EX-2.1 2 ea122974ex2-1_forummerger2.htm AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

 

EXECUTION VERSION

 

 

 

 

 

 

AGREEMENT AND PLAN OF MERGER

 

dated as of

 

June 11, 2020

 

by and among

 

FORUM MERGER II CORPORATION,

 

SPROUT MERGER SUB, Inc.,

 

MYJOJO, INC.

 

and

 

Salvatore Galletti, as the Holder Representative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

  Page
   
Article I. DEFINITIONS AND CONSTRUcTION 3
   
1.1 Definitions 3
1.2 Construction 3
1.3 Knowledge 3
     
Article II. THE MERGER; CLOSING 4
   
2.1 The Merger 4
2.2 Organizational Documents, Directors and Officers 4
2.3 Closing 5
2.4 Closing Deliverables. 5
     
Article III. MERGER CONSIDERATION and effects of THE Merger on securities 7
   
3.1 Closing Date Statement and Merger Consideration Schedule 7
3.2 Merger Consideration 8
3.3 Conversion of Company Interests. 9
3.4 Exchange Procedures 9
3.5 Merger Consideration Adjustment. 10
3.6 Withholding 12
3.7 Holdback. 13
3.8 Sponsor Earnout Shares. 14
     
Article IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 15 
   
4.1 Incorporation 15
4.2 Subsidiaries. 15
4.3 Due Authorization 16
4.4 No Conflict 16
4.5 Governmental Consents 16
4.6 Capitalization of the Company. 17
4.7 Capitalization of Subsidiaries. 17
4.8 Financial Statements 18
4.9 Undisclosed Liabilities; Indebtedness. 20
4.10 Litigation and Actions 20
4.11 Compliance with Laws 20
4.12 Contracts; No Defaults. 21
4.13 Company Benefit Plans. 23
4.14 Labor Relations. 25
4.15 Taxes 26
4.16 Brokers’ Fees 29
4.17 Insurance. 30
4.18 Permits 30
4.19 Tangible Personal Property; Sufficiency of Assets 30
4.20 Real Property. 31

 

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4.21 Intellectual Property. 32
4.22 Environmental Matters 35
4.23 Absence of Changes. 35
4.24 Affiliate Matters 36
4.25 Anti-Corruption Laws. 36
4.26 International Trade Laws. 37
4.27 Key Customers and Key Suppliers. 37
4.28 Information Supplied 38
4.29 Food Safety. 38
4.30 No Additional Representations or Warranties 39
     
Article V. REPRESENTATIONS AND WARRANTIES OF THE PARENT PARTIES 39
   
5.1 Organization 39
5.2 Due Authorization 40
5.3 No Conflict 40
5.4 Litigation and Actions 40
5.5 Capitalization. 41
5.6 Subsidiaries. 42
5.7 Material Contracts 42
5.8 Benefit Plans 42
5.9 Compliance with Laws 42
5.10 Governmental Consents 42
5.11 Brokers’ Fees 43
5.12 SEC Filings 43
5.13 Listing; Financial Statements. 43
5.14 Trust Account. 44
5.15 Parent Vote Required 44
5.16 Internal Controls; Financial Statements. 45
5.17 Investment Company Act; JOBS Act 46
5.18 Certain Business Practices. 46
5.19 Independent Investigation.. 47
5.20 No Additional Representations or Warranties 47
     
Article VI. COVENANTS 47
   
6.1 Interim Operations of the Company 47
6.2 Interim Operations of the Parent Parties 51
6.3 Supplemental Financing. 53
6.4 Trust Account 53
6.5 Commercially Reasonable Efforts; Consents. 54
6.6 Public Announcements 56
6.7 Supplemental Disclosure. 56
6.8 Access to Information 56
6.9 Tax Matters. 57
6.10 Directors’ and Officers’ Indemnification. 58

 

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6.11 Proxy Statement. 59
6.12 Parent Common Stockholder Meeting 62
6.13 Section 16 of the Exchange Act 63
6.14 Nonsolicitation. 63
6.15 Termination of Agreements 63
6.16 Written Consent 63
6.17 Lock-Up Period 63
6.18 Financial Statements and Related Information 64
6.19 Restructuring 64
6.20 Code Section 280G 64
     
Article VII. CONDITIONS TO OBLIGATIONS 65
   
7.1 Conditions to the Obligations of the Parent Parties and the Company 65
7.2 Conditions to the Obligations of the Parent Parties 65
7.3 Conditions to the Obligations of the Company 66
7.4 Waiver of Conditions; Frustration of Conditions 67
     
Article VIII. TERMINATION/EFFECTIVENESS 67
   
8.1 Termination 67
8.2 Effect of Termination 69
     
Article IX. HOLDER REPRESENTATIVE 69
   
9.1 Designation and Replacement of Holder Representative 69
9.2 Reserve 70
9.3 Authority and Rights of the Holder Representative; Limitations on Liability 70
     
Article X. MISCELLANEOUS 71
   
10.1 Notices 71
10.2 Assignment 72
10.3 Rights of Third Parties 72
10.4 Expenses 73
10.5 Non-Survival of Representations, Warranties and Covenants 73
10.6 Governing Law 73
10.7 Captions; Counterparts 73
10.8 Schedules and Exhibits 73
10.9 Entire Agreement 74
10.10 Amendments; Waiver 74
10.11 Severability 74
10.12 Jurisdiction; Waiver of Jury Trial. 74
10.13 Enforcement 75
10.14 Non-Recourse 75
10.15 Trust Account Waiver 75
10.16 Privilege. 76
     
Annex I – Defined Terms A-1

 

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Exhibits

 

Exhibit A – Form of Merger Certificate

 

Exhibit B – Form of Restrictive Covenant Agreement

 

Exhibit C – Form of Amended and Restated Certificate of Incorporation of Company

 

Exhibit D – Form of Amended and Restated Bylaws of Company

 

Exhibit E – Form of Amended and Restated Certificate of Incorporation of Parent

 

Exhibit F – Form of Amended and Restated Bylaws of Parent

 

Exhibit G – Form of Resignations

 

Exhibit H – Form of Registration Rights Agreement

 

Exhibit I – Form of Company Letter of Transmittal

 

Exhibit J – Form of Sponsor Earnout Letter

 

Exhibit K – Form of Press Release

 

Exhibit L – Form of Director Nomination Agreement

 

Exhibit M – Form of Holdback Escrow Agreement

 

Exhibit N – Form of Sponsor Escrow Agreement

 

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AGREEMENT AND PLAN OF MERGER

 

This Agreement and Plan of Merger (this “Agreement”), dated as of June 11, 2020, is made and entered into by and among (i) Forum Merger II Corporation, a Delaware corporation (“Parent”), (ii) Sprout Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), (iii) Myjojo, Inc., a Delaware corporation (the “Company”), and (iv) Salvatore Galletti, in the capacity as the initial Holder Representative hereunder.

 

RECITALS

 

WHEREAS, prior to the date hereof, (i) UMB Capital Corporation, a Missouri corporation (“UMB”), and Myjojo, Inc., a California corporation (“Myjojo California”), owned 12.5% and 87.5%, respectively, of Ittella International, LLC, a California limited liability company and direct Subsidiary of the Company (“Ittella”) and (ii) Pizzo Food Srls, a company organized under the laws of Italy (“Pizzo”), and Ittella’s Chef LLC, a California limited liability company (“Ittella Chef”), owned 30% and 70%, respectively, of Ittella Italy SRL, a limited liability company (società a responsabilità limitata) organized under the laws of Italy (“Ittella Italy”);

 

WHEREAS, in anticipation of the Transaction, on May 27, 2020, Myjojo California merged with and into a Delaware corporation and is herein referred to as the Company, with the separate corporate existence of Myjojo California terminating (the “Myjojo Merger”);

 

WHEREAS, in anticipation of the Transaction, on June 11, 2020, (i) UMB agreed to contribute all of the equity interests in Ittella owned by it to the Company in exchange for the Company issuing to UMB 1,176 shares of common stock of the Company (the “UMB Contribution”), and (ii) Pizzo agreed to contribute all of the equity interests in Ittella Italy owned by it to Ittella Chef in exchange for the Company issuing to Pizzo 1 share of Class B Special Stock of the Company (the “Pizzo Contribution” and together with the UMB Contribution, the “Contributions”);

 

WHEREAS, prior to the Effective Time, the Company will issue 1 share of Class A Special Stock in the Company to that certain Key Employee specified in Item 3 of Schedule 1 pursuant to an equity grant agreement (the “Key Employee Grant Agreement”);

 

WHEREAS, prior to the Effective Time, Salvatore Galletti will transfer some of his shares of common stock of the Company to Project Lily, LLC, a Delaware limited liability company, majority owned by Salvatore Galletti (the “Galletti Transfer” and collectively with the Myjojo Merger, the Contributions and the Key Employee Grant Agreement, the “Restructuring”).

 

WHEREAS, prior to the Effective Time, the Contributions will be consummated and as a result, Ittella and Ittella Italy will become wholly-owned indirect subsidiaries of the Company;

 

WHEREAS, at the Effective Time, Merger Sub will merge with and into the Company (the “Merger”) in accordance with the terms of this Agreement and a certificate of merger substantially in the form attached hereto as Exhibit A (the “Merger Certificate”);

 

WHEREAS, as a result of the Merger, (i) the Company will be the surviving corporation, and (ii) all issued and outstanding capital stock of the Company as of a moment in time immediately prior to the Merger will convert into the right receive Parent Common Stock in accordance with the terms of this Agreement;

 

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WHEREAS, pursuant to the Organizational Documents of Parent, shares of Parent Class B Common Stock shall automatically convert into shares of Parent Common Stock in connection with the Transaction;

 

WHEREAS, in connection with the transactions contemplated by this Agreement, the Sponsor and Parent shall enter into a Sponsor Earnout Letter, pursuant to which, the Sponsor will subject 2,500,000 of the Parent Common Stock owned by the Sponsor to potential forfeiture in the event that certain earnout targets are not achieved by the Parent following the Closing;

 

WHEREAS, concurrently with the effectiveness of this Agreement, and each effective as of the Closing (i) certain direct or indirect equityholders that are also employees of the Company or its Subsidiaries, each of whom are set forth on Schedule 1 will have executed and delivered to Parent a Restrictive Covenant Agreement in the form of Exhibit B (together, the “Restrictive Covenant Agreements”), which Restrictive Covenants Agreements shall be effective as of the Closing, and (ii) each of the individuals set forth on Schedule 1 and Ittella, will have executed and delivered to Parent, an Employment Agreement (collectively, the “Employment Agreements”), which Employment Agreements shall be effective as of the Closing;

 

WHEREAS, as a result of the foregoing integrated transactions (including the Merger) (collectively, with the other transactions contemplated by this Agreement, the “Transaction”), immediately following the Closing the Company will be a wholly-owned subsidiary of Parent;

 

WHEREAS, the board of directors of the Company (the “Company Board”) has (a) determined that it is advisable for, and in the best interests of, both the Company and its stockholders for the Company to enter into this Agreement and the other applicable Transaction Agreements to which it is party, (b) approved the execution and delivery of this Agreement and the other applicable Transaction Agreements to which it is party, the Company’s performance of its obligations hereunder and thereunder and the consummation of the Transaction, including the Merger, and (c) recommended adoption and approval by the stockholders of the Company of each of this Agreement, the other Transaction Agreements to which it is party and the Transaction (such approval, the “Company Stockholder Approval”);

 

WHEREAS, the board of directors of Parent (the “Parent Board”) has (a) determined that it is advisable for, and in the best interests of, both Parent and its stockholders for Parent to enter into this Agreement and the other applicable Transaction Agreements to which it is party, (b) approved the execution and delivery of this Agreement and the other applicable Transaction Agreements to which it is party, Parent’s performance of its obligations hereunder and thereunder and the consummation of the Transaction, including the Merger, and (c) recommended adoption and approval by the stockholders of Parent of each of this Agreement, the other Transaction Agreements to which it is party and the Transaction;

 

WHEREAS, other than the Company Stockholder Approval and the Parent Stockholder Approval, all other applicable entity approvals required in connection with the Transaction have been or will, concurrent with the execution of this Agreement, be obtained; and

 

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WHEREAS, the parties hereto intend that the Merger shall be treated as a “reorganization” described in Section 368(a) of the Code and that this Agreement be treated as a “plan or reorganization” for purposes of Section 368 of the Code.

  

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement and intending to be legally bound hereby, the Parties agree as follows:

 

Article I.
DEFINITIONS AND CONSTRUcTION

 

1.1 Definitions. Capitalized terms used in this Agreement shall have the meanings ascribed to them in Annex I hereto.

 

1.2 Construction. Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this entire Agreement, (iv) the terms “Article”, “Section”, “Schedule” or “Exhibit” refer to the specified Article or Section of, or Schedule or Exhibit to, this Agreement, (v) the word “including” shall mean “including, without limitation,” (vi) the word “or” shall be disjunctive but not exclusive, (vii) references to agreements and other documents shall be deemed to include all subsequent amendments and other modifications thereto, (viii) references to statutes shall include all rules and regulations promulgated thereunder. The language used in this Agreement shall be deemed to be the language chosen jointly by the parties to express their mutual intent and no rule of strict construction shall be applied against any party. Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. The phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”. Nothing contained in any representation or warranty in this Agreement, or the fact that any representation or warranty in this Agreement may or may not be more specific than any other representation or warranty in this Agreement or in any other Transaction Agreement, shall in any way limit or restrict the scope, applicability, or meaning of any other representation or warranty contained in this Agreement. The phrase “made available,” when used in reference to anything made available to Parent or its representatives shall be deemed to mean uploaded to and made available in the on-line data room hosted on behalf of the Company at least two (2) Business Days prior to the date of this Agreement and not thereafter removed, or otherwise delivered to Parent or its representatives. When calculating the period of time before which, within which, or following which, any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. All amounts payable pursuant to this Agreement shall be paid in U.S. dollars, and all references to “$” or “dollars” shall mean the lawful currency of the United States of America. Any U.S. legal term for any action, remedy, legal document, legal status, court, authority, statute or any other legal concept or thing shall, in respect of any jurisdiction other than the U.S., be deemed to include which most nearly approximates in that jurisdiction the U.S. legal term.

 

1.3 Knowledge. As used herein, the phrase “to the knowledge” of any party shall mean the actual knowledge, following inquiry of direct reports, of, in the case of the Company, those individuals set forth on Schedule 1.3, and in the case of all other parties, such party’s executive officers.

 

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Article II.
THE MERGER; CLOSING

 

2.1 The Merger. At the Closing, Parent and the Company shall cause the Merger Certificate to be executed, acknowledged and filed with Delaware SoS as provided in Section 251 of the DGCL. As soon as practicable on or after the Closing Date, the Parties shall make any and all other filings or recordings required under the DGCL to give effect to the Merger.

 

(a) The Merger. Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the DGCL, at the Closing (the “Effective Time”), Merger Sub shall merge with and into the Company. Following the Merger, the separate corporate existence of Merger Sub will cease and the Company will continue as the surviving corporation in the Merger (the “Surviving Subsidiary”).

 

(b) Effects of the Merger. The Merger will have the effects set forth in this Agreement and under the relevant provisions of the DGCL. Without limiting the generality of the foregoing, and subject hereto, at the respective effective times of the Merger, all property, rights, privileges, immunities, powers and franchises of the Company and Merger Sub will vest in the Surviving Subsidiary and all claims, obligations, restrictions, disabilities, liabilities, debts and duties of the Company and Merger Sub will become the claims, obligations, restrictions, disabilities, liabilities, debts and duties of the Surviving Subsidiary.

 

2.2 Organizational Documents, Directors and Officers. Subject only to the Closing actually occurring, the following provisions shall apply:

 

(a) At the Effective Time (i) the certificate of incorporation and bylaws of the Surviving Subsidiary shall be amended and restated in the form attached hereto as Exhibit C and Exhibit D, respectively, and (ii) the certificate of incorporation and the bylaws of Parent shall be amended and restated in the form attached hereto as Exhibit E and Exhibit F, respectively. The Parties shall take all actions necessary to implement the intent of this Section 2.2(a).

 

(b) Immediately prior to the Effective Time, the individuals designated as the directors and officers of Parent as set forth in Schedule 2.2(b)(i), together with any other individuals Parent and the Company may agree to designate as directors prior to Closing, will become the directors and officers of Parent and will remain the directors and officers of Parent until their respective successors are duly elected or appointed and qualified, or their earlier death, resignation or removal. In addition, immediately prior to the Effective Time, the board of directors of Parent, as reconstituted in accordance with this Section 2.2(b), shall authorize and empower a committee comprised of the directors set forth on Schedule 2.2(b)(ii) (such committee, the “Monitoring Committee”) with the exclusive power and authority to direct the officers and employees of Parent, retain and pay such third party advisors as the Monitoring Committee shall deem appropriate, and make all decisions and take all actions on behalf of Parent related to (i) the Merger Consideration Adjustment, (ii) monitoring of compliance by Parent with the terms of this Agreement and the other Transaction Agreements, and (iii) enforcing any rights or remedies or taking any other action deemed necessary or appropriate by the Monitoring Committee in connection with this Agreement, the other Transaction Agreements or the Transaction. The authorizing resolutions for the Monitoring Committee shall be in form and substance reasonably acceptable to Parent.

 

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(c) At the Effective Time, the individuals designated as the respective directors and officers set forth in Schedule 2.2(c), together with any other individuals Parent and the Company may agree to designate as directors prior to Closing, will become the directors and officers of the Parent and the Surviving Subsidiary and will remain the directors and officers of such Persons after the Merger, in each case until their respective successors are duly elected or appointed and qualified, or their earlier death, resignation or removal.

 

2.3 Closing. Subject to the terms and conditions of this Agreement, the closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Winston & Strawn LLP, 200 Park Avenue, New York, New York 10166, at 10:00 a.m. (Eastern time) on the date that is three (3) Business Days after the date on which all conditions set forth in Article VII shall have been satisfied or waived in writing (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions) or such other time and place as Parent and the Company may mutually agree. The date on which the Closing actually occurs is referred to in this Agreement as the “Closing Date”.

 

2.4 Closing Deliverables.

 

(a) Mutual Deliverables. At the Closing:

 

(i) Each of Parent and the Holder Representative shall deliver to each other and the Escrow Agent, an executed copy of the holdback escrow agreement substantially in the form attached as Exhibit M (the “Holdback Escrow Agreement”);

 

(ii) Each of the Company and Parent shall deliver the applicable Incumbency Certificates;

 

(iii) The Merger Certificates shall be executed and delivered (x) to Parent by the Company, and (y) to the Company by the applicable Parent Parties;

 

(iv) Each of the Company and the Parent Parties shall cause to be delivered resignations substantially in the form attached as Exhibit G of any directors and officers not contemplated pursuant to Sections 2.2(b)-(c) to continue after the Closing as directors and officers of any applicable Party (or such Party’s Subsidiaries);

 

(v) Each of Sponsor and Parent shall deliver to each other, an executed copy of the Sponsor Earnout Letter; and

 

(vi) Each of Sponsor and Parent shall deliver to each other, an executed copy of the director nomination agreement substantially in the form attached as Exhibit L (the “Director Nomination Agreement”).

 

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(b) Company Deliverables. At or prior to the Closing, the Company will deliver or cause to be delivered to Parent the following:

 

(i) the Closing Date Statement and the Merger Consideration Schedule, each prepared and delivered in accordance with Section 3.1;

 

(ii) a certificate of the Secretary of State (or other applicable office) in which the Company and each Subsidiary of the Company is organized dated as of a date not more than ten (10) Business Days prior to the Closing Date, certifying as to the good standing of the Company and each such applicable Subsidiary;

 

(iii) the Company Letters of Transmittal, duly executed by each Pre-Closing Holder; and

 

(iv) any other document reasonably requested by Parent to be delivered by or on behalf of the Company at Closing.

 

(c) Parent Parties Deliverables. At the Closing, the applicable Parent Parties will deliver or cause to be delivered (unless delivered previously) the following:

 

(i) the Merger Certificate to the Company;

 

(ii) the Adjustment Escrow Stock to the Escrow Agent, to be held in an escrow account (the “Adjustment Escrow Account”) in accordance with the terms of the Holdback Escrow Agreement;

 

(iii) the Ittella Holdback Shares to the Escrow Agent, to be held in an escrow account in accordance with the terms of the Holdback Escrow Agreement;

 

(iv) an executed copy of the sponsor escrow agreement substantially in the form attached as Exhibit N (the “Sponsor Escrow Agreement”);

 

(v) the Sponsor Earnout Shares to the Escrow Agent, to be held in an escrow account in accordance with the terms of the Sponsor Escrow Agreement;

 

(vi) a registration rights agreement substantially in the form attached as Exhibit H (the “Registration Rights Agreement”), duly executed by Parent;

 

(vii) the shares of Parent Common Stock described in Section 3.4(a); and

 

(viii) any other document reasonably requested by the Company to be delivered by or on behalf of the applicable Parent Parties at Closing.

 

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(d) Payment of Other Amounts at Closing. At the Closing, Parent shall:

 

(i) pay the Cash Consideration portion of the Merger Consideration to Holder Representative to be further paid to the Pre-Closing Holders who have delivered duly executed Letters of Transmittal, pursuant to Section 3.4;

 

(ii) pay to the Holder Representative the Holder Representative Expense Amount, by wire transfer to an account or accounts designated by the Holder Representative in writing at least three (3) Business Days prior to the Closing Date, in immediately available funds;

 

(iii) deposit or cause to be deposited with the Escrow Agent by wire transfer of immediately available funds the fees payable to the Escrow Agent in connection with the Holdback Escrow Agreement and the Sponsor Escrow Agreement;

 

(iv) on behalf of the Company, pay or cause to be paid to such account or accounts as the Company specifies to Parent pursuant to the Closing Date Statement, the Company Transaction Expenses that have not yet been paid;

 

(v) on behalf of the Company, pay or cause to be paid to the Pre-Closing Holders to such account or accounts as the Company specified to Parent pursuant to the Closing Date Statement, the Company Transaction Expenses that have been paid prior to Closing and any Parent Transaction Expenses that have been paid by the Company on the Parent’s behalf prior to the Closing; and

 

(vi) on behalf of the Parent Parties, pay or cause to be paid to such account or accounts as the Parent specifies to the Company in writing, the Parent Transaction Expenses.

 

Article III.
MERGER CONSIDERATION and effects of THE Merger on securities

 

3.1 Closing Date Statement and Merger Consideration Schedule. Not less than three (3) Business Days prior to the Closing Date, the Company shall deliver to Parent:

 

(a) A statement (the “Closing Date Statement”), signed and certified by the Chief Financial Officer of the Company on its behalf, which sets forth a good faith estimate (with reasonable supporting detail) of (i) the Closing Date Cash (“Estimated Closing Date Cash”), (ii) Closing Date Net Working Capital (“Estimated Closing Date Net Working Capital”) (and the Estimated Net Working Capital Adjustment Amount resulting therefrom), (iii) Closing Date Indebtedness (“Estimated Closing Date Indebtedness”), and (iv) Closing Transaction Expenses (“Estimated Company Transaction Expenses”). In addition, the Closing Date Statement shall also include (i) the Company’s calculation of the Merger Consideration based on the foregoing estimates (and the other components contemplated by Section 3.2 in the calculation of the Merger Consideration), (ii) a copy of the Company’s good faith estimated unaudited consolidated balance sheet of the Company as of immediately prior to the Closing upon which such calculations are based, and (iii) wire transfer or other applicable delivery instructions for payment of each item of Estimated Transaction Expenses to be paid at Closing. Each of the components required to be set forth on the Closing Date Statement shall be calculated in accordance with the definitions set forth in this Agreement.

 

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(b) A statement (the “Merger Consideration Schedule”), signed and certified by the Chief Financial Officer of the Company in his or her capacity as such, which sets forth (i) a detailed capitalization schedule, setting forth all Company Interests, (ii) the portion of the Merger Consideration payable in respect of each Company Interest, (iii) for each Pre-Closing Holder: (A) the number of Company Interests held by such Pre-Closing Holder (including the respective Certificate number of any certificated Company Interests held by such Pre-Closing Holder), and (B) the portion of the Merger Consideration required to be paid under the Company Certificate to each Pre-Closing Holder in respect of such Pre-Closing Holder’s Company Interests, and (C) such Pre-Closing Holder’s aggregate Per Share Amount. The calculations set forth in the Merger Consideration Schedule shall be prepared in accordance with the Company Certificate and the requirements of the DGCL. Each of the Parent Parties shall be entitled to rely (without any duty of inquiry) upon the Merger Consideration Schedule, and the Company Letter of Transmittal shall be required to be delivered by each Pre-Closing Holder as a condition to receipt of any Merger Consideration and shall include a waiver of, among other things, any and all claims (i) that the Merger Consideration Schedule did not accurately reflect the terms of the Company Certificate, and (ii) in connection with the issuance of any Company Interests (including any rights to indemnities from the Company or any of its Affiliates pursuant to any Contract entered into by such Pre-Closing Holder in connection with such issuance).

 

(c) Parent shall be entitled to review and comment upon the Closing Date Statement and the Merger Consideration Schedule delivered by the Company pursuant to this Section 3.1, and the Company shall consider Parent’s comments thereto in good faith (and, in the event of any such adjustments based on the comment of Parent, all references in this Agreement to the Closing Date Statement or the Merger Consideration Schedule shall be deemed to be references to such documents after giving effect to such adjustments).

 

3.2 Merger Consideration. The aggregate consideration to be paid to the Pre-Closing Holders shall be the Aggregate Consideration Value, as calculated below. The Aggregate Consideration Value will be paid to the Pre-Closing Holders (the “Merger Consideration”) in the form of: (i) Cash from Parent, the Company and/or its Subsidiaries in an amount equal to the Cash Consideration, and (ii) a number of shares of Parent Common Stock (the “Equity Consideration”) equal to (A) the Aggregate Consideration Value minus the Cash Consideration, divided by (B) $10.00 (the “Reference Price”), and (iii) the contingent right to receive the Ittella Holdback Shares after the Closing in accordance with Section 3.7. The Merger Consideration shall be allocated among the Pre-Closing Holders in accordance with the terms of the Company Certificate (as reflected in the Merger Consideration Schedule). Subject to the post-Closing adjustments contemplated by and set forth in Section 3.5, the “Aggregate Consideration Value” shall be calculated as follows:

 

(a) $420,000,000, plus

 

(b) the amount of Estimated Closing Date Cash, plus

 

(c) the Estimated Net Working Capital Adjustment Amount (if a positive number), minus

 

(d) the absolute value of the Estimated Net Working Capital Adjustment Amount (if a negative number), minus

 

(e) the Estimated Closing Date Indebtedness, minus

 

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(f) the Adjustment Escrow Amount, minus

 

(g) the Holder Representative Expense Amount.

 

3.3 Conversion of Company Interests.

 

(a) Conversion of Company Interests. At the Effective Time, by virtue of the Merger and without any action on the part of any Person, including by any Pre-Closing Holder, each Company Interest that is issued and outstanding immediately prior to the Effective Time (but excluding, for the avoidance of doubt, any Company Interests that are cancelled pursuant to Section 3.4(b)) shall thereupon be canceled and converted into and become the right to receive the applicable Per Share Amount for such Company Interest.

 

(b) Subsidiary-Owned Equity Interests. All Equity Interests of the Company (whether or not a Company Interest) owned by any Subsidiary of the Company will be canceled automatically without conversion thereof and no payment or distribution will be made with respect thereto.

 

(c) Extinguishment of all Pre-Closing Holders Equity Interests in the Company. For the avoidance of doubt, from and after the Effective Time, (i) all Persons other than Parent shall cease to have any rights as holders of any Equity Interests in the Company or the Surviving Subsidiary (and, other than any Equity Interests in the Company that may be held by Parent, no other Equity Interests in the Company shall remain outstanding after the Effective Time), and (ii) the consideration paid pursuant to this Article III upon the delivery of Letters of Transmittal (and surrender of Certificates, if any) in accordance with the terms hereof shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Company Interests, subject to the continuing rights of the Pre-Closing Holders expressly set forth under this Agreement (to the extent applicable). At the Effective Time, the transfer books of the Company shall be closed and no transfer of interests of Company Interests shall be made thereafter.

 

3.4 Exchange Procedures.

 

(a) At the Closing, Parent shall deliver to (i) the Holder Representative, that number of shares of Parent Common Stock and cash (in respect of the obligation to pay cash in lieu of fractional interests as provided in Section 3.4(c)) necessary to make payment of the Equity Consideration to the Pre-Closing Holders (without giving effect to the Merger Consideration Adjustment) and an amount equal to the Cash Consideration, and (ii) the Escrow Agent, that number of shares of Parent Common Stock necessary to fund the Adjustment Escrow Amount and the Holdback Releases.

 

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(b) As soon as reasonably practicable following the date hereof, the Company shall mail or otherwise deliver to each Pre-Closing Holder of Company Interests (i) a letter of transmittal in the form attached hereto as Exhibit I (“Company Letter of Transmittal”), and (ii) instructions for use in receiving the applicable portion of the Merger Consideration in respect of the Company Interests held by such Pre-Closing Holder. After the Effective Time, each Pre-Closing Holder of Company Interests, upon surrender of a Company Letter of Transmittal, shall be entitled to receive from the Holder Representative in exchange therefor such portion of the Merger Consideration into which such holder’s Company Interests (as applicable) shall have been converted as a result of the Merger (and, for the avoidance of doubt, without giving effect to any Merger Consideration Adjustment). If any Pre-Closing Holder’s shares of Company Interests are certificated, such Pre-Closing Holder shall be required to surrender and deliver to Parent all certificates (each, a “Certificate”) for such Company Interests, or a duly completed affidavit of loss (in a customary form reasonably acceptable to Parent) with respect to any lost, stolen, or destroyed Certificate, together with such Pre-Closing Holder’s Company Letter of Transmittal, before such Pre-Closing Holder shall be entitled to receive the applicable portion of the Merger Consideration pursuant to this Section 3.4(b). Pending such surrender of a Pre-Closing Holder’s Certificate(s), such Certificate(s) shall be deemed for all purposes to evidence such Pre-Closing Holder’s right to receive the portion of the Merger Consideration into which such Company Interests shall have been converted as a result of the Transactions and pursuant to the terms of this Agreement.

 

(c) Notwithstanding anything to the contrary contained herein, no fractional shares of Parent Common Stock shall be issued (whether in book-entry form or otherwise) in exchange for Parent Common Stock or Company Interests. In lieu of the issuance of any such fractional share, Parent shall pay to each former holder of Parent Common Stock or Pre-Closing Holder who otherwise would be entitled to receive such fractional share an amount in cash (rounded up to the nearest whole cent) determined by multiplying (i) the Reference Price, by (ii) the fraction of a share (rounded to the nearest thousandth when expressed in decimal form) of Parent Common Stock which such holder would otherwise be entitled to receive pursuant to this Article III. For the avoidance of doubt, the calculation of any cash in lieu of fractional shares to be paid pursuant to this Section 3.4(c) shall be made with respect to the aggregate shares of Parent Common Stock, to which such former holder of Parent Common Stock or Pre-Closing Holder would otherwise be entitled pursuant to this Agreement, and not with respect to the conversion of each share of Parent Common Stock or Company Interest, respectively. For illustrative purposes only, if, pursuant to this Agreement, a Pre-Closing Holder would be entitled to 1.5 shares of Parent Common Stock in exchange for each share of Company Interests held by such Pre-Closing Holder, and such Pre-Closing Holder holds 11 shares of Company Interests, such Pre-Closing Holder would be entitled to cash in lieu of .5 shares of Parent Common Stock (i.e., 16.5 minus 16).

 

(d) Parent may cause the Holder Representative to return any Parent Common Stock remaining unclaimed 180 days after the Effective Time, and thereafter each remaining Pre-Closing Holder and each record holder of outstanding shares of Parent Stock prior to the Effective shall be entitled to look only to Parent (subject to abandoned property, escheat, and other similar Laws) as a general creditor thereof with respect to such shares and warrants and dividends and distributions thereon to which he, she, or it is entitled upon surrender of his, her, or its certificates.

 

3.5 Merger Consideration Adjustment.

 

(a) The Merger Consideration may be increased or reduced as set forth in this Section 3.5. Any increase or decrease in the Merger Consideration pursuant to this Section 3.5 shall be referred to as a “Merger Consideration Adjustment”. Any payments made in respect of any Merger Consideration Adjustment pursuant to this Section 3.5 shall be treated as an adjustment to the Merger Consideration for all Tax purposes unless otherwise required by any applicable Law.

 

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(b) As soon as reasonably practicable following the Closing Date, and in any event within ninety (90) days of the Closing Date, Parent shall prepare and deliver to the Holder Representative (A) an unaudited consolidated balance sheet of the Company and its Subsidiaries (the “Final Closing Balance Sheet”), and (B) a statement (the “Closing Statement”) setting forth Parent’s good faith calculations of (with reasonable supporting detail): (w) Net Working Capital as of 12:01 a.m. (Eastern time) on the Closing Date (“Closing Date Net Working Capital”), (x) the aggregate amount of all Indebtedness of the Company as of immediately prior to the Closing on the Closing Date (“Closing Date Indebtedness”), (y) the aggregate Cash of the Company as of immediately prior to the Closing on the Closing Date (“Closing Date Cash”), and (z) the aggregate amount of Company Transaction Expenses as of immediately prior to the Closing on the Closing Date (the “Closing Company Transaction Expenses”), in each case, calculated in accordance with the definitions set forth in this Agreement. The Final Closing Balance Sheet shall be prepared using the Accounting Principles. From the Closing Date through the final determination and delivery of the Merger Consideration pursuant to this Section 3.5, Parent shall provide the Holder Representative and its representatives reasonable access (during normal business hours and upon reasonable advance notice and at the sole cost and expense of the Holder Representative) to the records, properties, personnel and (subject to the execution of customary work paper access letters if requested) auditors of the Company and its Subsidiaries relating to the preparation of the Final Closing Balance Sheet and shall cause the personnel of the Company and its Subsidiaries to reasonably cooperate with the Holder Representative in connection with its review of the Final Closing Balance Sheet; provided, however, that Parent shall not be required to provide any information the disclosure of which would violate applicable Law (including competition or antitrust Law) or that would, based on the advice of counsel, result in the waiver of attorney client privilege. If Parent does not provide information pursuant to the proviso of the preceding sentence, Parent will provide notice to the Holder Representative that such information is being withheld and Parent will use its reasonable best efforts to communicate, to the extent feasible, the applicable information in a way that will not violate the applicable privilege or applicable Law.

 

(c) If the Holder Representative disagrees with the calculations of Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Cash and/or Closing Company Transaction Expenses set forth in the Closing Statement, it shall notify Parent of such disagreement in writing (a “Disagreement Notice”), setting forth in reasonable detail the particulars of such disagreement within thirty (30) days after its receipt of the Closing Balance Sheet and the Closing Statement. If the Holder Representative does not provide a notice of disagreement within such thirty (30)-day period, the Holder Representative and Parent shall be deemed to have agreed to the Closing Balance Sheet and the calculations of Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Cash and Closing Company Transaction Expenses set forth in the Closing Statement, which shall be final, binding and conclusive for all purposes hereunder. If any Disagreement Notice is timely provided, Parent and the Holder Representative shall use commercially reasonable efforts for a period of thirty (30) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Cash or Closing Company Transaction Expenses. If, at the end of such period, they are unable to resolve such disagreements, then any such remaining disagreements shall be resolved by Moss Adams LLP or such other independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Parent and the Holder Representative (such firm, subject to the following proviso, the “Accounting Referee”). Each of Parent and the Holder Representative shall promptly provide their respective assertions regarding Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Cash and Closing Company Transaction Expenses and, to the extent relevant thereto, the Final Closing Balance Sheet in writing to the Accounting Referee and to each other; provided, that no Party shall disclose to the Accounting Referee any settlement discussions (or the contents thereof) between the Parties without the prior consent of the other Party. The Accounting Referee shall be instructed to render its determination with respect to such disagreements as soon as reasonably possible (which the Parties agree should not be later than thirty (30) days following the day on which the disagreement is referred to the Accounting Referee). The Accounting Referee shall base its determination solely on (i) the written submissions of the parties and shall not conduct an independent investigation and (ii) the extent (if any) to which Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Cash or Closing Company Transaction Expenses require adjustment (only with respect to the remaining disagreements submitted to the Accounting Referee) in order to be determined in accordance with Section 3.5(a) (including the definitions of the defined terms used in Section 3.5(a)), and the Parties shall instruct the Accounting Referee to make all determinations in accordance with the definitions set forth in this Agreement. The Accounting Referee may not assign a value greater than the greatest value for a disputed item claimed by either Party or smaller than the smallest value for such item claimed by either party. The determination of the Accounting Referee shall be final, conclusive and binding on the parties. The date on which Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Cash and Closing Company Transaction Expenses are finally determined in accordance with this Section 3.5(c) is hereinafter referred to as the “Determination Date.” All fees and expenses of the Accounting Referee relating to the work, if any, to be performed by the Accounting Referee hereunder shall be borne pro rata as between Parent, on the one hand, and the Holder Representative from the Reserve, on the other hand, in proportion to the allocation of the dollar value of the amounts in dispute as between Parent and the Holder Representative (as set forth in the written submissions to the Accounting Referee) made by the Accounting Referee such that the Party prevailing on the greater dollar value of such disputes pays the lesser proportion of the fees and expenses. For example, if the Holder Representative challenges items underlying the calculations of Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Cash and Closing Company Transaction Expenses in the net amount of $1,000,000, and the Accounting Referee determines that Parent has a valid claim for $400,000 of the $1,000,000, Parent shall bear sixty percent (60%) of the fees and expenses of the Accounting Referee and the Holder Representative shall bear the remaining forty percent (40%) of the fees and expenses of the Accounting Referee from the Reserve.

 

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(d) The “Adjustment Amount,” which may be positive or negative, shall mean (i) Closing Date Net Working Capital (as finally determined in accordance with Section 3.5(c)), minus Estimated Closing Date Net Working Capital, plus (ii) Estimated Closing Date Indebtedness, minus Closing Date Indebtedness (as finally determined in accordance with Section 3.5(c)), plus (iii) Closing Date Cash (as finally determined in accordance with Section 3.5(c)), minus Estimated Closing Date Cash, plus (iv) Estimated Company Transaction Expenses, minus Closing Company Transaction Expenses (as finally determined in accordance with Section 3.5(c)). If the Adjustment Amount is a positive number, then the Merger Consideration shall be increased by the Adjustment Amount, and if the Adjustment Amount is a negative number, then the Merger Consideration shall be decreased by the absolute value of the Adjustment Amount. The Adjustment Amount shall be paid in accordance with Section 3.5(e) or Section 3.5(f), as applicable.

 

(e) If the Adjustment Amount is a positive number, then, promptly following the Determination Date, and in any event within three (3) Business Days after the delivery by the Holder Representative of the updated Merger Consideration Schedule required to be delivered pursuant to Section 3.5(g), (i) Parent shall deliver (x) to the Holder Representative for further delivery to each Pre-Closing Holder a number of shares of Parent Common Stock equal to (A) the Adjustment Amount, divided by (B) the Reference Price, and (ii) the parties shall jointly instruct the Escrow Agent in writing to release from the Adjustment Escrow Account to the Holder Representative (for further delivery to each Pre-Closing Holder) all of the shares of Adjustment Escrow Stock. Notwithstanding the foregoing to the contrary, in no event shall Parent be required pursuant to subclause (i) of the preceding sentence to issue or deliver an amount of Parent Common Stock that exceeds the quotient of the Adjustment Escrow Amount divided by the Reference Price.

 

(f) If the Adjustment Amount is a negative number (the absolute value of such amount, the “Deficit Amount”), then, promptly following the Determination Date, and in any event within three (3) Business Days of the Determination Date, (i) the parties shall jointly instruct the Escrow Agent in writing to deliver, from the Adjustment Escrow Account to Parent that number of shares of Adjustment Escrow Stock that is equal to (A) the Deficit Amount divided by (B) the Reference Price. If, after release of the Adjustment Escrow Stock to Parent in accordance with the preceding sentence, any Adjustment Escrow Stock remains in the Adjustment Escrow Account, the parties shall jointly instruct the Escrow Agent to release such balance to the Holder Representative (for further delivery to each Pre-Closing Holder).

 

(g) If the Adjustment Amount is greater than the Adjustment Escrow Amount, then within three (3) Business Days after the Determination Date, the Holder Representative shall prepare and deliver to Parent a certified update to the Merger Consideration Schedule, prepared in accordance with the terms of the Company Certificate (the “Updated Merger Consideration Schedule”). The Updated Merger Consideration Schedule shall give effect to the Merger Consideration Adjustment, the Adjustment Amount and specify in detail the portion of any such additional Parent Common Stock or released Adjustment Escrow Stock that each Pre-Closing Holder is entitled to receive as a result. The Holder Representative, Parent and each of their respective agents and Affiliates shall be entitled to rely (without any duty of inquiry) upon the Updated Merger Consideration Schedule. (i) Parent shall issue to the Holder Representative for further delivery to the Pre-Closing Holders a number of additional shares of Parent Common Stock equal to (A) the Adjustment Amount minus the Adjustment Escrow Amount divided by (B) the Reference Price and (ii) Parent and the Holder Representative shall jointly instruct the Escrow Agent to release the Adjustment Escrow Stock to the Holder Representative (for further delivery to each Pre-Closing Holder).

 

3.6 Withholding. Parent, the Company, the Holder Representative, and the Escrow Agent shall be entitled to deduct and withhold from the consideration otherwise payable or deliverable in connection with the transactions contemplated by this Agreement to any Person such amounts (if any) that Parent, the Company, the Holder Representative, and the Escrow Agent are required to deduct and withhold with respect to any such deliveries and payments under applicable Law. To the extent that amounts or shares of Parent Stock are so withheld, and duly and timely deposited with the appropriate Governmental Authority, by Parent, the Company, the Holder Representative, or the Escrow Agent, such 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.

 

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3.7 Holdback.

 

(a) After the Closing, subject to the terms and conditions set forth herein, the holders of Company Interests shall have the contingent right to receive additional consideration from Parent based on the performance of Parent if the requirements as set forth in this Section 3.7 are achieved. If during the three (3) year period following the Closing Date (the “Holdback Period”), the price per share of Parent Common Stock on any twenty (20) trading days in any thirty (30) day trading period (i) equals or exceeds Twelve U.S. Dollars ($12.00) (the “First Share Price Trigger”), or (ii) equals or exceeds Fourteen U.S. Dollars ($14.00) (the “Second Share Price Trigger,” and, together with the First Share Price Trigger, each a “Share Price Trigger” and collectively, the “Share Price Triggers”) then, for each Share Price Trigger that is achieved, the holders of Company Interests as of immediately prior to the Effective Time shall receive additional consideration (in accordance with their Pro Rata Share) from Parent (each, a “Holdback Release”) of Two Million Five Hundred Thousand (2,500,000) shares of Parent Common Stock released from escrow (which shall be equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the like that occur after the Closing and prior to the relevant Holdback Release) (collectively, the “Ittella Holdback Shares”). For the avoidance of doubt and notwithstanding anything contained in this Agreement, the holders of Company Interests shall have the right to receive no more than two Holdback Releases, a Holdback Release may only be achieved once with respect to any Share Price Trigger and the aggregate sum of all Holdback Releases, together with a Change of Control Holdback Release, issuable hereunder (assuming both Share Price Triggers are achieved and/or a Change of Control occurs during the Holdback Period), shall be a maximum of 5,000,000 shares of Parent Common Stock (which shall be equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the like that occur after the Closing and prior to the relevant Holdback Release).

 

(b) If, during the Holdback Period, there is a Change of Control, then any Holdback Release that has not previously been released from escrow to the Holder Representative (whether or not previously earned) shall be deemed earned (and the applicable Share Price Trigger achieved, as applicable) and due by Parent to the Holder Representative (for further delivery to the Pre-Closing Holders) upon such Change of Control (a “Change of Control Holdback Release.” For purposes hereof, “Change of Control” means the occurrence, in a single transaction or as the result of a series of related transactions, of one or more of the following events: (i) a merger, consolidation, reorganization or similar business combination transaction involving Parent in which the holders of all of the outstanding Equity Interests in Parent immediately prior to the consummation of such transaction do not directly or indirectly (including through Affiliates) own beneficially or of record immediately upon the consummation of such transaction outstanding Equity Interests that represent a majority of the combined outstanding voting securities of the surviving entity in such transaction or of a parent of the surviving entity in such transaction; (ii) a transaction (or series of related transactions) in which a majority of Parent’s voting securities are transferred to any Person, or any two or more Persons acting as a group, and all Affiliates of such Person or Persons (each, a “Group”), that were not directly or indirectly (including through Affiliates), beneficially or of record, equityholders of Parent prior to the consummation of such transactions (other than as a result of a sale of Equity Interests in a secondary transaction by any single Pre-Closing Holder that is not otherwise approved by the disinterested independent directors of the board of directors of Parent); or (iii) the consummation of the sale of all or substantially all of the assets of Parent and its Subsidiaries (including the Company), taken as a whole, to any Group, other than such a sale to a Group in which the equityholders of Parent, directly or indirectly (including through Affiliates), beneficially or of record, own a majority of the combined voting securities.

 

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(c) If, during the Holdback Period, there is a final determination in accordance with this Section 3.7 that the holders of Company Interests are entitled to receive a Holdback Release or Change of Control Holdback Release, then Parent and the Holder Representative shall jointly direct the Escrow Agent to release from Escrow a number of shares equal to such Holdback Release within ten (10) Business Days following the date on which the applicable Price Trigger was met or exceeded, or a Change of Control occurred, as applicable.

 

(d) Any Ittella Holdback Shares that have not been released during the Holdback Period pursuant to this Section 3.7 within five (5) Business Days following the date that it is finally determined that the holders of Company Interests are not entitled to or eligible to receive any further Holdback Releases or a Change of Control Holdback Release under this Agreement, Parent and the Holder Representative shall jointly direct the Escrow Agent to release from escrow to Parent for immediately cancellation all such Ittella Holdback Shares that have not been released.

 

(e) Any Ittella Holdback Shares released from escrow pursuant to this Section 3.7 shall be treated as an adjustment to the Merger Consideration for federal and applicable state and local income Tax purposes except as otherwise required by Law.

 

3.8 Sponsor Earnout Shares.

 

(a) In accordance with the Sponsor Earnout Letter entered into on or about the date hereof by and among the Sponsor, the Parent, the Company and the Holder Representative in the form attached as Exhibit J (the “Sponsor Earnout Letter”), the Sponsor has agreed that effective upon the Closing, the Sponsor will subject 2,500,000 shares of Parent Common Stock owned by the Sponsor (the “Sponsor Earnout Shares”) to potential forfeiture if the Share Price Triggers are not achieved by the Parent pursuant to Section 3.7, with such Sponsor Earnout Shares vesting pursuant to the terms of this Section 3.8. Certificates representing the Sponsor Earnout Shares shall bear a legend referencing that they are subject to forfeiture pursuant to the provisions of this Agreement. In addition, any transfer agent for Parent Common Stock will be given appropriate stop transfer orders that will be applicable until the Sponsor Earnout Shares are vested.

 

(b) Until all of the Sponsor Earnout Shares have become fully vested, fifty percent (50%) of the Sponsor Earnout Shares shall become fully vested and no longer subject to forfeiture upon each date of final determination pursuant to Section 3.8(a) that (i) the First Share Price Trigger has been achieved and (ii) the Second Share Price Trigger has been achieved, in each case, that the applicable Holdback Releases has become required to be issued as a result thereof. For the avoidance of doubt and notwithstanding anything contained in this Agreement, no more than fifty percent (50%) of the Sponsor Earnout Shares shall become fully vested for each Share Price Trigger that has been achieved. In the event of a Change of Control, all unvested Sponsor Earnout Shares shall immediately vest and no longer be subject to forfeiture upon such Change of Control.

 

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(c) Any Sponsor Earnout Shares that have not vested pursuant to this Section 3.8 on or prior to the date that it is finally determined that the holders of Company Interests are not entitled to or eligible to receive any further Holdback Releases under this Agreement, will be forfeited by the Sponsor after such date, and returned to Parent for immediate cancellation.

 

Article IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as set forth in the Company Disclosure Schedules (to the extent arranged in sections corresponding to the numbered and lettered sections and subsections contained in this Article IV, or otherwise validly disclosed in accordance with Section 10.8), the Company represents and warrants to the Parent Parties as of the date of this Agreement and as of the Closing Date, other than as specifically identified to be true and correct as of a different date, as follows:

 

4.1 Incorporation. The Company has been duly incorporated and is validly existing as a corporation in good standing under the Laws of the State of Delaware and has the corporate power and authority to own, lease or operate its properties and assets and to conduct its business as it is now being conducted. Copies of the Organizational Documents of the Company, as currently in effect and made available by the Company to Parent, are true and complete, and the Company is not in default under or in violation of any provision thereof. The Company is duly licensed or qualified to do business and (where applicable) is in good standing as a foreign corporation in each jurisdiction in which the ownership, operation or lease of its properties or the character of its activities is such as to require it to be so licensed or qualified or in good standing, as applicable, except where the failure to be so licensed or qualified or in good standing would not reasonably be expected to have a Material Adverse Effect.

 

4.2 Subsidiaries.

 

(a) The Subsidiaries of the Company and their jurisdictions of incorporation or organization are set forth on Schedule 4.2. The Subsidiaries of the Company have been duly formed or organized and are validly existing under the Laws of their respective jurisdictions of incorporation or organization and have the power and authority to own, lease or operate their respective properties and assets and to conduct their respective businesses as now being conducted.

 

(b) The Company has previously made available to Parent or its representatives true and complete copies of the Organizational Documents of its Subsidiaries, as currently in effect, and no Subsidiary is in default under or in violation of any provision thereof. Each Subsidiary of the Company is duly licensed or qualified to do business and (where applicable) in good standing (or equivalent thereof) as a foreign corporation (or other entity, if applicable) in each jurisdiction in which the ownership, operation or lease of its property or the character of its activities is such as to require it to be so licensed or qualified or in good standing, as applicable, except where the failure to be so licensed or qualified or in good standing would not reasonably be expected to have a Material Adverse Effect.

 

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4.3 Due Authorization. The Company has all requisite power and authority to execute and deliver this Agreement and each other agreement, document, instrument and/or certificate expressly contemplated hereby (the “Transaction Agreements”) to which it is a party (subject to the consents, approvals, authorizations and other requirements described in Section 4.5) and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Transaction Agreements to which it is a party by the Company and the consummation by the Company of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by the Company Board, and no other corporate proceeding on the part of the Company or any of its Subsidiaries is necessary to authorize this Agreement or any of the Transaction Agreements (other than the Written Consent). This Agreement has been, and each of the Transaction Agreements to which the Company is a party has been, or will be at or prior to the Closing, duly and validly executed and delivered by the Company and (assuming this Agreement and each of the Transaction Agreements to which the Company is a Party constitutes a legal, valid and binding obligation of the applicable Parent Party) constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (collectively, the “Remedies Exception”).

 

4.4 No Conflict. Except as set forth on Schedule 4.4, subject to the receipt of the consents, approvals, authorizations and other requirements set forth in Section 4.5 or on Schedule 4.5, the execution and delivery of this Agreement and the Transaction Agreements by the Company and the consummation by the Company of the transactions contemplated hereby and thereby do not (a) violate any provision of, or result in the breach of, any applicable Law to which the Company, any of its Subsidiaries or any of their respective properties or assets is subject, except as would not be material to the Company and its Subsidiaries, taken as a whole, (b) conflict with, result in a breach or violation of or constitute a default under any of the provisions of the Organizational Documents of the Company or any of its Subsidiaries, (c) violate any provision of, result in a breach of, require a consent under, terminate or result in the termination of, or give rise to any right of revocation, withdrawal, suspension, acceleration, cancellation, modification, imposition of additional obligations or loss of rights or payment becoming due under any Company Material Contract, Lease or Company Lease, or result in the creation of any Lien under any such Contract, or otherwise upon any of the properties or assets of the Company or any of its Subsidiaries, or constitute an event that, with or without notice or lapse of time or both, would result in any such violation, breach, termination or right or creation of a Lien or (d) result in a violation or revocation of any Permit.

 

4.5 Governmental Consents. No consent, approval or authorization of, or designation, declaration or filing with, any Governmental Authority is required on the part of the Company or any of its Subsidiaries with respect to the Company’s execution or delivery of this Agreement or the consummation by the Company of the transactions contemplated hereby, except for (a) applicable requirements of the HSR Act or any applicable foreign competition Law, (b) compliance with any applicable requirements of the securities Laws, (c) as otherwise disclosed on Schedule 4.5, (d) the filing of the Merger Certificate in accordance with the DGCL and (e) any consent, approval or authorization of, or designation, declaration or filing with, any Governmental Authority, the failure to obtain of which would not be material to the Company and its Subsidiaries, taken as a whole.

 

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4.6 Capitalization of the Company.

 

(a) As of the date hereof, the authorized capital of the Company consists of 20,000 shares of Common Stock. As of the date hereof, there are 8,230 shares of Common Stock issued and outstanding. After giving effect to the Restructuring, the authorized capital of the Company will consist of 19,000 shares of Common Stock, 1 share of Class A Special Stock, and 1 share of Class B Special Stock, and 998 shares of Preferred Stock, of which 9,406 shares of Common Stock, 1 share of Class A Special Stock, and 1 share of Class B Special Stock will be issued and outstanding as of the Closing. All of the issued and outstanding Company Interests have been duly authorized and validly issued and are fully paid and nonassessable and not in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, any other applicable Law, the Company’s Organizational Documents or any Contract to which the Company or any of its Subsidiaries is a party or by which it or its securities are bound. Upon the consummation of the Closing, Parent will be the beneficial owner of the entire capital stock of the Company, free and clear of all Liens other than any restrictions on sales of securities under applicable securities Laws. No Company Interests are held in the treasury of the Company.

 

(b) Other than the outstanding Company Interests and except as set forth on Schedule 4.6(b), neither the Company nor any of its Subsidiaries has any (i) outstanding Equity Interests, (ii) other commitments or agreements providing for the issuance of additional Equity Interests, the sale of treasury interests, or for the repurchase or redemption of any Equity Interests, or (iii) agreements of any kind that may obligate the Company or any such Subsidiary to issue, purchase, register for sale, redeem or otherwise acquire any Equity Interests of or held by itself or any other Person. Except for this Agreement, the Company Certificate and as set forth on Schedule 4.6(b), neither the Company nor any of its Subsidiaries is party to (and, to the knowledge of the Company, none of their respective Equity Interests is subject to) any other voting trust, proxy, power-of-attorney or other agreement or understanding with respect to the voting, transfer, exchange or pledge of any Equity Interests. No holder of Indebtedness of the Company has any right to convert or exchange such Indebtedness for any Equity Interests in the Company or any of its Subsidiaries.

 

(c) All of the Company’s and its Subsidiaries’ securities have been granted, offered, sold and issued in material compliance with all applicable securities Laws.

 

4.7 Capitalization of Subsidiaries.

 

(a) The outstanding Equity Interests in each of the Company’s Subsidiaries set forth (or required to be set forth) on Schedule 4.2 have been duly authorized (if applicable) and validly issued and (if applicable) are fully paid and nonassessable and were not issued or acquired in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, any other applicable Law, such Subsidiary’s Organizational Documents or any Contract to which the Company or any such Subsidiary is a party or by which it or its securities are bound. Except for the Permitted Liens and as set forth on Schedule 4.7(a), the Company or one or more of its Subsidiaries owns of record and beneficially all the issued and outstanding Equity Interests in such Subsidiaries, free and clear of any Liens other than restrictions on sales of securities under applicable securities Laws.

 

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(b) Except for the Equity Interests of the Subsidiaries set forth on Schedule 4.2 and as set forth on Schedule 4.7(b), neither the Company nor any of its Subsidiaries owns, controls or has any rights or obligations to redeem or acquire, directly or indirectly, any capital stock or other Equity Interest in any other Person. After giving effect to the Restructuring, each of the direct and indirect Subsidiaries of the Company will be a direct or indirect wholly-owned Subsidiary of the Company.

 

(c) Except as disclosed in the Interim Financial Statements or as set forth on Schedule 4.7(c), since the Balance Sheet Date the Company has not declared or paid any distribution or dividend in respect of its Equity Interests and has not repurchased, redeemed or otherwise acquired any Equity Interests of the Company, and the Company Board has not authorized any of the foregoing.

 

4.8 Financial Statements.

 

(a) Correct and complete copies of the following financial statements of the Company and its Subsidiaries have been made available to Parent or its representatives: (i) the reviewed consolidated balance sheets, income statements, shareholders’ equity and cash flows as of and for the fiscal years ended December 31, 2018 and December 31, 2019 (the financial statements described in this clause (i), collectively, the “Reviewed Financial Statements”) and (ii) the unaudited unconsolidated internally-prepared balance sheet and income statement as of and for the 3-month period ended March 31, 2020 (such date, the “Balance Sheet Date”, and such financial statements, the “Interim Financial Statements” and, together with the Reviewed Financial Statements, the “Financial Statements”). The Financial Statements (including the notes thereto): (i) are true, correct, complete, (ii) were prepared from and are consistent with the books and records of the Company and its Subsidiaries, (iii) present fairly, in all material respects, the consolidated financial position and consolidated results of operations and cash flows of the Company and its Subsidiaries as of the dates and for the periods indicated in such Financial Statements (with the exception that the Interim Financial Statements are not consolidated), and (iv) except as set forth on Schedule 4.8(a) and except for the Interim Financial Statements, are presented in conformity with GAAP as applicable to non-public companies applied on a consistent basis throughout the periods indicated.

 

(b) Prior to the Closing, the Company will have established and, from the date of such establishment, maintained, a system of internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act) as required by Rule 13a-15 promulgated under the Exchange Act sufficient to provide reasonable assurances regarding the reliability of financial reporting for the Company and its Subsidiaries for external purposes in accordance with GAAP. To the Company’s knowledge, since January 1, 2017, the Company has not identified or been made aware of: (i) any significant deficiency or material weakness in the design or operation of internal control over financial reporting utilized by the Company that is reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; or (ii) any fraud, whether or not material, that involves the management or other employees of the Company or any of its Subsidiaries that have a significant role in the Company’s internal control over financial reporting.

 

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(c) Prior to the Closing, the Company will establish and, from the date of such establishment, maintain, disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures will be designed to ensure that material information relating to the Company and its Subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective in all material respects to perform the functions for which they were established.

 

(d) Other than as set forth in the Financial Statements, neither the Company nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any “off balance sheet arrangements” that would be required to be disclosed under Item 303(a) of Regulation S-K promulgated by the SEC or any “variable interest entities” (within the meaning Accounting Standards Codification 810).

 

(e) The accounts receivable reflected in the books and records of the Company and its Subsidiaries: (i) have arisen from bona fide transactions entered into by the Company or such Subsidiary involving the actual sale of Company Products in the ordinary course of business to Persons that are not Affiliates of the Company; and (ii) except to the extent reserved for in the Interim Financial Statements, constitute only valid, undisputed claims not subject to claims of set-off or other defenses or counterclaims. To the knowledge of the Company, no account debtor intends not to (based on COVID-19, COVID-19 Measures, or otherwise) pay any material accounts receivable within ninety (90) days of invoice. Since the Balance Sheet Date, collection of accounts receivable by the Company and its Subsidiaries has been and is consistent with past practices.

 

(f) All accounts payable and notes payable of the Company and its Subsidiaries, whether reflected in the Financial Statements or subsequently created, are valid payables that have arisen from bona fide transactions in the ordinary course of business consistent with past practice.  Since the Balance Sheet Date, the Company and its Subsidiaries have paid their respective accounts payable in the ordinary course of business consistent with past practices.

 

(g) The inventories and raw materials of the Company and its Subsidiaries reflected in the Financial Statements are of a quantity and quality usable and saleable in the ordinary course of business within a reasonable period of time and without discount outside of the ordinary course of business, are merchantable and fit and sufficient for their particular purpose, are not slow-moving or obsolete and are reasonable in kind and amount in light of the normal needs of the Company. To the knowledge of the Company, COVID-19 and COVID-19 Measures have not prevented or impaired the Company or any of its Subsidiaries from maintaining an adequate quantity of inventory and raw materials, including as a result of any disruption in supply chains affecting the Company’s or any of its Subsidiaries’ supply of inventory and raw materials. None of the inventory of the Company or any of its Subsidiaries is subject to any consignment, bailment, warehousing or similar Contract.

 

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4.9 Undisclosed Liabilities; Indebtedness.

 

(a) Except as set forth on Schedule 4.9(a), there is no liability, debt or obligation (whether accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due, whether known or unknown, and regardless of when asserted) of the Company or any of its Subsidiaries, except for liabilities and obligations (i) reflected or reserved for on the Financial Statements or disclosed in the notes thereto, (ii) that have arisen since the Balance Sheet Date in the ordinary course of business of the Company and its Subsidiaries (none of which relate to any breach of Contract, breach of warranty, tort, infringement, violation of Law, Order, Action or, to the knowledge of the Company, COVID-19 Measure), (iii) incurred in connection with the transactions contemplated by this Agreement or (iv) that would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.

 

(b) Other than as set forth in the Interim Financial Statements or on Schedule 4.9(b), there is no Indebtedness of the Company and its Subsidiaries as of the date hereof.

 

(c) Neither the Company nor any of its Subsidiaries has applied for or received any loan, exclusion, forgiveness or other item pursuant to any COVID-19 Measure, including, but not limited to, any “Paycheck Protection Program” loan, “Economic Stabilization Fund” loan or other United States Small Business Administration loan.

 

(d) Following the Closing, neither the Company nor any of its Subsidiaries shall have any liability for or relating to the Restructuring.

 

4.10 Litigation and Actions. Except as set forth on Schedule 4.10 or as would not, if adversely determined, be material to the Company or any of its Subsidiaries, there is no (a) Action of any nature pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries, whether at law or in equity or (b) to the knowledge of the Company, material investigation (internal or external) against or relating to the Company or any of its Subsidiaries or any officer or director of the Company or any of its Subsidiaries. There is no material unsatisfied judgment or any material open injunction binding upon the Company or any of its Subsidiaries.

 

4.11 Compliance with Laws. Except with respect to matters set forth on Schedule 4.11 or as otherwise would not be material to the Company and its Subsidiaries, taken as a whole, the Company and its Subsidiaries are in compliance with and, since January 1, 2017, have complied in all material respects with, all applicable Laws and, to the knowledge of the Company, COVID-19 Measures. Since January 1, 2017, neither the Company nor any of its Subsidiaries has received any written or, to the knowledge of the Company, oral notice from any Governmental Authority, or employee, independent contractor or other material business relationship of the Company or any of its Subsidiaries, that it is or has been in violation of any Law or COVID-19 Measure.

 

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4.12 Contracts; No Defaults.

 

(a) Schedule 4.12(a) sets forth a true, correct and complete list of, and the Company has made available to the Parent (including written summaries of oral Contracts), true, correct and complete copies of, each Contract described in clauses (i) through (xxii) below to which the Company or its Subsidiaries is a party or by which the Company or its Subsidiaries, or any of their properties or assets are bound or affected (each contract required to be set forth on Schedule 4.12(a), a “Company Material Contract”).

 

(i) Each Contract (other than (x) purchase orders with suppliers or customers entered into in the ordinary course of business and (y) Contracts of the types (without giving effect to dollar thresholds) described in other clauses of this Section 4.12(a)) that the Company reasonably anticipates will involve aggregate annual payments or consideration furnished by or to the Company and its Subsidiaries of more than $250,000 annually;

 

(ii) Each mortgage, note, debenture, other evidence of Indebtedness, guarantee, loan, credit or financing agreement or instrument or other contract for money borrowed by the Company or any of its Subsidiaries or security agreement or other Contract or instrument that grant any Lien on any material asset of the Company or any of its Subsidiaries;

 

(iii) Each Contract (A) for the acquisition of any Person or any business division thereof or the disposition of any material assets of the Company or any of its Subsidiaries (other than in the ordinary course of business), in each case, involving payments in excess of $100,000, other than Contracts in which the applicable acquisition or disposition has been consummated and there are no material obligations ongoing and (B) for the acquisition of any property or Person or any business division thereof with amounts owing as deferred purchase price, including all seller notes and “earn-out” payments;

 

(iv) Each Lease;

 

(v) Each lease or sublease of, or Contract that otherwise permits a Person to lease or use, any personal property (other than leases or subleases for personal property and conditional sales agreements with annual required payments of less than $20,000);

 

(vi) each joint venture Contract, partnership Contract, limited liability company Contract, strategic alliance Contract or other similar Contract with a third party involving any sharing of profits, losses, costs or liabilities pursuant to which the Company or any of its Subsidiaries has any ownership interest in any other Person (in each case, other than with respect to wholly owned Subsidiaries of the Company);

 

(vii) Each Contract requiring capital expenditures after the date of this Agreement in an annual amount in excess of $100,000;

 

(viii) Each Contract pursuant to which the Company or any of its Subsidiaries licenses or otherwise grants a right to any Person to (A) manufacture or reproduce any products, services or technology of the Company or any its Subsidiaries or (B) sell or distribute any products, services or technology of the Company or any of its Subsidiaries;

 

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(ix) Each Contract containing covenants expressly limiting the freedom of the Company or any of its Subsidiaries to compete with any Person in a product line or line of business or to operate in any geographic area;

 

(x) Each Contract granting to any person (other than the Company) an option or a first-refusal, first-offer or similar preferential right to purchase or acquire any material assets of the Company or any of its Subsidiaries;

 

(xi) Each Contract granting any exclusivity, “most favored nations”, “take or pay” or similar rights;

 

(xii) Each Contract that involves payments based, in whole or in part, on profits, revenues, fee income or other financial performance measures of the Company or any of its Subsidiaries;

 

(xiii) Each Contract set forth on Schedule 4.21(j);

 

(xiv) Each Contract that provides for a loan or advance of any amount to any director or officer of the Company or any of its Subsidiaries, other than (A) advances for travel, relocation and other appropriate business expenses in the ordinary course of business or (B) other customary employee benefits made generally available to all employees;

 

(xv) Each Contract with any supplier (A) that is a sole source supplier to the Company and its Subsidiaries or (B) from which the Company and its Subsidiaries source substantially all of their supply of any material product or service, except where the Company and its Subsidiaries would likely be able to replace such source of supply with a substitute supply at substantially the same volume, on substantially comparable terms and without material delay;

 

(xvi) Each employment, severance, retention, or independent contractor Contract with any employee or independent contractor pursuant to which such employee or independent contractor is eligible to receive an annual base salary in excess of $100,000;

 

(xvii) Each Contract concerning the manufacture of products for or on behalf of any other Person, or pursuant to which any other Person manufactures products for or on behalf of the Company or any of its Subsidiaries, including any private label manufacturing and/or supply Contract;

 

(xviii) Each collective bargaining agreement, works council agreement or other similar Contract with any labor union or employee representatives;

 

(xix) Each Contract relating to any hedge, swap, collar, forward, future, warrant, option or other derivative transaction;

 

(xx) Each Contract under which any of the benefits thereunder, to any Person party thereto, shall be increased, or the vesting of benefits of which shall be accelerated, by the consummation of any transaction contemplated hereby or the value of any of the benefits of which shall be calculated on the basis of any of the transactions contemplated hereby;

 

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(xxi) Each settlement or coexistence agreement with respect to any pending or threatened Action (A) entered into within twelve (12) months prior to the date of this Agreement, other than settlement agreements for cash only (which has been paid) that does not exceed $25,000 as to such settlement or (B) with respect to which unsatisfied amounts remain outstanding; and

 

(xxii) Each Contract for a charitable or political contribution.

 

(b) Except as would not, individually or in the aggregate reasonably be expected have a Material Adverse Effect, and except as set forth on Schedule 4.12(b), with respect to each Company Material Contract (i) each is in full force and effect, subject to the Remedies Exception, (ii) each represents valid and binding obligations of the Company or the applicable Subsidiaries party thereto and, to the knowledge of the Company, represent the valid and binding obligations of the other parties thereto, (iii) no party to any such Contract has made a claim of force majeure, (iv) neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any other party thereto is in material breach of or material default under any such Contract, (v) neither the Company nor any of its Subsidiaries has received any written claim or written notice of material breach of or material default under any such Contract which remains unresolved, and (vi) 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 material breach of or a material default under any such Contract (in each case, with or without notice or lapse of time or both) by the Company or its applicable Subsidiaries or any other party thereto.

 

(c) Neither the Company nor any of its Subsidiaries has any Contract with any Governmental Authority.

 

4.13 Company Benefit Plans.

 

(a) Schedule 4.13(a) sets forth a true, correct and complete list of each Company Benefit Plan. “Company Benefit Plan” means each Plan, including any Non-US Plan, providing compensation or benefits to any director, officer, employee, independent contractor or consultant of the Company or its Subsidiaries, which is maintained, sponsored or contributed to by the Company or any of its Subsidiaries or under which the Company or any of its Subsidiaries has any actual or contingent obligation or liability. “Non-US Plan” means each Company Benefit Plan maintained, sponsored or contributed to primarily for the benefit of any current or former director, officer, employee, independent contractor or consultant of the Company or its Subsidiaries based outside of the United States. Each Company Benefit Plan, including Plan documents and any amendments thereto, has been made available to Parent or its representatives.

 

(b) With respect to each Company Benefit Plan, there are no funded benefit obligations for which contributions have not been made or properly accrued and there are no unfunded benefit obligations that have not been accounted for by reserves, or otherwise properly footnoted in accordance with GAAP on the Company Financials. Neither the Company nor any of its Subsidiaries is or has in the past been a member of a “controlled group” for purposes of Section 414(b), (c), (m) or (o) of the Code, nor does the Company or any of its Subsidiaries have any Liability with respect to any (i) collectively-bargained for plans, (ii) defined benefit pension plans, (iii) “multiple employer plans” within the meaning of Section 210(a) of ERISA or Section 413(c) of the Code, or (iv) “multiple employer welfare arrangements” within the meaning of Section 3(40) of ERISA, in each case, whether or not subject to the provisions of ERISA.

 

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(c) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect with respect to the Company and its Subsidiaries, each Company Benefit Plan is and has been operated at all times in compliance with all applicable Laws in all respects, including ERISA and the Code. Each Company Benefit Plan which is intended to be “qualified” within the meaning of Section 401(a) of the Code (i) has been determined by the IRS to be so qualified (or is based on a prototype plan which has received a favorable opinion letter) during the period from its adoption to the date of this Agreement and (ii) its related trust has been determined to be exempt from taxation under Section 501(a) of the Code or the Company has requested an initial favorable IRS determination of qualification and/or exemption within the period permitted by applicable Law. To the knowledge of the Company, no fact exists which would reasonably be expected to materially and adversely affect the qualified status of such Company Benefit Plans or the exempt status of such trusts.

 

(d) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect with respect to the Company and its Subsidiaries, with respect to each Company Benefit Plan: (i) such Company Benefit Plan has been administered and enforced in all respects in accordance with its terms, the Code and ERISA; (ii) no breach of fiduciary duty has occurred in any respect; (iii) no Action is pending, or to the knowledge of the Company, threatened (other than routine claims for benefits arising in the ordinary course of administration); (iv) no prohibited transaction, as defined in Section 406 of ERISA or Section 4975 of the Code, has occurred, excluding transactions effected pursuant to a statutory or administration exemption; and (v) all contributions and premiums due have been made in all respects as required under ERISA or have been fully accrued for in the Interim Financial Statements.

 

(e) Except as set forth in Schedule 4.13(e), neither the Company’s execution of, nor the performance of the transactions contemplated by, this Agreement will, either alone or in connection with any other event, (i) result in any payment, severance or benefit becoming due to any current or former employee, director, officer or independent contractor of the Company or any of its Subsidiaries, (ii) increase the amount of any compensation, severance, or benefits payable under any Company Benefit Plan or (iii) result in the acceleration of the time of payment, funding, or vesting of any compensation, severance, or benefit due to any current or former employee, director, officer or independent contractor of the Company or any of its Subsidiaries. Neither the Company nor any Subsidiary of the Company has any obligation or commitment to “gross up” any Person with respect to Taxes under Section 409A or 4999 of the Code.

 

(f) Each Company Benefit Plan that is a nonqualified deferred compensation plan (as defined in Section 409A(d)(1) of the Code) has been maintained in all material respects in documentary and operational compliance with Section 409A of the Code or an available exemption therefrom.

 

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(g) With respect to each Non-US Plan, (i) each Non-US Plan required to be established, registered or approved has been established, registered or approved and has been maintained, administered, funded and contributed to in compliance in all material respects with, and is in good standing under, applicable Laws and Governmental Authorities; (ii) each Non-US Plan that is intended to qualify for favorable tax benefits under the applicable Laws of any jurisdiction is so qualified, and no condition exists and no event has occurred that would be reasonably expected to result in the loss or revocation of such status; (iii) each Non-US Plan that is required to be funded and/or book-reserved is funded and/or book-reserved, as appropriate, in accordance in all material respects with Italian GAAP and, if required, applicable Laws; and (iv) there are no material unfunded liabilities or material termination indemnities related to any period of time prior to the Closing under any Non-US Plan or with respect to any employees or former employees of the Company or any of its Subsidiaries based outside of the United States, except for any such liabilities reflected on the Financial Statements.

 

4.14 Labor Relations.

 

(a) Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement, work council agreement, trade union agreement, or other similar agreement for the representation of employees. With respect to the Company and its Subsidiaries, as of the date hereof there has been no labor strike, slowdown, work stoppage, picketing, labor shortage or other labor disruption (whether as a result of COVID-19, COVID-19 Measures or otherwise) or, to the knowledge of the Company, have any been threatened against the Company or any of its Subsidiaries. No union or labor representative organizing activities are taking place or have taken place since January 1, 2017 at any of the locations operated by the Company or its Subsidiaries.

 

(b) Schedule 4.14(b) sets forth a true, correct and complete list of each current employee of the Company and its Subsidiaries who receives an annual base salary in excess of $100,000, including such employee’s title, current annual rate of compensation or hourly wage, current target bonus opportunity, status (full-time or part-time, exempt or non-exempt, and active or on leave), and date of hire. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, for the purposes of applicable Law, including the Code, all employees of the Company and its Subsidiaries classified as exempt under the Fair Labor Standards Act and state and local wage and hour Laws are properly classified in all material respects.

 

(c) Except as set forth on Schedule 4.14(c) and except as has been mandated by Governmental Authority, as of the date hereof neither the Company nor its Subsidiaries has had, nor to the knowledge of the Company are there any facts that would give rise to, any workforce changes due to COVID-19 or COVID-19 Measures, whether directly or indirectly, including any actual or expected terminations, layoffs, furloughs, shutdowns (whether voluntary or by Governmental Order), or any changes to benefit or compensation programs, nor are any such changes currently contemplated.

 

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(d) The Company and its Subsidiaries are and, since January 1, 2017 have been, in compliance in all material respects with all applicable Laws relating to employment, wages and hours, immigration, plant closings and layoffs under the Worker Adjustment and Retraining Notification Act of 1988 (the “WARN Act”) and other similar applicable Laws, unemployment insurance, workers’ compensation, pay equity, discrimination in employment, wrongful discharge, collective bargaining, fair labor standards wages and hours, affirmative action, civil rights, background checks, hiring practices, and occupational health and safety. There are no Actions pending, or to the knowledge of the Company, threatened against the Company or its Subsidiaries by or on behalf of any current or former employee of the Company or its Subsidiaries related to any labor or employment matter, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(e) The Company and its Subsidiaries have not, since January 1, 2017, (i) taken any action that constitutes a “mass layoff,” “mass termination,” or “plant closing” within the meaning of the WARN Act or similar state, local, or foreign Laws, or (ii) incurred any liability under the WARN Act or similar state, local, or foreign Laws that remains unsatisfied.

 

(f) The Company and its Subsidiaries have paid in full or, to the extent not yet due, accrued on the Financial Statements, (i) to their respective employees and former employees, any wages, salaries, bonuses, commissions, overtime, cash-outs of accrued and unused vacation or paid time off, leave or severance amounts, and any other compensation due and payable to such Persons, and (ii) to their respective independent contractors, consultants, and temporary employees, any fees for services due and payable to such Persons.

 

(g) Neither the Company nor any of its Subsidiaries has incurred any liability or losses for a failure to provide information or to consult with works councils or unions under applicable Law. Neither the Company nor any of its Subsidiaries has incurred any liability or losses for a failure to provide information or to consult with employees, works councils, unions or other employee representatives under applicable Laws of Italy.

 

(h) The Company has made available to Parent or its representatives a true, correct and complete list of each independent contractor, temporary employee, and consultant currently providing services to the Company or its Subsidiaries who receives annual cash compensation in excess of $100,000, including the present rate of compensation payable by the Company or its Subsidiaries to each such independent contractor, temporary employee, and consultant.

 

4.15 Taxes.

 

(a) All income and other material Tax Returns required to be filed by the Company or any of its Subsidiaries have been timely filed (taking into account any extension of time within which to file) in accordance with all applicable Laws; and all such Tax Returns are true, correct and complete in all material respects.

 

(b) The Company and its Subsidiaries have (i) timely paid all Taxes that are due and payable by the Company and its Subsidiaries (whether or not such Tax is shown as payable on a Tax Return) and (ii) fully accrued all Taxes that are not yet due and payable on the Financial Statements in accordance with GAAP.

 

(c) The Company and its Subsidiaries have timely and properly withheld (i) all required amounts from payments to its employees, agents, contractors, nonresidents, shareholders, lenders, and other Persons and (ii) all sales, use, ad valorem, and value added Taxes. The Company and its Subsidiaries timely remitted all withheld Taxes to the proper Governmental Authority in accordance with all applicable Laws.

 

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(d) No audit or other proceeding by any Governmental Authority is in progress, pending, or to the knowledge of the Company, threatened, against the Company or any of its Subsidiaries with respect to any Taxes due from the Company or any of its Subsidiaries. Neither the Company nor any Subsidiary of the Company has received written notice from any Governmental Authority that the Company or any of its Subsidiaries is required to pay Taxes or file Tax Returns in a jurisdiction in which the Company or such Subsidiary does not file Tax Returns or pay Taxes. Except as set forth on Schedule 4.15(d), neither the Company nor any Subsidiary of the Company has commenced a voluntary disclosure proceeding in any state or local or non-U.S. jurisdiction relating to any Taxes that has not been fully resolved or settled.

 

(e) There are no Tax indemnification or Tax sharing agreements under which the Company or any of its Subsidiaries would be liable after the Closing Date for a Tax liability of any Person that is neither the Company nor one of its Subsidiaries. Neither the Company nor any Subsidiary of the Company is liable for Taxes of any other Person (other than the Company or any Subsidiary of the Company) as a result of successor liability, transferee liability, or joint or several liability under Law (including pursuant to Treasury Regulations Section 1.1502-6 or any similar provision of state, local, or non-U.S. Laws), or otherwise.

 

(f) Neither the Company nor any of its Subsidiaries has been, in the past five (5) years, a party to a transaction reported or intended to qualify as a reorganization under Section 368 of the Code (other than a reorganization described in Section 368(a)(1)(F) of the Code). Neither the Company nor any of its Subsidiaries has constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code in the two (2) years prior to the date of this Agreement or that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) that includes the transactions contemplated by this Agreement.

 

(g) Neither the Company nor any of its Subsidiaries has entered into a “listed transaction” (or a substantially similar transaction) that has given rise to a disclosure obligation under Section 6011 of the Code and the Treasury Regulations promulgated thereunder.

 

(h) The aggregate unpaid Taxes of the Company and each Subsidiary of the Company do not exceed the reserves for current Taxes (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax items) set forth on the most recent balance sheet included in the Financial Statements (without regard any notes thereto). Since the date of the most recent balance sheet included in the Financial Statements, neither the Company nor any Subsidiary of the Company has (i) incurred any Taxes outside the ordinary course of business, (ii) changed a method of accounting for Tax purposes, (iii) entered into any agreement with any Governmental Authority (including a “closing agreement” under Code Section 7121) with respect to any Tax matter, (iv) surrendered any right to a Tax refund, (v) changed an accounting period with respect to Taxes, (vi) filed an amended Tax Return, (vii) changed or revoked any material Tax election, or (viii) made any Tax election inconsistent with past practices.

 

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(i) There are no Liens for Taxes on any assets of the Company or any Subsidiary of the Company, other than Permitted Liens.

 

(j) Neither the Company nor any Subsidiary of the Company has ever been a member of any Affiliated Group (other than an Affiliated Group the common parent of which is the Company.

 

(k) Neither the Company nor any Subsidiary of the Company has a request for a private letter ruling, a request for technical advice, or another similar request pending with any Governmental Authority that relates to the Taxes or Tax Returns of the Company or any of its Subsidiaries. No power of attorney granted by the Company or any of its Subsidiaries with respect to any Taxes is currently in force. Neither the Company nor any Subsidiary of the Company has executed or filed with any Governmental Authority any agreement or other document extending or having the effect of extending the statute of limitations for assessment, collection or other imposition of any Tax.

 

(l) Neither the Company nor any Subsidiary of the Company is required to include any item of income in, or exclude any item of deduction from, its taxable income for any period (or portion thereof) beginning after the Closing Date as a result of (i) an installment sale transaction occurring on or before the Closing governed by Code Section 453 (or any similar provision of state, local, or non-U.S. Laws), (ii) a transaction occurring on or before the Closing reported as an open transaction for U.S. federal Income Tax purposes (or any similar doctrine under state, local or non-U.S. Laws), (iii) any prepaid amounts received or paid on or prior to the Closing or deferred revenue realized on or prior to the Closing other than deferred revenue set forth on the most recent balance sheet included in the Financial Statements or accrued in the ordinary course of business since the date thereof, (iv) a change in method of accounting made before the Closing Date with respect to a Pre-Closing Tax Period (or an impermissible method used in a Pre-Closing Tax Period), or (v) a Tax agreement entered into with any Governmental Authority (including a “closing agreement” under Code Section 7121 or any “gain recognition agreements” entered into under Code Section 367) on or prior to the Closing Date. Neither the Company nor any Subsidiary of the Company currently uses the cash method of accounting for Income Tax purposes. Neither the Company nor any Subsidiary of the Company has made an election under Section 965(h) or Section 965(n) of the Code. Neither the Company nor any of its Subsidiaries has any “long-term contracts” that are subject to a method of accounting provided for in Section 460 of the Code or has deferred any income pursuant to IRS Revenue Procedure 2004-34, Treasury Regulation Section 1.451-5, Section 455 of the Code, Section 456 of the Code, or any corresponding or similar provisions of Law.

 

(m) Neither the Company nor any of its Subsidiaries is (or has ever been) a “United States real property holding corporation” within the meaning of Section 897(c) of the Code.

 

(n) Neither the Company nor any of its Subsidiaries is subject to a Tax holiday or Tax incentive or grant in any jurisdiction.

 

(o) Except for shares of the Company stock for which a valid and timely election has been made under Section 83(b) of the Code, as of the Closing Date, no outstanding share of stock of the Company is subject to a “substantial risk of forfeiture” for purposes of Section 83 of the Code.

 

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(p) The Company duly elected to be treated as an S corporation pursuant to Code Section 1362(a) and the Laws of each state and other jurisdiction in which the Company conducts business or could otherwise be subject to income Taxes.  Each of these elections was initially effective as of the Company’s date of incorporation and was effective at all times prior to the Contributions.   No event has occurred (or fact has existed) that would preclude the Company from initially qualifying as an S corporation under Code Section 1361(a) or which would terminate the Company’s S corporation status (other than the Contributions).  No Governmental Entity has challenged the effectiveness of any of these elections. At all times prior to the Contributions, Ittella was properly classified as either an S corporation pursuant to Code Section 1362(a) and the Laws of each state and other jurisdiction in which Ittella conducts business or could otherwise be subject to income Taxes, as a qualified subchapter S subsidiary pursuant to Code Section 1361(b)(3)(B), or as a partnership for federal and applicable state and local income Tax purposes. At all times after the Contributions, Ittella will be treated as a “disregarded entity” for U.S. federal income Tax purposes pursuant to Treasury Regulation Section 301.7701-3(b)(1)(ii). At all times prior to the Contributions, Ittella Italy was properly classified as a partnership for federal and applicable state and local income Tax purposes. At all times after the Contributions, Ittella Italy will be treated as a “disregarded entity” for U.S. federal income Tax purposes pursuant to Treasury Regulation Section 301.7701-3(b)(1)(ii). Each Subsidiary of the Company (other than Ittella and Ittella Italy) has been treated as a “disregarded entity” for U.S. federal income Tax purposes pursuant to Code Section 1361(b)(3)(B) or Treasury Regulation Section 301.7701-3(b)(1)(ii) at all times since its respective formations and no election has been made (or is pending) to change such treatment.

 

(q) Neither the Company nor any of its Subsidiaries engages in (or has engaged) in a trade or business in a country other than the country in which the Company or such Subsidiary of the Company is incorporated or otherwise organized.

 

(r) Schedule 4.15(r) sets forth a true and complete list of elections that have been made (or are pending) and actions that have been taken (or are pending) by the Company or any of its Subsidiaries pursuant to Sections 2301-2308 of the CARES Act or Sections 7001-7005 of the Families First Act.

 

4.16 Brokers’ Fees. Except for Harrison Co. or its Affiliate, no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other similar commission, for which the Company or any of its Subsidiaries (or as a result of the Merger, any Parent Party) would be liable in connection with the Transaction based upon arrangements made by the Company or any of its Subsidiaries.

 

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4.17 Insurance.

 

(a) Schedule 4.17(a)(i) contains a true, correct and complete list of all binders and policies of property, fire and casualty, product liability, workers’ compensation, and other forms of insurance obtained, maintained or held by, or on behalf of, the Company or any of its Subsidiaries as of the date of this Agreement. True and complete copies of such insurance policies have been made available to Parent. Except as set forth in Schedule 4.17(a)(ii), since January 1, 2017, (i) neither the Company nor any of its Subsidiaries has received any written notice from any insurer under any such insurance policies, canceling or materially and adversely modifying any such policy or denying renewal of coverage thereunder and (ii) all premiums on such insurance policies due and payable have been paid in full.

 

(b) There are no material outstanding insurance claims of the Company or any of its Subsidiaries that have been denied or disputed by the applicable insurer and there is no outstanding reservation of rights under any applicable insurance policy. The Company and its Subsidiaries maintain, and at all times since January 1, 2017 have maintained, in full force and effect, certificates of insurance, binders and policies of such types and in such amounts and for such risks, casualties and contingencies as is reasonably adequate to insure the Company and its Subsidiaries against insurable losses, damages, claims and risks to or in connection with or relating to their respective businesses, properties, assets and operations. Except as set forth on Schedule 4.17(b), neither the Company nor any of its Subsidiaries has ever maintained, established, sponsored, participated in or contributed to any self-insurance program, co-insurance program, retrospective premium program or captive insurance program (excluding any programs that would be considered Plans and any workers’ compensation programs or plans).

 

4.18 Permits. Except as set forth on Schedule 4.18, the Company and its Subsidiaries currently possess and are in material compliance with, all of the material licenses, approvals, consents, registrations, authorizations, accreditations, concessions, variances, waivers, exemptions and permits (collectively, “Permits”) necessary under applicable Laws to permit the Company and its Subsidiaries to own, operate, use and maintain their assets in the manner in which they are now operated, used and maintained and to conduct the business of the Company and its Subsidiaries as currently conducted and as conducted during the periods reflected in the Financial Statements. Since January 1, 2017, (i) there has not occurred any default in any material respect under any Permit by the Company or any of its Subsidiaries, (ii) neither the Company nor any of its Subsidiaries has received any written notice from any Governmental Authority relating to the revocation, non-renewal or modification of any Permit or with respect to any failure by the Company or any of its Subsidiaries to have any Permit required in connection with the operation of their businesses, and (iii) to the knowledge of the Company, there have been no threatened Actions before or by any Governmental Authority that would reasonably be expected to result in the revocation, suspension or termination of any Permit.

 

4.19 Tangible Personal Property; Sufficiency of Assets.

 

(a) Except as would not be material to the Company and its Subsidiaries, taken as a whole, the Company or one of its Subsidiaries owns and has good and valid title to, or has a good and valid lease or license to use, all machinery, equipment and other tangible personal property reflected on the books of the Company and its Subsidiaries as owned, leased or licensed (as applicable) by the Company or one of its Subsidiaries, free and clear of all Liens (other than Permitted Liens).

 

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(b) All such tangible personal property is in good working order and condition, ordinary wear and tear excepted, is free from latent and patent defects, is suitable for the purposes for which it is being used by the Company and/or its applicable Subsidiaries and has been maintained in accordance with normal industry practice. Such tangible personal property, together with the Company Material Contracts, the Real Property (excluding any portion thereof subject to the Company Leases) and the Company Intellectual Property, are all of the material assets required for, and are adequate and sufficient for, the operation of the business of the Company and its Subsidiaries as currently conducted and as conducted during the periods reflected in the Financial Statements.

 

4.20 Real Property.

 

(a) Neither the Company nor any of its Subsidiaries owns any Owned Real Property.

 

(b) Schedule 4.20(b)(i) sets forth a true, correct and complete list of (i) each Leased Real Property and (ii) all leases, subleases, leases of going concern (contratti di affitto d’azienda or contratti d’affitto di ramo d’azienda), licenses and other agreements allowing for the lease, use or occupancy of such Leased Real Property by the Company or its Subsidiaries (along with all amendments, modifications and supplements thereto) (collectively, the “Leases”). Except as set forth on Schedule 4.20(b)(ii), (x) the Company or one of its Subsidiaries has a valid, binding and enforceable leasehold estate in, and, as to the Company’s leasehold estate in and to the Leased Real Property, enjoys peaceful and undisturbed possession of such Leased Real Property, subject to the Remedies Exceptions and any Permitted Liens and (y) neither the Company nor any of its Subsidiaries has received any written notice from any lessor, licensor or other counterparty of such Leased Real Property of, nor does the Company have knowledge of the existence of, any default, event or circumstance that, with notice or lapse of time, or both, would constitute a default by any party to the Leases. The Company has made available to Parent a true, correct and complete copy of all Leases.

 

(c) The Company has delivered to Parent copies of all current leases, licenses, and other occupancy agreements entered into by the Company or any of its Subsidiaries as sub-landlord or sub-licensor of the Leased Real Property (collectively, the “Company Leases”). All Company Leases, including all amendments, modifications and supplements thereto, have been made available to Parent or its Representatives. The Company and its Subsidiaries have performed and observed in all material respects all covenants, conditions and agreements required to be performed or observed by the applicable Company or its Subsidiaries in connection with the Company Leases. Neither the Company nor its Subsidiaries are in default under any of the Company Leases, and, to the knowledge of the Company, no event or circumstance exists that, with notice or lapse of time, or both, would constitute a default on the part of the Company or any of its Subsidiaries. To the knowledge of the Company, (i) no tenant, licensee or other occupant is in default under any of the Company Leases, and (ii) no event or circumstance exists that, with notice or lapse of time, or both, would constitute a default by the tenant, licensee or occupant.

 

(d) Neither the Company nor any of its Subsidiaries has received written notice of (i) any condemnation, eminent domain or similar proceedings affecting any parcel of Real Property, (ii) any special assessment or pending improvement liens to be made by any Governmental Authority, or (iii) violations of any building codes, zoning ordinances, other Laws or covenants or restrictions affecting any Real Property, in either case, that would, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole. The Real Property, taking into account the Company Leases, constitutes all of the real property used in the operation of the Company’s and its Subsidiaries’ business.

 

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(e) To the knowledge of the Company, there are no recorded or unrecorded agreements, easements or encumbrances that materially interfere with the continued operation of the business as currently conducted on any Real Property.

 

(f) Since January 1, 2017, no portion of the Real Property has suffered material damage by fire or other material casualty loss that has not been repaired and restored to its original condition.

 

(g) Neither the Company nor any of its Subsidiaries has received any written notice from any insurance company of defects or inadequacies in the Real Property that would materially and adversely affect the insurability of any parcel under any future insurance policy or may cause or result in any material adverse amendment (including a material increase in premiums under any policy listed on Schedule 4.17(a)(i)).

 

4.21 Intellectual Property.

 

(a) Schedule 4.21(a) sets forth a true, correct and complete list of all of the Owned Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued by, filed with or recorded by any Governmental Authority, quasi-governmental authority or registrar (the “Registered Intellectual Property”), and such Schedule shall include (i) the jurisdictions in which each such item of Registered Intellectual Property has been issued or registered or in which any such application for issuance or registration has been filed; (ii) the registration or application date, as applicable, for each such item of Registered Intellectual Property; and (iii) the record owner of each such item of Registered Intellectual Property. All Registered Intellectual Property has been maintained effective by the filing of all necessary filings, maintenance and renewals and timely payment of requisite fees. Schedule 4.21(a) also sets forth a true, correct, and complete list of all material unregistered Owned Intellectual property (including Trademarks and Software). The Company or one of its Subsidiaries is the sole and exclusive owner of all Owned Intellectual Property, free and clear of all Liens (other than Permitted Liens). All Owned Intellectual Property is valid and enforceable. The Company or one of its Subsidiaries owns all right, title, and interest in, or has a valid and enforceable written license or right to use all Company Intellectual Property. No loss or expiration of any material Owned Intellectual Property is threatened or pending, or reasonably foreseeable, except for patents or copyrights expiring at the end of their respective statutory terms (and not as a result of any act or omission by the Company or any of its Subsidiaries, including failure by the Company or any of its Subsidiaries to pay any required maintenance, renewal, or other fees).

 

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(b) Except as set forth on Schedule 4.21(b), the Company and its Subsidiaries, the Owned Intellectual Property, the former and current conduct of the business, and all former and current products and services of the Company and each of its Subsidiaries and the manufacture, importation, use, offer for sale, sale, licensing, distribution and other exploitation thereof, have not, since January 1, 2017, infringed, misappropriated, or otherwise violated, are not infringing, misappropriating, or otherwise violating and do not infringe, misappropriate, or otherwise violate any Intellectual Property rights, or rights of publicity of any Person. Neither the Company nor any of its Subsidiaries is the subject of any pending Action that (i) alleges a claim of infringement, misappropriation, dilution or other violation of any Intellectual Property rights of any Person, or (ii) challenges the ownership, use, patentability, registration, validity or enforceability of any Owned Intellectual Property, and no such claims have been asserted or threatened in writing or, to the knowledge of the Company, orally, against the Company or any Subsidiary since January 1, 2017. Except as set forth on Schedule 4.21(b), since January 1, 2017, no Person has notified the Company or any of its Subsidiaries in writing or, to the knowledge of the Company, orally, that any of such Person’s Intellectual Property rights are infringed, misappropriated or otherwise violated by the Company or any of its Subsidiaries or that the Company or any of its Subsidiaries requires a license to any of such Person’s Intellectual Property rights.

 

(c) The IT Assets are operational as required for the needs of the business as currently conducted (subject to ordinary bugs, outages, maintenance and wear and tear), fulfill the purposes for which the IT Assets were acquired or developed, have security, back-ups and disaster recovery arrangements in place and hardware and Software capacity, support, maintenance and trained personnel which are sufficient in all material respects for the needs of the business as currently conducted. The Company and its Subsidiaries have taken commercially reasonable measures to implement disaster recovery, data back-up, and security plans, procedures and facilities and have taken reasonable steps consistent with or exceeding industry standards to safeguard the availability, security and integrity of the IT Assets and all data and information stored thereon, including from unauthorized access and infection by any Malicious Code. The Company or one of its Subsidiaries has maintained in the ordinary course of business all required licenses and service contracts, including the purchase of a sufficient number of license seats for all Software used in the business as currently conducted, with respect to the IT Assets. The IT Assets have not suffered material failure since January 1, 2017.

 

(d) To the knowledge of the Company, no Person is infringing upon, misappropriating, or otherwise violating any Owned Intellectual Property. Since January 1, 2017, neither the Company nor any of its Subsidiaries has sent any written or oral notice, charge, complaint, claim, or other written assertion asserting or threatening to assert such infringement, misappropriation, or other violation.

 

(e) The Company and its Subsidiaries have taken commercially reasonable measures to protect the confidentiality of all trade secrets and any other confidential information of the Company and its Subsidiaries (and any confidential information owned by any Person to whom the Company or any of its Subsidiaries has a confidentiality obligation). No trade secrets or any other confidential information of the Company or any of its Subsidiaries or of any Person to whom the Company or any of its Subsidiaries owes a duty of confidentiality has been disclosed by the Company or any of its Subsidiaries to any Person other than pursuant to a written agreement restricting the disclosure and use of such trade secrets or any other confidential information by such Person or otherwise subject to a duty of confidentiality. No current or former founder, officer, director, shareholder, member, employee, contractor, or consultant of the Company or any of its Subsidiaries has any right, title or interest, directly or indirectly, in whole or in part, in any Owned Intellectual Property. The Company and its Subsidiaries have obtained from all Persons (including all current and former founders, officers, directors, shareholders, members, employees, contractors, consultants and agents) involved in the development of any Owned Intellectual Property valid and enforceable written assignments of any such Owned Intellectual Property. To the knowledge of the Company, no such Person has contested the ownership of any Owned Intellectual Property by the Company or has violated any such written confidentiality or assignment agreements.

 

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(f) There is no Owned Software. The Company or one of its Subsidiaries has all valid licenses relating to the Software used in the business of the Company and its Subsidiaries that are reasonably necessary for the Company’s activities as currently conducted.

 

(g) The consummation of the transactions contemplated hereby will not result in the loss or impairment of the Company’s or any of its Subsidiaries’ right to own or use any Company Intellectual Property. Immediately subsequent to the Closing, the Company Intellectual will be owned or available for use by the Company and its Subsidiaries on terms and conditions identical to those under which the Company and its Subsidiaries own or use any Company Intellectual Property immediately prior to the Closing, without payment of additional fees.

 

(h) The Company and its Subsidiaries are and always have been in material compliance with all applicable Privacy and Security Requirements. Neither the Company, nor any Subsidiary, are aware of any notices or complaints from any Person regarding a Security Breach.  Neither the Company, nor any Subsidiary, has received any notices or complaints from any Person (including any Governmental Entity) regarding the Processing of Personal Information or Confidential Data or compliance with applicable Privacy and Security Requirements. The Company and its Subsidiaries have not received any written requests made pursuant to applicable Law, including requests for access or deletion of Personal Information, in connection with the Company’s or any Subsidiary’s Processing of Personal Information or Confidential Data. Neither the Company, nor any Subsidiary, engages in the sale, as defined by applicable Law, of Personal information.

 

(i) The Company and its Subsidiaries have valid and legal rights to Process all Personal Information and Confidential Data that is Processed by or on behalf of the Company and its Subsidiaries in connection with the use and/or operation of its products, services and business, and the execution, delivery, or performance of this Agreement will not affect these rights or violate any applicable Privacy and Security Requirements. The Company and each Subsidiary has implemented, and require third parties that Process Personal Information or Confidential Data for or on behalf of the Company or any Subsidiary to implement, reasonable and industry standard physical, technical and administrative safeguards that (i) take into account the state of the art, the cost of implementation, and the nature, scope, context, and purposes of Processing as well as the varying likelihood and severity for rights and freedoms of natural persons posed by the Processing, (ii) that are designed to protect Personal Information or Confidential Data from unauthorized access by any Person, and (iii) materially comply with all applicable Privacy and Security Requirements.

 

(j) Schedule 4.21(j) sets forth (i) each Contract to which the Company or any of its Subsidiaries is a party relating to the development, registration, ownership, use, exercise of, or enforcement of any Intellectual Property; and (ii) each Contract pursuant to which the Company or any of its Subsidiaries licenses Intellectual Property from or to a third party, other than (A) click-wrap, shrink-wrap and off-the-shelf, commercially available, software licenses and software as a service agreements, having a replacement cost of less than $50,000 and that is not incorporated in, combined with, linked to, or distributed with, or used to host or provide any Owned Software or product or service of the Company or any of its Subsidiaries; and (B) nonexclusive licenses granted by the Company or any of its Subsidiaries to its customers in the ordinary course of business consistent with past practice.

 

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4.22 Environmental Matters. Except as set forth on Schedule 4.22, the Company and its Subsidiaries are in material compliance and, since January 1, 2015, have complied in all material respects with all Environmental Laws, and the Company and its Subsidiaries have not been party to any Action through which an unresolved and uncured material liability has arisen under such Environmental Laws. Except as set forth on Schedule 4.22, the Company and its Subsidiaries have timely obtained, maintain in full force and effect, hold, and are in material compliance with, and, since January 1, 2015, have complied in all material respects with, all Permits required under applicable Environmental Laws to permit the Company and its Subsidiaries to conduct the business of the Company and its Subsidiaries as currently or then conducted, as applicable (collectively, the “Environmental Permits”). Except as set forth on Schedule 4.22, (a) the Company has not received any written claims, notices of violation or Actions pending against the Company or any of its Subsidiaries alleging material violations of or material liability under any Environmental Law or Environmental Permit that are unresolved, and (b) to the knowledge of the Company, there are no Actions threatened against the Company or any of its Subsidiaries alleging any such material violations or any such material liability. Neither the Company nor any of its Subsidiaries has entered into or agreed to, or is subject to, any Governmental Order arising under or issued pursuant to any Environmental Law. Neither the Company nor any of its Subsidiaries has disposed of, arranged for the disposal of, transported, or released, owned or operated any property or facility contaminated by, exposed any Person to, or manufactured, distributed or sold any Hazardous Material generated by the Company or any of its Subsidiaries (including at, on, under or from any Real Property or any real property formerly owned or leased by the Company or any of its Subsidiaries during the time that the Company and its Subsidiaries owned or leased such real property), in each case in a manner that has not been in compliance with applicable Environmental Laws or that has given or, to the knowledge of the Company, would reasonably be expected to give rise to liabilities pursuant to applicable Environmental Laws. The Company and its Subsidiaries have not by contract assumed environmental liabilities of another Person. The Company and its Subsidiaries have made available to Parent all environmental audits, assessments, and reports, including Phase I environmental site assessment reports and Phase II reports, and any pleadings and documents related to any environmental Action or Governmental Order in the Company’s or any of its Subsidiary’s possession or control.

 

4.23 Absence of Changes.

 

(a) Since January 1, 2020, there has not been any Material Adverse Effect.

 

(b) Except as set forth on Schedule 4.23(b) or as expressly contemplated by this Agreement, since January 1, 2020, the Company and its Subsidiaries have (i) conducted their business in the ordinary course of business consistent with past practice in all material respects and (ii) not taken any action which, if it had been taken after the date hereof and prior to the Closing, would have required the consent of Parent under Section 6.1.

 

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(c) Except as set forth on Schedule 4.23(c), as of the date hereof and to the knowledge of the Company, neither the Company nor any of its Subsidiaries has experienced any material business interruptions or material losses arising out of, resulting from or related to COVID-19 or COVID-19 Measures, whether directly or indirectly, including, but not limited to: (i) disruptions to the Company’s or any of its Subsidiaries’ supply chain, (ii) the failure of the Company’s or any of its Subsidiaries’ suppliers to timely manufacture, ship or deliver raw materials and goods, (iii) the failure of the Company’s or any of its Subsidiaries’ agents and service providers to timely perform services, (iv) labor shortages, (v) reductions in customer demand, (vi) any claim of force majeure by the Company or any of its Subsidiaries or any counterparty to any Contract to which the Company or any of its Subsidiaries is a party, (vii) non-fulfillment of customer orders, (viii) restrictions on the Company’s or any of its Subsidiaries’ operations, including reduced hours of operations, layoffs, furloughs or reduced aggregate labor hours, and (ix) restrictions on uses of the Real Property.

 

4.24 Affiliate Matters. Except (a) as set forth on Schedule 4.24, (b) the Company Benefit Plans, (c) Contracts relating to labor and employment matters set forth on Schedule 4.14(a), and (d) contracts between or among only the Company and its wholly-owned Subsidiaries, neither the Company nor any of its Subsidiaries is party to any Contract with (i) any present or former officer or director of the Company or any of its Subsidiaries, (ii) any Affiliate of the Company, (iii) any holder of Company Interests that would be reasonably likely to be entitled to receive three percent (3%) or more of the combined Merger Consideration, or (iv) any Related Party of any of the Persons described in clauses (i), (ii), (iii) or (iv).

 

4.25 Anti-Corruption Laws.

 

(a) Neither the Company nor any of its Subsidiaries, nor any of its or their respective directors, managers, officers or employees, or, to the Company’s knowledge, other agents, in each case, acting for or on behalf of the Company or any of its Subsidiaries, has in violation of applicable Anti-Corruption Laws offered, paid, promised to pay or authorized the payment of anything of value, including cash, checks, wire transfers, tangible and intangible gifts, favors, services and entertainment and travel expenses that go beyond what is reasonable and customary, to (i) an executive, official, employee or agent of a Governmental Authority, (ii) a director, officer, employee, or agent of a wholly or partially government-owned or -controlled company or business, (iii) a political party or official thereof, or candidate for political office, or (iv) an executive, official, employee or agent of a public international organization (e.g., the United Nations, World Bank or International Monetary Fund), in order to obtain or retain business or direct business to the Company or its Subsidiaries or to secure any improper advantage for the Company of its Subsidiaries.

 

(b) The Company and its Subsidiaries, and their respective directors, managers, officers and employees, and to the Company’s knowledge, other agents, in each case acting for or on behalf of the Company or any of its Subsidiaries, are in compliance with Anti-Corruption Laws applicable to the Company and its Subsidiaries. No part of the consideration to be received by the Company or its equityholders in connection with the transactions contemplated by this Agreement is intended to be used for any purpose that would constitute a violation of any applicable Anti-Corruption Law.

 

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(c) Neither the Company nor any of its Subsidiaries has made any contribution or expenditure, whether in the form of money, products, services, facilities or discounts, for any election for political office or to any public official, except to the extent permitted by applicable Law.

 

4.26 International Trade Laws.

 

(a) Since January 1, 2015, none of the Company or any of its Subsidiaries, nor any of its or their respective directors, managers, officers, employees, or agents, in each case, acting for or on behalf of the Company or any of its Subsidiaries, has been: (A) a Sanctioned Person; (B) operating in or organized in any Sanctioned Country; (C) conducting business with, or otherwise engaging in dealings with or for the benefit of any Sanctioned Person or in any Sanctioned Country; or (D) otherwise in violation of any International Trade Laws. No Company Product requires a Permit from any Governmental Authority for sale or export to any jurisdiction or end-user to which a Company Product is currently shipped that is not otherwise targeted by restrictions under International Trade Laws.

 

(b) To the knowledge of the Company neither the Company nor any of its Subsidiaries, nor any of its or their respective directors, managers, officers or employees, or agents, in each case, acting for or on behalf of the Company or any of its Subsidiaries, is or has been, since January 1, 2015, the subject of any investigation, inquiry or enforcement Action by any Governmental Authority regarding any offense or alleged offense under International Trade Laws (including by virtue of having made any disclosure relating to any offense or alleged offense), and to the Company’s knowledge, since January 1, 2015 (i) no such investigation, inquiry or Action has been threatened in writing, or is pending, against the Company or any of its Subsidiaries, and (ii) there are no circumstances likely to give rise to any such investigation, inquiry or Action.

 

(c) The Company and its Subsidiaries are currently and, since January 1, 2015, have been in compliance in all material respects with all International Trade Laws, including those governing the importation of products into the United States. To the knowledge of the Company, there is no Action, including voluntary disclosures, to which the Company or any of its Subsidiaries is, or, since January 1, 2015, has been (or, to the extent the Company or a Subsidiary of the Company, as applicable, has waived the applicable statute of limitations with respect to such Action, the applicable earlier date to which such Action extends) a party related to the importation of merchandise or payment of (or failure to pay) duties or other customs payments.

 

4.27 Key Customers and Key Suppliers.

 

(a) Schedule 4.27(a) sets forth a true, correct and complete list of the ten (10) largest vendors and/or suppliers of raw materials, supplies, merchandise and other goods and services (collectively, “Goods”) to the Company’s and its Subsidiaries’ during the fiscal year ended December 31, 2019 (measured by dollar volume of purchases) (collectively, the “Key Suppliers”) and the dollar amount for which each such Key Supplier invoiced the Company or its Subsidiaries during such period. The Company and its Subsidiaries have not had any material quality control deficiencies with the Goods currently being supplied or on order from any of the Key Suppliers. Since January 1, 2020, no Key Supplier has (i) canceled, terminated, or materially modified, or threatened in writing (including via email) to cancel, terminate or materially modify its Contract, if any, with the Company or any of its Subsidiaries, (ii) refused, or threatened in writing (including via email) to refuse, to supply Goods to the Company or any of its Subsidiaries, or (iii) breached or threatened in writing (including via email) to breach or repudiate its obligations to the Company or any of its Subsidiaries in any material respect.

 

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(b) Schedule 4.27(b) sets forth true, correct and complete lists of the ten (10) largest customers for Company Products during the fiscal year ended December 31, 2019 (measured by dollar volume of purchases) (collectively, the “Key Customers”) and the dollar amount of Company Products that each such Key Customer purchased from the Company and its Subsidiaries (on a consolidated basis) during such period. Since January 1, 2020 and other than purchase orders changed in the ordinary course of business, no Key Customer has (i) canceled, terminated, or materially modified, or threatened in writing (including via email) to cancel, terminate or materially modify its Contract, if any, with the Company or any of its Subsidiaries, (ii) materially reduced, or threatened in writing (including via email) to materially reduce, the purchase of Company Products from the Company or any of its Subsidiaries, (iii) breached or threatened in writing (including via email) to breach or repudiate its obligations to the Company or any of its Subsidiaries in any material respect, or (iv) reported in writing (including via email) any material quality control deficiencies with the Company Products currently being supplied by or on order from the Company or any of its Subsidiaries.

 

4.28 Information Supplied. None of the information supplied by the Company for inclusion in the Proxy Statement will, at the date of mailing of the Proxy Statement (and any amendment or supplement thereto) and at the time of Parent Stockholder Meeting and at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. None of the information supplied by the Company expressly for inclusion in any of the filings made by Parent with the SEC will, at the time filed with the SEC, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, the Company makes no representation, warranty or covenant whatsoever with respect to any information supplied by the Parent Parties which is contained in the Proxy Statement or any filings made by Parent with the SEC.

 

4.29 Food Safety.

 

(a) Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries (taken as a whole), since January 1, 2017, (i) the Company and its Subsidiaries have complied and are in compliance with (A) the applicable provisions of the Federal Food, Drug, and Cosmetic Act and the Food Safety Modernization Act and the applicable regulations and requirements adopted by the U.S. Food and Drug Administration (the “FDA”) thereunder (the Company’s Products are not subject to regulation by the U.S. Department of Agriculture (the “USDA”)), all applicable statutes enforced by the Federal Trade Commission and the applicable Federal Trade Commission regulations and requirements, and all other applicable requirements established by any state, local or foreign Governmental Authority responsible for regulating food products (collectively with the FDA, the “Food Authorities”) and (B) all terms and conditions imposed in any Permits granted to the Company and its Subsidiaries by any Food Authority, (ii) except as set forth on Schedule 4.29(a)(ii), there has not been any actual defect or defect alleged in any lawsuit or demand from a lawyer in any of the Company Products, whether latent or patent, including any failure or alleged failure to provide adequate warnings, labeling or instructions and (iii) except as set forth on Schedule 4.29(a)(iii), there has not been any actual or, to the knowledge of the Company, alleged violation of any Law relating to any of the Company Products, or to their manufacture, shipment, import, labeling, weights and measurements, use or sale by any Food Authority, in any lawsuit or in any demand from a lawyer.

 

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(b) Except as (i) set forth in Schedule 4.29(b) or (ii) as has not been, and would not reasonably be expected to, individually or in the aggregate, be material to the Company and its Subsidiaries (taken as a whole): (A) since January 1, 2017, neither the Company nor any of its Subsidiaries has voluntarily or involuntarily initiated, conducted or issued, or caused to be initiated, conducted or issued, any recall, market withdrawal, stock recovery or replacement relating to any alleged lack of quality, safety or regulatory compliance of any Company Product, and (2) there has been no presence, release or exposure to any food contaminants or adulterants, food poisoning, pests, mold or microbial agents with respect to any Company Product, and there has not been any facility shutdown or other food-related condition with respect to any Company Product or otherwise with respect to the business of the Company or any of its Subsidiaries, in each case, that has given or would give rise to any liability or obligation of the Company or any of its Subsidiaries under Food Safety Laws.

 

4.30 No Additional Representations or Warranties. Except as provided in this Article IV and in the Transaction Agreements, neither Company nor any of its Subsidiaries, nor any of its or their respective directors, officers, employees, stockholders, partners, members or representatives has made, or is making, any representation or warranty whatsoever to the Parent Parties or its Affiliates, directors, officers, employees, stockholders, partners, members or representatives.

 

Article V.
REPRESENTATIONS AND WARRANTIES OF THE PARENT PARTIES

 

The Parent Parties represent and warrant to the Company as of the date of this Agreement and as of the Closing Date as follows:

 

5.1 Organization. Each of the Parent Parties has been duly organized and is validly existing in good standing under the Laws of its jurisdiction of incorporation or organization and has all requisite power and authority to own, lease or operate its properties and to conduct its business as it is now being conducted. The copies of the Organizational Documents, of each Parent Party, in each case, as currently in effect and provided by Parent to the Company are true and complete, and such Parent Party is not in default under or in violation of any provision thereof. Each of the Parent Parties is duly licensed or qualified to do business and (where applicable) is in good standing as a foreign corporation or foreign limited liability company, as applicable, in each jurisdiction in which the ownership, operation or lease of its property or the character of its activities is such as to require it to be so licensed or qualified or in good standing, as applicable, except where the failure to be so licensed or qualified or in good standing would not reasonably be expected to have a Parent Material Adverse Effect. Parent owns, beneficially and of record, all of the outstanding shares of capital stock of (or other Equity Interests in) Merger Sub.

 

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5.2 Due Authorization. Each of the Parent Parties has all requisite power and authority to execute and deliver this Agreement and the Transaction Agreements to which such Parent Party is a party and (subject to the consents, approvals, authorizations and other requirements described in Section 5.10 and the obtaining of the Parent Stockholder Approval) to consummate the transactions contemplated hereby and thereby and to perform all obligations to be performed by such Parent Party hereunder. The execution and delivery of this Agreement and the Transaction Agreements to which it is a party by each Parent Party and the consummation by such Parent Party of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by the board of directors (or equivalent governing body) of such Parent Party, and no other organizational proceeding on the part of such Parent Party is necessary to authorize this Agreement and the Transaction Agreements to which such Parent Party is a party (other than (A) the adoption of this Agreement by Parent in its capacity as the sole stockholder of Merger Sub and (B) the adoption of this Agreement by the Parent Stockholders via the Parent Stockholder Approval). This Agreement has been, and each of the Transaction Agreements to which a Parent Party is a party has been, or will be at or prior to the Closing, duly and validly executed and delivered by each such Parent Party and (assuming this Agreement and each of the Transaction Agreements to which a Parent Party is a party constitutes a valid and binding obligation of the Company and/or the Holder Representative, as applicable) constitutes a valid and binding obligation of each such Parent Party, enforceable against each such Parent Party in accordance with its terms, subject to the Remedies Exception.

 

5.3 No Conflict. The execution and delivery of this Agreement and the Transaction Agreements by the Parent Parties and the consummation by them of the transactions contemplated hereby and thereby do not (a) violate any provision of, or result in the breach of, any applicable Law to which any Parent Party is subject, except as would not be material to the Parent Parties, taken as a whole, (b) conflict with, result in a breach or violation of or constitute a default under the Organizational Documents of any Parent Party, or (c) violate any provision of or result in a breach of, or require a consent under, any agreement, indenture or other instrument to which such Parent Party is a party or by which such Parent Party or its properties or assets may be bound; terminate or result in the termination of, or give rise to any right of revocation, withdrawal, suspension, acceleration, cancellation, modification, imposition of additional obligations or loss of rights or payment becoming due under, any such agreement, indenture or instrument, or result in the creation of any Lien under any such agreement, indenture or instrument upon any of the properties or assets of the such Parent Party, or constitute an event which, with or without notice or lapse of time or both, would result in any such violation, breach, termination or right or creation of a Lien.

 

5.4 Litigation and Actions. Except as would not, if adversely determined, be material to Parent or any its Subsidiaries, there is no (a) Action of any nature pending or, to the knowledge of Parent, threatened against Parent or any of its Subsidiaries, whether at law or in equity or (b) to the knowledge of Parent, material investigation (internal or external) against or relating to Parent or any of its Subsidiaries or any officer or director of Parent or any of its Subsidiaries. There is no material unsatisfied judgment or any material open injunction binding upon Parent or any of its Subsidiaries.

 

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5.5 Capitalization.

 

(a) Capitalization of Parent.

 

(i) The authorized capital stock of Parent consists of (A) 110,000,000 shares of Parent Common Stock consisting of (1) 100,000,000 shares of Class A Common Stock, par value $0.0001 per share (“Parent Class A Common Stock”), and (2) 10,000,000 shares of Class B Common Stock, par value $0.0001 per share (“Parent Class B Common Stock”) and (B) 1,000,000 shares of preferred stock, par value $0.0001 per share (“Parent Preferred Stock”). Subject to the Supplemental Financing, the issued and outstanding shares of Parent’s capital stock consist of (x) 20,650,411 shares of Parent Class A Common Stock, (y) 5,000,000 shares of Parent Class B Common Stock and (z) 0 shares of Parent Preferred Stock. Except for the Supplemental Financing, and those certain agreements set forth on Schedule 5.5(a)(i), no Parent Party is party to, and to the knowledge of Parent, there are no other voting trusts, proxies or other agreements or understandings with respect to the voting of the shares of the capital stock of Parent. At the Effective Time, each share of Parent Class B Common Stock will automatically convert into one share of Parent Class A Common Stock.

 

(ii) All outstanding shares of Parent Common Stock have been duly authorized and validly issued, are fully paid and non-assessable and were issued in compliance with all applicable Laws and are not subject to and were not issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the Organizational Documents of Parent or any Contract to which Parent is a party or otherwise bound. All outstanding warrants of Parent have been duly authorized and validly issued, are fully paid and were issued in compliance with all applicable Laws and are not subject to and were not issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the Organizational Documents of Parent or any Contract to which Parent is a party or otherwise bound.

 

(iii) Other than (A) Parent Class B Common Stock, (B) the warrants of Parent set forth in Schedule 5.5(a)(iii), and (C) the Supplemental Financing, there are no options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which any Parent Party is a party or by which any of them is bound obligating any Parent Party to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of or other Equity Interests in any Parent Party.

 

(iv) Each holder of any of the shares of Parent Common Stock initially issued prior to Parent’s initial public offering (A) is obligated to vote all of such shares of Parent Common Stock in favor of adopting this Agreement and approving the Merger and (B) is not entitled to elect to redeem any of such shares of Parent Common Stock pursuant to Parent’s certificate of incorporation, as amended.

 

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(b) Capitalization of Merger Sub.

 

(i) As of the date hereof, the authorized capital stock of Merger Sub consists of 100 shares of common stock, par value $0.001 per share (the “Merger Sub Common Stock”), of which 10 shares are issued and outstanding.

 

(ii) All outstanding shares of the Merger Sub Common Stock have been duly authorized and validly issued, are fully paid and non-assessable and were issued in compliance with all applicable Laws and are not subject to and were not issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the certificate of incorporation or by-laws of Merger Sub or any Contract to which Merger Sub is a party or otherwise bound.

 

(iii) Other than the Equity Interests set forth in Schedule 5.5(b), there are no Equity Interests of Merger Sub issued and outstanding.

 

5.6 Subsidiaries. Except for Merger Sub, Parent does not own, control or have any rights to acquire, directly or indirectly, any Equity Interest or other investment (whether equity or debt) in any corporation, partnership, joint venture, business or other Person.

 

5.7 Material Contracts. Except as set forth in the Parent SEC Reports and the Supplemental Financing, none of Parent or any of its Subsidiaries is party to any Contract that would be required to be included or incorporated by reference as an exhibit to Parent’s Annual Report on Form 10-K for the year ended December 31, 2019.

 

5.8 Benefit Plans. None of the Parent Parties nor any of their respective Subsidiaries maintains, sponsors or contributes to, or has any actual or contingent obligation or liability under, any Plan (including, without limitation, any multiemployer plan (within the meaning of Section 3(37) of ERISA) or any pension plan subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code), nor does any Parent Party nor any Subsidiary have any obligation or commitment to create or adopt any Plan.

 

5.9 Compliance with Laws. Each of the Parent Parties has at all times since its incorporation or organization, as applicable, been and is in compliance in all material respects with all Laws and orders applicable to it or to its businesses or operations. Parent has not received any written notice or, to the knowledge of Parent, oral notice to the effect that a Governmental Authority has claimed or alleged that a Parent Party was not in compliance in all material respects with all Laws and orders applicable to it or to its business or properties.

 

5.10 Governmental Consents. No consent, approval or authorization of, or designation, declaration or filing with, any Governmental Authority is required on the part of any Parent Party with respect to such Parent Party’s execution or delivery of this Agreement or the consummation by such Parent Party of the transactions contemplated hereby, except for (a) applicable requirements of the HSR Act or any similar foreign competition Law and (b) compliance with any applicable requirements of applicable securities Laws.

 

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5.11 Brokers’ Fees. Except for fees described on Schedule 5.11 (which fees shall be the sole responsibility of Parent), no broker, finder, investment banker or other Person is entitled to any brokerage fee, finders’ fee or other similar commission in connection with the transactions contemplated by this Agreement based upon arrangements made by Parent or any of its Affiliates.

 

5.12 SEC Filings. Parent has, since its formation, timely filed or furnished all statements, prospectuses, registration statements, forms, reports and documents required to be filed by it with the SEC, pursuant to the Exchange Act or the Securities Act and will file all such forms, reports, schedules, statements and other documents required to be filed subsequent to the date of this Agreement (collectively, and together with any exhibits and schedules thereto and other information incorporated therein, and as they have been supplemented, modified or amended since the time of filing, the “Parent SEC Reports”). Each of the Parent SEC Reports, as of the respective date of its filing or, if amended, as of the date of the most recent amendment, complied in all material respects with the applicable requirements of the Securities Act, the Exchange Act and any rules and regulations promulgated thereunder applicable to the Parent SEC Reports. Except to the extent available on the SEC’s web site through EDGAR, Parent has delivered to the Company copies in the form filed with the SEC of all Parent SEC reports. As of the respective date of its filing or most recent amendment, no Parent SEC Report contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. As of the date hereof, there are no outstanding or unresolved comments in comment letters received from the SEC with respect to Parent SEC Reports. Except for information supplied by or on behalf of the Company (as to which Parent makes no representation), none of the information supplied by the Parent Parties for inclusion in the Proxy Statement will, in the case of the definitive proxy statement/prospectus included therein (and any amendment or supplement thereto), at the date of mailing of the Proxy Statement (and any amendment or supplement thereto) and at the time of Parent Stockholder Meeting and at the Effective Time, 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.

 

5.13 Listing; Financial Statements.

 

(a) Parent has complied in all material respects with the applicable listing and corporate governance rules and regulations of NASDAQ. As of the date hereof, the issued and outstanding shares of Parent Common Stock are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on NASDAQ. There is no legal proceeding pending or, to the knowledge of Parent threatened, in each case, by NASDAQ or the SEC with respect to any intention by such entity to deregister Parent Common Stock or prohibit or terminate the listing of Parent Common Stock on NASDAQ. Parent has not taken any action that is designed to terminate the registration of Parent Common Stock under the Exchange Act.

 

(b) The Parent SEC Reports contain true and complete copies of the (i) audited balance sheet as of December 31, 2019, and the related statements of operations, cash flows and changes in shareholders’ equity of Parent for the year ended December 31, 2019, of Parent, together with the auditor’s reports thereon, and (ii) unaudited balance sheet as of March 31, 2020, and the related statements of operations, cash flows and changes in shareholders’ equity of Parent for the three (3) month period ended March 31, 2020, of Parent ((i) and (ii) together, the “Parent Financial Statements”). Except as disclosed in the Parent SEC Reports, the Parent Financial Statements (i) fairly present in all material respects the consolidated financial position of Parent, as at the respective dates thereof, and its results of operations and cash flows for the respective periods then ended; (ii) were prepared in conformity with GAAP applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto); and (iii) 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.

 

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5.14 Trust Account.

 

(a) As of the date hereof, Parent has no less than $207,000,000.00 in the account established by Parent for the benefit of its stockholders (the “Trust Account”) at Continental Stock Transfer & Trust Company (the “Trustee”), such monies being invested in United States Government securities or money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, and held in trust pursuant to that certain Investment Management Trust Agreement, dated as of August 2, 2018, between Parent and Continental Stock Transfer & Trust Company (the “Trust Agreement”).

 

(b) The Trust Agreement has not been amended or modified, is valid and in full force and effect and is enforceable in accordance with its terms, except as limited by the Remedies Exception. The description of the Trust Agreement in Parent SEC Reports is accurate in all material respects, and prior to the Closing, no Person (other than stockholders of Parent holding Parent Class A Common Stock sold in Parent’s initial public offering who shall have elected to redeem their shares of Parent Class A Common Stock pursuant to Parent’s certificate of incorporation) is entitled to any portion of the proceeds in the Trust Account except that funds held in the Trust Account may be released (A) to pay income and franchise taxes from any interest income earned in the Trust Account and (B) to redeem Parent Class A Common Stock in accordance with the provisions of Parent’s certificate of incorporation. There are no Actions pending or, to the knowledge of Parent, threatened with respect to the Trust Account.

 

5.15 Parent Vote Required. At the meeting of Parent’s stockholders to be held to approve this Agreement (the “Parent Stockholders Meeting”), the affirmative vote of holders of a majority of (a) the issued and outstanding shares of Parent Common Stock is required to approve this Agreement and the transactions contemplated hereby and (b) the shares of Parent Common Stock that are voted at the Parent Stockholders Meeting required to approve the issuance of Parent Common Stock pursuant to this Agreement for purposes of applicable NASDAQ rules (collectively, the “Parent Stockholder Approval”). Other than the Parent Stockholder Approval, there are no other votes of the holders of Parent Common Stock or of any other class or series of the capital stock of Parent necessary with respect to the transactions contemplated hereby or any related matters.

 

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5.16 Internal Controls; Financial Statements.

 

(a) Parent has established and maintains disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 and paragraph (e) of Rule 15d-15 under the Exchange Act) as required by Rules 13a-15 and 15d-15 under the Exchange Act. Parent’s disclosure controls and procedures are designed to ensure that all information (both financial and non-financial) required to be disclosed by Parent in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such information is accumulated and communicated to Parent’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. Parent’s management has completed an assessment of the effectiveness of Parent’s disclosure controls and procedures and, to the extent required by applicable Law, presented in any applicable Parent SEC Report, or any amendment thereto, its conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by such report or amendment based on such evaluation. Based on Parent’s management’s most recently completed evaluation of Parent’s internal control over financial reporting, (i) Parent had no significant deficiencies or material weaknesses in the design or operation of its internal control over financial reporting that would reasonably be expected to adversely affect Parent’s ability to record, process, summarize and report financial information and (ii) Parent does not have knowledge of any fraud, whether or not material, that involves management or other employees who have a significant role in Parent’s internal control over financial reporting.

 

(b) Except as set forth on Schedule 5.16(b), as of the date hereof, there is no liability, debt or obligation (whether accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due, whether known or unknown, and regardless of when asserted) of Parent or any of its Subsidiaries, except for liabilities and obligations (i) reflected or reserved for on the Parent Financial Statements or disclosed in the notes thereto, (ii) expenses and other liabilities that have arisen since March 31, 2020 in the ordinary course of business of Parent or any of its Subsidiaries (none of which relate to any COVID-19 Measures, a breach of Contract, breach of warranty, tort, infringement, violation of Law, Order or Action), (iii) incurred in connection with the transactions contemplated by this Agreement, (iv) related to or arising from the Supplemental Financing or (v) that would not reasonably be expected to be material to Parent and its Subsidiaries, taken as a whole.

 

(c) 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 Jumpstart our Business Startups Act of 2012 (“JOBS Act”), Parent has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information relating to Parent, including its consolidated Subsidiaries, is made known to Parent’s principal executive officer and its principal financial officer by others within those entities and since July 6, 2018, Parent and its Subsidiaries have established and maintained a system of internal controls over financial reporting (as defined in Rule 13a-15 under the Exchange Act) sufficient to provide reasonable assurance regarding the reliability of Parent’s financial reporting and the preparation of the Parent Financial Statements for external purposes in accordance with GAAP.

 

(d) To Parent’s knowledge, each director and executive officer of Parent has filed with the SEC on a timely basis all statements required by Section 16(a) of the Exchange Act and the rules and regulations promulgated thereunder. Parent has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.

 

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5.17 Investment Company Act; JOBS Act. Parent is not an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company”, in each case within the meaning of the Investment Company Act. Parent constitutes an “emerging growth company” within the meaning of the JOBS Act.

 

5.18 Certain Business Practices.

 

(a) Neither Parent, nor any of its Representatives acting on its behalf, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political parties or campaigns or violated any provision of any Anti-Corruption Law, (iii) made any other unlawful payment or (iv) since the formation of Parent, directly or indirectly, given or agreed to give any gift or similar benefit in any material amount to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder Parent or assist it in connection with any actual or proposed transaction.

 

(b) The operations of Parent are and have been conducted at all times in compliance with laundering statutes in all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority, and no Action involving Parent with respect to the any of the foregoing is pending or, to the knowledge of Parent, threatened.

 

(c) None of Parent or any of its directors or officers, or, to the knowledge of Parent, any other Representative acting on behalf of Parent is currently identified on the specially designated nationals or other blocked person list or otherwise currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”), and Parent has not, directly or indirectly, used any funds, or loaned, contributed or otherwise made available such funds to any Subsidiary, joint venture partner or other Person, in connection with any sales or operations in any country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to, or otherwise in violation of, any U.S. sanctions administered by OFAC in the last five (5) fiscal years.

 

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5.19 Independent Investigation. Parent and its Representative have conducted their own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company and its Subsidiaries, and Parent acknowledges that it and they have been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Company and its Subsidiaries for such purpose. Parent acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, it has relied solely upon its own investigation, the express representations and warranties of the Company set forth in Article IV (including the related portions of the Company Disclosure Schedules) and the information provided on behalf of the Company for the Proxy Statement; and (b) none of the Company, its Subsidiaries nor their respective Representatives have made any express or implied representation or warranty as to the Company and its Subsidiaries, or this Agreement, except as expressly set forth in Article IV (including the related portions of the Company Disclosure Schedules). Without limiting the foregoing, in connection with the due diligence investigation of the Company and its Subsidiaries by Parent and its Representatives, Parent and its Representatives have received and may continue to receive after the date hereof from the Company and its Representatives certain estimates, projections, forecasts and other forward-looking information, as well as certain business plan information regarding the Company and its Subsidiaries and their businesses and operations (collectively, the “Forward-Looking Statements”). Parent hereby acknowledges that there are uncertainties inherent in attempting to make such Forward-Looking Statements, and that, except for the representations and warranties expressly set forth in Article IV, Parent will have no claim against the Company, its Subsidiaries, any of their respective Representatives, or any other Person, with respect thereto, including as to the accuracy or completeness of any information provided. Accordingly, for the avoidance of doubt, and without in any way limiting the provisions of this Section 5.19, Parent hereby acknowledges and agrees that, except for the representations and warranties expressly set forth in Article IV of this Agreement, none of the Company, its Subsidiaries or any of their respective Representatives has made or is making any express or implied representation or warranty with respect to such Forward-Looking Statements. Notwithstanding anything in this Section 5.19, nothing in this Agreement (including this Section 5.19) shall limit (i) the obligation of the Company, its Subsidiaries and their respective Representatives to ensure the accuracy of all information that is not a Forward-Looking Statement and which is provided by or on behalf of the Company for inclusion in the Proxy Statement, (ii) the liability of the Company, its Subsidiaries and their respective Representatives for the inaccuracy of any Forward-Looking Statement provided by or on behalf of the Company for inclusion in the Proxy Statement if such Forward-Looking Statement was made or approved by a Person with actual knowledge that the statement was false or misleading, or (iii) the ability and right of the Parent to rely upon the express representations and warranties set forth in Article IV.

 

5.20 No Additional Representations or Warranties. Except as provided in this Article V and in the Transaction Agreements, neither Parent nor any of its Affiliates, nor any of its or their respective directors, officers, employees, stockholders, partners, members or representatives has made, or is making, any representation or warranty whatsoever to the Company or its Affiliates, directors, officers, employees, stockholders, partners, members or representatives.

 

Article VI.
COVENANTS

 

6.1 Interim Operations of the Company. The Company agrees that, during the period from the date of this Agreement to the earlier of (x) the termination of this Agreement in accordance with Section 8.1, and (y) the Effective Time, except as (1) set forth on Schedule 6.1 or (2) otherwise consented to by Parent in writing (which consent shall not be unreasonably withheld, conditioned or delayed):

 

(a) the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice in all material respects and, to the extent consistent with the foregoing, use its commercially reasonable efforts to (i) preserve intact its present business organization and (ii) keep available the services of its officers and employees and (iii) maintain existing relationships with its Key Customers and Key Suppliers; and

 

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(b) except as is expressly contemplated in the Restructuring and set forth on Schedule 6.1, the Company shall not, and shall cause each of its Subsidiaries not to, effect any of the following:

 

(i) make any change in, amendment to or waiver of any provision in its Organizational Documents;

 

(ii) issue, sell, pledge, grant any proxy or power-of-attorney with respect to, or otherwise transfer, or authorize the issuance, sale, pledge, grant of proxy or power-of-attorney or other transfer with respect to, any Company Interests or any other Equity Interests of the Company or any of its Subsidiaries, or enter into any Contract providing for any of the foregoing;

 

(iii) split, combine, redeem or reclassify, or purchase or otherwise acquire, any Equity Interests;

 

(iv) other than sales of inventory or obsolete assets in the ordinary course of business, sell, lease, license, permit to lapse, abandon or otherwise dispose of any of its properties or assets that are material to its business, including any Owned Intellectual Property;

 

(v) disclose any material trade secret or other material confidential information included in the Owned Intellectual Property other than pursuant to Contracts with confidentiality obligations in favor of the Company or its Subsidiaries;

 

(vi) other than in the ordinary course of business consistent with past practice, (A) amend in any adverse respect any Company Material Contract, Lease or Company Lease, (B) terminate, fail to renew or extend any Company Material Contract, Lease or Company Lease, (C) waive, forfeit or relinquish any material rights under any Company Material Contract, Lease or Company Lease or (D) enter into a Contract which, had it been entered into prior to the date hereof, would have been a Company Material Contract, Lease or Company Lease;

 

(vii) (A) incur any Indebtedness in excess of $2,000,000, other than short-term Indebtedness, letters of credit or capital leases, incurred in the ordinary course of business consistent with past practice and refinancing of existing Indebtedness in an amount not to exceed the aggregate outstanding amount of the Indebtedness being refinanced and on terms no less favorable to the Company and its Subsidiaries than the Indebtedness being refinanced, or (B) make any loans or advances to any other Person, other than loans and advances to employees in the ordinary course of business consistent with past practice;

 

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(viii) (A) grant or agree to grant to any employee or other independent contractor of the Company or any its Subsidiaries, who has annual compensation in excess of $100,000, any increase in wages or bonus, severance, profit sharing, retirement, insurance or other compensation or benefits, (B) except as set forth on Schedule 6.1, grant or agree to grant to any employees or other independent contractors of the Company or any its Subsidiaries any increase in wages or bonus, severance, profit sharing, retirement, insurance or other compensation or benefits if such increase, together with all other such increases occurring from and after the date of this Agreement, would result in compensation increases in excess of $1,000,000 in the aggregate, (C) adopt or establish any new Plan, or amend, modify or terminate, or agree to amend, modify or terminate any existing Company Benefit Plans, (D) accelerate the time of payment, vesting or funding of any compensation or benefits under any Company Benefit Plan (including any Plan that would be a Company Benefit Plan if it was in effect on the date hereof), (E) make or agree to make any bonus or incentive payments to any individual outside of the ordinary course of business, (F) enter into employment, consulting or other compensation agreement (x) for which the annual compensation to be paid is greater than $100,000 or (y) which is not terminable upon notice and without liability to the Company or any of its Subsidiaries, except, with respect to new employment, consulting or other compensation agreements, (1) as may be required under applicable Law, (2) as required pursuant to the Company Benefit Plans set forth on Schedule 4.13, or (3) for payment of any accrued or earned but unpaid compensation, or (G) make any change to the key management structure of the Company or any of its Subsidiaries, including the hiring and firing of additional executive officers or termination of existing executive officers (other than for “cause”);

 

(ix) (A) make, change or rescind any Tax election, (B) settle or compromise any claim, notice, audit report or assessment in respect of any Taxes other than in the ordinary course of business, (C) change any Tax period, (D) file any amended Tax Return or claim for a Tax refund, (E) surrender any right to claim a refund of any Taxes, (F) enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement, pre-filing agreement, advance pricing agreement, cost sharing agreement, or closing agreement related to any Tax, in each case, other than agreements that do not relate primarily to Taxes, (G) request any Tax ruling from a competent authority, or (H) enter into any agreement to extend or waive the applicable statute of limitations with respect to any Taxes;

 

(x) cancel or forgive any Indebtedness in excess of $200,000 owed to the Company or any its Subsidiaries, other than Indebtedness of the Company to any Subsidiary of the Company or Indebtedness of any Subsidiary of the Company to the Company or to another Subsidiary of the Company that does not result in a post-Closing Tax or other liability;

 

(xi) except as may be required by GAAP and after consulting with the Company’s outside accountants, make any material change in the financial or tax accounting methods, principles or practices of the Company (or change an annual accounting period);

 

(xii) (i) enter into any collective bargaining agreement, works council agreement or any other labor-related Contract with any labor union, labor organization or works council, or (ii) recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative for any employees of the Company or any of its Subsidiaries;

 

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(xiii) implement any employee layoffs that would, independently or in connection with any layoffs occurring prior to the date hereof, implicate the WARN Act;

 

(xiv) grant or otherwise create or consent to the creation of any Lien (other than a Permitted Lien) on any of its material assets or Leased Real Properties, other than in the ordinary course of business;

 

(xv) declare, set aside or pay any dividend or make any other distribution other than the payment of cash dividends or cash distributions from excess cash balances not needed for the operation of the business in the ordinary course of business;

 

(xvi) make any change to any of the cash management practices of the Company or any of its Subsidiaries, including deviating from or altering any of its practices, policies or procedures in paying accounts payable or collecting accounts receivable;

 

(xvii) waive, release, assign, settle or compromise any material rights, claims, suits, actions, audits, reviews, hearings, proceedings, investigations or other Actions (whether civil, criminal, administrative or investigative) against the Company or any of its Subsidiaries other than waivers, releases, assignments, settlements or compromises (except any of the foregoing where the counterparty is an Affiliate of the Company) that do not exceed $500,000, individually or in the aggregate;

 

(xviii) make or incur any capital expenditures greater than $1,000,000 in the aggregate above the planned expenditures as disclosed on Schedule 6.1(a)(xviii);

 

(xix) buy, purchase or otherwise acquire (by merger, consolidation or acquisition of stock or assets) any equity or debt securities of any Person;

 

(xx) enter into any new material line of business, other than any natural expansions and/or extensions of any line of business of the Company or its Subsidiaries as of the date of this Agreement);

 

(xxi) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;

 

(xxii) fail to use its commercially reasonable efforts to maintain existing insurance policies or comparable replacement policies consistent with levels maintained by the Company and each of its Subsidiaries on the date of this Agreement;

 

(xxiii) fail to use its commercially reasonable efforts to maintain existing Permits in the ordinary course of business consistent with past practice;

 

(xxiv) take any action or cause or permit any action to be taken, the effect of which would reasonably be expected to prevent, impair or delay the transactions contemplated by this Agreement;

 

(xxv) enter into any transaction that would be required to be set forth on Schedule 4.24;

 

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(xxvi) (A) delay or postpone any payment of any accounts payable or other payables or expenses (other than in the ordinary course of business consistent with past practice), (B) accelerate the collection of accounts receivable or cash contributions of any type (other than in the ordinary course of business consistent with past practice) or (C) ship products ahead of normally maintained schedules or shipping dates or otherwise accelerate sales or sell products in quantities that are outside of the ordinary course of business, or (D) engage in any practice that could reasonably be considered “channel stuffing” or “trade loading”; or

 

(xxvii) authorize, or commit or agree to take, any of the foregoing actions in respect of which it is restricted by the provisions of this Section 6.1.

 

6.2 Interim Operations of the Parent Parties. Each Parent Party agrees that, during the period from the date of this Agreement to the earlier of (x) termination of this Agreement in accordance with Section 8.1, and (y) the Closing, except as set forth on Schedule 6.2, permitted by Section 6.3 or otherwise consented to by the Company (which consent shall not be unreasonably withheld, conditioned or delayed), that such Parent Party shall not effect any of the following:

 

(a) make any change in or amendment to its Organizational Documents;

 

(b) other than in connection with any Supplemental Financing, issue or sell, or authorize to issue or sell, any membership interests, shares of its capital stock or any other Equity Interests or Derivative Rights (other than in connection with any Derivative Rights outstanding as of the date of this Agreement);

 

(c) split, combine, redeem or reclassify, or purchase or otherwise acquire, any Equity Interests;

 

(d) authorize, declare, set aside or pay any dividends or make any distribution with respect to its outstanding shares of capital stock or other Equity Interests (whether in cash, assets, stock or other securities of such Parent Party) or otherwise make any payments to any equityholder of such Parent Party in their capacity as such (other than in accordance with the Common Stockholder Redemption);

 

(e) sell, lease or otherwise dispose of any of its properties or assets;

 

(f) incur, assume or become liable for (whether directly, contingently or otherwise) any Indebtedness in excess of $500,000 in the aggregate, or grant any Lien upon any material asset or property;

 

(g) make, change or rescind any material Tax election or settle or compromise any material Tax liability;

 

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(h) except as may be required by GAAP, make any material change in the financial or tax accounting methods, principles or practices of such Parent Party (including a change of an annual accounting period);

 

(i) with respect to Parent, fail to be listed as a public company on NASDAQ or NYSE or fail to timely file all Parent SEC Reports required to be filed pursuant to the Exchange Act;

 

(j) make any amendment or modification to the Trust Agreement;

 

(k) make or allow to be made any reduction in the Trust Amount, other than as expressly permitted by its Organizational Documents;

 

(l) initiate, settle any Action before or threatened to be brought before a Governmental Authority, other than settlements (i) if the amount of any such settlement is not in excess of $100,000 individually or $200,000 in the aggregate; provided, that such settlements do not involve any admission of guilt or wrongdoing, any criminal allegations, the Transaction, or impose any restrictions that are or will be applicable to the business activities of the Company and its Subsidiaries or Parent and its Subsidiaries or (ii) for amounts not in excess of Parent’s available insurance coverage as of the date hereof;

 

(m) make any material loan, advance, or any capital contribution or investment in any Person, or form any Subsidiary;

 

(n) form any joint venture, partnership or strategic alliance with any Person, or enter into any Contract or other arrangement with any Person that engages in activities that are competitive with any line of business of the Company and its Subsidiaries;

 

(o) purchase or otherwise acquire (whether by merger or otherwise), or lease or license, any material properties or assets (excluding cash interest earned on amounts in the Trust Account);

 

(p) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization or announce an intention to do so;

 

(q) adopt or enter into any Plan;

 

(r) other than in the ordinary course of business, increase the compensation of any Person who is a current or former director or executive officer, in respect of arrangements that will survive the Closing;

 

(s) make any capital expenditures; or

 

(t) authorize any of, or commit or agree or publicly announce an intention to take any of, the foregoing actions in respect of which it is restricted by the provisions of this Section 6.2.

 

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6.3 Supplemental Financing.

 

(a) Notwithstanding Section 6.2, the Parties intend that Parent will have the right to issue additional debt or equity in connection with the Closing as contemplated by and subject to the limitations set forth in this Section 6.3; provided, that solely with respect to Supplemental Financing in the form of Parent issuing Indebtedness, such Supplemental Financings shall require the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed. In the event that, as a result of good faith estimates or projections with respect to the magnitude of the Common Stockholder Redemption (and its impact on cash available to Parent at the Closing), Parent reasonably believes that it will require additional cash in order to consummate the Closing on the terms contemplated hereby and to maintain the solvency of Parent and its Subsidiaries immediately after the Closing, Parent may issue additional shares of Parent Common Stock, (i) pursuant to any Supplemental Financing, (ii) in connection with the exercise of any existing right to purchase Parent Common Stock, (iii) to the payees of Parent Transaction Expenses in lieu of all or any portion of the cash payments due to such payees at Closing, and (iv) as may otherwise be agreed between the Company and Parent. At and prior to the Effective Time, Parent may only issue additional shares of Parent Common Stock in connection with the Merger as contemplated herein. Prior to any issuance of additional shares of Parent Common Stock, Parent shall consult with Company on the potential investor and other relevant investment terms. In addition, Parent shall be entitled to borrow money from the Sponsor or one or more stockholders of the Sponsor (any such borrowing, a “Working Capital Loan”) without such Working Capital Loan constituting a breach of any representation or warranty or any covenant or agreement in this Agreement if (and only if) the Working Capital Loan satisfies the following conditions: (i) such Working Capital Loan is repaid in cash at or prior to the Effective Time, (ii) the proceeds from the Working Capital Loans are utilized for purposes reasonably related to the furtherance of the Transaction or for vindicating the rights or defenses of Parent arising under or related to this Agreement and any Transaction Agreement, and (iii) other than in connection with the repayment of the Working Capital Loans or for the payment of directors fees in place as of the date of this Agreement, the proceeds of the Working Capital Loans are not utilized to make payments to the Sponsor or one or more stockholders of the Sponsor or any of their respective controlled Affiliates.

 

(b) Subject to Section 5.5(a), from the date hereof and ending at the termination of this Agreement pursuant to Section 8.1, the Company shall, and shall cause its Subsidiaries to, use its commercially reasonable efforts to cooperate and cause the respective officers, employees and advisors, including legal and accounting, of the Company and its Subsidiaries to provide to the Parent Parties, such reasonable and customary cooperation in connection with the arrangement of each Supplemental Financing as may be reasonably requested by the Parent Parties. The Parent Parties agree to keep the Company reasonably apprised of material developments relating to the Supplemental Financings and to reasonably consult with the Company with respect thereto. For the avoidance of doubt, none of the Pre-Closing Holders or the Company shall have any consent rights with respect to any Supplemental Financing, including the (i) identity of any Person participating as a lender, investor or otherwise in any Supplemental Financing or (ii) the terms and conditions thereof.

 

(c) The Parties acknowledge that, as required by the Company, in the Sponsor Earnout Letter, Sponsor has waived, on behalf of itself and its members and Affiliates, effective upon and conditioned upon the Closing, any rights that it has to conversion adjustments under Section 4.3(b)(ii) of Parent’s Certificate of Incorporation and any other preemptive or participation rights that Sponsor and/or its members or Affiliates may have with respect to Sponsor’s Organizational Documents.

 

6.4 Trust Account. Upon satisfaction or waiver of the conditions set forth in Article VIII 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), (a) in accordance with and pursuant to the Trust Agreement, at the Closing, Parent (i) shall cause the documents, opinions and notices required to be delivered to the Trustee pursuant to the Trust Agreement to be so delivered, and (ii) shall use commercially reasonable efforts to cause the Trustee to (A) pay as and when due all amounts payable to stockholders of Parent holding shares of the Parent Common Stock sold in Parent’s initial public offering who shall have previously validly elected to redeem their shares of Parent Common Stock pursuant to Parent’s Organizational Documents, (B) pay as and when due the Deferred Discount (as defined in the Trust Agreement) to the underwriters of Parent’s initial public offering pursuant to the Trust Agreement, and (C) immediately following the Effective Time, pay all remaining amounts then available in the Trust Account to Parent for immediate use, subject to this Agreement and the Trust Agreement, and (b) thereafter, the Trust Account shall terminate, except as otherwise provided therein.

 

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6.5 Commercially Reasonable Efforts; Consents.

 

(a) Each of the Parties shall cooperate, and use their respective commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws to consummate the transactions contemplated by this Agreement as and when required in accordance with Section 3.1, including obtaining all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Authorities, or other Persons that are reasonable or necessary in connection with the Transaction.

 

(b) Without limiting the generality of the foregoing, each Party will promptly after execution of this Agreement (but in no event later than ten (10) Business Days after the date hereof) make all filings or submissions as are required under the HSR Act. Each Party will promptly furnish to the other such necessary information and reasonable assistance as the other may request in connection with its preparation of any filing or submission that is necessary under the HSR Act and will take all other actions necessary to cause the expiration or termination of the applicable waiting periods as soon as practicable. Each Party will promptly provide the other with copies of all substantive written communications (and a written summary setting forth the substance of all material oral communications) between each of them, any of their Affiliates or any of its or their Representatives, on the one hand, and any Governmental Authority, on the other hand, with respect to this Agreement or the transactions contemplated hereby. Without limiting the generality of the foregoing, and subject to applicable Law, the Company, each of its Subsidiaries and the Parent Parties will: (i) promptly notify other Parties of any written communication made to or received by them, as the case may be, from any Governmental Authority regarding any of the transactions contemplated hereby; (ii) permit each other to review in advance any proposed written communication to any such Governmental Authority and consider in good faith reasonable comments thereto; (iii) not agree to participate in any substantive meeting or discussion with any such Governmental Authority in respect of any filing, investigation or inquiry concerning this Agreement or the transactions contemplated hereby unless, to the extent reasonably practicable, it consults with the other Party in advance and, to the extent permitted by such Governmental Authority, gives the other Party the opportunity to attend; (iv) furnish each other with copies of all correspondence, filings (except for Item 4(c) and 4(d) documents included with filings made under the HSR Act) and written communications between such Party and their Affiliates and their respective agents, on one hand, and any such Governmental Authority, on the other hand, in each case, with respect to this Agreement and the transactions contemplated hereby; and (v) promptly respond to any formal or informal request for supplemental information or documentary material from any Governmental Authority with respect to the transactions contemplated hereby.

 

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(c) No Party shall take any action that could reasonably be expected to adversely affect or materially delay the approval of any Governmental Authority of any of the aforementioned filings. The Parties further covenant and agree, with respect to a threatened or pending preliminary or permanent injunction or other order, decree or ruling or statute, rule, regulation or executive order that would adversely affect the ability of the Parties to consummate the transactions contemplated hereby, to use commercially reasonable efforts to prevent or lift the entry, enactment or promulgation thereof, as the case may be.

 

(d) Prior to the Closing, the Company will cooperate in good faith with the Parent Parties in identifying key employees of the Company and, to the extent reasonably appropriate and mutually agreed by the Company and Parent under the circumstances, use commercially reasonable efforts to negotiate new employment agreements with such employees.

 

(e) Subject to the following sentence, each Party shall notify the other Parties of the defense, settlement or prosecution of any proceeding commenced following the date hereof related to this Agreement or the Transaction, and shall keep the other Parties apprised of any developments with respect to such defense, settlement or prosecution, on a reasonably frequent basis and at such Party’s sole cost and expense. Further, the Company shall promptly advise Parent in writing of any Action brought by any holder of Company Interests against the Company or its directors or officers relating to this Agreement, the Transactions, the issuance of such Company Interests in connection with any Organizational Documents of the Company (or similar agreement) or otherwise (such Action, a “Shareholder Action”) and shall keep Parent reasonably informed regarding any such litigation. The Company shall give Parent the opportunity to participate in, subject to a customary joint defense agreement, but not control the defense of any such litigation, to give due consideration to Parent’s advice with respect to such litigation and to not settle any such litigation without the prior written consent of Parent, such consent not to be unreasonably withheld, delayed or conditioned; provided, that, the Company shall bear all of its costs of investigation and all of its defense and attorneys’ and other professionals’ fees related to such Shareholder Action. Parent shall promptly advise the Company and the Holder Representative in writing of any Action brought by any stockholder of Parent against Parent or its directors or officers relating to this Agreement or the transactions contemplated by this Agreement and shall keep the Company and the Holder Representative reasonably informed regarding any such litigation. Parent shall give the Company, prior to the Closing, and the Holder Representative after the Closing, the opportunity to participate in, subject to a customary joint defense agreement, but not control the defense of any such litigation, shall give due consideration to the Company’s or the Holder Representative’s (as the case may be) advice with respect to such litigation and shall not settle any such litigation without the prior written consent of the Company, or after the Closing, the Holder Representative, such consent not to be unreasonably withheld, delayed or conditioned. Promptly following delivery of notice by Parent to the Company, the Company shall deliver to Parent (by wire transfer of immediately available funds) the amount of any settlement costs necessary to settle any such Action; provided, that such settlement or series of settlements satisfy the conditions set forth on Schedule 6.5. Any amounts delivered to Parent pursuant to this Section 6.5(e) in respect of any such settlement costs owing by Parent (as opposed to any settlement costs owing by the Company or any of its Subsidiaries) shall increase the Company’s Cash on a dollar-for-dollar basis for purposes of determining the Aggregate Consideration Value pursuant to Section 3.2.

 

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6.6 Public Announcements. None of the Parties shall, and each Party shall cause its Subsidiaries not to, make or issue any public announcement or press release to the general public with respect to this Agreement or the transactions contemplated by this Agreement without the prior written consent of the other Parties, which consent shall not be unreasonably withheld, conditioned or delayed; provided, that no such consent or prior notice shall be required in connection with any public announcement or press release the content of which is consistent with that of any prior or contemporaneous public announcement or press release by any Party in compliance with this Section 6.6. Nothing in this Section 6.6 shall limit any Party from making any announcements, statements or acknowledgments that such Party is required by applicable Law or the requirements of any national securities exchange to make, issue or release (including in connection with the exercise of the fiduciary duties of the board of directors of Parent); provided, that, to the extent practicable, the Party making such announcement, statement or acknowledgment shall provide such announcement, statement or acknowledgment to the other Parties with reasonable time to comment prior to release and consider in good faith any comments from such other Parties; provided, further, that Company and Parent each may issue a joint press release in the form attached as Exhibit K.

 

6.7 Supplemental Disclosure.

 

(a) From the date hereof through the Closing Date, the Company shall disclose to Parent any event, fact or circumstance that would reasonably be expected to cause the failure of any condition set forth in Section 7.1, Section 7.2 or Section 7.3 to be satisfied.

 

(b) From the date hereof through the Closing Date, Parent shall disclose to the Company any event, fact or circumstance that would reasonably be expected to cause the failure of any condition set forth in Section 7.1, Section 7.2 or Section 7.3 to be satisfied.

 

6.8 Access to Information. From the date hereof until the Closing, upon reasonable advance notice, the Company shall, and shall cause each of its Subsidiaries to, provide to the Parent Parties and their representatives during normal business hours reasonable access to all employees, facilities, books and records of the Company and its Subsidiaries reasonably requested; provided, that (a) such access shall occur in such a manner as the Company reasonably determines to be appropriate to protect the confidentiality of the transactions contemplated by this Agreement, (b) nothing herein shall require the Company to provide access to, or to disclose any information to, the Parent Parties or any of their representatives if such access or disclosure, in the good faith reasonable belief of the Company, (i) would cause significant competitive harm to the Company or any of its Subsidiaries if the transactions contemplated by this Agreement are not consummated, (ii) would waive any legal privilege, or (iii) would be in violation of applicable Laws (including federal antitrust Law and any other applicable Laws). All of such information provided to the Parent Parties shall be treated as confidential information pursuant to the terms of the Confidentiality Agreement, the provisions and restrictions of which are by this reference hereby incorporated herein; provided that nothing therein shall prohibit or limit the Parent Parties from disclosing any such information to any Person that is considering entering into a Supplemental Financing (in each case, provided that such Person is subject to customary confidentiality obligations with respect to such information) after giving prior written notice of such disclosure to the Holder Representative.

 

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6.9 Tax Matters.

 

(a) Tax Returns. Holder Representative, at its own cost, shall (A) prepare and timely file all Tax Returns of the Company and each of its Subsidiaries due (after taking into account all appropriate extensions) on or prior to the Effective Time and all Tax Returns of the Company and its Subsidiaries reflected on an IRS Form 1120-S or 1065 with respect to Pre-Closing Tax Periods due after the Effective Time (“Seller Prepared Returns”) and (B) timely pay all Taxes that are shown as payable with respect to Seller Prepared Returns. All Seller Prepared Returns shall be prepared in accordance with existing procedures, practices, and accounting methods of the Company and its Subsidiaries.

 

(b) Review of Tax Returns. Holder Representative shall provide Parent with a copy of each Seller Prepared Return prepared in accordance with Section 6.9(a) above for review and comment not later than thirty (30) days prior to its due date (including extensions). Parent shall review and comment on such Tax Returns within twenty (20) days of receipt thereof. Holder Representative shall incorporate any reasonable comments delivered by Parent with respect to any Seller Prepared Returns.

 

(c) Certain Taxes. All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement shall be treated as Company Transaction Expenses.

 

(d) Cooperation. Parent, the Company, and the Holder Representative shall use commercially reasonable efforts to (i) assist in the preparation and timely filing of any Tax Return of the Company or any Subsidiary of the Company; (ii) assist in any audit or other legal Proceeding with respect to Taxes or Tax Returns of the Company or any Subsidiary of the Company; (iii) make available any information, records, or other documents relating to any Taxes or Tax Returns of the Company or any Subsidiary of the Company; (iv) provide any information necessary or reasonably requested to allow Parent, the Company, or any Subsidiary of the Company to comply with any information reporting or withholding requirements contained in the Code or other applicable Laws or to compute the amount of payroll or other employment Taxes due with respect to any payment made in connection with this Agreement; and (v) provide certificates or forms, and timely execute any Tax Return, that are necessary or appropriate to establish an exemption for (or reduction in) any Transfer Tax.

 

(e) Partnership Audits. To the extent the Internal Revenue Service proposes an adjustment to any item of income, gain, loss, deduction or credit of the Company or any applicable Subsidiary, and such adjustment results in an “imputed underpayment” as described in Section 6225(b) of the Code, the Company or applicable Subsidiary shall be permitted to make an election described in Section 6226 of the Code.

 

(f) FIRPTA Certificate. At or prior to the Effective Time, the Company shall deliver or cause to be delivered to Parent a duly completed and executed certificate conforming to the requirements of Treasury Regulations Sections 1.897-2(g)(1)(ii) and (h)(1)(i).

 

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6.10 Directors’ and Officers’ Indemnification.

 

(a) Parent and the Surviving Subsidiary agree to ensure that all rights to indemnification now existing in favor of any individual who, at or prior to the Effective Time, was a director, officer, employee or agent of any Parent Party or of the Company or any of its Subsidiaries, or who, at the request of any Parent Party, served as a director, officer, member, trustee or fiduciary of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise (collectively, with such individual’s heirs, executors or administrators, the “Indemnified Persons”) solely to the extent as provided in the respective governing documents and indemnification agreements to which any Parent Party or of the Company or any of its Subsidiaries, as applicable, is a party or bound, shall survive the Merger and shall continue in full force and effect for a period of not less than six (6) years from the Effective Time in the case of any Parent Party and the other Indemnified Persons derivative thereof (“Parent Indemnified Persons”), or six (6) years from the Effective Time in the case of the Company and its Subsidiaries and the other Indemnified Persons derivative thereof (“Company Indemnified Persons”) and indemnification agreements and the provisions with respect to indemnification and limitations on liability set forth in such governing documents shall not be amended, repealed or otherwise modified in any manner that would adversely affect the rights of the Indemnified Persons thereunder; provided, that if any claim or claims are asserted or made within the applicable six (6) year period, all rights to indemnification in respect of any such claim or claims shall continue until final disposition of any and all such claims. Neither Parent nor any of its successors or Subsidiaries shall settle, compromise or consent to the entry of judgment in any action, proceeding or investigation or threatened action, proceeding or investigation without the written consent of such Indemnified Person unless Parent agrees to pay the costs associated therewith.

 

(b) On or prior to the Effective Time, Parent shall purchase through a broker mutually selected by Parent and the Company, and maintain in effect for a period of six (6) years thereafter, a tail policy to the current policy of directors’ and officers’ liability insurance maintained by Parent and a tail policy to the current policy of directors’ and officers’ liability maintained by the Company, which tail policy shall be effective for a period from the Closing through and including the date six (6) years after the Closing Date with respect to claims arising from facts or events that occurred on or before the Closing, and which tail policy shall contain substantially the same coverage and amounts as, and contain terms and conditions no less advantageous than, but not materially more advantageous than, in the aggregate, the coverage currently provided by the applicable current policy covering those Persons who are covered on the date hereof by such policy and with terms, conditions, retentions and limits of liability that are no less advantageous than, but not materially more advantageous than, the coverage provided under the applicable existing policy.

 

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(c) From and after the Effective Time, Parent agrees to indemnify, defend and hold harmless, to the extent set forth as of the date hereof in the Organizational Documents of the applicable Parent Party or under any indemnification agreement provided by any such Parent Party, and to the fullest extent permitted under applicable Law, all Parent Indemnified Persons with respect to all acts and omissions arising out of such individuals’ services as officers, directors, employees or agents of such Parent Party or as trustees or fiduciaries of any plan for the benefit of employees of such Parent Party, occurring prior to the Effective Time, including the execution of, and the transactions contemplated by, this Agreement. Without limitation of the foregoing, if any such Indemnified Person is or becomes involved, by reason of the fact that such person is or was a director, officer, trustee, general partner, manager, managing member, fiduciary, employee or agent of any Parent Party, in any action, proceeding or investigation in connection with any matter related to such Person’s services to a Parent Party, including the Transaction, occurring prior to, on or after the Effective Time, from and after the Effective Time, Parent shall pay, within ten (10) days after the receipt by Parent of a statement or statements requesting advances thereof from time to time, such Indemnified Person’s reasonable legal and other expenses (including the cost of any investigation and preparation to prosecute or defend) incurred in connection therewith. Parent shall pay, within thirty (30) days after any request for advancement, all reasonable expenses, including reasonable attorneys’ fees, which may be incurred by any Indemnified Person in enforcing this Section 6.10 subject to Parent’s receipt of an undertaking by such Indemnified Person to return such advancement if such Indemnified Person is ultimately determined to not be entitled to indemnification, or to be defended or held harmless, hereunder or otherwise. From and after the Effective Time, Parent agrees to indemnify, defend and hold harmless to the extent set forth as of the date hereof in the Organizational Documents of the Company or its applicable Subsidiary all Company Indemnified Persons with respect to all acts and omissions arising out of such individuals’ services as officers, directors, employees or agents of the Company and its Subsidiaries or as trustees or fiduciaries of any plan for the benefit of employees of such Persons, occurring prior to the Effective Time, including the execution of, and the transactions contemplated by, this Agreement.

 

(d) Notwithstanding any other provisions hereof, the obligations of Parent contained in this Section 6.10 shall be binding upon the successors and assigns of the Parent Parties and the Surviving Subsidiary. If Parent or any of its respective successors or assigns, (i) consolidates with or merges into any other Person, or (ii) transfers all or substantially all of its properties or assets to any Person, then, and in each case, appropriate provision shall be made so that the successors and assigns of Parent are bound by the indemnification and other obligations set forth in this Section 6.10.

 

(e) The obligations of Parent under this Section 6.10 shall survive the Effective Time and the Effective Time and shall not be terminated or modified in such a manner as to affect adversely any Indemnified Person to whom this Section 6.10 applies without the written consent of such affected Indemnified Person (it being expressly agreed that the Indemnified Persons to whom this Section 6.10 applies shall be third party beneficiaries of this Section 6.10, each of whom may enforce the provisions of this Section 6.10). It is the intent that with respect to all advancement, reimbursement and indemnification obligations under this Section 6.10, that Parent shall be the indemnitor of first resort (i.e., its obligations to Indemnified Persons under this Agreement are primary and any obligation of any other Person to provide advancement or indemnification for the same losses incurred by any Indemnified Person are secondary).

 

6.11 Proxy Statement.

 

(a) As promptly as practicable following the execution and delivery of this Agreement, Parent shall prepare and file with the SEC, in preliminary form, the Proxy Statement and provide therein the holders of Parent Common Stock the opportunity to elect redemption of their Parent Common Stock in connection with the Parent Common Stockholders Meeting, as required by the Organizational Documents of Parent. Each of Parent and the Company shall use its commercially reasonable efforts to: (i) cause the Proxy Statement to comply in all material respects with the applicable rules and regulations promulgated by the SEC; and (ii) promptly notify the other of, cooperate with each other with respect to and respond promptly to any comments of the SEC or its staff.

 

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(b) Parent shall provide the holders of Parent Common Stock the opportunity to elect redemption of such shares of Parent Common Stock in connection with the Special Meeting, as required by Parent’s Organizational Documents (the “Common Stockholder Redemption”).

 

(c) Without limitation, in the Proxy Statement, Parent shall solicit proxies from holders of Parent Common Stock to vote at the Parent Common Stockholders Meeting in favor of (i) the adoption of this Agreement and the approval of the transactions contemplated hereby pursuant to Section 251 of the DGCL, (ii) approval for purposes of the rules and regulations of NASDAQ or NYSE of the issuance of equity securities as part of the Merger Consideration, including the Holdback Releases, (iii) the approval for purposes of the rules and regulations of NASDAQ of the issuance of equity securities as part of the Supplemental Financings, (iv) the material differences between the constitutional documents of Parent that will be in effect upon the Effective Time and Parent’s current amended and restated certificate of incorporation, (v) an incentive compensation plan for employees of Parent and its Subsidiaries that will be in place at the Closing (the “Parent Incentive Plan”) and (vi) any other proposals the Parties deem necessary or desirable to consummate the transactions contemplated hereby (collectively, the “Transaction Proposals”). The Proxy Statement will comply as to form and substance with the applicable requirements of the Exchange Act and the rules and regulations thereunder.

 

(d) After all the comments received from the SEC have been cleared by the SEC staff and all information required to be contained in the Proxy Statement has been included therein by Parent and the Company, Parent shall file the Proxy Statement in definitive form with the SEC in accordance with the rules and regulations under the Exchange Act and mail the Proxy Statement to holders of record of Parent Common Stock, as of the record date to be established by the board of directors of Parent. Each of the Company and Parent shall furnish all information concerning such Party and its Affiliates to the other Party, and provide such other assistance, as may be reasonably requested in connection with the preparation, filing and distribution of the Proxy Statement, and the Proxy Statement shall include all information reasonably requested by such other Party to be included therein. Parent shall promptly notify the Company upon the receipt of any comments from the SEC or any request from the SEC for amendments or supplements to the Proxy Statement and shall provide the Company with copies of all correspondence between it and its Representatives, on the one hand, and the SEC, on the other hand. Parent (with the Company’s reasonable cooperation) shall use its reasonable best efforts to respond as promptly as reasonably practicable to any comments from the SEC with respect to the Proxy Statement.

 

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(e) Prior to filing with the SEC or mailing to Parent’s stockholders, Parent will make available to the Company drafts of the Proxy Statement, both preliminary and final (including any amendments or supplements thereto) and will provide the Company with a reasonable opportunity to comment on such drafts, shall consider such comments in good faith and shall accept all reasonable additions, deletions or changes suggested by the Company in connection therewith. Parent shall not file any such documents with the SEC (including response to any comments from the SEC with respect thereto) without the prior written consent (e-mail is sufficient) of the Company (such consent not to be unreasonably withheld, conditioned or delayed). Parent will advise the Company promptly after receipt of notice thereof, of (i) if the preliminary Proxy Statement is reviewed by the SEC, receipt of oral or written notification of the completion of the review by the SEC, (ii) the filing of any supplement or amendment to the Proxy Statement, (iii) any request by the SEC for amendment of the Proxy Statement, (iv) any comments from the SEC relating to the Proxy Statement and responses thereto (whether written or oral), or (viii) requests by the SEC for additional information. Parent shall promptly respond to any SEC comments on the Proxy Statement and shall use its commercially reasonable efforts to have the Proxy Statement cleared by the SEC under the Exchange Act as soon after filing as practicable; provided, that prior to responding to any comments or material requests from the SEC, Parent will make available to the Company drafts of any such response and provide the Company with a reasonable opportunity to comment on such drafts (including the proposed final version of such document or response).

 

(f) Each of Parent and the Company shall ensure that none of the information supplied by or on its behalf for inclusion or incorporation by reference in the Proxy Statement will, as of the date the Proxy Statement (or any amendment or supplement thereto) is first mailed to the Parent Stockholders, at the time of the Parent Common Stockholders Meeting, or at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading.  If at any time prior to the Parent Common Stockholders Meeting there shall be discovered any information that should be set forth in an amendment or supplement to the Proxy Statement so that the Proxy Statement would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, Parent shall promptly transmit to its stockholders an amendment or supplement to the Proxy Statement containing such information. If, at any time prior to the Effective Time, the Company discovers any information, event or circumstance relating to the Company, its Subsidiaries or any of their respective Affiliates, officers, directors or employees that should be set forth in an amendment or a supplement to the Proxy Statement so that the Proxy Statement would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, then the Company shall promptly inform Parent of such information, event or circumstance and shall promptly provide all information required for Parent to transmit to the holders of its capital stock an amendment or supplement to the Proxy Statement containing such information.

 

(g) Subject to compliance by the Company with its obligations under this Section 6.11 and provision by the Company on a timely basis of such information that may be required in order for Parent to comply with this Section 6.11(g), Parent shall make all necessary filings with respect to the transactions contemplated hereby under the Securities Act, the Exchange Act and applicable “blue sky” Laws and any rules and regulations thereunder.

 

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(h) The Company shall promptly provide Parent with all information (including applicable financial statements prepared in accordance with Regulation S-X of the SEC to the extent required by the applicable forms of the Proxy Statement) concerning the Company and its Subsidiaries reasonably requested by Parent for inclusion in the Proxy Statement and any amendment or supplement to the Proxy Statement (if any). The Company shall cause the officers and employees of the Company and its Subsidiaries to be reasonably available to Parent and its counsel in connection with the drafting of the Proxy Statement and responding in a timely manner to comments on the Proxy Statement from the SEC.

 

(i) Parent shall use its reasonable best efforts to (i) cause the shares of Parent Common Stock to be issued to the Pre-Closing Holders to be approved for listing on NASDAQ or NYSE upon issuance, (ii) cause the shares of Parent Common Stock to be issued to the holders of Parent Class B Common Stock to be approved for listing on NASDAQ or NYSE upon issuance, (iii) cause the shares of Parent Common Stock to be issued upon exercise of the Parent Warrants to be approved for listing on NASDAQ or NYSE upon issuance and (iv) make all necessary and appropriate filings with NASDAQ or NYSE and undertake all other steps reasonably required prior to the Closing Date to effect such listings.

 

6.12 Parent Common Stockholder Meeting. Parent shall, as promptly as practicable, establish a record date (which date shall be mutually agreed with the Company) for, duly call, give notice of, convene and hold a meeting of Parent’s stockholders (the “Parent Common Stockholders Meeting”), for the purpose of voting on the Transaction Proposals, which meeting shall be called for a date not more than thirty-five (35) days after the date on which Parent mails the Proxy Statement to its stockholders (subject to extension as provided in this Section 6.12). Parent shall use its reasonable best efforts to obtain the approval of the Transaction Proposals, including by soliciting proxies as promptly as practicable in accordance with applicable Law and its Organizational Documents for the purpose of approving the Transaction Proposals; provided, that the foregoing shall not in any event preclude a Change in Recommendation to the extent permitted by this Section 6.12. Parent shall, through its board of directors, recommend to its stockholders that they vote in favor of the Transaction Proposals (the “Parent Board Recommendation”) and Parent shall include the Parent Board Recommendation in the Proxy Statement. The board of directors of Parent shall not (and no committee or subgroup thereof shall) change, withdraw, withhold, qualify or modify, or publicly propose to change, withdraw, withhold, qualify or modify, the Parent Board Recommendation (a “Change in Recommendation”); provided, that the board of directors may make a Change in Recommendation if it determines in good faith, after consultation with its outside legal counsel and/or financial advisors, that a failure to make a Change in Recommendation would reasonably be expected to constitute a breach by the board of directors of its fiduciary obligations to Parent’s stockholders under applicable Law; provided, however, that the board of directors of Parent may not make such Change in Recommendation unless (1) the board of directors of Parent has provided prior written notice to the Company (a “Parent Recommendation Change Notice”) that it is prepared to effect a Change in Recommendation at least five (5) Business Days prior to taking such action, which notice shall specify the basis for such Change in Recommendation, (2) during the five (5) Business Day period after delivery of the Parent Recommendation Change Notice, the Company may propose to Parent any revisions to this Agreement that the Company proposes to make and Parent will engage in good faith discussions with the Company regarding such proposal(s), (3) at the end of such five (5) Business Day period and taking into account any changes to the terms of this Agreement committed to in writing by the Company, the board of directors of the Parent determines in good faith (after consultation with outside legal counsel and/or a financial advisor) that the failure to make such a Change Recommendation would reasonably be expected to constitute a breach by the board of directors of its fiduciary duties to Parent’s stockholders under applicable Law. Notwithstanding anything to the contrary contained in this Agreement, Parent shall be entitled to postpone or adjourn the Parent Common Stockholders Meeting on one or more occasions (a) to ensure that any supplement or amendment to the Proxy Statement that the board of directors of Parent has determined in good faith is required by applicable Law is disclosed to Parent’s stockholders and for such supplement or amendment to be promptly disseminated to the Parent’s stockholders prior to the Parent Common Stockholders Meeting, (b) if, as of the time for which the Parent Common Stockholders Meeting is scheduled (as set forth in the Proxy Statement), there are insufficient shares of Parent Common Stock (either in person or by proxy) to constitute a quorum necessary to conduct the business to be conducted at the Parent Common Stockholders Meeting, or (c) by up to ten (10) Business Days in order to solicit additional proxies from stockholders in favor of the adoption of the Transaction Proposals; provided, that in the event of a postponement or adjournment pursuant to clauses (a) or (b) above, the Parent Common Stockholders Meeting shall be reconvened as promptly as practicable following such time as the matters described in such clauses have been resolved, and in no event shall the Parent Common Stockholders Meeting be reconvened on a date that is later than five (5) Business Days prior to the Termination Date.

 

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6.13 Section 16 of the Exchange Act. Prior to the Closing, the board of directors of Parent, or an appropriate committee of non-employee directors thereof, shall adopt a resolution consistent with the interpretive guidance of the SEC so that the acquisition of Parent Common Stock pursuant to this Agreement by any officer or director of the Company or any of its Subsidiaries who is expected to become a “covered person” of Parent for purposes of Section 16 of the Exchange Act and the rules and regulations thereunder (“Section 16”) shall be an exempt transaction for purposes of Section 16.

 

6.14 Nonsolicitation. From the date of this Agreement until the earlier of (x) the Effective Time or (y) the date on which this Agreement is terminated, other than in connection with the transactions contemplated hereby, each Party shall not, and will not authorize or (to the extent within its control) permit any of its respective Subsidiaries or any of its or its Subsidiaries’ respective Affiliates, equityholders, directors, officers, employees, agents or representatives (including investment bankers, attorneys and accountants), in each case in such directors’, officers’, employees’, agents’ or representatives’ capacity in such role, to, directly or indirectly, (i) initiate, solicit, or facilitate, or make any offers or proposals related to, or continue in any way discussions relation to, an Acquisition Proposal, (ii) engage in any discussions or negotiations with respect to an Acquisition Proposal with, or provide any non-public information or data to, any Person that has made, or informs the Party that it is considering making, an Acquisition Proposal in connection therewith or in anticipation thereof, or (iii) enter into any agreement, letter of intent or memorandum of understanding (or comparable document, whether stylized as a letter of intent, term sheet or otherwise) relating to an Acquisition Proposal. The Company shall give notice of any Acquisition Proposal to Parent as soon as practicable following its awareness thereof. For purposes of this Agreement, “Acquisition Proposal” means (A) with respect to the Company, any contract, proposal, offer or indication of interest in any form, written or oral, relating to any transaction or series of related transactions (other than transactions with the Parent Parties) involving any acquisition, merger, amalgamation, share exchange, recapitalization, consolidation, liquidation or dissolution involving the acquisition of all or any material portion of the Company or its businesses or assets or any material portion of the Company’s capital stock or other equity interests and (B) with respect to the Parent and its Affiliates, a transaction (other than the transactions contemplated by this Agreement) concerning a business combination or other acquisition or merger by the Parent.

 

6.15 Termination of Agreements. At or prior to the Effective Time, the Company shall terminate all Contracts set forth on Schedule 6.15 without continuing liability to or obligations of the Parent Parties, the Company or any of its Subsidiaries.

 

6.16 Written Consent. Not later than the one (1) day after the execution of this Agreement, the Company shall deliver to Parent a duly executed copy of the Written Consent for the approval of the Transaction, which shall be in a form reasonably acceptable to Parent. The Company shall, through the Company Board, recommend to its equityholders that they approve the Transaction and shall include such recommendation in any applicable consent solicitation. The Company shall notify Parent promptly after having obtained the consent of the Requisite Company Stockholders through the Written Consent. To the extent required by the DGCL and the Company Certificate, the Company shall promptly (and, in any event, within fifteen (15) Business Days of the date of the Written Consent) deliver to any Pre-Closing Holder who has not executed the Written Consent a notice of the taking of the actions described in the Written Consent (and, prior to the dissemination thereof, shall provide Parent a copy three (3) days in advance of dissemination thereof and shall consider in good faith any comments made by Parent with respect thereto).

 

6.17 Lock-Up Period. Parent shall implement a trading policy after Effective Time, which shall prohibit members of management from transferring Parent Common Stock (whether or not received in the Merger) during the period commencing on the Effective Time through the calendar date that is 180 days following the Closing Date.

 

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6.18 Financial Statements and Related Information. The Company shall provide to Parent, as promptly as practicable after the date of this Agreement (but in no event later than fifty (50) days after the date hereof): (a) audited consolidated financial statements of the Company and its Subsidiaries, including the audited consolidated balance sheets, income statement, and statements of shareholders’ equity and cash flows as of and for the years ended December 31, 2018 and December 31, 2019, together with all related notes and schedules thereto, prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby and Regulation S-X, accompanied by a signed report of the Company’s independent auditor with respect thereto, which report shall refer to the standards of the PCAOB (the “PCAOB Audited Financial Statements”) and shall be unqualified, (b) unaudited consolidated financial statements of the Company and its Subsidiaries, including consolidated balance sheets, income statements, and statements of shareholders’ equity and cash flows as of and for the 3-month period ended March 31, 2020 (and the comparable period in the prior year) together with all related notes and schedules thereto, prepared in accordance with GAAP applied on a consistent basis throughout the covered periods and Regulation S-X, accompanied by a review by the Company’s independent auditor in accordance with PCAOB Auditing Standard 4105 (the “Reviewed Interim Financial Statements”), (c) all other audited and unaudited financial statements of the Company and its Subsidiaries required under the applicable rules and regulations and guidance of the SEC to be included in the Proxy Statement and or the Form 8-K to be filed with respect to the Closing of the Transaction and (iv) all selected financial data of the Company and its Subsidiaries required by Item 301 of Regulation S-K, in each case, to be included in the Proxy Statement and the Form 8-K to be filed with respect to the Closing of the Transaction. The Company shall provide to Parent the unaudited consolidated financial statements of the Company and its Subsidiaries, including consolidated balance sheets, income statement, and statements of shareholders’ equity and cash flows, together with all related notes and schedules thereto, prepared in accordance with GAAP applied on a consistent basis throughout the covered periods and Regulation S-X and a review by the Company’s independent auditor in accordance with PCAOB Auditing Standard 4105, for each fiscal quarter of the Company and its Subsidiaries after March 31, 2020 (and the comparable period in the prior year) and at least forty (40) days prior to the Closing Date, in each case within forty (40) days following the end of each such fiscal quarter.

 

6.19 Restructuring. Prior to the Closing, the Company shall cause the Restructuring to be consummated.

 

6.20 Code Section 280G. If necessary to render Section 280G or 4999 of the Code inapplicable to amounts payable in connection with the transactions contemplated by this Agreement, prior to the Closing Date, the Company shall use its commercially reasonable efforts to seek approval by its shareholders, in accordance with Section 280G(b)(5)(B) of the Code, of the right of any “disqualified individual” to receive or retain any payments that would, in the absence of such shareholder approval, constitute “excess parachute payments” within the meaning of Section 280G of the Code.  Prior to seeking such approvals, the Company shall seek, and use its commercially reasonable efforts to obtain, waivers from the intended recipients of such payments such that unless such payments are approved by the shareholders to the extent and in the manner prescribed under Sections 280G(b)(5)(A)(ii) and 280G(b)(5)(B) of the Code, the intended recipients shall have no right or entitlement with respect thereto. At least five (5) days prior to obtaining such waivers, the Company shall provide to Parent (i) drafts of any waivers, disclosure documents and other relevant documents relating to the waiver and vote prepared by or on behalf of the Company in connection with this Section 6.20 and (ii) a schedule setting forth in reasonable detail the basis for its determination of the payments and benefits that it is proposing to have waived and disclosed to comply with this Section 6.20.  The Company shall incorporate any reasonable comments made by Parent prior to obtaining the waivers and soliciting the shareholder vote. Prior to the Closing Date, the Company shall deliver to Parent evidence that a vote of the Company’s shareholders was solicited in accordance with the foregoing provisions of this Section 6.20 and that either (A) the requisite number of votes was obtained (the “280G Approval”), or (B) that the 280G Approval was not obtained and, to the extent waived by the recipient thereof, no such excess parachute payment shall be made.”

 

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Article VII.
CONDITIONS TO OBLIGATIONS

 

7.1 Conditions to the Obligations of the Parent Parties and the Company. The obligations of Parent Parties and the Company to consummate, or cause to be consummated, the Merger are subject to the satisfaction of the following conditions, any one or more of which may be waived in writing by all of such Parties:

 

(a) All waiting periods under the HSR Act applicable to the Merger shall have expired or been terminated.

 

(b) There shall not be in force any Law, injunction or order of any court of competent jurisdiction enjoining or prohibiting the consummation of the Merger or the Transaction.

 

(c) The Parent Stockholder Approval shall have been obtained.

 

(d) The Written Consent shall have been delivered.

 

7.2 Conditions to the Obligations of the Parent Parties. The obligations of the Parent Parties to consummate, or cause to be consummated, the Merger are subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by the Parent Parties:

 

(a) Each of the representations and warranties of the Company set forth in Sections 4.1 (Organization), 4.2(a) (Subsidiaries), 4.3 (Due Authorization), 4.4 (No Conflict), 4.6 (Capitalization of the Company), 4.7 (Capitalization of Subsidiaries) and 4.16 (Brokers’ Fees) shall be true and correct in all respects, except for inaccuracies that are de minimis in amount and effect, as of the Closing Date, as if made anew at and as of that date, except with respect to representations and warranties that speak only as to an earlier date, which representations and warranties shall be true and correct in all material respects at and as of such earlier date. Each of the other representations and warranties of the Company contained in Article IV (other than those specifically identified in the immediately preceding sentence), disregarding all qualifications contained therein relating to materiality, Material Adverse Effect or words of similar import, shall be true and correct as of the Closing Date, as if made anew at and as of that date, except with respect to representations and warranties that speak only as to an earlier date, which representations and warranties shall be true and correct at and as of such earlier date, except for any inaccuracies or omissions that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(b) Each of the covenants of the Company and the Holder Representative to be performed at or prior to the Closing shall have been performed in all material respects.

 

(c) Since the Balance Sheet Date, there shall not have occurred a Material Adverse Effect.

 

(d) The Company shall have delivered to Parent a certificate signed by an officer of the Company, dated as of the Closing Date, certifying that the conditions specified in Section 7.2(a), Section 7.2(b) and Section 7.2(c) have been fulfilled.

 

(e) The Company and the Holder Representative shall have delivered (or cause to have been delivered) each of the Closing deliverables to be delivered by it pursuant to Section 2.4.

 

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(f) Duly executed Company Letters of Transmittal from all Pre-Closing Holders shall have been delivered to Parent.

 

(g) Each of the Restrictive Covenant Agreements, Company Letters of Transmittal and Employment Agreements shall remain in full force and effect, and none of the foregoing shall have been modified or rescinded, in each case, without the prior written consent of Parent.

 

(h) The Company shall have delivered to Parent the PCAOB Audited Financial Statements and Reviewed Interim Financial Statements in a form reasonably acceptable to Parent, which PCAOB Audited Financial Statements and Reviewed Interim Financial Statements shall not contain any material deviations (as determined in good faith by Parent) from the corresponding financial information for the respective periods presented in the Financial Statements.

 

(i) The Restructuring shall have been consummated.

 

7.3 Conditions to the Obligations of the Company. The obligations of the Company to consummate, or cause to be consummated, the Merger are subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by the Company:

 

(a) Each of the representations and warranties of the Parent Parties set forth in Sections 5.1 (Organization), 5.2 (Due Authorization), 5.3 (No Conflict), 5.5 (Capitalization), 5.6 (Subsidiaries), 5.11 (Brokers’ Fees) and 5.15 (Parent Vote Required) shall be true and correct in all respects, except for inaccuracies that are de minimis in amount and effect, as of the Closing Date, as if made anew at and as of that date, except with respect to representations and warranties that speak only as to an earlier date, which representations and warranties shall be true and correct in all material respects at and as of such earlier date. Each of the other representations and warranties of the Parent Parties contained in Article V (other than those specifically identified in the immediately preceding sentence), disregarding all qualifications contained therein relating to materiality, Parent Material Adverse Effect (other than in the case of Section 5.8) or words of similar import, shall be true and correct as of the Closing Date, as if made anew at and as of that date, except with respect to representations and warranties that speak only as to an earlier date, which representations and warranties shall be true and correct at and as of such earlier date, except for any inaccuracies or omissions that would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.

 

(b) Each of the covenants of the Parent Parties to be performed at or prior to the Closing shall have been performed in all material respects.

 

(c) Since the date of this Agreement, there shall not have occurred a Parent Material Adverse Effect.

 

(d) Parent shall have delivered to the Company a certificate signed by an officer of Parent, dated as of the Closing Date, certifying that the conditions specified in Section 7.3(a), Section 7.3(b) and Section 7.3(c) have been fulfilled.

 

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(e) The shares of Parent Common Stock to be issued to the Pre-Closing Holders shall have been approved for listing on NASDAQ or NYSE upon issuance, subject only to official notification thereof.

 

(f) The amount of Cash Consideration available for payment to the Pre-Closing Holders from Parent, the Company and/or its Subsidiaries from any source (including the Trust Account and any Supplemental Financing), shall be at least $50,000,000.

 

(g) As of a moment in time prior to the Closing, Parent shall not have indebtedness for borrowed money that exceeds $5,000,000.

 

(h) The Company shall have delivered to Parent the PCAOB Financial Statements in a form reasonably acceptable to Parent, which PCAOB Financial Statements shall not contain any material deviations (as determined in good faith by Parent) from the corresponding financial information for the respective periods presented in the Financial Statements.

 

(i) The Parent Parties shall have delivered (or cause to have been delivered) each of the Closing deliverables to be delivered by it pursuant to Section 2.4 other than any payments to be made pursuant thereto, which payments shall be made at the Closing.

 

(j) The Restructuring shall have been consummated.

 

7.4 Waiver of Conditions; Frustration of Conditions. All conditions to the Closing shall be deemed to have been satisfied or waived from and after the Effective Time. None of the Company or the Parent Parties may rely on the failure of any condition set forth in this Article VII to be satisfied if such failure was caused by the failure of the Company, on the one hand, or the Parent Parties, on the other hand, respectively, to (i) use reasonable best efforts to consummate the Merger and the other transactions contemplated hereby and (ii) otherwise comply with its obligations under this Agreement.

 

Article VIII.
TERMINATION/EFFECTIVENESS

 

8.1 Termination. This Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing:

 

(a) by written consent of the Company and Parent;

 

(b) by written notice to the Company from Parent if:

 

(i)  there is any breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement, such that the conditions specified in Section 7.2(a) or Section 7.2(b) would not be satisfied at the Closing (a “Terminating Company Breach”), except that, if such Terminating Company Breach is curable, then, for a period of up to thirty (30) days after receipt by the Company of notice from Parent of such breach (the “Company Cure Period”), such termination shall not be effective and the Termination Date shall be automatically be extended until the end of the Company Cure Period, and such termination shall become effective only if the Terminating Company Breach is not cured within the Company Cure Period; provided, however, this Agreement may not be terminated pursuant to this Section 8.1(b)(i) if, as of such time, any Parent Party is in material breach of any of its covenants or other obligations hereunder;

 

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(ii) the Closing has not occurred on or before September 30, 2020 (subject to Sections 8.1(b)(i) and 10.13), the “Termination Date”), unless any Parent Party’s failure to comply with its obligations hereunder has resulted in the Closing not occurring on or before such date;

 

(iii) the consummation of any of the transactions contemplated hereby is permanently enjoined or prohibited by the terms of a final, non-appealable order or judgment of a court of competent jurisdiction unless Parent Party’s failure to comply with its obligations hereunder has resulted in such injunction or prohibition;

 

(iv) the Company has not delivered to Parent the PCAOB Audited Financial Statements and Reviewed Interim Financial Statements on or before July 31, 2020;

 

(v) at any time prior to the receipt of the Parent Stockholder Approval, if the board of directors of Parent shall have effected a Change in Recommendation; or

 

(vi) the Written Consent has not been delivered as and when required by Section 6.16.

 

(c) by written notice to Parent from the Company if:

 

(i) (A) there is any breach of any representation, warranty, covenant or agreement on the part of any Parent Party set forth in this Agreement, such that the conditions specified in Section 7.3(a) or Section 7.3(b) would not be satisfied at the Closing (a “Terminating Parent Breach”), except that, if any such Terminating Parent Breach is curable, then, for a period of up to thirty (30) days after receipt by Parent of notice from the Company of such breach (the “Parent Cure Period”), such termination shall not be effective and the Termination Date shall automatically be extended until the end of the Parent Cure Period, and such termination shall become effective only if the Terminating Parent Breach is not cured within Parent Cure Period; provided, however, this Agreement may not be terminated pursuant to this Section 8.1(c)(i) if, as of such time, the Company is in material breach of any of its covenants or other obligations hereunder, or (B) (1) all of the conditions set forth in Sections 7.1 and 7.2 have been satisfied (other than those conditions that by their nature are to be satisfied at the Closing) as of the date the Closing should have occurred pursuant to Section 2.3, and (2) the Parent Parties have failed to consummate the transactions contemplated by this Agreement within three (3) Business Days following the date the Closing should have occurred pursuant to Section 2.3;

 

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(ii) the Closing has not occurred on or before the Termination Date (subject to Sections 8.1(c)(i) and 10.13), unless the Company’s failure to comply with its obligations hereunder has resulted in the Closing not occurring on or before such date;

 

(iii) the consummation of any of the transactions contemplated hereby is permanently enjoined or prohibited by the terms of a final, non-appealable order or judgment of a court of competent jurisdiction unless the Company’s failure to comply with its obligations hereunder has resulted in such injunction or prohibition; or

 

(iv) at any time prior to the receipt of Parent Stockholder Approval, if the board of directors of Parent shall have (i) failed to include the Parent Board Recommendation in the Proxy Statement (at the time of mailing of such Proxy Statement), or (ii) effected a Change in Recommendation or if Parent Stockholder Approval shall not have been obtained at Parent Stockholders Meeting or at any adjournment or postponement thereof, in each case at which a vote on such approval was taken.

 

8.2 Effect of Termination. Except as otherwise set forth in this Section 8.2, in the event of the termination of this Agreement pursuant to Section 8.1, this Agreement shall forthwith become void and have no effect, without any liability on the part of any party hereto or its respective Affiliates, officers, directors, employees or stockholders, subject to the immediately succeeding sentence and other than liability of the Company and the Parent Parties, as the case may be, for fraud or any willful and material breach of this Agreement occurring prior to such termination. The provisions of Section 8.2, Article IX and Article X, and the Confidentiality Agreement shall survive any termination of this Agreement.

 

Article IX.
HOLDER REPRESENTATIVE

 

9.1 Designation and Replacement of Holder Representative. The parties have agreed that it is desirable to designate a representative to act on behalf of holders of the Company Interests, as specified herein (the “Holder Representative”). The parties have designated Salvatore Galletti as the initial Holder Representative, and approval of this Agreement by the holders of Company Interests shall constitute ratification and approval of such designation. The Holder Representative may resign at any time, and the Holder Representative may be removed by the vote of Persons that collectively constituted the Requisite Company Shareholders as of immediately prior to the Effective Time (or, in the case of a termination of this Agreement, as of such termination). If a Holder Representative has resigned or been removed, a new Holder Representative shall be appointed by a vote of Pre-Closing Holders constituting the Requisite Company Shareholders as of immediately prior to the Effective Time, such appointment to become effective upon the written acceptance thereof by the new Holder Representative. The designation of any Person as the Holder Representative is and shall be coupled with an interest, and, except as set forth in this Article IX, such designation is irrevocable and shall not be affected by the death, incapacity, illness, bankruptcy, dissolution or other inability to act of any of the holders of Company Interests.

 

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9.2 Reserve. In order to cover expenses of the Holder Representative, at Closing a reserve shall be established (the “Reserve”) with the Holder Representative Expense Amount paid to the Holder Representative at Closing. The amount of the Reserve shall be increased or decreased based upon interest earned thereon (if applicable) and distributions made therefrom, or other amounts received or held by the Holder Representative. The Reserve may be held or disbursed by the Holder Representative in his discretion to cover any such expenses that may arise in connection with this Agreement for payment after the Closing Date.

 

9.3 Authority and Rights of the Holder Representative; Limitations on Liability. The Holder Representative shall have such powers and authority as are necessary to carry out the functions assigned to it under this Agreement; provided, however, that the Holder Representative shall have no obligation to act, except as expressly provided herein. Without limiting the generality of the foregoing, the Holder Representative shall have full power, authority and discretion to (i) retain counsel, experts and other agents (any such representatives so retained, the “Retained Agents”) and to incur such fees, costs and expenses as the Holder Representative deems to be necessary or appropriate in connection with the performance of its obligations under this Agreement and each of the documents to be executed in connection with the transactions contemplated hereby; (ii) after the Closing, negotiate and enter into amendments to this Agreement and the Holder Escrow Agreement for and on behalf of the Pre-Closing Holders; (iii) make decisions with respect to the determination of the calculations set forth in the Closing Statement; and (iv) enter into any settlement or submitting any dispute relating to the Closing Statement. All actions taken by the Holder Representative under this Agreement shall be binding upon the Pre-Closing Holders and their successors as if expressly confirmed and ratified in writing by each of them. The Holder Representative shall have no liability to any Pre-Closing Holder with respect to actions taken or omitted to be taken in its capacity as the Holder Representative. In the absence of bad faith by the Holder Representative, the Holder Representative shall be entitled to conclusively rely on the opinions and advice of any Retained Agents; and the fact that any act was taken or omitted to be taken pursuant to the advice of counsel will be conclusive evidence of good faith. The Holder Representative shall be entitled to reimbursement from the Reserve for all reasonable expenses, disbursements and advances (including fees and disbursements of its counsel, experts and other agents and consultants) incurred by the Holder Representative in such capacity, and shall be entitled to indemnification from the Pre-Closing Holders against any loss, liability or expenses arising out of actions taken or omitted to be taken in its capacity as the Holder Representative (except for those arising out of the Holder Representative’s bad faith), including the costs and expenses of investigation and defense of claims. If the Holder Representative determines, in his sole and absolute discretion, that the Reserve exceeds the aggregate amount of fees, costs, expenses and Taxes incurred, or that may in the future be incurred, by the Holder Representative in connection with the performance of its obligations under this Agreement and each of the documents to be executed in connection with the transactions contemplated hereby, the Holder Representative shall pay such amounts to the Pre-Closing Holders as though such amounts were paid pursuant to the terms of the Company Articles as additional Merger Consideration. The Parent Parties shall be entitled to rely conclusively on the instructions and decisions of the Holder Representative as to any actions, consents, approvals, agreements and decisions required or permitted to be taken, given or made by the Holder Representative hereunder or on any other matter which the Holder Representative reasonably asserts the authority to represent the Pre-Closing Holders in respect of, and no Pre-Closing Holder shall have any cause of action against any Parent Parties to the extent that any Parent Party relied upon the instructions or decisions of the Holder Representative. For the avoidance of doubt, (A) there can be no assurances that any of the Reserve will be paid or disbursed to the Pre-Closing Holders, and (B) no Pre-Closing Holder shall be entitled to receive any interest on the Reserve.

 

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Article X.
MISCELLANEOUS

 

10.1 Notices. All notices and other communications among the parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) when delivered by FedEx or other nationally recognized overnight delivery service, or (iv) when delivered by email, solely if delivery is confirmed, addressed as follows:

 

(a) If to Parent or Merger Sub, to:

 

Forum Merger II Corporation

1615 South Congress Avenue 

Suite 103

Delray Beach, FL 33445

  Attention: Marshall Kiev
  David Boris

Email: mk@mkcapitalpartners.com

david@forummerger.com

 

with a copy (which shall not constitute notice) to:

 

Winston & Strawn LLP

200 Park Avenue

New York, New York 10166

Attention:Joel Rubinstein

Email: jrubinstein@winston.com

 

and

 

Winston & Strawn LLP

35 W. Wacker Drive

Chicago, IL 60601

Attention: Kyle Gann

Email: kgann@winston.com

 

(b) If to the Company, prior to the Closing, to:

 

Ittella International LLC
6305 Alondra Blvd.

Paramount, CA 90723

Attention: Salvatore Galletti, Chief Executive Officer

Email: sgalletti@ittellafoods.com

 

71

 


 

with copies (which shall not constitute notice) to:

 

Rutan & Tucker, LLP

611 Anton Blvd.

Costa Mesa, CA 92626

Attn: Ellis Wasson

Email: ewasson@rutan.com

 

(c) If to the Holder Representative, to:

 

Salvatore Galletti

6305 Alondra Blvd.

Paramount, CA 90723

Email: sgalletti@ittellafoods.com

 

with a copy (which shall not constitute notice) to:

 

Rutan & Tucker, LLP

611 Anton Blvd.

Costa Mesa, CA 92626

Attn: Ellis Wasson

Email: ewasson@rutan.com

 

or to such other address or addresses as the parties may from time to time designate in writing.

 

10.2 Assignment. No Party shall assign this Agreement or any part hereof without the prior written consent of the other Parties. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

 

10.3 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, any right or remedies under or by reason of this Agreement; provided, however, that, notwithstanding the foregoing (i) if the Closing occurs, the Indemnified Persons (and their successors, heirs and representatives) are intended third-party beneficiaries of, and may enforce, Section 6.10, (ii) from and after the Effective Time, the Pre-Closing Holders (and their successors, heirs and representatives) shall be intended third-party beneficiaries of, and may enforce, Article II and Article III, (iii) the past, present and future directors, officers, employees, incorporators, members, partners, stockholders, Affiliates, agents, attorneys, advisors and representatives of the parties, and any Affiliate of any of the foregoing (and their successors, heirs and representatives), are intended third-party beneficiaries of, and may enforce, Section 10.14; (iv) Company Counsel is an intended third party beneficiary of Section 10.16 and (v) WS is an intended third party beneficiary of Section 10.16.

 

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10.4 Expenses. Unless the Closing shall occur, (i) the Company shall be responsible for the Company Transaction Expenses and any other fees and expenses of the Company or its Affiliates incurred in connection with this Agreement and the transactions contemplated hereby, and (ii) Parent shall be responsible for the Parent Transaction Expenses and any other fees and expenses of the Parent Parties incurred in connection with this Agreement and the transactions contemplated hereby. Upon and subject to the Closing, and without limiting Parent’s rights under Section 6.3(a)(iii) to pay Parent Transaction Expenses in additional shares of Common Stock in lieu of cash, each of the Company Transaction Expenses and the Parent Transaction Expenses shall be paid out of cash available to Parent at the Closing; provided, that the expenses of the Holder Representative shall be paid out of the Reserve. For the sake of clarity, upon and subject to the Closing, Parent shall reimburse the Company for Company Transaction Expenses and Parent Transaction Expenses that are paid by the Company to the extent required by Section 2.4(d)(v).

 

10.5 Non-Survival of Representations, Warranties and Covenants. None of the representations, warranties or covenants in this Agreement shall survive the Effective Time; provided, however, that this Section 10.5 shall not limit any covenant or agreement herein that, by its terms, contemplates performance after the Closing (including any obligation to hold a party harmless or any covenant entitling a Person to rely upon any other Person) until such covenant or agreement has been performed or satisfied or any claim based on fraud.

 

10.6 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 Delaware, 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.

 

10.7 Captions; Counterparts. The captions 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. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or electronic transmission in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.

 

10.8 Schedules and Exhibits. The Schedules and Exhibits referenced herein are a part of this Agreement as if fully set forth herein. All references herein to Schedules and Exhibits shall be deemed references to such parts of this Agreement, unless the context shall otherwise require. Any disclosure made by a party in the Schedules with reference to any section or schedule of this Agreement shall be deemed to be a disclosure with respect to all other sections or schedules to which the relevance of such disclosure is reasonably apparent on the face of such disclosure. Certain information set forth in the Schedules is included solely for informational purposes and may not be required to be disclosed pursuant to this Agreement. The disclosure of any information shall not be deemed to constitute an acknowledgment that such information is required to be disclosed in connection with the representations and warranties made in this Agreement, nor shall such information be deemed to establish a standard of materiality.

 

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10.9 Entire Agreement. This Agreement (together with the Schedules and Exhibits to this Agreement), the Transaction Agreements and the Confidentiality Agreement constitute the entire agreement among the parties relating to the transactions contemplated hereby 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 transactions contemplated hereby. No representations, warranties, covenants, understandings or agreements, oral or otherwise, relating to the transactions contemplated by this Agreement exist between the parties, except as expressly set forth in this Agreement, the Transaction Agreements and the Confidentiality Agreement.

 

10.10 Amendments; Waiver. This Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing executed in the same manner as this Agreement and which makes reference to this Agreement. No waiver by any of the Parties (i) shall be effective unless explicitly set forth in writing and executed by the party sought to be charged with such waiver (and only to the extent of such waiver), or (ii) of any default, misrepresentation or breach of representation, warranty, covenant or other agreement hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

 

10.11 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 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, the remaining provisions of this Agreement shall be valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, the Parties shall negotiate in good faith to 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.

 

10.12 Jurisdiction; Waiver of Jury Trial.

 

(a) Any Action based upon, arising out of or related to this Agreement or the transactions contemplated hereby may be brought in the Delaware Chancery Court (or, if the Delaware Chancery Court shall be unavailable, any other court of the State of Delaware or, in the case of claims to which the federal courts have subject matter jurisdiction, any federal court of the United States of America sitting in the State of Delaware), and, in each case, appellate courts therefrom, and each of the Parties irrevocably submits to the exclusive jurisdiction of each such court in any such Action, waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, agrees that all claims in respect of such Action shall be heard and determined only in any such court, and agrees not to bring any 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 brought pursuant to this Section 10.12(a).

 

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(b) Each Party hereby waives, to the fullest extent permitted by applicable Law, any right it may have to a trial by jury in respect of any Action arising out of this Agreement or the transactions contemplated hereby. Each Party (i) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such party would not, in the event of any Action, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other Parties have been induced to enter into this Agreement by, among other things, the mutual waiver and certifications in this Section 10.12(b).

 

10.13 Enforcement. The Parties agree that irreparable damage would occur, and that the Parties would not have any adequate remedy at Law, if 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 breaches of this Agreement and to specifically enforce the terms and provisions of this Agreement, without proof of actual damages or otherwise, in addition to any other remedy to which any party is entitled at Law or in equity. Each Party shall waive any requirement for the securing or posting of any bond in connection with such remedy. The Parties further agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to Law or inequitable for any reason, nor to assert that a remedy of monetary damages would provide an adequate remedy.

 

10.14 Non-Recourse. This Agreement may only be enforced against, and any claim or cause of action based upon, arising out of or related to this Agreement or the transactions contemplated hereby may only be brought against, the entities that are expressly named as Parties and then only with respect to the specific obligations set forth herein with respect to such Party. Except to the extent a named Party to this Agreement (and then only to the extent of the specific obligations undertaken by such named Party in this Agreement and not otherwise), no past, present or future director, officer, employee, incorporator, member, partner, equityholder, Affiliate, agent, attorney, advisor, representative or assignee of any of the foregoing shall have any liability (whether in contract, tort, equity or otherwise) for any one or more of the representations, warranties, covenants, agreements or other obligations or liabilities of any one or more of the Parties under this Agreement or of or for any claim based on, arising out of or related to this Agreement or the transactions contemplated hereby.

 

10.15 Trust Account Waiver. The Company acknowledges that, as described in the Prospectus dated August 2, 2018, Parent established the Trust Account for the benefit of its public stockholders. The Company acknowledges that, prior to the Closing and the redemption of any Parent Common Stock validly tendered for redemption pursuant to Parent’s Organizational Documents, it does not have any right, title, interest or claim of any kind in or to any monies in the Trust Account, including, without limitation, any claim for indemnification, and hereby waives any claim for monies in the Trust Account it may have in the future as a result of, or arising out of, this Agreement, the Merger and the other transactions contemplated hereby or any other transactions contemplated amongst the Company, Parent and Merger Sub prior to the Closing and the redemption of any Parent Common Stock validly tendered for redemption pursuant to Parent’s Organizational Documents and will not seek recourse against the Trust Account for any reason whatsoever.

 

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10.16 Privilege.

 

(a) Each Parent Party and the Company agrees that, as to all communications between or among Company Counsel, the Company, the Company’s Subsidiaries and the Holder Representative that relate in any way to the transactions contemplated by this Agreement, the attorney/client privilege and the expectation of the client confidence belongs to the Pre-Closing Holders and may be controlled by the Holder Representative on behalf of the Pre-Closing Holders, and shall not pass to or be claimed by any Parent Party, the Surviving Subsidiary or any of their respective Affiliates. Notwithstanding the foregoing, if a dispute arises between or among Parent, the Surviving Subsidiary or their respective Subsidiaries and a Person other than the Surviving Subsidiary after the Closing, the Surviving Subsidiary may assert the attorney/client privilege to prevent disclosure of confidential communications by Company Counsel to such Person.

 

(b) Each Pre-Closing Holder, the Holder Representative, the Company and each of its Subsidiaries and each Parent Party agrees that, as to all communications between or among Winston & Strawn LLP (“WS”) and any Parent Party that relate in any way to the transactions contemplated by this Agreement, from and after the Closing, the attorney/client privilege and the expectation of the client confidence belongs, unless otherwise consented to by the Monitoring Committee, exclusively to the Monitoring Committee and may be controlled by the Monitoring Committee and, unless otherwise consented to by the Monitoring Committee, shall not pass to or be claimed by any party or Person. Notwithstanding the foregoing, if a dispute arises between or among Parent, the Surviving Subsidiary or their respective Subsidiaries and a Person other than the Surviving Subsidiary after the Closing, the Parent Parties may assert the attorney/client privilege to prevent disclosure of confidential communications by WS to such Person.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Parties have hereunto caused this Agreement to be duly executed as of the date first above written.

 

  FORUM MERGER II CORPORATION
     
  By: /s/ Marshall Kiev                     
  Name: Marshall Kiev
  Title: Co-CEO and President

 

 

SPROUT MERGER SUB INC.

     
  By:  /s/ David Boris              
  Name: David Boris
  Title: President and Treasurer

 

 

 

 

MYJOJO, INC.

     
  By: /s/ Salvatore Galletti               
  Name: Salvatore Galletti
  Title: President

  

 

Salvatore Galletti, solely in its capacity as the initial Holder Representative hereunder

     
  By: /s/ Salvatore Galletti    
  Name: Salvatore Galletti
  Title: Holder Representative            

 

 

 

Annex I

 

Defined Terms

 

280G Approval” has the meaning specified in Section 6.20.

 

Accounting Principles” means (a) GAAP, except as set forth on Schedule 1.2, and (c) calculations based exclusively on the facts and circumstances as they exist as of 12:01 a.m. (Eastern Time) on the Closing Date and excluding (i) the effects of any event, act, change in circumstances or similar development arising or occurring at or after Closing and (ii) any purchase accounting or other adjustment arising out of the consummation of the transactions contemplated hereby.

 

Accounting Referee” has the meaning specified in Section 3.5(c).

 

Acquisition Proposal” has the meaning specified in Section 6.14.

 

Action” means any claim, action, suit, hearing, audit, assessment, arbitration, inquiry, proceeding or investigation, in each case, by or before any Governmental Authority.

 

Additional Available Cash Consideration” means the amount Cash of Parent, the Company and its Subsidiaries available for payment to the Pre-Closing Holders from Parent, the Company and its Subsidiaries from any source (including the Trust Account and any Supplemental Financing) after first giving effect to (i) the payments required to be made under this Agreement at Closing by Parent, the Company and its Subsidiaries, including for the avoidance of doubt Payment of Company Transaction Expenses and Parent Transaction Expenses, (ii) the Common Stockholder Redemption and (iii) the requirement that, immediately following payment of the Cash Consideration to the Pre-Closing Holders pursuant to the terms of this Agreement, Parent, the Company and its Subsidiaries retain Cash in an aggregate amount that is at least $25,000,000; provided, that the Additional Available Cash Consideration shall not exceed $25,000,000.

 

Adjustment Amount” has the meaning specified in Section 3.5(d).

 

Adjustment Escrow Account” has the meaning specified in Section 2.4(c)(ii).

 

Adjustment Escrow Amount” means $1,000,000.00.

 

Adjustment Escrow Stock” means those shares of Parent Common Stock deposited with the Escrow Agent pursuant to the terms of this Agreement and the Holder Escrow Agreement as collateral for the Merger Consideration Adjustment. The number of such shares of Parent Common Stock initially deposited with the Escrow Agent shall be 100,000 (i.e., the Adjustment Escrow Amount divided by the Reference Price).

 

A-1

 

 

Affiliate” means, with respect to any specified Person, any Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person, through one or more intermediaries or otherwise. For the avoidance of doubt, following the Closing, Affiliates of Parent shall include the Company and its Subsidiaries. For purposes of this definition, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

Affiliated Group” means a group of Persons that elects, is required to, or otherwise files a Tax Return or pays a Tax as an affiliated group, consolidated group, combined group, unitary group, or other group recognized by applicable Tax Law.

 

Aggregate Consideration Value” has the meaning specified in Section 3.2.

 

Agreement” has the meaning specified in the preamble hereto.

 

Anti-Corruption Laws” means the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any rules or regulations thereunder, or any similar Laws and regulations regarding corruption, bribery, ethical business conduct, or gifts, hospitalities, or expense reimbursements to public officials and private persons which are applicable in countries where the Company and its Subsidiaries engage in business.

 

Balance Sheet Date” has the meaning specified in Section 4.8(a).

 

Business Combination” means, when used in reference to Parent, any merger, consolidation or combination of Parent or any direct or indirect Subsidiary (or parent entity) of Parent with, or any other acquisition of, or by, any third-party corporation, partnership, unincorporated association or other entity or Person.

 

Business Day” means any day that is not a Saturday, a Sunday or other day on which the Federal Reserve Bank of New York is closed.

 

Cash” of any Person as of any date means all cash and cash equivalents (including marketable securities and short term investments), and (i) includes checks, wire transfers and drafts deposited or available for deposit for such Person’s account, as well as petty cash and (ii) excludes issued but uncleared checks, wire transfers in transit and drafts issued by such Person, and (iii) excludes Restricted Cash, in each case, calculated in accordance with the Accounting Principles.

 

Cash Consideration” means an amount of Cash equal to (i) $50,000,000 plus (ii) the Additional Available Cash Consideration; provided, that Cash Consideration shall not exceed $75,000,000.

 

CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act.

 

Certificate” has the meaning specified in Section 3.4(b).

 

A-2

 

 

Change in Recommendation” has the meaning specified in Section 6.12.

 

Change of Control” has the meaning specified in Section 3.7(b).

 

Change of Control Holdback Release” has the meaning specified in Section 3.7(b).

 

Closing” has the meaning specified in Section 2.3.

 

Closing Company Transaction Expenses” has the meaning specified in Section 3.1(a).

 

Closing Date” has the meaning specified in Section 2.3.

 

Closing Date Cash” has the meaning specified in Section 3.5(b).

 

Closing Date Indebtedness” has the meaning specified in Section 3.5(b).

 

Closing Date Net Working Capital” has the meaning specified in Section 3.5(b).

 

Closing Date Statement” has the meaning specified in Section 3.1(a).

 

Closing Statement” has the meaning specified in Section 3.5(a).

 

Code” means the Internal Revenue Code of 1986, as amended.

 

Common Stock” means the common stock of the Company, par value $0.001 per share.

 

Common Stockholder Redemption” has the meaning specified in Section 6.11(b).

 

Company” has the meaning specified in the preamble hereto.

 

Company Benefit Plan” has the meaning specified in Section 4.13(a).

 

Company Board” has the meaning specified in the Recitals.

 

Company Certificate” means the Certificate of Incorporation of the Company, dated as of May 21, 2020.

 

Company Counsel” means Rutan & Tucker, LLP.

 

Company Cure Period” has the meaning specified in Section 8.1(b)(i).

 

Company D&O Tail Premium” means the premium payable in connection with the obtaining the tail policy with respect to the Company’s directors’ and officers’ liability insurance policy obtained pursuant to Section 6.10, inclusive of any underwriting fees, taxes, etc. For the avoidance of doubt, the Company D&O Tail Premium does not include the premium payable in connection with obtaining the tail policy with respect to the Parent Parties’ directors’ and officers’ liability insurance policy obtained pursuant to Section 6.10.

 

A-3

 

 

Company Disclosure Schedules” means the Company’s Disclosure Schedules delivered by the Company to the Parent Parties on the date hereof.

 

Company Indemnified Persons” has the meaning specified in Section 6.10(a).

 

Company Intellectual Property” means all Owned Intellectual Property and all Intellectual Property used or held for use in connection with, or otherwise necessary for, conducting the business of the Company and its Subsidiaries as previously conducted, currently conducted, and as proposed to be conducted.

 

Company Interests” means the Common Stock and Special Stock.

 

Company Leases” has the meaning specified in Section 4.20(c).

 

Company Letter of Transmittal” has the meaning specified in Section 3.4(b).

 

Company Material Contract” has the meaning specified in Section 4.12(a).

 

Company Product” means all current products and services made commercially available, distributed, sold or licensed out by or on behalf of the Company or any of its Subsidiaries.

 

Company Stockholder Approval” has the meaning specified in the Recitals.

 

Company Transaction Expenses” means the following fees, expenses and amounts payable solely to the extent such fees, expenses and amounts payable are incurred and unpaid as of the Closing: (a) the legal, accounting, financial advisory, and other advisory, transaction or consulting fees and expenses incurred and/or payable by the Company or its Subsidiaries in connection with the Transactions, the preparation, negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby, any alternative transaction and any prior equity financings of the Company or its Subsidiaries and any management, monitoring or other similar fee arrangements, (b) any severance, change of control, transaction, retention, termination or similar amounts payable to any employees of the Company or its Subsidiaries as a result of the consummation of the transactions contemplated hereby together with the employer portion of all payroll Taxes payable thereon or deferred pursuant to Section 2302 of the CARES Act thereon (including any “double-trigger” change of control payments or other vesting), (c) the Company D&O Tail Premium, (d) fifty percent (50%) of any filing fees incurred in connection with filings made pursuant to the HSR Act, and (e) fifty percent (50%) of any and all transfer taxes. For the avoidance of doubt, no amounts payable in connection with (i) the repayment of any Indebtedness, (ii) any Indebtedness Exclusions or (iii) the Holder Representative Expense Amount shall be included in the Company Transaction Expenses. For the avoidance of doubt, Company Transaction Expenses shall not include any Parent Transaction Expenses.

 

Confidential Data” means all data for which the Company or any of its Subsidiaries are required by Law, Contract or privacy policy to safeguard and/or keep confidential or private, including all such data transmitted to the Company or any of its Subsidiaries by customers or other Persons that interact with the Company or any of its Subsidiaries.

 

A-4

 

 

Confidentiality Agreement” means the Confidentiality Agreement, dated as of March 24, 2020, by and between Parent and the Company.

 

Contracts” means any legally binding contracts, agreements, subcontracts, leases, subleases, licenses, sublicenses and purchase orders, in each case, including all legally binding amendments, modifications and supplements thereto.

 

Contributions” has the meaning specified in the Recitals.

 

COVID-19” means SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), coronavirus disease or COVID-19.

 

COVID-19 Measures” means any quarantine, “shelter in place”, “stay at home”, workforce reduction, social distancing, shut down, closure, sequester or any other Law, Governmental Order, directive, guidelines or recommendations by any Governmental Order in connection with or in response to COVID-19, including, but not limited to, the Coronavirus Aid, Relief, and Economic Security Act (CARES).

 

Current Assets” means, as of any date, the consolidated current assets of the Company and its Subsidiaries, which current assets shall exclude Cash and include only the line items set forth on Schedule 1.2 under the heading “Current Assets” (after giving effect to the adjustments specified thereon) and no other assets.

 

Current Liabilities” means, as of any date, the consolidated current liabilities of the Company and its Subsidiaries, which current liabilities shall include the balance owing under Item 1 of Schedule 4.12(a)(ii) and such other line items set forth on Schedule 1.2 under the heading “Current Liabilities” (after giving effect to the adjustments specified thereof) and no other liabilities (including Indebtedness, Company Transaction Expenses and the Holder Representative Expense Amount).

 

Deficit Amount” has the meaning specified in Section 3.5(f).

 

Delaware SoS” means the Secretary of State of the State of Delaware.

 

Derivative Rights” means, with respect to any equity interests of any Person, any and all options, warrants, rights, convertible or exchangeable securities, “phantom” equity rights, equity appreciation rights, profits interests, equity-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which such Person is a party or is bound obligating such Person to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of or other equity (or phantom equity) interests in, or any security convertible or exercisable for or exchangeable into any capital stock or other equity interest in, such Person.

 

Determination Date” has the meaning specified in Section 3.5(c).

 

DGCL” means the General Corporation Law of the State of Delaware, as the same may be amended from time to time, and any successor to the General Corporation Law of the State of Delaware.

 

A-5

 

 

Director Nomination Agreement” has the meaning specified in Section 2.4(c)(vi).

 

Disagreement Notice” has the meaning specified in Section 3.5(c).

 

Effective Time” has the meaning specified in Section 2.1.

 

Employment Agreements” has the meaning specified in the Recitals.

 

Environmental Laws” means any and all applicable foreign, federal, state or local Laws relating to Hazardous Materials or the protection of human health and the environment as in effect as of the Closing Date.

 

Environmental Permits” has the meaning specified in Section 4.22.

 

Equity Consideration” has the meaning specified in Section 3.2.

 

Equity Interests” shall mean with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting or non-voting) of, such Person’s capital stock or other equity interests (including partnership or limited liability company interests in a partnership or limited liability company or any other interest or participation right that confers on a Person the right to receive a share of the profits and losses, or distributions of assets, of the issuing Person), and all Derivative Rights with respect to any of the foregoing.

 

ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

ERISA Affiliate” means, with respect to any entity, any corporation or trade or business (whether or not incorporated) which is or was, at the relevant time, treated with such entity as a single employer within the meaning of Section 414(b), (c), (m) or (o) of the Code.

 

Escrow Agent” means Citibank, N.A.

 

Estimated Closing Date Cash” has the meaning specified in Section 3.1(a).

 

Estimated Closing Date Indebtedness” has the meaning specified in Section 3.1(a).

 

Estimated Closing Date Net Working Capital” has the meaning specified in Section 3.1(a).

 

Estimated Company Transaction Expenses” has the meaning specified in Section 3.1(a).

 

Estimated Net Working Capital Adjustment Amount” means the amount, which may be positive or negative, equal to (i) Estimated Closing Date Net Working Capital, minus (ii) $10,000,000.00.

 

Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

Existing Credit Documents” means, collectively, on Schedule 4.12(a)(ii) (other than Item (1) thereof).

 

A-6

 

 

Families First Act” means the Families First Coronavirus Response Act.

 

FDA” has the meaning specified in Section 4.29(a).

 

Final Closing Balance Sheet” has the meaning specified in Section 3.5(b).

 

Financial Statements” has the meaning specified in Section 4.8(a).

 

First Share Price Trigger” has the meaning specified in Section 3.7(a).

 

Food Authorities” has the meaning specified in Section 4.29(a).

 

Food Safety Laws” means any Law regulating food safety, food sanitation or food production, including the use, manufacture, production, packaging, labeling, transportation, distribution, sale or marketing of food products, in each case, including the Federal Food, Drug and Cosmetic Act.

 

GAAP” means United States generally accepted accounting principles, consistently applied.

 

Galletti Transfer” has the meaning specified in the Recitals.

 

Goods” has the meaning specified in Section 4.27.

 

Governmental Authority” means any (a) nation, region, state, county, city, town, village, district or other jurisdiction, (b) federal, state, provincial, municipal, local or foreign government, (c) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department or other entity), (d) regulatory or administrative agency, (e) multinational organization, (f) governmental commission, department, board, bureau, agency, instrumentality, court or tribunal or (g) other body exercising, or entitled to exercise, any executive, judicial, legislative, arbitral, police or taxing authority or power of any nature.

 

Governmental Order” means any order, decision, ruling, verdict, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered, issued, published or promulgated by or with any Governmental Authority.

 

Group” has the meaning specified in Section 3.7(b).

 

Hazardous Material” means any substance, material or waste that is listed, classified or regulated by a Governmental Authority as a “toxic substance”, “hazardous substance” or “hazardous material” or words of similar meaning and regulatory effect, including petroleum and any byproducts or derivatives thereof, any material identified or regulated as carcinogenic, and per- and polyfluoroalkyl substances.

 

Holdback Escrow Agreement” has the meaning specified in Section 2.4(a)(i).

 

Holdback Period” has the meaning specified in Section 3.7(a).

 

Holdback Release” has the meaning specified in Section 3.7(a).

 

A-7

 

 

Holder Representative” has the meaning specified in Section 9.1.

 

Holder Representative Expense Amount” means the amount to be paid to the Holder Representative to establish the Reserve, which amount shall be set forth in the Closing Date Statement.

 

HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

Income Tax” (and, with the correlative meaning, “Income Taxes”) means any Tax that is based on, or computed with respect to, net income or earnings or gross income or earnings (and any franchise Tax or other Tax in connection with doing business imposed in lieu thereof) and any related penalties or interest.

 

Incumbency Certificate” means a certificate delivered by or on behalf of the Company, on the one hand, and Parent, on the other hand, dated as of the Closing Date, signed by an executive officer of such Party on its behalf, certifying as to (i) the incumbency of its and, as applicable, its Subsidiaries’ officers executing this Agreement and the Transaction Agreements, (ii) the Organizational Documents of such Person and each of its Subsidiaries and that such Organizational Documents have not been amended or rescinded since the date of such certification and remain in full force and effect immediately prior to the Effective Time, and (iii) the resolutions of the board of directors (or similar governing body) of such Person and, as applicable, authorizing the execution, delivery and performance by such Person of this Agreement and the Transaction Agreements to which such Person is party.

 

Indebtedness” means, without duplication, all (a) indebtedness of the Company and its consolidated Subsidiaries for borrowed money (including (x) letters of credit to the extent drawn, and (y) under the Existing Credit Documents), (b) all obligations under leases that were, prior to the effectiveness of ASC 842, required to be capitalized under GAAP, (c) indebtedness evidenced by any note, bond, debenture, mortgage, or other debt instrument or debt security, (d) obligations under any interest rate, currency or other hedging agreement (including any swaps, forward contracts, caps, floors, collars and similar Contracts calculated in accordance with the Accounting Principles), (e) obligations under any performance bond, but only to the extent drawn or called prior to the Closing Date, (f) unpaid income Taxes and the employer portion of any payroll Taxes accrued and otherwise payable on or prior to the Closing Date but deferred by the Company or any Subsidiary pursuant to Section 2302 of the CARES Act, (g) guarantees with respect to any indebtedness of any other Person of a type described in clauses “(a)” through “(f)” above, and (h) for clauses “(a)” through “(f)” above, all accrued and unpaid interest thereon, if any, and any premiums, make-whole amounts, penalties (including in respect of prepayment) and fees owing in respect thereof (but, only to the extent outstanding or payable in connection with the Transaction); provided, however, that Indebtedness shall not include (i) trade payables, accounts payable and other Current Liabilities, (ii) undrawn letters of credit and reimbursement obligations in respect of undrawn letters of credit, (iii) any liabilities related to inter-company debt between the Company and one or more of its Subsidiaries (iv) any non-income Tax liabilities, and (v) any items specifically included in Net Working Capital (including, any balance outstanding under the loan agreement set forth on Item 1 of Schedule 4.12(a)(ii) that is specifically included in Net Working Capital) (clauses (i) through (v) collectively, the “Indebtedness Exclusions”).

 

A-8

 

 

Indebtedness Exclusions” has the meaning specified in the definition of “Indebtedness”.

 

Indemnified Persons” has the meaning specified in Section 6.10(a).

 

Intellectual Property” means any of the following worldwide: (i) patents, industrial designs, and utility models and any applications for any of the foregoing, and all provisionals, continuations, continuations-in-part, provisionals, divisions, reissues, renewals, re-examinations and extensions thereof; and all patents, applications, documents, and filings claiming priority to or serving as a basis for priority thereof; (ii) registered and unregistered trademarks, service marks, certification marks, trade dress, trade names, logos, slogans, taglines, fictitious business names (d/b/a’s), uniform resource locators, Internet domain names, social media accounts, websites, and all other source of business identifiers or designators of origin; all applications and registrations and extensions thereof, and all common law rights in and goodwill associated with any of the foregoing (collectively, “Trademarks”); (iii) registered and unregistered works of authorship, copyrights, mask works, database rights, and design rights, and applications and registrations for any of the foregoing, renewals and extensions thereof, all moral rights associated with any of the foregoing, and all economic rights of authors and inventors, however denominated, associated with any of the foregoing; (iv) trade secrets and other confidential or proprietary information, including business and technical documents, know-how, inventions (patentable or not), invention disclosures, ideas, developments, improvements, designs, drawings, algorithms, source code, methods, processes, techniques, formulae, research and development, compilations, compositions, manufacturing processes, production processes, devices, technical data, specifications, reports, analyses, data analytics, customer lists, supplier lists, pricing information, cost information, business plans, business proposals, marketing plans, marketing proposals, and recipes; (v) Software; and (vi) rights recognized under applicable Law that are equivalent or similar to any of the foregoing.

 

Interim Financial Statements” has the meaning specified in Section 4.8(a).

 

International Trade Laws” means any law, statute, code, or order relating to international trade, including, but not limited to: (i) all import laws and regulations, including but not limited to those administered by U.S. Customs and Border Protection, (ii) export control regulations, including but not limited to laws and regulations issued by the U.S. Department of State pursuant to the International Traffic in Arms Regulations (22 C.F.R. 120 et seq.) and/or the U.S. Department of Commerce pursuant to the Export Administration Regulations (15 C.F.R. 730 et seq.); (iii) sanctions laws and regulations as administered by the U.S. Department of the Treasury’s  Office of Foreign Assets Control (“OFAC”) (31 C.F.R. Part 500 et seq.); (iv) U.S. anti-boycott laws and requirements (Section 999 of the US Internal Revenue Code of 1986, as amended, or related provisions, or under the Export Administration Act, as amended, 50 U.S.C. App. Section 2407 et. seq.); (v) anti-bribery and anti-corruption laws, including but not limited to the U.S. Foreign Corrupt Practices Act of 1977, the U.S. Travel Act, 18 U.S.C. § 1952, and the U.K. Bribery Act of 2010; (vi) any other similar law, directive, or regulation (including those of the European Union or any of its Member States) related to similar subject matter; or (vii) applicable anti-money laundering laws, regulations, rules and guidelines in United States and in the jurisdiction of incorporation.

 

A-9

 

 

IT Assets” means Software, systems, servers, computers, hardware, firmware, middleware, networks, data communications lines, routers, hubs, switches and all other information technology equipment, and all associated documentation, in each case, used or held for use in connection with, or otherwise necessary for, conducting the business of the Company or any of its Subsidiaries as previously conducted, currently conducted, and as proposed to be conducted.

 

Italian GAAP” means the accounting principles set out in the Italian Civil Code as defined and interpreted by the Organismo Italiano di Contabilità (the Italian Committee on Accounting) and by Consiglio Nazionale dei Dottori Commercialisti e dei Ragionieri (the Italian Accountants’ Organization), as in effect as of the relevant time.

 

Ittella” has the meaning specified in the Recitals.

 

Ittella Chef” has the meaning specified in the Recitals.

 

Ittella Italy” has the meaning specified in the Recitals.

 

Ittella Holdback Shares” has the meaning specified in Section 3.7(a).

 

JOBS Act” has the meaning specified in Section 5.16.

 

Key Customers” has the meaning specified in Section 4.27(b).

 

Key Employee Grant Agreement” has the meaning specified in the Recitals.

 

Key Suppliers” has the meaning specified in Section 4.27(a).

 

Law” means any statute, law, ordinance, rule, regulation or Governmental Order, in each case, of any Governmental Authority and the common law.

 

Leased Real Property” means all real property leased or licensed by the Company or any of its Subsidiaries.

 

Leases” has the meaning specified in Section 4.20(b).

 

Lien” means any mortgage, servitude, easement, right of way, equitable interest, leasehold or other possessory interest, option, preference, priority, right of first refusal, offer or negotiation, deed of trust, pledge, hypothecation, encumbrance, security interest, condition, limitation or other lien of any kind or nature whatsoever (whether absolute or contingent).

 

Malicious Code” means any (i) back door, time bomb, drop dead device, or other Software routine designed to disable a computer program automatically with the passage of time or under the positive control of a Person other than the user of the program; (ii) virus, Trojan horse, worm, or other Software routines or hardware components designed to permit unauthorized access, to disable, erase, or otherwise harm Software, hardware, or data; and (iii) similar program.

 

A-10

 

 

Material Adverse Effect” means any event, change, development, effect or occurrence that has, or would reasonably be expected to have a material adverse effect on (a) the business, results of operations, assets, liabilities or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole; provided, however, that in no event will any of the following (or the effect of any of the following), alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Material Adverse Effect”: (i) any change in Law, regulatory policies, accounting standards or principles (including GAAP) or any guidance relating thereto or enforcement philosophy or interpretation thereof, (ii) any change in interest rates or economic, political, business or financial market conditions generally (including any changes in credit, financial, commodities, securities or banking markets), (iii) any change generally affecting any of the industries in which the Company or any of its Subsidiaries operates or the economy as a whole, including any change in commodity prices, (iv) any acts of terrorism, war or the outbreak or escalation of armed hostilities, or (v) any failure, in and of itself, of the Company or its Subsidiaries to meet any projections, forecasts or budgets, provided, that this clause (v) shall not prevent a determination that any event, change, development, effect or occurrence underlying such failure to meet projections or forecasts has resulted in a Material Adverse Effect (to the extent such change or effect is not otherwise excluded from this definition of Material Adverse Effect); except, in the case of clauses (i), (ii) and (iii) above, to the extent that any such event, change, development, effect or occurrence has a materially disproportionate and adverse effect on the business of the Company and its Subsidiaries relative to other businesses in the industries in which the Company and its Subsidiaries operate, taken as a whole; or (b) the ability of the Company or any of its Subsidiaries, to enter into, to perform its obligations under, or to consummate the transactions contemplated by this Agreement.

 

Merger” has the meaning specified in the Recitals.

 

Merger Certificate” has the meaning specified in the Recitals.

 

Merger Consideration” has the meaning specified in Section 3.2.

 

Merger Consideration Adjustment” has the meaning specified in Section 3.5(a).

 

Merger Consideration Schedule” has the meaning specified in Section 3.1(b).

 

Merger Sub” has the meaning specified in the preamble hereto.

 

Monitoring Committee” has the meaning specified in Section 2.2(b).

 

Myjojo California” has the meaning specified in the Recitals.

 

Myjojo Merger” has the meaning specified in the Recitals.

 

NASDAQ” means the NASDAQ Capital Market.

 

A-11

 

 

Net Working Capital” as of any date means (i) all Current Assets, minus (ii) all Current Liabilities. An illustrative calculation of Net Working Capital, as of March 31, 2020, is set forth on Schedule 1.2.

 

Non-US Plan” has the meaning specified in Section 4.13(a).

 

NYSE” means The New York Stock Exchange.

 

OFAC” has the meaning specified in Section 5.18(c).

 

Organizational Documents” means (a) the certificate or articles of incorporation, (b) bylaws, (c) any charter, certificate of formation or similar document adopted or filed in connection with the creation, formation or organization of a Person, (d) any limited liability company, partnership or shareholder agreement, and (e) any amendment to any of the foregoing.

 

Owned Intellectual Property” means all Intellectual Property owned or purported to be owned by the Company or any of its Subsidiaries.

 

Owned Real Property” means all real property owned or purported to be owned by the Company or any of its Subsidiaries.

 

Owned Software” means all Software owned or purported to be owned by the Company or any of its Subsidiaries.

 

Parent” has the meaning specified in the preamble hereto.

 

Parent Board” has the meaning specified in the Recitals.

 

Parent Board Recommendation” has the meaning specified in Section 6.12.

 

Parent Class A Common Stock” has the meaning specified in Section 5.5(a)(i).

 

Parent Class B Common Stock” has the meaning specified in Section 5.5(a)(i).

 

Parent Common Stock” means (i) prior to the Effective Time, the Parent Class A Common Stock and Parent Class B Common Stock and (ii) at and after the Effective Time, the common stock, par value $0.0001 per share, of Parent.

 

Parent Common Stockholders Meeting” has the meaning specified in Section 6.12.

 

Parent Cure Period” has the meaning specified in Section 8.1(c)(i).

 

Parent Disclosure Schedules” means the Parent Parties’ Disclosure Schedules delivered by the Parent to the Company on the date hereof.

 

Parent Financial Statements” has the meaning specified in Section 5.13(b).

 

Parent Incentive Plan” has the meaning specified in Section 6.11(c).

 

A-12

 

 

Parent Indemnified Persons” has the meaning specified in Section 6.10(a).

 

Parent Material Adverse Effect” means any event, change, development, effect or occurrence that has, or would reasonably be expected to have a material adverse effect on the ability of the Parent Parties to enter into, to perform their respective obligations under, or to consummate the transactions contemplated by, this Agreement; provided, however, that in no event will any of the following (or the effect of any of the following), alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Parent Material Adverse Effect”: (i) any change in Law, regulatory policies, accounting standards or principles (including GAAP) or any guidance relating thereto or enforcement philosophy or interpretation thereof, (ii) any change in interest rates or economic, political, business or financial market conditions generally (including any changes in credit, financial, commodities, securities or banking markets), (iii) any change generally affecting any of the industries in which the Parent Parties, the Company or any of its Subsidiaries operate or the economy as a whole, including any change in commodity prices, (iv) any acts of terrorism, war or the outbreak or escalation of armed hostilities, or (v) any failure, in and of itself, of the Parent Parties, the Company or its Subsidiaries to meet any projections, forecasts or budgets, provided, that this clause (v) shall not prevent a determination that any event, change, development, effect or occurrence underlying such failure to meet projections or forecasts has resulted in a Parent Material Adverse Effect (to the extent such change or effect is not otherwise excluded from this definition of Parent Material Adverse Effect); except, in the case of clauses (i), (ii) and (iii) above, to the extent that any such event, change, development, effect or occurrence has a materially disproportionate and adverse effect on the businesses of the Parent Parties, the Company and its Subsidiaries, taken as a whole, relative to other businesses in the industries in which the Parent Parties, the Company and its Subsidiaries operate, taken as a whole.

 

Parent Party” means each of Parent and Merger Sub.

 

Parent Preferred Stock” has the meaning specified in Section 5.5(a)(i).

 

Parent Recommendation Change Notice” has the meaning specified in Section 6.12.

 

Parent SEC Reports” has the meaning specified in Section 5.12.

 

Parent Stock” means Parent Common Stock and Parent Preferred Stock.

 

Parent Stockholder Approval” has the meaning specified in Section 5.15.

 

Parent Stockholders Meeting” has the meaning specified in Section 5.15.

 

Parent Transaction Expenses” means the legal, accounting, financial advisory, and other advisory, transaction or consulting fees and expenses incurred and/or payable by the Parent Parties in connection with the transactions contemplated by this Agreement (including in connection with any Supplemental Financing) and in connection with the pursuit of other initial Business Combinations, fifty percent (50%) of any filing fees incurred in connection with filings made pursuant to the HSR Act, and fifty percent (50%) of any and all transfer taxes.

 

A-13

 

 

Parent Warrant” means each issued and outstanding warrant to purchase Parent Common Stock.

 

Party” means each of the Persons listed in (i)–(iv) of the preamble hereto.

 

PCAOB” means the Public Company Accounting Oversight Board.

 

PCAOB Audited Financial Statements” has the meaning set forth in Section 6.18.

 

PCAOB” means the Public Company Accounting Oversight Board.

 

PCAOB Financial Statements” has the meaning set forth in Section 6.18.

 

PCI DSS” means the Payment Card Industry Data Security Standard issued by the PCI Security Standards Council, as it may be amended from time to time.

 

Per Share Amount” means, with respect to any class of Company Interests, the portion of the Merger Consideration (without giving effect to the Merger Consideration Adjustment) that is payable with respect to any individual Company Interest, as determined in accordance with the Company Certificate and as such determination is certified in the Merger Consideration Schedule. For the avoidance of doubt, for purposes of determining the Per Share Amount, if interests within a single class of any Company Interests may be entitled to differing economics based on the date of issuance of such Company Interest (whether as a result of application of interest, distribution thresholds, or otherwise), such differing economics shall be given effect by dividing such Company Interests into sub-classes for purposes of calculating the applicable Per Share Amount.

 

Permits” has the meaning specified in Section 4.18.

 

Permitted Liens” means (i) mechanics, materialmen’s and similar Liens (A) with respect to any amounts not yet due and payable or (B) which are being contested in good faith through appropriate proceedings, (ii) Liens for Taxes and assessments not yet due and payable that have been fully reserved on the books of the Company or applicable Subsidiary or which are being contested in good faith through appropriate proceedings, (iii) Liens securing rental payments under capital lease agreements, (iv) Liens on Real Property that do not materially interfere with the present uses of such Real Property and do not materially detract from the value of such Real Property, (v) to the extent terminated at the Closing, Liens securing payment, or any other obligations, of the Company or its Subsidiaries with respect to Indebtedness, and (vi) Liens described on Schedule 1.1.

 

Person” means any individual, firm, corporation (including any not-for-profit corporation), general or limited partnership, limited liability partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority, trust, estate, organization, instrumentality or other entity of any kind.

 

Personal Information” means information that, alone or in combination with other information, allows the identification of an individual or can be used to contact an individual, or serve advertisements to an individual, including without limitation, name; Social Security number; government-issued identification numbers; health or medical information, including health insurance information; financial account information; passport numbers; user names/email addresses in combination with a password or security code that would allow access to an online account; unique biometric identifiers (e.g., fingerprints, retinal scans, face scans, or DNA profile); employee ID numbers; date of birth; digital signature; and Internet Protocol (IP) addresses; or any other data that constitutes personal information or personal data under applicable Law.

 

A-14

 

 

Pizzo” has the meaning specified in the Recitals.

 

Pizzo Contribution” has the meaning specified in the Recitals.

 

Plan” means each “employee benefit plan” as defined in Section 3(3) of ERISA, and each stock purchase, stock option, stock appreciation right, restricted stock, profits interest, phantom equity or other equity-based compensation, severance, employment, salary continuation, change in control, termination, fringe benefit, bonus, incentive, deferred compensation, profit sharing, pension, retirement, health, life, disability, accident, group insurance, welfare, vacation, other paid time off and holiday plan, policy or program and any other plan, policy or program providing compensation and/or benefits.

 

Pre-Closing Holders” means all Persons who hold one or more Company Interests immediately prior to the Effective Time.

 

Pre-Closing Tax Period” means any taxable period that ends on or before the Closing Date.

 

Privacy and Security Requirements” means, to the extent applicable to Company and its Subsidiaries, (a) all Laws regulating the Processing of Personal Information; (b) all Laws related to the Processing of Confidential Data; (c) the Payment Card Industry Data Security Standard issued by the PCI Security Standards Council, as it may be amended from time to time (“PCI DSS”); (d) all Contracts between the Company and any Person, or any Subsidiary and any Person, that is applicable to the PCI DSS and/or the Processing of Personal Information or Confidential Data; and (e) all policies and procedures applicable to the Company or any of its Subsidiaries relating to the PCI DSS and/or the Processing of Personal Information or Confidential Data, including without limitation all website and mobile application privacy policies and internal information security procedures.

 

Pro Rata Share” means, with respect to any Common Stock, the portion of the Merger Consideration (without giving effect to the Adjustment Amount) that is payable with respect to any individual share of Common Stock, as determined in accordance with the Company Articles and as such determination is certified in the Merger Consideration Schedule.

 

Process” means the creation, collection, use (including, without limitation, for the purposes of sending telephone calls, text messages and emails), storage, maintenance, processing, recording, distribution, transfer, transmission, receipt, import, export, protection, safeguarding, access, disposal or disclosure or other activity regarding data (whether electronically or in any other form or medium).

 

A-15

 

 

Projections” has the meaning specified in Section 5.19.

 

Proxy Statement” means a proxy statement of Parent in connection with the transactions contemplated hereby, as the same may be amended or supplemented in accordance herewith.

 

Real Property” means, collectively, the Owned Real Property and the Leased Real Property.

 

Redeemed Stock” means shares of the Parent Common Stock sold in Parent’s initial public offering which, prior to the Closing, have been the subject of a valid election for redemption pursuant to Parent’s Organizational Documents.

 

Reference Price” has the meaning specified in Section 3.2.

 

Registered Intellectual Property” has the meaning specified in Section 4.21(a).

 

Registration Rights Agreement” has the meaning specified in Section 2.4(c)(v).

 

Related Party” means (a) with respect to an individual, (i) immediate family members of the individual, by blood, adoption or marriage, (ii) the individual’s spouse or ex-spouse and (iii) any Person that is directly or indirectly, under the control of any of the foregoing individuals, (b) with respect to any Person other than an individual, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with or of, such Person and (c) with respect to any trust, the beneficiaries, trustees, settlors and grantors of such trust.

 

Remedies Exception” has the meaning specified in Section 4.3.

 

Required Closing Cash” means the Closing Cash that minus $25,000,000.

 

Requisite Company Stockholders” means equityholders of the Company collectively holding amount necessary to approve the Transaction under (i) applicable Law, including Section 251 of the DGCL, and (y) the Organizational Documents of the Company.

 

Reserve” has the meaning specified in Section 9.2.

 

Restricted Cash” any cash or cash equivalents not freely usable by a Person or any of that Person’s Subsidiaries because it is subject to restrictions, limitations or Taxes on use or distribution by Law, Contract or otherwise.

 

Restrictive Covenant Agreements” has the meaning specified in the Recitals.

 

Restructuring” has the meaning specified in the Recitals.

 

Retained Agents” has the meaning specified in Section 9.3.

 

Reviewed Financial Statements” has the meaning specified in Section 4.8(a).

 

Reviewed Interim Financial Statements” shall have the meaning set forth in Section 6.18.

 

A-16

 

 

Sanctioned Country” means any country or region that is, or has been, since January 1, 2015, the subject or target of a comprehensive embargo under Sanctions and Export Control Laws (including Cuba, Iran, North Korea, Sudan, Syria and the Crimea region of Ukraine).

 

Sanctioned Person” means any Person that is the subject or target of sanctions or restrictions under Sanctions and Export Control Laws, including: (i) any Person listed on any applicable U.S. or non-U.S. sanctions- or export-related restricted party list, including but not limited to OFAC’s Specially Designated Nationals and Blocked Persons List and Sectoral Sanctions Identifications List; the U.S. Department of Commerce’s Denied Persons, Unverified, and Entity Lists; the U.S. Department of State’s Debarred List and non-proliferation sanctions lists; the EU Consolidated List of Designated Parties; the Consolidated List of Assets Freeze Targets, maintained by HM Treasury (U.K.); and the UN Consolidated List; (ii) any Person that is, in the aggregate, fifty percent (50%) or greater owned, directly or indirectly, or otherwise controlled by a Person or Persons described in clause (i) so as to subject the Person to sanctions; (iii) any Person acting on behalf of or at the direction of any Person described in clause (i) or (ii); or (iv) any Person that is organized, resident, or located in a Sanctioned Country.

 

Schedules” means the Parent Disclosure Schedules and the Company Disclosure Schedules.

 

SEC” means the United States Securities and Exchange Commission.

 

Second Share Price Trigger” has the meaning specified in Section 3.7(a).

 

Section 16” has the meaning specified in Section 6.13.

 

Securities Act” means the Securities Act of 1933, as amended.

 

Security Breach” any (i) security breach or breach of Personal Information or Confidential Data under applicable Privacy and Security Requirements; (ii) unauthorized access, acquisition, use, disclosure, modification, deletion, or destruction of information (including Personal Information or Confidential Data); (iii) unauthorized interference with system operations of IT Systems; (iv) phishing incident or ransomware attack.

 

Seller Prepared Returns” has the meaning specified in Section 6.9(a).

 

Share Price Trigger” has the meaning specified in Section 3.7(a).

 

Shareholder Action” has the meaning specified in Section 6.5(e).

 

Software” means all computer software and databases, source code, object code, development tools, comments, user interfaces, menus, buttons, and icons; and all files, data, scripts, application programming interfaces, manuals, design notes, programmers’ notes, architecture, algorithms and other items and documentation related thereto or associated therewith, and any derivative works, foreign language versions, fixes, upgrades, updates, enhancements, new versions, previous versions, new releases and previous releases thereof; and all media and other tangible property necessary for the delivery or transfer thereof.

 

A-17

 

 

Special Stock” means the Class A and Class B special stock of the Company, each par value $0.001 per share.

 

Sponsor” means Forum Investors II LLC, a Delaware limited liability company.

 

Sponsor Earnout Letter” has the meaning specified in Section 3.8.

 

Sponsor Earnout Shares” has the meaning specified in Section 3.8.

 

Sponsor Escrow Agreement” has the meaning specified in Section 2.4(c)(iv).

 

Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, limited liability company, association or other business entity, a majority of the partnership, membership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.

 

Supplemental Financing” means any debt or equity financing that is arranged by Parent, Sponsor and/or their Affiliates in order to finance the transactions contemplated by this Agreement.

 

Surviving Subsidiary” has the meaning specified in Section 2.1(a).

 

Tax Returns” means any return, declaration, report, statement, information statement or other document filed or required to be filed with a Governmental Authority with respect to Taxes, including any claims for refunds of Taxes and any amendments of any of the foregoing.

 

Taxes” means all federal, state, local, foreign or other tax, including income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, customs duties, capital stock, ad valorem, value added, inventory, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, alternative, unclaimed or abandoned property, add-on minimum or estimated tax, and including any interest, penalty or addition thereto.

 

Terminating Company Breach” has the meaning specified in Section 8.1(b)(i).

 

Terminating Parent Breach” has the meaning specified in Section 8.1(c)(i).

 

Termination Date” has the meaning specified in Section 8.1(b)(ii).

 

Trade Controls” has the meaning specified in Section 4.26(a).

 

Trademarks” has the meaning specified in the definition of “Intellectual Property.”

 

Transaction” has the meaning specified in the Recitals.

 

A-18

 

 

Transaction Agreements” has the meaning specified in Section 4.3.

 

Transaction Proposals” has the meaning specified in Section 6.11(c).

 

Trust Account” has the meaning specified in Section 5.14(a).

 

Trust Agreement” has the meaning specified in Section 5.14(a).

 

Trustee” has the meaning specified in Section 5.14(a).

 

Updated Merger Consideration Schedule” has the meaning specified in Section 3.5(g).

 

UMB” has the meaning specified in the Recitals.

 

UMB Contribution” has the meaning specified in the Recitals.

 

USDA” has the meaning specified in Section 4.29(a).

 

WARN Act” has the meaning specified in Section 4.14(c).

 

Written Consent” means a written consent effectuating the Company Stockholder Approval by the Requisite Company Stockholders.

 

WS” has the meaning specified in Section 10.16.

 

A-19

 

 

EXHIBIT A

 

FORM OF MERGER CERTIFICATE

 

[See Attached]

 

Ex A-1

 

 

CERTIFICATE OF MERGER

 

OF

 

SPROUT MERGER SUB, INC.
(a Delaware corporation)

 

with and into

 

MYJOJO, INC.
(a Delaware corporation)

 

Pursuant to Section 251 of the General Corporation Law of the State of Delaware

 

Myjojo, Inc., a Delaware corporation, does hereby certify:

 

FIRST: The name and state of incorporation of each constituent corporation to this merger are as follows:

 

Name   Jurisdiction
     
Myjojo, Inc.   Delaware
     
Sprout Merger Sub, Inc.   Delaware

 

SECOND: An Agreement and Plan of Merger, dated as of June 11, 2020, by and among Forum Merger II Corporation, a Delaware corporation, Sprout Merger Sub, Inc., a Delaware corporation (“Merger Sub”), Myjojo, Inc., a Delaware corporation, and Salvatore Galletti, in the capacity as the initial holder representative thereunder, has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with the General Corporation Law of the State of Delaware.

 

THIRD: The name of the corporation surviving the merger is Myjojo, Inc., a Delaware corporation (the “Surviving Corporation”).

 

FOURTH: The Certificate of Incorporation of the Surviving Corporation shall be amended and restated at the effective time of the merger to read in its entirety as is attached hereto as Exhibit A.

 

FIFTH: This Certificate of Merger and the merger provided for herein shall be effective immediately upon the filing of this Certificate of Merger with the Secretary of State of the State of Delaware.

 

SIXTH: The executed Agreement and Plan of Merger between the aforesaid constituent corporations is on file at the office of the Surviving Corporation at 6305 Alondra Boulevard, Paramount, California 90723. A copy will be provided by the Surviving Corporation, upon request and without cost, to any stockholder of the constituent corporations.

 

[Signature Page Follows]

 

Ex A-2

 

 

IN WITNESS WHEREOF, the Surviving Corporation has caused this Certificate of Merger to be signed by an authorized officer this [●] day of [●], 2020.

 

  MYJOJO, INC.
     
  By:  
  Name:  [●]
  Its: [●]

 

[Signature Page - Certificate of Merger]

 

Ex A-3

 

 

Exhibit A to Certificate of Merger

 

[See attached.]

 

Ex A-4

 

 

 

EXHIBIT B

 

FORM OF RESTRICTIVE COVENANT AGREEMENT

 

[See Attached]

 

Ex B-1

 

 

RESTRICTIVE COVENANT AGREEMENT

 

This Restrictive Covenant Agreement (this “Agreement”) is made and entered into as of [__], 2020 by and between Forum Merger II Corporation, a Delaware corporation (“Parent”), and [__] (the “Restricted Party”, and together with Parent, the “Parties”, and each a “Party”). References to the “Company” in this Agreement shall refer to Parent after giving effect to the consummation of the Merger (as defined below) and each of Parent’s direct or indirect Subsidiaries (including Ittella) and any of their respective successors-in-interest or joint ventures (if any).

 

RECITALS

 

WHEREAS, this Agreement is being entered into in connection with that certain Agreement and Plan of Merger, dated as of June 11, 2020 (the “Signing Date”) (as amended, restated or otherwise modified from time to time in accordance therewith, the “Merger Agreement”), by and among Parent, Sprout Merger Sub, Inc., a Delaware corporation (“Merger Sub”), Myjojo, Inc., a Delaware corporation (together with its subsidiaries, “Ittella”) and the Holder Representative. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement.

 

WHEREAS, Parent (i) is a publicly listed special purpose acquisition vehicle, which has been established for the purpose of effecting an initial business combination, and (ii) has no material operating assets (other than those of a kind customarily held by a special purpose acquisition vehicle).

 

WHEREAS, pursuant to, and subject to the terms and conditions contained in, the Merger Agreement, Parent, Merger Sub, Ittella and the Holder Representative will enter into a business combination transaction pursuant to which, among other things, Merger Sub will merge with and into the Company (the “Merger”), with Ittella continuing as the Surviving Subsidiary.

 

WHEREAS, as a result of the Merger, (i) the stockholders of Ittella that existed a moment in time prior to the Merger, will have their equity interests in Ittella cancelled and converted into the right to receive the consideration set forth in the Merger Agreement, and (ii) Ittella (as the Surviving Subsidiary) will be a wholly-owned Subsidiary of Parent.

 

WHEREAS, the Restricted Party acknowledges and agrees that (i) this Agreement is being entered into as part of the Merger Agreement and the Merger, (ii) the covenants and agreements set forth in this Agreement are a material inducement to, and a condition precedent of, Parent’s willingness to enter into the Merger Agreement and consummate the Merger, (iii) the Restricted Party shall receive substantial direct and indirect benefits by the consummation of the Merger (including the Restricted Party’s portion of the consideration received by such Restricted Party in connection with the Merger), and (iv) Parent and its Affiliates would not obtain the benefit of the bargain set forth in the Merger Agreement as specifically negotiated by the parties thereto if the Restricted Party breached the provisions of this Agreement.

 

WHEREAS, as a condition to the consummation of the Merger, the Restricted Party has agreed to enter into this Agreement.

 

NOW THEREFORE, in consideration of the premises, the mutual promises and covenants of the Parties set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Restricted Party and Parent, intending to be legally bound, agree as follows:

 

 

Ex B-2

 

 

AGREEMENT

 

1.Covenants of the Restricted Party.

 

1.1.Restrictive Covenants.

 

1.1.1. Non-Competition. During the period beginning on the Closing Date and ending on the fifth (5th) anniversary of the Closing Date, the Restricted Party shall not, and shall cause each of his, her or its controlled Affiliates not to, directly or indirectly, own any interest in, control, manage, operate, participate in, develop products for, advise or consult with or render services for (as a director, officer, employee, agent, broker, partner or contractor), or engage in activities or businesses, or establish any new businesses, within North America or Europe (the “Territory”) any business that is competitive with the business operated by the Company as of the Signing Date or as of immediately prior to the Closing, including any activities or business (i) engaged in the production, marketing or distribution of (a) plant-based meals or dishes, (b) value-added fruit and vegetables, (c) plant- and/or dairy-based pizza toppings, or (d) plant-based novelty food products, or (ii) that offers any product or service in the same line of business or product or service category as any product or service offered by the Company or in development by the Company (collectively, the “Business”). Notwithstanding the foregoing, this Section 1.1.1 shall be deemed not breached solely as a result of the ownership by the Restricted Party or any of his, her or its Affiliates of less than an aggregate of 1% of any class of stock that is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and is listed on a national securities exchange. For the avoidance of doubt, this Agreement shall not restrict the Restricted Party from performing his or her duties as an officer, director or employee of Parent, its successors-in-interest or their respective Subsidiaries. [Notwithstanding anything to the contrary herein, Restricted Party shall in no way be restricted or prohibited from continuing to hold his passive investment in Good Karma Foods (provided, that, while he may take action to maintain his percentage ownership of Good Karma Foods as of the date hereof, he may not take any action the effect of which would result in an increase in his percentage ownership of Good Karma Foods as of the date hereof unless previously approved by the Monitoring Committee of the Company, which the Company agrees will not be unreasonably withheld, conditioned, or delayed). For the sake of clarity, any increase in Restricted Party’s percentage ownership of Good Karma Foods through the actions of others (such as redemptions, stock splits, or the like) shall not be governed by this restriction.]1

 

1.1.2. Non-Solicitation of Business Relations. During the period beginning on the Closing Date and ending on the fifth (5th) anniversary of the Closing Date, the Restricted Party shall not, and shall cause each of his, her or its Affiliates not to, directly or indirectly, (i) interfere with the relationship between the Company and any Material Business Relationship, (ii) solicit, contact, induce or attempt to induce (or assist any other Person in soliciting, contacting, inducing or attempting to induce), any Material Business Relationship to terminate its relationship with the Company, cease doing business with the Company or terminate or otherwise adversely modify its relationship with the Company, or (iii) acquire or attempt to acquire an interest in any Person or business in which, prior to the Closing, Ittella had either (a) entertained discussions, (b) requested or received information relating to the acquisition of such Person or business, (c) identified to Parent that such Person or business was a potential acquisition target of Ittella, or (d) otherwise contemplated the acquisition of such Person or business. “Material Business Relationship” means any (x) customer, supplier, licensee, licensor, franchisee of the Company as of the Closing or at any time in the twelve (12) month period prior to the Closing, or (y) any other Person with whom the Company, as of the Closing or at any time in the twelve (12) month period prior to the Closing, had a business relation (provided, that any such Person contemplated by this sub-clause (y)) is, was or was likely to become, material to the Company)

 

 

1 Note to Draft: This provision applies to one individual

 

 

Ex B-3

 

 

1.1.3. Non-Solicitation of Personnel; No Hire. During the period beginning on the Closing Date and ending on the third (3rd) anniversary of the Closing Date, the Restricted Party shall not, and shall cause each of his, her or its Affiliates not to, and shall not assist any other Person to, directly or indirectly, (i) solicit, recruit or hire any employee, independent contractor or consultant of the Company (“Company Employee”), or any Person who was an employee, independent contractor or consultant of the Company at any time during the 12-month period before the Closing, and (ii) solicit or encourage any Company Employee to leave the employment of Parent; provided, however, that, without limiting the restrictions against hiring, the provisions of this Section 1.1.3 shall not prevent the Restricted Party or any of his, her or its Affiliates (not including the Company) from making a general solicitation for employment that are not specifically targeted at the Company Employees or other employees of Parent.

 

1.1.4. Non-Disparagement. From and after the date hereof, the Restricted Party shall not, and shall cause each of his, her or its Affiliates not to, make any negative, derogatory or disparaging statements or communications, either orally or in writing, regarding the Business, the Company and its Affiliates, or any director, manager, officer, agent, representative or direct or indirect equity holder of the Company or its Affiliates. Notwithstanding the foregoing, nothing in this Section 1.1.4 shall prevent the Restricted Party from (i) performing his or her duties as an officer, director or employee of Parent, its successors-in-interest or their respective Subsidiaries, or (ii) making any truthful statement to the extent, but only to the extent, (a) necessary with respect to any Action involving this Agreement, including, but not limited to, the enforcement of this Agreement, in the forum in which such Action properly takes place, or (b) required by Law or Governmental Authority.

 

1.2Remedies.

 

1.2.1 During the duration of any breach of Section 1.1 by the Restricted Party, the restricted period set forth herein shall be tolled.

 

1.2.2 The Restricted Party acknowledges and agrees that (i) the covenants and agreements contained in Section 1.1 (collectively the “Non-Competition and Related Covenants”) relate to matters that are of a special, unique and extraordinary value; (ii) the Company has one or more legitimate business interest justifying enforcement in full of the Non-Competition and Related Covenants, including for the protection of the goodwill of the business acquired by Parent pursuant to the Merger Agreement, and the Non-Competition and Related Covenants are reasonable and narrowly tailored to protect the compelling interests of Parent, the Company and the Business; (iii) a breach by the Restricted Party of any of the Non-Competition and Related Covenants will result in irreparable harm and damages that cannot be adequately compensated by a monetary award and, accordingly, the Company will be entitled to seek injunctive or other equitable relief to prevent or redress any such breach (without posting a bond or other security); (iv) pursuant to the Merger Agreement, the Restricted Party will receive valuable consideration (including, as applicable, significant benefits, equity in Parent, cash payments and other valuable consideration), both directly or indirectly, from Parent in connection with the Merger; and (v) the Non-Competition and Related Covenants are intended to comply with the Laws of all jurisdictions that might be deemed to be applicable hereto and which restrict or otherwise limit the enforceability of a Contract that restrains a Person from engaging in a lawful profession, trade or business. Notwithstanding the foregoing, if the restrictions contained in Section 1.1 shall be determined by any court of competent jurisdiction to be unenforceable by reason of their extending for too great a period of time or over too great a geographical area of by reason of their being too extensive in any other respect, Section 1.1 shall be modified to be effective for the maximum period of time for which it may be enforceable and over the maximum geographical area as to which it may be enforceable and to the maximum extent in all other respects as to which it may be enforceable. Parent and the Restricted Party hereby consent and agree to any such reformation of the restrictions to the maximum of enforceability as determined by any court of competent jurisdiction.

 

Ex B-4

 

 

2.Miscellaneous.

 

2.1. Severability. Subject to and without limiting the application of Section 1.2, in the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to in this Agreement, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by Law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument. Subject to and without limiting the application of Section 1.2, upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

 

2.2. 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 Delaware, 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.

 

2.3. Jurisdiction; Waiver of Jury Trial.

 

2.3.1. Any Action based upon, arising out of or related to this Agreement or the transactions contemplated hereby may be brought in the Delaware Chancery Court (or, if the Delaware Chancery Court shall be unavailable, any other court of the State of Delaware or, in the case of claims to which the federal courts have subject matter jurisdiction, any federal court of the United States of America sitting in the State of Delaware), and, in each case, appellate courts therefrom, and each of the Parties irrevocably submits to the exclusive jurisdiction of each such court in any such Action, waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, agrees that all claims in respect of such Action shall be heard and determined only in any such court, and agrees not to bring any 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 brought pursuant to this Section 2.3.1.

 

2.3.2. Each Party hereby waives, to the fullest extent permitted by applicable Law, any right it may have to a trial by jury in respect of any Action arising out of this Agreement or the transactions contemplated hereby. Each Party (i) certifies that no representative, agent or attorney of any Party has represented, expressly or otherwise, that such Party would not, in the event of any Action, seek to enforce the foregoing waiver, and (ii) acknowledges that it and the other Party hereto have been induced to enter into this Agreement by, among other things, the mutual waiver and certifications in this Section 2.3.2.

 

2.4. Amendments and Waivers. This Agreement may be modified only by a written instrument duly executed by each Party. No breach of any covenant or agreement shall be deemed waived unless expressly waived in writing by the Party who might assert such breach. No waiver of any right hereunder shall operate as a waiver of any other right or of the same or a similar right on another occasion. For the avoidance of doubt, no notice, consent or waiver purported to be on behalf of the Parent or the Company shall be effective unless (i) provided by the Parent prior to the Closing, or (ii) provided by the Company at the direction or with the approval of the Monitoring Committee.

 

Ex B-5

 

 

2.5. Counterparts and PDF or Facsimile Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed and delivered by electronic mail, and an electronic copy of this Agreement or of a signature of a party shall be effective as an original.

 

2.6. Section Headings. The headings of each Section, subsection or other subdivision of this Agreement are for reference only and shall not limit or control the meaning thereof.

 

2.7. Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof may be assigned by any Party without the prior written consent of the other Party; provided, however, that Parent (or, after the Closing, the Company) may assign its rights hereunder, without the consent of the Restricted Party, to any Person in connection with a merger or consolidation involving the Company (including any of its Subsidiaries) or other disposition of all or substantially all of the assets of the Company.

 

2.8. Notices. All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by electronic or digital transmission method; the day after it is sent, if sent for next day delivery to a domestic address by recognized overnight delivery service (e.g., Federal Express); and upon receipt, if sent by certified or registered mail, return receipt requested, in each case to the parties at the following addresses or to other such addresses as may be furnished by one party to the others in accordance with this Section 2.7:

 

if to Parent (prior to the Closing):

 

Forum Merger II Corporation

1615 South Congress Avenue

Suite 103

Delray Beach, FL 33445

 Attention:  Marshall Kiev
  David Boris

 Email:mk@mkcapitalpartners.com
  david@forummerger.com
   

with a copy (which shall not constitute notice) to:

 

Winston & Strawn LLP

200 Park Avenue

New York, New York 10166

Attention: Joel Rubinstein

 Email: jrubinstein@winston.com

 

and

 

Winston & Strawn LLP

35 W. Wacker Drive

Chicago, IL 60601

Attention: Kyle Gann

Email: kgann@winston.com

 

Ex B-6

 

 

if to Parent (following the Closing):

 

Forum Merger II Corporation

6305 Alondra Blvd.

Paramount, CA 90723

Attention: The Monitoring Committee

Email: david@forummerger.com

 

with a copy (which shall not constitute notice) to:

 

Winston & Strawn LLP

200 Park Avenue

New York, New York 10166

Attention: Joel Rubinstein

 Email:jrubinstein@winston.com

 

and

 

Winston & Strawn LLP

35 W. Wacker Drive

Chicago, IL 60601

Attention: Kyle Gann

Email: kgann@winston.com

 

if to the Restricted Party:

 

[__________]

[__________]

[__________]

[__________]

 

2.9. Effectiveness. This Agreement will become effective as of the Closing. If the Merger Agreement is terminated in accordance with its terms, this Agreement shall be null and void ab initio and the Parties shall have no rights, liabilities or obligations whatsoever hereunder.

 

[Signature page follows]

 

Ex B-7

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

 

  PARENT:
     
  FORUM MERGER II CORPORATION
                              
  By:  
  Name:  
  Title:  
     
  RESTRICTED PARTY:
     
   
  [___________________]

 

[Signature Page to Restrictive Covenant Agreement]

 

Ex B-8

 

 

EXHIBIT C

 

FORM OF AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION OF THE COMPANY

 

[See Attached]

 

Ex C-1

 

 

SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MYJOJO, INC.

 

 

 

Pursuant to Sections 228, 242 and 245 of the
Delaware General Corporation Law

 

 

 

Myjojo, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify as follows:

 

1. The name of the Corporation is Myjojo, Inc. The original Certificate of Incorporation of the Corporation was filed with the office of the Secretary of State of the State of Delaware on May 21, 2020. The Amended and Restated Certificate of Incorporation of the Corporation was filed with the office of the Secretary of State of the State of Delaware on May 27, 2020.

 

2. This Second Amended and Restated Certificate of Incorporation was duly adopted by the Board of Directors (the “Board of Directors”) and the sole stockholder of the Corporation in accordance with Sections 228, 242 and 245 of the DGCL.

 

3. This Second Amended and Restated Certificate of Incorporation restates and integrates and further amends the Amended and Restated Certificate of Incorporation of the Corporation.

 

4. Effective as of the date of its filing with the Secretary of State of the State of Delaware, the text of the Amended and Restated Certificate of Incorporation of the Corporation is hereby amended and restated in its entirety as follows:

 

ARTICLE I

 

The name of the Corporation is Myjojo, Inc.

 

ARTICLE II

 

The address of the Corporation’s registered office in the State of Delaware is 251 Little Falls Drive, in the City of Wilmington, County of New Castle, Delaware 19808, and the name of the registered agent at such address is Corporation Service Company.

 

ARTICLE III

 

The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the DGCL.

 

Ex C-2

 

 

ARTICLE IV

 

The Corporation shall have perpetual existence.

 

ARTICLE V

 

A. The aggregate number of shares of capital stock which the Corporation shall have authority to issue is 100 shares of common stock with a par value of $0.001 per share.

 

B. Except as otherwise required by the DGCL, all shares of common stock shall be identical in all respects and shall entitle the holders thereof to the same rights and privileges, subject to the same qualifications, limitations and restrictions.

 

ARTICLE VI

 

A. The liability of the directors of the Corporation for monetary damages shall be eliminated to the fullest extent permitted by applicable law.

 

B. To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which applicable law permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise in excess of the indemnification and advancement otherwise permitted by such applicable law. If applicable law is amended after approval by the stockholders of this Article VI to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director to the Corporation shall be eliminated or limited to the fullest extent permitted by applicable law as so amended.

 

C. Any repeal or modification of this Article VI shall only be prospective and shall not affect the rights or protections or increase the liability of any director of the Corporation under this Article VI in effect at the time of the alleged occurrence of any act or omission to act giving rise to liability or indemnification.

 

Ex C-3

 

 

ARTICLE VII

 

A. In recognition and anticipation that (i) certain directors, principals, officers, employees and/or other representatives of the Sponsor and/or its direct and indirect subsidiaries (collectively, the “Forum Parties”) and each of their Affiliates (as defined in this Article VII) may serve as directors, officers or agents of the Corporation, (ii) the Forum Parties and their Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage or propose to engage and/or other business activities that overlap with or compete with those in which the Corporation or any of its Affiliates, directly or indirectly, may engage or propose to engage, and (iii) members of the Board of Directors who are not employees of the Corporation and each of their respective Affiliates (the Persons identified in clauses (i), (ii) and (iii), collectively, the “Identified Persons” and each, an “Identified Person”) may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation or any of its Affiliates, directly or indirectly, may engage or propose to engage, the provisions of this Article VII are set forth to regulate and define the conduct of certain affairs of the Corporation with respect to certain classes or categories of business opportunities as they may involve any of the Identified Persons and the powers, rights, duties and liabilities of the Corporation and its directors, officers and stockholders in connection therewith. In furtherance of the foregoing, no Identified Person shall, to the fullest extent permitted by law, (A) have any duty to refrain from directly or indirectly (i) engaging in the same or similar business activities or lines of business in which the Corporation or any of its Affiliates now engages or proposes to engage or (ii) otherwise competing with the Corporation or any of its Affiliates, and, to the fullest extent permitted by law, no Identified Person shall be liable to the Corporation or its stockholders or to any Affiliate of the Corporation for breach of any fiduciary duty solely by reason of the fact that such Identified Person engages in any such activities; and (B) the Corporation hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity that may be a corporate opportunity for an Identified Person and the Corporation or any of its Affiliates. Subject to Section (B) of this Article VII, if any Identified Person acquires knowledge of a potential transaction or other business opportunity that may be a corporate opportunity for itself, herself or himself and the Corporation or any of its Affiliates, such Identified Person shall, to the fullest extent permitted by law, have no duty to communicate or offer such transaction or other business opportunity to the Corporation or any of its Affiliates and, to the fullest extent permitted by law, shall not be liable to the Corporation or its stockholders or to any Affiliate of the Corporation for breach of any fiduciary duty as a stockholder, director or officer of the Corporation solely by reason of the fact that such Identified Person pursues or acquires such corporate opportunity for itself, herself or himself, or offers or directs such corporate opportunity to another Person or does not communicate information regarding such corporate opportunity to the Corporation.

 

B. Notwithstanding the foregoing provisions of this Article VII, the Corporation does not renounce its interest in any corporate opportunity offered to any Identified Person (including any Identified Person who serves as an officer of the Corporation) if such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Corporation, and the provisions of Section (A) of this Article VII shall not apply to any such corporate opportunity.

 

C. In addition to and notwithstanding the foregoing provisions of this Article VII, a potential corporate opportunity shall not be deemed to be a corporate opportunity for the Corporation if it is a business opportunity that (i) the Corporation is neither financially or legally able, nor contractually permitted to undertake, (ii) from its nature, is not in the line of the Corporation’s business or is of no practical advantage to the Corporation or (iii) is one in which the Corporation has no interest or reasonable expectancy.

 

Ex C-4

 

 

D. For purposes of this Article VII, “Affiliate” means (i) in respect of any Forum Party, any Person that, directly or indirectly, is controlled by a Forum Party, controls a Forum Party or is under common control with a Forum Party and includes any principal, member, director, partner, stockholder, officer, employee or other representative of any of the foregoing (other than the Corporation and any entity that is controlled by the Corporation), (ii) in respect of any other Identified Person, any Person that, directly or indirectly, is controlled by such Identified Person (other than the Corporation and any entity that is controlled by the Corporation) and (iii) in respect of the Corporation, any Person that, directly or indirectly, is controlled by the Corporation. For purposes of this Article VII, “control” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting stock, by contract, or otherwise. A Person who is the owner of 20% or more of the outstanding voting stock of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such Person holds voting stock, in good faith and not for the purpose of circumventing this Section, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity.

 

E. To the fullest extent permitted by law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article VII. Neither the alteration, amendment, addition to or repeal of this Article VII, nor the adoption of any provision of this Second Amended and Restated Certificate of Incorporation (or any certificate of designation filed with respect to a series of Preferred Stock) inconsistent with this Article VII, shall eliminate or reduce the effect of this Article VII in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Article VII, would accrue or arise, prior to such alteration, amendment, addition, repeal or adoption. This Article VII shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director or officer of the Corporation under this Second Amended and Restated Certificate of Incorporation, any bylaws or applicable law.

 

ARTICLE VIII

 

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Second Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.

 

ARTICLE IX

 

The number of directors which shall constitute the whole Board of Directors of the Corporation shall be fixed from time to time by, or in the manner provided in, the Bylaws of the Corporation or in an amendment thereof duly adopted by the Board of Directors of the Corporation or by the stockholders of the Corporation.

 

Ex C-5

 

 

ARTICLE X

 

Meetings of stockholders of the Corporation may be held within or without the State of Delaware, as the Bylaws of the Corporation may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors of the Corporation or in the Bylaws of the Corporation.

 

ARTICLE XI

 

Except as otherwise provided in this Second Amended and Restated Certificate of Incorporation, in furtherance and not in limitation of the powers conferred by statute, the Board of Directors of the Corporation is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of the Corporation.

 

* * * * * * *

 

[Signature page follows]

 

Ex C-6

 

 

IN WITNESS WHEREOF, the undersigned has caused this Second Amended and Restated Certificate of Incorporation to be signed on this ___ day of __________, 2020.

 

  MYJOJO, INC.
   
   
  Name:
  Title:

 

Ex C-7

 

 

EXHIBIT D

 

FORM OF AMENDED AND RESTATED BYLAWS OF THE COMPANY

 

[See Attached]

 

Ex D-1

 

 

AMENDED AND RESTATED BYLAWS

 

OF

 

MYJOJO, INC.

 

A Delaware corporation

 

Adopted as of [__________], 2020

 

ARTICLE I
OFFICES

 

Section 1. Registered Office. The registered office of the corporation in the State of Delaware shall be located at 251 Little Falls Drive, in the City of Wilmington, County of New Castle, Delaware 19808. The name of its registered agent at such address is Corporation Service Company. The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors.

 

Section 2. Other Offices. The corporation may also have offices at such other places, both within and without the State of Delaware, as the board of directors may from time to time determine or the business of the corporation may require.

 

ARTICLE II
MEETINGS OF STOCKHOLDERS

 

Section 1. Meetings Generally. At least one meeting of the stockholders shall be held each year for the purpose of electing directors and conducting any proper business as may come before the meeting. The date, time and place of such meeting shall be determined by the highest ranking officer then in office (the “Ranking Officer”); provided, however, that if the Ranking Officer does not act, the board of directors shall determine the date, time and place, if any, and/or the means of remote communication, of such meeting. Notwithstanding the foregoing, no annual meeting of stockholders need be held if not required by the corporation’s certificate of incorporation or by the Delaware General Corporation Law.

 

Section 2. Special Meetings. Special meetings of the stockholders may be called for any purpose and may be held at such time and place, within or without the State of Delaware, as shall be stated in a written notice of meeting or in a duly executed waiver of notice thereof. Except as otherwise provided in the corporation’s certificate of incorporation, such meetings may be called at any time by the board of directors or the Ranking Officer and shall be called by the Ranking Officer upon the written request of holders of shares entitled to cast not less than a majority of the votes at the meeting. Such written request shall state the purpose or purposes of the meeting and shall be delivered to the Ranking Officer. Upon such written request, the Ranking Officer shall fix a date, time and place, if any, and/or remote communication, for such meeting within two days of the date requested for such meeting; provided, however, that if the Ranking Officer does not act, the board of directors shall fix a date, time and place, if any, and/or remote communication for such meeting.

 

Section 3. Place of Meetings. The board of directors may designate any place, either within or without the State of Delaware, and/or by means of remote communication, as the place of meeting for any regular meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation.

 

Ex D-2

 

 

Section 4. Notice. Whenever stockholders are required or permitted to take action at a meeting, written or printed notice stating the place, if any, date, time, means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. All such notices shall be delivered, either personally, by mail, by facsimile or by electronic mail, by or at the direction of the board of directors, the president or the secretary, and such notice shall be deemed to be delivered (i) upon confirmation of receipt if sent by facsimile, electronic mail or personal delivery or (ii) three (3) days after being deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.

 

Section 5Stockholders List. The officer having charge of the stock ledger of the corporation shall make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least ten (10) days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, and/or (ii) during ordinary business hours, at the principal place of business of the corporation. If the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

 

Section 6. Quorum. The holders of at least a majority of the issued and outstanding shares of capital stock entitled to vote thereon, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by statute or by the corporation’s certificate of incorporation. If a quorum is not present, the holders of a majority of the shares present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. When a quorum is once present to commence a meeting of stockholders, it is not broken by the subsequent withdrawal of any stockholders or their proxies.

 

Section 7. Adjourned Meetings. When a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

 

Section 8. Vote Required. When a quorum is present, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the corporation’s certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

 

Ex D-3

 

 

Section 9. Voting Rights. Except as otherwise provided by the Delaware General Corporation Law or by the corporation’s certificate of incorporation or any amendments thereto and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one (1) vote in person or by proxy for each share of common stock held (or deemed held) by such stockholder (it being understood that certain other classes or series of capital stock may, pursuant to the corporation’s certificate of incorporation, be entitled to vote on as as-if converted to common stock basis).

 

Section 10. Proxies. Each stockholder entitled to vote at a meeting of the stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. Any proxy is suspended when the person executing the proxy is present at a meeting of the stockholders and elects to vote, except that, when such proxy is coupled with an interest and the fact of the interest appears on the face of the proxy, the agent named in the proxy shall have all voting and other rights referred to in the proxy, notwithstanding the presence of the person executing the proxy. At each meeting of the stockholders, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the secretary or a person designated by the secretary and no shares may be represented or voted under a proxy that has been found to be invalid or irregular.

 

Section 11. Action by Written Consent. Unless otherwise provided in the corporation’s certificate of incorporation, any action required to be taken at any regular or special meeting of stockholders of the corporation, or any action which may be taken at any regular or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the state of Delaware, or the corporation’s principal place of business, or an officer or agent of the corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested, by reputable overnight courier service, or by facsimile or electronic mail, with confirmation of receipt. All consents properly delivered in accordance with this section shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered to the corporation as required by this section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof.

 

Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used; provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

 

Ex D-4

 

 

ARTICLE III
DIRECTORS

 

Section 1. General Power. The business and affairs of the corporation shall be managed by or under the direction of the board of directors.

 

Section 2. Number, Election and Term of Office. The number of directors which shall constitute the first board shall be two (2). The number of directors shall be subject to change by the vote of holders of a majority of the stock then entitled to vote at an election of directors. The directors shall be elected by a plurality of the votes of the stock present in person or represented by proxy at a meeting of the stockholders and entitled to vote in the election of directors. The directors shall be elected in this manner at any meeting of the stockholders, except as provided in Section 4 of this Article III. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.

 

Section 3. Removal and Resignation. Any director or the entire board of directors may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the corporation’s certificate of incorporation, the provisions of this section shall apply, in respect to the removal without cause of a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole. Any director may resign at any time upon notice given in writing or by electronic transmission to the corporation.

 

Section 4. Vacancies. Except as otherwise provided in the corporation’s certificate of incorporation, board vacancies and newly created directorships resulting from any increase in the authorized number of directors shall be filled in the same manner in which directors are elected pursuant to Section 2 of this Article III. Notwithstanding the foregoing, any such vacancy shall automatically reduce the number of directors pro tanto, until such time as the holders of the class of common stock which was entitled to elect the director whose office is vacant shall have exercised their right to elect a director to fill such vacancy, whereupon the number of directors shall be automatically increased pro tanto. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided.

 

Section 5. Meetings and Notice. Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board or directors and promptly communicated to all directors then in the office. Special meetings of the board of directors may be called by or at the request of any director or the Ranking Officer on at least forty-eight (48) hours’ notice to each director, either personally, by telephone, by mail, or by facsimile or electronic mail.

 

Section 6. Quorum, Required Vote and Adjournment. Each director shall be entitled to one vote except as otherwise provided in the corporation’s certificate of incorporation. Directors then in office (and specifically excluding any vacancies) and holding a majority of the votes of all directors (or such greater number required by applicable law) shall constitute a quorum for the transaction of business. The vote of directors holding a majority of votes present at a meeting at which a quorum is present shall be the act of the board of directors. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

 

Ex D-5

 

 

Section 7. Committees. The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation, which to the extent provided in such resolution or these Amended and Restated Bylaws shall have and may exercise the powers of the board of directors in the management and affairs of the corporation except as otherwise limited by law. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

 

Section 8. Committee Rules. Each committee of the board of directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. If a member and that member’s alternate, if alternates are designated by the board of directors as provided in Section 7 of this Article III, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of any such absent or disqualified member.

 

Section 9. Communications Equipment. Members of the board of directors or any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this Section shall constitute presence in person at the meeting.

 

Section 10. Waiver of Notice and Presumption of Consent. Any member of the board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except, when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have consented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action.

 

Section 11. Action by Written Consent. Unless otherwise restricted by the corporation’s certificate of incorporation, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

Ex D-6

 

 

ARTICLE IV
OFFICERS

 

Section 1. Number. The officers of the corporation shall be elected by the board of directors and may consist of a chairman of the board, a president, a chief executive officer, a chief financial officer, one or more vice presidents, a secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable, except that the offices of president and secretary shall be filled as expeditiously as reasonably possible.

 

Section 2. Election and Term of Office. The officers of the corporation shall be elected at any meeting of the board of directors. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.

 

Section 3. Removal. Any officer or agent elected by the board of directors may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

 

Section 4. Vacancies. Any vacancy occurring in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term by the board of directors then in office.

 

Section 5. Compensation. Compensation of all officers shall be fixed by the board of directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation.

 

Section 6. Chairman of the Board. The chairman of the board, if one is appointed, shall have the powers and perform the duties incident to that position. Subject to the powers of the board of directors, he or she shall be in the general and active charge of the entire business and affairs of the corporation. He or she shall preside at meetings of the board of directors and the stockholders and shall have such other powers and perform such other duties as may be prescribed by the board of directors or provided in these Amended and Restated Bylaws. Whenever the president is unable to serve, by reason of sickness, absence or otherwise, the chairman of the board shall perform all the duties and responsibilities and exercise all the powers of the president.

 

Section 7. The President. The president shall be the chief executive officer of the corporation; shall preside at all meetings of the stockholders and board of directors at which he or she is present; subject to the powers of the board of directors, shall have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and resolutions of the board of directors are carried into effect. The president shall execute bonds, mortgages and other contracts which the board of directors has authorized to be executed, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. The president shall have such other powers and perform such other duties as may be prescribed by the board of directors or as may be provided in these Amended and Restated Bylaws. If there is no chief executive officer, the president shall also have the duties of the chief executive officer as prescribed above.

 

Section 8. Chief Financial Officer. The chief financial officer of the corporation, if one is appointed, shall, under the direction of the chief executive officer (or, in the absence of a chief executive officer, the president), be responsible for all financial and accounting matters and for the direction of the offices of treasurer and controller. The chief financial officer shall have such other powers and perform such other duties as may be prescribed by the chairman of the board, the chief executive officer (or, in the absence of a chief executive officer, the president) or the board of directors or as may be provided in these Amended and Restated Bylaws.

 

Ex D-7

 

 

Section 9. Vice Presidents. The vice president, if one is appointed, or if there shall be more than one, the vice presidents in the order determined by the board of directors or by the president, shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice presidents shall also perform such other duties and have such other powers as the board of directors, the chief executive officer (or, in the absence of a chief executive officer, the president) or these Amended and Restated Bylaws may, from time to time, prescribe.

 

Section 10. The Secretary and Assistant Secretaries. The secretary shall attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the chief executive officer’s (or, in the absence of a chief executive officer, the president’s) supervision, the secretary shall give, or cause to be given, all notices required to be given by these Amended and Restated Bylaws or by law; shall have such powers and perform such duties as the board of directors, the chief executive officer (or, in the absence of a chief executive officer, the president) or these Amended and Restated Bylaws may, from time to time, prescribe; and shall have custody of the corporate seal of the corporation. The secretary, or an assistant secretary, shall have authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his or her signature. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the chief executive officer (or, in the absence of a chief executive officer, the president) or the secretary may, from time to time, prescribe.

 

Section 11. The Treasurer and Assistant Treasurer. The treasurer shall, subject to the authority of the chief financial officer, if one is appointed, have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; shall render to the chief executive officer (or, in the absence of a chief executive officer, the president) and the board of directors, at its regular meeting or when the board of directors so requires, an account of the corporation; and shall have such powers and perform such duties as the board of directors, the chief executive officer (or, in the absence of a chief executive officer, the president) or these Amended and Restated Bylaws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six (6) years) in such sums and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office of treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors, shall in the absence or disability of the chief financial officer or treasurer, perform the duties and exercise the powers of the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the chief executive officer (or, in the absence of a chief executive officer, the president) or the treasurer may, from time to time, prescribe.

 

Section 12. Other Officers. Assistant Officers and Agents. Officers, assistant officers and agents, if any, other than those whose duties are provided for in these Amended and Restated Bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors.

 

Ex D-8

 

 

Section 13. Absence or Disability of Officers. In the case of the absence or disability of any officer of the corporation and of any person hereby authorized to act in such officer’s place during such officer’s absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select.

 

ARTICLE V
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS

 

Section 1. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including involvement as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she is or was a director or officer of the corporation or, while a director or officer of the corporation, is or was serving at the request of the corporation as a director, manager, officer, employee or agent of another corporation or of a partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise exercise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith, and such indemnification shall continue as to an indemnitee who has ceased to be a director, manager, officer, employee or agent and shall inure to the benefit of the indemnitee’s heirs, executors and administrators; provided, however, that, except as provided in Section 2 of this Article V with respect to proceedings to enforce rights to indemnification, the corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the board of directors of the corporation. The right to indemnification conferred in this Section 1 of this Article V shall be a contract right and shall include the obligation of the corporation to pay the expenses incurred in defending any such proceeding in advance of its final disposition (an “advance of expenses”); provided, however, that, if and to the extent that the Delaware General Corporation Law requires, an advance of expenses incurred by an indemnitee in his or her capacity as a director, manager or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the corporation of an undertaking (an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Section 1 of this Article V or otherwise. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same or lesser scope and effect as the foregoing indemnification of directors and officers. The corporation hereby acknowledges that certain directors and officers affiliated with institutional investors may have certain rights to indemnification, advancement of expenses and/or insurance provided by such institutional investors or certain of their affiliates (collectively, the “Institutional Indemnitors”). The corporation hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to the indemnitee are primary and any obligation of the Institutional Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by the indemnitee are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by the indemnitee in accordance with this Article V without regard to any rights the indemnitee may have against the Institutional Indemnitors and (iii) that it irrevocably waives, relinquishes and releases the Institutional Indemnitors from any and all claims against the Institutional Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The corporation further agrees that no advancement or payment by the Institutional Indemnitors on behalf of the indemnitee with respect to any claim for which the indemnitee has sought indemnification from the corporation shall affect the foregoing and the Institutional Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of the indemnitee against the corporation. Notwithstanding anything to the contrary herein, the corporation shall not be required to provide any advance of expenses to a director or officer who is a party to an action, suit or proceeding brought by the corporation and approved by a majority of the board of directors that alleges willful misappropriation of corporate assets by such director or officer, disclosure of confidential information in violation of such director’s or officer’s fiduciary or contractual obligations to the corporation or any other willful and deliberate breach in bad faith of such director’s or officer’s duty to the corporation or its stockholders.

 

Ex D-9

 

 

Section 2. Procedure for Indemnification. Any indemnification of a director or officer of the corporation or advance of expenses under Section 1 of this Article V shall be made promptly, and in any event within forty-five days (or, in the case of an advance of expenses, twenty days), upon the written request of the director or officer. If a determination by the corporation that the director or officer is entitled to indemnification pursuant to this Article V is required, and the corporation fails to respond within sixty days to a written request for indemnity, the corporation shall be deemed to have approved the request. If the corporation denies a written request for indemnification or advance of expenses, in whole or in part, or if payment in full pursuant to such request is not made within forty-five days (or, in the case of an advance of expenses, twenty days), the right to indemnification or advances as granted by this Article V shall be enforceable by the director or officer in any court of competent jurisdiction. Such person’s costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of expenses where the undertaking required pursuant to Section 1 of this Article V, if any, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the corporation (including its board of directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. The procedure for indemnification of other employees and agents for whom indemnification is provided pursuant to Section 1 of this Article V shall be the same procedure set forth in this Section 2 of this Article V for directors or officers, unless otherwise set forth in the action of the board of directors providing indemnification for such employee or agent.

 

Section 3. Insurance. The corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a director, officer, employee or agent of the corporation or was serving at the request of the corporation as a director, manager, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise against any expense, liability or loss asserted against him or her and incurred by him or her in any such capacity, whether or not the corporation would have the power to indemnify such person against such expenses, liability or loss under the Delaware General Corporation Law.

 

Section 4. Subsidiaries. To the extent any indemnitee under Section 1 of this Article V is also entitled to indemnification from a subsidiary of the corporation, such indemnitee shall first look to such subsidiary for indemnification, and only after seeking indemnification from such subsidiary shall such indemnitee seek indemnification from the corporation.

 

Ex D-10

 

 

Section 5. Reliance. Persons who, after the date of the adoption of this provision, become or remain directors or officers of the corporation or who, while a director or officer of the corporation, become or remain a director, manager, officer, employee or agent of a subsidiary, shall be conclusively presumed to have relied on the rights to indemnity, advance of expenses and other rights contained in this Article V in entering into or continuing such service. The rights to indemnification and to the advance of expenses conferred in this Article V shall apply to claims made against an indemnitee arising out of acts or omissions which occurred or occur both prior and subsequent to the adoption hereof.

 

Section 6. Non Exclusivity of Rights. The rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under the corporation’s certificate of incorporation or under any statute, by law, agreement, vote of stockholders or disinterested directors or otherwise.

 

Section 7. Merger or Consolidation. For purposes of this Article V, references to the “corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, manager, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, shall stand in the same position under this Article V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.

 

ARTICLE VI
CERTIFICATES OF STOCK

 

Section 1. Form. Every holder of stock in the corporation shall be entitled to have a certificate, signed by the chief executive officer (or, in the absence of a chief executive officer, the president), the chief financial officer or a vice president and the secretary or an assistant secretary of the corporation, certifying the number of shares of a specific class or series owned by such holder in the corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the corporation or its employee or (2) by a registrar, other than the corporation or its employee, the signature of any such chief executive officer (or, in the absence of a chief executive officer, the president), chief financial officer, vice president, secretary, or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall be transferred on the books of the corporation only by the holder of record thereof or by such holder’s attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation.

 

Ex D-11

 

 

Section 2. Lost Certificates. The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates previously issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate.

 

Section 3. Fixing a Record Date for Stockholder Meetings. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided that the board of directors may fix a new record date for the adjourned meeting.

 

Section 4. Fixing a Record Date for Action by Written Consent. In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested or by facsimile or electronic mail, with confirmation of receipt. If no record date has been fixed by the board of directors and prior action by the board of directors is required by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action.

 

Section 5. Fixing a Record Date for Other Purposes. In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.

 

Ex D-12

 

 

Section 6. Registered Stockholders. Prior to the surrender to the corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner. The corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof.

 

Section 7. Subscriptions for Stock. Unless otherwise provided for in the applicable subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation.

 

ARTICLE VII
GENERAL PROVISIONS

 

Section 1. Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the corporation’s certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of capital stock, subject to the provisions of the corporation’s certificate of incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or any other purpose, and the directors may modify or abolish any such reserve in the manner in which it was created.

 

Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders for the payment of money by or to the corporation and all notes and other evidences of indebtedness issued in the name of the corporation shall be signed by such officer(s) or agent(s) of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof.

 

Section 3. Contracts. The board of directors may authorize any officer or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.

 

Section 4. Loans. The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute.

 

Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

 

Section 6. Corporate Seal. The board of directors may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the corporation and the words “Corporate Seal, Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

 

Ex D-13

 

 

Section 7. Voting Securities Owned By Corporation. Voting securities in any other corporation held by the corporation shall be voted by the president, any vice president, the chief financial officer or the secretary, unless the board of directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution.

 

Section 8. Inspection of Books and Records. Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation’s stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware or at its principal place of business.

 

Section 9. Exclusive Jurisdiction. The Court of Chancery of the State of Delaware shall be the sole and exclusive forum from (i) any derivative action or proceeding brought on behalf of the corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director or officer of the corporation to the corporation arising pursuant to any provision of the Delaware General Corporation Law or the corporation’s certificate of incorporation or Amended and Restated Bylaws or (iv) any action asserting a claim against the corporation governed by the internal affairs doctrine.

 

Section 10. Section Headings. Section headings in these Amended and Restated Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

 

Section 11. Inconsistent Provisions. If any provision of these Amended and Restated Bylaws is or becomes inconsistent with any provision of the corporation’s certificate of incorporation, the Delaware General Corporation Law or any other applicable law, the provision of these Amended and Restated Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.

 

ARTICLE VIII
AMENDMENTS

 

Except for Article III and Article V hereof, these Amended and Restated Bylaws may be amended, altered, or repealed and new Amended and Restated Bylaws adopted at any meeting of the board of directors by a majority vote. Article III and Article V hereof may be amended, altered, or repealed at any meeting of the board of directors only by a unanimous vote (or unanimous written consent in lieu thereof). The fact that the power to adopt, amend, alter, or repeal the Amended and Restated Bylaws has been conferred upon the board of directors shall not divest the stockholders of the same powers.

 

*          *          *          *          *

 

Ex D-14

 

 

EXHIBIT E

 

FORM OF AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION OF PARENT

 

[See Attached]

 

Ex E-1

 

 

AMENDED AND RESTATED

 

CERTIFICATE OF INCORPORATION

 

OF

 

TATTOOED CHEF, INC.

 

[______] hereby certifies that:

 

ONE: The name of this company is Tattooed Chef, Inc. and date of filing the original Certificate of Incorporation of this corporation with the Secretary of State of Delaware was [______], 2020.

 

TWO: He is the duly elected and acting [Chief Executive Officer] of Tattooed Chef, Inc., a Delaware corporation.

 

THREE: The Certificate of Incorporation of this corporation is hereby amended and restated to read as follows:

 

I.

 

The name of this corporation is Tattooed Chef, Inc. (the “Company”).

 

II.

 

The address of the Company’s registered office in the State of Delaware is 251 Little Falls Drive, in the City of Wilmington, County of New Castle, Delaware 19808, and the name of the registered agent at such address is Corporation Service Company.

 

III.

 

The purpose of the Company is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law (“DGCL”).

 

IV.

 

A. The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 1,010,000,000 shares. 1,000,000,000 shares shall be Common Stock, each having a par value of one-hundredth of one cent ($0.0001). 10,000,000 shares shall be Preferred Stock, each having a par value of one-hundredth of one cent ($0.0001).

 

B. Effective immediately upon the filing and effectiveness of this Amended and Restated Certificate of Incorporation with the Office of the Secretary of State of the State of Delaware (the “Effective Time”), each share of the Company’s Class B Common Stock, par value $0.0001 per share (the “Class B Common Stock”), that was issued and outstanding immediately prior to the Effective Time shall automatically be reclassified, redesignated and changed into one validly issued, fully paid and non-assessable share of the Company’s Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”). Immediately following the conversion of such Class B Common Stock into shares of Class A Common Stock, each share of Class A Common Stock issued and outstanding shall, automatically and without further action by any stockholder, be reclassified, redesignated and changed into one validly issued, fully paid and non-assessable share of Common Stock.

 

Ex E-2

 

 

C. The Preferred Stock may be issued from time to time in one or more series. The Board of Directors of the Company (the “Board of Directors”) is hereby expressly authorized to provide for the issue of all or any number of the shares of the Preferred Stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the DGCL. The Board of Directors is also expressly authorized to increase or decrease the number of shares of any series subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be decreased in accordance with the foregoing sentence, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of the stock of the Company entitled to vote thereon, without a separate vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any certificate of designation filed with respect to any series of Preferred Stock.

 

D. Each outstanding share of Common Stock shall entitle the holder thereof to one vote on each matter properly submitted to the stockholders of the Company for their vote; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Amended and Restated Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon by law or pursuant to this Amended and Restated Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock).

 

V.

 

A.

 

1. DIRECTOR NOMINATIONS. For the management of the business and for the conduct of the affairs of the Company, and in further definition, limitation and regulation of the powers of the Company, of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that the management of the business and the conduct of the affairs of the Company shall be vested in the Board of Directors. Subject to the applicable requirements of the Director Nomination Agreement, dated as of June 11, 2020 (as the same may be amended, supplemented, restated or otherwise modified from time to time, the “Nomination Agreement”), the number of directors constituting the Board of Directors shall be fixed exclusively by resolutions adopted by a majority of the authorized number of directors constituting the Board of Directors.

 

Ex E-3

 

 

2. BOARD OF DIRECTORS. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, the directors shall be divided into three classes designated as Class I, Class II and Class III, respectively. The Board of Directors is authorized to assign members of the Board of Directors already in office to such classes at the time the classification becomes effective. At the first annual meeting of stockholders following the initial classification of the Board of Directors, the term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second annual meeting of stockholders following such initial classification, the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the third annual meeting of stockholders following such initial classification, the term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting.

 

Notwithstanding the foregoing provisions of this section, each director shall serve until his successor is duly elected and qualified or until his earlier death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

 

3. REMOVAL OF DIRECTORS. Subject to any limitations imposed by applicable law, any individual director or directors may be removed with cause by the affirmative vote of the holders of at least 85% of the voting power of all then-outstanding shares of capital stock of the Company entitled to vote generally at an election of directors; provided, that at any time when the Pre-Closing Holders (as defined in that certain Agreement and Plan of Merger, dated as of June 11, 2020, by and among Forum Merger II Corporation, Sprout Merger Sub, Inc., Myjojo, Inc., and Salvatore Galletti, as the Holder Representative (the “Merger Agreement”)), together with their Affiliates (as defined in the Merger Agreement) (collectively, the “Founder Parties”) beneficially own, in the aggregate, less than a majority of the total voting power of all then-outstanding shares of capital stock of the Company entitled to vote generally at an election of directors, subject to any limitations imposed by applicable law, any individual director or directors may be removed with cause by the affirmative vote of the holders of at least 66 2/3% of the voting power of all then-outstanding shares of capital stock of the Company entitled to vote generally at an election of directors.

 

4. VACANCIES. Subject to any limitations imposed by applicable law and subject to the rights of the holders of any series of Preferred Stock and the rights granted pursuant to the Nomination Agreement, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors, shall be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors, and not by the stockholders. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified.

 

Ex E-4

 

 

B.

 

1. BYLAW AMENDMENTS. The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the Company. Any adoption, amendment or repeal of the Bylaws of the Company by the Board of Directors shall require the approval of a majority of the authorized number of directors. The stockholders shall also have power to adopt, amend or repeal the Bylaws of the Company with, in addition to any vote of the holders of any class or series of stock of the Company required by law or by this Amended and Restated Certificate of Incorporation, the affirmative vote of the holders of at least 85% of the voting power of all of the then-outstanding shares of the capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class; provided, that, at any time when the Founder Parties beneficially own, in the aggregate, less than a majority of the total voting power of all then-outstanding shares of capital stock of the Company entitled to vote generally at an election of directors, subject to any limitations imposed by applicable law, any such adoption, amendment or repeal may be undertaken by the affirmative vote of the holders of at least 66 2/3% of the voting power of all then-outstanding shares of capital stock of the Company entitled to vote generally at an election of directors.

 

2. BALLOTS. The directors of the Company need not be elected by written ballot unless the Bylaws so provide.

 

3. NO WRITTEN CONSENTS. No action shall be taken by the stockholders of the Company except at an annual or special meeting of stockholders called in accordance with the Bylaws and, at no time shall any action be taken by the stockholders by written consent or electronic transmission.

 

4. NOTICE. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Company shall be given in the manner provided in the Bylaws of the Company.

 

5. SPECIAL MEETINGS. Special meetings of the stockholders of the Company may be called only by (i) the Chairperson of the Board of Directors or (ii) the Board of Directors pursuant to a resolution adopted by a majority of the directors then holding office (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption), and the ability of the stockholders to call a special meeting is hereby specifically denied.

 

VI.

 

A. The liability of the directors for monetary damages shall be eliminated to the fullest extent permitted by applicable law.

 

B. To the fullest extent permitted by applicable law, the Company is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Company (and any other persons to which applicable law permits the Company to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise in excess of the indemnification and advancement otherwise permitted by such applicable law. If applicable law is amended after approval by the stockholders of this Article VI to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director to the Company shall be eliminated or limited to the fullest extent permitted by applicable law as so amended.

 

Ex E-5

 

 

C. Any repeal or modification of this Article VI shall only be prospective and shall not affect the rights or protections or increase the liability of any director under this Article VI in effect at the time of the alleged occurrence of any act or omission to act giving rise to liability or indemnification.

 

VII.

 

A. Unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company; (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders; (iii) any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the DGCL, the Company’s Amended and Restated Certificate of Incorporation or the Bylaws of the Company; or (iv) any action asserting a claim against the Company or any director or officer or other employee of the Company governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim (A) as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction. Notwithstanding any of the foregoing to the contrary, unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under federal securities laws, including the Securities Act of 1933, as amended.

 

B. If any action the subject matter of which is within the scope of Section A of this Article VII is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section A of this Article VII (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

 

C. If any provision or provisions of this Article VII is held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article VII (including, without limitation, each portion of any sentence of this Article VII containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company shall be deemed to have notice of and to have consented to the provisions of this Article VII.

 

Ex E-6

 

 

VIII.

 

A. The Company hereby expressly elects not to be governed by Section 203 of the DGCL.

 

B. Notwithstanding the foregoing, the Company shall not engage in any Business Combination (as defined below), at any point in time at which the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act with any Interested Stockholder (as defined below) for a period of three years following the time that such stockholder became an Interested Stockholder, unless:

 

1. prior to such time, the Board of Directors approved either the business combination or the transaction which resulted in the stockholder becoming an Interested Stockholder, or

 

2. upon consummation of the transaction that resulted in the stockholder becoming an Interested Stockholder, the Interested Stockholder owned at least 85% of the Voting Stock (as defined below) of the Company outstanding at the time the transaction commenced, excluding for purposes of determining the Voting Stock outstanding (but not the outstanding Voting Stock owned by the Interested Stockholder) those shares owned (a) by persons who are directors and also officers and (b) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or

 

3. at or subsequent to such time, the Business Combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding Voting Stock of the Company that is not owned by the Interested Stockholder.

 

C. For purposes of this Article VIII, references to:

 

1.Affiliate” means a person that directly, or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, another person.

 

2.Associate”, when used to indicate a relationship with any person, means: (a) any corporation, partnership, unincorporated association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of Voting Stock; (b) any trust or other estate in which such person has at least a 20% beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (c) any relative, spouse or ex-spouse of such person, or any relative of such spouse or ex-spouse, whether or not such relative, spouse or ex-spouse has the same residence as such person. Notwithstanding any of the foregoing to the contrary, each of the Founder Group Parties shall be deemed to be Associates of one another.

 

Ex E-7

 

 

3.Business Combination”, when used in reference to the Company and any Interested Stockholder of the Company, means: (a) any merger or consolidation of the Company or any direct or indirect majority owned subsidiary of the Company (i) with the Interested Stockholder, or (ii) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the Interested Stockholder and, as a result of such merger or consolidation, Section (B) of this Article VIII is not applicable to the surviving entity; (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a stockholder of the Company, to or with the Interested Stockholder, whether as part of a dissolution or otherwise, of assets of the Company or of any direct or indirect majority owned subsidiary of the Company which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Company determined on a consolidated basis or the aggregate market value of all the outstanding stock of the Company; (c) any transaction which results in the issuance or transfer by the Company or by any direct or indirect majority owned subsidiary of the Company of any stock of the Company or of such subsidiary to the Interested Stockholder, except: (i) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Company or any such subsidiary which securities were outstanding prior to the time that the Interested Stockholder became such; (ii) pursuant to a merger under Section 251(g) of the DGCL; (iii) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Company or any such subsidiary which security is distributed, pro rata to all holders of a class or series of stock of the Company subsequent to the time the Interested Stockholder became such; (iv) pursuant to an exchange offer by the Company to purchase stock made on the same terms to all holders of said stock; or (v) any issuance or transfer of stock by the Company; provided, however, that in no case under items (iii)-(v) of this subsection (c) shall there be an increase in the Interested Stockholder’s proportionate share of the stock of any class or series of the Company or of the Voting Stock of the Company (except as a result of immaterial changes due to fractional share adjustments); (d) any transaction involving the Company or any direct or indirect majority owned subsidiary of the Company which has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the Company or of any such subsidiary which is owned by the Interested Stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the Interested Stockholder; or (e) any receipt by the Interested Stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Company), of any loans, advances, guarantees, pledges, or other financial benefits (other than those expressly permitted in subsections (a)-(d) above) provided by or through the Company or any direct or indirect majority owned subsidiary.

 

4.Control”, including the terms “Controlling”, “Controlled by”, and “under common Control with”, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of Voting Stock, by contract, or otherwise. A person who is the owner of 20% or more of the outstanding Voting Stock of the Company, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds Voting Stock, in good faith and not for the purpose of circumventing this Section, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity.

 

Ex E-8

 

 

5.Interested Stockholder” means any person (other than the Company or any direct or indirect majority owned subsidiary of the Company) that (a) is the owner of 15% or more of the outstanding Voting Stock of the Company, or (b) is an Affiliate or Associate of the Company and was the owner of 15% or more of the outstanding Voting Stock of the Company at any time within the three year period immediately prior to the date on which it is sought to be determined whether such person is an Interested Stockholder; and the Affiliates and Associates of such person; but “Interested Stockholder” shall not include any person whose ownership of shares in excess of the 15% limitation set forth herein is the result of any action taken solely by the Company, provided that such person shall be an Interested Stockholder if thereafter such person acquires additional shares of Voting Stock of the Company, except as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an Interested Stockholder, the Voting Stock of the Company deemed to be outstanding shall include stock deemed to be owned by the person through application of the definition of “owner” but shall not include any other unissued stock of the Company which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

 

6.owner,” including the terms “own” and “owned,” when used with respect to any stock, means a person that individually or with or through any of its Affiliates or Associates (a) beneficially owns such stock, directly or indirectly; (b) has (i) the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such person or any of such person’s Affiliates or Associates until such tendered stock is accepted for purchase or exchange; or (ii) the right to vote such stock pursuant to any agreement, arrangement or understanding; provided, however, that a person shall not be deemed the owner of any stock because of such person’s right to vote such stock if the agreement, arrangement or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to 10 or more persons; or (c) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in item (ii) of subsection (b) above), or disposing of such stock with any other person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, such stock.

 

7.person” means any individual, corporation, partnership, unincorporated association or other entity.

 

8.stock” means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.

 

9.Voting Stock” means stock of any class or series entitled to vote generally in the election of directors.

 

Ex E-9

 

 

IX.

 

A. In recognition and anticipation that (i) certain directors, principals, officers, employees and/or other representatives of the Sponsor and/or its direct and indirect subsidiaries (collectively, the “Forum Parties”) and each of their Affiliates (as defined in this Article IX) may serve as directors, officers or agents of the Company, (ii) the Forum Parties and their Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Company, directly or indirectly, may engage or propose to engage and/or other business activities that overlap with or compete with those in which the Company or any of its Affiliates, directly or indirectly, may engage or propose to engage, and (iii) members of the Board of Directors who are not employees of the Company and each of their respective Affiliates (the Persons identified in clauses (i), (ii) and (iii), collectively, the “Identified Persons” and each, an “Identified Person”) may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Company, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Company or any of its Affiliates, directly or indirectly, may engage or propose to engage, the provisions of this Article IX are set forth to regulate and define the conduct of certain affairs of the Company with respect to certain classes or categories of business opportunities as they may involve any of the Identified Persons and the powers, rights, duties and liabilities of the Company and its directors, officers and stockholders in connection therewith. In furtherance of the foregoing, no Identified Person shall, to the fullest extent permitted by law, (A) have any duty to refrain from directly or indirectly (i) engaging in the same or similar business activities or lines of business in which the Company or any of its Affiliates now engages or proposes to engage or (ii) otherwise competing with the Company or any of its Affiliates, and, to the fullest extent permitted by law, no Identified Person shall be liable to the Company or its stockholders or to any Affiliate of the Company for breach of any fiduciary duty solely by reason of the fact that such Identified Person engages in any such activities; and (B) the Company hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity that may be a corporate opportunity for an Identified Person and the Company or any of its Affiliates. Subject to Section (B) of this Article IX, in the event that any Identified Person acquires knowledge of a potential transaction or other business opportunity that may be a corporate opportunity for itself, herself or himself and the Company or any of its Affiliates, such Identified Person shall, to the fullest extent permitted by law, have no duty to communicate or offer such transaction or other business opportunity to the Company or any of its Affiliates and, to the fullest extent permitted by law, shall not be liable to the Company or its stockholders or to any Affiliate of the Company for breach of any fiduciary duty as a stockholder, director or officer of the Company solely by reason of the fact that such Identified Person pursues or acquires such corporate opportunity for itself, herself or himself, or offers or directs such corporate opportunity to another Person or does not communicate information regarding such corporate opportunity to the Company.

 

B. Notwithstanding the foregoing provisions of this Article IX, the Company does not renounce its interest in any corporate opportunity offered to any Identified Person (including any Identified Person who serves as an officer of the Company) if such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Company, and the provisions of Section (A) of this Article IX shall not apply to any such corporate opportunity.

 

C. In addition to and notwithstanding the foregoing provisions of this Article IX, a potential corporate opportunity shall not be deemed to be a corporate opportunity for the Company if it is a business opportunity that (i) the Company is neither financially or legally able, nor contractually permitted to undertake, (ii) from its nature, is not in the line of the Company’s business or is of no practical advantage to the Company or (iii) is one in which the Company has no interest or reasonable expectancy.

 

Ex E-10

 

 

D. For purposes of this Article IX, “Affiliate” shall mean (i) in respect of any Forum Party, any Person that, directly or indirectly, is controlled by a Forum Party, controls a Forum Party or is under common control with a Forum Party and shall include any principal, member, director, partner, stockholder, officer, employee or other representative of any of the foregoing (other than the Company and any entity that is controlled by the Company), (ii) in respect of any other Identified Person, any Person that, directly or indirectly, is controlled by such Identified Person (other than the Company and any entity that is controlled by the Company) and (iii) in respect of the Company, any Person that, directly or indirectly, is controlled by the Company. For purposes of this Article IX, “control” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting stock, by contract, or otherwise. A Person who is the owner of 20% or more of the outstanding voting stock of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such Person holds voting stock, in good faith and not for the purpose of circumventing this Section D, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity.

 

E. To the fullest extent permitted by law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Company shall be deemed to have notice of and to have consented to the provisions of this Article IX. Neither the alteration, amendment, addition to or repeal of this Article IX, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation (or any certificate of designation filed with respect to a series of Preferred Stock) inconsistent with this Article IX, shall eliminate or reduce the effect of this Article IX in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Article IX, would accrue or arise, prior to such alteration, amendment, addition, repeal or adoption. This Article IX shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director or officer of the Company under this Amended and Restated Certificate of Incorporation, any bylaws or applicable law.

 

X.

 

A. The Company reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, except as provided in paragraph B. of this Article X, and all rights conferred upon the stockholders herein are granted subject to this reservation.

 

Ex E-11

 

 

B. Notwithstanding any other provisions of this Amended and Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the Company required by law or by this Amended and Restated Certificate of Incorporation or any certificate of designation filed with respect to a series of Preferred Stock, the affirmative vote of the holders of at least 85% of the voting power of all of the then-outstanding shares of capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, at any time, shall be required to alter, amend or repeal Articles V, VI, VII, VIII, IX or X in any respect, or to adopt any provision or bylaw inconsistent therewith; provided, that, at any time when the Founder Parties beneficially own, in the aggregate, less than a majority of the total voting power of all then-outstanding shares of capital stock of the Company entitled to vote generally at an election of directors, the reference to “85%” in the foregoing sentence shall be deemed to be amended and replaced with the words “66 2/3%”.

 

* * * *

 

FOUR: This Amended and Restated Certificate of Incorporation has been duly approved by the Board of Directors of the Company.

 

FIVE: This Amended and Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of the Company in accordance with Section 228 of the DGCL. This Amended and Restated Certificate of Incorporation has been duly adopted in accordance with the provisions of Sections 242 and 245 of the DGCL by the stockholders of the Company.

 

[Signature Page Follows]

 

Ex E-12

 

 

IN WITNESS WHEREOF, the undersigned has caused this Amended and Restated Certificate of Incorporation to be signed on this [___] day of [_______], 2020.

 

  TATTOOED CHEF, INC.
   
   
  Name:
  Title:

 

Ex E-13

 

 

EXHIBIT F