the Company and Parent covenants and agrees that:
(a) Except as expressly contemplated by this Agreement or the Ancillary Agreements (including the PIPE Financing, Alternative PIPE Financing and the Repurchase), as set forth on Schedule 6.1(a), as required by applicable Law, or as consented to in writing by Parent or the Company, as applicable (such consent not to be unreasonably withheld, conditioned or delayed) (collectively, the “Permitted Interim Actions”), from the date hereof until the earlier of the Closing Date and the termination of this Agreement in accordance with its terms (the “Interim Period”), each Party shall conduct its business in the ordinary course in all material respects, and use its commercially reasonable efforts to preserve intact its business organization and material assets; provided, that no action by any member of the Company Group with respect to matters specifically addressed by Section 6.1(a)(i) through Section 6.1(a)(xxii), as applicable, shall be deemed a breach of this sentence unless such action would constitute a breach of any of Section 6.1(a)(i) through Section 6.1(a)(xxii). Without limiting the generality of the foregoing, and except for the Permitted Interim Actions, during the Interim Period, neither the Company, Parent, nor any of their respective Subsidiaries, shall be permitted to:
(i) amend, modify or supplement its certificate of incorporation or bylaws, memorandum and articles of association or other organizational or governing documents except as contemplated hereby or by any Ancillary Agreement or engage in any reorganization, reclassification, liquidation, dissolution or similar transaction;
(ii) solely in the case of the Company Group, amend, waive any provision of, terminate prior to its scheduled expiration date, or otherwise compromise or relinquish any material right under any Material Contract or Lease;
(iii) other than in the ordinary course of business, modify, amend or enter into any contract, agreement, lease, license or commitment that extends for a term of one year or more or obligates the payment by any member of the Company Group or Parent, as applicable, of more than $250,000 annually or $500,000 in the aggregate over the term of such Contract;
(iv) other than in the ordinary course of business, or, in the case of the Company Group, consistent with the Company’s budget or business plan made available to Parent, or as required to perform customer Contracts, make any capital expenditures in excess of $250,000 individually or $1,000,000 in the aggregate;
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(v) sell, lease, license or otherwise dispose of any of the Company Group’s or Parent’s, as applicable, material assets, except pursuant to existing contracts, commitments or non-exclusive licenses disclosed herein or otherwise in the ordinary course of business consistent with past practices;
(vi) solely in the case of the Company Group, (A) transfer, sell, assign, lease, license, sublicense, covenant not to assert, subject to a Lien (other than a Permitted Lien), abandon, allow to lapse, or otherwise dispose of any right, title or interest of the Company or its Subsidiaries in Company Owned IP (other than non-exclusive licenses of Company Owned IP granted to customers, end users, or service providers granted in the ordinary course of business) material to the Business; (B) disclose any Trade Secrets to any third party (other than pursuant to a written confidentiality agreement entered into in the ordinary course of business that contains reasonable protections therefor); or (C) subject any source code for any Company Software material to the Business to any Copyleft Licenses;
(vii) (A) pay, declare or promise to pay any dividends, distributions or other amounts with respect to its capital stock or other equity securities; (B) pay, declare or promise to pay any other amount to any shareholder or other equityholder in its capacity as such; and (C) except as contemplated hereby or by any Ancillary Agreement, amend any term, right or obligation with respect to any outstanding shares of its capital stock or other equity securities;
(viii) (A) make any loan, advance or capital contribution to any Person, other than advances of expenses to employees or service providers in the ordinary course of business consistent with past practices, extensions of trade credit to customers in the ordinary course of business consistent with past practices, or loans, advances or capital contributions between or among members of the Company Group; (B) incur any Indebtedness for borrowed money, including drawings under lines of credit, in excess of an aggregate principal amount of $500,000 other than (1) in the case of Parent, loans evidenced by promissory notes made to Parent by Sponsor or its Affiliates as working capital advances as described in the Prospectus, and (2) intercompany Indebtedness; or (C) repay or satisfy any Indebtedness, other than scheduled repayments or repayments required in accordance with the terms thereof;
(ix) suffer or incur any Lien, except for Permitted Liens or Liens securing Indebtedness permitted under clause (viii), on any assets of the Company Group or Parent, as applicable;
(x) delay, accelerate or cancel, or waive any material right with respect to, any receivables or Indebtedness owed to a member of the Company Group or write off or make reserves against the same, other than in the ordinary course of business consistent with past practice or as otherwise required by U.S. GAAP;
(xi) merge or consolidate or enter a similar transaction with, or acquire all or substantially all of the assets or business of, any other Person; make any material investment in any Person other than investments in cash equivalents or short-term investments in the ordinary course of treasury management; or be acquired by any other Person;
(xii) terminate or allow to lapse any insurance policy protecting any of the Company Group’s or the Parent Parties’, as applicable, assets, unless replaced with a policy providing substantially comparable coverage or unless such termination or lapse would not be material to such party;
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(xiii) waive, release, compromise, settle or agree to settle any Proceeding or any Action before any Authority, other than settlements or compromises that (A) involve payments by the Company Group or Parent, as applicable, of not more than $500,000 individually, net of any amounts covered by insurance, (B) do not impose any material non-monetary, injunctive or equitable relief, or any material restriction on the business or operations of the Company Group or Parent, as applicable, following the Closing, and (C) do not involve any admission of wrongdoing or liability by the Company Group or Parent, as applicable;
(xiv) except as required by applicable Law, U.S. GAAP, the Company’s or Parent’s auditors, as applicable, or SEC requirements, make any material change in its accounting principles, methods or practices or write down the value of its assets;
(xv) except (A) in connection with the exercise, conversion or settlement of rights under securities set forth on Schedule 4.5(a), (B) in the case of the Company, the grant of equity awards in the ordinary course under the Equity Incentive Plan and repurchases pursuant to existing agreements with service providers, (C) in the case of Parent, redemptions by Parent of Parent Ordinary Shares and Parent Units held by its public shareholders pursuant to the Parent Articles, the issuance of securities pursuant to the PIPE Financing or the Domestication, or the conversion or separation of Parent Units and Parent Warrants in accordance with their terms, or (D) as otherwise contemplated by this Agreement or any Ancillary Agreement, issue, redeem or repurchase any capital stock, membership interests or other securities, or issue any securities exchangeable for or convertible into any shares of its capital stock or other securities, amend, modify or waive any of the material terms or rights set forth in any Parent Warrant or the Parent Warrant Agreement;
(xvi) (A) make, change or revoke any election in respect of material Taxes; (B) amend, modify or otherwise change any filed Tax Return in respect of material Taxes, (C) adopt or request permission of any Taxing Authority to change any accounting method in respect of material Taxes, (D) settle or compromise any claim, notice, audit report, Action, suit, litigation, Proceeding, arbitration, investigation, controversy, or assessment relating to Taxes; (E) enter into any Tax allocation, Tax sharing, Tax indemnity, private letter ruling closing agreement, or other binding written agreement relating to Taxes, other than commercial agreements entered into in the ordinary course of business the primary purpose of which is not Taxes; (F) surrender or forfeit any right to claim a Tax refund, (G) consent to any extension or waiver of the limitation period applicable to any claim or assessment relating to Taxes or relating to any Tax attribute that would give rise to any claim or assessment of Taxes, (H) incur any material liability for Taxes other than in the ordinary course of business, (I) prepare any Tax Return in a manner materially inconsistent with past practice, or (J) grant any power of attorney relating to any Tax matter;
(xvii) enter into any transaction with or distribute or advance any material assets or property to any of its Affiliates, other than transactions among members of the Company Group, payments of salary, benefits, expense reimbursements, equity compensation and other compensation arrangements in the ordinary course of business consistent with past practices or pursuant to existing agreements;
(xviii) solely in the case of the Company Group, other than as required by Law or by the terms of a Plan, (A) increase the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of any employee of a member of the Company Group or service provider of a member of the Company Group at the level of manager or above, except for annual compensation increases not to exceed 25% in the aggregate, (B) accelerate the vesting or payment of any compensation or benefits of any employee or service provider of the Company, (C) enter into, amend, terminate, amend the actuarial assumptions used in respect of, any Plan (or any plan, program, agreement or arrangement that would be a Plan if in effect on the date hereof) or grant, amend or terminate any awards thereunder, (D) make or forgive any loan to any present or former employee, director, officer, or contractor or other individual service provider of the Company Group other than advancement of expenses in the ordinary course of business consistent with past practices, (E) enter into, amend or terminate any collective bargaining agreement or other agreement with a labor union or labor organization, (F) adopt any severance or retention plan, (G) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Plan, (H) hire or engage any new employee or consultant if such new employee or consultant will receive annual base compensation in excess of $500,000, or (I) waive any restrictive covenants with respect to any Company Group employee or service provider, except in connection with ordinary-course separation, settlement or offboarding arrangements that would not reasonably be expected to be material to the Company Group;
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(xix) solely in the case of the Company Group, (A) limit the right of the Company or any of the Company’s Subsidiaries to engage in any line of business or in any geographic area, to develop, market or sell products or services, or to compete with any Person or (B) grant any exclusive or similar rights to any Person, in each case, except pursuant to customer, teaming, subcontracting, distribution, reseller, license, government contract or similar arrangements that would not be material to the Company Group, taken as a whole, or where such limitation or grant does not, and would not be reasonably likely to, individually or in the aggregate, materially and adversely affect, or materially disrupt, the ordinary course operation of the businesses of the Company Group, taken as a whole;
(xx) grant, establish or agree to any form of compensation, bonus, retention, severance, change-in-control or similar payment or benefit arrangement to or for any current or former director, officer, employee, consultant or other service provider of any Parent Party (other than as contemplated by the Executive Employment Agreements), or enter into, amend, or terminate any plan, program, agreement or arrangement that would constitute an employee benefit plan for any Parent Party;
(xxi) solely in the case of Parent, amend, waive, terminate or otherwise modify the Trust Agreement, Parent Warrant Agreement, Underwriting Agreement, Parent Support Agreement, any PIPE Subscription Agreement or any other material Contract with Sponsor or any of its Affiliates, except as expressly contemplated by this Agreement or any Ancillary Agreement; release any funds from the Trust Account except in accordance with the Trust Agreement, the Parent Articles and this Agreement; or take any action that would reasonably be expected to result in the delisting or deregistration of the Parent Units, Parent Ordinary Shares or Parent Warrants;
(xxii) solely in the case of Parent, (A) grant any rights to any “foreign person” (as defined in 31 C.F.R. Part 800) that would constitute DPA Triggering Rights with respect to the Company or any member of the Company Group, (B) take any action that would reasonably be expected to cause the transactions contemplated by this Agreement or the post-Closing operations of the Company Group to require a mandatory filing with the Committee on Foreign Investment in the United States or any other mandatory foreign-investment, export-control or national-security filing (other than any filing required to consummate the transactions contemplated by this Agreement that is identified by the parties), or (C) disclose any material non-public technical information, classified information, controlled unclassified information or export-controlled information of any member of the Company Group to any “foreign person” in violation of applicable Export Control Laws, Sanctions Laws or the DPA; or
(xxiii) agree or commit to do any of the foregoing.
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(b) No Party shall (i) take or agree to take any action that would be reasonably likely to cause any representation or warranty of such Party to be inaccurate or misleading in any respect at, or as of any time prior to, the Closing Date or (ii) omit to take, or agree to omit to take, any action necessary to prevent any such representation or warranty from being inaccurate or misleading in any respect at any such time.
(c) Nothing in this Agreement is intended to give any Parent Party, directly or indirectly, the right to control or direct the Company’s operations prior to the Closing Date, and nothing in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct the Parent Parties’ operations prior to the Closing Date. Prior to the Closing Date, each of the Company and the Parent Parties shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
(d) Notwithstanding anything in this Section 6.1 to the contrary and subject to Section 6.1(a)(xiii), during the Interim Period, the Company shall have sole authority and control over the prosecution, defense, enforcement, and settlement of any pending or threatened Action in which the Company Group asserts or defends rights in or to any Company Owned IP (including any Action for infringement, misappropriation, or other violation of Company Owned IP). Neither Parent nor any Parent Party shall direct, request, or otherwise seek to influence the Company to settle, compromise, abandon, or otherwise dispose of any such Action or to grant any covenant not to sue, release, or immunity with respect to any Company Owned IP. The Company shall keep Parent reasonably informed of the status of any such material Action and shall consider in good faith any written comments of Parent with respect thereto; provided, that the Company shall retain final decision-making authority with respect to any such Action.
6.2 Exclusivity.
(a) During the Interim Period, no member of the Company Group, on the one hand, nor any Parent Party, on the other hand, shall, and such Persons shall cause their respective Affiliates and Representatives not to, without the prior written consent of Parent, on the one hand, or the Company, on the other hand, (which consent may be withheld in the sole and absolute discretion of the other party asked to provide consent), directly or indirectly, (i) accept, initiate, respond to, encourage, solicit, engage or participate in negotiations with any Person concerning any Alternative Transaction, (ii) take any other action intended or designed to facilitate the efforts of any Person relating to a possible Alternative Transaction, (iii) furnish or disclose any non-public information of the Company Group to any Person in connection with an Alternative Transaction, (iv) approve, recommend or enter into any Alternative Transaction or any contract or agreement related to any Alternative Transaction or (v) otherwise cooperate in any way with, or assist or participate in, or knowingly facilitate or encourage any effort or attempt by any Person to do or seek to do any of the foregoing.
(b) Immediately following the execution of this Agreement, the Company Group, on the one hand, and the Parent Parties, on the other hand, shall, and shall cause each of their Representatives, to cease and terminate any discussion or negotiations that may be ongoing with any Persons other than the Company or Parent, as applicable, concerning any Alternative Transaction. Each of the Company and Parent Parties shall be responsible for any acts or omissions of any of its respective Representatives that, if they were the acts or omissions of the Company or Parent Parties, as applicable, would be deemed a breach of such Party’s obligations hereunder (it being understood that such responsibility shall be in addition to and not by way of limitation of any right or remedy the Company or Parent Parties, as applicable, may have against such Representatives with respect to any such acts or omissions). For purposes of this Agreement, except as disclosed on Schedule 6.2(a), the term “Alternative Transaction” means any of the following transactions involving the Company or the Company’s Subsidiaries or Parent or Parent’s Subsidiaries (other than the transactions contemplated by this Agreement or the Ancillary Agreements): (A) any merger, consolidation, share exchange, business combination or other similar transaction, (B) any sale, lease, exchange, transfer or other disposition of all or a material portion of the assets of such Person (other than sales of inventory in the ordinary course of business) or any capital stock or other equity interests of the Company, Parent, or its Subsidiaries in a single transaction or series of transactions, (C) with respect to Parent, any other “Business Combination” as such term is defined in the Parent Articles or (D) with respect to the Company Group, any public offering of any equity securities of the Company, any of its Subsidiaries, or a newly formed holding company of the Company or such Subsidiaries.
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(c) In the event that there is a proposal for, or an indication of interest in entering into, an Alternative Transaction, communicated in writing to the Company Group or Parent Parties or any of their respective Representatives (each, an “Alternative Proposal”), such Party shall as promptly as practicable (and in any event within one Business Day after receipt thereof) advise the other Parties to this Agreement, orally and in writing, of such Alternative Proposal and the material terms and conditions thereof (including any changes thereto) and the identity of the Person making any such Alternative Proposal. The Company and Parent Parties shall keep each other informed on a reasonably current basis of material developments with respect to any such Alternative Proposal. As used herein with respect to Parent Parties, the term “Alternative Proposal” shall not include the receipt by the Parent Parties or the Company Group of any unsolicited communications (including the receipt of draft non-disclosure agreements) in the ordinary course of business inquiring as to such Person’s interest in a transaction that would constitute an Alternative Transaction; provided, however, that the Company or the Parent Parties shall inform the person initiating such communication of the existence of this Agreement.
6.3 Access to Information. Solely for purposes of consummating the transactions contemplated by this Agreement and the Ancillary Agreements, during the Interim Period, upon reasonable advance written notice, the Company and Parent shall each use commercially reasonable efforts to provide, or cause to be provided, to the other party and its Representatives, during normal business hours, reasonable access to such party’s offices, properties, Contracts and Books and Records, and to furnish such information relating to the business of the Company Group or Parent Parties, as applicable, as the other party may reasonably request, in each case in a manner so as not to interfere unreasonably with the normal business operations of such Party; provided, that no information furnished pursuant to this Section 6.3 during the Interim Period shall affect any representation or warranty given by the Company or Parent and shall be treated as “Confidential Information” or “Evaluation Material” pursuant to the Confidentiality Agreement. Notwithstanding anything to the contrary expressed or implied in this Agreement, neither Parent nor the Company shall be required to provide the access described above or disclose any information to the other party if doing so is reasonably likely to (i) violate any applicable Law, (ii) as reasonably determined upon the advice of outside legal counsel, result in the loss of the ability to successfully assert attorney-client privilege, work product doctrine or similar privilege, (iii) violate any Contract to which it is a party or to which it is subject, (iv) require disclosure of information reasonably pertinent to any litigation in which such party, on the one hand, and the other party or any of its Representatives, on the other hand, are adverse parties, or (v) require disclosure of Trade Secrets; provided, however, that in the case of clauses (i), (ii) or (iii), such party shall use commercially reasonable efforts to provide such access as can be provided, or otherwise convey such information regarding the applicable matter as can be conveyed, without violating such Law, Contract or privilege.
6.4 Notices of Certain Events. During the Interim Period, each of the Parent Parties and the Company shall promptly notify the other Parties of:
(a) any notice from any Person alleging or raising the possibility that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement or that the transactions contemplated by this Agreement might give rise to any Action or other rights by or on behalf of such Person or result in the loss of any rights or privileges of the Company (or Parent, post-Closing) to any such Person or create any Lien on any of the Company’s or any Parent Party’s assets;
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(b) any notice or other communication from any Authority in connection with the transactions contemplated by this Agreement or the Ancillary Agreements;
(c) any Actions commenced or threatened against, relating to or involving or otherwise affecting any Party or any of their shareholders or their equity, assets or business or that relate to the consummation of the transactions contemplated by this Agreement or the Ancillary Agreements;
(d) any written notice from Nasdaq or an Approved Exchange with respect to the listing of the securities of Parent;
(e) the occurrence of any fact or circumstance which constitutes or results, or would reasonably be expected to constitute or result in a Material Adverse Effect; and
(f) any inaccuracy of any representation or warranty of such Party contained in this Agreement at any time during the term hereof, or any failure of such Party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder, that would reasonably be expected to cause any of the conditions set forth in ARTICLE IX not to be satisfied.
6.5 Registration Statement/Proxy Statement; Other Filings.
(a) As promptly as practicable after the execution of this Agreement, Parent and the Company shall jointly prepare and file with the SEC, and with all other applicable regulatory bodies, mutually acceptable proxy materials for the purpose of soliciting proxies from holders of Parent Common Shares sufficient to obtain Parent Shareholder Approval at a meeting of holders of Parent Common Shares to be called and held for such purpose (the “Parent Shareholder Meeting”). Such proxy materials shall be in the form of a proxy statement (the “Proxy Statement”), which shall be included in a Registration Statement on Form S-4, or other appropriate form, including any pre-effective or post-effective amendments or supplements thereto (the “Registration Statement”), filed by Parent with the SEC, which shall also include a prospectus (such prospectus, together with the Proxy Statement and any amendments or supplements thereto, the “Proxy Statement/Prospectus”) pursuant to which the securities of Parent issuable in the Domestication and the Company Mergers shall be registered. Parent shall promptly respond to any SEC comments on the Registration Statement. Parent also agrees to use its best efforts to obtain all necessary state securities law or “Blue Sky” permits and approvals required to carry out the transactions contemplated hereby, and the Company shall furnish all information concerning the Company Group and any of its respective members or shareholders as may be reasonably requested in connection with any such action. Each of Parent and the Company agrees, as promptly as reasonably practicable, to furnish to the other party all information concerning itself, its Subsidiaries, officers, directors, managers, shareholders, and other equityholders and information regarding such other matters as may be reasonably necessary or advisable or as may be reasonably requested in connection with the preparation of the Registration Statement, the Proxy Statement/Prospectus, a Current Report on Form 8-K pursuant to the Exchange Act in connection with the signing of this Agreement and the Ancillary Agreements, a Current Report on Form 8-K pursuant to the Exchange Act in connection with the Closing of the transactions contemplated by this Agreement, or any other statement, filing, notice or application made by or on behalf of Parent, the Company or their respective Subsidiaries to any regulatory authority (including Nasdaq) in connection with the Domestication, the Company Mergers and the other transactions contemplated hereby (the “Offer Documents”).
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(b) Parent (i) shall permit the Company and its counsel to review and comment on the Registration Statement and Proxy Statement/Prospectus and any exhibits, amendments or supplements thereto (or other related documents); (ii) shall consider any such comments reasonably in good faith, and shall obtain the Company’s prior written consent (not to be unreasonably withheld, conditioned or delayed) with respect to any disclosure therein regarding the Company, the Company Group, the Business, or the Company Stockholders; and (iii) shall not file the Registration Statement and Proxy Statement/Prospectus or any exhibit, amendment or supplement thereto without giving reasonable and good faith consideration to the comments of the Company and without the Company’s prior written consent (not to be unreasonably withheld, conditioned or delayed) as to any portion thereof describing the Company, the Company Group, the Business or the Company Stockholders. As promptly as practicable after receipt thereof, Parent shall provide to the Company and its counsel notice and a copy of all correspondence (or, to the extent such correspondence is oral, a summary thereof), including any comments from the SEC or its staff, between Parent or any of its Representatives, on the one hand, and the SEC or its staff or other government officials, on the other hand, with respect to the Registration Statement and Proxy Statement/Prospectus, and, in each case, shall consult with the Company and its counsel concerning any such correspondence. Parent shall not file any response letters to any comments from the SEC that relate to the Company without the Company’s prior written consent (not to be unreasonably withheld, conditioned or delayed). Parent will use its reasonable best efforts to permit the Company’s counsel to participate in any calls, meetings or other communications with the SEC or its staff. Parent will advise the Company, promptly after it receives notice thereof, of the time when the Registration Statement and Proxy Statement/Prospectus or any amendment or supplement thereto has been filed with the SEC and the time when the Registration Statement is declared effective or any stop order relating to the Registration Statement is issued.
(c) As soon as practicable following the date on which the Registration Statement is declared effective by the SEC, Parent shall distribute the Proxy Statement/Prospectus to the holders of Parent Shares and, pursuant thereto, shall call the Parent Shareholder Meeting in accordance with its organizational documents, the applicable Nasdaq rules and the applicable Laws of the Cayman Islands and, subject to the other provisions of this Agreement, solicit proxies from such holders to vote in favor of the adoption of this Agreement and the approval of the transactions contemplated hereby and the other proposals presented to the holders of Parent Shares for approval or adoption at the Parent Shareholder Meeting.
(d) Parent shall comply with all applicable provisions of and rules under the Securities Act and Exchange Act, the applicable Nasdaq rules and all applicable Laws of the Cayman Islands and the State of Delaware, in the preparation, filing and distribution of the Registration Statement and the Proxy Statement/Prospectus (or any amendment or supplement thereto), as applicable, the solicitation of proxies under the Proxy Statement/Prospectus and the calling and holding of the Parent Shareholder Meeting. Without limiting the foregoing, Parent shall ensure that each of the Registration Statement, as of the effective date of the Registration Statement, and the Proxy Statement/Prospectus, as of the date on which it is first distributed to the holders of Parent Shares, and as of the date of the Parent Shareholder Meeting, does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading (provided, that Parent shall not be responsible for the accuracy or completeness of any information relating to the Company (or any other information) that is furnished by the Company expressly for inclusion in the Proxy Statement/Prospectus). The Company represents and warrants that the information relating to the Company supplied by the Company for inclusion in the Registration Statement or the Proxy Statement/Prospectus, as applicable, will not as of the effective date of the Registration Statement and the date on which the Proxy Statement/Prospectus (or any amendment or supplement thereto) is first distributed to the holders of Parent Shares or at the time of the Parent Shareholder Meeting does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in light of the circumstances under which they were made, not misleading. If at any time prior to the Second Effective Time, a change in the information relating to Parent or the Company or any other information furnished by Parent, Merger Sub I, Merger Sub II or the Company for inclusion in the Registration Statement or the Proxy Statement/Prospectus, which would make the preceding two sentences incorrect, should be discovered by Parent, Merger Sub I, Merger Sub II or the Company, as applicable, such Party shall promptly notify the other Parties of such change or discovery and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC and, to the extent required by Law, disseminated to the holders of Parent Shares. In connection therewith, Parent, Merger Sub I, Merger Sub II and the Company shall instruct their respective employees, counsel, financial advisors, auditors and other authorized representatives to reasonably cooperate with Parent as relevant if required to achieve the foregoing.
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(e) In accordance with the Parent Articles and applicable securities laws, rules and regulations, including the Cayman Companies Act and rules and regulations of Nasdaq, in the Proxy Statement/Prospectus, Parent shall seek from the holders of Parent Shares the approval the following proposals: (i) the Parent Shareholder Approval; (ii) amendment and restatement of Parent’s organizational documents, in the form of the Parent Certificate of Incorporation and Parent Bylaws (with such changes as may be agreed in writing by Parent and the Company) (as may be subsequently amended by mutual written agreement of Parent and the Company at any time before the effectiveness of the Registration Statement) in connection with the Domestication, including any separate or unbundled proposals as are required to implement the foregoing; (iii) approval of the issuance Parent Common Shares in connection with the Domestication, the Company Mergers under applicable exchange listing rules (the “Issuance Proposal”); (iv) adoption and approval of a new equity incentive plan for Parent in a form satisfactory to Parent and the Company (the “New Incentive Plan”), and which will provide for awards for a number of shares of Parent Common Shares equal to ten percent (10%) of the aggregate number of shares of Parent Common Shares issued and outstanding immediately after the Closing (after giving effect to any redemptions of Parent Ordinary Shares and the transactions contemplated hereby), as further set forth in the New Incentive Plan (the “New Incentive Plan Proposal”); (the proposals set forth in the foregoing clauses (i) through (iv), the “Required Parent Proposals”); (v) approval of Parent’s post-closing Board of Directors (the “Board Proposal”); (vi) approval to obtain any and all other approvals necessary or advisable to effect the consummation of the Domestication and the Company Mergers as reasonably determined by the Company and Parent; and (vii) approval to adjourn the Parent Shareholder Meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes to approve and adopt any of the foregoing, or otherwise if additional time is needed to consummate the transactions contemplated by this Agreement and the Ancillary Agreements (the “Adjournment Proposal”) (the proposals set forth in the foregoing clauses (i) through (vii) collectively, the “Parent Proposals”).
(f) Parent, with the assistance of the Company, shall use its reasonable best efforts to cause the Registration Statement to “clear” comments from the SEC and the Registration Statement to become effective as promptly as reasonably practicable thereafter. As soon as practicable after the Registration Statement is “cleared” by the SEC, Parent shall cause the Proxy Statement/Prospectus, together with all other Offer Documents, to be disseminated to holders of Parent Shares. The Offer Documents shall provide the public shareholders of Parent with the opportunity to redeem all or a portion of their Parent Ordinary Shares at a price per share equal to the pro rata share of the funds in the Trust Account, all in accordance with and as required by the Parent Articles, the Trust Agreement, applicable Law and any applicable rules and regulations of the SEC. In accordance with the Parent Articles, the proceeds held in the Trust Account will first be used for the redemption of the Parent Ordinary Shares held by Parent’s public shareholders who have elected to redeem such shares.
(g) Parent shall call and hold the Parent Shareholder Meeting as promptly as practicable after the effective date of the Registration Statement and, in any event, within thirty (30) days following the date on which the Registration Statement is declared effective by the SEC, for the purpose of seeking the approval of each of the Parent Proposals in accordance with the Parent Articles, and Parent shall consult in good faith with the Company with respect to the date on which such meeting is to be held. Parent shall use reasonable best efforts to solicit from its shareholders proxies in favor of the approval and adoption of the Parent Proposals. Except as otherwise required by applicable Law, including in respect of the duties of the directors of Parent in accordance with the Laws of the Cayman Islands, Parent’s Board of Directors shall recommend that the holders of Parent Shares vote in favor of the Parent Proposals. Without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed), the Parent Proposals shall be the only matters (other than procedural matters) that Parent shall propose to be acted on at the Parent Shareholder Meeting.
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(h) The Company acknowledges that a substantial portion of the Proxy Statement/ Prospectus shall include disclosure regarding the Company and its management, operations and financial condition. Accordingly, the Company agrees to as promptly as reasonably practical provide Parent with such information as shall be reasonably requested by Parent for inclusion in or attachment to the Proxy Statement/ Prospectus, and that such information is accurate in all material respects and complies as to form in all material respects with the requirements of the Exchange Act and the rules and regulations promulgated thereunder. The Company understands that such information shall be included in the Proxy Statement/ Prospectus or responses to comments from the SEC or its staff in connection therewith. In connection with the preparation and filing of the Registration Statement and any amendments thereto, the Company shall reasonably cooperate with Parent and shall make their directors, officers and appropriate senior employees reasonably available to Parent and its counsel in connection with the drafting of such filings and mailings and responding in a timely manner to comments from the SEC.
(i) Except as otherwise required by applicable Law, including in respect of the duties of the directors of Parent in accordance with the Laws of the Cayman Islands, Parent covenants that none of Parent, Parent’s Board of Directors nor any committee thereof shall withdraw or modify, or propose publicly or by formal action of Parent, Parent’s Board of Directors or any committee thereof to withdraw or modify, in any manner adverse to the Company, the Parent Board Recommendation.
(j) Notwithstanding anything else to the contrary in this Agreement or any Ancillary Agreements, Parent may make any public filing with respect to the Company Mergers to the extent required by applicable Law; provided that prior to making any filing that includes information regarding the Company, Parent shall provide a copy of the filing to the Company and permit the Company to make revisions to protect confidential or proprietary information of the Company.
6.6 Trust Account.
(a) Upon satisfaction or waiver of the conditions set forth in ARTICLE IX and provision of notice thereof to the Trustee (which notice Parent shall provide to the Trustee in accordance with the terms of the Trust Agreement), (i) in accordance with and pursuant to the Trust Agreement, Parent (a) shall cause any documents, opinions and notices required to be delivered to the Trustee pursuant to the Trust Agreement to be so delivered and (b) shall use its reasonable best efforts to cause the Trustee to, and the Trustee shall thereupon be obligated to (1) immediately prior to the Domestication, pay as and when due all amounts payable to Parent Ordinary Shares held by the public shareholders (the “Parent Redemption Amount”), (2) at the Closing, pay any unpaid Parent Transaction Expenses and Company Transaction Expenses, and (3) at the Closing, following the payment of unpaid Parent Transaction Expenses and Company Transaction Expenses in subparagraph (2), pay all remaining amounts then available in the Trust Account to Parent or the Surviving Company for immediate use, subject to this Agreement and the Trust Agreement, and (ii) thereafter, the Trust Account shall terminate, except as otherwise provided therein. Parent shall promptly (and in any event within three (3) Business Days) deliver to the Company an updated schedule of Parent Transaction Expenses following any event, circumstance or development that would reasonably be expected to result in a material change exceeding $500,000 in the aggregate to any amount, item or estimate set forth on Schedule 5.26.
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(b) During the Interim Period, Parent shall (i) maintain the Trust Account in accordance with the Trust Agreement and not permit any release or disbursement of funds from the Trust Account except in accordance with the Trust Agreement and the Parent Articles, and (ii) not amend, modify, supplement or waive any provision of the Trust Agreement in any manner materially adverse to the Company without the prior written consent of the Company.
6.7 Obligations of Merger Subs. Parent shall take all action necessary to cause Merger Sub I and Merger Sub II to perform its respective obligations under this Agreement and to consummate the transactions contemplated under this Agreement, upon the terms and subject to the conditions set forth in this Agreement.
6.8 Joinders to Parent Support Agreement. In the event any director or officer of Parent or any Affiliate of the Sponsor (or any Permitted Transferee thereof (as defined in the Parent Support Agreement)) acquires beneficial ownership of any securities of Parent at or prior to the Closing, Parent shall cause such Person(s) to execute a joinder to the Parent Support Agreement.
6.9 PIPE Financing.
(a) Parent shall keep the Company reasonably informed of the status of the PIPE Financing, and, in accordance with this Section 6.9, shall promptly notify the Company upon becoming aware of any breach, default, termination, withdrawal, repudiation or threatened failure to fund by any investor under any PIPE Subscription Agreement, or of any event or circumstance that, with or without notice, lapse of time or both, could give rise to any such breach or default, or if Parent does not expect to receive all or any portion of the PIPE Financing proceeds on the terms as contemplated by the PIPE Subscription Agreements, and shall not, without the Company’s prior written consent, (i) amend, modify, supplement or waive (including by way of a side letter) any provision of, or terminate or abandon its plans with respect to, any PIPE Subscription Agreement, (ii) release any investor from its obligations under any PIPE Subscription Agreement, or (iii) consent to any assignment of any PIPE Subscription Agreement. Parent shall enforce its rights under each PIPE Subscription Agreement and shall not waive any breach or default thereunder without the Company’s prior written consent.
(b) If all or any portion of the PIPE Financing becomes unavailable, Parent shall promptly use its reasonable best efforts to obtain alternative financing in an amount, when added to any portion of the PIPE Financing that remains available, sufficient to satisfy the PIPE Investment Amount and the Minimum Cash Condition, on terms mutually agreed by the Company and Parent (such portion of the PIPE Financing, the “Alternative PIPE Financing”). The cooperation and coordination obligations set forth in this Section 6.9 shall apply equally to the arrangement of any such Alternative PIPE Financing.
6.10 Repurchase . The Parties hereto acknowledge and agree that, as of the Business Day immediately following the Second Effective Time, Parent shall repurchase from each Selling Company Stockholder its Pro Rata Share of a number of Parent Common Shares at a purchase price of ten dollars ($10.00) per share equal to twenty (20%) percent of the PIPE Investment Amount received by Parent (the “Repurchase”). For the avoidance of doubt and notwithstanding anything to the contrary in this Agreement or any Ancillary Agreement, any failure or inability to consummate the Repurchase shall not delay or prevent the Closing, constitute a failure of any condition to the Closing set forth in Article IX or otherwise affect the obligations of the Parties to consummate the transactions contemplated by this Agreement.
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ARTICLE VII
COVENANTS OF THE COMPANY
7.1 Reporting; Compliance with Laws; No Insider Trading. During the Interim Period:
(a) Each member of the Company Group shall duly observe and conform in all material respects to all applicable Law, including the Exchange Act, and Orders.
(b) The Company shall not, and it shall direct its Representatives to not, directly or indirectly, (i) purchase or sell (including entering into any hedge transaction with respect to) any Parent Shares, Parent Units or Parent Warrants, except in compliance with all applicable securities Laws, including Regulation M under the Exchange Act; (ii) use or disclose or permit any other Person to use or disclose any information that Parent or its Affiliates has made or makes available to the Company and its Representatives in violation of the Exchange Act, the Securities Act or any other applicable securities Law; or (iii) disclose to any third party any non-public information about the Company, Parent, the Domestication, the Company Mergers or the other transactions contemplated hereby or by any Ancillary Agreement.
7.2 Company’s Shareholders Approval.
(a) As promptly as reasonably practicable after the effective date of the Registration Statement, and in any event within ten (10) Business Days following such date (the “Company Stockholder Written Consent Deadline”), the Company shall (i) cause to be mailed to each Company Stockholder a notice, which shall include copies of this Agreement, the Registration Statement, the Company Stockholder Written Consent, and, as applicable, any Ancillary Agreement or letter of transmittal to be executed or delivered by such Company Stockholder, stating that the Company’s Board of Directors recommends that each Company Stockholder approve the Company Mergers and the Repurchase by execution of the Company Stockholder Written Consent and (ii) take all actions necessary to obtain and deliver to Parent a true and correct copy of a written consent (in form and substance reasonably acceptable to Parent) evidencing the Company Stockholder Approval that is duly executed by the Company Stockholders that hold at least the requisite number and class of issued and outstanding shares of Company Capital Stock required to obtain the Company Stockholder Approval (the “Company Stockholder Written Consent”).
(b) The Company’s Board of Directors shall recommend that the Company Stockholders vote in favor of this Agreement, the Ancillary Agreements to which the Company is or will be a party, the transactions contemplated hereby and thereby (including, for the avoidance of doubt, the Repurchase) and other related matters, and neither the Company’s Board of Directors, nor any committee thereof, shall withhold, withdraw, amend, modify, change or propose or resolve to withhold, withdraw, amend, modify or change, in each case in a manner adverse to Parent, the recommendation of the Company’s Board of Directors.
7.3 Additional Financial Information. The Company shall use its commercially reasonable efforts to provide Parent with the audited financial statements of the Company and its Subsidiaries for the twelve month periods ended December 31, 2025 and 2024 consisting of the audited consolidated balance sheets as of such dates, the audited consolidated income statements for the twelve month period ended on such dates, and the audited consolidated cash flow statements for the twelve month period ended on such dates, together with the auditors report thereon (the “Year End Financials”) as soon as practicable after the date of this Agreement, but in any event no later than 45 days following the date of this Agreement; provided, that Parent may, with the Company’s consent (such consent not to be unreasonably withheld), extend this period by up to an additional 15 days by delivering written notice to the Company. Subsequent to the delivery of the Year End Financials, the Company’s consolidated interim financial information for each quarterly period thereafter shall be delivered to Parent no later than 45 calendar days following the end of each quarterly period (the “Required Financial Statements”). All of the financial statements to be delivered pursuant to this Section 7.3, shall be prepared under U.S. GAAP in accordance with requirements of the PCAOB for public companies. The Required Financial Statements shall be prepared from, and reflect in all material respects, the Books and Records of the Company Group, and shall fairly present, in all material respects, the consolidated financial position and results of operations of the Company Group as of the dates thereof and for the periods indicated, in accordance with U.S. GAAP, except as otherwise indicated in such statements and, in the case of unaudited financial statements, subject to normal year-end audit adjustments and the absence of footnotes. The Company shall use commercially reasonable efforts to assist Parent and its Representatives, upon advance written notice, during normal business hours and in a manner that does not unreasonably interfere with the normal operations of the Company Group, in preparing any other financial information or statements, including customary pro forma financial statements, that are reasonably required to be included in the Registration Statement, the Proxy Statement/Prospectus or any other filings to be made by Parent with the SEC in connection with the transactions contemplated by this Agreement and the Ancillary Agreements.
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7.4 Financial Projections.
(a) The financial projections provided by the Company and included in the “Astro Digital PIPE Presentation” dated September 22, 2026, which was provided to prospective investors in connection with the PIPE Financing, are forward-looking statements that are inherently uncertain and subject to significant business, economic, regulatory, and competitive risks and uncertainties that could cause actual results to differ materially from those projected. Such projections were prepared by Company management in good faith based on information available to the Company as of the date of the Investor Presentation and reflect assumptions that Company management believed, as of such date, to be reasonable in light of the information then available, but which may not prove to be correct. No representation or warranty, express or implied, is made by the Company, its Affiliates, or any of their respective directors, officers, employees, advisors, or other representatives as to the accuracy, completeness, or achievability of such projections.
(b) During the Interim Period, the Company shall promptly notify Parent in writing in the event that any individual listed on Schedule 1.1(c) has actual knowledge of any material change to, or material deviation of actual results from, such financial projections and, upon Parent’s reasonable request, shall use commercially reasonable efforts to provide updated projections reflecting such change in a form and at a level of detail substantially similar to the Investor Presentation, together with a reasonably detailed explanation of the basis for any revisions. For the avoidance of doubt, any such updated projections shall constitute forward-looking statements subject to the same representations, warranties, limitations and disclaimers set forth in Section 7.4(a), and the Company shall have no obligation to update or supplement any projection, forecast, or forward-looking statement, except as expressly set forth in this Section 7.4(b).
(c) Nothing in this Agreement shall (i) constitute a representation or warranty regarding the accuracy, completeness, or achievability of any projection, forecast, or forward-looking statement contained in the Investor Presentation or any updated projections delivered pursuant to this Section 7.4, or (ii) cause any failure to achieve the results set forth in such financial projections to constitute, in and of itself, a breach of this Agreement, (iii) give rise to any right of any Person (including any PIPE Investor) to claim that it relied on any such projection, forecast, or forward-looking statement in connection with its investment decision, or (iv) limit or modify the disclaimers, risk factors, or cautionary statements set forth in any of the Offer Documents or the Investor Presentation. This Section 7.4 shall not confer any rights or remedies upon any Person other than the Parties to this Agreement.
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ARTICLE VIII
COVENANTS OF ALL PARTIES HERETO
8.1 Reasonable Best Efforts; Further Assurances.
(a) Subject to the terms and conditions of this Agreement, Parent and the Company shall, and the Company shall cause its Subsidiaries to, use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable Laws, or as reasonably requested by the other Parties, to consummate and implement expeditiously each of the transactions contemplated by this Agreement, including using its reasonable best efforts to (i) obtain all necessary actions, nonactions, waivers, consents, approvals and other authorizations from all applicable Authorities prior to the First Effective Time; (ii) avoid an Action by any Authority, and (iii) execute and deliver any additional instruments reasonably necessary to consummate the transactions contemplated by this Agreement. The Parties shall execute and deliver such other documents, certificates, agreements and other writings and take such other actions as may be reasonably necessary in order to consummate or implement expeditiously each of the transactions contemplated by this Agreement.
(b) Subject to applicable Law, each of the Company and Parent agrees to (i) reasonably cooperate and consult with the other regarding obtaining and making all notifications and filings with Authorities, (ii) furnish to the other such information and assistance as the other may reasonably request in connection with its preparation of any notifications or filings, (iii) keep the other reasonably apprised of the status of matters relating to the completion of the transactions contemplated by this Agreement, including promptly furnishing the other with copies of notices and other communications received by such party from, or given by such party to, any third party or any Authority with respect to such transactions, (iv) permit the other party to review and incorporate the other party’s reasonable comments in any communication to be given by it to any Authority with respect to any filings required to be made with, or action or nonactions, waivers, expirations or terminations of waiting periods, clearances, consents or orders required to be obtained from, such Authority in connection with execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement and (v) to the extent reasonably practicable, consult with the other in advance of and not participate in any meeting or discussion relating to the transactions contemplated by this Agreement, either in person or by telephone, with any Authority in connection with the proposed transactions unless it gives the other party the opportunity to attend and observe; provided, however, that, in each of clauses (iii) and (iv) above, that materials may be redacted (A) to remove references concerning the valuation of such party and its Affiliates, (B) as necessary to comply with contractual arrangements or applicable Laws, and (C) as necessary to address reasonable attorney-client or other privilege or confidentiality concerns.
(c) In furtherance of, and without limiting the Parties’ obligations pursuant to, Section 8.1(a), the Company shall use commercially reasonable efforts to obtain, prior to the Closing, written consents, in form and substance reasonably acceptable to Parent, from each of the counterparties to the agreements set forth on Schedule 4.8; provided, that nothing herein shall require any Party or any of its respective Affiliates to expend money, commence any Action or offer or grant any accommodation, financial or otherwise, to any third party in connection with obtaining any consent, approval or waiver, except as otherwise expressly provided in this Agreement.
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(d) During the Interim Period, Parent, on the one hand, and the Company, on the other hand, shall each notify the other in writing promptly after learning of any shareholder demands or other shareholder Action (including derivative claims) relating to this Agreement, any of the Ancillary Agreements or any matters relating thereto commenced or threatened in writing against Parent, any of the Parent Parties or any of its or their respective Representatives in their capacity as a representative of a Parent Party or against the Company Group (collectively, the “Transaction Litigation”). Parent shall control the negotiation, defense and settlement of any such Transaction Litigation brought against Parent, Merger Sub I, Merger Sub II or members of the boards of directors or managers of Parent, Merger Sub I or Merger Sub II, and the Company shall control the negotiation, defense and settlement of any such Transaction Litigation brought against any member of the Company Group or the members of its Board of Directors; provided, however, that in no event shall the Company or Parent settle, compromise or come to any arrangement with respect to any Transaction Litigation, or agree to do the same, without the prior written consent of the other party (not to be unreasonably withheld, conditioned or delayed); provided, that it shall be deemed to be reasonable for Parent (if the Company is controlling the Transaction Litigation) or the Company (if Parent is controlling the Transaction Litigation) to withhold, condition or delay its consent if any such settlement or compromise (A) does not provide for a legally binding, full, unconditional and irrevocable release of each Parent Party (if the Company is controlling the Transaction Litigation) or the Company Group (if Parent is controlling the Transaction Litigation) and its respective Representative that is the subject of such Transaction Litigation, (B) provides for any non-monetary, injunctive, equitable or similar relief against any Parent Party (if the Company is controlling the Transaction Litigation) or any member of the Company Group (if Parent is controlling the Transaction Litigation) or (C) contains an admission of wrongdoing or liability by a Parent Party (if the Company is controlling the Transaction Litigation) or a member of the Company Group (if Parent is controlling the Transaction Litigation) and its respective Representative that is the subject of such Transaction Litigation. Parent and the Company shall each (i) keep the other reasonably informed regarding any Transaction Litigation, (ii) give the other the opportunity to, at its own cost and expense, participate in the defense, settlement and compromise of any such Transaction Litigation and reasonably cooperate with the other in connection with the defense, settlement and compromise of any such Transaction Litigation, (iii) consider in good faith the other’s advice with respect to any such Transaction Litigation and (iv) reasonably cooperate with each other.
8.2 Compliance with SPAC Agreements. Parent shall (a) comply with the Trust Agreement, the Parent Warrant Agreement, the Underwriting Agreement, dated as of February 11, 2026, by and between Parent and Clear Street LLC, as representative of the underwriters thereto and the letter agreement, dated as of February 11, 2026, by and among Parent, the Sponsor and each of the officers and directors of Parent named therein (the “Letter Agreement”), in each case, as has been or may be amended from time to time, and (b) enforce the terms of the Letter Agreement and all of the rights, restrictions, waivers and obligations of the parties thereto in accordance with its terms and shall not amend, modify or waive any provision of the Letter Agreement without the prior written consent of the Company (not to be unreasonably withheld, delayed or conditioned).
8.3 Confidentiality. Except as necessary to complete the Registration Statement, the other Offer Documents or any Other Filings, the Company, on the one hand, and Parent, Merger Sub I and Merger Sub II, on the other hand, shall comply with the Confidentiality Agreement.
8.4 Directors’ and Officers’ Indemnification and Liability Insurance.
(a) All rights to indemnification for acts or omissions occurring through the Closing Date now existing in favor of the current directors and officers of the Company or the Parent Parties and Persons who served as a director, officer, member, trustee or fiduciary of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise at the request of the Company or the Parent Parties, as provided in their respective organizational documents or in any indemnification agreements shall survive the Second Company Merger and shall continue in full force and effect in accordance with their terms. For a period of six years after the Second Effective Time, Parent shall cause the organizational documents of Parent, its Subsidiaries, and the Surviving Company to contain provisions no less favorable with respect to exculpation and indemnification of and advancement of expenses than are set forth as of the date of this Agreement in the organizational documents of, with respect to Parent, Parent, and with respect to the Surviving Company, the Company, as applicable, to the extent permitted by applicable Law.
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(b) Prior to the Closing, Parent and the Company shall reasonably cooperate in order to obtain directors’ and officers’ liability insurance for Parent and the Company that shall be effective as of Closing and will cover those Persons who will be the directors and officers of Parent and its Subsidiaries (including the Surviving Company after the Second Effective Time) at and after the Closing on terms not less favorable than the better of (x) the terms of the current directors’ and officers’ liability insurance in place for the Company’s directors and officers and (y) the terms of a typical directors’ and officers’ liability insurance policy for a company whose equity is listed on Nasdaq or an Approved Exchange, as applicable, which policy has a scope and amount of coverage that is reasonably appropriate for a company of similar characteristics (including the line of business and revenues) as the Company.
(c) The provisions of this Section 8.4 are intended to be for the benefit of, and shall be enforceable by, each Person who will have been a director or officer of the Company or Parent for all periods ending on or before the Closing Date and may not be changed with respect to any officer or director without his or her written consent.
(d) Prior to the First Effective Time, Parent shall obtain and fully pay the premium for a six year prepaid “tail” policy for the extension of the directors’ and officers’ liability coverage of Parent’s existing directors’ and officers’ liability insurance policies, for claims reporting or discovery period of six years from and after the Second Effective Time, on terms and conditions providing coverage retentions, limits and other material terms (other than premiums payable) substantially equivalent to the current policies of directors’ and officers’ liability insurance maintained by Parent with respect to matters arising on or before the First Effective Time, covering without limitation the transactions contemplated hereby (the “Parent Tail Policy”).
(e) Prior to the First Effective Time, the Company shall obtain and fully pay the premium for a six year prepaid “tail” policy for the extension of the directors’ and officers’ liability coverage of the Company’s existing directors’ and officers’ liability insurance policies, for claims reporting or discovery period of six years from and after the Second Effective Time, on terms and conditions providing coverage retentions, limits and other material terms (other than premiums payable) substantially equivalent to the current policies of directors’ and officers’ liability insurance maintained by the Company with respect to matters arising on or before the First Effective Time, covering without limitation the transactions contemplated hereby (the “Company Tail Policy”).
(f) If Parent, the Surviving Company or any of their respective successors or assigns consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger, or transfers all or substantially all of its properties and assets to any Person, then Parent shall make proper provision so that the successors and assigns of Parent or the Surviving Company, as applicable, assume the obligations set forth in this Section 8.4.
8.5 Parent Public Filings; Nasdaq. During the Interim Period, Parent will keep current and timely file all of its public filings with the SEC and otherwise comply in all material respects with applicable securities Laws, and shall use its reasonable best efforts prior to the Closing to maintain the listing of the Parent Ordinary Shares, the Parent Units and the Parent Warrants on Nasdaq. During the Interim Period, Parent shall use its reasonable best efforts to cause (a) Parent’s initial listing application with Nasdaq or an Approved Exchange, to be agreed mutually by Parent and the Company, in connection with the transactions contemplated by this Agreement to have been approved; (b) all applicable initial and continuing listing requirements of Nasdaq or an Approved Exchange, as applicable, to be satisfied; and (c) the Parent Common Shares, including the shares comprising the Aggregate Merger Consideration, and the Parent Warrants to be approved for listing on Nasdaq or an Approved Exchange, as applicable, subject to official notice of issuance, in each case, as promptly as reasonably practicable after the date of this Agreement and in any event prior to the First Effective Time.
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8.6 Certain Tax Matters.
(a) The Company and Parent shall (and shall cause its respective Subsidiaries to) cooperate fully, as and to the extent reasonably requested by another Party hereto, in connection with the filing of relevant Tax Returns, and any audit or Tax proceeding. Such cooperation shall include the retention and (upon the other Party’s request) the provision of records and information reasonably relevant to any Tax proceeding or audit, making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.
(b) The Parties shall ensure that all Transfer Taxes incurred in connection with this Agreement, or any of the Ancillary Agreements, are timely paid in full to the applicable Taxing Authority by the party legally responsible for such Transfer Taxes, and such party shall file, or cause to be filed, all necessary Tax Returns with respect to all such Transfer Taxes.
(c) The Parties will prepare and file all Tax Returns consistent with the Intended Tax Treatment and will not take any inconsistent position on any Tax Return or during the course of any audit, litigation or proceeding with respect to Taxes, except as otherwise required by a determination within the meaning of Section 1313(a) of the Code. Each of the Parties agrees to notify all other Parties of any challenge to the Intended Tax Treatment by any Taxing Authority. Notwithstanding anything to the contrary herein, if, after the date hereof the Company, in its sole discretion, determines that the Company Mergers are not reasonably expected to qualify for the Mergers Intended Tax Treatment, the Parties shall use commercially reasonable efforts to restructure the transactions contemplated hereby (such restructured transactions, the “Alternative Transaction Structure”) in a manner that is reasonably expected to cause the Alternative Transaction Structure to so qualify.
(d) No Party shall (and no Party shall permit or cause its respective Affiliates to) take or cause to be taken any action, or fail to take or cause to fail to be taken any action or failure to act would reasonably be expected to prevent or impede (i) the Company Mergers from so qualifying for the Mergers Intended Tax Treatment or (ii) the Domestication from so qualifying for the Domestication Intended Tax Treatment.
(e) In the event the SEC requests or requires a tax opinion regarding whether (i) the Domestication satisfies the Domestication Intended Tax Treatment, Parent will use its commercially reasonable best efforts to cause Loeb (or other tax counsel to Parent) to deliver such tax opinion to Parent, subject to customary assumptions and limitations, or (ii) the Company Mergers satisfy the Mergers Intended Tax Treatment, the Company shall use its commercially reasonable best efforts to cause Broadfield (or other tax counsel to the Company) to deliver such tax opinion to the Company. Each party shall use reasonable best efforts to execute and deliver customary tax representation letters to the applicable tax advisor in form and substance reasonably satisfactory to such advisor. Notwithstanding anything to the contrary in this Agreement, (i) Loeb (or other tax counsel to Parent) shall not be required to provide any opinion to any party regarding the Mergers Intended Tax Treatment or the tax consequences of the transactions contemplated by this Agreement to the Company or its shareholders and (ii) Broadfield shall not be required to provide any opinion to any party regarding the Domestication Intended Tax Treatment or the tax consequences of the transactions contemplated by this Agreement to Parent or its shareholders.
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8.7 Section 16 Matters. Prior to the First Effective Time, each of the Company and Parent shall take all such steps as may be required (to the extent permitted under applicable Law) to cause any dispositions of shares of the Company Capital Stock or acquisitions of Parent Common Shares (including, in each case, securities deliverable upon exercise, vesting or settlement of any derivative securities) resulting from the transactions contemplated hereby by each individual who may become subject to the reporting requirements of Section 16 of the Exchange Act to the extent necessary for such issuance to be an exempt acquisition pursuant to Rule 16b-3 promulgated under the Exchange Act.
8.8 Executive Employment Agreements. Simultaneously with the entry into this Agreement, the Key Executives have entered into employment agreements with Parent providing for the continued employment of such Key Executives with Parent and the Company Group effective as of the Closing in the form previously presented to Parent (each, an “Executive Employment Agreement” and, collectively, the “Executive Employment Agreements”). Each Executive Employment Agreement is a legal, valid, and binding agreement and enforceable in accordance with its terms, except as may be limited by the Enforceability Exceptions. During the Interim Period, Parent shall not amend, waive, modify or terminate any of the Executive Employment Agreements, and the Parties shall take all actions necessary such that the Executive Employment Agreements are in full force and effect as of the Closing.
ARTICLE IX
CONDITIONS TO CLOSING
9.1 Condition to the Obligations of the Parties. The obligations of all of the Parties to consummate the Closing are subject to the satisfaction or written waiver (where permissible) by the Parties of all the following conditions:
(a) No provisions of any applicable Law and no Order shall be in effect legally restraining, prohibiting or imposing any condition on the consummation of the transactions contemplated hereby, including the Domestication and the Company Mergers.
(b) Each consent, approval or authorization of any Authority required of Parent, its Subsidiaries, the Company or the Company Group to consummate the Domestication and the Company Mergers set forth on Schedule 9.1(b) shall have been obtained and shall be in full force and effect.
(c) No Authority shall have issued an Order or enacted a Law, having the effect of legally restraining, prohibiting or otherwise making illegal the consummation of the transactions contemplated hereby, including the Domestication and the Company Mergers, which Order or Law is final and non-appealable.
(d) The Company Stockholder Approval shall have been obtained and remain in full force and effect.
(e) Each of the Required Parent Proposals shall have been approved at the Parent Shareholder Meeting and remain in full force and effect.
(f) The Parent Common Shares to be issued pursuant to this Agreement shall be conditionally approved to be listed on Nasdaq or an Approved Exchange permitted by this Agreement and, immediately following the Second Effective Time, shall otherwise satisfy the applicable listing requirements of Nasdaq or such Approved Exchange (including with respect to the minimum number of round lot holders).
(g) The Registration Statement shall have become effective in accordance with the provisions of the Securities Act, no stop order suspending the effectiveness of the Registration Statement shall have been issued by the SEC that remains in effect and no Proceeding seeking such a stop order shall have been threatened or initiated by the SEC and not withdrawn.
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9.2 Conditions to Obligations of Parent and Merger Subs. The obligations of Parent, Merger Sub I and Merger Sub II to consummate the Closing are subject to the satisfaction, or the waiver in Parent’s sole and absolute discretion, of all the following further conditions:
(a) The Company shall have duly performed or complied with, in all material respects, the covenants and agreements required to be performed or complied with by the Company under this Agreement and each of the Ancillary Agreements to which it is a party (in each case, without giving effect to any materiality or similar qualifiers contained therein) at or prior to the Closing.
(b) The representations and warranties of the Company contained in this Agreement (disregarding all qualifications contained therein relating to materiality or Material Adverse Effect), other than the Company Fundamental Representations, shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date, as if made at and as of such date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct at and as of such earlier date) except, in each case, for any failure of such representations and warranties (disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect) to be so true and correct, taken as a whole, that would not have a Material Adverse Effect in respect of the Company.
(c) The Company Fundamental Representations (disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect) shall be true and correct in all but de minimis respects at and as of the date of this Agreement and as of the Closing Date, as if made as of such date (except to the extent that any such representation and warranty is expressly made as of a specific date, in which case such representation and warranty shall be true and correct in all but de minimis respects at and as of such specific date).
(d) Since the date of this Agreement, there shall not have occurred a Material Adverse Effect in respect of the Company that is continuing and uncured.
(e) Parent shall have received a certificate, dated as of the Closing Date, signed by the Chief Executive Officer of the Company certifying the accuracy of the provisions of the foregoing clauses (a), (b), (c) and (d) of this Section 9.2.
(f) Parent shall have received a certificate, dated as of the Closing Date, signed by the Secretary of the Company attaching true, correct and complete copies of (i) the Company Charter, certified as of a recent date by the Secretary of State of the State of Delaware; (ii) the Company Bylaws; (iii) copies of resolutions duly adopted by the Board of Directors of the Company authorizing this Agreement, the Ancillary Agreements to which the Company is a party and the transactions contemplated hereby and thereby and the Company Stockholder Written Consent; and (iv) a certificate of good standing or available equivalent of the Company, certified as of a recent date by the Secretary of State of the State of Delaware.
(g) Each of the Company and certain Company Stockholders, as applicable, shall have executed and delivered to Parent a copy of each Ancillary Agreement to which the Company or such Company Stockholder, as applicable, is a party.
(h) The Company shall have delivered to Parent a duly executed certificate conforming to the requirements of Treasury Regulations Sections 1.897-2(g), (h)(1)(i) and 1.1445-2(c)(3)(i) certifying that no interest in the Company is, or has been during the relevant period specified in Section 897(c)(1)(A)(ii) of the Code, a “U.S. real property interest” within the meaning of Section 897(c) of the Code, and a notice to be delivered to the IRS as required under Treasury Regulations Section 1.897-2(h)(2) together with written authorization for Parent to deliver such notice to the IRS on behalf of the Company following the Closing, each dated no more than 30 days prior to the Closing Date and in form and substance as reasonably agreed upon by Parent and the Company.
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(i) The Company shall have delivered to Parent a resignation from the Company of each non-continuing director of the Company as designated by the Company in writing prior to the Closing, effective as of the Closing Date.
(j) The Company shall have delivered to Parent written consents, in form and substance reasonably acceptable to Parent, from each of the counterparties to the agreements set forth on Schedule 9.2(j).
9.3 Conditions to Obligations of the Company. The obligations of the Company to consummate the Closing are subject to the satisfaction, or the waiver in the Company’s sole and absolute discretion, of all of the following further conditions:
(a) Each of Parent, Merger Sub I and Merger Sub II shall have duly performed or complied with, in all material respects, the covenants and agreements required to be performed or complied with by Parent, Merger Sub I or Merger Sub II, as applicable, under this Agreement and each of the Ancillary Agreements to which Parent, Merger Sub I or Merger Sub II, as applicable, is a party (in each case, without giving effect to any materiality or similar qualifiers contained therein) at or prior to the Closing Date.
(b) The representations and warranties of Parent, Merger Sub I and Merger Sub II contained in this Agreement (disregarding all qualifications contained therein relating to materiality or Material Adverse Effect), other than the Parent Fundamental Representations, shall be true and correct as of the date of this Agreement and as of the Closing Date, as if made at and as of such date (except to the extent that any such representation and warranty is made as of an earlier date, in which case such representation and warranty shall be true and correct at and as of such earlier date), except, in each case, for any failure of such representations and warranties (disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect) to be so true and correct that would not in the aggregate have or reasonably be expected to have a Material Adverse Effect in respect of Parent, Merger Sub I or Merger Sub II.
(c) The Parent Fundamental Representations shall be true and correct in all but de minimis respects at and as of the date of this Agreement and as of the Closing Date, as if made as of such date (except to the extent that any such representation and warranty is expressly made as of a specific date, in which case such representation and warranty shall be true and correct in all but de minimis respects at and as of such specific date).
(d) Since the date of this Agreement, there shall not have occurred a Material Adverse Effect in respect of Parent that is continuing and uncured.
(e) The Company shall have received a certificate, dated as of the Closing Date, signed by the Chief Executive Officer of Parent certifying the accuracy of the provisions of the foregoing clauses (a), (b), (c) and (d) of this Section 9.3.
(f) The Company shall have received evidence that (i) the Parent Certificate of Incorporation (in the form attached hereto as Exhibit A or with such changes as may be approved by the Company and Parent in writing) shall have been filed with, and certified by, the Secretary of State of the State of Delaware and (ii) the Parent Bylaws (in the form attached hereto as Exhibit B or with such changes as may be approved by the Company and Parent in writing) shall have been duly adopted by Parent and, in each case, are in full force and effect as of the Closing.
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(g) The Company shall have received a certificate, dated as of the Closing Date, signed by the Secretary of Parent attaching true, correct and complete copies of resolutions duly adopted by the Board of Directors of Parent authorizing this Agreement, the Ancillary Agreements to which Parent is a party and the transactions contemplated hereby and thereby and the Parent Proposals.
(h) The Company shall have received a certificate, dated as of the Closing Date, signed by the Secretary of Merger Sub I attaching true, correct and complete copies of (i) copies of resolutions duly adopted by the Board of Directors and sole stockholder of Merger Sub I authorizing this Agreement, the Ancillary Agreements to which Merger Sub I is a party and the transactions contemplated hereby and thereby and (ii) a certificate of good standing or available equivalent of Merger Sub I, certified as of a recent date by the Secretary of State of the State of Delaware.
(i) The Company shall have received a certificate, dated as of the Closing Date, signed by a manager of Merger Sub II attaching true, correct and complete copies of (i) copies of resolutions duly adopted by the managers and sole member of Merger Sub II authorizing this Agreement, the Ancillary Agreements to which Merger Sub II is a party and the transactions contemplated hereby and thereby and (ii) a certificate of good standing or available equivalent of Merger Sub II, certified as of a recent date by the Secretary of State of the State of Delaware.
(j) Each of Parent, Sponsor or other shareholder of Parent, as applicable, shall have executed and delivered to the Company a copy of each Ancillary Agreement to which Parent, Sponsor or such other shareholder of Parent, as applicable, is a party.
(k) The members of the post-Closing Parent Board of Directors shall have been elected or appointed to take effect as of the Second Effective Time as set forth in Section 2.9.
(l) The Domestication shall have occurred in accordance with Section 2.1 of this Agreement.
(m) The PIPE Financing shall (i) have been consummated as of immediately prior to the Closing in accordance with the PIPE Subscription Agreements, resulting in gross proceeds in an amount not less than the PIPE Investment Amount and (ii) there shall not have occurred any amendment or modification to the PIPE Subscription Agreements (other than in accordance with its terms), other than as consented to in writing by the Company after the date hereof.
(n) The amount of Parent Closing Cash at the Closing shall equal or exceed $30,000,000 (the “Minimum Cash Condition”).
9.4 Frustration of Closing Conditions. Notwithstanding anything contained herein to the contrary, no Party may rely on the failure of any condition set forth in this ARTICLE IX to be satisfied if such failure was primarily and directly caused by the failure of such Party or its Affiliates (or with respect to the Company, any member of the Company Group’s) failure to comply with or perform any of its covenants or obligations set forth in this Agreement or any of the Ancillary Agreements to which it is a party, as applicable.
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ARTICLE X
TERMINATION
10.1 Termination Without Default.
(a) In the event that (i) the Closing of the transactions contemplated hereunder has not occurred on or before April 26, 2027 (the “Outside Closing Date”); and (ii) the material breach or violation of any representation, warranty, covenant or obligation under this Agreement by the Party (i.e., Parent, Merger Sub I or Merger Sub II, on one hand, or the Company, on the other hand) seeking to terminate this Agreement was not the proximate and primary cause of the failure of the Closing to occur on or before the Outside Closing Date, then Parent or the Company, as applicable, shall have the right, at its sole option, to terminate this Agreement without liability to the other Party; provided, that the Outside Closing Date shall be automatically extended for an additional two months to the extent there is any delay to the applicable waiting or review periods, or any extension thereof, by any Authority, Nasdaq or any Approved Exchange (including any specific request from any Authority, Nasdaq or any Approved Exchange, as applicable, to delay filings or for additional time to review the transactions contemplated hereby) that would, or would reasonably be expected to, have the effect of delaying, impeding, hindering or preventing the review of the transactions contemplated hereby and/or issuance of clearance or approval from such Authority, Nasdaq or such Approved Exchange to the extent required to satisfy the condition set forth in Section 9.1(a).
(b) In the event an Authority shall have issued an Order or enacted a Law, having the effect of prohibiting the Domestication or the Company Mergers or making the Domestication or the Company Mergers illegal, which Order or Law is final and non-appealable, Parent or the Company shall have the right, at its sole option, to terminate this Agreement without liability to the other Party; provided, however, that the right to terminate this Agreement pursuant to this Section shall not be available to the Company or Parent if the failure by such Party or its Affiliates to comply with any provision of this Agreement has been a substantial cause of, or substantially resulted in, such action by such Authority.
(c) This Agreement may be terminated at any time by mutual written consent of the Company and Parent duly authorized by each of their respective boards of directors.
(d) Parent or the Company may terminate this Agreement by giving written notice to the other Party if the Parent Shareholder Meeting (including any adjournment or postponement thereof) is held and the Required Parent Proposals shall not have been approved by the requisite vote of the holders of Parent Shares in accordance with the Parent Articles and applicable Law.
10.2 Termination Upon Default.
(a) Parent may terminate this Agreement by giving written notice to the Company, without prejudice to any rights or obligations that the Parent Parties may have: (i) at any time prior to the Closing if the Company shall have breached any representation, warranty, agreement or covenant contained in this Agreement or the Ancillary Agreements to which it is a party, as applicable, to be performed on or prior to the Closing, which has rendered or would reasonably be expected to render the satisfaction of any of the conditions set forth in Section 9.2(a), 9.2(b) or 9.2(c) impossible (a “Terminating Company Breach”); except that, if such Terminating Company Breach is curable by the Company through the exercise of its reasonable best efforts, then, for a period of up to 30 days after receipt by the Company of notice from Parent of such breach, but only as long as the Company continues to use its reasonable best efforts to cure such Terminating Company Breach (the “Company Cure Period”), such termination shall not be effective, and such termination shall become effective only if the Terminating Company Breach is not cured within the Company Cure Period; provided, however, that in the case of a breach by the Company of Section 7.2 or the first sentence of each of Sections 2.7 or 8.1(a), the 30-day period referred to above shall be reduced to 10 days; or (ii) at any time after the Company Stockholder Written Consent Deadline if the Company has not delivered the Company Stockholder Approval to Parent (provided, that upon the Company delivering the Company Stockholder Approval to Parent, Parent shall no longer have any right to terminate this Agreement under this clause (ii)).
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(b) The Company may terminate this Agreement by giving written notice to Parent, without prejudice to any rights or obligations the Company may have, if at any time prior to the Closing, any of the Parent Parties shall have breached any of its covenants, agreements, representations, and warranties contained herein to be performed on or prior to the Closing, which has rendered or reasonably would render the satisfaction of any of the conditions set forth in Section 9.3(a), 9.3(b) or 9.3(c) impossible (a “Terminating Parent Breach”); except that, if such Terminating Parent Breach is curable by Parent through the exercise of its reasonable best efforts, then, for a period of up to 30 days after receipt by Parent of notice from the Company of such breach, but only as long as Parent continues to use its reasonable best efforts to cure such Terminating Parent Breach (the “Parent Cure Period”), such termination shall not be effective, and such termination shall become effective only if the Terminating Parent Breach is not cured within the Parent Cure Period; provided, however, that in the case of a breach by the Parent Parties of Section 6.5(i) or the first sentence of each of Sections 2.7 or 8.1(a), the 30-day period referred to above shall be reduced to 10 days.
10.3 Effect of Termination. If this Agreement is terminated pursuant to this ARTICLE X, this Agreement shall become void and of no further force or effect without liability of any Party and its Non-Party Affiliates to the other Parties hereto. The provisions of Section 8.3, this Section 10.3, ARTICLE XII and ARTICLE I (to the extent related to any of the foregoing), and the Confidentiality Agreement, shall survive any termination hereof pursuant to this ARTICLE X. Notwithstanding the foregoing, the termination of this Agreement pursuant to this ARTICLE X shall not affect any liability on the part of any Party for (i) a willful and material breach of any covenant or agreement set forth in this Agreement prior to such termination or (ii) Fraud.
ARTICLE XI
NO SURVIVAL
11.1 No Survival of Representations and Warranties. None of the representations, warranties, covenants or agreements in this Agreement or any Ancillary Agreement or in any certificate, statement or instrument delivered pursuant to this Agreement or the Ancillary Agreements, including any rights arising out of any breach of such representations, warranties, covenants, obligations, agreements and other provisions, shall survive the Closing (and there shall be no liability after the Closing in respect thereof), except for (a) any covenant or agreement contained in this Agreement that by its terms is required to be performed in whole or in part after the Closing and then only to the extent so required to be performed after the Closing, and (b) ARTICLE XII (but in the case of Section 12.17, solely as applied to covenants and agreements that by their terms apply or are to be performed in whole or in part after the Closing and then only with respect to any breaches occurring after the Closing). All covenants and agreements which are to be performed after the Closing shall survive with respect to such performance from and after the Closing for the applicable time period specified therein and shall terminate once such applicable covenant and agreement is fully performed. The Confidentiality Agreement shall (i) survive any termination of this Agreement in accordance with its terms and (ii) otherwise terminate as of the Closing.
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ARTICLE XII
MISCELLANEOUS
12.1 Notices. Any notice hereunder shall be sent in writing, addressed as specified below, and shall be deemed given: (a) if by hand, electronic mail, or nationally recognized overnight courier service, by 5:00 PM Eastern Time on a Business Day, addressee’s day and time, on the date of delivery, and if delivered after 5:00 PM Eastern Time, on the first Business Day after such delivery; (b) if by email, on the date of transmission with affirmative confirmation of receipt; or (c) three Business Days after mailing by prepaid certified or registered mail, return receipt requested. Notices shall be addressed to the respective Parties as follows, or to such other address as a Party shall specify to the others in accordance with these notice provisions:
if to the Company (or, following the Closing, the Surviving Company or Parent), to:
Astro Digital US, Inc.
7815 Shaffer Parkway
Littleton, CO 80127
Attention: Michael Wilson, Chief Financial Officer
E-mail: michael.wilson@astrodigital.com
with a copy (which shall not constitute notice) to:
Broadfield US LLP
488 Madison Avenue, 22nd Fl
New York, NY 10022
Attention: Michael A. Smith; Christopher Hagenbuch
E-mail: michaelsmith@broadfieldlaw.com; christopherhagenbuch@broadfieldlaw.com
if to Parent, Merger Sub I or Merger Sub II (prior to the Closing):
Proem Acquisition Corp I
3860 W. Northwest Hwy, Suite 470,
Dallas, TX 75220
Attention: Imran Khan, Chief Executive Officer
E-mail: imran@proemasset.com
with a copy (which shall not constitute notice) to:
Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
Attention: Mitchell S. Nussbaum
E-mail: mnussbaum@loeb.com
12.2 Amendments; No Waivers; Remedies.
(a) This Agreement may be amended or modified only by a written agreement executed and delivered by duly authorized officers of Parent (prior to the Closing), on the one hand, and the Company, on the other hand. This Agreement may not be modified or amended except as provided in the immediately preceding sentence and any purported amendment by any Party or Parties effected in a manner which does not comply with this Section 12.2 shall be void, ab initio. No provision hereof can be waived or extended, except by a writing signed by the Party against whom such waiver is to be enforced, and any such waiver shall apply only in the particular instance in which such waiver shall have been given.
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(b) Neither any failure or delay in exercising any right or remedy hereunder or in requiring satisfaction of any condition herein nor any course of dealing shall constitute a waiver of or prevent any Party from enforcing any right or remedy or from requiring satisfaction of any condition. No notice to or demand on a Party waives or otherwise affects any obligation of that Party or impairs any right of the Party giving such notice or making such demand, including any right to take any action without notice or demand not otherwise required by this Agreement. No exercise of any right or remedy with respect to a breach of this Agreement shall preclude exercise of any other right or remedy, as appropriate to make the aggrieved Party whole with respect to such breach, or subsequent exercise of any right or remedy with respect to any other breach.
(c) Except as otherwise expressly provided herein, no statement herein of any right or remedy shall impair any other right or remedy stated herein or that otherwise may be available.
(d) Notwithstanding anything to the contrary contained herein, no Party shall seek, nor shall any Party be liable for, punitive or exemplary damages under any tort, contract, equity or other legal theory with respect to any breach (or alleged breach) of this Agreement or any provision hereof or any matter otherwise relating hereto or arising in connection herewith.
12.3 Arm’s Length Bargaining; No Presumption Against Drafter. This Agreement has been negotiated at arm’s-length by parties of equal bargaining strength, each represented by counsel or having had but declined the opportunity to be represented by counsel and having participated in the drafting of this Agreement. This Agreement creates no fiduciary or other special relationship between the Parties, and no such relationship otherwise exists. No presumption in favor of or against any Party in the construction or interpretation of this Agreement or any provision hereof shall be made based upon which Person might have drafted this Agreement or such provision.
12.4 Publicity.
(a) Subject to Section 12.4(b), except as required by Law or applicable stock exchange rules and except with respect to the Additional Parent SEC Documents, the Parties agree that neither they nor their Representatives shall issue any press release or make any other public disclosure prior to the Closing concerning the transactions contemplated hereunder without the prior approval of the other Party hereto, which approval shall not be unreasonably withheld by any Party. If a Party is required to make such a disclosure as required by Law or applicable stock exchange rules, the Party making such determination will, if practicable in the circumstances, use reasonable commercial efforts to allow the other Party reasonable time to comment on such disclosure in advance of its issuance.
(b) The initial press release concerning this Agreement and the transactions contemplated hereby shall be a joint press release in the form agreed by the Company and Parent prior to the execution of this Agreement and such initial press release (the “Signing Press Release”) shall be released as promptly as practicable after the execution of this Agreement (but in any event within three (3) Business Days thereafter). Promptly after the execution of this Agreement (but in any event within four (4) Business Days thereafter), Parent shall file a current report on Form 8-K (the “Signing Filing”) with the Signing Press Release and a description of this Agreement as required by securities Laws, which the Company and its counsel shall have the opportunity to review and comment upon in accordance with the analogous requirements of Section 6.5(b). The Company, Parent and the Sponsor shall mutually agree upon (such agreement not to be unreasonably withheld, conditioned or delayed by any of them) and, as promptly as practicable after the Closing (but in any event within four (4) Business Days thereafter), issue a press release announcing the consummation of the transactions contemplated by this Agreement (the “Closing Press Release”). Promptly after the Closing (but in any event within four (4) Business Days after the Closing), Parent shall file a current report on Form 8-K (the “Closing Filing”) with the Closing Press Release and a description of the Closing as required by securities Laws, which the Sponsor shall have the opportunity to review and comment upon prior to filing in accordance with the analogous requirements of Section 6.5(b). In connection with the preparation of the Signing Press Release, the Signing Filing, the Closing Press Release or the Closing Filing, each Party shall, upon written request by any other Party, furnish such other Party with all information concerning itself, its directors, officers and equityholders, and such other matters as may be reasonably necessary for such press release or filing.
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12.5 Expenses.
(a) Except as otherwise set forth in this Agreement, the costs and expenses in connection with this Agreement and the transactions contemplated hereby shall be paid by Parent after the Closing. For the avoidance of doubt, any payments to be made (or to cause to be made) by Parent pursuant to this Section 12.5 shall be paid upon consummation of the Closing and release of proceeds from the Trust Account. During the Interim Period or if the Closing does not take place, each Party shall be responsible for its own expenses. Schedule 12.5(a) sets forth all accrued and estimated Company Transaction Expenses as of the date of this Agreement. The Company shall promptly (and in any event within three (3) Business Days) deliver to Parent an updated schedule of Company Transaction Expenses following any event, circumstance or development that would reasonably be expected to result in a material change exceeding $500,000 in the aggregate to any amount, item or estimate set forth therein.
(b) (i) If this Agreement is terminated by the Company pursuant to Section 10.1(a) at a time when prior to such termination Parent had provided to the Company in writing a reasonable basis to extend the Outside Closing Date (as it may have been extended in accordance with the terms of Section 10.1(a), then the Company shall pay to Parent a fee in an amount of $400,000 and (ii) if this Agreement is validly terminated by Parent pursuant to Section 10.2(a) then the Company shall pay to Parent, a fee in an amount of $200,000 (such amount, as applicable, a “Company Termination Fee”), any such fee payable by wire transfer of immediately available funds and within two (2) Business Days after any such termination. In no event shall Parent be entitled to the payment of more than one Company Termination Fee. The payment of any Company Termination Fee shall constitute liquidated damages under this Agreement and, if paid, shall be the sole and exclusive remedy (whether at law, in equity, in Contract, in tort or otherwise) of Parent, Merger Sub I and Merger Sub II and their respective equityholders and Affiliates (including Sponsor) against the Company or any of its directors, officers, equityholders and Affiliates for, and in no event will any of them be entitled to recover any other monetary damages or pursue any other remedy (whether at law, in equity, in Contract, in tort or otherwise) with respect to, (A) any loss suffered as a result of the failure of the transactions contemplated by this Agreement and the Ancillary Agreements to be consummated, (B) the termination of this Agreement and the Ancillary Agreements, (C) any liabilities or obligations arising under this Agreement or any of the Ancillary Agreements or (D) any Actions in connection with, arising out of or relating to any breach, termination or failure of or under this Agreement or any of the Ancillary Agreements, and upon payment to Parent of any Company Termination Fee in accordance with this Section 11.6(b), neither the Company nor any of its directors, officers, equityholders or Affiliates shall have any further liability or obligation to Parent, Merger Sub I or Merger Sub II or any of their respective equityholders or Affiliates (including Sponsor) in connection with, relating to or arising out of this Agreement, any of the Ancillary Agreements or the transactions contemplated hereby or thereby. For the avoidance of doubt, nothing in this Section 12.5(b) shall limit the Parent Parties’ right to seek specific performance of the Parent Parties’ obligations under this Agreement in accordance with Section 12.17 in lieu of (but not in addition to) the applicable Company Termination Fee; provided, that in no event shall Parent be entitled to receive both the applicable Company Termination Fee and an order of specific performance requiring the Closing to occur.
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(c) If this Agreement is validly terminated (i) by the Company due to Parent’s failure to satisfy the conditions set forth in Section 9.3(n) or (ii) pursuant to Section 10.1(d), then Parent shall pay to the Company a fee in an amount of $300,000 (such amount, the “Parent Termination Fee”), by wire transfer of immediately available funds and within two Business Days after any such termination. The Parent Termination Fee shall constitute liquidated damages under this Agreement and, if paid, shall be the sole and exclusive remedy (whether at law, in equity, in Contract, in tort or otherwise) of the Company and its equityholders and Affiliates against Parent, Merger Sub I and Merger Sub II or any of their respective directors, officers, equityholders and Affiliates for, and in no event will any of them be entitled to recover any other monetary damages or pursue any other remedy (whether at law, in equity, in Contract, in tort or otherwise) with respect to, (A) any loss suffered as a result of the failure of the transactions contemplated by this Agreement and the Ancillary Agreements to be consummated, (B) the termination of this Agreement and the Ancillary Agreements, (C) any liabilities or obligations arising under this Agreement or any of the Ancillary Agreements or (D) any Actions in connection with, arising out of or relating to any breach, termination or failure of or under this Agreement or any of the Ancillary Agreements, and upon payment to the Company of the Parent Termination Fee in accordance with this Section 11.6(c), none of Parent, Merger Sub I or Merger Sub II or any of their respective directors, officers, equityholders or Affiliates shall have any further liability or obligation to the Company or its equityholders or Affiliates in connection with, relating to or arising out of this Agreement, any of the Ancillary Agreements or the transactions contemplated hereby or thereby. For the avoidance of doubt, nothing in this Section 12.5(c) shall limit the Company’s right to seek specific performance of the Parent Parties’ obligations under this Agreement in accordance with Section 12.17 in lieu of (but not in addition to) the Parent Termination Fee; provided, that in no event shall the Company be entitled to receive both the Parent Termination Fee and an order of specific performance requiring the Closing to occur.
12.6 No Assignment or Delegation. No Party may assign any right or delegate any obligation hereunder, including by merger, consolidation, operation of law or otherwise, without the written consent of the other Party. Any purported assignment or delegation without such consent shall be void.
12.7 Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby, including the applicable statute of limitations, shall be governed by and construed in accordance with the Laws of the State of 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 jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of New York, except that the Domestication, the internal affairs of Parent prior to the Domestication and any provisions of this Agreement that are expressly or otherwise required to be governed by the Cayman Companies Act, shall be governed by the Laws of the Cayman Islands (without giving effect to choice of law principles thereof) in respect of which the Parties irrevocably submit to the non-exclusive jurisdiction of the courts of the Cayman Islands.
12.8 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which shall constitute one agreement. This Agreement shall become effective upon delivery to each Party of an executed counterpart or the earlier delivery to each Party of original, photocopied, or electronically transmitted signature pages that together (but need not individually) bear the signatures of all other Parties.
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12.9 Entire Agreement. This Agreement, together with the Ancillary Agreements, sets forth the entire agreement of the Parties with respect to the subject matter hereof and thereof and supersedes all prior and contemporaneous understandings and agreements related thereto (whether written or oral), all of which are merged herein. No provision of this Agreement or any Ancillary Agreement may be explained or qualified by any agreement, negotiations, understanding, discussion, conduct or course of conduct or by any trade usage. Except as otherwise expressly stated herein or in any Ancillary Agreement, there is no condition precedent to the effectiveness of any provision hereof or thereof. Notwithstanding the foregoing, the Confidentiality Agreement is not superseded by this Agreement or merged herein and shall continue in accordance with its terms, including in the event of any termination of this Agreement.
12.10 Severability. A determination by a court or other legal authority that any provision that is not of the essence of this Agreement is legally invalid shall not affect the validity or enforceability of any other provision hereof. The Parties shall cooperate in good faith to substitute (or cause such court or other legal authority to substitute) for any provision so held to be invalid a valid provision, as alike in substance to such invalid provision as is lawful.
12.11 Further Assurances. Each Party shall execute and deliver such documents and take such action, as may reasonably be considered within the scope of such Party’s obligations hereunder, necessary to effectuate the transactions contemplated by this Agreement.
12.12 Third Party Beneficiaries. Except as provided in Section 8.4, Article XI, and Section 12.18, neither this Agreement nor any provision hereof confers any benefit or right upon or may be enforced by any Person not a signatory hereto.
12.13 Trust Account Waiver. The Company has read the Prospectus and understands that Parent has established the Trust Account for the benefit of the public shareholders of Parent and the underwriters of the IPO pursuant to the Trust Agreement and that, except for a portion of the interest earned on the amounts held in the Trust Account, Parent may disburse monies from the Trust Account only for the purposes set forth in the Trust Agreement. For and in consideration of Parent agreeing to enter into this Agreement, the Company, for itself and on behalf of the Company Stockholder, hereby agrees that it does not now and shall not at any time hereafter prior to the Closing have any right, title, interest or claim of any kind in or to any monies in the Trust Account as a result of, or arising out of, any negotiations, contracts or agreements with Parent and hereby agrees that it will not seek recourse against the Trust Account for any reason; provided, however, that Parent acknowledges and agrees that the foregoing shall not limit or prohibit any claims that the Company or any of its Affiliates and Representatives may have pursuant to this Agreement or any Ancillary Agreement or related to the transactions contemplated hereby against Parent’s assets or funds that are not held in the Trust Account.
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12.14 No Other Representations; No Reliance.
(a) NONE OF THE COMPANY, ANY COMPANY STOCKHOLDER NOR ANY OF THEIR RESPECTIVE REPRESENTATIVES HAS MADE ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER RELATING TO THE COMPANY OR THE BUSINESS OR OTHERWISE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, OTHER THAN THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN ARTICLE IV, IN EACH CASE, AS MODIFIED BY THE SCHEDULES TO THIS AGREEMENT. Without limiting the generality of the foregoing, neither the Company, any Company Stockholder or any of their respective Representatives has made, and shall not be deemed to have made, any representations or warranties in the materials relating to the Company made available to Parent and its Representatives, including due diligence materials, or in any presentation of the business of the Company by management of the Company or others in connection with the transactions contemplated hereby, and no statement contained in any of such materials or made in any such presentation shall be deemed a representation or warranty hereunder or otherwise or deemed to be relied upon by Parent, Merger Sub I or Merger Sub II in executing, delivering and performing this Agreement, the Ancillary Agreements or the transactions contemplated hereby or thereby, in each case except for the representations and warranties set forth in ARTICLE IV as modified by the Schedules to this Agreement. It is understood that any cost estimates, projections or other predictions, any data, any financial information or any memoranda or offering materials or presentations, including any offering memorandum or similar materials made available by the Company, any Company Stockholder or their respective Representatives are not and shall not be deemed to be or to include representations or warranties of the Company or any Company Stockholder, and are not and shall not be deemed to be relied upon by Parent, Merger Sub I or Merger Sub II in executing, delivering and performing this Agreement, the Ancillary Agreement and the transactions contemplated hereby or thereby, in each case except for the representations and warranties set forth in ARTICLE IV, in each case, as modified by the Schedules to this Agreement. Except for the specific representations and warranties expressly made by the Company in ARTICLE IV, in each case as modified by the Schedules: (a) Parent acknowledges and agrees that: (i) neither the Company, the Company Stockholder nor any of their respective Representatives is making or has made any representation or warranty, express or implied, at law or in equity, in respect of the Company, the business, assets, liabilities, operations, prospects or condition (financial or otherwise) of the Company, the nature or extent of any liabilities of the Company, the effectiveness or the success of any operations of the Company or the accuracy or completeness of any confidential information memoranda, projections, forecasts or estimates of earnings, or other information (financial or otherwise) regarding the Company furnished to Parent, Merger Sub I, Merger Sub II or their respective Representatives or made available to Parent and its Representatives in any “data rooms,” “virtual data rooms,” management presentations or any other form in expectation of, or in connection with, the transactions contemplated hereby, or in respect of any other matter or thing whatsoever; and (ii) no Representative of any Company Stockholder or the Company has any authority, express or implied, to make any representations, warranties or agreements not specifically set forth in ARTICLE IV and subject to the limited remedies herein provided; (b) each of Parent, Merger Sub I and Merger Sub II specifically disclaims that it is relying upon or has relied upon any such other representations or warranties that may have been made by any Person, and acknowledges and agrees that the Company Stockholders and the Company have specifically disclaimed and do hereby specifically disclaim any such other representation or warranty made by any Person; and (c) none of the Company, the Company Stockholders nor any other Person shall have any liability to Parent, Merger Sub I, Merger Sub II or any other Person with respect to any such other representations or warranties, including projections, forecasts, estimates, plans or budgets of future revenue, expenses or expenditures, future results of operations, future cash flows or the future financial condition of the Company or the future business, operations or affairs of the Company.
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(b) NONE OF PARENT, MERGER SUB NOR ANY OF THEIR RESPECTIVE REPRESENTATIVES HAS MADE ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER RELATING TO PARENT, MERGER SUB OR OTHERWISE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, OTHER THAN THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN ARTICLE V, IN EACH CASE, AS MODIFIED BY THE SCHEDULES TO THIS AGREEMENT AND THE PARENT SEC DOCUMENTS. Without limiting the generality of the foregoing, neither Parent, Merger Sub I, Merger Sub II nor any of their respective Representatives has made, and shall not be deemed to have made, any representations or warranties in the materials relating to Parent, Merger Sub I and Merger Sub II made available to the Company and the Company Stockholders and their Representatives, including due diligence materials, or in any presentation of the business of Parent by management of Parent or others in connection with the transactions contemplated hereby, and no statement contained in any of such materials or made in any such presentation shall be deemed a representation or warranty hereunder or otherwise or deemed to be relied upon by the Company and the Company Stockholders in executing, delivering and performing this Agreement, the Ancillary Agreements or the transactions contemplated hereby or thereby, in each case except for the representations and warranties set forth in ARTICLE V as modified by the Schedules to this Agreement and the Parent SEC Documents. It is understood that any cost estimates, projections or other predictions, any data, any financial information or any memoranda or offering materials or presentations, including any offering memorandum or similar materials made available by Parent, Merger Sub I, Merger Sub II or their respective Representatives are not and shall not be deemed to be or to include representations or warranties of Parent, Merger Sub I and Merger Sub II, and are not and shall not be deemed to be relied upon by the Company or Company Stockholders in executing, delivering and performing this Agreement, the Ancillary Agreement and the transactions contemplated hereby or thereby, in each case except for the representations and warranties set forth in ARTICLE V, in each case, as modified by the Schedules to this Agreement and the Parent SEC Documents. Except for the specific representations and warranties expressly made by Parent, Merger Sub I and Merger Sub II in ARTICLE V, in each case as modified by the Schedules and the Parent SEC Documents: (a) the Company acknowledges and agrees that: (i) neither Parent, Merger Sub I, Merger Sub II nor any of their respective Representatives is making or has made any representation or warranty, express or implied, at law or in equity, in respect of Parent, Merger Sub I, Merger Sub II, the business, assets, liabilities, operations, prospects or condition (financial or otherwise) of Parent, Merger Sub I or Merger Sub II, the nature or extent of any liabilities of Parent, Merger Sub I or Merger Sub II, the effectiveness or the success of any operations of Parent, Merger Sub I or Merger Sub II or the accuracy or completeness of any confidential information memoranda, projections, forecasts or estimates of earnings, or other information (financial or otherwise) regarding Parent, Merger Sub I or Merger Sub II furnished to the Company, the Company Stockholders or their respective Representatives or made available to the Company, the Company Stockholders and their Representatives in any “data rooms,” “virtual data rooms,” management presentations or any other form in expectation of, or in connection with, the transactions contemplated hereby, or in respect of any other matter or thing whatsoever; and (ii) no Representative of Parent, Merger Sub I or Merger Sub II has any authority, express or implied, to make any representations, warranties or agreements not specifically set forth in ARTICLE V and subject to the limited remedies herein provided; (b) the Company specifically disclaims that it is relying upon or has relied upon any such other representations or warranties that may have been made by any Person, and acknowledges and agrees that Parent, Merger Sub I and Merger Sub II have specifically disclaimed and do hereby specifically disclaim any such other representation or warranty made by any Person; and (c) none of Parent, Merger Sub I nor any other Person shall have any liability to the Company, the Company Stockholders or any other Person with respect to any such other representations or warranties, including projections, forecasts, estimates, plans or budgets of future revenue, expenses or expenditures, future results of operations, future cash flows or the future financial condition of Parent or the future business, operations or affairs of Parent.
12.15 Waiver of Jury Trial. THE PARTIES EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY PROCEEDING (I) ARISING UNDER THIS AGREEMENT OR UNDER ANY ANCILLARY AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES IN RESPECT OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO OR THERETO OR ANY FINANCING IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. THE PARTIES EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH PROCEEDING SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.15.
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12.16 Submission to Jurisdiction. Each of the Parties irrevocably and unconditionally submits to the exclusive jurisdiction of a federal court sitting in the Borough of Manhattan of The City of New York or, if such federal court does not have jurisdiction over any such Actions, the Supreme Court of the State of New York, Commercial Division, sitting in the Borough of Manhattan of The City of New York (and any appellate court therefrom), for the purposes of any Action (a) arising under this Agreement or under any Ancillary Agreement or (b) in any way connected with or related or incidental to the dealings of the Parties in respect of this Agreement or any Ancillary Agreement or any of the transactions contemplated hereby or thereby, and irrevocably and unconditionally waives any objection to the laying of venue of any such Action in any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Action has been brought in an inconvenient forum. Each Party hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Action (i) arising under this Agreement or under any Ancillary Agreement or (ii) in any way connected with or related or incidental to the dealings of the Parties in respect of this Agreement or any Ancillary Agreement or any of the transactions contemplated hereby or thereby, (A) any claim that it is not personally subject to the jurisdiction of the courts as described in this Section 12.16 for any reason, (B) that it or its property is exempt or immune from the jurisdiction of any such court or from any Action commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) that (x) the Action in any such court is brought in an inconvenient forum, (y) the venue of such Action is improper or (z) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. Each Party agrees that service of any process, summons, notice or document by registered mail to such Party’s respective address set forth in Section 12.1 shall be effective service of process for any such Action.
12.17 Remedies. Except as otherwise expressly provided herein, any and all remedies provided herein will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The Parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the Parties do not perform their respective obligations under the provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate the transactions contemplated by this Agreement) in accordance with their specific terms or otherwise breach such provisions. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case, without posting a bond or undertaking and without proof of damages and this being in addition to any other remedy to which they are entitled at law or in equity. Each of the Parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief when expressly available pursuant to the terms of this Agreement on the basis that the other Parties have an adequate remedy at law or an award of specific performance is not an appropriate remedy for any reason at law or equity.
12.18 Non-Recourse. Except as provided in ARTICLE XI, this Agreement may be enforced only against, and any dispute, claim or controversy based upon, arising out of or related to this Agreement or the transactions contemplated hereby may be brought only against, the entities that are expressly named as Parties hereto and then only with respect to the specific obligations set forth in this Agreement with respect to such Party. Except as provided in ARTICLE XI, no past, present or future director, officer, employee, incorporator, member, partner, shareholder, agent, attorney, advisor, lender or representative or Affiliate of any named Party to this Agreement (which Persons are intended third party beneficiaries of this Section 12.18) shall have any liability (whether in contract or tort, at law or in equity or otherwise, or based upon any theory that seeks to impose liability of an entity Party against its owners or Affiliates) for any one or more of the representations, warranties, covenants, agreements or other obligations or liabilities of such named Party or for any dispute, claim or controversy based on, arising out of, or related to this Agreement or the transactions contemplated hereby.
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12.19 Conflicts and Privilege.
(a) Parent and the Company, on behalf of their respective successors and assigns (including, after the Closing, the Surviving Company), hereby agree that, in the event a dispute with respect to this Agreement or the transactions contemplated hereby arises after the Closing between or among (i) the Sponsor, the stockholders or holders of other equity interests of Parent or the Sponsor and/or any of their respective directors, members, partners, officers, employees or Affiliates (other than the Surviving Company) (collectively, the “PAAC Group”), on the one hand, and (ii) the Surviving Company and/or any member of the Astro Group, on the other hand, any legal counsel, including Loeb & Loeb LLP (“Loeb”), that represented Parent and/or the Sponsor prior to the Closing may represent the Sponsor and/or any other member of the PAAC Group, in such dispute even though the interests of such Persons may be directly adverse to the Surviving Company, and even though such counsel may have represented Parent in a matter substantially related to such dispute, or may be handling ongoing matters for the Surviving Company and/or the Sponsor. Parent and the Company, on behalf of their respective successors and assigns (including, after the Closing, the Surviving Company), further agree that, as to all legally privileged communications prior to the Closing (made in connection with the negotiation, preparation, execution, delivery and performance under, or any dispute or Action arising out of or relating to, this Agreement, any Ancillary Agreements or the transactions contemplated hereby or thereby) between or among Parent, the Sponsor and/or any other member of the PAAC Group, on the one hand, and Loeb, on the other hand, the attorney/client privilege and the expectation of client confidence shall survive the Company Mergers and belong to the PAAC Group after the Closing, and shall not pass to or be claimed or controlled by the Surviving Company. Notwithstanding the foregoing, any privileged communications or information shared by the Company prior to the Closing with Parent or the Sponsor under a common interest agreement shall remain the privileged communications or information of the Surviving Company.
(b) Parent and the Company, on behalf of their respective successors and assigns (including, after the Closing, the Surviving Company), hereby agree that, in the event a dispute with respect to this Agreement or the transactions contemplated hereby arises after the Closing between or among (i) the stockholders or holders of other equity interests of the Company and/or any of their respective directors, members, partners, officers, employees or Affiliates (other than the Surviving Company) (collectively, the “Astro Group”), on the one hand, and (ii) the Surviving Company and/or any member of the PAAC Group, on the other hand, any legal counsel, including Broadfield US LLP (“Broadfield”) that represented the Company prior to the Closing may represent any member of the Astro Group in such dispute even though the interests of such Persons may be directly adverse to the Surviving Company, and even though such counsel may have represented Parent and/or the Company in a matter substantially related to such dispute, or may be handling ongoing matters for the Surviving Company, further agree that, as to all legally privileged communications prior to the Closing (made in connection with the negotiation, preparation, execution, delivery and performance under, or any dispute or Action arising out of or relating to, this Agreement, any Ancillary Agreements or the transactions contemplated hereby or thereby) between or among the Company and/or any member of the Astro Group, on the one hand, and Broadfield, on the other hand, the attorney/client privilege and the expectation of client confidence shall survive the Company Mergers and belong to the Astro Group after the Closing, and shall not pass to or be claimed or controlled by the Surviving Company. Notwithstanding the foregoing, any privileged communications or information shared by Parent prior to the Closing with the Company under a common interest agreement shall remain the privileged communications or information of the Surviving Company.
[The remainder of this page intentionally left blank; signature pages to follow]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
| Parent: | ||
| PROEM ACQUISITION CORP I | ||
| By: | /s/ Imran Khan | |
| Name: | Imran Khan | |
| Title: | Chief Executive Officer | |
| Merger Sub I: | ||
| PAAC MERGER SUB I, INC. | ||
| By: | /s/ Imran Khan | |
| Name: | Imran Khan | |
| Title: | CEO | |
| Merger Sub II: | ||
| PAAC MERGER SUB II, LLC | ||
| By: | /s/ Imran Khan | |
| Name: | Imran Khan | |
| Title: | Manager | |
[Signature Page to Merger Agreement]
| Company: | ||
| ASTRO DIGITAL US, INC. | ||
| By: | /s/ Michael Wilson | |
| Name: | Michael Wilson | |
| Title: | Chief Financial Officer | |
[Signature Page to Merger Agreement]
Exhibit 10.1
COMPANY SUPPORT AGREEMENT
This COMPANY SUPPORT AGREEMENT (this “Agreement”) is dated as of September 26, 2026, by and among the Persons set forth on Schedule I hereto (each, a “Company Stockholder” and, collectively, the “Company Stockholders”), Proem Acquisition Corp I, a Cayman Islands exempted company (which shall de-register from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation prior to the Closing) (“Parent”), and Astro Digital US, Inc., a Delaware corporation (the “Company”). Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement (as defined below).
RECITALS
WHEREAS, as of the date hereof, the Company Stockholders are the holders of record and the “beneficial owners” (within the meaning of Rule 13d-3 under the Exchange Act) of such number of shares of Company Capital Stock as are indicated opposite each such Company Stockholder’s name set forth on Schedule I attached hereto (all such shares (including any securities underlying, convertible into, or exercisable, or exchangeable for, such securities), or any successor (including by way of the Company Mergers) or other equity securities (including any securities underlying, convertible into, or exercisable, or exchangeable for, equity securities) of the Company, or any successor (including by way of the Company Mergers) of which ownership is hereafter acquired by any such Company Stockholder prior to the termination of this Agreement are referred to herein as the “Subject Shares”);
WHEREAS, contemporaneously with the execution and delivery of this Agreement, Parent, the Company, PAAC Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Merger Sub I”), and PAAC Merger Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Parent (“Merger Sub II”), have entered into that certain Merger Agreement, dated as of the date hereof (as amended or modified from time to time, the “Merger Agreement”), pursuant to which, among other transactions, (i) Merger Sub I is to merge with and into the Company (the “First Company Merger”), with the Company continuing as the surviving corporation (the “Initial Surviving Corporation”); and (ii) immediately following the First Company Merger, the Initial Surviving Corporation is to merge with and into Merger Sub II (the “Second Company Merger” and together with the First Company Merger, the “Company Mergers”), with Merger Sub II continuing as the surviving entity and a wholly owned subsidiary of Parent, on the terms and subject to the conditions set forth therein;
WHEREAS, on the day that is at least one (1) Business Days prior to the First Effective Time and subject to the conditions of the Merger Agreement, Parent shall de-register from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation in accordance with Parent’s organizational documents, Section 388 of the DGCL and the Cayman Companies Act; and
WHEREAS, as an inducement to Parent and the Company to enter into the Merger Agreement and to consummate the transactions contemplated therein, the parties hereto desire to agree to certain matters as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
Article
I
VOTING AGREEMENT; COVENANTS
1.1 Binding Effect of Merger Agreement. Until the Expiration Time (as defined below), each Company Stockholder shall be bound by and comply with Sections 6.2 (Exclusivity) and 12.4 (Publicity) of the Merger Agreement (and any relevant definitions contained in any such Sections) as if (a) such Company Stockholder was an original signatory to the Merger Agreement with respect to such provisions, and (b) each reference to the “Company” contained in Section 6.2 of the Merger Agreement also referred to each such Company Stockholder.
1.2 Voting Agreement. (a) During the period commencing on the date hereof and ending on the earliest of (x) the Second Effective Time, (y) such date and time as the Merger Agreement shall be validly terminated in accordance with Article X (Termination) thereof and (z) the liquidation of Parent (the earlier of (x), (y) and (z), the “Expiration Time”), each Company Stockholder hereby unconditionally and irrevocably agrees that, at any meeting of the stockholders of the Company (or any adjournment or postponement thereof), and in any action by written consent of the stockholders of the Company distributed by the Board of Directors of the Company or otherwise undertaken as contemplated by the Merger Agreement or the transactions contemplated thereby, such Company Stockholder shall, if a meeting is held, appear at the meeting, in person or by proxy, or otherwise cause all of its, his or her Subject Shares to be counted as present thereat for purposes of establishing a quorum, and such Company Stockholder shall vote or provide consent (or cause to be voted or consented), in person or by proxy, all of its, his or her Subject Shares:
(i) to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the Company Mergers (the “Company Transaction Proposals”), including without limitation any other consent, waiver or approval required under the Company’s organizational documents or under any agreements between the Company and its stockholders, or otherwise sought by the Company with respect to the Merger Agreement or the transactions contemplated thereby or the Company Transaction Proposals;
(ii) against any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by the Company (other than the Merger Agreement or the Ancillary Agreements and the Company Mergers and the other transactions contemplated thereby);
(iii) against any change in the business (to the extent in violation of the Merger Agreement), management or Board of Directors of the Company (other than in connection with the Company Transaction Proposals and the transactions contemplated thereby); and
(iv) against any proposal, action or agreement that would (A) impede, interfere with, delay, postpone, frustrate, prevent or nullify any provision of this Agreement, the Merger Agreement, the Ancillary Agreements or the Company Mergers or any of the transactions contemplated thereby, (B) result in a breach in any respect of any covenant, representation, warranty or any other obligation or agreement of the Company or the Company Stockholders under the Merger Agreement or this Agreement, as applicable, (C) result in any of the conditions set forth in Article IX of the Merger Agreement not being fulfilled, or (D) change in any manner the dividend policy or capitalization of the Company, including the voting rights of any share capital of the Company.
Each Company Stockholder hereby agrees that it, he or she shall not commit or agree to take any action inconsistent with the foregoing. Notwithstanding the foregoing, the obligations of each Company Stockholder specified in this Section 1.2 shall apply whether or not the Company Mergers or any action described above is recommended by the Board of Directors of the Company or the Board of Directors of the Company has previously recommended the Company Mergers but changed such recommendation.
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(c) In furtherance of the foregoing, each Company Stockholder hereby irrevocably appoints as its proxy and attorney-in-fact, Imran Khan, in his capacity as an officer of Parent, and any individual who shall hereafter succeed to such officer of Parent, and any other Person designated in writing by Parent (collectively, the “Grantees”), with full power of substitution, to vote or execute written consents with respect to the Subject Shares in accordance with this Section 1.2 and, in the discretion of the Grantees, with respect to any proposed postponements or adjournments of any annual or special meetings of the stockholders of the Company at which any of the matters described in Section 1.2(a) was to be considered. This proxy is coupled with an interest and shall be irrevocable, and each Company Stockholder will take such further action or execute such other instruments as may be necessary to effectuate the intent of this proxy and hereby revokes any proxy previously granted by such Company Stockholder with respect to the Subject Shares. Parent may terminate this proxy with respect to any Company Stockholder at any time at its sole election by written notice provided to such Company Stockholder.
1.3 No Transfer. During the period commencing on the date hereof and ending on the Expiration Time, each Company Stockholder agrees that such Company Stockholder shall not, without the prior written consent of Parent, directly or indirectly, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of or transfer or establish or increase a put equivalent position or liquidate with respect to or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder, each with respect to any Subject Shares owned by such Company Stockholder, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Subject Shares owned by such Company Stockholder, whether any such transaction is to be settled by delivery of such Subject Shares, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii) (clauses (i), (ii) and (iii), collectively, a “Transfer”); provided, however, that the foregoing restrictions shall not apply to any Permitted Transfer. “Permitted Transfer” shall mean any Transfer (a) in the case of a Person who is not an individual, to any Affiliate of such Person or to any member(s) of such Person or any of their Affiliates; (b) in the case of an individual, to a member of such individual’s immediate family or to a trust, the beneficiary of which is a member of such individual’s immediate family, an Affiliate of such individual or to a charitable organization; (c) in the case of an individual, by virtue of Laws of descent and distribution upon death of such individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; or (e) to any other Person, with the prior written consent of Parent and the Company; provided, however, that, prior to and as a condition to the effectiveness of any Permitted Transfer described in clauses (a) through (e), the transferee in such Permitted Transfer (a “Permitted Transferee”) shall have executed and delivered to Parent and the Company, in form reasonably satisfactory to Parent and the Company, a joinder or counterpart of this Agreement pursuant to which such Permitted Transferee shall be bound by all of the applicable terms and provisions of this Agreement as a Company Stockholder hereto. The Company shall not register any Transfer of any Subject Shares on the Company’s stock ledger (book entry or otherwise) that is not in compliance with this Section 1.3 and any such Transfer shall be void ab initio. During the period commencing on the date hereof and ending on the Expiration Time, each Company Stockholder shall not, without the prior written consent of Parent, engage in any transaction involving the securities of Parent prior to the Closing.
1.4 New Shares. In the event that (a) any Company Capital Stock, other Subject Shares or other equity securities of the Company are issued to a Company Stockholder after the date of this Agreement pursuant to any issuance, offering, stock split, reverse stock split, stock dividend or distribution, recapitalization, reclassification, combination, subdivision, exchange of shares or other similar event of the Company Capital Stock, other Subject Shares or other equity securities of the Company of, on or affecting the Company Capital Stock, other Subject Shares or other equity securities of the Company owned by such Company Stockholder or otherwise, (b) a Company Stockholder purchases or otherwise acquires beneficial ownership of any Company Capital Stock, other Subject Shares or other equity securities of the Company after the date of this Agreement and prior to the Closing, or (c) a Company Stockholder acquires the right to vote or share in the voting of any Company Capital Stock, other Subject Shares or other equity securities of the Company after the date of this Agreement (such Company Capital Stock, other Subject Shares or other equity securities of the Company, the “New Securities”), then such New Securities acquired or purchased by such Company Stockholder shall be subject to the terms of this Agreement to the same extent as if they constituted the Subject Shares owned by such Company Stockholder as of the date hereof.
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1.5 Further Assurances. Each Company Stockholder shall execute and deliver, or cause to be executed and delivered, such additional documents, and take, or cause to be taken, all such further actions and do, or cause to be done, all things reasonably necessary or reasonably requested by the Company or Parent under applicable Laws to effect the actions and to consummate the Company Mergers and the other transactions contemplated by this Agreement and the Merger Agreement, in each case, on the terms and subject to the conditions set forth therein and herein, as applicable. Each Company Stockholder agrees that such Company Stockholder will not take any action that would make any representation or warranty of such Company Stockholder herein untrue or incorrect, or have the effect of preventing or disabling such Company Stockholder from performing its, his or her obligations hereunder.
1.6 No Inconsistent Agreement. Except as provided hereunder, each Company Stockholder hereby represents and covenants that such Company Stockholder (i) has not entered into, shall not enter into, any voting agreement or voting trust with respect to any of such Company Stockholder’s Subject Shares that is inconsistent with such Company Stockholder’s obligations pursuant to this Agreement, and (ii) shall not grant a proxy or power of attorney to enter into, any agreement or undertaking that would restrict, limit, be inconsistent with or interfere with the performance of such Company Stockholder’s obligations hereunder.
1.7 No Challenges. Each Company Stockholder agrees not to commence, join in, facilitate, assist or encourage, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Parent, Merger Sub I, Merger Sub II, the Company or any of their respective successors, directors, officers, agents or equity holders (a) challenging the validity of, or seeking to enjoin the operation of, any provision of this Agreement, the Merger Agreement, the Company Mergers or the transactions contemplated by the Merger Agreement or any of the Ancillary Agreements or the consideration and approval thereof by the stockholders of the Company, the Board of Directors of the Company or the governing bodies of any of the Subsidiaries of the Company or (b) alleging a breach of any fiduciary duty of any person in connection with the evaluation, negotiation or entry into the Merger Agreement and the consummation of the transactions contemplated thereby.
1.8 Consent to Disclosure. Each Company Stockholder hereby consents to the publication and disclosure in the Registration Statement and the Proxy Statement/Prospectus (and, as and to the extent otherwise required by applicable securities Laws or the SEC or any other applicable securities authorities, any other documents or communications provided by Parent or the Company to any Authority or to securityholders of Parent or the Company) of such Company Stockholder’s identity and beneficial ownership of Subject Shares and the nature of such Company Stockholder’s commitments, arrangements and understandings under and relating to this Agreement and, if deemed appropriate by Parent or the Company, a copy of this Agreement. Each Company Stockholder will promptly provide any information reasonably requested by Parent or the Company for any applicable regulatory application or filing made or approval sought in connection with the transactions contemplated by the Merger Agreement (including filings with the SEC).
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1.9 Dissenters’ Rights. Each Company Stockholder hereby irrevocably waives, and agrees not to exercise or attempt to exercise, any right to dissent, right to demand payment or right of appraisal or any similar provision under applicable Law (including pursuant to the DGCL) in connection with the Company Mergers, the Merger Agreement and the other transactions as contemplated by the Merger Agreement.
Article
II
REPRESENTATIONS AND WARRANTIES
2.1 Company Stockholder Representations. Each Company Stockholder represents and warrants to Parent and the Company, as of the date hereof, that:
(a) such Company Stockholder has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked;
(b) such Company Stockholder has full right and power, without violating any agreement to which it, he or she is bound (including any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Agreement;
(c) (i) if such Company Stockholder is not an individual, such Company Stockholder is duly organized, validly existing and in good standing under the Laws of the jurisdiction in which it is organized, and the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby are within such Company Stockholder’s organizational powers and have been duly authorized by all necessary organizational actions on the part of such Company Stockholder and (ii) if such Company Stockholder is an individual, the signature on this Agreement is genuine, and such Company Stockholder has legal competence and capacity to execute the same;
(d) this Agreement has been duly executed and delivered by such Company Stockholder and, assuming due authorization, execution and delivery by the other parties to this Agreement, this Agreement constitutes a legally valid and binding obligation of such Company Stockholder, enforceable against such Company Stockholder in accordance with the terms hereof (except as enforceability may be limited by bankruptcy Laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies);
(e) if this Agreement is being executed in a representative or fiduciary capacity, the Person signing this Agreement has full power and authority to enter into this Agreement on behalf of the applicable Company Stockholder;
(f) such Company Stockholder is the record and beneficial owner (as defined in the Securities Act) of, and has good, valid and marketable title to, all of such Company Stockholder’s Subject Shares, and there exist no Liens or any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such Subject Shares (other than transfer restrictions under the Securities Act)) affecting any such Subject Shares, other than Liens pursuant to (i) this Agreement, (ii) the Company’s organizational documents, (iii) the Merger Agreement or (iv) any applicable securities Laws. Such Company Stockholder’s Subject Shares are the only equity securities (including any securities underlying, convertible into, or exercisable, or exchangeable for, equity securities) in the Company owned of record or beneficially by such Company Stockholder on the date of this Agreement. Such Company Stockholder has full voting power, full power of disposition and full power to issue instructions with respect to the matters set forth herein whether by ownership or by proxy, in each case, with respect to such Company Stockholder’s Subject Shares, and except as provided in this Agreement, none of such Company Stockholder’s Subject Shares are subject to any proxy, voting trust or other agreement or arrangement with respect to the voting of such Subject Shares. Except for such Company Stockholder’s Subject Shares, such Company Stockholder does not hold or own any rights to acquire (directly or indirectly) any other equity securities of the Company or any other equity securities convertible into, or which can be exchanged for, equity securities of the Company;
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(g) the execution and delivery of this Agreement by such Company Stockholder does not, and the performance by such Company Stockholder of its, his or her obligations hereunder and the consummation of the transactions contemplated hereby and the Company Mergers and the other transactions contemplated by the Merger Agreement will not constitute or result in, (i) if such Company Stockholder is not an individual, conflict with or result in a violation of the organizational documents of such Company Stockholder, or (ii) require any consent or approval from any third party that has not been given or other action that has not been taken by any third party, in each case, to the extent such consent, approval or other action would prevent, enjoin or materially delay the performance by such Company Stockholder of its, his or her obligations under this Agreement, or (iii) result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of the Company or its Subsidiary, to the extent the creation of such Lien would prevent, enjoin or materially delay the performance by such Company Stockholder of its, his or her obligations under this Agreement;
(h) there are no Actions pending against such Company Stockholder or, to the knowledge of such Company Stockholder, threatened against such Company Stockholder, before (or, in the case of threatened Actions, that would be before) any Authority, which in any manner questions the beneficial or record ownership of such Company Stockholder’s Subject Shares or the validity of this Agreement, or challenges or seeks to prevent, enjoin or materially delay the performance by such Company Stockholder of its, his or her obligations under this Agreement; there is no outstanding Order imposed upon such Company Stockholder, or, if applicable, any of such Company Stockholder’s Subsidiaries;
(i) no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with this Agreement or any of the respective transactions contemplated hereby, based upon arrangements made by or on behalf of such Company Stockholder;
(j) such Company Stockholder has had the opportunity to read the Merger Agreement and this Agreement and has had the opportunity to consult with such Company Stockholder’s tax and legal advisors;
(k) such Company Stockholder has not entered into, and shall not enter into, any agreement that would prevent such Company Stockholder from performing any of Company Stockholder’s obligations hereunder;
(l) such Company Stockholder understands and acknowledges that each of Parent and the Company is entering into the Merger Agreement in reliance upon such Company Stockholder’s execution and delivery of this Agreement and the representations, warranties, covenants and other agreements of such Company Stockholder contained herein; and
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(m) such Company Stockholder is a sophisticated stockholder and has adequate information concerning the business and financial condition of Parent and the Company to make an informed decision regarding this Agreement and the transactions contemplated by the Merger Agreement and has independently and without reliance upon Parent or the Company and based on such information as such Company Stockholder has deemed appropriate, made its, his or her own analysis and decision to enter into this Agreement. Such Company Stockholder acknowledges that Parent and the Company have not made and do not make any representation or warranty to such Company Stockholder, whether express or implied, of any kind or character except as expressly set forth in this Agreement. Such Company Stockholder acknowledges that the agreements contained herein with respect to the Subject Shares held by such Company Stockholder are irrevocable.
Article
III
MISCELLANEOUS
3.1 Termination. This Agreement and all of its provisions shall terminate and be of no further force or effect upon the earlier of (a) the Expiration Time, and (b) as to each Company Stockholder, the written agreement of Parent, the Company and such Company Stockholder. Upon such termination of this Agreement, all obligations of the parties under this Agreement will terminate, without any liability or other obligation on the part of any party hereto to any Person in respect hereof or the transactions contemplated hereby, and no party hereto shall have any claim against another (and no person shall have any rights against such party), whether under contract, tort or otherwise, with respect to the subject matter hereof; provided, however, that the termination of this Agreement shall not relieve any party hereto from liability arising in respect of any breach of this Agreement prior to such termination or Fraud. This ARTICLE III shall survive the termination of this Agreement.
3.2 Waiver. Each provision in this Agreement may only be waived by written instrument making specific reference to this Agreement signed by the party against whom enforcement of any such provision so waived is sought. No action taken pursuant to this Agreement, including any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty, covenant or agreement contained herein. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.
3.3 Rights of Third Parties. Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any Person, other than the parties hereto, any right or remedies under or by reason of this Agreement.
3.4 Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of New York, without giving effect to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.
3.5 Jurisdiction; Waiver of Jury Trial.
(a) Any proceeding or Action based upon, arising out of or related to this Agreement or the transactions contemplated hereby must be brought in a federal court sitting in the Borough of Manhattan of The City of New York or, if such federal court does not have jurisdiction over any such Actions, the Supreme Court of the State of New York, Commercial Division, sitting in the Borough of Manhattan of The City of New York (and any appellate court therefrom), and each of the parties hereto irrevocably (i) submits to the exclusive jurisdiction of each such court in any such proceeding or Action, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, (iii) agrees that all claims in respect of the proceeding or Action shall be heard and determined only in any such court, and (iv) agrees not to bring any proceeding or Action arising out of or relating to this Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by Law or to commence Legal Proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any Action, suit or proceeding brought pursuant to this Section 3.5.
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(b) EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
3.6 Assignment. No party hereto shall assign this Agreement or any part hereof or delegate any rights or obligations hereunder without the prior written consent of the other parties hereto and any such assignment, transfer or delegation without such prior written consent shall be void. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.
3.7 Enforcement. The parties hereto agree that irreparable damage could occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent any breach, or threatened breach, of this Agreement and to specific enforcement of the terms and provisions of this Agreement, in addition to any other remedy to which any party is entitled at law or in equity. In the event that any Action shall be brought in equity to enforce the provisions of this Agreement, no party shall allege, and each party hereby waives the defense, that there is an adequate remedy at law, and each party agrees to waive any requirement for the securing or posting of any bond in connection therewith.
3.8 Amendment. This Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing executed by Parent, the Company and each Company Stockholder, and which makes reference to this Agreement.
3.9 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The parties hereto further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the parties.
3.10 Notices; Schedules. Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing and shall be sent or given in accordance with the terms of Section 12.1 of the Merger Agreement to the applicable party, with respect to the Company and Parent, at the respective addresses set forth in Section 12.1 of the Merger Agreement, and, with respect to a Company Stockholder, at the address set forth on Schedule I. Following the effectiveness of any Permitted Transfer to any Permitted Transferee in accordance with the terms of this Agreement, Schedule I hereto shall be automatically deemed to be updated to reflect such Permitted Transfer, including such Permitted Transferees agreement to be bound by the terms of this Agreement as a Company Stockholder hereto.
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3.11 Headings; Counterparts. The headings in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
3.12 Entire Agreement. This Agreement and the agreements referenced herein constitute the entire agreement and understanding of the parties hereto relating to the subject matter hereof and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the parties hereto or any of their respective Subsidiaries relating to the subject matter hereof.
3.13 Adjustment for Stock Split. If, and as often as, there are any changes in the Company or the Subject Shares by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization, recapitalization or business combination, or by any other means, equitable adjustment shall be made to the provisions of this Agreement as may be required so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Company Stockholders, Parent, the Company, or the Subject Shares, as so changed.
3.14 No Partnership, Agency or Joint Venture. This Agreement is intended to create a contractual relationship among the Company Stockholders, the Company and Parent, and is not intended to create, and does not create, any agency, partnership, joint venture or any like relationship among the parties hereto or among any other Company Stockholders entering into agreements with the Company or Parent. Each Company Stockholder has acted independently regarding its, his or her decision to enter into this Agreement. Nothing contained in this Agreement shall be deemed to vest in the Company or Parent any direct or indirect ownership or incidence of ownership of or with respect to any Subject Shares.
3.15 Capacity as Company Stockholder. Each Company Stockholder signs this Agreement solely in such Company Stockholder’s capacity as a stockholder of the Company, and not in any other capacity, including, if applicable, as a director (including “director by deputization”), officer or employee of the Company or any of its Subsidiaries. Nothing herein shall be construed to limit or affect any actions or inactions by such Company Stockholder or any representative of such Company Stockholder, as applicable, serving as a director, officer or employee of the Company or any Subsidiary of the Company, acting in such Person’s capacity as a director, officer or employee of the Company or any Subsidiary of the Company, including with respect to any exercise or discharge of such person’s fiduciary duties under applicable Laws.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be duly executed as of the date first written above.
| PARENT: | ||
| PROEM ACQUISITION CORP I | ||
| By: | /s/ Imran Khan | |
| Name: Imran Khan | ||
| Title: Chief Executive Officer | ||
[Signature Page to Company Support Agreement]
| COMPANY: | ||
| ASTRO DIGITAL US, INC. | ||
| By: | /s/ Michael Wilson | |
| Name: Michael Wilson | ||
| Title: Chief Financial Officer | ||
[Signature Page to Company Support Agreement]
| COMPANY STOCKHOLDERS: | |
| /s/ Chris Biddy | |
| Name: Chris Biddy | |
| /s/ Michael Wilson | |
| Name: Michael Wilson | |
| /s/ Kyle Leveque | |
| Name: Kyle Leveque | |
| /s/ John Cuseo | |
| Name: John Cuseo | |
| /s/ Billy Wahng | |
| Name: Billy Wahng |
[Signature Page to Company Support Agreement]
Schedule I
Company Stockholders
| Stockholder | Shares of Company Common Stock |
Shares of Company Preferred Stock |
|
Chris Biddy Address: 3674 Fairgate Ct Highlands Ranch CO, 80126 Email: chris@astrodigital.com
|
103,164 | - |
|
Michael Wilson Address: 11153 Geddes Ave. Littleton CO 80127 Email: michael.wilson@astrodigital.com
|
61,857 | - |
|
Kyle Leveque Address: 1146 Monroe Street Santa Clara CA, 95050 Email: kleveque@gmail.com
|
31,875 | - |
|
John Cuseo Address: 5090 W Maplewood Pl Littleton CO 80123 Email: cuseot34@gmail.com
|
18,875 | 11,140 |
|
Billy Wahng Address: 767 Montrose Ave Palo Alto CA 94303 Email: billy@astrodigital.com
|
29,111 | - |
Exhibit 10.2
PARENT SUPPORT AGREEMENT
This PARENT SUPPORT AGREEMENT (this “Agreement”) is dated as of September 26, 2026, by and among the Persons set forth on Schedule I hereto (each, a “Parent Shareholder” and, collectively, the “Parent Shareholders”), Proem Acquisition Corp I, a Cayman Islands exempted company (which shall de-register from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation prior to the Closing) (“Parent”), and Astro Digital US, Inc., a Delaware corporation (the “Company”). Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement (as defined below).
RECITALS
WHEREAS, as of the date hereof, the Parent Shareholders are the holders of record and the “beneficial owners” (within the meaning of Rule 13d-3 under the Exchange Act) of such number of Parent Shares and Parent Units as are indicated opposite each such Parent Shareholder’s name set forth on Schedule I attached hereto (all such securities of Parent (including any securities underlying, convertible into, or exercisable, or exchangeable for, such securities), or any successor (including by way of the Domestication) or other equity securities (including any securities underlying, convertible into, or exercisable, or exchangeable for, equity securities) of Parent, or any successor (including by way of the Domestication) of which ownership is hereafter acquired by any such Parent Shareholder prior to the termination of this Agreement are referred to herein as the “Subject Securities”);
WHEREAS, contemporaneously with the execution and delivery of this Agreement, Parent, the Company, PAAC Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Merger Sub I”), and PAAC Merger Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Parent (“Merger Sub II”), have entered into that certain Merger Agreement, dated as of the date hereof (as amended or modified from time to time, the “Merger Agreement”), pursuant to which, among other transactions, (i) Merger Sub I is to merge with and into the Company (the “First Company Merger”), with the Company continuing as the surviving corporation (the “Initial Surviving Corporation”); and (ii) immediately following the First Company Merger, the Initial Surviving Corporation is to merge with and into Merger Sub II (the “Second Company Merger” and together with the First Company Merger, the “Company Mergers”), with Merger Sub II continuing as the surviving entity and a wholly owned subsidiary of Parent, on the terms and subject to the conditions set forth therein;
WHEREAS, on the day that is at least one (1) Business Day prior to the First Effective Time and subject to the conditions of the Merger Agreement, Parent shall de-register from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation in accordance with Parent’s organizational documents, Section 388 of the DGCL and the Cayman Companies Act (the “Domestication”); and
WHEREAS, as an inducement to Parent and the Company to enter into the Merger Agreement and to consummate the transactions contemplated therein, the parties hereto desire to agree to certain matters as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE
I
SUPPORT AGREEMENT; COVENANTS
Section 1.1 Binding Effect of Merger Agreement. Each Parent Shareholder hereby acknowledges that such Parent Shareholder has read the Merger Agreement and this Agreement and has had the opportunity to consult with such Parent Shareholder’s tax, legal and other advisors. Until the Expiration Time (as defined below), each Parent Shareholder shall be bound by and comply with Sections 6.2 (Exclusivity) and 12.4 (Publicity) of the Merger Agreement (and any relevant definitions contained in any such Sections) as if (a) such Parent Shareholder was an original signatory to the Merger Agreement with respect to such provisions, and (b) each reference to the “Parent” contained in Section 6.2 of the Merger Agreement also referred to each such Parent Shareholder.
Section 1.2 No Transfer. During the period commencing on the date hereof and ending on the earliest of (x) the Second Effective Time, (y) such date and time as the Merger Agreement shall be validly terminated in accordance with Article X (Termination) thereof and (z) the liquidation of Parent (the earlier of (x), (y) and (z), the “Expiration Time”), each Parent Shareholder shall not, without the prior written consent of the Company, directly or indirectly, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of or transfer or establish or increase a put equivalent position or liquidate with respect to or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder, each with respect to any Subject Securities owned by such Parent Shareholder, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Subject Securities owned by such Parent Shareholder, whether any such transaction is to be settled by delivery of such Subject Securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii) (clauses (i), (ii) and (iii), collectively, a “Transfer”); provided, however, that the foregoing restrictions shall not apply to any Permitted Transfer. “Permitted Transfer” shall mean any Transfer (a) to any of Parent’s officers, directors or consultants, any Affiliate or any family member of any of Parent’s officers, directors or consultants; (b) in the case of a Person who is not an individual, to any Affiliate of such Person or to any member(s) of such Person or any of their Affiliates or any employees of such Affiliates; (c) in the case of an individual, to a member of such individual’s immediate family or to a trust, the beneficiary of which is a member of such individual’s immediate family, an Affiliate of such individual or to a charitable organization; (d) in the case of an individual, by virtue of Laws of descent and distribution upon death of such individual; (e) in the case of an individual, pursuant to a qualified domestic relations order; or (f) to any other Person, with the prior written consent of Parent and the Company; provided, however, that, prior to and as a condition to the effectiveness of any Permitted Transfer described in clauses (a) through (f), the transferee in such Permitted Transfer (a “Permitted Transferee”) shall have executed and delivered to Parent and the Company, in form reasonably satisfactory to Parent and the Company, a joinder to each of this Agreement pursuant to which such Permitted Transferee shall be bound by all of the applicable terms and provisions of this Agreement as a Parent Shareholder hereto. Parent shall not register any Transfer of any Subject Securities on Parent’s stock ledger (book entry or otherwise) that is not in compliance with this Section 1.2 and any such Transfer shall be void ab initio.
Section 1.3 New Shares. In the event that (a) any Parent Shares, Parent Units or other Subject Securities are issued to a Parent Shareholder after the date of this Agreement pursuant to any issuance, offering, stock split, reverse stock split, stock dividend or distribution, recapitalization, reclassification, combination, subdivision, exchange of shares or other similar event of Parent Shares, Parent Units or other Subject Securities of Parent of, on or affecting the Parent Shares, Parent Units or other Subject Securities of Parent owned by such Parent Shareholder or otherwise, (b) a Parent Shareholder purchases or otherwise acquires beneficial ownership of any Parent Shares, Parent Units or other Subject Securities of Parent after the date of this Agreement, or (c) a Parent Shareholder acquires the right to vote or share in the voting of any Parent Shares, Parent Units or other Subject Securities of Parent after the date of this Agreement (such Parent Shares, Parent Units or other Subject Securities of Parent, collectively the “New Securities”), then such New Securities acquired or purchased by such Parent Shareholder shall be subject to the terms of this Agreement to the same extent as if they constituted Subject Securities owned by such Parent Shareholder as of the date hereof.
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Section 1.4 Certain Agreements of the Parent Shareholders
(a) At any meeting of the shareholders of Parent, however called, or at any adjournment thereof, or in any other circumstance in which the vote, consent or other approval of the shareholders of Parent is sought, each Parent Shareholder hereby unconditionally and irrevocably agrees that such Parent Shareholder shall (i) appear at each such meeting, in person or by proxy, or otherwise cause all of its, his or her Parent Shares, Parent Units or other Subject Securities to be counted as present thereat for purposes of calculating a quorum and (ii) vote (or cause to be voted), in person or by proxy, or execute and deliver a written consent (or cause a written consent to be executed and delivered) covering, all of such Parent Shareholder’s Parent Shares, Parent Units or other Subject Securities:
(i) in favor of each Parent Proposal, including, without limitation, any other consent, waiver or approval required under Parent’s organizational documents or under any agreements between Parent and its shareholders, or otherwise sought by Parent with respect to the Merger Agreement or the transactions contemplated thereby or the Parent Proposals;
(ii) against any Alternative Proposal or any proposal relating to a business combination transaction (other than the Parent Proposals and the transactions contemplated thereby);
(iii) against any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by Parent (other than the Merger Agreement or the Ancillary Agreements and the Company Mergers and the other transactions contemplated thereby);
(iv) against any change in the business, management or Board of Directors of Parent (other than in connection with the Parent Proposals and the transactions contemplated thereby);
(v) against any proposal, action or agreement that would (A) impede, interfere with, delay, postpone, frustrate, prevent or nullify any provision of this Agreement, the Merger Agreement, the Ancillary Agreements or the Company Mergers or any of the transactions contemplated thereby, (B) result in a breach in any respect of any covenant, representation, warranty or any other obligation or agreement of Parent, Merger Sub I, Merger Sub II, the Sponsor or the Parent Shareholders under the Merger Agreement or this Agreement, as applicable, (C) result in any of the conditions set forth in Article IX of the Merger Agreement not being fulfilled or (D) change in any manner the dividend policy or capitalization of, including the voting rights of any class of capital stock of, Parent; and
(vi) in favor of any extension of Parent’s deadline to consummate a “Business Combination” as such term is defined in the Parent Articles, to the extent permitted under the Parent Articles.
Each Parent Shareholder hereby agrees that it, he or she shall not commit or agree to take any action inconsistent with the foregoing. Notwithstanding the foregoing, the obligations of each Parent Shareholder specified in this Section 1.4 shall apply whether or not the Parent Proposals or any action described above are recommended by the Board of Directors of Parent or the Board of Directors of Parent has previously recommended such Parent Proposals but changed such recommendation
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(b) Each Parent Shareholder shall comply with, and fully perform all of its, his or her obligations, covenants and agreements set forth in, that certain Letter Agreement, dated as of February 11, 2026, by and among Parent, the Sponsor and the other parties thereto (the “Letter Agreement”), including the obligations of such Parent Shareholder therein to not redeem, sell or tender, or submit a request to Parent’s transfer agent or otherwise exercise any right to redeem, sell or tender, any Parent Shares, Parent Units or other Subject Securities owned by such Parent Shareholder in connection with the transactions contemplated by the Merger Agreement.
Section 1.5 Further Assurances. Each Parent Shareholder shall execute and deliver, or cause to be executed and delivered, such additional documents, and take, or cause to be taken, all such further actions and do, or cause to be done, all things reasonably necessary or reasonably requested by the Company or Parent under applicable Laws to effect the actions and to consummate the Company Mergers and the other transactions contemplated by this Agreement and the Merger Agreement, in each case, on the terms and subject to the conditions set forth therein and herein, as applicable. Each Parent Shareholder agrees that such Parent Shareholder will not take any action that would make any representation or warranty of such Parent Shareholder herein untrue or incorrect, or have the effect of preventing or disabling such Parent Shareholder from performing its, his or her obligations hereunder.
Section 1.6 No Inconsistent Agreement. Except as provided hereunder or under the Letter Agreement, each Parent Shareholder hereby represents and covenants that (i) it, he or she has not entered into, shall not enter into, any voting agreement or voting trust with respect to any of such Parent Shareholder’s Subject Securities that is inconsistent with such Parent Shareholder’s obligations pursuant to this Agreement, and (ii) shall not grant a proxy or power of attorney to enter into, any agreement or undertaking that would restrict, limit, be inconsistent with or interfere with the performance of its, his or her obligations hereunder.
Section 1.7 No Challenges. Each Parent Shareholder agrees not to commence, join in, facilitate, assist or encourage, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Parent, Merger Sub I, Merger Sub II, the Company or any of their respective successors, directors, officers, agents or equityholders (a) challenging the validity of, or seeking to enjoin the operation of, any provision of this Agreement, the Merger Agreement, the Parent Proposals or the transactions contemplated by the Merger Agreement or any of the Ancillary Agreements or the consideration and approval thereof by the shareholders of Paren or the Board of Directors of Parent, or (b) alleging a breach of any fiduciary duty of any person in connection with the evaluation, negotiation or entry into the Merger Agreement and the consummation of the transactions contemplated thereby.
Section 1.8 Consent to Disclosure. Each Parent Shareholder hereby consents to the publication and disclosure in the Registration Statement and the Proxy Statement/Prospectus (and, as and to the extent otherwise required by applicable securities Laws or the SEC or any other applicable securities authorities, any other documents or communications provided by Parent or the Company to any Authority or to securityholders of Parent or the Company) of such Parent Shareholder’s identity and beneficial ownership of Subject Securities, and the nature of such Parent Shareholder’s commitments, arrangements and understandings under and relating to this Agreement and, if deemed appropriate by Parent or the Company, a copy of this Agreement. Each Parent Shareholder will promptly provide any information reasonably requested by Parent or the Company for any applicable regulatory application or filing made or approval sought in connection with the transactions contemplated by the Merger Agreement (including filings with the SEC).
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ARTICLE
II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the Parent Shareholders. Each Parent Shareholder represents and warrants to Parent and the Company, as of the date hereof, as follows:
(a) Organization; Due Authorization. (i) if such Parent Shareholder is not an individual, such Parent Shareholder is duly organized, validly existing and in good standing under the Laws of the jurisdiction in which it is organized, and the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby are within such Parent Shareholder’s organizational powers and have been duly authorized by all necessary organizational actions on the part of such Parent Shareholder and (ii) if such Parent Shareholder is an individual, the signature on this Agreement is genuine, and such Parent Shareholder has legal competence and capacity to execute the same. This Agreement has been duly executed and delivered by such Parent Shareholder and, assuming due authorization, execution and delivery by the other parties to this Agreement, this Agreement constitutes a legally valid and binding obligation of such Parent Shareholder, enforceable against such Parent Shareholder in accordance with the terms hereof (except as enforceability may be limited by bankruptcy Laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies). Such Parent Shareholder has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked and has full right and power, without violating any agreement to which it, he or she is bound (including any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Agreement. If this Agreement is being executed in a representative or fiduciary capacity, the Person signing this Agreement has full power and authority to enter into this Agreement on behalf of the applicable Parent Shareholder.
(b) Ownership. Such Parent Shareholder is the record and beneficial owner (as defined in the Securities Act) of, and has good, valid and marketable title to, all of its, his or her Subject Securities, and there exist no Liens or any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such Subject Securities (other than transfer restrictions under the Securities Act)) affecting any such Subject Securities, other than Liens pursuant to (i) this Agreement, (ii) Parent’s organizational documents, (iii) the Merger Agreement, (iv) the Letter Agreement or (v) any applicable securities Laws. Such Parent Shareholder’s Subject Securities are the only equity securities of Parent (including any securities underlying, convertible into, or exercisable, or exchangeable for, equity securities in Parent) owned of record or beneficially by such Parent Shareholder on the date of this Agreement. Such Parent Shareholder has full voting power, full power of disposition and full power to issue instructions with respect to the matters set forth herein whether by ownership or by proxy, in each case, with respect to its, his or her Subject Securities, and none of such Parent Shareholder’s Subject Securities are subject to any proxy, voting trust or other agreement or arrangement with respect to the voting of such Subject Securities, except as provided hereunder and under the Letter Agreement.
(c) No Conflicts. The execution and delivery of this Agreement by such Parent Shareholder does not, and the performance by such Parent Shareholder of its, his or her obligations hereunder and the consummation of the transactions contemplated hereby and the Company Mergers and the other transactions contemplated by the Merger Agreement will not constitute or result in, (i) if such Parent Shareholder is not an individual, conflict with or result in a violation of the organizational documents of such Parent Shareholder, (ii) require any consent or approval from any third party that has not been given or other action that has not been taken by any such third party, in each case, to the extent such consent, approval or other action would prevent, enjoin or materially delay the performance by such Parent Shareholder of its, his or her obligations under this Agreement, or (iii) result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of Parent or any of Parent’s Subsidiaries, to the extent the creation of such Lien would prevent, enjoin or materially delay the performance by such Parent Shareholder of its, his or her obligations under this Agreement.
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(d) Litigation. There are no Actions pending against such Parent Shareholder, or to the knowledge of such Parent Shareholder threatened against such Parent Shareholder, before (or, in the case of threatened Actions, that would be before) any arbitrator or any Authority, which in any manner questions the beneficial or record ownership of such Parent Shareholder’s Subject Securities or the validity of this Agreement, or challenges or seeks to prevent, enjoin or materially delay the performance by such Parent Shareholder of its, his or her obligations under this Agreement. There is no outstanding Order imposed upon such Parent Shareholder, or, if applicable, any of its Subsidiaries.
(e) CFIUS Foreign Person Status. Such Parent Shareholder is not a “foreign person” and is not controlled by a “foreign person,” as those terms are defined in 31 C.F.R. Part 800 promulgated under Section 721 of the DPA. As of the date of this Agreement, such Parent Shareholder has not agreed to grant, in connection with the transactions contemplated by the Merger Agreement and the Ancillary Agreements, any rights to any “foreign person” (as defined in 31 C.F.R. Part 800) that would constitute a “covered transaction” subject to mandatory filing requirements under the DPA. Such Parent Shareholder does not permit any “foreign person” affiliated with such Parent Shareholder, whether affiliated as a limited partner, shareholder or equivalent, to obtain, through such Parent Shareholder as a result of that foreign person’s investment, any of the following with respect to the Company: (i) access to any “material nonpublic technical information” (as defined in 31 C.F.R. § 800.232) in the possession of the Company; (ii) membership or observer rights on the Board of Directors or equivalent governing body of the Company or the right to nominate an individual to a position on such governing body; (iii) any “involvement,” other than through the voting of shares, in the “substantive decision-making” of the Company (as such terms are defined in the DPA) regarding the use, development, acquisition or release of any “critical technology” (as defined in 31 C.F.R. § 800.215); or (iv) “control” of the Company (as defined in 31 C.F.R. § 800.208).
(f) Brokers’ Fees. No broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other commission in connection with this Agreement or any of the respective transactions contemplated by the Merger Agreement or any Ancillary Agreements to which such Parent Shareholder is a party based upon arrangements made by or on behalf of such Parent Shareholder, for which Parent or any of its Affiliates may become liable.
(g) Affiliate Arrangements. Except as set forth on Schedule II attached hereto, such Parent Shareholder is not party to, nor has any rights with respect to or arising from, any Contract with Parent or its Subsidiaries.
(h) Acknowledgment. Such Parent Shareholder understands and acknowledges that each of Parent and the Company is entering into the Merger Agreement in reliance upon such Parent Shareholder’s execution and delivery of this Agreement and the representations, warranties, covenants and other agreements of such Parent Shareholder contained herein.
(i) Adequate Information. Such Parent Shareholder is a sophisticated shareholder and has adequate information concerning the business and financial condition of Parent and the Company to make an informed decision regarding this Agreement and the transactions contemplated by the Merger Agreement and has independently and without reliance upon Parent or the Company and based on such information as such Parent Shareholder has deemed appropriate, made its, his or her own analysis and decision to enter into this Agreement. Such Parent Shareholder acknowledges that Parent and the Company have not made and do not make any representation or warranty to such Parent Shareholder, whether express or implied, of any kind or character except as expressly set forth in this Agreement. Such Parent Shareholder acknowledges that the agreements contained herein with respect to the Subject Securities held by such Parent Shareholder are irrevocable.
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ARTICLE
III
MISCELLANEOUS
Section 3.1 Termination. This Agreement and all of its provisions shall terminate and be of no further force or effect upon the earliest of (a) the Expiration Time and (b), as to each Parent Shareholder, the written agreement of Parent, the Company and such Parent Shareholder. Upon such termination of this Agreement, all obligations of the parties under this Agreement will terminate, without any liability or other obligation on the part of any party hereto to any Person in respect hereof or the transactions contemplated hereby, and no party hereto shall have any claim against another (and no person shall have any rights against such party), whether under contract, tort or otherwise, with respect to the subject matter hereof; provided, however, that the termination of this Agreement shall not relieve any party hereto from liability arising in respect of any breach of this Agreement prior to such termination or Fraud. This Article III shall survive the termination of this Agreement.
Section 3.2 Waiver. Each provision in this Agreement may only be waived by written instrument making specific reference to this Agreement signed by the party against whom enforcement of any such provision so waived is sought. No action taken pursuant to this Agreement, including any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty, covenant or agreement contained herein. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.
Section 3.3 Rights of Third Parties. Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any Person, other than the parties hereto, any right or remedies under or by reason of this Agreement.
Section 3.4 Governing Law. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of New York, without giving effect to principles or rules of conflict of Laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.
Section 3.5 Jurisdiction; Waiver of Jury Trial
(a) Any proceeding or Action based upon, arising out of or related to this Agreement or the transactions contemplated hereby must be brought in a federal court sitting in the Borough of Manhattan of The City of New York or, if such federal court does not have jurisdiction over any such Actions, the Supreme Court of the State of New York, Commercial Division, sitting in the Borough of Manhattan of The City of New York (and any appellate court therefrom), and each of the parties hereto irrevocably (i) submits to the exclusive jurisdiction of each such court in any such proceeding or Action, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, (iii) agrees that all claims in respect of the proceeding or Action shall be heard and determined only in any such court, and (iv) agrees not to bring any proceeding or Action arising out of or relating to this Agreement or the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect the right of any party to serve process in any manner permitted by Law or to commence Legal Proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any Action, suit or proceeding brought pursuant to this Section 3.5.
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(b) EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 3.6 Assignment. No party hereto shall assign this Agreement or any part hereof or delegate any rights or obligations hereunder without the prior written consent of the other parties hereto and any such assignment, transfer or delegation without such prior written consent shall be void. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.
Section 3.7 Enforcement. The parties hereto agree that irreparable damage could occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent any breach, or threatened breach, of this Agreement and to specific enforcement of the terms and provisions of this Agreement, in addition to any other remedy to which any party is entitled at law or in equity. In the event that any Action shall be brought in equity to enforce the provisions of this Agreement, no party shall allege, and each party hereby waives the defense, that there is an adequate remedy at law, and each party agrees to waive any requirement for the securing or posting of any bond in connection therewith.
Section 3.8 Amendment. This Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing executed by Parent, the Company and each Parent Shareholder, and which makes reference to this Agreement.
Section 3.9 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The parties hereto further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the parties.
Section 3.10 Notices; Schedules. Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing and shall be sent or given in accordance with the terms of Section 12.1 of the Merger Agreement to the applicable party, with respect to the Company and Parent, at the respective addresses set forth in Section 12.1 of the Merger Agreement, and, with respect to a Parent Shareholder, at the address set forth on Schedule I. Following the effectiveness of any Permitted Transfer to any Permitted Transferee in accordance with the terms of this Agreement, Schedule I hereto shall be automatically deemed to be updated to reflect such Permitted Transfer, including such Permitted Transferees agreement to be bound by the terms of this Agreement as a Parent Shareholder hereto.
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Section 3.11 Headings; Counterparts. The headings in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
Section 3.12 Entire Agreement. This Agreement and the agreements referenced herein constitute the entire agreement and understanding of the parties hereto relating to the subject matter hereof and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the parties hereto or any of their respective Subsidiaries relating to the subject matter hereof.
Section 3.13 Adjustment for Stock Split. If, and as often as, there are any changes in Parent or the Subject Securities by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization, recapitalization or business combination, or by any other means, equitable adjustment shall be made to the provisions of this Agreement as may be required so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Parent Shareholders, Parent, the Company, or the Subject Securities, as so changed.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be duly executed as of the date first written above.
| PARENT: | ||
| Proem Acquisition Corp I | ||
| By: | /s/ Imran Khan | |
| Name: | Imran Khan | |
| Title: | Chief Executive Officer | |
| PARENT SHAREHOLDERS: | ||
| PROEM SPAC PARTNERS I LLC | ||
| By: | /s/ Imran Khan | |
| Name: | Imran Khan | |
| Title: | Authorized Signatory | |
| /s/ Imran Khan | ||
| Name: | Imran Khan | |
| /s/ John Wu | ||
| Name: | John Wu | |
| /s/ David Eckstein | ||
| Name: | David Eckstein | |
| /s/ Amarnath Thombre | ||
| Name: | Amarnath Thombre | |
| /s/ Andrey Kazakov | ||
| Name: | Andrey Kazakov | |
[Signature Page to Parent Support Agreement]
| COMPANY: | ||
| ASTRO DIGITAL US, INC. | ||
| By: | /s/ Michael Wilson | |
| Name: | Michael Wilson | |
| Title: | Chief Financial Officer | |
[Signature Page to Parent Support Agreement]
Schedule I
Parent Shareholders
| Shareholder | Parent Shares | Parent Units |
|
Proem SPAC Partners I LLC 3860 W. Northwest Hwy, Suite 470, Dallas, TX 75220 |
4,248,333 Parent Ordinary Shares | 292,500 Parent Units |
|
John Wu c/o Proem Acquisition Corp. I 3860 W. Northwest Hwy, Suite 470, Dallas, TX 75220 |
10,000 Parent Ordinary Shares | –– |
|
David Eckstein c/o Proem Acquisition Corp. I 3860 W. Northwest Hwy, Suite 470, Dallas, TX 75220 |
25,000 Parent Ordinary Shares | –– |
|
Amarnath Thombre c/o Proem Acquisition Corp. I 3860 W. Northwest Hwy, Suite 470, Dallas, TX 75220 |
25,000 Parent Ordinary Shares | –– |
|
Andrey Kazakov c/o Proem Acquisition Corp. I 3860 W. Northwest Hwy, Suite 470, Dallas, TX 75220 |
25,000 Parent Ordinary Shares | –– |
Schedule II
Affiliate Agreements
Letter Agreement, dated February 11, 2026, by and among Parent, Proem SPAC Partners I LLC and Parent’s officers and directors
Registration Rights Agreement, dated February 11, 2026, by and among Parent, Proem SPAC Partners I LLC and certain other security holders of Parent
Private Placement Unit Purchase Agreement, dated February 11, 2026, by and between Parent and Proem SPAC Partners I LLC
Administrative Services Agreement, dated February 11, 2026, by and between Parent and Proem SPAC Partners I LLC
Exhibit 10.3
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (this “Agreement”) is dated as of [●], by and among Astro Digital Holdings, Inc., a Delaware corporation (“Parent”) (formerly known as Proem Acquisition Corp I, a Cayman Islands exempted company prior to its domestication as a Delaware corporation), Proem SPAC Partners I LLC, a Cayman Islands limited liability company (the “Sponsor”), certain former stockholders, officers and directors of Astro Digital US, Inc., a Delaware corporation (the “Company”), identified on the signature page and as set forth on Schedule I hereto (such stockholders, the “Company Holders”) and other persons and entities (collectively with the Sponsor, the Company Holders and any person or entity who hereafter becomes a party to this Agreement, the “Holders” and each, a “Holder”).
A. Parent, the Company, PAAC Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Merger Sub I”), and PAAC Merger Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Parent (“Merger Sub II”), have entered into that certain Merger Agreement dated as of September 25, 2026 (as amended or modified from time to time, the “Merger Agreement”). Capitalized terms used, but not otherwise defined, herein shall have the meanings ascribed to such terms in the Merger Agreement.
B. On the date hereof, pursuant to the Merger Agreement, the Company Holders received Parent Common Shares in connection with the transactions contemplated therein.
C. As a condition of, and as a material inducement for Parent to enter into and consummate the transactions contemplated by the Merger Agreement, the Holders have agreed to execute and deliver this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, agree as follows:
AGREEMENT
1. Lock-Up.
(a) During the Lock-up Period provided in Section 1(d) hereof, each Holder agrees that it, he or she will not (i) offer, sell, contract to sell, hypothecate, pledge, encumber, grant any option to purchase or otherwise dispose of, directly or indirectly, any of the Lock-up Shares (as defined below), establish or increase a put equivalent position or liquidate with respect to or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the Commission promulgated thereunder with respect to, any of the Lock-up Shares, or (ii) enter into any swap, hedge or other arrangement that transfers to another person, in whole or in part, any of the economic or voting consequences of ownership of the Lock-up Shares, whether any such transaction is to be settled by delivery of any such Lock-up Shares, in cash or otherwise, (iii) publicly disclose the intention to make or to enter into any transaction specified in clause (i) or (ii) above (such transaction, a “Transfer”), or (iv) engage in any Short Sales (as defined below) with respect to any Parent Common Shares. For the avoidance of any doubt, Holder shall retain all of its rights as a stockholder of Parent during the Lock-up Period, including the right to vote, and to receive any dividends and distributions in respect of, any Lock-up Shares.
(b) In furtherance of the foregoing, during the Lock-up Period, Parent will (i) place a stop order on all the Lock-up Shares, including those which may be covered by a registration statement or prospectus, and (ii) notify Parent’s transfer agent in writing of the stop order and the restrictions on the Lock-up Shares under this Agreement and direct Parent’s transfer agent not to process any attempts by any Holder to resell or transfer any Lock-up Shares, except in compliance with this Agreement. In addition to any other applicable legends, each certificate or book entry position representing the Lock-up Shares shall be stamped or otherwise imprinted with a legend in substantially the following form:
“THE SHARES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A LOCK-UP AGREEMENT, DATED AS OF [●], BY AND AMONG THE ISSUER OF SUCH SHARES (THE “ISSUER”) AND THE ISSUER’S STOCKHOLDER NAMED THEREIN. A COPY OF SUCH LOCK-UP AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”
(c) For purposes hereof, “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-U.S. broker dealers or foreign regulated brokers.
(d) The term “Lock-up Period” means the shorter period of the earlier of (i) six months after the Closing Date and (ii) subsequent to the Closing Date, (x) the date on which the last reported sale price of the Parent Common Shares equals or exceeds $12.50 per share (as adjusted for stock splits, reverse stock splits, stock dividends or distributions, recapitalizations, reclassifications, combinations, subdivisions, exchanges of shares or other similar events) for any 20 trading days within any 30-trading day period after the Closing Date, or (y) the date on which Parent completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of its holders of Parent Common Shares having the right to exchange their Parent Common Shares for cash, securities or other property.
(e) The term “Lock-up Shares” means the Parent Common Shares and any other equity securities convertible into or exercisable or exchangeable for or representing the rights to receive Parent Common Shares, if any, held by the Holders immediately following the Closing (after effecting the Repurchase); provided, however, that the Sponsor’s Lock-up Shares shall consist solely of its founder shares (as defined in the Prospectus) (including any such founder shares purchased, received or otherwise acquired in the Interim Period) that were converted into Parent Common Shares in connection with the Domestication (excluding any Parent Common Shares transferred to the PIPE Investors in connection with the PIPE Financing that are subject to the Insider Letter) (the “Unlocked Sponsor Shares”). For the avoidance of doubt, all other securities of Parent held by the Sponsor shall be freely transferable and shall not be subject to any lock-up restrictions under this Agreement or otherwise. Notwithstanding the foregoing, the Lock-up Shares shall not include (i) Parent Common Shares acquired by any such Holder in compliance with this Agreement in open market transactions or any public or private capital raising transactions of Parent after the Closing Date or (ii) the Parent Common Shares held by any Holder subject to the Repurchase (such Parent Common Shares, together with the Unlocked Sponsor Shares, the “Unlocked Shares”).
2. Beneficial Ownership. Each Holder hereby represents and warrants that it, he or she does not beneficially own, directly or through its nominees (as determined in accordance with Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder), any Parent Common Shares, or any economic interest in or derivative of such shares, other than the Lock-up Shares, as set forth on Schedule I attached hereto, or Unlocked Shares.
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3. Permitted Transfers. Notwithstanding the foregoing, and subject to the conditions below, a Holder may Transfer Lock-up Shares in connection with, as applicable, (i) transfers or distributions to such Holder’s current or former general or limited partners, managers or members, shareholders, other equity holders, consultants or direct or indirect affiliates (within the meaning of Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”)), including any investment fund, special purpose vehicle or other entity that controls or manages, is under common control or management with, or is controlled or managed by, such Holder, or to the estates of any of the foregoing; (ii) a bona fide gift or gifts to a member of such Holder’s immediate family or to a trust, the beneficiary of which is such Holder or a member of such Holder’s immediate family for estate planning purposes, or to a charitable organization; (iii) a will, testamentary document or the laws of descent and distribution upon death of such Holder; (iv) a qualified domestic relations order or as required by a divorce settlement; (v) transfers to Parent’s current or former officers, directors or their affiliates; (vi) a bona fide third-party tender offer, merger, stock sale, recapitalization, consolidation or other transaction involving a change of control of Parent or which results in all of the holders of Parent Common Shares having the right to exchange their Parent Common Shares for cash, securities or other property subsequent to the consummation of such transaction; provided, however, that in the event that such tender offer, merger, recapitalization, consolidation or other such transaction is not completed, the Lock-up Shares subject to this Agreement shall remain subject to this Agreement; (vii) to a nominee or custodian of a person or entity to whom a transfer would be permissible under clauses (i) through (v) above; and (viii) to the extent required by any legal or regulatory order; provided, however, that, in the case of any transfer pursuant to the foregoing clauses (i) through (v) and (vii), it shall be a condition to any such transfer that (a) the transferee/donee executes and delivers to Parent a joinder, in form reasonably satisfactory to Parent, to this Agreement (including, without limitation, the restrictions set forth in this Agreement and the applicable Lock-up Period) to the same extent as if the transferee/donee were a party hereto, (b) each party (donor, donee, transferor or transferee) shall not be required by law (including without limitation the disclosure requirements of the Securities Act and the Exchange Act) to make, and shall agree to not voluntarily make, any filing or public announcement of the transfer or disposition prior to the expiration of the applicable Lock-up Period, and (c) no transfer pursuant to this Section 3 shall be made to any person that is a “foreign person” as defined in 31 C.F.R. § 800.224 without the prior written consent of the Board of Directors of Parent (which consent may be withheld in the Board’s sole discretion if the Board determines, after consultation with outside counsel, that such transfer could reasonably be expected to (x) constitute a “covered transaction” or “covered investment” within the meaning of 31 C.F.R. Parts 800 or 802, (y) trigger a mandatory or voluntary filing obligation with the Committee on Foreign Investment in the United States, or (z) otherwise implicate national security review under Section 721 of the Defense Production Act of 1950, as amended).
4. Representations and Warranties. Each of the parties hereto, by their respective execution and delivery of this Agreement, hereby represents and warrants to the others that (a) such party has the full right, capacity and authority to enter into, deliver and perform its respective obligations under this Agreement, (b) this Agreement has been duly executed and delivered by such party and is a binding and enforceable obligation of such party, enforceable against such party in accordance with the terms of this Agreement, and (c) the execution, delivery and performance of such party’s obligations under this Agreement will not conflict with or breach the terms of any other agreement, contract, arrangement, commitment or understanding to which such party is a party or to which the assets or securities of such party are bound. Each Holder has independently evaluated the merits of his/her/its decision to enter into and deliver this Agreement, and such Holder confirms that he/she/it has not relied on the advice of the Company, the Company’s legal counsel, Parent, Parent’s legal counsel, or any other person.
5. No Additional Fees/Payment. Other than the consideration specifically referenced herein, the parties hereto agree that no fee, payment or additional consideration in any form has been or will be paid to any Holder in connection with this Agreement.
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6. Notices. Any notices required or permitted to be sent hereunder shall be sent in writing, addressed as specified below, and shall be deemed given: (i) if by hand or nationally recognized overnight courier service, by 5:00PM on a Business Day, addressee’s day and time, on the date of delivery, and if delivered after 5:00PM on the first Business Day, addressee’s day and time, after such delivery; (ii) if by electronic mail, on the date that transmission with affirmative confirmation of receipt; or (iii) three (3) Business Days after mailing by prepaid certified or registered mail, return receipt requested. Notices shall be addressed to the respective parties as follows (excluding telephone numbers, which are for convenience only), or to such other address as a party shall specify to the others in accordance with these notice provisions:
(a) If to Parent, to:
Astro Digital Holdings, Inc.
7815 Shaffer Parkway
Littleton, CO 80127
Attention: Michael Wilson, Chief Financial Officer
E-mail: michael.wilson@astrodigital.com
with a copy to (which copy shall not constitute notice):
Broadfield US LLP
488 Madison Avenue, 22nd Fl
New York, NY 10022
Attention: Michael A. Smith; Christopher Hagenbuch
E-mail: michaelsmith@broadfieldlaw.com;
christopherhagenbuch@broadfieldlaw.com
(b) If to a Holder, to the address set forth on Schedule I attached hereto;
or to such other address(es) as any party may have furnished to the others in writing in accordance herewith.
Notices or other communications to any other Holder that becomes a party hereto pursuant to Section 1 shall be delivered to the address set forth in the applicable joinder agreement or other instrument executed by such Holder and binding such Holder to the terms of this Agreement.
7. Enumeration and Headings. The enumeration and headings contained in this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any of the provisions of this Agreement.
8. Counterparts. This Agreement may be executed in any number of original, electronic or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. This Agreement shall become effective upon delivery to each party of an executed counterpart or the earlier delivery to each party of original, photocopied, or electronically transmitted signature pages that together (but need not individually) bear the signatures of all other parties.
9. Successors and Assigns. This Agreement and the terms, covenants, provisions and conditions hereof shall be binding upon, and shall inure to the benefit of, the respective heirs, successors and assigns of the parties hereto. Each Holder hereby acknowledges and agrees that this Agreement is entered into for the benefit of and is enforceable by Parent and its successors and assigns. No party hereto may, except as set forth herein, assign either this Agreement or any of its rights, interests, or obligations hereunder, including by merger, consolidation, operation of law or otherwise, without the prior written consent of the other parties. Any purported assignment or delegation in violation of this paragraph shall be void and ineffectual, and shall not operate to transfer or assign any interest or title to the purported assignee.
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10. Severability. This Agreement shall be deemed severable, and a determination by a court or other legal authority that any provision that is not of the essence of this Agreement is legally invalid shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, the parties shall cooperate in good faith to substitute (or cause such court or other legal authority to substitute) for any provision so held to be invalid a valid provision, as alike in substance to such invalid or unenforceable provision as may be possible and be valid and enforceable.
11. Entire Agreement; Amendment. This Agreement and the other agreements referenced herein constitute the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersede all prior and contemporaneous understandings and agreements related hereto (whether written or oral), to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. No provision of this Agreement may be explained or qualified by any agreement, negotiations, understanding, discussion, conduct or course of conduct or by any trade usage. Except as otherwise expressly stated herein, there is no condition precedent to the effectiveness of any provision hereof. This Agreement may not be changed, amended or modified as to any particular provision, except by a written instrument executed by all parties hereto, and cannot be terminated orally or by course of conduct. No provision hereof can be waived, except by a writing signed by the party against whom such waiver is to be enforced, and any such waiver shall apply only in the particular instance in which such waiver shall have been given.
12. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as may reasonably be considered within the scope of such party’s obligations hereunder, in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
13. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
14. Dispute Resolution. Sections 12.15 and 12.16 of the Merger Agreement are incorporated by reference herein to apply with full force to any disputes arising under this Agreement and shall survive Closing of the Merger Agreement.
15. Governing Law. Section 12.7 of the Merger Agreement is incorporated by reference herein to apply with full force to any disputes arising under this Agreement.
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16. Specific Performance. The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that each party shall be entitled to an injunction or injunctions to prevent any breach, or threatened breach, of this Agreement and to specific enforcement of the terms and provisions of this Agreement, in addition to any other remedy to which any party is entitled at law or in equity. In the event that any action shall be brought in equity to enforce the provisions of this Agreement, no party shall allege, and each party hereby waives the defense, that there is an adequate remedy at law, and each party agrees to waive any requirement for the securing or posting of any bond in connection therewith.
17. Termination. Notwithstanding anything to the contrary contained herein, this Agreement and all rights and obligations of the parties hereunder shall automatically terminate and be of no further force or effect upon the expiration of the Lock-up Period; provided that, such termination shall not affect any liability on the part of any party for (i) a material breach of any covenant or agreement set forth in this Agreement prior to such termination or (ii) Fraud.
18. Prior Agreement. For those parties to the Letter Agreement dated February 11, 2026 with Parent (the “Letter Agreement”) which are also parties to this Agreement, the lock-up provisions in this Agreement shall supersede the lock-up provisions in the Letter Agreement, including, for avoidance of doubt, Section 8 of the Letter Agreement. Such provisions of the Letter Agreement shall be of no further force or effect as to such parties. This Agreement constitutes the exclusive and controlling lock-up instrument for all Holders with respect to their Lock-up Shares, and in the event of any conflict between the lock-up provisions of this Agreement and any lock-up provisions contained in any other Ancillary Agreement or other agreements entered into by the parties hereto, the provisions of this Agreement shall control.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
| PARENT: | ||
| ASTRO DIGITAL HOLDINGS, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| HOLDER: | ||
| [_____________] | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Lock-Up Agreement]
Schedule I
Lock-up Shares1
| Holder Name | Address | Lock-Up Shares | ||
| 1 | Note: To include (i) the Sponsor, (ii) the other Parent equityholders party to the Parent Support Agreement and their Permitted Transferees (as defined therein) and (iii) the Company Stockholders party to the Company Support Agreement and their Permitted Transferees (as defined therein). |
Exhibit 10.4
Privileged & Confidential
INVESTORS’ RIGHTS AGREEMENT
THIS INVESTORS’ RIGHTS AGREEMENT (this “Agreement”) is entered into as of [●], 2026, by and among Astro Digital Holdings, Inc. (f/k/a Proem Acquisition Corp I), a Delaware corporation (“Parent”), Proem SPAC Partners I LLC, a Cayman Islands limited liability company (“Sponsor”), and the other Holders listed on Schedule I attached hereto, including, only for purposes of Section 5.04, any required Prior Agreement (as defined below) signatories identified thereon.
RECITALS
WHEREAS, Parent, the Sponsor and certain security holders are parties to that certain Registration Rights Agreement, dated as of February 11, 2026 (the “Prior Agreement”);
WHEREAS, Parent, Astro Digital US, Inc., a Delaware corporation (the “Company”), PAAC Merger Sub I, Inc., a Delaware corporation, and PAAC Merger Sub II, LLC, a Delaware limited liability company, entered into that certain Merger Agreement, dated as of September 25, 2026 (as it may be amended or modified from time to time, the “Merger Agreement”);
WHEREAS, in connection with the Domestication (as defined in the Merger Agreement), Parent has been domesticated as a Delaware corporation;
WHEREAS, the parties hereto desire to enter into this Agreement in connection with the consummation of the transactions contemplated by the Merger Agreement (the “Transactions”), effective as of the Closing (as defined in the Merger Agreement), to grant the Holders (as defined below) certain registration rights and other rights as set forth herein; and
WHEREAS, effective as of the Closing, and only upon satisfaction of the conditions described in Section 5.04, the Prior Agreement will be terminated in its entirety and superseded by this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Article I.
DEFINITIONS
As used in this Agreement, the following terms have the meanings set forth below:
“Addendum Agreement” means the agreement in the form attached hereto as Exhibit A.
“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person, where “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.
“Agreement” has the meaning set forth in the Preamble.
“Approved Exchange” means the Nasdaq Stock Market or the New York Stock Exchange (or any successor thereto).
“Block Trade” has the meaning set forth in Section 2.05.
“Board” means the board of directors of Parent.
“Business Day” means any day other than a Saturday, Sunday, or other day on which commercial banks in New York, New York are authorized or required by law or executive order to close.
“Closing” has the meaning ascribed to such term in the Merger Agreement.
“Closing Date” means the date on which the Closing occurs.
“Commission” or “SEC” means the United States Securities and Exchange Commission.
“Company” has the meaning set forth in the Recitals.
“Company Holders” means the Persons identified on Schedule I hereto as Company Holders who execute this Agreement, and their respective Permitted Transferees who become parties to this Agreement.
“Company Stockholder Group” means the Company Holders, collectively.
“Converted Stock Options” has the meaning ascribed to such term in the Merger Agreement.
“Covered Sponsor Securities” means the Parent Common Shares and Parent Warrants held by Sponsor Holders as of immediately following the Closing and identified on Schedule I hereto, together with any Parent Common Shares issuable upon the exercise or conversion of such identified securities.
“Demand Registration” has the meaning set forth in Section 2.02(a).
“DPA” means Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. § 4565), and all rules and regulations issued thereunder, including those of the Committee on Foreign Investment in the United States.
“DPA Triggering Rights” means any rights that would constitute a “covered transaction” or trigger a mandatory or voluntary filing with, or review by, the Committee on Foreign Investment in the United States under the DPA.
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“EAR” means the Export Administration Regulations, 15 C.F.R. Parts 730–774.
“Effectiveness Period” has the meaning set forth in Section 2.01(b).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Form S-1” means a Registration Statement on Form S-1 under the Securities Act or any successor form thereto.
“Form S-3” means a Registration Statement on Form S-3 under the Securities Act or any successor form thereto.
“Holder” means any Company Holder, Sponsor Holder, PIPE Investor, or any Person who becomes a party to this Agreement by executing an Addendum Agreement.
“ITAR” means the International Traffic in Arms Regulations, 22 C.F.R. Parts 120–130.
“Lock-Up Agreement” means that certain Lock-Up Agreement, dated as of [●], 2026, by and among Parent and the holders party thereto, as amended, restated, supplemented, or otherwise modified from time to time.
“Lock-Up Period” means the period specified as the “Lock-Up Period” in the Lock-Up Agreement applicable to the relevant Holder and Registrable Securities.
“Maximum Number of Shares” means, with respect to any Underwritten Demand Registration or Underwritten Shelf Takedown, the maximum dollar amount or maximum number of securities that can be sold in such offering without being reasonably likely to have a material adverse effect on the proposed offering price, the timing, the distribution method, or the probability of success of such offering.
“Merger Agreement” has the meaning set forth in the Recitals.
“Parent” has the meaning set forth in the Preamble.
“Parent Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of Parent, as in effect from time to time.
“Parent Common Shares” means shares of common stock, par value $0.0001 per share, of Parent.
“Permitted Transferee” means, with respect to any Holder, any Person that is a permitted transferee under the Lock-Up Agreement and that executes an Addendum Agreement.
“Person” means any individual, corporation, partnership, limited liability company, joint venture, trust, estate, unincorporated organization, government (or any department, agency, or political subdivision thereof), or other entity.
“Piggyback Registration” has the meaning set forth in Section 2.03(a).
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“PIPE Investors” means the Holders identified on Schedule I hereto as PIPE Investors and who have entered into PIPE Subscription Agreements, as contemplated by the Merger Agreement; provided, that a PIPE Investor (in their capacity as such) shall only be considered a Holder with respect to PIPE Shares held by it from time to time only with respect to the rights expressly granted to it under Article II.
“PIPE Shares” means the Parent Common Shares purchased by the PIPE Investors pursuant to their respective PIPE Subscription Agreements.
“Prior Agreement” has the meaning set forth in the Recitals.
“Registrable Securities” means (a) the Parent Common Shares issued to Company Holders as part of the Aggregate Merger Consideration (as defined in the Merger Agreement) in connection with the Transactions, together with any Parent Common Shares issuable upon the exercise of Converted Stock Options held by such Company Holders, (b) the Covered Sponsor Securities, (c) the PIPE Shares, (d) any Parent Common Shares held by a Holder immediately following the Closing, including any Parent Common Shares issued or issuable upon the exercise, conversion, vesting or settlement of any other equity security of Parent held by a Holder immediately following the Closing, and (e) any other equity security of Parent or any of its subsidiaries issued or issuable as a dividend or distribution on, or in exchange for, the securities described in clauses (a) through (d); provided that Registrable Securities shall not include any securities (i) that have been sold in a Registration or pursuant to Rule 144 under the Securities Act, (ii) that have been sold in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee, or (iii) that are then eligible for sale without registration pursuant to Rule 144 or any successor rule promulgated under the Securities Act without volume or other restrictions or limitations including manner or timing of sale.
“Registration” means a registration effected by the preparation and filing of a Registration Statement, and the declaration or ordering of effectiveness of such Registration Statement.
“Registration Expenses” means all fees, costs, and expenses of Registration, including all Commission, stock exchange, and Nasdaq fees, printing expenses, fees and disbursements of Parent’s counsel and accountants, fees and disbursements of one counsel for the selling Holders (selected by the holders of a majority-in-interest of the Registrable Securities being registered), road show expenses, and fees of the transfer agent and registrar.
“Registration Statement” means any registration statement of Parent filed with, or to be filed with, the Commission under the Securities Act, including all amendments and supplements thereto and all exhibits and materials incorporated therein by reference.
“Resale Shelf Registration Statement” has the meaning set forth in Section 2.01(a).
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Sponsor” has the meaning set forth in the Recitals.
“Sponsor Group” means the Sponsor Holders, collectively.
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“Sponsor Holders” means the Sponsor, the other Holders identified as “Sponsor Holders” on the signature pages hereto, and their respective Permitted Transferees who become parties to this Agreement and hold Registrable Securities.
“Transactions” has the meaning set forth in the Recitals.
“Underwriter” means any investment banker or underwriter engaged in connection with an underwritten offering of securities.
“Underwritten Demand Registration” shall mean an underwritten public offering of Registrable Securities pursuant to a Demand Registration.
“Underwritten Shelf Takedown” has the meaning set forth in Section 2.04(a).
Article II.
REGISTRATION RIGHTS
Section 2.01 Resale Shelf Registration.
| (a) | As promptly as reasonably practicable following the Closing Date, and in any event within thirty (30) days thereafter, Parent shall file with the Commission a Registration Statement on Form S-3 (or, if Parent is not then eligible to use Form S-3, on Form S-1) (the “Resale Shelf Registration Statement”) providing for the resale from time to time by the Holders of all Registrable Securities then held by such Holders, whether or not any such Registrable Securities are then subject to the Lock-Up Period. The filing and maintenance of the Resale Shelf Registration Statement shall not be delayed or prevented solely because any Registrable Securities are subject to the Lock-Up Period. Parent shall use its reasonable best efforts to cause such Resale Shelf Registration Statement to become effective as soon as practicable after filing, but in any event no later than the earlier of (i) 60th calendar day following the filing date (or, in the event the Commission notifies Parent that it will “review” the Resale Shelf Registration Statement, the 90th calendar day following the filing date) and (ii) the 15th Business Day after the date Parent is notified in writing by the Commission that the Resale Shelf Registration Statement will not be “reviewed” or will not be subject to further review by the Commission; provided, further, that if such date falls on a Saturday, Sunday or other day that the Commission is closed for business, such date shall be extended to the next Business Day on which the Commission is open for business and if the Commission is closed for operations due to a government shutdown then such date shall be extended by the same number of Business Days that the Commission remains closed. Once effective, Parent shall keep the Resale Shelf Registration Statement continuously effective under the Securities Act at all times until the expiration of the Effectiveness Period. In the event that Parent files a Form S-1, Parent shall use its reasonable best efforts to convert such Registration Statement to a Registration Statement on Form S-3 as soon as Parent is eligible to use such form. |
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| (b) | Parent shall maintain the effectiveness of the Resale Shelf Registration Statement (and any successor registration statement) continuously from the date of its initial effectiveness until the earlier of (i) such time as there are no longer any Registrable Securities outstanding and (ii) such time as all Registrable Securities covered thereby have been sold thereunder (the “Effectiveness Period”), whether or not any Registrable Securities may then be sold under the Lock-Up Agreement. Parent shall supplement or amend the Resale Shelf Registration Statement as required to maintain its effectiveness during the Effectiveness Period. |
| (c) | Parent shall, upon written request of any Permitted Transferee who becomes a Holder pursuant to an Addendum Agreement, file any supplements, post-effective amendments, or additional Registration Statements as may be necessary to add such Holder as a selling securityholder within ten (10) Business Days of such request. |
| (d) | In the event the Commission prevents Parent from including any or all of the Registrable Securities in the Resale Shelf Registration Statement due to limitations on the use of Rule 415 under the Securities Act for an offering to be made on a delayed or continuous basis, Parent shall (i) inform all Holders and reduce the number of Registrable Securities included pro rata in accordance with the number of shares that each such Person has requested be included in such Registration, regardless of the number of shares held by each such Person (such proportion is referred to herein as “Pro Rata”), (ii) use its reasonable best efforts to advocate with the Commission for the registration of all Registrable Securities in accordance with the Commission’s then-current guidance, and (iii) file amendments, supplements, or new Registration Statements (on Form S-3 or, if unavailable, Form S-1) as soon as practicable to register those Registrable Securities not previously registered. |
Section 2.02 Demand Registration.
| (a) | Subject to Section 2.07, at any time when no Resale Shelf Registration Statement is effective, the holders of a majority-in-interest of the Registrable Securities held by the Company Stockholder Group, or the holders of a majority-in-interest of the Registrable Securities held by the Sponsor Group (such group, the “Demand Initiating Holder Group”) may deliver a written demand to Parent requesting that Parent effect a Registration of all or part of such Holders’ Registrable Securities, which written demand shall describe the amount and type of securities to be included in such Registration and the intended method(s) of distribution thereof (a “Demand Registration”). |
| (b) | Within fifteen (15) days after receipt of such demand, Parent shall give written notice of such demand to all other Holders, and each such Holder shall have fifteen (15) days following receipt of such notice to request inclusion of its Registrable Securities in such Demand Registration (each such holder including shares of Registrable Securities in such Registration, a “Demanding Holder”). |
| (c) | The Company Stockholder Group and the Sponsor Group, collectively, shall be entitled to not more than three (3) Demand Registrations in any twelve (12)-month period in the aggregate, and each Underwritten Shelf Takedown shall count as one Demand Registration for purposes of this single aggregate limit. |
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| (d) | A Registration will not count as a Demand Registration until the Registration Statement filed with the Commission with respect to such Demand Registration has been declared effective and Parent has complied with all of its obligations under this Agreement with respect thereto; provided, however, that if, after such Registration Statement has been declared effective, the offering of Registrable Securities pursuant to a Demand Registration is interfered with by any stop order or injunction of the Commission or any other governmental agency or court, the Registration Statement with respect to such Demand Registration will be deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding Holders thereafter elect to continue the offering; provided, further, that Parent shall not be obligated to file a second Registration Statement until a Registration Statement that has been filed is counted as a Demand Registration or is terminated. |
| (e) | If the Demanding Holders so elect and such holders so advise Parent as part of their written demand for a Demand Registration, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an Underwritten Demand Registration. In such event, the right of any holder to include its Registrable Securities in such registration shall be conditioned upon such holder’s participation in such underwriting and the inclusion of such holder’s Registrable Securities in the underwriting to the extent provided herein. The parties agree that, in order to be effected, any Underwritten Demand Registration must be reasonably expected to result in aggregate proceeds to the selling shareholders of at least Twenty-Five Million Dollars ($25,000,000). |
| (f) | If the managing Underwriter or Underwriters for an Underwritten Demand Registration advises Parent and the Demanding Holders in writing that, in such Underwriter’s or Underwriters’ opinion, that the Maximum Number of Shares has been exceeded, all such securities shall be included in the following order of priority: (i) first, the Registrable Securities held by the Demand Initiating Holder Group, Pro Rata; (ii) second, the Registrable Securities of the other Demanding Holders, Pro Rata; (iii) third, the Parent Common Shares or other securities that Parent proposes to sell for its own account; and (iv) fourth, any Parent Common Shares or other securities for the account of other persons that Parent is obligated to register pursuant to written contractual arrangements with such persons, as to which “piggy-back” registration has been requested by the holders thereof, Pro Rata. |
| (g) | A majority-in-interest of the Demanding Holders may elect to withdraw from such Demand Registration by giving written notice to Parent and, if applicable, the Underwriter or Underwriters of their request to withdraw prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Demand Registration. If the majority-in-interest of the Demanding Holders withdraws from a proposed offering, then either the Demanding Holders shall reimburse Parent for the costs associated with the withdrawn Registration (in which case such Registration shall not count as a Demand Registration) or the withdrawn Registration shall count as a Demand Registration. Notwithstanding the foregoing, if a majority-in-interest of the Demanding Holders withdraws from a Demand Registration primarily as a result of (i) a material adverse change in general economic or market conditions or in the market for the Registrable Securities since the date of the applicable demand notice, (ii) a material adverse change in the business, financial condition, or prospects of Parent or its subsidiaries that has occurred or become known to the Demanding Holders since the date of the applicable demand notice, (iii) the occurrence of a Suspension Event pursuant to Section 2.06, or (iv) a material adverse development in any pending or threatened governmental, regulatory, or judicial action or proceeding relating to Parent or its subsidiaries, then such withdrawn Registration shall not count as a Demand Registration for purposes of Section 2.02(c), and Parent shall bear all Registration Expenses incurred in connection therewith. |
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Section 2.03 Piggyback Registration.
| (a) | Subject to Section 2.07, if Parent proposes to file a Registration Statement (other than a Registration Statement on Form S-4 or Form S-8, or filed in connection with an employee benefit plan, an exchange offer, or a dividend reinvestment plan), whether for its own account or for the account of one or more securityholders, Parent shall give written notice of such proposed filing to all Holders at least ten (10) days before the anticipated filing date. Each Holder shall have five (5) Business Days following receipt of such notice to request inclusion of its Registrable Securities (a “Piggyback Registration”). Parent shall cause such Registrable Securities to be included in such Registration and, if such Registration is pursuant to an underwritten offering, shall use its best efforts to cause the managing Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggyback Registration on the same terms and conditions as any similar securities of Parent and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. |
| (b) | If a Piggyback Registration is in connection with a primary underwritten offering by Parent and the managing Underwriter or Underwriters advises Parent in writing, in such Underwriter’s or Underwriters’ opinion, that the Maximum Number of Shares has been exceeded, securities shall be included in the following order of priority: (i) first, the Parent Common Shares or other securities that Parent proposes to sell for its own account; (ii) second, Registrable Securities of the Holders, Pro Rata; and (iii) third, Parent Common Shares or other securities for the account of other persons that Parent is obligated to register pursuant to written contractual arrangements with such persons, Pro Rata. |
| (c) | If a Piggyback Registration is in connection with an underwritten demand registration by a third party and the managing Underwriter or Underwriters advises Parent and such third party in writing, in such Underwriter’s or Underwriters’ opinion, that the Maximum Number of Shares has been exceeded, securities shall be included in the following order of priority: (i) first, the Parent Common Shares or other securities of such third party and any Registrable Securities of the Holders, Pro Rata; (ii) second, the Parent Common Shares or other securities that Parent proposes to sell for its own account; and (iii) third, Parent Common Shares or other securities for the account of other persons that Parent is obligated to register pursuant to written contractual arrangements with such persons, Pro Rata. |
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| (d) | Any Holder may elect to withdraw such holder’s request for inclusion of Registrable Securities in any Piggyback Registration by giving written notice to Parent of such request to withdraw prior to the effectiveness of the Registration Statement, if such offering is pursuant to a Demand Registration, or prior to the public announcement of the offering, if such offering is pursuant to an Underwritten Shelf Takedown. Parent (whether on its own determination or as the result of a withdrawal by persons making a demand pursuant to written contractual obligations) may withdraw a Registration Statement at any time prior to the effectiveness of such Registration Statement. |
Section 2.04 Underwritten Shelf Takedowns.
| (a) | Subject to Section 2.07, at any time when a Resale Shelf Registration Statement is effective, the holders of a majority-in-interest of the Registrable Securities held by the Company Stockholder Group, or the holders of a majority-in-interest of the Registrable Securities held by the Sponsor Group (such group, the “Takedown Initiating Holder Group”), may deliver written notice to Parent requesting an underwritten offering pursuant to such Resale Shelf Registration Statement (an “Underwritten Shelf Takedown”). |
| (b) | Parent shall give written notice of such Underwritten Shelf Takedown to all other Holders within seven (7) Business Days, and each such Holder shall have two (2) Business Days following receipt of such notice to request inclusion of its Registrable Securities (each such holder including shares of Registrable Securities in such Underwritten Shelf Takedown, a “Takedown Holder”). |
| (c) | The Company Stockholder Group and the Sponsor Group shall not be entitled to any Underwritten Shelf Takedown in excess of the three (3) aggregate Demand Registrations available to them under Section 2.02(c), and each Underwritten Shelf Takedown shall count as one Demand Registration for purposes of that aggregate limit. No Underwritten Shelf Takedown shall be required unless the aggregate market value of the Registrable Securities to be sold is at least Twenty-Five Million Dollars ($25,000,000). |
| (d) | The Takedown Initiating Holder Group shall select the managing Underwriter, subject to the approval of Parent (not to be unreasonably withheld, conditioned, or delayed). |
| (e) | If the managing Underwriter or Underwriters for an Underwritten Shelf Takedown advises Parent and Takedown Initiating Holder Group in writing that, in such Underwriter’s or Underwriters’ opinion, that the Maximum Number of Shares has been exceeded, all such securities shall be included in the following order of priority: (i) first, the Registrable Securities held by the Takedown Initiating Holder Group, Pro Rata; (ii) second, the Registrable Securities of the other Takedown Holders, Pro Rata; (iii) third, the Parent Common Shares or other securities that Parent proposes to sell for its own account; and (iv) fourth, any Parent Common Shares or other securities for the account of other persons that Parent is obligated to register pursuant to written contractual arrangements with such persons, as to which “piggy-back” registration has been requested by the holders thereof, Pro Rata. |
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Section 2.05 Block Trades.
Notwithstanding any other provision of this Agreement, and subject to Sections 2.06, 2.07, and 5.17, applicable securities laws, and the applicable requirements of the Transfer Agent, at any time when a Resale Shelf Registration Statement is effective, any Holder other than a PIPE Investor, in its capacity as such, may effect a sale of Registrable Securities in a block trade (a “Block Trade”) having an aggregate market value of at least Ten Million Dollars ($10,000,000); provided that (a) no road show shall be required, (b) no comfort letter or legal opinion shall be required, and (c) such Block Trade shall not count against the limitations on Demand Registrations under Section 2.02(c) or Underwritten Shelf Takedowns under Section 2.04(c). Upon receipt of written notice from a Holder of its intent to effect a Block Trade, Parent shall (i) within two (2) Business Days, instruct the Transfer Agent to cooperate with the removal of any restrictive legends from the Registrable Securities to be sold in accordance with applicable law and the Transfer Agent’s customary requirements, and (ii) provide such other reasonable cooperation as may be necessary to facilitate the Block Trade, including making available appropriate officers for due diligence calls if reasonably requested by the placement agent.
Section 2.06 Suspension.
| (a) | Parent shall be entitled to postpone or suspend the effectiveness or use of any Registration Statement, or to suspend any offering, sale, request, or other exercise of a registration right under this Article II, for a reasonable period of time (a “Suspension Period”) if the chief executive officer or chief financial officer of Parent certifies in writing that, in the good faith judgment of the Board, such filing, effectiveness, use, offering, sale, or exercise would (i) require disclosure of material nonpublic information that Parent is not otherwise required to disclose and that could reasonably be expected to materially and adversely affect Parent or its stockholders, (ii) interfere with, jeopardize, or require disclosure of a proposed or pending financing, acquisition, disposition, strategic transaction, or other material corporate development, (iii) violate or cause Parent to fail to comply with Regulation FD, applicable securities or other laws, Parent’s disclosure controls and procedures, or any listing standard, or (iv) require disclosure of or access to information that is subject to export-control, CFIUS or DPA, classified-information, CUI, facility-clearance, attorney-client privilege, work-product, trade-secret, contractual, or other confidentiality restrictions, or that would otherwise create a material risk to Parent, its subsidiaries, or their businesses. Parent shall not be required to disclose the basis for a Suspension Period if doing so would itself create any such risk. |
| (b) | No Suspension Period under clause (i) or clause (ii) of Section 2.06(a) shall exceed sixty (60) consecutive days, and the aggregate duration of all Suspension Periods under clause (i) or clause (ii) of Section 2.06(a) shall not exceed one hundred twenty (120) days in any twelve (12)-month period. Parent shall not exercise its right to suspend more than two (2) times in any twelve (12)-month period, and no Suspension Period shall commence within thirty (30) days following the conclusion of a prior Suspension Period; provided that the foregoing duration, frequency, and minimum-interval limitations shall not apply to any Suspension Period reasonably necessary to comply with applicable law or regulatory requirements or to protect information or activities described in clauses (iii) or (iv) of Section 2.06(a), or to complete a financing, acquisition, disposition, strategic transaction, or other material corporate development, so long as Parent acts in good faith and terminates the Suspension Period promptly when the applicable basis no longer exists; provided, further, that notwithstanding the foregoing, no single Suspension Period under clauses (iii) or (iv) of Section 2.06(a) shall exceed ninety (90) consecutive days without a resolution of the Board reauthorizing such Suspension Period for a stated additional term, and Parent shall provide written notice to the Holders of any such reauthorization. |
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| (c) | Any registration-related deadlines set forth in this Article II shall be tolled during any Suspension Period. Parent shall give prompt written notice to the Holders of the commencement and termination of each Suspension Period; provided that such notice may state only that a Suspension Period has commenced or terminated and need not disclose the basis for the Suspension Period or any other confidential information. |
| (d) | Upon receipt of any notice from Parent of the happening of any event of the kind described in Section 3.01(b), or, upon any suspension by Parent pursuant to Section 2.06, pursuant to a written insider trading compliance program adopted by the Board, of the ability of all “insiders” covered by such program to transact in Parent’s securities because of the existence of material non-public information, each Holder included in any Registration shall immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Holder receives the supplemented or amended prospectus contemplated by Section 3.01(b) or the restriction on the ability of “insiders” to transact in Parent’s securities is removed, as applicable, and, if so directed by Parent, each such Holder will deliver to Parent all copies, other than permanent file copies then in such Holder possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. |
| (e) | Upon the termination of any Suspension Period, Parent shall, within five (5) Business Days, (i) update, amend, or supplement the Registration Statement and related prospectus as necessary to ensure that the statements therein are not misleading, and (ii) provide written notice to all Holders that they may resume sales under the Registration Statement. |
Section 2.07 Lock-Up Interaction.
Notwithstanding anything to the contrary in this Article II, the filing, effectiveness, and maintenance of any Registration Statement, including the Resale Shelf Registration Statement, shall not be restricted or delayed solely because any Registrable Securities are subject to transfer restrictions under the Lock-Up Agreement. However, no Holder may sell, offer, transfer, request inclusion of, or effect any sale, Demand Registration, Piggyback Registration, Underwritten Shelf Takedown, or Block Trade with respect to Registrable Securities subject to a Lock-Up Period during the applicable Lock-Up Period, except as expressly permitted by the Lock-Up Agreement. Any Registrable Securities as to which the applicable Lock-Up Period has expired shall thereafter be eligible for use in accordance with this Agreement.
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Section 2.08 PIPE Investor Rights.
Notwithstanding any other provision of this Article II, the PIPE Investors (in their capacity as such) shall be entitled solely to inclusion of their PIPE Shares in (i) the Resale Shelf Registration Statement pursuant to Section 2.01 and (ii) Piggyback Registrations pursuant to Section 2.03, in each case subject to Section 2.07. The PIPE Investors, in their capacity as such, shall not be entitled to initiate or request inclusion of PIPE Shares in a Demand Registration under Section 2.02 (which shall be governed by the provisions of the applicable PIPE Subscription Agreement with respect to such PIPE Shares) or to initiate, request inclusion of PIPE Shares in, or otherwise participate in any Underwritten Shelf Takedown under Section 2.04 or any Block Trade under Section 2.05.
Article III.
REGISTRATION PROCEDURES
Section 3.01 Registration Procedures. Whenever Parent is required to effect a Registration or facilitate the sale of Registrable Securities pursuant to this Agreement, Parent shall use its reasonable best efforts to effect such Registration and sale and shall:
| (a) | prepare and file with the Commission a Registration Statement with respect to such Registrable Securities, and use its reasonable best efforts to cause such Registration Statement to become effective; furnish drafts of such Registration Statement and each amendment or supplement thereto to the selling Holders and their counsel at least five (5) Business Days before filing; |
| (b) | notify the selling Holders within three (3) Business Days of (i) the filing and effectiveness of the Registration Statement (or any amendment thereto), (ii) any stop order issued by the Commission, and (iii) any comments received from the Commission with respect to such Registration Statement; |
| (c) | use its reasonable best efforts to qualify such Registrable Securities for offer and sale under the securities or “blue sky” laws of such jurisdictions as any selling Holder reasonably requests; |
| (d) | in connection with any underwritten offering, enter into customary underwriting agreements in form and substance reasonably acceptable to Parent and the managing Underwriter; |
| (e) | furnish to the Underwriters, upon request, customary comfort letters from Parent’s independent registered public accounting firm, with customary bring-down letters in connection with the closing of any underwritten offering; |
| (f) | furnish customary legal opinions and negative assurance letters from Parent’s counsel in connection with any underwritten offering; |
| (g) | make available members of senior management for participation in road shows and investor presentations in connection with any underwritten offering for which the aggregate gross proceeds are reasonably expected to exceed Fifty Million Dollars ($50,000,000); |
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| (h) | cooperate with the transfer agent to facilitate the timely preparation and delivery of certificates or book-entry positions representing the Registrable Securities to be sold; |
| (i) | use its reasonable best efforts to cause the Registrable Securities to be listed on each Approved Exchange on which similar securities of Parent are then listed; |
| (j) | bear all Registration Expenses; provided that the selling Holders shall bear all underwriting discounts, selling commissions, and transfer taxes, if any, applicable to the sale of their Registrable Securities; |
| (k) | cooperate with the selling Holders and the Underwriters to facilitate the removal of any restrictive legends from the Registrable Securities being sold; |
| (l) | comply with all applicable rules and regulations of the Commission and make generally available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act; and |
| (m) | use its reasonable best efforts to maintain eligibility for use of Form S-3 (or any successor form thereto). |
Section 3.02 Information. Each Holder that sells Registrable Securities pursuant to a Registration Statement hereunder agrees to (a) furnish to Parent in writing such information as Parent may reasonably request for use in connection with such Registration Statement, subject to Section 5.17 and only to the extent reasonably necessary to comply with applicable securities laws and prepare the applicable filing, and (b) comply with the prospectus delivery requirements of the Securities Act with respect to the disposition of such Registrable Securities. Upon receipt of notice from Parent of any Suspension Period, each Holder shall immediately discontinue disposition of Registrable Securities until such Holder receives notice that the Suspension Period has terminated. Any request by Parent for information from a Holder pursuant to this Section 3.02 shall (i) be made in writing, (ii) describe with reasonable specificity the information requested and the purpose for which it is needed, and (iii) be delivered at least ten (10) Business Days before the applicable filing or effectiveness deadline. Parent shall not assert that any delay in filing or effectiveness of a Registration Statement was caused by a Holder's failure to furnish information unless Parent complied with the foregoing requirements and the Holder failed to respond within five (5) Business Days of receipt of a compliant request.
Section 3.03 Rule 144. Parent covenants that it shall file any reports required to be filed by it under the Securities Act and the Exchange Act and shall take such further action as the Holders may reasonably request, all to the extent required from time to time to enable such Holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rules may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission.
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Article IV.
INDEMNIFICATION AND CONTRIBUTION
Section 4.01 Indemnification by Parent.
Parent agrees to indemnify and hold harmless each selling Holder, its Affiliates, officers, directors, employees, agents, and each Person who controls (within the meaning of the Securities Act) such Holder, against all losses, claims, damages, liabilities, and expenses (including reasonable attorneys’ fees) arising out of or based upon any untrue statement (or alleged untrue statement) of a material fact contained in any Registration Statement, prospectus, or preliminary prospectus, or arising out of or based upon any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided that such indemnity shall not apply to any loss arising out of or based upon any untrue statement or omission made in reliance upon and in conformity with written information furnished by or on behalf of such Holder expressly for use therein, or arising out of such Holder’s own violation of applicable securities laws.
Section 4.02 Indemnification by Holders.
Each selling Holder agrees, severally and not jointly, to indemnify and hold harmless Parent, its Affiliates, officers, directors, employees, agents, and each Person who controls Parent (within the meaning of the Securities Act), against all losses, claims, damages, liabilities, and expenses arising out of or based upon any untrue statement (or alleged untrue statement) of a material fact contained in any Registration Statement, prospectus, or preliminary prospectus, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, and only to the extent, that such untrue statement or omission was made in reliance upon and in conformity with written information furnished by such Holder expressly for use therein; provided that each Holder’s liability hereunder shall be limited to the net proceeds received by such Holder from the sale of Registrable Securities in such Registration.
Section 4.03 Defense and Settlement.
Any Person entitled to indemnification hereunder shall promptly notify the indemnifying party upon becoming aware of any claim, and the indemnifying party shall be entitled to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. If the indemnified party determines that a conflict of interest exists that makes representation by the indemnifying party’s counsel inappropriate, the indemnified party shall be entitled to retain separate counsel at the indemnifying party’s expense. No indemnifying party shall consent to the entry of any judgment or enter into any settlement (a) that does not include as an unconditional term thereof the giving by the claimant or plaintiff to the indemnified party of a release from all liability with respect to such claim or (b) that includes any non-monetary relief binding on the indemnified party, in each case without the prior written consent of such indemnified party.
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Section 4.04 Contribution.
If the indemnification provided for in this Article IV is held by a court to be unavailable to an indemnified party, then the indemnifying party shall contribute to the amounts paid or payable as a result of such losses, claims, damages, liabilities, or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations; provided that no Holder shall be required to contribute in excess of the net proceeds received by such Holder from the sale of Registrable Securities in such Registration; and provided further that no Person who has been found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who has not been found guilty of such fraudulent misrepresentation.
Article V.
MISCELLANEOUS
Section 5.01 Termination. This Agreement shall terminate on the date as of which there shall be no Registrable Securities outstanding. The registration rights set forth in Article II shall terminate with respect to any Holder at such time as such Holder no longer holds any Registrable Securities.
Section 5.02 Assignment; Addendum Agreement.
| (a) | Any Holder may transfer its registration rights under this Agreement to a Permitted Transferee; provided that (i) such Permitted Transferee executes an Addendum Agreement in the form attached hereto as Exhibit A, and (ii) such Permitted Transferee agrees to be bound by all applicable terms of this Agreement. |
| (b) | Notwithstanding the foregoing, no transfer of rights to any Person who is a foreign person shall be effective if such transfer would give rise to DPA Triggering Rights, unless such Person provides evidence satisfactory to Parent that no filing or review under the DPA would be required. |
Section 5.03 Amendment; Waiver.
| (a) | This Agreement may be amended, modified, or supplemented only by a written instrument executed by Parent and the holders of a majority-in-interest of the then-outstanding Registrable Securities; provided that any amendment that would have a material adverse effect on the rights of the Company Stockholder Group or the Sponsor Group (as applicable) shall require the prior written consent of such adversely affected group; provided, further, that any amendment that would materially and adversely affect the registration rights of the PIPE Investors as a class shall require the prior written consent of the holders of a majority-in-interest of the PIPE Shares then outstanding. |
| (b) | No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the party to be bound thereby. No waiver shall constitute a continuing waiver or a waiver of any subsequent breach or default. |
Section 5.04 Prior Agreement.
Effective as of the Closing, the Prior Agreement is hereby terminated and superseded in its entirety by the execution of this Agreement by Parent, Sponsor Holders, and each other party to the Prior Agreement whose consent or signature is required under the Prior Agreement.
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Section 5.05 Notices.
All notices, requests, consents, claims, waivers, and other communications hereunder shall be in writing and shall be deemed to have been given when delivered by hand or by nationally recognized overnight courier service, when sent by email (with confirmation of transmission), or when received if sent by certified mail (return receipt requested), to the parties as follows:
If to Parent:
Astro Digital Holdings, Inc.
7815 Shaffer Parkway
Littleton, CO 80127
Attention: Michael Wilson, Chief Financial Officer
E-mail: michael.wilson@astrodigital.com
with a copy to (which copy shall not constitute notice):
Broadfield US LLP
488 Madison Avenue, 22nd Fl
New York, NY 10022
Attention: Michael A. Smith; Christopher Hagenbuch
E-mail: michaelsmith@broadfieldlaw.com; christopherhagenbuch@broadfieldlaw.com
If to a Holder, to the address set forth on Schedule I attached hereto;
or to such other address(es) as any party may have furnished to the others in writing in accordance herewith.
Notices or other communications to any other Holder that becomes a party hereto pursuant to Section 1 shall be delivered to the address set forth in the applicable joinder agreement or other instrument executed by such Holder and binding such Holder to the terms of this Agreement.
Section 5.06 Governing Law.
This Agreement, and any claim or cause of action hereunder based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the laws of any other jurisdiction.
Section 5.07 Jurisdiction; Venue.
Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the federal and state courts located in the Borough of Manhattan, City of New York, State of New York, in any action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby. Each party irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any such action or proceeding in such courts and any claim that any such action or proceeding brought in such courts has been brought in an inconvenient forum.
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Section 5.08 Waiver of Jury Trial.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE, AND ENFORCEMENT HEREOF.
Section 5.09 Specific Performance.
The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that each party shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which such party is entitled at law or in equity. Each party hereby waives any requirement for the securing or posting of any bond in connection with any action for specific performance or injunctive relief.
Section 5.10 Entire Agreement.
This Agreement (together with the Schedules and Exhibits hereto) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties with respect to the subject matter hereof. Nothing in this Agreement shall limit or otherwise affect the rights and obligations of the parties under the Merger Agreement, the Lock-Up Agreement, any PIPE Subscription Agreement, or any Confidentiality Agreement.
Section 5.11 Severability.
If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon a determination that any term or provision is invalid, illegal, or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible.
Section 5.12 Counterparts; Electronic Signatures.
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by electronic mail (including in portable document format (.pdf)) or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document shall be effective as delivery of a manually executed counterpart of this Agreement.
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Section 5.13 No Third-Party Beneficiaries.
Except as expressly provided in Article IV (with respect to indemnified parties), this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever.
Section 5.14 Further Assurances.
Each of the parties hereto shall execute and deliver such additional documents, instruments, conveyances, and assurances, and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated hereby.
Section 5.15 Headings.
The headings in this Agreement are for reference only and do not affect the interpretation of this Agreement.
Section 5.16 No Presumption Against Drafter.
This Agreement shall be construed without regard to any presumption or rule of construction requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
Section 5.17 Regulatory and Disclosure Compliance.
The exercise of any rights and the performance of any obligations under this Agreement shall at all times be subject to and limited by (a) ITAR, EAR, and all applicable export control laws, rules, and regulations, (b) the DPA and any requirements of the Committee on Foreign Investment in the United States, (c) facility security clearance requirements applicable to Parent, (d) restrictions on the disclosure of classified information, CUI, or information subject to national security restrictions, (e) Regulation FD under the Exchange Act, (f) attorney-client privilege and work product protection, (g) trade secret protections, and (h) Parent’s disclosure controls and procedures. The foregoing limitations apply to the exercise of registration rights (including diligence conducted in connection therewith and the execution of Addendum Agreements under Section 5.02).
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
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| PARENT: | ||
| ASTRO DIGITAL HOLDINGS, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Investors’ Rights Agreement]
| SPONSOR: | ||
| PROEM SPAC PARTNERS I LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Investors’ Rights Agreement]
| SPONSOR HOLDERS: | ||
| [____] | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature page to Addendum Agreement]
| COMPANY HOLDERS: | ||
| [____] | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Investors’ Rights Agreement]
| FOR PURPOSES OF SECTION 5.04 ONLY: | ||
| [_____] | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Investors’ Rights Agreement]
SCHEDULE I
Holders
| NAME / CAPACITY | NUMBER OF PARENT COMMON SHARES | ADDRESS | |
|
Chris Biddy
Company Holder |
[●] | [●] | chris@astrodigital.com |
|
Michael Wilson
Company Holder |
[●] | [●] | michael.wilson@astrodigital.com |
| [Other Company Support Agreement Holders to be added] | [●] | [●] | [●] |
|
Proem SPAC Partners I LLC
Sponsor |
[●] | c/o Proem Acquisition Corp I, 3860 W. Northwest Hwy, Suite 470, Dallas, TX 75220 | [●] |
| [Parent Support Agreement, Lock-Up Agreement holders, any other Sponsor Holders and participating PIPE Investors to be added] |
EXHIBIT A
FORM OF ADDENDUM AGREEMENT
This Addendum Agreement (this “Addendum Agreement”) is entered into as of [DATE], by and between Astro Digital Holdings, Inc., a Delaware corporation (“Parent”), and the undersigned (the “New Holder”). Capitalized terms used, but not otherwise defined herein, shall have the meaning ascribed to them in the IRA.
WHEREAS, Parent and certain investors are parties to that certain Investors’ Rights Agreement, dated as of [●], 2026 (as it may be amended, restated, supplemented, or otherwise modified from time to time, the “IRA”); and
WHEREAS, the New Holder desires to become a party to the IRA for purposes of Article II (Registration Rights) thereof.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
| 1. | The New Holder hereby acknowledges that it has received and reviewed a copy of the IRA and agrees to be bound by all of the terms and conditions thereof as a “Holder” for purposes of Article II (Registration Rights) of the IRA. |
| 2. | The New Holder acknowledges and agrees that it shall not be entitled to any director nomination rights under Article V or information rights under Article VI of the IRA. |
| 3. | The New Holder represents and warrants that: |
| a. | New Holder is not a “foreign person” and is not controlled by a “foreign person,” as those terms are defined in 31 C.F.R. Part 800 promulgated under Section 721 of the DPA; |
| b. | As of the date of this Addendum Agreement, such New Holder has not agreed to grant any rights to any “foreign person” (as defined in 31 C.F.R. Part 800) that would constitute a “covered transaction” subject to mandatory filing requirements under the DPA. |
| c. | New Holder does not permit any “foreign person” affiliated with New Holder, whether affiliated as a limited partner, shareholder or equivalent, to obtain, through New Holder as a result of that foreign person’s investment in New Holder, any of the following with respect to Parent: (i) access to any “material nonpublic technical information” (as defined in 31 C.F.R. § 800.232) in the possession of Parent; (ii) membership or observer rights on the Board or equivalent governing body of Parent or the right to nominate an individual to a position on such governing body; (iii) any “involvement,” other than through the voting of shares, in the “substantive decision-making” of Parent (as such terms are defined in the DPA) regarding the use, development, acquisition or release of any “critical technology” (as defined in 31 C.F.R. § 800.215); or (iv) “control” of the Parent (as defined in 31 C.F.R. § 800.208). |
| 4. | This Addendum Agreement shall be governed by and construed in accordance with the laws of the State of New York. |
| 5. | This Addendum Agreement may be executed in counterparts. |
[Remainder of Page Intentionally Left Blank]
| NEW HOLDER: | ||
| By: | ||
| Name: | ||
| Title: | ||
| Address: | ||
| ACKNOWLEDGED AND AGREED: | ||
| ASTRO DIGITAL HOLDINGS, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature page to Addendum Agreement]
Exhibit 10.5
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered as of [DATE] and effective as of the Effective Date (as defined below), by and between Proem Acquisition Corp. I, a Cayman Islands exempted company (the “Company”), and [NAME], an individual residing at [ADDRESS] (the “Executive”). This Agreement shall amend and replace in its entirety the Employment Agreement signed between Astro Digital US, Inc., a Delaware corporation (“Astro Digital”) and [NAME] dated as of [PRIOR AGREEMENT DATE] (the “Prior Agreement”), effective as of (and contingent upon) the Effective Date. For purposes of this Agreement, the Company and Executive may be referred to each individually as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, Executive has been serving as the [TITLE] of Astro Digital pursuant to the Prior Agreement;
WHEREAS, Astro Digital has entered into that certain Merger Agreement, dated as of the date hereof, by and among Astro Digital, PAAC Merger Sub I, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub I”), PAAC Merger Sub II, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Merger Sub II”), and the Company (such agreement, the “Merger Agreement”);
WHEREAS, pursuant to the terms of the Merger Agreement, (i) the Company shall de-register from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation in accordance with the relevant organizational documents of the Company, Section 388 of the Delaware General Corporation Law, as amended (the “DGCL”), and Part XII of the Companies Act (As Revised) of the Cayman Islands and be renamed Astro Digital, Inc., (ii) Merger Sub I will merge with and into Astro Digital (the “First Merger”), after which Astro Digital will be the surviving corporation (the “Initial Surviving Corporation”); and (iii) immediately following the First Merger, the Initial Surviving Corporation will merge with and into Merger Sub II (the “Second Merger” and together with the First Merger, the “Mergers”), with Merger Sub II continuing as the surviving entity and a wholly-owned subsidiary of the Company;
WHEREAS, the Company desires to retain and employ Executive to provide executive services on behalf of the Company, and Executive desires to be employed by the Company, pursuant to the terms and provisions set forth in this Agreement, effective as of the date of the consummation of (and contingent upon the occurrence of) the Mergers (the “Effective Date”); and
WHEREAS, the Parties desire to document in this Agreement the terms and conditions relating to such services and employment.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. EMPLOYMENT OF EXECUTIVE.
1.1. Duties. The Company hereby engages Executive as the [TITLE] “[TITLE ABBREVIATION]” of the Company and its subsidiaries for so long as the Company may request. Executive hereby accepts such engagement, pursuant to the further terms and provisions of this Agreement. During the term of this Agreement, Executive shall report directly to the Board of Directors of the Company (the “Board of Directors”) and shall faithfully perform such duties on behalf of the Company and its subsidiaries as are typically and routinely associated with such title and position, and shall perform such other duties as Executive and the Company shall mutually determine from time to time.
1.2. Time and Effort. Executive shall devote the Executive’s time, attention, and reasonable best efforts to the business of the Company. Executive shall perform all duties in a professional, ethical and businesslike manner and in furtherance of the policies and directions of the Company. Executive shall operate the Company’s business in the ordinary course of business consistent with the Executive’s schedule to assure sufficient hours to properly effectuate the Executive’s duties. Executive may participate fully in social, charitable, corporate advisory, and civic activities, and such other personal affairs and personal business interests of Executive as do not interfere with the performance of Executive’s duties hereunder and that are not in conflict with the business.
2. COMPENSATION AND BENEFITS.
2.1. Annual Base Salary. As compensation for the services rendered by Executive hereunder, the Company shall pay to Executive an annualized base salary of $[BASE SALARY] (the “Base Salary”). The Base Salary shall be reviewed annually by the Board of Directors or a committee thereof. The Base Salary shall not be decreased below the then-current level without Executive’s written consent, except as part of an across-the-board reduction in base salary applicable to all senior executives of the Company of not more than ten percent (10%). Executive’s Base Salary shall be payable in equal installments in accordance with the regular payroll practices and procedures of the Company. To the extent required by applicable law, all Base Salary amounts paid hereunder shall be subject to the customary impositions (including, without limitation, state disability insurance), withholding tax and other employment taxes as are customarily withheld and as required with respect to compensation paid to an employee by an employer.
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2.2. Bonus Compensation. Executive shall be entitled to participate in all commission, profit-sharing, equity/option, incentive and performance award plans and programs as may from time to time be made available to Senior Executives by the Company, which shall include, for each calendar year ending during the Term, an annual performance bonus (the “Annual Bonus”) targeted at [BONUS PERCENTAGE] percent ([BONUS PERCENTAGE]%) of Base Salary or such other amount as determined in the sole discretion of the Board of Directors (or a committee thereof). The target Annual Bonus and applicable performance metrics shall be established by the Board of Directors or a committee thereof at the beginning of each fiscal year. Any Annual Bonus earned shall be paid no later than March 15 of the calendar year following the performance year to which such Annual Bonus relates. The Company shall neither (y) terminate or amend any bonus or benefit programs, plan or arrangement of the Company pursuant to which Executive, or the Executive’s dependents, beneficiaries or estate, is or shall be entitled to benefits pursuant to this Section 2 nor (z) terminate or amend any formula or method set forth in any bonus or benefit program, plan or arrangement of the Company pursuant to which the amount and type of benefits to which the Executive, or the Executive’s dependents, beneficiaries or estate, is or shall be entitled thereunder are determined, if such termination or amendment would in any way modify or deprive Executive, or the Executive’s dependents, beneficiaries or estate, of any benefits to which the Executive, or the Executive’s dependents, beneficiaries or estate, is or shall be entitled under any bonus or benefit program, plan or arrangement of the Company, unless (A) Executive expressly consents in writing to such termination or amendment or (B) the amendment is required by law or regulation and the Company shall, to the extent necessary, pay or provide for payment of amounts equal to any benefits lost or reduced by such amendment.
2.3. Expense Reimbursement. The Company shall pay or reimburse Executive for all reasonable business expenses actually paid or incurred by Executive in connection with the performance of Executive’s duties under this Agreement. Such reimbursement shall be paid or reimbursed in accordance with any and all policies and procedures of the Company (including any parent entity or affiliate, as applicable) applicable to the reimbursement of employee expenses, or as may be otherwise agreed between the Parties.
2.4. Vacation. Executive shall be entitled to vacation and other personal leave time (including, without limitation, leave for sickness and temporary disability) during each calendar year hereunder in a manner agreed upon between the Parties. In no event shall Executive be entitled to less than [MINIMUM VACATION WEEKS] weeks’ vacation plus religious, national and State holidays. In the event Executive does not use all paid vacation time permitted by the Company, Executive shall have the right to carry over paid vacation into the next calendar year. The maximum number of vacation days that Executive may carryover is [MAXIMUM CARRYOVER WEEKS] weeks.
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2.5. Additional Benefits. During the Term (or thereafter, to the extent expressly provided herein), Executive shall receive benefits paid for by the Company in a manner consistent with benefits included and as offered to the members of the Senior Executive Management Team. At a minimum, these will include:
(a) Insurance. Health and dental insurance paid by the Company and similar health and welfare benefits and life insurance as may be determined by the Company consistent with such benefits provided to the Senior Management Executives of the Company, under the formal Health Benefits program for its Senior Executive team and employees. In the event that the Company shall provide disability insurance to its Senior Executive Management Team, the Company shall also provide Executive with equivalent disability insurance coverage.
(b) Retirement Plans. Subject to existing eligibility rules, participation in the Company’s Pension/Profit Sharing Plans and other deferral of income plans shall be as made available to the members of the Senior Executive Management Team.
2.6. Equity Compensation. Following consummation of the Mergers, Executive shall be eligible to receive grants of equity awards (including stock options, restricted stock units, and time-based or performance-based equity awards) under the proposed New Incentive Plan (as defined in the Merger Agreement) (the “Plan”) with a grant date fair value (as determined by the Board of Directors (or a committee thereof)) equal to $[ANNUAL EQUITY GRANT VALUE] per year in accordance with vesting terms to be established by the Board of Directors (or a committee thereof) which may vary from year to year, subject to approval by the Board of Directors (or a committee thereof) (the “Equity Awards”). In order for Executive to be eligible to receive Equity Awards pursuant to this Section 2.6, Executive must remain continuously employed by the Company through the date of grant. The terms and conditions of any equity awards, including vesting schedules, performance criteria, and treatment upon termination of employment or a Change in Control, shall be set forth in separate award agreements and the Plan. For the avoidance of doubt, no Equity Awards shall be granted to Employee unless and until (i) the Mergers are consummated, (ii) the requisite Board of Directors and shareholders of the Company (as applicable) approve the Plan, and (iii) the shares underlying the Plan are registered on a Form S-8.
2.7. Clawback/Recoupment. All incentive-based compensation (including annual bonuses, Equity Awards, and any other compensation that is granted, earned, or vested based wholly or in part upon the attainment of a financial reporting measure) paid or payable to Executive pursuant to this Agreement or otherwise shall be subject to recovery, recoupment, or clawback by the Company pursuant to any compensation recovery policy adopted by the Company pursuant to Rule 10D-1 under the Securities Exchange Act of 1934 and applicable listing standards, as such policy may be amended from time to time. Executive agrees to promptly comply with any such policy and to return any compensation required to be returned pursuant thereto. No recovery of compensation under such policy will constitute an event giving rise to Executive’s right to voluntarily terminate employment for “Good Reason” or constitute “constructive termination” under this Agreement.
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3. TERM AND TERMINATION.
3.1. Term. Executive’s employment hereunder shall be deemed to have commenced Effective Date and shall continue until terminated by either Party in accordance with the provisions of this Agreement; provided, that if the Mergers are not consummated, this Agreement shall be null and void ab initio and neither the Company, Astro Digital nor any other person shall have any liability to Executive under this Agreement. Executive’s employment is “at-will,” meaning either the Company or Executive may terminate the employment relationship at any time, with or without Cause or Good Reason, subject to the provisions of this Section 3. The period during which Executive is employed hereunder is referred to as the “Term.”
3.2. Termination.
(a) By the Company For Cause. The Company shall have the right to terminate this Agreement and the Company’s employment of Executive in the event of the occurrence of any of the following (each such event, “Cause”):
(i) Executive commits a material breach of any term or provision of this Agreement, and such breach is not cured by Executive within thirty (30) days following notice to Executive by the Company, if provided, specifying the nature of such breach; or
(ii) The Company determines, in good faith, that Executive has engaged in any of the following: (A) misappropriation, theft, or embezzlement of funds or property from the Company or any affiliate; (B) conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude; (C) willful misconduct or gross negligence in the performance of Executive’s duties that causes or is reasonably likely to cause material harm to the Company; (D) material violation of any written Company policy, including the Company’s Code of Conduct or insider trading policy; (E) breach of fiduciary duty to the Company or its stockholders; (F) willful failure to cooperate with a bona fide internal investigation or an investigation by any regulatory or law enforcement agency, after being instructed to cooperate; or (G) material violation of applicable securities laws; or
(iii) Executive’s willful and continued failure to perform substantially all of Executive’s duties with the Company (other than any such failure resulting from incapacity due to Disability), after a written demand for substantial performance is delivered to Executive by the Board that specifically identifies the manner in which the Board believes that Executive has not substantially performed Executive’s duties, and such failure is not cured within thirty (30) days after such notice.
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(b) By the Company Upon Disability. The Company shall have the right to terminate this Agreement and the Company’s employment of Executive hereunder upon the provision of at least thirty (30) days’ prior written notice to Executive upon a written determination by an independent physician selected by the Company and reasonably acceptable to Executive that Executive is unable to perform Executive’s obligations under this Agreement, despite Executive’s best efforts, by reason of Disability. As used herein, “Disability” shall mean the inability of Executive, due to a physical or a mental condition, to perform the essential functions of Executive’s position, for any period of 180 consecutive days or for 180 days in any 365-day period. For purposes of the foregoing, the return of the Executive to the Executive’s duties for a period of twenty-one (21) days or less shall not be deemed to interrupt or cancel any period of Disability.
(c) By Executive for Good Reason. Executive shall have the right to terminate this Agreement and Executive’s employment hereunder for “Good Reason” upon the occurrence of any of the following events without Executive’s prior written consent:
| (i) | a material diminution in Executive’s Base Salary (other than an across-the-board reduction in base salary applicable to all senior executives of the Company of not more than ten percent (10%)); |
| (ii) | a material diminution in Executive’s title, authority, duties, or responsibilities, including a requirement that Executive report to any person other than the Board of Directors; |
| (iii) | a material breach by the Company of this Agreement or any other material agreement between the Company and Executive; | |
| (iv) | a relocation of Executive’s principal place of employment by more than fifty (50) miles from its then-current location; or | |
| (v) | the failure of the Company to make any required payment to Executive hereunder. |
Notwithstanding the foregoing, Executive may not terminate employment for Good Reason unless: (A) Executive provides written notice to the Company of the existence of the condition giving rise to Good Reason within ninety (90) days of the initial existence of such condition; (B) the Company fails to remedy such condition within thirty (30) days after receipt of such notice (the “Cure Period”); and (C) Executive’s termination of employment occurs within thirty (30) days following the expiration of the Cure Period.
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(d) Death of Executive. This Agreement and the employment of Executive hereunder shall terminate upon the death of Executive.
(e) By Either Party Without Cause. Either Party may terminate this Agreement at any time without cause upon minimum of sixty (60) days’ notice to the other Party.
(f) Change in Control Definition. For purposes of this Agreement, a “Change in Control” shall mean the occurrence of any of the following events:
| (i) | the acquisition by any person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934) of beneficial ownership of fifty percent (50%) or more of the combined voting power of the then-outstanding voting securities of the Company; |
| (ii) | the consummation of a merger, consolidation, or reorganization of the Company with or into another entity, unless the holders of the Company’s voting securities immediately prior to such transaction hold at least fifty percent (50%) of the combined voting power of the surviving entity’s outstanding voting securities immediately after such transaction; |
| (iii) | the sale or disposition of all or substantially all of the assets of the Company; |
| (iv) | a change in the composition of the Board of Directors such that the individuals who constitute the Board as of the Effective Date (the “Incumbent Board”) cease to constitute at least a majority of the Board; provided that any individual who becomes a director subsequent to the Effective Date whose election or nomination was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be treated as a member of the Incumbent Board; or |
| (v) | a complete liquidation or dissolution of the Company. |
Notwithstanding the foregoing, a “Change in Control” shall not include any transaction that does not constitute a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5).
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3.3 Payments and Benefits Following Termination.
(a) Accrued Obligations. Upon any termination of Executive’s employment for any reason, Executive (or Executive’s estate or designated beneficiaries, as applicable) shall be entitled to receive: (i) any earned but unpaid Base Salary through the date of termination; (ii) any accrued but unused vacation pay; (iii) reimbursement of any unreimbursed business expenses incurred prior to the date of termination in accordance with Company policy; (iv) any earned but unpaid Annual Bonus for the fiscal year preceding the year of termination, payable at the time bonuses are paid to other senior executives; and (v) any vested benefits under the Company’s employee benefit plans in accordance with the terms of such plans (collectively, the “Accrued Obligations”).
(b) Severance Benefits. In the event of a termination of Executive’s employment by the Company without Cause (other than due to death or Disability) or by Executive for Good Reason (in each case, a “Qualifying Termination”), and subject to Executive’s compliance with Section 3.3(d) below, the Company shall provide Executive with the following severance benefits in addition to the Accrued Obligations:
| (i) | an amount equal to [SEVERANCE MONTHS] months of Executive’s then-current Base Salary, payable in substantially equal installments over the [SEVERANCE MONTHS]-month period following the date of termination in accordance with the Company’s regular payroll schedule; |
| (ii) | an amount equal to Executive’s target Annual Bonus for the fiscal year in which the termination occurs (or, if no target has been established for such year, the target Annual Bonus for the immediately preceding fiscal year), payable in substantially equal installments over the [SEVERANCE MONTHS]-month period following the date of termination; |
| (iii) | if Executive timely elects continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay the employer portion of the premiums for Executive’s (and Executive’s eligible dependents’) continued participation in the Company’s group health plan for up to [COBRA MONTHS] months following the date of termination or until Executive becomes eligible for coverage under another employer’s group health plan, whichever occurs first. |
Notwithstanding anything in this Section 3.3(b) to the contrary, upon the Company’s adoption of a formal executive severance plan applicable to the Company’s senior executives generally (an “Executive Severance Plan”), the severance benefits provided under this Section 3.3(b) shall be superseded by the terms and conditions of such Executive Severance Plan, provided that Executive is designated as a participant therein and the benefits provided under such Executive Severance Plan are no less favorable in the aggregate to Executive than those provided under this Section 3.3(b).
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(c) Change in Control Severance Benefits. In the event of a Qualifying Termination that occurs within [CIC PROTECTION PERIOD] months following a Change in Control, in lieu of the severance benefits described in Section 3.3(b), and subject to Executive’s compliance with Section 3.3(d) below, the Company shall provide Executive with the following enhanced severance benefits in addition to the Accrued Obligations:
| (i) | a lump-sum cash payment equal to [CIC SEVERANCE MONTHS] months of Executive’s then-current Base Salary (or, if higher, Executive’s Base Salary in effect immediately prior to the Change in Control), payable within sixty (60) days following the date of termination; |
| (ii) | a lump-sum cash payment equal to [CIC BONUS MULTIPLIER] times Executive’s target Annual Bonus for the fiscal year in which the termination occurs (or, if higher, the target Annual Bonus in effect immediately prior to the Change in Control), payable within sixty (60) days following the date of termination; |
| (iii) | full acceleration of vesting of all outstanding unvested equity awards held by Executive as of the date of termination (with any performance-based awards vesting at target level unless a higher level has been achieved as of the date of termination); |
| (iv) | if Executive timely elects COBRA continuation coverage, the Company shall pay the employer portion of premiums for up to [CIC COBRA MONTHS] months following the date of termination or until Executive becomes eligible for coverage under another employer’s group health plan, whichever occurs first. |
The provisions of this Section 3.3(c) shall similarly be superseded by the terms of any Executive Severance Plan adopted by the Company, subject to the same conditions set forth in the last paragraph of Section 3.3(b).
(d) Release Requirement. Notwithstanding any provision of this Agreement to the contrary, the Company’s obligation to provide severance benefits under Section 3.3(b) or 3.3(c) shall be conditioned upon Executive’s timely execution (and non-revocation during any applicable revocation period) of a general release of claims in a form reasonably satisfactory to the Company (the “Release”) within sixty (60) days following Executive’s date of termination. If the sixty (60)-day period during which the Release must become effective spans two calendar years, payments that would otherwise commence during the first calendar year shall instead commence on the first payroll date occurring in the second calendar year (with any payments that were otherwise scheduled during the first calendar year being paid in a lump sum on such date), regardless of when within such sixty (60)-day period the Release actually becomes effective.
(e) Payments made pursuant to Section 3 hereunder are in the nature of severance and/or liquidated damages. Executive is under no obligation to mitigate these damages.
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3.4 Cooperation. During and after employment, to the extent reasonably requested by the Board, Executive shall reasonably assist and cooperate with the Company in connection with the defense or prosecution of any claim that may be made against or by the Company, or in connection with any ongoing or future investigation or dispute or claim of any kind involving the Company, including any proceeding before any arbitral, administrative, judicial, legislative, or other body or agency, including testifying in any proceeding, to the extent such claims, investigations or proceedings relate to services performed or required to be performed by Executive, pertinent knowledge possessed by Executive, or any act or omission by Executive. Executive will also perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this paragraph. Notwithstanding the foregoing, the Company shall make reasonable efforts to minimize disruption of the Executive’s personal, business, and other activities and Executive shall not be required to cooperate against the Executive’s own interests. If Executive is required to cooperate pursuant to this Section 3.4, the Company shall reimburse the Executive for reasonable expenses incurred in connection with such cooperation (including, without limitation, reasonable legal fees incurred by Executive if Executive in good faith believes independent counsel is necessary) and, to the extent that Executive is required to spend substantial time on such matters, the Company shall compensate Executive at a mutually agreed upon hourly rate. Further, if requested, Executive agrees to provide the Company with reasonable assistance, including, without limitation, providing information, in connection with the transition of Executive’s employment duties and responsibilities to others and matters with which Executive was involved during Executive’s employment with the Company.
3.4 Effects of Termination. For a period of two (2) years following any expiration or termination of this Agreement, the Company (it being understood that comments or actions by an individual will not be treated as comments or actions by the Company unless such individual is an officer or director of the Company or is an individual who has both the authority to act, and is acting, on behalf of the Company with respect to such comments or actions) and Executive shall not engage in any actions that could reasonably be deemed to disparage or criticize the other or the services rendered by Executive on behalf of the Company, and the Company shall not engage in any other action that injures or hinders the business opportunities of Executive. Notwithstanding the foregoing, nothing in this Section 3.4 shall: (i) prohibit either Party from making truthful statements (A) in response to legal process, subpoena, or court order, (B) in connection with testimony under oath, or (C) as otherwise required by applicable law; (ii) prohibit or restrict Executive from communicating with, filing a charge or complaint with, providing documents or information to, or participating in any investigation or proceeding conducted by any federal, state, or local government agency, including the Securities and Exchange Commission (“SEC”), the Equal Employment Opportunity Commission, the National Labor Relations Board, or any state or local equivalent, without notice to or consent of the Company; or (iii) limit Executive’s right to receive an SEC whistleblower award pursuant to Section 21F of the Securities Exchange Act of 1934. This Section 3.4 shall survive termination of this Agreement.
3.5 Section 280G. (a) In the event that any payment, benefit, or distribution by the Company to or for the benefit of Executive (whether paid or payable, distributed or distributable, pursuant to the terms of this Agreement or otherwise) (the “Total Payments”) would constitute an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code, Executive shall receive the greater of (on an after-tax basis): (i) the Total Payments reduced to the largest amount that would not result in any portion being subject to the excise tax imposed by Section 4999 of the Code; or (ii) the Total Payments without reduction. (b) If a reduction is required, the reduction shall be made in the following order: (i) cash severance payments; (ii) other cash payments; (iii) reduction of benefits; and (iv) cancellation of equity award acceleration, in each case in reverse chronological order.
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3.6 Section 409A Compliance.
| (a) | General. This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), or to be exempt therefrom, and shall be construed and administered accordingly. Notwithstanding any provision of this Agreement to the contrary, in the event that the Company determines that any amounts payable hereunder would be taxable to Executive under Section 409A prior to the payment thereof, the Company and Executive shall cooperate in good faith to amend this Agreement to maintain to the maximum extent practicable the original intent of the applicable provisions without violating the provisions of Section 409A. Each payment made under this Agreement shall be treated as a separate payment, and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. |
| (b) | Separation from Service. For purposes of this Agreement, any reference to Executive’s “termination of employment” or words of similar import shall mean Executive’s “separation from service” as defined in Treasury Regulation Section 1.409A-1(h) (determined after applying the presumptions set forth therein). |
| (c) | Specified Employee Delay. Notwithstanding anything in this Agreement to the contrary, if Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) at the time of Executive’s separation from service, then any payments or benefits that constitute “nonqualified deferred compensation” within the meaning of Section 409A that are payable on account of Executive’s separation from service shall not commence until the earlier of (i) the date that is six (6) months after Executive’s separation from service, or (ii) the date of Executive’s death. Any payments that are delayed pursuant to this Section 5.8(c) shall be accumulated and paid in a single lump sum on the first business day following the end of the six (6)-month delay period, together with interest thereon at the applicable federal rate under Section 7872(f)(2)(A) of the Code. |
| (d) | Reimbursements. To the extent that any reimbursements or in-kind benefits provided under this Agreement are subject to Section 409A: (i) the amount of such benefits or reimbursements provided in one taxable year shall not affect the amount of such benefits or reimbursements provided in any other taxable year; (ii) such reimbursements shall be paid no later than the last day of the taxable year following the taxable year in which the expense was incurred; and (iii) the right to such benefits or reimbursements is not subject to liquidation or exchange for another benefit. |
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| (e) | Short-Term Deferral and Separation Pay Exceptions. Any payment that is made within the applicable “short-term deferral” period specified in Treasury Regulation Section 1.409A-1(b)(4) or that qualifies for the separation pay exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) shall be treated as not constituting “nonqualified deferred compensation” subject to Section 409A to the maximum extent permitted. In no event may Executive, directly or indirectly, designate the calendar year of any payment. |
| (f) | No Acceleration. The Company shall not accelerate any payment or the provision of benefits under this Agreement except to the extent permitted by Section 409A and the Treasury Regulations thereunder. |
4. CONFIDENTIALITY; NON-SOLICITATION; NON-COMPETITION.
4.1. The Executive acknowledges that during the course of employment, Executive has had and will have access to and will acquire Confidential Information (as defined below) respecting the business of the Company and its affiliates. Executive agrees that, at all times during and after Executive’s employment with the Company, Executive shall hold in strictest confidence and shall not disclose, use, publish, or otherwise reveal any Confidential Information to any person or entity, except as required in connection with the performance of Executive’s duties under this Agreement or as authorized in writing by the Board of Directors. “Confidential Information” means all non-public information that relates to the actual or anticipated business, research, or development of the Company, or to the Company’s technical data, trade secrets, or know-how, including but not limited to: (a) trade secrets, inventions, ideas, processes, formulas, source and object code, data, programs, software, and other works of authorship; (b) technology and engineering information; (c) satellite and spacecraft specifications, designs, and technical data; (d) business plans, financial information, budgets, and projections; (e) customer and supplier lists and related information; (f) proprietary production processes, advertising, marketing, and sales information; (g) personnel and compensation information; and (h) information regarding pending or threatened litigation or governmental investigations. Confidential Information does not include information that: (i) is or becomes publicly available through no fault of Executive; (ii) was independently developed by Executive without use of or reference to Confidential Information; or (iii) is rightfully received by Executive from a third party without restriction on disclosure.
4.2. Notwithstanding anything to the contrary herein, pursuant to the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1833(b)), Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the employer’s trade secrets to the attorney and use the trade secret information in the court proceeding if the individual files any document containing the trade secret under seal and does not disclose the trade secret except pursuant to court order.
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4.3. To protect the Company’s trade secrets and Confidential Information, for a period of twelve (12) months following the termination of Executive’s employment for any reason, Executive shall not, directly or indirectly, solicit, induce, or attempt to solicit or induce any customer, client, supplier, vendor, employee, contractor, consultant, or other service provider of the Company or its affiliates with whom Executive had material contact during Executive’s employment, where such solicitation would necessarily require or result in the use or disclosure of the Company’s trade secrets or Confidential Information. This restriction does not prohibit Executive from (a) working for any competitor (subject to Executive’s obligations under Section 4.4 of this Agreement), (b) general advertising or marketing that is not specifically directed at the Company’s customers, clients, suppliers, vendors, employees, contractors, or consultants, (c) accepting unsolicited business, or (d) any solicitation that does not involve use or disclosure of the Company’s trade secrets or Confidential Information. Nothing in this Section shall be construed to restrict Executive’s right to engage in any lawful profession, trade, or business, or to impose any restriction on Executive’s employment beyond the protection of Confidential Information as permitted under applicable law, including the [Jurisdiction] Uniform Trade Secrets Act, C.R.S. §§ 7-74-101 et seq. This Section 4.3 shall be enforceable only to the extent permitted by applicable law.
4.4. To protect the Company’s trade secrets and Confidential Information, for a period of twelve (12) months following the termination of Executive’s employment (the “Restricted Period”) for any reason, Executive shall not, directly or indirectly, engage in any Restricted Business (as defined below) within the geographic areas in which the Company actively conducted business operations as of the date of Executive’s termination of employment (the “Restricted Territory”). Notwithstanding the foregoing, if the Company fails to pay Executive the severance benefits to which Executive is entitled under Section 3.3 (if applicable), the Restricted Period shall terminate immediately upon such failure.
| (a) | For the avoidance of doubt, “Restricted Business” shall not include (i) any business or enterprise that is not in direct commercial competition with the Company’s then-current products or services as of the date of termination, (ii) any business the Company has merely contemplated but not actually commenced, or (iii) any division, subsidiary, or business unit of a diversified enterprise that is not itself engaged in the Restricted Business, even if other divisions, subsidiaries, or business units of such enterprise compete with the Company. |
| (b) | Notwithstanding the foregoing, nothing in this Section 4.4 shall prohibit Executive from: |
| (i) | owning, as a passive investor, securities of any publicly traded company, provided that Executive’s aggregate holdings in any such company do not exceed two percent (2%) of the outstanding equity securities of such company; | |
| (ii) | serving as a member of the board of directors or advisory board of any entity that is not primarily engaged in the Restricted Business within the Restricted Territory; or | |
| (iii) | engaging in teaching, academic research, or publishing activities. |
| (c) | This Section 4.4 shall be enforceable only to the extent permitted by applicable law. |
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4.5. Executive agrees to assign and hereby assigns to the Company all right, title, and interest in and to any and all inventions, discoveries, improvements, works of authorship, designs, formulas, ideas, processes, techniques, know-how, and data (whether or not patentable or copyrightable) that Executive may solely or jointly conceive, develop, or reduce to practice during the period of Executive’s employment with the Company and that (a) relate to the business of the Company or any of its subsidiaries, or to the Company’s actual or demonstrably anticipated research or development, (b) result from any work performed by Executive for the Company, or (c) are developed using the Company’s equipment, supplies, facilities, or trade secrets (collectively, “Company Inventions”). Executive shall promptly disclose all Company Inventions to the Company and shall execute all documents and take all actions necessary to confirm the Company’s ownership thereof.
4.6. Executive acknowledges that the Executive has had a period of at least fourteen (14) days to review the provisions set forth in this Section 4.
5. MISCELLANEOUS.
5.1. This Agreement may not be changed, modified or amended except by a subsequent writing signed by the Parties, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the Party to be charged.
5.2. This Agreement sets forth the entire agreement and understanding between the Parties as to the matters contained herein, and merges and supersedes all prior discussions, agreements and understandings of every kind and nature among them. No Party shall be bound by any condition, definition, warranty, or representation other than as expressly provided for in this Agreement.
5.3. This Agreement shall be binding upon, and inure to the benefit of, the Parties and their respective heirs, executors, estates, legal representatives, successors and permitted assigns. This Agreement and a Party’s rights and obligations herein may not be assigned or delegated by a Party without the prior written consent of the other Party.
5.4. This Agreement may be assigned in whole or in part by the Company to any of its subsidiaries upon written notice to Executive. The Company may also arrange to structure all payroll processing/other payment and benefits programs described hereunder through any member of the TriNet Group or similar outsourced PEO/HR/Payroll group engaged by the Company to cover its employees. Executive may not assign this Agreement or any of the Executive’s rights or obligations hereunder to any other party without the Company’s prior written consent.
5.5. All notices, requests, demands, and other communications required or permitted by this Agreement shall be in writing and (unless otherwise specifically provided herein) sent to the addresses first set forth above (or to such other addresses as may be designated by a Party to the other Party, provided that notice of change of address shall be valid only upon receipt), and shall be deemed to have been received: (i) three (3) days after deposit in the U.S. mail, postage prepaid, registered or certified, return receipt requested; or (ii) one (1) day after deposit with a nationally recognized overnight delivery or overnight courier service. All notices may be given by the attorneys for the Parties with the same force and effect as if given by the Parties themselves.
5.6. If any provision of this Agreement or the application of any provision hereof to any person or circumstance is held invalid, then the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected unless the invalid provision substantially impairs the benefits of the remaining portions of this Agreement.
5.7. This Agreement shall be governed by and construed under the internal laws of the State of [Jurisdiction] without giving effect to the principles of conflicts or choice of laws.
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5.8. The headings of the Sections hereof are inserted only for the convenience of the Parties and in no way define, limit or prescribe the intent of this Agreement.
5.9. Whenever used herein and required by the context, the singular number shall include the plural, the plural shall include the singular number, and the use of either gender shall include both genders and the neuter, and the words “hereof” and “herein” and “hereinafter” and “hereto” shall refer to this entire Agreement and not to any provision, paragraph, subparagraph or section.
5.10. The waiver by either Party of a breach or violation of any provision of this Agreement shall not operate as, or be construed to constitute, a waiver of any subsequent breach or violation of the same or another provision hereof.
5.11. Each Party and its counsel have had the opportunity to participate fully in the review and development of this Agreement. In interpreting this Agreement, any rules of construction that favor the non-drafting Party shall not apply.
5.12. The non-prevailing Party in any litigation relating to the terms and provisions of this Agreement (including, without limitation, the enforcement by Executive of the provisions of Section 3.3, above) shall be obligated to pay to the prevailing Party the reasonable costs and expenses (including, without limitation, legal fees and court costs) incurred by the prevailing Party in connection with such litigation.
5.13. This Agreement may be executed in counterparts, and by electronic (.pdf) execution and transmission thereof, and each such counterpart shall for all purposes be deemed to be an original. All of such counterparts together shall constitute one and the same instrument.
5.14. The Company shall indemnify and hold harmless Executive to the fullest extent permitted by applicable law (including the DGCL) against any and all costs, expenses (including reasonable attorneys’ fees), judgments, fines, penalties, and amounts paid in settlement actually and reasonably incurred by Executive in connection with any action, suit, or proceeding (whether civil, criminal, administrative, or investigative) arising out of or relating to Executive’s service as an officer, director, employee, or agent of the Company or any of its affiliates. The Company shall advance to Executive all reasonable attorneys’ fees and expenses incurred by Executive in connection with any such action, suit, or proceeding within thirty (30) days after receipt of a written request for advancement accompanied by reasonable documentation of such expenses, subject to an undertaking by Executive to repay such amounts if it is ultimately determined that Executive is not entitled to indemnification. The Company shall maintain directors’ and officers’ liability insurance covering Executive on terms and in amounts no less favorable than the coverage provided to other senior executives and directors of the Company during Executive’s employment and for a period of not less than six (6) years following the termination of Executive’s employment (regardless of the reason for such termination). The Company’s obligations under this Section 5.16 shall survive the termination of this Agreement and Executive’s employment.
5.15. Except for allegations of sexual harassment or disparate treatment due to gender, the Parties agree that all disputes arising out of or relating to this Agreement (“Disputes”), the Parties’ employment relationship, or any termination thereof shall be resolved by binding arbitration, which shall be the sole and exclusive procedure for the resolution of such Disputes. Arbitrations shall be conducted in [Jurisdiction] by JAMS in accordance with its employment dispute resolution rules. The prevailing Party in any Dispute resolved by arbitration pursuant to this Agreement shall be entitled to reimbursement of its/their associated expenses, including reasonable attorneys’ fees, by the non-prevailing Party. Notwithstanding the foregoing, the Parties may seek injunctive or other equitable relief from any court in the State of [Jurisdiction] having jurisdiction by way of a temporary restraining order, stay, preliminary injunction, or other provisional remedy to which either Party would be entitled in the absence of this arbitration clause.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.
| COMPANY: | ||
| Proem Acquisition Corp. I | ||
| By: | ||
| Name: | ||
| Date: | ||
| EXECUTIVE: | ||
| [NAME] | ||
[Signature page to Executive Employment Agreement]
Exhibit 10.6
EXECUTION COPY
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into on September 26, 2026, by and between Proem Acquisition Corp I., a Cayman Islands exempted company (“PAAC”), and the undersigned subscriber (“Subscriber”).
This Subscription Agreement substitutes and replaces any other previously signed Subscription Agreements (if any) between the Subscriber and PAAC.
WHEREAS, PAAC is entering into a Merger Agreement by and among PAAC, Astro Digital US, Inc., a Delaware corporation (“Astro Digital”), PAAC Merger Sub I, Inc., a Delaware corporation (“Merger Sub I”), and PAAC Merger Sub II, LLC, a Delaware limited liability company (“Merger Sub II”) (such merger agreement as amended, supplemented, restated or otherwise modified from time to time, the “Agreement” and the transactions contemplated by the Agreement, the “Transaction”);
WHEREAS, in connection with the Transaction and as more fully described in the Agreement, PAAC shall de-register from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation (the “Domestication”), and upon which, (i) Merger Sub I will merge with and into Astro Digital, with Astro Digital surviving the merger (the “Initial Surviving Corporation”, and such merger, the “First Company Merger”), and (ii) immediately following the First Company Merger, the Initial Surviving Corporation will merge with and into Merger Sub II (the “Second Company Merger” and together with the First Company Merger, the “Mergers”), with Merger Sub II continuing as the surviving entity and a wholly-owned subsidiary of PAAC, with PAAC remaining as the publicly listed combined company after its re-domestication as a Delaware company (referred to herein as “PubCo”);
WHEREAS, in connection with the Transaction, PAAC is seeking commitments from interested investors to purchase shares of the common stock of PubCo (the “Shares”) as set forth on the signature page hereto (the “Subscribed Securities”), in a private placement for a purchase price of $10.00 per share (the “Per Share Price” and the aggregate of such Per Share Price for all Subscribed Securities (as defined below) being referred to herein as the “Purchase Price”);
WHEREAS, Subscriber desires to subscribe for and purchase from PubCo, in connection with the consummation of the Transaction, the Subscribed Securities and PubCo desires to issue and sell, or cause to be issued and sold, to Subscriber the Subscribed Securities in consideration of the payment of the Purchase Price by or on behalf of Subscriber to PubCo; and
WHEREAS, concurrently with the execution of this Subscription Agreement, PubCo is entering into subscription agreements (the “Other Subscription Agreements” and together with the Subscription Agreement, the “Subscription Agreements”) with certain other investors (the “Other Subscribers” and together with Subscriber, the “Subscribers”), which are on substantially the same terms as the terms of this Subscription Agreement, pursuant to which such investors have agreed to purchase on the closing date of the Transaction (the “Closing Date”), inclusive of the Subscribed Securities, an aggregate amount of up to 5,000,000 Shares.
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Subscription. Subject to the terms and conditions hereof, at the Closing (as defined below), Subscriber hereby subscribes for and agrees to purchase, and PubCo hereby agrees to issue and sell, or cause to be issued and sold, to Subscriber, upon the payment of the Purchase Price, the Subscribed Securities (such subscription and issuance, the “Subscription”).
2. Closing.
(a) The consummation of the Subscription contemplated hereby (the “Closing”) is only contingent upon the substantially concurrent consummation of the Transaction and shall occur on the Closing Date concurrently with the consummation of the Transaction.
(b) At least five Business Days (as defined below) before the anticipated Closing Date, PAAC shall deliver written notice to Subscriber (the “Closing Notice”) specifying: (i) the anticipated Closing Date and (ii) the wire instructions for delivery of the Purchase Price to PubCo or its designee. No later than two Business Days after receiving the Closing Notice, Subscriber shall (i) deliver to PubCo such information as is reasonably requested in the Closing Notice in order for PubCo to issue or cause to be issued the Subscribed Securities to Subscriber and (ii) deliver the Purchase Price by wire transfer of United States dollars in immediately available funds to the account specified in the Closing Notice, such funds to be held in escrow by a third-party escrow provider selected by PAAC until the Closing or as otherwise provided herein in accordance with Section 2(d). Upon satisfaction (or, if applicable, waiver) of the conditions set forth in this Section 2, at the Closing the Purchase Price shall be released from escrow automatically and without further action by PAAC, PubCo or Subscriber.
(c) On the Closing Date, PubCo shall deliver, or cause to be delivered, to Subscriber: (i) the Subscribed Securities, against payment of the Purchase Price to be released from the escrow, and cause the Subscribed Securities to be registered in book entry form, free and clear of any liens or other restrictions (other than those arising under this Subscription Agreement or state or federal securities laws), in the name of Subscriber (or its nominee in accordance with its delivery instructions) or to a custodian designated by Subscriber, as applicable, on PubCo’s share register and provide to Subscriber evidence of such issuance from the transfer agent (the “Transfer Agent”), and (ii) a written record from PubCo or its Transfer Agent evidencing the issuance to Subscriber of the Subscribed Securities on and as of the Closing Date.
(d) In the event that the consummation of the Transaction does not occur within five Business Days after the anticipated Closing Date specified in the Closing Notice (unless otherwise agreed to in writing by PAAC and Subscriber), such third-party escrow provider, as applicable, shall promptly (but in no event later than seven Business Days thereafter) cause the return of the funds so delivered by Subscriber by wire transfer in immediately available funds to the account specified by Subscriber, and any book entries shall be deemed cancelled; provided, however, that unless this Subscription Agreement has been terminated pursuant to Section 7 below, such return of funds shall not terminate this Subscription Agreement or relieve Subscriber of its obligation to redeliver funds to PubCo on the new Closing Date following PubCo redelivering to Subscriber a new Closing Notice and to purchase the Subscribed Securities at the Closing. For the purposes of this Subscription Agreement, “Business Day” means any day other than a Saturday, Sunday or a day on which either the Federal Reserve Bank of New York or governmental authorities in the Cayman Islands (for so long as PAAC remains domiciled in Cayman Islands) are authorized or required by law to close.
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(e) The Closing shall be subject to the satisfaction or valid waiver by PAAC, on the one hand, or Subscriber, on the other, of the conditions that, on the Closing Date:
(i) no suspension of the qualification of the Subscribed Securities for offering or sale or trading in any jurisdiction, or initiation or threatening of any proceedings for any of such purposes, shall have occurred;
(ii) all conditions precedent to the closing of the Transaction set forth in Article 9 of the Agreement (other than those conditions which, by their nature, are to be satisfied at the Closing) shall have been satisfied or waived, and the closing of the Transaction shall be scheduled to occur substantially concurrently with or immediately following the Closing;
(iii) no governmental authority shall have enacted, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation (whether temporary, preliminary or permanent) which is then in effect and has the effect of making consummation of the transactions contemplated hereby illegal or otherwise restraining or prohibiting consummation of the transactions contemplated hereby; and
(iv) the Subscribed Securities shall be qualified for listing on The Nasdaq Stock Market (the “Nasdaq”) or an approved stock exchange as permitted under the Agreement (an “Approved Exchange”).
(f) The obligation of PAAC to consummate the Closing shall be subject to the satisfaction or valid waiver by PAAC of the additional conditions that, on the Closing Date:
(i) all representations and warranties of Subscriber contained in this Subscription Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Subscriber Material Adverse Effect (as defined below), which representations and warranties shall be true in all respects) at and as of the Closing Date; and
(ii) Subscriber shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing.
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(g) The obligation of Subscriber to consummate the Closing shall be subject to the satisfaction or valid waiver by Subscriber of the additional conditions that, on the Closing Date:
(i) all representations and warranties of PAAC contained in this Subscription Agreement shall be true and correct in all material respects (other than (x) representations and warranties that are qualified as to materiality or Company Material Adverse Effect (as defined below) and (y) the representations and warranties of PAAC in Section 3(o), which representations and warranties shall be true in all respects) at and as of the Closing Date;
(ii) PAAC shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing; and
(iii) except to the extent consented in writing by the Subscriber, no amendment, modification or waiver of the Agreement shall have occurred that materially and adversely affects the number of Subscribed Securities, Per Share Price or the Purchase Price of the Subscribed Securities that Subscriber is acquiring pursuant to this Subscription Agreement.
(h) No later than two business days prior to the Closing, Subscriber shall deliver to PAAC a duly completed and executed Internal Revenue Service Form W-9 or appropriate Form W-8.
(i) At and from the Closing, PubCo and Subscriber shall execute and deliver such additional documents and take such additional actions as the parties reasonably may deem to be practical and necessary in order to consummate the Subscription as contemplated in this Subscription Agreement.
3. PAAC Representations and Warranties. PAAC represents and warrants to Subscriber that:
(a) PAAC (i) is an exempted company duly incorporated, validly existing and in good standing under the laws of the Cayman Islands (to the extent such concept exists in such jurisdiction) and, as of the Closing Date, following the Domestication and Mergers, PubCo will be duly incorporated, validly existing as a corporation and in good standing under the laws of the State of Delaware, (ii) has the requisite power and authority to own, lease and operate its properties, to carry on its business as it is now being conducted and to enter into and perform its obligations under this Subscription Agreement, and (iii) is duly licensed or qualified to conduct its business and, if applicable, is in good standing under the laws of each jurisdiction (other than its jurisdiction of incorporation) in which the conduct of its business or the ownership of its properties or assets requires such license or qualification, except, with respect to the foregoing clause (iii), where the failure to be in good standing would not reasonably be expected to have a Company Material Adverse Effect or have a material adverse effect on PubCo’s ability to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Securities. For purposes of this Subscription Agreement, a “Company Material Adverse Effect” means an event, change, development, occurrence, condition or effect with respect to PAAC, PubCo and its subsidiaries, taken together as a whole (on a consolidated basis), that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the business, financial condition, stockholders equity or results of operations of PAAC, PubCo and its subsidiaries, taken together as a whole (on a consolidated basis).
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(b) As of the Closing Date, the Subscribed Securities will be duly authorized and, when issued and delivered to Subscriber against full payment therefor in accordance with the terms of this Subscription Agreement, will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under PubCo’s organizational documents (as in effect at such time of issuance) or the laws of its jurisdiction of incorporation. As of the date hereof, except pursuant to, or as contemplated by, (i) the Other Subscription Agreements, (ii) the redeemable warrants, each whole warrant entitles the holder thereof to purchase one ordinary share at a price of $11.50 per share, subject to adjustment (the “warrants”), (iii) the private placement units, comprised of one ordinary share and one-half of one warrant, or (iv) as disclosed in the Agreement (including the exhibits and schedules thereto), there are no outstanding options, warrants or other rights to subscribe for, purchase or acquire from PubCo any shares of common stock or other equity interests in PubCo (collectively, “Equity Interests”) or securities convertible into or exchangeable or exercisable for Equity Interests. As of the date hereof, with the exception of the aforementioned wholly owned merger subsidiaries, PubCo has no subsidiaries and does not own, directly or indirectly, interests or investments (whether equity or debt) in any person, whether incorporated or unincorporated. There are no shareholder agreements, voting trusts or other agreements or understandings to which PubCo is a party or by which it is bound relating to the voting of any Equity Interests, other than as contemplated by the Agreement. Except as disclosed in the Agreement (including the exhibits and schedules thereto), there are no securities or instruments issued by PAAC or to which PAAC is a party containing anti-dilution or similar provisions that will be triggered, by (i) the issuance of the Subscribed Securities or the shares to be issued pursuant to any Other Subscription Agreement, (ii) the Mergers or (iii) the Transaction, except in each case for such anti-dilution or similar provisions the application of which has been effectively waived.
(c) This Subscription Agreement has been duly authorized, executed and delivered by PAAC, and assuming the due authorization, execution and delivery of the same by Subscriber, this Subscription Agreement shall constitute the valid and legally binding obligation of PAAC and, following the Transactions, PubCo, enforceable against PAAC and PubCo in accordance with its terms, except as such enforceability may be limited or otherwise affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws relating to or affecting the rights of creditors generally and by the availability of equitable remedies.
(d) The execution and delivery of this Subscription Agreement, the issuance and sale of the Subscribed Securities and the compliance by PAAC with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of PAAC pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which PAAC is a party or by which PAAC is bound or to which any of the property or assets of PAAC is subject; (ii) the organizational documents of PAAC; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over PAAC or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Company Material Adverse Effect or have a material adverse effect on PAAC’s ability to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Securities.
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(e) PAAC is not in default or violation (and no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation) of any term, condition or provision of (i) the organizational documents of PAAC, (ii) any loan or credit agreement, guarantee, note, bond, mortgage, indenture, lease or other agreement, permit, franchise or license to which, as of the date of this Subscription Agreement, PAAC is a party or by which PAAC’s properties or assets are bound or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency, taxing authority or regulatory body, domestic or foreign, having jurisdiction over PAAC or PubCo or any of its properties, except, in the case of clauses (ii) and (iii), for defaults or violations that have not had and would not be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect.
(f) [Intentionally Omitted.].
(g) Assuming the accuracy of the representations and warranties of Subscriber set forth in Section 4 of this Subscription Agreement, PAAC is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self-regulatory organization (including Nasdaq) or other person in connection with the execution, delivery and performance of this Subscription Agreement (including, without limitation, the issuance of the Subscribed Securities), other than (i) filings required by applicable state securities laws, (ii) the filing of the Registration Statement pursuant to Section 5 below, (iii) the filing of a Notice of Exempt Offering of Securities on Form D with the United States Securities and Exchange Commission (“Commission”) under Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), if applicable, (iv) those required by Nasdaq, including with respect to obtaining stockholder approval of the Transaction, (v) those required to consummate the Transaction as provided under the Agreement, (vi) the filing of notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, if applicable, and (vii) the failure of which to obtain would not be reasonably likely to have a Company Material Adverse Effect or have a material adverse effect on PubCo’s ability to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Securities.
(h) As of their respective dates, all reports (the “SEC Reports”) required to be filed by PAAC with the Commission since its initial registration statement of the units and until the date hereof under Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder (the “Exchange Act”), complied in all material respects with the requirements of the Exchange Act and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of PAAC included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing and fairly present in all material respects the financial position of PAAC 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. There are no material outstanding or unresolved comments in comment letters from the Commission staff with respect to any of the SEC Reports.
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(i) As of the date hereof, the issued and outstanding ordinary shares of PAAC are registered pursuant to Section 12(b) of the Exchange Act, and are listed for trading on Nasdaq under the symbol “PAAC”. There is no suit, action, proceeding or investigation pending or, to the knowledge of PAAC, threatened against PAAC by Nasdaq or the Commission with respect to any intention by such entity to deregister the its ordinary shares or prohibit or terminate the listing of the its ordinary shares on Nasdaq. PAAC has taken no action that is designed to terminate the registration of its ordinary shares under the Exchange Act or the listing of the ordinary shares on Nasdaq. Following the Mergers, PubCo’s shares of common stock are expected to be registered under the Exchange Act and listed for trading on an Approved Exchange.
(j) PAAC is in compliance with all applicable laws, except where such non-compliance would not be reasonably likely to have a Company Material Adverse Effect.
(k) Except for such matters as have not had and would not be reasonably likely to have a Company Material Adverse Effect or have a material adverse effect on PAAC’s ability to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Securities, as of the date hereof, there is no (i) suit, action, proceeding or arbitration before a governmental authority or arbitrator pending, or, to the knowledge of PAAC, threatened in writing against PAAC or (ii) judgment, decree, injunction, ruling or order of any governmental authority or arbitrator outstanding against PAAC.
(l) Assuming the accuracy of Subscriber’s representations and warranties set forth in Section 4 below, no registration under the Securities Act is required for the offer and sale of the Subscribed Securities by PubCo to Subscriber.
(m) Neither PAAC nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Subscribed Securities.
(n) PAAC is not under any obligation to pay any broker’s fee or commission in connection with the sale of the Subscribed Securities.
(o) Other than the Other Subscription Agreements, PAAC has not entered into any side letter or similar agreement with any Other Subscribers in connection with Other Subscription Agreements, other than such Other Subscription Agreements that include (i) any rights or benefits granted to an Other Subscriber in connection with such Other Subscriber’s compliance with any law, regulation or policy specifically applicable to such Other Subscriber or in connection with the taxable status of an Other Subscriber, (ii) any rights or benefits which are personal to an Other Subscriber based solely on its place of organization or headquarters, organizational form of, or other particular restrictions applicable to, such Other Subscriber or (iii) other terms with respect to the purchase of the Subscribed Securities that are no more favorable in any material respect to such Other Subscriber thereunder than the terms of this Subscription Agreement.
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(p) PAAC is not, and immediately after receipt of payment for the Subscribed Securities will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
4. Subscriber Representations and Warranties. Subscriber represents and warrants to PAAC that:
(a) Subscriber (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation or incorporation, and (ii) has the requisite power and authority to enter into and perform its obligations under this Subscription Agreement.
(b) This Subscription Agreement has been duly authorized, executed and delivered by Subscriber, and assuming the due authorization, execution and delivery of the same by PAAC, this Subscription Agreement shall constitute the valid and legally binding obligation of Subscriber, enforceable against Subscriber in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies.
(c) The execution and delivery of this Subscription Agreement, the purchase of the Subscribed Securities and the compliance by Subscriber with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of Subscriber pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Subscriber is a party or by which Subscriber is bound or to which any of the property or assets of Subscriber is subject; (ii) the organizational documents of Subscriber; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over Subscriber or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Subscriber Material Adverse Effect. For purposes of this Subscription Agreement, a “Subscriber Material Adverse Effect” means an event, change, development, occurrence, condition or effect with respect to Subscriber that would reasonably be expected to have a material adverse effect on Subscriber’s ability to consummate the transactions contemplated hereby, including the purchase of the Subscribed Securities.
(d) Subscriber (i) is (x) a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or (y) an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) satisfying the applicable requirements set forth on Annex A hereto; (ii) is acquiring the Subscribed Securities only for its own account and not for the account of others, or if Subscriber is subscribing for the Subscribed Securities as a fiduciary or agent for one or more investor accounts, each owner of such account is a qualified institutional buyer and Subscriber has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Subscribed Securities with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or the securities laws of any other jurisdiction (and has provided PAAC with the requested information on Annex A following the signature page hereto). Subscriber is not an entity formed for the specific purpose of acquiring the Subscribed Securities. Subscriber has determined based on its own independent review and such professional advice as it deems appropriate that its purchase of the Subscribed Securities and participation in the Subscription (i) are fully consistent with its financial needs, objectives and condition, (ii) comply and are fully consistent with all investment policies, guidelines and other restrictions applicable to it, (iii) have been duly authorized and approved by all necessary action, and (iv) do not and will not violate or constitute a default under its charter, by-laws or other constituent document or under any law, rule, regulation, agreement or other obligation by which it is bound.
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(e) Subscriber understands that the Subscribed Securities are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Subscribed Securities have not been registered under the Securities Act. Subscriber understands that the Subscribed Securities may not be resold, transferred, pledged or otherwise disposed of by Subscriber absent an effective registration statement under the Securities Act, except (i) to PAAC or a subsidiary thereof, or (ii) pursuant to an applicable exemption from the registration requirements of the Securities Act, and, in each of cases (i) and (ii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any book entry positions representing the Shares shall contain a restrictive legend (the “Restricted Legend”) to such effect. Subscriber acknowledges and agrees that the Subscribed Securities will be subject to these securities law transfer restrictions and, as a result of these transfer restrictions, Subscriber may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Subscribed Securities and may be required to bear the financial risk of an investment in the Subscribed Securities for an indefinite period of time. Subscriber acknowledges and agrees that the Subscribed Securities will not immediately be eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act, and that the provisions of Rule 144(i) will apply to the Subscribed Securities. Subscriber understands that it has been advised to consult legal counsel prior to making any offer, resale, transfer, pledge or other disposition of any of the Subscribed Securities.
(f) In making its decision to purchase the Subscribed Securities, Subscriber has relied solely upon independent investigation made by Subscriber. Subscriber acknowledges and agrees that Subscriber has received such information as Subscriber deems necessary in order to make an investment decision with respect to the Subscribed Securities, including with respect to PAAC, PubCo (including Astro Digital) and the Transaction. Subscriber represents and agrees that Subscriber and Subscriber’s professional advisor(s), if any, have (i) had the full opportunity to ask such questions, receive such answers and obtain such information as Subscriber and such undersigned’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Subscribed Securities and (ii) conducted and completed independent due diligence with respect to the Subscription and the Subscribed Securities. Based on such information as Subscriber has deemed appropriate and without reliance upon PAAC or any of its officers, directors, employees or other representatives, legal counsel, financial advisors, accountants or agents (collectively, “Representatives”), Subscriber has independently made its own analysis and decision to enter into the Subscription, and has not relied on any statements or other information provided by any of PAAC, PubCo, Astro Digital and its affiliates or their respective Representatives (collectively, the “Covered Persons”), with respect to PAAC, PubCo, Astro Digital or the Subscribed Securities, except for the representations, warranties and agreements of PAAC and PubCo set forth herein. In addition, except for the representations, warranties and agreements of PAAC and PubCo set forth herein, Subscriber is relying exclusively on its own sources of information, investment analysis and due diligence (including professional advice it deems appropriate) with respect to the Subscription, the Subscribed Securities and the business, condition (financial and otherwise), management, operations, properties and prospects of PAAC, PubCo and Astro Digital and its affiliates, including but not limited to all business, legal, regulatory, accounting, credit and tax matters.
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(g) Subscriber hereby acknowledges and agrees that no disclosure or offering document has been prepared in connection with the offer and sale of the Subscribed Securities by any Covered Person, and no Covered Person has made or will make any representation or warranty (except for the representations and warranties of PAAC and PubCo set forth herein), whether express or implied, of any kind or character and has not provided any advice or recommendation in connection with the Subscription.
(h) Subscriber became aware of this offering of the Subscribed Securities solely by means of direct contact between Subscriber and PAAC and the Subscribed Securities were offered to Subscriber solely by direct contact between Subscriber and PAAC. Subscriber did not become aware of this offering of the Subscribed Securities, nor were the Subscribed Securities offered to Subscriber, by any other means. Subscriber acknowledges that PAAC represents and warrants that the Subscribed Securities (i) were not offered by any form of general solicitation or general advertising and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. Subscriber acknowledges that Subscriber shall be responsible for any of Subscriber’s tax liabilities that may arise as a result of the transactions contemplated by this Subscription Agreement, and that neither PAAC, PubCo nor Astro Digital and its affiliates has provided any tax advice or any other representation or guarantee regarding the tax consequences of the transactions contemplated by the Subscription Agreement.
(i) Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Subscribed Securities. Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Subscribed Securities, and Subscriber has had an opportunity to seek, and has sought, such accounting, legal, business and tax advice as Subscriber has considered necessary to make an informed investment decision.
(j) Subscriber has adequately analyzed and fully considered the risks of an investment in the Subscribed Securities and determined that the Subscribed Securities are a suitable investment for Subscriber and that Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of Subscriber’s investment in PAAC. Subscriber acknowledges specifically that a possibility of total loss exists. Subscriber has exercised independent judgment in evaluating its participation in the Subscription.
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(k) Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Subscribed Securities or made any findings or determination as to the fairness of this investment.
(l) Neither Subscriber nor any of its officers, directors, managers, managing members, general partners or any other person acting in a similar capacity or carrying out a similar function is: (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons, the Foreign Sanctions Evaders List, the Sectoral Sanctions Identification List or any other similar list of sanctioned persons administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or in any Executive Order issued by the President of the United States and administered by OFAC or in any similar list of sanctioned persons administered by the European Union or any individual European Union member state or by the United Kingdom (collectively, the “Sanctions Lists”) or a person or entity prohibited by any OFAC sanctions program; (ii) directly or indirectly owned or controlled by, or acting on behalf of, one or more persons on a Sanctions List; (iii) organized, incorporated, established, located, resident or born in, or a citizen, national or the government, including any political subdivision agency, or instrumentality thereof, of, Cuba, Iran, North Korea, Syria, Venezuela, the Crimea region of Ukraine or any other country or territory embargoed or subject to substantial trade restrictions by the United States, the European Union or any individual European Union member state or the United Kingdom; (iv) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515; or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (collectively, a “Prohibited Investor”). Subscriber agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law; provided that Subscriber is permitted to do so under applicable law. Subscriber represents that if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001 and its implementing regulations (collectively, the “BSA/PATRIOT Act”), that Subscriber maintains, either directly or through the use of a third-party administrator, policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. Subscriber also represents that, to the extent applicable, it maintains policies and procedures reasonably designed to ensure compliance with sanctions administered by the United States, the European Union or any individual European Union member state or the United Kingdom. Subscriber further represents and warrants that, to the extent applicable, it maintains, either directly or through the use of a third-party administrator, policies and procedures reasonably designed to ensure that the funds held by Subscriber and used to purchase the Subscribed Securities were legally derived and were not obtained, directly or indirectly, from a Prohibited Investor, and that such funds held by Subscriber and used to purchase the Subscribed Securities were legally derived and were not obtained, directly or indirectly, from a Prohibited Investor.
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(m) (i) Subscriber is not a ‘foreign person’ as defined in 31 C.F.R. § 800.224, and is not directly or indirectly controlled by a ‘foreign person,’ or (ii) if Subscriber is a ‘foreign person’ or is controlled by a ‘foreign person,’ Subscriber’s acquisition of the Subscribed Securities does not constitute a ‘covered transaction’ under the DPA (as defined below) that would trigger a mandatory declaration or notice filing requirement with the Committee on Foreign Investment in the United States (“CFIUS”). As used in this Section 4(m), “DPA” means the Defense Production Act of 1950, as amended (including by the Foreign Investment Risk Review Modernization Act of 2018), 50 U.S.C. § 4565, and all rules and regulations promulgated thereunder, including 31 C.F.R. Parts 800 and 802. No foreign government or foreign government-controlled entity (as such terms are understood under 31 C.F.R. Part 800) holds, directly or indirectly, a 25% or greater voting interest in Subscriber, or otherwise exercises control (as defined in 31 C.F.R. § 800.208) over Subscriber, and Subscriber has not entered into any agreement, arrangement, or understanding with any foreign government or foreign government-controlled entity that would grant such person any DPA Triggering Rights (as defined in the Agreement) with respect to PAAC, PubCo, Astro Digital, or any member of the Company Group. As of the date hereof, there are no pending or, to Subscriber’s knowledge, threatened reviews, investigations, notices, declarations, or proceedings by or before CFIUS relating to Subscriber’s investment in PubCo, Astro Digital, or any member of the Company Group, and no prior investment by Subscriber in Astro Digital has been the subject of any CFIUS review, investigation, declaration, or notice.
(n) Subscriber does not have, as of the date hereof, any “put equivalent position” as such term is defined in Rule 16a-1 under the Exchange Act, any “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, and any type of direct or indirect stock pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and or other short sale positions, whether through a broker dealer or otherwise, with respect to the securities of PAAC (collectively, “Short Sales”). Subscriber will not, during the period commencing on the date hereof and until the closing of the Transaction, engage in any Short Sales with respect to the Subscribed Securities. Notwithstanding the foregoing, in the case (i) other entities under common management with Subscriber that have no knowledge of this Subscription Agreement or of Subscriber’s participation in the Transaction (including Subscriber’s affiliates) or (ii) Subscriber is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Subscriber’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Subscriber’s assets, then, in each case, the foregoing representation shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Subscribed Securities covered by this Agreement.
(o) If Subscriber is an employee benefit plan that is subject to Title I of ERISA, a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, Subscriber represents and warrants that neither PubCo, nor any of its respective affiliates (the “Transaction Parties”) has acted as the Plan’s fiduciary, or has been relied on for advice, with respect to its decision to acquire and hold the Subscribed Securities, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Subscribed Securities.
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(p) At the Closing, Subscriber will have sufficient funds to pay the Purchase Price pursuant to Section 2(b) above and consummate the purchase and sale of the Subscribed Securities when required pursuant to this Subscription Agreement.
(q) Subscriber acknowledges its obligations under applicable securities laws with respect to the treatment of non-public information relating to PAAC, PubCo and Astro Digital and its affiliates.
(r) Subscriber agrees that, notwithstanding Section 9(j) below, after the Closing, PubCo may rely upon the representations and warranties made by Subscriber to PAAC and PubCo in this Subscription Agreement.
(s) At all times prior to the Closing Date, Subscriber has no binding commitment to dispose of, or otherwise transfer (directly or indirectly) any of the Subscribed Securities.
5. Registration of Subscribed Securities.
(a) PAAC agrees that, within 30 calendar days following the Closing Date (the “Filing Date”), PubCo will file with the Commission (at PubCo’s sole cost and expense) a registration statement registering the resale of the Subscribed Securities (the “Registration Statement”), Registration Statement and PubCo shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable thereafter, but in any event no later than the earlier of (i) 60 calendar days after the Filing Date thereof (or, in the event the Commission notifies PubCo that it will “review” the Registration Statement, the 90th calendar day following the Filing Date thereof) and (ii) 15 Business Days after the date PubCo is notified in writing by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effectiveness Date”); provided, that if such date falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Date shall be extended to the next business day on which the Commission is open for business. PubCo will provide a draft of the Registration Statement to Subscriber for review (but not comment) at least two Business Days in advance of the filing of the Registration Statement. Notwithstanding the foregoing, if the Commission prevents PubCo from including any or all of the shares proposed to be registered under the Registration Statement due to limitations on the use of Rule 415 under the Securities Act for the resale of the Subscribed Securities by the applicable stockholders or otherwise, such Registration Statement shall register for resale such number of Subscribed Securities which is equal to the maximum number of Subscribed Securities as is permitted to be registered by the Commission. In such event, the number of Subscribed Securities to be registered for each selling stockholder named in the Registration Statement shall be reduced pro rata among all such selling stockholders and as promptly as practicable after being permitted to register additional Subscribed Securities under Rule 415 under the Securities Act, PubCo shall use commercially reasonable efforts to amend the Registration Statement or file a new Registration Statement to register such additional Subscribed Securities and cause such amendment or Registration Statement to become effective as promptly as practicable. For purposes of clarification, any failure by PubCo to file the Registration Statement by the Filing Date or to effect such Registration Statement by the Effectiveness Date shall not otherwise relieve PubCo of its obligations to file or effect the Registration Statement as set forth above in this Section 5(a).
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(b) PAAC agrees that, except for such times as PubCo is permitted hereunder to suspend the effectiveness or use of the prospectus forming part of a Registration Statement, PubCo will use best efforts to cause such Registration Statement, or another shelf registration statement that includes the Subscribed Securities, to remain effective with respect to Subscriber until the earlier of (i) the date on which all of the Subscribed Securities shall have been sold, and (ii) the first date on which Subscriber can sell all of its Subscribed Securities (or shares received in exchange therefor) under Rule 144 under the Securities Act without limitation as to the manner of sale or the amount of such securities that may be sold and without the requirement for PubCo to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable). For as long as the Registration Statement shall remain effective pursuant to the immediately preceding sentence, PubCo will use commercially reasonable efforts to file all reports, and provide all customary and reasonable cooperation, necessary to enable Subscriber to resell the Subscribed Securities pursuant to the Registration Statement, qualify the Subscribed Securities for listing on the applicable stock exchange on which PubCo’s shares of common stock are then listed, and update or amend the Registration Statement as necessary to include the Subscribed Securities.
(c) Subscriber agrees to disclose its beneficial ownership, as determined in accordance with Rule 13d-3 under the Exchange Act, of Subscribed Securities to PubCo (or its successor) upon request to assist PubCo in making the determination described above. PAAC’s and PubCo’s obligations to include the Subscribed Securities in the Registration Statement are contingent upon Subscriber furnishing in writing to PubCo such information regarding Subscriber, the securities of PubCo held by Subscriber and the intended method of disposition of the Subscribed Securities as shall be reasonably requested by PubCo to effect the registration of the Subscribed Securities, and Subscriber shall execute such documents in connection with such registration as PubCo may reasonably request that are customary for a selling stockholder in similar situations; provided that Subscriber shall not in connection with the foregoing be required to execute any lock-up or similar agreement or otherwise be subject to any contractual restriction on the ability to transfer the Subscribed Securities.
(d) Subscriber agrees PubCo shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement during any customary blackout or similar period or as permitted hereunder. In the case of the registration effected by PubCo pursuant to this Subscription Agreement, PubCo shall, upon reasonable request, inform Subscriber as to the status of such registration. In no event shall Subscriber be identified as a statutory underwriter in the Registration Statement unless requested by the Commission. If the Commission requests that Subscriber be identified as a statutory underwriter in the Registration Statement, Subscriber will have an opportunity to withdraw from the Registration Statement. Subscriber shall not be entitled to use the Registration Statement for an underwritten offering of Subscribed Securities. Notwithstanding anything to the contrary contained herein, PubCo may delay or postpone filing of such Registration Statement, and from time to time require Subscriber not to sell under the Registration Statement or suspend the use or effectiveness of any such Registration Statement, if it determines that in order for the registration statement to not contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act, or PubCo’s Chief Executive Officer or CFO believes such filing or use could materially affect a bona fide business or financing transaction of PubCo or would require premature disclosure of information that could materially adversely affect PubCo (each such circumstance, a “Suspension Event”); provided that PubCo shall not declare more than two Suspension Events in any 12-month period; provided further, that no Suspension Event shall be declared within the 30 days following the conclusion of a prior delay in the filing of or initial effectiveness of, or suspension of use of, the Registration Statement (“Suspension Period”); provided further, that the total Suspension Period in any consecutive 12-month period shall not exceed an aggregate of 120 days. Notwithstanding the foregoing, if for any reason the Registration Statement has not been declared effective by the Commission by the 90th calendar day following the Filing Date, then from and after the 91st calendar day following the Filing Date until such time as the Registration Statement is declared effective, PubCo shall pay to Subscriber interest on the Purchase Price at a rate of 12% per annum, accruing daily and payable in cash on a quarterly basis in arrears, as sole and exclusive liquidated damages for such failure and not a penalty. Such interest shall cease to accrue on the date the Registration Statement is declared effective by the Commission.
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(e) At its expense, PubCo shall advise Subscriber within two Business Days: (i) of the issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for such purpose; (ii) of the receipt by PubCo of any notification with respect to the suspension of the qualification of the Subscribed Securities included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (iii) subject to the provisions in this Subscription Agreement, of the occurrence of a Suspension Event or any other event that requires the making of any changes in any Registration Statement or prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading. Notwithstanding anything to the contrary set forth herein, PubCo shall not, when so advising Subscriber of such events, provide Subscriber with any material, non-public information regarding PubCo. At its expense, PubCo shall use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable, and upon the occurrence of any event contemplated above (other than a permitted Suspension Event), PubCo shall use its commercially reasonable efforts to, as soon as reasonably practicable, prepare a post-effective amendment to such Registration Statement or a supplement to the related prospectus, or file any other required document so that, as thereafter delivered to purchasers of the Subscribed Securities included therein, such prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f) Upon receipt of written notice from PubCo of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus), not misleading, the undersigned agrees that (1) it will immediately discontinue offers and sales of the Subscribed Securities under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until the undersigned receives copies of a supplemental or amended prospectus (which PubCo agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by PubCo that it may resume such offers and sales, and (2) it will maintain the confidentiality of any information included in such written notice delivered by PubCo unless otherwise required by law, subpoena or regulatory request or requirement. If so directed by PubCo, the undersigned will deliver to PubCo or, in the undersigned’s sole discretion, destroy all copies of the prospectus covering the Subscribed Securities in the undersigned’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Subscribed Securities shall not apply (x) to the extent the undersigned is required to retain a copy of such prospectus (A) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (B) in accordance with a bona fide pre-existing document retention policy or (y) to copies stored electronically on archival servers as a result of automatic data back-up.
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(g) For purposes of this Section 5, “Subscribed Securities” shall mean, as of any date of determination, the Subscribed Securities (as defined in the recitals to this Subscription Agreement) and any other equity security issued or issuable with respect to the Subscribed Securities by way of share split, dividend, distribution, recapitalization, merger, exchange, replacement or similar event, and “Subscriber” shall include any affiliate of the undersigned Subscriber to which the rights under this Section 5 shall have been duly assigned.
(h) PubCo shall indemnify and hold harmless Subscriber (to the extent a seller under the Registration Statement), its officers, directors and agents, trustees, partners, members, managers, stockholders, affiliates, employees, employees of its investment manager or advisors, investment manager or advisors and each person who controls Subscriber (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including reasonable and documented attorneys’ fees) and expenses (collectively, “Losses”), as incurred, that arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement (or incorporated by reference therein), any prospectus included in the Registration Statement or any form of prospectus or preliminary prospectus, or in any amendment or supplement thereto, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus, or any form of prospectus or preliminary prospectus, or any amendment or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, that such Losses arise out of, or are based upon, any untrue statements, alleged untrue statements, omissions or alleged omissions were made in reliance upon and in conformity with any information regarding Subscriber furnished in writing to PubCo by Subscriber expressly for use therein.
(i) Subscriber shall indemnify and hold harmless PubCo, its directors, officers, agents and employees, each person who controls PubCo (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, that arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement (or incorporated by reference therein), any prospectus included in the Registration Statement any form of prospectus or preliminary prospectus, or in any amendment or supplement thereto, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus, or any form of prospectus or preliminary prospectus, or any amendment or supplement thereto, in light of the circumstances under which they were made) not misleading, but only to the extent that such Losses arise out of, or are based upon, any untrue statements, alleged untrue statements, omissions or alleged omissions were made in reliance upon and in conformity with any information regarding Subscriber furnished in writing to PubCo by Subscriber expressly for use therein. In no event shall the liability of Subscriber be greater in amount than the dollar amount of the net proceeds received by Subscriber upon the sale of the Subscribed Securities giving rise to such indemnification obligation. Subscriber shall notify PubCo promptly of the institution, threat or assertion of any proceeding arising from or in connection with the transactions contemplated by this Section 5 of which Subscriber is aware.
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(j) Any person or entity entitled to indemnification herein shall (A) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s or entity’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (B) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld, conditioned or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement includes a statement or admission of fault and culpability on the part of such indemnified party or which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
(k) If the indemnification provided under this Section 5 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any Losses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Losses referred to above shall be deemed to include, subject to the limitations set forth in this Section 5, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 5(k) from any person who was not guilty of such fraudulent misrepresentation. Each indemnifying party’s obligation to make a contribution pursuant to this Section 5(k) shall be individual, not joint and several, and in no event shall the liability of any Subscriber hereunder be greater in amount than the dollar amount of the net proceeds received by such Subscriber upon the sale of the Subscribed Securities giving rise to such indemnification obligation.
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6. Other Covenants.
(a) With a view to making available to Subscriber the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the Commission that may at any time permit Subscriber to sell securities of PubCo to the public without registration, PubCo agrees, until Subscriber no longer holds Subscribed Securities, to use commercially reasonable efforts to:
(i) make and keep public information available, as those terms are understood and defined in Rule 144;
(ii) file with the Commission in a timely manner all reports and other documents required of PubCo under the Securities Act and the Exchange Act so long as PubCo remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and
(iii) furnish to Subscriber so long as it owns Subscribed Securities, as promptly as practicable upon request, (x) a written statement by PubCo, if true, that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, and (y) such other information as may be reasonably requested to permit Subscriber to sell such securities pursuant to Rule 144 without registration.
(b) If requested by Subscriber, PubCo shall use its commercially reasonable efforts to cause the removal of the Restricted Legend from:
(i) any Subscribed Securities being sold by Subscriber under the Registration Statement so long as the Registration Statement is effective and no stop order or Suspension Event is in effect;
(ii) any Subscribed Securities being sold by Subscriber under Rule 144 so long as such sale complies with Rule 144 in all respects (and Subscriber certifies to PubCo of such compliance) and PubCo is in compliance with the current public information required by Rule 144(c)(1) and with Rule 144(i)(2), if applicable; or
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(iii) all of Subscriber’s Subscribed Securities so long as all of its Subscribed Securities may be sold by Subscriber under Rule 144 without any volume and manner of sale restrictions (and Subscriber certifies to PubCo accordingly) without the requirement for PubCo to be in compliance with the current public information required by Rule 144(c)(1), and PubCo is in compliance with Rule 144(i)(2), if applicable.
To the extent required by the Transfer Agent, PubCo shall use commercially reasonable efforts to cause its legal counsel to deliver a customary opinion within two Business Days of the delivery of all reasonably necessary representations and other documentation from Subscriber as reasonably requested by PubCo, its counsel or the Transfer Agent by Subscriber to the Transfer Agent to the effect that the removal of the Restricted Legend in such circumstances may be effected under the Securities Act.
(c) Subscriber hereby agrees that, from the date of this Subscription Agreement, none of Subscriber, its controlled affiliates, or any person or entity acting on behalf of Subscriber or any of its controlled affiliates or pursuant to any understanding with Subscriber or any of its controlled affiliates will engage in any Short Sales with respect to securities of PubCo prior to the Closing. Notwithstanding the foregoing, (i) nothing herein shall prohibit other entities under common management with Subscriber that have no knowledge of this Subscription Agreement or of Subscriber’s participation in the Transaction (including Subscriber controlled affiliates and/or affiliates) from entering into any Short Sales and (ii) in the case of a Subscriber that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Subscriber’s assets and the portfolio managers have no knowledge of the investment decisions made by the portfolio managers managing other portions of such Subscriber’s assets, this Section 6(c) shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Purchase Price covered by this Subscription Agreement.
7. Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earliest to occur of (a) such date and time as the Agreement is terminated in accordance with its terms, (b) upon the mutual written agreement of PAAC or PubCo, as applicable, Subscriber and Astro Digital to terminate this Subscription Agreement, (c) the event that any conditions contained in Section 2 herein are not satisfied on or prior to the Closing and, as a result thereof, the Subscription and the other transactions contemplated by this Subscription Agreement are not or will not be consummated at the Closing; or (d) the “Outside Closing Date”, as defined in the Agreement, if the Closing has not occurred by such date; provided, however, that nothing herein will relieve any party hereto from liability for any willful breach hereof prior to the time of termination, and each party hereto will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach. PAAC or PubCo shall notify Subscriber of the termination of the Agreement promptly after the termination thereof. For the avoidance of doubt, if this Subscription Agreement terminates following the delivery by Subscriber of the Purchase Price, PubCo shall instruct the escrow agent hereunder to promptly (but not later than two Business Days thereafter) return the Purchase Price to Subscriber, whether or not the closing of the Transaction shall have occurred. For purposes of this Section 7, “willful breach” shall mean a material breach of this Subscription Agreement that is a consequence of an act or omission by the breaching party with the actual knowledge that such act or omission would, or would reasonably be expected to, constitute a breach of this Subscription Agreement, including, without limitation, Subscriber’s failure or refusal to deliver the Purchase Price at the Closing when all conditions to Subscriber’s obligation to consummate the Closing have been satisfied or waived.
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8. Trust Account Waiver. Subscriber hereby acknowledges that PAAC has established a trust account (the “Trust Account”) containing the proceeds of its initial public offering (the “IPO”) and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of PAAC’s public stockholders and certain other parties (including the underwriters of the IPO). For and in consideration of PAAC entering into this Subscription Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Subscriber hereby (i) agrees that it does not now, and shall not at any time hereafter, have any right, title, interest or claim of any kind in or to any assets held in the Trust Account, and shall not make any claim against the Trust Account, regardless of whether such claim arises as a result of, in connection with or relating in any way to this Subscription Agreement or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (any and all such claims are collectively referred to hereafter as the “Released Claims”), (ii) irrevocably waives any Released Claims that it may have against the Trust Account now or in the future as a result of, or arising out of, any negotiations, contracts or agreements with PAAC, and (iii) will not seek recourse against the Trust Account for any reason whatsoever; provided however, that nothing in this Section 8 shall (a) be deemed to limit any Subscriber’s right to distributions from the Trust Account by virtue of Subscriber’s record of beneficial ownership of PAAC’s or PubCo’s shares of common stock, (b) be deemed to limit subscriber’s right to exercise any redemption rights with respect to of PAAC’s or PubCo’s shares of common stock owned by Subscriber, (c) serve to limit or prohibit Subscriber’s right to pursue a claim against PAAC for legal relief against assets held outside the Trust Account, for specific performance or other equitable relief, or (d) serve to limit or prohibit any claims that Subscriber may have in the future against PAAC’s assets or funds that are not held in the Trust Account.
9. Miscellaneous.
(a) All notices, requests, demands, claims and other communications hereunder shall be in writing. Any notice, request, demand, claim or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient, (ii) when sent by electronic mail, on the date of transmission to such recipient, (iii) one Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid), or (iv) four Business Days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and, in each case, addressed to the intended recipient at its address specified on the signature page hereof or to such electronic mail address or address as subsequently modified by written notice given in accordance with this Section 9(a).
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(b) Subscriber acknowledges that PAAC will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement. Prior to the Closing, Subscriber agrees to promptly notify PAAC if it becomes aware that any of the acknowledgments, understandings, agreements, representations and warranties of Subscriber set forth herein are no longer accurate in all material respects (unless qualified by materiality or “material adverse effect,” in which case are no longer accurate in all respects). PAAC acknowledges that Subscriber and others will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement. Prior to the Closing, PAAC agrees to promptly notify Subscriber if it becomes aware that any of the acknowledgments, understandings, agreements, representations and warranties of PAAC set forth herein are no longer accurate in all material respects (unless qualified by materiality or “material adverse effect,” in which case are no longer accurate in all respects).
(c) Each of PAAC, Astro Digital and Subscriber is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
(d) Each of PAAC and Subscriber shall pay all of its own expenses in connection with this Subscription Agreement and the transactions contemplated herein.
(e) PAAC shall be responsible for the fees of its transfer agent, stamp taxes and all of the Depository Trust Company’s fees associated with the issuance of the Subscribed Securities.
(f) Neither this Subscription Agreement nor any rights that may accrue to Subscriber hereunder (other than the Subscribed Securities acquired hereunder, if any) may be transferred or assigned. Except as otherwise provided herein, neither this Subscription Agreement nor any rights that may accrue to PAAC hereunder may be transferred or assigned; provided, that, PAAC may, without the prior written consent of Subscriber, transfer or assign its rights and obligations under this Subscription Agreement to PubCo in connection with the consummation of the Transaction. Notwithstanding the foregoing, Subscriber may assign its rights and obligations under this Subscription Agreement without PAAC’s or Astro Digital’s prior written consent to one or more of its affiliates or to any fund or account managed by the same investment adviser as Subscriber, or by an affiliate of such investment adviser, or, with PubCo’s and Astro Digital’s prior written consent, to another person; provided that no such assignment shall relieve Subscriber of its obligations hereunder regardless of whether any such assignee performs such obligations; provided further that any such assignee shall independently satisfy the requirements of Section 4(d) and shall execute and deliver to PAAC and Astro Digital a joinder agreement making the representations and warranties of Subscriber set forth herein.
(g) All the agreements, representations and warranties made by each party hereto in this Subscription Agreement shall survive the Closing.
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(h) PAAC or PubCo may request from Subscriber such additional information as it may deem reasonably necessary to evaluate the eligibility of Subscriber to acquire the Subscribed Securities, and Subscriber shall provide such information as may be reasonably requested, to the extent readily available and to the extent consistent with its internal policies and procedures; provided that PAAC and PubCo expressly agrees to keep any such information provided by Subscriber confidential, except (i) as required by law, subpoena or regulatory request or requirement or (ii) to the extent such disclosure is required by law, at the request of the staff of the Commission or regulatory agency or under the regulations of any national securities exchange on which PAAC or PubCo’s securities are listed for trading. The Subscriber acknowledges and agrees that if it does not provide PAAC or PubCo, as applicable, with such requested information, PAAC or PubCo may not be able to register the Subscriber’s Subscribed Securities for resale pursuant to Section 5 hereof. The Subscriber hereby agrees that its identity and the Subscription Agreement, as well as the nature of the Subscriber’s obligations hereunder, may be disclosed in any public announcement or disclosure required by the Commission and in any registration statement, proxy statement, consent solicitation statement or any other Commission filing to be filed by PAAC or PubCo in connection with the issuance of Shares contemplated by this Subscription Agreement and/or the Transaction.
(i) This Subscription Agreement may not be amended, modified, waived or terminated (other than pursuant to the terms of Section 7 above) except by an instrument in writing, signed by each of the parties hereto; provided, however, that no amendment, modification or waiver of any provision of this Subscription Agreement shall be effective without the prior written consent of Astro Digital if such amendment, modification or waiver would (A) reduce the number or change the type of Subscribed Securities to be purchased hereunder, reduce the Per Share Price or the Purchase Price, (B) amend, modify or waive any provision of this Subscription Agreement that confers rights on Astro Digital as a third-party beneficiary, (C) amend, modify or waive any of the conditions to the Closing set forth in Section 2(e), Section 2(f) or Section 2(g), (D) amend, modify or waive the representations and warranties set forth in Section 4(f) or Section 4(m) or (E) amend, modify or waive any provision of Section 7 or this Section 9. No failure or delay of either party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have hereunder.
(j) This Subscription Agreement, together with Annex A and the other documents and certificates delivered pursuant hereto, constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties hereto, with respect to the subject matter hereof.
(k) Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.
(l) If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
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(m) This Subscription Agreement may be executed and delivered in one or more counterparts and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., .pdf or www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
(n) This Subscription Agreement is intended for the benefit of the parties hereto (including Astro Digital) and their respective successors and permitted assigns. Astro Digital is an express third-party beneficiary of this Subscription Agreement with the right to enforce the provisions hereof, including the right to seek specific performance of Subscriber’s obligation to fund the Purchase Price at the Closing.
(o) The parties hereto and Astro Digital agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties hereto and Astro Digital shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party or Astro Digital, as applicable, is entitled at law, in equity, in contract, in tort or otherwise.
(p) This Subscription Agreement shall be governed by, and construed in accordance with, the laws of the state of New York, without regard to the principles of conflicts of laws that would otherwise require the application of the law of any other state.
(q) EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OR RELATED TO THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO OR ANY AFFILIATE OF ANY OTHER SUCH PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE PARTIES HERETO AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES HERETO FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS SUBSCRIPTION AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS SUBSCRIPTION AGREEMENT.
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(r) The parties hereto agree that all disputes, legal actions, suits and proceedings arising out of or relating to this Subscription Agreement must be brought exclusively in the UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY, NEW YORK, AND ANY APPELLATE COURT THEREFROM (collectively the “Designated Courts”). Each party hereto hereby consents and submits to the exclusive jurisdiction of the Designated Courts. No legal action, suit or proceeding with respect to this subscription agreement may be brought in any other forum. Each party hereto hereby irrevocably waives all claims of immunity from jurisdiction and any objection which such party may now or hereafter have to the laying of venue of any suit, action or proceeding in any Designated Court, including any right to object on the basis that any dispute, action, suit or proceeding brought in the Designated Courts has been brought in an improper or inconvenient forum or venue. Each of the parties hereto also agrees that delivery of any process, summons, notice or document to a party hereof in compliance with Section 9(a) above shall be effective service of process for any action, suit or proceeding in a Designated Court with respect to any matters to which the parties hereto have submitted to jurisdiction as set forth above.
(s) PAAC has disclosed to Subscriber certain non-public information regarding the Transaction, including the material terms of the transactions contemplated hereby (and by the Other Subscription Agreements), and Subscriber acknowledges its agreement to treat such information confidentially until such time as all such “material non-public information” (within the meaning of applicable securities laws) is either publicly disclosed by PAAC (including as contemplated by the following sentence) or deemed by PAAC to be no longer relevant. In accordance therewith, PAAC shall, by 9:00 a.m., New York City time, on the first Business Day immediately following the date of this Subscription Agreement, issue one or more press releases or file with the Commission a Current Report on Form 8-K disclosing, to the extent not previously publicly disclosed, such material non-public information unless PAAC determines, in compliance with applicable laws and regulations, that any of such information is no longer material. Notwithstanding anything in this Subscription Agreement to the contrary, PAAC shall not publicly disclose the name of Subscriber, its investment adviser or any of their respective affiliates, or include the name of Subscriber, its investment adviser or any of their respective affiliates in any press release or in any filing with the Commission or any regulatory agency or trading market, without the prior written consent (including by e-mail) of Subscriber, except as required by the federal securities laws, rules or regulations and to the extent such disclosure is required by other laws, rules or regulations, at the request of the staff of the Commission or regulatory agency or under Nasdaq regulations, in which case PAAC shall provide Subscriber with prior written notice (including by e-mail) of such permitted disclosure, and shall reasonably consult with Subscriber regarding such disclosure.
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(t) The obligations of Subscriber under this Subscription Agreement are several and not joint with the obligations of any Other Subscriber or any other investor under the Other Subscription Agreements, and Subscriber shall not be responsible in any way for the performance of the obligations of any Other Subscriber under this Subscription Agreement or any other investor under the Other Subscription Agreements. Nothing contained herein or in any Other Subscription Agreement, and no action taken by Subscriber or investor pursuant hereto or thereto, shall be deemed to constitute Subscriber and other investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that Subscriber and other investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Subscription Agreement and the Other Subscription Agreements. Subscriber acknowledges that no Other Subscriber has acted as agent for Subscriber in connection with making its investment hereunder and no Other Subscriber will be acting as agent of Subscriber in connection with monitoring its investment in the Subscribed Securities or enforcing its rights under this Subscription Agreement. Subscriber shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Subscription Agreement, and it shall not be necessary for any Other Subscriber or investor to be joined as an additional party in any proceeding for such purpose.
(u) Subscriber understands and agrees that Subscriber is purchasing the Subscribed Securities directly from PubCo. Subscriber further acknowledges that there have not been, and Subscriber hereby agrees that it is not relying on, any representations, warranties, covenants or agreements made to Subscriber by PAAC, PubCo, Astro Digital and its affiliates, any other party to the Transaction, any of the foregoing person’s Representatives or any other person or entity, expressly or by implication, other than those representations, warranties, covenants and agreements of PAAC set forth in this Subscription Agreement. Subscriber acknowledges that certain information provided by PAAC was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections.
10. Notices. All notices and other communications among the parties shall be made in the manner provided in Section 9(a) above.
If to Subscriber, to the address provided on Subscriber’s signature page hereto.
If to PAAC or PubCo, prior to the closing of the Transaction:
Proem Acquisition Corp I.
3860 W. Northwest Hwy, Suite 470,
Dallas, TX 75220
Attention: Imran Khan, Chief Executive Officer
Email: imran@proemasset.com
with copies (which shall not constitute notice) to:
Loeb & Loeb LLP
345 Park Ave.
New York, NY 101543
Attention: Mitchell S. Nussbaum
Email: mnussbaum@loeb.com
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If to PubCo, after the closing of the Transaction:
Astro Digital, Inc.
7815 Shaffer Parkway
Littleton, CO 80127
Attention: Michael Wilson, Chief Financial Officer
E-mail: michael.wilson@astrodigital.com
with copies (which shall not constitute notice) to:
Broadfield US LLP
488 Madison Avenue, 22nd Fl
New York, NY 10022
Attention: Michael A. Smith; Christopher Hagenbuch
E-mail: michaelsmith@broadfieldlaw.com;
christopherhagenbuch@broadfieldlaw.com
or to such other address or addresses as the parties may from time to time designate in writing. Copies delivered solely to outside counsel shall not constitute notice.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, each of PAAC and Subscriber has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first set forth above.
| Proem Acquisition Corp I. | |||
| By: | |||
| Name: | Imran Khan | ||
| Title: | Chief Executive Officer | ||
[Signature Page to PIPE Subscription Agreement]
IN WITNESS WHEREOF, each of PAAC and Subscriber has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first set forth above.
| SUBSCRIBER | |||
| Print Name: | |||
| By: | |||
| Name: | |||
| Title: | |||
| Address for Notices: | |||
Name in which securities are to be registered:
__________________________________________
| Number of Subscribed Securities subscribed for: | ||||
| Price Per Subscribed Security: | $ | 10.00 | ||
| Aggregate Purchase Price: | $ | |||
You must pay the Purchase Price by wire transfer of United States dollars in immediately available funds to the escrow account of PubCo specified by PubCo in the Closing Notice.
[Signature Page to PIPE Subscription Agreement]
ANNEX A
ELIGIBILITY REPRESENTATIONS OF SUBSCRIBER
This Annex A should be completed and signed
by Subscriber
and constitutes a part of the Subscription Agreement.
| A. | QUALIFIED INSTITUTIONAL BUYER STATUS (Please check the box, if applicable) |
| ☐ | Subscriber is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act). |
| B. | ACCREDITED INVESTOR STATUS (Please check the box) |
| ☐ | Subscriber is an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) or an entity in which all of the equity holders are accredited investors, and has marked and initialed the appropriate box below indicating the provision under which it qualifies as an “accredited investor.” |
| C. | AFFILIATE STATUS (Please check the applicable box) |
SUBSCRIBER:
| ☐ | is: |
| ☐ | is not: |
an “affiliate” (as defined in Rule 144 under the Securities Act) of PubCo or acting on behalf of an affiliate of PubCo.
Rule 501(a), in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Subscriber has indicated, by marking and initialing the appropriate box below, the provision(s) below which apply to Subscriber and under which Subscriber accordingly qualifies as an “accredited investor.”
| ☐ | Any bank, registered broker or dealer, SEC or state registered investment adviser, exempt reporting adviser, insurance company, registered investment company, insurance company, business development company, small business investment company or rural business investment company; |
| ☐ | Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; |
| ☐ | Any employee benefit plan, within the meaning of the Employee Retirement Income Security Act of 1974, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5,000,000; |
| ☐ | Any corporation, similar business trust, partnership, limited liability company or any organization described in Section 501(c)(3) of the Internal Revenue Code, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000; |
| ☐ | Any director, executive officer, or general partner of PubCo; |
| ☐ | Any natural person whose individual net worth, or joint net worth with that person’s spouse or spousal equivalent, at the time of his or her purchase exceeds $1,000,000. For purposes of calculating a natural person’s net worth: (a) the person’s primary residence shall not be included as an asset; (b) indebtedness that is secured by the person’s primary residence up to the estimated fair market value of the primary residence shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of calculation exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the residence shall be included as a liability; |
| ☐ | Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse or spousal equivalent in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year. |
| ☐ | Any trust with assets in excess of $5,000,000, not formed to acquire the securities offered, whose purchase is directed by a sophisticated person; |
| ☐ | Any natural person who is a “knowledgeable employee” as defined under the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder; |
| ☐ | Any “family office” as defined under the Investment Advisers Act of 1940, as amended, and the rules and regulations promulgated thereunder (the “Investment Advisers Act”), which was not formed for the purpose of investing in PubCo, has assets under management in excess of $5,000,000 and whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment; or |
| ☐ | Any “family client,” as defined under the Investment Advisers Act, of a family office, whose prospective investment in PubCo is directed by such family office, and such family office is one (i) with assets under management in excess of $5,000,000, (ii) that was not formed for the specific purpose of investing in PubCo, and (iii) whose prospective investment in PubCo is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of such prospective investment; or |
| ☐ | Any entity in which all of the equity owners are accredited investors meeting one or more of the above tests or one of the following tests. |
[Specify which tests: ]
| SUBSCRIBER | ||
| Print Name: | ||
| By: | ||
| Name: | ||
| Title: | ||
Exhibit 99.1
Astro Digital, Premier Builder of Satellites for Commercial, Civil and Defense Applications, to Become Public Through Merger with Proem Acquisition Corp I
Since 2018, Astro Digital has delivered nearly 40 satellites across 16 mission types for more than 30 customers, including NASA, the Department of Defense, Boeing, and Sony.
Astro Digital grew revenue at a 42% two-year CAGR while generating positive adjusted EBITDA, a rare combination among public space peers.
$50 million PIPE with Proem Asset Management and its affiliates committing $25 million, co-led with Leon Capital Group
Proem Asset Management is led by Imran Khan, former Chief Strategy Officer of Snap; following closing, Imran Khan will join the board of directors of Astro Digital.
DENVER, CO and DALLAS, TX, Sept. 28, 2026 (GLOBE NEWSWIRE) -- Astro Digital, US, Inc. (“Astro Digital” or the “Company”), a designer, manufacturer and operator of mission-configurable satellites for commercial, civil and defense applications, and Proem Acquisition Corp I (Nasdaq: PAAC) (“Proem”), a publicly traded special purpose acquisition company, today announced that they have entered into a definitive business combination agreement. Upon closing of the business combination, Proem will be named Astro Digital Holdings, Inc. and is expected to trade on Nasdaq following closing, which is anticipated in the first quarter of 2027, subject to certain closing conditions.
Astro Digital designs, manufactures, and operates satellite systems and mission support services for applications such as earth observation, communications, space infrastructure and defense applications. Since 2018, Astro Digital has delivered nearly 40 satellites across 16 distinct mission types and has served more than 30 customers including NASA, the Department of Defense, Boeing, and Sony. Its platforms have enabled a series of industry firsts, including Starcloud-1, which in November 2025 carried the first NVIDIA H100 GPU into orbit and has since run large language model training and inference on orbit; Mandrake, which demonstrated optical inter-satellite links for DARPA and the Space Development Agency; and Otter Pup 1 and 2, a mission demonstration for rendezvous, proximity operations and docking for Starfish Space.
“Breakthrough technologies and expanding commercial applications are driving rapid innovation across the constellation and space sectors and Astro Digital is uniquely positioned to benefit from these tailwinds,” said Chris Biddy, Co-Founder and Chief Executive Officer of Astro Digital. “Over the past 11 years, we have developed strong customer relationships, meeting growing demand with rapid execution capabilities, our scalable manufacturing platform and cost discipline. Unlike competitors in this industry, we have been able to deliver nearly 40 satellites, profitably, with revenue compounding at 42% annualized over two years, positive adjusted EBITDA, and a backlog that doubled last year.”
“We see a long runway for continued growth,” Biddy added. “Our customers continue to expand their constellation plans and develop new applications including data-centers-in-space which we are well suited to take on. This transaction with Proem will enable us to increase our sales force and production capacity, and expand into new verticals, while preserving the discipline that got us here. We are grateful to have Proem as a partner on this journey.”
“We like this business for five reasons,” said Imran Khan, Chairman and Chief Executive Officer of Proem and Founder and Chief Investment Officer of Proem Asset Management. “One, it is capital efficient: it has built satellites for eleven years and delivered nearly 40 of them without the cash burn that defines most of this sector. Two, it is direct leverage to the secular growth of space; as constellations multiply, demand for its platforms multiplies with them. Three, its growth comes from multiple vectors: existing customer follow-ons, new customer wins, government and sovereign programs, and new mission categories like orbital data centers. Four, the management team has a proven track record; they built this business from zero. And five, it is adjusted EBITDA profitable, and has been while compounding revenue at an impressive rate.”
The business combination values Astro Digital at a pro forma post-money enterprise value of approximately $587 million. The transaction will be funded by up to approximately $180 million in gross proceeds, comprising up to $130 million of cash held in Proem’s trust account (assuming no redemptions) and approximately $50 million from PIPE investments led by Proem Asset Management and Leon Capital Group, of which Proem Asset Management and its affiliates have committed $25 million. The transaction has been unanimously approved by the boards of directors of both Astro Digital and Proem and is expected to close in the first quarter of 2027, subject to approval by Proem’s shareholders, the satisfaction of a minimum cash condition of $30 million, the effectiveness of a registration statement on Form S-4 to be filed with the U.S. Securities and Exchange Commission (the “SEC”), and other customary closing conditions.
Astro Digital’s existing management team, led by Co-Founder and Chief Executive Officer Chris Biddy and Chief Financial Officer and EVP of Operations Michael Wilson, will continue to lead the combined company. Imran Khan, Chairman and Chief Executive Officer of Proem and Founder and Chief Investment Officer of Proem Asset Management, will join the board of directors of the combined company at closing, alongside current Astro Digital directors Adrian Steckel, former CEO of OneWeb, and Dr. Derek Tournear, former director of the Space Development Agency.
Additional information about the proposed transaction, including a copy of the business combination agreement and an investor presentation, will be provided in a Current Report on Form 8-K to be filed by Proem with the SEC and available at www.sec.gov.
Conference Call and Investor Presentation
Astro Digital and Proem will host a joint investor conference call on September 28, 2026, at 9:00 a.m. ET to discuss the proposed transaction. Participants can register for the webcast at https://events.q4inc.com/attendee/122125528. The webcast and the accompanying investor presentation will also be available on Proem’s website at www.proemacq.com. A replay will be available following the call.
Advisors
Broadfield US LLP is serving as legal counsel to Astro Digital. Clear Street is serving as financial and capital markets advisor to Proem, and Loeb & Loeb LLP is serving as legal counsel to Proem.
About Astro Digital
Astro Digital, a Delaware corporation, is the infrastructure powering space constellations. The Company designs, manufactures, launches and operates mission-configurable satellites for commercial, civil and defense customers, partnering with constellation operators from first spacecraft through constellation-scale production. Since 2018, Astro Digital has served more than 30 customers across 16 mission types, delivering nearly 40 satellites with decades of cumulative on-orbit time. The Company is headquartered in Denver, Colorado, with operations in California and Australia. For more information, visit www.astrodigital.com.
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About Proem Acquisition Corp I
Proem Acquisition Corp I, a Cayman Islands exempted company (Nasdaq: PAAC) is a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Proem is sponsored by Proem SPAC Partners I LLC, an affiliate of Proem Asset Management, a long-biased equity fund focused on the technology, media, telecommunications and consumer sectors. Proem raised $130 million in its initial public offering in February 2026, and its units, ordinary shares and warrants trade on Nasdaq under the symbols “PAACU”, “PAAC” and “PAACW”, respectively.
Non-GAAP Financial Measures
This press release includes references to adjusted EBITDA, a financial measure that is not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Astro Digital defines adjusted EBITDA as net income (loss) before interest, taxes, depreciation and amortization, adjusted for stock-based compensation. Astro Digital believes adjusted EBITDA provides useful information to investors regarding its operating performance. Non-GAAP financial measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. A reconciliation of adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, is included in the investor presentation. Financial information for Astro Digital presented herein is unaudited and preliminary; 2026E-2029E figures are projections.
Additional Information and Where to Find It
The business combination will be submitted to shareholders of Proem for their consideration. Proem and Astro Digital intend to jointly file a registration statement on Form S-4 (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”), which will include a preliminary proxy statement/prospectus (a “Proxy Statement/Prospectus”). A definitive Proxy Statement/Prospectus will be mailed to Proem’s shareholders as of a record date to be established for voting on the business combination and other proposals. Proem may also file other relevant documents regarding the business combination with the SEC. Proem’s shareholders and other interested persons are advised to read, once available, the preliminary Proxy Statement/Prospectus and any amendments thereto and, once available, the definitive Proxy Statement/Prospectus, in connection with Proem’s solicitation of proxies for its extraordinary general meeting of shareholders to be held to approve, among other things, the business combination, because these documents will contain important information about Proem, Astro Digital and the business combination. Shareholders may also obtain a copy of the preliminary or definitive Proxy Statement/Prospectus, once available, as well as other documents filed with the SEC regarding the Business Combination and other documents filed with the SEC by Proem, without charge, at the SEC’s website located at www.sec.gov or by directing a request to Proem’s Chief Executive Officer at 3860 W. Northwest Hwy, Suite 470, Dallas, TX.
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Forward-Looking Statements
This press release includes certain statements that are not historical facts but are forward-looking statements. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “project,” “forecast,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters, but the absence of these words does not mean that a statement is not forward looking. These forward-looking statements include, but are not limited to, (1) statements regarding estimates and forecasts of other financial, performance and operational metrics and projections of market opportunity; (2) references with respect to the anticipated benefits of the proposed business combination and the projected future financial performance of Astro Digital following the proposed business combination; (3) changes in the market for Astro Digital’s satellite technology infrastructure and mission support services, expansion plans and opportunities; (4) Astro Digital’s aerospace business, including modular satellite technology infrastructure and mission support services; (5) the sources and uses of cash in connection with the proposed Business Combination; (6) the anticipated capitalization and enterprise value of Proem following the consummation of the proposed business combination; (7) the projected technological developments of Astro Digital; (8) current and future potential commercial and customer relationships; (9) the ability to operate efficiently at scale; (10) anticipated investments in capital resources and research and development, and the effect of these investments; (11) the amount of redemption requests made by Proem’s public shareholders; (12) the ability of Astro Digital to issue equity or equity-linked securities in the future; (13) the failure to achieve the minimum cash condition; (14) the inability to obtain or maintain the listing of the combined company’s common stock on Nasdaq following the proposed business combination, including but not limited to redemptions exceeding anticipated levels or the failure to meet Nasdaq’s initial listing standards in connection with the consummation of the proposed business Combination; and (15) expectations related to the terms and timing of the proposed Business Combination. Additional risks include the availability and funding of the PIPE financing, including the risk that any PIPE investor may fail to satisfy its obligations; the level of redemptions and the resulting effect on minimum cash condition; delays in resolving SEC comments on, or obtaining effectiveness of, the Registration Statement; the failure to obtain required shareholder approvals or Nasdaq listing approval; and risks relating to Astro Digital’s aerospace, satellite, remote-sensing, communications and government-contract businesses, including export-control, sanctions, and other national-security regulatory requirements. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of Proem’s and Astro Digital’s management and are not predictions of actual performance. Any projections or other forward-looking information included in this press release, any investor presentation or other transaction communications are provided for illustrative purposes only, were prepared for purposes of evaluating the proposed business combination and related financing, and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability; no representation or warranty is made as to their achievability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Proem and Astro Digital. These forward-looking statements are subject to a number of risks and uncertainties, as set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the final prospectus of Proem filed with the SEC on February 13, 2026 (File No. 333-292217), and/or will be contained in the Registration Statement and the Proxy Statement/Prospectus when available, and in those other documents that Proem and Astro Digital have filed, or will file, with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. The risks and uncertainties above are not exhaustive, and there may be additional risks that neither Proem nor Astro Digital presently know or that Proem and Astro Digital currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Proem’s and Astro Digital’s expectations, plans or forecasts of future events and views as of the date of this press release. Proem and Astro Digital anticipate that subsequent events and developments will cause Proem’s and Astro Digital’s assessments to change. However, while Proem and Astro Digital may elect to update these forward-looking statements at some point in the future, Proem and Astro Digital specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing Proem’s and Astro Digital’s assessments as of any date subsequent to the date of this release. Accordingly, undue reliance should not be placed upon the forward-looking statements.
4
Participants in the Solicitation
Proem and Astro Digital and certain of their respective directors, executive officers and other members of management and employees may be considered participants in the solicitation of proxies with respect to the business combination under the rules of the SEC. Information about (i) the directors and executive officers of Proem is set forth in Proem’s Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 26, 2026, and (ii) a description of the interests of the directors and executive officers of Proem and Astro Digital and the business combination will be contained in the Registration Statement and the Proxy Statement/Prospectus when available, which documents can be obtained free of charge from the sources indicated above.
No Offer or Solicitation
This press release shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Contacts
Astro Digital
Email: investor@astrodigital.com
Website: www.astrodigital.com
Proem Acquisition Corp I
Tel. No. (214) 706-9344
Website: www.proemacq.com
5
Exhibit 99.2
A profitable, fast growing space infrastructure leader going public through a business combination with Proem Acquisition Cor p I (Nasdaq: PAAC) SEPTEMBER 25, 2026 Confidential SPACE INFRASTRUCTURE FROM CONCEPT TO CONSTELLATION
DISCLAIMER & FORWARD -LOOKING STATEMENTS Important Information This presentation (the "Presentation") has been prepared by Astro Digital US, Inc. ("Astro Digital" or the "Company") and Proem Acquisition Corp. I (the "SPAC"), and is provided on a confidential basis solely to the recipients (any such recipient, together with its subsidiaries and affiliates, the "Recipient") for purposes of considering an opportunity to participate in the private placement of the securities of the Company. This Presentation is being provided on a confidential basis only to a limited number of specifically identified potential investors and is not intended for general distribution. Private placements are speculative, illiquid, carry a high degree of risk and should only be purchased by persons who can afford the loss of their entire investment. Any reproduction or distribution of this Presentation, in whole or in part, or the disclosure of its contents, without the prior consent of the Company and the SPAC is prohibited. By accepting this Presentation solely for use during our meeting, each recipient agrees: (i) to maintain the confidentiality of all information that is contained in this Presentation and not already in the public domain and (ii) to use this Presentation for the sole purpose of evaluating the Company and the SPAC. This Presentation does not constitute, and should not be construed as an offer to sell or a solicitation of an offer to buy any securities of Astro Digital, the SPAC or any of their respective affiliates in any jurisdiction. No such offer or solicitation shall be made except pursuant to applicable securities laws and regulations. The Company and the SPAC intend to file a registration statement/proxy statement on Form S-4 with the Securities and Exchange Commission (the "SEC") in connection with the proposed business combination between the SPAC and the Company. The information in this Presentation and in any registration statement/proxy statement on Form S-4 may not be complete and may be changed at any time. Certain information contained in this Presentation has been derived from sources prepared by third parties. Although the Company and the SPAC believe the information contained in this Presentation related to the Company and the SPAC is accurate in all material respects, the Company and the SPAC make no representation or warranty, either express or implied, as to the accuracy, completeness or reliability of the information contained herein. The Company and the SPAC further expressly disclaim any and all liability relating to or resulting from the use of this Presentation. In addition, the information contained in this Presentation is provided as of the date hereof and may change, and the Company and the SPAC undertake no obligation to update such information, including in the event that such information becomes inaccurate. Except to the extent required by law, neither the Company nor the SPAC nor any other person assume responsibility for the accuracy and completeness of the information contained in this Presentation. The information contained herein is preliminary, is provided for discussion purposes only, is only a summary of key information, is not complete, and does not contain certain material information about the opportunity, including certain risk factors associated with the opportunity, and is subject to change without notice. Recipients agree that the Company and the SPAC and their respective agents shall have no liability for any misstatement or omission of fact or any opinion expressed herein. Any actual terms of the opportunity may vary from what is discussed herein and may do so in a material manner. There can be no assurance that the Company will achieve the desired results or that any investor will receive any return of or on capital. This Presentation has been prepared in good faith; however, no representation or warranty, express or implied, is made by or on behalf of Astro Digital, the SPAC or any of their respective directors, officers, employees, shareholders, advisors or agents as to the accuracy, completeness or fairness of the information or opinions contained herein. None of Astro Digital, the SPAC or any of their respective affiliates or representatives shall have any liability whatsoever (whether direct, indirect, consequential or otherwise) for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection therewith. This Presentation is not intended to provide, and should not be relied upon as, legal, financial, tax, investment or other professional advice. Recipients should conduct their own independent investigation and analysis of Astro Digital, the SPAC and the matters described herein and should consult their own legal, financial, tax and other professional advisers prior to making any investment or other decision. Cautionary Note Regarding Forward-Looking Statements Certain statements contained in this Presentation constitute "forward-looking statements." Forward-looking statements include, but are not limited to, statements regarding future plans, strategies, objectives, expectations, intentions, market opportunities, product development, technology roadmaps, customer adoption, revenue growth, development timelines and anticipated results. These forward-looking statements are based on current expectations, assumptions and estimates and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those expressed or implied by such forward-looking statements. Such risks include, but are not limited to, the ability to consummate the proposed business combination, regulatory approvals, market acceptance and customer adoption of the Company's products and services, competition, changes in applicable laws and regulations, the ability to attract and retain key personnel, intellectual property risks, cybersecurity risks, financing risks, operational and technical challenges geopolitical factors, and general economic conditions. Forward-looking statements speak only as of the date of this Presentation. Astro Digital and the SPAC undertake no obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as required by applicable law. Recipients are cautioned not to place undue reliance on forward-looking statements. 2
Industry and Market Data In this Presentation, we rely on and refer to information and statistics regarding market participants in the sectors in which Astro Digital competes and other industry data. We obtained this information and statistics from third-party sources, including reports by market research firms and company filings. In addition, all of the market data included in this Presentation involves a number of assumptions and limitations, and there can be no guarantee as to the accuracy or reliability of such assumptions. The externally sourced information has been obtained from sources Astro Digital believes to be reliable, but the accuracy and completeness of such information cannot be assured. While Astro Digital and the SPAC believe their internal research is reliable, such research has not been verified by any independent source. None of Astro Digital, the SPAC or any of their respective officers, directors, managers, employees, agents or representatives assume responsibility or liability for any inaccuracies or omissions in such information or undertake to update any of such information or provide additional information as a result of new information or future events or developments. Trademarks This Presentation may contain trademarks, service marks, trade names and copyrights of other companies, which are the property of their respective owners, and the use thereof herein does not imply an affiliation with or endorsement by the owners of such trademarks, service marks, tradenames and copyrights. Solely for convenience, some of the trademarks, service marks, trade names and copyrights referred to in this Presentation may be listed without the , ℠ © or ® symbols, but the Company and the SPAC will assert, to the fullest extent under applicable law, the rights of the applicable owners, if any, to these trademarks, service marks, trade names and copyrights. Unaudited Financial Information The financial information contained in this Presentation has not been audited or reviewed by an independent registered public accounting firm. This information has been prepared by management of the Company and the SPAC based on internal records and estimates and is being provided solely for informational purposes in connection with the proposed private placement of securities described herein. While management believes that such financial information has been prepared in good faith and on a reasonable basis, no representation or warranty, express or implied, is made as to the accuracy, completeness, or reliability of such information. The unaudited financial information included herein may not conform to generally accepted accounting principles ("GAAP") and may differ materially from audited financial statements that the Company and/or the SPAC may prepare or be required to prepare in the future. Such information may be subject to adjustment, revision, or restatement upon completion of the customary financial closing and audit procedures of the Company and the SPAC. There can be no assurance that, upon completion of an audit, such financial information will not differ materially from the unaudited information presented in this Presentation. Prospective investors should not place undue reliance on the unaudited financial information contained herein and should make their own independent evaluation of the Company's financial condition and results of operations. This Presentation does not purport to contain all information that may be necessary or desirable to evaluate the Company, the SPAC or the proposed offering. Prospective investors are encouraged to review the audited financial statements and other disclosure documents of the Company and the SPAC, when available, and to consult with their own financial, legal, tax, and other advisors before making any investment decision. Projections and Non-GAAP Financial Measures This Presentation includes EBITDA, Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP financial measures. A reconciliation of EBITDA and Adjusted EBITDA to net income (GAAP), the most directly comparable GAAP measure, for both historical and projected periods is included in the Appendix. Projected reconciling items are management estimates subject to the same uncertainties as the projections; in particular, the projections do not include stock-based compensation expense the Company expects to incur following the closing of the business combination. Non-GAAP measures should not be considered in isolation or as substitutes for GAAP measures and may not be comparable to similarly titled measures of other companies. No Solicitation This Presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities of the SPAC or the Company, nor shall there be any sale of any securities of the SPAC or the Company in any state or jurisdiction, domestic or foreign, in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The securities of the SPAC and the Company have not been registered under the U.S. Securities Act of 1933, as amended, or any other applicable securities law. The securities of the SPAC and the Company have not been approved or disapproved by the SEC or any other regulatory or governmental authority, nor have any of the foregoing passed upon the accuracy or adequacy of the information presented. Any representation to the contrary is a criminal offense. This Presentation is provided solely for informational purposes and does not constitute investment advice or a recommendation to engage in any transaction. Recipients should not treat the contents of this Presentation as a substitute for professional advice or as a basis for making any investment decision. DISCLAIMER & FORWARD -LOOKING STATEMENTS Important Information 3
DISCLAIMER & FORWARD -LOOKING STATEMENTS Important Information General This Presentation does not purport to contain all of the information that may be necessary or appropriate to evaluate the proposed transaction, and any recipient hereof should conduct its own independent analysis of the Company and the SPAC and the data contained or referred to herein. The Company and the SPAC are not acting as financial advisor, intermediary or distributor of securities, or in any fiduciary capacity of any kind to the recipient or any other prospective purchaser. This Presentation is not intended to form the basis of any investment decision by the recipient and does not constitute investment, tax or legal advice. The recipient should also seek advice from its own specialized advisors (including financial, legal, accounting and tax) in conducting such analysis. The SPAC is an "emerging growth company" within the meaning of the Jumpstart Our Business Startups Act of 2012. As a result, the SPAC is subject to reduced public company reporting requirements. This Presentation is not intended for distribution to, or use by, any person or entity in any jurisdiction where such distribution or use would be contrary to applicable law or regulation. Persons into whose possession this Presentation comes are required to inform themselves about and to observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. 4
SUMMARY OF RISK FACTORS Important Information The following is a summary of the principal risks associated with an investment in the combined company's securities, which w ill be explained and updated in the registration statement on Form S -4 to be filed with the SEC. • Astro Digital has a limited operating history . • Astro Digital depends on a limited number of customers, including early -stage companies, and the loss, cancellation or nonpayment of a significant customer could reduce revenue and cash flow . • Astro Digital depends in part on U.S. Government programs and indirect subcontracting relationships ; task orders are not guaranteed, funding and procurement decisions may change, and the Business Combination may reduce its small -business set -aside opportunities . • Astro Digital relies on third -party launch providers and operates satellites in a challenging environment ; launch failures, space debris, on-orbit anomalies and limited service lives could cause mission losses or reduce service revenue . • The Corvus -Raven platform and planned applications, including rendezvous, proximity operations and docking and in-space data processing, are new and may not perform as planned or achieve commercial adoption . • Fixed -price and milestone -based contracts expose the Company to cost overruns, while rapid growth could strain its manufacturing capacity, facilities, supply chain and workforce . • The Company faces strong competition from larger or better -capitalized providers and may be unable to attract or retain key executives and cleared engineers . • Operational failures, cybersecurity incidents or inadequate intellectual property protections could disrupt missions, result in liability or reduce the Company's competitive advantage . • The Company may need substantial additional capital to execute its growth plans, and inflation, supply - chain constraints and geopolitical conditions could increase costs or reduce demand . • Export controls, sanctions, anti -corruption laws, security -clearance requirements, foreign -ownership restrictions and CFIUS review may limit the Company's international activities or ability to pursue and perform classified government work . • The Company must obtain and maintain FCC, NOAA, spectrum and other licenses, and evolving rules for orbital debris, space traffic management and commercial space activities could delay or restrict operations . • The Company's facilities and operations involve hazardous materials and are subject to environmental, health and safety requirements ; incidents or noncompliance could result in injury, liability or shutdowns . • The Company's international operations and use of satellite imagery and other data may subject it to foreign currency, regulatory, privacy and data -protection risks . • High redemptions, a smaller -than -expected PIPE investment or transaction costs could reduce cash available to the combined company, prevent the Business Combination from closing or limit its ability to fund operations . • The financial projections, targets and non -GAAP measures presented in connection with the Business Combination may not be achieved, may omit material costs or may not be comparable to those of other companies . • The sponsor and Proem's officers and directors have interests that may differ from those of public shareholders and may have influenced the decision to pursue the Business Combination . • Astro Digital will face additional disclosure and liability requirements in this transaction ; the PSLRA safe harbor is unavailable for transaction projections, and the combined company may face significant public -company costs and internal -control challenges . • The Business Combination may not close because required approvals, closing conditions or Nasdaq listing requirements may not be satisfied ; if Proem cannot complete a business combination within its required timeframe, it may liquidate or face investment -company regulation . • Related financings and the Business Combination may substantially dilute existing stockholders through founder shares, warrants, PIPE shares, convertible securities and future issuances ; the domestication and Business Combination may also have adverse tax consequences, including Section 382 limits on Astro Digital's tax attributes . • A small group of stockholders may control a significant portion of the combined company's voting power, limiting other stockholders' influence over corporate matters . • The market price of the combined company's securities may be volatile or decline, including because of a limited public float, future sales of shares, limited analyst coverage or the performance of other space companies . • The combined company does not expect to pay cash dividends for the foreseeable future, and anti -takeover provisions may limit opportunities for stockholders to sell at a premium . 5
SPAC & ANCHOR INVESTOR MANAGEMENT Chris Biddy Co-Founder & CEO 18 years of executive and technical leadership scaling teams, delivering satellite missions and growing space businesses. Michael Wilson CFO / EVP Operations Extensive experience across finance, strategy, business development and operations; turns ambitious plans into sustainable growth. Billy Wahng CTO 20+ years of technical leadership, 14 dedicated to small -satellite technology; drives the Corvus and Raven platform roadmap. Imran Khan Chairman & CEO, Proem Acq. Corp I CIO and Founder of Proem Asset Management; 25 years of investing and operating experience at Snap, Credit Suisse and JP Morgan. 100+ Team members across CA · CO · WA · Australia 40,000+ Sq ft of engineering & production facilities 33 Satellites launched ~40 Satellites delivered 25+ Cumulative years of management tenure at Astro Digital MANAGEMENT & SPONSOR 6
ASTRO DIGITAL DESIGNS, MANUFACTURES, AND OPERATES SATELLITES AD assists clients to design their diverse space mission concepts. AD is a full -lifecycle mission partner AD assists client s with scale up to on -orbit constellation 7
OUR VISION: THE INFRASTRUCTURE POWERING SPACE CONSTELLATIONS We believe the next decade of the space economy will be built by hundreds of constellations - commercial, government and defense . We expect that operators behind them want to build space -enabled businesses, not satellite factories. Astro Digital's vision is to be the infra structure they build on: mission -specific satellites, designed, manufactured and operated from the first demonstration to constellations of hundreds. TODAY Concept -to-constellation partner Designing, manufacturing and operating mission - specific satellites for +30 customers across 16 mission types. NEXT Constellation -scale production Modular constellation lines and at -scale co - manufacturing as customers grow from demos to hundreds of satellites; expanded US civil, defense and sovereign programs. BEYOND The space economy's physical layer Becoming the infrastructure behind orbital data centers, on -orbit power, and in -space servicing and logistics - new mission categories delivered on the same configurable platform family. Astro Digital Proem Acquisition Corp I (Nasdaq: PAAC). Confidential — Subject to definitive Registration Statement / Proxy Statement on Form S -4 8
INVESTMENT HIGHLIGHTS Full lifecycle: mission concept to constellation NASA, Boeing, DoD, Sony, Starcloud , Starfish Space A flight proven mission partner Salesforce, government solutions, added production capacity and new products Partner of Choice Trusted Execution Growth Runway Blue -chip Customers 42% Revenue CAGR, FY'24 -FY26E 14% Adj. EBITDA margin, '25A +30 Customers across the industry 1 9
THE SPACE ECONOMY IS POWERED BY SATELLITE CONSTELLATIONS Astro Digital provides customers with the engineering, satellite platform manufacturing and flight operations needed for high - performance satellite constellations. Constellations for commercial, government, and defense applications drive the global space economy Observing assets, conditions, and changes on earth Optical Imaging Data Networks Satellite -based C4ISR IoT Satellite -based SIGINT Direct To Device Satellite -based PNT Hyperspectral Weather Data networks serving ground - and space -based comms Intelligence, surveillance, and reconnaissance and more Orbital data centers for compute demands Power beaming and on - orbit solar power Remote sensing Communications Defense Space Infrastructure 10
BURGEONING CONSTELLATION DEMAND Constellation demand provides a strong tailwind to Astro Digital's business: Commercial satellite constellations are active or planned 2 Large constellations of 50+ satellites are active or planned 1 > 300 > 80 Constellations already have satellites on -orbit 1 > 130 Active & Planned 2 >3002 52 61 69 76 85 94 113 109 126 2017 2018 2019 2020 2021 2022 2023 2024 2025 Active commercial satellite constellations1 1) Active commercial satellite constellation counts are estimates derived from Jonathan McDowell Space Report data (planet4589). The number of active/planned large and enormous constellations (>50 satellites) are based on Jonathan McDowell estimates as of 2026 (https://planet4589.org/space/con/largecon.html; https://planet4589.org/space/con/conlist.html). 2) Count of commercial constellations active/planned is based on NewSpace Index data as of July 2026 (https://www.newspace.im). Planned constellations reflect operator projections ranging from early-stage demonstration concepts to planned deployments. 11
Demos, One -offs, & Small constellations Most constellations (10-200) Very large constellations (>200) ASTRO DIGITAL'S MODEL SCALES ALONGSIDE ITS CONSTELLATION CUSTOMERS Most satellite operators aspire to build space -enabled businesses, not satellite manufacturing organizations. Astro Digital is their full lifecycle partner, from concept to large constellation. As customer production volume scales, Astro Digital's role grows with them Traditional primes not cost -effective for larger systems Vertical integration only cost -effective for very large systems Development partner Agile production At-scale production Design and manufacture one satellite to a new mission definition Manufacture repeat satellites on a proven configuration Co-manufacturing partner with customer 12
THE FUTURE OF CONSTELLATIONS IS MASS CONFIGURATION, NOT MASS PRODUCTION EVERY MISSION IS DIFFERENT WHY SHOULD EVERY SATELLITE BE THE SAME? One Size Fits All: Customer Must Adapt Astro Digital is a mission partner, combining the efficiency of standardized production with the flexibility required for customers' mission -specific constellations. Mass Configuration, Suited to the Mission Missions differ in payload, power and orbit. One fixed design can't serve them all efficiently. 13
THE WINNING ASTRO DIGITAL PHILOSOPHY Astro Digital's winning formula has delivered consistent, profitable growth on a capital -efficient basis. Agile, customer -centric Proven on -orbit success Highly configurable Flexible Innovative Constellation scale -up Mass configuration Diverse mission types 33 satellites, years on orbit 16 mission types to date Adaptable platform variants Cost-effective solutions 14
FLIGHT HERITAGE & TRACK RECORD OF SUCCESS Customers trust Astro Digital for its long and successful on -orbit history Satellites Delivered Astro Digital Firsts Include: Starcloud -1 Otter Pup 1 & 2 Mandrake Lyra 1 –3 First Nvidia H100 GPU in orbit (Corvus -Micro) Starfish Space RPOD / servicing demos DARPA / SDA optical inter - satellite link demo EchoStar IoT constellation satellites Cumulative on -orbit time Nearly 40 60+ Years GHOSt 1–5 Hyperspectral imaging constellation Tomorrow -R1 and R2 Precipitation Radar satellites 0 5 10 15 20 25 30 35 2018 2019 2020 2021 2022 2023 2024 2025 Cumulative Satellites Launched By Year -End 1 15
DIVERSE PORTFOLIO OF CUSTOMERS FUELING GROWTH Serviced since 2018 Current and planned constellations by Astro Digital's customers Astro Digital today: AD's customers represent: Delivered and ordered Core Astro Digital satellite platform technologies support the full range of customer applications 30+ Customers 20+ Constellations 70+ Satellites Astro Digital IP Starfish Space NASA Boeing Orbital Sidekick OTTER PUP 1 & 2 Fly Foundational Robots VERTEX + CONEJO / Q4S GHOSt Satellite -servicing / RPOD demos on Corvus - Micro+ (2023 & 2025). In orbit robot arm demonstration mission, launch 2028. Comms mission complete; photon -entanglement (quantum) experiment, launch 2027. Hyper -spectral imaging constellation for commercial and defense customers, operational Starcloud SONY STARCLOUD -1 And numerous other customers... First Nvidia H100 GPU in orbit (Corvus -Micro) — launched 2025. Optical inter -satellite link communications mission, launched 2026 KITA 16
STARCLOUD CASE STUDY Starcloud -1 Based on an Astro Digital platform, Starcloud -1 is a groundbreaking satellite that carried the first NVIDIA H100 GPU into orbit in November 2025 "Astro Digital consistently exceeded our expectations , delivering outstanding technical expertise, responsiveness, and execution. They were a true partner in our success, and we continue to work with them on additional initiatives." – Philip Johnston, CEO The entire Starcloud -1 satellite development cycle, from initial design through build and delivery, was only 1.5 years, leveraging Astro Digital's Corvus -Micro+ platform to power this highly innovative spacecraft. 17
Astro Digital Proem Acquisition Corp I (Nasdaq: PAAC). DATA CENTERS IN SPACE: ALREADY FLYING ON ASTRO DIGITAL Astro Digital built the platform that carried the first data -center -class GPU into orbit Flight -Proven Data -center -class GPU (NVIDIA H100) in orbit — Starcloud -1, built on Astro Digital's Corvus -Micro+ platform and delivered in 1.5 years 1 2 Power to Scale Corvus XL roadmap for compute -class payloads, plus a power -beaming agreement with Star Catcher 3 Grows with the Customer Operators building orbital data centers: Starcloud 4, Google Suncatcher 5, Axiom 6. Astro Digital's model scales from first satellite to at -scale co -manufacturing. 1st 1 Data -center -class GPU (NVIDIA H100) in orbit on Astro Digital's Corvus -Micro+ WHY IT MATTERS: Terrestrial AI buildout is throttled by power, water and grid interconnection, orbit removes those limits, and Astro Digital is the platform partner that has already flown it. 1 NVIDIA Blog (Oct 2025): https://blogs.nvidia.com/blog/starcloud/ | Astro Digital Corvus -Micro bus, Data Center Dynamics (Nov 3, 2025): https:// www.datacenterdynamics.com/en/news/starcloud -1-satellite -reaches -space -with -nvidia -h100-gpu -now -operating -in-orbit/ 2 Astro Digital internal data. 3 Star Catcher press release (Sept 16, 2025): www.star -catcher.com/news/astro -digital -power -purchase -agreement 4 CNBC (Dec 10 , 2025): https://www.cnbc.com/2025/12/10/nvidia -backed -starcloud -trains -first -ai-model -in-space -orbital -data -centers.html 5 Google (Nov 4, 2025): https://blog.google/innovation -and -ai/technology/research/google -project -suncatcher/ | Platform partner (Planet Labs ): https://www.planet.com/pulse/planet -to-build -and -operate -advanced -space -platform -for -project -suncatcher -moonshot/ 6 Axiom Space press release: https://www.axiomspace.com/release/axiom -space -to-launch -orbital -data -center -nodes -to-support -national -security -commerc ial-international -customers 18
SUBSTANTIAL CUSTOMER LIFETIME VALUE FUELED BY CUSTOMER EXPANSION ILLUSTRATION OF SEVEN -YEAR CUSTOMER LIFETIME VALUE 1 Initial Order 1 Satellite Small Constellation 3-10 Satellites ~$1-$3m ~$6-25m Mid-Sized Constellation 11-50 Satellites ~$25 -125m ~$0.1-1B+ Large Constellation >50 Satellites CUSTOMER VALUE CAN INCREASE RAPIDLY ($M) Case Study: Case Study: Customer A Customer B • Initial order in 2021 • Substantial follow -on satellite order activity • Initial order in 2019 • Follow -on orders for initial constellation of satellites Initial Orders Initial Orders Total Value at Y3 Total Value at Y3 $2M $1M $28M $17M 1 19
+$500M REVENUE ASPIRATION BY 2032: 10X GROWTH PATH EXISTING CUSTOMER FOLLOW -ONS NEW CUSTOMER WINS • Existing AD customers target constellations totaling over 1,000 satellites over time • Astro Digital has an active sales pipeline with multiple potential new logos in play • Strategic pursuits with US civil, defense, and sovereign constellations are expected to accelerate A GROWTH ASPIRATION GROUNDED BY MARKET EXPERIENCE 2026E OPPORTUNITY FOR RAPID VALUE EXPANSION 1 Revenue target bridge | 2026E to 2032 target Existing customers 2032E +$500M $50M New customers M&A driven growth organic M&A 20
ORGANIC GROWTH STRATEGY – SCALING THE CORE FOUNDATION Sales and BD build -out Government and defense Broader customer coverage Production capacity Dedicated sales team Grow share across U.S. DoD, NASA, and sovereign programs Grow customers from demos to larger constellations and replenishment; win new mission applications Scale footprint and systems for customer constellation growth Constellation lines Modular, repurposable production lines plus added platform configurability options 21
BOARD OF DIRECTORS Operating, investing and government experience across commercial and defense space DIRECTOR BACKGROUND MANAGEMENT BOARD SPAC SPONSOR Chris Biddy Co-Founder & CEO, Astro Digital 18 years of executive and technical leadership scaling teams, delivering satellite missions and growing space businesses. Michael Wilson CFO / EVP Operations, Astro Digital Extensive experience across finance, strategy, business development and operations; turns ambitious plans into sustainable growth. Adrian Steckel Former CEO, OneWeb Led OneWeb's LEO broadband constellation; built and sold Iusacell to AT∓T; founded Unefon ; took TV Azteca public on the NYSE. Dr. Derek Tournear Former Director, Space Development Agency Director of Space Development Agency (2019 –2025); architect of the Proliferated Warfighter Space Architecture; DARPA, IARPA and Harris alumnus. Imran Khan Chairman & CEO, Proem Acquisition Corp I CIO and Founder of Proem Asset Management; 25 years of investing and operating experience at Snap, Credit Suisse and JP Morgan. POST - CLOSE Messrs. Biddy and Wilson, Mr. Steckel and Dr. Tournear currently serve as directors of Astro Digital and are expected to cont inue on the board of the combined company upon closing of the business combination. Mr. Khan is expected to join the board follo win g closing. Board composition is subject to the definitive Business Combination Agreement, shareholder approval and Nasdaq listing requirements. Mr. Khan is Chairman & CEO o f the SPAC and Founder & CIO of Proem Asset Management, which has committed to backstop up to $25M of the PIPE (see Transaction Sum mary). Independence determinations have not been made; the Company expects to appoint additional independent directors to satisfy Nasdaq board and committee ind ependence requirements, including applicable phase -in periods. Board Chair and committee assignments to be finalized. Prior governm ent service is provided for biographical purposes only and does not imply endorsement by any U.S. government agency. 22
Financials 23
EXPANDING BACKLOG OFFERS ATTRACTIVE FORWARD VISIBILITY $157 $198 $119 $86 $63 $30 BACKLOG (US$M) 1 24
FINANCIAL OVERVIEW: REVENUE & REVENUE GROWTH TOTAL REVENUE (US$M) BY FISCAL YEAR 1 2 +47% +40% $25 $34 $50 $71 $93 $124 +37% +32% +34% 25
ADJ. EBITDA GROWTH & OPERATING LEVERAGE 1 2 ADJ. EBITDA (US$M) BY FISCAL YEAR ADJ. EBITDA MARGIN (%) 20% $3 $5 $8 $12 $18 $29 FY2024 FY2025 FY2026E FY2027E FY2028E FY2029E 14% 11% 16% 17% 23% 26
QUARTERLY RESULTS: 1Q & 2Q (YEAR-OVER-YEAR) US$M · Unaudited REVENUE 1 +38% YoY $7.0 $9.7 1Q25E 1Q26E +54% YoY $7.3 $11.3 2Q25E 2Q26E ADJ. EBITDA 1 +111% YoY $0.8 $1.7 1Q25E 1Q26E +133% YoY $0.7 $1.6 2Q25E 2Q26E Revenue growth accelerated from +38% in 1Q26 to +54% in 2Q26 Adj. EBITDA growth accelerated from +111% in 1Q26 to +133% in 2Q26 27
Valuation 28
COMPARABLE COMPANIES — EV / REVENUE 1 CY '27 EV / Revenue (x) Rocket Lab (RKLB) LTM Net Income Negative 30.6x LTM Net Income Negative SpaceX (SPCX) 18.7x LTM Net Income Negative Planet Labs (PL) 11.3x LTM Net Income Negative Satellogic (SATL) 10.1x LTM Net Income Positive Astro Digital (Implied) 8.3x LTM Net Income Negative BlackSky (BKSY) 4.6x LTM Net Income Negative Voyager (VOYG) 4.2x LTM Net Income Negative Redwire (RDW) 4.0x 29
2025A-2028E Revenue CAGR 39% 44% 89% 63% 30% 26% 21% 63% 2025 Net Income % of Rev 4.5% -32.9% -26.4% -27.6% -69.3% -65.9% -67.6% -63.0% VALUATION RELATIVE TO PEERS 1 8.3x 30.6x 18.7x 11.3x 10.1x 4.6x 4.2x 4.0x 6.3x 23.1x 10.8x 7.7x 8.0x 3.5x 3.6x 2.0x AD Rocket Lab SpaceX Satellogic Planet Labs Blacksky Redwire Voyager 2027 2028 Enterprise Value / Revenue 30
GROWTH WITH POSITIVE MARGINS, UNLIKE MANY PEERS 1 0% 50% 100% 150% 200% -80% -70% -60% -50% -40% -30% -20% -10% 0% 10% CY26 Revenue Growth (YoY) CY25 Net Income Margin Satellogic Voyager Rocket Lab Planet Labs BlackSky Redwire Astro Digital SpaceX 31
ASTRO DIGITAL - RULE OF 40 1 51% 63% 57% 51% 57% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2025A 2026E 2027E 2028E 2029E Adjusted EBITDA Margin + YoY Revenue Growth 32
PROPOSED TRANSACTION SUMMARY Held in SPAC trust (Feb 2026 IPO) PIPE financing (up to) $130M1 $50M 2 Financing & Capital SPAC MINIMUM CASH CONDITION Proposed terms of the business combination. Trust $130M held in trust (Feb 2026 IPO). 1 $30M available cash at close including proceeds from the PIPE after redemptions, expenses, and deferred underwriting. Up to $25M of the PIPE is committed by Proem Asset Management, an affiliate of the Sponsor. SHARE REPURCHASE 3 20% of PIPE proceeds may be used to repurchase shares from stockholders designated by Astro Digital. SPONSOR BACKSTOP 2 33
TRANSACTION SUMMARY Valuation • Assumes a ~$525M pre -money equity value for Astro Digital • Implies ~$587M pro forma enterprise value Financing • Transaction is expected to provide gross proceeds of approximately $180M 4 to Astro Digital • $130M from anticipated trust capital retained at close, assuming no redemptions • $50M from a targeted PIPE at a subscription price of $10.00 per share Deal Structure • Assumes Astro Digital's existing shareholders will rollover 100% of their equity and are expected to own a pro forma equity ownership of ~70% in the combined company ILLUSTRATIVE PRO - FORMA OWNERSHIP (1)(2)(3) NON - FULLY DILUTED SOURCES AND USES ($M) 4 PRO FORMA VALUATION (4) Sources and uses, pro forma valuation and pro forma ownership assume the full $50M PIPE is retained by the combined compa ny and exclude the share repurchase described on slide 33. 20% of PIPE proceeds (approximately $10M at full subscription) may be us ed to repurchase shares from designated existing Astro Digital stockholders. If used in full, cash to the balance sheet and net cash would each fall by approximately $10M to approximately $155M, and gross proceeds to Astro Digital would be approximately $170M rather than $180M; depending on final structure and pric e, shares held by Target Sellers and implied pro forma equity value would fall correspondingly, leaving implied enterprise value substantially unchanged. Repurchase amounts are not retained by the combine d company and count toward the $30M minimum cash condition. Terms will be described in the Form S -4. Shares Outstanding — Non-Fully Diluted (M) 75.2 Share Price ($) $10.00 Implied Pro Forma Equity Value (M) $752.2 Less: Net Cash (M) (165.0) Implied Enterprise Value (M) $587.2 70% 17% 6% 7% Target Sellers SPAC Public Sponsor PIPE Sources SPAC Cash in Trust3 130.0 PIPE Proceeds 50.0 Rollover Equity — Consideration Shares (non-cash) 525.0 Total Sources 705.0 Uses Equity Consideration to Sellers (non-cash) 525.0 Estimated Other Transaction Fees & Expenses 15.0 Cash to Combined Company Balance Sheet4 165.0 Total Uses 705.0 PROPOSED TRANSACTION OVERVIEW Astro Digital Proem Acquisition Corp I (Nasdaq: PAAC). Confidential — Subject to definitive Registration Statement / P roxy Statement on Form S -4. (1) Assumes no redemptions by public stockholders of PAAC. If public stockholders redeem, SPAC Publi c ownership (shown as 17%) would decline and the Target Sellers, Sponsor and PIPE percentages would increase correspondingly, and cash to the combined company would decrease; see footnote (3 ). Figures may not foot due to rounding. (2) Pro forma ownership shown on a non -fully -diluted basis; excludes public warrants (6.5M ) and sponsor private placement warrants (0.15M), out - of-the-money at $11.50. (3) Amounts held in trust are subject to redemption. SPAC public stockholders may elect to redeem their shares for their pro rata portion of the trust account, and redemptions in SPAC business combinations are frequently substant ial . There is no assurance that any particular amount of the $130M held in trust will remain available at closing, and cash delivered to the combined company may be significantly less than the amount shown. 34
CONCEPT TO CONSTELLATION. Thank you Space. Delivered. 35
Glossary of Key Terms APPENDIX Adjusted net income Net income excluding items management treats as non -recurring or non-operational. A non -GAAP measure; the adjustments differ between companies. Anchor investor An investor committing early and in size to a financing, which can help attract further participation. Backlog Contracted work awarded but not yet performed or recognized as revenue. Definitions vary and may include unfunded, optioned or cancelable amounts. Business combination The merger through which the SPAC and the operating company become a single public entity. Also called a de -SPAC. Capital -efficient Achieving growth using relatively little invested capital or outside funding. Cislunar The region of space between Earth and the Moon, and the space around the Moon. Comparable companies Public companies selected as valuation reference points. Choosing the peer set is a judgment; no peer is identical. Constellation A group of satellites that work together for a particular use, typically operated as one system to provide continuous or near -continuous coverage. Constellation size bands As used here: small is roughly 3 –10 satellites, mid -sized 11–50, large above 50. Company groupings, not industry standards. Customer lifetime value Total revenue expected from a customer across the whole relationship, rather than from the first order alone. Deferred underwriting IPO banking fees left unpaid at the SPAC IPO and payable on closing. They reduce cash available at close. Direct -to-device Satellites connecting directly to mobile phones, IoT sensors, trackers, vehicles, industrial equipment and other terrestrial devices, with no dish or special terminal. Dual -use Technology or a product with both commercial and defense or government applications. Earth observation Using satellites to observe, image and measure conditions on Earth without physical contact. Also called remote sensing. Emerging growth company A category created by the JOBS Act of 2012 permitting reduced disclosure and reporting for newer or smaller public companies. Enterprise value Equity market value plus debt less cash — the value of the whole business, independent of how it is financed. EV / Revenue multiple Enterprise value divided by revenue for a given year. Used to compare companies that are not consistently profitable. Flight heritage A documented record that a design or component has already operated successfully in space. Buyers treat it as a measure of technical risk. Flight operations Day -to-day commanding, monitoring and health management of satellites after launch. Often sold as an ongoing service. Form S -4 / proxy statement The registration statement and stockholder -voting document to be filed with the SEC for the business combination. It will contain additional information about the SPAC, the Company and the transaction. Forward -looking statements Statements about future plans or expected results rather than historical fact. Actual outcomes may differ materially. 36
Glossary of Key Terms APPENDIX Growth -adjusted EV / Revenue An EV / Revenue multiple divided by the growth rate, so fast and slow growers can be compared more evenly. Gross margin Revenue less the direct costs of delivering the product or service, as a percentage of revenue. Before overhead, sales and R&D. Hyperspectral imaging Imaging that splits light into many narrow bands. Because materials reflect distinctively, it can reveal gas leaks, crop stress or minerals. Implied valuation A valuation derived from proposed transaction terms rather than set by open-market trading. In-space manufacturing Producing materials or products in orbit, where microgravity and vacuum allow results difficult to achieve on Earth. Launch vehicle The rocket that carries a satellite to orbit. A launch vehicle failure means the rocket, not the satellite, caused the loss. Mass configuration The Company's term for using standardized production to build mission- specific variants. Not an established industry term. Mass production Building large numbers of identical units. Efficient at volume, but requires every customer to accept the same design. Minimum cash condition A closing condition requiring at least a specified amount of cash at completion, after redemptions, expenses and deferred fees. Mission type The category of job a satellite performs. A company that has flown many mission types has demonstrated versatility. Non-GAAP measure A figure not calculated under US accounting standards. Useful for comparison but not standardized; read alongside GAAP results. On-orbit Operating in space after launch. Cumulative on-orbit time adds together the operating time of every satellite flown. On-orbit logistics Delivering, moving, hosting or servicing hardware in space, analogous to logistics services on the ground. Operating income margin Operating profit as a percentage of revenue, after operating expenses but before interest and tax. Optical imaging Capturing pictures of Earth in visible light, similar in principle to a high- altitude digital camera. Optical inter-satellite link Laser connections moving large volumes of data directly between satellites rather than routing through ground stations. Orbital data center Computing hardware on satellites, so data is processed in space and only results are sent down. Pathfinder mission A first satellite flown to prove a design, technology or business case before committing to a full constellation. Payload The mission-specific equipment a satellite exists to carry — camera, sensor, radio or processor. The platform supports it. Platform (bus) The standardized core of a satellite: structure, power, propulsion, pointing, computer and radios. The chassis carrying the payload. Power beaming Collecting solar energy in space and transmitting it wirelessly, to other spacecraft or toward Earth. 37
Glossary of Key Terms APPENDIX Precipitation radar A satellite radar measuring rain, snow and storm structure from orbit for weather forecasting. Prime contractor The large, established contractor holding the main customer contract and managing subcontractors. Traditional primes are legacy aerospace firms. Private placement A sale of securities to a limited group of investors rather than the public. Typically illiquid, speculative and unregistered at the time of sale. Redemption The right of SPAC public holders to take their pro rata cash from trust instead of remaining invested. High redemptions cut cash at closing. Regulation S-X The SEC's requirements for the form and content of financial statements in filings. Figures here are unaudited and not prepared to that standard. Replenishment Replacing satellites as they reach end of life so a constellation keeps operating. Creates repeat demand from the same customer. Rollover equity The portion of consideration in which existing owners receive shares in the combined company instead of cash. Non-cash consideration. Rule of 40 An investor rule of thumb that revenue growth plus profit margin should total at least 40. A heuristic, not an accounting standard. Sales pipeline Prospective opportunities a company is pursuing. Not backlog and not contracted revenue; individual opportunities may never convert. Satellite Internet of Things Connecting large numbers of low-power devices and sensors by satellite where there is no cellular coverage. Satellite servicing Extending the life or usefulness of satellites already in orbit — refueling, repairing, repositioning or removing them. Secondary A purchase of shares from existing shareholders. Proceeds go to those sellers, not to the company; no new capital reaches the business. Sources and uses A summary of where the transaction's capital comes from and where it goes. Both sides must total the same amount. Sovereign program A space program funded and owned by a national government seeking independent capability. Allied sovereign means friendly foreign governments. Space domain awareness Detecting, tracking and understanding objects and activity in orbit, including debris and other operators' satellites. Space economy The total worldwide value of space-related products and services across government, defense and commercial activity. Sponsor The group that forms, funds and manages the SPAC, and which typically holds founder shares. Sponsor commitment An undertaking by the sponsor or affiliates to invest a set amount, or buy shares others do not, so a minimum financing size is reached. A backstop. Task order A specific, funded work assignment issued under an IDIQ or similar vehicle. Task orders are where revenue is actually generated. Trust account The segregated account holding cash raised in the SPAC IPO, released only to fund a completed combination or repay redeeming holders. Vertical integration Designing and building most components in-house rather than purchasing them. Can lower unit cost at high volume, but needs large fixed investment. 38
Glossary of Acronyms APPENDIX ARR Annual recurring revenue C4ISR Military command, control and intelligence systems CAGR Compound annual growth rate CLV / LTV Customer lifetime value D2D Direct-to-device DARPA Defense Advanced Research Projects Agency DoD US Department of Defense EBITDA Earnings before interest, tax, depreciation and amortization EGC Emerging growth company EV Enterprise value FY (A / E) Fiscal year; actual or estimated GAAP US generally accepted accounting principles GEO Geostationary orbit, about 22,000 miles above the equator IDIQ Indefinite delivery, indefinite quantity contract vehicle IoT Internet of things LEO Low Earth orbit, roughly 100–1,200 miles up LTM Last twelve months NASA National Aeronautics and Space Administration OISL Optical inter-satellite link PIPE Private investment in public equity PNT Positioning, navigation and timing RPOD Rendezvous, proximity operations and docking SDA Space Development Agency SIGINT Signals intelligence SPAC Special purpose acquisition company TBD To be determined; not finalized as of the date of this presentation USG United States Government USSF United States Space Force 39
US$ in millions · Fiscal years ended December 31 · FY2024 –FY2025 unaudited actuals; FY2026E –FY2029E management projections ACTUAL PROJECTED 3 FY2024 FY2025 FY2026E FY2027E FY2028E FY2029E Net income (GAAP) $0.9 $1.5 $4.6 $6.8 $11.0 $18.4 Income tax expense 0.5 0.7 1.6 2.9 4.5 7.1 Interest and other expense (income), net¹ 0.1 0.3 0.2 0.2 0.2 0.3 Depreciation & amortization 0.9 1.8 1.7 2.0 2.5 3.1 EBITDA $2.4 $4.3 $8.1 $12.0 $18.2 $29.0 Stock -based compensation (non -cash)² 0.3 0.5 — — — — Adjusted EBITDA $2.8 $4.8 $8.1 $12.0 $18.2 $29.0 MEMO Revenue $25.1 $34.3 $50.3 $70.5 $92.8 $123.9 Net income margin (GAAP) 3.7% 4.5% 9.1% 9.7% 11.8% 14.9% Adjusted EBITDA margin 11.1% 14.0% 16.0% 17.0% 19.6% 23.4% EBITDA is a non -GAAP financial measure defined as net income (GAAP) before income tax expense, interest and other non -operating expense (income), net, and depreciation and amortization. Adjusted EBITDA is EBITDA excluding non -cash stock -based compensation expense. Adjusted EBITDA margin is Adjusted EBITDA divided by revenue; net income margin is net income (GAAP) divided by revenue. Management uses these measures to evaluate operating performance a nd believes they are useful to investors in assessing the business on a consistent basis. They are not substitutes for net incom e (GAAP), the most directly comparable GAAP measure, and may not be comparable to similarly titled measures used by other companies. ¹ Interest expense less interest income, plus other non -operating (income) expense, net. ² FY2024 –FY2025 add back stock -based compensation expense actually incurred. FY2026E –FY2029E projections do not i nclude any stock -based compensation expense and therefore include no add - back. Astro Digital expects to grant equity awards and incur stock -based compensation following the closing of the business comb ination; those costs are not reflected in projected net income (GAAP), EBITDA or Adjusted EBITDA. Historical actuals are unau dited, have not been reviewed or audited by an independent registered public accounting firm, do not conform to Regulation S -X, and may change upon completion of the audit. Projected amounts, including eac h reconciling item, are management estimates, are inherently uncertain, and were not prepared in accordance with GAAP or publ ish ed guidelines for prospective financial information; actual results will differ, possibly materially. Figures may not foot due to rounding. ³Incremental public company costs. Projected operating expenses in clu de management's estimate of incremental public company costs of $1.5M, $1.8M and $1.9M in FY2027E, FY2028E and FY2029E, respe ctively; no such costs are included in FY2026E. These costs are assumed to commence in FY2027E, may commence earlier or later depending on the actual closing date of the business combination, are a ma nag ement estimate only, and may be materially understated. Projected net income (GAAP), EBITDA, Adjusted EBITDA and Adjusted EBI TDA margin are presented after these costs. APPENDIX: ADJ EBITDA RECONCILIATION ANNUAL Revenue Growth (YoY) 36.6% 46.8% 40.2% 31.6% 33.5% 40
APPENDIX: ADJ EBITDA RECONCILIATION QUARTERLY US$ in thousands · Quarters ended March 31 and June 30 · Unaudited actuals 1Q25E 1Q26E 2Q25E 2Q26E Net income (GAAP)² $467 $1,269 $310 $1,137 Income tax expense² — — — — Interest and other expense (income), net¹ 33 85 57 144 Depreciation & amortization 193 201 194 141 EBITDA $693 $1,554 $560 $1,421 Stock -based compensation (non -cash)³ 105 130 108 136 Adjusted EBITDA $798 $1,684 $668 $1,557 MEMO Revenue $6,987 $9,649 $7,307 $11,265 Revenue growth (YoY) +38.1% +54.2% Adjusted EBITDA growth (YoY) +111.1% +133.0% Net income margin (GAAP) 6.7% 13.1% 4.2% 10.1% Adjusted EBITDA margin 11.4% 17.5% 9.1% 13.8% ¹ Interest expense less interest income, plus other non -operating (income) expense, net. ² Income tax provision is recorded annu ally in the fourth quarter; no provision is reflected in interim periods, and interim net income (GAAP) is presented before i nco me taxes. ³ Non -cash stock -based compensation expense actually incurred. Quarterly Adjusted EBITDA therefore adds back SBC, consistent with FY2024 –FY2025 actuals but not with FY2026E –FY2029E projections, which include no SBC expense and no add -back (see slide 40); 1H26 Adjusted EBITDA is not directly comparable to FY2026E projected Adjusted EBITDA. EBITDA and Adjusted EBITDA are non -GAAP financial measures; see slide 40 for definitions. Historical actuals are unaudited, have not been reviewed or audited by an independent registered public accounting firm, do n ot conform to Regulation S -X, and may change upon completion of the audit or review. Growth rates are calculated from unrounded figures. Figures may not foot d ue to rounding. Presented in thousands (slide 40 is in millions) so that quarterly amounts can be tied to the nearest $1K. E on qua rterly periods denotes unaudited estimated results subject to change upon completion of audit or review; FY2026E –FY2029E elsewhere in this Presentation denote ma nagement projections. 41
APPENDIX: SUMMARY BALANCE SHEET US$ in thousands · As of December 31, 2024 and 2025 · Unaudited actuals Assets FY2024 FY2025 Liabilities & shareholders' equity FY2024 FY2025 Cash & cash equivalents $2,356 $4,426 Deferred revenue 3 $6,014 $7,903 Other current assets 1 9,707 13,808 Accounts payable & accrued expenses 4 2,429 3,058 Total current assets $12,064 $18,234 Short -term debt 528 676 Total current liabilities $8,971 $11,637 Property, plant & equipment, net 2 5,270 4,375 Long -term debt 3,554 3,653 Other non -current assets 3,244 2,855 Total liabilities $12,525 $15,290 Total assets $20,577 $25,463 Paid -in capital 18,782 19,375 Retained earnings / (accumulated deficit) (10,730) (9,202) Total shareholders' equity $8,052 $10,173 Total liabilities & shareholders' equity $20,577 $25,463 1 Comprises accounts receivable ($3,019 and $4,125), inventory ($2,835 and $2,950) and prepaid expenses and other current asset s ($3,854 and $6,733) at December 31, 2024 and 2025, respectively. 2 Property, plant and equipment, gross, of $14,762 and $15,260, less accumulated depreciation of $9,492 and $10,885, respectively. 3 The timing of revenue recognition on satellite design, manufacturing and operations contracts, including the treatment of def erred revenue and multi -year contracts, may change upon completion of the audit and the Company's adoption of public company accounting policies, which could shift amounts between periods. 4 Includes accrued payroll of $647 and $717, respectively. Balances are presented on a standalone, pre -transaction basis and do n ot reflect the proposed business combination, amounts held in the SPAC trust account, PIPE proceeds, redemptions by SPAC public stockholders, transaction fees and expenses, deferred underwriting fees, any repurchase of shares from existing Astro Digital stockholders, or the capital structure of the combined company (see slides 33 –34). Classifica tion of balance sheet items reflects management's internal presentation and has not been reviewed by an independent accountant; amounts may be reclassifi ed or adjusted, including for items such as leases, accrued liabilities and equity instruments, upon completion of the audit. No projected balance sheet or statement of cash flows is presented, and no cash flow information should be inferred other than the period -end cash balances sh own. Historical actuals are unaudited, have not been reviewed or audited by an independent registered public accounting firm, do not conform to Regulation S -X, and may change upon completion of the audit or review. Presented in thousands; figures may not foot due to rounding. 42