EX-2.1 2 tm2314502d1_ex2-1.htm EXHIBIT 2.1

 

Exhibit 2.1

 

BUSINESS COMBINATION AGREEMENT

 

by and among

 

BITE ACQUISITION CORP.,

 

2510169 ALBERTA INC.,

 

ABOVE MERGER SUB, INC.

 

and

 

ABOVE FOOD CORP.

 

dated as of

 

April 29, 2023

 

 

 

 

TABLE OF CONTENTS

 

  Page
   
Article I CERTAIN DEFINITIONS 4

 

Section 1.1 Definitions 4
Section 1.2 Other Definitions 26
Section 1.3 Construction 29
Section 1.4 Knowledge 30

 

Article II TRANSACTIONS; CLOSING 30

 

Section 2.1 The Company Continuance 30
Section 2.2 The Arrangement 32
Section 2.3 Closing Transactions; Effect of Arrangement, Share Exchange and Merger 36
Section 2.4 Closing of the Transactions Contemplated by this Agreement 41
Section 2.5 Allocation Schedule 41
Section 2.6 Exchange Agent 42
Section 2.7 Withholding 44
Section 2.8 Earnout Shares 45
Section 2.9 No Fractional TopCo Common Shares 47
Section 2.10 Compliance with Antitrust Laws 47

 

Article III REPRESENTATIONS AND WARRANTIES OF THE COMPANY 47

 

Section 3.1 Organization, Good Standing, Corporate Power and Qualification 48
Section 3.2 Subsidiaries; Capitalization 48
Section 3.3 Due Authorization 50
Section 3.4 Financial Statements 51
Section 3.5 Material Contracts 52
Section 3.6 Intellectual Property; Information Technology; Data Protection 53
Section 3.7 Personal Property 57
Section 3.8 Real Property 57
Section 3.9 Environmental Matters 60
Section 3.10 Compliance with Other Instruments 61
Section 3.11 Compliance with Applicable Laws 62
Section 3.12 Absence of Changes 62
Section 3.13 Litigation 62
Section 3.14 Insurance 62
Section 3.15 Governmental Consents 63
Section 3.16 Permits 63
Section 3.17 Brokers or Finders 63
Section 3.18 Related-Party Transactions 63
Section 3.19 Employment and Labor 64
Section 3.20 Company Benefit Plans 65

 

i

 

Section 3.21 Tax Matter 67
Section 3.22 Books and Records 71
Section 3.23 Foreign Corrupt Practices Act 72
Section 3.24 Anti-Money Laundering 72
Section 3.25 Sanctions 72
Section 3.26 Export Controls 72
Section 3.27 Proxy/Registration Statement and Company Information Circular 73
Section 3.28 Board Approval 73
Section 3.29 Shareholder Support Agreement 73
Section 3.30 Shareholder Claims 73
Section 3.31 Food Laws 73
Section 3.32 No Additional Representations or Warranties 74

 

Article IV REPRESENTATIONS AND WARRANTIES OF SPAC 75

 

Section 4.1 Organization, Good Standing, Corporate Power and Qualification 75
Section 4.2 Capitalization 75
Section 4.3 Due Authorization 76
Section 4.4 Financial Statements; Internal Controls 77
Section 4.5 Compliance with Other Instruments 78
Section 4.6 Compliance with Applicable Laws 79
Section 4.7 Absence of Changes 79
Section 4.8 Litigation 79
Section 4.9 Governmental Consents 79
Section 4.10 Brokers or Finders 80
Section 4.11 Tax 80
Section 4.12 Information Supplied 81
Section 4.13 SEC Filings 82
Section 4.14 Trust Account 83
Section 4.15 Investment Company Act; JOBS Act 83
Section 4.16 Business Activities 83
Section 4.17 NYSE American Quotation 84
Section 4.18 Corporate Approvals 84
Section 4.19 Related Party Transactions 84
Section 4.20 Investigation; Reliance 85
Section 4.21 No Additional Representations or Warranties 86

 

Article V REPRESENTATIONS AND WARRANTIES OF the merger subsidiaries 86

 

Section 5.1 Organization, Good Standing, Corporate Power and Qualification 86
Section 5.2 Capitalization 87
Section 5.3 Due Authorization 88
Section 5.4 Compliance with Other Instruments 88
Section 5.5 Compliance with Applicable Law 88
Section 5.6 Brokers or Finders 88
Section 5.7 Business Activities 88
Section 5.8 No Prior Activities 89
Section 5.9 Foreign Private Issuer 89

 

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Article VI COVENANTS OF THE COMPANY 89

 

Section 6.1 Company Conduct of Business 89
Section 6.2 Conduct of Business by TopCo and Merger Sub 93
Section 6.3 Shareholder Rights Plans 93
Section 6.4 No Trading in SPAC Stock 93
Section 6.5 Shareholder Support Agreement 93
Section 6.6 Annual and Interim Financial Statements 93
Section 6.7 Cashless Exercise of Company Options 94
Section 6.8 Termination of Certain Agreements 94

 

Article VII COVENANTS OF SPAC 95

 

Section 7.1 Trust Account Payments 95
Section 7.2 SPAC NYSE American Listing 95
Section 7.3 SPAC Conduct of Business 95
Section 7.4 SPAC Public Filings 97

 

Article VIII JOINT COVENANTS 98

 

Section 8.1 Regulatory Approvals; Other Filings 98
Section 8.2 Preparation of Proxy/Registration Statement; SPAC Stockholder Meeting and Approvals 100
Section 8.3 Support of Transaction 103
Section 8.4 Tax Matters 103
Section 8.5 Stockholder Litigation 105
Section 8.6 Business Combination Proposal, Acquisition Proposals and Specified Other Transactions 105
Section 8.7 Access to Information; Confidentiality; Inspection 106
Section 8.8 Post-Closing Directors and Officers 106
Section 8.9 Deliverables to Advisors 107
Section 8.10 PIPE Investment 107
Section 8.11 D&O Indemnification and Insurance 109
Section 8.12 Equity Incentive Plan 110
Section 8.13 SPAC Extension 110

 

Article IX CONDITIONS TO OBLIGATIONS 111

 

Section 9.1 Conditions to Obligations of Each Party 111
Section 9.2 Conditions to Obligations of SPAC 111
Section 9.3 Conditions to the Obligations of the Company 113
Section 9.4 Frustration of Conditions 114

 

iii

 

Article X ALTERNATIVE TRANSACTION 114

 

Section 10.1 Alternative Transaction 114

 

Article XI TERMINATION/EFFECTIVENESS 115

 

Section 11.1 Termination 115
Section 11.2 Effect of Termination 116

 

Article XII MISCELLANEOUS 116

 

Section 12.1 Trust Account Waiver 116
Section 12.2 Waiver 117
Section 12.3 Notices 117
Section 12.4 Assignment 118
Section 12.5 Rights of Third Parties 118
Section 12.6 Expenses 119
Section 12.7 Governing Law 119
Section 12.8 Headings; Counterparts 119
Section 12.9 Company and SPAC Disclosure Schedules 120
Section 12.10 Entire Agreement 120
Section 12.11 Amendments 120
Section 12.12 Publicity 120
Section 12.13 Severability 121
Section 12.14 Jurisdiction; Waiver of Jury Trial 121
Section 12.15 Enforcement 122
Section 12.16 Non-Recourse 123
Section 12.17 Non-Survival of Representations, Warranties and Covenants 123
Section 12.18 Prior SPAC Counsel Conflicts and Privilege 123
Section 12.19 Prior Company Counsel Conflicts and Privilege 125

 

Exhibits

 

Exhibit A Form of Lock-Up Agreement
Exhibit B Form of Registration Rights Agreement
Exhibit C Company Resolution
Exhibit D Plan of Arrangement
Exhibit E Continuance Resolution
   
Schedule 1 Termination Contracts
Schedule 2 Key Employees

 

iv

 

BUSINESS COMBINATION AGREEMENT

 

This Business Combination Agreement, dated as of April 29, 2023 (this “Agreement”), is made and entered into by and among Bite Acquisition Corp., a Delaware corporation (“SPAC”), 2510169 Alberta Inc., an Alberta corporation (“TopCo”) and a direct, wholly owned Subsidiary of the Company, Above Merger Sub, Inc., a Delaware corporation and a direct, wholly owned Subsidiary of TopCo (“Merger Sub” and, together with TopCo, the “Merger Subsidiaries” and each, a “Merger Subsidiary”), and Above Food Corp., a corporation organized under the laws of Saskatchewan, Canada (the “Company”). Capitalized terms used herein without definition have the meanings set forth in Article I.

 

RECITALS

 

WHEREAS, SPAC is a blank check company incorporated as a Delaware corporation on September 29, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more target businesses;

 

WHEREAS, each of TopCo and Merger Sub was incorporated or formed, as applicable, for the purposes of consummating the transactions contemplated by this Agreement and the applicable Ancillary Agreements;

 

WHEREAS, prior to the Closing and subject to the conditions of this Agreement, the Company shall be continued as a corporation under the law of the Province of Alberta pursuant to Section 14-19 of the ABCA (the “Company Continuance”);

 

WHEREAS, pursuant to the Plan of Arrangement, at the Share Exchange Effective Time (i) the Company Shareholders will contribute to TopCo all of the issued and outstanding equity of the Company in exchange for newly issued TopCo Common Shares, TopCo Class A Earnout Shares and TopCo Class B Earnout Shares (the “Share Exchange”), and (ii) holders of Company Securities will receive Rollover Options, Rollover RSUs or Assumed Warrants, in each case entitling the holders thereof upon exercise or vesting of such Rollover Options, Rollover RSUs and Assumed Warrants to receive TopCo Common Shares and, in the case of Assumed Warrants, to additionally receive TopCo Class A Earnout Shares and TopCo Class B Earnout Shares, and (iii) after giving effect to the Share Exchange, the Company will become a direct, wholly owned Subsidiary of TopCo;

 

WHEREAS, following the completion of the Share Exchange, at which time the Company will be a direct, wholly owned Subsidiary of TopCo, at the Merger Effective Time, upon the terms and subject to the conditions of this Agreement and in accordance with the Delaware General Corporation Law, as amended (the “DGCL”), Merger Sub shall merge with and into SPAC (the “Merger”, and together with the Plan of Arrangement and the other transactions contemplated by this Agreement, the “Transactions”), with SPAC continuing as the surviving corporation after the Merger, as a result of which SPAC will become a direct, wholly owned Subsidiary of TopCo;

 

1

 

 

WHEREAS, as a result of the Merger, (a) each issued and outstanding share of SPAC Common Stock shall no longer be outstanding and shall be automatically converted into and exchanged for the right to receive the SPAC Per Share Merger Consideration and (b) each issued and outstanding SPAC Warrant shall no longer be outstanding and shall, pursuant to the terms of the SPAC Warrant Agreement, be automatically converted into and become one warrant to purchase TopCo Common Shares, and all rights with respect to shares of SPAC Common Stock underlying such SPAC Warrants will be automatically converted into rights with respect to TopCo Common Shares, in each case, with TopCo issuing a number of TopCo Common Shares and warrants in accordance with the terms of this Agreement;

 

WHEREAS, the Company and Sponsor are parties to that certain Convertible Subordinated Loan Agreement, dated as of December 29, 2022 (as amended, restated or otherwise modified from time to time in accordance with its terms, the “Convertible Loan Agreement”), by and among the Company, Sponsor and other parties that may become parties thereto as Lenders from time to time, pursuant to which, among other things, each Lender’s loan shall be converted, on the Closing Date, into a number of TopCo Common Shares as set forth thereunder, on the terms and subject to the conditions set forth therein;

 

WHEREAS, following the execution of this Agreement, certain investors (collectively, the “PIPE Investors”) may enter into one or more subscription agreements (each, a “PIPE Subscription Agreement”), pursuant to which, among other things, each PIPE Investor shall agree to subscribe for and purchase on the Closing Date, and TopCo shall agree to issue and sell to each such PIPE Investor on the Closing Date, the number of TopCo Common Shares set forth in the applicable PIPE Subscription Agreement in exchange for the purchase price set forth therein (the aggregate purchase price under all PIPE Subscription Agreements, collectively, the “PIPE Financing Amount,” and the equity financing under all PIPE Subscription Agreements, collectively, the “PIPE Financing”), in each case, on the terms and subject to the conditions set forth therein;

 

WHEREAS, as a condition and inducement to SPAC’s willingness to enter into this Agreement, concurrently with the execution and delivery of this Agreement, the Key Company Shareholders will duly execute and deliver to SPAC a voting and support agreement (the “Shareholder Support Agreement”), pursuant to which each such Key Company Shareholder will agree to, among other things, (a) not transfer their Company Securities (as defined herein), (b) support and vote in favor of the Continuance Resolution and the Company Resolution, as applicable, and any Alternative Transaction (as defined herein), (c) not exercise, and waive, rights in respect of Dissent Rights or Continuance Dissent Rights and (d) consent to the termination of the Termination Contracts effective at the Closing and to the taking of any actions necessary or advisable to cause such termination of the Termination Contracts, in each case, on the terms and subject to the conditions set forth in the Shareholder Support Agreement;

 

WHEREAS, Sponsor beneficially owns 5,450,001 shares of SPAC Common Stock;

 

WHEREAS, as a condition and inducement to the Company’s willingness to enter into this Agreement, concurrently with the execution and delivery of this Agreement, the Company, SPAC and Sponsor will duly execute and deliver to the Company a sponsor support agreement (the “Sponsor Support Agreement”), pursuant to which, among other things, Sponsor (a) will vote the SPAC Shares held by it as of the date hereof and any additional SPAC Capital Stock that it acquires prior to the SPAC Stockholder Meeting, in each case, in favor of this Agreement and each of the Transaction Proposals and (b) will not redeem any SPAC Shares held by it in connection with the Transactions, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement;

 

2

 

 

WHEREAS, in connection with the Closing, TopCo, Sponsor and certain holders of Company Securities will enter into a lock-up agreement substantially in the form attached hereto as Exhibit A (the “Lock-Up Agreement”), pursuant to which, among other things, each of Sponsor and the holders of Company Securities party thereto will agree to not effect any sale or distribution of any equity securities of TopCo held by any of them during the period set forth in the Lock-Up Agreement, subject to certain customary exceptions set forth in the Lock-Up Agreement;

 

WHEREAS, in connection with the Closing, certain holders of shares of SPAC Common Stock (including Sponsor), certain holders of Company Securities and TopCo will enter into a customary registration rights agreement substantially in the form attached hereto as Exhibit B (the “Registration Rights Agreement”), pursuant to which, among other things, TopCo will agree to provide such holders of shares of SPAC Common Stock and such holders of Company Securities with certain registration rights with respect to the Registrable Securities (as defined in the Registration Rights Agreement);

 

WHEREAS, prior to the Closing Date, TopCo shall adopt an omnibus equity incentive plan (the “Equity Incentive Plan”) as provided herein;

 

WHEREAS, the board of directors of SPAC (the “SPAC Board”) has unanimously (a) determined that it is fair to, advisable for and in the best interests of SPAC and its shareholders to enter into this Agreement and to consummate the Transactions, (b) approved the execution and delivery of this Agreement and the documents contemplated hereby and the consummation of the Transactions, and (c) determined to recommend to its stockholders the approval and adoption of this Agreement, the Plan of Arrangement and the Transactions contemplated hereby and thereby;

 

WHEREAS, the board of directors of TopCo (the “TopCo Board”) has approved this Agreement, the Ancillary Agreements to which TopCo is or will be a party and the Transactions;

 

WHEREAS, the board of directors of Merger Sub has unanimously (a) determined that the Transactions, including the Merger, are in the best interests of Merger Sub and TopCo (as sole stockholder of Merger Sub), and (b) approved and recommended the adoption and approval by TopCo of this Agreement, the Ancillary Agreements to which Merger Sub is or will be a party and the Transactions, including the Merger;

 

WHEREAS, TopCo, in its capacity as the sole shareholder of Merger Sub, has approved the Agreement, the Ancillary Agreements to which Merger Sub is or will be a party and the Transactions, including the Merger;

 

WHEREAS, the board of directors of the Company (the “Company Board”) has unanimously (a) determined that it is fair to, advisable for and in the best interests of the Company and its shareholders to enter into this Agreement and to consummate the Transactions, and (b) approved this Agreement, the Ancillary Agreements to which the Company is or will be a party and agreed to recommend that the Company Shareholders vote in favor of the Company Resolution to be approved by the Company Shareholders at the Company Shareholders Meeting, on the terms and subject to the conditions contained in this Agreement;

 

3

 

 

WHEREAS, for Canadian tax purposes, it is intended that the Share Exchange will occur on a tax deferred basis for Canadian resident Company Shareholders who elect with TopCo under subsections 85(1) or (2) of the Tax Act; and

 

WHEREAS, for U.S. federal income tax purposes, it is intended that (a) the Share Exchange, the Merger, the issuance of TopCo Common Shares to the Lenders pursuant to the Convertible Loan Agreement and, if applicable, the PIPE Financing collectively constitute an integrated transaction that qualifies under Section 351(a) of the Code, and (b) the transfers of shares of SPAC Common Stock by SPAC Stockholders pursuant to the Merger (other than by any SPAC Stockholders who (i) are “U.S. persons”, (ii) are or will be “five-percent transferee shareholders” (in each case, as defined in Treasury Regulations Section 1.367(a)-3(c)(5)) and (iii) do not enter into gain recognition agreements within the meaning of Treasury Regulations Sections 1.367(a)-3(c)(1)(iii)(B) and 1.367(a)-8) qualify for the exception to Section 367(a)(1) of the Code set forth in Treasury Regulations Section 1.367(a)-3(c) (collectively, the “Intended U.S. Tax Treatment”).

 

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, each of SPAC, TopCo, Merger Sub and the Company agrees as follows:

 

Article I
CERTAIN DEFINITIONS

 

Section 1.1             Definitions. As used herein, the following terms shall have the following meanings:

 

ABCA” means the Business Corporations Act (Alberta) and the regulations made thereunder, as now in effect and as they may be promulgated or amended from time to time.

 

Acquisition Proposal” means, as to the Company, other than the Transactions and other than the acquisition or disposition of equipment or other tangible personal property in the Ordinary Course, any offer or proposal relating to: (a) any acquisition or purchase, direct or indirect, of (i) 15% or more of the consolidated assets of such Person and its Subsidiaries or (ii) 15% or more of any class of equity or voting securities of (x) such Person or (y) one or more Subsidiaries of such Person holding assets constituting, individually or in the aggregate, 15% or more of the consolidated assets of such Person and its Subsidiaries; (b) any take-over bid, issuer bid, tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any Person beneficially owning 15% or more of any class of equity or voting securities of (i) such Person or (ii) one or more Subsidiaries of such Person holding assets constituting, individually or in the aggregate, 15% or more of the consolidated assets of such Person and its Subsidiaries; or (c) a merger, amalgamation, consolidation, share exchange, business combination, arrangement, sale of substantially all the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving (i) such Person or (ii) one or more Subsidiaries of such Person holding assets constituting, individually or in the aggregate, 15% or more of the consolidated assets of such Person and its Subsidiaries.

 

4

 

 

Action” means any action, lawsuit, complaint, claim, petition, suit, audit, examination, assessment, charge, audit, arbitration, mediation or inquiry, or any proceeding or investigation, by or before any Governmental Authority.

 

Adjusted EBITDA” means, for the applicable measurement period, determined in a manner consistent with the Company Audited Year-End Financial Statements for the fiscal year ended January 31, 2022, earnings before interest expense, taxes, depreciation, amortization adjusted for non-recurring items in the company’s normal operations resulting from discontinued operations, extraordinary items, unusual or infrequent items, and changes resulting from changes in accounting policies/principles.

 

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, whether through one or more intermediaries or otherwise. The term “control” (including the terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by Contract or otherwise.

 

Aggregate Closing PIPE Proceeds” means the aggregate cash proceeds actually received in respect of the PIPE Financing (whether on or prior to the Closing Date) and held in a bank account owned and controlled by TopCo on the Closing Date (and, for the avoidance of doubt, after giving effect to the funding of the PIPE Financing on such date and before giving effect to the payment of any Unpaid SPAC Transaction Expenses or Unpaid Company Transaction Expenses).

 

Ancillary Agreements” means, collectively, (a) the Shareholder Support Agreement, (b) the Sponsor Support Agreement, (c) the Lock-Up Agreement, (d) the PIPE Subscription Agreements, if any, (e) the Registration Rights Agreement, (f) the Equity Incentive Plan and (g) each other agreement, document, instrument and/or certificate executed or contemplated by this Agreement to be executed, in connection with consummation of the transactions contemplated hereby (including in connection with the Company Continuance, the Merger and the Transactions).

 

ANF” means Atlantic Natural Foods, LLC, a Delaware limited liability company.

 

ANF Purchase Agreement” means that certain letter agreement, entered into among ANF Seller, ANF, Above Food USA Corp. and the Company as of December 29, 2022.

 

ANF Purchase Consideration Shares” means the aggregate number of TopCo Common Shares to be issued to ANF Seller or its Affiliates in respect of the purchase of the limited liability company interests of ANF pursuant to the ANF Purchase Agreement at or after the Closing, which, for the avoidance of doubt, shall not include the First Year Earn-Out Amount or the Second Year Earn-Out Amount (in each case, as defined in the ANF Purchase Agreement).

 

ANF Seller” means ANF Holdco, LLC, a Delaware limited liability company.

 

5

 

 

Anti-Bribery Laws” means the anti-bribery provisions of the Foreign Corrupt Practices Act of 1977 and all other applicable anti-corruption and bribery Laws (including the Corruption of Foreign Public Officials Act (Canada), U.K. Bribery Act 2010 or other Laws of other countries implementing the OECD Convention on Combating Bribery of Foreign Officials), and any related or similar laws, rules, regulations or guidelines, which, in each case, are issued, administered or enforced by any authority having jurisdiction over the Company and/or any of its Subsidiaries, or to which the Company and/or any of its Subsidiaries are subject.

 

Antitrust Laws” means any Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization, restraint of trade or lessening of competition through merger or acquisition.

 

Arrangement” means an arrangement under Part 15 of the ABCA on the terms and subject to the conditions set forth in the Plan of Arrangement, subject to any amendments or variations to the Plan of Arrangement made in accordance with the terms of this Agreement and the Plan of Arrangement or made at the direction of the Court in the Final Order with the prior written consent of SPAC and the Company, such consent not to be unreasonably withheld, conditioned or delayed.

 

Arrangement Filings” means the records and information required to be provided to the Registrar under Section 193(2) of the ABCA in respect of the Arrangement, together with a copy of the Final Order.

 

Available Cash” means, without duplication, an aggregate amount equal to (a) the amount of cash available to be released from the Trust Account as of immediately prior to the Closing (after giving effect to SPAC Share Redemption Amount), plus (b) the aggregate amount of unrestricted cash of SPAC on hand held outside of the Trust Account immediately prior to the Closing, plus (c) the Aggregate Closing PIPE Proceeds, plus (d) the amount of all unrestricted proceeds of any Alternative Financing that shall have been received at or prior to the Closing in connection with the Transactions, plus (e) the proceeds of the Loan received by the Company in excess of $9,000,000. For the avoidance of doubt, (i) any cash proceeds received by TopCo or any of their respective Affiliates in respect of any amounts funded under a PIPE Subscription Agreement prior to the Closing Date and not refunded or otherwise used prior to the Closing shall constitute, and be taken into account for purposes of determining, the Available Cash, and (ii) the term “unrestricted” before the words “cash” or “proceeds” means cash and cash equivalents that, immediately following the Closing are available for use by TopCo, the Company or any of the Group Companies.

 

Business Combination” has the meaning set forth in the Governing Documents of SPAC.

 

Business Combination Proposal” means any offer, inquiry, proposal or indication of interest (whether written or oral, binding or non-binding, and other than an offer, inquiry, proposal or indication of interest with respect to the Transactions), relating to a Business Combination.

 

Business Data” means all business information and data, excluding Personal Information, processed, stored, shared, distributed, transferred, disclosed, destroyed, or disposed of by any of the IT Systems or otherwise by or on behalf of any of the Group Companies in the conduct of their business as currently conducted.

 

Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York, Regina, Saskatchewan, or Calgary, Alberta are authorized or required by Law to close.

 

6

 

 

CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act, as amended, and the rules and regulations promulgated thereunder.

 

Change of Control” means any transaction or series of transactions the result of which is: (a) the acquisition by any Person or group (as defined under Section 13 of the Exchange Act) of Persons of direct or indirect beneficial ownership of securities representing 50% or more of the combined voting power of the then outstanding securities of the Company; (b) a merger, consolidation, business combination, recapitalization, reorganization, or other similar transaction, however effected, resulting in any Person or group (as defined under Section 13 of the Exchange Act) acquiring at more than least 50% of the combined voting power of the then outstanding securities of the Company or the surviving or successor entity immediately after such combination; or (c) a sale of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole; provided, however, that any securities of the Company issued (i) in a bona fide financing transaction, (ii) series of bona fide financing transactions, (iii) in accordance with this Agreement, or (iv) pursuant to the conversion of any securities issued in accordance with this Agreement shall be excluded from the definition of “Change of Control”.

 

Company Broker Warrant” means a warrant representing the right to acquire Company Common Shares and Company Warrants that is outstanding and unexercised.

 

Closing Date” means the date on which the Closing occurs in accordance with Section 2.4.

 

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

 

Company and Merger Subsidiary Fundamental Representations” means the representations and warranties made pursuant to Section 3.1 (except for the third sentence thereof) (Organization, Good Standing and Corporate Power), Section 3.2 (Subsidiaries; Capitalization), Section 3.3 (Due Authorization), Section 3.17 (Brokers or Finders), Section 5.1 (Organization, Good Standing, Corporate Power and Qualification), Section 5.2 (Capitalization), Section 5.3 (Due Authorization) and Section 5.6 (Brokers or Finders).

 

Company Benefit Plan” means each “employee benefit plan” as defined in Section 3(3) of ERISA (whether or not subject to ERISA), and each other compensation or benefits plan, policy, program, or arrangement and each other stock purchase, stock option, restricted stock, profit sharing, pension, retirement, savings, severance, retention, employment, consulting, commission, change-of-control, vacation, holiday pay, paid time off, employee loan, educational assistance, bonus, incentive, deferred compensation, defined benefit, defined contribution, fringe benefit, insurance, welfare, post-retirement health or welfare, health, medical, vision, dental, flexible spending account, cafeteria, life, disability, accident, sick pay, sick leave, termination, severance and other plan, policy, program or arrangement, whether oral or written, insured or self-insured, registered or unregistered, in each case, that is sponsored, administered, established, maintained, contributed to or required to be contributed to by any of the Group Companies on behalf of current or former employees, officers, individual independent contractors or directors of any of the Group Companies or their spouses, beneficiaries or dependents, or under which any of the Group Companies has or could reasonably be expected to have any material liability, contingent or otherwise, other than any such plan, policy, program or arrangement sponsored by a Governmental Authority.

 

7

 

 

Company Bonus Shares” means an amount of Company Common Shares equal to the quotient of (a) 400,000 TopCo Common Shares divided by (b) the Exchange Ratio.

 

Company Common Shares” means the common shares in the capital of the Company.

 

Company Continuance Meeting” means the meeting of the Company Shareholders, including any adjournment or postponement thereof in accordance with the terms of this Agreement and applicable Law, that is to be convened as provided by applicable Law to consider, and, if deemed advisable, approve, the Continuance Resolution, and for any other purpose as may be set out in the Continuance Information Circular and agreed to by SPAC.

 

Company Earnout Ratio” means the fraction equal to (a) 3,057,310 divided by (b) the number of issued and outstanding Company Shares, including the Company Bonus Shares, as of immediately prior to the Share Exchange Effective Time.

 

Company Earnout Shares” means (i) TopCo Class A Earnout Shares and (ii) TopCo Class B Earnout Shares; in each case, issuable and convertible into TopCo Common Shares as set forth in Section 2.8.

 

Company Indenture Warrant” means a warrant representing the right to acquire Company Common Shares issued under the Company Warrant Indenture, that is outstanding and unexercised.

 

Company In-The-Money Vested Option” means a Company Option that, as of immediately prior to the Share Exchange Effective Time, both (a) has an exercise price that is less than the Company Share Implied Price and (b) is vested.

 

Company In-The-Money Warrant” means a Company Warrant that, as of immediately prior to the Share Exchange Effective Time, has an exercise price that is less than the Company Share Implied Price.

 

Company Information Circular” means the notice of the Company Shareholders Meeting to be sent to the Company Shareholders, and the accompanying management information circular to be prepared in connection with the Company Shareholders Meeting, together with any amendments thereto or supplements thereof in accordance with the terms of this Agreement.

 

Company Intellectual Property” means any and all Intellectual Property used or held for use in connection with the Group Companies’ business, including the Owned Intellectual Property and the Licensed Intellectual Property.

 

8

 

 

Company Material Adverse Effect” means any Event that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets and liabilities, results of operations or financial condition of the Group Companies, taken as a whole; provided, however, that in no event would any of the following Event (or the effect of any of the following Event), alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or would reasonably expected to be, a “Company Material Adverse Effect”: (a) any enactment of, or change or proposed change in, any applicable Laws or GAAP or any interpretation thereof following the date of this Agreement, (b) any change in interest rates or economic, political, business or financial market conditions generally, (c) the taking of any action expressly required to be taken under this Agreement, the Plan of Arrangement or any Ancillary Agreement, (d) any natural disaster (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences), epidemic, pandemic, disease or outbreak (including COVID-19 or any change in COVID-19 Measures or binding interpretations of an applicable Governmental Authority with respect thereto following the date of this Agreement), acts of nature or change in climate, (e) any acts of terrorism or war (whether or not declared and including the current conflict between the Russian Federation and Ukraine), sabotage, civil unrest, curfews, public disorder, riots, the outbreak or escalation of hostilities, geopolitical conditions, local, regional, state, national or international political conditions, or social conditions, (f) any failure in and of itself of any Group Companies to meet any projections, forecasts, guidance, estimates, milestones, budgets or financial or operating predictions of revenue, earnings, cash flow or cash position, provided that the causes underlying such failure may, if not otherwise excluded from this definition of Company Material Adverse Effect, be deemed either alone or in combination to constitute, or be taken into account in determining whether a Company Material Adverse Effect has occurred, (g) any Events generally applicable to the industries or markets in which the Group Companies operate (including increases in the cost of products, supplies, materials or other goods purchased from third party suppliers), (h) any matter existing as of the date of this Agreement, to the extent expressly set forth in the Company Disclosure Schedules, (i) any action taken by, or at the request, approval or consent of, or with the written approval or consent (except with respect to the matters requiring consent in Section 6.5, unless otherwise agreed by SPAC to be subject to this clause (i)) of SPAC, (j) any Events that are cured by the Group Companies prior to the Closing, (k) any downturn in general economic conditions, including changes in the credit, debt, securities, financial or capital markets (including changes in interest or exchange rates, prices of any security or market index or commodity or any disruption of such markets); (l) the announcement of this Agreement, or the consummation of the Transactions, including any termination of, reduction in or similar adverse impact (but in each case only to the extent attributable to such announcement or consummation) on relationships, contractual or otherwise, with any landlords, customers, suppliers, distributors, partners or employees of the Group Companies, provided that this clause (l) shall not be deemed to apply to references to “Company Material Adverse Effect” in the representations and warranties set forth in Sections 3.5 and 3.10, and, to the extent related thereto, the condition in Section 9.2(a), or (m) any worsening of the Events referred to in clauses (b), (d), (e), (g) or (k) to the extent existing as of the date of this Agreement; provided, that in the case of each of clauses (a), (b), (d), (e), (g) and (k), any such Event shall not be excluded from the determination of whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect to the extent it disproportionately and adversely affects the Group Companies, taken as a whole, relative to other similarly situated companies in the industry in which the Group Companies operate, in which case only the incremental disproportionate, adverse effect relative to other similarly situated companies in the industry in which the Group Companies operate may be taken into account in determining whether there has been or would be a Company Material Adverse Effect (for the avoidance of doubt and without limiting the effect of any other disproportionate and adverse impact as provided in this proviso, it is understood and agreed that any cyber-attack primarily directed at a Group Company shall be deemed to disproportionately and adversely affect the Group Companies).

 

9

 

 

Company Option Plan” means the Above Food Corp. Stock Option Plan in effect as of this date, as approved by the Company Board and as further amended and/or restated from time to time.

 

Company Options” means any options granted under the Company Option Plan to purchase Company Common Shares.

 

Company Out-Of-The-Money / Unvested Option” means a Company Option that, as of immediately prior to the Share Exchange Effective Time, either (a) has an exercise price that is equal to or greater than the Company Share Implied Price or (b) is not vested.

 

Company Preferred Shares” means the Preferred shares in the capital of the Company.

 

Company Products” means each product developed, produced, manufactured, packaged, tested, labeled, stored, shipped, imported, exported, marketed, advertised, sold, distributed and/or made available to third parties or currently under development by or on behalf of any of the Group Companies.

 

Company Required Approval” means (i) approval by the affirmative vote of the holders of at least 66 2/3% of the votes cast at the Company Shareholders Meeting or the Company Continuance Meeting by the holders of the Company Shares, present in person or represented by proxy, voting as a single class, pursuant to the terms and subject to applicable Law and the Company’s Governing Documents, provided that at least twenty-five percent (25%) of the Company Shares must be present in person or by proxy at any such Company Shareholders Meeting or the Company Continuance Meeting, as applicable; (ii) approval by the affirmative vote of the holders, voting as a separate class, of at least 50% of the votes cast at the Company Shareholders Meeting by the holders of the Company Shares, present in person or represented by proxy other than interested parties (as such term is defined in Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions) to the Arrangement (including a related party thereto or a joint actor therewith), subject to applicable Law and the Company’s Governing Documents; (iii) approval by the affirmative vote of the holders, voting as separate classes, of at least 66 2/3% of the votes cast at the Company Shareholders Meeting by the holders of Company Options and Company RSUs, present in person or represented by proxy, subject to applicable Law and the Company’s Governing Documents, and (iv) any approval requirements as may be imposed by the Court.

 

Company Resolution” means a special resolution of the holders of Company Shares, voting as a single class, in respect of the Arrangement to be considered at the Company Shareholders Meeting, substantially in the form attached hereto as Exhibit C, with such changes as may be mutually agreed to by SPAC and the Company (such agreement not to be unreasonably withheld, conditioned or delayed by either SPAC or the Company, as applicable).

 

Company RSU Plan” means the Above Food Corp. Restricted Share Unit Plan in effect as of this date, as approved by the Company Board and as further amended and/or restated from time to time.

 

10

 

 

Company RSUs” means any restricted share units granted under the Company RSU Plan.

 

Company Securities” means, collectively, the Company Shares, Company Warrants, Company RSUs and Company Options.

 

Company Share Implied Price” means the dollar amount equal to the quotient of (a) the Equity Value divided by (b) the Diluted Company Shares.

 

Company Shareholder” means any holder of any Company Shares.

 

Company Shareholder Transaction Consideration” means the aggregate number of TopCo Common Shares equal to (a) the Equity Value divided by (b) $10.00.

 

Company Shareholders Meeting” means the meeting of the Company Shareholders, including any adjournment or postponement thereof in accordance with the terms of this Agreement, the Interim Order and applicable Law, that is to be convened as provided by the Interim Order and applicable Law to consider, and, if deemed advisable, approve, the Company Resolution, and for any other purpose as may be set out in the Company Information Circular and agreed to by SPAC.

 

Company Shares” means, collectively, the Company Common Shares and the Company Preferred Shares.

 

Company Transaction Expenses” means, without duplication, any out-of-pocket fees and expenses payable by any of the Group Companies, the Merger Subsidiaries or their respective Affiliates (whether or not billed or accrued for) as a result of or in connection with the negotiation, documentation and consummation of the Transactions, including (a) all fees, costs, expenses, brokerage fees, commissions, finders’ fees and disbursements of financial advisors, investment banks, data room administrators, attorneys, accountants and other advisors and service providers; (b) any change in control bonus, transaction bonus, retention bonus, termination or severance payment or payment relating to terminated options (including any Company Options), warrants or other equity appreciation, phantom equity, profit participation or similar rights, in any case, to be made to any current or former employee, independent contractor, director or officer of any of the Group Companies or the Merger Subsidiaries which become payable (including if subject to continued employment) as a result of or in connection with the execution of this Agreement or the consummation of the Transactions, plus any employer portion of any payroll Taxes required to be paid thereon; (c) Transfer Taxes; (d) fifty percent (50%) of any and all filing fees paid to Governmental Authorities in connection with the Transactions in accordance with ‎Section 8.1(c); (e) fifty percent (50%) of the costs for the preparation, filing and mailing of the Proxy/Registration Statement (excluding, for the avoidance of doubt, the fees and expenses of any other party’s outside counsels, financial advisors, consultants and other advisors); and (f) the premium and other costs and expenses associated with the D&O Tail.

 

Company Warrants” means the Company Indenture Warrants and the Company Broker Warrants.

 

11

 

 

Company Warrant Indenture” means that certain warrant indenture, entered into between the Company and Odyssey Trust Company on January 18, 2021, as amended, modified or supplemented from time to time.

 

Confidential Information” means any non-public information of or concerning the Group Companies or any of their respective businesses, including any such information pertaining to the Group Companies’ business plans, financial data, customer, supplier and client lists, customer, supplier and client information (including names, addresses and contact information and including prospective customers, prospective suppliers and prospective clients), business and marketing plans, technology, products, services, formulas, methods, technical manuals, technical data, pricing and cost information, compositions, recipes, ingredients, know-how (including ideas and inventions (whether or not patentable or reduced to practice)), trade secrets, research and development information, solutions, offerings, platforms and Intellectual Property, whether existing or being developed.

 

Confidentiality Agreement” means that certain Confidentiality Agreement, dated as of November 25, 2022, between SPAC and the Company.

 

Continuance Dissent Rights” means the right of Company Shareholders to dissent to the Company Continuance pursuant to Section 14-21(1)(d) of the SBCA.

 

Continuance Dissent Share” means a Company Share held by a Continuance Dissenting Shareholder in respect of which such Continuance Dissenting Shareholder has duly and validly exercised Continuance Dissent Rights in strict compliance with the SBCA.

 

Continuance Dissenting Shareholder” means a registered holder of Company Shares who has duly and validly exercised the Continuance Dissent Rights in respect of all Company Shares held and who has not withdrawn or been deemed to have withdrawn such exercise of Continuance Dissent Rights as of the applicable time of determination.

 

Continuance Information Circular” means the notice of the Company Continuance Meeting to be sent to the Company Shareholders, and the accompanying management information circular to be prepared in connection with the Company Continuance Meeting, together with any amendments thereto or supplements thereof in accordance with the terms of this Agreement.

 

Continuance Resolution” means a special resolution of the holders of Company Shares, voting as a single class, in respect of the Company Continuance to be considered at the Company Continuance Meeting, substantially in the form attached hereto as Exhibit E, with such changes as may be mutually agreed to by SPAC and the Company (such agreement not to be unreasonably withheld, conditioned or delayed by either SPAC or the Company, as applicable).

 

Contracts” means any contracts, subcontracts, agreements, arrangements, understandings, commitments, instruments, undertakings, indentures, leases, mortgages, purchase orders, or other obligations to which a Person is a party, by which a Person is bound or by which any of the assets or properties of a Person is bound, whether written or oral.

 

Convertible Loan PIK Interest Shares” means the interest paid on the Closing Date in the form of TopCo Common Shares pursuant to the Convertible Loan Agreement.

 

12

 

 

Copyrights” means all rights in copyrights (whether registered or unregistered) of any type, in all forms, media or medium, now known or hereinafter developed, and whether or not completed, published, or used, including all drafts, plans, sketches, artwork, layouts, copy, designs, photographs, illustrations, collections, serials, printed or graphic matter, slides, compilations, serials, promotions, audio or visual recordings, transcriptions, software, and all derivative works, translations, adaptations and combinations of any of the foregoing, all registrations and applications therefor and all extensions, restorations, and renewals of any of the foregoing, all worldwide rights and priorities afforded under any Law with respect to any of the foregoing, and all termination rights, moral rights, author rights and all other rights associated therewith.

 

Court” means the Court of King’s Bench of Alberta or any other court with jurisdiction to consider and issue the Interim Order and the Final Order.

 

COVID-19” means SARS-CoV-2 or COVID-19, and any evolutions or mutations thereof.

 

COVID-19 Measures” means any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester, workplace safety or similar applicable Law promulgated by any Governmental Authority, including the Centers for Disease Control and Prevention, Health Canada and the World Health Organization, in each case, in connection with or in response to COVID-19, including the CARES Act and Families First Act.

 

COVID-19 Tax Measure” means any legislation or order enacted or issued by any Governmental Authority, and any administrative authority issued pursuant to such legislation or order, with respect to any Tax matter, or in response to the COVID-19 pandemic in any jurisdiction, whether domestic or non-U.S. (including the CARES Act, the Families First Act, the Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster, dated August 8, 2020, IRS Notice 2020-65, the Health and Economic Recovery Omnibus Emergency Solutions Act, the Consolidated Appropriations Act, 2021 (H.E. 133), and the American Rescue Plan Act).

 

Develop” or “Development” means any conception, reduction to practice, invention, creation, formulation, design, enhancement, testing, discovery, editing, commercialization, modification, improvement, or development (and any contribution to the foregoing), whether independently or jointly.

 

Diluted Company Shares” means, as of immediately prior to the Share Exchange Effective Time, the sum, without duplication, of (a) the aggregate number of all (i) issued and outstanding Company Shares, including the Company Bonus Shares, (ii) Company Common Shares issuable upon exercise of the Company In-The-Money Vested Options (assuming exercise on a cashless basis), (iii) Company Common Shares issuable upon settlement of the Company RSUs, (iv) Company Common Shares issuable upon exercise of the Company In-the-Money Warrants, plus (b) the aggregate number of Company Common Shares equal to (i) the ANF Purchase Consideration Shares divided by (ii) the ratio determined by dividing the Company Shareholder Transaction Consideration by the number of Company Shares set forth in subsection (a) (and excluding, for the avoidance of doubt, subsections (b) and (c)) plus (c) the aggregate number of Company Common Shares equal to (i) the aggregate number of TopCo Common Shares issued as Convertible Loan PIK Interest Shares divided by (ii) the ratio determined by dividing the Company Shareholder Transaction Consideration by the number of Company Shares set forth in subsection (a) (and excluding, for the avoidance of doubt, subsections (b) and (c)).

 

13

 

 

Disclosure Schedules” means, as applicable, the Company Disclosure Schedules or the SPAC Disclosure Schedules.

 

Dissent Rights” means the rights of dissent in respect of the Arrangement described in the Plan of Arrangement.

 

Dissent Share” means a Company Share held by a Dissenting Shareholder in respect of which such Dissenting Shareholder has duly and validly exercised Dissent Rights in strict compliance with the Plan of Arrangement.

 

Dissenting Shareholder” means a registered holder of Company Shares who has duly and validly exercised the Dissent Rights in respect of all Company Shares held and who has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights as of the applicable time of determination.

 

DTC” means The Depository Trust Company.

 

Earnout Period” means any time during the five (5)-year period following the Closing Date.

 

Earnout Shares” means, collectively, the Company Earnout Shares and the Sponsor Earnout Shares.

 

Environmental Laws” means all Laws arising out of or relating to: (a) emissions, discharges, releases or threatened releases of any Hazardous Material into the environment (including ambient air, surface water, ground water, land surface or subsurface strata); and (b) the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport or handling of any Hazardous Material, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901, et seq.), the Clean Water Act (33 U.S.C. § 1251, et seq.), the Clean Air Act (42 U.S.C. § 7401, et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601, et seq.) and the Occupational Safety and Health Act (29 U.S.C. § 653, et seq.).

 

Environmental Permits” means the permits, and any and all other similar approvals, consents, waivers, or certifications required under Environmental Laws.

 

Equity Value” means $206,000,000.

 

ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

 

ERISA Affiliate” means, with respect to any Person, each entity, trade or business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included such Person, or that is a member of the same “controlled group” as such Person pursuant to Section 4001(a)(14) of ERISA.

 

14

 

 

Escrow Agreement” means that certain Stock Escrow Agreement, dated as of February 11, 2021, by and among SPAC, Sponsor, CST and the other stockholders of SPAC party thereto.

 

Event” means any event, state of facts, development, change, circumstance, occurrence or effect.

 

Exchange Act” means the United States Securities Exchange Act of 1934.

 

Exchange Ratio” means the fraction equal to (a) the Company Shareholder Transaction Consideration divided by (b) the number of Diluted Company Shares.

 

Export Laws” means (a) all applicable trade, export control, import, and antiboycott laws and regulations imposed, administered, or enforced by the U.S. government, including the International Emergency Economic Powers Act (50 U.S.C. §§1701–1706), Section 999 of the Internal Revenue Code, the U.S. customs laws at Title 19 of the U.S. Code, the Export Control Reform Act of 2018 (50 U.S.C. §§4801-4861), the Export Administration Regulations (15 C.F.R. Parts 730-774), the U.S. customs regulations at 19 C.F.R. Chapter I, and the Foreign Trade Regulations (15 C.F.R. Part 30); and (b) all applicable trade, export control, import, and antiboycott laws and regulations imposed, administered or enforced by any other country, except to the extent inconsistent with U.S. law.

 

Families First Act” means the Families First Coronavirus Response Act of 2020 (H.R. 6201).

 

FDA” means the U.S. Food and Drug Administration.

 

Final Order” means the final order of the Court pursuant to Section 193 of the ABCA, in a form acceptable to the Company and SPAC, each acting reasonably, approving the Arrangement, as such order may be amended by the Court (with the consent of both the Company and SPAC, such consent to not be unreasonably withheld, conditioned or delayed) at any time prior to the Share Exchange Effective Time or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended, on appeal, provided that any such amendment is acceptable to each of both the Company and SPAC, each acting reasonably.

 

Food Laws” means all laws applicable to the development, safety, manufacture, packaging, testing, labeling, storage, shipment, import, export, marketing, advertising, sale and distribution of food products, including (a) the U.S. Federal Food, Drug and Cosmetic Act and amendments thereto, (b) the U.S. Federal Trade Commission Act, (c) federal, provincial and state Laws addressing false advertising, unfair trade practices, product safety and consumer protection, (d) the Food and Drugs Act (Canada) and regulations made thereunder, (e) the Safe Food for Canadians Act and regulations made thereunder and (f) all comparable foreign, federal, provincial, state, municipal and local Laws relating to any of the foregoing, including regulations of any applicable Governmental Authority governing current good manufacturing practices, product labeling, promotion and claims substantiation.

 

15

 

 

fraud” means, with respect to a party hereto, actual and intentional fraud with respect to the making of the representations and warranties by such party in Article III or Article IV (as qualified by the Company Disclosure Schedules and the SPAC Disclosure Schedules, respectively), the certificates to be delivered pursuant to Section 9.2(d)(i) and Section 9.3(f)(i), as applicable; provided, however, that such actual and intentional fraud of a party shall only be deemed to exist if any of the individuals identified in Section 1.4(a) of the Company Disclosure Schedules (in the case of the Company) or Section 1.4(b) of the SPAC Disclosure Schedules (in the case of SPAC) had actual knowledge (and not imputed or constructive knowledge) at the time of making the applicable representations or warranties of a misrepresentation with respect to the representations and warranties made by such party in Article III or Article IV (as qualified by the Company Disclosure Schedules and the SPAC Disclosure Schedules, respectively) or the certificates to be delivered pursuant to Section 9.2(d)(i) and Section 9.3(f)(i), as applicable, and such misrepresentation was made with the actual intention that the other party to this Agreement rely thereon to its material detriment and such other party did actually and reasonably rely thereon to its material detriment (as opposed to any fraud claim based on constructive knowledge, negligent or reckless misrepresentation or any similar theory or other forms of “fraud” under applicable Law).

 

GAAP” means generally accepted accounting principles in the United States as in effect from time to time.

 

Governing Documents” means the legal documents by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs. For example, the “Governing Documents” of a Alberta corporation are its certificate(s) of incorporation, continuance and/or Arrangement, its articles and by-laws; the “Governing Documents” of a U.S. limited partnership are its limited partnership agreement and certificate of limited partnership; the “Governing Documents” of a U.S. limited liability company are its limited liability company agreement and certificate of formation; and the “Governing Documents” of a Saskatchewan corporation are its certificate(s) of incorporation, continuance and/or Arrangement, its articles and bylaws.

 

Governmental Authority” means any federal, state, provincial, municipal, local, international, supranational or foreign government, governmental authority, legislature, regulatory or administrative agency (which for the purposes of this Agreement shall include the SEC), governmental commission, department, board, bureau, agency, court, arbitral tribunal, securities exchange or similar body or instrumentality thereof.

 

Governmental Order” means any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any Governmental Authority.

 

Group Companies” (and, with corresponding meaning, “Group Company”) means, collectively, the Company, ANF and each of their respective Subsidiaries, but excluding the Surviving Corporation and the Merger Subsidiaries.

 

Group Company Interests” means equity interests of the Group Companies.

 

16

 

 

Hazardous Materials” means any solid, liquid or gaseous material or substance, alone or in combination, mixture or solution, that is regulated by, defined, listed or identified as “hazardous” (including “hazardous substances” or “hazardous wastes”), “toxic”, a “pollutant” or a “contaminant” pursuant to any Environmental Law, including asbestos, urea formaldehyde, polychlorinated biphenyls (PCBs), radon, per- and poly-fluoroalkyl substances, toxic mold, lead or petroleum (including its derivatives, by-products or other hydrocarbons).

 

Indebtedness” means with respect to any Person, without duplication, any obligations, contingent or otherwise, in respect of (a) the outstanding principal of and premium (if any) in respect of all indebtedness for borrowed money of such Person, including accrued and unpaid interest and any per diem interest accruals, (b) the outstanding principal and unpaid interest components of capitalized lease obligations of such Person under GAAP (excluding, for the avoidance of doubt, any real estate leases), (c) amounts drawn (including any accrued and unpaid interest) on letters of credit, bank guarantees, bankers’ acceptances and other similar instruments (solely to the extent such amounts have actually been drawn) under which such Person is the applicant or guaranteed party, (d) the outstanding principal of and premium (if any) in respect of obligations evidenced by bonds, debentures, notes and similar instruments of such Person, (e) the termination value of interest rate protection agreements and currency obligation swaps, hedges or similar arrangements (without duplication of other indebtedness supported or guaranteed thereby), (f) the unpaid principal component of all obligations to pay the deferred and unpaid purchase price of property and equipment which have been delivered, including “earn outs” and “seller notes” of such Person and (g) unpaid breakage costs, prepayment or early termination premiums, penalties, or other fees or expenses payable by such Person as a result of the consummation of the Transactions in respect of any of the items in the foregoing clauses (a) through (f), and (h) all Indebtedness of another Person referred to in clauses (a) through (g) above guaranteed directly or indirectly, jointly or severally by such Person; provided, however, that Indebtedness shall not include (i) accounts payable to trade creditors arising in the Ordinary Course and (ii) Indebtedness owing from one Group Company that is directly or indirectly wholly owned by the Company to another Group Company that is directly or indirectly wholly owned by the Company. For the avoidance of doubt, “Indebtedness” shall exclude the Company Transaction Expenses and the SPAC Transaction Expenses, as applicable.

 

Intellectual Property” means any and all rights, title and interests in and to all intellectual property or proprietary rights of every kind and nature however denominated, anywhere in the world, including all of the following: (a) Copyrights; (b) Trademarks; (c) Patents; (d) Confidential Information; (e) software, data, databases and technology; (f) Internet domain names and registrations thereof, social media accounts and handles; (g) plant breeder rights; (h) all copies and embodiments of any of the foregoing and (i) the right to prosecute and perfect such interests and powers to assert, defend and recover damages for any past, present and future infringement, misuse, misappropriation, impairment, unauthorized use or other violation of any rights in or to any of the foregoing.

 

Interim Order” means the interim order of the Court contemplated by Section 2.2(a) of this Agreement and made pursuant to Section 193 of the ABCA, in a form acceptable to the Company and SPAC, each acting reasonably, providing for, among other things, the calling and holding of the Company Shareholders Meeting, as the same may be amended by the Court (with the consent of SPAC and the Company, such consent not to be unreasonably withheld, conditioned or delayed) at any time prior to the Final Order or, if appealed, then unless such appeal is withdrawn or denied, as affirmed or as amended on appeal, provided that any such amendment is reasonably acceptable to each of the Company and SPAC.

 

17

 

 

Investment Company Act” means the United States Investment Company Act of 1940.

 

IT Systems” means, collectively, the hardware, software, data communication lines, network and telecommunications equipment, platforms, servers, peripherals, computer systems and other information technology equipment and infrastructure owned, purported to be owned, licensed, leased or controlled by any of the Group Companies and used in their business as currently conducted.

 

JOBS Act” means Jumpstart Our Business Startups Act of 2012.

 

Key Company Shareholders” means the persons and entities listed in Section 1.1(b) of the Company Disclosure Schedules.

 

Law” means any statute, law, ordinance, rule, regulation, directive or Governmental Order, in each case, of any Governmental Authority, including general principles of common and civil law and equity, in each case having binding effect and the force of law.

 

Leased Real Property” means all real property leased, licensed, subleased, sublicensed or otherwise used or occupied by any of the Group Companies or to which the Group Companies otherwise has a right to use.

 

Lender” has the meaning set forth in the Convertible Loan Agreement.

 

Letter of Transmittal” means the letter of transmittal as mutually agreed to by each of the Exchange Agent, SPAC and the Company (such agreement not to be unreasonably withheld, conditioned or delayed in the case of SPAC or the Company, as applicable) (which, for the avoidance of doubt, shall include a waiver of Dissent Rights, a grant of an irrevocable proxy and powers of attorney and an agreement to vote in a manner consistent with the holders of shares of SPAC Common Stock, in each case, by the applicable Company Shareholder).

 

Licensed Intellectual Property” means all Intellectual Property rights owned or purported to be owned by a third party and used or held for use by the Group Companies in connection with their business.

 

Lien” means all liens, mortgages, deeds of trust, pledges, hypothecations, charges, security interests, licenses, covenants, options (including options to purchase and options to lease), agreements for sale, leases, subleases, restrictions, title retention devices (including the interest of a seller or lessor under any conditional sale agreement or capital lease, or any financing lease having substantially the same economic effect as any of the foregoing), collateral assignments, claims or other restrictions or encumbrances of any kind whether consensual, statutory or otherwise, and whether filed, recorded or perfected under applicable Law (including any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset, but in any event excluding restrictions under applicable securities Laws).

 

18

 

 

Loan” has the meaning set forth in the Convertible Loan Agreement.

 

Merger Effective Time” means 10:00am (Calgary time) on the Closing Date.

 

Merger Sub Common Stock” shall mean the shares of common stock, par value $0.01 per share, of Merger Sub.

 

NYSE” means the New York Stock Exchange or a successor that is a national securities exchange registered under Section 6 of the Exchange Act.

 

NYSE American” means the NYSE American stock exchange or a successor that is a national securities exchange registered under Section 6 of the Exchange Act.

 

OFAC” means the U.S. Office of Foreign Assets Control.

 

Ordinary Course” means, with respect to an action taken by a Person, that such action is in the ordinary course of the normal day-to-day operations of such Person, including (with respect to the use of such term in ‎Article III or ‎Article IV as to the period prior to the date of this Agreement) any Permitted COVID-19 Measures implemented by such Person.

 

Other Real Property Interests” means the rights-of-way, easements, licenses, servitudes, restrictive covenants, leases, access rights, mortgages, notices of security interests, rights of first refusals and other interests in land, other than Owned Real Property and Leased Real Property, in which any of the Group Companies has a legal or beneficial interest.

 

Owned Intellectual Property” means any and all Intellectual Property owned or purported to be owned, in whole or in part, by any of the Group Companies.

 

Owned Real Property” means the land currently owned by or on behalf of any of the Group Companies, including the lands set forth in Section 3.8(a) of the Company Disclosure Schedules.

 

Patents” means all (a) Canadian, U.S. and foreign patents (including certificates of invention and other patent equivalents) and inventions, designs and improvements described or claimed therein, utility models, mask works, industrial designs, and applications for any of the foregoing, including provisional applications, and all patents of addition, improvement patents, continuations, continuations-in-part, divisionals, reissues, re-examinations, renewals, confirmations, substitutions and extensions thereof or related thereto, and all applications or counterparts in any jurisdiction pertaining to any of the foregoing, including applications filed pursuant to any international patent law treaty and (b) other patent rights and any other Governmental Authority issued indicia of invention ownership (including inventors’ certificates, petty patents and innovation patents), together with all worldwide rights and priorities afforded under any Law with respect to any of the foregoing.

 

PCAOB” means the United States Public Company Accounting Oversight Board and any division or subdivision thereof.

 

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Permit” means any consent, franchise, approval, variance, license, permit, grant, certificate, certification, accreditation, registration or other authorization of a Governmental Authority.

 

Permitted COVID-19 Measures” means any COVID-19 Measures (a) to the extent referring to actions prior to the date of this Agreement, implemented prior to the date of this Agreement and disclosed to SPAC prior to the date of this Agreement, if material, or (b) reasonably implemented by a party hereto following the date of this Agreement in good faith and with respect to which, if material, such party provides at least one (1) Business Days’ prior written notice to the other party hereto prior to implementation (except that no such notice shall be required to be provided in advance of taking such action if it shall be impracticable for the Company to provide such advance notice, but in such case notice is provided as soon as practicable following such action).

 

Permitted Liens” means (a) mechanic’s, materialmen’s, landlord’s, operator’s, warehouseman’s, worker’s, repairmen’s, carrier’s, producer’s, grower’s, utilities’ and similar Liens arising or incurred in the Ordinary Course or consistent with industry practice with respect to any amounts (i) not yet delinquent or which are being contested in good faith through appropriate actions and (ii) for which adequate accruals or reserves have been established in accordance with GAAP, (b) Liens for Taxes (i) not yet delinquent or which are being contested in good faith through appropriate actions and (ii) for which adequate accruals or reserves have been established in accordance with GAAP, (c) Liens, encumbrances and restrictions on Real Property (including defects or imperfections of title, mineral rights, easements, encroachments, covenants, rights-of-way, conditions and similar restrictions of record) that (i) are registered against the titles to such Real Property or (ii) do not, individually or in the aggregate, materially interfere with the current use or occupancy of the Real Property, (d) with respect to any Leased Real Property (i) the statutory or contractual interests and rights of the respective lessors with respect thereto, including any statutory landlord liens and any Liens thereon, (ii) any Lien permitted under a Real Property Lease, and (iii) any Liens encumbering the real property of which the Leased Real Property is a part, (e) zoning, building, entitlement and other land use and Environmental Laws promulgated by any Governmental Authority that do not, individually or in the aggregate, materially interfere with the current use or occupancy of the Leased Real Property, (f) non-exclusive licenses of Owned Intellectual Property entered into in the Ordinary Course by the Group Companies with customers or service providers of the Group Companies incidental to the provision of the Company Products to customers or the provision of services to the Group Companies by the service providers, (g) Ordinary Course purchase money Liens and Liens securing rental payments under operating leases, finance leases or capital lease arrangements for amounts not yet delinquent, (h) other Liens arising in the Ordinary Course and not incurred in connection with the borrowing of money and on a basis consistent with past practice or industry practice in connection with workers’ compensation, unemployment insurance or other types of social security, (i) all other Liens that do not, individually or in the aggregate, materially impair the use, occupancy or value of the applicable assets and property of the Group Companies or the Real Property, (k) Liens deemed to be created by this Agreement or any other agreement providing for the Transactions, and (l) Liens, encumbrances or restrictions that would be released at or prior to the Closing.

 

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Person” means any individual, firm, corporation, exempted company, partnership, limited liability company, incorporated or unincorporated association, trust, estate, joint venture, joint stock company, Governmental Authority or instrumentality or other entity of any kind.

 

Personal Information” has the meaning given to the term “personal data,” “personal information,” “personally identifiable information” or other similar term under applicable Law in any form or media, whether paper, electronic, or otherwise.

 

Plan of Arrangement” means the Plan of Arrangement in substantially the form attached hereto as Exhibit D, with such changes as may be mutually agreed to by SPAC and the Company (such agreement not to be unreasonably withheld, conditioned or delayed by either SPAC or the Company, as applicable) or required upon the direction of the Court in the Final Order, with the prior written consent of SPAC and the Company (such consent not to be unreasonably withheld, conditioned or delayed by either SPAC or the Company, as applicable).

 

Privacy Obligations” means all applicable (a) Laws, (b) Contracts, (c) external-facing privacy policies and (d) self-regulatory or other industry standards to which a Group Company is subject (including the Payment Card Industry Data Security Standard), with respect to each of (a), (b), (c) and (d), that relate in any way to the privacy, security (both physical and technical), collection, storage, use, disclosure, retention, transfer, sale or other Processing of Personal Information.

 

Process” or “Processing” means any operation or set of operations that are performed on Personal Information or on sets of Personal Information, whether or not by automated means, such as the receipt, access, acquisition, collection, recording, organization, compilation, structuring, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transfer (including cross-border), transmission, processing, dissemination or otherwise making available, alignment or combination, restriction, disposal, erasure or destruction.

 

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

 

Registrar” means the Registrar of Companies appointed under Section 263 of the ABCA.

 

Representatives” of a Person means, collectively, officers, directors, employees, accountants, consultants, legal counsel, agents and other representatives of such Person or its Affiliates.

 

Sanctions” means economic or financial sanctions administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, or His Majesty’s Treasury.

 

Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.

 

SBCA” means The Business Corporations Act, 2021 (Saskatchewan) and the regulations made thereunder, as now in effect and as they may be promulgated or amended from time to time.

 

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SEC” means the United States Securities and Exchange Commission.

 

Securities Act” means the United States Securities Act of 1933.

 

Security Incident” means any material incident or occurrence of unauthorized Processing of any Personal Information or Confidential Information owned, used, maintained, received or controlled by or on behalf of any Group Company.

 

Share Exchange Effective Time” means 9:00am (Calgary time) on the Closing Date.

 

SPAC Capital Stock” means, collectively, SPAC Common Stock and SPAC Preferred Stock.

 

SPAC Common Stock” means SPAC’s common stock, par value $0.0001 per share.

 

SPAC Extension Expenses” means, without duplication, (a) any out-of-pocket fees and expenses paid or payable by SPAC or its Affiliates (whether or not billed or accrued for) as a result of or in connection with the negotiation, documentation and consummation of a SPAC Extension (including (i) submitting a proposal to the SPAC Stockholders pursuant to a definitive proxy statement filed by SPAC with the SEC and (ii) providing such definitive proxy statement to the SPAC Stockholders) and (b) any cash deposits made or to be made into the Trust Account by the Sponsor or its Affiliates or permitted designees for the purpose of extending the time period for SPAC to consummate a Business Combination, as approved by the SPAC Stockholders on December 15, 2022.

 

SPAC Fundamental Representations” means the representations and warranties made pursuant to Section 4.1 (Organization, Good Standing and Corporate Power), Section 4.3 (Due Authorization) and Section 4.10 (Brokers or Finders; Transaction Expenses).

 

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SPAC Material Adverse Effect” means any Event that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets and liabilities, results of operations or financial condition of SPAC, taken as a whole; provided, however, that in no event would any of the following Event (or the effect of any of the following Event), alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or would reasonably expected to be, a “SPAC Material Adverse Effect”: (a) any enactment of, or change or proposed change in, any applicable Laws or GAAP or any interpretation thereof following the date of this Agreement, (b) any change in interest rates or economic, political, business or financial market conditions generally, (c) the taking of any action expressly required to be taken under this Agreement, the Plan of Arrangement or any Ancillary Agreement, (d) any natural disaster (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences), epidemic, pandemic, disease or outbreak (including COVID-19 or any change in COVID-19 Measures or binding interpretations of an applicable Governmental Authority with respect thereto following the date of this Agreement), acts of nature or change in climate, (e) any acts of terrorism or war (whether or not declared and including the current conflict between the Russian Federation and Ukraine), sabotage, civil unrest, curfews, public disorder, riots, the outbreak or escalation of hostilities, geopolitical conditions, local, regional, state, national or international political conditions, or social conditions, (f) any matter existing as of the date of this Agreement, to the extent expressly set forth in the SPAC Disclosure Schedules, (g) any action taken by, or at the request, approval or consent (except with respect to the matters requiring consent set forth in Section 6.2, unless otherwise agreed by the Company to be subject to this exception (g)), of the Company, (h) any downturn in general economic conditions, including changes in the credit, debt, securities, financial or capital markets (including changes in interest or exchange rates, prices of any security or market index or commodity or any disruption of such markets), (i) the consummation and effects of any SPAC Share Redemptions or the failure to obtain the SPAC Stockholders’ Approval, (j) any Events that are cured by SPAC prior to the Closing, (k) the announcement of this Agreement, or the consummation of the Transactions, provided that this clause (k) shall not be deemed to apply to references to “SPAC Material Adverse Effect” in the representations and warranties set forth in Sections 4.5, and 4.9, and, to the extent related thereto, the condition in Section 9.3(a), or (l) any worsening of the Events referred to in clauses (b), (d), (e) or (h) to the extent existing as of the date of this Agreement; provided, that in the case of each of clauses (a), (b), (d), (e) and (h), any such Event shall not be excluded from the determination of whether there has been, or would reasonably be expected to be, a SPAC Material Adverse Effect to the extent it disproportionately and adversely affects SPAC, taken as a whole, relative to other similarly situated companies in the industries in which SPAC operates, in which case only the incremental disproportionate, adverse effect relative to other similarly situated companies in the industries in which SPAC operates may be taken into account in determining whether there has been or would be a SPAC Material Adverse Effect (for the avoidance of doubt and without limiting the effect of any other disproportionate and adverse impact as provided in this proviso, it is understood and agreed that any cyber-attack primarily directed at SPAC shall be deemed to disproportionately and adversely affect SPAC).

 

SPAC Aggregate Merger Consideration” means a number of shares of TopCo Common Shares equal to the number of shares of SPAC Common Stock issued and outstanding immediately prior to the Merger Effective Time, payable to the SPAC Stockholders in connection with the Merger.

 

SPAC Preferred Stock” means SPAC’s preferred stock, par value $0.0001 per share.

 

SPAC Promissory Note” means that certain unsecured promissory note in the principal amount of up to $2,000,000 issued by SPAC to Sponsor on March 23, 2023.

 

SPAC Share Redemption” means the election (not validly withdrawn or cancelled prior to the Closing) of an eligible (as determined in accordance with the Governing Documents of SPAC) holder of shares of SPAC Common Stock to redeem all or a portion of the shares of SPAC Common Stock held by such holder at a per-share price, payable in cash, equal to a pro rata share of the aggregate amount on deposit in the Trust Account (as determined in accordance with the Governing Documents of SPAC) in connection with (a) the Transaction Proposals or (b) any SPAC Extension.

 

SPAC Share Redemption Amount” means the aggregate amount actually payable from the Trust Account to redeeming SPAC Stockholders with respect to all SPAC Share Redemptions.

 

SPAC Stockholder” means any holder of SPAC Capital Stock immediately prior to the Merger Effective Time.

 

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SPAC Stockholders’ Approval” means (a) the approval of the Transaction Proposals other than the Merger Proposal, in each case, by the applicable vote of the holders of the outstanding SPAC Common Stock, as required by the Governing Documents of SPAC and (b) the approval of the Merger Proposal by an affirmative vote of the holders of a majority of the shares of SPAC Common Stock that are voted at the SPAC Stockholder Meeting.

 

SPAC Transaction Expenses” means, without duplication, (a) any out-of-pocket fees and expenses payable by SPAC (whether or not billed or accrued for) as a result of or in connection with the negotiation, documentation and consummation of the Transactions, including (i) all fees, costs, expenses, brokerage fees, commissions, finders’ fees and disbursements of financial advisors, underwriters, investment banks, data room administrators, attorneys, accountants and other advisors and service providers, (ii) fifty percent (50%) of any and all filing fees paid to Governmental Authorities in connection with the Transactions in accordance with ‎Section 8.1(c) and (iii) fifty percent (50%) of the costs for the preparation, filing and mailing of the Proxy/Registration Statement (excluding, for the avoidance of doubt, the fees and expenses of any other party’s outside counsels, financial advisors, consultants and other advisors), and (b) any out-of-pocket fees and expenses payable by SPAC (whether or not billed or accrued for) as a result of or in connection with the negotiation, documentation and consummation of SPAC’s initial public offering (including fees and expenses payable to the underwriters in connection therewith), (c) any SPAC Extension Expenses and (d) the aggregate amount owed by SPAC under the SPAC Promissory Note (for the avoidance of doubt, excluding such amounts elected to be converted into SPAC Units in connection with the Closing pursuant to the Promissory Note).

 

SPAC Units” means units of SPAC, each unit comprising one share of SPAC Common Stock and one-half of one SPAC Warrant.

 

SPAC Warrant Agreement” means that certain warrant agreement, dated February 11, 2021, by and between SPAC and CST, as amended, modified or supplemented from time to time.

 

SPAC Warrants” means whole warrants to purchase shares of SPAC Common Stock (a) as issued by SPAC in connection with its initial public offering and (b) as contemplated under the SPAC Warrant Agreement, with each whole warrant exercisable for one (1) share of SPAC Common Stock at an exercise price of $11.50.

 

Specified Other Transaction” means, as to the Company, a transaction (other than any transaction contemplated by this Agreement, and except for repurchases of Company Shares acquired upon the exercise of Company Options or settlement of Company RSUs in the Ordinary Course in connection with a termination of employment or other services, concerning the sale or transfer of any of the Company Shares or other equity interests or profit interests (including any phantom or synthetic equity) of the Company, whether newly issued or already outstanding, in any case, whether such transaction takes the form of a sale or issuance of shares or other equity interests, assets, merger, arrangement, consolidation, issuance of debt securities or convertible securities, warrants, management Contract, joint venture or partnership, or otherwise.

 

Sponsor” means Smart Dine, LLC, a Delaware limited liability company.

 

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Sponsor Earnout Shares” means up to 1,100,000 TopCo Common Shares (as adjusted in accordance with Section 2.8(d)) issued as part of the SPAC Aggregate Merger Consideration that are subject to the vesting conditions set forth in Section 2.8(b)(i) and Section 2.8(b)(ii).

 

Subsidiary” means, with respect to a Person, any corporation, general or limited partnership, limited liability company, joint venture or other entity in which such Person, directly or indirectly, (a) owns or controls fifty percent (50%) or more of the outstanding voting securities, profits interest or capital interest, (b) is entitled to elect at least a majority of the board of directors or similar governing body or (c) in the case of a limited partnership, limited liability company or similar entity, is a general partner or managing member and has the power to direct the policies, management and affairs of such entity, respectively.

 

Tax Act” means the Income Tax Act (Canada).

 

Tax Authority” means any Governmental Authority responsible for the collection or administration of Taxes or Tax Returns.

 

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

 

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

 

Termination Contracts” means, in relation to the Company, (a) any voting trust agreements, (b) any management rights or side letters between the Company and any Company Shareholder and (c) any rights under any letter or agreement between any Company Shareholder and the Company providing for redemption rights, put rights, purchase rights or other similar rights not generally available to the Company Shareholders (including the agreements set forth on Schedule 1 hereto).

 

Topco Class A Earnout Shares” shall have the meaning ascribed to such term in the articles of TopCo.

 

Topco Class B Earnout Shares” shall have the meaning ascribed to such term in the articles of TopCo.

 

TopCo Common Shares” means the common shares in the capital of TopCo.

 

Trademarks” means all trademarks, service marks, trade names, business names, corporate names, trade dress, product and service names, logos, brand names, and other indicia of source or origin, whether or not registered, including all common law rights thereto, and all applications, renewals, extensions and registrations therefor, and all goodwill associated with any of the foregoing or the business connected with the use of and symbolized by the foregoing.

 

Trading Day” means any day on which the Trading Market is open for trading.

 

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Trading Market” means, with respect to any security, the national stock exchange on which such security is trading.

 

Trading Price” means, with respect to any security trading on the Trading Market, the dollar volume-weighted average price for such shares traded on the Trading Market during the period beginning at 9:30:01 a.m., New York time on such Trading Day and ending at 4:00:00 p.m., New York time on such Trading Day, as reported by Bloomberg through its “HP” function (set to weighted average).

 

Transfer Taxes” means any transfer, documentary, sales, use, real property transfer, stamp, registration and other similar Taxes, fees and costs (including any associated penalties and interest) payable in connection with the Transactions.

 

Trust Agreement” means that certain Investment Management Trust Agreement between SPAC and the Trustee, dated as of February 11, 2021, as amended.

 

Trustee” or “CST” means Continental Stock Transfer & Trust Company.

 

Unpaid Company Transaction Expenses” means the Company Transaction Expenses that are unpaid as of immediately prior to the Closing.

 

Unpaid SPAC Transaction Expenses” means the SPAC Transaction Expenses that are unpaid as of immediately prior to the Closing.

 

USD / CAD Exchange Rate” means an exchange rate of 0.7466 U.S. Dollar per Canadian Dollar.

 

WARN Act” means the United States Worker Adjustment and Retraining Notification Act or any similar state or local Law requiring notice to employees and their appropriate union Representatives of a plant closing or mass layoff.

 

Section 1.2             Other Definitions.

 

The following terms are defined in the Sections of this Agreement indicated below:

 

Additional SEC Reports 7.4
Agreement Preamble
Agreement End Date 11.1(f)
Allocation Schedule 2.5(a)
Alternative Financing 8.10(e)
Alternative Transaction 10.1
Anti-Money Laundering Laws 3.24

 

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Assumed Warrant 2.3(c)
Balance Sheet Date 3.4(a)
Certificate of Merger 2.4(b)
Closing 2.4
Closing Date 2.4
Company Preamble
Company Audited Interim Financial Statements 3.4(a)
Company Audited Year-End Financial Statements 3.4(a)
Company Board Recitals
Company Board Recommendation 8.2(c)
Company Continuance Recitals
Company Cure Period 11.1(f)
Company Deal Communications 12.19(b)
Company Disclosure Schedules Art. III
Company Financial Statements 3.4(a)
Company Non-Recourse Party 12.16(b)
Company Unaudited Year-End Financial Statements 3.4(a)
Convertible Loan Agreement Recitals
Creator 3.6(h)
D&O Indemnitees 8.11(a)
D&O Tail 8.11(b)
Designated Entity 3.6(c)
DGCL Recitals
Enforceability Exceptions 3.3
Equity Incentive Plan Recitals
Escrow Amount 12.6(c)(i)
Exchange Agent 2.6(a)
Existing D&O Arrangements 8.11(a)
FCPA 3.23
Intended U.S. Tax Treatment Recitals
Interim Period 6.1
Lock-Up Agreement Recitals
Material Contract 3.5(a) 
Merger Proposal 8.2(a)(i)
Merger Subsidiary(ies) Preamble
PIPE Financing Recitals
PIPE Financing Amount Recitals
PIPE Investors Recitals
PIPE Subscription Agreements Recitals
Post-Closing Board of Directors 8.8
Prior Company Counsel 12.19(a)
Prior SPAC Counsel 12.18(a)
Privileged Company Deal Communications 12.19(b)

 

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Privileged SPAC Deal Communications 12.18(b)
Proxy/Registration Statement 8.2(a)(i)
Real Property Lease 3.5(a)(iii)
Registered IP 3.6(a)
Registration Rights Agreement Recitals
Regulatory Approvals 8.1(a)
Related Party 3.18(a)
Share Exchange Section 2.3(b)
Shareholder Support Agreement Recitals
SPAC Preamble
SPAC Board Recitals
SPAC Board Recommendation 8.2(b)(ii)
SPAC Business Combination Deadline 8.13(a)
SPAC Cure Period 11.1(g)
SPAC Deal Communications 12.18(b)
SPAC Disclosure Schedules Art. IV
SPAC Extension 8.13(b)
SPAC Extension Proxy Statement 8.13(a)
SPAC Financial Statements 4.4(a)
SPAC Per Share Merger Consideration 2.3(h)
SPAC Non-Recourse Party 12.16(b)
SPAC SEC Filings 4.13
SPAC Stockholder Meeting 8.2(a)(i)
Sponsor First Tranche Earnout Shares 2.8(b)(i)
Sponsor Second Tranche Earnout Shares 2.8(b)(ii)
Sponsor Support Agreement Recitals
Stockholder Litigation 8.4(b)
Surviving Corporation 2.3(e)
Terminating Company Breach 11.1(f)
Terminating SPAC Breach 11.1(g)
TopCo Board Recitals
Transaction Proposals 8.2(a)(i)
Transactions Recitals
Trust Account 4.14
Withholding Agent 2.7(a)

 

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Section 1.3             Construction.

 

(a)            Unless the context of this Agreement otherwise requires or unless otherwise specified, (i) words of any gender shall be construed as masculine, feminine, neuter or any other gender, as applicable; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby,” “herewith,” “hereto” and derivative or similar words refer to this entire Agreement; (iv) the terms “Article” or “Section” refer to the specified Article or Section of this Agreement; (v) the terms “Schedule” or “Exhibit” refer to the specified Schedule or Exhibit of this Agreement; (vi) the words “including,” “included,” or “includes” shall mean “including, without limitation;” (vii) the word “extent” in the phrase “to the extent” means the degree to which a subject or thing extends, and such phrase shall not simply mean “if;” (viii) the word “or” shall be disjunctive but not exclusive; and (ix) references to “written” or “in writing” include in electronic form.

 

(b)            Unless the context of this Agreement otherwise requires, references in this Agreement to any Law shall include all rules and regulations promulgated thereunder and shall be deemed to refer to such Law as amended, reenacted, supplemented or superseded in whole or in part and in effect from time to time.

 

(c)            References in this Agreement to any Contract (including this Agreement) mean such Contract as amended, restated, supplemented or modified from time to time in accordance with the terms thereof; provided that with respect to any Contract listed (or required to be listed) on either Disclosure Schedules, all material amendments and modifications thereto (but excluding any purchase orders, work orders or statements of work) must also be listed on the appropriate section of the applicable Disclosure Schedules.

 

(d)            References to “$,” “US$,” “USD” or “dollars” are to the lawful currency of the United States of America. Except as otherwise set forth herein, for purposes of calculating the Available Cash or other terms herein applying currency other than U.S. dollars, such foreign currencies shall be converted into U.S. dollars at the applicable Bloomberg exchange rate as of market close on the applicable date.

 

(e)            Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. Time periods within or following which any payment is to be made or act is to be done under this Agreement shall be calculated by excluding the calendar day on which the period commences and including the calendar day on which the period ends, and by extending the period to the next following Business Day if the last calendar day of the period is not a Business Day.

 

(f)            All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.

 

(g)            The parties hereto and their respective counsels have reviewed and negotiated this Agreement as the joint agreement and understanding of the parties hereto, and the language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any Person.

 

(h)            The phrases “provided to SPAC,” “delivered to SPAC”, “furnished to SPAC,” “made available to SPAC” and phrases of similar import when used herein, unless the context otherwise requires, means that a copy of the information or material referred thereto has been made available to SPAC no later than 11:59 p.m. (New York time) on the day prior to the date of this Agreement in the virtual “data rooms” prepared by the Company and hosted on behalf of the Company by Dropbox or Google Drive in connection with the Transactions.

 

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Section 1.4             Knowledge. As used herein, (a) the phrases “to the knowledge of the Company” or “to the Company’s knowledge” shall mean the actual knowledge of the individuals identified in ‎Section 1.4(a) of the Company Disclosure Schedules, following reasonable inquiry and (b) the phrase “to the knowledge of SPAC” or “to SPAC’s knowledge” shall mean the actual knowledge of the individuals identified in ‎Section 1.4(b) of the SPAC Disclosure Schedules, following reasonable inquiry.

 

Article II
TRANSACTIONS; CLOSING

 

Section 2.1             The Company Continuance. The Company and SPAC agree that the Company Continuance will be implemented in accordance with and subject to the terms and conditions of this Agreement.

 

(a)            The Company Continuance Meeting. Subject to the terms of this Agreement, the Company shall convene and conduct the Company Continuance Meeting in accordance with the Governing Documents of the Company and applicable Laws as soon as reasonably practicable, and shall not adjourn, postpone or cancel (or propose the adjournment, postponement or cancellation of) the Company Continuance Meeting without the prior written consent of SPAC, except in the case of an adjournment as required for quorum purposes. The Company shall consult with SPAC in fixing the record date for the Company Continuance Meeting and the date of the Company Continuance Meeting, give notice to SPAC of the Company Continuance Meeting and allow SPAC’s Representatives to attend the Company Continuance Meeting. Subject to the other terms of this Agreement, the Company shall use its commercially reasonable efforts to obtain the Company Required Approval in respect of the Continuance Resolution by Company Shareholders and to solicit proxies in favor of the approval of the Continuance Resolution and against any resolution submitted by any Company Shareholder that is inconsistent with the Continuance Resolution and the completion of any of the transactions contemplated herein, including, if otherwise determined necessary or advisable by the Company or if so requested by SPAC, acting reasonably, using investment dealers and proxy solicitation services firms selected by the Company (acceptable to SPAC, acting reasonably), cooperating with any Persons engaged by SPAC to solicit proxies in favor of the approval of the Continuance Resolution and against any resolution submitted by any Company Shareholder that is inconsistent with the Continuance Resolution, instructing the management proxyholders named in the Continuance Information Circular to vote any discretionary or blank proxy submitted by the Company Shareholders in favor of such action, and shall take all other action reasonably necessary or advisable to secure the Company Required Approval.

 

(i)            The Company shall use commercially reasonable efforts to provide SPAC with (A) updates with respect to the aggregate tally of the proxies received by the Company in respect of the Continuance Resolution, (B) updates with respect to any communication (written or oral) from any Company Shareholder in opposition to the Company Continuance or any purported exercise or withdrawal of Continuance Dissent Rights, and (C) the right to review and comment on all communications sent to the Company Shareholders and to participate in any discussions, negotiations or Actions with or including any such Company Shareholders, in each case, solely in connection with the Company Continuance Meeting. The Company shall not (y) make any payment or settlement offer, or agree to any payment or settlement with respect to Continuance Dissent Rights, or (z) waive any failure by any Company Shareholder to timely deliver a notice of exercise of Continuance Dissent Rights, in each case without the prior written consent of SPAC, which will not be unreasonably withheld, conditioned or delayed.

 

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(b)            The Continuance Information Circular.

 

(i)            The Company shall as promptly as practicable prepare and complete, in good faith consultation with SPAC, the Continuance Information Circular together with any other documents required by applicable Law in connection with the Company Continuance Meeting, and the Company shall cause the Continuance Information Circular and such other documents to be delivered to each Company Shareholder and other Person as required by applicable Law, in each case so as to permit the Company Continuance Meeting to be held by the time specified in Section 2.1(a)(i).

 

(ii)            The Company shall ensure that the Continuance Information Circular (A) complies in all material respects with the Governing Documents of the Company and applicable Law, (B) provides the Company Shareholders with sufficient information (explained in reasonably sufficient detail) to permit them to form a reasoned judgement concerning the matters to be placed before the Company Continuance Meeting, including that the Key Company Shareholders’ commitment approving the Continuance Resolution is sufficient to satisfy the Company Required Approval, and (C) states any material interest of each director and officer, whether as director, officer, securityholder or creditor of the Company, as and to the extent required by applicable Law.

 

(iii)            Without limiting the generality of Section 2.1(b)(i) and Section 2.1(b)(ii), the Company shall, subject to the terms of this Agreement, ensure that the Continuance Information Circular includes (A) a statement that the Company Board has unanimously determined that the Company Continuance is in the best interests of the Company and fair to the Company Shareholders, and recommends that the Company Shareholders vote in favor of the Continuance Resolution and (B) a statement that each Key Company Shareholder has entered into a Shareholder Support Agreement pursuant to which such Key Company Shareholder has agreed to support and vote in favor of the Continuance Resolution and that such support is sufficient once acted upon at the Company Shareholders Meeting to achieve the Company Required Approval.

 

(iv)            The Company shall give SPAC and its legal counsel a reasonable opportunity to review and comment on drafts of the Continuance Information Circular and other related documents, and shall accept the reasonable comments made by SPAC and its counsel, and agrees that all information relating to SPAC included in the Continuance Information Circular must be in a form and content reasonably satisfactory to SPAC and its counsel. The Company shall provide SPAC with a final copy of the Continuance Information Circular prior to its delivery to the Company Shareholders.

 

(v)            Each party hereto shall promptly notify the other parties if it becomes aware that the Continuance Information Circular contains any untrue statement of a material fact or fail 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 were made, not misleading, or otherwise requires an amendment or supplement. The parties hereto shall reasonably cooperate in the preparation of any such amendment or supplement as required or appropriate, and the Company shall promptly deliver or otherwise disseminate any such amendment or supplement to the Company Shareholders as required by applicable Law.

 

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(c)            Company Continuance.

 

(i)            Each Continuance Dissent Share, if any, issued and outstanding immediately prior to the Share Exchange Effective Time shall be, and shall be deemed to be, transferred to the Company for cancellation, and the holder of such transferred Continuance Dissent Share will cease to be the holder of such Continuance Dissent Share or to have any rights as a holder in respect of such Continuance Dissent Share other than the right to be paid the fair value of such Continuance Dissent Share determined and payable in accordance with the SBCA.

 

(ii)            Upon approval of and in accordance with the Continuance Resolution, immediately prior to the filing of the Interim Order, the Company shall effect the Company Continuance.

 

Section 2.2             The Arrangement. The Company and SPAC agree that the Arrangement will be implemented in accordance with and subject to the terms and conditions of this Agreement, the Plan of Arrangement, the Interim Order and the Final Order.

 

(a)            The Interim Order. As soon as reasonably practicable after the date of the Company Continuance, but in any event no later than three (3) Business Days after the initial filing with the SEC of the Proxy/Registration Statement, the Company shall apply, in accordance with the provisions of the ABCA and, in cooperation with SPAC (which shall include the opportunity to review all relevant documents by SPAC and the incorporation of all reasonable comments from SPAC thereon), prepare, file and diligently pursue an application to the Court for the Interim Order in respect of the Arrangement, which shall identify that the Shareholder Support Agreements have been executed by the Key Company Shareholders and shall provide, among other things:

 

(i)            for the class(es) of Persons to whom notice is to be provided in respect of the Arrangement and the Company Shareholders Meeting, and for the manner in which such notice is to be provided;

 

(ii)            that the required level of approval for the Company Resolution shall be the Company Required Approval and that under the Shareholder Support Agreements, the Key Company Shareholders have, in aggregate, irrevocably agreed to vote in favor of the Company Resolution and thereby satisfy this level of approval;

 

(iii)            that, in all other respects, the terms, restrictions and conditions of the Governing Documents of the Company, including quorum requirements and all other matters, shall apply in respect of the Company Shareholders Meeting;

 

(iv)            for the grant of the Dissent Rights to those Company Shareholders who are registered Company Shareholders as contemplated by the Plan of Arrangement;

 

(v)            for the notice requirements regarding the presentation of the application to the Court for the Final Order;

 

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(vi)          that the Company Shareholders Meeting may be adjourned or postponed from time to time by the Company in accordance with the terms of this Agreement or as otherwise agreed in writing by the parties hereto without the need for additional approval of the Court and without the necessity of first convening the Company Shareholders Meeting or first obtaining any vote of the Company Shareholders respecting the adjournment or postponement, and notice of any such adjournment or postponement shall be given by such method as the Company Board may determine is appropriate in the circumstances, and may be held virtually;

 

(vii)         that the Company Shareholders Meeting may be held in-person or be a virtual meeting or hybrid meeting whereby Company Shareholders may join virtually;

 

(viii)        that the record date for the Company Shareholders entitled to notice of and to vote at the Company Shareholders Meeting will not change in respect of any adjournment(s) or postponement(s) of the Company Shareholders Meeting, unless required by applicable Law or by the Court;

 

(ix)          confirmation of the record date for the purposes of determining the Company Shareholders entitled to receive material and vote at the Company Shareholders Meeting in accordance with the Interim Order; and

 

(x)           that each Company Shareholder and any other affected person shall have the right to appear before the Court at the hearing of the Court to approve the application of the Final Order so long as they provide a Response to Petition and any materials they intend to rely upon within the time period and in the manner stipulate in the Interim Order; and

 

(xi)          for such other matters as the parties hereto may agree in writing are reasonably necessary to complete the Transactions.

 

(b)            The Company Shareholders Meeting.

 

(i)            Subject to the terms of this Agreement, and the provision of the SPAC Information, the Company shall convene and conduct the Company Shareholders Meeting in accordance with the Governing Documents of the Company, applicable Laws and the Interim Order as soon as reasonably practicable (and in any event no later than 45 days after the filing of the Proxy/Registration Statement or such later date as may be required in order to provide the SPAC Stockholders with additional disclosure as required in connection with the SEC review of the Proxy/Registration Statement), and shall not adjourn, postpone or cancel (or propose the adjournment, postponement or cancellation of) the Company Shareholders Meeting without the prior written consent of SPAC, except in the case of an adjournment as required for quorum purposes. The Company shall consult with SPAC in fixing the record date for the Company Shareholders Meeting and the date of the Company Shareholders Meeting, give notice to SPAC of the Company Shareholders Meeting and allow SPAC’s Representatives to attend the Company Shareholders Meeting. Subject to the other terms of this Agreement, the Company shall use its commercially reasonable efforts to obtain the Company Required Approval in respect of the Company Resolution and to solicit proxies in favor of the approval of the Company Resolution and against any resolution submitted by any Company Shareholder that is inconsistent with the Company Resolution and the completion of any of the transactions contemplated herein, including, if otherwise determined necessary or advisable by the Company or if so requested by SPAC, acting reasonably, using investment dealers and proxy solicitation services firms selected by the Company (acceptable to SPAC, acting reasonably), cooperating with any Persons engaged by SPAC to solicit proxies in favor of the approval of the Company Resolution and against any resolution submitted by any Company Shareholder that is inconsistent with the Company Resolution, instructing the management proxyholders named in the Company Information Circular to vote any discretionary or blank proxy submitted by the Company Shareholders in favor of such action, and shall take all other action reasonably necessary or advisable to secure the Company Required Approval.

 

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(ii)           The Company shall use commercially reasonable efforts to provide SPAC with (A) updates with respect to the aggregate tally of the proxies received by the Company in respect of the Company Resolution, (B) updates with respect to any communication (written or oral) from any Company Shareholder in opposition to the Arrangement or any purported exercise or withdrawal of Dissent Rights, and (C) the right to review and comment on all communications sent to the Company Shareholders and to participate in any discussions, negotiations or Actions with or including any such Company Shareholders, in each case, solely in connection with the Company Shareholders Meeting. The Company shall not (x) make any payment or settlement offer, or agree to any payment or settlement prior to the Share Exchange Effective Time with respect to Dissent Rights, or (y) waive any failure by any Company Shareholder to timely deliver a notice of exercise of Dissent Rights, in each case without the prior written consent of SPAC, which will not be unreasonably withheld, conditioned or delayed.

 

(c)            The Company Information Circular.

 

(i)            The Company shall as promptly as practicable prepare and complete, in good faith consultation with SPAC, the Company Information Circular together with any other documents required by applicable Law in connection with the Company Shareholders Meeting and the Arrangement, and the Company shall, as promptly as practicable after obtaining the Interim Order, cause the Company Information Circular and such other documents to be delivered to each Company Shareholder and other Person as required by the Interim Order and applicable Law, in each case so as to permit the Company Shareholders Meeting to be held by the time specified in Section 2.2(b)(i).

 

(ii)           The Company shall ensure that the Company Information Circular (A) complies in all material respects with the Governing Documents of the Company, the Interim Order and applicable Law, (B) does not contain any untrue statement of a material fact or fail 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 were made, not misleading, except with respect to SPAC Information included in the Company Information Circular, (C) provides the Company Shareholders with sufficient information (explained in reasonably sufficient detail) to permit them to form a reasoned judgement concerning the matters to be placed before the Company Shareholders Meeting, including that the Key Company Shareholders’ commitment to approving the Company Resolution is sufficient to satisfy the Company Required Approval, and (D) states any material interest of each director and officer, whether as director, officer, securityholder or creditor of the Company, as and to the extent required by applicable Law.

 

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(iii)          Without limiting the generality of Section 2.2(c)(ii), the Company shall, subject to the terms of this Agreement, ensure that the Company Information Circular includes (A) a statement that the Company Board has unanimously determined that the Arrangement is in the best interests of the Company and fair to the Company Shareholders, and recommends that the Company Shareholders vote in favor of the Company Resolution and (B) a statement that each Key Company Shareholder has entered into a Shareholder Support Agreement pursuant to which such Key Company Shareholder has agreed to support and vote in favor of the Company Resolution and that such support is sufficient once acted upon at the Company Shareholders Meeting to achieve the Company Required Approval.

 

(iv)          SPAC shall reasonably assist the Company in the preparation of the Company Information Circular, including obtaining and furnishing to the Company any information with respect to SPAC required to be included under applicable Laws in the Company Information Circular (the “SPAC Information”), and ensuring that the SPAC Information does not contain any untrue statement of a material fact or fail 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 were made, not misleading. The Company shall give SPAC and its legal counsel a reasonable opportunity to review and comment on drafts of the Company Information Circular and other related documents, and shall accept the reasonable comments made by SPAC and its counsel, and agrees that all information relating to SPAC included in the Company Information Circular must be in a form and content reasonably satisfactory to SPAC. The Company shall provide SPAC with a final copy of the Company Information Circular prior to its delivery to the Company Shareholders.

 

(v)           Each party hereto shall promptly notify the other parties if it becomes aware that the Company Information Circular contains any untrue statement of a material fact or fail 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 were made, not misleading, or otherwise requires an amendment or supplement. The parties hereto shall reasonably cooperate in the preparation of any such amendment or supplement as required or appropriate, and the Company shall promptly deliver or otherwise disseminate any such amendment or supplement to the Company Shareholders as required by the Court or applicable Law.

 

(d)            The Final Order. The Company shall take all steps necessary or reasonably desirable to submit the Arrangement to the Court and diligently pursue an application for the Final Order pursuant to Section 193(4) of the ABCA, as soon as reasonably practicable, but in any event not later than five (5) Business Days after the Company Required Approval is obtained for the Company Resolution as provided for in the Interim Order, unless otherwise agreed by the Company and SPAC.

 

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(e)             Court Proceedings.

 

(i)            In connection with all Court proceedings relating to obtaining the Interim Order and the Final Order, the Company shall: (A) diligently pursue (and SPAC shall reasonably cooperate with the Company in diligently pursuing), the Interim Order and the Final Order; (B) provide SPAC and its Representatives with a reasonable opportunity to review and comment upon drafts of all materials to be filed with the Court in connection with the Arrangement, and accept the reasonable comments of SPAC and its Representatives, and all information relating to SPAC included in such materials must be in a form and content reasonably satisfactory to SPAC; (C) provide on a timely basis copies of any response to petition, evidence or other documents served on the Company or its legal counsel in respect of the application for the Interim Order or the Final Order or any appeal from them, and any notice, written or oral, indicating the intention of any Person to appeal, or oppose the granting of, the Interim Order or the Final Order; (D) ensure that all material filed with the Court in connection with the Arrangement is consistent with this Agreement and the Plan of Arrangement; (E) not file any material with the Court that result in an increase or variation in the form of the Company Shareholder Transaction Consideration or other modification or amendment to such materials that expands or increases SPAC’s obligations, or diminishes or limits SPAC’s rights, set forth in any such materials or under this Agreement, the Arrangement, the Plan of Arrangement or the Shareholder Support Agreements; (F) subject to this Agreement, oppose any proposal from any Person that the Final Order contain any provision inconsistent with the Plan of Arrangement or this Agreement, and if at any time after the issuance of the Final Order and prior to the Share Exchange Effective Time, the Company is required by the terms of the Final Order or by applicable Law to return to Court with respect to the Final Order, it will do so only after notice to, and in good faith consultation with, SPAC; and (G) not object to legal counsel to SPAC making such submissions on the hearing of the motion for the Interim Order and the application for the Final Order as such counsel considers appropriate, provided SPAC advises the Company of the nature of any such submissions prior to the hearing and such submissions are consistent with this Agreement and the Plan of Arrangement.

 

(ii)           Subject to the terms of this Agreement, SPAC will reasonably cooperate with, and assist the Company in, seeking the Interim Order and the Final Order, including by providing the Company on a timely basis any material information reasonably required or reasonably requested to be supplied by SPAC in connection therewith.

 

Section 2.3              Closing Transactions; Effect of Arrangement, Share Exchange and Merger. On the terms and subject to the conditions set forth in this Agreement and the Plan of Arrangement, the following transactions shall occur:

 

(a)            Arrangement Filings. Subject to obtaining the Final Order and to the satisfaction or, where not prohibited, the waiver (subject to applicable Laws) by the party or parties in whose favor the condition is, of each of the conditions set out in Article IX hereof (excluding conditions that by their terms cannot be satisfied until the Closing Date, but subject to the satisfaction or, where not prohibited, waiver by the party or parties in whose favor the condition is, of those conditions as of the Closing Date), unless another time or date is agreed to in writing by the parties, any Arrangement Filings required to be filed prior to the Closing Date shall be filed by the Company with the Registrar not later than three (3) Business Days after receipt of the Final Order, provided, however, that no Arrangement Filings shall be sent to the Registrar, for endorsement and filing by the Registrar, except as contemplated hereby.

 

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(b)            Share Exchange. In accordance with and subject to the provisions of the Plan of Arrangement:

 

(i)            Each Dissent Share, if any, issued and outstanding immediately prior to the Share Exchange Effective Time shall be, and shall be deemed to be, transferred to the Company for cancellation, and the holder of such transferred Dissent Share will cease to be the holder of such Dissent Share or to have any rights as a holder in respect of such Dissent Share other than the right to be paid the fair value of such Dissent Share determined and payable in accordance with the Plan of Arrangement.

 

(ii)           Pursuant to the Share Exchange, each Company Share, including each Company Bonus Share, issued and outstanding immediately prior to the Share Exchange Effective Time (other than any Dissent Shares, if any) shall be transferred, and shall be deemed to be transferred, to TopCo in exchange for the issuance by TopCo of TopCo Common Shares and Company Earnout Shares, respectively, in accordance with the Allocation Schedule and the Plan of Arrangement. Upon completion of the Share Exchange, the Company will be a direct, wholly owned Subsidiary of TopCo.

 

(c)            Treatment of Company Warrants. Following the date hereof, the Company shall use its commercially reasonable efforts to (x) request the holder of each Company Warrant that is outstanding and unexercised to exercise such Company Warrant in exchange for Company Shares in accordance with the terms of the Company Warrant Agreement, and (y) amend the terms of the Company Warrants to allow for their exercise on a cashless basis. Notwithstanding the foregoing, immediately following the consummation of the Share Exchange, each Company Warrant that remains outstanding and unexercised shall become converted into and become a warrant exercisable to receive TopCo Common Shares and Company Earnout Shares, and TopCo shall assume each such Company Warrant in accordance with its terms. All rights with respect to Company Common Shares under the Company Warrants assumed by TopCo (each, an “Assumed Warrant”) shall thereupon be converted into rights with respect to TopCo Common Shares and Company Earnout Shares. Accordingly, from and after the consummation of the Share Exchange: (i) each Company Warrant assumed by TopCo may be exercised solely for TopCo Common Shares; (ii) the number of TopCo Common Shares subject to each Assumed Warrant shall be determined by multiplying the number of Company Common Shares that were subject to such Company Warrant immediately prior to the consummation of the Arrangement by the Exchange Ratio, and rounding the resulting number down to the nearest whole number of TopCo Common Shares; (iii) the per share exercise price for TopCo Common Shares issuable upon exercise of each Assumed Warrant shall be expressed in U.S. Dollars and determined by dividing the per share exercise price of Company Common Shares subject to such Company Warrant, as in effect immediately prior to the consummation of the Share Exchange (converted into U.S. Dollars by using the USD / CAD Exchange Rate), by the Exchange Ratio and rounding the resulting exercise price up to the nearest whole cent; (iv) upon exercise of an Assumed Warrant, the holder thereof is entitled to receive the portion of the TopCo Class A Earnout Shares and the TopCo Class B Earnout Shares to be allocated to each Assumed Warrant upon exercise of each Assumed Warrant pursuant to and in accordance with Section 2.8 and the Allocation Schedule; and (v) any restriction on any Company Warrant assumed by TopCo shall continue in full force and effect and the terms and other provisions of such Company Warrant shall otherwise remain unchanged, except for terms rendered inoperative by reason of the Transactions or for such other immaterial administrative or ministerial changes as the TopCo Board (or the compensation committee of the TopCo Board) may determine in good faith are necessary to effectuate the administration of the Assumed Warrants. TopCo shall enter into a supplemental warrant indenture to the Company Warrant Indenture with Odyssey Trust Company, as warrant agent, in order to give effect to this Section 2.3(c).

 

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(d)            Treatment of Company Equity Awards. Prior to the Share Exchange Effective Time, the Company shall take all lawful actions necessary (including obtaining any resolutions of the Company Board) so that, effective immediately following the Share Exchange Effective Time, by virtue of the Arrangement and without any action on the part of SPAC, TopCo, Merger Sub, the Company or the holders of the securities described in this Section 2.3(d), each of the following shall occur:

 

(i)            Each Company RSU outstanding immediately prior to the Share Exchange Effective Time, whether or not vested, shall be assumed by Topco and shall automatically be converted into a restricted stock unit covering a number of TopCo Common Shares equal to the number of Company Common Shares subject to such Company RSU immediately prior to the Share Exchange Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share) (each, a “Rollover RSU”). Each Rollover RSU shall be subject to the same terms and conditions (including applicable vesting and forfeiture provisions) that applied to the corresponding Company RSU immediately prior to the Share Exchange Effective Time, subject to the adjustments required by this Section 2.3(d) after giving effect to the Arrangement (or Alternative Transaction). Such assumption and conversion shall occur in a manner intended to comply with the applicable requirements of Section 409A of the Code and subsection 7(1.4) of the Tax Act.

 

(ii)           Each Company Option outstanding immediately prior to the Share Exchange Effective Time, whether or not vested, shall be assumed by TopCo and shall automatically be converted into an option to purchase that number of TopCo Common Shares equal to the number of Company Common Shares subject to such Company Option immediately prior to the Share Exchange Effective Time multiplied by the Exchange Ratio (rounded down to the nearest whole share) under the Equity Incentive Plan (each, a “Rollover Option”) at an exercise price per TopCo Common Share expressed in U.S. Dollars and equal to the exercise price per Company Common Share as in effect immediately prior to the Share Exchange Effective Time (converted into U.S. Dollars by using the USD / CAD Exchange Rate) divided by the Exchange Ratio (rounded up to the nearest whole cent). Each Rollover Option shall be subject to the same terms and conditions (including applicable vesting, expiration and forfeiture provisions) that applied to the corresponding Company Option immediately prior to the Share Exchange Effective Time, subject to the adjustments required by this Section 2.3(d) after giving effect to the Arrangement (or Alternative Transaction) and by Section 6.7, and all shares issued in respect of any Rollover Option that was a Company Out-Of-The-Money / Unvested Option immediately prior to the Share Exchange Effective Time shall be issued from the Equity Incentive Plan. Such assumption and conversion shall occur in a manner intended to comply with the applicable requirements of Section 409A of the Code and subsection 7(1.4) of the Tax Act; provided that in the case of any Rollover Option to which Section 422 of the Code applies, the exercise price and the number of TopCo Common Shares purchasable pursuant to such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code.

 

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(iii)          As of the Share Exchange Effective Time, all Company Options and all Company RSUs shall no longer be outstanding and each holder of Company Options and Company RSUs, as applicable, shall cease to have any rights with respect to such Company Options and Company RSUs, except as set forth in this Section 2.3(d).

 

(e)            Merger. On the Closing Date, following the completion of the Share Exchange at which time the Company will be a direct, wholly owned Subsidiary of TopCo, at the Merger Effective Time, Merger Sub will be merged with and into SPAC upon the terms and subject to the conditions set forth in this Agreement, the Certificate of Merger and in accordance with the DGCL. As a result of the Merger, the separate corporate existence of Merger Sub will cease and SPAC will continue as the surviving corporation of the Merger (the “Surviving Corporation”). As a result of and following the Merger, the shares of the Surviving Corporation will be directly and solely held by TopCo.

 

(f)             Governing Documents of Surviving Corporation. At the Merger Effective Time, the certificate of incorporation and bylaws of Merger Sub as in effect immediately prior to the Merger Effective Time shall be the certificate of incorporation and bylaws of the Surviving Corporation, except all references to the name of Merger Sub shall be replaced by the name of the Surviving Corporation, until thereafter changed or amended as provided therein or by applicable Law.

 

(g)            Directors and Officers of the Surviving Corporation. SPAC shall take necessary corporate action so that, immediately after the Merger Effective Time, (a) the directors of the Surviving Corporation shall be the individuals identified by the Company prior to the Closing Date, until any such director’s successor is duly elected or appointed and qualified, or until the earlier of their death, resignation or removal, and (b) the officers of the Surviving Corporation shall be the individuals identified by the Company prior to the Closing Date, each to hold office in accordance with the applicable provisions of the DGCL and the certificate of incorporation and bylaws of the Surviving Corporation.

 

(h)            Treatment of SPAC Common Stock. At the Merger Effective Time, by virtue of the Merger and without any action on the part of SPAC, TopCo, Merger Sub, the Company or the holders of SPAC Common Stock, each issued and outstanding share of SPAC Common Stock (other than the shares of SPAC Common Stock that will be cancelled pursuant to Section 2.3(j) and after giving effect to the SPAC Share Redemption) shall be automatically converted into and exchanged for the right to receive one (1) TopCo Common Share (the “SPAC Per Share Merger Consideration”), following which each SPAC Common Stock shall no longer be outstanding and shall automatically be cancelled and shall cease to exist by virtue of the Merger, and each holder of SPAC Common Stock issued and outstanding immediately prior to the Merger Effective Time shall thereafter cease to have any rights with respect to the shares of SPAC Common Stock, except as provided herein or by applicable Law; provided that the 1,100,000 TopCo Common Shares comprising the Sponsor Earnout Shares to be received by Sponsor pursuant to this Section 2.3(h) shall remain in the escrow account pursuant to the terms of the Escrow Agreement and be subject to the vesting provisions set forth in Section 2.8 hereof. TopCo shall use commercially reasonable efforts to cause the TopCo Common Shares issued pursuant to this Section 2.3(h) to be issued in book-entry form as of the Merger Effective Time. In accordance with Section 262(b) of the DGCL, no appraisal rights will be available to holders of SPAC Common Stock in connection with the Merger.

 

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(i)             Treatment of SPAC Warrants. At the Merger Effective Time, by virtue of the Merger and without any action on the part of SPAC, TopCo, Merger Sub, the Company or the holders of SPAC Warrants, each SPAC Warrant that is outstanding and unexercised immediately prior to the Merger Effective Time, shall be converted into and become a warrant to purchase TopCo Common Shares determined as if TopCo assumed such SPAC Warrant in accordance with its terms as in effect as of the date of this Agreement. As a result thereof, all rights with respect to shares of SPAC Common Stock underlying the SPAC Warrants that will be converted into warrants of TopCo shall thereupon be converted into rights with respect to TopCo Common Shares. Accordingly, from and after the Merger Effective Time: (i) each SPAC Warrant converted into a warrant of TopCo as a result of the Merger may be exercised solely for TopCo Common Shares; (ii) the number of TopCo Common Shares subject to each such SPAC Warrant shall be the number of shares of SPAC Common Stock that were subject to such SPAC Warrant, as in effect immediately prior to the Merger Effective Time; (iii) the per share exercise price for the TopCo Common Shares issuable upon exercise of each such SPAC Warrant shall be the per share exercise price of shares of SPAC Common Stock subject to such SPAC Warrant, as in effect immediately prior to the Merger Effective Time and (iv) any restriction on the exercise of any such SPAC Warrant shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such SPAC Warrant shall otherwise remain unchanged; provided, however, that to the extent provided under the terms of a SPAC Warrant, such SPAC Warrant converted into a warrant of TopCo in accordance with this Section 2.3(i) shall, in accordance with its terms, be subject to further adjustment as appropriate to reflect any share split, division or subdivision of shares, share dividend or distribution (including any dividend or distribution of securities convertible into TopCo Common Shares), reorganization, combination, exchange of shares, reverse share split, consolidation of shares, reclassification, recapitalization or other like change with respect to TopCo Common Shares subsequent to the Merger Effective Time.

 

(j)             Cancellation of Certain Shares of SPAC Common Stock. All shares of SPAC Common Stock held in the treasury of SPAC immediately prior to the Merger Effective Time, if any, shall automatically be canceled, and no TopCo Common Shares or other consideration shall be delivered or deliverable in exchange therefor.

 

(k)            Cancellation of Merger Sub Common Stock. Each share of Merger Sub Common Stock that is outstanding immediately prior to the Merger Effective Time shall automatically convert into one (1) share of common stock, par value $0.01 per share, of the Surviving Corporation. The shares of common stock of the Surviving Corporation shall have the same rights, powers and privileges as the shares so converted and shall constitute the only issued and outstanding share capital of the Surviving Corporation.

 

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Section 2.4              Closing of the Transactions Contemplated by this Agreement.

 

(a)            Subject to obtaining the Final Order and to the satisfaction or, where not prohibited, the waiver (subject to applicable Laws) by the party or parties in whose favor the condition is, of each of the conditions set out in Article IX (other than those conditions that by their nature are to be satisfied at the Closing, but subject to satisfaction or waiver of such conditions), the consummation of the transactions contemplated by this Agreement (including the Arrangement) (the “Closing”) shall occur on the Closing Date. The Closing, other than the filing of the Arrangement Filings, shall take place remotely via electronic exchange of documents, or in such other manner or at such other location, as may be agreed upon between the Company and SPAC. At the Closing and on the Closing Date, the Company shall cause the Arrangement Filings to be filed in accordance with Section 2.3(a), so that the Arrangement will become effective at the Share Exchange Effective Time and prior to the Merger Effective Time.

 

(b)            Upon the terms and subject to the conditions set forth in this Agreement, on the Closing Date, the parties hereto shall cause the Merger to be consummated by filing a certificate of merger (the “Certificate of Merger”) with the Secretary of State of the State of Delaware so that the Merger will become effective at the Merger Effective Time and following the Share Exchange Effective Time.

 

Section 2.5              Allocation Schedule.

 

(a)             No later than five (5) Business Days prior to the Closing Date, the Company shall deliver to SPAC (and SPAC shall thereafter deliver to the Exchange Agent) an allocation schedule (the “Allocation Schedule”) setting forth:

 

(i)            the number of Company Shares held by each Company Shareholder, the number of Company Common Shares subject to each Company Option held by each holder thereof and the exercise price thereof, the number of Company Shares subject to each Company RSU held by each holder thereof, and the number of Company Shares subject to each Company Warrant held by each holder thereof;

 

(ii)           (A) the number of TopCo Common Shares that will be subject to each Rollover Option and Rollover RSU, which shall be determined in accordance with Section 2.3(d), and (B) with respect to Rollover Options, the exercise price thereof at the Share Exchange Effective Time, which shall be determined in accordance with Section 2.3(d);

 

(iii)          the portion of the Company Shareholder Transaction Consideration allocated to each holder of Company Shares, determined by multiplying the number of Company Shares held by such Company Shareholder immediately prior to the Share Exchange Effective Time by the Exchange Ratio;

 

(iv)          the number of TopCo Class A Earnout Shares and TopCo Class B Earnout Shares allocated to each holder of Company Shares, including the Company Bonus Shares, in each case determined by multiplying the number of Company Common Shares held by such Company Shareholder immediately prior to the Share Exchange Effective Time by the Company Earnout Ratio;

 

(v)           the number of TopCo Common Shares to be issued in satisfaction of the ANF Purchase Consideration Shares and the Convertible Loan PIK Interest Shares;

 

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(vi)          (A) the number of Assumed Warrants that will be outstanding as of the consummation of the Share Exchange, and with respect to such Assumed Warrants, the number of TopCo Common Shares issuable upon exercise of such Assumed Warrants and the exercise price of such Assumed Warrants, in each case calculated in accordance with Section 2.3(c) and (B) the number of TopCo Class A Earnout Shares and TopCo Class B Earnout Shares to be allocated to each holder of Assumed Warrants upon exercise of such Assumed Warrants in accordance with Section 2.8, in each case determined by multiplying the number of Company Common Shares subject to the relevant Company Warrant immediately prior to the Share Exchange Effective Time by the Company Earnout Ratio; and

 

(vii)         a certification, duly executed by an authorized officer of the Company, that the information delivered pursuant to clauses (i), (ii), (iii), (iv), (v) and (vi) is, and will be as of immediately prior to the Share Exchange or the Share Exchange Effective Time, as applicable, true and correct in all respects and in accordance with the last sentence of this Section 2.5.

 

The Company will review any comments to the Allocation Schedule provided by SPAC or any of its Representatives and consider and incorporate in good faith any reasonable comments proposed by SPAC or any of its Representatives. Notwithstanding the foregoing or anything to the contrary herein, in no event shall (1) the aggregate number of TopCo Common Shares set forth on the Allocation Schedule that are allocated in respect of the equity securities of the Company (assuming exercise of the Company In-The-Money Vested Options and the Company In-The-Money Warrants on a cashless basis) exceed the Company Shareholder Transaction Consideration and (2) the Allocation Schedule (or the calculations or determinations therein) breach, as applicable, any applicable Law, the Governing Documents of the Company, the Company Option Plan, the Company RSU Plan or any other Contract to which the Company is a party or bound.

 

(b)            SPAC, the Exchange Agent and their respective Affiliates and Representatives shall be entitled to rely, without any independent investigation or inquiry, on the names, amounts, and other information set forth in the Allocation Schedule. None of SPAC, the Exchange Agent and their respective Affiliates or Representatives shall have any liability to any Company Shareholder or any of its Affiliates for relying on the Allocation Schedule. Except with SPAC’s written consent, the Allocation Schedule may not be modified after delivery to SPAC except pursuant to a written instruction from the Company, with certification from an authorized Representative of the Company that such modification is true and correct. SPAC, the Exchange Agent and their respective Affiliates and Representatives shall be entitled to rely, without any independent investigation or inquiry, on such modified Allocation Schedule.

 

Section 2.6              Exchange Agent.

 

(a)            As promptly as reasonably practicable following the date of this Agreement, but in no event later than ten (10) Business Days prior to the Closing Date, the Company shall appoint an exchange agent reasonably acceptable (such acceptance not to be unreasonably withheld, conditioned or delayed) to SPAC and the Company (the “Exchange Agent”) and enter into an exchange agent agreement with the Exchange Agent for the purpose of exchanging certificates, if any, representing the Company Common Shares (“Certificates”), and each Company Share held in book-entry form on the securities registry of the Company immediately prior to the Share Exchange Effective Time, in either case, for the portion of the Company Shareholder Transaction Consideration and Company Earnout Shares issuable in respect of such Company Shares in accordance with the Allocation Schedule and on the terms and subject to the conditions set forth in this Agreement and the Plan of Arrangement.

 

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(b)            At least three (3) Business Days prior to the Closing Date, the Company shall mail or otherwise deliver, or shall cause to be mailed or otherwise delivered, a Letter of Transmittal to the Company Shareholders.

 

(c)            Prior to the Share Exchange Effective Time, TopCo shall deposit, or cause to be deposited, with the Exchange Agent, for the benefit of (i) the Company Shareholders and for exchange in accordance with this Section 2.6 through the Exchange Agent and (ii) the Company Shareholders in accordance with Section 2.8, evidence of the Company Shareholder Transaction Consideration and Company Earnout Shares in book-entry form.

 

(d)            At the Share Exchange Effective Time, on the terms and subject to the conditions set forth in this Agreement and the Plan of Arrangement, each Company Shareholder shall be entitled to receive the portion of the Company Shareholder Transaction Consideration and Company Earnout Shares to which he, she or it is entitled on the date provided in Section 2.6(e) upon (i) surrender of a Certificate (or affidavit of loss in lieu thereof in the form required by SPAC, TopCo, the Company and the Exchange Agent) to the Exchange Agent or (ii) in the case of Company Common Shares held in book-entry form, a properly completed and duly executed Letter of Transmittal (including, for the avoidance of doubt, any documents or agreements required by SPAC, TopCo, the Company and the Exchange Agent), to the Exchange Agent.

 

(e)             If a properly completed and duly executed Letter of Transmittal together with, as applicable, any Certificates (or affidavit of loss in lieu thereof in the form required by SPAC, the Company and the Exchange Agent) are delivered to the Exchange Agent in accordance with Section 2.6(d) (i) at least two (2) Business Days prior to the Closing Date, then SPAC, TopCo the Company shall take all necessary actions to cause the applicable portion of the Company Shareholder Transaction Consideration and Company Earnout Shares to be issued to the applicable Company Shareholder in book-entry form on the Closing Date in accordance with the Allocation Schedule, or (ii) less than two (2) Business Days prior to the Closing Date, then SPAC, TopCo and the Company shall take all necessary actions to cause the applicable portion of the Company Shareholder Transaction Consideration and Company Earnout Shares to be issued to the Company Shareholder in book-entry form in accordance with the Allocation Schedule within two (2) Business Days after such delivery.

 

(f)             If any portion of the Company Shareholder Transaction Consideration or Company Earnout Shares is to be issued to a Person other than the Company Shareholder in whose name the surrendered Certificate or the transferred Company Share in book-entry form is registered, it shall be a condition to the issuance of the applicable portion of the Company Shareholder Transaction Consideration and Company Earnout Shares that (i) either such Certificate shall be properly endorsed or shall otherwise be in proper form for transfer or such Company Share in book-entry form shall be properly transferred and (ii) the Person requesting such consideration pay to the Exchange Agent any transfer or similar taxes required as a result of such consideration being issued to a Person other than the registered holder of such Certificate or Company Share in book-entry form or establish to the satisfaction of the Exchange Agent that such transfer or similar taxes have been paid or are not payable.

 

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(g)            No interest will be paid or accrued on the Company Shareholder Transaction Consideration or Company Earnout Shares (or any portion thereof). From and after the Share Exchange Effective Time, until surrendered or transferred, as applicable, in accordance with this Section 2.6(g), each Company Share shall solely represent the right to receive a portion of the Company Shareholder Transaction Consideration and Company Earnout Shares to which such Company Share is entitled to receive in accordance with the Allocation Schedule.

 

(h)            Any portion of the aggregate Company Shareholder Transaction Consideration and Company Earnout Shares that remains unclaimed by the Company Shareholders two (2) years following the Closing Date shall be delivered to TopCo or as otherwise instructed thereby, and any right or claim to payment under the Plan of Arrangement that remains outstanding two (2) years following the Closing Date shall cease to represent a right or claim of any kind or nature and the right of the Company Shareholders to receive the applicable portion of the aggregate Company Shareholder Transaction Consideration and Company Earnout Shares in accordance with the Plan of Arrangement shall terminate and be deemed to be surrendered and forfeited to TopCo, for no consideration.

 

Section 2.7              Withholding.

 

(a)             Each of the parties hereto, the Exchange Agent and their respective agents (each, a “Withholding Agent”), shall be entitled to deduct and withhold from any amount otherwise payable pursuant to this Agreement or the Transactions such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code, the Tax Act or any provision of provincial, state, local or foreign Tax Law. To the extent that amounts are so withheld and paid over to the appropriate taxing authority, 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. If any Withholding Agent determines that any amount payable pursuant to this Agreement is subject to deduction and/or withholding (other than any deduction or withholding required in respect of compensatory amounts), then such Withholding Agent shall use commercially reasonable efforts to (i) provide notice to such Person of any such deduction or withholding as soon as reasonably practicable after such determination, and (ii) cooperate in good faith to eliminate or reduce any such deduction or withholding (including through the request and provision of any statements, forms or other documents to reduce or eliminate any such deduction or withholding).

 

(b)            Without limiting the foregoing, each Withholding Agent, as applicable, is hereby authorized to sell, on the open market and with customary commercial terms, to a Person that is not SPAC or any of its Affiliates, on behalf of and for the benefit of such Person and in accordance with Section 2.7(c) below, such portion of the Company Shareholder Transaction Consideration as is necessary to provide sufficient funds to the Withholding Agent to enable it to comply with such deduction and withholding requirement and the Withholding Agent shall use commercially reasonable efforts to notify such Person thereof and shall remit the applicable portion of the net proceeds of such sale to the appropriate Governmental Authority and, if applicable, any portion of such net proceeds that it is not required to be so remitted shall be paid to such Person.

 

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(c)            To the extent any Withholding Agent sells any portion of the Company Shareholder Transaction Consideration as contemplated under Section 2.7(b) above, (i) the Withholding Agent shall be acting on behalf of and for the benefit of the Person in respect of which the relevant deduction or withholding is made, solely as an agent of such Person, for administrative convenience, (ii) such Person shall be treated as the seller, and prior to the sale, the beneficial owner of such of Company Shareholder Transaction Consideration for all Tax purposes, including Tax reporting, and (iii) such Person shall be responsible for, and hold the Withholding Agent and each of its respective representatives and Affiliates, harmless from, any Taxes arising as a result of the sale of such Person’s Company Shareholder Transaction Consideration. Any costs or expenses incurred by the relevant Withholding Agent in connection with such sale shall be borne by, and deducted from the payment of any net proceeds of such sale to, the applicable Person.

 

Section 2.8              Earnout Shares.

 

(a)            At the Share Exchange Effective Time, on the terms and subject to the conditions set forth in this Agreement and the Plan of Arrangement, each Company Shareholder shall be entitled to receive the portion of the Company Earnout Shares to which he, she or it is entitled in accordance with the Allocation Schedule, Section 2.6 and this Section 2.8.

 

(b)            From and after the Closing, a number of (x) Company Earnout Shares shall be issued upon exercise of Assumed Warrants, converted into TopCo Common Shares and/or redeemed and (y) Sponsor Earnout Shares shall vest or be cancelled, as applicable, as follows:

 

(i)            if at any time during the Earnout Period, (x) on any twenty (20) Trading Days within any thirty (30) Trading Day period, the Trading Price of the TopCo Common Shares is greater than or equal to $12.50 (as adjusted for share splits, reverse share splits, sub-divisions, rights issuances, stock dividends, reorganizations, recapitalizations and other similar transactions), (y) the Adjusted EBITDA of TopCo for the fiscal year ending January 31, 2024 is greater than or equal to $21,200,000 based on the audited consolidated financial statements for such period or (z) there occurs any transaction resulting in a Change of Control with a valuation of the TopCo Common Shares that is greater than or equal to $12.50 per TopCo Common Share (such value per share to be calculated without giving effect to the conversion or vesting of any applicable Earnout Shares) (any such event, a “First Tranche Earnout Target”), then, upon the earlier First Tranche Earnout Target to occur, (A) all of the TopCo Class A Earnout Shares shall automatically be converted into TopCo Common Shares and (B) an aggregate of 550,000 Sponsor Earnout Shares (the “Sponsor First Tranche Earnout Shares”) shall vest; provided that the TopCo Class A Earnout Shares shall convert into TopCo Common Shares, and the Sponsor First Tranche Earnout Shares shall vest, in each case, only once upon the earlier occurrence of one of the First Tranche Earnout Targets and, thereafter no additional TopCo Class A Earnout Shares shall convert into TopCo Common Shares and no additional Sponsor Earnout Shares shall vest under this Section 2.8(b)(i).

 

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(ii)           if at any time during the Earnout Period, (x) on any twenty (20) Trading Days within any thirty (30) Trading Day period, the Trading Price of the TopCo Common Shares is greater than or equal to $15.00 (as adjusted for share splits, reverse share splits, sub-divisions, rights issuances, stock dividends, reorganizations, recapitalizations and other similar transactions), (y) the Adjusted EBITDA of TopCo for the fiscal year ending January 31, 2025 is greater than or equal to $32,900,000 based on the audited consolidated financial statements for such period, or (z) there occurs any transaction resulting in a Change of Control with a valuation of the TopCo Common Shares that is greater than or equal to $15.00 per TopCo Common Share (such value per share to be calculated without giving effect to the conversion or vesting of any applicable Earnout Shares) (any such event, a “Second Tranche Earnout Target”), then, upon the earlier Second Tranche Earnout Target to occur, (A) all of the TopCo Class B Earnout Shares shall automatically be converted into TopCo Common Shares and (B) 550,000 Sponsor Earnout Shares (the “Sponsor Second Tranche Earnout Shares”) shall vest; provided that the TopCo Class B Earnout Shares shall convert into TopCo Common Shares, and the Sponsor Second Tranche Earnout Shares shall vest, in each case, only once upon the earlier occurrence of one of the Second Tranche Earnout Targets and, thereafter no additional TopCo Class A Earnout Shares shall convert into TopCo Common Shares and no additional Sponsor Earnout Shares shall vest under this Section 2.8(b)(ii).

 

(iii)          upon exercise of an Assumed Warrant during the Earnout Period, TopCo shall issue to the holder thereof the Company Earnout Shares allocated thereto pursuant to Section 2.5(a)(vi); provided that (x) no TopCo Class A Earnout Shares or TopCo Class B Earnout Shares will be issuable to holders of Assumed Warrants upon exercise thereof if, prior to such exercise, the Company Earnout Shares are redeemed pursuant to Section 2.8(b)(iv), (y) no TopCo Class A Earnout Shares will be issuable to holders of Assumed Warrants upon exercise thereof if, prior to such exercise, the First Tranche Earnout Target has been achieved and (z) no TopCo Class B Earnout Shares will be issuable to holders of Assumed Warrants upon exercise thereof if, prior to such exercise, the Second Tranche Earnout Target has been achieved;

 

(iv)          if (y) there occurs any transaction resulting in a Change of Control and the applicable valuation of the TopCo Common Shares (such value per share to be calculated without giving effect to the conversion or vesting of any applicable Earnout Shares) is less than the respective dollar values set forth in Section 2.8(b)(i) and Section 2.8(b)(ii) above or (z) any Company Earnout Share has not been converted into TopCo Common Shares or any Sponsor Earnout Share remains unvested, as applicable, on the last date of the Earnout Period, then each such Earnout Share shall automatically be cancelled or redeemed, without any action or consent on the part of the holders of Company Earnout Shares or Sponsor, and without any consideration paid to any holder of Company Earnout Shares or Sponsor, except in the case of TopCo Class A Earnout Shares and TopCo Class B Earnout Shares, which shall be redeemed at a price of US$0.00000000001 per TopCo Class A Earnout Share or TopCo Class B Earnout Share.

 

(c)            TopCo shall take such actions as are reasonably requested by any holder of Company Earnout Shares or Sponsor, as applicable, to evidence the issuances to or ownership by him, her or it of TopCo Common Shares pursuant to this Section 2.8, including through the provision of an updated securities registry showing such issuances (as certified by an officer of TopCo responsible for maintaining such registry or the applicable registrar or transfer agent of TopCo).

 

(d)            In the event TopCo shall at any time during the Earnout Period effect a subdivision or consolidation of the outstanding TopCo Common Shares into a greater or lesser number of TopCo Common Shares, then (i) any Company Earnout Shares that have not converted into TopCo Common Shares and any Sponsor Earnout Shares that have not vested shall be subdivided or consolidated in the same manner and (ii) the dollar values set forth in Section 2.8(b)(i) and Section 2.8(b)(ii) above shall be adjusted accordingly to provide to the Company Shareholders and Sponsor the same economic effect as contemplated by this Agreement prior to such corporate event.

 

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(e)            During the Earnout Period, TopCo shall take all reasonable efforts for TopCo to remain listed as a public company on, and for the TopCo Common Shares (including, for the avoidance of doubt, the TopCo Common Shares issuable in accordance with this Section 2.8) to be tradable over, the NYSE or Nasdaq, as applicable; provided, however, the foregoing shall not limit TopCo from consummating a Change of Control or entering into a Contract that contemplates a Change of Control. Subject to the terms hereof, upon the consummation of any Change of Control during the Earnout Period, other than as set forth in Section 2.8(b)(iv) above, TopCo shall have no further obligations pursuant to this Section 2.8(e).

 

(f)             Maximum Earnout Shares. Notwithstanding anything to the contrary in this Agreement or any Ancillary Agreements, (i) the aggregate number of TopCo Common Shares issuable pursuant to this Section 2.8 on conversion of Company Earnout Shares that are issued in exchange for Company Common Shares at the Share Exchange Effective Time shall not exceed 6,114,620 TopCo Common Shares, and (ii) the aggregate number of the Sponsor Earnout Shares vested following the Closing pursuant to this Section 2.8 shall not exceed 1,100,000 TopCo Common Shares; in each case, as adjusted for share splits, reverse share splits, sub-divisions, rights issuances, stock dividends, reorganizations, recapitalizations and other similar transactions.

 

Section 2.9              No Fractional TopCo Common Shares. Notwithstanding any other provision of this Agreement, no fractional TopCo Common Shares will be issued in connection with the transactions contemplated hereby, and the number of TopCo Common Shares each holder of SPAC Common Stock or Company Shares, as applicable, is entitled to receive pursuant to this Article II will be rounded down (after aggregating all fractional shares of such TopCo Common Shares that otherwise would be received by such Person pursuant to this Article II) to the nearest whole share.

 

Section 2.10            Compliance with Antitrust Laws. Notwithstanding any other provision of this Agreement, no TopCo Common Shares issuable on conversion of Company Earnout Shares pursuant to Section 2.8, if any, shall be released to any holder of Company Earnout Shares who is required to file notification pursuant to any Antitrust Law until any applicable waiting period pursuant to any Antitrust Law has expired or been terminated or waived (provided that any such Company Shareholder has notified TopCo of such required filing pursuant to any Antitrust Law in connection therewith following reasonable advance notice from TopCo of the reasonably anticipated conversion of Company Earnout Shares).

 

Article III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company hereby represents and warrants to SPAC the following, except as set forth in the Disclosure Schedules delivered to SPAC by the Company on the date of this Agreement (the “Company Disclosure Schedules”), which exceptions shall be deemed to be part of the representations and warranties made hereunder subject to, and in accordance with, ‎Section 12.9 (and any reference in this Agreement or any Ancillary Agreement to this ‎Article III or any provision thereof shall be deemed to refer to such Article or provision as modified by the Company Disclosure Schedules in accordance with ‎Section 12.9):

 

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Section 3.1              Organization, Good Standing, Corporate Power and Qualification. The Company is duly incorporated, validly existing and in good standing (or the equivalent thereof, if applicable, in each case, with respect to the jurisdictions that recognize the concept of good standing or any equivalent thereof) under the Laws of its jurisdiction of incorporation. The Company has the requisite corporate power and authority to own and operate its properties and assets, and to carry on its business as presently conducted. The Company is presently qualified to do business in each jurisdiction in which it is required to be so qualified and is in good standing in each such jurisdiction (or the equivalent thereof, if applicable, in each case, with respect to the jurisdictions that recognize the concept of good standing or any equivalent thereof), except where the failure to be so qualified or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Prior to the date of this Agreement, the Company has made available to SPAC accurate and complete copies of the Company’s Governing Documents and the Governing Documents of each other Group Company, including all amendments thereto as in effect as of the date of this Agreement.

 

Section 3.2              Subsidiaries; Capitalization.

 

(a)            The Company does not own or control, directly or indirectly, any interest in any corporation, partnership, limited liability company, association or other business entity, other than as set forth in ‎Section 3.2(a) of the Company Disclosure Schedules. Each Group Company has been duly organized and is validly existing and in good standing (or the equivalent thereof, if applicable, in each case, with respect to the jurisdictions that recognize the concept of good standing or any equivalent thereof) under the Laws of its jurisdiction of incorporation or organization, as applicable, and has the requisite corporate or other entity power and authority to own and operate its properties and assets and to carry on its business as presently conducted. Each Group Company is presently qualified to do business in each jurisdiction in which it is required to be so qualified and is in good standing in each such jurisdiction (or the equivalent thereof, if applicable, in each case, with respect to the jurisdictions that recognize the concept of good standing or any equivalent thereof), except where the failure to be so qualified or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. All of the shares or other equity securities of each Group Company that are issued and outstanding are owned, directly or indirectly, by the Company, free and clear of all Liens (other than Permitted Liens and Liens arising from the applicable Group Company’s Governing Documents and applicable securities Laws), have been duly authorized and validly issued in compliance with applicable Laws in all material respects, are fully paid and nonassessable, and have not been issued in violation of (i) the applicable Group Company’s Governing Documents, or (ii) any purchase option, call option, right of first refusal, right of first offer, preemptive right, subscription right or other similar right.

 

(b)            As of the date of this Agreement, the maximum number and the classes of shares the Company is authorized to issue and the number and the classes of shares the Company has issued is: (i) an unlimited number of Company Common Shares, of which 77,965,501 shares are issued and outstanding and (ii) an unlimited number of Company Preferred Shares, of which 0 shares are issued and outstanding.

 

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(c)            All Company Securities that are issued and outstanding have been duly authorized and validly issued in compliance with applicable Laws in all material respects, are fully paid and nonassessable, and have not been issued in violation of (i) the Company’s Governing Documents, or (ii) any purchase option, call option, right of first refusal, right of first offer, preemptive right, subscription right or other similar right. The Company Shares have the rights, preferences, privileges and restrictions set forth in the Company’s Governing Documents.

 

(d)            As of the date of this Agreement, the Company has reserved (i) 16,025,000 Company Common Shares for issuance upon exercise of Company Options, (ii) 7,200,000 Company Common Shares for issuance upon vesting of Company RSUs; (iii) 11,292,639 Company Common Shares for issuance upon exercise of the Company Indenture Warrants and (iv) 1,609,999 Company Common Shares and 805,000 Company Indenture Warrants for issuance upon exercise of Company Broker Warrants.

 

(e)            Other than the Company Required Approval, there is no consent required of the holders of any class or series of Company Shares or other Company Shareholders in connection with the approval of the Transactions.

 

(f)             Except as set forth in ‎Section 3.2(f) of the Company Disclosure Schedules and for (i) the Company Options to purchase Company Shares outstanding under the Company Option Plan, (ii) the Company RSUs representing a right to receive Company Shares outstanding under the Company RSU Plan, (iii) the Company Warrants representing a right to purchase Company Shares, and (iv) the shares or other equity securities owned by the Company in its Subsidiaries, there are no equity or equity-based interests, options, restricted stock, warrants or other equity appreciation, phantom equity, profit participation or similar rights for the purchase or acquisition from the Company or any of its Subsidiaries of any Company Shares or other equity securities of the Company or any of its Subsidiaries, and there are no legally binding promises or commitments (whether oral or written) to grant any Company Options, Company RSUs, restricted stock, warrants or other equity appreciation, phantom equity, profit participation or similar rights for the purchase or acquisition from the Company of any Company Shares or other equity securities of the Company or any of its Subsidiaries. Except as set forth in ‎Section 3.2(f) of the Company Disclosure Schedules and the Company’s Governing Documents, no Group Company is a party to or subject to any agreement or understanding and, to the Company’s knowledge, there is no agreement or understanding between any Persons, that affects or relates to the voting, transfers or giving of written consents with respect to any security of any Group Company or by a director of any Group Company. To the Company’s knowledge, no officer or director has made any representations or promises regarding equity incentives to any current or former officer, employee, director, individual independent contractor or consultant of a Group Company that is not reflected in the outstanding share and option numbers contained in this ‎Section 3.2, except for employment offer letters and employment agreements entered into in the Ordinary Course, copies of which have been made available to SPAC. There are no outstanding bonds, debentures, notes or other Indebtedness of a Group Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter for which such Group Company’s equityholders may vote. No Group Company has adopted any shareholder rights plan or similar agreement to which any Group Company would be or become subject, party or otherwise bound.

 

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(g)            ‎Section 3.2(g) of the Company Disclosure Schedules sets forth the Company Option and Company RSU ledger dated as of the date of this Agreement, which reflects all of the outstanding Company Options and Company RSUs and lists, to the extent applicable (i) the name of each holder, (ii) the grant date, (iii) the applicable exercise prices, (iv) whether such Company Option is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code, (v) the expiration date, (vi) vesting schedules therefor as of such date, and (vii) whether such vesting accelerates in connection with the transactions contemplated by the Agreement.

 

(h)            The Company has never adjusted or amended the exercise price of any stock options (including Company Options) previously awarded, whether through amendment, cancellation, replacement grant, repricing, or any other means, except for customary adjustments in connection with stock splits and the like. The Company has no obligation (contingent or otherwise) to purchase or redeem any of the Company Shares.

 

Section 3.3              Due Authorization. The Company has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Agreement to which it is or will be a party, to perform its obligations hereunder and thereunder and, subject only to obtaining the Company Required Approval, the effectiveness of the Proxy/Registration Statement, receipt of the Regulatory Approvals, distribution of the Company Information Circular, to consummate the transactions contemplated hereby and thereby. All corporate action on the part of each of the Group Companies and their respective directors, officers and shareholders necessary for the (a) authorization, execution and delivery by the Company of this Agreement and the Ancillary Agreements to which it is or will be a party, (b) consummation of the Transactions and (c) performance of all of the Company’s obligations hereunder or thereunder has been taken or will be taken prior to the Closing, subject to (i) obtaining the Company Required Approval, and (ii) the receipt of the Regulatory Approvals. This Agreement and the Ancillary Agreements to which it is or will be a party (assuming due authorization, execution and delivery by each other party hereto and thereto) constitute or will constitute at the Closing (with respect to the Ancillary Agreements to be executed at the Closing) valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except (A) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other Laws of general application affecting enforcement of creditors’ rights generally and (B) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable remedies or by general principles of equity ((A) and (B), collectively, the “Enforceability Exceptions”).

 

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Section 3.4              Financial Statements.

 

(a)            The Company has made available to SPAC (i) the audited consolidated balance sheet of the Group Companies as of January 31, 2022 and July 31, 2020, and the related audited consolidated statements of operations, consolidated statement of changes in shareholders’ equity and consolidated statement of cash flows for the fiscal years ended January 31, 2022 and July 31, 2020 (collectively, the “Company Audited Year-End Financial Statements”), (ii) the audited consolidated balance sheet of the Group Companies as of January 31, 2021, and the related audited consolidated statements of operations, consolidated statements of changes in shareholders’ equity and consolidated statements of cash flows for the six (6)-month period ended January 31, 2021 (the “Company Audited Interim Financial Statements”) and (iii) the unaudited consolidated balance sheet of the Group Companies as of January 31, 2023 (the “Balance Sheet Date”), and the related unaudited consolidated statements of operations, consolidated statement of changes in shareholders’ equity and consolidated statement of cash flows for the fiscal year then ended (the “Company Unaudited Year-End Financial Statements” and together with the Company Audited Year-End Financial Statements and the Company Audited Interim Financial Statements, collectively, the “Company Financial Statements”), in each case of clauses (i) and (ii), audited in accordance with GAAP and including the notes thereto and the report of the Company’s independent auditor. The Company Financial Statements, including, in the case of the Company Audited Year-End Financial Statements, the notes thereto, are true and correct in all material respects and present fairly in all material respects the financial condition, operating results, shareholders’ equity and cash flows of the Group Companies as of the dates and during the periods indicated (subject, in the case of the Company Audited Interim Financial Statements and the Company Unaudited Year-End Financial Statements, to the absence of notes and to normal recurring year-end adjustments, none of which would be would be material in amount or effect individually or in the aggregate). The Company Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated, except as otherwise noted therein and, in the case of the Company Audited Interim Financial Statements and the Company Unaudited Year-End Financial Statements, subject to the absence of notes and to normal recurring year-end adjustments that, individually or in the aggregate, would not be material in amount or effect. The books of account, ledgers, order books, records and other financial documents of the Group Companies accurately reflect all material information relating to the Company’s business, the nature, acquisition, maintenance, location and collection of its assets and the nature of all transactions giving rise to its obligations and accounts receivable.

 

(b)            The Group Companies maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

(c)            For the past two (2) years, neither the Company nor, to the knowledge of the Company, any Representative of any of the Group Companies has received or otherwise had or obtained knowledge of any written complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of any of the Group Companies with respect to the Company Financial Statements or the internal accounting controls of any of the Group Companies, including any written complaint, allegation, assertion or claim that any of the Group Companies has engaged in questionable accounting or auditing practices. Since the date of its incorporation, to the knowledge of the Company, no attorney representing any of the Group Companies, whether or not employed by any of the Group Companies, has reported evidence of a violation of securities Laws, breach of fiduciary duty or similar violation by any of the Group Companies or any of their respective Representatives to the Company Board or the board of directors (or similar governing body) of any Group Company or any committee thereof or to any director or officer of any of the Group Companies.

 

(d)            None of the Group Companies has any liability or obligation, absolute or contingent, individually or in the aggregate, that would be required to be set forth on a consolidated balance sheet of the Group Companies prepared in accordance with GAAP applied and in accordance with past practice, other than (i) obligations and liabilities that have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (ii) obligations and liabilities under Contracts incurred in the Ordinary Course (other than due to a breach under such Contracts, or any act or omission that with the giving of notice, the lapse of time or otherwise, would constitute a breach thereunder), (iii) any Company Transaction Expenses, (iv) obligations and liabilities arising under this Agreement or the Ancillary Agreements to which it is or will be a party and/or incurred in connection with the Transactions, and (v) obligations and liabilities reflected, or reserved against, in the Company Financial Statements or disclosed in the notes thereto or as set forth in ‎Section 3.4(d) of the Company Disclosure Schedules.

 

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Section 3.5              Material Contracts.

 

(a)            Section 3.5(a) of the Company Disclosure Schedules lists all Contracts (other than Company Benefit Plans) to which any Group Company is a party, or to the Company’s knowledge, by which any Group Company is bound or to which any Group Company or any of their respective assets or properties are subject that are in effect as of the date of this Agreement (each Contract required to be set forth in Section 3.5(a) of the Company Disclosure Schedules, together with all amendments, waivers or other changes thereto, a “Material Contract”). The Material Contracts include:

 

(i)            obligations of, or payments to, any of the Group Companies of $1,000,000 or more;

 

(ii)           any outstanding Indebtedness (other than capitalized lease obligations incurred in the Ordinary Course) of $1,000,000 or more, including any convertible debt/equity instruments;

 

(iii)          any real property leasehold, license or other occupancy interest (“Real Property Lease”);

 

(iv)          any Contract (A) pursuant to which the Group Companies grant any right or license under any Owned Intellectual Property to any Person (excluding non-exclusive licenses granted to customers and service providers of the Group Companies in the Ordinary Course); (B) pursuant to which the Group Companies obtain the right to use any IT Systems or other Intellectual Property owned by another Person that is material to the business of the Group Companies (excluding nonexclusive licenses or other rights granted to any Group Company for standard, generally commercially available IT Systems or other software, products or applications that are non-customized and licensed for a payment of less than $25,000 per annum in the aggregate); (C) that constitutes a concurrent-use agreement, settlement agreement or co-existence agreement with respect to any Owned Intellectual Property; or (D) pursuant to which any Group Company grants any exclusive license of any Intellectual Property to any Person;

 

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(v)           Contracts with any Governmental Authority;

 

(vi)          Contracts which (A) remain in effect immediately following the Closing and limit the right of any Group Company to engage in any line of business or in any geographic area, or to Develop, license or sell the Company Products, or to compete with any Person; or (B) involve the Development of any material Owned Intellectual Property by any third-party on behalf of any Group Company; or (C) involve any Development of any material Intellectual Property by any Group Company with any third-party or the contribution of any material Intellectual Property by any Group Company to any third-party;

 

(vii)         Contracts between (A) on the one hand, any of the Group Companies, and (B) on the other hand, any Company Shareholder or any of his, her or its Affiliates;

 

(viii)        the grant of exclusive rights to Develop, license, market or sell any Company Products; and

 

(ix)          Contracts that in the Company’s determination will be required to be filed with the Proxy/Registration Statement under applicable SEC requirements pursuant to Items 601(b)(1), (2), (4), (9) or (10) of Regulation S-K under the Securities Act if the Company was the registrant.

 

(b)            True, correct and complete copies of the Material Contracts have been delivered to or made available to SPAC.

 

(c)             Except (i) as does not have, or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (ii) for any Material Contract that is terminated or expires following the date of this Agreement in accordance with its terms or (iii) as set forth on Section 3.5(c) of the Company Disclosure Schedules, (A) to the knowledge of the Company, all Contracts to which any of the Group Companies is a party or by which its assets are bound are valid, binding and in full force and effect, except as limited by the Enforceability Exceptions, and (B) no Group Company has received written notice, or to the knowledge of the Company, oral notice of the intention of any party to any Material Contract to terminate such Material Contract, exercise any option not to renew thereunder, or amend the terms thereof other than modifications in the Ordinary Course that do not materially impair the rights of any Group Company thereunder. None of the Group Companies (nor, to the knowledge of the Company, any other party to any such Contract) is or, with the giving of notice, the lapse of time or otherwise, would be, in default, in any material respect, under any Material Contract.

 

Section 3.6              Intellectual Property; Information Technology; Data Protection.

 

(a)             Section 3.6(a) of the Company Disclosure Schedules sets forth an accurate and complete list of each of the following included in the Owned Intellectual Property: (i) applications and registrations for Patents, (ii) applications and registrations for Trademarks, (iii) applications and registrations for Copyrights, and (iv) domain names and social media accounts and handles (the items set forth, or required to be set forth, under (i) through (iv), collectively, the “Registered IP”). For each item of Registered IP, Section 3.6(a) of the Company Disclosure Schedules specifies, as applicable, the filing, serial or registration or application number, title, jurisdiction, date of filing or issuance, status, and current owner(s).

 

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(b)            Each item of Owned Intellectual Property is subsisting and, except with respect to pending items included in the Registered IP, valid and enforceable. All application, filing, registration, maintenance, annuity, renewal and other fees required with respect to any Registered IP have been paid and all documents, disclosures, recordations and certificates required to be filed in connection with any Registered IP have been filed with the relevant Governmental Authority or registrar, as applicable, for the purposes of prosecuting, maintaining and perfecting the Registered IP. There is no Action, Governmental Order or proceeding pending or, to the knowledge of the Company, threatened (other than prosecution of pending applications of Registered IP in the Ordinary Course before a relevant Intellectual Property office), challenging or purporting to restrict the validity, enforceability, registrability, scope or use of any Owned Intellectual Property.

 

(c)             Except as set forth in Section 3.6(c) of the Company Disclosure Schedules, (i) no funding, facilities, material, information, Intellectual Property or personnel of a university, college, other educational institution or research center, or Governmental Authority (each a “Designated Entity”) were used in the Development or commercialization, in whole or in part, of any Owned Intellectual Property or Company Product, and (ii) no Designated Entity has or would have any right, title or interest (including any usage, license, “march in,” ownership, co-ownership or other rights) in or to any Owned Intellectual Property or Company Product.

 

(d)            The Group Companies (i) solely and exclusively own all right, title, and interest in and to all Owned Intellectual Property, free and clear of all Liens, except for Permitted Liens, and (ii) have and have had, a valid, enforceable and sufficient right to use all Licensed Intellectual Property. The consummation of the transactions contemplated by this Agreement will not (1) materially impair any rights under, or cause any of the Group Companies to be in material violation of or material default under, any license or other agreement to use any material Licensed Intellectual Property or under which any of the Group Companies grants any Person rights to use any material Owned Intellectual Property, (2) entitle any other party to terminate or modify in a manner materially detrimental to the Group Companies, any such licenses or other agreements, or (3) require the payment of (or increase the amount of) any royalties, fees, or other consideration with respect to any use or exploitation of any Licensed Intellectual Property, except as would not, individually or in the aggregate, be material to the Group Companies as a whole. The Company Intellectual Property, including the Licensed Intellectual Property and Owned Intellectual Property, constitutes all of the material Intellectual Property used in or necessary for the operation of the business of the Group Companies as currently conducted and proposed to be conducted immediately following the transactions contemplated hereby.

 

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(e)            To the knowledge of the Company, except as would not reasonably be expected to be, individually or in the aggregate, material to the Group Companies as a whole, there is no, and there has not been any, unauthorized use, unauthorized disclosure, infringement, misappropriation, dilution or other violation of any Owned Intellectual Property by any Person, and, in the past six (6) years, the Group Companies have not brought or threatened any Action or sent any notices to any third party regarding any of the foregoing. The Group Companies, Owned Intellectual Property, and the operation of the Group Companies’ business (including the manufacture, sale, distribution and use of their products and services), do not infringe, misappropriate, dilute or otherwise violate, and, for the past six (6) years, have not infringed, misappropriated, diluted or otherwise violated, any Intellectual Property owned by any third party, and there is no Action pending or threatened in writing by any Person and, in the past six (6) years, the Group Companies have not received any written communications, alleging any of the foregoing (including any invitations to take a license under any Intellectual Property or consider the applicability of any Intellectual Property to any Company Product or the conduct of the business).

 

(f)             The Group Companies (i) lawfully own, lease, or license the IT Systems, and such IT Systems are reasonably sufficient for the operation of the Group Companies’ business as currently conducted and as contemplated to be conducted immediately following the Closing, and (ii) will continue to have such rights immediately after the Closing. The IT Systems (1) owned or controlled by any of the Group Companies and, to the knowledge of the Company, licensed or leased by any of the Group Companies perform in material conformance with their documentation; (2) have not suffered any material substandard performance, breakdown or failure that has not been remediated in all material respects; (3) owned or controlled by any of the Group Companies and, to the knowledge of the Company, licensed or leased by any of the Group Companies are free from any material defects or vulnerabilities; (4) to the knowledge of the Company, do not contain any virus, malware, bugs, worms, software bombs, software routine or hardware component which could permit unauthorized access or disable or otherwise harm any computer, systems or software, or any software routine which could disable a computer program automatically with the passage of time or under the positive control of a Person other than an authorized licensee or owner of the software (collectively, “Malicious Code”); (5) owned or controlled by any of the Group Companies and, to the knowledge of the Company, licensed or leased by any of the Group Companies are protected by regular testing and assessments in accordance with applicable industry standards to identify the potential for items listed in the foregoing clauses (2), (3) and (4); and (6) are sufficient in all material respects for the needs of the business of the Group Companies as currently conducted. Each Group Company has implemented and currently implements industry standard measures designed to prevent the introduction of Malicious Code into IT Systems, including firewall protections and regular virus scans. The Group Companies have implemented, maintain, and regularly test (at least annually) commercially reasonable backup and data recovery, disaster recovery, and business continuity plans, and procedures. The Group Companies have not materially breached of any of their Contracts relating to IT Systems. The Group Companies have not been subjected to any audit of any kind in connection with any Contract relating to the IT Systems for which the Group Companies currently owe any material unpaid or outstanding amounts.

 

(g)            The Group Companies have taken all commercially reasonable, legally required, and/or necessary actions to maintain and protect the secrecy, validity, enforceability and value of all Confidential Information or trade secrets disclosed to, owned or possessed by them. To the knowledge of the Company, there has been no material breach of confidentiality or non-disclosure Contract relating to such Confidential Information or trade secrets of the Group Companies.

 

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(h)            All founders, current and former employees, consultants and contractors who are currently Developing or have Developed or contributed to Intellectual Property for or on behalf of any Group Company (collectively, “Creators”) have executed enforceable written Contracts substantially in one of the forms made available to the SPAC, and that irrevocably assign to the Company all of such Person’s rights, title and interest in and to such Intellectual Property without further consideration or any restrictions or obligations whatsoever, including on the use or other disposition or ownership of such Intellectual Property, and has waived, in writing, all moral rights therein to the extent applicable and legally permissible, or the Group Company otherwise solely and exclusively owns all rights, title and interest in and to such Intellectual Property by operation of law. No founder or current or former employee, consultant, officer or director of the Group Companies (i) owns any Intellectual Property used or held for use by the Group Companies or (ii) has made any claims with respect to, or has any right, license, claim or interest whatsoever in, any Owned Intellectual Property, or, to the knowledge of the Company, any Licensed Intellectual Property. To the knowledge of the Company, no Creator is in violation of any term or covenant of any Contract relating to employment, invention disclosure, invention assignment, non-disclosure or non-competition or any other Contract with any other party by virtue of such Creator’s being employed by, or performing services for, the Group Companies.

 

(i)             The Group Companies have established, implemented and, in the past three (3) years, maintained commercially reasonable administrative, technical, physical and organizational measures and programs designed for the safeguarding of Personal Information, Confidential Information and IT Systems against any Security Incident. No Group Company has disclosed any trade secrets or other Confidential Information that is material to the business of the Group Companies to any other Person other than pursuant to a written confidentiality agreement under which such other Person agrees to maintain the confidentiality of such Confidential Information.

 

(j)              Each Group Company and, to the knowledge of the Company, each vendor, processor, or other third party Processing or otherwise with authorization to access Company Personal Information in the course of their respective performance of services to any Group Company, has, in the past three (3) years, complied in all material respects with all Privacy Obligations. The execution, delivery or performance of this Agreement, including the consummation of the Transactions and any transfer of Personal Information in connection therewith, do not and will not cause, constitute, or result in a material breach or violation of any Privacy Obligations.

 

(k)             In the past three (3) years, there have been no Security Incidents such that the Group Companies have been legally or contractually required to provide any notices to any Person in connection with any such Security Incidents. No Actions, order or written notice by any Governmental Authority, or by any Person, are currently or, to the knowledge of the Company, threatened against any of the Group Companies, relating to the breach or violation of any applicable Laws related to the privacy, security or other Processing of Personal Information and, to the knowledge of the Company, there is no reasonable basis for the same.

 

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(l)             The Group Companies (i) exclusively own and possess all right, title and interest in and to the Business Data constituting Owned Intellectual Property, free and clear of any Liens other than Permitted Liens or (ii) have the right to use, exploit, publish, reproduce, distribute, license, sell, and create derivative works of the Business Data, in whole or in part, in substantially the same manner in which the Group Companies receive and use such Business Data prior to the Closing Date. No Group Company is subject to any contractual requirements, privacy policies, or other legal obligations, including based on the Transactions contemplated hereunder, that would prohibit SPAC from receiving or using Personal Information or other Business Data after the Closing Date, in the manner in which the Group Companies receive and use such Personal Information and other Business Data immediately prior to the Closing Date.

 

Section 3.7              Personal Property. Except (i) as has not had and would not reasonably be expected to have a Company Material Adverse Effect or (ii) for assets sold, consumed or disposed of in the Ordinary Course since the Balance Sheet Date, each of the Group Companies good title to, or holds a valid leasehold interest in or license to, its tangible personal property and assets and rights, including the Owned Intellectual Property, in each case, shown to be owned, leased or licensed by it on the Company Financial Statements and free and clear of any Liens, other than Permitted Liens. With respect to the tangible personal property, assets and rights leased by the Group Companies, except as has not had and would not reasonably be expected to have a Company Material Adverse Effect, each of the Group Companies is in compliance with such leases and has a valid leasehold interest free of any Liens, other than Permitted Liens. Such personal property, assets and rights owned, leased or licensed by the Group Companies (including any Company Intellectual Property) constitute (A) all tangible personal property, assets and rights used or held for use in connection with the businesses of the Group Companies as they are conducted on the date hereof, except for such properties, assets and rights the loss of which would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and (B) all the tangible personal property, assets and rights necessary for the Group Companies to continue to conduct their respective businesses following the Closing as they are conducted on the date hereof, except as has not had or would not reasonably be expected to have a Company Material Adverse Effect.

 

Section 3.8              Real Property.

 

(a)             Except as disclosed on Section 3.8(a) of the Company Disclosure Schedules, none of the Group Companies own, and none of the Group Companies has ever owned, any real property.

 

(b)            Section 3.8(b) of the Company Disclosure Schedules sets forth a true, correct and complete list of all Real Property Leases to which any Group Company is a party, together with all amendments, modifications, supplements, extensions, renewals, guaranties, non-disturbance agreements and other similar agreements with respect thereto (collectively, the “Supplemental Lease Documents”). The Company has made available to SPAC a true, correct and complete copy of each Real Property Lease and all Supplemental Lease Documents.

 

(c)            To the knowledge of the Company:

 

(i)            the Company or a Group Company has a valid and enforceable leasehold interest in the Leased Real Property, free and clear of Liens other than Permitted Liens;

 

(ii)           no Group Company is in default under the Real Property Leases;

 

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(iii)          there is no default by any lessor under the Real Property Leases;

 

(iv)          neither the Company nor any Subsidiary has received written notice from any landlord of any ongoing material dispute involving any terms of its lease of any Leased Real Property;

 

(v)           there is no fact or condition which may lead to a breach or default, or permit the termination, modification or acceleration of rent under such Real Property Lease;

 

(vi)          the consummation of the Transaction contemplated by this Agreement does not require the consent of any party to such Real Property Lease, will not result in a breach of or default under such Real Property Lease, or otherwise cause such Real Property Lease to cease to be legal, valid, binding, enforceable and in full force and effect on identical terms following the Closing;

 

(vii)         Except as disclosed on Section 3.8(c)(vii) of the Company Disclosure Schedules, no Group Company has subleased, licensed, or otherwise granted any Person the right to use or occupy such Leased Real Property or any portion thereof;

 

(viii)        no Group Company has failed, nor will fail, to exercise any right of renewal with respect to any Real Property Lease except in the ordinary course of business, consistent with past practice. There are no disputes or forbearance programs in effect as to any such Real Property Lease;

 

(ix)          no written notice has been received by any Group Company from any landlord indicating an intention to terminate any lease of any Leased Real Property prior to the date of the expiration of such lease;

 

(x)           each Group Company has the right to conduct its business in each Leased Real Property for the remaining term of the applicable Real Property Lease;

 

(xi)          any lease or other tenancy entered into by the Company or by any Subsidiary with respect to any Leased Real Property complies with and does not violate applicable subdivision legislation;

 

(xii)          each Group Company has a valid and enforceable leasehold interest under each Real Property Lease and each Real Property Lease free and clear of all Liens, except for Permitted Liens, and with a right to peaceful and quiet possession and quiet enjoyment, is in full force and effect and constitutes a valid and binding obligation of the applicable Group Company that is the lessee thereunder, enforceable against such Group Company and, to the knowledge of the Company, each other party thereto, in accordance with its terms, except as limited by the Enforceability Exceptions; and

 

(xiii)        there are no disputes or forbearance programs in effect as to any Real Property Lease.

 

(d)            All material buildings, structures, improvements, fixtures, building systems and equipment included in the Owned Real Property and Leased Real Property are in reasonable operating condition and repair in all material respects, and are sufficient for the conduct of the business of the Group Companies as is currently conducted and in the Ordinary Course.

 

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(e)            To the knowledge of the Company, there are no pending condemnation, eminent domain, or any other taking by public authority with or without payment of consideration therefor or similar actions with respect to any of the Real Property. To the knowledge of the Company, no notice of such a proposed condemnation has been received by any Group Company.

 

(f)            All interests in Real Property held by the Company or any Group Company are registered against the appropriate titles to the subject lands;

 

(g)            Each of the Owned Real Property and Leased Real Property are supplied with utilities and other services reasonably necessary for the operation of the business of the Group Companies as currently conducted at such Owned Real Property and Leased Real Property, and no fact or condition exists that would result in the termination or impairment of the furnishing of service to any of the Owned Real Property and Leased Real Property of water, sewer, gas, electric, telephone, drainage and other such utility services. The Owned Real Property and Leased Real Property and all improvements thereon, including without limitation, the mechanical systems, HVAC systems, plumbing, electrical, security, utility and sprinkler systems, are in reasonably good working condition and repair, subject only to normal, scheduled maintenance and are reasonably sufficient for the operation thereof for its current use.

 

(h)            The Owned Real Property and the Leased Real Property and the improvements thereon are sufficient for the conduct of the business of the Group Companies as is currently conducted and in the ordinary course, and no business activities of any Group Company take place on lands other than those included in the Owned Real Property and the Leased Real Property.

 

(i)            With respect to the Owned Real Property:

 

(i)            the Company or a Group Company is the registered owner of bare legal title of an estate in fee simple to all Owned Real Property, free and clear of Liens, other than Permitted Liens; and

 

(ii)           the Company or a Group Company does not hold any Owned Real Property in trust for any other party nor as agent for any other party.

 

(j)            With respect to the Other Real Property Interests:

 

(i)            any of the Group Companies is the registered holder of a legal interest in all Other Real Property Interests, free and clear of Liens, other than Permitted Liens, except where the failure to register such Other Real Property Interests (or a legal interest therein) would not, individually or in the aggregate, have a Company Material Adverse Effect; and

 

(ii)           the Other Real Property Interests are valid and in good standing.

 

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(k)            The Owned Real Property and Leased Real Property, the current uses thereof and the conduct of the business thereon by the Group Companies, comply with all restrictive covenants, governmental and quasi-governmental Laws and regulations, including, without limitation, those dealing with zoning, municipal planning schemes, parking access, loading facilities, building, electrical and plumbing codes and fire and public health and safety, except as would not, individually or in the aggregate, have a Company Material Adverse Effect.

 

(l)            No alteration, repair, improvement or other work has been ordered, directed or requested to the in writing to be done or performed to or in respect of the Owned Real Property or Leased Real Property by any municipal, provincial or other competent authority, which alteration, repair, improvement or other work has not been completed, except as would not, individually or in the aggregate, have a Company Material Adverse Effect.

 

(m)            All accounts for work and services performed and materials placed or furnished upon or in respect of the Owned Real Property and the Leased Real Property at the request of the Company or any Subsidiary, including its predecessors in interest, have been fully paid and satisfied, except as would not, individually or in the aggregate, have a Company Material Adverse Effect.

 

(n)            In respect of Owned Real Property on which there are third party leases:

 

(i)            any of the Group Companies are not in default of any of their material obligations as landlord under any of the third party leases and, the tenant under each third party lease is not in default of any of its material obligations as tenant under any such third party lease;

 

(ii)           any lease or other tenancy entered into by the Company or by any Subsidiary with respect to such Owned Real Property complies with and does not violate applicable subdivision legislation;

 

(iii)          the consummation of the Transaction contemplated by this Agreement does not require the consent of any party to such lease, will not result in a breach of or default under such lease, or otherwise cause such lease to cease to be legal, valid, binding, enforceable and in full force and effect on identical terms following the Closing;

 

(iv)          neither the Company nor any Subsidiary have received written notice from any tenant of any ongoing material dispute involving any terms of its lease; and

 

(v)            no written notice has been received by the Company or any Subsidiary from any tenant indicating an intention to vacate its premises or any part thereof or terminate its lease prior to the date of the expiration of its lease.

 

Section 3.9              Environmental Matters.

 

(a)            Except as would not reasonably be expected, individually or in the aggregate, to have a Company Material Adverse Effect:

 

(i)            For the past two (2) years, each Group Company has complied with and is currently in compliance with all applicable Environmental Laws;

 

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(ii)           Each Group Company possesses all Environmental Permits that are required for the operation of the business as presently operated and for the ownership and use of their assets (including the Owned Real Property and Leased Real Property) as presently owned and used, and such Environmental Permits are in good standing and in full force and effect;

 

(iii)          To the knowledge of the Company, there has been no release of any Hazardous Materials in, on, at, or under any of the Owned Real Property and Leased Real Property or any property currently or formerly owned, used, or occupied by any Group Company;

 

(iv)          No Group Company is subject to any pending or, to the knowledge of the Company, threatened, Action, alleging any violation by or liability of such Group Company under any applicable Environmental Law.

 

(v)           No Group Company has received any written notice, order, directive, claim or demand from any Governmental Authority, or any third party, with respect to (a) the generation, storage, use, handling, transportation, treatment, emission, spillage, disposal, release, discharge or removal of any Hazardous Materials that has not been fully cured or resolved, or (b) any actual violation or failure to comply with any Environmental Law that has not been fully cured or resolved; and

 

(vi)          Prior to the date of this Agreement, true, complete and correct copies of all currently in force Environmental Permits issued to any Group Company have been made available to SPAC.

 

(b)            The Company has delivered to SPAC complete copies of all material non-privileged environmental audits, assessments and reports which are within the possession or reasonable control of the Company relating to the environmental condition of the properties currently owned or used by the Company.

 

Section 3.10            Compliance with Other Instruments. None of the Group Companies is in violation of any term of its Governing Documents in any material respects, taken as a whole. None of the Group Companies is in violation of any term or provision of any Governmental Order to which it is party or by which it is bound, which has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The execution and delivery by the Company and the performance by the Company of its obligations pursuant to this Agreement and the Ancillary Agreements to which it is or will be a party will not result in, by the giving of notice, the lapse of time or otherwise, (a) any violation of, conflict with, or (except for obtaining the Company Required Approval, the filing of any documents required by the Final Order, the Interim Order and filings required pursuant to the Plan of Arrangement and the receipt of the Regulatory Approvals) require any consent, filing, notice, waiver or approval or constitute a default under (i) any Group Company’s Governing Documents, (ii) any Contract to which any of the Group Companies is a party or by which any of the Group Companies’ assets are bound or (iii) any applicable Law, Permit or Governmental Order, except, in the case of clause (ii), as disclosed in Section 3.10 of the Company Disclosure Schedules, or (b) the creation of any Lien upon any of the properties or assets of the Company (other than Permitted Liens), except, in the case of clauses (a)(ii), (a)(iii) and (b) of this Section 3.10, to the extent that the occurrence of the foregoing has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

 

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Section 3.11            Compliance with Applicable Laws. Each of the Group Companies is in compliance with, and has during the two (2) years preceding the date of this Agreement been in compliance with, all applicable Laws, except where such failure to comply has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. For the past two (2) years, none of the Group Companies has received any written notice alleging the violation of any applicable Laws, except where such violation has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

 

Section 3.12            Absence of Changes. Except as set forth in ‎Section 3.12 of the Company Disclosure Schedules, since the Interim Balance Sheet Date, (a) there has not been, individually or in the aggregate, any Company Material Adverse Effect and (b) the Group Companies have conducted their businesses in all material respects in the Ordinary Course, other than with respect to the evaluation of and negotiations in connection with this Agreement and the Transactions contemplated hereby (and with respect to ANF, other than the evaluation of and negotiations in connection with the Company’s purchase of additional equity interests in ANF).

 

Section 3.13            Litigation. Except as set forth in Section 3.13 of the Company Disclosure Schedules, as of the date of this Agreement (a) there are no Actions pending or, to the Company’s knowledge, currently threatened in writing against any of the Group Companies or their respective assets or properties before any Governmental Authority that (i) question the validity of this Agreement or any Ancillary Agreement, or the right of the Company to enter into this Agreement or any Ancillary Agreement, or the right of any of the Group Companies to perform its obligations contemplated by this Agreement or any Ancillary Agreement, or (ii) if determined adversely to any Group Company, would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or result in a material adverse change in the aggregate equity ownership of the Key Company Shareholders; (b) none of the Group Companies is a party or subject to the provisions of any Governmental Order; and (c) there is no Action initiated by any of the Group Companies currently pending or which any of the Group Companies currently intends to initiate, except, in the case of each of clauses (a)(i), (b) and (c) of this Section 3.13, as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

 

Section 3.14            Insurance. To the knowledge of the Company, each of the Group Companies has in full force and effect insurance policies that cover such risks and are in such amounts as are determined by the Company to be reasonable for the businesses of the Group Companies, as applicable. True, correct and complete copies in all material respects of such insurance policies as in effect as of the date of this Agreement have been made available to SPAC. All premiums due thereunder have been paid, and no written notice of cancellation or termination has been received by any of the Group Companies with respect to any such policy. The Company has not received any written notice of denial or dispute of coverage for, and to the Company’s knowledge, no insurer has otherwise denied or disputed coverage for, any material claim made by any Group Company under an insurance policy during the last twelve (12) months.

 

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Section 3.15            Governmental Consents. Assuming the accuracy of the representations made by SPAC in ‎Article IV, no consent, clearance, approval or authorization of, or registration, qualification, designation, declaration, notification, application or filing with, any Governmental Authority on the part of any of the Group Companies is required in connection with the valid execution and delivery by the Company of this Agreement or any Ancillary Agreement, or the consummation of any Transaction contemplated hereby or thereby, except for (i) such filings or notices as may be required under the Securities Act or under applicable state securities Laws, (ii) notifications, filings and applications pursuant to applicable Antitrust Laws and the receipt of the Regulatory Approvals, (iii) the filing of any documents required by the Final Order, the Interim Order and filings required pursuant to the Plan of Arrangement and (iv) such other consents, approvals, authorizations, registrations, qualifications, designations, declarations or filings, the failure of which to make or obtain has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

 

Section 3.16            Permits. Each of the Group Companies has all Permits necessary for the conduct of its business as now being conducted, and all such Permits are valid and in full force and effect, except where the lack of such Permits or the failure of such Permits to be valid and in full force and effect does not have, or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. None of the Group Companies is in breach, default, or violation of any such Permits, except as does not have, or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. No modification, suspension, cancellation, withdrawal, or revocation of any such Permit is pending or, to the Company’s knowledge, currently threatened, except as does not have, or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

 

Section 3.17            Brokers or Finders. Except as set forth in ‎Section 3.17 of the Company Disclosure Schedules, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with this Agreement or the Transactions based upon arrangements made by or on behalf of the Group Companies.

 

Section 3.18            Related-Party Transactions. Except as set forth in ‎Section 3.18 of the Company Disclosure Schedules (and other than with respect to actions expressly contemplated by this Agreement, any of the Ancillary Agreements, the Plan of Arrangement or any Company Benefit Plan):

 

(a)            No director, officer, employee, stockholder, warrant holder or Affiliate of any of the Group Companies or any member of such Person’s immediate family or any corporation, partnership or other entity in which such Person has a significant ownership interest or otherwise controls (each, a “Related Party”) is indebted to any of the Group Companies for monies actually borrowed, nor is any of the Group Companies indebted (or committed to make loans or extend or guarantee credit) to any Related Party for monies actually borrowed, other than with respect to advances to employees for expenses in the Ordinary Course.

 

(b)            To the Company’s knowledge, no Related Party has any direct or indirect ownership interest in (i) any Person with which any of the Group Companies is party to a Contract or has a material business relationship or (ii) any Person that competes with any of the Group Companies, except that Related Parties may own stock in publicly traded companies that may compete with each of the Group Companies.

 

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(c)            No Related Party is directly or indirectly interested in any Contract with any of the Group Companies, other than any such Contracts related to such Person’s (i) ownership of Company Shares, options or other securities of the Company, (ii) indemnification by the Company or (iii) salary, commission, consulting fee and other employment benefits provided by the Company to such Person.

 

Section 3.19            Employment and Labor.

 

(a)            The Group Companies are and have been at all times in compliance, in all material respects, with all applicable Laws and Contracts relating to employees and employment or engagement of labor, including, without limitation, all applicable Laws and Contracts relating to wages, vacation pay, hours, overtime, collective bargaining, employment discrimination, accessibility, privacy, civil rights, safety and health, workers’ compensation, pay equity, classification of employees and independent contractors, immigration, and the collection and payment of income tax withholding payroll taxes, Canada Pension Plan remittances, and/or social security Taxes or other similar Taxes. All amounts due and owing to any employee as of the date of this Agreement, including for wages, vacation pay, hours, overtime and severance, have been paid in full, or if accrued are reflected in the books of account, ledgers, order books, records and other financial documents of the Group Companies except as would not result in material liability to the Group Companies.

 

(b)            None of the Group Companies is a party to or otherwise bound by any collective bargaining agreement or other Contract with a labor union, works council or similar employee organization applicable to any employees and, to the knowledge of the Company, there are no activities or proceedings of or on behalf of any labor union, works council or similar organization to organize any such employees. Additionally, (i) there is no unfair labor practice charge or complaint pending before any applicable Governmental Authority relating to the Group Companies or any of their respective employees; (ii) there is no labor strike, material slowdown, material dispute, or material work stoppage or lockout pending or, to the knowledge of the Company, threatened against or affecting any of the Group Companies, and none of the Group Companies has experienced any strike, material slowdown or material work stoppage, lockout or other collective labor action by or with respect to any of their respective employees; (iii) there is no representation claim or petition pending before any applicable Governmental Authority; and (iv) there are no Actions with respect to or relating to any of the Group Companies pending or, to the knowledge of the Company, threatened before any applicable Governmental Authority responsible for the prevention of unlawful employment practices.

 

(c)            To the knowledge of the Company, no allegations of sexual harassment, sex-based discrimination, or sexual misconduct have been made against any current or former employee, officer, individual independent contractor, or director of the Company. There are no material claims, disputes, grievances, or controversies pending or, to the knowledge of the Company, threatened involving the employment of any employee of the Group Companies or the termination of any former employee of the Group Companies. To the knowledge of the Company, there are no material charges, investigations or administrative proceedings pending against any of the Group Companies pursuant to which any current or former employee of any of the Group Companies has alleged illegal discrimination or harassment, violations of health and safety laws, workplace injuries, or whistleblower retaliation.

 

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(d)            To the knowledge of the Company as of the date of this Agreement, no executive or officer of any of the Group Companies intends to terminate his or her employment with any of the Group Companies, nor do the Group Companies have any present intention to terminate the employment of any of the forgoing.

 

(e)            The Company has made available to SPAC a complete and accurate list, as of November 30, 2022, of (i) all then-current employees of the Group Companies by position, together with each employee’s (ii) location of employment; (iii) original start date; (iv) cumulative length of service; (v) annual base salary; (vi) method of compensation (e.g., salaried, hourly); (vii) status as full- or part-time; (viii) status as regular or temporary; (ix) geographic location; (x) classification as exempt or non-exempt from overtime pay requirements to the extent applicable; (xi) annual bonus target, if any; and (xii) any severance potentially payable to such employee upon termination of employment. The Company has made available to SPAC a complete and accurate list, as of November 30, 2022, of all then-current individual independent contractors engaged by any of the Group Companies, together with such individual’s compensation arrangement with any of the Group Companies and whether such individual has entered into a written Contract regarding the individual’s engagement (other than individual independent contractors whose services to the Group Companies consist of the posting of video content to any platforms maintained by any of the Group Companies and whose annual compensation does not exceed $10,000). Except as set forth in Section 3.19(e) of the Company Disclosure Schedules, the employment of each employee of the Group Companies and the engagement of each individual independent contractor of the Group Companies (other than individual independent contractors whose services to the Group Companies consist of the posting of video content to any platforms maintained by any of the Group Companies and whose annual compensation does not exceed $10,000) is terminable at will by the respective Group Company without any material penalty, liability, or severance obligation.

 

Section 3.20            Company Benefit Plans.

 

(a)            ‎Section 3.20(a) of the Company Disclosure Schedules sets forth a true and complete list of each Company Benefit Plan. With respect to each material Company Benefit Plan, the Company has made available to SPAC or its counsel a true, complete and correct copy, to the extent applicable, of (i) each document constituting a material part of such Company Benefit Plan (or a complete and accurate description of any unwritten Company Benefit Plan); (ii) the most recent member booklet or summary plan description, including any summary of material modifications; (iii) the most recent actuarial report or other financial report or statements relating to such Company Benefit Plan; (iv) any trust agreement (currently in effect) relating to such Company Benefit Plan; (v) Form 5500 and all schedules and attachments thereto filed with the Internal Revenue Service for the last two (2) completed plan years; (vi) the most recent determination letter or pre-approved plan letter; (vii) nondiscrimination testing results for the last two (2) completed plan years and details of any corrections; (viii) any non-routine correspondence with any Governmental Authority within the past three (3) years concerning such Company Benefit Plan; and (ix) evidence of registration of such Company Benefit Plan.

 

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(b)            Each Company Benefit Plan has been established, administered, maintained, operated and funded in all material respects in accordance with its terms, and in all material respects in compliance with all applicable Laws. There are no pending or, to the knowledge of the Company, threatened actions, claims or lawsuits by any Person against or relating to the Company Benefit Plans (other than routine benefits claims), and there have been no such actions, claims or lawsuits for the last five (5) years. No Company Benefit Plan is presently, or for the last five (5) years has been, under audit or examination (nor has written notice been received of a potential investigation, audit or examination) by any Governmental Authority. No event has occurred and no condition exists that would reasonably be expected to subject any of the Group Companies to any material Tax, penalty or fine in connection with any Company Benefit Plan.

 

(c)            No Company Benefit Plan is, and none of the Group Companies has within the last six (6) years sponsored, established, maintained, contributed to or been required to contribute to, or in any way has any liability (whether on account of an ERISA Affiliate or otherwise), directly or indirectly, with respect to any Company Benefit Plan that is, (i) a plan other than one maintained primarily outside the United States, (ii) a “registered pension plan”, a “deferred profit sharing plan”, a “registered retirement savings plan”, or a “retirement compensation arrangement” as defined in subsection 248(1) of the Income Tax Act (Canada), (iii) single employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) subject to Section 412 of the Code and/or Title IV of ERISA, (iv) a multi-employer pension plan within the meaning of Section 3(37) or 4001(a)(3) of ERISA, (v) a “multiple employer plan” (within the meaning of Section 413 of the Code) or (vi) a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA).

 

(d)            All contributions, premium payments and other amounts required to have been paid under or with respect to any Company Benefit Plan have been timely paid in accordance with the terms of such Company Benefit Plan except as would not result in material liability to the Group Companies.

 

(e)             Except as set forth in Section 3.20(e) of the Company Disclosure Schedules, none of the Company Benefit Plans provide medical, health, life or other welfare benefits after the termination of a participant’s employment or engagement, as applicable, except as may be required by applicable Law, at the sole expense of the participant or the participant’s beneficiary.

 

(f)             Except for accelerated vesting of certain Company Options, Company RSUs and restricted Company Common Shares pursuant to the terms of the applicable grant agreements, and disclosed on ‎Section 3.20(f) of the Company Disclosure Schedules, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in combination with another event) (i) result in any payment becoming due, or increase the amount of any compensation or benefits due, to any employee, director or individual independent contractor of any of the Group Companies or with respect to any Company Benefit Plan; (ii) increase any benefits otherwise payable under any Company Benefit Plan; (iii) result in the acceleration of the time of payment or vesting of any such compensation or benefits, or the forgiveness of indebtedness of any employee, director or individual independent contractor of any of the Group Companies; or (iv) result in an obligation to fund or otherwise set aside assets to secure to any extent any of the obligations under any Company Benefit Plan.

 

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(g)            Neither the execution of this Agreement nor the consummation of the Transactions contemplated hereby, either alone or in conjunction with any other event, in respect of any “disqualified individual” within the meaning of Section 280G of the Code, could give rise to (or already has resulted in) a payment or provision of any other benefit (including accelerated vesting) that, individually or collectively, would not be deductible by reason of Section 280G of the Code or would be subject to an excise Tax under Section 4999 of the Code. No Person is entitled to receive any additional payment (including any Tax gross-up or other payment) from any of the Group Companies as a result of the imposition of the excise Taxes required by Section 4999 of the Code or any Taxes required by Section 409A of the Code.

 

(h)            All Company Options and Company RSUs that are held by individuals who are U.S. taxpayers comply in all material respects with the applicable with the requirements of Section 409A of the Code and all regulations and other applicable guidance thereunder. Each Company Option was granted in accordance with the terms of the applicable Company Option Plan, and each Company Option granted to a U.S. taxpayer has been granted with an exercise price that is no less than the fair market value of the underlying Company Common Shares on the date of grant, as determined in accordance with Section 409A of the Code. Each Company RSU was granted in accordance with the terms of the applicable Company RSU Plan, and each Company RSU granted to a U.S. taxpayer complies or falls within an exception to Section 409A of the Code.

 

(i)              Each Company Benefit Plan that is intended to be qualified under Section 401(a) of the Code or Section 401(k) of the Code has (i) timely received a favorable determination letter from the U.S. Internal Revenue Service (the “IRS”) covering all of the provisions applicable to such plan for which determination letters are currently available that the Company Benefit Plan is so qualified and each trust established in connection with such Company Benefit Plan is exempt from federal income taxation under Section 501(a) of the Code or (ii) is entitled to rely on a favorable opinion letter from the IRS, and to the knowledge of the Company, no fact or event has occurred since the date of such determination or opinion letter or letters from the IRS that could reasonably be expected to result in the loss of the qualified status of any such Company Benefit Plan or the exempt status of any such trust.

 

Section 3.21            Tax Matters. For purposes of this Section 3.21, the Group Companies shall include the Merger Subsidiaries.

 

(a)             Each Group Company has prepared and filed all material Tax Returns required to have been filed by it, all such Tax Returns are true and complete in all material respects and prepared in compliance in all material respects with all applicable Laws and Governmental Orders, and each Group Company has paid all material amounts of Taxes required to have been paid by it regardless of whether shown on a Tax Return.

 

(b)            Each Group Company has timely withheld and paid to the appropriate Tax Authority all material amounts required to have been withheld and paid in connection with amounts paid or owing to any employee, individual independent contractor, other service providers, equity interest holder or other third-party.

 

(c)             Each Group Company has timely collected and paid the appropriate Tax Authority all material amounts of Taxes required to have been so collected and paid.

 

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(d)            No Group Company is currently the subject of a Tax audit or examination or has been informed in writing of the commencement or anticipated commencement of any Tax audit or examination that has not been resolved or completed.

 

(e)            No Group Company has consented to extend or waive the time in which any material Tax may be assessed or collected by any Tax Authority, other than any such extensions or waivers that are no longer in effect or that were extensions of time to file Tax Returns obtained in the Ordinary Course of business, in each case with respect to Taxes.

 

(f)             No “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. Law), private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into by, or issued by any Tax Authority with respect to any Group Company which agreement or ruling would be effective after the Closing Date.

 

(g)            No Group Company is or has been a party to any “listed transaction” as defined in Section 6707A of the Code and Treasury Regulations Section 1.6011-4 (or any corresponding or similar provision of state, local or non-U.S. Tax Law).

 

(h)            There are no Liens for Taxes on any assets of the Group Companies other than for Taxes described in clause (ii) of the definition of Permitted Liens.

 

(i)             During the two (2)-year period ending on the date of this Agreement, no Group Company was a distributing corporation or a controlled corporation in a transaction purported or intended to be governed by Section 355 of the Code.

 

(j)             No Group Company (i) has been a member of an affiliated group filing a consolidated, combined, affiliated, unitary or similar Tax Return (other than a group the common parent of which was a Group Company or any of its current Affiliates) or (ii) has any material liability for the Taxes of any Person (other than a Group Company or any of its current Affiliates) under Section 160 of the Tax Act or Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or non-U.S. Law), as a transferee or successor or Contract (other than any Contract entered into in the ordinary course of business and the principal purpose of which does not relate to Taxes).

 

(k)            None of the Group Companies will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in, or improper use of, a method of accounting; (ii) installment sale or open transaction; (iii) prepaid amount or deferred revenue; or (iv) any agreement entered into with any Governmental Authority in respect of Taxes. None of the Group Companies has made an election pursuant to Section 965(h) of the Code.

 

(l)             No written claims have ever been made by any Tax Authority in a jurisdiction where a Group Company does not file Tax Returns that such Group Company is or may be subject to taxation by that jurisdiction, which claims have not been resolved or withdrawn.

 

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(m)           No Group Company is a party to any Tax allocation, Tax sharing or Tax indemnity or similar agreements (other than (i) one that is included in a Contract entered into in the ordinary course of business that is not primarily related to Taxes, or (ii) with any other Group Company or any of its current Affiliates).

 

(n)            No Group Company has, or has ever been deemed to have, for purposes of the Tax Act or any relevant provincial legislation, acquired or had the use of property for proceeds greater than the fair market value thereof from, or disposed of property for proceeds less than the fair market value thereof to, or received or performed services or had the use of property for other than the fair market value from or to, or paid or received interest or any other amount other than at a fair market value rate to or from, any Person with whom it does not deal at arm’s length within the meaning of the Tax Act. Each Group Company has complied in all material respects with the transfer pricing provisions of applicable Tax Laws.

 

(o)            The Company Shares are not “taxable Canadian property” within the meaning of the Tax Act.

 

(p)            The total fair market value of all the shares that are held directly or indirectly by the Company and are shares of foreign affiliates (within the meaning of the Tax Act) of the Company does not exceed 75% of the total fair market value (determined without reference to debt obligations of any corporation resident in Canada in which the Company has a direct or indirect interest) of all of the properties owned by the Company.

 

(q)            The Company (i) is, and has always been, treated as a corporation for U.S. federal income tax purposes and (ii) will continue to be treated as a corporation for U.S. federal income tax purposes at the time of and following the Company Continuance for at least two (2) calendar years following the Closing Date.

 

(r)            The Company was not a passive foreign investment company, as defined in Section 1297(a) of the Code (“PFIC”) for its 2022 taxable year. On the basis of facts presently known, the Company does not believe that it will be a PFIC for its 2022 taxable year or its 2023 taxable year.

 

(s)            The Company has not been, and to the knowledge of the Company will not become, a “controlled foreign corporation” as defined in Section 957 of the Code (“CFC”) during its 2022 taxable year. On the basis of facts presently known, the Company does not expect to be a CFC during its 2023 taxable year.

 

(t)            There are no circumstances which exist and would result in, or which have existed and resulted in, the application of any of Sections 78, 80, 80.01, 80.02, 80.03 or 80.04 of the Tax Act, or any equivalent provincial provision to a Group Company.

 

(u)            The Company is classified as a corporation for U.S. federal income tax purposes. Section 3.21(u) of the Company Disclosure Schedule sets forth all elections made by any Group Company pursuant to Treasury Regulations Section 301.7701-3.

 

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(v)           No outstanding options, warrants or other rights to purchase or acquire Company Shares (i) were issued by the Company (or any current or former Affiliate of the Company) with an exercise price that was less than the fair value of the underlying Company Shares (or Affiliate shares) for which the options, warrants or other rights were exercisable at the time such options, warrants or other rights were issued, (ii) are, or have ever been, properly treated as stock for U.S. federal income tax purposes, or (iii) were issued with terms such that a holder of such options, warrants or other rights could be reasonably expected to be economically compelled to exercise such options, warrants or other rights.

 

(w)           The Company will not be an investment company within the meaning of Section 351(e)(1) of the Code and Treasury Regulations Section 1.351-1(c)(1) immediately prior to the Share Exchange. To the knowledge of the Group Companies, TopCo will not be an investment company within the meaning of Section 351(e)(1) of the Code and Treasury Regulations Section 1.351-1(c)(1) immediately following the completion of the Merger.

 

(x)            To the knowledge of the Group Companies, there are no facts or circumstances that could reasonably be expected to prevent the Transactions from qualifying for the Intended U.S. Tax Treatment.

 

(y)            No Group Company has taken or agreed to take any action not contemplated by this Agreement and/or any Ancillary Agreement that would reasonably be expected to prevent the Transactions from qualifying for the Intended U.S. Tax Treatment.

 

(z)            Neither the Company nor any of its Subsidiaries will be required to pay any material Tax after the Closing Date as a result of any deferral of a payment obligation or advance of a credit with respect to Taxes to the extent relating to any action, election, deferral, filing, or request made or taken by the Company or any Subsidiary (including the non-payment of a Tax) on or prior to the Closing Date (including (1) the delay of payment of employment Taxes under any COVID-19 Tax Measure or any similar notice or order or law, and (2) the advance refunding or receipt of credits under any COVID-19 Tax Measure (including, without limitation, Section 3606 of the CARES Act)).

 

(aa)          No Group Company (i) is or was a “surrogate foreign corporation” within the meaning of Section 7874(a)(2)(B) of the Code or is treated as a U.S. corporation under Section 7874(b) of the Code; or (ii) was created or organized in the United States such that such entity would be taxable in the United States as a domestic entity pursuant to United States Treasury Regulations Section 301.7701-5(a).

 

(bb)         Each of the Group Companies is, and has been since formation, a Tax resident only in is jurisdiction of incorporation for Tax purposes and is not and has not been treated as having a permanent establishment (within the meaning of an applicable Tax treaty), branch or taxable presence in any jurisdiction other than its jurisdiction of incorporation. Each of TopCo and the Company are, and have been since formation, treated as a foreign corporation for U.S. federal income tax purposes.

 

(cc)          None of the Group Companies has taken, permitted or agreed to take any action, intends to or plans to take any action, or has any knowledge of any fact or circumstance that could reasonably be expected to cause TopCo to be treated as (i) a Tax resident of any jurisdiction other than Canada following the Transactions, (ii) a “domestic corporation” (as such term is defined in Section 7701 of the Code) as a result of the application of Section 7874(b) of the Code or (iii) a “surrogate foreign corporation” within the meaning of Section 7874(a)(2)(B) of the Code after the Closing Date.

 

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(dd)         The Company, or one or more of its “qualified subsidiaries” (within the meaning of Treasury Regulation Section 1.367(a)-3(c)(5)(vii)), is and has been engaged in an active trade or business outside the United States, within the meaning of Treasury Regulation Section 1.367(a)-2(d)(2), (3), and (4), for a continuous period of at least thirty-six (36) months immediately preceding the Closing Date. Pursuant to Treasury Regulations Section 1.367(a)-3(c)(5)(vii), the Company did not acquire any of such qualified subsidiaries for the principal purpose of satisfying the active trade or business test. Neither the Company nor any such “qualified subsidiary” has an intention to substantially dispose of or discontinue such trade or business or the qualified subsidiary conducting such trade or business.

 

(ee)          None of the Group Companies have any current plan or intention to: (i) merge or combine with or into another corporation, (ii) liquidate (including any transaction that would result in a deemed liquidation for U.S. federal income tax purposes), or (iii) cause SPAC to (A) merge with and into another corporation (other than pursuant to the Merger) or liquidate (including any transaction that would result in a deemed liquidation for U.S. federal income tax purposes).

 

(ff)           To the knowledge of the Group Companies, no Company Shareholder, SPAC Stockholder or PIPE Investor (i) has any current plan or intention to dispose of or otherwise transfer the TopCo Common Shares following Closing or (iii) is currently under any binding agreement to dispose of or otherwise transfer the TopCo Common Shares following Closing.

 

(gg)         There are no requests for rulings or determinations in respect of any Taxes in progress or pending between any Group Company and any Tax Authority.

 

(hh)         To the extent required under applicable Law, each Group Company has complied with all transfer pricing requirements under the Tax Act and under applicable Law of all other jurisdictions in which it carries on business.

 

(ii)            No Group Company has ever had an obligation to file an information return pursuant to subsection 237.3(2) of the Tax Act.

 

Section 3.22           Books and Records. The minute books of each of the Group Companies contain complete and accurate records in all material respects of all meetings and other corporate actions of each of the Company Shareholders, the Company Board or the Subsidiaries’ shareholders or board of directors (or similar governing body) and all committees, if any, appointed by the Company Board or the Subsidiaries’ board of directors (or similar governing body), as applicable. The central securities ledger, register of shareholders or equivalent document of each of the Group Companies is complete and reflects all issuances, transfers, repurchases and cancellations of shares of share capital of each of the Group Companies, in each case except for any inaccuracies that are immaterial.

 

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Section 3.23           Foreign Corrupt Practices Act. In the past two (2) years, none of the Group Companies or their respective Subsidiaries, nor any of their respective directors, officers, employees or, to the Company’s knowledge, agents or other third parties acting on behalf of the Company, have corruptly made, directly or knowingly indirectly, any payment or promise to pay, or any gift or promise to give or authorized such a promise or gift, of any money or anything of value to (a) any foreign official (as such term is defined in the U.S. Foreign Corrupt Practices Act (the “FCPA”)) for the purpose of influencing any official act or decision of such foreign official or inducing him or her to use his or her influence to affect any act or decision of a Governmental Authority or (b) any foreign political party or official thereof or candidate for foreign political office for the purpose of influencing any official act or decision of such party, official or candidate or inducing such party, official or candidate to use his, her or its influence to affect any act or decision of a Governmental Authority, in the case of both clauses (a) and (b) above in order to assist any of the Group Companies to obtain or retain business for, or direct business to any of the Group Companies in violation of the Anti-Bribery Laws. No Action by or before any Governmental Authority involving any of the Group Companies with respect to FCPA or any other applicable Anti-Bribery Laws is pending or, to the Company’s knowledge, threatened. The Group Companies have implemented and maintained policies and procedures reasonably designed to promote compliance with applicable Anti-Bribery Laws.

 

Section 3.24           Anti-Money Laundering. The operations of each of the Group Companies are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, applicable provisions of the USA PATRIOT Act of 2001, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), and the money laundering Laws of all jurisdictions to the extent applicable to each of the Group Companies, or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority (collectively, the “Anti-Money Laundering Laws”) in each case, to the extent applicable to each of the Group Companies, and, no Action by or before any Governmental Authority involving any of the Group Companies with respect to Anti-Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

Section 3.25           Sanctions. None of any of the Group Companies nor any of their respective directors or officers, or, to the knowledge of the Company, any of its Affiliates, employees, or agents, is a Person that is, or is 50% or more owned or controlled by, a Person that is (i) the subject of any Sanctions (a “Sanctioned Person”); nor (ii) organized, incorporated, or ordinarily resident in a country or territory that is the subject of comprehensive Sanctions (as of the date of this Agreement, Cuba, Iran, North Korea, Syria, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic) (a “Sanctioned Country”). For the past two (2) years, to the Company’s knowledge, none of the Group Companies has engaged in, or is now engaged in, any dealings or transactions with any Sanctioned Person, or in any Sanctioned Country, in violation of Sanctions.

 

Section 3.26           Export Controls. The Group Companies, and to the Company’s knowledge, their respective Representatives in their capacity as such, have during the two (2) years preceding the date of this Agreement been in compliance with, in all material respects, all applicable Export Laws, and to the knowledge of the Company, none of the Group Companies has (A) received written notice of, any actual, alleged or potential violation of any Export Laws or (B) been a party to or the subject of any pending (or to the knowledge of the Company, threatened) Action by or before any Governmental Authority (including receipt of any subpoena) related to any actual, alleged or potential violation of any Export Laws.

 

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Section 3.27           Proxy/Registration Statement and Company Information Circular. The Company Information Circular and the information supplied by the Company in writing specifically for inclusion or incorporation by reference in the Proxy/Registration Statement (or any amendment thereof or supplement thereto) or in any current report of SPAC on Form 8-K shall not (i) in the case of the Proxy/Registration Statement, on the effective date of the Proxy/Registration Statement, (ii) in the case of the Proxy/Registration Statement or any current report of SPAC on Form 8-K, when each is filed, made available, mailed or distributed, as the case may be, (iii) in the case of the Proxy/Registration Statement, at the time of the SPAC Stockholder Meeting, and (iv) in the case of the Company Information Circular, at the time the Company Information Circular is first made available, mailed or distributed, as the case may be, to the Company Shareholders, contain any untrue statement of a material fact or fail 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 were made, not misleading.

 

Section 3.28           Board Approval. The Company Board has, as of the date of this Agreement, unanimously (a) declared the advisability of the transactions contemplated by this Agreement, (b) determined that the transactions contemplated hereby are in the best interests of the Company Shareholders, and (c) subject to the effectiveness of the Proxy/Registration Statement, receipt of the Regulatory Approvals, and distribution of the Company Information Circular, recommended that the Company Shareholders vote for the Company Resolution. The Company Required Approval represents the only votes of the holders of any of the Company Securities necessary in connection with entry into this Agreement by the Company and the consummation of the Transactions.

 

Section 3.29           Shareholder Support Agreement. The Shareholder Support Agreement, once acted upon at the Company Shareholders Meeting, will satisfy the approval thresholds required pursuant to the Company Required Approval.

 

Section 3.30           Shareholder Claims. Except as set forth in Section 3.30 of the Company Disclosure Schedules, (i) there have been no Actions commenced, or to the Company’s knowledge, threatened in writing, against any Group Company by or on behalf of, and (ii) no Group Company has received written notice of any claim or dispute from (including with respect to (x) any intent to dissent from any material transaction, including the Transactions, or (y) any intent to exercise appraisal rights), a Company Shareholder or other holder of shares, options, warrants or other securities (convertible or otherwise) in any Group Company.

 

Section 3.31           Food Laws.

 

(a)            All Company Products are, and for the past two (2) years have been, in compliance with all applicable Food Laws except as has not had or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

 

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(b)            For the past two (2) years, no Company Product has been subject to a material recall, market withdrawal, seizure, detention, public notification, field notification, FDA Reportable Food Registry report, import or export restriction or prohibition, suspension of manufacturing, marketing, or distribution, or other similar action, in each case relating to an alleged lack of safety or compliance with applicable Food Laws.

 

(c)            For the past two (2) years, none of the Group Companies has received any FDA Form 483, warning letter, untitled letter, notice of violation, or other written notice from a Governmental Authority alleging material noncompliance with any applicable Food Laws.

 

(d)            For the past two (2) years, none of the Group Companies (i) has received written notice of any Action by a Governmental Authority alleging material noncompliance with any applicable Food Laws, nor, to the knowledge of the Company, has any such Action been threatened, or (ii) is party to any monitoring agreement, consent decree, settlement order, or other similar written agreement entered into with or imposed by any Governmental Authority. None of the Group Companies has been disqualified or disbarred by the FDA or engaged in any conduct that would reasonably be expected to result in such debarment.

 

Section 3.32           No Additional Representations or Warranties. NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO SPAC OR ANY OF ITS REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION (INCLUDING ANY FINANCIAL PROJECTIONS OR OTHER SUPPLEMENTAL DATA), EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE ‎III (AS MODIFIED BY THE COMPANY DISCLOSURE SCHEDULES), THE ANCILLARY AGREEMENTS OR IN THE CASE OF FRAUD, (A) NONE OF THE COMPANY, ANY COMPANY NON-RECOURSE PARTY OR ANY OTHER PERSON MAKES, AND THE COMPANY EXPRESSLY DISCLAIMS AND NEGATES, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, (I) IN CONNECTION WITH THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, (II) WITH RESPECT TO THE GROUP COMPANIES, AND ANY MATTER RELATING TO ANY OF THEM, INCLUDING THEIR AFFAIRS, THE CONDITION, VALUE OR QUALITY OF THE ASSETS, LIABILITIES, FINANCIAL CONDITION OR RESULTS OF OPERATIONS, OR (III) WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF ANY STATEMENT OR INFORMATION THAT HAVE BEEN MADE AVAILABLE TO SPAC OR ANY OF ITS REPRESENTATIVES, INCLUDING THE MATERIALS RELATING TO THE BUSINESS AND AFFAIRS OR HOLDINGS OF THE GROUP COMPANIES OR ANY PRESENTATION OF THE BUSINESS AND AFFAIRS OF THE GROUP COMPANIES BY THE MANAGEMENT OF THE COMPANY OR OTHERS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR BY THE ANCILLARY AGREEMENTS, AND (B) NO STATEMENT OR INFORMATION CONTAINED IN ANY OF SUCH MATERIALS OR MADE IN ANY SUCH PRESENTATION SHALL BE DEEMED A REPRESENTATION OR WARRANTY HEREUNDER OR OTHERWISE OR DEEMED TO BE RELIED UPON BY SPAC, ANY SPAC NON-RECOURSE PARTY OR ANY OTHER PERSON IN EXECUTING, DELIVERING AND PERFORMING THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE ‎III, THE ANCILLARY AGREEMENTS OR IN THE CASE OF FRAUD, IT IS UNDERSTOOD THAT ANY COST ESTIMATES, PROJECTIONS, FORECASTS, BUDGETS OR OTHER PREDICTIONS, ANY DATA, ANY FINANCIAL INFORMATION OR ANY MEMORANDA OR OFFERING MATERIALS OR PRESENTATIONS, INCLUDING ANY OFFERING MEMORANDUM OR SIMILAR MATERIALS MADE AVAILABLE BY ANY GROUP COMPANY, ARE NOT AND SHALL NOT BE DEEMED TO BE OR TO INCLUDE REPRESENTATIONS OR WARRANTIES OF THE COMPANY, ANY COMPANY NON-RECOURSE PARTY OR ANY OTHER PERSON, AND, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE ‎III, THE ANCILLARY AGREEMENTS OR IN THE CASE OF FRAUD, ARE NOT AND SHALL NOT BE DEEMED TO BE RELIED UPON BY SPAC, ANY SPAC NON-RECOURSE PARTY OR ANY OTHER PERSON IN EXECUTING, DELIVERING OR PERFORMING THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

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Article IV
REPRESENTATIONS AND WARRANTIES OF SPAC

 

SPAC hereby represents and warrants to the Company the following, except as set forth in (i) the SPAC SEC Filings (excluding any disclosures set forth in the “risk factor” section or in any other section to the extent it is reasonably apparent on its face to be forward-looking statements or cautionary or predictive in nature) or (ii) the Disclosure Schedules delivered to the Company by SPAC on the date of this Agreement (the “SPAC Disclosure Schedules”), which exceptions shall, in the case of this clause (ii), be deemed to be part of the representations and warranties made hereunder subject to, and in accordance with, ‎Section 12.9 (and any reference in this Agreement or any Ancillary Agreement to this ‎Article IV or any provision thereof shall be deemed to refer to such Article or provision as modified by the SPAC Disclosure Schedules in accordance with ‎Section 12.9):

 

Section 4.1             Organization, Good Standing, Corporate Power and Qualification. SPAC is a corporation, duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. SPAC has the requisite corporate power and authority to own and operate its properties and assets and to carry on its business as presently conducted. SPAC is presently qualified to do business in each jurisdiction in which it is required to be so qualified and is in good standing in each such jurisdiction (or the equivalent thereof, if applicable, in each case, with respect to the jurisdictions that recognize the concept of good standing or any equivalent thereof), except where the failure to be so qualified or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a SPAC Material Adverse Effect. As of the date of this Agreement, SPAC has either delivered or made available to the Company, including via the SEC’s Electronic Data Gathering Analysis and Retrieval system database, accurate and complete copies of the Governing Documents of SPAC, including all amendments thereto as in effect as of the date of this Agreement.

 

Section 4.2             Capitalization.

 

(a)            As of the date of this Agreement, (i) 100,000,000 shares of SPAC Common Stock are authorized, of which 8,638,815 are issued and outstanding, (ii) 1,000,000 shares of SPAC Preferred Stock are authorized, of which zero (0) are issued and outstanding and (iii) 10,275,000 SPAC Warrants are outstanding.

 

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(b)            All shares of SPAC Common Stock that are issued and outstanding have been duly authorized and validly issued in compliance with applicable Laws, are fully paid and nonassessable, and have not been issued in violation of (i) the SPAC’s Governing Documents, or (ii) any purchase option, call option, right of first refusal, right of first offer, preemptive right, subscription right or other similar right. The SPAC Capital Stock has the rights, preferences, privileges and restrictions set forth in SPAC’s Governing Documents.

 

(c)            Except for the rights under the SPAC Warrants to purchase 10,275,000 shares of SPAC Common Stock, there are no outstanding options, warrants or other equity appreciation, phantom equity, profit participation or similar rights for the purchase or acquisition from SPAC of any SPAC Capital Stock. Except as set forth in Section 4.2(c) of the SPAC Disclosure Schedules and the Ancillary Agreements, SPAC is not a party to or subject to any agreement or understanding and, to SPAC’s knowledge, there is no agreement or understanding between any Persons, that affects or relates to the voting or giving of written consents with respect to any security of SPAC or by a director of SPAC.

 

(d)            Other than the SPAC Warrants or any rights to acquire securities of SPAC pursuant to the Transactions arising under this Agreement, there are no options, warrants, preemptive rights, calls, convertible securities, conversion rights or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of SPAC or obligating SPAC to issue or sell any shares of capital stock of, or other equity interests in SPAC. SPAC is not a party to, or otherwise bound by, and has not granted, any equity appreciation rights, participations, phantom equity or similar rights. There are no voting trusts, voting agreements, proxies, shareholder agreements or other agreements with respect to the voting or transfer of the capital stock, or other equity interests, of SPAC. SPAC does not own or control, directly or indirectly, any equity interests in any Person. There are no outstanding bonds, debentures, notes or other indebtedness of SPAC having the right to vote (or that is convertible into, or exchangeable for, securities having the right to vote) on any matter for which SPAC Stockholders may vote. SPAC has not adopted any shareholder rights plan or similar agreement to which it would be or become subject, party or otherwise bound.

 

(e)            Other than rights to exercise the SPAC Share Redemption and other rights in respect of disbursements from and liquidation of the trust under the Trust Agreement, there are no outstanding contractual obligations of SPAC to repurchase, redeem or otherwise acquire any SPAC Capital Stock or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any Person.

 

Section 4.3             Due Authorization. SPAC has all requisite exempted company, corporate, limited liability company or other similar power and authority to execute and deliver this Agreement and each Ancillary Agreement to which it is or will be a party, to perform its obligations hereunder and thereunder and, subject only to obtaining the SPAC Stockholders’ Approval, the effectiveness of the Proxy/Registration Statement, receipt of the Regulatory Approvals, the filing of any documents required by the Final Order, the Interim Order and filings required pursuant to the Plan of Arrangement and the consummation of the Arrangement, to consummate the transactions contemplated hereby and thereby. All corporate action on the part of SPAC and its respective directors, officers and stockholders necessary for the (a) authorization, execution and delivery by SPAC of this Agreement and the Ancillary Agreements to which it is or will be a party, (b) consummation of the Transactions and (c) performance of each of their obligations hereunder or thereunder has been taken or will be taken prior to the Closing, subject to (i) obtaining the SPAC Stockholders’ Approval, (ii) the receipt of the Regulatory Approvals and (iii) the consummation of the Arrangement. This Agreement and the Ancillary Agreements to which it is or will be a party (assuming due authorization, execution and delivery by each other party hereto and thereto) constitute or will constitute at the Closing (with respect to the Ancillary Agreements to be executed at the Closing) valid and binding obligations of SPAC, enforceable against it in accordance with their respective terms, except as limited by the Enforceability Exceptions.

 

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Section 4.4             Financial Statements; Internal Controls.

 

(a)            Except as set forth in ‎Section 4.4(a) of the SPAC Disclosure Schedules, the financial statements of SPAC contained in the SPAC SEC Filings (the “SPAC Financial Statements”) are true and correct in all material respects and present fairly the financial condition, operating results, stockholders equity and cash flows of SPAC as of the dates and during the periods indicated. The SPAC Financial Statements have been prepared in accordance with GAAP and Regulation S-X, applied on a consistent basis throughout the periods indicated (except that they are subject to normal and recurring year-end adjustments and as may be indicated in the notes thereto or, in the case of unaudited financial statements, as permitted by Form 10-Q of the SEC) and 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. The books of account, ledgers, order books, records and other financial documents of SPAC accurately and completely reflect all material information relating to SPAC’s business, the nature, acquisition, maintenance, location and collection of its assets and the nature of all transactions giving rise to its obligations and accounts receivable.

 

(b)            SPAC has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act) that are designed to provide reasonable assurances that material information relating to SPAC (including any fraud that involves management or other employees who have a significant role in the internal controls of SPAC), and other material information required to be disclosed by SPAC in the reports and other documents that it files or furnishes under the Exchange Act, is made known to the management of SPAC by others within SPAC and are effective in recording, processing, summarizing and reporting such material information within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to SPAC’s principal executive officer and its principal financial officer as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. Such disclosure controls and procedures are effective in timely alerting SPAC’s principal executive officer and principal financial officer to material information required to be included in SPAC’s periodic reports required under the Exchange Act. SPAC has established and maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

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(c)            Since the organization of SPAC, neither SPAC nor, to the knowledge of SPAC, any Representative of SPAC has received or otherwise had or obtained knowledge of any written complaint, allegation, assertion or claim, regarding the accounting or auditing practices, procedures, methodologies or methods of SPAC with respect to the SPAC Financial Statements or the internal accounting controls of SPAC, including any written complaint, allegation, assertion or claim that SPAC has engaged in questionable accounting or auditing practices. Since the organization of SPAC, no attorney representing SPAC, whether or not employed by SPAC, has reported evidence of a violation of securities Laws, breach of fiduciary duty or similar violation by SPAC or any of its Representatives to the SPAC Board or any committee thereof or to any director or officer of SPAC. Since the organization of the SPAC, neither the SPAC nor, to the knowledge of SPAC, any Representative (including its independent auditors) has identified or been made aware of (i) any significant deficiency or material weakness in the system of internal accounting controls utilized by SPAC, (ii) any fraud, whether or not material, that involves SPAC’s management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilized by SPAC or (iii) any claim or allegation regarding any of the foregoing.

 

(d)            SPAC has no liability or obligation, absolute or contingent, individually or in the aggregate, that would be required to be set forth on a consolidated balance sheet of SPAC prepared in accordance with GAAP applied and in accordance with past practice, other than (i) obligations and liabilities that have not had and would not reasonably be expected to have, individually or in the aggregate, a SPAC Material Adverse Effect, (ii) obligations and liabilities under Contracts incurred in the Ordinary Course (other than due to a breach under any such Contracts, or any act or omission that with the giving of notice, the lapse of time or otherwise, would constitute a breach thereunder), (iii) SPAC Transaction Expenses, (iv) obligations and liabilities arising under this Agreement or the Ancillary Agreements to which it is or will be a party, and (v) obligations and liabilities reflected, or reserved against, in the latest balance sheet included in the SPAC Financial Statements or disclosed in the notes thereto or as set forth in ‎Section 4.4(d) of the SPAC Disclosure Schedules. Except as set forth in ‎Section 4.4(d) of the SPAC Disclosure Schedules or to the extent, individually and in the aggregate, de minimis, as of the date of this Agreement, SPAC does not have any Indebtedness for borrowed money nor has it incurred any guarantees in respect of Indebtedness for borrowed money. SPAC does not have any material off-balance sheet arrangements that are not disclosed in the SPAC SEC Filings.

 

Section 4.5             Compliance with Other Instruments. SPAC is not in violation of any term of its respective Governing Documents in any material respects, taken as a whole. SPAC is not in violation of any term or provision of any Governmental Order by which it is bound which has had or would reasonably be expected to have, individually or in the aggregate, a SPAC Material Adverse Effect. The execution, delivery and the performance by SPAC of its obligations pursuant to this Agreement and the Ancillary Agreements to which it is or will be a party will not result in, by the giving of notice, the lapse of time or otherwise, (a) any violation of, conflict with, or subject to obtaining the SPAC Stockholders’ Approval, require any consent, filing, notice, waiver or approval or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, (i) its Governing Documents, (ii) any Contract to which it is a party or by which its assets are bound or (iii) any applicable Law, Permit or Governmental Order, nor (b) the creation of any Lien upon any of its properties or assets (other than Permitted Liens) except, in the case of clauses (a)(ii), (a)(iii) and (b), to the extent that the occurrence of the foregoing has not had, and would not reasonably be expected to have, individually or in the aggregate, a SPAC Material Adverse Effect.

 

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Section 4.6             Compliance with Applicable Laws. SPAC is in compliance with, and since the date of its organization has been in compliance with, all applicable Laws, except where such failure to comply has not had, and would not reasonably be expected to have, individually or in the aggregate, a SPAC Material Adverse Effect. Since the date of its organization, SPAC has not received any written notice of alleging the violation of any appliable Laws, except where such violation has not had, and would not reasonably be expected to have, individually or in the aggregate, a SPAC Material Adverse Effect.

 

Section 4.7             Absence of Changes. Since the date of the most recent SPAC Financial Statements, (a) there has not been, individually or in the aggregate, any SPAC Material Adverse Effect and (b) SPAC has conducted its business in all material respects in the Ordinary Course, other than with respect to the evaluation of and negotiations in connection with this Agreement and the Transactions contemplated hereby.

 

Section 4.8             Litigation. As of the date of this Agreement (a) there are no Actions pending or, to SPAC’s knowledge, currently threatened against SPAC or its assets or properties before any Governmental Authority that (i) question the validity of this Agreement or any Ancillary Agreement, or the right of SPAC to enter into this Agreement or any Ancillary Agreement, or the right of SPAC to perform its obligations contemplated by this Agreement or any Ancillary Agreement, or (ii) if determined adversely to SPAC would reasonably be expected to have, individually or in the aggregate, a SPAC Material Adverse Effect or result in a material change in the current equity ownership of SPAC; (b) SPAC is not a party or subject to the provisions of any Governmental Order; and (c) there is no Action initiated by SPAC currently pending or which SPAC currently intends to initiate, except, in the case of each of clauses (a)(i), (b) and (c), as has not had, and would not reasonably be expected to have, individually or in the aggregate, a SPAC Material Adverse Effect.

 

Section 4.9             Governmental Consents. Assuming the accuracy of the representations made by the Company in ‎Article III, no consent, clearance, approval or authorization of, or registration, qualification, designation, declaration, notification, application or filing with, any Governmental Authority on the part of SPAC is required in connection with the valid execution and delivery by SPAC of this Agreement or any Ancillary Agreement, or the consummation by SPAC of any Transaction contemplated hereby or thereby, except for (i) such filings or notices as may be required under the Securities Act or under applicable state securities Laws, (ii) notifications, filings and applications pursuant to applicable Antitrust Laws and the receipt of the Regulatory Approvals, (iii) the filing of any documents required by the Final Order, the Interim Order and filings required pursuant to the Plan of Arrangement, and (iv) such other consents, approvals, authorizations, registrations, qualifications, designations, declarations or filings, the failure of which to make or obtain has not had, and would not reasonably be expected to have, individually or in the aggregate, a SPAC Material Adverse Effect.

 

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Section 4.10           Brokers or Finders. Except as set forth on the SPAC Disclosure Schedules, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with this Agreement or the Transactions based upon arrangements made by or on behalf of SPAC.

 

Section 4.11           Tax.

 

(a)            SPAC has prepared and filed all material Tax Returns required to have been filed by it, all such Tax Returns are true and complete in all material respects and prepared in compliance in all material respects with all applicable Laws and Governmental Orders, and SPAC has paid all material amounts of Taxes required to have been paid by it regardless of whether shown on a Tax Return.

 

(b)            SPAC has timely withheld and paid to the appropriate Tax Authority all material amounts required to have been withheld and paid in connection with amounts paid or owing to any employee, individual independent contractor, other service providers, equity interest holder or other third-party.

 

(c)            SPAC is not currently the subject of a Tax audit or examination and has not been informed in writing of the commencement or anticipated commencement of any Tax audit or examination that has not been fully resolved or completed.

 

(d)            SPAC has not consented to extend or waive the time in which any material Tax may be assessed or collected by any Tax Authority, other than any such extensions or waivers that are no longer in effect or that were extensions of time to file Tax Returns obtained in the ordinary course of business, in each case with respect to material Taxes.

 

(e)            No “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. Law), private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into by or issued by any Tax Authority with respect to SPAC which agreement or ruling would be effective after the Closing Date.

 

(f)            SPAC is not or has not been a party to any “listed transaction” as defined in Section 6707A of the Code and Treasury Regulations Section 1.6011-4 (or any corresponding or similar provision of state, local or non-U.S. Tax Law).

 

(g)            SPAC is not a party to any Tax allocation, Tax sharing or Tax indemnity or similar agreements and is not a party to any joint venture, partnership or other arrangement that is treated as a partnership for U.S. federal, state, local or non-U.S. Tax purposes.

 

(h)            SPAC is not and has not been during the last five (5) years a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code.

 

(i)             No outstanding options, warrants or other rights to purchase or acquire SPAC Common Stock (i) were issued by SPAC (or any current or former Affiliate of SPAC) with an exercise price that was less than the fair value of the underlying SPAC Common Stock (or Affiliate shares) for which the options, warrants or other rights were exercisable at the time such options, warrants or other rights were issued, (ii) are, or have ever been, properly treated as stock for U.S. federal income tax purposes, or (iii) were issued with terms such that a holder of such options, warrants or other rights could be reasonably expected to be economically compelled to exercise such options, warrants or other rights.

 

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(j)            To the knowledge of SPAC, TopCo will not be an investment company within the meaning of Section 351(e)(1) of the Code and Treasury Regulations Section 1.351-1(c)(1) immediately following the completion of the Merger.

 

(k)            To the knowledge of the SPAC, there are no facts or circumstances that could reasonably be expected to prevent the Transactions from qualifying for the Intended U.S. Tax Treatment.

 

(l)             SPAC has not taken or agreed to take any action not contemplated by this Agreement and/or any Ancillary Agreements that would reasonably be expected to prevent the Transactions from qualifying for the Intended U.S. Tax Treatment.

 

(m)           SPAC is, and has been since formation, a Tax resident only in its jurisdiction of incorporation for Tax purposes and is not, and has not been, treated as having a permanent establishment (within the meaning of an applicable Tax treaty), branch or taxable presence in any jurisdiction other than its jurisdiction of incorporation.

 

(n)           SPAC has not taken, permitted or agreed to take any action, does not intend to or plan to take any action, and does not have any knowledge of any fact or circumstance that could reasonably be expected to cause TopCo to be treated as (i) a Tax resident of any jurisdiction other than Canada following the Transactions, (ii) a “domestic corporation” (as such term is defined in Section 7701 of the Code) as a result of the application of Section 7874(b) of the Code or (iii) a “surrogate foreign corporation” within the meaning of Section 7874(a)(2)(B) of the Code after the Closing Date.

 

(o)            To the knowledge of SPAC, no Company Shareholder, SPAC Stockholder or PIPE Investor (i) has any current plan or intention to dispose of or otherwise transfer the TopCo Common Shares following Closing or (iii) is currently under any binding agreement to dispose of or otherwise transfer the TopCo Common Shares following Closing.

 

Section 4.12           Information Supplied. None of the information supplied or to be supplied by SPAC expressly for inclusion or incorporation by reference in the Proxy/Registration Statement, any current report of SPAC on Form 8-K or the Company Information Circular shall, (i) in the case of the Proxy/Registration Statement, on the effective date of the Proxy/Registration Statement, (ii) in the case of the Proxy/Registration Statement (or any amendment thereof or supplement thereto) or any current report of SPAC on Form 8-K, when each is filed, made available, mailed or distributed, as the case may be, (iii) in the case of the Proxy/Registration Statement, at the time of the SPAC Stockholder Meeting and the Closing Date, and (iv) in the case of the Company Information Circular, at the time the Company Information Circular is first made available, mailed or distributed, as the case may be, to the Company Shareholders, contain any untrue statement of a material fact or fail 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 were made, not misleading. All documents that SPAC is responsible for filing with the SEC in connection with the Transactions will comply as to form and substance in all material respects with the applicable requirements of the Securities Act and the Exchange Act. For the avoidance of doubt, SPAC makes no representation, warranty or covenant with respect to any information supplied by or on behalf of the Company, TopCo, Merger Sub, their respective Affiliates or any Company Shareholder.

 

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Section 4.13           SEC Filings. Except as set forth in Section 4.13 of the SPAC Disclosure Schedules, SPAC has filed or furnished, as applicable, on a timely basis, all statements, prospectuses, registration statements, forms, certifications, schedules, exhibits, reports and documents required to be filed or furnished by it with the SEC (collectively, as they have been amended or supplemented since the time of their filing through the date of this Agreement, the “SPAC SEC Filings”). Each of the SPAC SEC Filings, as of the respective date of its filing, and as of the date of any amendment or supplement thereto, complied in all material respects with the requirements of the Securities Act, the Exchange Act or the Sarbanes-Oxley Act applicable to the SPAC SEC Filings. As of the respective date of its filing (or if amended or superseded by a filing prior to the date of this Agreement or the Closing Date, then on the date of such filing), the SPAC SEC Filings did not, and any SPAC SEC Filings filed with or furnished to the SEC subsequent to the date of this Agreement will not, 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 made therein, in light of the circumstances under which they were made, not misleading. As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the SEC with respect to the SPAC SEC Filings. To the knowledge of SPAC, none of the SPAC SEC Filings filed on or prior to the date of this Agreement is subject to ongoing SEC review or investigation as of the date of this Agreement. Except as set forth in Section 4.13 of the SPAC Disclosure Schedules, to the knowledge of SPAC, each director and executive officer of SPAC 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. There are no outstanding loans or other extensions of credit made by SPAC to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of SPAC, and SPAC has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.

 

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Section 4.14           Trust Account. As of the date of this Agreement, there is at least $30,500,000 held in a trust account (the “Trust Account”), maintained by the Trustee pursuant to the Trust Agreement. Prior to the Closing, none of the funds held in the Trust Account may be released except in accordance with the Trust Agreement, the other Governing Documents of SPAC and SPAC’s final prospectus dated February 11, 2021. Amounts in the Trust Account are invested in United States government securities or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended. SPAC has performed all material obligations required to be performed by it to date under, and is not in material default, breach or delinquent in performance or any other respect (claimed or actual) in connection with, the Trust Agreement and the Trust Account, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default or breach thereunder. There are no Actions pending, or to the knowledge of SPAC, threatened with respect to the Trust Account or the funds contained therein. SPAC has not released any money from the Trust Account (other than as permitted by the Trust Agreement). The consummation of the Transactions shall not cause or require the dissolution or liquidation of SPAC pursuant to the Governing Documents of SPAC or otherwise. From and after the Merger Effective Time, no shareholder of SPAC shall be entitled to receive any amount from, or any amount previously held in, the Trust Account except to the extent such shareholder shall have elected to tender its shares of SPAC Common Stock for redemption pursuant to the SPAC Share Redemption prior to such time. The Trust Agreement is in full force and effect and is a legal, valid and binding obligation of SPAC and the Trustee, enforceable in accordance with its terms. The Trust Agreement has not been terminated, repudiated, rescinded, amended or supplemented or otherwise modified, in any respect, and, to the knowledge of SPAC, no such termination, repudiation, rescission, amendment, supplement or modification is contemplated or anticipated. There are no side letters or other Contracts, arrangements or understandings, whether written or unwritten, express or implied, with the Trustee or any other Person that would (i) cause the description of the Trust Agreement in the SPAC SEC Filings to be inaccurate or (ii) entitle any Person (other than shareholders of SPAC who shall have elected to redeem their shares of SPAC Common Stock pursuant to the SPAC Share Redemption or the underwriters of SPAC’s initial public offering in respect of any fees or expenses payable as a result of arrangements entered into in connection with SPAC’s initial public offering) to any portion of the proceeds in the Trust Account. Prior to the Closing, none of the funds held in the Trust Account are permitted to be released, except in the circumstances described in the Governing Documents of SPAC.

 

Section 4.15           Investment Company Act; JOBS Act. SPAC 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. SPAC constitutes an “emerging growth company” within the meaning of the JOBS Act.

 

Section 4.16           Business Activities.

 

(a)            Since the date of its incorporation, SPAC has not conducted any business activities other than activities related to the SPAC’s initial public offering or directed toward the accomplishment of a Business Combination. Except as set forth in the Governing Documents of SPAC or as otherwise contemplated by this Agreement or the Ancillary Agreements and the Transactions, there is no Contract to which SPAC is a party which has or would reasonably be expected to have the effect of prohibiting or impairing in any material respect any business practice of SPAC or any acquisition of property by SPAC or the conduct of business by SPAC as currently conducted or as contemplated to be conducted as of the Closing.

 

(b)            Except for this Agreement, the Ancillary Agreement and the Transactions, SPAC has no material interests, rights, obligations or liabilities with respect to, and is not party to, bound by or has its assets or property subject to, in each case whether directly or indirectly, any Contract or transaction which is, or would reasonably be interpreted as constituting, a Business Combination.

 

(c)            Other than reimbursement of any out-of-pocket expenses incurred by SPAC’s officers and directors in connection with activities on SPAC’s behalf, SPAC has no unsatisfied liability with respect to any employee. SPAC does not currently maintain or have any liability under any employment or employee benefit plan, program or arrangement, and neither the execution and delivery of this Agreement or any of the Ancillary Agreements nor the consummation of the Transactions will (i) result in any payment (including severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due to any director, officer or employee of SPAC, or (ii) result in the acceleration of the time of payment or vesting of any such benefits.

 

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(d)            Except for this Agreement, the Ancillary Agreements and the other documents and transactions contemplated hereby and thereby (including with respect to expenses and fees incurred in connection therewith and the SPAC Transaction Expenses) or any Contracts that are exhibits to the SPAC SEC Filings, and except as set forth in Section 4.16(d) of the SPAC Disclosure Schedules, SPAC is not a party to any Contract with any other Person that (i) obligates SPAC to make payments following the Closing or (ii) will remain in effect immediately following the Closing and limit the right of any Group Company to engage in any line of business or in any geographic area in any material respect.

 

Section 4.17           NYSE American Quotation. As of the date of this Agreement, the issued and outstanding SPAC Units, each such unit comprised of one share of SPAC Common Stock and one-half of one redeemable SPAC Warrant, are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the NYSE American under the symbol “BITE.U.” The issued and outstanding shares of SPAC Common Stock are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the NYSE American under the symbol “BITE.” The issued and outstanding SPAC Warrants are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the NYSE American under the symbol “BITE.WS.” SPAC is and has been in compliance with the rules and regulations of the NYSE American and there is no Action pending or, to the knowledge of SPAC, threatened against SPAC by NYSE American or the SEC with respect to any intention by such entity to deregister the SPAC Common Stock, SPAC Warrants or SPAC Units or terminate the listing of SPAC Common Stock, SPAC Warrants or SPAC Units on NYSE American. SPAC has not taken any action in an attempt to terminate the registration of SPAC Common Stock, SPAC Warrants or SPAC Units under the Exchange Act except as contemplated by this Agreement.

 

Section 4.18           Corporate Approvals. The SPAC Board (including any required committee or subgroup of such board and including in its capacity as the board of directors of the sole stockholder of Merger Sub) has, as of the date of this Agreement, unanimously (a) declared the advisability of the transactions contemplated by this Agreement, (b) determined that the transactions contemplated hereby are in the best interests of the SPAC Stockholders, (c) determined that the transactions contemplated hereby constitutes a Business Combination and (d) subject to the receipt of the Regulatory Approvals, recommended that the SPAC Stockholders approve the Transaction Proposals. The SPAC Stockholders’ Approval represents the only votes of the holders of any SPAC Capital Stock necessary in connection with entry into this Agreement by SPAC and the consummation of the Transactions.

 

Section 4.19           Related Party Transactions. Except as described in the reports filed by SPAC with the SEC prior to the date of this Agreement or as set forth in Section 4.19 of the SPAC Disclosure Schedules, there are no Contracts between SPAC, on the one hand, and any (i) present or former officer, director or employee of SPAC, (ii) beneficial owner (within the meaning of Section 13(d) of the Exchange Act) of 5% or more of the capital stock or equity interests of SPAC or (iii) Affiliate, “associate” or member of the “immediate family” (as such terms are respectively defined in Rules 12b-2 and 16a-1 of the Exchange Act) of any of the foregoing, on the other hand, in each case, except for (x) employment or engagement agreements, confidentiality agreements and fringe benefits and other compensation to directors, officers or employees, (y) reimbursements of expenses incurred in connection with their employment or service, or (z) the Existing D&O Arrangements.

 

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Section 4.20           Investigation; Reliance. SPAC is a sophisticated purchaser and has made its own independent investigation, review and analysis regarding the Company and the other Group Companies and the Transactions, which investigation, review and analysis were conducted by SPAC together with expert advisors, including legal counsel, that they have engaged for such purpose. SPAC is not relying on any statement, representation or warranty, oral or written, express or implied, made by the Company or any other Group Company or any of their respective Representatives, except as expressly set forth in Article III (as modified by the Company Disclosure Schedules) or in any certificate delivered by the Company pursuant to this Agreement, the Ancillary Agreements and the other documents and transactions contemplated hereby and thereby. Neither the Company nor any of its respective stockholders, Affiliates or Representatives shall have any liability to SPAC or any of its respective stockholders, Affiliates or Representatives resulting from the use of any information, documents or materials made available to SPAC or any of its Representatives, whether orally or in writing, in any confidential information memoranda, “data rooms,” management presentations, due diligence discussions or in any other form in expectation of the Transactions, except as expressly set forth in this Agreement (as modified by the Company Disclosure Schedules) or in any certificate delivered by the Company pursuant to this Agreement, the Ancillary Agreements and the other documents and transactions contemplated hereby and thereby. SPAC acknowledges that, except as expressly set forth in this Agreement (as modified by the Company Disclosure Schedules) or in any certificate delivered by the Company pursuant to this Agreement, the Ancillary Agreements and the other documents and transactions contemplated hereby and thereby, neither the Company nor any of its stockholders, Affiliates or Representatives is making, directly or indirectly, any representation or warranty with respect to any estimates, projections or forecasts involving the Company and/or any Group Company.

 

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Section 4.21           No Additional Representations or Warranties. NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE COMPANY OR ANY OF ITS REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION (INCLUDING ANY FINANCIAL PROJECTIONS OR OTHER SUPPLEMENTAL DATA), EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE ‎IV (AS MODIFIED BY THE SPAC DISCLOSURE SCHEDULES), THE ANCILLARY AGREEMENTS OR IN THE CASE OF FRAUD, (A) SPAC, ANY SPAC NON-RECOURSE PARTY OR ANY OTHER PERSON DO NOT MAKE, AND SPAC EXPRESSLY DISCLAIMS AND NEGATES, ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, (I) IN CONNECTION WITH THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, (II) WITH RESPECT TO SPAC, INCLUDING ITS AFFAIRS, THE CONDITION, VALUE OR QUALITY OF THE ASSETS, LIABILITIES, FINANCIAL CONDITION OR RESULTS OF OPERATIONS, OR (III) WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF ANY STATEMENT OR INFORMATION THAT HAVE BEEN MADE AVAILABLE TO THE COMPANY OR ANY OF ITS REPRESENTATIVES, INCLUDING THE MATERIALS RELATING TO THE BUSINESS AND AFFAIRS OR HOLDINGS OF SPAC OR ANY PRESENTATION OF THE BUSINESS AND AFFAIRS OF THE COMPANY BY THE MANAGEMENT OF THE COMPANY OR OTHERS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR BY THE ANCILLARY AGREEMENTS, AND (B) NO STATEMENT OR INFORMATION CONTAINED IN ANY OF SUCH MATERIALS OR MADE IN ANY SUCH PRESENTATION SHALL BE DEEMED A REPRESENTATION OR WARRANTY HEREUNDER OR OTHERWISE OR DEEMED TO BE RELIED UPON BY THE COMPANY, ANY COMPANY NON-RECOURSE PARTY OR ANY OTHER PERSON IN EXECUTING, DELIVERING AND PERFORMING THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE ‎IV, THE ANCILLARY AGREEMENTS OR IN THE CASE OF FRAUD, IT IS UNDERSTOOD THAT ANY COST ESTIMATES, PROJECTIONS, FORECASTS, BUDGETS OR OTHER PREDICTIONS, ANY DATA, ANY FINANCIAL INFORMATION OR ANY MEMORANDA OR OFFERING MATERIALS OR PRESENTATIONS, INCLUDING ANY OFFERING MEMORANDUM OR SIMILAR MATERIALS MADE AVAILABLE BY SPAC, ARE NOT AND SHALL NOT BE DEEMED TO BE OR TO INCLUDE REPRESENTATIONS OR WARRANTIES OF SPAC, ANY SPAC NON-RECOURSE PARTY OR ANY OTHER PERSON, AND, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE ‎IV, THE ANCILLARY AGREEMENTS OR IN THE CASE OF FRAUD, ARE NOT AND SHALL NOT BE DEEMED TO BE RELIED UPON BY THE COMPANY, ANY COMPANY NON-RECOURSE PARTY OR ANY OTHER PERSON IN EXECUTING, DELIVERING OR PERFORMING THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

Article V
REPRESENTATIONS AND WARRANTIES OF the merger subsidiaries

 

Each of the Merger Subsidiaries hereby represents and warrants to the Company as follows:

 

Section 5.1             Organization, Good Standing, Corporate Power and Qualification. Each Merger Subsidiary is an exempted company, corporation, limited liability company or other applicable business entity duly organized or incorporated, validly existing and in good standing (or the equivalent thereof, if applicable, in each case, with respect to the jurisdictions that recognize the concept of good standing or any equivalent thereof) under the Laws of its jurisdiction of organization, incorporation or formation, as applicable. Each Merger Subsidiary has the requisite exempted company, corporate, limited liability company or other similar power and authority to own and operate its properties and assets and to carry on its business as presently conducted and contemplated to be conducted. Each Merger Subsidiary is presently qualified to do business in each jurisdiction in which it is required to be so qualified and is in good standing in each such jurisdiction (or the equivalent thereof, if applicable, in each case, with respect to the jurisdictions that recognize the concept of good standing or any equivalent thereof). As of the date of this Agreement, the Merger Subsidiaries have either delivered or made available to SPAC accurate and complete copies of the Governing Documents of each Merger Subsidiary, including all amendments thereto as in effect as of the date of this Agreement.

 

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Section 5.2             Capitalization.

 

(a)            As of the date of this Agreement, (i) the authorized share capital of TopCo is an unlimited number of TopCo Common Shares, of which one TopCo Common Share is issued and outstanding, and (ii) no other classes or series of TopCo capital stock are authorized or issued or outstanding.

 

(b)           As of the date of this Agreement, the authorized share capital of Merger Sub is 1,000 shares of Merger Sub Common Stock, of which 1,000 are issued and outstanding.

 

(c)            All TopCo Common Shares and common shares of Merger Sub, in each case, that are issued and outstanding have been duly authorized and validly issued in compliance with applicable Laws, are fully paid and nonassessable, and have not been issued in violation of (i) the applicable Merger Subsidiary’s Governing Documents, or (ii) any purchase option, call option, right of first refusal, right of first offer, preemptive right, subscription right or other similar right. Each TopCo Common Share and common share of Merger Sub has the rights, preferences, privileges and restrictions set forth in the applicable Merger Subsidiary’s Governing Document.

 

(d)            There are no outstanding options, warrants or other equity appreciation, phantom equity, profit participation or similar rights for the purchase or acquisition from any Merger Subsidiary of any of their respective capital stock. Except as contemplated in this Agreement, no Merger Subsidiary is a party to or subject to any agreement or understanding and there is no agreement or understanding between any Persons, that affects or relates to the voting or giving of written consents with respect to any security of any Merger Subsidiary.

 

(e)            Other than any rights to acquire securities of the Merger Subsidiaries pursuant to the Transactions arising under this Agreement, there are no options, warrants, preemptive rights, calls, convertible securities, conversion rights or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of any Merger Subsidiary or obligating any Merger Subsidiary to issue or sell any shares of capital stock of, or other equity interests in, any Merger Subsidiary. No Merger Subsidiary is a party to, or otherwise bound by, and has not granted, any equity appreciation rights, participations, phantom equity or similar rights. There are no voting trusts, voting agreements, proxies, shareholder agreements or other agreements with respect to the voting or transfer of the capital stock, or other equity interests, of any Merger Subsidiary. No Merger Subsidiary owns or controls, directly or indirectly, any equity interests in any Person, other than TopCo’s ownership in Merger Sub. There are no outstanding bonds, debentures, notes or other indebtedness of any Merger Subsidiary having the right to vote (or that is convertible into, or exchangeable for, securities having the right to vote) on any matter for which Merger Subsidiary may vote. No Merger Subsidiary has adopted any shareholder rights plan or similar agreement to which it would be or become subject, party or otherwise bound.

 

(f)             Except as contemplated by this Agreement, there are no outstanding contractual obligations of any Merger Subsidiary to repurchase, redeem or otherwise acquire any of their capital stock or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any Person.

 

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Section 5.3             Due Authorization. Each Merger Subsidiary has all requisite exempted company, corporate, limited liability company or other similar power and authority to execute and deliver this Agreement and each Ancillary Agreement to which it is or will be a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. All exempted company, corporate, limited liability company or other similar action on the part of each Merger Subsidiary and their respective directors, officers and stockholders necessary for the (a) authorization, execution and delivery by each Merger Subsidiary of this Agreement and the Ancillary Agreements to which it is or will be a party, (b) consummation of the Transactions and (c) performance of each of their obligations hereunder or thereunder has been taken or will be taken prior to the Closing. This Agreement and the Ancillary Agreements to which it is or will be a party (assuming due authorization, execution and delivery by each other party hereto and thereto) constitute or will constitute at the Closing (with respect to the Ancillary Agreements to be executed at the Closing) valid and binding obligations of each Merger Subsidiary, enforceable against such Person in accordance with their respective terms, except as limited by the Enforceability Exceptions.

 

Section 5.4             Compliance with Other Instruments. No Merger Subsidiary is in violation of any term of its respective Governing Documents in any material respects, taken as a whole. No Merger Subsidiary is in violation of any term or provision of any Governmental Order by which it is bound. The execution, delivery and the performance by each Merger Subsidiary of its obligations pursuant to this Agreement and the Ancillary Agreements to which it is or will be a party will not result in, by the giving of notice, the lapse of time or otherwise, (a) any violation of, conflict with, or require any consent, filing, notice, waiver or approval or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, (i) its Governing Documents, (ii) any Contract to which it is a party or by which its assets are bound or (iii) any applicable Law, Permit or Governmental Order, nor (b) the creation of any Lien upon any of its properties or assets (other than Permitted Liens).

 

Section 5.5             Compliance with Applicable Law. Each Merger Subsidiary is in compliance with, and since the date of its organization has been in compliance with, all applicable Laws, except where such failure to comply is not, and would not reasonably be expected to be, individually or in the aggregate, material to the Group Companies, taken as a whole. Since the date of its organization, no Merger Subsidiary has received any written notice of any violation of any Laws, except where such violation is not, and would not reasonably be expected to be, individually or in the aggregate, material to the Group Companies, taken as a whole.

 

Section 5.6             Brokers or Finders. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with this Agreement or the Transactions based upon arrangements made by or on behalf of any Merger Subsidiary.

 

Section 5.7             Business Activities.

 

(a)            Except for TopCo’s ownership of capital stock of Merger Sub, no Merger Subsidiary owns or has a right to acquire, directly or indirectly, any interest or investment (whether equity or debt) in any corporation, partnership, joint venture, business, trust or other entity (including in respect of any other potential Business Combination).

 

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(b)            Except for this Agreement, the Ancillary Agreements and the other documents and transactions contemplated hereby and thereby (including with respect to expenses and fees incurred in connection therewith and the Company Transaction Expenses), no Merger Subsidiary is a party to any Contract with any other Person that (i) obligates any Merger Subsidiary to make payments following the Closing or (ii) will remain in effect immediately following the Closing and limit the right of any Group Company to engage in any line of business or in any geographic area in any material respect.

 

Section 5.8             No Prior Activities. Each of the Merger Subsidiaries was formed and organized solely for the purpose of entering into this Agreement, the Ancillary Agreements to which it is or will be a party, the performance of its covenants and agreements in this Agreement and the Ancillary Agreements, the consummation of the Arrangement, and the consummation of the transactions contemplated hereby and thereby and has not engaged in any activities or business, other than those incident or related to, or incurred in connection with, its organization and existence or the execution of this Agreement or any Ancillary Agreement to which it is or will be a party, the performance of its covenants or agreements in this Agreement or any Ancillary Agreement, the consummation of the Transactions contemplated hereby or thereby, including the Merger.

 

Section 5.9             Foreign Private Issuer. TopCo is and shall be at all times commencing from the date thirty (30) days prior to the first filing of the Proxy/Registration Statement with the SEC through the Closing, a foreign private issuer as defined in Rule 405 under the Securities Act.

 

Article VI
COVENANTS OF THE COMPANY

 

Section 6.1             Company Conduct of Business. Except (i) as expressly permitted by this Agreement or the Ancillary Agreements, (ii) as reasonably necessary to comply with applicable Law, (iii) as set forth on ‎Section 6.1 of the Company Disclosure Schedules, (iv) for the incurrence of Company Transaction Expenses or (v) as consented to by SPAC in writing (which consent shall not be unreasonably conditioned, withheld, delayed or denied), from the date of this Agreement through the earlier of the Closing or valid termination of this Agreement pursuant to ‎Article X (the “Interim Period”), the Company shall use its reasonable best efforts, and shall cause the other Group Companies to use their reasonable best efforts, to operate its business in the Ordinary Course and in compliance with applicable Laws in all material respects, and use commercially reasonable efforts to maintain in effect all material Permits of the Group Companies necessary to conduct its business as now conducted, and to maintain and preserve the Company’s and the other Group Companies’ business organization, properties, employees, goodwill and business relationships with customers, suppliers, partners and other Persons with which any of the Group Companies has material business relations. Without limiting the generality of the foregoing, except (A) as expressly permitted by this Agreement or the Ancillary Agreements, (B) as required by applicable Law, (C) as set forth on ‎Section 6.1 of the Company Disclosure Schedules, (D) for the incurrence of Company Transaction Expenses; or (E) as consented to by SPAC in writing (which consent shall not be unreasonably conditioned, withheld or delayed or denied), the Company shall not, and shall cause the other Group Companies not to, directly or indirectly:

 

(a)            change or amend the Governing Documents of any Group Company;

 

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(b)            make or declare any dividend or distribution to the shareholders of any Group Company or make any other distributions in respect of any of the Group Companies’ issued shares or equity interests, except dividends and distributions by a wholly owned Subsidiary of a Group Company to such Group Company or another wholly owned Subsidiary of such Group Company;

 

(c)            split, combine, reclassify, recapitalize or otherwise amend any terms of any shares or series of the Group Companies’ authorized capital, except for any such transaction by a wholly owned Subsidiary of a Group Company that remains a wholly owned Subsidiary of such Group Company after consummation of such transaction;

 

(d)            purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares, membership interests or other equity interests of any Group Company, except for (i) transactions between a Group Company and any wholly owned Subsidiary of such Group Company, (ii) repurchases of Company Shares acquired upon exercise of Company Options in the Ordinary Course and in connection with any termination of employment or other services, and (iii) acquire Company Common Shares to facilitate the settlement of any Tax withholding obligations in respect of Company RSUs that are outstanding as of the date of this Agreement, in accordance with their terms, in the Ordinary Course and (iv) the withholding, in the Ordinary Course, of Company Common Shares to satisfy Tax obligations with respect to the Company Options;

 

(e)            (A) sell, assign, transfer, convey, license, lease, abandon, allow to lapse, or otherwise dispose of any material assets or properties of the Group Companies, except for (i) dispositions of equipment in the Ordinary Course, (ii) sales of inventory in the Ordinary Course or (iii) transactions solely among the Group Companies, (B) disclose any Confidential Information to any Person who has not entered into a written confidentiality agreement or is not otherwise subject to confidentiality obligations, or (C) create, subject or incur any Lien on any material assets or properties of the Group Companies, other than Permitted Liens;

 

(f)            acquire any ownership interest in any real property;

 

(g)            except for the consummation of acquisitions pursuant to a Material Contract set forth on Section 6.1(g) of the Company Disclosure Schedule, acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all or a material portion of the equity or assets of, any corporation, partnership, association, joint venture or other business organization or division thereof;

 

(h)            except as required by this Agreement, (A) make, change, or revoke an entity classification election or other material election for U.S. federal income Tax purposes for any of the Group Companies, (B) settle or compromise any material U.S. federal, state, local, or non-U.S. Tax liability, (C) change any annual Tax accounting period, adopt, change or revoke any method of Tax accounting, (D) amend any Tax Returns or file claims for Tax refunds, (E) enter into any closing agreement, waive or extend any statute of limitations period in respect of an amount of Taxes, settle any Tax claim, audit or assessment, (F) change its jurisdiction of tax residency, (G) surrender any right to claim a Tax refund, offset or other reduction in Tax liability, (H) enter into any Tax sharing or Tax indemnification agreement (other than (i) one that is included in a Contract entered into in the ordinary course of business that is not primarily related to Taxes, or (ii) with any other Group Company or any of its current Affiliates), or (I) fail to pay any material Taxes when due;

 

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(i)             except as set forth on Section 6.1(i) of the Company Disclosure Schedules, (A) issue any additional Group Company Interests or securities exercisable for or convertible into Group Company Interests, other than Company Shares issued upon vesting or settlement of any Company RSU or other equity award or exercise of any vested Company Option, or (B) grant any options, warrants, convertible equity instruments or other equity-based awards that relate to the equity of any Group Company, except for Company Options and Company RSUs the grant (including the number of shares underlying the option or unit, the exercise price and the other material terms and conditions of the grant) of which has been approved by the Company Board prior to the date of this Agreement but for which the related grant agreement has not yet been entered into or that is granted to a newly hired or promoted employee in the ordinary course of business, or (C) amend, modify or waive any of the terms or rights set forth in any Company Options or Company RSUs, including, without limitation, any acceleration of vesting or, with respect to any Company Options, any amendment, modification or reduction of the exercise, conversion or warrant price set forth therein;

 

(j)             adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of any Group Company, merge or consolidate with any Person or be acquired by any Person, or file for bankruptcy in respect of any Group Company;

 

(k)            waive, release, settle, compromise or otherwise resolve any Action;

 

(l)             (x) incur, assume or guarantee any Indebtedness for borrowed money or (y) issue or sell or guaranty any debt securities or other rights to acquire any debt securities or guaranty any debt securities of another Person;

 

(m)           delay payments of any accounts payable or other liability of a Group Company beyond its due date or the date when such liability would have been paid in the Ordinary Course; provided that nothing in this clause (m) shall prohibit or otherwise restrict any of the Group Companies from delaying payments of accounts payable or other liabilities to the extent that any such Group Company is disputing in good faith such amounts owed in respect of such accounts payable or other liabilities;

 

(n)            enter into, renew or amend in any material respect (i) any transaction or Contract with a Company Shareholder or any of their respective family members or other related Persons that would require disclosure of transactions therewith under Item 404 of Regulation S-K promulgated by the SEC, (ii) any Contract between any Group Company and any broker, finder, investment banker or financial advisor with respect to any of the Transactions, or (iii) except in the Ordinary Course, any Contract that, had such Contract been entered into on or before the date of this Agreement, would have been required to be disclosed pursuant to Section 3.5(a) of the Company Disclosure Schedules;

 

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(o)            limit the right of any Group Company to engage in any line of business or in any geographic area, to Develop, market or sell products or services, or to compete with any Person;

 

(p)            except as set forth on Section 6.1(p) of the Company Disclosure Schedules or with respect to a newly hired employee in the Ordinary Course, enter into, renew or amend any employment agreement with any executive officers of the Company;

 

(q)            other than as required by applicable Law, enter into, negotiate, amend or extend any labor or collective bargaining agreement or other agreement with a union or labor organization;

 

(r)             engage in any mass layoff or plant closing as such terms (or similar terms) are defined under the WARN Act, or engage in any partial or temporary shut down or reduction in operating hours of any location;

 

(s)            subject to Section 6.1(i), except in the Ordinary Course, as otherwise required by the terms of any existing Company Benefit Plan or existing employment Contract as in effect on the date hereof, or as otherwise required under applicable Law, (i) pay or promise to pay, fund any new, enter into or make any grant of any severance, change in control, transaction bonus, retention or termination payment or arrangement to any Company employee, (ii) take any action to accelerate any payments or benefits, or the funding of any payments or benefits, payable or to become payable to any employees, (iii) establish, adopt, enter into, amend or terminate any material Company Benefit Plan or any Contract that would be a Company Benefit Plan if it were in existence as of the date of this Agreement; or (iv) materially increase the bonus, salary, severance pay or other compensation of any current or former employee, officer, independent contractor, or director;

 

(t)             fail to maintain in full force and effect in all material respects, or fail to replace or renew, the insurance policies of the Group Companies;

 

(u)            convert the Company to any form of legal entity other than a corporation; and

 

(v)            enter into any agreement or otherwise make a binding commitment to do any action prohibited under this ‎Section 6.1.

 

During the Interim Period, the Company shall, and shall cause its Subsidiaries to, comply (1) in all material respects with, and continue performing under, as applicable, the Company’s Governing Documents, such Subsidiary’s Governing Documents, and all other Material Contracts to which any of the Group Companies may be a party, and (2) with all applicable Sanctions and Export Laws. If, during the Interim Period, the Company (A) receives written notice of, any actual, alleged or potential violation of any Sanctions or Export Laws, (B) becomes a party to or the subject of any pending (or to the knowledge of the Company, threatened) Action by or before any Governmental Authority (including receipt of any subpoena) related to any actual, alleged or potential violation of any Sanctions or Export Laws, or (C) otherwise becomes aware of any actual, alleged, or potential violation of any Sanctions or Export Laws, it shall provide written notice to the SPAC within two (2) Business Days of the discovery of the actual, alleged, or potential violation.

 

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Section 6.2             Conduct of Business by TopCo and Merger Sub. From and after the date of this Agreement until the earlier of the Merger Effective Time or the termination of this Agreement in accordance with its terms, neither TopCo nor Merger Sub shall engage in any activities other than the execution of this Agreement or the Ancillary Agreements to which it is party and the performance of its obligations hereunder and thereunder in furtherance of the Transactions (and matters ancillary thereto).

 

Section 6.3             Shareholder Rights Plans. The Company shall not adopt any shareholder rights plan or similar agreement to which any Group Company would be or become subject, party or otherwise bound.

 

Section 6.4             No Trading in SPAC Stock. The Company acknowledges and agrees that it and each other Group Company is aware of the restrictions imposed by U.S. federal securities Laws and the rules and regulations of the SEC and NYSE American promulgated thereunder or otherwise and other applicable Laws on a Person possessing material nonpublic information about a publicly traded company. The Company hereby agrees that, while it is in possession of such material nonpublic information, it shall not purchase or sell any securities of SPAC (except with the prior written consent of SPAC), take any other action with respect to SPAC in violation of such Laws, or cause or encourage any third party to do any of the foregoing.

 

Section 6.5             Shareholder Support Agreement. In the event any Key Company Shareholder fails to comply in any material respect with his, her or its obligations under the Shareholder Support Agreement in a timely manner, the Company will utilize the proxy granted to it under Section 7 (Appointed Representative) of the Shareholder Support Agreement by such Key Company Shareholder to act for such Key Company Shareholder in accordance with the terms and conditions of the Shareholder Support Agreement, the SBCA, the ABCA and other applicable Law; provided that no such action by the Company will be necessary if the failed action by such Key Company Shareholder is not necessary for any vote or written consent to be approved by a required percentage of shareholders.

 

Section 6.6             Annual and Interim Financial Statements.

 

(a)            The Company shall deliver to SPAC, as promptly as reasonably practicable following the date of this Agreement and in no event later than May 15, 2023, all the financial statements of the Company, any Subsidiaries of the Company and TopCo that are required by the applicable accounting requirements and other rules and regulations of the SEC to be included in the Proxy/Registration Statement (including pro forma financial information) in such form as required by the rules and regulations of the SEC (the “Required Company Financial Statements”).

 

(b)            Following any “staleness” date (as determined in accordance with the applicable rules and regulations of the SEC) applicable to the financial statements that are required by the applicable accounting requirements and other rules and regulations of the SEC to be included in the Proxy/Registration Statement (including pro forma financial information) that occurs prior to the Closing Date, the Company shall deliver as promptly as reasonably practicable, any financial statements of the Company, any Subsidiaries of the Company and TopCo that are required by the applicable accounting requirements and other rules and regulations of the SEC to be included in the Proxy/Registration Statement (including pro forma financial information) (such audited or unaudited financial statements, the “Additional Financial Statements”).

 

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(c)            The Required Company Financial Statements and the Additional Financial Statements (i) will be prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except, in the case of any audited financial statements, as may be specifically indicated in the notes thereto and subject, in the case of any unaudited financial statements, to normal year-end audit adjustments (none of which is expected to be individually or in the aggregate material) and the absence of notes thereto), (ii) will fairly present, in all material respects, the financial position, results of operations and comprehensive loss, shareholders’ deficit and cash flows of the applicable entity as of the dates thereof and for the periods indicated therein (subject, in the case of any unaudited financial statements, to normal year-end audit adjustments (none of which is expected to be individually or in the aggregate material)), (iii) in the case of any audited financial statements, will be audited to the extent required by applicable rules and regulations of the SEC in accordance with the standards of the PCAOB and will contain an unqualified report of the applicable entity’s auditors and (iv) will 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 of delivery (including Regulation S-X or Regulation S-K, as applicable).

 

(d)            The Company shall use its reasonable best efforts (i) to assist TopCo and SPAC in causing to be prepared in a timely manner any other financial information or statements (including customary pro forma financial statements) that are required to be included in the Proxy/Registration Statement and any other filings to be made by TopCo or SPAC with the SEC in connection with the transactions contemplated by this Agreement and (ii) to obtain the consents of the auditors of the Company, any Subsidiaries of the Company and TopCo, as applicable, with respect thereto as may be required by applicable Law or requested by the SEC.

 

Section 6.7             Cashless Exercise of Company Options. The Company shall take all lawful actions necessary (including obtaining any resolutions of the Company Board) so that, as soon as practicable following the date of this Agreement and in any event prior to the Share Exchange Effective Time, the Company Option Plan and the Company Options are amended to require exercise of the Company Options on a cashless basis.

 

Section 6.8             Termination of Certain Agreements. The Company shall use commercially reasonable efforts to terminate the Termination Contracts effective as of the Closing, provided that any and all confidentiality or indemnification provisions in any such agreement may survive such termination to the extent set forth in such Termination Contract.

 

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Article VII
COVENANTS OF SPAC

 

Section 7.1             Trust Account Payments. Upon satisfaction or waiver of the conditions set forth in ‎Article IX and provision of notice thereof to the Trustee (which notice SPAC shall provide to the Trustee in accordance with the terms of the Trust Agreement), (i) in accordance with and pursuant to the Trust Agreement, at the Closing, SPAC (a) shall cause any documents, opinions and notices required to be delivered to the Trustee pursuant to the Trust Agreement to be so delivered and (b) shall cause the Trustee to, and the Trustee shall thereupon be obligated to (1) pay as and when due all amounts payable to SPAC Stockholders pursuant to the SPAC Share Redemptions, and (2) immediately thereafter, disburse all remaining amounts then available in the Trust Account as directed by SPAC, subject to this Agreement and the Trust Agreement and (ii) thereafter, the Trust Account shall terminate, except as otherwise provided therein.

 

Section 7.2             SPAC NYSE American Listing. From the date of this Agreement until the Closing, SPAC shall use reasonable best efforts to ensure that the SPAC Common Stock, SPAC Warrants and SPAC Units remain listed on the NYSE American and to satisfy any applicable initial and continuing listing requirements of the NYSE American. From the date of this Agreement until the Closing, SPAC shall promptly notify the Company of any communications or correspondence from the NYSE with respect to the listing of SPAC Common Stock, SPAC Warrants, SPAC Units or other securities of SPAC, compliance with the rules and regulations of the NYSE American, and any threatened suspension of listing or delisting action contemplated or threatened by the NYSE American. Prior to the Closing Date, TopCo shall apply for, and shall use commercially reasonable efforts to cause, the TopCo Common Shares to be issued in connection with the Transactions to be approved for listing on the NYSE American, and accepted for clearance by DTC, subject to official notice of issuance.

 

Section 7.3             SPAC Conduct of Business.

 

(a)            Except (i) as expressly permitted by this Agreement or the Ancillary Agreements (including, for the avoidance of doubt, as contemplated pursuant to the PIPE Subscription Agreements), (ii) as required by applicable Law, Governmental Authority, or any Contract to which SPAC is a party, (iii) as required by Permitted COVID-19 Measures, (iv) as set forth on ‎Section 7.3(a) of the SPAC Disclosure Schedules, (v) for the incurrence of SPAC Transaction Expenses or (vi) as consented to by the Company in writing (which consent shall not be unreasonably withheld, conditioned or delayed), during the Interim Period, SPAC shall use its reasonable best efforts to, and shall cause each of its Subsidiaries to use their reasonable best efforts to, operate its business in the Ordinary Course and in compliance with applicable Laws in all material respects, and shall not, and shall cause each of its Subsidiaries not to:

 

(i)            change, modify or amend the Trust Agreement or the SPAC’s Governing Documents, or seek any approval from the SPAC Stockholders to take any such action, except as contemplated by the Transaction Proposals;

 

(ii)           change, modify or amend the SPAC Warrant Agreement, including by reducing the Warrant Price (as defined in the SPAC Warrant Agreement);

 

(iii)          (x) make or declare any dividend or distribution to the SPAC Stockholders or make any other distributions in respect its capital stock, share capital or equity interests, (y) split, combine, reclassify or otherwise amend any terms of any shares or series of its capital stock or equity interests or (z) purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock, share capital or membership interests, warrants or other equity interests, other than a redemption of SPAC Common Stock (prior to the Closing Date) made as part of the SPAC Share Redemptions;

 

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(iv)          merge, consolidate or amalgamate with or into, or acquire (by purchasing a substantial portion of the assets of or equity in, or by any other manner) any other Person or be acquired by any other Person;

 

(v)           except as required by this Agreement, (A) make, change, or revoke an entity classification election or other material election for U.S. federal income Tax purposes for SPAC, (B) settle or compromise any material U.S. federal, state, local, or non-U.S. Tax liability, (C) change any annual Tax accounting period, or adopt, change or revoke any method of Tax accounting, (D) amend any Tax Returns or file claims for Tax refunds, (E) enter into any closing agreement, waive or extend any statute of limitations period in respect of an amount of Taxes, settle any Tax claim, audit or assessment, (F) change its jurisdiction of tax residency, (G) surrender any right to claim a Tax refund, offset or other reduction in Tax liability, (H) enter into any Tax sharing or Tax indemnification agreement (other than (i) one that is included in a Contract entered into in the ordinary course of business that is not primarily related to Taxes, or (ii) with any other Group Company or any of its current Affiliates), or (I) fail to pay any material Taxes when due;

 

(vi)          enter into, renew or amend in any material respect, any transaction or Contract (A) with an Affiliate of SPAC (including, for the avoidance of doubt, (x) Sponsor and (y) any Person in which Sponsor has a direct or indirect legal, contractual or beneficial ownership interest of 5% or more), (B) with any SPAC Stockholder except as permitted or contemplated by this Agreement or (C) between SPAC and any broker, finder, investment banker or financial advisor with respect to any of the Transactions;

 

(vii)         except as set forth on Section 7.3(a)(vii) of the SPAC Disclosure Schedules, incur or assume any Indebtedness or guarantee any Indebtedness of another Person, issue or sell or guaranty any debt securities or warrants or other rights to acquire any debt securities or guaranty any debt securities of another Person;

 

(viii)        (A) make any material change in its accounting principles, policies, procedures or methods unless required by an amendment in GAAP made subsequent to the date of this Agreement, as agreed to by its independent accountants, or (B) engage in any conduct in a new line of business or engage in any material commercial activities (other than to consummate the Transactions contemplated by this Agreement);

 

(ix)          (A) issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any SPAC Capital Stock or securities exercisable for or convertible into SPAC Capital Stock or (B) grant any options, warrants or other equity-based awards with respect to SPAC Capital Stock not outstanding on the date of this Agreement and disclosed in documents filed publicly with the SEC or (C) amend, modify or waive any of the material terms or rights set forth in any SPAC Warrant or the SPAC Warrant Agreement, including any amendment, modification or reduction of the warrant price set forth therein;

 

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(x)            waive, release, compromise, settle or agree to waive, release, compromise, or settle any Action;

 

(xi)           except as set forth on Section 7.3(a)(xi) of the SPAC Disclosure Schedules, (A) hire, or otherwise enter into any employment, consulting or similar agreement with, any person, (B) grant any increase in the compensation of any current or former officer or director, (C) adopt any benefit plan for the benefit of any current or former officer or director, or (D) materially amend any existing agreement with any current or former officer or director;

 

(xii)          except as set forth on Section 7.3(a)(xii) of the SPAC Disclosure Schedules, make any loans, advances or capital contributions to, or investments in, any other Person (including to any of its officers, directors, agents or consultants, other than business expenses advanced to officers or directors in the Ordinary Course), make any change in its existing borrowing or lending arrangements for or on behalf of such Persons, or enter into any “keep well” or similar agreement to maintain the financial condition of any Person;

 

(xiii)         liquidate, dissolve, reorganize or otherwise wind-up its business and operations;

 

(xiv)         split, combine, reclassify, recapitalize or otherwise amend any terms of any shares or series of SPAC Capital Stock or equity interests;

 

(xv)         except as set forth on Section 7.3(a)(xv) of the SPAC Disclosure Schedules, purchase, repurchase, redeem (except for the exercise of the SPAC Share Redemption) or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock, membership interests or other equity interests of SPAC; or

 

(xvi)        enter into any formal or informal agreement or otherwise make a binding commitment to do any action prohibited under this ‎Section 7.3.

 

(b)            During the Interim Period, SPAC shall comply in all material respects with, and continue performing under, as applicable, its Governing Documents, the Trust Agreement and all other material Contracts to which it may be a party.

 

Section 7.4             SPAC Public Filings. During the Interim Period, SPAC will keep current and use commercially reasonable efforts to timely file all of the forms, reports, schedules, statements and other documents required to be filed by SPAC with the SEC, including all necessary amendments and supplements thereto, and otherwise comply in all material respects with applicable securities Laws (the “Additional SEC Reports”). All such Additional SEC Reports (including any financial statements or schedules included therein) (i) shall be prepared in all material respects in accordance with the requirements of the Securities Act, the Exchange Act and/or the Sarbanes-Oxley Act, in each case to the extent applicable, and the rules and regulations promulgated thereunder and (ii) will not, at the time they are filed, and, if amended, as of the date of such amendment, contain any untrue statement of a material fact or fail 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 were made, not misleading. As used in this ‎Section 7.4, the term “file” shall be broadly construed to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC or Nasdaq, NYSE or NYSE American. SPAC shall consult with the Company regarding any Additional SEC Reports which discuss or refer to this Agreement or the Transactions, except with respect to references that do not disclose information not previously disclosed in accordance with the terms of this Agreement, and shall provide the Company with a reasonable opportunity to review and provide comments to any such Additional SEC Reports prior to the filing of any such Additional SEC Reports; provided, however, that (i) such Company comments shall relate only to the Company or the Transactions; and (ii) SPAC will have the final approval with respect to the content of such Additional SEC Reports.

 

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Article VIII
JOINT COVENANTS

 

Section 8.1             Regulatory Approvals; Other Filings.

 

(a)            Each of the Company and SPAC shall, and shall cause its Affiliates to, use its commercially reasonable efforts to cooperate in good faith with the other party and with any Governmental Authority in connection with the Transactions and to undertake promptly any and all action required to obtain any necessary or advisable regulatory approvals, consents, clearances, Actions, nonactions or waivers in order to complete lawfully the Transactions under the Laws set forth and described on Section 8.1(a) of the Company Disclosure Schedules (the “Regulatory Approvals”) as soon as practicable (but in any event prior to the Agreement End Date) and any and all action necessary to consummate the Transactions. Each of the Company and SPAC shall, and shall cause its Affiliates to, use commercially reasonable efforts to take such action as may be required to obtain each required Regulatory Approval with respect to the Transactions as promptly as practicable after the execution of this Agreement.

 

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(b)            With respect to each of the Regulatory Approvals and any other requests, inquiries, Actions or other proceedings by or from Governmental Authorities, each of the Company and SPAC shall, and shall cause its Affiliates to, (i) promptly submit all notifications, reports, and other filings required to be submitted to a Governmental Authority in order to obtain the Regulatory Approvals; (ii) diligently and expeditiously defend and use commercially reasonable efforts to obtain any necessary clearance, approval, consent or Regulatory Approval under any applicable Laws prescribed or enforceable by any Governmental Authority for the Transactions and to resolve any objections as may be asserted by any Governmental Authority with respect to the Transactions; and (iii) cooperate fully with each other in the defense of such matters. To the extent not prohibited by Law, the Company shall promptly furnish to SPAC, and SPAC shall promptly furnish to the Company, copies of any substantive notices or written communications received by such party or any of its Affiliates from any Governmental Authority with respect to the Transactions, and each such party shall permit counsel to the other party an opportunity to review in advance, and each such party shall consider in good faith the views of such counsel in connection with, any proposed substantive written communications by such party or its Affiliates to any Governmental Authority concerning the Transactions. Neither the Company nor SPAC shall, nor shall they permit their Affiliates to, enter into any agreement with any Governmental Authority relating to any Regulatory Approval contemplated in this Agreement without the written consent of the other party. To the extent not prohibited by Law, the Company agrees to provide SPAC and its counsel, and SPAC agrees to provide the Company and its counsel, the opportunity, on reasonable advance notice, to participate in any substantive meetings or discussions, either in person or by telephone, between such party or any of its Affiliates or Representatives, on the one hand, and any Governmental Authority, on the other hand, concerning or in connection with the Transactions. Each of the Company and SPAC agrees to make all filings, to provide all information reasonably required of such party and to reasonably cooperate with each other, in each case, in connection with the Regulatory Approvals; provided, further, that such party shall not be required to provide information to the other party to the extent that (w) any applicable Law requires it or its Affiliates to restrict or prohibit access to such information, (x) in the reasonable judgment of such party, the information is subject to confidentiality obligations to a third party, (y) in the reasonable judgment of such party, the information is commercially sensitive and disclosure of such information would have a material impact on the business, results of operations or financial condition of such party, or (z) disclosure of any such information would reasonably be likely to result in the loss or waiver of the attorney-client, work product or other applicable privilege. Notwithstanding anything to the contrary contained in this Agreement, nothing in this Section 8.1 or otherwise in this Agreement shall require any Group Company, SPAC or any of their Affiliates to offer, propose, negotiate, agree to, consent to or effect (A) the sale, divestiture, transfer, license or other disposal of, or hold separate with respect to, any entities, assets, businesses or interests, (B) the creation, termination, amendment or assignment of commercial relationships, agreements, licenses or contractual rights or obligations, (C) conduct of business restrictions, including restrictions on any party’s or its Affiliates’ ability to manage, operate or own any entities, assets, businesses or interests, (D) any other change or restructuring of any entities, assets, businesses or interests, or of any party or its Affiliates or (E) any other remedy, condition, undertaking or commitment of any kind. Neither the Company nor SPAC shall, nor shall they permit their Affiliates to, take any of the actions described in the foregoing sentence without the other party’s prior written consent. None of the Group Companies, SPAC or any of their Affiliates shall be required to contest, resist, defend against or appeal any Action, whether judicial or administrative, challenging or seeking to prevent, prohibit, delay or declare unlawful this Agreement or any of the Transactions.

 

(c)            The Company, on the one hand, and SPAC, on the other hand, shall each be responsible for and pay one-half of any and all filing fees payable to Governmental Authorities in connection with the Transactions.

 

(d)            Notwithstanding anything in this Section 8.1, matters relating to the Competition Act (Canada) and the Investment Canada Act shall be subject to the additional requirements set out in Section 8.1 of the Company Disclosure Schedules, and to the extent of any conflict between this Section 8.1 and Section 8.1 of the Company Disclosure Schedules in relation to such matters, Section 8.1 of the Company Disclosure Schedules shall take precedence.

 

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Section 8.2             Preparation of Proxy/Registration Statement; SPAC Stockholder Meeting and Approvals.

 

(a)            Proxy/Registration Statement.

 

(i)            As promptly as reasonably practicable after the execution of this Agreement, TopCo, SPAC and the Company shall prepare and TopCo shall file (and the Company shall cause TopCo to file) with the SEC a proxy/registration statement on Form F-4 (as amended or supplemented from time to time, the “Proxy/Registration Statement”) relating to the meeting of SPAC Stockholders (including any adjournment or postponement thereof, the “SPAC Stockholder Meeting”) (x) in connection with the registration under the Securities Act of the TopCo Common Shares to be issued pursuant to this Agreement, (y) to provide the SPAC Stockholders holding shares of SPAC Common Stock an opportunity to redeem their shares of SPAC Common Stock in the SPAC Share Redemption in accordance with the Governing Documents of SPAC and (z) to solicit proxies from SPAC Stockholders for the approval and adoption of: (A) this Agreement and the transactions contemplated hereby, including the Transactions (the “Merger Proposal”), (B) the amendment to the Governing Documents of SPAC, (C) any other proposals as the SEC or NYSE American (or the respective staff members thereof) may indicate are necessary in its comments to the Proxy/Registration Statement or correspondence related thereto, (D) any other proposals as determined by SPAC and the Company to be necessary or appropriate in connection with the transactions contemplated hereby and (E) adjournment of the SPAC Stockholder Meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes to approve and adopt any of the foregoing (such proposals in (A) through (F), collectively, the “Transaction Proposals”). Each of TopCo, the Company and SPAC shall furnish all information concerning such party as any such other party may reasonably request in connection with such actions and the preparation of the Proxy/Registration Statement. Each party shall use commercially reasonable efforts to (1) cause the Proxy/Registration Statement when filed with the SEC to comply in all material respects with all Laws applicable thereto, including all rules and regulations promulgated by the SEC, (2) respond as promptly as reasonably practicable to and resolve all comments received from the SEC concerning the Proxy/Registration Statement in accordance with Section 8.4(a)(iii) of this Agreement and Section 8.4(a)(iii) of the Company Disclosure Schedules, (3) cause the Proxy/Registration Statement to be declared effective under the Securities Act as promptly as practicable and (4) keep the Proxy/Registration Statement effective as long as is necessary to consummate the Transactions. Prior to the effective date of the Proxy/Registration Statement, the Company and SPAC shall take all or any action required under any applicable federal or state securities Laws in connection with the issuance of SPAC Common Stock pursuant to this Agreement. Each of the Company and SPAC also agrees to use its commercially reasonable efforts to obtain all necessary state securities law or “Blue Sky” permits and approvals required to carry out the Transactions, and the Company and SPAC shall furnish all information concerning the Company and its Subsidiaries (in the case of the Company) or SPAC and its Subsidiaries (in the case of SPAC) and any of their respective shareholders as may be reasonably requested in connection with any such action. As promptly as practicable after the Proxy/Registration Statement is declared effective by the SEC, SPAC shall mail (or cause to be mailed) the Proxy/Registration Statement to the SPAC Stockholders. Each of TopCo, SPAC and the Company shall furnish to such other parties all information concerning itself, its Subsidiaries, officers, directors, managers, shareholders, and other equityholders and information regarding such other matters as may be reasonably necessary or advisable or as may be reasonably requested in connection with the Proxy/Registration Statement, a current report of SPAC on Form 8-K pursuant to the Exchange Act in connection with the Transactions, or any other statement, filing, notice or application made by or on behalf of SPAC, the Company or their respective Affiliates to any regulatory authority (including NYSE American) in connection with the Transactions. SPAC shall comply in all material respects with all applicable rules and regulations promulgated by the SEC, any applicable rules and regulations of the NYSE American, the Governing Documents of SPAC, and this Agreement in the distribution of the Proxy/Registration Statement, any solicitation of proxies thereunder, the calling and holding of the SPAC Stockholder Meeting and the SPAC Share Redemption. Each of TopCo, the Company and SPAC shall provide such other parties and their respective legal counsels with a reasonable opportunity to review and comment upon drafts of the Proxy/Registration Statement, and shall give reasonable consideration to any comments made by any such party and its legal counsels prior to the filing of the Proxy/Registration Statement with the SEC. The Company, on the one hand, and SPAC, on the other, shall each be responsible for and pay one half of the costs for the preparation, filing and mailing of the Proxy/Registration Statement (excluding, for the avoidance of doubt, the fees and expenses of outside counsels, financial advisors, consultants and other advisors of each party incurred in connection therewith, which shall be paid by such party).

 

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(ii)           Without limiting Section 8.2(a)(i), any filing of, or amendment or supplement to, the Proxy/Registration Statement will be prepared by TopCo, SPAC and the Company and filed by TopCo with the SEC. Each of TopCo, SPAC and the Company will advise the such other parties, promptly after receiving notice thereof, of the time when the Proxy/Registration Statement has become effective or any supplement or amendment has been filed, of the issuance of any stop order, of the suspension of the qualification of TopCo Common Shares to be issued or issuable in connection with this Agreement for offering or sale in any jurisdiction, or of any request by the SEC for amendment of the Proxy/Registration Statement or comments thereon and responses thereto or requests by the SEC for additional information and responses thereto, and shall provide such other parties with a reasonable opportunity to provide comments and amendments to any such filing. TopCo, SPAC and the Company shall cooperate and mutually agree upon (such agreement not to be unreasonably withheld or delayed) any response to comments of the SEC or its staff with respect to the Proxy/Registration Statement and any amendments filed in response thereto (including in accordance with Section 8.4(a)(iii) of this Agreement and Section 8.4(a)(iii) of the Company Disclosure Schedules).

 

(iii)           If, at any time prior to the Closing, any event or circumstance relating to SPAC or its officers or directors is discovered by SPAC which should be set forth in an amendment or a supplement to the Proxy/Registration Statement or a current report of SPAC on Form 8-K, SPAC shall promptly inform the Company. If, at any time prior to the Closing, any event or circumstance relating to TopCo, the Company, any of their respective Subsidiaries, officers or directors is discovered by TopCo or the Company which should be set forth in an amendment or a supplement to the Proxy/Registration Statement or a current report of SPAC on Form 8-K, TopCo or the Company, as applicable, shall promptly inform SPAC. Thereafter, SPAC and the Company shall promptly cooperate in the preparation of an appropriate amendment or supplement to the Proxy/Registration Statement describing or correcting such information and shall promptly file such amendment or supplement with the SEC and, to the extent required by Law, disseminate such amendment or supplement to the SPAC Stockholders.

 

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(b)            SPAC Stockholders’ Approval.

 

(i)            Prior to or as promptly as practicable after the Proxy/Registration Statement is declared effective under the Securities Act, SPAC shall establish a record date for, duly call, give notice of, and convene and hold the SPAC Stockholder Meeting (and in any event, such meeting shall be held not more than thirty (30) days after the date on which the Proxy/Registration Statement is mailed to the SPAC Stockholders) for the purpose of voting on the Transaction Proposals and obtaining the SPAC Stockholders’ Approval (including any adjournment or postponement of such meeting for the purpose of soliciting additional proxies in favor of the adoption of this Agreement), providing SPAC Stockholders with the opportunity to elect to effect a SPAC Share Redemption and such other matters as may be mutually agreed by SPAC and the Company. SPAC will use its commercially reasonable efforts to (A) solicit from its stockholders proxies in favor of the adoption of this Agreement and the Transaction Proposals, including the SPAC Stockholders’ Approval, and will take all other action necessary or advisable to obtain such proxies and SPAC Stockholders’ Approval and (B) obtain the vote or consent of its stockholders required by and in compliance with all applicable Law or NYSE American rules (as applicable) and the Governing Documents of SPAC; provided that none of SPAC, Sponsor or any of their Affiliates shall be required to pay any additional consideration to any SPAC Stockholder in order to obtain the SPAC Stockholders’ Approval. SPAC (x) shall consult with the Company regarding the record date and the date of the SPAC Stockholder Meeting and (y) shall not adjourn or postpone the SPAC Stockholder Meeting without the prior written consent of Company (which consent shall not be unreasonably withheld, conditioned or delayed); provided, however, that SPAC may adjourn or postpone the SPAC Stockholder Meeting for a period of not longer than 15 days without any such consent (1) to the extent necessary to ensure that any supplement or amendment to the Proxy/Registration Statement that SPAC reasonably determines (following consultation with the Company) is necessary to comply with applicable Laws, is provided to the SPAC Stockholders in advance of a vote on the adoption of this Agreement, (2) if, as of the time that the SPAC Stockholder Meeting is originally scheduled, there are insufficient SPAC Common Stock represented at such meeting (either in person or by proxy) to constitute a quorum necessary to conduct the business of the SPAC Stockholder Meeting (3) if, as of the time that the SPAC Stockholder Meeting is originally scheduled, adjournment or postponement of the SPAC Stockholder Meeting is necessary to enable SPAC to solicit additional proxies required to obtain SPAC Stockholders’ Approval or (4) in the event that, as a result of the SPAC Share Redemptions submitted by the SPAC Stockholders prior to the redemption deadline preceding the date on which the SPAC Stockholder Meeting is originally scheduled, SPAC reasonably believes that the condition set forth in ‎Section 9.3(b) would not be satisfied as of the Closing (assuming for purposes of this clause (4) that the full PIPE Financing Amount will be funded pursuant to the terms of the PIPE Subscription Agreements). To the extent practicable, and in any event subject to the SPAC’s obligations under Law, SPAC shall provide the Company with (I) reasonable updates with respect to the tabulated vote counts received by SPAC, and (II) the right to review and discuss all material communications sent to SPAC Stockholders and holders of SPAC Warrants with respect to the SPAC Stockholder Meeting.

 

(ii)           The Proxy/Registration Statement shall include a statement to the effect that SPAC Board has unanimously recommended that the SPAC Stockholders vote in favor of the Transaction Proposals at the SPAC Stockholder Meeting (such statement, the “SPAC Board Recommendation”).

 

(c)            Company Board Recommendation. The Company Information Circular shall include a statement to the effect that the Company Board has unanimously recommended that the Company Shareholders vote in favor of the Company Resolution (the “Company Board Recommendation”).

 

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Section 8.3             Support of Transaction. (i) The Company shall, and shall cause the other Group Companies to, and (ii) SPAC shall, (a) use commercially reasonable efforts to obtain all material consents and approvals of third parties that any Group Company or SPAC, as applicable, is required to obtain in order to consummate the Transactions, and (b) take or cause to be taken such other action as may be reasonably necessary or as the other party hereto may reasonably request to satisfy the conditions of ‎Article IX (including, in the case of the Company, the use of commercially reasonable efforts to enforce SPAC’s rights under the PIPE Subscription Agreements) or otherwise to comply with this Agreement and to consummate the Transactions as soon as practicable; provided that, notwithstanding anything contained herein to the contrary, nothing in this Agreement shall require any Group Company or SPAC or any of their respective Affiliates to (and no Group Company, SPAC or any of their respective Affiliates shall, without the other party’s prior written consent) (i) commence or threaten to commence, pursue or defend against any Action (except as required under Section 8.5), whether judicial or administrative, (ii) seek to have any stay or other Governmental Order vacated or reversed, (iii) propose, negotiate, commit to or effect by consent decree, hold separate order or otherwise, the sale, divestiture, licensing or disposition of any assets or businesses of the Group Companies, (iv) take or commit to take actions that limit the freedom of action of any of the Group Companies or SPAC with respect to, or the ability to retain, control or operate, or to exert full rights of ownership in respect of, any of the businesses, product lines or assets of the Group Companies or SPAC or (v) grant any financial, legal or other accommodation to any other Person (for the avoidance of doubt, without limiting the express obligations of such parties under the terms of this Agreement and the Ancillary Agreements).

 

Section 8.4             Tax Matters.

 

(a)            Intended U.S. Tax Treatment.

 

(i)            Subject to Section 8.4(a)(v), the parties hereto intend that for U.S. federal income Tax purposes the relevant Transactions will qualify for the Intended U.S. Tax Treatment and each party hereto, as applicable, shall, and shall cause its respective Affiliates to, use commercially reasonable efforts to cause the relevant Transactions to so qualify and shall file all Tax Returns consistent with, and take no position inconsistent with (whether in audits, Tax Returns or otherwise), such treatment unless required to do so pursuant to a “determination” that is final within the meaning of Section 1313(a) of the Code.

 

(ii)           Subject to Section 8.4(a)(v), the parties hereto shall not take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Intended U.S. Tax Treatment. Neither TopCo nor its Affiliates will take any action, make any Tax election or engage in any transaction that would result in the liquidation of SPAC for U.S. federal income tax purposes within two (2) calendar years following the Closing Date.

 

(iii)           The parties hereto shall cooperate with each other to document and support the Intended U.S. Tax Treatment by taking the actions described in Section 8.4(a)(iii) of the Company Disclosure Schedules.

 

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(iv)          TopCo acknowledges that any Company Shareholder or SPAC Stockholder that is a direct or indirect holder of TopCo Common Shares who is also a “five-percent transferee shareholder” (within the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii)) of TopCo following the Merger Effective Time (each a “5% Shareholder”) may enter into (and cause to be filed with the U.S. Internal Revenue Service) a “gain recognition agreement” in the form provided in Treasury Regulations Section 1.367(a)-8(c) (each a “GRA”). Upon the written request of any 5% Shareholder made following the Closing Date, TopCo shall (i) furnish to such 5% Shareholder such information as such 5% Shareholder reasonably requests in connection with such 5% Shareholder’s preparation of a GRA and any necessary Tax forms with respect thereto during the period in which such GRA is in place under Treasury Regulations Section 1.367(a)-8, and (ii) provide such 5% Shareholder with the information reasonably requested by such 5% Shareholder for purposes of such 5% Shareholder’s tax compliance during the period in which such GRA is in place under Treasury Regulations Section 1.367(a)-8, including for purposes of determining whether there has been a gain “triggering event” (within the meaning of Treasury Regulations Section 1.367(a)-8) under the terms of such 5% Shareholder’s GRA. TopCo shall use commercially reasonable efforts to operate in a manner that avoids or mitigates the likelihood of a triggering event. This Section 8.4(a)(iv) shall not apply in the event of a Reporting Exception Determination (as defined below).

 

(v)           The Parties agree to report the Merger as qualifying for the exception provided under Treasury Regulation Section 1.367(a)-3(c) (other than with respect to a 5% Shareholder that does not enter into a GRA) unless the Company, TopCo or SPAC make a determination in good faith that there is not a level of support of at least “substantial authority” within the meaning of Treasury Regulations Section 1.6662-4(d) for such reporting (a “Reporting Exception Determination”). The Company and Topco shall consult in good faith with the SPAC and the Sponsor with respect to such determination. During the Interim Period and after the Closing Date, the parties hereto will cooperate in good faith to conduct all necessary diligence prior to making a Reporting Exception Determination. Following the Closing Date, TopCo shall, or shall cause SPAC to, use commercially reasonable efforts to comply with the tax reporting obligations of Treasury Regulations Section 1.367(a)-3(c)(6) in connection with the Transactions unless a Reporting Exception Determination has occurred.

 

(vi)          The Parties hereto shall report the Company Continuance as a “reorganization” under Section 368(a)(1)(F) of the Code. The Agreement is intended to constitute and is hereby adopted as a “plan of reorganization” within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a) for purposes of Sections 354, 361 and 368 of the Code and the Treasury Regulations thereunder with respect to the Company Continuance.

 

(vii)         In the event TopCo believes that it or any of its Subsidiaries is reasonably likely to be treated as a “passive foreign investment company” as defined under Section 1297 of the Code (“PFIC”) during the taxable year that includes the Closing, TopCo shall take commercially reasonable steps to disclose such information to its shareholders.

 

(viii)        For the avoidance of doubt, nothing in this Section 8.4(a) shall require any restructuring of the Transactions if such restructuring could be reasonably likely to have a material adverse impact to any Group Company, TopCo or any Company Shareholders.

 

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(b)            Certain Tax Elections. It is intended that the exchange of the Company Common Shares for Company Shareholder Transaction Consideration, TopCo Class A Earnout Shares and TopCo Class B Earnout Shares, issuable in accordance with the Allocation Schedule, pursuant to the Plan of Arrangement be governed by subsection 85(1) and 85(2) of the Tax Act. Subject to the provisions of the Plan of Arrangement, TopCo shall execute joint tax elections under subsections 85(1) and 85(2) of the Tax Act or any equivalent provincial legislation with Company Shareholders who are Eligible Holders (as defined in the Plan of Arrangement) and who receive Exchange Consideration under the Arrangement, subject to and in accordance with the Plan of Arrangement.

 

Section 8.5             Stockholder Litigation. The Company shall promptly advise SPAC, and SPAC shall promptly advise the Company, as the case may be, of any Action commenced (or to the knowledge of the Company or the knowledge of SPAC, as applicable, threatened) on or after the date of this Agreement against such party, any of its Subsidiaries or any of its directors by any Company Shareholder or SPAC Stockholder relating to this Agreement or any of the Transactions (any such Action, “Stockholder Litigation”), and such party shall keep the other party reasonably informed regarding any such Stockholder Litigation. The Company shall give SPAC the opportunity to participate in the defense or settlement of any such Stockholder Litigation brought against the Company, any of its Subsidiaries or any of its directors, and no such settlement shall be agreed to without the SPAC’s prior consent (which consent shall not be unreasonably withheld, conditioned or delayed). The SPAC shall give the Company the opportunity to participate in the defense or settlement of any such Stockholder Litigation brought against SPAC, any of its Subsidiaries or any of their respective directors, and no such settlement shall be agreed to without the Company’s prior consent (which consent shall not be unreasonably withheld, conditioned or delayed).

 

Section 8.6             Business Combination Proposal, Acquisition Proposals and Specified Other Transactions. During the Interim Period, each of the Company, SPAC, TopCo and Merger Sub shall not, and shall cause their respective Representatives not to, (i) initiate any negotiations with any Person with respect to, or provide any non-public information or data concerning the Company or SPAC or their respective Subsidiaries, to any Person relating to a Business Combination Proposal, an Acquisition Proposal or an Specified Other Transaction or afford to any Person access to the business, properties, assets or personnel of any Group Company or SPAC or any of their respective Subsidiaries in connection with a Business Combination Proposal, an Acquisition Proposal or Specified Other Transaction, (ii) enter into any acquisition agreement, merger agreement or similar definitive agreement, or any letter of intent, memorandum of understanding or agreement in principle, or any other agreement relating to a Business Combination Proposal, an Acquisition Proposal or a Specified Other Transaction, (iii) grant any waiver, amendment or release under any confidentiality agreement or the anti-takeover Laws of any state relating to a Business Combination Proposal, an Acquisition Proposal or a Specified Other Transaction, or (iv) otherwise knowingly facilitate any such inquiries, proposals, discussions, or negotiations or any effort or attempt by any Person to make a Business Combination Proposal, an Acquisition Proposal or a Specified Other Transaction. Each of the Company, SPAC, TopCo and Merger Sub shall, and shall cause its respective Representatives to, immediately cease any and all existing discussions or negotiations with any Person conducted heretofore with respect to any Business Combination Proposal, Acquisition Proposal or Specified Other Transaction. Without limiting the foregoing, the parties agree that any violation of the restrictions set forth in this Section 8.6 by a party or its affiliates or Representatives shall be deemed to be a breach of this Section 8.6 by such party.

 

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Section 8.7      Access to Information; Confidentiality; Inspection. During the Interim Period, to the extent permitted by applicable Law, each of the Company and SPAC shall, and shall cause each of their respective Subsidiaries to, (i) afford to the other party and its Representatives reasonable access, during normal business hours and with reasonable advance notice, in such manner as to not materially interfere with the Ordinary Course of its operations, to all of its respective assets, properties, facilities, books, Contracts, Tax Returns, records and appropriate officers, employees and other personnel, and shall furnish such Representatives with all financial and operating data and other information concerning its affairs that are in its possession as such Representatives may reasonably request, and (ii) cooperate with the other party and its Representatives regarding all due diligence matters, including document requests. All information obtained by the Company, SPAC, TopCo and Merger Sub and their respective Representatives pursuant to the foregoing shall be subject to the Confidentiality Agreement, and the Company hereby agrees to be bound to the same restrictions as SPAC (applied mutatis mutandis to the Company and its Representatives) as to all information furnished before or after the date of this Agreement by or on behalf of SPAC or its Affiliates to the Company or its Representatives, which information shall constitute “Confidential Information” under the Confidentiality Agreement (subject to the applicable exceptions set forth therein) with respect to the Company. Notwithstanding the foregoing, none of the parties hereto shall be required to directly or indirectly provide access to or disclose information where the access or disclosure would violate its obligations of confidentiality, Privacy Obligations or similar legal restrictions with respect to such information, jeopardize the protection of attorney-client privilege or contravene applicable Law (it being agreed that the parties shall use their commercially reasonable efforts to cause such information to be provided in a manner that would not result in such jeopardy or contravention), inconsistent with COVID-19 Measures or violate any law or regulations applicable to such party; provided, further, that SPAC’s right to access the properties and facilities of the Company shall in no event include a right to conduct any invasive or subsurface sampling or testing of any environmental media.

 

Section 8.8      Post-Closing Directors and Officers.

 

(a)            The Company, SPAC and TopCo shall take commercially reasonable actions within their respective powers as may be necessary or appropriate such that, immediately following the Merger Effective Time, the Board of Directors of TopCo (the “Post-Closing Board of Directors”) shall initially consist of seven (7) directors as follows: (i) three (3) individuals shall be co-designated by Sponsor and certain Lenders or their Affiliates (provided such individuals are reasonably acceptable to the Company), at least one (1) of whom shall qualify as an “independent” under the rules of the national stock exchange on which the TopCo Common Shares are traded, and (ii) four (4) individuals shall be designated by the Company, in each case of clauses (i) and (ii), as soon as reasonably practicable following the date of this Agreement; provided that the Post-Closing Board of Directors shall consist of such number of independent directors (for purposes of the Exchange Act and the rules promulgated thereunder) as may be required by NYSE, of which, at least one shall meet the “financial expert” requirements of NYSE.

 

(b)            The initial officers of TopCo shall be the existing officers of the Company, except to the extent otherwise mutually agreed by the Company and SPAC prior to the Closing.

 

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Section 8.9      Deliverables to Advisors. If, and to the extent, required by any underwriter, placement agent, financial advisor, capital markets advisor or other adviser to the SPAC and/or the Company (collectively, the “Advisors”), each of TopCo, the SPAC and the Company will use its reasonable best efforts to deliver, upon the effectiveness of the Proxy/Registration Statement and the occurrence of the SPAC Stockholder Meeting (i) comfort letters from the independent certified public accounting firms of each of TopCo, the SPAC and the Company, (ii) negative assurance letters of outside counsel to each of TopCo, the SPAC and the Company and (iii) certificates from the chief financial officers of each of TopCo, SPAC and the Company, in each case, in form and substance reasonably satisfactory to the Advisors.

 

Section 8.10      PIPE Investment. Prior to the earlier of the Closing and the termination of this Agreement in accordance with its terms:

 

(a)            TopCo, the Company and SPAC shall use their reasonable best efforts to cooperate, negotiate and agree upon a form of the PIPE Subscription Agreement to which one or more PIPE Investors will become a party thereto in connection with the PIPE Financing. The form of PIPE Subscription Agreement may include customary resale registration rights, as may be reasonably requested by the PIPE Investors. TopCo, the Company and SPAC further agree that, if requested by the Lenders under the Convertible Loan Agreement, such Lenders shall also be granted customary resale registration rights with respect to the TopCo Common Shares issuable pursuant to the Convertible Loan Agreement.

 

(b)            TopCo, the Company and SPAC shall use their commercially reasonable efforts to (i) obtain the PIPE Financing, enforce the obligations of the PIPE Investors under the PIPE Subscription Agreements, and consummate the purchases contemplated by the PIPE Subscription Agreements on the terms and subject to the conditions set forth in the PIPE Subscription Agreements, (ii) satisfy all conditions to the PIPE Financing set forth in the PIPE Subscription Agreements that are within their control and (iii) satisfy and comply with their respective obligations under the PIPE Subscription Agreements. TopCo shall use its commercially reasonable efforts to, and shall use its commercially reasonable efforts to cause its respective Representatives to, cooperate with the Company and SPAC and their Representatives in connection with the matters specified in this Section 8.10(a). If reasonably requested by the Company or SPAC, TopCo shall, to the extent it has such rights under any PIPE Subscription Agreement, waive any breach of any representation, warranty, covenant or agreement of such PIPE Subscription Agreement by the applicable PIPE Investor to the extent necessary to cause the satisfaction of the conditions to closing of the PIPE Financing set forth in the PIPE Subscription Agreements and solely for the purpose of consummating the Closing, provided that (i) any such waiver may be subject to, and conditioned upon, the Closing occurring and the substantially concurrent funding of the PIPE Financing, (ii) subject to, and condition upon, the Closing occurring and the substantially concurrent funding of the PIPE Financing, the Company or SPAC, as applicable, also waives any such breach to the extent the Company is a third-party beneficiary of the provision that was so breached and (iii) any such waiver shall be subject to the rights of the placement agent, as applicable, under such PIPE Subscription Agreement with respect to such waiver.

 

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(c)            TopCo shall not amend, modify or waive any provisions of any PIPE Subscription Agreement without the prior written consent of the Company and SPAC; provided that any amendment, modification or waiver that is solely ministerial in nature or otherwise immaterial, and, in each case, that does not affect any economic or any other material term, shall not require the prior written consent of the Company or SPAC, so long as TopCo has provided to the Company and SPAC no less than two (2) Business Days’ prior written notice of such amendment, modification or waiver (including the form thereof), it being understood, but without limiting the foregoing, that it shall be deemed material if any amendment, modification or waiver (i) reduces or is reasonably expected to reduce the amount of the PIPE Financing available under any PIPE Subscription Agreement, (ii) imposes new or additional conditions or otherwise expands, amends or modifies any of the conditions to the receipt of the PIPE Financing or (iii) prevents, impedes or delays or is expected to prevent, impede or delay the consummation of the Transactions.

 

(d)            TopCo shall (i) promptly notify the Company and SPAC upon having knowledge of any material breach or default under, or termination of, any PIPE Subscription Agreement (including any refusal or repudiation by any PIPE Investor with respect to its obligation and/or ability to provide the full financing contemplated by the applicable PIPE Subscription Agreement), (ii) at least 24 hours prior to delivering any written notice (or any other material notice) to a PIPE Investor with respect to any PIPE Subscription Agreement, deliver such notice to the Company and SPAC for their prior review and consent (which consent shall not be unreasonably withheld, conditioned or delayed) and (iii) promptly, and in any event, within two (2) Business Days following the Company’s or SPAC’s reasonable request, deliver the Closing Notice (as such term (or similar term) will be defined in the PIPE Subscription Agreement) to the PIPE Investors if conditions to the delivery of such notice under the PIPE Subscription Agreement have been satisfied or waived in accordance with the terms hereof and thereof and all of the conditions to the Closing set forth in Article IX have been satisfied or waived (other than those conditions that, by their nature, are to be satisfied at the Closing, but that would, as of such date, reasonably be expected to be satisfied if the Closing were to occur).

 

(e)            In the event that any portion of the proceeds contemplated to be received by TopCo upon the consummation of the transactions contemplated by the PIPE Subscription Agreements become unavailable on the terms and conditions contemplated in each PIPE Subscription Agreement, regardless of the reason therefor, and such unavailable proceeds are required to fund the Transactions on the Closing Date in order to satisfy Section 9.3(c), TopCo, the Company and SPAC will (i) as promptly as practicable following the occurrence of such event, use its commercially reasonable efforts to obtain alternative financing (the “Alternative Financing”) (in an amount sufficient, when taken together with any then-available proceeds contemplated by the PIPE Subscription Agreements and available cash of SPAC, to consummate the Transactions) on terms not less favorable in the aggregate to TopCo than those contained in each PIPE Subscription Agreement that the Alternative Financing would replace from the same or other sources and which do not include any incremental conditionality to the consummation of such Alternative Financing that are materially more onerous to TopCo, SPAC and the Company (in each case, in the aggregate) than the conditions set forth in each PIPE Subscription Agreement (as applicable) in effect as of prior to the occurrence of such event and (ii) immediately notify the other parties hereto of such unavailability and the reason therefor; provided that none of TopCo, the Company or SPAC shall enter into any Alternative Financing without the prior written consent of the other such parties (such consent not to be unreasonably withheld, conditioned or delayed). Upon receiving such notification, the other parties hereto will use their respective commercially reasonable efforts to assist in obtaining Alternative Financing.

 

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Section 8.11      D&O Indemnification and Insurance.

 

(a)            Each party hereto agrees that all rights to exculpation, indemnification and advancement of expenses existing as of the date of this Agreement in favor of the current or former directors or officers of SPAC or any Group Company (each, together with such person’s heirs, executors or administrators, a “D&O Indemnitees”) under the applicable Governing Documents, any “directors and officers” insurance policy or under any indemnification agreement such D&O Indemnitee may have with SPAC or the applicable Group Companies, in each case, as in effect as of immediately prior to the date of this Agreement (collectively, the “Existing D&O Arrangements”), shall survive the Closing and shall continue in full force and effect for a period of six (6) years from the Closing Date. For a period of six (6) years from the Closing Date, to the maximum extent permitted under applicable Law, TopCo, the Company and the Surviving Corporation shall, and shall cause their respective Subsidiaries to, maintain in effect the Existing D&O Arrangements and not to amend, repeal or otherwise modify any such provisions in any manner that would materially and adversely affect the rights thereunder of any D&O Indemnitee; provided, however, that all rights to indemnification or advancement of expenses in respect of any Action pending or asserted or any claim made within such period shall continue until the disposition of such Action or resolution of such claim. None of SPAC, the Company, TopCo, the Company or the Surviving Corporation shall have any obligation under this Section 8.11(a) to any D&O Indemnitee when and if a court of competent jurisdiction shall ultimately determine, and such determination shall have become final and non-appealable, that the indemnification of such D&O Indemnitee in the manner contemplated hereby is prohibited by applicable Law.

 

(b)            Prior to and effective as of the Closing, TopCo, the Company and SPAC shall purchase a prepaid six (6)-year “tail” or “runoff” directors’ and officers’ liability insurance policy (the “D&O Tail”) in respect of acts or omissions occurring prior to the Share Exchange Effective Time covering each individual who is a director or officer of SPAC or any Group Company or Merger Subsidiary currently covered by the directors’ and officers’ liability insurance policy of SPAC or the Group Companies on terms with respect to coverage, deductibles and amounts reasonably appropriate for companies of similar circumstances, commercially practicable under market conditions at such time and acceptable to SPAC and the Company. TopCo shall, and shall cause the Surviving Corporation and Company to, maintain the D&O Tail in full force and effect for its full term.

 

(c)            If TopCo, the Company, the Surviving Corporation or any of their respective successors or assigns (i) shall merge or consolidate with or merge into any other corporation or entity and shall not be the surviving or continuing corporation or entity of such consolidation or merger or (ii) shall transfer all or substantially all of their respective properties and assets as an entity in one or a series of related transactions to any Person, then in each such case, proper provisions shall be made so that the successors or assigns of TopCo, the Company and/or Surviving Corporation, as applicable, shall assume all of the obligations set forth in this Section 8.11.

 

(d)            On the Closing Date, TopCo shall enter into customary indemnification agreements reasonably satisfactory to each of the Company and SPAC with the post-Closing directors and officers of TopCo, which indemnification agreements shall continue to be effective following the Closing.

 

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Section 8.12      Equity Incentive Plan. Prior to the Share Exchange, TopCo shall approve and adopt, subject to the approval of the stockholders of TopCo, the Equity Incentive Plan to be effective in connection with the Closing. The Equity Incentive Plan shall provide for an initial aggregate share reserve thereunder equal to 10% of the number of TopCo Common Shares determined on a fully diluted basis at the Closing (the “Equity Incentive Plan Initial Share Reserve”); provided that all TopCo Common Shares that may be issued in respect of any Rollover Option that was a Company Out-Of-The-Money / Unvested Option immediately prior to the Share Exchange Effective Time shall be included in, and issued from, the Equity Incentive Plan Initial Share Reserve. As promptly as practicable after the date that is sixty (60) days after the Form 8-K announcing the Closing is filed with the SEC, TopCo shall file an effective Form S-8 Registration Statement with the SEC with respect to the TopCo Common Shares issuable under the Equity Incentive Plan and TopCo shall maintain the effectiveness of such Form S-8 Registration Statement (and the current status of the prospectus or prospectuses contained therein) for so long as awards granted pursuant to the Equity Incentive Plan remain outstanding.

 

Section 8.13      SPAC Extension.

 

(a)            The Company acknowledges that SPAC filed a proxy statement (as amended, the “SPAC Extension Proxy Statement”) and on December 15, 2022, received approval from the SPAC Stockholders of an amendment to SPAC’s Governing Documents, including its certificate of incorporation, pursuant to which the deadline by which SPAC must complete its initial Business Combination (the “SPAC Business Combination Deadline”) was extended for up to an additional six one-month periods, from February 17, 2023 to up to August 17, 2023, and upon the exercise of each such extension of the Business Combination Deadline, Sponsor (or its affiliates or permitted designees) will deposit into the Trust Account an amount set forth in the SPAC Extension Proxy Statement for each share of SPAC Common Stock that remains outstanding.

 

(b)            Unless the Closing has occurred or this Agreement shall have otherwise been terminated in accordance with the provisions set forth in Section 11.1, (i) prior to August 17, 2023, SPAC shall make, or cause Sponsor to make, the deposits into the Trust Account necessary to extend the SPAC Business Combination Deadline to August 17, 2023 as set forth in the SPAC Extension Proxy Statement and the SPAC’s Governing Documents and (ii) from and after August 17, 2023, SPAC shall use commercially reasonable efforts to take any and all actions necessary, including filing a proxy statement, amending the SPAC’s Governing Documents and obtaining the necessary approval from the SPAC Stockholders, to extend the SPAC Business Combination Deadline (each extension in clause (i) and (ii), a “SPAC Extension”) until the Agreement End Date or another date mutually agreed in writing between SPAC and the Company.

 

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Article IX
CONDITIONS TO OBLIGATIONS

 

Section 9.1      Conditions to Obligations of Each Party. The obligations of each party to this Agreement to consummate, or cause to be consummated, the Transactions at the Closing is 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)            The SPAC Stockholders’ Approval shall have been obtained;

 

(b)            All waiting periods (and any extensions thereof) applicable to the Transactions under any Antitrust Law, and any commitments or agreements (including timing agreements) with any Governmental Authority not to consummate the Transactions before a certain date, shall have expired or been terminated, and all other Regulatory Approvals shall have been obtained;

 

(c)            The Proxy/Registration Statement shall have become effective under the Securities Act and no stop order suspending the effectiveness of the Proxy/Registration Statement shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC and not withdrawn;

 

(d)            No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) or Governmental Order that is then in effect and which has the effect of making the Transactions illegal or which otherwise prevents or prohibits consummation of the Transactions;

 

(e)            The Company Required Approval shall have been obtained; and

 

(f)            TopCo’s initial listing application with NYSE or Nasdaq in connection with the transactions contemplated by this Agreement shall have been approved and the TopCo Common Shares (including, for the avoidance of doubt, the TopCo Common Shares to be issued pursuant to the Transactions) shall have been approved for listing on NYSE or Nasdaq, as applicable.

 

Section 9.2      Conditions to Obligations of SPAC. The obligations of SPAC to consummate, or cause to be consummated, the Transactions at the Closing are subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by SPAC:

 

(a)            Representations and Warranties.

 

(i)            The representations and warranties of (A) the Company contained in Section 3.2 (Subsidiaries; Capitalization) and (B) the Merger Subsidiaries contained in Section 5.2 (Capitalization) shall be true and correct in all but de minimis respects as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date, which representations and warranties shall be true and correct in all but de minimis respects on and as of such date, except for changes after the date of this Agreement that are contemplated or expressly permitted by this Agreement or the Ancillary Agreements;

 

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(ii)            Each of the Company and Merger Subsidiary Fundamental Representations (other than Section 3.2 (Subsidiaries; Capitalization) and Section 5.2 (Capitalization)) shall be true and correct in all material respects, in each case as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date, which representations and warranties shall be true and correct in all material respects on and as of such earlier date, except for changes after the date of this Agreement that are contemplated or expressly permitted by this Agreement or the Ancillary Agreements; and

 

(iii)            Each of the representations and warranties of the Company and the Merger Subsidiaries contained in this Agreement other than the Company and Merger Subsidiary Fundamental Representations (disregarding any qualifications and exceptions contained therein related to materiality, material adverse effect and Company Material Adverse Effect or any similar qualification or exception) shall be true and correct as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date, which representations and warranties shall be true and correct on and as of such date, except for, in each case, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect;

 

(b)            Each of the covenants of the Company to be performed as of or prior to the Closing shall have been performed in all material respects;

 

(c)            There has not been any Event that has had, or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and be continuing; and

 

(d)            The Company shall have delivered or caused to be delivered:

 

(i)            a certificate signed by an officer of the Company, dated as of the Closing Date, certifying that the conditions specified in ‎Section 9.2(a), ‎Section 9.2(b) and Section 9.2(c) have been fulfilled;

 

(ii)            evidence in form and substance reasonably acceptable to SPAC of the termination of the Termination Contracts;

 

(iii)            copies of the written resignations of all the directors and officers of TopCo (except for any director or officer who is designated pursuant to Section 8.8 if he or she is a director of TopCo immediately prior to the Closing), effective as of the Closing;

 

(iv)            duly executed employment agreements, in each case effective as of the Closing, in form and substance reasonably acceptable to SPAC, between TopCo and each of the individuals set forth in Schedule 2 hereto; and

 

(v)            duly executed counterparts of each of the Ancillary Agreements contemplated to be executed at the Closing by the Company or any of its Subsidiaries.

 

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Section 9.3      Conditions to the Obligations of the Company. The obligations of the Company to consummate, or cause to be consummated, the Transactions at the Closing is subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by the Company:

 

(a)            Representations and Warranties.

 

(i)            The representations and warranties of SPAC contained in Section 4.2 shall be true and correct in all but de minimis respects as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date, which representations and warranties shall be true and correct in all but de minimis respects on and as of such date, except for changes after the date of this Agreement that are contemplated or expressly permitted by this Agreement or the Ancillary Agreements;

 

(ii)            Each of the SPAC Fundamental Representations shall be true and correct in all material respects, in each case as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date, which representations and warranties shall be true and correct in all material respects on and as of such earlier date, except for changes after the date of this Agreement that are contemplated or expressly permitted by this Agreement or the Ancillary Agreements; and

 

(iii)            Each of the representations and warranties of SPAC contained in this Agreement other than the SPAC Fundamental Representations and the representations and warranties of SPAC contained in Section 4.2 (disregarding any qualifications and exceptions contained therein related to materiality, material adverse effect and SPAC Material Adverse Effect or any similar qualification or exception) shall be true and correct as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date, which representations and warranties shall be true and correct on and as of such date, except for, in each case, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect;

 

(b)            Each of the covenants of SPAC to be performed as of or prior to the Closing shall have been performed in all material respects;

 

(c)            As of the Closing, the Available Cash shall be no less than the sum of (i) the Company Transaction Expenses plus (ii) the SPAC Transaction Expenses plus (iii) $5,000,000;

 

(d)            As of the Closing, the Company shall have received proceeds of the Loan in an aggregate amount at least equal to $9,000,000;

 

(e)            There has not been any Event that has had, or would reasonably be expected to have, individually or in the aggregate, a SPAC Material Adverse Effect and be continuing; and

 

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(f)            SPAC shall have delivered or cause to be delivered:

 

(i)            a certificate signed by an officer of SPAC, dated as of the Closing Date, certifying that the conditions specified in ‎Section 9.3(a) and ‎Section 9.3(b) have been fulfilled;

 

(ii)            copies of the written resignations of all the directors and officers of SPAC (except for any director or officer who is designated pursuant to Section 2.3(g) if he or she is a director of SPAC immediately prior to the Closing), effective as of the Closing; and

 

(iii)            duly executed counterparts of each of the Ancillary Agreements contemplated to be executed at the Closing by Sponsor.

 

(iv)            at or prior to the Closing, in a form reasonably acceptable to the Company, a properly executed certification that shares of SPAC Common Stock are not “United States real property interests” in accordance with Treasury Regulation Section 1.1445-2(c)(3), together with a notice to the IRS (which shall be filed by the Company with the IRS at or following the Closing) in accordance with the provisions of Section 1.897-2(h)(2) of the Treasury Regulations. Notwithstanding anything to the contrary in this Agreement, the Company’s only recourse for SPAC’s failure to deliver such a certification shall be to make any withholding pursuant to Section 2.7 that is required as a result of such failure.

 

Section 9.4      Frustration of Conditions. Neither SPAC nor the Company may rely on the failure of any condition set forth in this ‎Article IX to be satisfied if such failure was caused by such party’s failure to act in good faith or to take such actions as may be necessary to cause the conditions of the other party hereto to be satisfied, as required by Section 8.4.

 

Article X
ALTERNATIVE TRANSACTION

 

Section 10.1      Alternative Transaction. In the event that the Final Order is not obtained (for any reason other than as a result of a material breach of SPAC’s covenants or obligations under this Agreement), the parties hereto agree to take all actions reasonably required to execute and deliver all related documentation in order to complete the Share Exchange by way of an arrangement under Part 14 of the ABCA (an “Alternative Transaction”), including, as soon as reasonably practicable following the Court hearing relating the Final Order in accordance with Section 2.2(d), (i) the entering into of an arrangement agreement with SPAC on substantially the same terms and conditions as this Agreement and (ii) the preparation of a management information circular and holding of a meeting of the Company Shareholders for the approval of the Alternative Transaction; provided, however, if reasonably practicable, and subject to the consent of each of the Company and SPAC, in each case not to be unreasonably withheld, conditioned or delayed, Company Shareholders shall be given the opportunity to effect the Share Exchange by way of share exchange immediately prior to the arrangement contemplated by this Section 10.1.

 

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Article XI
TERMINATION/EFFECTIVENESS

 

Section 11.1      Termination. This Agreement may be terminated and the Transactions abandoned:

 

(a)            by mutual written consent of the Company and SPAC;

 

(b)            by written notice from the Company or SPAC to the other if any Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order or other Law that has become final and nonappealable and has the effect of making consummation of the Transactions illegal or otherwise preventing or prohibiting consummation of the Transactions; provided that the Governmental Authority issuing such Governmental Order has jurisdiction over the parties hereto with respect to the Transactions;

 

(c)            by written notice from the Company or SPAC to such other party if the SPAC Stockholders’ Approval shall not have been obtained by reason of the failure to obtain the required vote at the SPAC Stockholder Meeting duly convened therefor or at any adjournment or postponement thereof; provided that the right to terminate this Agreement pursuant to this Section 11.1(c) shall not be available to SPAC unless the SPAC has complied in all material respects with its obligations under Section 8.2(b);

 

(d)            by written notice from the Company or SPAC to such other party if the Company Required Approval in respect of the Company Resolution shall not have been obtained at the Company Shareholders Meeting in accordance with applicable Law; provided that the right to terminate this Agreement pursuant to this Section 11.1(d) shall not be available to the Company unless the Company has complied in all material respects with its obligations under Section 8.2(c);

 

(e)            by written notice from the Company, if a SPAC Extension is not effected in accordance with Section 8.13 and SPAC must liquidate in accordance with its Governing Documents;

 

(f)            prior to the Closing, by written notice to the Company from SPAC if (i) there is any breach of any representation, warranty, covenant or agreement on the part of the Company or any Merger Subsidiary set forth in this Agreement, such that the conditions specified in ‎Section 9.2(a), ‎9.2(b) or 9.2(c) would not be satisfied at the Closing (a “Terminating Company Breach”), except that, if such Terminating Company Breach is curable by the Company or such Merger Subsidiary through the exercise of its commercially reasonable efforts, then, for a period of up to thirty (30) days after receipt by the Company of notice from SPAC of such breach (the “Company Cure Period”), but only as long as the Company or such Merger Subsidiary continues to use its commercially reasonable efforts to cure such Terminating Company Breach, such termination shall not be effective, and such termination shall become effective only if the Terminating Company Breach is not cured within the Company Cure Period, or (ii) the Closing has not occurred on or before December 31, 2023 (to be automatically extended to March 31, 2024, in the event the Proxy/Registration Statement is not filed with the SEC by May 31, 2023) (the “Agreement End Date”); provided that SPAC shall not have the right to terminate this Agreement pursuant to clause (i) of this Section 11.1(f) if SPAC is then in breach of any of its covenants, agreements, representations or warranties contained in this Agreement, which breach would cause any condition set forth in Section 9.3(a) or Section 9.3(b), as applicable, not to be satisfied; provided, further, that the right to terminate this Agreement pursuant to clause (ii) of this Section 11.1(f) shall not be available to SPAC in the event that the breach of or failure to perform any provision of this Agreement by SPAC is the proximate cause of the failure of the Closing to be consummated by the Agreement End Date; and

 

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(g)            prior to the Closing, by written notice to SPAC from the Company if (i) there is any breach of any representation, warranty, covenant or agreement on the part of SPAC set forth in this Agreement, such that the conditions specified in ‎Section 9.3(a) and ‎Section 9.3(b) would not be satisfied at the Closing (a “Terminating SPAC Breach”), except that, if any such Terminating SPAC Breach is curable by SPAC through the exercise of its commercially reasonable efforts, then, for a period of up to thirty (30) days after receipt by SPAC of notice from the Company of such breach (the “SPAC Cure Period”), but only as long as SPAC continues to use its commercially reasonable efforts to cure such Terminating SPAC Breach, such termination shall not be effective, and such termination shall become effective only if the Terminating SPAC Breach is not cured within the SPAC Cure Period or (ii) the Closing has not occurred on or before the Agreement End Date; provided that the Company shall not have the right to terminate this Agreement pursuant to clause (i) of this Section 11.1(g) if the Company is then in breach of any of its covenants, agreements, representations or warranties contained in this Agreement, which breach would cause any condition set forth in Section 9.2(a), or Section 9.2(b), as applicable, not to be satisfied; provided, further, that the right to terminate this Agreement pursuant to clause (ii) of this Section 11.1(g) shall not be available to the Company in the event that the breach of or failure to perform any provision of this Agreement by the Company is the proximate cause of the failure of the Closing to be consummated by the Agreement End Date.

 

Section 11.2      Effect of Termination. In the event of the termination of this Agreement pursuant to ‎Section 11.1, this Agreement shall forthwith become void and have no effect, without any liability on the part of either party hereto or its respective Affiliates, officers, directors, stockholders, or other Representatives, other than liability of the Company or SPAC, as the case may be, for any fraud or willful and material breach of this Agreement occurring prior to such termination, except that the provisions of this ‎Section 11.2 and ‎Article XII and the Confidentiality Agreement shall survive any termination of this Agreement.

 

Article XII
MISCELLANEOUS

 

Section 12.1      Trust Account Waiver. The Company acknowledges that it has read SPAC’s final prospectus, dated June 16, 2021, the other SPAC SEC Filings and the SPAC’s Governing Documents and understands that SPAC has established the Trust Account described therein for the benefit of SPAC’s public shareholders and that disbursements from the Trust Account are available only in the limited circumstances set forth in the Trust Agreement. The Company further acknowledges that, if the Transactions, or, in the event of a termination of this Agreement, another Business Combination, are not consummated within 24 months from the closing of the offering contemplated by SPAC’s final prospectus (subject to extensions as approved by the SPAC Stockholders), SPAC will be obligated to return to its public shareholders the amounts being held in the Trust Account. Accordingly, the Company hereby waives any claims (whether based on contract, tort, equity or any other theory of legal liability) of any kind in or to any monies in the Trust Account and agree not to seek recourse against the Trust Account or any funds distributed therefrom as a result of, or arising out of, this Agreement or the Transactions with SPAC; provided that (x) nothing herein shall serve to limit or prohibit the Company’s right to pursue a claim against SPAC for legal relief against monies or other assets held outside the Trust Account, for specific performance or other equitable relief in connection with the consummation of the Transactions (including a claim for SPAC to specifically perform its obligations under this Agreement and cause the disbursement of the balance of the cash remaining in the Trust Account (after giving effect to the SPAC Share Redemptions) to the Company in accordance with the terms of this Agreement and the Trust Agreement) so long as such claim would not affect SPAC’s ability to fulfill its obligation to effectuate the SPAC Share Redemptions, or for fraud and (y) nothing herein shall serve to limit or prohibit any claims that the Company may have in the future against SPAC’s assets or funds that are not held in the Trust Account (including any funds that have been released from the Trust Account and any assets that have been purchased or acquired with any such funds). This Section 12.1 shall survive the termination of this Agreement for any reason.

 

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Section 12.2      Waiver. Either party to this Agreement may, at any time prior to the Closing, by action taken by its board of directors or officers or Persons thereunto duly authorized, (a) extend the time for the performance of the obligations or acts of the other party hereto, (b) waive any inaccuracies in the representations and warranties (of another party hereto) that are contained in this Agreement or (c) waive compliance by the other party hereto with any of the agreements or conditions contained in this Agreement, but such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party granting such extension or waiver.

 

Section 12.3      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 during normal business hours at the location of the recipient, and otherwise on the next following Business Day, addressed as follows:

 

  (a)  If to SPAC, to:
     
    Bite Acquisition Corp.
    30 West Street, No.28F
    New York, NY 10004
    Attention: Alberto Ardura
    E-mail: alberto@biteacquisitioncorp.com
     
    with a copy (which shall not constitute notice) to:
     
    Greenberg Traurig, LLP
    One Vanderbilt Ave.
    New York, NY 10017
    Attention: Michael Helsel
      Jason Simon
    Email: helselm@gtlaw.com
      jason.simon@gtlaw.com

 

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  (b) If to the Company or any of the Merger Subsidiaries, to:  
     
    Above Food Corp.  
    001-2305 Victoria Avenue  
    Regina, Saskatchewan S4P 0S7, Canada  
    Attention: Lionel Kambeitz
    E-mail: lionel@abovefood.com
     
    with a copy (which shall not constitute notice) to:  
     
    Attention: Michelle Westerman
    E-mail: michelle@abovefood.com
     
    with a copy (which shall not constitute notice) to:  
     
    Latham & Watkins LLP
    811 Main Street, Suite 3700
    Houston, Texas 77002
    Attention: Ryan J. Maierson
      Ryan J. Lynch
    Email: ryan.maierson@lw.com
      ryan.lynch@lw.com

 

or to such other address or addresses as the parties may from time to time designate in writing. Copies delivered solely to outside counsel shall not constitute notice.

 

Section 12.4      Assignment. No party hereto shall assign this Agreement or any part hereof, by operation of Law or otherwise, without the prior written consent of the other party and any such purported assignment without prior written consent shall be null and void. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

Section 12.5      Rights of Third Parties. Nothing expressed or implied in this Agreement is intended or shall be construed to (i) confer upon or give any Person (including any equityholder, any current or former director, manager, officer, employee or independent contractor of the Company, or any participant in any Company Benefit Plan or other employee benefit plan, agreement or other arrangement (or any dependent or beneficiary thereof)), other than the parties hereto, any right or remedies under or by reason of this Agreement, (ii) establish, amend or modify any employee benefit plan, program, policy, agreement or arrangement or (iii) limit the right of SPAC, TopCo, the Company or their respective Affiliates to amend, terminate or otherwise modify any Company Benefit Plan or other employee benefit plan, policy, agreement or other arrangement following the Closing; provided, however, that (A) the D&O Indemnitees (and their successors, heirs and Representatives) are intended third-party beneficiaries of, and may enforce, Section 8.11, (B) the Company Non-Recourse Parties (as defined below) and the SPAC Non-Recourse Parties (as defined below) (and their successors, heirs and Representatives), are intended third-party beneficiaries of, and may enforce, ‎Section 12.16 and (C) Sponsor, Prior SPAC Counsel and Prior Company Counsel are intended third-party beneficiary of, and may enforce, any provision of Section 12.18 or Section 12.19 that confers any right or privilege to such party. Notwithstanding the foregoing, Section 8.9 is intended to be for the benefit of, and may be enforced by, any of the Advisors.

 

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Section 12.6      Expenses.

 

(a)            Except as otherwise set forth in this Agreement, including ‎Section 8.1(c) and Section 8.2(a)(i), each party hereto shall be responsible for and pay its own expenses incurred in connection with this Agreement and the Transactions, including all fees of its legal counsel, financial advisers and accountants. Notwithstanding the foregoing, (a) if this Agreement is terminated in accordance with its terms, the Company shall pay, or cause to be paid, all Unpaid Company Transaction Expenses and SPAC shall pay, or cause to be paid, all Unpaid SPAC Transaction Expenses and (b) if the Closing occurs, then TopCo shall pay, or cause to be paid, all Unpaid Company Transaction Expenses and all Unpaid SPAC Transaction Expenses.

 

(b)            Following the date of this Agreement, as soon as reasonably practicable, the Company shall deposit, or cause to be deposited, a portion of the proceeds from the Loan equal to an aggregate amount of $200,000 (the “Escrow Amount”) in an escrow account with an escrow agent as mutually determined by SPAC and the Company.

 

(c)            The Company shall instruct the escrow agent to release a portion of the Escrow Amount to SPAC as follows:

 

(i)            If the Required Company Financial Statements shall not have been delivered to SPAC by the Company on or before May 15, 2023, an aggregate amount of $100,000 shall be released to SPAC.

 

(ii)            If the Required Company Financial Statements shall not have been delivered to SPAC by the Company on or before June 15, 2023, the remaining balance in the escrow account equal to an aggregate amount of $100,000 shall be released to SPAC.

 

(d)            In the event the Company delivers the Required Company Financial Statements to SPAC on or before May 15, 2023, then promptly thereafter, the Escrow Amount shall be released to the Company.

 

(e)            SPAC acknowledges and agrees that any and all portion of the Escrow Amount received by SPAC in accordance with this Section 12.6 shall (i) be used solely for the purposes of paying the corresponding amount of the SPAC Extension Expenses and (ii) not be retained by SPAC or distributed to Sponsor.

 

Section 12.7      Governing Law. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware applicable to contracts executed in and to be performed in that State, except to the extent mandatorily governed by the laws of the Province of Alberta and the federal laws of Canada applicable therein, including the provisions relating to the Arrangement and the Plan of Arrangement.

 

Section 12.8      Headings; Counterparts. The headings in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. This Agreement may be executed in two or more counterparts, and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document, but all of which together shall constitute one and the same instrument. Copies of executed counterparts of this Agreement transmitted by electronic transmission (including by email or in .pdf format) or facsimile as well as electronically or digitally executed counterparts (such as DocuSign) shall have the same legal effect as original signatures and shall be considered original executed counterparts of this Agreement.

 

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Section 12.9      Company and SPAC Disclosure Schedules. The Company Disclosure Schedules and the SPAC Disclosure Schedules (including, in each case, any section thereof) referenced herein are a part of this Agreement as if fully set forth herein. All references herein to the Company Disclosure Schedules and/or the SPAC Disclosure Schedules (including, in each case, any section thereof) shall be deemed references to such parts of this Agreement, unless the context shall otherwise require. Any disclosure made by a party in the applicable Disclosure Schedules, or any section thereof, with reference to any section of this Agreement or section of the applicable Disclosure Schedules shall be deemed to be a disclosure with respect to such other applicable sections of this Agreement or sections of applicable Disclosure Schedules if it is reasonably apparent on the face of such disclosure that such disclosure is responsive to such other section of this Agreement or section of the applicable Disclosure Schedules. Certain information set forth in the Disclosure Schedules is included therein 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.

 

Section 12.10      Entire Agreement. This Agreement (together with the Company Disclosure Schedules and the SPAC Disclosure Schedules), the Plan of Arrangement and the Ancillary Agreements constitute the entire agreement among the parties to this Agreement relating to the Transactions 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 (including the letter of intent between SPAC and the Company, dated May 17, 2022). No representations, warranties, covenants, understandings, agreements, oral or otherwise, relating to the Transactions exist between such parties except as expressly set forth in this Agreement and the Ancillary Agreements.

 

Section 12.11      Amendments. This Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing approved by the respective boards of directors of the Company, SPAC, TopCo and Merger Sub and executed in the same manner as this Agreement and which makes reference to this Agreement. Any purported amendment by any party or parties hereto effected in a manner which does not comply with this Section 12.11 shall be null and void, ab initio.

 

Section 12.12      Publicity.

 

(a)            All press releases or other public communications relating to the Transactions, and the method of the release for publication thereof, shall prior to the Closing be subject to the prior mutual approval of SPAC and the Company, which approval shall not be unreasonably withheld by either party; provided that no party shall be required to obtain consent pursuant to this ‎Section 12.12(a) to the extent any proposed release or statement is substantially equivalent to the information that has previously been made public without breach of the obligation under this ‎Section 12.12(a). For the avoidance of doubt, nothing contained in this ‎Section 12.12 shall prevent SPAC or the Company and/or their respective Affiliates from furnishing customary summarized information concerning the Transactions and publicly available information to their current and prospective investors or PIPE Investors.

 

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(b)            The restriction in ‎Section 12.12(a) shall not apply to the extent the public announcement is required by applicable securities Law, any Governmental Authority or stock exchange rule; provided, however, that in such an event, the party making the announcement shall use its commercially reasonable efforts to consult with the other party in advance as to its form, content and timing. Disclosures resulting from the parties’ efforts to satisfy or obtain approval or early termination in connection with the Regulatory Approvals and to make any relating filing shall be deemed not to violate this ‎Section 12.12.

 

Section 12.13      Severability. The provisions of this Agreement shall be deemed severable and the illegality, invalidity or unenforceability of any provision shall not affect the legality, validity or enforceability of the other provisions of this Agreement. 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, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the parties.

 

Section 12.14      Jurisdiction; Waiver of Jury Trial.

 

(a)            All legal Actions, claims, demands, actions or causes of action arising out of or relating to this Agreement or any Ancillary Agreement shall be heard and determined exclusively in any Delaware Chancery Court; provided that if jurisdiction is not then available in the Delaware Chancery Court, then any such legal Actions, claims, demands, actions or causes of action may be brought in any federal court located in the State of Delaware or any other Delaware state court. Each of the parties hereto (a) irrevocably and unconditionally submits to the exclusive jurisdiction of the aforesaid courts for themselves and with respect to their respective properties for the purpose of any Action, claim, demand, action or cause of action arising out of or relating to this Agreement or any Ancillary Agreement or any of the transactions contemplated hereby or thereby brought by any party hereto and (b) agrees not to commence any Action, claim, demand, action or cause of action relating thereto except in the courts described above in Delaware, other than Actions, claims, demands, actions or causes of action in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware as described herein. Each party hereto hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Action claim, demand, action or cause of action against such party (i) arising under this Agreement or under any Ancillary Agreement or (ii) in any way connected with or related or incidental to the dealings of the parties hereto in respect of this Agreement or any Ancillary Agreement or any of the transactions contemplated hereby or thereby, (A) any claim that such party is not personally subject to the jurisdiction of the courts in Delaware as described in this Section 12.14(a) for any reason, (B) that such party or such party’s property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) that (x) the Action, claim, demand, action or cause of action in any such court is brought against such party in an inconvenient forum, (y) the venue of such Action, claim, demand, action or cause of action against such party is improper or (z) this Agreement, or the subject matter hereof, may not be enforced against such party in or by such courts. Each party hereto agrees that service of any process, summons, notice or document by registered mail to such party’s respective address set forth in Section 12.14(b) shall be effective service of process for any such Action, claim, demand, action or cause of action.

 

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(b)            THE PARTIES HERETO EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY PROCEEDING, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR UNDER ANY ANCILLARY AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO OR THERETO OR ANY FINANCING IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. THE PARTIES HERETO EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH PROCEEDING, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT SUCH PARTIES MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.14(b).

 

Section 12.15      Enforcement. Except as otherwise expressly provided herein, any and all remedies provided herein will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon the parties hereto, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. Each party hereto agrees that the rights of each party to consummate the Transactions are special, unique and of extraordinary character and immediate and irreparable harm or damage would be caused for which money damages would not be an adequate remedy in the event that any of the provisions of this Agreement were not performed or complied with in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, in addition to any other remedy to which either party is entitled at law or in equity, the parties shall be entitled to equitable remedies against another party for its breach or threatened breach of this Agreement, including an injunction or injunctions to prevent breaches of this Agreement and specific enforcement of the terms and provisions of this Agreement, in each case, (i) without necessity of posting a bond or other form of security and (ii) without proving the inadequacy of money damages or another any remedy at law. In the event that any Action shall be brought in equity to enforce the provisions of this Agreement (including to prevent breaches or threatened breaches of this Agreement), no party shall allege, and each party hereby waives all defenses and objections to such Action on the grounds that (A) money damages would be adequate or there is another adequate remedy at law or (B) the party seeking equitable remedies must either post a bond or other form of security and prove the inadequacy of money damages or another remedy at law.

 

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Section 12.16      Non-Recourse.

 

(a)            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 may only be brought against, the Company or SPAC as named parties hereto; and

 

(b)            Except to the extent a party hereto (and then only to the extent of the specific obligations undertaken by such party hereto), (i) no past, present or future director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney, advisor or other Representative of the Company or the Merger Subsidiaries (each, a “Company Non-Recourse Party”) or of SPAC (each, a “SPAC Non-Recourse Party”) and (ii) no past, present or future director, officer, employee, incorporator, member, partner, stockholder, Affiliate (including Sponsor), agent, attorney, advisor or other Representative 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 Company or the Merger Subsidiaries or SPAC under this Agreement for any claim based on, arising out of, or related to this Agreement or the Transactions.

 

Section 12.17      Non-Survival of Representations, Warranties and Covenants. Except as otherwise contemplated by ‎Section 11.2, none of the representations, warranties, covenants, obligations or other agreements in this Agreement or in any certificate (including confirmations therein), statement or instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations, warranties, covenants, obligations, agreements and other provisions, shall survive the Closing and shall terminate and expire upon the occurrence of the Closing (and there shall be no liability after the Closing in respect thereof), except for (a) those covenants and agreements contained herein that by their terms expressly apply in whole or in part after the Closing and then only with respect to any breaches occurring after the Closing and this ‎Article XII and (b) the Confidentiality Agreement (including the confidentiality obligations set forth in Section 8.7).

 

Section 12.18      Prior SPAC Counsel Conflicts and Privilege.

 

(a)            SPAC and the Company hereby agree that, in the event a dispute with respect to this Agreement, any Ancillary Agreement or the Transactions arises after the Closing between or among SPAC and/or Sponsor, on the one hand, and the Company or any Merger Subsidiary, on the other hand, any legal counsel (including Greenberg Traurig, LLP) that represented SPAC and/or Sponsor prior to the Closing (“Prior SPAC Counsel”) may represent Sponsor in such dispute even though the interests of Sponsor may be directly adverse to SPAC, and even though such counsel may have represented SPAC prior to the Closing in a matter substantially related to such dispute.

 

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(b)            The Company further agrees, on behalf of itself, and, after the Closing, on behalf of the Company and TopCo, that all pre-Closing communications in any form or format whatsoever between or among any of Prior SPAC Counsel, SPAC, Sponsor or any of their respective Representatives that relate in any way to the negotiation, preparation, execution and delivery of, and performance under, this Agreement or the Ancillary Agreements or consummation of the Transactions or, beginning on the date of this Agreement, any dispute arising under this Agreement or the Ancillary Agreements (collectively, the “SPAC Deal Communications”) shall be deemed to be retained and owned collectively by Sponsor, shall be controlled by Sponsor and shall not pass to or be claimed by SPAC or, after the Closing, the Surviving Corporation. All SPAC Deal Communications that are attorney-client privileged (the “Privileged SPAC Deal Communications”) shall remain privileged after the Closing and the privilege and the expectation of client confidence relating thereto shall belong solely to Sponsor, shall be controlled by Sponsor and shall not pass to or be claimed by SPAC or, after the Closing, by the Surviving Corporation; provided, however, that nothing contained herein shall be deemed to be a waiver by Sponsor or any of its Affiliates of any applicable privileges or protections that can or may be asserted to prevent disclosure of any such communications to any third party.

 

(c)            Notwithstanding the foregoing, in the event that a dispute arises between SPAC or after the Closing, the Surviving Corporation, on the one hand, and a third party other than Sponsor, on the other hand, Sponsor may assert the attorney-client privilege to prevent the disclosure of the Privileged SPAC Deal Communications to such third party; provided, however, that neither SPAC nor the Group Companies may waive such privilege with respect to Privileged SPAC Deal Communications without the prior written consent of Sponsor. In the event that SPAC or the Group Companies is legally required by Governmental Order or otherwise to access or obtain a copy of all or a portion of the Privileged SPAC Deal Communications, SPAC shall as promptly as practicable (and, in any event, within two (2) Business Days) after becoming aware thereof notify Sponsor in writing (including by making specific reference to this ‎Section 12.18) so that Sponsor can (at the cost and expense of Sponsor) seek a protective order, and SPAC and the Company agree to use commercially reasonable efforts to assist therewith.

 

(d)            To the extent that files or other materials maintained by Prior SPAC Counsel constitute property of its clients, only Sponsor shall hold such property rights and Prior SPAC Counsel shall have no duty to reveal or disclose any such files or other materials or any Privileged SPAC Deal Communications by reason of any attorney-client relationship between Prior SPAC Counsel, on the one hand, and SPAC, on the other hand, so long as such files or other materials would be subject to a privilege or protection if they were being requested in a proceeding by an unrelated third party.

 

(e)            The Company agrees (i) to the extent that the Company receives or takes physical possession of any SPAC Deal Communications, (a) such physical possession or receipt shall not, in any way, be deemed a waiver by Sponsor or any other Person of the privileges or protections described in this ‎Section 12.18, and (b) the Company shall not assert any claim that Sponsor or any other Person waived the attorney-client privilege, attorney work-product protection or any other right or expectation of client confidence applicable to any such materials or communications, (ii) not to access or use the SPAC Deal Communications, including by way of review of any electronic data, communications or other information, or by seeking to have the Company waive the attorney-client or other privilege, or by otherwise asserting that the Company has the right to waive the attorney-client or other privilege and (iii) not to seek to obtain the SPAC Deal Communications from Prior SPAC Counsel so long as such SPAC Deal Communications would be subject to a privilege or protection if they were being requested in a proceeding by an unrelated third party.

 

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(f)            The Company, on behalf of the Group Companies, hereby acknowledges that it has had the opportunity (including on behalf of its Affiliates) to discuss and obtain adequate information concerning the significance and material risks of, and reasonable available alternatives to, the waivers, permissions and other provisions of this Agreement. This Section 12.18 shall be irrevocable, and no term of this Section 12.18 may be amended, waived or modified, without the prior written consent of the Prior SPAC Counsel.

 

Section 12.19      Prior Company Counsel Conflicts and Privilege.

 

(a)            Each of the parties hereto acknowledges and agrees that Latham & Watkins LLP (“Prior Company Counsel”) has acted as counsel to the Company in various matters involving a range of issues and as counsel to the Company in connection with the negotiation, preparation, execution and delivery of, and performance under, this Agreement and the Ancillary Agreements and consummation of the Transactions. In connection with any matter or dispute under this Agreement, SPAC hereby irrevocably waives and agrees, on behalf of itself, and after the Closing, on behalf of the Surviving Corporation, not to assert any conflict of interest arising from or in connection with (i) Prior Company Counsel’s prior representation of the Company and (ii) Prior Company Counsel’s representation of any member of the Group Companies (collectively, the “Company Advised Parties”) prior to and after the Closing.

 

(b)            SPAC further agrees, on behalf of itself, and, after the Closing, on behalf of the Surviving Corporation, that all communications in any form or format whatsoever between or among any of Prior Company Counsel, the Company, any of the Group Companies or Merger Subsidiaries or any of their respective Representatives that relate in any way to the negotiation, preparation, execution and delivery of, and performance under, this Agreement or the Ancillary Agreements or consummation of the Transactions or, beginning on the date of this Agreement, any dispute arising under this Agreement or the Ancillary Agreements (collectively, the “Company Deal Communications”) shall be deemed to be retained and owned collectively by the Company Advised Parties, shall be controlled by the Company on behalf of the Group Companies and the Merger Subsidiaries and shall not pass to or be claimed by SPAC or, after the Closing, the Surviving Corporation. All Company Deal Communications that are attorney-client privileged (the “Privileged Company Deal Communications”) shall remain privileged after the Closing and the privilege and the expectation of client confidence relating thereto shall belong solely to the Company, shall be controlled by the Company on behalf of the Company, the Group Companies and Merger Subsidiaries and shall not pass to or be claimed by SPAC or, after the Closing, the Surviving Corporation; provided, however, that nothing contained herein shall be deemed to be a waiver by SPAC or any of its Affiliates of any applicable privileges or protections that can or may be asserted to prevent disclosure of any such communications to any third party.

 

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(c)            Notwithstanding the foregoing, in the event that a dispute arises between SPAC (including, after the Closing, the Surviving Corporation), the Group Companies or the Merger Subsidiaries, on the one hand, and a third party other than Sponsor, on the other hand, SPAC (including, after the Closing, the Surviving Corporation), the applicable Group Company(ies) or Merger Subsidiary(ies) may assert the attorney-client privilege to prevent the disclosure of the Privileged Company Deal Communications to such third party; provided, however, that none of SPAC (including, after the Closing, the Surviving Corporation), the Group Companies or the Merger Subsidiaries may waive such privilege with respect to Privileged Company Deal Communications without the prior written consent of the Company. In the event that SPAC or, after the Closing, the Surviving Corporation is legally required by Governmental Order or otherwise to access or obtain a copy of all or a portion of the Privileged Company Deal Communications, SPAC or, after the Closing, the Surviving Corporation shall as promptly as practicable (and, in any event, within two (2) Business Days) after becoming aware thereof notify the Company in writing (including by making specific reference to this Section 12.19) so that the Company can seek a protective order, and SPAC agrees to use commercially reasonable efforts to assist therewith.

 

(d)            To the extent that files or other materials maintained by Prior Company Counsel constitute property of its clients, only the Company and the Company Advised Parties shall hold such property rights and Prior Company Counsel shall have no duty to reveal or disclose any such files or other materials or any Privileged Company Deal Communications by reason of any attorney-client relationship between Prior Company Counsel, on the one hand, and the Group Companies, on the other hand, so long as such files or other materials would be subject to a privilege or protection if they were being requested in a proceeding by an unrelated third party.

 

(e)            SPAC agrees, on behalf of itself, and, after the Closing, on behalf of the Surviving Corporation, (i) to the extent that SPAC or, after the Closing, the Surviving Corporation receives or takes physical possession of any Company Deal Communications, (a) such physical possession or receipt shall not, in any way, be deemed a waiver by any of the Company Advised Parties or any other Person of the privileges or protections described in this ‎Section 12.19, and (b) neither SPAC nor, after the Closing, the Surviving Corporation, shall assert any claim that any of the Company Advised Parties or any other Person waived the attorney-client privilege, attorney work-product protection or any other right or expectation of client confidence applicable to any such materials or communications, (ii) not to access or use the Company Deal Communications, including by way of review of any electronic data, communications or other information, or by seeking to have the Surviving Corporation waive the attorney-client or other privilege, or by otherwise asserting that SPAC or the Surviving Corporation has the right to waive the attorney-client or other privilege and (iii) not to seek to obtain the Company Deal Communications from Prior Company Counsel so long as such Company Deal Communications would be subject to a privilege or protection if they were being requested in a proceeding by an unrelated third party.

 

(f)            SPAC, on behalf of itself and Sponsor, hereby acknowledges that it has had the opportunity (including on behalf of its Affiliates) to discuss and obtain adequate information concerning the significance and material risks of, and reasonable available alternatives to, the waivers, permissions and other provisions of this Agreement. This Section 12.19 shall be irrevocable, and no term of this Section 12.19 may be amended, waived or modified, without the prior written consent of the Prior Company Counsel.

 

[Remainder of page intentionally left blank]

 

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

 

SPAC: BITE ACQUISITION CORP.
   
  By: /s/ Alberto Ardura_González
  Name: Alberto Ardura González
  Title: Chief Executive Officer
   
COMPANY: ABOVE FOOD CORP.
   
  By: /s/ Lionel Kambeitz
  Name: Lionel Kambeitz
  Title: President
   
  By: /s/ Wayne Bernakevitch
  Name: Wayne Bernakevitch
  Title: Director
   
TOPCO: 2510169 ALBERTA INC.
   
  By: /s/ Lionel Kambeitz
  Name: Lionel Kambeitz
  Title: Chief Executive Officer

 

MERGER SUB: ABOVE MERGER SUB, INC.
   
  By: /s/ Lionel Kambeitz
  Name: Lionel Kambeitz
  Title: President

 

[Signature Page to Business Combination Agreement]

 

 

 

 

Exhibit A

 

Form of Lock-Up Agreement

 

[Attached.]

 

 

 

 

FORM OF LOCK-UP AGREEMENT

 

THIS LOCK-UP AGREEMENT (this “Agreement”), dated as of [●], is made and entered into by and among [TopCo], an Alberta corporation (“TopCo”), and the undersigned (together with any person or entity who hereafter becomes a party to this Agreement pursuant to Section 2 or Section 3(h) of this Agreement, the “Holders” and each, a “Holder”). Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to them in the Business Combination Agreement (as defined below).

 

WHEREAS, Bite Acquisition Corp., a Delaware corporation (“SPAC”), TopCo, Above Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of TopCo (“Merger Sub”), and Above Food Corp., a corporation organized under the laws of Saskatchewan, Canada (the “Company”), entered into a Business Combination Agreement, dated as of April 29, 2023 (as it may be amended, restated or otherwise modified from time to time in accordance with its terms, the “Business Combination Agreement”), pursuant to which, among other things, on or about the date hereof: (i) the Company will continue from the laws of Saskatchewan to a corporation continued under the laws of the Province of Alberta; (ii) pursuant to the Share Exchange, the Company Shareholders will contribute to TopCo all of the issued and outstanding equity of the Company in exchange for newly issued TopCo Common Shares, whereby the Company will become a direct, wholly owned subsidiary of TopCo, (iii) Merger Sub shall merge with and into SPAC (the “Merger”), with SPAC continuing as the surviving corporation after the Merger, as a result of which SPAC will become a direct, wholly owned subsidiary of TopCo and (iv) as a result of the Merger, (A) each issued and outstanding share of SPAC Common Stock shall be automatically converted into and exchanged for the right to receive SPAC Per Share Merger Consideration and (B) each issued and outstanding SPAC warrant shall no longer be outstanding and shall be automatically converted into and become a warrant to purchase one (1) TopCo Common Share, in each case of clauses (i), (ii), (iii) and (iv), subject to the terms and conditions of the Business Combination Agreement;

 

WHEREAS, upon consummation of the Share Exchange and Merger (the “Closing”), the Holders will own equity interests in TopCo; and

 

WHEREAS, pursuant to the Business Combination Agreement, and in view of the valuable consideration to be received by each Holder thereunder, the parties wish to set forth herein certain understandings between such parties with respect to restrictions on the transfer of equity interests in TopCo.

 

NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and intending to be legally bound hereby, the parties hereby agree as follows:

 

1.              For purposes of this Agreement:

 

(a)            Affiliate” has the meaning ascribed to such term in Rule 12b-2 promulgated under the Exchange Act.

 

(b)            immediate family” means with respect to any Person, such Person’s spouse or domestic partner (or former spouse or former domestic partner), ancestors, descendants (whether by blood, marriage or adoption) or spouse of a descendant of such Person, brothers and sisters (whether by blood, marriage or adoption).

 

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(c)            Lock-Up Period” means the period commencing immediately following the Closing and expiring on the earlier of (i) the [6-month][12-month] anniversary of the Closing Date, (ii) such time, if ever, after one hundred fifty (150) calendar days after the Closing Date that the Trading Price of the TopCo Common Shares equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and similar corporate events) for any 20 Trading Days within any 30-Trading Day period commencing at least one hundred fifty (150) calendar days after the Closing Date and (iii) such date on which TopCo completes a liquidation, merger, stock exchange or other similar transaction which results in all of the stockholders of TopCo having the right to exchange their TopCo Common Shares for cash, securities or other property.

 

(d)            “Lock-Up Shares” means, collectively, (i) any TopCo Common Shares beneficially owned by the Holder immediately after the Closing, (ii) any TopCo Common Shares issuable upon the exercise of options to purchase TopCo Common Shares or the vesting of restricted stock units covering TopCo Common Shares, in each case, held by the Holder immediately after the Closing (along with such securities themselves), (iii) any TopCo Common Shares acquirable upon the conversion, exercise or exchange of any securities convertible into or exercisable or exchangeable for TopCo Common Shares held by such Holder immediately after the Closing (along with such securities themselves), (iv) any Sponsor Earnout Shares to the extent vested pursuant to the Business Combination Agreement, (v) any TopCo Common Shares to the extent issued on conversion of the Company Earnout Shares pursuant to the Business Combination Agreement and (vi) any ANF Purchase Consideration Shares.

 

(e)            Transfer” means to:

 

(i)            offer, sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant a security interest in or Lien on, grant any option, right or warrant to purchase, or transfer, lend or otherwise dispose of or agree to transfer, lend or otherwise dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder, any TopCo Common Shares, or any options or warrants to purchase any TopCo Common Shares, or any securities convertible into, exchangeable for or that represent the right to receive TopCo Common Shares (such options, warrant or other securities, collectively, “Derivative Instruments”), including without limitation any such shares or Derivative Instruments now owned or hereafter acquired, owned directly or indirectly by the Holder (including holding as a custodian) or with respect to which the Holder has beneficial ownership within the rules and regulations of the SEC;

 

(ii)            enter into any swap or other arrangement (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or instrument, however described or defined) that is designed to or that would reasonably be expected to lead to a sale, loan, pledge other disposition, or transfer of any of the economic consequences of ownership, in whole or in part, directly or indirectly, of any of the TopCo Common Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise; or

 

(iii)            publicly announce any intention to engage in or cause any action or activity to effect any transaction described in clause (i) or clause (ii) above.

 

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2.            Lock-Up Provisions.

 

(a)            Each Holder agrees not to Transfer any Lock-Up Shares until the end of the Lock-Up Period.

 

(b)            Notwithstanding the foregoing, the restrictions set forth in Section 2(a), shall not apply to:

 

(i)            as a bona fide gift or gifts or charitable contribution, or for bona fide estate planning purposes;

 

(ii)            in the case of an individual, Transfers (A) to a partnership, limited liability company or other entity of which the Holder and/or the immediate family (as defined below) of the Holder are the legal and beneficial owner of all of the outstanding equity securities or similar interests, (B) by bona fide gift to a member of the Holder’s immediate family or to a trust, the beneficiary of which is the Holder or a member of the Holder’s immediate family, or an Affiliate of such Person, (C) by virtue of will, intestate succession or the laws of descent and distribution upon death of the Holder or (D) by operation of law, including bankruptcy laws, or pursuant to a court order, including a qualified domestic relations order, divorce decree, divorce settlement or separation agreement;

 

(iii)            in the case of an entity, Transfers (A) to another entity that is an Affiliate (as defined in Rule 405 promulgated under the Securities Act) of the Holder, or to any investment fund or other entity controlling, controlled by, managing or managed by or under common control with the Holder or Affiliates of the Holder or who shares a common investment advisor with the Holder, or (B) as part of a distribution to members, partners, shareholders or equity holders of the Holder;

 

(iv)            in the case of an entity, Transfers by virtue of applicable laws, including bankruptcy laws, or laws of the state or jurisdiction of the Holder’s organization or the Holder’s organizational documents upon dissolution of the Holder;

 

(v)            in the case of an entity that is a trust, Transfer to a trustor or beneficiary of the trust or to the estate of a beneficiary of such trust;

 

(vi)            Transfers relating to TopCo Common Shares or other securities convertible into or exercisable or exchangeable for TopCo Common Shares, in each case, acquired in open market transactions after the Closing;

 

(vii)            the exercise of stock options or warrants to purchase shares of TopCo Common Shares or the vesting of stock awards of TopCo Common Shares and any related transfer of shares of TopCo Common Shares in connection therewith (A) deemed to occur upon the “cashless” or “net” exercise of such options or warrants or (B) for the purpose of paying the exercise price of such options or warrants or for paying taxes due as a result of the exercise of such options or warrants, the vesting of such options, warrants or stock awards, or as a result of the vesting of such shares of TopCo Common Shares, it being understood that all shares of TopCo Common Shares received upon such exercise, vesting or transfer will remain subject to the restrictions of this Agreement during the applicable Lock-Up Period;

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(viii)            Transfers to TopCo pursuant to any contractual arrangement in effect at the Closing that provides for the repurchase by TopCo or forfeiture of TopCo Common Shares or other securities convertible into or exercisable or exchangeable for TopCo Common Shares in connection with the termination of the Holder’s service to TopCo;

 

(ix)            the establishment, by the Holder, at any time after the Closing, of any trading plan pursuant to Rule 10b5-1 promulgated under the Exchange Act providing for the transfer of the Lock-Up Shares; provided, however, that such plan does not provide for, or permit, the sale of any Lock-Up Shares during the Lock-Up Period and no public announcement or filing is voluntarily made or required regarding such plan during the Lock-Up Period;

 

(x)            Transfers in connection with any bona fide mortgage, encumbrance or pledge to a financial institution in connection with any bona fide loan or debt transaction or enforcement thereunder, including foreclosure thereof; or

 

(xi)            Transfers to TopCo, the Company or the Sponsor, or their respective officers or directors;

 

provided, however, that (A) in the case of clauses (ii) and (iii) above, such Transfer shall not involve a disposition for value and (B) in the case of clauses (ii), (iii) and (iv), it shall be a condition to the Transfer or distribution that each applicable permitted transferee, trustee, donee or distributee enter into a written agreement, in substantially the form of this Agreement (it being understood that any references to “immediate family” in the agreement executed by such permitted transferee shall expressly refer only to the immediate family of the applicable Holder and not to the immediate family of such permitted transferee), agreeing to be bound by the Transfer restrictions set forth in this Agreement.

 

(c)            Any purported Transfer contrary to the provisions of this Agreement shall be void ab initio, and TopCo shall refuse to recognize any such purported transferee of the TopCo Common Shares or securities convertible into or exercisable or exchangeable for TopCo Common Shares as an equity holder for any purpose. Each Holder acknowledges and agrees that during the Lock-Up Period, stop transfer orders shall be placed against the Lock-Up Shares and each certificate or book entry position statement evidencing Lock-Up Shares shall be stamped or otherwise imprinted with a legend in substantially the following form, in addition to any other applicable legends:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A LOCK-UP AGREEMENT, DATED AS OF [●], BY AND BETWEEN THE ISSUER OF SUCH SECURITIES (THE “ISSUER”) AND THE ISSUER’S SECURITY HOLDER NAMED THEREIN. A COPY OF SUCH LOCK-UP AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”

 

3.            Miscellaneous.

 

(a)            Pro Rata Release.

 

(i)            Notwithstanding anything to the contrary in this Agreement, each of the parties hereby acknowledges and agrees that, at any time during the Lock-Up Period, the members of the board of directors of TopCo who are “independent” (as such term is defined in Regulation 303A.02 of The New York Stock Exchange Listed Company Manual) directors (collectively, the “Independent Board Members”) may, in their sole discretion, resolve to terminate, in whole or in part, the Transfer restrictions provided in Section 2; provided, that the approval of such resolution of the Independent Board Members shall (A) be given at a meeting of the Independent Board Members called for the purpose of considering and voting upon such resolution and (B) include at least a majority of the Independent Board Members.

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(ii)            In the event that the Independent Board Members release or waive, in full or in part, any party from a lock-up agreement entered into in connection with the Closing, then the same percentage of Lock-Up Shares held by the Holder on the date of such release or waiver as the percentage of Lock-Up Shares (or such equivalent term as defined in such lock-up agreement) held by such released party on the date of such release or waiver to such released party’s aggregate number of Lock-Up Shares (or such equivalent term as defined in such lock-up agreement) that are subject of such release or wavier shall be immediately and fully released on the same terms from the applicable prohibition(s) set forth herein; provided, that the foregoing provisions of this Section 3(a)(ii) will not apply if (i) the release or waiver is granted to a holder of TopCo Common Shares in connection with a follow-on public offering of TopCo Common Shares pursuant to a registration statement filed with the SEC, whether or not such offering or sale is wholly or partially a secondary offering of the TopCo Common Shares, and the Holder, only to the extent the Holder has a contractual right to demand or require the registration of the Holder’s TopCo Common Shares or “piggyback” on a registration statement filed by TopCo for the offer and sale of its TopCo Common Shares, has been given an opportunity to participate on a basis consistent with such contractual rights in such follow-on offering, (ii)(A) the release or waiver is effected solely to permit a transfer not for consideration and (B) the transferee has agreed in writing to be bound by the same terms described in this Agreement to the extent and for the duration that such terms remain in effect at the time of the Transfer, (iii) the aggregate number of Lock-Up Shares affected by such releases or waivers (whether in one or multiple releases or waivers) with respect to any particular beneficial or record holder of Lock-Up Shares is less than or equal to 1% of the total number of outstanding TopCo Common Shares then-outstanding (on a fully-diluted basis, calculated as of the date of such release or waiver) or (iv) TopCo determines in its sole discretion that a release or waiver should be granted to a record or beneficial holder of Lock-Up Shares due to circumstances of emergency or hardship. In the event that TopCo changes, amends, modifies or waives (other than to correct a typographical error) any particular provision of any other lock-up agreement entered into in connection with the Closing, then the Holder shall be offered the option (but not the requirement) to make a corresponding change, amendment, modification or waiver to this Agreement.

 

(b)            Power and Authority. Each Holder hereby represents and warrants that it, he or she has full power and authority to enter into this Agreement and that this Agreement constitutes the legal, valid and binding obligation of such Holder, enforceable in accordance with its terms.

 

(c)            Capacity as a TopCo Shareholder. Each Holder signs this Agreement solely in such Holder’s capacity as a shareholder of TopCo, and not in such Holder’s capacity as a director or officer of TopCo, as applicable.

 

(d)            Investment Intent. Notwithstanding anything in this Agreement to the contrary, the Holder (i) intends to hold the Lock-Up Shares for investment purposes, (ii) has no current plan or intention to dispose of or otherwise transfer the Lock-Up Shares and (iii) is under no binding agreement to dispose of or otherwise transfer the Lock-Up Shares.

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(e)            Entire Agreement. This Agreement (and the Business Combination Agreement to the extent incorporated herein) constitutes the full and entire understanding and agreement among the parties to this Agreement with respect to the subject matter hereof and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the parties hereto relating to the subject matter hereof; provided, that, for the avoidance of doubt, the foregoing shall not affect the rights and obligations of the parties under the Business Combination Agreement or any Ancillary Agreement.

 

(f)            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 during normal business hours at the location of the recipient, and otherwise on the next following Business Day, addressed as follows:

 

If to TopCo, to:

 

[TopCo]

001-2305 Victoria Avenue

 

Regina, Saskatchewan S4P 0S7, Canada
Attention: Lionel Kambeitz
E-mail: lionel@abovefood.com

 

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

 

Michelle Westerman

E-mail: michelle@abovefood.com

 

And to:

 

Latham & Watkins LLP

811 Main Street, Suite 3700

Houston, Texas 77002

Attention:      Ryan J. Maierson

Ryan J. Lynch

Email:             ryan.maierson@lw.com

ryan.lynch@lw.com

 

If to the Holder, to:

 

the address set forth below such Holder’s name on the signature page to this Agreement.

 

(g)            Amendments and Waivers.

 

(i)            This Agreement may be amended or modified, in whole or in part, only by a duly authorized agreement in writing, executed by TopCo and the Holders holding a majority of the Lock-Up Shares then held by the Holders in the aggregate. This Agreement may not be modified or amended except as provided in the immediately preceding sentence and any purported amendment by any party or parties hereto effected in a manner which does not comply with this Section 3(g)(i) shall be null and void, ab initio.

6

 

 

(ii)            Any agreement on the part of a party hereto to any extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party and shall not constitute or give rise to an extension or waiver of any rights or obligations hereunder except to the extent specifically provided in such writing (it being understood that all such other non-waived rights and obligations are expressly reserved).

 

(iii)            Except as expressly set forth in this Agreement, neither the failure nor delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.

 

(iv)            Notwithstanding anything to the contrary, any amendment, modification or waiver of any provision herein that would (A) adversely affect any Holder or (B) disproportionately affect any Holder as compared to any other Holder, in each case, will not bind any such Holder without such Holder’s prior written approval.

 

(h)            Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs and permitted assigns and transferees. Except as set forth herein, no party hereto may assign either this Agreement or any of its rights, interests or obligations hereunder, in whole or in part, without the prior written consent of each other party. Any purported assignment in violation of this Section 3(h) shall be null and void and shall not operate to transfer or assign any interest or title to the purported assignee.

 

(i)            Third Parties. Nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any person or entity that is not a party hereto or thereto or a successor or permitted assign of such party.

 

(j)            Governing Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware applicable to contracts executed in and to be performed in that State, except to the extent mandatorily governed by the laws of the Provinces of Alberta and Saskatchewan and the federal laws of Canada applicable therein.

 

(k)            WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY OF ANY PROCEEDING, CLAIM, DEMAND, ACTION OR CAUSE OR ACTION, BASED UPON, ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. THE PARTIES HERETO EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH PROCEEDING, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT SUCH PARTIES MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 3(K).

7

 

 

(l)            Headings; Counterparts. The headings in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. This Agreement may be executed in two or more counterparts, and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document, but all of which together shall constitute one and the same instrument. Copies of executed counterparts of this Agreement transmitted by electronic transmission (including by email or in .pdf format) or facsimile as well as electronically or digitally executed counterparts (such as DocuSign) shall have the same legal effect as original signatures and shall be considered original executed counterparts of this Agreement.

 

(m)            Severability. The provisions of this Agreement shall be deemed severable and the illegality, invalidity or unenforceability of any provision shall not affect the legality, validity or enforceability of the other provisions of this Agreement. 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, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the parties.

 

(n)            Enforcement. Except as otherwise expressly provided herein, any and all remedies provided herein will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon the parties hereto, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. Each party hereto acknowledges and agrees that its obligations under this Agreement are special, unique and of extraordinary character and immediate and irreparable harm or damage would be caused for which money damages would not be an adequate remedy in the event that any of the provisions of this Agreement were not performed or complied with in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, in addition to any other remedy to which either party is entitled at law or in equity, the parties shall be entitled to equitable remedies against another party for its breach or threatened breach of this Agreement, including an injunction or injunctions to prevent breaches of this Agreement and specific enforcement of the terms and provisions of this Agreement, in each case, (A) without necessity of posting a bond or other form of security and (B) without proving the inadequacy of money damages or another any remedy at law. In the event that any Action shall be brought in equity to enforce the provisions of this Agreement (including to prevent breaches or threatened breaches of this Agreement), no party shall allege, and each party hereby waives all defenses and objections to such Action on the grounds that (I) money damages would be adequate or there is another adequate remedy at law or (II) the party seeking equitable remedies must either post a bond or other form of security and prove the inadequacy of money damages or another remedy at law.

 

(o)            Legal Representation. Each Holder acknowledges that Latham & Watkins LLP is acting as counsel to the Company in connection with the Business Combination Agreement and the transactions contemplated thereby, and Latham & Watkins LLP is not acting as counsel to such Holder.

 

(p)            Several Liabilities. The liability of any Holder hereunder is several (and not joint). Notwithstanding any other provision of this Agreement, in no event will any Holder be liable for any other Holder’s breach of such other Holder’s obligations under this Agreement.

8

 

 

[Remainder of page intentionally left blank; Signature pages follow]

9

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

 

 TopCo:
  
 [TopCo]
  
 By:  
 Name:
 Title:

 

[Signature Page to Lock-Up Agreement]

 

 

  HOLDER:
   
  If holder is an entity:
   
  [ ● ]
   
  By:  
  Name:
  Title:
   
  If holder is an individual:
   
  [ ● ]
   
   
 
Name:
   
  Address for Notice:
   
  [Address Line 1]
  [Address Line 2]
  Attention: [●]
  E-mail: [●]

 

 

 

 

Exhibit B

 

Form of Registration Rights Agreement

 

[Attached.]

 

 

 

 

FORM OF
REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of [●], 2023, is made and entered into by and among [TopCo], an Alberta corporation (the “Company”) and the direct parent company of Above Food Corp., an Alberta corporation (“Above Food”), Smart Dine, LLC, a Delaware limited liability company (the “Sponsor”), the undersigned parties listed under “SPAC Holders” on the signature page(s) hereto (the Sponsor and each such party, a “SPAC Holder,” and, such parties collectively, including the Sponsor, the “SPAC Holders”), and the undersigned parties listed under “Above Food Holders” on the signature page(s) hereto (each such party, an “Above Food Holder,” and, collectively, the “Above Food Holders”). The Sponsor, the other SPAC Holders, the Above Food Holders, and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 or Section 5.10 of this Agreement, are each referred to herein as a “Holder,” and, collectively, the “Holders.

 

RECITALS

 

WHEREAS, the Company has entered into that certain Business Combination Agreement, dated as of April 29, 2023, (as it may be amended or supplemented from time to time pursuant to the terms thereof, the “Business Combination Agreement”), by and among Bite Acquisition Corp. (“SPAC”), the Company, Above Merger Sub, Inc., a Delaware corporation and direct, wholly owned subsidiary of the Company (“Merger Sub”), and Above Food, pursuant to which and subject to the terms and conditions thereof, among other things, on or about the date hereof, (i) Above Food will continue from the laws of Saskatchewan to a corporation continued under the laws of the Province of Alberta; (ii) pursuant to the Share Exchange, the holders of Above Food common shares will contribute to the Company all of the issued and outstanding shares of Above Food in exchange for newly issued Common Shares, whereby Above Food will become a direct, wholly owned subsidiary of the Company; and (iii) Merger Sub will merge with and into SPAC (the “Merger”) with SPAC continuing as the surviving corporation after the Merger, whereby SPAC will become a direct, wholly owned subsidiary of the Company;

 

WHEREAS, at the Share Exchange Effective Time, pursuant to the transactions contemplated by the Business Combination Agreement, the Above Food Holders will receive Common Shares in such amounts as set forth in the Business Combination Agreement;

 

WHEREAS, at the Merger Effective Time, pursuant to the transactions contemplated by and as set forth in the Business Combination Agreement, the Sponsor and the other SPAC Holders will receive, as consideration therefor, an aggregate of (i) 5,640,000 Common Shares, which includes 1,100,000 Common Shares that are subject to vesting conditions as set forth in Section 2.8 of the Business Combination Agreement (such Common Shares that are subject to vesting conditions, the “Sponsor Earnout Shares”) and (ii) 275,000 warrants representing the right to acquire Common Shares (the “Sponsor Warrants”);

 

WHEREAS, upon the terms and subject to the conditions set forth in the Business Combination Agreement, the Above Food Holders have a contingent right to receive up to 6,114,620 Common Shares in the aggregate upon the occurrence of certain events set forth in the Business Combination Agreement (such Common Shares and the Sponsor Earnout Shares, collectively, the “Earnout Shares”);

 

 

 

WHEREAS, SPAC, the Sponsor and the other SPAC Holders are parties to that certain Registration Rights Agreement, dated as of February 11, 2021 (the “Original RRA”); and

 

WHEREAS, upon consummation of the transactions contemplated by the Business Combination Agreement, the parties to the Original RRA desire to terminate the Original RRA.

 

NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

  

1.1            Definitions. Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Business Combination Agreement. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:

 

Above Food” shall have the meaning given in the Recitals hereto.

 

Above Food Holders” shall have the meaning given in the Preamble hereto.

 

Additional Holder” shall have the meaning given in Section 5.10.

 

Additional Holder Common Shares” shall have the meaning given in Section 5.10.

 

Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Board, Chief Executive Officer or the Chief Financial Officer of the Company, after consultation with counsel to the Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement or Prospectus were not being filed, declared effective or used, as the case may be and (iii) the Company has a bona fide business purpose for not making such information public.

 

Agreement” shall have the meaning given in the Preamble hereto.

 

Block Trade” shall have the meaning given in Section 2.4.1.

 

Board” shall mean the Board of Directors of the Company.

 

 

 

Business Combination Agreement” shall have the meaning given in the Recitals hereto.

 

Closing” shall have the meaning given in the Business Combination Agreement.

 

Closing Date” shall have the meaning given in the Business Combination Agreement.

 

Commission” shall mean the Securities and Exchange Commission.

 

Common Shares” shall mean the common shares in the capital of the Company.

 

Company” shall have the meaning given in the Preamble hereto and includes the Company’s successors by recapitalization, merger, consolidation, spin-off, reorganization or similar transaction.

 

Competing Registration Rights” shall have the meaning given in Section 5.7.

 

Demanding Holder” shall have the meaning given in Section 2.1.4.

 

EarlyBird” shall mean EarlyBirdCapital, Inc.

 

Earnout Shares” shall have the meaning given in the Recitals hereto.

 

EDGAR” shall have the meaning given in Section 3.1.3.

 

Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.

 

Form F-1 Shelf” shall have the meaning given in Section 2.1.1.

 

Form F-3 Shelf” shall have the meaning given in Section 2.1.1.

 

Holder Information” shall have the meaning given in Section 4.1.2.

 

Holders” shall have the meaning given in the Preamble hereto, for so long as such person or entity holds any Registrable Securities.

 

Joinder” shall have the meaning given in Section 5.2.5.

 

Lock-Up Agreement” shall mean that certain Lock-Up Agreement, dated as of the date hereof, by and among the Company, the Sponsor and certain holders of Common Shares party thereto.

 

Lock-Up Period” shall have the meaning given in the Lock-Up Agreement.

 

Maximum Number of Securities” shall have the meaning given in Section 2.1.5.

 

Merger” shall have the meaning given in the Recitals hereto.

 

Merger Sub” shall have the meaning given in the Recitals hereto.

 

 

 

Minimum Takedown Threshold” shall have the meaning given in Section 2.1.4.

 

Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading.

 

New Registration Statement” shall have the meaning given in Section 2.1.7.

 

Original RRA” shall have the meaning given in the Recitals hereto.

 

Other Coordinated Offering” shall have the meaning given in Section 2.4.1.

 

own” or “ownership” (and derivatives of such terms) shall mean (i) ownership of record and (ii) “beneficial ownership” as defined in Rule 13d-3 or Rule 16a-1(a)(2) promulgated by the Commission under the Exchange Act (but without regard to any requirement for a security or other interest to be registered under Section 12 of the Securities Act).

 

Permitted Transferees” shall mean, with respect to each Holder and its Permitted Transferees, (i) prior to the expiration of the Lock-Up Period, any person or entity to whom such Holder is permitted to transfer such Registrable Securities prior to the expiration of the Lock-Up Period pursuant to Section 2 of the Lock-Up Agreement and (ii) after the expiration of the Lock-Up Period, any person or entity to whom such Holder is permitted to transfer such Registrable Securities, subject to and in accordance with any applicable agreement between such Holder and/or their respective Permitted Transferees and the Company and any transferee thereafter.

 

Piggyback Registration” shall have the meaning given in Section 2.2.1.

 

Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.

 

Registrable Security” shall mean (a) any issued and outstanding Common Shares and any other equity security (including Common Shares issued or issuable upon the exercise or conversion of any other equity security, including warrants to purchase Common Shares) of the Company held by a Holder immediately following the Closing (including the Sponsor Warrants and any Earnout Shares to the extent such Earnout Shares have vested or have been issued by the Company pursuant to the Business Combination Agreement and other securities distributable pursuant to Section 2.8 of the Business Combination Agreement); (b) any outstanding Common Shares or any other equity security (including warrants to purchase Common Shares and Common Shares issued or issuable upon the exercise or conversion of any other equity security) of the Company acquired by a Holder following the date hereof to the extent that such securities are “restricted securities” (as defined in Rule 144) or are otherwise held by an “affiliate” (as defined in Rule 144) of the Company; (c) any Additional Holder Common Shares; and (d) any other equity security of the Company or any of its subsidiaries issued or issuable with respect to any securities referenced in clause (a), (b) or (c) above by way of a stock dividend or stock split or in connection with a recapitalization, merger, consolidation, spin-off, reorganization or similar transaction; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities upon the earliest to occur of: (A) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement by the applicable Holder; (B) (i) such securities shall have been otherwise transferred (other than to a Permitted Transferee), (ii) new certificates for such securities not bearing (or book entry positions not subject to) a legend restricting further transfer shall have been delivered by the Company and (iii) subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding; (D) such securities may be sold without registration pursuant to Rule 144 or any successor rule promulgated under the Securities Act (but with no volume or other restrictions or limitations including as to manner or timing of sale); and (E) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.

 

 

 

Registration” shall mean a registration, including any related Shelf Takedown, effected by preparing and filing a registration statement, Prospectus or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.

 

Registration Expenses” shall mean the documented, out-of-pocket expenses of a Registration, including, without limitation, the following:

 

(A)            all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any national securities exchange on which the Common Shares are then listed;

 

(B)            fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of outside counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);

 

(C)            printing, messenger, telephone and delivery expenses;

 

(D)            reasonable fees and disbursements of counsel for the Company;

 

(E)            reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration; and

 

(F)            in an Underwritten Offering or Other Coordinated Offering, reasonable and documented fees and expenses not to exceed $30,000 in the aggregate for each such Registration, of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders with the approval of the Company, which approval shall not be unreasonably withheld.

 

Registration Statement” shall mean any registration statement that covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.

 

SEC Guidance” shall have the meaning given in Section 2.1.7.

 

 

 

Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

 

Shelf” shall have the meaning given in Section 2.1.1.

 

Shelf Registration” shall mean a registration of securities pursuant to a registration statement filed with the Commission in accordance with and pursuant to Rule 415 promulgated under the Securities Act (or any successor rule then in effect).

 

Shelf Takedown” shall mean an Underwritten Shelf Takedown or any proposed transfer or sale using a Registration Statement, including a Piggyback Registration.

 

SPAC” shall have the meaning given in the Recitals hereto.

 

SPAC Holders” shall have the meaning given in the Preamble hereto.

 

Sponsor” shall have the meaning given in the Preamble hereto.

 

Sponsor Earnout Shares” shall have the meaning given in the Recitals hereto.

 

Sponsor Support Agreement” shall mean that certain Sponsor Support Agreement, dated as of April 29, 2023, by and among the Sponsor, SPAC and Above Food.

 

Sponsor Warrants” shall have the meaning given in the Recitals hereto.

 

Subsequent Shelf Registration Statement” shall have the meaning given in Section 2.1.2.

 

Transfer” shall mean the (a) sale or assignment of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the Commission promulgated thereunder, with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b).

 

Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.

 

Underwritten Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.

 

Underwritten Shelf Takedown” shall have the meaning given in Section 2.1.4.

 

Withdrawal Notice” shall have the meaning given in Section 2.1.6.

 

 

 

ARTICLE II

 

REGISTRATIONS AND OFFERINGS

 

2.1            Shelf Registration.

 

2.1.1            Filing. Within thirty (30) calendar days following the Closing Date, the Company shall submit to or file with the Commission a Registration Statement for a Shelf Registration on Form F-1 (the “Form F-1 Shelf”) or a Registration Statement for a Shelf Registration on Form F-3 (the “Form F-3 Shelf,” and together with the Form F-1 Shelf, the New Registration Statement and any Subsequent Shelf Registration Statement, the “Shelf”), if the Company is then eligible to use a Form F-3 Shelf, in each case, covering the public resale of all the Registrable Securities (determined as of two (2) business days prior to such submission or filing) on a delayed or continuous basis and shall use its commercially reasonable efforts to have such Shelf declared effective as soon as practicable after the filing thereof, but no later than the earlier of (a) the ninetieth (90th) calendar day following the filing date thereof if the Commission notifies the Company that it will “review” the Registration Statement and (b) the tenth (10th) business day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review. Such Shelf shall provide for the resale of the Registrable Securities included therein pursuant to any method or combination of methods legally available to, and requested by, any Holder named therein. In the event the Company files a Form F-1 Shelf, the Company shall use its commercially reasonable efforts to convert the Form F-1 Shelf (and any Subsequent Shelf Registration Statement) to a Form F-3 Shelf as soon as practicable after the Company is eligible to use Form F-3. The Company shall maintain a Shelf in accordance with the terms hereof, and shall use commercially reasonable efforts to prepare and file with the Commission such amendments, including post-effective amendments, and supplements as may be necessary to keep a Shelf continuously effective, available for use to permit the Holders named therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. The Company’s obligation under this Section 2.1.1, shall, for the avoidance of doubt, be subject to Section 3.4.

 

2.1.2            Subsequent Shelf Registration. If any Shelf ceases to be effective under the Securities Act for any reason at any time while Registrable Securities are still outstanding, the Company shall, subject to Section 3.4, use its commercially reasonable efforts to as promptly as is reasonably practicable cause such Shelf to again become effective under the Securities Act with respect to the public resale of all the Registrable Securities (including using its commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness of such Shelf), and shall use its commercially reasonable efforts to as promptly as is reasonably practicable amend such Shelf in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such Shelf or file an additional registration statement as a Shelf Registration (a “Subsequent Shelf Registration Statement”) registering the resale of all Registrable Securities (determined as of two (2) business days prior to such filing), and pursuant to any method or combination of methods legally available to, and requested by, any Holder named therein. If a Subsequent Shelf Registration Statement is filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration Statement to become effective under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that the Subsequent Shelf Registration Statement shall be an automatic shelf registration statement (as defined in Rule 405 promulgated under the Securities Act) if the Company is a well-known seasoned issuer (as defined in Rule 405 promulgated under the Securities Act) at the most recent applicable eligibility determination date) at the time of filing and (ii) keep such Subsequent Shelf Registration Statement continuously effective, available for use to permit the Holders named therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. Any such Subsequent Shelf Registration Statement shall be on Form F-3 to the extent that the Company is eligible to use such form. Otherwise, such Subsequent Shelf Registration Statement shall be on another appropriate form. The Company’s obligation under this Section 2.1.2, shall, for the avoidance of doubt, be subject to Section 3.4.

 

 

 

2.1.3            Additional Registrable Securities. Subject to Section 3.4, in the event that any Holder holds Registrable Securities that are not registered for resale on a delayed or continuous basis, the Company, upon written request of a SPAC Holder or an Above Food Holder, shall promptly use its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered by either, at the Company’s option, any then available Shelf (including by means of a post-effective amendment) or by filing a Subsequent Shelf Registration Statement and cause the same to become effective as soon as practicable after such filing and such Shelf or Subsequent Shelf Registration Statement shall be subject to the terms hereof; provided, however, that the Company shall only be required to cause such additional Registrable Securities to be so covered twice per calendar year for each of the Sponsor, the other SPAC Holders (as a group) and the Above Food Holders (as a group).

 

2.1.4            Requests for Underwritten Shelf Takedowns. Subject to Section 3.4, at any time and from time to time after the expiration of any Lock-Up Period to which a Holder’s shares are subject and when an effective Shelf is on file with the Commission, one or more SPAC Holders or one or more Above Food Holders, or their respective Permitted Transferee (any of the SPAC Holders or Above Food Holders or respective Permitted Transferees being in such case, a “Demanding Holder”) may request to sell all or any portion of its Registrable Securities in an Underwritten Offering that is registered pursuant to the Shelf (each, an “Underwritten Shelf Takedown”); provided that the Company shall only be obligated to effect an Underwritten Shelf Takedown if such offering shall include Registrable Securities proposed to be sold by the Demanding Holder, either individually or together with other Demanding Holders, with an aggregate offering price, net of underwriting discounts and commissions, reasonably expected to exceed at least $50 million (the “Minimum Takedown Threshold”). All requests for Underwritten Shelf Takedowns shall be made by giving written notice to the Company at least 48 hours prior to the public announcement of the Underwritten Shelf Takedown (a “Shelf Takedown Notice”), which Shelf Takedown Notice shall specify the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown and the expected price range (net of underwriting discounts and commissions) of such Underwritten Shelf Takedown. Subject to Section 2.4.4, the Company shall have the right to select the Underwriters for such offering (which shall consist of one or more reputable nationally recognized investment banks), subject to the initial Demanding Holder’s prior approval (which shall not be unreasonably withheld, conditioned or delayed). The Sponsor and other SPAC Holders (and their respective Permitted Transferees), as a group, may demand not more than one (1) Underwritten Shelf Takedown and the Above Food Holders (and their Permitted Transferees), as a group, may demand not more than three (3) Underwritten Shelf Takedowns, in each case, pursuant to this Section 2.1.4 in any twelve (12) month period. Notwithstanding anything to the contrary in this Agreement, the Company may consummate an Underwritten Offering pursuant to any then effective Registration Statement, including a Form F-3, that is then available for such offering. Notwithstanding anything to the contrary in this Agreement, EarlyBird may demand an Underwritten Shelf Takedown pursuant to this Section 2.1.4 in only one (1) occasion and only during the period commencing on the date of this Agreement and ending on February 11, 2026, and, thereafter, will no longer have any rights under this Section 2.1.4.

 

 

 

2.1.5            Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Shelf Takedown advise the Demanding Holders in writing that marketing factors require a limitation of the number of shares to be underwritten, then the Demanding Holders shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares of Registrable Securities that may be included in the underwriting (such maximum number of such securities, the “Maximum Number of Securities”) shall be allocated among all participating Holders thereof, including the Demanding Holders, in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company owned by each participating Holder; provided, however, that the number of shares of Registrable Securities to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting.

 

2.1.6            Withdrawal. Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing such Underwritten Shelf Takedown, a majority-in-interest of the Demanding Holders initiating an Underwritten Shelf Takedown shall have the right to withdraw from such Underwritten Shelf Takedown for any or no reason whatsoever upon written notification (a “Withdrawal Notice”) to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Underwritten Shelf Takedown; provided that the remaining Demanding Holders may elect to have the Company continue an Underwritten Shelf Takedown if the Minimum Takedown Threshold would still be satisfied by the Registrable Securities proposed to be sold in the Underwritten Shelf Takedown by the remaining Demanding Holders. If withdrawn, a demand for an Underwritten Shelf Takedown shall constitute a demand for an Underwritten Shelf Takedown by the withdrawing Demanding Holder for purposes of Section 2.1.4, unless either (i) such Demanding Holder has not previously withdrawn any Underwritten Shelf Takedown or (ii) such Demanding Holder reimburses the Company for all Registration Expenses with respect to such Underwritten Shelf Takedown (or, if there is more than one Demanding Holder, a pro rata portion of such Registration Expenses based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Shelf Takedown); provided that, if one or more Demanding Holders elect to continue an Underwritten Shelf Takedown pursuant to the proviso in the immediately preceding sentence, such Underwritten Shelf Takedown shall instead count as an Underwritten Shelf Takedown demanded by such remaining Demanding Holders, as applicable, for purposes of Section 2.1.4. Following the receipt of any Withdrawal Notice, the Company shall promptly forward such Withdrawal Notice to any other Holders that had elected to participate in such Shelf Takedown. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Shelf Takedown prior to its withdrawal under this Section 2.1.6, other than if a Demanding Holder elects to pay such Registration Expenses pursuant to clause (ii) of the second sentence of this Section 2.1.6.

 

 

 

2.1.7            New Registration Statement. Notwithstanding the registration obligations set forth in this Section 2.1, in the event the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415 under the Securities Act, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly (a) inform each of the holders thereof and use its commercially reasonable efforts to file amendments to the Shelf Registration as required by the Commission and/or (b) withdraw the Shelf Registration and file a new registration statement (a “New Registration Statement”), on Form F-3, or if Form F-3 is not then available to the Company for such registration statement, on such other form available to register for resale the Registrable Securities as a secondary offering; provided, however, that prior to filing such amendment or New Registration Statement, the Company shall use its commercially reasonable efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with any publicly-available written or oral guidance, comments, requirements or requests of the Commission staff (the “SEC Guidance”). Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation of the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used commercially reasonable efforts to advocate with the Commission for the registration of all or a greater number of Registrable Securities), unless otherwise directed in writing by a Holder as to its Registrable Securities to register a lesser amount of Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced on a pro rata basis based on the total number of Registrable Securities held by the Holders. In the event the Company amends the Shelf Registration or files a New Registration Statement, as the case may be, under clause (a) or (b) above, the Company will use its commercially reasonable efforts to file with the Commission, as promptly as allowed by Commission or provided by SEC Guidance to the Company or to registrants of securities in general, one or more registration statements on Form F-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Shelf Registration, as amended, or the New Registration Statement.

 

2.2            Piggyback Registration.

 

2.2.1            Piggyback Rights. If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for holders of capital stock other than the Holders) any Common Shares or other equity securities of the Company under the Securities Act in connection with the public offering of such securities solely for cash (including, for this purpose, an Underwritten Shelf Takedown pursuant to Section 2.1) (other than a registration relating solely to the sale of securities to participants in a Company stock plan or a transaction covered by Rule 145 under the Securities Act, a registration in which the only shares being registered is Common Shares issuable upon conversion of debt securities which are also being registered, or any registration on any form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities), then the Company shall give written notice of such proposed offering to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) calendar days before the anticipated filing date of such Registration Statement or, in the case of an Underwritten Offering pursuant to a Shelf Registration, the applicable “red herring” prospectus or prospectus supplement used for marketing such offering, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to include in such registered offering such number of Registrable Securities as such Holders may request in writing within five (5) calendar days after receipt of such written notice (such registered offering, a “Piggyback Registration”). Subject to Section 2.2.2, the Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and, if applicable, shall use its commercially reasonable efforts to cause the managing Underwriter or Underwriters of such Piggyback Registration to permit the Registrable Securities requested by the Holders pursuant to this Section 2.2.1 to be included therein on the same terms and conditions as any similar securities of the Company included in such registered offering and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. The inclusion of any Holder’s Registrable Securities in a Piggyback Registration shall be subject to such Holder agreement to enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering. Notwithstanding anything to the contrary, the Holders shall have no rights under this Section 2.2.1 if the registration statement the Company proposes to file is solely for purposes of a delayed or continuous offering pursuant to Rule 415 under the Securities Act and, at the time of the filing of such registration statement, the Company is in compliance with its obligations under Section 2.1.

 

 

 

2.2.2            Reduction of Piggyback Registration. If the total amount of securities, including Registrable Securities, requested by holders of Registrable Securities to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will not jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling security holders according to the total amount of securities entitled to be included therein owned by each selling security holder or in such other proportions as shall mutually be agreed to by such selling security holders). For purposes of the preceding parenthetical concerning apportionment, for any selling security holder which is a holder of Registrable Securities and which is a partnership or corporation, the partners, retired partners and holders of capital stock of such holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling security holder,” and any pro-rata reduction with respect to such “selling security holder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “selling security holder,” as defined in this sentence.

 

2.2.3            Piggyback Registration Withdrawal. Any Holder of Registrable Securities (other than a Demanding Holder, whose right to withdraw from an Underwritten Shelf Takedown, and related obligations, shall be governed by Section 2.1.6) shall have the right to withdraw all or any portion of its Registrable Securities from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw such Registrable Securities from such Piggyback Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration or, in the case of a Piggyback Registration pursuant to a Shelf Registration, the filing of the applicable “red herring” prospectus or prospectus supplement with respect to such Piggyback Registration used for marketing such transaction. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons or entities pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration (which, in no circumstance, shall include a Shelf) at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement (other than Section 2.1.6), the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this Section 2.2.3.

 

 

 

2.2.4            Unlimited Piggyback Registration Rights. For purposes of clarity, subject to Section 2.1.6, any Piggyback Registration effected pursuant to Section 2.2 hereof shall not be counted as a demand for an Underwritten Shelf Takedown under Section 2.1.4 hereof. Notwithstanding anything to the contrary in this Agreement, EarlyBird may participate in a Piggyback Registration only during the period commencing on the date of this Agreement and ending on February 11, 2028, and, thereafter, will no longer have any rights thereof.

 

2.3            Market Stand-off. In connection with any Underwritten Offering of equity securities of the Company (other than a Block Trade or Other Coordinated Offering), if requested by the managing Underwriters, each Holder participating in such Underwritten Offering that is an executive officer, director or Holder holding in excess of five percent (5%) of the outstanding Common Shares (and for which it is customary for such a Holder to agree to a lock-up) agrees that it shall not Transfer any Common Shares, the Sponsor Warrants or other equity securities of the Company (other than those included in such offering pursuant to this Agreement), without the prior written consent of the Company, during the ninety (90)-calendar day period (or such shorter time agreed to by the managing Underwriters) beginning on the date of pricing of such offering, except as expressly permitted by such lock-up agreement or in the event the managing Underwriters otherwise agree by written consent. Each such Holder agrees to execute a customary lock-up agreement in favor of the Underwriters to such effect (in each case on substantially the same terms and conditions as all such Holders).

 

2.4            Block Trades; Other Coordinated Offerings.

 

2.4.1            Notwithstanding any other provision of this Article II, but subject to Section 3.4, at any time and from time to time when an effective Shelf is on file with the Commission, if a Demanding Holder wishes to engage in (a) an underwritten registered offering not involving a “roadshow,” an offer commonly known as a “block trade” (a “Block Trade”) or (b) an “at the market” or similar registered offering through a broker, sales agent or distribution agent, whether as agent or principal, (an “Other Coordinated Offering”), in each case, either (x) with an aggregate offering price reasonably expected to be at least the Minimum Takedown Threshold or (y) of all remaining Registrable Securities held by the Demanding Holder, then such Demanding Holder only needs to notify the Company of the Block Trade or Other Coordinated Offering at least five (5) business days prior to the day such offering is to commence and the Company shall use its commercially reasonable efforts to facilitate such Block Trade or Other Coordinated Offering; provided that the Demanding Holders representing a majority of the Registrable Securities wishing to engage in the Block Trade or Other Coordinated Offering shall use commercially reasonable efforts to work with the Company and any Underwriters, brokers, sales agents or placement agents prior to making such request in order to facilitate preparation of the registration statement, prospectus and other offering documentation related to the Block Trade or Other Coordinated Offering. For the avoidance of doubt, neither a Block Trade nor an Other Coordinated Offering shall include an offering of Registrable Securities in which a negative assurance letter of counsel to the Company or a comfort letter of the accountants of the Company is to be delivered to the Underwriter or Underwriters, brokers, sales agents or distribution agents, as applicable.

 

 

 

2.4.2            Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used in connection with a Block Trade or Other Coordinated Offering, a majority-in-interest of the Demanding Holders initiating such Block Trade or Other Coordinated Offering shall have the right to submit a Withdrawal Notice to the Company, the Underwriter or Underwriters (if any) and any brokers, sales agents or placement agents (if any) of their intention to withdraw from such Block Trade or Other Coordinated Offering. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Block Trade or Other Coordinated Offering prior to its withdrawal under this Section 2.4.2.

 

2.4.3            Notwithstanding anything to the contrary in this Agreement, Section 2.2 shall not apply to a Block Trade or Other Coordinated Offering initiated by a Demanding Holder pursuant to this Agreement.

 

2.4.4            The Demanding Holder in a Block Trade or Other Coordinated Offering shall have the right to select the Underwriters and any brokers, sales agents or placement agents (if any) for such Block Trade or Other Coordinated Offering (in each case, which shall consist of one or more reputable nationally recognized investment banks).

 

2.4.5            A Holder in the aggregate may demand no more than two (2) Block Trades or Other Coordinated Offerings pursuant to this Section 2.4 in any twelve (12) month period. For the avoidance of doubt, any Block Trade or Other Coordinated Offering effected pursuant to this Section 2.4 shall not be counted as a demand for an Underwritten Shelf Takedown pursuant to Section 2.1.4 hereof, and the procedures set forth in Section 2.1.4 with respect to an Underwritten Shelf Takedown shall not apply with respect thereto.

 

ARTICLE III

 

COMPANY PROCEDURES

 

3.1            General Procedures. In connection with any Shelf and/or Shelf Takedown, the Company shall use its commercially reasonable efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall:

 

3.1.1            prepare and file with the Commission as soon as reasonably practicable a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until the earlier of (i) when all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or have ceased to be Registrable Securities or (ii) the termination of this Agreement;

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