Exhibit 8.1

 

250 West 55th Street New York, NY 10019-9601 U.S.A.   Telephone: 212.468.8000 Facsimile: 212.468.7900   www.mofo.com

morrison & foerster llp   beijing, berlin, boston, brussels, denver, hong kong, london, los angeles, new york, palo alto, san diego, san francisco, shanghai, singapore, tokyo, washington, d.c.

 

March 28, 2022

 

Silver Crest Acquisition Corporation
Suite 3501, 35/F, Jardine House,
1 Connaught Place, Central, Hong Kong
Telephone: +852-2165-9000

 

Ladies and Gentlemen:

 

We have acted as United States counsel to Silver Crest Acquisition Corporation, a Cayman Islands exempted company (“Silver Crest”), in connection with the preparation of the registration statement on Form F-4 (and together with the Proxy Statement/Prospectus filed therewith, and as amended, the “Registration Statement”) (Registration No. 333-259743) originally filed with the Securities and Exchange Commission on September 23, 2021, under the Securities Act of 1933, as amended, by TH International Limited, a Cayman Islands exempted company (“THIL”).

 

The Registration Statement is being filed in connection with transactions contemplated by the Agreement and Plan of Merger, dated as of August 13, 2021 (the “Merger Agreement”), by and among Silver Crest, THIL, and Miami Swan Ltd, a Cayman Islands exempted company and a wholly-owned subsidiary of THIL (“Merger Sub”) (such transactions, collectively, the “Business Combination”).

 

Capitalized terms not otherwise defined herein shall have the same meanings attributed to such terms in the Registration Statement.

 

In rendering our opinion set forth below:

 

a)

We have examined (i) the Merger Agreement, (ii) the Registration Statement, and (iii) such other documents as we have deemed necessary or appropriate for purposes to enable us to render the opinion set forth below (such Merger Agreement, Registration Statement, and other documents, collectively, the “Combination Documents”). We have not, however, undertaken any independent investigation of any factual matter set forth in any of the foregoing.

 

 

 

March 28, 2022

Page Two

 

b)

We have assumed, with your permission and without any independent investigation or review thereof, that:

 

i.

All original documents submitted to us (including signatures thereto) are authentic, all documents submitted to us as copies conform to the original documents, all such documents have been duly and validly executed and delivered by non-Silver Crest parties where such due execution and delivery are a prerequisite to the effectiveness thereof, and all non-Silver Crest parties to such documents had or will have, as applicable, the requisite corporate powers and authority to enter into such documents and to undertake and consummate the Business Combination;

 

ii.

All statements regarding factual matters, representations, warranties, and covenants contained in the Combination Documents are true, complete and correct and will remain true, complete and correct at all times up to and including the Second Effective Time;

 

iii.

Any representations made in the Combination Documents “to the knowledge of” or based on the “belief” or “intent” of any person, or that are similarly qualified, are true, complete and correct and will remain true, complete and correct at all times up to and including the Second Effective Time, in each case without such qualification;

 

iv.

There are no understandings between any of the parties that would alter, or are inconsistent with, the terms and representations set forth in the Combination Documents, and none of the material terms and conditions of the Combination Documents have been or will be waived or modified; and

 

v.

The Business Combination will be effected in accordance with the Combination Documents, the parties have complied with and, if applicable, will continue to comply with, the covenants contained in the Combination Documents, and all applicable reporting requirements have been or will be satisfied;

 

c)

We have based our opinion on the current provisions of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), the U.S. Treasury Regulations promulgated thereunder, and the interpretation of the Code and such regulations by the courts and the U.S. Internal Revenue Service, in each case, as they are in effect and exist at the date hereof. The foregoing authorities may be repealed, revoked or modified, and any such change may have retroactive effect. Any change in applicable laws or facts and circumstances surrounding the Business Combination, or any inaccuracy in the statements, facts, assumptions and representations on which we have relied may affect the validity of our opinion. We assume no responsibility to inform Silver Crest of any such change or inaccuracy that may occur or come to our attention or to supplement or revise our opinion to reflect any legal developments or factual matters arising subsequent to the date hereof. In addition, our opinion is being delivered prior to the consummation of the Business Combination and therefore is prospective and dependent on future events.

 

 

 

March 28, 2022

Page Three

 

Based upon the foregoing and subject to the further assumptions, qualifications and limitations set forth herein and in the Registration Statement, the statements set forth in the Registration Statement under the section entitled “Taxation — Certain Material U.S. Federal Income Tax Considerations” (the “Tax Disclosure”), insofar as such statements set forth legal conclusions regarding U.S. federal income tax law, constitute our opinion regarding such material U.S. federal income tax consequences of the Business Combination.

 

We express no opinion on any transactions other than the Business Combination, or any matter other than those specifically covered by this opinion. In particular, this opinion is limited to the U.S. federal income tax matters discussed in the Tax Disclosure, and does not address (a) the U.S. federal income tax treatment of any shareholder subject to special rules under the Code or the Treasury Regulations, as further described in the Tax Disclosure, (b) any matter arising in connection with Section 367 of the Code, or (c) any matter arising in connection with Section 7874 of the Code.

 

The U.S. federal income tax consequences of the Business Combination are complex and are subject to varying interpretations. Our opinion is not binding on the U.S. Internal Revenue Service or any court, and there can be no assurance or guarantee that either will agree with our conclusions. The U.S. Internal Revenue Service may challenge one or more of the conclusions contained herein and the U.S. Internal Revenue Service may take a position that is inconsistent with the views expressed herein. There can be no assurance or guarantee that a court would, if presented with the issues addressed herein, reach the same or similar conclusions as we have reached.

 

This opinion is furnished to you solely for use in connection with the Registration Statement. This opinion is based on facts and circumstances existing on the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and also to the references to Morrison & Foerster LLP in the Registration Statement. In giving such consent, we do not thereby concede that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.

 

[Signature continued on next page]

 

 

 

March 28, 2022

Page Four

 

Sincerely,

 

/s/ Morrison & Foerster LLP

Morrison & Foerster LLP

 

 

 

Exhibit 10.5 

 

EXECUTION VERSION 

 

AMENDMENT NO. 1 TO VOTING AND SUPPORT AGREEMENT

 

This AMENDMENT NO. 1 TO VOTING AND SUPPORT AGREEMENT (this “Amendment”) is entered into as of March 9, 2022, by and among TH International Limited, a Cayman Islands exempted company (the “Company”), Silver Crest Acquisition Corporation, a Cayman Islands exempted company (“SPAC”), and Silver Crest Management LLC, Cayman Islands limited liability company (“Sponsor”). Unless otherwise specifically defined herein, all capitalized terms used but not defined herein shall have the meanings ascribed to them under the Agreement (as defined below).

 

WHEREAS, the parties hereto entered into that certain Voting and Support Agreement, dated as of August 13, 2021 (as may be amended and modified from time to time, including by this Amendment, the “Agreement”) in connection with that certain Agreement and Plan of Merger, dated as of August 13, 2021 (as may be amended and modified from time to time, including by its Amendment No. 1, dated as of January 30, 2022, and Amendment No. 2, dated as of the date hereof, the “Merger Agreement”)) entered into by and among the Company, Miami Swan Ltd, a Cayman Islands exempted company and wholly-owned subsidiary of the Company (“Merger Sub”), and SPAC, pursuant to which, among other things, (i) Merger Sub will be merged with and into SPAC (the “First Merger”), with SPAC surviving the First Merger as a wholly owned subsidiary of the Company, and (ii) SPAC will be merged with and into the Company (the “Second Merger” and together with the First Merger, the “Mergers”), with the Company surviving the Second Merger;

 

WHEREAS, Section 5.3 of the Agreement provides that the provisions of Article XI (other than Section 11.06) of the Merger Agreement are incorporated therein by reference, mutatis mutandis, as if set forth in full therein, and pursuant to Section 11.09 of the Merger Agreement, the Merger Agreement may be amended or modified in whole or in part, only by an agreement in writing executed by each of the Parties to the Merger Agreement in the same manner as the Merger Agreement and which makes reference to the Merger Agreement;

 

WHEREAS, by analogy to Section 11.06 of the Merger Agreement, the Agreement may be amended or modified in whole or in part, only by an agreement in writing executed by each of the Company, SPAC and Sponsor in the same manner as the Agreement and which makes reference to the Agreement; and

 

WHEREAS, the parties hereto, consisting of the Company, SPAC and Sponsor, expressly making reference to the Agreement, now desire to amend the Agreement as set forth below.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

 

1.            Amendment to the Agreement.

 

1.1            Amendment to Article IV. Article IV of the Agreement is hereby amended and supplemented by adding the following Section 4.13:

 

“4.13      Contribution by Sponsor. Immediately prior to, and contingent upon, the First Effective Time, Sponsor hereby agrees to contribute to the capital of SPAC for no consideration (i) 4,312,500 SPAC Shares and (ii) 4,450,000 SPAC Private Placement Warrants, each beneficially owned by Sponsor as of the date hereof (the “Contribution”). For U.S. federal and applicable state and local income tax purposes, each of Sponsor and SPAC intends for the Contribution to be treated as a contribution to the capital of SPAC within the meaning of Section 118 of the Internal Revenue Code of 1986, as amended.”

 

 

2.            Miscellaneous

 

2.1            No Further Amendment. The parties hereto agree that all other provisions of the Agreement shall, subject to the amendments set forth in Section 1 of this Amendment, continue unmodified, in full force and effect and constitute legal and binding obligations of the parties in accordance with their terms. This Amendment is limited precisely as written and shall not be deemed to be an amendment to any other term or condition of the Agreement or any of the documents referred to therein. This Amendment forms an integral and inseparable part of the Agreement.

 

2.2            Representations and Warranties.

 

Each party hereto hereby represents and warrants to each other party that:

 

(a)            It has all necessary corporate power and authority to execute and deliver this Amendment and to perform its obligations hereunder. The execution and delivery of this Amendment by it have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on its part are necessary to authorize the execution and delivery of this Amendment.

 

(b)            This Amendment has been duly and validly executed and delivered by it and, assuming due authorization, execution and delivery by each other party, constitutes a legal, valid and binding obligation of such party, enforceable against it in accordance with its terms, subject to the Enforceability Exceptions.

 

2.3            Acknowledgment. The parties hereto acknowledge and agree that Sponsor has no obligation to donate or transfer SPAC Warrants to a charitable foundation, and any obligation that existed prior to the date hereof is irrevocably waived.

 

2.4            References. Each reference to “this Agreement,” “hereof,” “herein,” “hereunder,” “hereby” and each other similar reference contained in the Agreement shall, effective from the date of this Amendment, refer to the Agreement as amended by this Amendment. Notwithstanding the foregoing, references to the date of the Agreement and references in the Agreement, as amended hereby, to “the date hereof,” “the date of this Agreement” and other similar references shall in all instances continue to refer to August 13, 2021 and references to the date of this Amendment and “as of the date of this Amendment” shall refer to March 9, 2022.

 

2.5            Effect of Amendment. This Amendment shall form a part of the Agreement for all purposes, and each party thereto and hereto shall be bound hereby. From and after the execution of this Amendment by the parties hereto, any reference to the Agreement shall be deemed a reference to the Agreement as amended hereby. This Amendment shall be deemed to be in full force and effect from and after the execution of this Amendment by the parties hereto.

 

 

2.6            Other Miscellaneous Terms. The provisions of Article V (General Provision) of the Agreement shall apply mutatis mutandis to this Amendment, and to the Agreement as amended by this Amendment, taken together as a single agreement, reflecting the terms therein as amended by this Amendment.

 

[Signature pages follow]

 

 

IN WITNESS WHEREOF, each party has duly executed and delivered this Amendment as a deed, all as of the date first written above.

 

	EXECUTED AND DELIVERED AS A DEED BY:
	TH INTERNATIONAL LIMITED

 

Signature:

/s/ Paul Hong

 

Name:

Paul Hong

 

Title:

Director

 

[Signature Page to Amendment No. 1 to Sponsor Voting and Support Agreement]

 

 

IN WITNESS WHEREOF, each party has duly executed and delivered this Amendment as a deed, all as of the date first written above.

 

 

	EXECUTED AND DELIVERED AS A DEED BY:
	SILVER CREST ACQUISITION CORPORATION

 

Signature:

/s/ Liang Meng

 

	Name:	Liang Meng
	Title:	Director

 

[Signature Page to Amendment No. 1 to Sponsor Voting and Support Agreement]

 

 

IN WITNESS WHEREOF, each party has duly executed and delivered this Amendment as a deed, all as of the date first written above.

 

	EXECUTED AND DELIVERED AS A DEED BY:
	SILVER CREST MANAGEMENT LLC

 

Signature:

/s/ Liang Meng

 

	Name:	Liang Meng
	Title:	Director

 

[Signature Page to Amendment No. 1 to Sponsor Voting and Support Agreement]

 

 

Exhibit 10.7

 

FORM OF INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this “Agreement”) is entered into as of             , 2022 by and between TH International Limited, an exempted company incorporated and existing under the laws of the Cayman Islands (the “Company”), and the undersigned (“Indemnitee”), and is effective as of the Effective Date (as defined below).

 

RECITALS

 

WHEREAS, in connection with the Business Combination (as defined below) contemplated by the Agreement and Plan of Merger (the “Merger Agreement”) entered into by and among the Company, Miami Swan Ltd, a Cayman Islands exempted company and wholly-owned subsidiary of the Company (“Merger Sub”) and Silver Crest Acquisition Corporation, a Cayman Islands exempted company (“Silver Crest”) on August 13, 2021, pursuant to which, (i) Merger Sub will merge with and into Silver Crest (such merger, the “First Merger”), with Silver Crest surviving the First Merger as a wholly owned subsidiary of the Company (Silver Crest, as the surviving entity of the First Merger, the “Surviving Entity”), and (ii) immediately following the consummation of the First Merger, the Surviving Entity will merge with and into the Company (such merger, the “Second Merger”), with the Company surviving the Second Merger (such transactions, collectively, the “Business Combination”, and such consummation date, the “Effective Date”);

 

WHEREAS, the Board of Directors of the Company (the “Board of Directors”) has determined that in order to attract and retain highly competent persons to serve the Company as directors or officers it is reasonable and necessary for the Company to provide adequate protection to such persons against risks of claims and actions against them arising out of their services to the Company;

 

WHEREAS, the amended and restated memorandum and articles of association of the Company (the “Articles”) provide for the indemnification of the directors and officers of the Company; and

 

WHEREAS, this Agreement is a supplement to and in furtherance of the Articles of the Company and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

AGREEMENT

 

In consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

A.                DEFINITIONS

 

The following terms shall have the meanings defined below:

 

“Expenses” shall include, without limitation, damages, judgments, fines, penalties, settlements and costs, attorneys’ fees, experts’ fees and disbursements and costs of attachment or similar bond, investigations, and any other expenses paid or incurred in connection with investigating, defending, being a witness in, participating in (including on appeal), or preparing for any of the foregoing in, any Proceeding.

 

 

“Indemnifiable Event” means any event or occurrence that takes place either before or after the execution of this Agreement, related to the fact that Indemnitee is or was a director or officer of the Company, or is or was serving at the request of the Company as a director or officer of another corporation, company, partnership, joint venture or other entity, or related to anything done or not done by Indemnitee in any such capacity either alone or jointly with another person.

 

“Participant” means a person who is a party to, or witness or participant (including on appeal) in, a Proceeding.

 

“Proceeding” means any threatened, pending, or completed action, suit, arbitration or proceeding, or any inquiry, hearing or investigation, whether civil, criminal, administrative, investigative or other, including appeal, in which Indemnitee may be or may have been involved as a party or otherwise by reason of an Indemnifiable Event.

 

B.                 AGREEMENT TO INDEMNIFY

 

1.

General Agreement. In the event Indemnitee was, is, or becomes a Participant in, or is threatened to be made a Participant in, a Proceeding, the Company shall indemnify the Indemnitee from and against any and all Expenses which Indemnitee incurs or becomes obligated to incur in connection with such Proceeding, to the fullest extent permitted by applicable law.

 

2.

Indemnification of Expenses of Successful Party. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits in defense of any Proceeding or in defense of any claim, issue or matter in such Proceeding, the Company shall indemnify Indemnitee against all Expenses incurred in connection with such Proceeding or such claim, issue or matter, as the case may be.

 

3.

Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of Expenses, but not for the total amount of Expenses, the Company shall indemnify the Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

 

4.

Exclusions. Subject to Section F.2 (Subrogation) of this Agreement, the Indemnitee shall not be entitled to indemnification under this Agreement:

 

(a)

to the extent and for the amount that Indemnitee is entitled to be indemnified and is actually indemnified under a valid, enforceable and collectible insurance policy;

 

(b)

to the extent and for the amount that the Indemnitee is entitled to be indemnified and is actually indemnified other than pursuant to this Agreement;

 

(c)

in connection with a judicial action by or in the right of the Company, in respect of any claim, issue or matter as to which the Indemnitee shall have been adjudicated by final judgment in a court of law (as to which all rights of appeal therefrom have been exhausted or lapsed) to be liable to the Company for intentional misconduct in the performance of his/her duty to the Company unless and then only to the extent that any court in which such action was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the Indemnitee is entitled to indemnity for such Expenses as such court shall deem proper;

 

 

(d)

in connection with any Proceeding initiated by the Indemnitee against the Company, any director or officer of the Company or any other party, and not by way of defense, unless (i) the Company has joined in or the Reviewing Party (as defined below) has consented to the initiation of such Proceeding, (ii) the Proceeding is one to enforce indemnification rights under this Agreement or any applicable law, (iii) the Proceeding was initiated or maintained in the name of the Indemnitee by any legally authorized individual, entity or regulatory authority, or (iv) the Proceeding was initiated or maintained by the Indemnitee for contribution or indemnity, if the Proceeding directly results from another Proceeding otherwise indemnified under this Agreement;

 

(e)

for a disgorgement of profits made from the purchase and sale by the Indemnitee of securities pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of any applicable U.S. state statutory law or common law;

 

(f)

in connection with any Proceeding brought about by the deliberate dishonesty, fraud or gross negligence of the Indemnitee seeking payment hereunder; provided, however, that the Indemnitee shall be protected under this Agreement as to any claims upon which suit may be brought against him/her by reason of any alleged dishonesty on his/her part, unless a judgment or other final adjudication thereof (as to which all rights of appeal therefrom have been exhausted or lapsed) adverse to the Indemnitee establishes that he/she committed (i) acts of active and deliberate dishonesty, (ii) with actual dishonest purpose and intent, and (iii) which acts were material to the cause of action so adjudicated;

 

(g)

for any judgment, fine or penalty which the Company is prohibited by applicable law from paying as indemnity;

 

(h)

in connection with an application in which the competent court refused to grant the Indemnitee relief; or

 

(i)

in connection with any Proceeding arising out of the Indemnitee’s personal tax affairs, except to the extent taxes are incurred by the Indemnitee arising from his/her position with the Company or any position with any other enterprise whereby the Indemnitee is providing services at the request of the Company.

 

5.

No Employment Rights or Obligations. Nothing in this Agreement is intended to create in Indemnitee any right to continued employment with the Company, nor shall this Agreement impose any independent obligation on the Indemnitee to continue the Indemnitee’s service to the Company. This Agreement shall not be deemed an employment contract or contract for service between the Company (or any other entity) and the Indemnitee.

 

 

6.

Contribution. If the indemnification provided in this Agreement is unavailable and may not be paid to Indemnitee for any reason other than those set forth in Section B.4 (Exclusions), then the Company shall contribute to the amount of Expenses paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand and by the Indemnitee on the other hand from the transaction or events from which such Proceeding arose, and (ii) the relative fault of the Company on the one hand and of the Indemnitee on the other hand in connection with the events which resulted in such Expenses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Indemnitee on the other hand shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such Expenses, judgments, fines or settlement amounts. The Company agrees that it would not be just and equitable if contribution pursuant to this Section B.6 (Contribution) were determined by pro rata allocation or any other method of allocation which does not take account of the foregoing equitable considerations.

 

7.

Overriding Principle. Notwithstanding anything in Section B.3 (Partial Indemnification) and/or Section B.6 (Contribution) and for the avoidance of all doubt, where the Indemnitee incurs Expenses and is personally liable for the Expenses, the Company shall pay those Expenses if, apart from Section B.3 (Partial Indemnification) and/or Section B.6 (Contribution), the Expenses are payable by the Company, irrespective of whether any other person is also liable for such Expenses in whole or in part.

 

8.

Nature of Indemnities. The indemnities in this Agreement: (i) are continuing obligations, independent of the Company’s other obligations under this Agreement, and (ii) (without limitation of Section E.3 (Duration of Agreement)) extend to Expenses arising out of Proceedings brought or arising or maintained after the Indemnitee has ceased being a director and/or officer of the Company or has ceased being a director or officer of another corporation, company, partnership, joint venture or other entity at the request of the Company. It is not necessary for the Indemnitee to incur expense, make payment or await the outcome of a claim under any insurance policy (other than the Liability Policies) or other indemnity before enforcing a right of indemnity under this Agreement.

 

C.                INDEMNIFICATION PROCESS

 

1.

Notice and Cooperation By Indemnitee. Indemnitee shall, as a condition precedent to his/her right to be indemnified under this Agreement, give the Company notice in writing as soon as practicable of any claim made against Indemnitee for which indemnification will or could be sought under this Agreement, provided that the delay of Indemnitee to give notice hereunder shall not prejudice any of Indemnitee’s rights hereunder, unless such delay results in the Company’s forfeiture of substantive rights or defenses. Notice to the Company shall be given in accordance with Section F.7 (Notice) below. If, at the time of receipt of such notice, the Company has directors’ and officers’ liability insurance policies in effect, the Company shall give prompt notice to its insurers of the Proceeding relating to the notice. The Company shall thereafter take all necessary and desirable action to cause such insurers to pay, on behalf of Indemnitee, all Expenses payable as a result of such Proceeding. In addition, Indemnitee shall give the Company such information and cooperation as the Company may reasonably request.

 

 

2.

Indemnification Payment.

 

(a)

Advancement of Expenses. Indemnitee may submit a written request with reasonable particulars to the Company requesting that the Company advance to Indemnitee all Expenses that may be reasonably incurred in advance by Indemnitee in connection with a Proceeding. Subject to such conditions as the Board of Directors thinks fit, in each case by votes of the majority of all the Disinterested Directors (as defined below) each acting in good faith, the Company shall, within fifteen (15) business days of receiving such a written request by Indemnitee, advance all requested Expenses to Indemnitee, subject to Section C.2(c) (Determination by the Reviewing Party) below. Any excess of the advanced Expenses over the actual Expenses will be repaid to the Company. If the Company provides funds to the Indemnitee in respect to Expenses which is subsequently determined as relating to the matters set forth in Section B.4 (Exclusions), any obligation of the Company to make further contributions towards the Indemnitee shall cease and Expenses already advanced by the Company must be repaid not later than the date that the conviction, judgment or refusal to grant relief becomes final.

 

(b)

Reimbursement of Expenses. To the extent Indemnitee has not requested any advanced payment of Expenses from the Company, Indemnitee shall be entitled to receive reimbursement for the Expenses incurred in connection with a Proceeding from the Company within fifteen (15) business days after Indemnitee makes a written request to the Company for reimbursement, unless the Company refers the indemnification request to the Reviewing Party in compliance with Section C.2(c) (Determination by the Reviewing Party) below.

 

(c)

Determination by the Reviewing Party. Notwithstanding anything foregoing to the contrary, if the Company reasonably believes that it is not obligated under this Agreement to indemnify the Indemnitee, the Company shall, within five (5) days after the Indemnitee’s written request for an advancement or reimbursement of Expenses, notify the Indemnitee that the request for advancement of Expenses or reimbursement of Expenses will be submitted to the Reviewing Party (as defined below). The Reviewing Party shall make a determination on the request within 30 days after the Indemnitee’s written request for an advancement or reimbursement of Expenses. Notwithstanding anything foregoing to the contrary, in the event the Reviewing Party informs the Company that Indemnitee is not entitled to indemnification in connection with a Proceeding under this Agreement or applicable law, the Company shall be entitled to be reimbursed by Indemnitee for all the Expenses previously advanced or otherwise paid to Indemnitee in connection with such Proceeding.

 

3.

Assumption of Defense. In the event the Company is obligated under this Agreement to advance or bear any Expenses for any Proceeding against Indemnitee, the Company shall be entitled to assume the defense of such Proceeding, with counsel approved by Indemnitee, upon delivery to Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, unless (i) the employment of counsel by Indemnitee has been previously authorized by the Company, (ii) Indemnitee shall have reasonably concluded, based on written advice of counsel, that there may be a conflict of interest of such counsel retained by the Company between the Company and Indemnitee in the conduct of any such defense, or (iii) the Indemnitee shall have reasonably concluded that counsel selected by the Company may not be adequately representing the Indemnitee, or (iv) the Company ceases or terminates the employment of such counsel with respect to the defense of such Proceeding, in any of which events the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company. At all times, Indemnitee shall have the right to employ counsel in any Proceeding at Indemnitee’s expense.

 

 

4.

Defense to Indemnification, Burden of Proof and Presumptions. It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement that it is not permissible under this Agreement or applicable law for the Company to indemnify the Indemnitee for the amount claimed. In connection with any such action or any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified under this Agreement, the burden of proving such a defense or determination shall be on the Company. Neither the failure of the Reviewing Party or the Company to have made a determination prior to the commencement of such action by the Indemnitee that indemnification is proper under the circumstances because the Indemnitee has met the standard of conduct set forth in applicable law, nor an actual determination by the Reviewing Party or the Company that the Indemnitee had not met such applicable standard of conduct shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct.

 

5.

No Settlement Without Consent. Neither party to this Agreement shall settle any Proceeding in any manner that would impose any damage, loss, penalty or limitation on Indemnitee without the other party’s written consent. Neither the Company nor Indemnitee shall unreasonably withhold its consent to any proposed settlement.

 

6.

Company Participation. Subject to Section B.6 (Contribution), the Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial action if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense, conduct and/or settlement of such action.

 

7.

Reviewing Party.

 

(a)

For purposes of this Agreement, the “Reviewing Party” with respect to each indemnification request of Indemnitee that is referred by the Company pursuant to Section C.2(c) (Indemnification Payment) above shall be (A) the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as defined below), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, said Disinterested Directors so direct, by Independent Counsel (as defined below) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee. If the Reviewing Party determines that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within fifteen (15) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel or member of the Board of Directors shall act reasonably and in good faith in making a determination under this Agreement of the Indemnitee’s entitlement to indemnification. Any reasonable costs or expenses (including reasonable attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

 

(b)

If the determination of entitlement to indemnification is to be made by Independent Counsel, the Independent Counsel shall be selected as provided in this Section C.7(b). The Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors, in which event the proceeding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section C.7(d) of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting under this Agreement, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section C.7(b), regardless of the manner in which such Independent Counsel was selected or appointed.

 

 

(c)

In making a determination with respect to entitlement to indemnification hereunder, the Reviewing Party shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement (with or without court approval), conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he/she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his/her conduct was unlawful. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Company and any other corporation, company, partnership, joint venture or other entity of which Indemnitee is or was serving at the request of the Company as a director or officer, including financial statements, or on information supplied to Indemnitee by the officers and directors of the Company or such other corporation, company, partnership, joint venture or other entity in the course of their duties, or on the advice of legal counsel for the Company or such other corporation, company, partnership, joint venture or other entity or on information or records given or reports made to the Company or such other corporation, company, partnership, joint venture or other entity by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or such other corporation, company, partnership, joint venture or other entity. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Company or such other corporation, company, partnership, joint venture or other entity shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. The provisions of this Section C.7(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

 

(d)

“Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

 

D.                DIRECTOR AND OFFICER LIABILITY INSURANCE

 

1.

Liability Insurance.

 

(a)

The Company shall use its commercially reasonable efforts to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the directors and officers of the Company with coverage for liabilities and losses incurred in connection with their acts, omissions and services to the Company and for any other enterprise for whom he/she provides services at the request of the Company, including such acts, omissions and services performed in connection with the Business Combination, and to provide coverage in respect of the Company’s indemnification obligations under this Agreement (the “Liability Policies”) and which contains the kinds of terms, conditions, exclusions and additional cover commonly included in a directors’ and officers’ liability insurance policy in the United States of America for a listed company in the position of the Company and having regard to the Company’s circumstances at the relevant time.

 

(b)

The Company shall use its commercially reasonable efforts to continue to maintain such policy or policies for the benefit of the Indemnitee, notwithstanding whether the Indemnitee has ceased acting or serving in any capacity at the Company or any other enterprise at the Company’s request. The Company must use its best endeavours to ensure that the terms of the Liability Policies it maintains for the Indemnitee after he/she has ceased acting or serving in any capacity at the Company or any other enterprise at the Company’s request, taken as a whole, are no less favorable to the Indemnitee than (i) the terms of the Liability Policies extending cover to the Indemnitee immediately prior to his/her ceasing to serve in any capacity at the Company or any such other enterprise, and (ii) the terms of the Liability Policies applicable to the directors and officers of the Company remaining in office.

 

(c)

The Indemnitee acknowledges that the negotiation of the terms of the Liability Policies in any given period may: (i) involve the insurer/s varying the terms of one or more of the Liability Policies offered, which, if accepted by the Company, may provide less coverage or less favorable coverage for the Indemnitee, (ii) involve a decision by the Company, acting reasonably, to balance the proposed level of premiums against the terms offered, or (iii) result in a decision by the Company to accept varied terms or to change insurers, but only in a manner consistent with the Company’s obligations under this Section D.1 (Liability Insurance). Subject to and without limitation of the foregoing, to the extent the Company determines in good faith that coverage is no longer reasonably available, it shall notify promptly the Indemnitee before it terminates such insurances, and such termination must be approved by the Board of Directors.

 

(d)

Upon request by the Indemnitee, the Company shall provide to the Indemnitee a copy of each certificate of currency in respect of each Liability Policy issued from time to time by the Company’s insurers. The Company will also provide the Indemnitee with a copy of any Liability Policy within thirty (30) days of a request for such from the Indemnitee. The Company shall promptly notify the Indemnitee of any material changes in such insurance coverage, and of any expiration or lapse of all or any part of such insurance coverage.

 

 

2.

Coverage of Indemnitee. To the extent the Company maintains an insurance policy or policies providing directors’ and officers’ liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any of the Company’s directors or officers. If the Company makes any payment to or for the benefit of the Indemnitee pursuant to this Agreement and the Indemnitee subsequently recovers or becomes entitled to recover from a third party any amount which is referable to any Expense for which payment was made by the Company, the Indemnitee shall promptly repay or procure the repayment to the Company of the amount paid by the Company to the extent covered by the amount actually recovered by the Indemnitee, less any expenses incurred by the Indemnitee in effecting any such recovery which are not recoverable from any third party. The Indemnitee shall not be entitled to recover more than once pursuant to this Agreement and/or the Liability Policies in respect of any matter giving rise to a Proceeding.

 

E.                 NON-EXCLUSIVITY; U.S. FEDERAL PREEMPTION; TERM

 

1.

Non-Exclusivity. The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the Company’s current memorandum and articles of association, as may be amended from time to time, applicable law or any written agreement between Indemnitee and the Company (including its subsidiaries and affiliates). The indemnification provided under this Agreement shall continue to be available to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though he/she may have ceased to serve in any such capacity at the time of any Proceeding.

 

2.

U.S. Federal Preemption. Notwithstanding the foregoing, both the Company and Indemnitee acknowledge that in certain instances, U.S. federal law or public policy may override applicable law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. Such instances include, but are not limited to, the U.S. Securities and Exchange Commission’s (the “SEC”) prohibition on indemnification for liabilities arising under certain U.S. federal securities laws. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.

 

3.

Duration of Agreement. All agreements and obligations of the Company contained herein shall become effective on the Effective Date and shall continue during the period Indemnitee is an officer and/or a director of the Company (or is or was serving at the request of the Company as a director or officer of another corporation, company, partnership, joint venture or other entity) and continue thereafter so long as Indemnitee shall be subject to any Proceeding by reason of his/her former or current aforementioned capacity, whether or not he/she is acting or serving in any such capacity at the time any Expense is incurred for which indemnification can be provided under this Agreement.

 

F.                 MISCELLANEOUS

 

1.

Amendment of this Agreement. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall operate as a waiver of any other provisions (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided in this Agreement, no failure to exercise or any delay in exercising any right or remedy shall constitute a waiver.

 

 

2.

Subrogation. In the event of payment to Indemnitee by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company to bring suit to enforce such rights.

 

3.

Assignment; Binding Effect. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by either party hereto without the prior written consent of the other party; except that the Company may, without such consent, assign all such rights and obligations to a successor in interest to the Company which assumes all obligations of the Company under this Agreement. Notwithstanding the foregoing, this Agreement shall be binding upon and inure to the benefit of and be enforceable by and against the parties hereto and the Company’s successors (including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business and/or assets of the Company) and assigns, as well as Indemnitee’s spouses, heirs, and personal and legal representatives.

 

4.

Severability and Construction. Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. The Company’s inability, pursuant to a court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. In addition, if any portion of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by applicable law. The parties hereto acknowledge that they each have opportunities to have their respective counsels review this Agreement. Accordingly, this Agreement shall be deemed to be the product of both of the parties hereto, and no ambiguity shall be construed in favor of or against either of the parties hereto.

 

5.

Counterparts. This Agreement may be executed in two counterparts, both of which taken together shall constitute one instrument.

 

6.

Governing Law and Dispute Resolutions. This agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to conflicts of law provisions thereof. Any dispute, controversy, difference, or claim arising out of or relating to this Agreement, including its existence, validity, interpretation, performance, breach, or termination, or any dispute regarding non-contractual obligations arising out of or relating to this Agreement, shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (“HKIAC”) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted. The seat of arbitration shall be Hong Kong. There shall be three arbitrators. The arbitration proceedings shall be conducted in English. The law of this arbitration clause shall be Hong Kong law. For the avoidance of doubt, a request by a party to a court of competent jurisdiction for interim measures necessary to preserve such party’s rights, including pre-arbitration attachments, injunctions, or other equitable relief, shall not be deemed incompatible with, or a waiver of, the agreement to arbitrate in this Section F.6 (Governing Law and Dispute Resolutions). Each of the parties hereby irrevocably waives any and all right to trial by jury in any action based upon, arising out of or related to this Agreement.

 

 

7.

Notices. All notices, demands, and other communications required or permitted under this Agreement shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed via postage prepaid, certified or registered mail, return receipt requested, and addressed to the Company at:

 

TH International Limited
2501 Central Plaza
227 Huangpi North Road
Shanghai, People's Republic of China, 200003
Attn:

 

and to Indemnitee at his/her address last known to the Company.

 

8.

Entire Agreement. Subject to Section E.1 (Non Exclusivity), this Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

 

 

IN WITNESS WHEREOF, the parties hereto execute this Agreement as of the date first written above

 

TH International Limited
By:
Name:
Title:
Indemnitee
Signature:
Name:

 

 

 

 

 

 

 

 

Exhibit 10.12

 

FINAL FORM

 

CONVERTIBLE NOTE PURCHASE AGREEMENT

 

among

 

th international limited

 

and

 

[SONA CREDIT MASTER FUND LIMITED]/ [SUNRISE PARTNERS LIMITED PARTNERSHIP]

 

and

 

Pangaea Two Acquisition Holdings XXIIA Ltd

 

 

 

_______________________________

 

Dated December 9, 2021

 

_______________________________

 

 

Table of Contents

 

Page

 

1.	Definitions and Interpretation		2
	1.1	Definitions	2
	1.2	Interpretation	10
2.	Purchase and Sale of the Notes and the Common Shares		11
	2.1	Purchase and Sale of the Notes and the Common Shares	11
	2.2	Accredited Investor	11
3.	Closing, Closing Deliveries and Exchange of Notes		12
	3.1	Closing	12
	3.2	Closing Deliveries of the Company	12
	3.3	Closing Deliveries of the Investor	13
	3.4	Exchange and Listing of Notes	13
4.	Representations and Warranties of the Company		14
	4.1	Organization, Good Standing and Qualification	14
	4.2	Authorization; Enforceable Agreement	14
	4.3	Governmental Consents	14
	4.4	Capitalization	15
	4.5	Subsidiaries	15
	4.6	Financial Statements	16
	4.8	Reports	16
	4.9	Absence of Changes	17
	4.10	Property	18
	4.11	Indebtedness	18
	4.12	Master Franchise Agreements	18
	4.13	Litigation and Proceedings	19
	4.14	Taxes	19
	4.15	Compliance with Laws	20
	4.16	Environmental Compliance	21
	4.17	Compliance with Other Instruments	22
	4.18	No Conflict	22
	4.19	Intellectual Property	22
	4.20	Ranking of the Notes	23
	4.21	Registration Rights	23

 

 

	4.22	Investment Company Act	24
	4.23	Brokers’ Fees and Expenses	24
	4.24	International Trade; Anti-Corruption	24
	4.25	Money Laundering Laws	25
	4.26	No General Solicitation	25
	4.27	Offering; Exemption	25
	4.28	No Integrated Offering	25
	4.29	Labor Matters	25
	4.30	Insurance	25
	4.31	Solvency	26
	4.32	Related Party Transactions	26
5.	Representations and Warranties of the Investor		26
	5.1	Organization	26
	5.2	Authorization; Enforceability	26
	5.3	Consents	26
	5.4	No Default or Violation	27
	5.5	Investor Status	27
6.	Conditions to the Investor’s Obligations at Closing		28
	6.1	Representations and Warranties	28
	6.2	Performance	29
	6.3	No Material Adverse Effect	29
	6.4	Qualification Under Securities Laws	29
	6.5	Orders	29
	6.6	Disclosure Letter	29
7.	Conditions to the Company’s Obligations at Closing		29
	7.1	Representations and Warranties	29
	7.2	Performance	29
	7.3	Orders	29
8.	Covenants		29
	8.1	PIPE Share Subscription Agreement and Option Agreement	30
	8.2	Reservation of Common Shares; Issuance of Common Shares; Blue Sky	30
	8.3	Removal of Restrictive Legend	30
	8.4	Transfer Taxes	30
	8.5	Confidentiality	31

 

 

	8.6	Further Assurances	31
9.	Registration Rights		32
10.	Indemnification		36
	10.6	Exclusive Remedy	38
11.	Termination		38
	11.1	This Agreement may be terminated prior to the Closing as follows:	38
	11.2	Survival	39
12.	Miscellaneous		39
	12.1	Governing Law	39
	12.2	Jurisdiction	39
	12.3	Remedies	40
	12.4	No Third-Party Beneficiaries	40
	12.5	No Personal Liability of Directors, Officers, Owners, Etc	40
	12.6	Entire Agreement	40
	12.7	Notices	40
	12.8	Delays or Omissions	41
	12.9	Amendments and Waivers	41
	12.10	Counterparts	41
	12.11	Severability	41

 

Exhibits

 

Exhibit A – Form of Convertible Note
Exhibit B – Form of Public Note Indenture
Exhibit C – Form of Maples & Calder Opinion
Exhibit D – Form of PIPE Subscription Agreement

Schedule 1 – Investor Schedule

Schedule 2 – List of Knowledge Individuals

Schedule 3 – Addresses for Notice

 

 

CONVERTIBLE NOTE PURCHASE AGREEMENT

 

This CONVERTIBLE NOTE PURCHASE AGREEMENT is entered into as of December 9, 2021, by and among TH INTERNATIONAL LIMITED, an exempted company with limited liability incorporated under the Laws of the Cayman Islands with registration number 336092 (the “Company”, which, for purposes of Section 9 hereto, shall include any successor thereto), Pangaea Two Acquisition Holdings XXIIA Ltd (“PGXXIIA”) and the investor named in Schedule 1 (the “Investor”).

 

WHEREAS, on the terms and conditions set forth in this Agreement, the Company desires to issue and sell, and the Investor desires to purchase, senior unsecured convertible notes in the aggregate principal amount of $[●] substantially in the form attached hereto as Exhibit A (with such changes thereto as may be mutually agreed) (the “Notes”);

 

WHEREAS, Silver Crest Acquisition Corporation, an exempted company with limited liability incorporated under the Laws of the Cayman Islands with registration number 365811 (“Silver Crest”) and Miami Swan Ltd, an exempted company with limited liability incorporated under the Laws of the Cayman Islands with registration number 376960 and a wholly-owned subsidiary of the Company (“Target”), are, together with the other parties thereto, entering into a definitive Agreement and Plan of Merger (the “Merger Agreement” and the transactions contemplated by the Merger Agreement to be completed on and prior to the closing date thereof, the “Merger Transactions”), pursuant to which, among other things, in the manner, and on the terms and subject to the conditions and exclusions set forth therein, (i) Target will merge with and into Silver Crest (such merger, the “First Merger”), with Silver Crest surviving the First Merger as a wholly owned subsidiary of the Company (Silver Crest as the surviving entity of the First Merger, the “Surviving Entity”), and (ii) immediately following consummation of the First Merger and as part of the same overall transaction, the Surviving Entity will merge with and into the Company (such merger, the “Second Merger”), with the Company surviving the Second Merger (such transactions, collectively, the “Business Combination”), and upon consummation of the Merger Transactions, the shareholders of Silver Crest will become shareholders of the Company;

 

WHEREAS, on or about the date of completion of the Business Combination (the “Business Combination Closing Date”), the Company intends to enter into a subscription agreement (the “PIPE Share Subscription Agreement”) with the Investor, in substantially the form attached hereto as Exhibit D (with such changes thereto as may be mutually agreed), pursuant to which the Company has agreed to issue and allot, and the Investor has agreed to subscribe, an aggregate of 500,000 of the Company’s ordinary shares (the “Common Shares”) at a price of US$10.00 per share;

 

WHEREAS, PGXXIIA has agreed to, on or about the Business Combination Closing Date, enter into an option agreement in mutually agreed form (the “Option Agreement” and, together with this Agreement, the Notes, the PIPE Share Subscription Agreement, and any other agreement, certificate or other document to be entered into or delivered pursuant to the terms hereof, the “Transaction Documents” and the transactions contemplated thereunder, the “Transactions”) with the Investor, pursuant to which PGXXIIA will agree to assign to the Investor (and cause Pangaea Two Acquisition Holdings XXIIB Ltd (“PGXXIIB”) to effect such assignment), and the Investor will agree to acquire, 200,000 Class A ordinary shares in the Company with an exercise price of $11.50 per share; and

 

 

WHEREAS, in connection with such purchase and sale, the Company and the Investor desire to make certain representations and warranties and enter into certain agreements.

 

NOW THEREFORE, in consideration of the foregoing and the representations, warranties and agreements set forth herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound by this Agreement, the parties agree as follows:

 

1.                Definitions and Interpretation.

 

1.1              Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth in this Section 1:

 

“Action” means any action, suit, audit, arbitration or legal, judicial or administrative proceeding (whether at law or in equity) by or before any Governmental Authority.

 

“Affiliate” means, with respect to any Person, any other Person (1) directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person; (2) who is a director or officer of such Person or any Subsidiary of such Person or of any Person referred to in clause (1) of this definition; or (3) who is a spouse or any person cohabiting as a spouse, child or step-child, parent or step-parent, brother, sister, step-brother or step-sister, parent-in-law, grandchild, grandparent, uncle, aunt, nephew and niece of a Person described in clause (1) or (2). For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; provided that for purposes of Section 4.24, clause (3) above shall be limited to a spouse, child, parent or a Person described in clause (1) or (2).

 

“Agreement” means this Convertible Note Purchase Agreement, as it may be amended, restated, or otherwise modified from time to time, together with all exhibits, schedules, and other attachments thereto.

 

“Anti-Corruption Laws” means the PRC Anti-Unfair Competition Law, the anti-bribery provisions of the PRC Criminal Law, the U.S. Foreign Corrupt Practices Act of 1977 (as amended), the United Kingdom Bribery Act 2010 and any other applicable anti-bribery or anti-corruption Laws.

 

“Audited Financial Statements” means the audited consolidated balance sheet of the Company and its Subsidiaries as of December 31, 2020 and 2019, consolidated statement of operations, consolidated statement of comprehensive loss, consolidated statement of changes in shareholders’ equity and consolidated statement of cash flows of the Company and its Subsidiaries for the twelve-month periods ended December 31, 2020 and 2019.

 

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

 

 

“Breach” shall have the meaning set forth in Section 10.1.

 

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York, Hong Kong and London are authorized or required by law to remain closed.

 

“Capital Lease Obligations” means any obligation under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

 

“Closing” shall have the meaning set forth in Section 3.1.

 

“Closing Date” shall have the meaning set forth in Section 3.1.

 

“Code” means the Internal Revenue Code of 1986.

 

“Common Shares” shall have the meaning set forth in the recitals of this Agreement.

 

“Company” shall have the meaning set forth in the preamble of this Agreement.

 

“Company Benefit Plan” means each “employee benefit plan” as defined in Section 3(3) of ERISA (whether or not subject to ERISA), and each material stock ownership, stock purchase, stock option, phantom stock, equity or other equity-based, severance, employment (other than offer letters that do not provide severance benefits or notice periods in excess of 30 days upon termination of the employment relationship), individual consulting, retention, change-in-control, transaction, fringe benefit, pension, bonus, incentive, deferred compensation, employee loan and each other material benefit or compensation plan, agreement or other general arrangement that is, in each case, contributed to, required to be contributed to, sponsored by or maintained by the Company or any of its Subsidiaries for the benefit of any current employee or director of the Company or its Subsidiaries or under or with respect to which the Company or any of its Subsidiaries has or could have any liability, contingent or otherwise (including on account of an ERISA Affiliate), but not including any of the foregoing sponsored or maintained by a Governmental Authority or required to be contributed to or maintained pursuant to applicable Law.

 

“Company Intellectual Property” shall have the meaning set forth in Section 4.19(a).

 

“Company Lease” shall have the meaning set forth in Section 4.10(b) (collectively, the “Company Leases”).

 

“Company Permits” shall have the meaning set forth in Section 4.15(a).

 

“Contracts” means any legally binding contracts, agreements, licenses, subcontracts, leases, subleases, franchise and other commitment.

 

“Conversion Shares” means the Common Shares issuable upon conversion of the Notes purchased under this Agreement and, for purposes of Section 9 of this Agreement, shall also include any securities issued or issuable, directly or indirectly, with respect to, on account of or in exchange for such Common Shares, whether by share split, share dividend, recapitalization, merger, consolidation or other reorganization, charter amendment or otherwise.

 

 

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

 

“COVID-19 Measures” means any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other Law, directive, guidelines or recommendations by any Governmental Authority (including the Centers for Disease Control and Prevention, the World Health Organization or an industry group) in relation to, arising out of, in connection with or in response to COVID-19, or any change in such Law, directive, guideline, recommendation or interpretation thereof.

 

“Cut-off Date” means June 25, 2021.

 

“Disclosure Letter” means the disclosure letter delivered by the Company to Investor on the date hereof and dated as of the date of this Agreement.

 

“Effectiveness Date” shall have the meaning set forth in Section 9.1.

 

“Environmental Laws” means any and all applicable Laws relating to pollution, protection of the environment (including natural resources) and, solely to the extent related to exposure to Hazardous Materials, public or worker health and safety, or the use, storage, emission, distribution, transport, handling, disposal or release of, or exposure of any Person to, Hazardous Materials.

 

“Equity Securities” means, with respect to any Person, (i) any shares of capital or capital stock, partnership, membership, joint venture or similar interest, or other voting securities of, or other ownership interest in, such Person, (ii) any securities of such Person (including debt securities) convertible into or exchangeable or exercisable for shares of capital or capital stock, partnership, membership, joint venture or similar interest, or other voting securities of, or other ownership interests in, such Person, (iii) any warrants, calls, options or other rights to acquire from such Person, or other obligations of such Person to issue, any shares of capital or capital stock, partnership, membership, joint venture or similar interest, or other voting securities of, or other ownership interests in, or securities convertible into or exchangeable or exercisable for shares of capital or capital stock, partnership, membership, joint venture or similar interest, or other voting securities of, or other ownership interests in, such Person, and (iv) any restricted shares, stock appreciation rights, restricted units, performance units, contingent value rights, “phantom” stock or similar securities or rights (including, for the avoidance of doubt, interests with respect to an employee share ownership plan) issued by or with the approval of such Person that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any shares of capital or capital stock or other voting securities of, other ownership interests in, or any business, products or assets of, such Person.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means any entity (whether or not incorporated) other than the Company or a Subsidiary of the Company that, together with the Company or such Subsidiary, is considered under common control and treated as one employer under Section 414(b), (c), (m) or (o) of the Code.

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the SEC thereunder.

 

 

“Filing Date” shall have the meaning set forth in Section 9.1.

 

“GAAP” means United States generally accepted accounting principles, as in effect from time to time, applied on a consistent basis.

 

“Government Official” means any officer or employee of a Governmental Authority or any department, agency or instrumentality thereof, including state-owned entities, or of a public organization or any individual acting in an official capacity for or on behalf of any such Governmental Authority, department, agency or instrumentality or on behalf of any such public organization.

 

“Governmental Authority” means any federal, state, provincial, municipal, local or foreign government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court, arbitral body (public or private) or tribunal.

 

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

 

“Hazardous Material” means material, substance or waste that is listed, regulated, or otherwise defined as “hazardous,” “toxic,” or “radioactive,” or as a “pollutant” or “contaminant” (or words of similar intent or meaning) under Environmental Laws, including petroleum, petroleum by-products, asbestos or asbestos-containing material, polychlorinated biphenyls, per and polyfluoroalkyl substances, flammable or explosive substances, or pesticides.

 

“Indemnified Party” shall have the meaning set forth in Section 10.1.

 

“Indemnifying Party” shall have the meaning set forth in Section 10.1.

 

“Information” shall have the meaning set forth in Section 8.5.

 

“Intellectual Property” means all intellectual property rights anywhere in the world, including all: (i) patents, patent applications and intellectual property rights in inventions (whether or not patentable), (ii) trademarks, service marks, trade names, corporate names, logos, slogans (and all translations, adaptations, derivations and combination of the foregoing) and all registrations, applications and renewals in connection therewith, together with all goodwill associated therewith, (iii) copyrights and all registrations and applications in connection therewith, (iv) internet domain names and social media accounts, and (v) trade secrets, and any other intellectual property rights in know-how and confidential information.

 

“Investor” shall have the meaning set forth in the preamble of this Agreement.

 

“Knowledge” means the knowledge that each of the individuals listed in Schedule 2 actually has, or the knowledge that any of them would have actually had following a reasonable inquiry with his or her direct reports directly responsible for the applicable subject matter or his or her contacts among the deal team members at Silver Crest (“Relevant Persons”); provided that, for the avoidance of doubt, other than such reasonable inquiry with Relevant Persons, no such individual will be under any express or implied duty to investigate.

 

 

“Law” means any statute, act, code, law (including common law), ordinance, rule, regulation or Governmental Order, in each case, of any Governmental Authority.

 

“Lien” means any mortgage, charge, deed of trust, pledge, license, hypothecation, encumbrance, easement, security interests, or other lien of any kind (other than, in the case of a security, any restriction on transfer of such security arising under Securities Laws).

 

“Losses” shall have the meaning set forth in Section 10.1.

 

“Master Franchise Agreements” means that (1) certain Company Franchise Agreement, dated as of June 12, 2018, by and between Tim Hortons Restaurants International GmbH and TH Hong Kong International Limited, (2) certain Amended and Restated Company Franchise Agreement, dated as of June 12, 2018, by and among Tim Hortons Restaurants International GmbH, TH Hong Kong International Limited and Tim Hortons (Shanghai) Food and Beverage Management Co., Ltd. (including any joinder agreements entered into from time to time pursuant to the terms and conditions thereof), and (3) certain Master Development Agreement, dated as of June 11, 2018, by and between Tim Hortons Restaurants International GmbH and TH Hong Kong International Limited, each as supplemented, amended, restated or modified in accordance with the terms and conditions thereof from time to time.

 

“Material Adverse Effect” means an effect, development, circumstance, fact, change or event (collectively, “Effects”) that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on (x) the Company and its Subsidiaries (taken as a whole) or the results of operations or financial condition of the Company and its Subsidiaries, in each case, taken as a whole or (y) the ability of the Company and its Subsidiaries to consummate the Transactions; provided, however, that, solely with respect to the foregoing clause (x), in no event would any of the following (or the effect of any of the following), alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Material Adverse Effect” (a) any change in Law, regulatory policies, accounting standards or principles (including GAAP) or any guidance relating thereto or interpretation thereof, in each case after the date hereof; (b) any change in interest rates or economic, political, business or financial market conditions generally (including any changes in credit, financial, commodities, securities or banking markets); (c) any change affecting any of the industries in which the Company and its Subsidiaries operate or the economy as a whole; (d) any epidemic, pandemic or disease outbreak (including COVID-19 and any COVID-19 Measures); (e) the announcement or the execution of this Agreement, the pendency of the Transactions and Merger Transactions, or the performance of this Agreement or the Merger Agreement (including actions taken at the request or with the consent of the Silver Crest pursuant thereto); (f) any action taken or not taken at the written request of the Investor or, if reasonably sufficient information is provided to the Investor in advance to determine whether a Material Adverse Effect would reasonably be expected to occur, any action taken or not taken that is consented to in writing by Investor; (g) any weather conditions, earthquake, hurricane, tsunami, tornado, flood, mudslide, wild fire or other natural disaster, act of God or other force majeure event; (h) any acts of terrorism, sabotage, war, riot, the outbreak or escalation of hostilities, or change in geopolitical conditions; (i) any failure of the Company or its Subsidiaries to meet, with respect to any period or periods, any internal or industry analyst projections, forecasts, estimates or business plans (provided, however, that this clause (i) shall not prevent a determination that any Effect underlying such failure has resulted in a Material Adverse Effect (to the extent such Effect is not otherwise excluded from this definition of Material Adverse Effect)); or (j) any action taken by the Investor or its Affiliates; provided, further, that any Effect referred to in clauses (a), (b), (c), (d), (g) or (h) above may be taken into account in determining if a Material Adverse Effect has occurred to the extent it has a disproportionate and adverse effect on the Company and its Subsidiaries or the results of operations or financial condition of the Company and its Subsidiaries, in each case, taken as a whole, relative to other similarly situated businesses in the industries in which the Company and its Subsidiaries operate.

 

 

“Memorandum and Articles of Association” means (i) prior to the effective time of the First Merger, the Company’s Amended and Restated Memorandum and Articles of Association adopted by special resolution dated February 26, 2021, and (ii) upon adoption immediately prior to the effective time of the First Merger, the Company’s Amended and Restated Memorandum and Articles of Association substantially set out in Annex B of the Form F-4 of the Company filed with the SEC (the “Amended Memorandum and Articles of Association”).

 

“Money Laundering Laws” means applicable financial recordkeeping and reporting requirements of the U.S. Currency and Foreign Transaction Reporting Act of 1970, the U.S. Money Laundering Control Act of 1986 and all money laundering-related laws of all jurisdictions where the Company or its Subsidiaries conduct business or own assets, and any related or similar Law issued, administered or enforced by any Governmental Authority.

 

“Notes” shall have the meaning set forth in the recitals of this Agreement.

 

“Onshore Companies” means each of Tim Hortons (China) Holdings Co., Ltd., Shanghai Donuts Enterprise Management Co., Ltd., Tim Hortons (Shanghai) Food and Beverage Co., Ltd., Tim Hortons (Beijing) Food and Beverage Service Co., Ltd and Tims Coffee (Shenzhen) Co., Ltd.

 

“Organizational Documents” means, with respect to any Person that is not an individual, the articles or certificate of incorporation, registration or organization, bylaws, memorandum and articles of association, limited partnership agreement, partnership agreement, limited liability company agreement, shareholders agreement and other similar organizational documents of such Person.

 

“Owned Intellectual Property” means all Intellectual Property that is owned by the Company or its Subsidiaries.

 

“Permitted Liens” means (i) statutory or common law Liens of mechanics, materialmen, warehousemen, landlords, carriers, repairmen, construction contractors and other similar Liens that arise in the ordinary course of business that relate to amounts (A) not yet delinquent or that are being contested in good faith through appropriate Actions and (B) for which appropriate reserves have been established in accordance with GAAP, (ii) Liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business consistent with past practice, (iii) Liens for Taxes not yet delinquent or which are being contested in good faith through appropriate Actions for which appropriate reserves have been established in accordance with GAAP, (iv) with respect to any real property subject to a Company Lease (A) the interests and rights of the respective lessors with respect thereto, including any statutory landlord liens and any Lien thereon and (B) any Lien permitted under a Company Lease, (v) Liens, defects or imperfections on title, encumbrances and restrictions on real property (including easements, covenants, rights of way and similar restrictions of record) that are matters of record or would be discovered by a current, accurate survey or physical inspection of such real property, in all cases, that do not materially impair the value or materially interfere with the present uses of such real property, (vi) Liens that do not, individually or in the aggregate, materially and adversely affect, or materially disrupt, the ordinary course operation of the businesses of the Company and its Subsidiaries, taken as a whole, (vii) non-exclusive licenses or sublicenses of Intellectual Property entered into in the ordinary course of business, (viii) Liens that secure obligations that are reflected as liabilities on the Audited Financial Statements of the Company (which such Liens are referenced, or the existence of which such Liens is referred to, in the notes to the Audited Financial Statements of the Company), (ix) Liens securing any indebtedness of the Company or its Subsidiaries, (x) Liens arising under applicable Securities Laws, (xi) with respect to an entity, Liens arising under the Organizational Documents of such entity.

 

 

“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or any government or any department or agency thereof.

 

“PRC” or “China” means the People’s Republic of China excluding, for the purposes of this Agreement only, the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan.

 

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, tangible or intangible.

 

“Public Note Indenture” shall have the meaning set forth in Section 3.4.

 

“Public Notes” shall have the meaning set forth in Section 3.4.

 

“Purchase Price” shall have the meaning set forth in Section 2.

 

“Registered Intellectual Property” shall have the meaning set forth in Section 4.19(a).

 

“Registration Rights Agreement” means the registration rights agreement in substantially the form attached to the Merger Agreement to be entered into by the parties thereto on or about the Business Combination Closing Date.

 

“Registration Statement” shall have the meaning set forth in Section 9.1.

 

“Representative” means, as to any Person, any of the officers, directors, managers, employees, counsel, accountants, financial advisors, consultants, agents and other representatives of such Person.

 

“Rule 144” shall mean Rule 144 promulgated under the Securities Act, as such rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such rule.

 

 

“SAFE” means the State Administration of Foreign Exchange of the PRC.

 

“SAFE Circulars” means, to the extent applicable, any of (i) Circular 7, issued by SAFE on February 15, 2012, titled “Notice of the State Administration of Foreign Exchange on the Issues Related to the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Listed Company,” (the “SAFE Circular 7”) effective as of February 15, 2012, or any successor rule or regulation under the Law of the PRC, (ii) Circular 37, issued by SAFE on July 4, 2014, titled “Notice of the State Administration of Foreign Exchange on the Administration of Foreign Exchange Involved in Overseas Investment, Financing and Round-Trip Investment Conducted by Domestic Residents through Special Purpose Vehicles,” (the “SAFE Circular 37”) effective as of July 4, 2014, or any successor rule or regulation under the Law of the PRC, (iii) Circular 75, issued by SAFE on October 21, 2005, titled “Notice Regarding Certain Administrative Measures on Financing and Inbound Investments by PRC Residents Through Offshore Special Purpose Vehicles,” effective as of November 1, 2005, and repealed by SAFE Circular 37 on July 4, 2014 and (iv) Circular 78, issued by SAFE on March 28, 2007, titled “Notice of the SAFE on Foreign Exchange Administration of the Involvement of Domestic Individuals in the Employee Stock Ownership Plans and Share Option Schemes of Overseas Listed Companies,” effective as of March 28, 2007 and repealed by SAFE Circular 7 on February 15, 2012.

 

“Sanctioned Country” means at any time, a country or territory which is itself the subject or target of any country-wide or territory-wide Sanctions Laws (at the time of this Agreement, the Crimea region, Cuba, Iran, North Korea and Syria).

 

“Sanctioned Person” means (i) any Person identified in any sanctions-related list of designated Persons maintained by (a) the United States Department of the Treasury’s Office of Foreign Assets Control, the United States Department of Commerce, Bureau of Industry and Security, or the United States Department of State; (b) Her Majesty’s Treasury of the United Kingdom; (c) any committee of the United Nations Security Council; (d) the European Union or (e) PRC; (ii) any Person located, organized, or resident in, organized in, or a Governmental Authority or government instrumentality of, any Sanctioned Country; and (iii) any Person directly or indirectly owned or controlled by, or acting for the benefit or on behalf of, a Person described in clause (i) or (ii), either individually or in the aggregate.

 

“Sanctions Laws” means those trade, economic and financial sanctions Laws administered, enacted or enforced from time to time by (i) the United States (including the Department of the Treasury’s Office of Foreign Assets Control), (ii) the European Union and enforced by its member states, (iii) the United Nations, (iv) Her Majesty’s Treasury of the United Kingdom or (v) PRC.

 

“SEC” shall mean the U.S. Securities and Exchange Commission or any other U.S. federal agency then administering the Securities Act or Exchange Act.

 

“SEC Reports” shall have the meaning set forth in Section 4.

 

“Securities” shall have the meaning set forth in Section 5.5.

 

“Securities Act” shall mean the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder.

 

 

“Securities Laws” means the securities Laws of any Governmental Authority and the rules and regulations promulgated thereunder (including the Securities Act and the Exchange Act and the rules and regulations thereunder).

 

“Solvent” shall have the meaning set forth in Section 4.32.

 

“SPAC Impairment Effect” an event, occurrence or circumstance that, individually or in the aggregate, would reasonably be expected to prevent or materially delay or materially impair the ability of Silver Crest to consummate the Merger Transactions.

 

“Subsidiary” means, with respect to a Person, any corporation, company or other organization (including a limited liability company or a partnership), whether incorporated or unincorporated, of which (a) such Person directly or indirectly owns or controls a majority of the Equity Securities having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation, company or other organization, (b) such Person directly or indirectly possesses the right to elect a majority of directors or others performing similar functions with respect to such corporation, company or other organization, or (c) such Person or any of its Subsidiaries is, directly or indirectly, a general partner or managing member.

 

“Tax” or “Taxes” means any federal, state, provincial, territorial, local, foreign and other net income tax, alternative or add-on minimum tax, franchise tax, gross income, adjusted gross income or gross receipts tax, employment related tax (including employee withholding or employer payroll tax, social security or national health insurance), ad valorem, transfer, franchise, license, excise, severance, stamp, occupation, premium, personal property, real property, escheat or unclaimed property, capital stock, profits, disability, registration, value added, estimated, customs duties, and sales or use tax, or other tax or like assessment or charge, in each case imposed by any Governmental Authority, together with any interest, indexation, penalty, addition to tax or additional amount imposed with respect thereto (or in lieu thereof) by a Governmental Authority.

 

“Tax Returns” mean any and all returns, report, document, declarations, claims for refund, tax shelter disclosure statements, election or information returns, filings or statements, reports and forms relating to Taxes filed or required to be filed with any Tax authority or any other Person, including any schedule or attachment thereto or any amendment thereof.

 

“Trade Control” shall have the meaning set forth in Section 4.24(a).

 

“Transaction Documents” shall have the meaning set forth in the recitals of this Agreement.

 

“Treasury Regulations” means the income tax regulations promulgated under the Code.

 

1.2           Interpretation. Unless the context otherwise requires:

 

(a)               Directly or Indirectly. The phrase “directly or indirectly” means directly, or indirectly through one or more intermediate Persons or through contractual or other arrangements, and “direct or indirect” has the correlative meaning.

 

 

(b)              Gender and Number. All words (whether gender-specific or gender neutral) shall be deemed to include each of the masculine, feminine and neuter genders, and words importing the singular include the plural and vice versa.

 

(c)               Headings. Headings, titles and subtitles are included for convenience only and shall not affect the construction or interpretation of any provision of this Agreement.

 

(d)               Include not Limiting. “Include,” “including,” “are inclusive of” and similar expressions are not expressions of limitation and shall be construed as if followed by the words “without limitation.”

 

(e)               References. A reference to any Section, Schedule or Exhibit is, unless otherwise specified, to such Section of, or Schedule or Exhibit to this Agreement. The words “hereof,” “hereunder” and “hereto,” and words of like import, unless the context requires otherwise, refer to this Agreement as a whole and not to any particular Section hereof or Schedule or Exhibit hereto. Any agreement, instrument or statute defined or referred to in this Agreement means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes or any rules or regulations promulgated under such statutes. The term “party” or “parties” shall mean a party to or the parties to this Agreement unless the context requires otherwise. All references in this Agreement to “dollars” or “$” shall mean United States dollars. Any period of time hereunder ending on a day that is not a Business Day shall be extended to the next Business Day. The word “day”, unless otherwise indicated, shall be deemed to refer to a calendar day.

 

(f)                Drafting and Negotiation. Each of the parties has participated in the drafting and negotiation of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if it is drafted by each of the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement.

 

(g)               Writing. References to writing and written include any mode of reproducing words in a legible and non-transitory form including emails and faxes.

 

(h)               Language. This Agreement is drawn up in the English language.

 

2.             Purchase and Sale of the Notes and the Common Shares.

 

2.1           Purchase and Sale of the Notes and the Common Shares. On the terms and conditions set forth in this Agreement, at the Closing, the Investor will purchase from the Company, and the Company will issue, sell and deliver to the Investor Notes in an aggregate principal amount of $50,000,000 (the “Principal Amount”), for a purchase price of 98.0% of the Principal Amount (the “Purchase Price”), such amount to be paid in full, in cash, to the Company at the Closing.

 

2.2           Accredited Investor. The Note will be sold to the Investor pursuant to a private placement pursuant to Section 4(a)(2) of the Securities Act to persons who are accredited investors (as defined in Rule 501 of Regulation D under the Securities Act).

 

 

3.              Closing, Closing Deliveries and Exchange of Notes.

 

3.1           Closing. The consummation of the purchase and sale of the Notes and the Common Shares and the other transactions contemplated by this Agreement (the “Closing”) shall, unless this Agreement is terminated pursuant to Section 11.1, take place electronically at 10:00 a.m. London time on the first date following the date on which each of the conditions set forth in Sections 6 and 7 has previously been fulfilled or waived (other than those conditions that can be fulfilled only at the Closing), or at such other time and place as the Company and the Investor shall mutually agree (such date, the “Closing Date”).

 

3.2            Closing Deliveries of the Company. At the Closing, the Company shall deliver to the Investor:

 

(a)               one or more note certificates representing the principal of the Notes being purchased by the Investor, substantially in the form as attached in Exhibit A, with such changes as may be mutually agreed;

 

(b)               a copy of the constitutional documents and statutory registers of the Company certified by a duly authorized director of the Board of the Company to be true, complete and correct copies thereof;

 

(c)               a copy of a recent certificate of incumbency in respect of the Company issued by its registered office and a recent certificate of good standing in respect of the Company issued by the Registrar of Companies in the Cayman Islands;

 

(d)               a copy of all resolutions and documentation evidencing the Board’s authorization of this Agreement, the other Transaction Documents to which the Company is a party and the transactions contemplated hereby and thereby, and the execution, delivery and performance of this Agreement and the other Transaction Documents to which the Company is a party, certified by a duly authorized director of the Board to be true, complete and correct copies thereof;

 

(e)               a copy of all resolutions and documentation evidencing the authorization of the board of directors of PGXXIIA of the Transaction Documents to which it is a party and the transactions contemplated hereby and thereby, and the execution, delivery and performance of the Transaction Documents to which it is a party, certified by a duly authorized director of such party to be true, complete and correct copies thereof;

 

(f)                an incumbency certificate, in a form reasonably acceptable to the Investor, with respect to the officers executing documents or instruments on behalf of the Company, certified by a duly authorized director of the Company to be true, complete and correct copies thereof;

 

(g)               a certificate, executed by a duly authorized director of the Board of the Company, dated as of the Closing Date, certifying as to the conditions set forth in Section 6;

 

(h)               a receipt for payment of the Purchase Price;

 

 

(i)                an opinion of Maples & Calder (Cayman) LLP, counsel for the Company as to Cayman Islands Law, dated as of the Closing Date, substantially in the form attached hereto as Exhibit C;

 

(j)                a copy of the signed consent letter from Silver Crest consenting to the transactions contemplated by the Transaction Documents; and

 

(k)              a copy of the consent and waiver letter signed by and on behalf of Tim Hortons Restaurants International GmbH, PGXXIIB, L&L Tomorrow Holdings Limited, Lord Winterfell Limited, Tencent Mobility Limited, SCC Growth VI Holdco D, Ltd., and Eastern Bell International XXVI Limited and PGXXIIA.

 

3.3            Closing Deliveries of the Investor. At the Closing, the Investor shall deliver to the Company:

 

(a)               payment of the Purchase Price by wire transfer of immediately available funds to an account designated by the Company on or prior to the date hereof.

 

3.4            Exchange and Listing of Notes. On or before December 31, 2021, the Company shall:

 

(a)               exchange the Notes of the Investor for convertible notes with substantially the same terms as the Notes as updated to reflect the Public Note Indenture (as defined below) and with such other changes as may be consented to by the Company and the Investor (the “Public Notes”) issued under an indenture substantially in the form of Exhibit B, with such changes as may be consented to by the Company and the Investor (such consent not to be unreasonably withheld) (the “Public Note Indenture”); and

 

(b)               procure and maintain the listing and quotation of the Public Notes on the SGX-ST or such other stock exchange as may be approved by the Investor.

 

Upon the issuance of the Public Notes, all of the outstanding principal amount of the Notes will be automatically exchanged for an equal principal amount of the Public Notes. The exchange of the Notes into Public Notes will be completed on a cashless basis by the Investor surrendering the Notes to the Company in exchange for Public Notes, and other than such surrender of the Notes to the Company by the Investor, no consent or any other action will be required by the Investor for such exchange. Notwithstanding anything in this Agreement or the Notes to the contrary, the covenants in Section 9 of the Notes shall cease to be applicable in their entirety once the Public Notes are issued and the Notes are exchanged therefor in accordance with this Section 3.4, and the Notes and the obligations of the Company thereunder shall be cancelled and extinguished. The covenants, agreements and terms of or relating to the Public Notes, once issued, shall be exclusively governed by or pursuant to the Public Note Indenture.

 

3.5            Delivery of Register of Notes. On or before the second Business Day after the Closing, the Company shall deliver to the Investor a copy of the register of notes of the Company as of that date evidencing the issuance of the Note to the Investor, certified by a duly authorized director of the Board to be a true, complete and correct copy thereof;

 

 

4.              Representations and Warranties of the Company. The Company represents and warrants to the Investor that, except as otherwise disclosed or incorporated by reference in the Company’s Form F-4 or other reports and forms filed with or furnished to the SEC by the Company and/or Silver Crest on or before the date of this Agreement (excluding any risk factor disclosures contained under the heading “Risk Factors,” any disclosure of risks included in any “forward-looking statements” disclaimer or any other statements that are similarly cautionary, predictive or forward-looking in nature) (all such reports covered by this clause collectively, the “SEC Reports”):

 

4.1            Organization, Good Standing and Qualification. Each of the Company and its Subsidiaries is duly organized, validly existing, in good standing under the Laws of the jurisdiction of its formation and in compliance with all registration, inspection and approval requirements; has all requisite power, authority and qualifications and has made all requisite filings or obtained all requisite approvals to own its properties and conduct its business as presently conducted; and is duly qualified to do business and in good standing in each jurisdiction in which its business requires such qualification, except to the extent that any such failure to be in good standing or duly qualified would not prevent or materially delay or materially impair the performance by the Company and its Subsidiaries of its obligations under this Agreement or the consummation of the transactions contemplated by this Agreement and, in each case, to the extent that the concepts of “good standing” and “qualified to business” are applicable in the respective jurisdictions of incorporation of the Company and its Subsidiaries or the jurisdictions in which any of them is conducting business. True, accurate and complete copies of the Company’s Memorandum and Articles of Association and the organizational documents of the Company’s Subsidiaries have been made available to the Investor.

 

4.2            Authorization; Enforceable Agreement. All corporate action on the part of the Company necessary for the authorization, execution, and delivery of each of the Transaction Documents, the performance of all obligations of the Company under each of the Transaction Documents, and the authorization, issuance (or reservation for issuance), sale, and delivery of (i) the Notes being sold hereunder, and (ii) the Common Shares issuable upon conversion of the Notes in accordance with the terms of the Notes has been taken, and each of the Transaction Documents, when executed and delivered, assuming due authorization, execution and delivery by the Investor or any other party thereto other than the Company, constitutes and will constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles. Without limiting the foregoing, the issuance and delivery of the Common Shares have been duly authorized by all necessary corporate action on the part of the Company. Upon issuance, the Common Shares will be duly and validly issued, fully paid and nonassessable.

 

4.3            Governmental Consents. No consent, approval, order, or authorization of or registration, qualification, declaration, or filing with, any Governmental Authority on the part of the Company is required in connection with the offer, sale, or issuance of the Notes, the Common Shares, or the Common Shares issuable upon conversion of the Notes, or the consummation of any other transaction contemplated by this Agreement, except for the following: (i) the compliance with other applicable foreign or U.S. state securities or “blue sky” Laws, which compliance will have occurred within the appropriate time periods; (ii) the filing with the SEC of the registration statements contemplated under Section 9 hereof, (iii) any application or notification to Nasdaq that is required in connection with the issuance and sale of the Notes and the Common Shares hereunder, and the Common Shares issuable upon conversion of the Notes; (iv) any filings required by the Financial Industry Regulatory Authority; and (v) the filing with the SEC of such reports under the Exchange Act as may be required in connection with this Agreement and the transactions contemplated by this Agreement and (vi) any such notices to, actions by, consents, approvals, permits or authorizations of, or designations, declarations or filings with, any Governmental Authority, the absence of which would not have a Material Adverse Effect.

 

 

4.4            Capitalization. The authorized share capital of the Company consists of 5,000,000 shares of par value US$0.01 per share, of which 56,691 ordinary shares and 60,000 redeemable shares were issued and outstanding as of December 9, 2021. All issued and outstanding shares have been duly authorized and validly issued and are fully paid and nonassessable. All of the issued and outstanding capital stock or other ownership interests of each Subsidiary are owned by the Company, directly or through its Subsidiaries, and are free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim. None of the outstanding shares, shares of capital stock of or ownership interests in the Company or any of its Subsidiaries were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company or such Subsidiary. Except as set forth in Section 4.4 of the Disclosure Letter, there are no other outstanding rights, options, warrants, preemptive rights, rights of first offer, or similar rights for the purchase or acquisition from the Company of any securities of the Company, nor are there any agreements or commitments to issue or execute any such rights, options, warrants, preemptive rights or rights of first offer. Except as set forth in Section 4.4 of the Disclosure Letter, there are no outstanding rights or obligations of the Company to repurchase or redeem any of its equity securities or any shareholders agreement, voting or similar agreement in relation to the Company’s equity securities. The respective rights, preferences, privileges, and restrictions of the Common Shares are as stated in the Memorandum and Articles of Association. The Company does not have outstanding shareholder purchase rights or “poison pill” or any similar arrangement in effect giving any Person the right to purchase any equity interest in the Company upon the occurrence of certain events.

 

4.5            Subsidiaries. All of the issued and outstanding shares of capital stock of each of the Company’s Subsidiaries are owned directly or indirectly by the Company, free and clear of all Liens, and are duly authorized and validly issued, fully paid and non-assessable and there is no subscription, option, warrant, call right, agreement or commitment relating to the issuance, sale, delivery, voting, transfer or redemption by any of the Company’s Subsidiaries (including any right of conversion or exchange under any outstanding security or other instrument) of the capital stock of any of the Company’s Subsidiaries (other than any such subscription, option, warrant, call right, agreement or commitment in favor of the Company or its Subsidiaries).

 

(a)               None of the Subsidiaries of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such Subsidiary’s capital stock, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary’s property or assets to the Company or any other Subsidiary of the Company. After the Onshore Companies have paid up all its taxes, levies and charges, made any statutorily required funds allocations and taken appropriate corporate actions for such authorizations, all dividends and other distributions declared and paid in Renminbi by the Onshore Companies upon the equity interests held by the Company’s non-PRC Subsidiaries may be converted into foreign currencies and transferred out of the PRC; all such dividends and other distributions may be distributed without the necessity of obtaining any authorizations from any Governmental Authority, subject to compliance with certain procedural requirements.

 

 

4.6            Financial Statements.

 

(a)               The financial statements of the Company and its Subsidiaries on a consolidated basis as of and for the financial year ended December 31, 2020 and the period ended 30 June 2021 and, to the Company’s Knowledge and except as otherwise set forth in Section 4.6(a) of the Disclosure Letter, the financial statements of Silver Crest included or incorporated by reference in the SEC Reports (A) fairly present the financial condition and the results of operations of the Company, its Subsidiaries and Silver Crest (as applicable) as of the dates and for the periods indicated in such SEC Reports, (B) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby and (C) have been prepared from and are consistent with the books and records of the Company, its Subsidiaries and Silver Crest (as applicable).

 

(b)               Except as otherwise set forth in Section 4.6(b) of the Disclosure Letter, the Company and its Subsidiaries do not (and to the Company’s Knowledge, Silver Crest does not) have any liabilities or obligations (accrued, absolute, contingent or otherwise) that would be required under GAAP to be reflected on a consolidated balance sheet of the Company or Silver Crest (as applicable).

 

4.7            Valid Issuance. The Conversion Shares have been duly and validly reserved for issuance and, upon issuance of the Conversion Shares in accordance with their terms, the Conversion Shares will be duly and validly issued, fully paid, and nonassessable and will be free of any Liens or restrictions on transfer other than restrictions on transfer under the Transaction Documents, the Memorandum and Articles of Association and under applicable state, U.S. federal and foreign securities Laws. The sale of the Notes hereunder is not, and the subsequent conversion of the Notes into Conversion Shares will not be, subject to any preemptive rights, rights of first offer or any anti-dilution provisions contained in the Memorandum and Articles of Association or any other agreement.

 

4.8            Reports.

 

(a)               The SEC Reports (including any exhibits and schedules thereto and other information incorporated by reference therein), when they became effective or were filed with or furnished to the SEC, as the case may be, complied as to form in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, in each case as in effect at such time, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make such statements, in the light of the circumstances in which they were made, not misleading.

 

 

(b)               There is no transaction, arrangement or other relationship between the Company, any of its Subsidiaries and/or (to the Company’s Knowledge) Silver Crest and an unconsolidated or other off-balance sheet entity that is required to be disclosed by the Company or Silver Crest (as applicable) in its SEC Reports and is not so disclosed.

 

(c)               There are no outstanding or unresolved comments in any comment letters or other correspondence received from the staff of the SEC with respect to any SEC Report and to the Knowledge of the Company, none of the SEC Reports is the subject of ongoing SEC review. There are no internal investigations, any SEC inquiries or investigations or other inquiries or investigations by any Governmental Authority pending or, to the Knowledge of the Company, threatened, in each case, regarding the Company, Silver Crest or any of its officers or directors.

 

4.9            Absence of Changes. Except as set forth in Section 4.9 of the Disclosure Letter, since the date of filing of the Form F-4, the Company, its Subsidiaries and (to the Knowledge of the Company) Silver Crest have carried on their respective businesses in the ordinary course, consistent with past practice, and, except as separately disclosed to the Investor in writing, as set forth in any subsequent SEC Reports or as contemplated by the Transaction Documents, there has not been:

 

(a)               any amendment of any term of any outstanding security of the Company, its Subsidiaries or (to the Knowledge of the Company) Silver Crest;

 

(b)               any damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting the Company’s, its Subsidiaries’ and (to the Knowledge of the Company) Silver Crest’s properties or assets when taken as a whole;

 

(c)               any sale, assignment or transfer, or any agreement to sell, assign or transfer, any material asset, liability, property, obligation or right of the Company, any Subsidiary or (to the Knowledge of the Company) Silver Crest to any Person, including the Investor and its Affiliates, in each case, other than in the ordinary course of business and consistent with past practice;

 

(d)               any obligation or liability incurred, or any loans or advances made, by the Company, any Subsidiary or (to the Knowledge of the Company) Silver Crest to any of its Affiliates, other than any obligation or liability incurred, or any loans or advance made in the ordinary course of business of the Company or Silver Crest not to exceed $500,000;

 

(e)               any purchase or acquisition of, or agreement, plan or arrangement to purchase or acquire, any material property, rights or assets other than in the ordinary course of business of the Company or (to the Knowledge of the Company) Silver Crest;

 

(f)                any waiver of any material rights or claims of the Company, any Subsidiary or (to the Knowledge of the Company) Silver Crest;

 

(g)               any written agreement or binding commitment by the Company, any Subsidiary or (to the Knowledge of the Company) Silver Crest to do any of the foregoing; or

 

 

(h)               any change, development, occurrence or event that constitutes a Material Adverse Effect.

 

4.10          Property.

 

(a)               Neither the Company nor any of its Subsidiaries owns any real property.

 

(b)               Except as would not, individually or in the aggregate, reasonably be expected to be material to the business of the Company and its Subsidiaries, taken as whole, the Company or one of its Subsidiaries has a good and valid leasehold interest in or contractual right to use or occupy, subject to the terms of the applicable Company Lease, each real property subject to the Company Leases, free and clear of all Liens, other than Permitted Liens.

 

(c)               Neither the Company nor any of its Subsidiaries has subleased, licensed or otherwise granted any Person the right to use or occupy any real property subject to a Company Lease or any material portion thereof.

 

(d)               Except as would not have a Material Adverse Effect, the Company or one of its Subsidiaries has good and marketable title to, or a valid and binding leasehold or other interest in, all tangible personal property necessary for the conduct of the business of the Company and its Subsidiaries, taken as a whole, as currently conducted, free and clear of all Liens, other than Permitted Liens.

 

4.11         Indebtedness. Neither the Company, any of its Subsidiaries nor (to the Company’s knowledge) Silver Crest is, immediately prior to this Agreement, or will be, at the time of the Closing after giving effect to the Closing, in default in the payment of any indebtedness having an outstanding principal amount in excess of $1,000,000 or in default under any agreement governing or creating any indebtedness for borrowed money, obligations evidenced by bonds, debentures, notes or similar instruments or Capital Lease Obligations to the extent such indebtedness or obligation relates to an amount payable in excess of $1,000,000.

 

4.12          Master Franchise Agreements. Except as set forth in Section 4.12 of the Disclosure Letter, the Master Franchise Agreements are (i) in full force and effect and (ii) represent the legal, valid and binding obligations of the Company or one or more of its Subsidiaries party thereto and represents the legal, valid and binding obligations of the other parties thereto, in each case, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting or relating to creditors’ rights generally and subject, as to enforceability, to general principles of equity, whether such enforceability is considered in a proceeding in equity or at Law. Except as would not have a Material Adverse Effect, (1) the Company and its Subsidiaries have performed in all respects all respective obligations required to be performed by them under the Master Franchise Agreements and (2) neither the Company, the Company’s Subsidiaries, nor any other party thereto is in default under the Master Franchise Agreements. During the last twelve (12) months, neither the Company nor any of its Subsidiaries has received any written notice of termination or material breach of, or material default under, the Master Franchise Agreements. Except as would not have a Material Adverse Effect, no event has occurred that, individually or together with other events, would reasonably be expected to result in a breach of or a default under the Master Franchise Agreements (in each case, with or without notice or lapse of time or both). The execution, delivery and performance by each of the Company and Target of this Agreement and the other Transaction Agreements (as defined in the Merger Agreement) to which it is or will be a party and the consummation by each of the Company and Target of the transactions contemplated hereby and thereby do not and will not in any material respect violate, conflict with, result in a breach of, result in the termination of, or result in a right of termination under, the Master Franchise Agreements.

 

 

4.13          Litigation and Proceedings.

 

(a)               Except as set forth in Section 4.13 of the Disclosure Letter, there are no, and during the last two years there have been no, pending or, to the Knowledge of the Company, threatened Actions by or against the Company or any of its Subsidiaries that, if adversely decided or resolved, would reasonably be expected to result in liability to or obligations of the Company or any of its Subsidiaries in an amount in excess of $100,000 individually or $500,000 in the aggregate. There is no Governmental Order imposed upon the Company or any of its Subsidiaries that would reasonably be expected to result in liability to or obligations of the Company or any of its Subsidiaries in an amount in excess of $100,000 individually or $500,000 in the aggregate. Neither the Company nor any of its Subsidiaries is party to a settlement or similar agreement regarding any of the matters set forth in the two preceding sentences that contains any ongoing obligations, restrictions or liabilities (of any nature) that would reasonably be expected to result in liability to or obligations of the Company or any of its Subsidiaries in an amount in excess of $100,000 individually or $500,000 in the aggregate.

 

(b)               To the Knowledge of the Company, (i) there are no pending or threatened Actions by or against Silver Crest that, if adversely decided or resolved, would have a SPAC Impairment Effect, (ii) there is no Governmental Order currently imposed upon Silver Crest that would have a SPAC Impairment Effect, and (iii) Silver Crest is not party to any settlement or similar agreement regarding any of the matters set forth in paragraphs (i) and (ii) that contains any ongoing obligations, restrictions or liabilities (of any nature) that would have a SPAC Impairment Effect.

 

4.14          Taxes.

 

(a)               All material Tax Returns required to be filed by the Company, each of its Subsidiaries and (to the Company’s Knowledge) Silver Crest through the date hereof have been timely filed (taking into account valid extensions of time within which to file).

 

(b)               All Tax Returns filed by the Company, each of its Subsidiaries and (to the Company’s Knowledge) Silver Crest (taking into account all amendments thereto) are true, correct and complete in all material respects.

 

(c)               The Company, its Subsidiaries and (to the Company’s Knowledge) Silver Crest have complied in all material respects with all applicable Laws relating to the payment, withholding, and reporting of all material Taxes and all material Taxes required to be withheld by the Company, any of its Subsidiaries or (to the Company’s Knowledge) Silver Crest have been timely withheld, paid, and reported over to the appropriate Governmental Authority.

 

 

(d)               All material Taxes due and owing by any of the Company, its Subsidiaries or (to the Company’s Knowledge) Silver Crest (whether or not shown on any Tax Return) have been timely paid.

 

(e)               There are no Liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of the Company, any of its Subsidiaries or (to the Company’s Knowledge) Silver Crest.

 

(f)                No deficiencies for Taxes against the Company, any of its Subsidiaries or (to the Company’s Knowledge) Silver Crest have been claimed, proposed or assessed by any Governmental Authority, which have not been paid or otherwise resolved in full.

 

(g)               None of the Company, any of its Subsidiaries or (to the Company’s Knowledge) Silver Crest is a party to or is bound by any tax sharing agreement (excluding any commercial contract entered into in the ordinary course of business consistent with past practice and not primarily relating to Taxes).

 

(h)               None of the Company, any of its Subsidiaries or (to the Company’s Knowledge) Silver Crest has consummated, has participated in, or is currently participating in any transaction that was or is a “listed transaction” as defined in Section 6707A of the Code or the Treasury Regulations or under any comparable provisions of foreign Law.

 

4.15          Compliance with Laws.

 

(a)               Each of the Company and its Subsidiaries is, and during the last two years has been, in compliance with all applicable Laws, except as set forth in Section 4.15(a) of the Disclosure Letter and except for such noncompliance which, individually or in the aggregate, would not reasonably be expected to be material to the business of the Company and its Subsidiaries, taken as a whole. None of the Company or its Subsidiaries has received any written notice from any Governmental Authority of a violation of any applicable Law at any time during the last two years, except for any such violation which, individually or in the aggregate, would not reasonably be expected to be material to the business of the Company and its Subsidiaries, taken as a whole.

 

(b)               Except as set for in Section 4.15(b) of the Disclosure Letter , each of the Company and its Subsidiaries, as of the Cut-off Date, holds, and during the last two year period ended the Cut-off Date, has held, all material licenses, approvals, consents, registrations, franchises and permits necessary for the operation of the business of the Company and its Subsidiaries (the “Company Permits”). The Company and its Subsidiaries are, and during the last two years have been, in compliance with and not in default under such Company Permits, in each case except for such noncompliance that would not have a Material Adverse Effect. Without limiting the generality of the foregoing, all permits, licenses and approvals by, and filings and registrations and other requisite formalities with, the Governmental Authorities of the PRC that are required to be obtained or made in respect of, as applicable, the Company or any of its Subsidiaries with respect to its establishment, capital structure, business and operations as it is now being conducted, including the approval of and registrations or filings with the State Administration for Market Regulation of the PRC (formerly the State Administration for Industry and Commerce), the Ministry of Commerce of the PRC, the National Development and Reform Commission of the PRC, the Ministry of Industry and Information Technology of the PRC, SAFE, the Ministry of Human Resources and Social Security of the PRC, the Fire and Rescue Department Ministry of Emergency Management and the State Administration of Taxation of the PRC, and their respective local counterparts, if required, have been duly completed in accordance with applicable Laws of the PRC, except for any such permits, licenses and approvals by, and filings and registrations and other formalities, the absence of which would not have a Material Adverse Effect. Each of the Company and its Subsidiaries, if established in the PRC, has been conducting its business activities within its permitted scope of business, and has been operating its business in compliance in all material respects with all relevant legal requirements and with all requisite permits, licenses and approvals granted by, and filings and registrations made with the competent Governmental Authorities of the PRC.

 

 

(c)               No Representative of the Company or any of its Subsidiaries is a Government Official. To the Knowledge of the Company, each holder or beneficial owner of Equity Securities of the Company who is a PRC resident and subject to any of the registration or reporting requirements of the SAFE Circulars or any other applicable SAFE rules and regulations (collectively, the “SAFE Rules and Regulations”), has complied with such reporting or registration requirements under the SAFE Rules and Regulations with respect to its investment in the Company, except as set forth in Section 4.15(c) of the Disclosure Letter. Neither the Company nor, to the Knowledge of the Company, such holder or beneficial owner has received any inquiries, notifications, orders or any other forms of official correspondence from SAFE or any of its local branches with respect to any actual or alleged non-compliance with the SAFE Rules and Regulations.

 

4.16          Environmental Compliance.

 

(a)               The Company and its Subsidiaries are, and during the last two years have been, in compliance with all Environmental Laws applicable thereto, except where the failure to be, or to have been, in compliance with such Environmental Laws has not had a Material Adverse Effect.

 

(b)               There are no written claims or notices of violation pending or, to the Knowledge of the Company, issued to or threatened, against either the Company or any of its Subsidiaries alleging violations of or liability under any material Environmental Law.

 

(c)               Neither the Company nor any of its Subsidiaries has treated, stored, manufactured, transported, handled, disposed or released any Hazardous Materials in any material respect.

 

(d)               To the Knowledge of the Company, neither the Company nor any of its Subsidiaries has any material liability with respect to the presence of Hazardous Materials in any real property subject to a Company Lease.

 

 

(e)               Neither the Company nor any of its Subsidiaries has contractually assumed or provided an indemnity with respect to material liability of any other Person under any Environmental Laws.

 

4.17         Compliance with Other Instruments. Neither the Company nor any of its Subsidiaries is in violation or default of any provision of the Memorandum and Articles of Association or other applicable charter or constitutional documents. The execution, delivery, and performance of and compliance with each of the Transaction Documents and the issuance and sale of the Notes hereunder and the conversion of the Notes will not (i) result in any default or violation of the Memorandum and Articles of Association or any charter or constitutional documents of the Company’s Subsidiaries, (ii) (subject to the closing condition in Section 6.6 being satisfied) result in any default or violation of any agreement or under any mortgage, deed of trust, security agreement, indenture or lease to which the Company or any Subsidiary is a party or in any default or violation of any judgment, order or decree of any Governmental Authority with jurisdiction over the Company or any Subsidiary, other than such as would not, individually or in the aggregate, reasonably be expected to be material to the Company or any of its Subsidiaries or (iii) result in the creation of any mortgage, pledge, lien, encumbrance, or charge upon any of the properties or assets of the Company or its Subsidiaries pursuant to any mortgage, deed of trust, securities agreement, indenture or lease to which the Company or any Subsidiary is a party or the suspension, revocation, impairment or forfeiture of any permit, license, authorization, or approval applicable to the Company or any of its Subsidiaries, their respective businesses or operations, or any of their respective assets or properties pursuant to any such document, excepting, in any such case, any such default as would not, individually or in the aggregate, reasonably be expected to be material to the Company or any of its Subsidiaries.

 

4.18          No Conflict. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is or will be a party and the consummation by each of the Company of the Transactions do not and will not, (a) contravene, breach or conflict with the Organizational Documents of the Company or any of its Subsidiaries, (b) contravene or conflict with or constitute a violation of any provision of any Law, Permit or Governmental Order binding upon or applicable to the Company or any of its Subsidiaries or any of their respective assets or properties, (c) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default under, result in the termination or acceleration of, result in a right of termination, cancellation, modification, acceleration or amendment under, or accelerate the performance required by, any of the terms, conditions or provisions of any Specified Contract (as defined in the Merger Agreement), or (d) result in the creation or imposition of any Lien on any asset, property or Equity Security of the Company or any of its Subsidiaries (other than any Permitted Liens), except, in the case of each of clauses (b) through (d), for any such conflict, violation, breach, default, loss, right or other occurrence which would not have a Material Adverse Effect.

 

4.19          Intellectual Property.

 

(a)               Section 4.19 of the Disclosure Letter sets forth a complete and correct list, as of the date of the Merger Agreement, of all the issued and registered Intellectual Property and applications therefor, in each case, owned or purported to be owned by the Company and its Subsidiaries (the “Registered Intellectual Property”).

 

 

(b)               Except as would not have a Material Adverse Effect, the Company and its Subsidiaries exclusively own all Owned Intellectual Property, and have a valid and enforceable (subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting or relating to creditors’ rights generally and subject, as to enforceability, to general principles of equity, whether such enforceability is considered in a proceeding in equity or at Law) license, or other right to use, all other Intellectual Property (including any such Intellectual Property in the Tim Hortons System) necessary for the operation of their businesses as presently conducted (together with the Owned Intellectual Property, the “Company Intellectual Property”).

 

(c)               Except as would not have a Material Adverse Effect, all Registered Intellectual Property is free and clear of any Liens (other than Permitted Liens), is subsisting and unexpired.

 

(d)               Except as would not have a Material Adverse Effect, all Owned Intellectual Property, to the Knowledge of the Company, is valid and enforceable and, to the Knowledge of the Company, there is no Action pending or threatened in writing against the Company or any of its Subsidiaries, challenging the validity, enforceability, ownership, registration, or use of any Owned Intellectual Property.

 

(e)               Except as would not have a Material Adverse Effect, (i) the conduct of the business of the Company and its Subsidiaries as currently conducted is not infringing upon, misappropriating or otherwise violating any Intellectual Property rights of any third party, and has not infringed upon, misappropriated or otherwise violated any Intellectual Property rights of any third party during the past three years, and (ii) to the Knowledge of the Company, no third party is infringing upon, misappropriating or otherwise violating, any Company Intellectual Property (excluding all commercially available off-the-shelf software licensed to the Company or its Subsidiaries). The Company and its Subsidiaries have not received from any Person any written notice during the past three years that the Company or any of its Subsidiaries is infringing upon, misappropriating or otherwise violating any Intellectual Property rights of any Person in any material respect.

 

(f)               The Company and its Subsidiaries have in place commercially reasonable measures designed to protect and maintain all material Owned Intellectual Property, including the confidentiality of any material trade secrets included therein.

 

4.20          Ranking of the Notes. The Notes, when issued by the Company, will constitute senior indebtedness of the Company and will rank at least pari passu with all other unsecured indebtedness of the Company (subject to any priority rights of such indebtedness pursuant to applicable Laws) and senior in right of payment to all future obligations of the Company expressly subordinated in right of payment to the Notes.

 

4.21          Registration Rights. Except as set forth in Section 4.21 of the Disclosure Letter or as provided in Section 9 of this Agreement, the Company has not granted or agreed to grant, and is not under any obligation to provide, any rights to register under the Securities Act any of its presently outstanding securities or any of its securities that may be issued subsequently.

 

 

4.22          Investment Company Act. The Company is not registered, and after giving effect to the sale of the Notes and Common Shares and application of the proceeds thereof as described in section 10(o) of the Notes will not be required to register, as an “investment company” as such term is defined in the Investment Company Act of 1940.

 

4.23          Brokers’ Fees and Expenses. No broker, investment banker, or financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with transactions contemplated by this Agreement.

 

4.24          International Trade; Anti-Corruption.

 

(a)               Neither the Company nor any of its Subsidiaries, nor, to the Knowledge of the Company, any of their respective directors, officers, employees, agents or other third-party representatives acting on behalf of the Company or any of its Subsidiaries, is currently, or has been in the last five years: (i) a Sanctioned Person; (ii) organized, resident, or operating from a Sanctioned Country; (iii) knowingly engaged in any dealings or transactions with any Sanctioned Person or in any Sanctioned Country, in violation of Sanctions Laws; or (iv) otherwise in violation of applicable Sanctions Laws or Trade Control Laws (collectively, “Trade Controls”).

 

(b)               Neither the Company nor any of its Subsidiaries, nor, to the Knowledge of the Company, any of their respective directors, officers, employees, agents or other third-party representatives acting on behalf of the Company or any of its Subsidiaries, has at any time made or accepted any unlawful payment or given, offered, promised, or authorized or agreed to give, or received, any money or thing of value, directly or indirectly, to or from any Government Official or other Person in violation of any applicable Anti-Corruption Laws. Neither the Company nor any of its Subsidiaries, nor, to the Knowledge of the Company, any of their respective directors, officers, employees, agents or other third-party representatives acting on behalf of the Company or any of its Subsidiaries, is currently, or has in the last five years been, the subject of any written claim or allegation by any Governmental Authority that such Person has made any unlawful payment or given, offered, promised, or authorized or agreed to give, or received, any money or thing of value, directly or indirectly, to or from any Government Official or any other Person in violation of any Anti-Corruption Laws.

 

(c)               In the past five years, neither the Company nor any of its Subsidiaries has received from any Governmental Authority or any other Person any notice, inquiry, or internal or external allegation; made any voluntary or involuntary disclosure to a Governmental Authority; or conducted any internal investigation or audit concerning any actual or potential violation or wrongdoing related to Trade Controls or Anti-Corruption Laws, except as would not reasonably be expected to be material to the business of the Company and its Subsidiaries, taken as a whole. The Company and its Subsidiaries maintain and enforce policies, procedures, and internal controls reasonably designed to promote compliance with Anti-Corruption Laws and Trade Controls, and have maintained complete and accurate books and records, including records of any payments to agents, consultants, representatives, third parties, and Government Officials.

 

 

4.25          Money Laundering Laws. The operations of the Company and each of its Subsidiaries has been conducted at all times in compliance with Money Laundering Laws. The Company has effective controls that are sufficient to provide reasonable assurances that violations of applicable Money Laundering Laws will be prevented, detected and deterred.

 

4.26          No General Solicitation. Neither the Company nor any of its affiliates (as defined in Rule 405 under the Securities Act) nor any persons acting on its or their behalf (a) has offered or sold the Notes by means of any general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D under the Securities Act or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act. The Company has offered the Securities for sale only to the Investor.

 

4.27          Offering; Exemption. Assuming the accuracy of the Investor’s representations and warranties set forth in Section 5 of this Agreement, except as provided in Section 9 hereof, no registration under the Securities Act or any applicable state securities law is required for the offer and sale of the Securities by the Company to the Investor as contemplated hereby or for the conversion of the Notes.

 

4.28          No Integrated Offering. Neither the Company, nor any Affiliate of the Company, nor any person acting on its behalf or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offering or issuance of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act in a manner that would require registration of such offer and sale under the Securities Act, or would cause any applicable state securities Law exemptions or any applicable stockholder approval provisions exemptions, including under the rules and regulations of any national securities exchange or automated quotation system on which any of the securities of the Company are listed or designated to be unavailable, nor will the Company take any action or steps that would cause the offering or issuance of the Securities to be integrated with other offerings.

 

4.29          Labor Matters. The Company and each of its Subsidiaries are and have been during the past two years in compliance with all applicable Laws respecting labor, employment, immigration, fair employment practices, terms and conditions of employment, workers’ compensation, occupational safety, plant closings, mass layoffs, worker classification, exempt and non-exempt status, compensation and benefits, statutory social insurances and housing funds, and wages and hours, except as would not have a Material Adverse Effect.

 

4.30          Insurance. Except as would not reasonably be expected to be material to the business of the Company and its Subsidiaries, taken as a whole: (a) the Company and its Subsidiaries have insurance policies of the type, and that provide coverage, that is in compliance with applicable Law in all material respects and is reasonable and appropriate considering the business of the Company and its Subsidiaries, and the Company and its Subsidiaries are in compliance in all respects thereunder, including with respect to the payment of premiums; and (b) except as set forth in Section 4.30 of the Disclosure Letter, there is no claim pending under any such insurance policy as to which coverage has been denied or disputed by the applicable insurer as of the Cut-off Date.

 

 

4.31         Solvency. Each of the Company and (to the Knowledge of the Company) Silver Crest is, and immediately after the Closing Date will be, Solvent. As used herein, the term “Solvent” means, with respect to any Person on a particular date, that on such date (i) the fair market value of the assets of such Person is greater than the total amount of liabilities (including known contingent liabilities) of such Person, (ii) the present fair salable value of the assets of such Person is greater than the amount that will be required to pay the probable liabilities of such Person on its debts as they become absolute and matured, (iii) such Person is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature and (iv) such Person does not have unreasonably small capital for the business and transaction it is engaged in.

 

4.32         Related Party Transactions. Except for the Contracts set forth in Section 4.32 of the Disclosure Letter or any Contract that expires or terminates pursuant to its terms prior to the Business Combination Closing Date without any liability to the Company or its Subsidiaries continuing following the Business Combination Closing Date, there are no Contracts between the Company and its Subsidiaries, on the one hand, and Affiliates of the Company or any of its Subsidiaries (other than the Company or any of its Subsidiaries), the officers, directors and managers (or equivalents) of the Company or any of its Subsidiaries, the direct equityholders of the Company or any of its Subsidiaries, the direct equityholders of Pangaea Two Acquisition Holdings XXIIB, Ltd. or Tim Hortons Restaurants International GmbH, any employee of the Company or any of its Subsidiaries or a member of the immediate family of the foregoing Persons, on the other hand, except in each case, for (i) employment agreements, fringe benefits and other compensation paid to directors, officers and employees consistent with previously established policies, (ii) reimbursements of expenses incurred in connection with their employment or service, (iii) amounts paid pursuant to Company Benefit Plans, (iv) powers of attorney and similar grants of authority made in the ordinary course of business and (v) the Master Franchise Agreements.

 

5.              Representations and Warranties of the Investor. The Investor represents and warrants to the Company as of the date of this Agreement that:

 

5.1            Organization. [The Investor is a limited partnership duly organized, and validly existing under the laws of its jurisdiction of formation.][The Investor is an exempted company with limited liability duly incorporated and validly existing under the laws of its jurisdiction of incorporation.]

 

5.2            Authorization; Enforceability. The Investor has full right, power, authority and capacity to enter into each of the Transaction Documents and to consummate the transactions contemplated by each such Transaction Document. The execution, delivery and performance of each of the Transaction Documents have been duly authorized by all necessary action on the part of the Investor, and each of the Transaction Documents has been duly executed and delivered by the Investor and, assuming due authorization, execution and delivery of each of the Transaction Documents by the Company, will constitute valid and binding obligation of the Investor, enforceable against it in accordance with its terms.

 

5.3            Consents. No consent, approval, order, or authorization of, or registration, qualification, declaration, or filing with, any federal, state, or local governmental authority on the part of the Investor is required in connection with the purchase of the Notes hereunder, the conversion of the Notes or the consummation of any other transaction contemplated by this Agreement, except for the following: (i) the compliance with applicable state securities Laws, which compliance will have occurred within the appropriate time periods; and (ii) the filing with the SEC of such reports under the Exchange Act as may be required in connection with this Agreement and the transactions contemplated by this Agreement.

 

 

5.4           No Default or Violation. The execution, delivery, and performance of and compliance with each of the Transaction Documents, the issuance and sale of the Notes hereunder, and the conversion of the Notes will not (i) result in any default or violation of the Organizational Documents of the Investor, (ii) result in any default or violation of any agreement relating to its material indebtedness or under any mortgage, deed of trust, security agreement or lease to which it is a party or in any default or violation of any material judgment, order or decree of any Governmental Authority or (iii) be in conflict with or constitute, with or without the passage of time or giving of notice, a default under any such provision, require any consent or waiver under any such provision, or result in the creation of any mortgage, pledge, lien, encumbrance, or charge upon any of the properties or assets of the Investor pursuant to any such provision, or the suspension, revocation, impairment or forfeiture of any material permit, license, authorization, or approval applicable to the Investor, its business or operations, or any of its assets or properties pursuant to any such provision, except in the case of clauses (ii) and (iii) as would not, individually or in the aggregate, reasonably be expected to prevent or materially delay or materially impair the ability of the Investor to consummate the transactions contemplated by this Agreement.

 

5.5           Investor Status.

 

(a)               The Investor is (i) an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act; (ii) aware that the sale of the Notes and the Conversion Shares being issued and sold pursuant to this Agreement (collectively, the “Securities”) is being made in reliance on an exemption from registration under the Securities Act and (iii) acquiring the Securities for its own account and not for the account of others, and (iv) not acquiring the Securities with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or the securities law of any other jurisdiction. Investor is not an entity formed for the specific purpose of acquiring the Securities.

 

(b)              The Investor understands that the Securities are being offered in a transaction not involving any public offering within the meaning of the Securities Act, that such Securities have not been and, except as may be required pursuant to Section 9 hereof, will not be registered under the Securities Act and that such Securities may not be resold, transferred, pledged or otherwise disposed of by the Investor absent an effective registration statement under the Securities Act, except (i) to the Company or a subsidiary thereof, or (ii) pursuant to an applicable exemption from the registration requirements of the Securities Act, and, in each case, in accordance with any applicable securities laws of the applicable states, other jurisdictions of the United States and other applicable jurisdictions, and that any book-entry position or certificates representing the Securities shall contain a restrictive legend to such effect. Investor understands and agrees that the Securities will be subject to transfer restrictions under applicable securities laws and, as a result of these transfer restrictions, Investor may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Securities and may be required to bear the financial risk of an investment in the Notes for an indefinite period of time. Investor understands and agrees that the Notes will not be immediately eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act until at least one year from the Closing Date. Investor understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Securities.

 

 

(c)              The Investor understands that, unless sold pursuant to a registration statement that has been declared effective under the Securities Act or in compliance with Rule 144 thereunder, the Company may require that the Securities will bear a legend or other restriction substantially to the following effect (it being agreed that if the Securities are not certificated, other appropriate restrictions shall be implemented to give effect to the following):

 

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT: (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR (II) PURSUANT TO ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND, IN EACH OF CASES (I) AND (II), IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS. WITH RESPECT TO ANY TRANSACTION UNDER CLAUSE (II) ABOVE, THE ISSUER MAY REQUIRE THE DELIVERY OF A WRITTEN OPINION OF COUNSEL OR CERTIFICATIONS, TO THE EXTENT REASONABLY REQUIRED TO CONFIRM THE SECURITIES ACT EXEMPTION FOR SUCH TRANSACTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

(d)             The Investor understands that the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

 

6.             Conditions to the Investor’s Obligations at Closing. The obligation of the Investor to purchase the Notes at the Closing is subject to the fulfillment or waiver on or before the Closing of each of the following conditions:

 

6.1           Representations and Warranties. Each of the representations and warranties of the Company in this Agreement shall be true and correct in all material respects as of the Closing except for such representations and warranties made as of a specific date, which shall be true and correct in all material respects as of such date; provided, however, that the representations and warranties set forth in Sections 4.1, 4.2 and 4.4 shall be, as of the Closing, true and correct in all respects with the same effect as though such representations and warranties had been made as of the Closing.

 

 

6.2           Performance. The Company shall have performed in all material respects all of its obligations required to be complied with or performed by it at or prior to the Closing.

 

6.3           No Material Adverse Effect. Since the date of this Agreement, no Material Adverse Effect shall have occurred.

 

6.4           Qualification Under Securities Laws. All registrations, qualifications, permits and approvals, if any, required to be obtained prior to the Closing under applicable foreign or U.S. state securities or “blue sky” Laws shall have been obtained for the lawful execution, delivery and performance of each of the Transaction Documents including, without limitation, the offer and sale of the Securities.

 

6.5           Orders. As of the Closing, no court or other Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered into any Law (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits consummation of the transactions contemplated hereby.

 

6.6           Disclosure Letter. The Investor shall have received on the date of this Agreement a copy of the signed Disclosure Letter.

 

7.             Conditions to the Company’s Obligations at Closing. The obligations of the Company to issue, sell and deliver to the Investor the Notes are subject to the fulfillment or waiver on or before the Closing of each of the following conditions:

 

7.1           Representations and Warranties. Each of the representations and warranties of the Investor contained in this Agreement shall be true and correct in all material respects (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” set forth therein) as of the Closing except for such representations and warranties made as of a specific date, which shall be true and correct as of such date; provided, however, that the representations and warranties set forth in Sections 5.1 and 5.2 shall be, as of the Closing, true and correct in all respects with the same effect as though such representations and warranties had been made as of the Closing.

 

7.2           Performance. The Investor shall have performed and complied in all material respects with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with it on or before the Closing.

 

7.3           Orders. As of the Closing, no court or other Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits consummation of the transactions contemplated hereby.

 

8.             Covenants. The Company covenants and agrees, and the Investor covenants and agrees, for the benefit of the other parties to this Agreement and their respective assigns, as follows:

 

 

8.1           PIPE Share Subscription Agreement and Option Agreement.

 

(a)               The Company and the Investor shall, on or before the Business Combination Closing Date, execute and deliver to the other party the PIPE Share Subscription Agreement.

 

(b)               PGXXIIA and the Investor shall, on or before the Business Combination Closing Date, execute and deliver the Option Agreement.

 

8.2           Reservation of Common Shares; Issuance of Common Shares; Blue Sky.

 

(a)               For as long as any Notes remain outstanding, the Company shall at all times reserve and keep available, free from preemptive rights of other Persons, out of its authorized but unissued Common Shares or Common Shares held in treasury by the Company, for the purpose of effecting the conversion of the Notes, the full number of Conversion Shares (after giving effect to all anti-dilution adjustments) then outstanding. All Conversion Shares shall represent newly issued shares or shares held in treasury by the Company, shall have been duly authorized and validly issued and shall be fully paid and nonassessable, and shall be free from preemptive rights and free of any lien or adverse claim.

 

(b)               The Company shall take such action as necessary in order to obtain an exemption for or to qualify the issuance of the Conversion Shares under applicable foreign or U.S. securities or “blue sky” Laws (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Investor. The Company shall make all filings and reports relating to the offer and sale of the Conversion Shares required under such Laws pursuant to Section 9 following the Closing.

 

8.3           Removal of Restrictive Legend. The Company agrees to take commercially reasonable efforts to (including but not limited to causing its transfer agent to) remove the restrictive legend on the Notes and/or the Conversion Shares, as applicable, when such securities are sold pursuant to Rule 144 or an effective registration statement or may be sold without restriction under Rule 144. In connection therewith, if required by the transfer agent, the Company will promptly cause an opinion of counsel to be delivered to and maintained with the transfer agent, together with any other authorizations, certificates and directions required by the transfer agent that authorize and direct the transfer agent to transfer such securities without any such legend.

 

8.4           Transfer Taxes. The Company shall pay any and all documentary, stamp or similar issue or transfer tax due on (x) the issue of the Notes at Closing and (y) the issue of Conversion Shares. However, in the case of conversion of the Notes, the Company shall not be required to pay any tax or duty that may be payable in respect of any transfer involved in the issue and delivery of Conversion Shares in a name other than that of the holder of the Notes to be converted, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of any such tax or duty, or has established to the satisfaction of the Company that such tax or duty has been paid.

 

 

8.5           Confidentiality. Each party to this Agreement will use commercially reasonable efforts to hold, and cause its respective Affiliates and their directors, officers, employees, agents, consultants and advisors to hold, in strict confidence, unless disclosure to a regulatory authority is necessary or appropriate in connection with any necessary regulatory approval or unless disclosure is required by judicial or administrative process or by other requirement of Law or the applicable requirements of any regulatory agency or relevant stock exchange, all non-public records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning the other party furnished to it by such other party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (a) previously known by such party on a non-confidential basis, (b) in the public domain through no fault of such party or (c) later lawfully acquired from other sources on a non-confidential basis by the party to which it was furnished), and no party shall release or disclose such Information to any other person, except its Affiliates, officers, directors, employees, partners, members, auditors, attorneys, financial advisors, other consultants and advisors. The Investor acknowledges that this Agreement and the Transaction Documents may be subject to public disclosure in connection with the Company’s and Silver Crest’s disclosure obligations, and permits such disclosure; provided that the Company shall not disclose the identity of the Investor in such public disclosure unless required by law, and if such disclosure is required, shall provide the Investor a reasonable opportunity to review any such proposed public disclosure (it being understood that the Company will use commercially reasonable efforts to persuade Silver Crest to keep Investor’s identity confidential in its public filings). Notwithstanding the foregoing, a party may disclose Information in connection with any routine governmental or regulatory inquiry, examination or other request that does not specifically target the Information.

 

8.6           Further Assurances. Each of the Investor and the Company will cooperate and consult with each other and use commercially reasonable efforts to prepare and file all necessary documentation, to effect all necessary applications, notices, petitions, filings and other documents, and to obtain all necessary permits, consents, orders, approvals and authorizations of, or any exemption by, all third Persons required to consummate the transactions contemplated by this Agreement.

 

Notwithstanding anything in this Agreement to the contrary, the covenants in this Section 7 shall cease to be applicable in their entirety once the Public Notes are issued and the Notes are exchanged therefor in accordance with Section 3.4. The covenants, agreements and terms of or relating to the Public Notes, once issued, shall be exclusively governed by or pursuant to the Public Note Indenture, and not this Agreement.

 

 

9.             Registration Rights.

 

9.1           In the event that (i) the Conversion Shares are issued subsequent to the completion of the Business Combination and such Conversion Shares are not registered in connection with the consummation of the transactions contemplated thereby or (ii) the Company is or becomes subject to the reporting obligations under Section 13 or Section 15(d) of the Exchange Act, the Company agrees that, within forty-five (45) calendar days after earlier of the completion of the Business Combination and the satisfaction in the condition in clause (ii) above (the “Filing Date”), the Company will file with the SEC (at the Company’s sole cost and expense) a shelf registration statement registering the resale of the Conversion Shares (the “Registrable Securities”, and such statement the “Registration Statement”), and the Company shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, (such date, the “Effectiveness Date”); provided, however, that the Company’s obligations to include the Conversion Shares in the Registration Statement are contingent upon Investor furnishing in writing to the Company such information regarding Investor, the securities of the Company held by Investor and the intended method of disposition of the Conversion Shares as shall be reasonably requested by the Company to effect the registration of the Conversion Shares, and Investor shall execute such documents in connection with such registration as the Company may reasonably request that are customary of a selling stockholder in similar situations, including providing that the Company shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement during any customary blackout or similar period or as permitted under Section 9.4 hereunder. For purposes of clarification, any failure by the Company to file the Registration Statement by the Filing Date or to cause such Registration Statement to be declared effective by the Effectiveness Date shall not otherwise relieve the Company of its obligations to file the Registration Statement or cause the Registration Statement to be declared effective as set forth above in this Section 9.

 

 

9.2           If the Company proposes to conduct a registered offering of, or if the Company proposes to file a registration statement under the Securities Act with respect to the registration of Common Shares, for its own account and/or for the account of any stockholders of the Company, other than a registration statement (or any registered offering with respect thereto) (i) filed in connection with any employee stock option or other benefit plan, (ii) pursuant to a registration statement on Form F-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), (iii) for a dividend reinvestment plan, or (iv) for a rights offering, then the Company shall give written notice of such proposed offering to the Investor as soon as practicable but not less than five (5) 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 the Investor the opportunity to include in such registered offering such number of Conversion Shares as the Investor may request in writing within two (2) days after receipt of such written notice (such registered offering, a “Piggyback Registration”). Subject to this Section 9.2, the Company shall, in good faith, cause such Conversion Shares 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 Conversion Shares requested by the Investor pursuant to this Section 9.2 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 Conversion Shares in accordance with the intended method(s) of distribution thereof. The inclusion of the Investor’s Conversion Shares in a Piggyback Registration shall be subject to such Investor’s agreement to enter into such agreements and deliver such certificates and opinions as reasonably or customarily requested by the underwriters. If the managing underwriter or underwriters in an underwritten offering that is to be a Piggyback Registration, in good faith, advises the Company and the Investor participating in the Piggyback Registration in writing that the dollar amount or number of Common Shares or other equity securities that the Company desires to sell, taken together with (i) the Common Shares or other equity securities, if any, as to which registration or a registered offering has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Investor, (ii) the Conversion Shares as to which registration has been requested pursuant to Section 9.2 hereof, and (iii) the Common Shares or other equity securities, if any, as to which registration or a registered offering has been requested pursuant to separate written contractual piggyback registration rights of other stockholders of the Company (the “Other Piggyback Parties”), exceeds the maximum dollar amount or maximum number of equity securities that can be sold in such underwritten offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then: (i) if the registration or registered offering is undertaken for the Company’s account, the Company shall include in any such registration or registered offering (A) first, the Common Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Common Shares or other equity securities, if any, as to which registration or a registered offering has been requested pursuant to separate written contractual arrangements with persons or entities other than the Investor; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Conversion Shares of the Investor, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the Common Shares or other equity securities, if any, as to which registration or a registered offering has been requested pursuant to written contractual piggyback registration rights of the Other Piggyback Parties, which can be sold without exceeding the Maximum Number of Securities; (ii) if the registration or registered offering is pursuant to a request by persons or entities other than the Investor, then the Company shall include in any such registration or registered offering (A) first, the Common Shares or other equity securities, if any, of such requesting persons or entities, other than the Investor, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Conversion Shares of the Investor which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Common Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the Common Shares or other equity securities, if any, as to which registration or a registered offering has been requested pursuant to written contractual piggyback registration rights of the Other Piggyback Parties, which can be sold without exceeding the Maximum Number of Securities. The Investor shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the managing underwriter or underwriters (if any) of his, her or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the registration statement filed with the SEC 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 pursuant to separate written contractual obligations) may withdraw a registration statement filed with the SEC in connection with a Piggyback Registration (which, in no circumstance, shall include the Registration Statement) at any time prior to the effectiveness of such registration statement.

 

 

9.3           In the case of the registration effected by the Company pursuant to this Agreement, the Company shall, upon reasonable request, inform Investor as to the status of such registration. At its expense, the Company shall:

 

(a)               except for such times as the Company is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to keep such registration, and any qualification, exemption or compliance under state securities laws which the Company determines to obtain, continuously effective with respect to Investor, and to keep the applicable Registration Statement or any subsequent shelf registration statement free of any material misstatements or omissions, until the earlier of the following: (i) Investor ceases to hold any Notes or Conversion Shares, (ii) the date all Conversion Shares held by or issuable to Investor may be sold without restriction under Rule 144, including without limitation, any volume and manner of sale restrictions which may be applicable to affiliates under Rule 144 and without the requirement for the Company to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), and (iii) two years from the Effectiveness Date of the Registration Statement;

 

(b)              advise Investor within five (5) Business Days (i) when a Registration Statement or any post-effective amendment thereto has become effective; (ii) of the issuance by the SEC of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for such purpose; (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Conversion Shares included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (iv) subject to the provisions in this Agreement, of the occurrence of any event that requires the making of any changes in any Registration Statement or prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading.

 

(c)              Notwithstanding anything to the contrary set forth herein, the Company shall not, when so advising Investor of such events, provide Investor with any material, nonpublic information regarding the Company other than to the extent that providing notice to Investor of the occurrence of the events listed in (i) through (iv) above constitutes material, nonpublic information regarding the Company;

 

(d)              use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable;

 

(e)               upon the occurrence of any event contemplated in Section 9.3(b)(iv), except for such times as the Company is permitted hereunder to suspend, and has suspended, the use of a prospectus forming part of a Registration Statement, the Company shall use its commercially reasonable efforts to as soon as reasonably practicable prepare a post-effective amendment to such Registration Statement or a supplement to the related prospectus, or file any other required document so that, as thereafter delivered to purchasers of the Conversion Shares included therein, such prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and

 

 

(f)              use its commercially reasonable efforts to cause all Conversion Shares held by the Investor to be listed on each securities exchange or market, if any, on which the Common Shares of the Company are then listed.

 

9.4           Notwithstanding anything to the contrary in this Agreement, the Company shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require Investor not to sell under the Registration Statement or to suspend the effectiveness thereof, if (x) the use of the Registration Statement would require the inclusion of financial statements that are unavailable for reasons beyond the Company’s control, (y) the Company determines that in order for the Registration Statement to not contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act, or if (z) such filing or use could materially affect a bona fide business or financing transaction of the Company or its Subsidiaries or would require additional disclosure by the Company in the Registration Statement of material information that the Company has a bona fide business purpose for keeping confidential (each such circumstance, a “Suspension Event”); provided, however, that the Company may not delay or suspend the Registration Statement on more than three occasions or for more than ninety (90) consecutive calendar days during any twelve (12) month period (or for such shorter periods as may be mutually agreed in the PIPE Subscription Agreement between the Company and the Investor consistent with the subscription terms of the other PIPE investors in connection with the Business Combination). Upon receipt of any written notice from the Company of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, Investor agrees that (i) it will immediately discontinue offers and sales of the Conversion Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until Investor receives copies of a supplemental or amended prospectus (which the Company agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Company that it may resume such offers and sales, and (ii) it will maintain the confidentiality of any information included in such written notice delivered by the Company unless otherwise required by law or subpoena. If so directed by the Company, Investor will deliver to the Company or, in Investor’s sole discretion, destroy, all copies of the prospectus covering the Shares in Investor’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Shares shall not apply (i) to the extent Investor is required to retain a copy of such prospectus (a) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (b) in accordance with a bona fide pre-existing document retention policy or (ii) to copies stored electronically on archival servers as a result of automatic data back-up. The Company agrees that any time transfer is permitted pursuant to Rule 144 and Investor is unable to sell under the Registration Statement, Company will take commercially reasonable efforts to remove the restrictive legend from the Conversion Shares.

 

 

10.           Indemnification.

 

10.1         The Company (in such capacity, the “Indemnifying Party”) shall indemnify, defend and hold harmless the Investor (to the extent a seller under the Registration Statement) and its Affiliates, directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents (each, in such capacity, an “Indemnified Party”) from and against any and all losses, damages, liabilities, claims, proceedings, costs and expenses (including the fees, disbursements and other charges of counsel reasonably incurred by the Indemnified Party in any action between the Company and the Indemnified Party or between the Indemnified Party and any third party, in connection with any investigation or evaluation of a claim or otherwise) (collectively, “Losses”) that arise out of, relate to or are based upon (a) any untrue or alleged untrue statement of a material fact contained in the SEC Reports, any Registration Statement (which, for purposes of this Section 10, shall include any registration statement in respect of which an Investor exercises piggyback rights pursuant to Section 9.2 hereof), any prospectus included in the Registration Statement, or any form of prospectus or preliminary prospectus relating to such Registration Statement, any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, or (b) any violation or alleged violation by the Company of the Securities Act, Exchange Act or any state securities law or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement (each a “Breach”); provided that the Investor will not be liable to the Indemnified Parties or their respective officers, directors, employees, agents or their respective Affiliates for any portion of such Losses (i) resulting from the Indemnified Party or their respective officers’, directors’, employees’, agents’ or Affiliates’ gross negligence or willful misconduct as determined by a final non-appeal judgment of a court of competent jurisdiction; (ii) if such untrue statements, alleged untrue statements, omissions or alleged omissions are based upon information regarding the Investor furnished in writing to the Company by or on behalf of the Investor expressly for use therein or otherwise made in reliance upon and in conformity with information furnished by the Investor, (iii) attributable to a settlement of any Losses if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld, conditioned or delayed); (iv) in connection with any failure of such person to deliver or cause to be delivered a prospectus made available by the Company in a timely manner, (v) as a result of offers or sales effected by or on behalf of any person by means of a freewriting prospectus (as defined in Rule 405) that was not authorized in writing by the Company, or (vi) in connection with any offers or sales effected by or on behalf of the Investor in violation of Section 9.4 of this Agreement. The Company shall notify the Investor promptly of the institution, threat or assertion of any proceeding arising from or in connection with the transactions contemplated by this Section 10 of which the Company is aware.

 

 

10.2         The Investor (in such capacity, the “Indemnifying Party”) shall indemnify and hold harmless the Company, its directors, officers, agents and employees, and each person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) (in such capacity, the “Indemnified Parties”), to the fullest extent permitted by applicable law, from and against all Losses (including the fees, disbursements and other charges of counsel reasonably incurred by the Indemnified Party), as incurred, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any prospectus included in the Registration Statement, or any form of prospectus or preliminary prospectus relating to such Registration Statement, or in any amendment or supplement thereto, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading to the extent, but only to the extent, that such untrue statements or omissions are based upon information regarding the Investor furnished in writing to the Company by the Investor expressly for use therein; provided, however, that the indemnification contained in this Section 10 shall not apply to amounts paid in settlement of any Losses if such settlement is effected without the consent of the Investor (which consent shall not be unreasonably withheld, conditioned or delayed). In no event shall the liability of the Investor be greater in amount than the dollar amount of the net proceeds received by the Investor upon the sale of the Registrable Securities giving rise to such indemnification obligation. The Investor shall notify the Company promptly of the institution, threat or assertion of any proceeding arising from or in connection with the transactions contemplated by this Section 10.2 of which the Investor is aware.

 

10.3         

 

(a)               The Indemnified Party shall give written notice to the Indemnifiying Party promptly after receiving written notice of any action, lawsuit, proceeding, investigation or other claim against it (if by a third party) or discovering the Loss, obligation or facts giving rise to such claim for indemnification, describing the claim, the amount thereof (if known and quantifiable), and the basis thereof; provided that the failure to so notify the Indemnifying Party promptly shall not relieve the Indemnifying Party of its liability hereunder except to the extent such failure shall have materially prejudiced the Indemnifying Party . In that regard, if any action, lawsuit, proceeding, investigation or other claim shall be brought or asserted by any third party that, if adversely determined, would entitle the Indemnified Party to indemnity pursuant to this Section 10, the Indemnified Party shall notify promptly the Indemnifying Party of the same in writing, specifying in reasonable detail the basis of such claim, and the Indemnifying Party shall be entitled to control the defense of such action, lawsuit, proceeding, investigation or other claim giving rise to the Indemnified Party’s claim for indemnification at the Indemnifying Party’s expense, and at the Indemnifying Party’s option (subject to the limitations set forth below) shall be entitled to appoint lead counsel of such defense with a reputable counsel reasonably acceptable to the Indemnified Party; provided that, in the event that the Indemnifying Party elects to control such defense, the Indemnifying Party shall be deemed to have agreed to be fully responsible (with no reservation of rights) for all Losses relating to such claim, subject to the limitations set forth in this Section 10. Within thirty (30) days after receiving written notice of an indemnification claim, the Indemnifying Party shall give written notice to the Indemnified Party stating whether it disputes all or any portion of the claim. If the Indemnifying Party fails to give written notice to the Indemnified Party that it disputes an indemnification claim within thirty (30) days after receipt of notice thereof, the Indemnifying Party shall be deemed to have accepted and agreed to the claim, which shall become immediately due and payable subject to the limitations set forth in this Section 10.

 

 

(b)              If the Indemnifying Party exercises the right to control the defense of any third-party claim as provided above, then the Indemnified Party shall have the right to employ its own counsel in any such action and to participate in the defense thereof at its own expense, unless the Indemnifying Party has specifically authorized the employment of such counsel in writing, in which case the fees and expenses of such counsel shall be borne by the Indemnifying Party. Similarly, if the Indemnified Party controls the defense of any such claim, then the Indemnifying Party shall have the right to employ its own counsel in any such action and to participate in the defense thereof at its own expense. If the Indemnified Party reasonably determines that there exists a conflict of interest that would make it inappropriate for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled to retain its own counsel in each jurisdiction for which the Indemnified Party reasonably determines counsel is required, at the expense of the Indemnifying Party. In the event that the Indemnifying Party exercises the right to control the defense of any third-party claim as provided above, then the Indemnified Party shall cooperate with the Indemnifying Party in such defense. Similarly, in the event that the Indemnified Party is, directly or indirectly, controlling the defense of any such claim, then the Indemnifying Party shall cooperate with the Indemnified Party in such defense. The Indemnifying Party shall obtain the prior written consent of the Indemnified Party (such consent not to be unreasonably withheld, delayed or conditioned) before entering into any settlement of a claim or ceasing to defend such claim.

 

10.4         Any Indemnified Party’s right to indemnification shall not be affected or deemed waived by reason of any investigation made by or on behalf of any Indemnified Party or by reason of the fact that the Indemnified Party knew or should have known of any such potential Breach.

 

10.5         Upon the earlier to occur of (i) the agreement of the Indemnifying Party to pay the amount claimed by an Indemnified Party in a claim notice, or (ii) a final determination of a court of competent jurisdiction as provided for in Section 12.2 that any amount is payable by the Indemnifying Party hereunder, the Indemnifying Party shall pay the Indemnified Party as soon as commercially practicable but in no event more than five (5) Business Days thereafter.

 

10.6        Exclusive Remedy. Nothing contained in this Agreement shall limit a Party’s right to pursue (i) equitable remedies, including, without limitation, injunctive relief and specific performance, or (ii) any rights and remedies of such Party under the Transaction Documents.

 

11.           Termination.

 

11.1         This Agreement may be terminated prior to the Closing as follows:

 

(a)               by either the Company, on the one hand, or the Investor, on the other hand, if the Closing has not occurred by January 31, 2022;

 

(b)              by the Investor, if the Company has breached any of its representations, warranties, covenants or agreements contained in this Agreement, which breach cannot be cured or, if it is capable of being cured, is not cured within 30 days after the Company has been notified in writing of the same;

 

 

(c)              by the Company, if the Investor has breached any of its representations, warranties, covenants or agreements contained in this Agreement, which breach cannot be cured or, if capable of being cured, is not cured within 30 days after the Investor has been notified in writing of the same; or

 

(d)              by mutual agreement in writing between the Company, on the one hand, and the Investor, on the other hand.

 

provided, however that any right to terminate this Agreement pursuant to clauses (a), (b) or (c) of this Section 11.1 shall not be available to any party whose failure to fulfill any material obligation under this Agreement has been the primary cause of, or primarily resulted in, the failure of the Closing to have occurred on or before such date.

 

11.2         Survival. If this Agreement is terminated in accordance with Section 11.1, it shall become void and of no further force and effect, except for the provisions of Section 8.5 (Confidentiality), Section 10 (Indemnification), this Section 11, Section 12.1 (Governing Law) and Section 12.2 (Jurisdiction); provided, however, that such termination, unless otherwise agreed to by the Investor, on the one hand, or the Company, on the other hand, shall be without prejudice to the rights or obligations of any party in respect of a breach of this Agreement prior to such termination.

 

12.           Miscellaneous.

 

12.1         Governing Law. This Agreement shall be governed in all respects by the Laws of the State of New York without regard to any choice of Laws or conflict of Laws provisions that would require the application of the Laws of any other jurisdiction.

 

12.2         Jurisdiction. Each of the parties irrevocably agrees that any legal action or proceeding with respect to this Agreement, or for recognition and enforcement of any judgment in respect of this Agreement brought by the other party or its successors or assigns, shall be brought and determined non-exclusively in any state or federal court located in the City and County of New York. Each of the parties hereby irrevocably submits with regard to any such action or proceeding to the personal jurisdiction of the aforesaid courts. Each of the parties hereby irrevocably waives, and agrees not to assert by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve process, (b) any claim of sovereign immunity with respect to itself or its property and (c) any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement may not be enforced in or by such courts. Each party hereby consents to service being made through the notice procedures set forth in Section 12.7 and agrees that service of any process, summons, notice or document by registered mail (return receipt requested and first-class postage prepaid) to the respective addresses set forth in Section 12.7 shall be effective service of process for any suit or proceeding in connection with this Agreement. Service shall be deemed complete upon receipt by addressee. EACH OF THE PARTIES KNOWINGLY, INTENTIONALLY AND VOLUNTARILY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

 

12.3         Remedies. The parties agree that irreparable damage would occur in the event that the Company does not perform the provisions of this Agreement in accordance with its specified terms or otherwise breach such provisions. Accordingly, the parties acknowledge and agree that the Investor shall be entitled to seek an injunction, specific performance and other equitable relief to prevent breaches of this Agreement by the Company and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled at law or in equity. The Company agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief to the Investor on the basis that (a) the Investor has an adequate remedy at law or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity. In seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, the Investor shall not be required to provide any bond or other security in connection with any such order or injunction. The remedies available to the Investor pursuant to this Section 12.3 shall be in addition to any other remedy to which it is entitled at law or in equity, and the election to pursue an injunction or specific performance shall not restrict, impair or otherwise limit the Investor from, in the alternative, seeking to terminate this Agreement and collect a remedy at law. Notwithstanding anything in this Agreement to the contrary, the Company shall not pursue or be entitled to a grant of specific performance under this Agreement.

 

12.4         No Third-Party Beneficiaries. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties any rights, remedies, obligations or liabilities under or by reason of this Agreement, and no Person that is not a party to this Agreement (including any partner, member, stockholder, director, officer, employee or other beneficial owner of any party, in its own capacity as such or in bringing a derivative action on behalf of a party) shall have any standing as third-party beneficiary with respect to this Agreement or the transactions contemplated by this Agreement.

 

12.5         No Personal Liability of Directors, Officers, Owners, Etc. No director, officer, employee, incorporator, stockholder, managing member, member, general partner, limited partner, principal or other agent of any of the parties shall have any liability for any obligations of such party under this Agreement or for any claim based on, in respect of or by reason of the respective obligations of such party under this Agreement. Each party hereby waives and releases all such liability. This waiver and release is a material inducement to each party’s entry into this Agreement.

 

12.6         Entire Agreement. This Agreement and the other Transaction Documents, including the Notes, constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof.

 

12.7         Notices. Except as otherwise provided in this Agreement, all notices, requests, claims, demands, waivers and other communications required or permitted under this Agreement shall be in writing and shall be mailed by reliable overnight delivery service or delivered by hand, facsimile or messenger, addressed as set forth in Schedule 3, or in any such case to such other address, facsimile number or telephone as either party may, from time to time, designate in a written notice given in a like manner. Notices shall be deemed given when actually delivered by overnight delivery service, hand or messenger, or when received by facsimile if promptly confirmed.

 

 

12.8          Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement shall impair any such right, power, or remedy of such party, nor shall it be construed to be a waiver of or acquiescence to any breach or default, or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default. All remedies, either under this Agreement or by Law or otherwise afforded to any holder, shall be cumulative and not alternative.

 

12.9          Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only if such amendment or waiver is in writing and signed, in the case of an amendment, by the Company and the Investor or, in the case of a waiver, by the party against whom the waiver is to be effective. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding (including securities into which such securities are convertible), each future holder of all such securities and the Company.

 

12.10       Counterparts. This Agreement may be executed in any number of counterparts and signatures may be delivered by facsimile or in electronic format, each of which may be executed by less than all the parties, each of which shall be enforceable against the parties actually executing such counterparts and all of which together shall constitute one instrument.

 

12.11       Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement and the balance of this Agreement shall be enforceable in accordance with its terms.

 

[The remainder of this page has been intentionally left blank.]

 

 

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

 

	COMPANY:
	TH INTERNATIONAL LIMITED

 

	By:
	Name:
	Title:

 

[Signature page to Note Purchase Agreement]

 

 

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

	INVESTOR:
	[SONA CREDIT MASTER FUND LIMITED

 

	By:
	Name:
	Title:]

 

	[SUNRISE PARTNERS LIMITED PARTNERSHIP
	By: Paloma Partners Management Company, acting as its general partner

 

	By:
	Name:
	Title:]

 

[Signature page to Note Purchase Agreement]

 

 

Exhibit A

 

Form of Convertible Note

 

 

Exhibit B

 

Form of Public Note Indenture

 

 

Exhibit C

 

Form of Maples & Calder (Cayman) LLP Opinion

 

 

Exhibit D

 

Form of PIPE Subscription Agreement

 

 

Schedule 1

 

Investor Schedule

 

Name		Principal Amount of Notes to be Purchased on Closing
[Sona Credit Master Fund Limited] [Sunrise Partners Limited Partnership acting by Paloma Partners Management Company in the capacity as its general partner]		[  ]

 

 

 

Schedule 2

 

List of Knowledge Individuals

 

Yongchen Lu (卢永臣);

Bin He (何滨);

Peter Yu;

Gregory Armstrong; and

Paul Hong.

 

[Signature page to Note Purchase Agreement]

 

 

Schedule 3

 

Addresses for Notice

 

if to the Company:

 

TH International Limited
2501 Central Plaza
227 Huangpi North Road
Shanghai
People’s Republic of China 200003

 

c/o Cartesian Capital Group LLC

505 5th Avenue, 15th Floor

Attn: Peter Yu, Gregory Armstrong

E-mail: peter.yu@cartesiangroup.com; gregory.armstrong@cartesiangroup.com

 

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

 

Kirkland & Ellis

26th Floor, Gloucester Tower, The Landmark

15 Queen’s Road Central, Hong Kong

Attn: Daniel Dusek; Joseph Raymond Casey; Ram Narayan

E-mail: daniel.dusek@kirkland.com; joseph.casey@kirkland.com; ram.narayan@kirkland.com

 

if to the Investor:

[Sona Credit Master Fund Limited

Address: 20 St James's Street, London, SW1A 1ES
Email: compliance@sona-am.com]

 

[OR]

 

[Sunrise Partners Limited Partnership

Attention: Doug Ambrose

Address: Two American Lane, Greenwich, CT 06831

Phone: 203-861-8410
Email: DAmbrose@paloma.com]

 

[Signature page to Note Purchase Agreement]

 

Exhibit 10.13

 

CONFIDENTIAL

 

SUBSCRIPTION AGREEMENT

 

This Subscription Agreement (this “Subscription Agreement”) is entered into this [●] day of March, 2022, by and among TH International Limited, an exempted company incorporated under the laws of the Cayman Islands with the registered address at the office of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands (the “Issuer”), and the undersigned subscriber (“Subscriber”).

 

Whereas, on August 13, 2021, the Issuer entered into that certain Agreement and Plan of Merger (as may be amended or supplemented from time to time, and including all schedules and exhibits thereto, the “Merger Agreement”), among the Issuer, Silver Crest Acquisition Corporation, a Cayman Islands exempted company (“SPAC”), and Miami Swan Ltd, a Cayman Islands exempted company and wholly-owned subsidiary of the Issuer (“Merger Sub”), pursuant to which, on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into SPAC, with SPAC surviving as a wholly-owned subsidiary of the Issuer (the “First Merger”), and immediately following the consummation of the First Merger and as part of the same overall transaction, the surviving entity of the First Merger will merge with and into the Issuer (the “Second Merger” and, together with the First Merger, the “Mergers”), with the Issuer surviving the Second Merger. All capitalized terms used but not defined in this Subscription Agreement shall have the meanings ascribed to such terms in the Merger Agreement;

 

Whereas, prior to the consummation of the Mergers, the Issuer shall effect the Recapitalization;

 

Whereas, in connection with, and contingent on the closing of, the Mergers, on the terms and subject to the conditions set forth in this Subscription Agreement, Subscriber desires to subscribe for and purchase, following the Recapitalization, from the Issuer that number of Company Ordinary Shares (the “Company Shares”), set forth on the signature page hereto (the “Acquired Shares”) for a purchase price of $10.00 per share (the “Share Purchase Price”), and an aggregate purchase price set forth on the signature page hereto (the “Purchase Price”), and the Issuer desires to issue and sell to Subscriber on the Closing Date (defined below) the Acquired Shares in consideration of the payment of the Purchase Price by or on behalf of Subscriber to the Issuer at or prior to the Closing Date;

 

Whereas, Issuer and Subscriber are executing and delivering this Subscription Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933 (codified at 15 U.S.C. Sec. 77a et seq., and hereinafter the “Securities Act”);

 

Whereas, in connection with the Mergers, certain other “qualified institutional buyers” (as defined in Rule 144A under the Securities Act) and “accredited investors” (within the meaning of Rule 501(a) under the Securities Act) have entered into or may enter into subscription agreements (the “Other Subscription Agreements”) with the Issuer from time to time prior to the closing of the Mergers, contingent on the closing of the Mergers, with substantially similar terms to this Subscription Agreement, pursuant to which such other investors have agreed or will agree to subscribe for and purchase, and the Issuer has agreed or will agree to issue and sell to such other investors (the “Other Subscribers” and, together with Subscriber, the “Aggregate Subscribers”), on the Closing Date, Company Shares at the Share Purchase Price; and

 

Whereas, in order to induce the Subscriber to enter into this Agreement, the Issuer agrees that it will, substantially concurrently with and contingent upon the Closing (as defined below), issue to each of such Subscribers who agrees to pay the Purchase Price of at least $10,000,000 such number of Company Shares and Company Warrants additionally as set forth on the signature page of such Subscriber to its Subscription Agreement, and, for the avoidance of doubt, such additional Company Shares and Company Warrants shall be deemed to constitute a portion of the Acquired Shares but shall not result in any adjustment to the Share Purchase Price.

 

Now, Therefore, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

 

1.                   Subscription. Subject to the terms and conditions hereof, at the Closing (defined below), Subscriber hereby agrees to subscribe for and purchase, and the Issuer hereby agrees to issue and sell to Subscriber, upon the payment of the Purchase Price, the Acquired Shares (including that number of Company Shares and Company Warrants as set forth on the signature page of such Subscriber) (such subscription and issuance, the “Subscription”).

 

 

2.                   Closing.

 

(a)                Subject to the satisfaction or waiver of the conditions set forth in Section 2(e) and contingent upon the subsequent occurrence of the closing of the Mergers, the closing of the Subscription contemplated hereby (the “Closing”) shall occur on the date (the “Closing Date”) of, and immediately prior to or substantially concurrent with (and subject to), the closing of the Mergers. For the avoidance of doubt, once the Closing occurs, if the closing of the Mergers does not occur on or about the timing of the Closing, the Closing shall be deemed as never have occurred ab initio.

 

(b)                Not less than five (5) business days prior to the scheduled Closing Date (the “Scheduled Closing Date”), the Issuer shall provide or cause to be delivered written notice to the Subscriber (the “Closing Notice”) of the Scheduled Closing Date. Subscriber shall deliver to the Issuer (A) at least three (3) business days prior to the Scheduled Closing Date, to be held on behalf of Subscriber until the Closing in an escrow account by an escrow agent selected by the Company prior to the date hereof, the Purchase Price for the Acquired Shares by wire transfer of United States dollars in immediately available funds to the account specified by the Issuer in the Closing Notice and (B) such information as is reasonably requested in the Closing Notice in order for the Issuer to issue the Acquired Shares to Subscriber at the Closing, including, without limitation, the legal name of the person in whose name such Acquired Shares are to be issued and a duly executed Internal Revenue Service Form W-9 or W-8, as applicable. On the Closing Date, the Issuer shall issue the Acquired Shares to Subscriber and cause the Acquired Shares to be delivered in book entry form and registered in its share register or register of members (as applicable) in the name of Subscriber or the name of such other person notified by Subscriber to the Issuer prior to Closing, as applicable, and the Purchase Price shall be released from escrow automatically and without further action by the Issuer or Subscriber; provided, however, that the Issuer’s obligation to issue the Acquired Shares to the Subscriber is contingent upon the Issuer having received the Purchase Price in full accordance with this Section 2.

 

[In place of 2(b) above, the below will be included for mutual funds:

 

(b)                 Not less than five (5) business days prior to the scheduled Closing Date (the “Scheduled Closing Date”), the Issuer shall provide or cause to be delivered written notice to the Subscriber (the “Closing Notice”) of the Scheduled Closing Date. On the Scheduled Closing Date, Subscriber shall deliver to Issuer (A) the Purchase Price by wire transfer of United States dollars in immediately available funds to the account specified by the Issuer in the Closing Notice and (B) such information as is reasonably requested in the Closing Notice in order for the Issuer to issue the Acquired Shares to Subscriber at the Closing, including, without limitation, the legal name of the person in whose name such Acquired Shares are to be issued and a duly executed Internal Revenue Service Form W-9 or W-8, as applicable. On the Closing Date, and prior to the release of its Purchase Price by Subscriber, the Issuer shall issue the Acquired Shares to Subscriber against payment of the Purchase Price and cause the Acquired Shares to be delivered in book entry form and registered in its share register or register of members (as applicable) in the name of Subscriber or the name of such other person notified by Subscriber to the Issuer prior to Closing, as applicable, and will provide to Subscriber evidence of such issuance from the Issuer’s transfer agent (the “Transfer Agent”); provided that, if Subscriber fails to deliver the Purchase Price within one (1) business day after the Closing Date, such Acquired Shares shall be repurchased for nil consideration, and book-entries for the Acquired Shares shall be made in the Issuer’s share register or register of members (as applicable) to record the repurchase and cancellation of the Acquired Shares for nil consideration.]

 

(c)                 In the event (i) the Closing does not occur within three (3) business days of the Scheduled Closing Date; or (ii) the Closing occurs but the closing of the Mergers does not occur on or about the timing of the Closing, the Issuer shall promptly (but not later than two (2) business days thereafter) return the Purchase Price so delivered by Subscriber to the Issuer by wire transfer of United States dollars in immediately available funds to the account specified by Subscriber, and, to the extent that any Acquired Shares have been delivered to Subscriber, such Acquired Shares shall be deemed repurchased, and book-entries for the Acquired Shares shall be deemed cancelled and the Issuer’s share register or register of members (as applicable) shall be updated to record the repurchase and cancellation of the Acquired Shares; provided that, unless this Subscription Agreement has been terminated pursuant to Section 7 hereof, such return of funds shall not terminate this Subscription Agreement or relieve the Subscriber of its obligation to purchase the Acquired Shares at the Closing following the Issuer’s delivery to Subscriber of a new Closing Notice advising of a new Scheduled Closing Date. For purposes of this Subscription Agreement, “business day” shall mean a day, other than a Saturday, Sunday or other day on which commercial banks in New York City, the Cayman Islands, Hong Kong or the PRC are authorized or required by law to close.

 

 

(d)                The Issuer shall issue to Subscriber the Acquired Shares against and upon payment by the Subscriber pursuant to Section 2(b), free and clear of any liens or other restrictions whatsoever (other than those arising under this Subscription Agreement or applicable state or federal securities laws), in the name of Subscriber or the name of such other person notified by Subscriber to the Issuer prior to the Closing, as applicable. Each book entry for the Acquired Shares shall contain a notation in substantially the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.

 

(e)                 The Closing shall be subject to the satisfaction on the Closing Date, or the waiver by the party or parties hereto that are entitled to waive such condition pursuant to Section 2(f) below, of each of the following conditions:

 

(i)                  solely with respect to Subscriber’s obligation to close, the representations and warranties made by the Issuer in this Subscription Agreement (taking into account the complete legal effect to all the qualifications as to “materiality,” “in all material respects,” “Material Adverse Effect” or similar qualifiers contained in such representations and warranties) shall be true and correct in all respects at and as of the Closing Date (other than representations and warranties that speak as of an earlier date, in which case they shall have been true and correct in all respects as of such earlier date);

 

(ii)                solely with respect to the Issuer’s obligation to close, the representations and warranties made by Subscriber in this Subscription Agreement (without giving effect to any qualification as to “materiality,” “in all material respects,” “material adverse effect” or similar qualifiers contained in such representations and warranties) shall be true and correct in all respects at and as of the Closing Date (other than representations and warranties that speak as of an earlier date, in which case they shall have been true and correct in all respects as of such earlier date), except to the extent that the failure of such representations and warranties to be so true and correct would not reasonably be expected to prevent, materially delay, or materially impair the ability of Subscriber to consummate the Closing;

 

(iii)              the Issuer shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing, except where the failure of such performance, satisfaction or compliance would not or would not reasonably be expected to prevent, materially delay, or materially impair the ability of the Issuer to consummate the Closing;

 

(iv)               the Subscriber shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing, except where the failure of such performance, satisfaction or compliance would not or would not reasonably be expected to prevent, materially delay, or materially impair the ability of the Subscriber to consummate the Closing;

 

(v)                the closing of the Mergers shall occur pursuant to the terms of the Merger Agreement immediately after or substantially concurrent with the Closing; and

 

(vi)               no government authorities of competent jurisdiction shall have issued, promulgated, enforced or entered any law, regulations, judgment, decree, injunction, ruling or order that enjoins or prohibits the consummation of the Subscription, or initiated or threatened in writing any investigation, action, suit, claim or other proceeding aimed at enjoining or prohibiting the consummation of the Subscription.

 

 

(f)                 The conditions provided in Sections 2(e)(i) and 2(e)(iii) may be waived entirely or partly by the Subscriber in its sole discretion; the conditions provided in Sections 2(e)(ii) and 2(e)(iv) may be waived entirely or partly by the Issuer in its sole discretion; and the conditions provided in Sections 2(e)(v) and 2(e)(vi) may be waived only by both the Subscriber and the Issuer by mutual agreement in writing.

 

(g)                At or prior to the Closing, the parties hereto shall execute and deliver such additional documents and take such additional actions as the parties reasonably and mutually may deem to be practical and necessary in order to consummate the Subscription as contemplated by this Subscription Agreement.

 

3.                   Issuer Representations And Warranties. The Issuer represents and warrants to Subscriber that:

 

(a)                The Issuer is an exempted company duly incorporated, is validly existing and is in good standing under the laws of the Cayman Islands, with corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver and perform its obligations under this Subscription Agreement.

 

(b)                As of the Closing Date, the Acquired Shares have been duly authorized by the Issuer and, when issued and delivered to the Subscriber against full payment for the Acquired Shares in accordance with the terms of this Subscription Agreement and registered in the Issuer’s share register or register of members (as applicable), the Acquired Shares will be validly issued, fully paid and non-assessable, free and clear of any liens or other restrictions whatsoever (other than those arising under this Subscription Agreement or applicable state or federal securities laws) and will not have been issued in violation of or subject to any preemptive or similar rights created under the Issuer’s memorandum and articles of association or under the laws of the Cayman Islands.

 

(c)                This Subscription Agreement has been duly authorized, executed and delivered by the Issuer and, assuming that this Subscription Agreement constitutes the valid and binding agreement of the Subscriber, this Subscription Agreement is enforceable against the Issuer in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting or relating to creditors’ rights generally and subject, as to enforceability, to general principles of equity, whether such enforceability is considered in a proceeding in equity or at law.

 

(d)                The issuance and sale of the Acquired Shares and the compliance by the Issuer with all of the provisions of this Subscription Agreement and the consummation of the transactions herein will be done in accordance with The Nasdaq Stock Market LLC (“Nasdaq”) marketplace rules, and the consummation of the other transactions contemplated herein, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Issuer pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer is a party or by which the Issuer is bound or to which any of the property or assets of the Issuer is subject; (ii) the organizational documents of the Issuer; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency, taxing authority or regulatory body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that, in the cases of clauses (i) and (iii), would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, properties, financial condition or results of operations of the Issuer and its subsidiaries taken as a whole (a “Material Adverse Effect”) or materially affect the validity or enforceability of the Acquired Shares or the ability or legal authority of the Issuer to comply in all material respects with this Subscription Agreement.

 

(e)                The Issuer is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other United States federal, state, local or other governmental authority, self-regulatory organization or other person in connection with the execution, delivery and performance by the Issuer of this Subscription Agreement (including, without limitation, the issuance of the Acquired Shares), other than (i) the filing with the United States Securities and Exchange Commission (the “Commission”) of the Registration Statement (as defined below), (ii) the filings required by applicable state or federal securities laws, (iii) the filings required in accordance with Section 10(n), (iv) those required by Nasdaq, including with respect to obtaining shareholder approval, and (v) any consent, waiver, authorization or order of, notice to, or filing or registration, the failure of which to obtain would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect.

 

 

(f)                 There is no (i) investigation, action, suit, claim or other proceeding, in each case by or before any governmental authority pending, or, to the knowledge of the Issuer as of the date of this Subscription Agreement, threatened in writing against the Issuer that affects or would reasonably be expected to affect the Issuer’s ability to consummate the transactions contemplated by this Subscription Agreement, or (ii) judgment, decree, injunction, ruling or order of any governmental entity or arbitrator outstanding against the Issuer  that affects or would be reasonably likely to have, individually or in the aggregate, a material adverse effect on the validity of the Acquired Shares or the legal authority of the Issuer to enter into and perform its obligations under this Subscription Agreement.

 

(g)               The Issuer is in compliance with all applicable laws, except where such non-compliance would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the validity of the Acquired Shares or the legal authority of the Issuer to enter into and perform its obligations under this Subscription Agreement. The Issuer has not received any written communication from a governmental authority that alleges that the Issuer is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the validity of the Acquired Shares or the legal authority of the Issuer to enter into and perform its obligations under this Subscription Agreement.

 

(h)                Assuming the accuracy of Subscriber’s representations and warranties set forth in Section 4, no registration under the Securities Act is required for the offer and sale of the Acquired Shares by the Issuer to Subscriber in the manner contemplated by this Subscription Agreement.

 

(i)                 Neither the Issuer nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) in connection with any offer or sale of the Acquired Shares.

 

(j)                 Neither the Issuer, nor any person acting on its behalf has, directly or indirectly, made any offers or sales of any Issuer security or solicited any offers to buy any security under circumstances that would adversely affect reliance by the Issuer on Section 4(a)(2) of the Securities Act for the exemption from registration for the transactions contemplated hereby or would require registration of the issuance of the Acquired Shares.

 

(k)                Except as provided in this Subscription Agreement, the Other Subscription Agreements, and the agreements in relation to the investment of $55,000,000 by a certain asset management fund and/or its Affiliates in the Company by way of subscribing for certain convertible debentures of the Company and Company Ordinary Shares, none of the Issuer, its subsidiaries or any of their affiliates, nor any person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the issuance of any of the Acquired Shares under the Securities Act, whether through integration with prior offerings pursuant to Rule 502(a) of the Securities Act or otherwise.

 

(l)                 Except for placement fees payable to UBS Securities LLC, Merrill Lynch (Asia Pacific) Limited and Inte Securities LLC, in their capacities as placement agents for the offer and sale of the Acquired Shares (in such capacities, the “Placement Agents”), the Issuer has not paid, and is not obligated to pay, any brokerage, finder’s or other fee or commission in connection with its issuance and sale of the Acquired Shares, including, for the avoidance of doubt, any fee or commission payable to any shareholder or affiliate, as defined in Rule 144 under the Securities Act (“Affiliate”), of the Issuer.

 

(m)              No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”) is applicable to the Issuer or, to the Issuer’s knowledge, any Issuer Covered Person, except for a Disqualification Event as to which Rule 506(d)(2)(ii-iv) or (d)(3), is applicable. “Issuer Covered Person” means, with respect to the Issuer as an “issuer” for purposes of Rule 506 promulgated under the Securities Act, any person listed in the first paragraph of Rule 506(d)(1). The Issuer represents that it has exercised reasonable care to determine the accuracy of the representation made by the Issuer in this paragraph.

 

 

(n)                The Other Subscription Agreements have not been and shall not be amended in any material respect following the date of such Other Subscription Agreement and reflects or shall reflect the same Share Purchase Price and other material terms and conditions with respect to the purchase of the Acquired Shares that are no more favorable to such subscriber thereunder in any material respect than the terms of this Subscription Agreement, other than terms particular to the regulatory requirements applicable to such investor or its affiliates or related funds or are otherwise subject to regulations related to the timing of funding and the issuance of the related Acquired Shares.

 

(o)                The Issuer’s and the SPAC’s public reports filed with the Commission (collectively, the “Exchange Act Reports”) did not when filed, and taken as a whole and as amended to the date hereof, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading and such Exchange Act Reports complied in all material respects with the requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations of the Commission promulgated thereunder. Each of the Issuer and the SPAC has timely filed each report, statement, schedule, prospectus, and registration statement that it was required to file with the Commission since its inception. There are no material outstanding or unresolved comments in comment letters from the Commission Staff with respect to any of the Issuer’s or the SPAC’s filings with the Commission. The financial statements of each of the Issuer and the SPAC included in the Exchange Act Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing and fairly present in all material respects the financial position of the Issuer and the SPAC (as the case may be) as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments. A copy of each Exchange Act Report is available to the Subscriber via the Commission’s EDGAR system.

 

4.                   Subscriber Representations And Warranties. Subscriber represents and warrants that:

 

(a)                Subscriber has been duly formed or incorporated and is validly existing in good standing under the laws of its jurisdiction of incorporation or formation, with the requisite entity power and authority to enter into, deliver and perform its obligations under this Subscription Agreement.

 

(b)               This Subscription Agreement has been duly authorized, executed and delivered by Subscriber, and assuming that this Subscription Agreement constitutes the valid and binding agreement of the Issuer, this Subscription Agreement is the valid and binding obligation of Subscriber, enforceable against Subscriber in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting or relating to creditors’ rights generally and subject, as to enforceability, to general principles of equity, whether such enforceability is considered in a proceeding in equity or at law.

 

(c)                The execution and delivery by Subscriber of this Subscription Agreement, and the performance by Subscriber of its obligations under this Subscription Agreement, including the purchase of the Acquired Shares and the consummation of the other transactions contemplated herein, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien or encumbrance upon any of the property or assets of Subscriber pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Subscriber is a party or by which Subscriber is bound or to which any of the property or assets of Subscriber is subject; (ii) the organizational documents of Subscriber; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over Subscriber or any of Subscriber’s properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a material adverse effect on the legal authority of Subscriber to comply in all material respects with the terms of this Subscription Agreement.

 

(d)                Subscriber, or each of the funds managed by or affiliated with Subscriber for which Subscriber is acting as nominee, as applicable, (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act), an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act), in each case, satisfying the applicable requirements set forth on Schedule A, or an “institutional account” (as defined in FINRA Rule 4512(c)) of an investment adviser to which Subscriber has delegated investment decision making authority, (ii) is acquiring the Acquired Shares only for its own account and not for the account of others, or if Subscriber is subscribing for the Acquired Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is a “qualified institutional buyer” (as defined above) and Subscriber has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Acquired Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act. Subscriber has not taken any of the actions set forth in, and is not subject to, the disqualification provisions of Rule 506(d)(1) of the Securities Act. Subscriber has completed Schedule A following the signature page hereto and the information contained therein is accurate and complete. Subscriber is not an entity formed for the specific purpose of acquiring the Acquired Shares, unless such newly formed entity is an entity in which all of the equity owners are “accredited investors” (within the meaning of Rule 501(a) under the Securities Act).

 

 

(e)                Subscriber acknowledges and agrees that the Acquired Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Acquired Shares have not been registered under the Securities Act. Subscriber acknowledges and agrees that the Acquired Shares may not be offered, resold, transferred, pledged or otherwise disposed of by Subscriber absent an effective registration statement under the Securities Act, except (i) to the Issuer or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, (iii) pursuant to Rule 144 under the Securities Act, provided that all of the applicable conditions thereof have been met or (iv) pursuant to another applicable exemption from the registration requirements of the Securities Act, and that any certificates or book-entry records representing the Acquired Shares shall contain a legend to such effect. Subscriber acknowledges and agrees that it may be required to bear the financial risk of an investment in the Acquired Shares for an indefinite period of time. Subscriber acknowledges and agrees that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Acquired Shares.

 

(f)                 Subscriber understands and agrees that Subscriber is purchasing the Acquired Shares directly from the Issuer. Subscriber further acknowledges that there have been no representations, warranties, covenants and agreements made to Subscriber by the Issuer or any of its officers or directors, SPAC, the Placement Agents or any of their respective officers, directors, employees or representatives, or any other party to the transaction, expressly or by implication, other than those representations, warranties, covenants and agreements included in this Subscription Agreement.

 

(g)                Subscriber’s acquisition and holding of the Acquired Shares will not constitute or result in a non-exempt prohibited transaction under section 406 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or any applicable similar law.

 

(h)                In making its decision to subscribe for and purchase the Acquired Shares, Subscriber represents that it has relied solely upon its own independent investigation and the Issuer’s representations, warranties and covenants contained herein. Without limiting the generality of the foregoing, Subscriber has not relied on any statements or other information provided by or on behalf of the Placement Agents or any of their respective Affiliates, or any of their respective officers, directors, employees or representatives concerning the Issuer, the Mergers or the Acquired Shares or the offer and sale of the Acquired Shares.

 

(i)                 Subscriber acknowledges and agrees that Subscriber has received and has had an adequate opportunity to review such financial and other information as Subscriber deems necessary in order to make an investment decision with respect to the Acquired Shares, including with respect to the Issuer and the Mergers and made its own assessment and is satisfied concerning the relevant tax and other economic considerations relevant to the Subscriber’s investment in the Acquired Shares. Without limiting the generality of the foregoing, Subscriber acknowledges and agrees that it has reviewed the Investor Presentation that will be filed with the Commission promptly after the execution of this Subscription Agreement. Subscriber represents and agrees that Subscriber and Subscriber’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as Subscriber and such Subscriber’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Acquired Shares. Subscriber has been furnished with all materials that it considers relevant to an investment in the Acquired Shares, has had a full opportunity to ask questions of and receive answers from the Issuer or any person or persons acting on behalf of the Issuer concerning the terms and conditions of the offering of the Acquired Shares to Subscriber; and that Subscriber is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, including, without limitation, the Placement Agents, except for the statements, representations and warranties contained in this Subscription Agreement.

 

 

(j)                  In making its decision to purchase the Acquired Shares, the Subscriber has relied solely upon independent investigation made by Subscriber. Without limiting the generality of the foregoing, Subscriber acknowledges that it has not relied on the Placement Agents in connection with its determination as to the legality of its acquisition of the Acquired Shares or as to the other matters referred to herein and the Subscriber has not relied on any investigation that the Placement Agents, any of their respective Affiliates or any person acting on their behalf have conducted with respect to the Acquired Shares, the Issuer or SPAC. Subscriber further acknowledges that it has not relied on any information contained in any research reports prepared by the Placement Agents or any of their respective Affiliates.

 

(k)               Subscriber became aware of this offering of the Acquired Shares solely by means of direct contact between Subscriber and the Issuer, SPAC, or any of the Placement Agents, and the Acquired Shares were offered to Subscriber solely by direct contact between Subscriber and the Issuer or one of the Placement Agents. Subscriber did not become aware of this offering of the Acquired Shares, nor were the Acquired Shares offered to Subscriber, by any other means. Subscriber acknowledges that the Issuer represents and warrants that the Acquired Shares (i) were not offered to Subscriber by any form of general solicitation or general advertising and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Issuer, SPAC, the Placement Agents, any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), other than the representations and warranties of the Issuer contained in Section 3 of this Subscription Agreement, in making its investment or decision to invest in the Issuer.

 

(l)                 The Placement Agents shall have no liability or obligation (including, without limitation, for or with respect to any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements incurred by Subscriber, the Issuer, SPAC or any other person or entity), whether in contract, tort or otherwise, to Subscriber, or to any person claiming through Subscriber, in respect of the Subscription, except in each case, to the extent resulting from such Placement Agent’s own gross negligence, fraud or willful misconduct.

 

(m)              Subscriber understands, acknowledges and agrees that (i) no disclosure or offering document has been prepared by the Placement Agents or any of their respective affiliates in connection with the offer and sale of the Acquired Shares; (ii) the Placement Agents and their respective directors, officers, employees, representatives and controlling persons have made no independent investigation with respect to the Issuer, SPAC, the transactions contemplated herein or the Acquired Shares or the accuracy, completeness or adequacy of any information supplied to Subscriber by the Issuer and/or SPAC; (iii) the Placement Agents are not participating in any manner in the Subscription, including but not limited to the negotiation between the Issuer and the Subscriber with respect to the Subscription, the execution by the Subscriber of this Subscription Agreement or the issuance or sale of Acquired Shares by the Issuer to the Subscriber as contemplated herein; and (iv) the Acquired Shares were not offered to Subscriber by any form of advertising or, to Subscriber’s knowledge, general solicitation (within the meaning of Regulation D), and, to Subscriber’s knowledge, are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.

 

(n)                Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Acquired Shares. Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Acquired Shares, and Subscriber has sought such accounting, legal and tax advice as Subscriber has considered necessary to make an informed investment decision. Subscriber will not look to the Placement Agents for all or part of any such loss or losses the Subscriber may suffer and is able to sustain a complete loss on its investment in the Acquired Shares.

 

(o)                Subscriber acknowledges and agrees that none of the Placement Agents nor any Affiliate of any of the Placement Agents (or any officer, director, employee or representative of any of the Placement Agents or any Affiliate thereof) has provided Subscriber with any information or advice with respect to the Acquired Shares nor is such information or advice necessary or desired. Subscriber acknowledges that the Placement Agents, any Affiliate of any of the Placement Agents (or any officer, director, employee or representative of any of the Placement Agents or any Affiliate thereof) (i) have not made any representation as to the Issuer, Issuer’s credit quality, SPAC, or the quality of the Acquired Shares, (ii) may have acquired non-public information with respect to the Issuer which Subscriber agrees need not be provided to it, (iii) have made no independent investigation with respect to the Issuer or the Acquired Shares or the accuracy, completeness or adequacy of any information supplied to Subscriber by the Issuer, (iv) have not acted as Subscriber’s financial advisor, tax advisor, or fiduciary in connection with the issue and purchase of the Acquired Shares, (v) have not prepared a disclosure or offering document in connection with the offer and sale of the Acquired Shares and (vi) may have existing or future business relationships with the Issuer and SPAC (including, but not limited to, lending, depository, risk management, advisory and banking relationships) and will pursue actions and take steps that it deems or they deem necessary or appropriate to protect its or their interests arising therefrom without regard to the consequences for a holder of Acquired Shares, and that certain of these actions may have material and adverse consequences for a holder of Acquired Shares.

 

 

(p)                Subscriber represents and acknowledges that, alone, or together with any professional advisor(s), Subscriber has adequately analyzed and fully considered the risks of an investment in the Acquired Shares and determined that the Acquired Shares are a suitable investment for Subscriber and that Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of Subscriber’s investment in the Issuer. Subscriber acknowledges specifically that a possibility of total loss exists.

 

(q)                Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Acquired Shares or made any findings or determination as to the fairness of an investment in the Acquired Shares.

 

(r)                 Subscriber is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons, the Executive Order 13599 List, the Foreign Sanctions Evaders List, or the Sectoral Sanctions Identification List, each of which is administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) (collectively “OFAC Lists”), (ii) owned or controlled by, or acting on behalf of, a person, that is named on an OFAC List, (iii) organized, incorporated, established, located, resident or born in, or a citizen, national, or the government, including any political subdivision, agency, or instrumentality thereof, of, Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine, or any other country or territory embargoed or subject to substantial trade restrictions by the United States, (iv) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (collectively, a “Prohibited Investor”). Subscriber agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that Subscriber is permitted to do so under applicable law. Subscriber represents that if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. section 5311 et seq.) (the “BSA”), as amended by the USA PATRIOT Act of 2001 (the “PATRIOT Act”), and its implementing regulations (collectively, the “BSA/PATRIOT Act”), Subscriber maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. Subscriber also represents that, to the extent required, it maintains policies and procedures reasonably designed to ensure compliance with OFAC-administered sanctions programs, including for the screening of its investors against the OFAC Lists. Subscriber further represents and warrants that, to the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by Subscriber and used to purchase the Acquired Shares were legally derived.

 

(s)                 Subscriber does not have, as of the date hereof, and during the 30-day period immediately prior to the date hereof, Subscriber has not entered into, any “put equivalent position” as such term is defined in Rule 16a-1 under the Exchange Act or end of day short sale positions with respect to the securities of the SPAC or the Issuer.

 

(t)                  If Subscriber is an employee benefit plan that is subject to Title I of ERISA, a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Code or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, Subscriber represents and warrants that (i) to its knowledge, neither Issuer, SPAC, nor any of its respective Affiliates that the Issuer has disclosed to Subscriber for purposes of determining compliance with this section (the “Transaction Parties”) has acted as the Plan’s fiduciary, or has been relied on for advice, with respect to its decision to acquire and hold the Acquired Shares, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Acquired Shares; (ii) the decision to invest in the Acquired Shares has been made at the recommendation or direction of an “independent fiduciary” (“Independent Fiduciary”) within the meaning of US Code of Federal Regulations 29 C.F.R. section 2510.3 21(c), as amended from time to time (the “Fiduciary Rule”) who is (A) independent of the Transaction Parties; (B) is capable of evaluating investment risks independently, both in general and with respect to particular transactions and investment strategies (within the meaning of the Fiduciary Rule); (C) is a fiduciary (under ERISA and/or section 4975 of the Code) with respect to Subscriber’s investment in the Acquired Shares and is responsible for exercising independent judgment in evaluating the investment in the Acquired Shares; and (D) is aware of and acknowledges that (I) none of the Transaction Parties is undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the purchaser’s or transferee’s investment in the Acquired Shares, and (II) the Transaction Parties have a financial interest in the purchaser’s investment in the Acquired Shares on account of the fees and other remuneration they expect to receive in connection with transactions contemplated hereunder.

 

 

(u)                Subscriber has or has commitments to have and, when required to deliver payment to the Issuer pursuant to Section 2 above, will have, sufficient funds to pay the Purchase Price and consummate the purchase and sale of the Acquired Shares pursuant to this Subscription Agreement.

 

(v)                Subscriber acknowledges and agrees, and unconditionally waives any conflicts of interest with respect to, the fact that UBS Securities LLC is acting as one of the Issuer’s Placement Agent and also acted as sole bookrunning manager for the SPAC’s initial public offering for which UBS Securities LLC will receive $12,075,000 of deferred underwriting commission upon the consummation of the Merger.

 

(w)               Subscriber acknowledges that certain information provided to it was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections. Subscriber further acknowledges that such information and projections were prepared without the participation of the Placement Agents and that the Placement Agents do not assume responsibility for independent verification of, or the accuracy or completeness of, such information or projections.

 

5.                   Additional Subscriber Agreement. Subscriber hereby agrees that neither Subscriber nor any person or entity acting on its behalf or pursuant to any understanding with it will engage in any Short Sales with respect to the SPAC Shares during the period from the date of this Subscription Agreement until the Closing (or such earlier termination of this Subscription Agreement pursuant to its terms). For purposes of this Section 5, “Short Sales” shall include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, and all types of direct and indirect stock pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-U.S. broker dealers or foreign regulated brokers. Notwithstanding the foregoing, (i) nothing herein shall prohibit other entities under common management with Subscriber that have no knowledge of this Subscription Agreement or of Subscriber’s participation in the transactions contemplated hereby (including Subscriber’s controlled affiliates and/or affiliates) from entering into any Short Sales and (ii) in the case of a Subscriber that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Subscriber’s assets and the portfolio managers have no knowledge of the investment decisions made by the portfolio managers managing other portions of such Subscriber’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Acquired Shares covered by this Subscription Agreement.

 

6.                   Registration Rights.

 

(a)                The Issuer agrees that, within forty-five (45) calendar days after the Closing Date (the “Filing Date”), the Issuer will file with the Commission (at the Issuer’s sole cost and expense) a registration statement registering the resale of the Acquired Shares (the “Registration Statement”), and the Issuer shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof; provided, however, that the Issuer’s obligations to include the Acquired Shares in the Registration Statement are contingent upon Subscriber furnishing in writing to the Issuer such information regarding Subscriber, the securities of the Issuer held by Subscriber and the intended method of disposition of the Acquired Shares as shall be reasonably requested by the Issuer to effect the registration of the Acquired Shares, and Subscriber shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling shareholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement during any customary blackout or similar period or as permitted hereunder. For purposes of clarification, any failure by the Issuer to file the Registration Statement by the Filing Date or to effect such Registration Statement by the date the Issuer 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 shall not otherwise relieve the Issuer of its obligations to file or effect the Registration Statement as set forth above in this Section 6. The Issuer will provide a draft of the Registration Statement to Subscriber for review at least five (5) business days in advance of filing the Registration Statement. In no event shall Subscriber be identified as a statutory underwriter in the Registration Statement unless requested by the Commission; provided, that if the Commission requests that a Subscriber be identified as a statutory underwriter in the Registration Statement, Subscriber will have the opportunity to withdraw from the Registration Statement. Notwithstanding the foregoing, if the Commission prevents the Issuer from including any or all of the Company Shares proposed to be registered under the Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale of the Company Shares by Subscriber and the relevant Other Subscribers or otherwise, such Registration Statement shall register for resale such number of Company Shares which is equal to the maximum number of Company Shares as is permitted by the Commission. In such event, the number of Company Shares to be registered for each selling shareholder named in the Registration Statement shall be reduced pro rata among all such selling shareholders. In the event the Commission informs the Issuer that all of such Company Shares cannot, as a result of the application of Rule 415 of the Securities Act, be registered for resale on the Registration Statement, the Issuer agrees to promptly inform Subscriber thereof and use its commercially reasonable efforts to file amendments to the Registration Statement as required by the Commission, covering the maximum number of Company Shares permitted to be registered by the Commission, on Form F-1 or such other form available to register for resale such shares as a secondary offering.

 

 

(b)               In the case of the registration, qualification, exemption or compliance effected by the Issuer pursuant to this Subscription Agreement, the Issuer shall, upon reasonable request, inform Subscriber as to the status of such registration, qualification, exemption and compliance. At its expense the Issuer shall:

 

(i)                  except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to keep such registration, and any qualification, exemption or compliance under state securities laws which the Issuer determines to obtain, continuously effective with respect to Subscriber, and to keep the applicable Registration Statement or any subsequent shelf registration statement free of any material misstatements or omissions, until the earliest of the following: (i) Subscriber ceases to hold any Acquired Shares; and (ii) the date all Acquired Shares held by Subscriber may be sold without restriction under Rule 144, including without limitation, any volume and manner of sale restrictions which may be applicable to Affiliates under Rule 144 and without the requirement for the Issuer to be in compliance with the current public information required under Rule 144(c)(1) or Rule 144(i)(2), as applicable.

 

(ii)                advise Subscriber as soon as practicable within five (5) business days:

 

(1)                when a Registration Statement or any amendment thereto has been filed with the Commission and when such Registration Statement or any post-effective amendment thereto has become effective;

 

(2)                after it shall receive notice or obtain knowledge thereof, of any request by the Commission for amendments or supplements to any Registration Statement or the prospectus included therein or for additional information;

 

(3)                of the issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for such purpose;

 

(4)                of the receipt by the Issuer of any notification with respect to the suspension of the qualification of the Acquired Shares included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and

 

(5)                subject to the provisions in this Subscription Agreement, of the occurrence of any event that requires the making of any changes in any Registration Statement or prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading.

 

 

(iii)              use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable;

 

(iv)               upon the occurrence of any event contemplated above, except for such times as the Issuer is permitted hereunder to suspend, and has suspended, the use of a prospectus forming part of a Registration Statement, the Issuer shall use its commercially reasonable efforts to as soon as reasonably practicable prepare a post-effective amendment to such Registration Statement or a supplement to the related prospectus, or file any other required document so that, as thereafter delivered to purchasers of the Acquired Shares included therein, such prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

(v)                use its commercially reasonable efforts to cause all Acquired Shares to be listed on each securities exchange or market, if any, on which the Company Shares issued by the Issuer have been listed;

 

(vi)               use its commercially reasonable efforts (i) to take all other steps necessary to effect the registration of the Acquired Shares contemplated hereby and (ii) to file all reports and other materials required to be filed by the Exchange Act so long as the Issuer is subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144 to enable Subscriber to sell the Acquired Shares under Rule 144 for so long as the Subscriber holds Acquired Shares; and

 

(vii)             cause the Transfer Agent to remove the legend set forth above in Section 2(d), at Subscriber’s request, when the Acquired Shares are sold pursuant to Rule 144 under the Securities Act or the Registration Statement or may be sold without restriction under Rule 144. In connection therewith, if required by the Transfer Agent, the Issuer will promptly cause an opinion of counsel to be delivered to and maintained with the Transfer Agent, together with any other authorizations, certificates and directions required by the Transfer Agent that authorize and direct the Transfer Agent to transfer such Acquired Shares without any such legend.

 

(c)                 Notwithstanding anything to the contrary in this Subscription Agreement, the Issuer shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require Subscriber not to sell under the Registration Statement or to suspend the effectiveness thereof, if (x) the use of the Registration Statement would require the inclusion of financial statements that are unavailable for reasons beyond the Issuer’s control, (y) the Issuer determines that in order for the Registration Statement to not contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act, or if (z) such filing or use could materially affect a bona fide business or financing transaction of the Issuer or its subsidiaries or would require additional disclosure by the Issuer in the Registration Statement of material information that the Issuer has a bona fide business purpose for keeping confidential (each such circumstance, a “Suspension Event”); provided, however, that the Issuer may not delay or suspend the Registration Statement on more than three occasions or for more than ninety (90) total calendar days, in each case during any twelve-month period. Upon receipt of any written notice from the Issuer of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, Subscriber agrees that it will immediately discontinue offers and sales of the Acquired Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until Subscriber receives copies of a supplemental or amended prospectus (which the Issuer agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales; provided, for the avoidance of doubt, that the Issuer shall not include any material non-public information in any such written notice. If so directed by the Issuer, Subscriber will deliver to the Issuer or, in Subscriber’s sole discretion destroy, all copies of the prospectus covering the Acquired Shares in Subscriber’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Acquired Shares shall not apply (i) to the extent Subscriber is required to retain a copy of such prospectus (a) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (b) in accordance with a bona fide pre-existing document retention policy or (ii) to copies stored electronically on archival servers as a result of automatic data back-up.

 

 

(d)                Subscriber may deliver written notice (an “Opt-Out Notice”) to the Issuer requesting that Subscriber not receive notices from the Issuer otherwise required by this Section 6; provided, however, that Subscriber may later revoke any such Opt-Out Notice in writing. Following receipt of an Opt-Out Notice from Subscriber (unless subsequently revoked), (i) the Issuer shall not deliver any such notices to Subscriber and Subscriber shall no longer be entitled to the rights associated with any such notice and (ii) each time prior to Subscriber’s intended use of an effective Registration Statement, Subscriber will notify the Issuer in writing at least two (2) business days in advance of such intended use, and if a notice of a Suspension Event was previously delivered (or would have been delivered but for the provisions of this Section 6(d) and the related suspension period remains in effect, the Issuer will so notify Subscriber, within one (1) business day of Subscriber’s notification to the Issuer, by delivering to Subscriber a copy of such previous notice of Suspension Event, and thereafter will provide Subscriber with the related notice of the conclusion of such Suspension Event immediately upon its availability.

 

(e)                 For purposes of this Section 6, “Acquired Shares” shall mean, as of any date of determination, the Acquired Shares purchased by Subscriber pursuant to this Subscription Agreement (including any Company Shares issuable upon exercise of any Acquired Shares) and any other equity security issued or issuable with respect to such Acquired Shares by way of share split, dividend, distribution, recapitalization, merger, exchange, replacement or similar event, and “Subscriber” shall include any person to whom the rights under this Section 6 shall have been duly assigned, which shall be deemed to include any person to whom any Acquired Share has been duly transferred after the Closing.

 

(f)                  Issuer shall indemnify, to the extent permitted by law, Subscriber (to the extent a seller under the Registration Statement), its officers, directors, partners, members, managers, employees, stockholders, advisers and agents, and each person who controls Subscriber (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), from and against any and all losses, claims, damages, liabilities, costs (including reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, that arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement (or incorporated by reference therein), any prospectus included in the Registration Statement or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent that such untrue statements or alleged untrue statements or omissions or alleged omissions, are based upon information regarding Subscriber furnished in writing to Issuer by Subscriber expressly for use therein.

 

(g)                Subscriber shall indemnify and hold harmless the Issuer, its directors, officers, agents and employees, and each person who controls the Issuer (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), to the fullest extent permitted by applicable law, from and against all Losses, as incurred, that arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any prospectus included in the Registration Statement, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading to the extent, but only to the extent, that such untrue statements or alleged untrue statements, or omissions, or alleged omissions, are based upon information regarding Subscriber furnished in writing to the Issuer by Subscriber expressly for use therein. In no event shall the liability of Subscriber exceed the net proceeds received by Subscriber upon the sale of the Acquired Shares giving rise to such indemnification obligation. Subscriber shall notify the Issuer promptly of the institution, threat or assertion of any proceeding arising from or in connection with the transactions contemplated by this Section 6 of which Subscriber is aware.

 

 

(h)                If the indemnification provided under this Section 6 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be subject to the limitations set forth in this Section 6 and deemed to include any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 6 from any person who was not guilty of such fraudulent misrepresentation. Each indemnifying party’s obligation to make a contribution pursuant to this Section 6(h) shall be individual, not joint and several, and in no event shall the liability of Subscriber hereunder exceed the net proceeds received by Subscriber upon the sale of the Acquired Shares giving rise to such indemnification obligation.

 

7.                   Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earlier to occur of (a) such date and time as the Merger Agreement is validly terminated in accordance with the terms therein, (b) upon the mutual written agreement of the Issuer, Subscriber and SPAC to terminate this Subscription Agreement, (c) thirty (30) days after the Termination Date (as may be amended from time to time), if the Closing has not occurred by such date other than as a result of a breach of the obligations of Subscriber hereunder, or (d) if, on the closing date of the Mergers, any of the conditions to Closing set forth in Section 2 of this Subscription Agreement have not been satisfied as of the time required hereunder to be so satisfied or waived by the party entitled to grant such waiver and, as a result thereof, the Subscription contemplated by this Subscription Agreement are not consummated (each of (a), (b), (c) and (d), a “Termination Event”); provided, that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from any such willful breach. The Issuer shall promptly notify Subscriber in writing of the termination of the Merger Agreement promptly after the termination of such agreement. Upon the occurrence of any Termination Event, any monies paid by the Subscriber to the Issuer in connection herewith shall promptly following the Termination Event be returned to the Subscriber in accordance with the escrow agreement to be agreed and signed after the date of this Subscription Agreement, which obligation to return such monies and remedies for losses, liabilities and damages arising from willful breach shall survive termination of this Subscription Agreement.

 

8.                   Trust Account Waiver. Subscriber acknowledges that SPAC is a blank check company with the powers and privileges to effect a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination involving SPAC and one or more businesses or entities. Subscriber further acknowledges that, as described in SPAC’s final prospectus, dated January 15, 2021 (the “Prospectus”), available at www.sec.gov, substantially all of SPAC’s assets consist of the cash proceeds of SPAC’s initial public offering and private placements of its securities, and substantially all of those proceeds have been deposited in a trust account (the “Trust Account”) for the benefit of SPAC, its public shareholders and the underwriters of SPAC’s initial public offering. Except with respect to interest earned on the funds held in the Trust Account that may be released to SPAC to pay its tax obligations, if any, the cash in the Trust Account may be disbursed only for the purposes set forth in the Prospectus. Subscriber, on behalf of itself and its representatives, hereby irrevocably waives any and all right, title and interest, or any claim of any kind they have or may have in the future, in or to any monies held in the Trust Account, and agrees not to seek recourse against the Trust Account as a result of, or arising out of, this Subscription Agreement; provided, however, that nothing in this Section 8 shall be deemed to limit Subscriber’s right, title, interest or claim to the Trust Account by virtue of Subscriber’s record or beneficial ownership of shares in SPAC, pursuant to a validly exercised redemption right with respect to any such shares in SPAC, except to the extent that Subscriber has otherwise agreed with SPAC to not exercise such redemption right.

 

 

9.                   Exculpation of Placement Agents. Subscriber acknowledges and agrees for the express benefit of the Placement Agents, and their Affiliates and their and their Affiliates’ respective officers, directors, employees or representatives that neither the Placement Agents, nor any of their Affiliates or any of their or their Affiliates’ officers, directors, employees or representatives shall be liable to Subscriber, pursuant to this Subscription Agreement or any other subscription agreement related to the private placement of the Acquired Shares, the negotiation hereof or thereof or the subject matter hereof or thereof, or the transactions contemplated hereby or thereby, for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Acquired Shares by Subscriber.

 

10.                Miscellaneous.

 

(a)                Each party hereto acknowledges that the other party hereto, the Placement Agents and others will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement. Prior to the Closing, each party hereto agrees to promptly notify the other party hereto and SPAC if any of the acknowledgments, understandings, agreements, representations and warranties made by such party as set forth herein are no longer accurate in all material respects. Subscriber further acknowledges and agrees that each of the Placement Agents is a third-party beneficiary of the representations and warranties of the Issuer and Subscriber contained in Section 3 and Section 4, respectively. The Subscriber acknowledges and agrees that the purchase by Subscriber of the Acquired Shares from the Issuer will constitute a reaffirmation of the acknowledgements, understandings, agreements, representations and warranties herein (as modified by any such notice) by Subscriber as of the time of such subscription.

 

(b)                Each of the Issuer, Subscriber and SPAC is entitled to rely upon this Subscription Agreement and is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Each of the Placement Agents is entitled to rely upon the representations and warranties made by Subscriber in this Subscription Agreement.

 

(c)                 Notwithstanding anything to the contrary in this Subscription Agreement, prior to the Closing, Subscriber may transfer or assign all or a portion of its rights under this Subscription Agreement; provided, that, such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Subscription Agreement, makes the representations and warranties in Section 4 and completes Schedule A hereto. In the event of such a transfer or assignment, Subscriber shall update Schedule B to provide the information required therein.

 

(d)                All the agreements, representations and warranties made by each party hereto in this Subscription Agreement shall survive the Closing.

 

(e)                 The Issuer may request from Subscriber such additional information as the Issuer may reasonably deem necessary to evaluate the eligibility of Subscriber to acquire the Acquired Shares, and Subscriber shall promptly provide such information as may be reasonably requested, to the extent readily available and to the extent consistent with its internal policies and procedures; provided, that the Issuer agrees to keep any such information provided by Subscriber confidential, except (i) as necessary to include in any registration statement the Issuer is required to file hereunder, (ii) as required by the federal securities law or pursuant to other routine proceedings of regulatory authorities or (iii) to the extent such disclosure is required by law, at the request of the staff of the Commission or regulatory agency or under the regulations of any national securities exchange on which the Issuer’s securities are listed for trading. The Subscriber acknowledges and agrees that if it does not provide the Issuer with such requested information, the Issuer may not be able to register the Acquired Shares for resale pursuant to Section 6 hereof. The Subscriber acknowledges that the Issuer may file a copy of this Subscription Agreement (or a form of this Subscription Agreement) with the Commission as an exhibit to a periodic report or a registration statement of the Issuer. Upon written request, the Issuer shall provide such additional information delivered pursuant to this Section 10(e) to each Placement Agent, provided, that the Placement Agents shall keep such information confidential, except as may be required by applicable law, rule, regulation or in connection with any legal proceeding or regulatory request.

 

 

 

(f)                  This Subscription Agreement may not be modified, waived or terminated (other than pursuant to the terms of Section 7 above) except by an instrument in writing, signed by (i) each of the parties hereto and (ii) SPAC. For the avoidance of doubt, the Issuer may not provide any consent to any proposed modification, wavier or termination (other than pursuant to the terms of Section 7 above) to this Subscription Agreement without the prior written approval of SPAC.

 

(g)                This Subscription Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof. Except as set forth in Section 10(a) with respect to the persons referenced therein (who shall be express third party beneficiaries of and entitled to enforce such provision) and as set forth in the immediately following sentence, this Subscription Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successor and assigns. SPAC is an express third-party beneficiary of this Subscription Agreement and entitled to enforce specifically the respective obligations, acknowledgements and waivers of the Issuer and Subscriber hereunder directly against the Issuer and Subscriber, including pursuant to Section 10(o) (including enforcing Subscriber’s obligations hereunder to purchase the Acquired Shares and deliver the Purchase Price).

 

(h)                Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.

 

(i)                  If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect. The parties hereto shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

 

(j)                  This Subscription Agreement may be executed in two (2) or more counterparts (including by facsimile transmission, by e-mail delivery of a “.pdf” format data file or by other electronic means), all of which shall be considered one and the same agreement and shall become effective only when signed by a duly authorized person by or on behalf of each party and delivered to the other parties, it being understood that all parties need not sign the same counterpart. For the avoidance of doubt, the Issuer reserves the right to accept or reject the Subscriber’s subscription for the Acquired Shares for any reason or for no reason, in whole or in part, any time until the point when this Subscription Agreement is signed by a duly authorized person by or on behalf of the Issuer.

 

(k)                Each party shall pay all of its own expenses in connection with this Subscription Agreement and the transactions contemplated herein except as otherwise provided in the Subscription Agreement.

 

(l)                  Notices. Any notice or communication required or permitted hereunder shall be in writing and either delivered personally, emailed or telecopied, sent by overnight mail via a reputable overnight carrier, or sent by certified or registered mail, postage prepaid, and shall be deemed to be given and received (a) when so delivered personally, (b) upon receipt of an appropriate electronic answerback or confirmation when so delivered by telecopy (to such number specified below or another number or numbers as such person may subsequently designate by notice given hereunder), (c) when sent, if sent on a business day prior to 5:00 p.m. local time of the recipient, with no mail undeliverable or other rejection notice, if sent by email, or on the business day following the day when sent, if sent on a day that is not a business day or after 5:00 p.m. local time of the recipient on a business day, with no mail undeliverable or other rejection notice, if sent by email, or (d) five (5) business days after the date of mailing to the address below or to such other address or addresses as such person may hereafter designate by notice given hereunder:

 

(i)                  if to Subscriber, to such address or addresses set forth on the signature page hereto;

 

 

(ii)          if to the Issuer, to:

 

TH International Limited

c/o Cartesian Capital Group LLC

505 5th Avenue, 15th Floor

New York, NY 10017

Attn: Gregory Armstrong; Peter Yu

Email: Gregory.armstrong@cartesiangroup.com; peter.yu@cartesiangroup.com

 

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

 

Kirkland & Ellis

26th Floor, Gloucester Tower, The Landmark

15 Queens Road Central Hong Kong

Attn: Daniel Dusek, Esq.

Email: daniel.dusek@kirkland.com

 

(iii)         if to the Placement Agents, to:

 

Merrill Lynch (Asia Pacific) Limited,

55/F Cheung Kong Centre,

2 Queen’s Road Central Hong Kong,

Attn: Tucker Highfield
Email: tucker.highfield@bofa.com

 

and

 

UBS Securities LLC

1285 Avenue of Americas

New York, New York 10019

Attn: John Delgado-McCollum and Alex Cahail

Email: john.delgado@ubs.com and alex.cahail@ubs.com

 

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

 

Davis Polk & Wardwell LLP

18th Floor, The Hong Kong Club Building

3A Chater Road, Central Hong Kong

Attn: James C. Lin, Esq.

Email: james.lin@davispolk.com

 

(m)              This Subscription Agreement, and any claim or cause of action hereunder based upon, arising out of or related to this Subscription Agreement (whether based on law, in equity, in contract, in tort or any other theory) or the negotiation, execution, performance or enforcement of this Subscription Agreement, shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of law thereof.

 

 

THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, THE SUPREME COURT OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF NEW YORK IN NEW YORK COUNTY SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS SUBSCRIPTION AGREEMENT AND THE DOCUMENTS REFERRED TO IN THIS SUBSCRIPTION AGREEMENT AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR INTERPRETATION OR ENFORCEMENT HEREOF OR SUCH DOCUMENTS THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS SUBSCRIPTION AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND DETERMINED BY SUCH A NEW YORK STATE OR FEDERAL COURT. THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH SUCH ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 10(l) OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.

 

EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS SUBSCRIPTION AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT (INCLUDING THE PLACEMENT AGENTS) 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; (II) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THE FOREGOING WAIVER; (III) SUCH PARTY MAKES THE FOREGOING WAIVER VOLUNTARILY AND (IV) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS SUBSCRIPTION AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 10(m).

 

(n)                The SPAC shall, and the Issuer shall procure that the SPAC shall, by 9:00 a.m., New York City time, on the first (1st) business day immediately following the date of this Subscription Agreement, issue one or more press releases or file with the Commission a Current Report on Form 8-K (collectively, the “Disclosure Document”) disclosing all material terms of the transactions contemplated hereby, the Mergers, and any other material, nonpublic information with respect to the Mergers that the Issuer has provided to Subscriber at any time prior to the filing of the Disclosure Document. Notwithstanding anything in this Subscription Agreement to the contrary, the Issuer shall not publicly disclose or use the name or brand of Subscriber or any of its Affiliates or investment advisers, or include the name or brand of Subscriber or any of its Affiliates or investment advisers in any press release or in any filing with the Commission or any regulatory agency or trading market, without the prior written consent of Subscriber, except (i) as required by the federal securities law in connection with the Registration Statement, (ii) the filing of this Subscription Agreement (or a form of this Subscription Agreement) with the Commission, (iii) the filing of the Schedule 14A, F-4 and related proxy materials to be filed by the Issuer with respect to the Transaction and (iv) to the extent such disclosure is required by law, at the request of the Staff of the Commission or regulatory agency or under the regulations of Nasdaq, in which case the Issuer shall provide Subscriber with prior written notice of such disclosure permitted under this subclause (iv).

 

(o)                Remedies. The parties agree that irreparable damage would occur if any provision of this Subscription Agreement were not performed in accordance with the terms hereof, and accordingly, that the parties hereto shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement or to enforce specifically the performance of the terms and provisions of this Subscription Agreement in an appropriate court of competent jurisdiction as set forth in Section 10(m), in addition to any other remedy to which any party is entitled at law or in equity.

 

 

(p)                Non-Reliance and Exculpation. Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Placement Agents, any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), other than the statements, representations and warranties of the Issuer expressly contained in Section 3 of this Subscription Agreement, in making its investment or decision to invest in the Issuer. Subscriber acknowledges and agrees that none of (i) any Other Subscriber pursuant to this Subscription Agreement or any Other Subscription Agreement (including any such Other Subscriber’s affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), (ii) the Placement Agents, their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing, (iii) any other party to this Subscription Agreement, the Other Subscription Agreements and the Merger Agreement (collectively, the “Transaction Documents” (other than the Issuer), and (iv) any affiliates, or any control persons, officers, directors, employees, partners, agents or representatives of any of the Issuer, SPAC or any other party to the Transaction Documents shall be liable to Subscriber, or to any Other Subscriber, pursuant to this Subscription Agreement or any Other Subscription Agreement, the negotiation hereof or thereof or the subject matter hereof or thereof, or the transactions contemplated hereby or thereby, including, without limitation, for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Company Shares or with respect to any claim (whether in tort, contract or otherwise) for breach of this Subscription Agreement or in respect of any written or oral representations made or alleged to be made in connection herewith (except as expressly provided herein), or for any actual or alleged inaccuracies, misstatements or omissions with respect to any information or materials of any kind furnished in connection with the Subscription.

 

(q)                If any change in the number or type of equity securities of the Issuer shall occur between the date hereof and immediately prior to the Closing by reason of any share dividend, share split, share combination, recapitalization or similar event (in each case, other than the Recapitalization), then the number of Company Shares purchased by Subscriber and the price per share paid therefor shall be appropriately adjusted to reflect such change.

 

[Signature page follows.]

 

 

IN WITNESS WHEREOF, each of the Issuer and Subscriber has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date set forth below.

 

		TH INTERNATIONAL LIMITED
	By:
		Name:
		Title:

 

Date: ____________________, 2022

 

SUBSCRIBER:

 

Signature of Subscriber:

 

By:
Name:
Title:

 

Date: ____________________, 2022

 

Name of Subscriber:

(Please print. Please indicate name and capacity of person signing above)

 

Name in which securities are to be registered (if different):

 

Email Address:

 

 

Subscriber’s EIN:

 

 

Address:

 

Attn:

 

Telephone No.:

 

 

Facsimile No.:

 

 

Aggregate Number of Acquired Shares subscribed for: _____________________ (including _______________Company Shares and __________________ Company Warrants issued pursuant to the sixth recital of this Subscription Agreement)

 

[Signature Page to Subscription Agreement]

 

 

Aggregate Purchase Price:

$_________________________________

 

You must pay the Purchase Price by wire transfer of United States dollars in immediately available funds to the account specified by the Issuer in the Closing Notice.

 

 

SCHEDULE A
ELIGIBILITY REPRESENTATIONS OF SUBSCRIBER

 

This Schedule must be completed by Subscriber and forms a part of the Subscription Agreement to which it is attached. Capitalized terms used and not otherwise defined in this Schedule have the meanings given to them in the Subscription Agreement. Subscriber must check the applicable box in either Part A or Part B below and the applicable box in Part C below.

 

A.	QUALIFIED INSTITUTIONAL BUYER STATUS

 

(Please check the applicable subparagraphs):

 

¨	Subscriber is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act (a “QIB”)).

 

*** OR ***

 

¨	Subscriber is subscribing for the Acquired Shares as a fiduciary or agent for one or more investor accounts, and each owner of such accounts is a QIB.
B.	ACCREDITED INVESTOR STATUS

 

(Please check the applicable subparagraphs):

 

Rule 501(a), in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Subscriber has indicated, by marking and initialing the appropriate box below, the provision(s) below which apply to Subscriber and under which Subscriber accordingly qualifies as an “accredited investor.”

 

¨	Any bank, registered broker or dealer, insurance company, registered investment company, business development company, or small business investment company;
¨	Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000;
¨	Any employee benefit plan, within the meaning of the Employee Retirement Income Security Act of 1974, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5,000,000;
¨	Any corporation, similar business trust, partnership or any organization described in Section 501(c)(3) of the Internal Revenue Code, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000; or
¨	Any trust with assets in excess of $5,000,000, not formed to acquire the securities offered, whose purchase is directed by a sophisticated person.
¨	Any entity in which all of the equity owners are accredited investors.
¨	Any entity or natural person that is otherwise qualified as an accredited investor under Rule 501(a).

 

*** AND ***

 

C.	AFFILIATE STATUS

 

(Please check the applicable box)

 

SUBSCRIBER:

 

¨

is:

 

an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.

 

¨

is not:

 

 

SCHEDULE B
SCHEDULE OF TRANSFERS

 

Subscriber’s Subscription was in the amount of ____ Company Shares. The following transfers of a portion of the Subscription have been made:

 

Date of Transfer or Reduction	Transferee		Number of Transferee Acquired Shares Transferred or Reduced	Subscriber Revised Subscription Amount

Schedule B as of ______________, 20__, accepted and agreed to as of this ____ day of ____________, 20__ by:

TH INTERNATIONAL LIMITED
By:
	Name:
	Title:
Signature of Subscriber:   [SUBSCRIBER]

 

By:
	Name:
	Title:

 

Exhibit 10.14

 

Execution Version

 

ORDINARY SHARE PURCHASE AGREEMENT

 

This ORDINARY SHARE PURCHASE AGREEMENT is made and entered into as of March 11, 2022 (this “Agreement”), by and between CF Principal Investments LLC, a Delaware limited liability company (the “Investor”), and TH International Limited, a Cayman Islands exempted company (including any successor entity, the “Company”).

 

RECITALS

 

WHEREAS, the Company has entered into an Agreement and Plan of Merger, dated as of August 13, 2021, with Miami Swan Ltd, a Cayman Islands exempted company and wholly owned subsidiary of the Company, and Silver Crest Acquisition Corporation, a blank check company incorporated as a Cayman Islands exempted company (the “SPAC”) (as amended from time to time, the “Merger Agreement”);

 

WHEREAS, following the consummation of the transactions contemplated by the Merger Agreement (the “Merger Closing”), the Company shall be the surviving entity, with ordinary shares (the “Ordinary Shares”) registered under Section 12(b) of the Exchange Act;

 

WHEREAS, the parties desire that, upon the terms and subject to the conditions and limitations set forth herein, during the Investment Period, the Company may issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company, up to the lesser of (i) $100,000,000 in aggregate gross purchase price of newly issued Ordinary Shares and (ii) the Exchange Cap (to the extent applicable under Section 3.3);

 

WHEREAS, such sales of Ordinary Shares by the Company to the Investor will be made in reliance upon the provisions of Section 4(a)(2) of the Securities Act (“Section 4(a)(2)”) and/or Rule 506(b) of Regulation D promulgated by the Commission under the Securities Act (“Regulation D”), and upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the issuances and sales of Ordinary Shares by the Company to the Investor to be made hereunder;

 

WHEREAS, the parties hereto are concurrently entering into a Registration Rights Agreement in the form attached as Exhibit A hereto (the “Registration Rights Agreement”), pursuant to which the Company shall register the resale of the Registrable Securities, upon the terms and subject to the conditions set forth therein;

 

WHEREAS, in consideration for the Investor’s execution and delivery of this Agreement, the Company shall issue to the Investor the Commitment Shares, pursuant to and in accordance with Section 10.1(ii); and

 

WHEREAS, the Company acknowledges that the Investor is an Affiliate of the Cantor Fitzgerald group of entities, and the Investor’s Affiliate, Cantor Fitzgerald & Co. (“CF&CO”), is acting as the Investor’s representative in connection with the transactions contemplated hereby.

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Capitalized terms used in this Agreement shall have the meanings ascribed to such terms in Annex I hereto, and hereby made a part hereof, or as otherwise set forth in this Agreement.

 

 

ARTICLE II

PURCHASE AND SALE OF ORDINARY SHARES

 

Section 2.1. Purchase and Sale of Shares. Upon the terms and subject to the conditions of this Agreement, during the Investment Period, the Company, in its sole discretion, shall have the right, but not the obligation, to issue and sell to the Investor, and the Investor shall purchase from the Company, up to the lesser of (i) $100,000,000 (the “Total Commitment”) in aggregate gross purchase price of duly authorized, validly issued, fully paid and non-assessable Ordinary Shares and (ii) the Exchange Cap, to the extent applicable under Section 3.3 (such lesser amount of Ordinary Shares, the “Aggregate Limit”), by the delivery to the Investor of VWAP Purchase Notices as provided in Article III.

 

Section 2.2. Signing Date; Closing Date; Settlement Dates.

 

(i) This Agreement shall become effective and binding upon (a) the delivery of counterpart signature pages of this Agreement and the Registration Rights Agreement executed by each of the parties hereto and thereto, and (b) the delivery of a signing certificate, dated as of the Signing Date and substantially in the form attached hereto as Exhibit B, to the offices of Covington & Burling LLP, Attn: Matthew Gehl, The New York Times Building, 620 Eighth Avenue, New York, NY 10018, at 10:00 a.m., New York City time.

 

(ii) On a date mutually agreed to by the Company and the Investor, to be no earlier than the Commitment Shares Determination Date and no later than the Trading Day prior to the filing of the Initial Registration Statement (the “Closing Date”), the Company shall (a) satisfy the conditions set forth in Section 7.1 (the “Closing”) and (b) issue to the Investor the Commitment Shares, pursuant to and in accordance with Section 10.1(ii).

 

(iii) In consideration of and in express reliance upon the representations, warranties and covenants contained in, and upon the terms and subject to the conditions of, this Agreement, during the Investment Period, the Company, at its sole option and discretion, may issue and sell to the Investor, and, if the Company elects to so issue and sell, the Investor shall purchase from the Company, the Shares in respect of each VWAP Purchase. The issue of Shares in respect of each VWAP Purchase, and the payment for such Shares, shall occur in accordance with Section 3.2, provided that all of the conditions precedent in Article VII shall have been fulfilled at the applicable times set forth in Article VII.

 

Section 2.3. Initial Public Announcements and Required Filings. The Company shall cause the SPAC to file with the Commission, not later than 9:00 a.m., New York City time, on the first (1st) business day immediately following the date of this Agreement, a Current Report on Form 8-K disclosing the execution of this Agreement and the Registration Rights Agreement by the Company and the Investor and describing the material terms thereof, including, without limitation, the issuance of the Commitment Shares payable by the Company to the Investor in accordance with Section 10.1(ii), and attaching as exhibits thereto copies of each of this Agreement and the Registration Rights Agreement (including all exhibits thereto) (the “Current Report”). The Company shall cause the SPAC to provide the Investor and its legal counsel a reasonable opportunity to comment on a draft of the Current Report prior to filing, and shall give due consideration to all such comments. From and after the filing of the Current Report with the Commission, all material nonpublic information delivered to the Investor (or the Investor’s representatives or agents) by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees, agents or representatives (if any) in connection with the transactions contemplated by the Transaction Documents shall have been publicly disclosed. The Company shall use its reasonable best efforts to prepare and, as soon as practicable following the Merger Closing, file with the Commission the Initial Registration Statement and any New Registration Statement covering only the resale by the Investor of the Registrable Securities in accordance with the Securities Act and the Registration Rights Agreement. At or before 8:30 a.m., New York City time, on the second (2nd) Trading Day immediately following the Effective Date of the Initial Registration Statement and any New Registration Statement (or any post-effective amendment thereto), the Company shall use its reasonable best efforts to file with the Commission in accordance with Rule 424(b) under the Securities Act the final Prospectus to be used in connection with sales pursuant to such Registration Statement (or post-effective amendment thereto).

 

 

ARTICLE III

PURCHASE TERMS

 

Subject to the satisfaction of the conditions set forth in Article VII, the parties agree as follows:

 

Section 3.1. VWAP Purchases. Upon the initial satisfaction of all of the conditions set forth in Section 7.2 (the “Commencement” and the date of such initial satisfaction, the “Commencement Date”) and from time to time thereafter, subject to the satisfaction of all of the conditions set forth in Section 7.3, the Company shall have the right, but not the obligation, to direct the Investor, by its timely delivery to the Investor of a VWAP Purchase Notice, in substantially the form attached hereto as Exhibit D, after 6:00 a.m., New York City time, but prior to 9:00 a.m., New York City time, to purchase a number of Shares equal to the applicable VWAP Purchase Share Amount, not to exceed the applicable VWAP Purchase Maximum Amount, at the applicable VWAP Purchase Price therefor on such VWAP Purchase Date in accordance with this Agreement (each such purchase, a “VWAP Purchase”). In addition, the Investor may, in its sole discretion, accept a VWAP Purchase Notice after 9:00 a.m., New York City time, on a VWAP Purchase Date, provided that such acceptance, once provided, shall be irrevocable and binding and the Company’s obligation to issue the Shares that are the subject of such VWAP Purchase Notice to the Investor shall be binding; provided further that, if the Investor does not accept a VWAP Purchase Notice that is delivered after 9:00 a.m., New York City time, such VWAP Purchase Notice shall be deemed to be null and void. The Investor may also, in its sole discretion, accept additional VWAP Purchase Notices within a Trading Day, in which case any prior VWAP Purchase Notice accepted by the Investor in such Trading Day shall be null, void, superseded and replaced in its entirety by such subsequent VWAP Purchase Notice. The Company may timely deliver a VWAP Purchase Notice to the Investor as often as every Trading Day (and may deliver multiple VWAP Purchase Notices in any given day, it being understood that a subsequent VWAP Purchase Notice will supersede and replace all earlier VWAP Purchase Notices delivered within the same Trading Day in their entirety), so long as (i) the Closing Sale Price of the Ordinary Shares on the Trading Day immediately preceding such Trading Day is not less than the Threshold Price, and (ii) all Shares subject to all prior VWAP Purchases theretofore required to have been received by the Investor as DWAC Shares under this Agreement have been issued to the Investor as DWAC Shares in accordance with this Agreement. The Investor is obligated to accept each VWAP Purchase Notice prepared and delivered by the Company in accordance with the terms of and subject to the satisfaction of the conditions contained in this Agreement. If the Company delivers any VWAP Purchase Notice directing the Investor to purchase a number of Shares that is in excess of the applicable VWAP Purchase Maximum Amount, such VWAP Purchase Notice shall be void ab initio to the extent of the amount by which the VWAP Purchase Share Amount set forth in such VWAP Purchase Notice exceeds such applicable VWAP Purchase Maximum Amount, and the Investor shall have no obligation to purchase such excess Shares in respect of such VWAP Purchase Notice; provided, however, that the Investor shall remain obligated to purchase the applicable VWAP Purchase Maximum Amount in such VWAP Purchase. Notwithstanding anything in this paragraph to the contrary, in the case where the Sale Price falls below the Threshold Price during a Trading Day, the VWAP Purchase Amount shall be calculated using (i) the VWAP Purchase Share Percentage of the aggregate number of shares traded on the Principal Market for such portion of the VWAP Purchase Date the Sale Price is not below the Threshold Price and (ii) a VWAP Purchase Price calculated using the volume weighted average price of Ordinary Shares sold during such portion of the VWAP Purchase Date the Sale Price is not below the Threshold Price. Each VWAP Purchase Notice must include a VWAP Purchase Share Estimate. Each VWAP Purchase Notice must be accompanied by irrevocable instructions to the Company’s Transfer Agent to immediately issue to the Investor a number of Ordinary Shares equal to the VWAP Purchase Share Estimate. In no event shall the Investor purchase (or be deemed to have purchased), pursuant to any VWAP Purchase, a number of Shares constituting the applicable VWAP Purchase Share Amount that exceeds the VWAP Purchase Share Estimate issued on the VWAP Purchase Date in connection with such VWAP Purchase Notice; however, the Investor will promptly instruct the Transfer Agent to return to the Company any Shares issued pursuant to the VWAP Purchase Share Estimate that exceeds the number of Shares constituting the applicable VWAP Purchase Share Amount the Investor actually purchases in connection with such VWAP Purchase (such amount, the “Excess Shares”). Alternatively, if the Transfer Agent does not return the Excess Shares to the Company on the VWAP Purchase Date in accordance with the Investor’s instructions, or if otherwise instructed in writing by the Company, the Investor may retain such Excess Shares (provided the Investor will not be deemed to have purchased such Excess Shares), and such Excess Shares will be deemed pre-issued Shares that will reduce the number of Shares required to be issued by the Company to the Investor in accordance with this Section 3.1 on the next VWAP Purchase Date in connection with the next VWAP Purchase Notice. At or prior to 5:30 p.m., New York City time, on the VWAP Purchase Date for each VWAP Purchase, the Investor shall provide to the Company a written confirmation for such VWAP Purchase setting forth the applicable VWAP Purchase Price per Share to be paid by the Investor in such VWAP Purchase, and the total aggregate VWAP Purchase Price to be paid by the Investor for the total VWAP Purchase Share Amount purchased by the Investor in such VWAP Purchase. Notwithstanding the foregoing, the Company shall not deliver any VWAP Purchase Notices to the Investor during the Post-Effective Amendment Period.

 

 

Section 3.2. Settlement. For each VWAP Purchase, the Investor shall pay to the Company an amount in cash equal to the product of (i) the total number of Shares purchased by the Investor in such VWAP Purchase and (ii) the applicable VWAP Purchase Price for such Shares (the “VWAP Purchase Amount”), as full payment for such Shares purchased by the Investor in such VWAP Purchase, via wire transfer of immediately available funds, not later than 5:00 p.m., New York City time, on (a) the second (2nd) Trading Day following the first Trading Day on which, as of 10:30 a.m., New York City time, on such Trading Day, the Investor shall have received, as DWAC Shares, all of the Shares purchased by the Investor in such VWAP Purchase. If the Investor fails to pay the VWAP Purchase Amount when due, the Investor will return the DWAC Shares to the Company. If the Company or the Transfer Agent shall fail for any reason to issue to the Investor, as DWAC Shares, any Shares purchased by the Investor in a VWAP Purchase prior to 10:30 a.m., New York City time, on the Trading Day immediately following the applicable VWAP Purchase Date (the “Share Issuance Deadline”), and if, on or after such Trading Day, the Investor purchases (in an open market transaction or otherwise) Ordinary Shares to transfer in satisfaction of a sale by the Investor of any Shares not issued by the Company to the Investor by the Share Issuance Deadline in respect of such VWAP Purchase, then the Company shall, within one (1) Trading Day after the Investor’s request, either (i) pay cash to the Investor in an amount equal to the Investor’s total purchase price (including brokerage commissions, if any) for the Ordinary Shares so purchased (the “Cover Price”), at which point the Company’s obligation to issue such Shares to the Investor as DWAC Shares (and the Investor’s obligation to purchase such Shares from the Company) shall terminate, or (ii) promptly honor its obligation to issue to the Investor such Shares as DWAC Shares and pay cash to the Investor in an amount equal to the excess (if any) of the Cover Price over the total purchase price paid by the Investor pursuant to this Agreement for all of the Shares purchased by the Investor in such VWAP Purchase. The Company shall not issue any fraction of an Ordinary Share to the Investor in connection with any VWAP Purchase effected pursuant to this Agreement. If the issuance would result in the issuance of a fraction of an Ordinary Share, the Company shall round such fraction of an Ordinary Share up (if half an Ordinary Share or greater) or down (if less than half an Ordinary Share) to the nearest whole Ordinary Share; provided, however, that in the event rounding up shall cause payment for any Ordinary Share to be below the par value thereof, such Ordinary Share shall instead be rounded down. All payments to be made by the Investor pursuant to this Agreement shall be made by wire transfer of immediately available funds to such account as the Company may from time to time designate by written notice to the Investor in accordance with the provisions of this Agreement.

 

Section 3.3. Compliance with Rules of Principal Market.

 

(i) Exchange Cap. The Company shall not issue or sell any Ordinary Shares pursuant to this Agreement, and the Investor shall not purchase or acquire any Ordinary Shares pursuant to this Agreement, to the extent that after giving effect thereto, the aggregate number of Ordinary Shares that would be issued pursuant to this Agreement and the transactions contemplated hereby would exceed the maximum number of Ordinary Shares permitted under applicable rules of the Principal Market to be issued without a vote of the Company’s shareholders, which number of Ordinary Shares shall be reduced, on a share-for-share basis, by the number of Ordinary Shares issued or issuable pursuant to any transaction or series of transactions that may be aggregated with the transactions contemplated by this Agreement under applicable rules of the Principal Market (such maximum number of Ordinary Shares, the “Exchange Cap”), unless the Company’s shareholders have approved the issuance of Ordinary Shares pursuant to this Agreement in excess of the Exchange Cap in accordance with the applicable rules of the Principal Market. For the avoidance of doubt, the Company may, but shall be under no obligation to, request its shareholders to approve the issuance of Ordinary Shares pursuant to this Agreement; provided, that if such shareholder approval is not obtained, the Exchange Cap shall be applicable for all purposes of this Agreement and the transactions contemplated hereby at all times during the term of this Agreement.

 

(ii) General. The Company shall not issue or sell any Ordinary Shares pursuant to this Agreement if such issuance or sale would reasonably be expected to result in (a) a violation of the Securities Act or (b) a breach of the rules of the Principal Market. The provisions of this Section 3.3 shall not be implemented in a manner otherwise than in strict conformity with the terms of this Section 3.3 unless necessary to ensure compliance with the Securities Act and the applicable rules of the Principal Market.

 

 

Section 3.4. Beneficial Ownership Limitation. Notwithstanding anything to the contrary contained in this Agreement, the Company shall not issue or sell, and the Investor shall not purchase or acquire, any Ordinary Shares under this Agreement which, when aggregated with all other Ordinary Shares then beneficially owned by the Investor and its Affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by the Investor and its Affiliates (on an aggregated basis) of more than 4.99% of the outstanding voting power or Ordinary Shares (the “Beneficial Ownership Limitation”). Upon the written or oral request of the Investor, the Company shall promptly (but not later than the next business day on which the Transfer Agent is open for business) confirm orally or in writing to the Investor the number of Ordinary Shares then outstanding. The Investor and the Company shall each cooperate in good faith in the determinations required under this Section 3.4 and the application of this Section 3.4. The Investor’s written certification to the Company of the applicability of the Beneficial Ownership Limitation, and the resulting effect thereof hereunder at any time, shall be conclusive with respect to the applicability thereof and such result absent manifest error. The provisions of this Section 3.4 shall not be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3.4 unless necessary to properly give effect to the limitations contained in this Section 3.4.

 

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR

 

The Investor hereby makes the following representations, warranties and covenants to the Company:

 

Section 4.1. Organization and Standing of the Investor. The Investor is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware.

 

Section 4.2. Authorization and Power. The Investor has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the Registration Rights Agreement and to purchase or acquire the Shares in accordance with the terms hereof. The execution, delivery and performance by the Investor of this Agreement and the Registration Rights Agreement and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action, and no further consent or authorization of the Investor or its sole member is required. Each of this Agreement and the Registration Rights Agreement has been duly executed and delivered by the Investor and constitutes a valid and binding obligation of the Investor enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership, or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application (including any limitation of equitable remedies) (collectively, the “Enforceability Exceptions”).

 

Section 4.3. No Conflicts. The execution, delivery and performance by the Investor of this Agreement and the Registration Rights Agreement and the consummation by the Investor of the transactions contemplated hereby and thereby do not and shall not (i) result in a violation of such Investor’s applicable organizational instruments, (ii) conflict with, constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give rise to any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Investor is a party or by which it or any of its property or assets are bound, or (iii) result in a violation of any federal, state, local or foreign statute, rule, or regulation, or any order, judgment or decree of any court or governmental agency applicable to the Investor or by which any of its properties or assets are bound or affected, except, in the case of clauses (ii) and (iii), for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, prohibit or otherwise interfere with, in any material respect, the ability of the Investor to enter into and perform its obligations under this Agreement and the Registration Rights Agreement. The Investor is not required under any applicable federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement and the Registration Rights Agreement or to purchase or acquire the Shares in accordance with the terms hereof, other than as may be required by FINRA; provided, however, that for purposes of the representation made in this sentence, the Investor is assuming and relying upon the accuracy of the relevant representations and warranties and the compliance with the relevant covenants and agreements of the Company in the Transaction Documents to which it is a party; provided, further, that the Investor shall exercise commercially reasonable efforts to obtain any such consent, authorization or order of, or make any such filing or registration with, FINRA.

 

 

Section 4.4. Investment Purpose. The Investor is acquiring the Shares for its own account, for investment purposes and not with a view towards, or for resale in connection with, the public sale or distribution thereof, in violation of the Securities Act or any applicable state securities laws; provided, however, that by making the representations herein, the Investor does not agree, or make any representation or warranty, to hold any of the Shares for any minimum or other specific term and reserves the right to dispose of the Shares at any time in accordance with, or pursuant to, a registration statement filed pursuant to the Registration Rights Agreement or an applicable exemption under the Securities Act. The Investor is acquiring the Shares hereunder in the ordinary course of its business and does not presently have any agreement or understanding, directly or indirectly, with any Person to sell or distribute any of the Shares.

 

Section 4.5. Accredited Investor Status. The Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.

 

Section 4.6. Reliance on Exemptions. The Investor understands that the Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of U.S. federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Investor’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Investor set forth herein in order to determine the availability of such exemptions and the eligibility of the Investor to acquire the Shares.

 

Section 4.7. Information. All materials relating to the business, financial condition, management and operations of the Company and materials relating to the offer and sale of the Shares which have been requested by the Investor have been furnished or otherwise made available to the Investor or its advisors, including, without limitation, the Commission Documents. The Investor understands that its investment in the Shares involves a high degree of risk. The Investor is able to bear the economic risk of an investment in the Shares and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of a proposed investment in the Shares. The Investor and its advisors have been afforded the opportunity to ask questions of and receive answers from representatives of the Company concerning the financial condition and business of the Company and other matters relating to an investment in the Shares. Neither such inquiries nor any other due diligence investigations conducted by the Investor or its advisors, if any, or its representatives shall modify, amend or affect the Investor’s right to rely on the Company’s representations and warranties contained in this Agreement or in any other Transaction Document to which the Company is a party or the Investor’s right to rely on any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transaction contemplated hereby (including, without limitation, the opinions of the Company’s counsel delivered pursuant to this Agreement and the Registration Rights Agreement). The Investor has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Shares. The Investor understands that it (and not the Company) shall be responsible for its own tax liabilities that may arise as a result of this investment or the transactions contemplated by this Agreement.

 

Section 4.8. No Governmental Review. The Investor understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in the Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.

 

Section 4.9. No General Solicitation. The Investor is not purchasing or acquiring the Shares as a result of any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Shares.

 

Section 4.10. Not an Affiliate. The Investor is not an officer, director or Affiliate of the Company. During the Investment Period, the Investor will not acquire for its own account any Ordinary Shares or securities exercisable for or convertible into Ordinary Shares, other than pursuant to this Agreement; provided, however, that nothing in this Agreement shall prohibit or be deemed to prohibit the Investor from purchasing, in an open market transaction or otherwise, Ordinary Shares necessary for the Investor to transfer in satisfaction of a sale by the Investor of Shares that the Investor anticipated receiving from the Company in connection with the settlement of a VWAP Purchase if the Company or its Transfer Agent shall have failed for any reason (other than a failure of Investor or its Broker-Dealer (as defined below) to set up a DWAC and required instructions) to electronically transfer all of the Shares subject to such VWAP Purchase to the Investor by the applicable Share Issuance Deadline by crediting the Investor’s or its designated Broker-Dealer’s account at DTC through its DWAC delivery system in compliance with Section 3.2 of this Agreement.

 

 

Section 4.11. No Prior Short Sales. At no time prior to the date of this Agreement has the Investor, or any entity managed or controlled by the Investor, engaged in or effected, in any manner whatsoever, directly or indirectly, for its own principal account, any (i) “short sale” (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Ordinary Shares or (ii) hedging transaction, which establishes a net short position with respect to the Ordinary Shares that remains in effect as of the date of this Agreement.

 

Section 4.12. Statutory Underwriter Status. The Investor acknowledges that it will be disclosed as an “underwriter” and a “selling shareholder” in each Registration Statement and in any Prospectus contained therein to the extent required by applicable law and to the extent the Prospectus is related to the resale of Registrable Securities.

 

Section 4.13. Resales of Shares. The Investor will resell such Shares only pursuant to the Registration Statement in which the resale of such Shares is registered under the Securities Act, in a manner described under the caption “Plan of Distribution” in such Registration Statement, and in a manner in compliance with all applicable U.S. federal and state securities laws, rules and regulations.

 

Section 4.14. Residency. The Investor is a resident of the State of Delaware.

 

ARTICLE V

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY

 

The Company hereby makes the following representations, warranties and covenants to the Investor:

 

Section 5.1. Organization, Good Standing and Power. The Company and each of its Subsidiaries are duly organized, validly existing and in good standing under the laws of their respective jurisdictions of organization. The Company and each of its Subsidiaries are duly licensed or qualified as a foreign corporation (or other entity, if applicable) for transaction of business and in good standing under the laws of each other jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such license or qualification, and have all entity power and authority necessary to own or hold their respective properties and to conduct their respective businesses as described in the Commission Documents, except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, have a material adverse effect or would reasonably be expected to have a material adverse effect on or a material adverse effect affecting the assets, business, operations, earnings, properties, condition (financial or otherwise), prospects, shareholder’s equity or results of operations of the Company and the Subsidiaries taken as a whole, or prevent or materially interfere with consummation of the transactions contemplated hereby (a “Material Adverse Effect”).

 

Section 5.2. Subsidiaries. The subsidiaries set forth on Schedule 1 (collectively, the “Subsidiaries”), are the Company’s only significant subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X promulgated by the Commission). Except as set forth in the Commission Documents, the Company owns, directly or indirectly, all of the equity interests of the Subsidiaries free and clear of any lien, charge, security interest, encumbrance, right of first refusal or other restriction, and all the equity interests of the Subsidiaries are validly issued and are fully paid (or, with respect to any Subsidiaries incorporated in the PRC, the registered capital of such Subsidiary has been or will be validly issued and fully paid with all contributions within the time periods permitted under applicable PRC laws and their constitutive documents), non-assessable and free of preemptive and similar rights. None of the outstanding shares, shares of capital stock of or ownership interests in the Company or any of its Subsidiaries were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company or such Subsidiary. Except as set forth in the Commission Documents, no Subsidiary is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such Subsidiary’s capital stock, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary’s property or assets to the Company or any other Subsidiary of the Company.

 

 

Section 5.3. Authorization, Enforcement. The Company has the requisite corporate power and authority to enter into and perform its obligations under each of the Transaction Documents to which it is a party and to issue the Shares in accordance with the terms hereof. Except for approvals of the Company’s Board of Directors or a committee thereof as may be required in connection with any issuance and sale of Shares to the Investor hereunder (which approvals shall be obtained prior to the delivery of any VWAP Purchase Notice), the execution, delivery and performance by the Company of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action, and no further consent or authorization of the Company, its Board of Directors or its shareholders is required. Each of the Transaction Documents to which the Company is a party has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by the Enforceability Exceptions.

 

Section 5.4. Capitalization. The authorized share capital of the Company and the shares thereof issued and outstanding are as set forth in the Commission Documents as of the dates reflected therein. All issued and outstanding shares have been duly authorized and validly issued and are fully paid and non-assessable. No Ordinary Shares are entitled to preemptive rights after the Merger Closing and, except as set forth in the Commission Documents, there are no outstanding debt securities and no contracts, commitments, understandings, or arrangements by which the Company is or may become bound to issue additional shares of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, any shares of the Company other than those issued or granted in the ordinary course of business pursuant to the Company’s equity incentive and/or compensatory plans or arrangements. Except for customary transfer restrictions contained in agreements entered into by the Company to sell restricted securities or as set forth in the Commission Documents, the Company is not a party to, and it has no Knowledge of, any agreement that will restrict the voting or transfer of any shares of the Company after the Merger Closing. Except as set forth in the Commission Documents, there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by this Agreement or any of the other Transaction Documents or the consummation of the transactions described herein or therein. The Company has filed with the Commission true and correct copies of the Company’s operative amended and restated memorandum and articles of association (as amended from time to time, the “Memorandum”).

 

Section 5.5. Issuance of Shares. The Shares to be issued under this Agreement have been, or with respect to Shares to be purchased by the Investor pursuant to a particular VWAP Purchase Notice, will be, prior to the issuance to the Investor hereunder of such VWAP Purchase Notice, duly and validly authorized by all necessary corporate action on the part of the Company. The Commitment Shares, when issued to the Investor in accordance with this Agreement, and the Shares, if and when issued and sold against payment therefor in accordance with this Agreement, shall be validly issued and outstanding, fully paid and non-assessable and free from all liens, charges, taxes, security interests, encumbrances, rights of first refusal, preemptive or similar rights and other encumbrances with respect to the issue thereof, and the Investor shall be entitled to all rights accorded to a holder of Ordinary Shares. At or prior to Commencement, the Company shall have duly authorized and reserved a number of Ordinary Shares equal to the Exchange Cap for issuance and sale as Shares to the Investor pursuant to VWAP Purchases that may be effected by the Company, in its sole discretion, from time to time from and after the Commencement Date, pursuant to this Agreement.

 

Section 5.6. No Conflicts. The execution, delivery and performance by the Company of each of the Transaction Documents to which it is a party and the consummation by the Company of the transactions contemplated hereby and thereby do not and shall not (i) result in a violation of any provision of the Company’s Memorandum, (ii) conflict with or constitute a material default (or an event which, with notice or lapse of time or both, would become a material default) under, or give rise to any rights of termination, amendment, acceleration or cancellation of, any Material Contract, (iii) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree applicable to the Company or any of its Subsidiaries (including federal and state securities laws and regulations and the rules and regulations of the Principal Market), except, in the case of clauses (ii) and (iii), for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect or that have been waived. As of the Commencement Date and each VWAP Purchase Condition Satisfaction Time (as defined below) thereafter, the Company shall not be required under any federal, state or local rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under the Transaction Documents to which it is a party, or to issue the Shares to the Investor in accordance with the terms hereof and thereof; provided, however, that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the representations and warranties of the Investor in this Agreement and the compliance by it with its covenants and agreements contained in this Agreement and the Registration Rights Agreement.

 

 

Section 5.7. Commission Documents, Financial Statements; Internal Controls Over Financial Reporting; Accountants.

 

(i) At all times after the Merger Closing, the Company shall have timely filed (giving effect to permissible extensions in accordance with Rule 12b-25 under the Exchange Act) all filings required to be filed with or furnished to the Commission by the Company under the Securities Act or the Exchange Act, including those required to be filed with or furnished to the Commission under Section 13(a) or Section 15(d) of the Exchange Act. No Subsidiary of the Company is required to file or furnish any report, schedule, registration, form, statement, information or other document with the Commission. As of its filing date (or, if amended or superseded by a filing, on the date of such amended or superseded filing), each Commission Document filed with or furnished to the Commission complied in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and other federal, state and local laws, rules and regulations applicable to it. Each Registration Statement, on the date it is filed with the Commission, on the date it becomes effective and on each VWAP Purchase Date shall comply in all material respects with the requirements of the Securities Act (including, without limitation, Rule 415 under the Securities Act) and shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, except that this representation and warranty shall not apply to statements in or omissions from such Registration Statement made in reliance upon and in conformity with information relating to the Investor furnished to the Company in writing by or on behalf of the Investor expressly for use therein. The Prospectus and each Prospectus Supplement required to be filed pursuant to this Agreement or the Registration Rights Agreement after the Signing Date, when taken together, on its date and on each VWAP Purchase Date shall comply in all material respects with the requirements of the Securities Act (including, without limitation, Rule 424(b) under the Securities Act) and shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that this representation and warranty shall not apply to statements in or omissions from the Prospectus or any Prospectus Supplement made in reliance upon and in conformity with information relating to the Investor furnished to the Company in writing by or on behalf of the Investor expressly for use therein. The statistical, demographic and market-related data included in the Registration Statement and Prospectus are based on or derived from sources that the Company believes to be reliable and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources. Each Commission Document (other than the Initial Registration Statement or any New Registration Statement, or the Prospectus included therein or any Prospectus Supplement thereto) to be filed with or furnished to the Commission after the Signing Date and incorporated by reference in the Initial Registration Statement or any New Registration Statement, or the Prospectus included therein or any Prospectus Supplement thereto required to be filed pursuant to this Agreement or the Registration Rights Agreement, when such document is filed with or furnished to the Commission and, if applicable, when such document becomes effective, as the case may be, shall comply in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and other federal, state and local laws, rules and regulations applicable to it. There are no (i) current or pending audits, investigations, actions, suits or proceedings that are required under the Securities Act to be described in the Commission Documents that are not so described and (ii) contracts or other documents that are required under the Securities Act to be filed as exhibits to the Commission Documents that are not so filed. The Company has delivered or made available to the Investor true and complete copies of all comment letters and substantive correspondence received by the Company from the Commission relating to the Commission Documents, together with all written responses of the Company thereto in the form such responses were filed via the Commission’s Electronic Data Gathering, Analysis and Retrieval System. At all times on and after the Commencement Date, there shall not be any outstanding or unresolved comments or undertakings in such comment letters received by the Company from the Commission. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Securities Act or the Exchange Act.

 

 

(ii) The consolidated financial statements of the Company included or incorporated by reference in the Commission Documents, together with the related notes and schedules, present fairly, in all material respects, the consolidated financial position of the Company and its then consolidated subsidiaries as of the dates indicated, and the consolidated results of operations, cash flows and changes in shareholder equity of the Company and its then consolidated subsidiaries for the periods specified and have been prepared in compliance with the published requirements of the Securities Act and the Exchange Act, as applicable, and in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis. Any summary consolidated financial data included or incorporated by reference in the Commission Documents present fairly the information shown therein and have been compiled on a basis consistent with that of the financial statements included or incorporated by reference in the Commission Documents, as of the dates and for the periods indicated. Any pro forma condensed combined financial statements and the pro forma combined financial statements and any other pro forma financial statements or data included or incorporated by reference in the Commission Documents comply with the requirements of Regulation S-X of the Securities Act, including, without limitation, Article 11 thereof, and the assumptions used in the preparation of such pro forma financial statements and data are reasonable, the pro forma adjustments used therein are appropriate to give effect to the circumstances referred to therein and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements and data. There are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the Commission Documents that are not included or incorporated by reference as required. All disclosures contained or incorporated by reference in the Commission Documents, if any, regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Securities Act, to the extent applicable. At all times after the Merger Closing, the interactive data in eXtensible Business Reporting Language included in the Commission Documents, if any, shall fairly present the information called for in all material respects and shall be prepared in accordance with the Commission’s rules and guidelines applicable thereto. The Company and the Subsidiaries do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations or any “variable interest entities” as that term is used in Accounting Standards Codification Paragraph 810-10-25-20), not described in the Commission Documents which are required to be described in the Commission Documents.

 

(iii) KPMG Huazhen LLP (such firm, or any successor independent registered public accounting firm for the Company, the “Accountant”), whose report on the consolidated financial statements of the Company is included in the Commission Documents, are and, during the periods covered by their report, were an independent public accounting firm within the meaning of the Securities Act and the rules and regulations of the Public Company Accounting Oversight Board (United States). To the Company’s Knowledge, the Accountant is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) with respect to the Company.

 

(iv) At all times after the Merger Closing, there shall not be or have been any failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply in all material respects with any applicable provisions of the Sarbanes-Oxley Act and the rules and regulations promulgated thereunder. At all times after the Merger Closing, each of the principal executive officer and the principal financial officer of the Company (or each former principal executive officer of the Company and each former principal financial officer of the Company as applicable) shall have made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with respect to all reports, schedules, forms, statements and other documents required to be filed by it or furnished by it to the Commission. For purposes of the preceding sentence, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act. At all times after the Merger Closing, the Company and the Subsidiaries will maintain and keep accurate books and records reflecting their assets and maintain internal accounting controls in a manner designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and including those policies and procedures that (a) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (b) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the Company’s consolidated financial statements in accordance with GAAP and that receipts and expenditures of the Company are being made only in accordance with management’s and the Company’s directors’ authorization, and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on its financial statements. At all times after the Merger Closing, the Company and the Subsidiaries will maintain controls and other procedures, including, without limitation, those required by Sections 302 and 906 of the Sarbanes-Oxley Act, and the applicable regulations thereunder that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure and to ensure that material information relating to the Company or the Subsidiaries is made known to them by others within those entities, particularly during the period in which such periodic reports are being prepared.

 

 

Section 5.8. No Material Adverse Effect; Absence of Certain Changes. Subsequent to the respective dates as of which information is given in the Commission Documents (including any document deemed incorporated by reference therein), there has not been (i) any Material Adverse Effect or the occurrence of any development that the Company reasonably expects will result in a Material Adverse Effect, (ii) any transaction which is material to the Company and the Subsidiaries taken as a whole, (iii) any obligation or liability, direct or contingent (including any off-balance sheet obligations), incurred by the Company or any Subsidiary, which is material to the Company and the Subsidiaries taken as a whole, (iv) any material change in the capital stock or outstanding long-term indebtedness of the Company or any of its Subsidiaries or (v) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any Subsidiary, other than in each case above in the ordinary course of business or as otherwise disclosed in the Commission Documents (including any document deemed incorporated by reference therein). The Company and its Subsidiaries have conducted their respective businesses in the ordinary course of business consistent with past practice in all material respects.

 

Section 5.9. No Material Defaults. Neither the Company nor any of its Subsidiaries is (i) in default in the payment of any Threshold Debt or (ii) in default in the payment of any other indebtedness or in default under any agreement governing or creating any indebtedness for borrowed money, obligations evidenced by bonds, debentures, notes or similar instruments, which defaults would, individually or in the aggregate, have a Material Adverse Effect. The Company has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act indicating that it (i) has failed to pay any dividend or sinking fund installment on preferred shares or (ii) has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults would, individually or in the aggregate, have a Material Adverse Effect. The Commission Documents set forth, as of the respective dates stated therein, all outstanding secured and unsecured Threshold Debt of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments through such dates (other than intra-group Threshold Debt). For the purposes of this Agreement, “Threshold Debt” shall mean (a) any liabilities for borrowed money or amounts owed in excess of $500,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements, indemnities and other contingent obligations in respect of Threshold Debt of others in excess of $500,000, whether or not the same are or should be reflected on the Company’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business and (c) the present value of any lease payments in excess of $500,000 due under Company Leases required to be capitalized in accordance with GAAP. Neither the Company nor any of its Subsidiaries is in violation of the Memorandum or other applicable charter or constitutional documents.

 

Section 5.10. No Preferential Rights. Except as set forth in the Commission Documents, (i) there are no other outstanding rights, options, warrants, preemptive rights, rights of first offer, or similar rights for the purchase or acquisition from the Company of any securities of the Company that will be in effect after the Merger Closing, nor are there any agreements or commitments to issue or execute any such rights, options, warrants, preemptive rights or rights of first offer, (ii) there are no outstanding rights or obligations of the Company to repurchase or redeem any of its equity securities and (iii) the Company is not a party to, and it has no Knowledge of, any shareholders agreement, voting or similar agreement in relation to its equity securities that will be in effect after the Merger Closing. The respective rights, preferences, privileges, and restrictions of the Shares are as stated in the Company’s Memorandum. The Company does not have outstanding shareholder purchase rights or “poison pill” or any similar arrangement in effect giving any Person the right to purchase any equity interest in the Company upon the occurrence of certain events. Except as set forth in the Commission Documents, the Convertible Note Purchase Agreements of the Company dated December 9, 2021 or the Registration Rights Agreement, the Company has not granted or agreed to grant, and is not under any obligation to provide, any rights to register under the Securities Act any of its presently outstanding securities or any of its securities that may be issued subsequently. Except as set forth in the Commission Documents, no Person has the right to act as an underwriter or as a financial advisor to the Company in connection with the offer and sale of Ordinary Shares.

 

 

Section 5.11. Material Contracts. Each of the Material Contracts are (i) in full force and effect and (ii) represent the legal, valid and binding obligations of the Company or one or more of its Subsidiaries party thereto and represents the legal, valid and binding obligations of the other parties thereto, in each case, subject to the Enforceability Exceptions. Except as would not, individually or in the aggregate, have a Material Adverse Effect, (a) the Company and its Subsidiaries have performed in all respects all respective obligations required to be performed by them under each Material Contract and (b) neither the Company, the Company’s Subsidiaries, nor any other party thereto is in default under any Material Contract. During the last twelve (12) months, neither the Company nor any of its Subsidiaries has received any written notice of termination or material breach of, or material default under, any Material Contract. Except as would not, individually or in the aggregate, have a Material Adverse Effect, no event has occurred that would reasonably be expected to result in a breach of or a default under any Material Contract (in each case, with or without notice or lapse of time or both). The execution, delivery and performance by the Company of each of the Transaction Documents to which it is a party and the consummation by the Company of the transactions contemplated hereby and thereby do not and will not in any material respect violate, conflict with, result in a breach of, result in the termination of, or result in a right of termination under, any Material Contract.

 

Section 5.12. Solvency. The Company is Solvent. As used herein, the term “Solvent” means, with respect to any Person on a particular date, that on such date (i) the fair market value of the assets of such Person is greater than the total amount of liabilities (including known contingent liabilities) of such Person, (ii) the present fair salable value of the assets of such Person is greater than the amount that will be required to pay the probable liabilities of such Person on its debts as they become absolute and matured, (iii) such Person is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature, (iv) such Person does not have unreasonably small capital for the business and transaction it is engaged in and (v) such Person has not taken any steps, and does not expect to take any steps, to seek protection pursuant to any Bankruptcy Law, nor does such Person have any knowledge that its creditors intend to initiate involuntary bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for relief against such Person under any Bankruptcy Law.

 

Section 5.13. Real Property.

 

(i) Neither the Company nor any of its Subsidiaries owns any real property.

 

(ii) Except as would not, individually or in the aggregate, have a Material Adverse Effect, the Company or one of its Subsidiaries has a good and valid leasehold interest in or contractual right to use or occupy, subject to the terms of the applicable Company Lease, each real property subject to the Company Leases, free and clear of all liens, other than Permitted Liens.

 

(iii) Neither the Company nor any of its Subsidiaries has subleased, licensed or otherwise granted any Person the right to use or occupy any real property subject to a Company Lease or any material portion thereof.

 

(iv) Except as would not, individually or in the aggregate, have a Material Adverse Effect, the Company or one of its Subsidiaries has good and marketable title to, or a valid and binding leasehold or other interest in, all tangible personal property necessary for the conduct of the business of the Company and its Subsidiaries, taken as a whole, as currently conducted, free and clear of all liens, other than Permitted Liens.

 

Section 5.14. Intellectual Property.

 

(i) Except as set forth in the Commission Documents, the Company and its Subsidiaries own, possess, license or have other rights to use all foreign and domestic patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property (collectively, the “Intellectual Property”), necessary for the conduct of their respective businesses as now conducted except to the extent that the failure to own, possess, license or otherwise hold adequate rights to use such Intellectual Property would not, individually or in the aggregate, have a Material Adverse Effect.

 

 

(ii) Except as would not, individually or in the aggregate, have a Material Adverse Effect, the Company and its Subsidiaries (a) exclusively own all Intellectual Property that is owned by the Company or its Subsidiaries (the “Owned Intellectual Property”) and there are no rights of third parties to any such Owned Intellectual Property, and (b) have a valid and enforceable license (subject to the Enforceability Exceptions), or other right to use, all other Intellectual Property necessary for the operation of their businesses as presently conducted (the “Licensed Intellectual Property” and, together with the Owned Intellectual Property, the “Company Intellectual Property”).

 

(iii) Except as would not have a Material Adverse Effect, all Company Intellectual Property is free and clear of any liens (other than Permitted Liens) and is subsisting and unexpired.

 

(iv) Except as would not, individually or in the aggregate, have a Material Adverse Effect, all Owned Intellectual Property is valid and enforceable and there is no action, suit, proceeding or claim pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries, challenging the validity, enforceability, ownership, registration, or use of any Owned Intellectual Property.

 

(v) Except as would not, individually or in the aggregate, have a Material Adverse Effect, (a) the conduct of the business of the Company and its Subsidiaries as currently conducted is not infringing upon, misappropriating or otherwise violating any patent, trademark, copyright, trade secret or other proprietary rights (collectively, “Intellectual Property Rights”) of any third party, and has not infringed upon, misappropriated or otherwise violated any Intellectual Property Rights of any third party during the past three years, and (b) to the Knowledge of the Company, no third party is infringing upon, misappropriating or otherwise violating, any Company Intellectual Property Rights (excluding all commercially available off-the-shelf software licensed to the Company or its Subsidiaries). The Company and its Subsidiaries have not received from any Person any written notice during the past three years that the Company or any of its Subsidiaries is infringing upon, misappropriating or otherwise violating any Intellectual Property Rights of any Person in any material respect.

 

(vi) The Company and its Subsidiaries have in place commercially reasonable measures designed to protect and maintain all material Owned Intellectual Property, including the confidentiality of any material trade secrets included therein.

 

(vii) To the Company’s Knowledge, there is no third-party U.S. patent or published U.S. patent application which contains claims for which an Interference Proceeding (as defined in 35 U.S.C. § 135) has been commenced against any patent or patent application described in the Commission Documents as being owned by or licensed to the Company, which is material to the Company and its Subsidiaries, taken as a whole.

 

(viii) The Company and its Subsidiaries have complied with the terms of each agreement pursuant to which Licensed Intellectual Property has been licensed to the Company or such Subsidiary, and all such agreements are in full force and effect, except as would not, individually or in the aggregate, have a Material Adverse Effect.

 

Section 5.15. Actions Pending. Except as set forth in the Commission Documents, there are no, and during the last two years there have been no, pending or, to the Knowledge of the Company, threatened actions, suits, proceedings, audits or investigations by or against the Company or any of its Subsidiaries or of which any property of the Company or any of its Subsidiaries is the subject that, if adversely decided or resolved, would, individually or in the aggregate, have a Material Adverse Effect. There is no Governmental Order imposed upon the Company or any of its Subsidiaries that would reasonably be expected to result in liability to or obligations of the Company or any of its Subsidiaries that would, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is party to a settlement or similar agreement regarding any of the matters set forth in the two preceding sentences that contains any ongoing obligations, restrictions or liabilities (of any nature) that would, individually or in the aggregate, have a Material Adverse Effect.

 

 

Section 5.16. Compliance with Law. Except as set forth in the Commission Documents, each of the Company and its Subsidiaries is, and during the last two years has been, in compliance with all applicable laws, regulations and statutes except for such noncompliance which would not, individually or in the aggregate, have a Material Adverse Effect. Except as set forth in the Commission Documents, none of the Company or its Subsidiaries has received any written notice of non-compliance, nor has Knowledge of, nor has reasonable grounds to have Knowledge of, any facts that could give rise to a notice of non-compliance with any such laws, regulations and statutes, and has no Knowledge of any pending change or contemplated change to any applicable law or regulation or governmental position; in each case that would, individually or in the aggregate, have a Material Adverse Effect.

 

Section 5.17. Certain Fees. Neither the Company nor any of its Subsidiaries has incurred any liability for any finder’s fees, brokerage commissions or similar payments in connection with the transactions herein contemplated.

 

Section 5.18. Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided the Investor or any of its agents, advisors or counsel with any information that constitutes or could reasonably be expected to constitute material nonpublic information concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by the Transaction Documents. The Company understands and confirms that the Investor will rely on the foregoing representations in effecting resales of Shares under the Registration Statement.

 

Section 5.19. Broker/Dealer Relationships. Neither the Company nor any of the Subsidiaries (i) is required to register as a “broker” or “dealer” in accordance with the provisions of the Exchange Act or (ii) directly or indirectly through one or more intermediaries, controls or is a “person associated with a member” or “associated person of a member” (within the meaning set forth in the FINRA Manual).

 

Section 5.20. Disclosure Controls. At all times after the Merger Closing, the Company shall maintain a system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the Exchange Act and that has been designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. After the Merger Closing, the Company will carry out any evaluations of the effectiveness of its disclosure controls and procedures required by Rule 13a-15 of the Exchange Act.

 

Section 5.21. Permits. Except as set forth in the Commission Documents, each of the Company and its Subsidiaries holds, and during the last two year period, has held, all material licenses, approvals, consents, registrations, franchises and permits (including, without limitation, any under Environmental Laws) necessary for the operation of the business of the Company and its Subsidiaries (the “Company Permits”), except where the failure to hold any such Company Permit would not, individually or in the aggregate, have a Material Adverse Effect. The Company and its Subsidiaries are, and during the last two years have been, in compliance with and not in default under such Company Permits, in each case except for such noncompliance that would not, individually or in the aggregate, have a Material Adverse Effect. Without limiting the generality of the foregoing, all permits, licenses and approvals by, and filings and registrations and other requisite formalities with, the Governmental Authorities of the PRC that are required to be obtained or made in respect of, as applicable, the Company or any of its Subsidiaries with respect to its establishment, capital structure, business and operations as it is now being conducted, including the approval of and registrations or filings with the State Administration for Market Regulation of the PRC (formerly the State Administration for Industry and Commerce), the Ministry of Commerce of the PRC, the National Development and Reform Commission of the PRC, the Ministry of Industry and Information Technology of the PRC, the State Administration of Foreign Exchange of the PRC, the Ministry of Human Resources and Social Security of the PRC, the Fire and Rescue Department Ministry of Emergency Management and the State Administration of Taxation of the PRC, and their respective local counterparts, if required, have been duly completed in accordance with applicable laws of the PRC, except for any such permits, licenses and approvals by, and filings and registrations and other formalities, the absence of which would not, individually or in the aggregate, have a Material Adverse Effect. Each of the Company and its Subsidiaries, if established in the PRC, has been conducting its business activities within its permitted scope of business, and has been operating its business in compliance in all material respects with all relevant legal requirements and with all requisite permits, licenses and approvals granted by, and filings and registrations made with the competent Governmental Authorities of the PRC. Neither the Company nor any Subsidiary has received, or has any reason to believe that it will receive, any notice of proceedings relating to the revocation or modification of, or non-compliance with, any Company Permit which, if the subject of an unfavorable decision, ruling or finding, would, individually or in the aggregate, have a Material Adverse Effect.

 

 

Section 5.22. Environmental Compliance.

 

(i) The Company and its Subsidiaries are, and during the last two years have been, in compliance with all Environmental Laws applicable thereto, except where the failure to be, or to have been, in compliance with such Environmental Laws has not had, and would not have, individually or in the aggregate, a Material Adverse Effect.

 

(ii) There are no written claims or notices of violation pending or issued to or, to the Knowledge of the Company, threatened against either the Company or any of its Subsidiaries alleging violations of or liability under any Environmental Law that would, individually or in the aggregate, have a Material Adverse Effect.

 

(iii) Neither the Company nor any of its Subsidiaries has treated, stored, manufactured, transported, handled, disposed or released any Hazardous Materials in any material respect.

 

(iv) To the Knowledge of the Company, neither the Company nor any of its Subsidiaries has any liability material to the Company and its Subsidiaries, taken as a whole, with respect to the presence of Hazardous Materials in any real property subject to a Company Lease.

 

(v) Except as set forth in the Commission Documents, neither the Company nor any of its Subsidiaries has contractually assumed or provided an indemnity with respect to the liability of any other Person under any Environmental Laws, except where such assumption or indemnity would not, individually or in the aggregate, have a Material Adverse Effect.

 

Section 5.23. No Improper Practices.

 

(i) Neither the Company nor the Subsidiaries, nor any director, officer, or employee of the Company or any Subsidiary nor, to the Company’s Knowledge, any agent, Affiliate or other person acting on behalf of the Company or any Subsidiary has, in the past five years, made any unlawful contributions to any candidate for any political office (or failed fully to disclose any contribution in violation of applicable law) or made any contribution or other payment to any official of, or candidate for, any federal, state, municipal, or foreign office or other person charged with similar public or quasi-public duty in violation of any applicable law or of the character required to be disclosed in the Commission Documents.

 

(ii) No relationship, direct or indirect, exists between or among the Company or any Subsidiary or any Affiliate of any of them, on the one hand, and the directors, officers and shareholders of the Company or any Subsidiary, on the other hand, that is required by the Securities Act to be described in the Commission Documents that is not so described.

 

(iii) No relationship, direct or indirect, exists between or among the Company or any Subsidiary or any Affiliate of them, on the one hand, and the directors, officers, or shareholders of the Company or any Subsidiary, on the other hand, that is required by the rules of FINRA to be described in the Commission Documents that is not so described.

 

(iv) Except as set forth in the Commission Documents, there are no material outstanding loans or advances or material guarantees of indebtedness by the Company or any Subsidiary to or for the benefit of any of their respective officers or directors or any of the members of the families of any of them; no such loans, advances or guarantees (whether or not material) are required to be disclosed in the Commission Documents that are not so disclosed.

 

(v) The Company has not offered, or caused any placement agent to offer, Ordinary Shares to any person with the intent to influence unlawfully (a) a customer or supplier of the Company or any Subsidiary to alter the customer’s or supplier’s level or type of business with the Company or any Subsidiary or (b) a trade journalist or publication to write or publish favorable information about the Company or any Subsidiary or any of their respective products or services.

 

 

(vi) Neither the Company nor any Subsidiary nor any director, officer or employee of the Company or any Subsidiary nor, to the Company’s Knowledge, any agent, Affiliate or other person acting on behalf of the Company or any Subsidiary has (a) violated or is in violation of any Anti-Corruption Laws; (b) promised, offered, provided, attempted to provide or authorized the provision of anything of value, directly or indirectly, to any person for the purpose of obtaining or retaining business, influencing any act or decision of the recipient, or securing any improper advantage; or (c) made any payment of funds of the Company or any Subsidiary or received or retained any funds in violation of any Anti-Corruption Laws.

 

Section 5.24. Money Laundering Laws. The operations of the Company and each of its Subsidiaries are and have been conducted at all times in compliance with Money Laundering Laws; and no action, suit or proceeding by or before any Governmental Authority involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the Knowledge of the Company, threatened. The Company has effective controls that are sufficient to provide reasonable assurances that violations of applicable Money Laundering Laws will be prevented, detected and deterred.

 

Section 5.25. Off-Balance Sheet Arrangements. There are no transactions, arrangements or other relationships between or among the Company, or any of its Affiliates and any unconsolidated entity, including, but not limited to, any structural finance, special purpose or limited purpose entity (each, an “Off-Balance Sheet Transaction”) that could, individually or in the aggregate, reasonably be expected to affect materially the Company’s liquidity or the availability of or requirements for its capital resources, including those Off-Balance Sheet Transactions described in the Commission’s Statement about Management’s Discussion and Analysis of Financial Conditions and Results of Operations (Release Nos. 33-8056; 34-45321; FR-61), required to be described in the Commission Documents which have not been described as required.

 

Section 5.26. Transactions With Affiliates. No relationship, direct or indirect, exists between or among the Company or any of its Subsidiaries on the one hand, and the directors, officers, trustees, managers, shareholders, partners, customers or suppliers of the Company or any of the Subsidiaries on the other hand, which would be required by the Securities Act or the Exchange Act to be disclosed in the Commission Documents, which is not so disclosed.

 

Section 5.27. Labor Disputes. The Company and each of its Subsidiaries are and have been during the past two years in compliance with all applicable laws respecting labor, employment, immigration, fair employment practices, terms and conditions of employment, workers’ compensation, occupational safety, plant closings, mass layoffs, worker classification, exempt and non-exempt status, compensation and benefits, statutory social insurances and housing funds, and wages and hours, except as would not, individually or in the aggregate, have a Material Adverse Effect. None of the Company nor any of its Subsidiaries is bound by or subject to any collective bargaining or similar agreement with any labor union, and, to the Knowledge of the Company, none of the employees, representatives or agents of the Company or any of its Subsidiaries is represented by any labor union. No labor disturbance by or dispute with employees of the Company or any of its Subsidiaries exists or, to the Knowledge of the Company, is threatened which would, individually or in the aggregate, have a Material Adverse Effect.

 

Section 5.28. Use of Proceeds. The proceeds from the sale of the Shares by the Company to the Investor shall be used by the Company in the manner as will be set forth in the Prospectus included in any Registration Statement (and any post-effective amendment thereto) and any Prospectus Supplement thereto filed pursuant to the Registration Rights Agreement.

 

Section 5.29. Investment Company Act Status. The Company is not, and as a result of the consummation of the transactions contemplated by the Transaction Documents and the application of the proceeds from the sale of the Shares as will be set forth in the Prospectus included in any Registration Statement (and any post-effective amendment thereto) and any Prospectus Supplement thereto filed pursuant to the Registration Rights Agreement, the Company will not be an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

Section 5.30. Margin Rules. Neither the issuance, sale and delivery of the Shares nor the application of the proceeds thereof by the Company as described in the Commission Documents will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.

 

 

Section 5.31. Taxes. The Company and each of its Subsidiaries have filed all federal, state, local and foreign tax returns which have been required to be filed and paid all taxes shown thereon, to the extent that such taxes have become due and are not being contested in good faith, except where the failure to so file or pay would not have a Material Adverse Effect. Except as set forth in the Commission Documents, no tax deficiency has been determined adversely to the Company or any of its Subsidiaries which has had, or would have, individually or in the aggregate, a Material Adverse Effect. The Company has no Knowledge of any federal, state or other governmental tax deficiency, penalty or assessment which has been or might be asserted or threatened against it which would have a Material Adverse Effect.

 

Section 5.32. ERISA. Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained, administered or contributed to by the Company or any of its Affiliates for employees or former employees of the Company and any of its Subsidiaries has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”), except where noncompliance would not, individually or in the aggregate, have a Material Adverse Effect. No prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred which would result in a material liability to the Company with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; and for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions.

 

Section 5.33. Stock Transfer Taxes. All stock or share transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Shares to be sold hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will have been fully complied with.

 

Section 5.34. Insurance. The Company and each of its Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Company and each of its Subsidiaries reasonably believe are adequate for the conduct of their properties and as is customary for companies engaged in similar businesses in similar industries.

 

Section 5.35. Exemption from Registration. Subject to, and in reliance on, the representations, warranties and covenants made herein by the Investor, the offer and sale of the Shares in accordance with the terms and conditions of this Agreement is exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D; provided, however, that at the request of and with the express agreements of the Investor (including, without limitation, the representations, warranties and covenants of Investor set forth in Section 4.9 through 4.13) and, provided the Investor and its Broker-Dealer shall have provided any deliverables that the Company, its counsel or the Transfer Agent shall reasonably request or require in connection therewith, the Shares to be issued from and after Commencement to or for the benefit of the Investor pursuant to this Agreement shall be issued to the Investor or its designee only as DWAC Shares and will not bear legends noting restrictions as to resale of such securities under federal or state securities laws, nor will any such securities be subject to stop transfer instructions.

 

Section 5.36. No General Solicitation or Advertising. Neither the Company, nor any of its Subsidiaries or Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Shares.

 

Section 5.37. No Integrated Offering. None of the Company, its Subsidiaries or any of their Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the issuance of any of the Shares under the Securities Act, whether through integration with prior offerings or otherwise, or cause this offering of the Shares to require approval of the shareholders of the Company under any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of the Principal Market. None of the Company, its Subsidiaries, their Affiliates nor any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of the issuance of any of the Shares under the Securities Act or cause the offering of any of the Shares to be integrated with other offerings.

 

 

Section 5.38. Dilutive Effect. The Company is aware and acknowledges that issuance of the Shares could cause dilution to existing shareholders and could significantly increase the outstanding number of Ordinary Shares. The Company further acknowledges that its obligation to issue the Shares to be purchased by the Investor pursuant to a VWAP Purchase is, upon the Company’s delivery to the Investor of a VWAP Purchase Notice for a VWAP Purchase in accordance with this Agreement, absolute and unconditional following the delivery of such VWAP Purchase Notice to the Investor, regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

 

Section 5.39. Manipulation of Price. Neither the Company nor any of its officers, directors or Affiliates has, and, to the Knowledge of the Company, no Person acting on their behalf has, (i) taken, directly or indirectly, any action designed or intended to cause or to result in the stabilization or manipulation of the price of any security of the Company, or which caused or resulted in, or which would in the future reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Company, in each case to facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company. Neither the Company nor any of its officers, directors or Affiliates will during the term of this Agreement, and, to the Knowledge of the Company, no Person acting on their behalf will during the term of this Agreement, take any of the actions referred to in the immediately preceding sentence.

 

Section 5.40. Shell Company Status. The Company is not, and has not previously been at any time, an issuer identified in, or subject to, Rule 144(i).

 

Section 5.41. Listing and Maintenance Requirements; DTC Eligibility. At all times after the Merger Closing, (i) the Ordinary Shares will be registered pursuant to Section 12(b) of the Exchange Act, and the Company shall not have taken action designed to, or which to its Knowledge is likely to have the effect of, terminating the registration of the Ordinary Shares under the Exchange Act, nor shall the Company have received any notification that the Commission is contemplating terminating such registration; (ii) the Company shall not have received notice from the Principal Market to the effect that the Company is not in compliance with the listing or maintenance requirements of the Principal Market; (iii) the Ordinary Shares shall be eligible for participation in the DTC book entry system and there shall be Ordinary Shares on deposit at DTC for transfer electronically to third parties via DTC through its Deposit/Withdrawal at Custodian (“DWAC”) delivery system; and (iv) the Company shall not have received notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Ordinary Shares, electronic trading or book-entry services by DTC with respect to the Ordinary Shares is being imposed or is contemplated.

 

Section 5.42. Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Memorandum or the laws of its jurisdiction of formation that is or could become applicable to the Investor as a result of the Investor and the Company fulfilling their respective obligations or exercising their respective rights under the Transaction Documents (as applicable), including, without limitation, as a result of the Company’s issuance of the Shares and the Investor’s ownership of the Shares.

 

Section 5.43. OFAC. Neither the Company nor any of its Subsidiaries, nor any of their respective directors, officers, employees, agents, Affiliates or other representatives is currently, or has been in the last five years: (i) a Sanctioned Person; (ii) located, organized or resident in, or operating from, a Sanctioned Country; (iii) knowingly engaged in any dealings or transactions with any Sanctioned Person or in any Sanctioned Country, in violation of Sanctions Laws; or (iv) otherwise in violation of applicable Sanctions Laws or trade control laws. Neither the Company nor any of its Subsidiaries will, directly or indirectly, use the proceeds from the sale of Shares, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person (a) to fund or facilitate any activities or business of or with any Sanctioned Person or in any Sanctioned Country, or (b) in any other manner that will result in a violation of Sanctions Laws by any Person (including any Person participating in the transactions contemplated by the Transaction Documents, whether as underwriter, advisor, investor or otherwise).

 

 

Section 5.44. Information Technology; Compliance with Data Protection Laws.

 

(i) The Company’s and its Subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects as required in connection with, the operation of the business of the Company as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants, except as would not, individually or in the aggregate, have a Material Adverse Effect. The Company and its Subsidiaries have implemented and maintain commercially reasonable measures designed to maintain and protect their material confidential information and the confidentiality, integrity and security of the Company’s and its Subsidiaries’ IT Systems and data, including all sensitive, confidential or regulated data (“Confidential Data”). The Company and its Subsidiaries have implemented and maintain commercially reasonable back-up and disaster recovery procedures designed for the continued operation of their business in the event of a failure of the IT systems. Except as set forth in the Commission Documents, there have been no breaches, violations, outages or unauthorized uses of or accesses to the IT Systems, except for those that have been remedied without material cost or liability or the duty to notify any other person, nor any incidents under internal review or investigations relating to the same. The Company and its Subsidiaries are presently in material compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority in effect, internal policies and contractual obligations of the Company and its Subsidiaries relating to the privacy and security of IT Systems and Confidential Data and to the protection of such IT Systems and Confidential Data from unauthorized use, access, misappropriation or modification.

 

(ii) The Company and its Subsidiaries are in material compliance, and for the past three years have been in material compliance, with the Data Protection Laws. To ensure compliance with the Data Protection Laws, the Company has in place, complies with, and takes appropriate steps to ensure compliance in all material respects with its policies and procedures relating to the Data Protection Laws, including data privacy and security and the collection, storage, use, processing, disclosure, handling, and analysis of Confidential Data (the “Policies”). The Company has at all times made all disclosures to users or customers required under the Data Protections Laws and the Policies, and none of such disclosures made or contained in any Policy have been inaccurate or in violation of any applicable laws, regulatory rules or requirements, in any material respect. Neither the Company nor any Subsidiary: (a) has received notice of any actual or potential liability under or relating to, or actual or potential violation of, any of the Data Protection Laws, and has no Knowledge of any event or condition that would reasonably be expected to result in any such notice; (b) is currently conducting or paying for, in whole or in part, any investigation, remediation, or other corrective action pursuant to any Data Protection Law; or (c) is a party to any order, decree, or agreement that imposes any obligation or liability under any Data Protection Law.

 

Section 5.45. Acknowledgement Regarding Relationship with Investor and CF&CO. The Company acknowledges and agrees, to the fullest extent permitted by law, that the Investor is acting solely in the capacity of an arm’s-length purchaser with respect to this Agreement and the transactions contemplated by the Transaction Documents, and CF&CO is acting as a representative of the Investor in connection with the transactions contemplated by the Transaction Documents, and of no other party, including the Company. The Company further acknowledges that while the Investor will be deemed to be a statutory “underwriter” with respect to certain of the transactions contemplated by the Transaction Documents in accordance with interpretive positions of the Staff of the Commission, the Investor is a “trader” that is not required to register with the Commission as a broker-dealer under Section 15(a) of the Securities Exchange Act of 1934. The Company further acknowledges that the Investor and its representatives are not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated by the Transaction Documents, and any advice given by the Investor or any of its representatives (including CF&CO) or agents in connection therewith is merely incidental to the Investor’s acquisition of the Shares. The Company understands and acknowledges that employees of CF&CO may discuss market color, VWAP Purchase Notice timing and parameter considerations and other related capital markets considerations with the Company in connection with the Transaction Documents and the transactions contemplated thereby, in all cases on behalf of the Investor. The Company acknowledges and agrees that the Investor has not made and does not make any representations or warranties with respect to the transactions contemplated by the Transaction Documents other than those specifically set forth in Article IV.

 

 

Section 5.46. Acknowledgement Regarding Investor’s Affiliate Relationships. The Company acknowledges and understands the contents of this paragraph. Affiliates of the Investor, including CF&CO, engage in a wide range of activities for their own accounts and the accounts of customers, including corporate finance, mergers and acquisitions, merchant banking, equity and fixed income sales, trading and research, derivatives, foreign exchange, futures, asset management, custody, clearance and securities lending. In the course of their respective business, Affiliates of the Investor may, directly or indirectly, hold long or short positions, trade and otherwise conduct such activities in or with respect to debt or equity securities or bank debt of, or derivative products relating to, the Company. Any such position will be created, and maintained, independently of the position the Investor takes in the Company. In addition, at any given time Affiliates of the Investor, including CF&CO, may have been or in the future be engaged by one or more entities that may be competitors with, or otherwise adverse to, the Company in matters unrelated to the transactions contemplated by the Transaction Documents, and Affiliates of the Investor, including CF&CO may have or may in the future provide investment banking or other services to the Company in matters unrelated to the transactions contemplated by the Transaction Documents. Activities of any of the Investor’s Affiliates performed on behalf of the Company may give rise to actual or apparent conflicts of interest given the Investor’s potentially competing interests with those of the Company. The Company expressly acknowledges the benefits it receives from the Investor’s participation in the transactions contemplated by the Transaction Documents, on the one hand, and the Investor’s Affiliates’ activities, if any, on behalf of the Company unrelated to the transactions contemplated by the Transaction Documents, on the other hand, and understands the conflict or potential conflict of interest that may arise in this regard, and has consulted with such independent advisors as it deems appropriate in order to understand and assess the risks associated with these potential conflicts of interest. Consistent with applicable legal and regulatory requirements, applicable Affiliates of the Investor have adopted policies and procedures to establish and maintain the independence of their research departments and personnel from their investment banking groups and the Investor. As a result, research analysts employed by Affiliates of the Investor may hold views, make statements or investment recommendations or publish research reports with respect to the Company or the transactions contemplated by the Transaction Documents that differ from the views of the Investor.

 

Section 5.47. Emerging Growth Company Status. From the time of the initial filing of the Company’s first registration statement with the Commission, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Securities Act.

 

ARTICLE VI

ADDITIONAL COVENANTS

 

The Company covenants with the Investor, and the Investor covenants with the Company, as follows, which covenants of one party are for the benefit of the other party, during the Investment Period (and with respect to the Company, for the period following the termination of this Agreement specified in Section 8.3 pursuant to and in accordance with Section 8.3):

 

Section 6.1. Securities Compliance. The Company shall notify the Commission and the Principal Market, if and as applicable, in accordance with their respective rules and regulations, of the transactions contemplated by the Transaction Documents, and shall use its reasonable best efforts to take all necessary action, undertake all proceedings and obtain all registrations, permits, consents and approvals that are required for the legal and valid issuance of the Shares to the Investor in accordance with the terms of the Transaction Documents, as applicable.

 

Section 6.2. Reservation of Ordinary Shares. The Company has available and shall reserve and keep available at all times, free of preemptive and other similar rights of shareholders, the requisite aggregate number of authorized but unissued Ordinary Shares to enable the Company to timely effect the issuance and sale of all Shares to be issued and sold in respect of each VWAP Purchase effected under this Agreement, at least prior to the delivery by the Company to the Investor of the applicable VWAP Purchase Notice in connection with such VWAP Purchase. Without limiting the generality of the foregoing, as of the Commencement Date the Company shall have reserved, out of its authorized and unissued Ordinary Shares, a number of Ordinary Shares equal to the Exchange Cap solely for the purpose of effecting VWAP Purchases under this Agreement. The number of Ordinary Shares so reserved for the purpose of effecting VWAP Purchases under this Agreement may be increased from time to time by the Company from and after the Commencement Date, and such number of reserved shares may be reduced from and after the Commencement Date only by the number of Shares actually issued and sold to the Investor pursuant to any VWAP Purchase effected from and after the Commencement Date pursuant to this Agreement.

 

 

 

Section 6.3. Registration and Listing. During the Investment Period, the Company shall use its reasonable best efforts to cause the Ordinary Shares to continue to be registered as a class of securities under Sections 12(b) of the Exchange Act, and to comply with its reporting and filing obligations under the Exchange Act, and shall not take any action or file any document (whether or not permitted by the Securities Act or the Exchange Act) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the Exchange Act or Securities Act, except as permitted herein. The Company shall use its reasonable best efforts to continue the listing and trading of its Ordinary Shares and the listing of the Shares purchased by the Investor hereunder on the Principal Market and to comply with the Company’s reporting, filing and other obligations under the rules and regulations of the Principal Market. The Company shall not take any action which could be reasonably expected to result in the delisting or suspension of the Ordinary Shares on the Principal Market (other than in connection with the listing or quotation of the Ordinary Shares on an Alternative Market). If the Company receives any final and non-appealable notice that the listing or quotation of the Ordinary Shares on the Principal Market shall be terminated on a date certain, the Company shall promptly (and in any case within 24 hours) notify the Investor of such fact in writing and shall use its reasonable best efforts to cause the Ordinary Shares to be listed or quoted on another Principal Market.

 

Section 6.4. Compliance with Laws.

 

(i) During the Investment Period, the Company shall comply with applicable provisions of the Securities Act and the Exchange Act, including Regulation M thereunder, applicable state securities or “Blue Sky” laws, and applicable listing rules of the Principal Market, in connection with the transactions contemplated by this Agreement and the Registration Rights Agreement, except as would not, individually or in the aggregate, prohibit or otherwise interfere with the ability of the Company to enter into and perform its obligations under this Agreement in any material respect or for the Investor to conduct resales of Shares under the Registration Statement in any material respect.

 

(ii) The Investor shall comply with all laws, rules, regulations and orders applicable to the performance by it of its obligations under this Agreement and its investment in the Shares, except as would not, individually or in the aggregate, prohibit or otherwise interfere with the ability of the Investor to enter into and perform its obligations under this Agreement in any material respect. Without limiting the foregoing, the Investor shall comply with all applicable provisions of the Securities Act and the Exchange Act, including Regulation M thereunder, and all applicable state securities or “Blue Sky” laws, in connection with the transactions contemplated by this Agreement and the Registration Rights Agreement.

 

Section 6.5. Keeping of Records and Books of Account; Due Diligence.

 

(i) The Investor and the Company shall each maintain records showing the remaining Total Commitment, the remaining Aggregate Limit and the dates and VWAP Purchase Share Amount for each VWAP Purchase.

 

(ii) Subject to the requirements of Section 6.12, from time to time from and after the Signing Date, the Company shall make available for inspection and review by the Investor during normal business hours and after reasonable advanced notice, customary documentation reasonably requested by the Investor and/or its appointed counsel or advisors to conduct due diligence.

 

Section 6.6. No Frustration; No Similar Transactions.

 

(i) No Frustration. The Company shall not enter into, announce or recommend to its shareholders any agreement, plan, arrangement or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability or right of the Company to perform its obligations under the Transaction Documents to which it is a party, including, without limitation, the obligation of the Company to issue (a) the Commitment Shares to the Investor in accordance with Section 10.1(ii), and (b) the Shares to the Investor in respect of a VWAP Purchase not later than the applicable Share Issuance Deadline. For the avoidance of doubt, nothing in this Section 6.6(i) shall in any way limit the Company’s right to terminate this Agreement in accordance with Section 8.2 (subject in all cases to Section 8.3).

 

 

(ii) No Similar Transactions. The Company shall not effect or enter into an agreement to effect an “equity line of credit,” “at-the-market offering,” “equity distribution program” or any similar transaction whereby the Company may issue or sell Ordinary Shares or Ordinary Share Equivalents at a future determined price, other than in connection with an Exempt Issuance. The Investor shall be entitled to seek injunctive relief against the Company and its Subsidiaries to preclude any such issuance, which remedy shall be in addition to any right to collect damages, without the necessity of showing economic loss and without any bond or other security being required.

 

Section 6.7. Corporate Existence. The Company shall take all steps necessary to preserve and continue the corporate existence of the Company; provided, however, that, except as provided in Section 6.8, nothing in this Agreement shall be deemed to prohibit the Company from engaging in any Fundamental Transaction with another Person. For the avoidance of doubt, nothing in this Section 6.7 shall in any way limit the Company’s right to terminate this Agreement in accordance with Section 8.2 (subject in all cases to Section 8.3).

 

Section 6.8. Fundamental Transaction. If a VWAP Purchase Notice has been delivered to the Investor and the transactions contemplated therein have not yet been fully settled in accordance with the terms and conditions of this Agreement, the Company shall not effect any Fundamental Transaction until the expiration of five (5) Trading Days following the date of full settlement thereof and the issuance to the Investor of all of the Shares issuable pursuant to the VWAP Purchase to which such VWAP Purchase Notice relates.

 

Section 6.9. Selling Restrictions.

 

(i) Except as expressly set forth below, the Investor covenants that from and after the Signing Date through and including the Trading Day next following the expiration or termination of this Agreement as provided in Article VIII (the “Restricted Period”), none of the Investor or any entity managed or controlled by the Investor (collectively, the “Restricted Persons” and each of the foregoing is referred to herein as a “Restricted Person”) shall, directly or indirectly, (a) engage in any Short Sales of Ordinary Shares or (b) hedging transaction, which establishes a net short position with respect to the Ordinary Shares, with respect to each of clauses (a) and (b) hereof, for the principal account of any Restricted Person. Notwithstanding the foregoing, it is expressly understood and agreed that nothing contained herein shall (without implication that the contrary would otherwise be true) prohibit any Restricted Person during the Restricted Period from: (x) selling “long” (as defined under Rule 200 promulgated under Regulation SHO) the Shares; or (y) selling a number of Ordinary Shares equal to the number of Shares that such Restricted Person is unconditionally obligated to purchase under a pending VWAP Purchase Notice but has not yet received from the Company or the Transfer Agent pursuant to this Agreement, so long as (1) such Restricted Person (or the Broker-Dealer, as applicable) transfers the Shares purchased pursuant to such VWAP Purchase Notice to the purchaser thereof or the applicable Broker-Dealer promptly upon such Restricted Person’s receipt of such Shares from the Company in accordance with Section 3.2 and (2) neither the Company nor the Transfer Agent shall have failed for any reason to issue such Shares to the Investor or its Broker-Dealer so that such Shares are received by the Investor as DWAC Shares by the applicable Share Issuance Deadline.

 

(ii) In addition to the foregoing, in connection with any sale of Shares (including any sale permitted by paragraph (i) above), the Investor shall comply in all respects with all applicable laws, rules, regulations and orders, including, without limitation, the requirements of the Securities Act and the Exchange Act.

 

Section 6.10. Effective Registration Statement. During the Investment Period, the Company shall use its reasonable best efforts to maintain the continuous effectiveness of the Initial Registration Statement and each New Registration Statement filed with the Commission under the Securities Act for the applicable Registration Period pursuant to and in accordance with the Registration Rights Agreement.

 

Section 6.11. Blue Sky. The Company shall take such action, if any, as is necessary by the Company in order to obtain an exemption for or to qualify the Shares for sale by the Company to the Investor pursuant to the Transaction Documents, and at the request of the Investor, the subsequent resale of Registrable Securities by the Investor, in each case, under applicable state securities or “Blue Sky” laws and shall provide evidence of any such action so taken to the Investor from time to time following the Closing Date; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 6.11, (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction.

 

 

Section 6.12. Non-Public Information. Neither the Company or any of its Subsidiaries, nor any of their respective directors, officers, employees or agents shall disclose any material non-public information about the Company to the Investor during any VWAP Purchase Period, unless a simultaneous public announcement thereof is made by the Company in the manner contemplated by Regulation FD. In the event of a breach of the foregoing covenant by the Company or any of its Subsidiaries, or any of their respective directors, officers, employees and agents (as determined in the reasonable good faith judgment of the Investor), (i) the Investor shall promptly provide written notice of such breach to the Company and (ii) after such notice has been provided to the Company and, provided that the Company shall have failed to demonstrate to the Investor in writing within 24 hours that such information does not constitute material non-public information or the Company shall have failed to publicly disclose such material non-public information within 24 hours following demand therefor by the Investor, in addition to any other remedy provided herein or in the other Transaction Documents, if the Investor is holding any Shares at the time of the disclosure of material non-public information, the Investor shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material non-public information without the prior approval by the Company, any of its Subsidiaries, or any of their respective directors, officers, employees or agents. The Investor shall not have any liability to the Company, any of its Subsidiaries, or any of their respective directors, officers, employees, shareholders or agents, for any such disclosure in compliance with this Section 6.12.

 

Section 6.13. Broker/Dealer. The Investor shall use one or more broker-dealers to effectuate all sales, if any, of the Shares that it may purchase or otherwise acquire from the Company pursuant to the Transaction Documents, as applicable, which (or whom) shall be a DTC participant (collectively, the “Broker-Dealer”). The Investor shall, from time to time, provide the Company and the Transfer Agent with all information regarding the Broker-Dealer reasonably requested by the Company and the Transfer Agent. The Investor shall be solely responsible for all fees and commissions of the Broker-Dealer (if any), which shall not exceed customary brokerage fees and commissions and shall be responsible for designating only a DTC participant eligible to receive DWAC Shares.

 

Section 6.14. Disclosure Schedule.

 

(i) The Company may provide to the Investor, and from time to time update, a disclosure schedule (the “Disclosure Schedule”) as may be required to satisfy the conditions set forth in Section 7.2(ii) and Section 7.3(i) (to the extent such condition set forth in Section 7.3(i) relates to the condition in Section 7.2(ii) as of a specific VWAP Purchase Condition Satisfaction Time). For purposes of this Section 6.14, any disclosure made in a schedule to a Compliance Certificate shall be deemed to be an update of the Disclosure Schedule. Notwithstanding anything in this Agreement to the contrary, no update to the Disclosure Schedule pursuant to this Section 6.14 shall cure any breach of a representation or warranty of the Company contained in this Agreement and made prior to the applicable update and shall not affect any of the Investor’s rights or remedies with respect thereto.

 

(ii) Notwithstanding anything to the contrary contained in the Disclosure Schedule or this Agreement, the information and disclosure contained in any Schedule of the Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other Schedule of the Disclosure Schedule as though fully set forth in such Schedule for which applicability of such information and disclosure is readily apparent on its face. The fact that any item of information is disclosed in the Disclosure Schedule shall not be construed to mean that such information is required to be disclosed by this Agreement. Except as expressly set forth in this Agreement, such information and the thresholds (whether based on quantity, qualitative characterization, dollar amounts or otherwise) set forth herein shall not be used as a basis for interpreting the terms “material” or “Material Adverse Effect” or other similar terms in this Agreement.

 

 

Section 6.15. Delivery of Bring-Down Opinions and Compliance Certificates Upon Occurrence of Certain Events. Within three (3) Trading Days immediately following each time the Company files or furnishes, as applicable (i) an Annual Report on Form 20-F under the Exchange Act (including any Form 20-F/A containing amended financial information or a material amendment to the previously filed Form 20-F); (ii) interim financial information on Form 6-K under the Exchange Act; (iii) a report on Form 6-K containing amended financial information under the Exchange Act; or (iv) the Initial Registration Statement, any New Registration Statement, or any supplement or post-effective amendment thereto, and in any case, not more than once per calendar quarter, the Company shall (a) deliver to the Investor a compliance certificate substantially in the form attached hereto as Exhibit C (a “Compliance Certificate”), dated as of such date, (b) cause to be furnished to the Investor (1) opinions from U.S., Cayman Islands and Chinese outside counsel to the Company and (2) a negative assurance letter from U.S. outside counsel to the Company, in each case in form and substance reasonably satisfactory to the Investor (each such document, a “Bring-Down Opinion”) and (c) cause to be furnished to the Investor a comfort letter or letters from the independent registered public accounting firm or firms (in the case of a post-effective amendment, only if such amendment contains amended or new financial information) whose reports are included or incorporated by reference therein, modified, as necessary, to address such new financial information or relate to such Registration Statement or post-effective amendment, or the Prospectus contained therein as then amended or supplemented by such Prospectus Supplement, as applicable, and in form and substance satisfactory to the Investor in its good faith judgment (each, a “Bring-Down Comfort Letter”).

 

ARTICLE VII

CONDITIONS TO CLOSING, COMMENCEMENT

AND VWAP PURCHASES

 

Section 7.1. Conditions Precedent to Closing. The satisfaction of each of the conditions set forth in this Section 7.1 on the Closing Date shall constitute the Closing.

 

(i) Accuracy of the Investor’s Representations and Warranties. The representations and warranties of the Investor contained in this Agreement (a) that are not qualified by “materiality” shall have been true and correct in all material respects as of the Signing Date and shall be true and correct in all material respects as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall have been or be, as applicable, true and correct in all material respects as of such other date and (b) that are qualified by “materiality” shall have been true and correct as of the Signing Date and shall be true and correct as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall have been or be, as applicable, true and correct as of such other date.

 

(ii) Accuracy of the Company’s Representations and Warranties. The representations and warranties of the Company contained in this Agreement (a) that are not qualified by “materiality” or “Material Adverse Effect” shall have been true and correct in all material respects as of the Signing Date and shall be true and correct in all material respects as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall have been or be, as applicable, true and correct in all material respects as of such other date and (b) that are qualified by “materiality” or “Material Adverse Effect” shall have been true and correct as of the Signing Date and shall be true and correct as of the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall have been or be, as applicable, true and correct as of such other date.

 

(iii)  Issuance of Commitment Shares. The Company shall have issued to the Investor, and the Investor shall have received, the Commitment Shares in accordance with Section 10.1(ii), all of which Commitment Shares shall be fully earned and non-refundable as of the Closing Date, regardless of whether any VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement.

 

(iv) Closing Deliverables. The Investor’s counsel shall have received (a) the opinions of U.S. and Cayman Islands outside counsel to the Company, dated as of the Closing Date, in form and substance reasonably satisfactory to the Investor, and (b) a Compliance Certificate, dated as of the Closing Date, except that such Compliance Certificate need only contain clauses (1)-(3) thereof.

 

(v) Current Report. The Current Report shall have been filed with the Commission as required pursuant to Section 2.3.

 

 

(vi) Merger Closing. The Merger Closing shall have occurred on or prior to the Closing Date.

 

Section 7.2. Conditions Precedent to Commencement. The right of the Company to commence delivering VWAP Purchase Notices under this Agreement, and the obligation of the Investor to accept VWAP Purchase Notices delivered to the Investor by the Company under this Agreement, are subject to the initial satisfaction, at Commencement, of each of the conditions set forth in this Section 7.2.

 

(i) Accuracy of the Investor’s Representations and Warranties. The representations and warranties of the Investor contained in this Agreement (a) that are not qualified by “materiality” or “Material Adverse Effect” shall have been true and correct in all material respects as of the Signing Date and the Closing Date and shall be true and correct in all material respects as of the Commencement Date with the same force and effect as if made on such date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall have been or be, as applicable, true and correct in all material respects as of such other date and (b) that are qualified by “materiality” or “Material Adverse Effect” shall have been true and correct as of the Signing Date and the Closing Date and shall be true and correct as of the Commencement Date with the same force and effect as if made on such date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall have been or be, as applicable, true and correct as of such other date.

 

(ii) Accuracy of the Company’s Representations and Warranties. The representations and warranties of the Company contained in this Agreement (a) that are not qualified by “materiality” or “Material Adverse Effect” shall have been true and correct in all material respects as of the Signing Date and the Closing Date and shall be true and correct in all material respects as of the Commencement Date with the same force and effect as if made on such date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall have been or be, as applicable, true and correct in all material respects as of such other date and (b) that are qualified by “materiality” or “Material Adverse Effect” shall have been true and correct as of the Signing Date and the Closing Date and shall be true and correct as of the Commencement Date with the same force and effect as if made on such date, except to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall have been and be, as applicable, true and correct as of such other date.

 

(iii) Performance of the Company. The Closing shall have occurred and the Company shall have performed, satisfied and complied in all material respects with all other covenants, agreements and conditions required by this Agreement and the Registration Rights Agreement to be performed, satisfied or complied with by the Company at or prior to the Commencement. The Company shall deliver to the Investor a Compliance Certificate dated as of the Commencement Date.

 

(iv) Initial Registration Statement Effective. The Initial Registration Statement covering the resale by the Investor of the Registrable Securities included therein required to be filed by the Company with the Commission pursuant to Section 2(a) of the Registration Rights Agreement shall have become effective under the Securities Act, and the Investor shall be permitted to utilize the Prospectus therein to resell all of the Commitment Shares and the Shares included in such Prospectus.

 

(v) No Material Notices. None of the following events shall have occurred and be continuing: (a) receipt of any request by the Commission or any other federal or state governmental authority for any additional information relating to the Initial Registration Statement, the Prospectus contained therein or any Prospectus Supplement thereto, or for any amendment of or supplement to the Initial Registration Statement, the Prospectus contained therein or any Prospectus Supplement thereto; (b) the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of the Initial Registration Statement or prohibiting or suspending the use of the Prospectus contained therein or any Prospectus Supplement thereto, or of the suspension of qualification or exemption from qualification of the Shares for offering or sale in any jurisdiction, or the initiation or contemplated initiation of any proceeding for such purpose; (c) the objection of FINRA to the terms of the transactions contemplated by the Transaction Documents; or (d) the occurrence of any event or the existence of any condition or state of facts, which makes any statement of a material fact made in the Initial Registration Statement, the Prospectus contained therein or any Prospectus Supplement thereto untrue or which requires the making of any additions to or changes to the statements then made in the Initial Registration Statement, the Prospectus contained therein or any Prospectus Supplement thereto in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make the statements then made therein (in the case of the Prospectus or any Prospectus Supplement, in the light of the circumstances under which they were made) not misleading, or which requires an amendment to the Initial Registration Statement or a supplement to the Prospectus contained therein or any Prospectus Supplement thereto to comply with the Securities Act or any other law. The Company shall have no Knowledge of any event that could reasonably be expected to have the effect of causing the suspension of the effectiveness of the Initial Registration Statement or the prohibition or suspension of the use of the Prospectus contained therein or any Prospectus Supplement thereto in connection with the resale of the Registrable Securities by the Investor.

 

 

(vi) Other Commission Filings. The final Prospectus included in the Initial Registration Statement shall have been filed with the Commission prior to Commencement in accordance with Section 2.3 and the Registration Rights Agreement. All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the Commission pursuant to the reporting requirements of the Exchange Act, including all material required to have been filed pursuant to Section 13(a) or 15(d) of the Exchange Act, prior to Commencement shall have been filed with the Commission.

 

(vii) No Suspension of Trading in or Notice of Delisting of the Ordinary Shares. Trading in the Ordinary Shares shall not have been suspended by the Commission, the Principal Market or FINRA (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Commencement Date), the Company shall not have received any final and non-appealable notice that the listing or quotation of the Ordinary Shares on the Principal Market shall be terminated on a date certain (unless, prior to such date certain, the Ordinary Shares are listed or quoted on any Alternative Market), nor shall there have been imposed any suspension of, or restriction on, accepting additional deposits of the Ordinary Shares, electronic trading or book-entry services by DTC with respect to the Ordinary Shares that is continuing, the Company shall not have received any notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Ordinary Shares, electronic trading or book-entry services by DTC with respect to the Ordinary Shares is being imposed or is contemplated (unless, prior to such suspension or restriction, DTC shall have notified the Company in writing that DTC has determined not to impose any such suspension or restriction).

 

(viii) Compliance with Laws. The Company shall have complied with all applicable federal, state and local governmental laws, rules, regulations and ordinances in connection with the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, including, without limitation, having obtained all permits and qualifications required by any applicable state securities or “Blue Sky” laws for the offer and sale of the Shares by the Company to the Investor and the subsequent resale of the Registrable Securities by the Investor (or having the availability of exemptions therefrom).

 

(ix) No Injunction. No statute, regulation, order, decree, writ, ruling or injunction shall have been enacted, entered, promulgated, threatened or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of or which would materially modify or delay any of the transactions contemplated by the Transaction Documents.

 

(x) No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any court or governmental authority shall have been commenced, and no inquiry or investigation by any governmental authority shall have been commenced, against the Company or any Subsidiary, or any of the officers, directors or Affiliates of the Company or any Subsidiary, seeking to restrain, prevent or change the transactions contemplated by the Transaction Documents, or seeking material damages in connection with such transactions.

 

(xi) Listing of Shares. All of the Shares that have been and may be issued pursuant to this Agreement shall have been approved for listing or quotation on the Principal Market as of the Commencement Date, subject only to notice of issuance.

 

(xii) No Material Adverse Effect. No condition, occurrence, state of facts or event constituting a Material Adverse Effect shall have occurred and be continuing.

 

 

(xiii) No Bankruptcy Proceedings. No Person shall have commenced a proceeding against the Company pursuant to or within the meaning of any Bankruptcy Law. The Company shall not have, pursuant to or within the meaning of any Bankruptcy Law, (a) commenced a voluntary case, (b) consented to the entry of an order for relief against it in an involuntary case, (c) consented to the appointment of a Custodian of the Company or for all or substantially all of its property, or (d) made a general assignment for the benefit of its creditors. A court of competent jurisdiction shall not have entered an order or decree under any Bankruptcy Law that (1) is for relief against the Company in an involuntary case, (2) appoints a Custodian of the Company or for all or substantially all of its property, or (3) orders the liquidation of the Company or any of its Subsidiaries.

 

(xiv) Delivery of Commencement Irrevocable Transfer Agent Instructions and Notice of Effectiveness. The Commencement Irrevocable Transfer Agent Instructions shall have been executed by the Company and delivered to and acknowledged in writing by the Transfer Agent, and the Notice of Effectiveness relating to the Initial Registration Statement shall have been executed by the Company’s outside counsel and delivered to the Transfer Agent, in each case directing the Transfer Agent to issue to the Investor or its designated Broker-Dealer all of the Shares included in the Initial Registration Statement as DWAC Shares in accordance with this Agreement and the Registration Rights Agreement.

 

(xv) Reservation of Shares. As of the Commencement Date, the Company shall have reserved out of its authorized and unissued Ordinary Shares a number of Ordinary Shares equal to the Exchange Cap solely for the purpose of effecting VWAP Purchases under this Agreement.

 

(xvi) Opinions and Negative Assurance of Company Counsel. On the Commencement Date, the Investor shall have received (a) opinions from U.S., Cayman Islands and Chinese outside counsel to the Company and (b) a negative assurance letter from U.S. outside counsel to the Company, in each case dated the Commencement Date and in form and substance reasonably satisfactory to the Investor.

 

(xvii) Comfort Letters. The Investor shall have received a comfort letter or letters, in form and substance satisfactory to the Investor in its good faith judgment, from the independent registered public accounting firm or firms whose reports are included or incorporated by reference in the Registration Statement and the Prospectus, and any Prospectus Supplement, with respect to the audited and unaudited financial statements (if any) and certain financial information contained therein, in each case dated as of the Commencement Date (except that the specific date referred to therein for the carrying out of procedures shall be no more than three (3) business days prior to the Commencement Date).

 

(xviii) FINRA. On or prior to the Commencement Date, FINRA shall have confirmed in writing that it has no objection with respect to the fairness and reasonableness of the terms and arrangements of the transactions contemplated by the Transaction Documents.

 

(xix) Qualified Independent Underwriter. If the Investor reasonably determines that a Qualified Independent Underwriter must participate in the transactions contemplated by the Transaction Documents in order for such transactions to comply with FINRA’s rules, the Company and the Investor shall have executed such documentation as may reasonably be required to engage a Qualified Independent Underwriter to participate in such transactions.

 

Section 7.3. Conditions Precedent to VWAP Purchases after Commencement Date. The right of the Company to deliver VWAP Purchase Notices under this Agreement after the Commencement Date, and the obligation of the Investor to accept VWAP Purchase Notices under this Agreement after the Commencement Date, are subject to the satisfaction of each of the conditions set forth in this Section 7.3 at the applicable VWAP Purchase Commencement Time for the VWAP Purchase to be effected pursuant to the applicable VWAP Purchase Notice timely delivered by the Company to the Investor in accordance with this Agreement (each such time, a “VWAP Purchase Condition Satisfaction Time”).

 

(i) Satisfaction of Certain Prior Conditions. Each of the conditions set forth in subsections (i), (ii), (iii), (viii) through (xv) and (xix) set forth in Section 7.2 shall be satisfied at the applicable VWAP Purchase Condition Satisfaction Time after the Commencement Date (with the terms “Commencement” and “Commencement Date” in the conditions set forth in subsections (i) through (iii) of Section 7.2 replaced with “applicable VWAP Purchase Condition Satisfaction Time”); provided, however, that the Company shall not be required to deliver the Compliance Certificate after the Commencement Date, except as provided in Section 6.15 and Section 7.3(x).

 

 

(ii) Initial Registration Statement Effective. The Initial Registration Statement covering the resale by the Investor of the Registrable Securities included therein filed by the Company with the Commission pursuant to Section 2(a) of the Registration Rights Agreement, and any post-effective amendment thereto required to be filed by the Company with the Commission after the Commencement Date and prior to the applicable VWAP Purchase Date pursuant to the Registration Rights Agreement, in each case shall have become effective under the Securities Act and shall remain effective for the applicable Registration Period, and the Investor shall be permitted to utilize the Prospectus therein, and any Prospectus Supplement thereto, to resell all of the Commitment Shares and the Shares included in the Initial Registration Statement, and any post-effective amendment thereto, that have been issued and sold to the Investor hereunder pursuant to all VWAP Purchase Notices delivered by the Company to the Investor prior to such applicable VWAP Purchase Date and all of the Shares included in the Initial Registration Statement, and any post-effective amendment thereto, that are issuable pursuant to the applicable VWAP Purchase Notice delivered by the Company to the Investor with respect to a VWAP Purchase to be effected hereunder on such applicable VWAP Purchase Date.

 

(iii) Any Required New Registration Statement Effective. Any New Registration Statement covering the resale by the Investor of the Registrable Securities included therein, and any post-effective amendment thereto, required to be filed by the Company with the Commission pursuant to the Registration Rights Agreement after the Commencement Date and prior to the applicable VWAP Purchase Date, in each case shall have become effective under the Securities Act and shall remain effective for the applicable Registration Period, and the Investor shall be permitted to utilize the Prospectus therein, and any Prospectus Supplement thereto, to resell (a) all of the Commitment Shares and the Shares included in such New Registration Statement, and any post-effective amendment thereto, that have been issued and sold to the Investor hereunder pursuant to all VWAP Purchase Notices delivered by the Company to the Investor prior to such applicable VWAP Purchase Date and (b) all of the Shares included in such new Registration Statement, and any post-effective amendment thereto, that are issuable pursuant to the applicable VWAP Purchase Notice delivered by the Company to the Investor with respect to a VWAP Purchase to be effected hereunder on such applicable VWAP Purchase Date.

 

(iv) Delivery of Subsequent Irrevocable Transfer Agent Instructions and Notice of Effectiveness. With respect to any post-effective amendment to the Initial Registration Statement, any New Registration Statement or any post-effective amendment to any New Registration Statement, in each case becoming effective after the Commencement Date, the Company shall have delivered or caused to be delivered to the Transfer Agent (a) irrevocable instructions in the form substantially similar to the Commencement Irrevocable Transfer Agent Instructions executed by the Company and acknowledged in writing by the Transfer Agent and (b) the Notice of Effectiveness, in each case modified as necessary to refer to such Registration Statement or post-effective amendment and the Registrable Securities included therein, to issue the Registrable Securities included therein as DWAC Shares in accordance with the terms of this Agreement and the Registration Rights Agreement.

 

 

(v) No Material Notices. None of the following events shall have occurred and be continuing: (a) receipt of any request by the Commission or any other federal or state governmental authority for any additional information relating to the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto, or for any amendment of or supplement to the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto; (b) the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or prohibiting or suspending the use of the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto, or of the suspension of qualification or exemption from qualification of the Shares for offering or sale in any jurisdiction, or the initiation or contemplated initiation of any proceeding for such purpose; (c) the objection of FINRA to the terms of the transactions contemplated by the Transaction Documents; or (d) the occurrence of any event or the existence of any condition or state of facts, which makes any statement of a material fact made in the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto untrue or which requires the making of any additions to or changes to the statements then made in the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make the statements then made therein (in the case of the Prospectus or any Prospectus Supplement, in the light of the circumstances under which they were made) not misleading, or which requires an amendment to the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto to comply with the Securities Act or any other law (other than the transactions contemplated by the applicable VWAP Purchase Notice delivered by the Company to the Investor with respect to a VWAP Purchase to be effected hereunder on such applicable VWAP Purchase Date and the settlement thereof). The Company shall have no Knowledge of any event that could reasonably be expected to have the effect of causing the suspension of the effectiveness of the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the prohibition or suspension of the use of the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto in connection with the resale of the Registrable Securities by the Investor.

 

(vi) Other Commission Filings. The final Prospectus included in any post-effective amendment to the Initial Registration Statement, and any Prospectus Supplement thereto, required to be filed by the Company with the Commission pursuant to Section 2.3 and the Registration Rights Agreement after the Commencement Date and prior to the applicable VWAP Purchase Date, shall have been filed with the Commission in accordance with Section 2.3 and the Registration Rights Agreement. The final Prospectus included in any New Registration Statement and in any post-effective amendment thereto, and any Prospectus Supplement thereto, required to be filed by the Company with the Commission pursuant to Section 2.3 and the Registration Rights Agreement after the Commencement Date and prior to the applicable VWAP Purchase Date, shall have been filed with the Commission in accordance with Section 2.3 and the Registration Rights Agreement. All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the Commission pursuant to the reporting requirements of the Exchange Act, including all material required to have been filed pursuant to Section 13(a) or 15(d) of the Exchange Act, after the Commencement Date and prior to the applicable VWAP Purchase Date, shall have been filed with the Commission.

 

(vii) No Suspension of Trading in or Notice of Delisting of the Ordinary Shares. Trading in the Ordinary Shares shall not have been suspended by the Commission, the Principal Market or FINRA (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the applicable VWAP Purchase Date); the Company shall not have received any final and non-appealable notice that the listing or quotation of the Ordinary Shares on the Principal Market shall be terminated on a date certain (unless, prior to such date certain, the Ordinary Shares are listed or quoted on any Alternative Market); there shall not have been imposed any suspension of, or restriction on, accepting additional deposits of the Ordinary Shares, electronic trading or book-entry services by DTC with respect to the Ordinary Shares that is continuing; and the Company shall not have received any notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Ordinary Shares, electronic trading or book-entry services by DTC with respect to the Ordinary Shares is being imposed or is contemplated (unless, prior to such suspension or restriction, DTC shall have notified the Company in writing that DTC has determined not to impose any such suspension or restriction).

 

(viii) Certain Limitations. The issuance and sale of the Shares issuable pursuant to the applicable VWAP Purchase Notice shall not (a) exceed the applicable VWAP Purchase Maximum Amount, (b) cause the Aggregate Limit or the Beneficial Ownership Limitation to be exceeded, or (c) cause the Exchange Cap (to the extent applicable under Section 3.3) to be exceeded, unless in the case of this clause (c), the Company’s shareholders have theretofore approved the issuance of Ordinary Shares under this Agreement in excess of the Exchange Cap in accordance with the applicable rules of the Principal Market.

 

(ix) Shares Authorized and Issued. All of the Shares issuable pursuant to the applicable VWAP Purchase Notice shall have been duly authorized by all necessary corporate action of the Company. All Shares relating to all prior VWAP Purchase Notices required to have been received by the Investor as DWAC Shares under this Agreement prior to the applicable VWAP Purchase Condition Satisfaction Time for the applicable VWAP Purchase shall have been issued to the Investor as DWAC Shares in accordance with this Agreement.

 

 

(x) Bring-Down Opinions of Company Counsel, Bring-Down Comfort Letters and Compliance Certificates. The Investor shall have received (a) all Bring-Down Opinions which the Company was obligated to instruct its outside counsel to deliver prior to the applicable VWAP Purchase Condition Satisfaction Time for the applicable VWAP Purchase, (b) all Bring-Down Comfort Letters which the Company was obligated to instruct delivery of prior to the applicable VWAP Purchase Condition Satisfaction Time for the applicable VWAP Purchase, and (c) all Compliance Certificates which the Company was obligated to deliver prior to the applicable VWAP Purchase Condition Satisfaction Time for the applicable VWAP Purchase, in each case in accordance with Section 6.15.

 

(xi) Material Non-Public Information. Neither the Company nor, in the Investor’s sole discretion, the Investor, shall be in possession of any material non-public information concerning the Company.

 

ARTICLE VIII

TERMINATION

 

Section 8.1. Automatic Termination. Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earliest to occur of (i) the first (1st) day of the month next following the 36-month anniversary of the Effective Date of the Initial Registration Statement (it being hereby acknowledged and agreed that such term may not be extended by the parties hereto), (ii) the date on which the Investor shall have purchased the Total Commitment worth of Shares pursuant to this Agreement, (iii) the date on which the Ordinary Shares shall have failed to be listed or quoted on the Principal Market or any Alternative Market after Commencement, (iv) the date on which, pursuant to or within the meaning of any Bankruptcy Law, (a) the Company commences a voluntary case, (b) a Custodian is appointed for the Company or for all or substantially all of its property, (c) the Company makes a general assignment for the benefit of its creditors, or (d) a court of competent jurisdiction enters an order or decree for relief against the Company in an involuntary case or the liquidation of the Company or any of its Subsidiaries, and (v) the termination of the Merger Agreement prior to the Merger Closing.

 

Section 8.2. Other Termination. Subject to Section 8.3, the Company may terminate this Agreement after the Commencement Date effective upon three (3) Trading Days’ prior written notice to the Investor in accordance with Section 10.4; provided, however, that (i) the Company shall have issued the Commitment Shares to the Investor required to be issued to the Investor pursuant to Section 10.1(ii) prior to such termination, and (ii) prior to issuing any press release, or making any public statement or announcement, with respect to such termination, the Company shall consult with the Investor and its counsel on the form and substance of such press release or other disclosure. Subject to Section 8.3, this Agreement may be terminated at any time by the mutual written consent of the parties, effective as of the date of such mutual written consent unless otherwise provided in such written consent. Subject to Section 8.3, the Investor shall have the right to terminate this Agreement effective upon three (3) Trading Days’ prior written notice to the Company, which notice shall be made in accordance with Section 10.4, if: (a) any condition, occurrence, state of facts or event constituting a Material Adverse Effect has occurred and is continuing; (b) a Fundamental Transaction shall have occurred; (c) the Company is in breach or default in any material respect of any of its covenants and agreements in the Registration Rights Agreement, and, if such breach or default is capable of being cured, such breach or default is not cured within fifteen (15) Trading Days after notice of such breach or default is delivered to the Company pursuant to Section 10.4; (d) while a Registration Statement, or any post-effective amendment thereto, is required to be maintained effective pursuant to the terms of the Registration Rights Agreement and the Investor holds any Registrable Securities, the effectiveness of such Registration Statement, or any post-effective amendment thereto, lapses for any reason (including, without limitation, the issuance of a stop order by the Commission) or such Registration Statement or any post-effective amendment thereto, the Prospectus contained therein or any Prospectus Supplement thereto otherwise becomes unavailable to the Investor for the resale of all of the Registrable Securities included therein in accordance with the terms of the Registration Rights Agreement, and such lapse or unavailability continues for a period of forty-five (45) consecutive Trading Days or for more than an aggregate of ninety (90) Trading Days in any three-hundred-and-sixty-five (365)-day period, other than due to acts of the Investor; (e) trading in the Ordinary Shares on the Principal Market shall have been suspended and such suspension continues for a period of five (5) consecutive Trading Days; or (f) the Company is in material breach or default of any of its covenants and agreements contained in this Agreement, and, if such breach or default is capable of being cured, such breach or default is not cured within fifteen (15) Trading Days after notice of such breach or default is delivered to the Company pursuant to Section 10.4. In addition, the Investor shall have the right to terminate this Agreement immediately if, on the seventh Trading Day following the Merger Closing, the aggregate market value of the outstanding voting and non-voting common equity (as defined in Rule 405 under the Securities Act) of the Company is less than $100 million (calculated by multiplying (x) the price at which the common equity of the Company closed on the Principal Market on such date by (y) the number of outstanding shares on such date) as of that date. Unless notification thereof is required elsewhere in this Agreement (in which case such notification shall be provided in accordance with such other provision), the Company shall promptly (but in no event later than 24 hours) notify the Investor (and, if required under applicable law, rule or regulation, including without limitation the applicable rules and regulations of the Principal Market, the Company shall publicly disclose such information in accordance with applicable law, rule and regulation) upon becoming aware of any of the events set forth in the third or fourth sentences of this Section 8.2.

 

 

Section 8.3. Effect of Termination. In the event of termination by the Company or the Investor (other than by mutual termination) pursuant to Section 8.2, written notice thereof shall forthwith be given to the other party as provided in Section 10.4 and the transactions contemplated by this Agreement shall be terminated without further action by either party. If this Agreement is terminated as provided in Section 8.1 or Section 8.2, this Agreement shall be of no further force and effect, except that (i) the provisions of Article V (Representations, Warranties and Covenants of the Company), Article IX (Indemnification), Article X (Miscellaneous) and this Article VIII (Termination) shall remain in full force and effect indefinitely notwithstanding such termination, and, (ii) so long as the Investor owns any Shares, the covenants and agreements of the Company contained in Article VI (Additional Covenants) shall remain in full force and notwithstanding such termination for a period of thirty (30) days following such termination. Notwithstanding anything in this Agreement to the contrary, no termination of this Agreement by any party shall (i) become effective prior to the second (2nd) Trading Day immediately following the date on which the purchase of Shares by the Investor pursuant to any pending VWAP Purchase has been fully settled, including, without limitation, the issuance by the Company to the Investor of all Shares purchased by the Investor pursuant to such pending VWAP Purchase as DWAC Shares, and the delivery by the Investor to the Company of the aggregate VWAP Purchase Price payable by the Investor for such Shares, in each case in accordance with the settlement procedures set forth in Section 3.2 (it being hereby acknowledged and agreed that no termination of this Agreement shall limit, alter, modify, change or otherwise affect any of the Company’s or the Investor’s rights or obligations under the Transaction Documents with respect to any pending VWAP Purchase that has not fully settled, and that the parties shall fully perform their respective obligations with respect to any such pending VWAP Purchase under the Transaction Documents), (ii) limit, alter, modify, change or otherwise affect the Company’s or the Investor’s rights or obligations under the Registration Rights Agreement, all of which shall survive any such termination, or (iii) affect the Commitment Shares issued or issuable to the Investor pursuant to Section 10.1(ii), it being hereby acknowledged and agreed that all of the Commitment Shares shall be fully earned by the Investor and shall be non-refundable as of the Closing Date, regardless of whether any VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement. Nothing in this Section 8.3 shall be deemed to release the Company or the Investor from any liability for any breach or default under this Agreement, the Registration Rights Agreement or any of the other Transaction Documents to which it is a party, or to impair the rights of the Company and the Investor to compel specific performance by the other party of its obligations under this Agreement, the Registration Rights Agreement or any of the other Transaction Documents to which it is a party.

 

 

ARTICLE IX

INDEMNIFICATION

 

Section 9.1. Indemnification of Investor. In consideration of the Investor’s execution and delivery of this Agreement and acquiring the Shares hereunder and in addition to all of the Company’s other obligations under the Transaction Documents to which it is a party, subject to the provisions of this Section 9.1, the Company shall, to the maximum extent permitted by applicable law, indemnify and hold harmless the Investor, its Affiliates and each of its and their respective directors, officers, shareholders, members, partners, employees, representatives and agents (and any other Person with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title), each Person, if any, who controls the Investor (within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act), and the respective directors, officers, shareholders, members, partners, employees, representatives and agents (and any other Person with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) of such controlling Persons (each, an “Investor Party”), each of which shall be an express third-party beneficiary of this Article IX, from and against all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses (including all judgments, amounts paid in settlement, court costs, reasonable attorneys’ fees and costs of defense and investigation) (collectively, “Damages”) that any Investor Party may suffer or incur (a) as a result of, relating to or arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any Commission Document (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact included in any Commission Document, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this indemnity in clause (a) shall not apply to any loss, liability, claim, damage or expense to the extent arising out of an untrue statement or omission, or alleged untrue statement or omission in a Commission Document, made in reliance upon and in conformity with information furnished in writing to the Company by the Investor expressly for use in connection with the preparation of the Registration Statement, Prospectus or Prospectus Supplement or any such amendment thereof or supplement thereto (it being hereby acknowledged and agreed that the written information set forth on Exhibit C to the Registration Rights Agreement is the only written information furnished to the Company by or on behalf of the Investor expressly for use in any Registration Statement, Prospectus or Prospectus Supplement), (b) to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any Governmental Authority, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that any such settlement is effected with the written consent of the Company, which consent shall not unreasonably be delayed, conditioned or withheld, (c) in investigating, preparing or defending against any litigation, or any investigation or proceeding by any Governmental Authority, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission (whether or not a party), to the extent that any such expense is not paid under clause (a) or (b) above, (d) as a result of, relating to or arising out of any breach by the Company of its representations, warranties, covenants or agreements under this Agreement, or (e) as a result of, relating to or arising out of any other action, suit, claim or proceeding against an Investor Party arising out of or otherwise in connection with the Transaction Documents (except solely to the extent in the case of this clause (e), to the extent any Damage is determined by a court of competent jurisdiction, not subject to further appeal, to have resulted primarily and directly from the bad faith or gross negligence of such Investor Party).

 

The Company shall reimburse any Investor Party promptly upon demand (with accompanying presentation of documentary evidence) for all legal and other costs and expenses reasonably incurred by such Investor Party in connection with (i) any action, suit, claim or proceeding, whether at law or in equity, to enforce compliance by the Company with any provision of the Transaction Documents or (ii) any other any action, suit, claim or proceeding, whether at law or in equity, with respect to which it is entitled to indemnification under this Section 9.1.

 

Section 9.2. Indemnification of the Company.

 

In consideration of the Company’s execution and delivery of this Agreement and sale of the Shares hereunder and in addition to all of the Investor’s other obligations under the Transaction Documents to which it is a party, subject to the provisions of this Section 9.2, the Investor shall, to the maximum extent permitted by applicable law, indemnify and hold harmless the Company and each of its directors, officers, shareholders, members, partners, employees, representatives and agents, each Person, if any, who controls the Investor (within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act), and the respective directors, officers, shareholders, members, partners, employees, representatives and agents of such controlling Persons (each, a “Company Party”), each of which shall be an express third-party beneficiary of this Article IX, from and against Damages that any Company Party may suffer or incur in connection with the claims described in clauses (a), (b) and (c) of Section 9.1; provided that such indemnity shall only be required if the Damages occurred as a result of an untrue statement or omission, or alleged untrue statement or omission in a Commission Document, made in reliance upon and in conformity with information furnished in writing to the Company by the Investor expressly for use in connection with the preparation of the Registration Statement, Prospectus or Prospectus Supplement or any amendment thereof or supplement thereto (it being hereby acknowledged and agreed that the written information set forth on Exhibit C to the Registration Rights Agreement is the only written information furnished to the Company by or on behalf of the Investor expressly for use in any Registration Statement, Prospectus or Prospectus Supplement).

 

 

Section 9.3. Indemnification Procedures.

 

(i) Promptly after an Investor Party receives notice of a claim or the commencement of an action for which the Investor Party intends to seek indemnification under Section 9.1, the Investor Party will notify the Company in writing of the claim or commencement of the action, suit or proceeding; provided, however, that failure to notify the Company will not relieve the Company from liability under Section 9.1, unless and solely to the extent it has been materially prejudiced by the failure to give such notice as evidenced by the forfeiture by the Company of substantive rights or defenses. The Company will be entitled to participate in the defense of any claim, action, suit or proceeding as to which indemnification is being sought, and if the Company acknowledges in writing the obligation to indemnify the Investor Party against whom the claim or action is brought, the Company may (but will not be required to) assume the defense against the claim, action, suit or proceeding with counsel satisfactory to the Investor Party. After the Company notifies the Investor Party that the Company wishes to assume the defense of a claim, action, suit or proceeding, the Company will not be liable for any further legal or other expenses incurred by the Investor Party in connection with the defense against the claim, action, suit or proceeding unless (a) the employment of counsel by the Investor Party has been authorized in writing by the Company, (b) the Investor Party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or another Investor Party that are different from or in addition to those available to the Company, (c) a conflict or potential conflict exists (based on advice of counsel to the Investor Party) between an Investor Party and the Company (in which case the Company will not have the right to direct the defense of such action on behalf of the indemnified party) or (d) the Company has not in fact employed counsel to assume the defense of such action or counsel reasonably satisfactory to the indemnified party, in each case, within a reasonable time after receiving notice of the commencement of the action; in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the Company. It is understood that the Company shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm (plus local counsel) admitted to practice in such jurisdiction at any one time for all such similarly situated Investor Parties. The Company will not be liable for any settlement of any action effected without its prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned. The Company shall not, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 9.3(i) (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent (x) includes an express and unconditional release of each indemnified party, in form and substance reasonably satisfactory to such indemnified party, from all liability arising out of such litigation, investigation, proceeding or claim and (y) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

 

(ii) In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Article IX for any reason is held to be unavailable or insufficient to hold an Investor Party harmless, the Company and the Investor Party will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted) to which the Company and the Investor Party may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Investor on the other hand. The relative benefits received by the Company on the one hand and the Investor Party on the other hand shall be deemed to be in the same proportion as the total net proceeds from the aggregate of all VWAP Purchase Amounts (before deducting expenses) received by the Company bear to the aggregate proceeds received by the Investor from the sale of Shares to bona fide third parties net of the aggregate VWAP Purchase Price paid to the Company therefore under this Agreement. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and the Investor Party, on the other hand, with respect to the statements or omission that resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Investor Party, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Investor agree that it would not be just and equitable if contributions pursuant to this Section 9.3(ii) were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense, or damage, or action in respect thereof, referred to above in this Section 9.3(ii) shall be deemed to include, for the purpose of this Section 9.3(ii), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim to the extent consistent with Section 9.3(i) hereof. Notwithstanding the foregoing provisions of this Section 9.3(ii), the Investor shall not be required to contribute any amount in excess of the aggregate discount to the VWAP for all purchases made under this Agreement and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9.3(ii), any person who controls a party to this Agreement within the meaning of the Securities Act, any Affiliates of the Investor Party and any officers, directors, partners, employees or agents of the Investor Party or any of its Affiliates, will have the same rights to contribution as that party, and each director of the Company and each officer of the Company who signed the Registration Statement will have the same rights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 9.3(ii), will notify any such party or parties from whom contribution may be sought, but the omission to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 9.3(ii) except to the extent that the failure to so notify such other party materially prejudiced the substantive rights or defenses of the party from whom contribution is sought. No party will be liable for contribution with respect to any action or claim settled without its written consent if such consent is required pursuant to Section 9.3(i).

 

 

(iii) The remedies provided for in this Article IX are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Investor Party at law or in equity. To the extent that the undertakings by the Company set forth in Section 9.1 or of the Investor set forth in Section 9.2 may be unenforceable for any reason, the Company or the Investor, as the case may be, shall make the maximum contribution to the payment and satisfaction of each of the Damages of the other which is permissible under applicable law, provided that in no event shall the Investor be obligated to contribute any amount in excess of the fees it actually receives pursuant to this Agreement.

 

ARTICLE X

MISCELLANEOUS

 

Section 10.1. Certain Fees and Expenses; Commitment Shares; Commencement Irrevocable Transfer Agent Instructions.

 

(i) Certain Fees and Expenses. Each party shall bear its own fees and expenses related to the transactions contemplated by this Agreement except that the Company will reimburse the fees and disbursements of legal counsel to the Investor in an amount not to exceed $75,000 in connection with the entry into this Agreement and $25,000 per fiscal quarter in connection with the Investor’s ongoing due diligence and review of deliverables subject to Section 6.15. The Company shall pay all U.S. federal, state and local stamp and other similar transfer and other taxes and duties levied in connection with issuance of the Shares pursuant hereto.

 

(ii) Commitment Shares. In consideration for the Investor’s execution and delivery of this Agreement, the Company shall issue the Commitment Shares to the Investor or its designee (in which case such designee name shall have been provided by the Investor to the Company in writing prior to the Closing Date) on the Closing Date, which issuance shall be evidenced by one or more book-entry statement(s) reflecting the Commitment Shares in the name of the Investor or its designee. Such book-entry statement(s) shall be delivered to the Investor by overnight courier at its address set forth in Section 10.4. For the avoidance of doubt, all of the Commitment Shares shall be fully earned by the Investor and shall be non-refundable as of the Closing Date, regardless of whether any VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement. Upon issuance pursuant to this Section 10.1(ii), the Commitment Shares shall constitute “restricted securities” as such term is defined in Rule 144(a)(3) under the Securities Act and, subject to the provisions of Section 10.1(iv), the book-entry statement(s) reflecting the Commitment Shares shall bear the restrictive legend set forth below in Section 10.1(iii). The Commitment Shares shall constitute Registrable Securities and shall be included in the Initial Registration Statement and any post-effective amendment thereto, and the Prospectus included therein, and, if necessary to register the resale thereof by the Investor under the Securities Act, in any New Registration Statement and any post-effective amendment thereto, and the Prospectus included therein, in each case in accordance with this Agreement and the Registration Rights Agreement.

 

 

(iii) Legends. The book-entry statement(s) reflecting the Commitment Shares, except as set forth below, shall bear a restrictive legend in substantially the following form (and stop transfer instructions may be placed against transfer of the Commitment Shares):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF COUNSEL, IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.

 

Notwithstanding the foregoing and for the avoidance of doubt, all Ordinary Shares to be issued in respect of any VWAP Purchase Notice delivered to the Investor pursuant to this Agreement shall be issued to the Investor in accordance with Section 3.2 by crediting the Investor’s or its designees’ account at DTC as DWAC Shares, and the Company shall not take any action or give instructions to the Transfer Agent otherwise.

 

(iv) Irrevocable Transfer Agent Instructions; Notice of Effectiveness. On the Effective Date of the Initial Registration Statement and prior to Commencement, the Company shall deliver or cause to be delivered to the Transfer Agent (a) irrevocable instructions executed by the Company to be acknowledged in writing by the Transfer Agent (the “Commencement Irrevocable Transfer Agent Instructions”) and (b) the notice of effectiveness in the form attached as an exhibit to the Registration Rights Agreement (the “Notice of Effectiveness”) relating to the Initial Registration Statement executed by the Company’s outside counsel, in each case directing the Transfer Agent to issue to the Investor or its designated Broker-Dealer at which the account or accounts to be credited with the Shares being purchased by the Investor are maintained any Registrable Securities included in the Initial Registration Statement as DWAC Shares, if and when such Registrable Securities are issued in accordance with this Agreement and the Registration Rights Agreement. With respect to any post-effective amendment to the Initial Registration Statement, any New Registration Statement or any post-effective amendment to any New Registration Statement, in each case becoming effective after the Commencement Date, the Company shall deliver or cause to be delivered to the Transfer Agent (x) irrevocable instructions in the form substantially similar to the Commencement Irrevocable Transfer Agent Instructions executed by the Company and to be acknowledged in writing by the Transfer Agent and (y) the Notice of Effectiveness, in each case modified as necessary to refer to such Registration Statement or post-effective amendment and the Registrable Securities included therein, to issue the Registrable Securities included therein as DWAC Shares in accordance with the terms of this Agreement and the Registration Rights Agreement. For the avoidance of doubt, all Shares to be issued in respect of any VWAP Purchase Notice delivered to the Investor pursuant to this Agreement shall be issued to the Investor in accordance with Section 3.2 by crediting the Investor’s account at DTC as DWAC Shares, and the Company shall not take any action or give instructions to the Transfer Agent otherwise. The Company represents and warrants to the Investor that, while this Agreement is effective, no instruction other than those referred to in this Section 10.1(iv) will be given by the Company to the Transfer Agent with respect to the Shares from and after Commencement, and the Registrable Securities covered by the Initial Registration Statement or any post-effective amendment thereof, or any New Registration Statement or post-effective amendment thereof, as applicable, shall otherwise be freely transferable on the books and records of the Company and no stop transfer instructions shall be maintained against the transfer thereof. The Company agrees that if the Company fails to fully comply with the provisions of this Section 10.1(iv) within three (3) Trading Days after the date on which the Investor and its Broker-Dealer have provided any deliverables that the Company, its counsel or the Transfer Agent shall reasonably request or require in connection therewith (if any), the Company shall, at the Investor’s written instruction, purchase from the Investor all Ordinary Shares purchased or acquired by the Investor pursuant to this Agreement that contain any restrictive legend or that have any stop transfer orders that prohibit or impede the transfer thereof in any respect at the greater of (i) the purchase price paid by the Investor for such Ordinary Shares (as applicable) and (ii) the Closing Sale Price of the Ordinary Shares on the date of the Investor’s written instruction.

 

 

Section 10.2. Specific Enforcement; Consent to Jurisdiction; Waiver of Jury Trial.

 

(i) The Company and the Investor acknowledge and agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that either party shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement by the other party and to enforce specifically the terms and provisions hereof (without the necessity of showing economic loss and without any bond or other security being required), this being in addition to any other remedy to which either party may be entitled by law or equity.

 

(ii) Each of the Company and the Investor (a) hereby irrevocably submits to the jurisdiction of the U.S. District Court and other courts of the United States sitting in the State of New York for the purposes of any suit, action or proceeding arising out of or relating to this Agreement, and (b) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the Company and the Investor consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 10.2 shall affect or limit any right to serve process in any other manner permitted by law.

 

(iii) EACH OF THE COMPANY AND THE INVESTOR HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR DISPUTES RELATING HERETO. EACH OF THE COMPANY AND THE INVESTOR (A) CERTIFIES THAT 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 AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.2.

 

Section 10.3. Entire Agreement. The Transaction Documents set forth the entire agreement and understanding of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, negotiations and understandings between the parties, both oral and written, with respect to such matters. There are no promises, undertakings, representations or warranties by either party relative to subject matter hereof not expressly set forth in the Transaction Documents. All exhibits to this Agreement are hereby incorporated by reference in, and made a part of, this Agreement as if set forth in full herein.

 

Section 10.4. Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery or electronic mail delivery at the address designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first (1st) business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second (2nd) business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The address for such communications shall be:

 

If to the Company:

 

TH International Limited

c/o Cartesian Capital Group LLC

505 5th Avenue, 15th Floor

Attention: Peter Yu; Gregory Armstrong

Email: [***]

 

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

Kirkland & Ellis

26th Floor, Gloucester Tower, The Landmark

15 Queen’s Road Central, Hong Kong

Attention: Daniel Dusek

Email: [***]

 

 

If to the Investor:

 

CF Principal Investments LLC

499 Park Avenue

New York, NY 10022

Attention: COO

Email: [***]

 

and:

 

CF Principal Investments LLC

499 Park Avenue

New York, NY 10022

Attention: General Counsel

Facsimile: [***]

Email: [***]

 

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

 

Covington & Burling LLP

The New York Times Building

620 Eighth Avenue

New York, NY 10018

Email: [***]

Attention: Matthew T. Gehl

 

Either party hereto may from time to time change its address for notices by giving at least five (5) days’ advance written notice of such changed address to the other party hereto.

 

Section 10.5. Waivers. No provision of this Agreement may be waived by the parties from and after the date that is one (1) Trading Day immediately preceding the filing of the Initial Registration Statement with the Commission. Subject to the immediately preceding sentence, no provision of this Agreement may be waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercises thereof or of any other right, power or privilege.

 

Section 10.6. Amendments. No provision of this Agreement may be amended by the parties from and after the date that is one (1) Trading Day immediately preceding the filing of the Initial Registration Statement with the Commission. Subject to the immediately preceding sentence, no provision of this Agreement may be amended other than by a written instrument signed by both parties hereto.

 

Section 10.7. Headings. The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found.

 

 

Section 10.8. Construction. The parties agree that each of them and their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents. In addition, each and every reference to share prices (including the Threshold Price) and number of Ordinary Shares in any Transaction Document shall, in all cases, be subject to adjustment for any share splits, share combinations, share dividends, recapitalizations, reorganizations and other similar transactions that occur on or after the date of this Agreement. Any reference in this Agreement to “Dollars” or “$” shall mean the lawful currency of the United States of America. Any references to “Section” or “Article” in this Agreement shall, unless otherwise expressly stated herein, refer to the applicable Section or Article of this Agreement. Any use of “or” in this Agreement shall be inclusive and each use of “including” shall mean “including, without limitation.”

 

Section 10.9. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors. Neither the Company nor the Investor may assign this Agreement or any of their respective rights or obligations hereunder to any Person.

 

Section 10.10. No Third Party Beneficiaries. Except as expressly provided in Article IX, this Agreement is intended only for the benefit of the parties hereto and their respective successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

Section 10.11. Governing Law. This Agreement shall be governed by and construed in accordance with the internal procedural and substantive laws of the State of New York, without giving effect to the choice of law provisions of such state that would cause the application of the laws of any other jurisdiction.

 

Section 10.12. Survival. The representations, warranties, covenants and agreements of the Company and the Investor contained in this Agreement shall survive the execution and delivery hereof until the termination of this Agreement; provided, however, that (i) the provisions of Article VIII (Termination), Article IX (Indemnification) and this Article X (Miscellaneous) shall remain in full force and effect indefinitely notwithstanding such termination, and, (ii) so long as the Investor owns any Shares, the covenants and agreements of the Company and the Investor contained in Article VI (Additional Covenants), shall remain in full force and effect notwithstanding such termination for a period of thirty (30) days following such termination.

 

Section 10.13. Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature or signature delivered by e-mail in a “.pdf” format data file, including any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com, www.echosign.adobe.com, etc., shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.

 

Section 10.14. Publicity. The Company shall afford the Investor and its counsel a reasonable opportunity to review and comment upon, shall consult with the Investor and its counsel on the form and substance of, and shall give due consideration to all such comments from the Investor or its counsel on, any press release, Commission filing or any other public disclosure made by or on behalf of the Company relating to the Investor, its purchases hereunder or any aspect of the Transaction Documents or the transactions contemplated thereby, prior to the issuance, filing or public disclosure thereof. For the avoidance of doubt, the Company shall not be required to submit for review any such disclosure (i) contained in periodic reports filed with the Commission under the Exchange Act if it shall have previously provided the same disclosure to the Investor or its counsel for review in connection with a previous filing or (ii) any Prospectus Supplement if it contains disclosure that does not reference the Investor, its purchases hereunder or any aspect of the Transaction Documents or the transactions contemplated thereby.

 

Section 10.15. Severability. The provisions of this Agreement are severable and, if any court of competent jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement, and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible.

 

Section 10.16. Further Assurances. From and after the Signing Date, upon the request of the Investor or the Company, each of the Company and the Investor shall execute and deliver such instrument, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officer as of the date first above written.

 

	TH International Limited
	By:	/s/ Paul Hong
	Name:	Paul Hong
	Title:	Director
	CF Principal Investments LLC
	By:	/s/ Mark Kaplan
	Name:	Mark Kaplan
	Title:	Global Chief Operating Officer

 

 

ANNEX I

 

DEFINITIONS

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with a Person, as such terms are used in and construed under Rule 144.

 

“Alternative Market” means the New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, or the Nasdaq Global Market.

 

“Anti-Corruption Laws” means the PRC Anti-Unfair Competition Law, the anti-bribery provisions of the PRC Criminal Law, the U.S. Foreign Corrupt Practices Act of 1977 (as amended), the United Kingdom Bribery Act 2010 and any other applicable anti-bribery or anti-corruption laws.

 

“Bankruptcy Law” means Title 11, U.S. Code, or any similar U.S. federal or state law or foreign law for the relief of debtors.

 

“Block” means any trade in excess of 100,000 Ordinary Shares on a single Trading Day to a single purchaser, as reported on Bloomberg through its “VWAP” function.

 

“Bloomberg” means Bloomberg, L.P.

 

“Closing Sale Price” means, for the Ordinary Shares as of any date, the last closing trade price for the Ordinary Shares on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price for the Ordinary Shares, then the last trade price for the Ordinary Shares prior to 4:00 p.m., New York City time, as reported by Bloomberg. All such determinations shall be appropriately adjusted for any share splits, share dividends, share combinations, recapitalizations or other similar transactions.

 

“Commission” means the U.S. Securities and Exchange Commission or any successor entity.

 

“Commission Documents” shall mean (i) with respect to any date prior to the Commencement Date, the Company’s registration statement on Form F-4 (File No. 333-259743) initially filed with the Commission on September 23, 2021, including any related prospectus or prospectuses, as amended, including the financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein together with the Current Report on Form 8-K filed by the SPAC with the Commission on March 9, 2022 and (ii) with respect to the Commencement Date and any date thereafter, each effective Registration Statement, as amended, the Prospectus contained therein and each Prospectus Supplement thereto and all information contained in such filings and all documents and disclosures that have been or are deemed to be incorporated by reference therein.

 

“Commitment Shares” means a number of duly authorized, validly issued, fully paid and non-assessable Ordinary Shares equal to the quotient obtained by dividing (i) $3,000,000 and (ii) the fair market value of the Ordinary Shares on the Commitment Shares Determination Date.

 

“Commitment Shares Determination Date” means the earlier to occur of (i) the second Trading Day prior to the filing of the Initial Registration Statement and (ii) the Trading Day prior to the Investor sending an invoice to the Company for the Commitment Shares.

 

“Company Lease” means any contract pursuant to which the Company or any of its Subsidiaries leases, subleases or occupies any real property.

 

“Contract” means any written or oral legally binding contract, agreement, understanding, arrangement, subcontract, loan or credit agreement, note, bond, indenture, mortgage, purchase order, deed of trust, lease, sublease, instrument, or other legally binding commitment, obligation or undertaking to which the Company or any of its Subsidiaries is a party or is bound.

 

 

“Custodian” shall mean any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

“Data Protection Laws” means any applicable laws relating to data privacy, data protection and data security, including with respect to the collection, use, storage, transmission, disclosure, transfer (including cross-border transfer), processing, retention, and disposal of personal information as that, or a similar or equivalent, term is defined under such applicable law.

 

“DTC” means The Depository Trust Company, a subsidiary of The Depository Trust & Clearing Corporation, or any successor thereto.

 

“DWAC Shares” means Ordinary Shares issued pursuant to this Agreement that are (i) issued in electronic form, (ii) freely tradable and transferable and without restriction on resale and without stop transfer instructions maintained against the transfer thereof and (iii) timely credited by the Company to the Investor’s or its designated Broker-Dealer at which the account or accounts to be credited with the Shares being purchased by Investor are maintained specified DWAC account with DTC under its Fast Automated Securities Transfer (FAST) Program, or any similar program hereafter adopted by DTC performing substantially the same function.

 

“Effective Date” means, with respect to the Initial Registration Statement filed pursuant to Section 2(a) of the Registration Rights Agreement (or any post-effective amendment thereto) or any New Registration Statement filed pursuant to Section 2(c) of the Registration Rights Agreement (or any post-effective amendment thereto), as applicable, the date on which the Initial Registration Statement (or any post-effective amendment thereto) or any New Registration Statement (or any post-effective amendment thereto) becomes effective.

 

“Environmental Laws” means any and all applicable laws relating to pollution, protection of the environment (including natural resources) and, solely to the extent related to exposure to Hazardous Materials, public or worker health and safety, or the use, storage, emission, distribution, transport, handling, disposal or release of, or exposure of any Person to, Hazardous Materials.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.

 

“Exempt Issuance” means the issuance of (i) Ordinary Shares, options or other equity incentive awards to employees, officers, directors or vendors of the Company pursuant to any equity incentive plan duly adopted for such purpose, by the Company’s Board of Directors or a majority of the members of a committee of the Board of Directors established for such purpose, (ii) (a) any Shares issued to the Investor pursuant to this Agreement, (b) any securities issued upon the exercise or exchange of or conversion of any Ordinary Shares or Ordinary Share Equivalents held by the Investor at any time, or (c) any securities issued upon the exercise or exchange of or conversion of any Ordinary Share Equivalents issued and outstanding on the date of this Agreement, including, for the avoidance of doubt, the convertible notes issued under the indenture, dated as of December 30, 2021, between the Company and Wilmington Savings Fund Society, FSB, as trustee, provided that such securities referred to in this clause (c) have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities, (iii) securities issued pursuant to acquisitions, divestitures, licenses, partnerships, collaborations or strategic transactions approved by the Company’s Board of Directors or a majority of the members of a committee of directors established for such purpose, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (iv) Ordinary Shares issued by the Company to the Investor or an Affiliate of the Investor in connection with any “equity line of credit” or other continuous offering or similar offering of Ordinary Shares pursuant to one or more written agreements between the Company and the Investor or an Affiliate of the Investor, whereby the Company may sell Ordinary Shares to the Investor or an Affiliate of the Investor at a future determined price, or (v) Ordinary Shares issued by the Company by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act, exclusively to or through Cantor Fitzgerald & Co., as the Company’s sales agent, pursuant to one or more written agreements between the Company and Cantor Fitzgerald & Co.

 

“FINRA” means the Financial Industry Regulatory Authority.

 

 

“Fundamental Transaction” means that (i) the Company shall, directly or indirectly, in one or more related transactions, (a) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person, with the result that the holders of the Company’s share capital immediately prior to such consolidation or merger together beneficially own less than 50% of the outstanding voting power of the surviving or resulting corporation, (b) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, (c) take action to facilitate a purchase, tender or exchange offer by another Person that is accepted by the holders of more than 50% of the outstanding Ordinary Shares (excluding any Ordinary Shares held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), (d) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding Ordinary Shares (not including any Ordinary Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (e) reorganize, recapitalize or reclassify its Ordinary Shares, or (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Ordinary Shares.

 

“Governmental Authority” means (i) any federal, provincial, state, local, municipal, national or international government or governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court, tribunal, arbitrator or arbitral body (public or private); (ii) any self-regulatory organization; or (iii) any political subdivision of any of the foregoing.

 

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

 

“Hazardous Material” means any substance, material, or other matter regulated as toxic or hazardous, or as a contaminant or for which standards are imposed, by any governmental authority because of its deleterious impact on the environment including but not limited to petroleum and petroleum byproduct and distillates, asbestos and asbestos-containing materials, urea formaldehyde, polychlorinated biphenyls, mold, radon gas, radioactive substances, and poly- and perfluoroalkyl substances.

 

“Initial Registration Statement” shall have the meaning assigned to such term in the Registration Rights Agreement.

 

“Investment Period” means the period commencing on the Effective Date of the Initial Registration Statement and expiring on the date this Agreement is terminated pursuant to Article VIII.

 

“Knowledge” means the actual knowledge of the Company’s Chief Executive Officer, the Company’s President, and the Company’s Chief Financial Officer, in each case after reasonable inquiry of all officers, directors and employees of the Company and its Subsidiaries who would reasonably be expected to have knowledge or information with respect to the matter in question.

 

“Material Contracts” means any Contract that is expressly referred to in or filed or incorporated by reference as an exhibit to a Commission Document or that, if terminated or subject to default by a party thereto, would, individually or in the aggregate, have a Material Adverse Effect.

 

“Money Laundering Laws” means applicable financial recordkeeping and reporting requirements of the U.S. Currency and Foreign Transaction Reporting Act of 1970, the U.S. Money Laundering Control Act of 1986 and all money laundering-related laws of all jurisdictions where the Company or its Subsidiaries conduct business or own assets, and any related or similar law issued, administered or enforced by any Governmental Authority.

 

 

“New Registration Statement” shall have the meaning assigned to such term in the Registration Rights Agreement.

 

“Ordinary Share Equivalents” means any securities of the Company or its Subsidiaries which entitle the holder thereof to acquire at any time Ordinary Shares, including, without limitation, any debt, preferred stock or shares, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Ordinary Shares.

 

“Permitted Liens” means (i) statutory or common law liens of mechanics, materialmen, warehousemen, landlords, carriers, repairmen, construction contractors and other similar liens that arise in the ordinary course of business that relate to amounts (a) not yet delinquent or that are being contested in good faith through appropriate actions and (b) for which appropriate reserves have been established in accordance with GAAP, (ii) liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business consistent with past practice, (iii) liens for taxes not yet delinquent or which are being contested in good faith through appropriate actions for which appropriate reserves have been established in accordance with GAAP, (iv) with respect to any real property subject to a Company Lease (a) the interests and rights of the respective lessors with respect thereto, including any statutory landlord liens and any lien thereon and (b) any lien permitted under a Company Lease, (v) liens, defects or imperfections on title, encumbrances and restrictions on real property (including easements, covenants, rights of way and similar restrictions of record) that are matters of record or would be discovered by a current, accurate survey or physical inspection of such real property, in all cases, that do not materially impair the value or materially interfere with the present uses of such real property, (vi) liens that do not, individually or in the aggregate, materially and adversely affect, or materially disrupt, the ordinary course operation of the businesses of the Company and its Subsidiaries, taken as a whole, (vii) non-exclusive licenses or sublicenses of Intellectual Property entered into in the ordinary course of business, (viii) liens that secure obligations that are reflected as liabilities on the audited financial statements of the Company (which such liens are referenced, or the existence of which such liens is referred to, in the notes to the audited financial statements of the Company), (ix) liens securing any indebtedness of the Company or its Subsidiaries, (x) liens arising under applicable securities laws, (xi) with respect to an entity, liens arising under the organizational documents of such entity, in each case that do not materially interfere with the use made or proposed to be made of the subject property by the Company or any of its Subsidiaries or would not, individually or in the aggregate, have a Material Adverse Effect.

 

“Person” means any person or entity, whether a natural person, trustee, corporation, partnership, limited partnership, limited liability company, trust, unincorporated organization, business association, firm, joint venture, governmental agency or authority.

 

“Post-Effective Amendment Period” means the period commencing at 9:30 a.m., New York City time, on the fifth (5th) Trading Day immediately prior to the filing of any post-effective amendment to the Initial Registration Statement or any New Registration Statement, and ending at 9:30 a.m., New York City time, on the Trading Day immediately following, the Effective Date of such post-effective amendment.

 

“PRC” means the People’s Republic of China, excluding, for the purposes of this Agreement only, the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan.

 

“Principal Market” means the Nasdaq Stock Market; provided, however, that if the Company’s Ordinary Shares are ever listed or traded on an Alternative Market, then the “Principal Market” shall mean such Alternative Market on which the Company’s Ordinary Shares are then listed or traded.

 

“Prospectus” means the prospectus in the form included in a Registration Statement, as supplemented from time to time by any Prospectus Supplement, including the documents incorporated by reference therein.

 

“Prospectus Supplement” means any prospectus supplement to the Prospectus filed with the Commission from time to time pursuant to Rule 424(b) under the Securities Act, including the documents incorporated by reference therein.

 

“Qualified Independent Underwriter” shall have the meaning assigned to such term in FINRA Rule 5121(f)(12).

 

 

“Registrable Securities” shall have the meaning assigned to such term in the Registration Rights Agreement.

 

“Registration Period” shall have the meaning assigned to such term in the Registration Rights Agreement.

 

“Registration Statement” shall have the meaning assigned to such term in the Registration Rights Agreement.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect.

 

“Sale Price” means any trade price for the Ordinary Shares on the Principal Market during normal trading hours, as reported by the Principal Market.

 

“Sanctioned Country” means at any time, a country or territory which is itself the subject or target of any Sanctions Laws that broadly prohibit dealings with that country or territory (at the time of this Agreement, the Crimea region, Cuba, Iran, North Korea and Syria).

 

“Sanctioned Person” means (i) any Person identified in any sanctions-related list of designated Persons maintained by (a) the United States Department of the Treasury’s Office of Foreign Assets Control, the United States Department of Commerce, Bureau of Industry and Security, or the United States Department of State; (b) Her Majesty’s Treasury of the United Kingdom; (c) any committee of the United Nations Security Council; (d) the European Union, (e) the PRC, or (f) any other relevant sanctions authority; (ii) any Person located, organized, or resident in, organized in, or a Governmental Authority or government instrumentality of, any Sanctioned Country; and (iii) any Person directly or indirectly owned or controlled by, or acting for the benefit or on behalf of, a Person described in clause (i) or (ii), either individually or in the aggregate.

 

“Sanctions Laws” means those trade, economic and financial sanctions laws administered, enacted or enforced from time to time by (i) the United States (including the Department of the Treasury’s Office of Foreign Assets Control), (ii) the European Union and enforced by its member states, (iii) the United Nations, (iv) Her Majesty’s Treasury of the United Kingdom, (v) the PRC or (vi) any other relevant sanctions authority.

 

“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.

 

“Shares” shall mean the Ordinary Shares that are and/or may be purchased by the Investor under this Agreement pursuant to one or more VWAP Purchase Notices.

 

“Short Sales” shall mean “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act.

 

“Signing Date” means the date of this Agreement.

 

“Threshold Price” means with respect to any particular VWAP Purchase Notice, the Sale Price on the VWAP Purchase Date equal to the greater of (i) 90% of the Closing Sale Price on the Trading Day immediately preceding the VWAP Purchase Date or (ii) such higher price as set forth by the Company in the VWAP Purchase Notice.

 

“Trading Day” shall mean any day on which the Principal Market is open for trading (regular way), including any day on which the Principal Market is open for trading (regular way) for a period of time less than the customary time.

 

“Transaction Documents” means, collectively, this Agreement (as qualified by the Commission Documents) and the exhibits hereto, the Registration Rights Agreement and the exhibits thereto, and each of the other documents, certificates and instruments entered into or furnished by the parties hereto in connection with the transactions contemplated hereby and thereby.

 

 

“Transfer Agent” means Continental Stock Transfer & Trust Company, or any successor thereof as the Company’s transfer agent.

 

“VWAP” means, for the Ordinary Shares for a specified period, the dollar volume-weighted average price for the Ordinary Shares on the Principal Market, for such period, as reported by Bloomberg through its “AQR” function. All such determinations shall be appropriately adjusted for any share dividend, share split, share combination, recapitalization or other similar transaction during such period.

 

“VWAP Purchase Commencement Time” means, with respect to a VWAP Purchase made pursuant to Section 3.1, 9:30:01 a.m., New York City time, on the applicable VWAP Purchase Date, or such later time on such VWAP Purchase Date publicly announced by the Principal Market as the official open (or commencement) of trading (regular way) on the Principal Market on such VWAP Purchase Date; provided, however, that if a VWAP Purchase Notice is delivered after 9:00 a.m., New York City time, on a VWAP Purchase Date, then the VWAP Purchase Commencement Time shall start only upon receipt by the Company of written confirmation (which may be by email) of acceptance by the Investor, and which confirmation shall specify the VWAP Purchase Commencement Time.

 

“VWAP Purchase Date” means, with respect to a VWAP Purchase made pursuant to Section 3.1, the Trading Day on which the Investor (i) receives, after 6:00 a.m., New York City time, but prior to 9:00 a.m., New York City time, a valid VWAP Purchase Notice for such VWAP Purchase in accordance with this Agreement or (ii) accepts (which it may do or decline to do in its sole discretion) a VWAP Purchase Notice delivered after 9:00 a.m., New York City time.

 

“VWAP Purchase Maximum Amount” means, with respect to a VWAP Purchase made pursuant to Section 3.1, a number of Ordinary Shares equal to the lesser of (i) a number of Ordinary Shares which, when aggregated with all other Ordinary Shares then beneficially owned by the Investor and its Affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by the Investor of more than the Beneficial Ownership Limitation and (ii) a number of Shares equal to (a) the VWAP Purchase Share Percentage multiplied by (b) the total number (or volume) of Ordinary Shares traded on the Principal Market during the applicable VWAP Purchase Period on the applicable VWAP Purchase Date for such VWAP Purchase and (iii) the VWAP Purchase Share Estimate.

 

“VWAP Purchase Notice” means, with respect to a VWAP Purchase made pursuant to Section 3.1, an irrevocable written notice delivered by the Company to the Investor directing the Investor to purchase a VWAP Purchase Share Amount (such specified VWAP Purchase Share Amount subject to adjustment as set forth in Section 3.1 as necessary to give effect to the VWAP Purchase Maximum Amount), at the applicable VWAP Purchase Price therefor on the applicable VWAP Purchase Date for such VWAP Purchase in accordance with this Agreement.

 

“VWAP Purchase Period” means, with respect to a VWAP Purchase made pursuant to Section 3.1, the period on the applicable VWAP Purchase Date for such VWAP Purchase beginning at the applicable VWAP Purchase Commencement Time and ending at the applicable VWAP Purchase Termination Time.

 

“VWAP Purchase Price” means the purchase price per Share to be purchased by the Investor in such VWAP Purchase on such VWAP Purchase Date equal to ninety-seven percent (97%) of the VWAP over the applicable VWAP Purchase Period on such VWAP Purchase Date for such VWAP Purchase. Notwithstanding anything in this Agreement to the contrary, on any Trading Day on which the Company delivers, and the Investor accepts, a VWAP Purchase Notice for a VWAP Purchase Share Request Percentage in excess of the VWAP Purchase Share Percentage, the VWAP Purchase Price shall be calculated using the lower of: (i) the VWAP over the applicable VWAP Purchase Period on such VWAP Purchase Date for such VWAP Purchase; and (ii) the lowest Sale Price in any Block sold on such Trading Day following the delivery and acceptance of such VWAP Purchase Notice for a VWAP Purchase Share Request Percentage in excess of the VWAP Purchase Share Percentage.

 

“VWAP Purchase Share Amount” means, with respect to a VWAP Purchase made pursuant to Section 3.1, the number of Shares to be purchased by the Investor in such VWAP Purchase as specified by the Company in the applicable VWAP Purchase Notice, which number of Shares shall not exceed the applicable VWAP Purchase Maximum Amount.

 

 

“VWAP Purchase Share Estimate” means the number of Ordinary Shares constituting a good faith estimate by the Company of the number of Shares that the Investor shall have the obligation to buy pursuant to the VWAP Purchase Notice.

 

“VWAP Purchase Share Percentage” means, with respect to a VWAP Purchase made pursuant to Section 3.1, twenty percent (20%).

 

“VWAP Purchase Share Request Percentage” means the percentage set forth in any VWAP Purchase Notice.

 

“VWAP Purchase Termination Time” means, with respect to a VWAP Purchase made pursuant to Section 3.1, 4:00 p.m., New York City time, on the applicable VWAP Purchase Date, or such earlier time publicly announced by the Principal Market as the official close of trading (regular way) on the Principal Market on such applicable VWAP Purchase Date.

 

 

SCHEDULE 1

 

SUBSIDIARIES

 

#	Company Name	Shareholding	Jurisdiction of Incorporation
1.	TH Hong Kong International Limited （天好（香港）国际有限公司）	TH International Limited: 100%	Hong Kong
2.	Tim Hortons (China) Holdings Co., Ltd. (“TH China”) （天好（中国）投资有限公司）	TH Hong Kong International Limited: 100%	PRC
3.	Tim Hortons (Shanghai) Food and Beverage Co., Ltd. （提姆（上海）餐饮管理有限公司）	Tim Hortons (China) Holdings Co., Ltd.: 100%	PRC
4.	Tim Hortons (Beijing) Food and Beverage Service Co., Ltd. （天好（北京）餐饮服务有限公司）	Tim Hortons (China) Holdings Co., Ltd.: 100%	PRC
5.	Tim Coffee (Shenzhen) Co., Ltd. （天好咖啡（深圳）有限公司）	Tim Hortons (China) Holdings Co., Ltd.: 100%	PRC
6.	Shanghai Donuts Enterprise Management Co., Ltd. (“Shanghai Donuts”) （上海哆呐思企业管理有限公司）1	Tim Hortons (China) Holdings Co., Ltd.: 40%; Shanghai Yinguike Food and Beverage Management Co., Ltd. (上海饮归客餐饮管理有限公司, “Shanghai Yinguike”): 60%	PRC

 

---

¹ According to the Shareholder Agreement regarding Setting up Shanghai Donuts and its supplementary agreements, (i) TH China and Shanghai Yinguike represent 51% and 49% voting right, respectively, on the daily management and other matters and such matters shall obtain the approval by the shareholders representing more than half of the voting rights; (ii) the board of Shanghai Donuts consists of three (3) directors, two (2) of which are designated by TH China.

 

 

EXHIBIT A

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

 

EXHIBIT B

 

SIGNING CERTIFICATE

 

March  , 2022

 

The undersigned, the Director of TH International Limited, a Cayman Islands exempted company (the “Company”), delivers this certificate in connection with the Ordinary Share Purchase Agreement, dated as of March  , 2022 (the “Agreement”), by and between the Company and CF Principal Investments LLC, a Delaware limited liability company (the “Investor”), and hereby certifies on the date hereof that (capitalized terms used herein without definition have the meanings assigned to them in the Agreement):

 

1. The undersigned is the duly appointed Director of the Company.

 

2. The Board of Directors of the Company has approved the transactions contemplated by the Transaction Documents; said approval has not been amended, rescinded or modified and remains in full force and effect as of the date hereof. Attached hereto as Exhibit A are true, correct and complete copies of the resolutions duly adopted by the Board of Directors of the Company via unanimous written consent on March 8, 2022.

 

3. Each person who, as an officer of the Company, or as attorney-in-fact of an officer of the Company, signed the Transaction Documents to which the Company is a party was duly elected, qualified and acting as such officer or duly appointed and acting as such attorney-in-fact, and the signature of each such person appearing on any such document is his genuine signature.

 

IN WITNESS WHEREOF, I have signed my name as of the date first above written.

 

	Name: Paul Hong
	Title: Director

 

 

Exhibit A

 

Board Resolutions of the Company

 

 

EXHIBIT C

 

COMPLIANCE CERTIFICATE

 

The undersigned, the [●] of TH International Limited, a Cayman Islands exempted company (the “Company”), delivers this certificate in connection with the Ordinary Share Purchase Agreement, dated as of [●], 2022 (the “Agreement”), by and between the Company and CF Principal Investments LLC, a Delaware limited liability company (the “Investor”), and hereby certifies on the date hereof that, to the best of his or her knowledge after reasonable investigation, on behalf of the Company (capitalized terms used herein without definition have the meanings assigned to them in the Agreement):

 

1. The undersigned is the duly appointed [●] of the Company.

 

2. Attached hereto as Exhibit A is a true, complete and correct copy of the amended and restated memorandum and articles of association of the Company, as amended through the date hereof (the “Memorandum”). The Memorandum has not been further amended or restated, no document with respect to any amendment to the Memorandum has been filed, the Memorandum is in full force and effect on the date hereof, and no action has been taken by the Company in contemplation of any amendment to the Memorandum or the dissolution, merger or consolidation of the Company.

 

3. Except as set forth in the Commission Documents, the representations and warranties of the Company set forth in Article V of the Agreement (i) that are not qualified by “materiality” or “Material Adverse Effect” are true and correct in all material respects as of [the Commencement Date] [the date hereof] with the same force and effect as if made on [the Commencement Date] [the date hereof], except to the extent such representations and warranties are as of another date, in which case, such representations and warranties are true and correct in all material respects as of such other date and (ii) that are qualified by “materiality” or “Material Adverse Effect” are true and correct as of [the Commencement Date] [the date hereof] with the same force and effect as if made on [the Commencement Date] [the date hereof], except to the extent such representations and warranties are as of another date, in which case, such representations and warranties are true and correct as of such other date.

 

4. The Company has performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Agreement and the Registration Rights Agreement to be performed, satisfied or complied with by the Company [at or prior to Commencement][on or prior to the date hereof].

 

5. The Shares issuable in respect of each VWAP Purchase Notice effected pursuant to the Agreement shall be issued to the Investor electronically as DWAC Shares, and shall be freely tradable and transferable and without restriction on resale and without any stop transfer instructions maintained against such Shares.

 

6. As of [the Commencement Date][the date hereof], the Company does not possess any material non-public information.

 

7. As of [the Commencement Date][the date hereof], the Company has reserved out of its authorized and unissued Ordinary Shares [●] Ordinary Shares solely for the purpose of effecting VWAP Purchases under the Agreement.

 

8. No stop order suspending the effectiveness of the Registration Statement or the use of the Prospectus under the Securities Act has been issued and no proceedings for such purpose or pursuant to Section 8A of the Securities Act are pending before or, to the knowledge of the Company, threatened by the Commission.

 

 

The undersigned has executed this Certificate this [●] day of [●], 202[●].

 

	By:
	Name:
	Title:

 

 

EXHIBIT D

 

FORM OF VWAP PURCHASE NOTICE

 

From:		TH International Limited
To:		CF Principal Investments LLC
Attention:		Chief Operating Officer
C/o:		CFControlledEquityOffering@cantor.com
Subject:		VWAP Purchase Notice
Date:		[●], 202[●]
Time:		[●]

 

Ladies and Gentlemen:

 

Pursuant to the terms and subject to the conditions contained in the Ordinary Share Purchase Agreement (the “Agreement”) between TH International Limited, a Cayman Islands exempted company (the “Company”), and CF Principal Investments LLC (the “Investor”), dated [●], 2022, the Company hereby directs the Investor to purchase a number of shares constituting [●]% of the total volume of the Company’s Ordinary Shares, traded on the Principal Market during the applicable VWAP Purchase Period, at the relevant VWAP Purchase Price; provided, however, that if such number exceeds the VWAP Purchase Share Estimate of [●] Ordinary Shares, which the Company represents is no greater than the VWAP Purchase Share Amount, then the Investor will instead purchase the number of Ordinary Shares equal to the VWAP Purchase Share Estimate. The Company represents that all conditions set forth in Section 7.3 of the Agreement (including without limitation Section 7.3(xi) in respect of material non-public information) have been satisfied. Capitalized terms used herein without definition have the meanings assigned to them in the Agreement.

 

	Name:
	Title:

 

Exhibit 10.15

 

Execution Version

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of March 11, 2022, is by and between CF Principal Investments LLC, a Delaware limited liability company (the “Investor”), and TH International Limited, a Cayman Islands exempted company (the “Company”). For purposes of this Agreement, references to the “Company” shall also include any successor entity to the Company.

 

RECITALS

 

A. The Company has entered into an Agreement and Plan of Merger, dated as of August 13, 2021, with Miami Swan Ltd, a Cayman Islands exempted company and wholly owned subsidiary of the Company, and Silver Crest Acquisition Corporation, a blank check company incorporated as a Cayman Islands exempted company (as amended from time to time, the “Merger Agreement”). Following the consummation of the transactions contemplated by the Merger Agreement (the “Merger Closing”), the Company shall be the surviving entity, with ordinary shares(the “Ordinary Shares”) registered under Section 12(b) of the Exchange Act.

 

B. The Company and the Investor have entered into that certain Ordinary Share Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), pursuant to which the Company may issue, from time to time, to the Investor up to the lesser of (i) $100,000,000 in aggregate gross purchase price of newly issued Ordinary Shares and (ii) the Exchange Cap (to the extent applicable under Section 3.3 of the Purchase Agreement), as provided for therein.

 

C. Pursuant to the terms of, and in consideration for the Investor entering into, the Purchase Agreement, the Company shall cause to be issued to the Investor the Commitment Shares in accordance with the terms of the Purchase Agreement.

 

D. Pursuant to the terms of, and in consideration for the Investor entering into, the Purchase Agreement, and to induce the Investor to execute and deliver the Purchase Agreement, the Company has agreed to provide the Investor with certain registration rights with respect to the Registrable Securities (as defined herein) as set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained herein and in the Purchase Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, intending to be legally bound hereby, the Company and the Investor hereby agree as follows:

 

1.            Definitions.

 

Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

 

(a) “Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in New York, New York are authorized or required by law to remain closed.

 

(b) “Commission” means the U.S. Securities and Exchange Commission or any successor entity.

 

(c) “EDGAR” means the Commission’s Electronic Data Gathering, Analysis and Retrieval System.

 

(d) “Effective Date” means the date that the applicable Registration Statement becomes effective.

 

 

(e) “Person” means any person or entity, whether a natural person, trustee, corporation, partnership, limited partnership, limited liability company, trust, unincorporated organization, business association, firm, joint venture, governmental agency or authority.

 

(f) “Prospectus” means the prospectus in the form included in the Registration Statement at the applicable Effective Date of the Registration Statement, as supplemented from time to time by any Prospectus Supplement, including the documents incorporated by reference therein.

 

(g) “Prospectus Supplement” means any prospectus supplement to the Prospectus filed with the Commission from time to time pursuant to Rule 424(b) under the Securities Act, including the documents incorporated by reference therein.

 

(h) “register,” “registered,” and “registration” refer to a registration effected by preparing and filing one or more Registration Statements in compliance with the Securities Act and pursuant to Rule 415 and the declaration of effectiveness of such Registration Statement(s) by the Commission.

 

(i) “Registrable Securities” means all of (i) the Shares, (ii) the Commitment Shares and (iii) any share capital of the Company issued or issuable with respect to such Shares or Commitment Shares, including, without limitation, (1) as a result of any share split, share dividend, recapitalization, exchange or similar event and (2) shares of the Company into which Ordinary Shares are converted or exchanged and shares of a successor entity into which Ordinary Shares are converted or exchanged, in each case until such time as such securities cease to be Registrable Securities pursuant to Section 2(f).

 

(j) “Registration Statement” means a registration statement or registration statements of the Company filed under the Securities Act covering the resale by the Investor of Registrable Securities, as such registration statement or registration statements may be amended and supplemented from time to time, including all documents filed as part thereof or incorporated by reference therein.

 

(k) “Rule 144” means Rule 144 promulgated by the Commission under the Securities Act, as such rule may be amended from time to time, or any other similar or successor rule or regulation of the Commission that may at any time permit the Investor to sell securities of the Company to the public without registration.

 

(l) “Rule 415” means Rule 415 promulgated by the Commission under the Securities Act, as such rule may be amended from time to time, or any other similar or successor rule or regulation of the Commission providing for offering securities on a delayed or continuous basis.

 

2.            Registration.

 

(a) Mandatory Registration. The Company shall prepare and, as soon as practicable, and in any case no more than 45 days after the Merger Closing, file with the Commission an initial Registration Statement on Form F-1 (or any successor form) covering the resale by the Investor of the maximum number of Registrable Securities as shall be permitted to be included thereon in accordance with applicable Commission rules, regulations and interpretations so as to permit the resale of such Registrable Securities by the Investor under Rule 415 under the Securities Act at then prevailing market prices (and not fixed prices) (the “Initial Registration Statement”). The Initial Registration Statement shall contain the “Selling Shareholder” and “Plan of Distribution” sections in substantially the form attached hereto as Exhibit B. The Company shall use its commercially reasonable efforts to have the Initial Registration Statement become effective under the Securities Act as soon as reasonably practicable following the filing thereof with the Commission, but in any event no later than the earlier of (i) the ninetieth (90th) day following the filing date thereof if the Staff (as defined below) notifies the Company that the Initial Registration Statement will be “reviewed” and (ii) the second (2nd) Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the Staff that the Initial Registration Statement will not be “reviewed” or will not be subject to further review (the number of days in (i) and (ii) each being a “Review Period,” depending on the nature of the Commission’s review).

 

 

(b) Legal Counsel. Subject to Section 5, the Investor shall have the right to select one legal counsel to review and oversee, solely on its behalf, any registration pursuant to this Section 2 (“Legal Counsel”), which shall be Covington & Burling LLP, 620 Eighth Avenue, New York, New York 10018, or such other counsel as thereafter designated by the Investor. Except as provided for in the Purchase Agreement, the Company shall have no obligation to reimburse the Investor for any and all legal fees and expenses of the Legal Counsel incurred in connection with the transactions contemplated hereby.

 

(c) Sufficient Number of Shares Registered. If at any time all Registrable Securities are not covered by the Initial Registration Statement filed pursuant to Section 2(a) as a result of Section 2(e) or otherwise, the Company shall use its commercially reasonable efforts to file with the Commission one or more additional Registration Statements so as to cover all of the Registrable Securities not covered by such Initial Registration Statement, in each case, as soon as practicable (taking into account any position of the staff of the Commission (“Staff”) with respect to the date on which the Staff will permit such additional Registration Statement(s) to be filed with the Commission and the rules and regulations of the Commission) (each such additional Registration Statement, a “New Registration Statement”). The Company shall use its commercially reasonable efforts to cause each such New Registration Statement to become effective as soon as reasonably practicable following the filing thereof with the Commission, but in any event no later than the end of the applicable Review Period.

 

(d) No Inclusion of Other Securities. In no event shall the Company include any securities other than Registrable Securities on any Registration Statement pursuant to Section 2(a) or Section 2(c) without consulting the Investor and Legal Counsel prior to filing such Registration Statement with the Commission.

 

(e) Offering. If the Company is required by the Staff or the Commission to reduce the number of Registrable Securities included in any Registration Statement, then the Company shall reduce the number of Registrable Securities to be included in such Registration Statement (after consultation with the Investor and Legal Counsel as to the specific Registrable Securities to be removed therefrom) to the extent necessary to comply with such requirement. Notwithstanding anything in this Agreement to the contrary, if the Staff or the Commission does not permit a Registration Statement to become effective and be used for resales by the Investor on a delayed or continuous basis under Rule 415 at then-prevailing market prices (and not fixed prices), the Company shall not request acceleration of the Effective Date of such Registration Statement and shall promptly (but in no event later than 48 hours) request the withdrawal of such Registration Statement pursuant to Rule 477 under the Securities Act. In the event of any reduction in Registrable Securities or withdrawal of a Registration Statement pursuant to this paragraph, the Company shall use its commercially reasonable efforts to file one or more New Registration Statements with the Commission in accordance with Section 2(c) until such time as all Registrable Securities have been included in Registration Statements that have become effective and the Prospectuses contained therein are available for use by the Investor.

 

(f) Any Registrable Security shall cease to be a “Registrable Security” at the earliest of the following: (i) when a Registration Statement covering such Registrable Security becomes or has been declared effective by the Commission and such Registrable Security has been sold or disposed of pursuant to such effective Registration Statement, (ii) when such Registrable Security is held by the Company or one of its Subsidiaries and (iii) the date that is the first (1st) anniversary of the date of termination of the Purchase Agreement in accordance with Article VIII of the Purchase Agreement.

 

 

3.            Related Obligations.

 

The Company shall use its commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof by the Investor, and, pursuant thereto, during the term of this Agreement, the Company shall have the following obligations:

 

(a) The Company shall promptly prepare and file with the Commission the Initial Registration Statement pursuant to Section 2(a) and, if applicable, one or more New Registration Statements pursuant to Section 2(c) with respect to the Registrable Securities, and the Company shall use its commercially reasonable efforts to cause each such Registration Statement to become effective as soon as practicable after such filing. Subject to Allowable Grace Periods, the Company shall use its best efforts to keep each Registration Statement effective (and the Prospectus contained therein available for use) pursuant to Rule 415 for resales by the Investor on a continuous basis at then-prevailing market prices (and not fixed prices) at all times until the earlier of (i) the date on which the Investor shall have sold all of the Registrable Securities covered by such Registration Statement and (ii) the date of termination of the Purchase Agreement if as of such termination date the Investor holds no Registrable Securities (or, if applicable, the date on which such securities cease to be Registrable Securities after the date of termination of the Purchase Agreement) (the “Registration Period”). Notwithstanding anything to the contrary contained in this Agreement (but subject to the provisions of Section 3(p)), the Company shall ensure that, when filed and at all times while effective, each Registration Statement (including, without limitation, all amendments and supplements thereto) and the Prospectus (including, without limitation, all amendments and supplements thereto) included in such Registration Statement shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of Prospectuses, in light of the circumstances under which they were made) not misleading. The Company shall submit to the Commission, as soon as reasonably practicable after the date that the Company learns that no review of a particular Registration Statement will be made by the Staff or that the Staff has no further comments on a particular Registration Statement (as the case may be), a request for acceleration of effectiveness of such Registration Statement to a time and date as soon as reasonably practicable in accordance with Rule 461 under the Securities Act.

 

(b) Subject to Section 3(p), the Company shall use its commercially reasonable efforts to prepare and file with the Commission such amendments (including, without limitation, post-effective amendments) and supplements to each Registration Statement and the Prospectus included in each such Registration Statement, which Prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep each such Registration Statement effective (and the Prospectus contained therein current and available for use) at all times during the Registration Period, and, during such period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company required to be covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the Investor. Without limiting the generality of the foregoing, the Company covenants and agrees that (i) at or before 8:30 a.m., New York City time, on the second (2nd) Trading Day immediately following the Effective Date of the Initial Registration Statement and any New Registration Statement (or any post-effective amendment thereto), the Company shall file with the Commission in accordance with Rule 424(b) under the Securities Act the final Prospectus to be included in such Registration Statement (or any post-effective amendment thereto) and (ii) if the transactions contemplated by any VWAP Purchase are material to the Company (individually or collectively with all other prior VWAP Purchases, the consummation of which have not previously been reported in any Prospectus Supplement filed with the Commission under Rule 424(b) under the Securities Act or in any report, statement or other document filed or furnished by the Company with or to the Commission under the Exchange Act), or if otherwise required under the Securities Act (or the interpretations of the Commission thereof), in each case as reasonably determined by the Company and the Investor, then, at or before 8:30 a.m., New York City time, on the first (1st) Trading Day immediately following the VWAP Purchase Date, if a VWAP Purchase Notice was properly delivered to the Investor hereunder in connection with such VWAP Purchase, the Company shall file with the Commission a Prospectus Supplement pursuant to Rule 424(b) under the Securities Act with respect to the VWAP Purchase(s), the total VWAP Purchase Price for the Shares subject to such VWAP Purchase(s) (as applicable), the applicable VWAP Purchase Price(s) for such Shares and the net proceeds that are to be (and, if applicable, have been) received by the Company from the sale of such Shares. To the extent not previously disclosed in the Prospectus or a Prospectus Supplement, the Company shall disclose each quarter in an interim financial report on Form 6-K or Annual Report on Form 20-F, as applicable, the information described in the immediately preceding sentence relating to all VWAP Purchase(s) consummated during the relevant reporting period and shall furnish such interim financial reports and file such Annual Reports with the Commission within the applicable time period prescribed for such report under the Exchange Act, if applicable. In the case of amendments and supplements to any Registration Statement on Form F-1 or Prospectus included therein which are required to be filed pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b)) by reason of the Company furnishing or filing a report on Form 6-K or Form 20-F, respectively, or any analogous report under the Exchange Act, the Company shall have incorporated such report (or the applicable portion thereof) by reference into such Registration Statement and Prospectus, if applicable, or shall file such amendments or supplements to the Registration Statement or Prospectus with the Commission on the same day on which the Exchange Act report is furnished or filed, as applicable, which created the requirement for the Company to amend or supplement such Registration Statement or Prospectus, for the purpose of including or incorporating such report (or applicable portion thereof) into such Registration Statement and Prospectus. The Company consents to the use of the Prospectus (including, without limitation, any supplement thereto) included in each Registration Statement in accordance with the provisions of the Securities Act and with the securities or “Blue Sky” laws of the jurisdictions in which the Registrable Securities may be sold by the Investor, in connection with the resale of the Registrable Securities and for such period of time thereafter as such Prospectus (including, without limitation, any supplement thereto) (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) is required by the Securities Act to be delivered in connection with resales of Registrable Securities.

 

 

(c) The Company shall (i) permit Legal Counsel an opportunity to review and comment upon (A) each Registration Statement at least five (5) Business Days prior to its filing with the Commission and (B) all amendments and supplements to each Registration Statement (including, without limitation, the Prospectus contained therein) (except for Annual Reports on Form 20-F) within a reasonable number of days prior to their filing with the Commission, and (ii) shall reasonably consider any comments of the Investor and Legal Counsel on any such Registration Statement or amendment or supplement thereto or to any Prospectus contained therein. The Company shall promptly furnish to Legal Counsel, without charge, (A) electronic copies of any correspondence from the Commission or the Staff to the Company or its representatives relating to each Registration Statement (which correspondence shall be redacted to exclude any material, non-public information regarding the Company or any of its Subsidiaries), (B) after the same is prepared and filed with the Commission, one (1) electronic copy of each Registration Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein by reference, if requested by the Investor, and all exhibits and (C) upon the effectiveness of each Registration Statement, one (1) electronic copy of the Prospectus included in such Registration Statement and all amendments and supplements thereto; provided, however, the Company shall not be required to furnish any document (other than the Prospectus, which may be provided in .PDF format) to Legal Counsel to the extent such document is available on EDGAR at the time of Legal Counsel’s request.

 

(d) Without limiting any obligation of the Company under the Purchase Agreement, the Company shall promptly furnish to the Investor, without charge, (i) after the same is prepared and filed with the Commission, at least one (1) electronic copy of each Registration Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein by reference, if requested by the Investor, and all exhibits thereto, (ii) upon the effectiveness of each Registration Statement, one (1) electronic copy of the Prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as the Investor may reasonably request from time to time) and (iii) such other documents, including, without limitation, copies of any final Prospectus and any Prospectus Supplement thereto, as the Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by the Investor; provided, however, the Company shall not be required to furnish any document (other than the Prospectus, which may be provided in .PDF format) to the Investor to the extent such document is available on EDGAR).

 

(e) The Company shall take such action as is reasonably necessary to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by the Investor of the Registrable Securities covered by a Registration Statement under such other securities or “Blue Sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including, without limitation, post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be reasonably necessary to maintain such registrations and qualifications in effect at all times during the Registration Period and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and the Investor of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “Blue Sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

 

 

(f) The Company shall notify Legal Counsel and the Investor in writing of the happening of any event, as promptly as reasonably practicable after becoming aware of such event, as a result of which the Prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, non-public information regarding the Company or any of its Subsidiaries), and, subject to Section 3(p), promptly prepare a supplement or amendment to such Registration Statement and such Prospectus contained therein to correct such untrue statement or omission and deliver one (1) electronic copy of such supplement or amendment to Legal Counsel and the Investor (or such other number of copies as Legal Counsel or the Investor may reasonably request). The Company shall also promptly notify Legal Counsel and the Investor in writing (i) when a Prospectus or any Prospectus Supplement or post-effective amendment has been filed, when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and the Investor by facsimile or e-mail on the same day of such effectiveness) and when the Company receives written notice from the Commission that a Registration Statement or any post-effective amendment will be reviewed by the Commission, (ii) of any request by the Commission for amendments or supplements to a Registration Statement or related Prospectus or related information, (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate and (iv) of the receipt of any request by the Commission or any other federal or state governmental authority for any additional information relating to the Registration Statement or any amendment or supplement thereto or any related Prospectus. The Company shall respond as promptly as reasonably practicable to any comments received from the Commission with respect to a Registration Statement or any amendment thereto. Nothing in this Section 3(f) shall limit any obligation of the Company under the Purchase Agreement.

 

(g) The Company shall (i) use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement or the use of any Prospectus contained therein, or the suspension of the qualification, or the loss of an exemption from qualification, of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible time and (ii) notify Legal Counsel and the Investor of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding.

 

(h) The Company shall hold in confidence and not make any disclosure of information concerning the Investor provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required to be disclosed in any Registration Statement pursuant to the Securities Act, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other Transaction Document. The Company agrees that it shall, upon learning that disclosure of such information concerning the Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Investor and allow the Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

 

(i) Without limiting any obligation of the Company under the Purchase Agreement, the Company shall use its best efforts either to (i) cause all of the Registrable Securities covered by each Registration Statement to be listed on the Principal Market or (ii) secure designation and quotation of all of the Registrable Securities covered by each Registration Statement on an Alternative Market. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(i).

 

(j) The Company shall cooperate with the Investor and, to the extent applicable, facilitate the timely preparation and delivery of Registrable Securities, as DWAC Shares, to be offered pursuant to a Registration Statement and enable such DWAC Shares to be in such denominations or amounts (as the case may be) as the Investor may reasonably request from time to time. Investor hereby agrees that it shall cooperate with the Company, its counsel and the Transfer Agent in connection with any issuances of DWAC Shares, and hereby represents, warrants and covenants to the Company that that it will resell such DWAC Shares only pursuant to the Registration Statement in which such DWAC Shares are included, in a manner described under the caption “Plan of Distribution” in such Registration Statement, and in a manner in compliance with all applicable U.S. federal and state securities laws, rules and regulations. At the time such DWAC shares are offered and sold pursuant to the Registration Statement, such DWAC Shares shall be free from all restrictive legends and may be transmitted by the Transfer Agent to the Investor by crediting an account at DTC as directed in writing by the Investor.

 

 

(k) Upon the written request of the Investor, the Company shall as soon as reasonably practicable after receipt of notice from the Investor and subject to Section 3(p), (i) incorporate in a Prospectus Supplement or post-effective amendment such information as the Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering, (ii) make all required filings of such Prospectus Supplement or post-effective amendment after being notified of the matters to be incorporated in such Prospectus Supplement or post-effective amendment and (iii) supplement or make amendments to any Registration Statement or Prospectus contained therein if reasonably requested by the Investor.

 

(l) The Company shall use its commercially reasonable efforts to cause the Registrable Securities covered by a Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.

 

(m) The Company shall make generally available to its security holders (which may be satisfied by making such information available on EDGAR) as soon as practical, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the Securities Act) covering a twelve-month period beginning not later than the first (1st) day of the Company’s fiscal quarter next following the applicable Effective Date of each Registration Statement.

 

(n) The Company shall otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission in connection with any registration hereunder.

 

(o) Within one (1) Business Day after each Registration Statement which covers Registrable Securities becomes effective, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the Transfer Agent (with copies to the Investor) confirmation that such Registration Statement has become effective in the form attached hereto as Exhibit A.

 

(p) Notwithstanding anything to the contrary contained herein (but subject to the last sentence of this Section 3(p)), at any time after the Effective Date of a particular Registration Statement, the Company may, upon written notice to Investor, suspend Investor’s use of any Prospectus that is a part of any Registration Statement (in which event the Investor shall discontinue sales of the Registrable Securities pursuant to such Registration Statement contemplated by this Agreement, but shall settle any previously made sales of Registrable Securities) if the Company (i) is pursuing an acquisition, merger, tender offer, reorganization, disposition or other similar transaction and the Company determines in good faith that (A) the Company’s ability to pursue or consummate such a transaction would be materially adversely affected by any required disclosure of such transaction in such Registration Statement or other registration statement or (B) such transaction renders the Company unable to comply with Commission requirements, in each case under circumstances that would make it impractical or inadvisable to cause any Registration Statement (or such filings) to be used by the Investor or to promptly amend or supplement any Registration Statement contemplated by this Agreement on a post-effective basis, as applicable, or (ii) has experienced some other material, non-public event the disclosure of which at such time, in the good faith judgment of the Company, would materially adversely affect the Company (each, a “Blackout Event”); provided, however, that in no event shall the Investor be suspended from selling Registrable Securities pursuant to any Registration Statement for a period that exceeds twenty (20) consecutive Trading Days or an aggregate of sixty (60) days in any three hundred and sixty-five (365)-day period without the Investor’s written consent; and provided, further, the Company shall not effect any such suspension during the ten (10)-Trading Day period following the Share Issuance Deadline for each VWAP Purchase. Upon disclosure of such information or the termination of the condition described above, the Company shall provide prompt notice, but in any event within one (1) Business Day of such disclosure or termination, to the Investor and shall promptly terminate any suspension of sales it has put into effect and shall take such other reasonable actions to permit registered sales of Registrable Securities as contemplated in this Agreement (including as set forth in the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public information is no longer applicable) (each period between the Company providing notice of a Blackout Event to the Investor pursuant to the preceding sentence and the Company providing notice under this sentence, an “Allowable Grace Period”). Notwithstanding anything to the contrary contained in this Section 3(p), the Company shall cause the Transfer Agent to deliver DWAC Shares to a transferee of the Investor in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which (i) the Company has made a sale to the Investor and (ii) the Investor has entered into a contract for sale, and delivered a copy of the Prospectus included as part of the particular Registration Statement to the extent applicable, in each case prior to the Investor’s receipt of the notice of a Blackout Event and for which the Investor has not yet settled.

 

 

4.            Obligations of the Investor.

 

(a) At least five (5) Business Days prior to the first anticipated filing date of each Registration Statement (or such shorter period to which the parties agree), the Company shall notify the Investor in writing of the information the Company requires from the Investor with respect to such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of the Investor that the Investor shall promptly furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities and shall promptly execute such documents in connection with such registration as the Company may reasonably request.

 

(b) The Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of each Registration Statement hereunder, unless the Investor has notified the Company in writing of the Investor’s election to exclude all of the Investor’s Registrable Securities from such Registration Statement.

 

(c) The Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in the first sentence of 3(f) or a Blackout Event, the Investor shall as soon as is reasonably practicable discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until the Investor’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(p) or the first sentence of Section 3(f) or receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary in this Section 4(c), the Company shall cause the Transfer Agent to deliver DWAC Shares to a transferee of the Investor in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which the Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the happening of any event of the kind described in the first sentence of Section 3(f) or a Blackout Event and for which the Investor has not yet settled.

 

(d) The Investor covenants and agrees that it shall comply with the prospectus delivery and other requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to a Registration Statement.

 

5.            Expenses of Registration.

 

All reasonable expenses of the Company, other than sales or brokerage commissions and fees and disbursements of counsel for, and other expenses of, the Investor (except as provided for in the Purchase Agreement), incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company, shall be paid by the Company.

 

 

6.            Indemnification.

 

(a) In the event any Registrable Securities are included in any Registration Statement under this Agreement, to the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, each of its directors, officers, shareholders, members, partners, employees, agents, representatives (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) and each Person, if any, who controls the Investor within the meaning of the Securities Act or the Exchange Act and each of the directors, officers, shareholders, members, partners, employees, agents, representatives (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) of such controlling Persons (each, an “Investor Party” and collectively, the “Investor Parties”), each of which shall be an express third-party beneficiary of this Section 6(a), against any losses, obligations, claims, damages, liabilities, contingencies, judgments, fines, penalties, charges, costs (including, without limitation, court costs, reasonable attorneys’ fees, costs of defense and investigation), amounts paid in settlement or expenses, joint or several, (collectively, “Claims”) reasonably incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the Commission, whether pending or threatened, whether or not an Investor Party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering of Registrable Securities under the securities or other “Blue Sky” laws of any jurisdiction in which Registrable Securities are offered, or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (as amended or supplemented) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading (the matters in the foregoing clauses (i) and (ii) being, collectively, “Violations”). Subject to Section 6(c), the Company shall reimburse the Investor Parties, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Investor Party arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Investor Party expressly for use in connection with the preparation of such Registration Statement, Prospectus or Prospectus Supplement or any such amendment thereof or supplement thereto (it being hereby acknowledged and agreed that the written information set forth on Exhibit C attached hereto is the only written information furnished to the Company by or on behalf of the Investor expressly for use in any Registration Statement, Prospectus or Prospectus Supplement), (ii) shall not be available to the Investor to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered the Prospectus (as amended or supplemented) made available by the Company (to the extent applicable), including, without limitation, a corrected Prospectus, if such Prospectus (as amended or supplemented) or corrected Prospectus was timely made available by the Company pursuant to Section 3(d) and then only if, and to the extent that, following the receipt of the corrected Prospectus no grounds for such Claim would have existed and (iii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Investor Party.

 

(b) In connection with any Registration Statement in which the Investor is participating, the Investor agrees to indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (each, a “Company Party”), each of which shall be an express third-party beneficiary of this Section 6(b), against any Claim or Indemnified Damages to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case, to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information relating to the Investor furnished to the Company by the Investor expressly for use in connection with such Registration Statement, the Prospectus included therein or any Prospectus Supplement thereto (it being hereby acknowledged and agreed that the written information set forth on Exhibit C attached hereto is the only written information furnished to the Company by or on behalf of the Investor expressly for use in any Registration Statement, Prospectus or Prospectus Supplement); and, subject to Section 6(c) and the below provisos in this Section 6(b), the Investor shall reimburse a Company Party any legal or other expenses reasonably incurred by such Company Party in connection with investigating or defending any such Claim; provided, however, the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Investor, which consent shall not be unreasonably withheld or delayed; and provided, further that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to the Investor as a result of the applicable sale of Registrable Securities pursuant to such Registration Statement, Prospectus or Prospectus Supplement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Company Party and shall survive the transfer of any of the Registrable Securities by the Investor pursuant to Section 9.

 

 

(c) Promptly after receipt by an Investor Party or Company Party (as the case may be) under this Section 6 of notice of the commencement of any action or proceeding (including, without limitation, any governmental action or proceeding) involving a Claim, such Investor Party or Company Party (as the case may be) shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Investor Party or the Company Party (as the case may be); provided, however, an Investor Party or Company Party (as the case may be) shall have the right to retain its own counsel with the reasonable fees and expenses of such counsel to be paid by the indemnifying party if: (i) the indemnifying party has agreed in writing to pay such fees and expenses, (ii) the indemnifying party shall have failed promptly to assume the defense of such Claim and to employ counsel reasonably satisfactory to such Investor Party or Company Party (as the case may be) in any such Claim or (iii) the named parties to any such Claim (including, without limitation, any impleaded parties) include both such Investor Party or Company Party (as the case may be) and the indemnifying party, and such Investor Party or such Company Party (as the case may be) shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Investor Party or such Company Party and the indemnifying party (in which case, if such Investor Party or such Company Party (as the case may be) notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, then the indemnifying party shall not have the right to assume the defense thereof on behalf of the indemnified party and such counsel shall be at the expense of the indemnifying party; provided further that in the case of clause (iii) above the indemnifying party shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for all Investor Parties or Company Parties (as the case may be). The Company Party or Investor Party (as the case may be) shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Company Party or Investor Party (as the case may be) which relates to such action or Claim. The indemnifying party shall keep the Company Party or Investor Party (as the case may be) reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent; provided, however, the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Company Party or Investor Party (as the case may be), consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Company Party or Investor Party (as the case may be) of a release from all liability in respect to such Claim, and such settlement shall not include any admission as to fault on the part of the Company Party or Investor Party (as the case may be). For the avoidance of doubt, the immediately preceding sentence shall apply to Sections 6(a) and 6(b). Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Company Party or Investor Party (as the case may be) with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Investor Party or Company Party (as the case may be) under this Section 6, except to the extent that the indemnifying party is materially and adversely prejudiced in its ability to defend such action.

 

(d) No Person involved in the sale of Registrable Securities who is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with such sale shall be entitled to indemnification from any Person involved in such sale of Registrable Securities who is not guilty of fraudulent misrepresentation.

 

(e) The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred; provided that any Person receiving any payment pursuant to this Section 6 shall promptly reimburse the Person making such payment for the amount of such payment to the extent a court of competent jurisdiction determines in a final, non-appealable determination that such Person receiving such payment was not entitled to such payment.

 

 

(f) The indemnity and contribution agreements contained herein shall be in addition to (i) any cause of action or similar right of the Company Party or Investor Party against the indemnifying party or others and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

 

7.            Contribution.

 

To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however: (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6, (ii) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation and (iii) contribution by any Investor Party shall be limited in amount to the amount of net proceeds received by such Investor Party from the applicable sale of Registrable Securities. Notwithstanding the provisions of this Section 7, the Investor shall not be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by the Investor from the applicable sale of the Registrable Securities subject to the Claim exceeds the amount of any damages that the Investor has otherwise been required to pay, or would otherwise be required to pay under Section 6(b), by reason of such untrue or alleged untrue statement or omission or alleged omission. Each Investor Party and each Company Party shall be an express third-party beneficiary of this Section 7.

 

8.            Reports Under the Exchange Act.

 

With a view to making available to the Investor the benefits of Rule 144, the Company agrees to:

 

(a) use its best efforts to make and keep public information available, as those terms are understood and defined in Rule 144;

 

(b) use its best efforts to file or furnish, as applicable, with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements (it being understood that nothing herein shall limit any of the Company’s obligations under the Purchase Agreement) and the filing of such reports and other documents is required for the applicable provisions of Rule 144;

 

(c) furnish to the Investor, so long as the Investor owns Registrable Securities or may receive Registrable Securities under the Purchase Agreement, promptly upon request, (i) a written statement by the Company, if true, that it has complied with the reporting, submission and posting requirements of Rule 144 and the Exchange Act, (ii) a copy of the most recent annual report or interim financial report of the Company and such other reports and documents so filed or furnished, as applicable, by the Company with the Commission if such reports are not publicly available via EDGAR, and (iii) such other information as may be reasonably requested to permit the Investor to sell such securities pursuant to Rule 144 without registration; and

 

(d) take such additional action as is reasonably requested by the Investor to enable the Investor to sell the Registrable Securities pursuant to Rule 144, including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to the Company’s Transfer Agent without unreasonable delay as may be reasonably requested from time to time by the Investor and otherwise fully cooperate with Investor and Investor’s broker in their efforts to effect such sale of securities pursuant to Rule 144.

 

9.            Assignment of Registration Rights.

 

Neither the Company nor the Investor shall assign this Agreement or any of their respective rights or obligations hereunder; provided, however, that any transaction, whether by merger, reorganization, restructuring, consolidation, financing or otherwise, whereby the Company remains the surviving entity immediately after such transaction shall not be deemed an assignment.

 

 

10.            Amendment or Waiver.

 

No provision of this Agreement may be amended or waived by the parties from and after the date that is one (1) Trading Day immediately preceding the date of filing of the Initial Registration Statement with the Commission. Subject to the immediately preceding sentence, no provision of this Agreement may be (i) amended other than by a written instrument signed by both parties hereto or (ii) waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

 

11.            Miscellaneous.

 

(a) Solely for purposes of this Agreement, a Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of such Registrable Securities.

 

(b) Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement shall be given in accordance with Section 10.4 of the Purchase Agreement.

 

(c) The Company and the Investor acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that either party shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement by the other party and to enforce specifically the terms and provisions hereof (without the necessity of showing economic loss and without any bond or other security being required), this being in addition to any other remedy to which either party may be entitled by law or equity.

 

(d) All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(e) The Transaction Documents set forth the entire agreement and understanding of the parties solely with respect to the subject matter thereof and supersedes all prior and contemporaneous agreements, negotiations and understandings between the parties, both oral and written, solely with respect to such matters. There are no promises, undertakings, representations or warranties by either party relative to the subject matter hereof not expressly set forth in the Transaction Documents. Notwithstanding anything in this Agreement to the contrary and without implication that the contrary would otherwise be true, nothing contained in this Agreement shall limit, modify or affect in any manner whatsoever (i) the conditions precedent to a VWAP Purchase contained in Article VII of the Purchase Agreement or (ii) any of the Company’s obligations under the Purchase Agreement.

 

 

(f) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors. This Agreement is not for the benefit of, nor may any provision hereof be enforced by, any Person, other than the parties hereto, their respective successors and the Persons referred to in Sections 6 and 7.

 

(g) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found.

 

(h) This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature or signature delivered by e-mail in a “.pdf” format data file, including any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com, www.echosign.adobe.com, etc., shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.

 

(i) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

(j) The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.

 

[Signature Pages Follow]

 

 

IN WITNESS WHEREOF, Investor and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.

 

	TH International Limited
	By:	/s/ Paul Hong
	Name:	Paul Hong
	Title:	Director

 

[Signature Page to Registration Rights Agreement]

 

 

IN WITNESS WHEREOF, Investor and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.

 

	INVESTOR:
	CF PRINCIPAL INVESTMENTS LLC
	By:	/s/ Mark Kaplan
		Name: Mark Kaplan
		Title:  Global Chief Operating Officer

 

[Signature Page to Registration Rights Agreement]

 

 

EXHIBIT A

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

[Transfer Agent]

[•]

[•]

 

Re: TH International Limited

 

Ladies and Gentlemen:

 

We are counsel to TH International Limited, a Cayman Islands exempted company (the “Company”), and have represented the Company in connection with that certain Ordinary Share Purchase Agreement, dated as of [•], 2022 (the “Purchase Agreement”), entered into by and among the Company and the Investor named therein (the “Holder”) pursuant to which the Company will issue to the Holder from time to time ordinary shares of the Company (the “Ordinary Shares”). Pursuant to the Purchase Agreement, the Company also has entered into a Registration Rights Agreement, dated as of [•], 2022, with the Holder (the “Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to register the offer and sale by the Holder of the Registrable Securities (as defined in the Registration Rights Agreement) under the Securities Act of 1933, as amended (the “Securities Act”). In connection with the Company’s obligations under the Registration Rights Agreement, on [•], the Company filed a Registration Statement on Form F-1 (File No. 333-[•]) (the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”) relating to the Registrable Securities which names the Holder as an underwriter and a selling shareholder thereunder.

 

In connection with the foregoing, based solely on our review of the Commission’s EDGAR website, we advise you that the Registration Statement became effective under the Securities Act on [•]. In addition, based solely on our review of the information made available by the Commission at http://www.sec.gov/litigation/stoporders.shtml, we confirm that the Commission has not issued any stop order suspending the effectiveness of the Registration Statement. To our knowledge, based solely on our review of the information made available by the Commission at http://www.sec.gov/litigation/stoporders.shtml, no proceedings for that purpose are pending or have been instituted or threatened by the Commission.

 

We assume no obligation to update or supplement this letter to reflect any facts or circumstances which may hereafter come to our attention with respect to the matters herein and statements expressed above, including any changes in applicable law that may hereafter occur.

 

This letter is being delivered solely for the benefit of the person to whom it is addressed; accordingly, it may not be quoted, filed with any governmental authority or other regulatory agency or otherwise circulated or utilized for any purposes without our prior written consent.

 

	Very truly yours,
	[ISSUER’S COUNSEL]
	By: _________________________________________________________
cc: CF Principal Investments LLC

 

 

EXHIBIT B

 

SELLING SHAREHOLDER

 

This prospectus relates to the possible resale from time to time by CF Principal Investments LLC (“Cantor”) of any or all of the ordinary shares that may be issued by us to Cantor under the Purchase Agreement. For additional information regarding the issuance of ordinary shares covered by this prospectus, see the section titled “Cantor Committed Equity Financing” above. We are registering the ordinary shares pursuant to the provisions of the Registration Rights Agreement we entered into with Cantor on [•], 2022 in order to permit the selling shareholder to offer the shares for resale from time to time. Except for the transactions contemplated by the Purchase Agreement and the Registration Rights Agreement or as otherwise disclosed in this prospectus, Cantor has not had any material relationship with us within the past three years. As used in this prospectus, the term “selling shareholder” means Cantor.

 

The table below presents information regarding the selling shareholder and the ordinary shares that it may offer from time to time under this prospectus. This table is prepared based on information supplied to us by the selling shareholder, and reflects holdings as of [•]. The number of shares in the column “Maximum Number of Ordinary Shares to be Offered Pursuant to this Prospectus” represents all of the ordinary shares that the selling shareholder may offer under this prospectus. The selling shareholder may sell some, all or none of its shares in this offering. We do not know how long the selling shareholder will hold the shares before selling them, and we currently have no agreements, arrangements or understandings with the selling shareholder regarding the sale of any of the shares.

 

Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the Commission under the Exchange Act, and includes ordinary shares with respect to which the selling shareholder has voting and investment power. Because the purchase price of the ordinary shares issuable under the Purchase Agreement is determined on the VWAP Purchase Date with respect to each VWAP Purchase, the number of shares that may actually be sold by the Company under the Purchase Agreement may be fewer than the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered by the selling shareholder pursuant to this prospectus.

Number of Ordinary Owned Prior to Offering

Maximum Number of Ordinary Shares to be Offered Pursuant to this

Number of Ordinary Shares Owned After Offering

Name of Selling Shareholder

Number(1)

Percent(2)

Prospectus

Number(3)

Percent(2)

CF Principal Investments LLC(4)

[

•]

*

[

•]

0

—

 

*	Represents beneficial ownership of less than 1% of the outstanding ordinary shares.

 

 

(1)

In accordance with Rule 13d-3(d) under the Exchange Act, we have excluded from the number of shares beneficially owned prior to the offering all of the shares that Cantor may be required to purchase under the Purchase Agreement, because the issuance of such shares is solely at our discretion and is subject to conditions contained in the Purchase Agreement, the satisfaction of which are entirely outside of Cantor’s control, including the registration statement that includes this prospectus becoming and remaining effective. Furthermore, the VWAP Purchases of ordinary shares are subject to certain agreed upon maximum amount limitations set forth in the Purchase Agreement. Also, the Purchase Agreement prohibits us from issuing and selling any ordinary shares to Cantor to the extent such shares, when aggregated with all other ordinary shares then beneficially owned by Cantor, would cause Cantor’s beneficial ownership of our ordinary shares to exceed 4.99%. The Purchase Agreement also prohibits us from issuing or selling ordinary shares under the Purchase Agreement to the extent the aggregate number of ordinary shares so issued and sold would exceed the maximum number of ordinary shares permitted under applicable rules of the Nasdaq Stock Market to be issued without a vote of our shareholders, unless we obtain shareholder approval to do so. Neither the [Beneficial Ownership Limitation] nor the Exchange Cap may be amended or waived under the Purchase Agreement.

(2)	Applicable percentage ownership is based on [•] ordinary shares as of [•].

(3)	Assumes the sale of all shares being offered pursuant to this prospectus.

(4)	The business address of Cantor is [499 Park Avenue, New York, NY 10022].

 

 

PLAN OF DISTRIBUTION

 

The ordinary shares offered by this prospectus are being offered by the selling shareholder, Cantor. The shares may be sold or distributed from time to time by the selling shareholder directly to one or more purchasers or through brokers, dealers or underwriters who may act solely as agents at market prices prevailing at the time of sale, at prices related to the prevailing market prices, at negotiated prices or at fixed prices, which may be changed. The sale of the ordinary shares offered by this prospectus could be effected in one or more of the following methods:

 

•

ordinary brokers’ transactions;

•

transactions involving cross or block trades;

•

through brokers, dealers or underwriters who may act solely as agents;

•

“at the market” into an existing market for our ordinary shares;

•

in other ways not involving market makers or established business markets, including direct sales to purchasers or sales effected through agents;

•

in privately negotiated transactions; or

•

any combination of the foregoing.

 

In order to comply with the securities laws of certain states, if applicable, the shares may be sold only through registered or licensed brokers or dealers. In addition, in certain states, the shares may not be sold unless they have been registered or qualified for sale in the state or an exemption from the state’s registration or qualification requirement is available and complied with.

 

Cantor is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act.

 

Cantor has informed us that it intends to use one or more registered broker-dealers [(one of which is an affiliate of Cantor)] to effectuate all sales, if any, of our ordinary shares that it may acquire from us pursuant to the Purchase Agreement. Such sales will be made at prices and at terms then prevailing or at prices related to the then current market price. Each such registered broker-dealer will be an underwriter within the meaning of Section 2(a)(11) of the Securities Act. Cantor has informed us that each such broker-dealer may receive commissions from Cantor and, if so, such commissions will not exceed customary brokerage commissions.

 

Brokers, dealers, underwriters or agents participating in the distribution of the ordinary shares offered by this prospectus may receive compensation in the form of commissions, discounts or concessions from the purchasers, for whom the broker-dealers may act as agent, of the shares sold by the selling shareholder through this prospectus. The compensation paid to any such particular broker-dealer by any such purchasers of ordinary shares sold by the selling shareholder may be less than or in excess of customary commissions. Neither we nor the selling shareholder can presently estimate the amount of compensation that any agent will receive from any purchasers of ordinary shares sold by the selling shareholder.

 

We know of no existing arrangements between the selling shareholder or any other shareholder, broker, dealer, underwriter or agent relating to the sale or distribution of the ordinary shares offered by this prospectus.

 

We may from time to time file with the Commission one or more supplements to this prospectus or amendments to the registration statement of which this prospectus forms a part to amend, supplement or update information contained in this prospectus, including, if and when required under the Securities Act, to disclose certain information relating to a particular sale of shares offered by this prospectus by the selling shareholder, including the names of any brokers, dealers, underwriters or agents participating in the distribution of such shares by the selling shareholder, any compensation paid by the selling shareholder to any such brokers, dealers, underwriters or agents, and any other required information.

 

We will pay the expenses incident to the registration under the Securities Act of the offer and sale of the ordinary shares covered by this prospectus by the selling shareholder. As consideration for its irrevocable commitment to purchase our ordinary shares under the Purchase Agreement, we issued Cantor commitment shares with a value equal to 3% of Cantor’s total dollar amount purchase commitment under the Purchase Agreement.

 

 

We also have agreed to indemnify Cantor and certain other persons against certain liabilities in connection with the offering of ordinary shares offered hereby, including liabilities arising under the Securities Act or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities. Cantor has agreed to indemnify us against liabilities under the Securities Act that may arise from certain written information furnished to us by Cantor specifically for use in this prospectus or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, we have been advised that in the opinion of the Commission this indemnification is against public policy as expressed in the Securities Act and is therefore, unenforceable.

 

We estimate that the total expenses for the offering will be approximately $[•].

 

Cantor has represented to us that at no time prior to the date of the Purchase Agreement has Cantor, any of its affiliates or any entity managed or controlled by Cantor engaged in or effected, directly or indirectly, for its own principal account, any short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of our ordinary shares or any hedging transaction that establishes a net short position with respect to our ordinary shares. Cantor has agreed that during the term of the Purchase Agreement, none of Cantor, any of its affiliates nor any entity managed or controlled by Cantor will enter into or effect, directly or indirectly, any of the foregoing transactions for its own principal account or for the principal account of any other such entity.

 

We have advised the selling shareholder that it is required to comply with Regulation M promulgated under the Exchange Act. With certain exceptions, Regulation M precludes the selling shareholder, any affiliated purchasers, and any broker-dealer or other person who participates in the distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M also prohibits any bids or purchases made in order to stabilize the price of a security in connection with the distribution of that security. All of the foregoing may affect the marketability of the ordinary shares offered by this prospectus.

 

This offering will terminate on the date that all ordinary shares offered by this prospectus have been sold by the selling shareholder.

 

Our ordinary shares is currently listed on [●] under the symbol “[●]”.

 

Cantor and/or one or more of its affiliates has provided, currently provides and/or from time to time in the future may provide various investment banking and other financial services for us and/or one or more of our affiliates that are unrelated to the transactions contemplated by the Purchase Agreement and the offering of shares for resale by Cantor to which this prospectus relates, for which investment banking and other financial services they have received and may continue to receive customary fees, commissions and other compensation from us, aside from any discounts, fees and other compensation that Cantor has received and may receive in connection with the transactions contemplated by the Purchase Agreement, including cash fees for its commitment to purchase ordinary shares from us under the Purchase Agreement and discounts to current market prices of our ordinary shares reflected in the purchase prices payable by it for ordinary shares that we may require it to purchase from us from time to time under the Purchase Agreement.

 

 

EXHIBIT C

 

The business address of Cantor is [499 Park Avenue, New York, NY 10022].

 

Cantor has represented to us that at no time prior to the date of the Purchase Agreement has Cantor or any of its agents, representatives or affiliates or any entity managed or controlled by Cantor engaged in or effected, in any manner whatsoever, directly or indirectly, for its own principal account, any short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of our ordinary shares or any hedging transaction, which that establishes a net short position with respect to our ordinary shares. Cantor has agreed that during the term of the Purchase Agreement, neither Cantor, nor any of its agents, representatives or affiliates nor any entity managed or controlled by Cantor will enter into or effect, directly or indirectly, any of the foregoing transactions for its own principal account or for the principal account of any other such entity.

 

 

Exhibit 10.16

 

EQUITY SUPPORT AGREEMENT

 

This EQUITY SUPPORT AGREEMENT (this “Equity Support Agreement”) is entered into on March 8, 2022, by and between the subscribers set forth on Schedule B hereto (individually, a “Subscriber” and collectively, the “Subscribers”) and TH International Limited, a Cayman Islands exempted company (the “Issuer”, which, for the avoidance of doubt, shall include the entity surviving the Transaction Closing (as defined below)).

 

WHEREAS, this Equity Support Agreement is being entered into in connection with the Agreement and Plan of Merger, dated as of August 13, 2021 (as may be amended, supplemented or otherwise modified from time to time, the “Transaction Agreement”), by and among Silver Crest Acquisition Corp., a Cayman Islands exempted company (the “SPAC”), the Issuer, Miami Swan Ltd., a Cayman Islands exempted company and wholly owned subsidiary of the Issuer (“Merger Sub”), and the other parties thereto, pursuant to which, among other things, (i) Merger Sub will merge with and into the SPAC, with the SPAC surviving such merger as a wholly owned subsidiary of the Issuer, and (ii) the SPAC will merge with and into the a subsidiary of the Issuer (collectively, the “Transaction”), and the closing of the Transaction is referred to as the “Transaction Closing”);

 

WHEREAS, in connection with the Transaction, the Issuer (i) has entered into a private placement that will occur at or prior to the Transaction Closing (the “PIPE Investment”) with certain investors pursuant to which, and on the terms and subject to the conditions of which, such investors have agreed to purchase from the Issuer an aggregate of 5,500,000 PIPE Shares (as defined below) for a purchase price of $10.00 per PIPE Share, such purchases to be consummated prior to or substantially concurrently with the Transaction Closing, (ii) has received $50.0 million in the form of a promissory note, convertible into shares of the Issuer’s ordinary shares, par value $0.0001 per share (the “Shares”), and (iii) has entered into that certain Ordinary Share Purchase Agreement entered into as of March 8, 2022 by and between CF Principal Investments LLC, a Delaware limited liability company and the Issuer (the “ATM Agreement”);

 

WHEREAS, in connection with the Transaction, and subject to the limitations set forth in Section  1 hereof, the Issuer is seeking the commitment from each Subscriber to purchase, substantially concurrently with the Transaction Closing, a certain number of Shares (the Shares purchased by each Subscriber from the Issuer pursuant hereto, the “Equity Support Shares”) determined as set forth in Section 1(ii) hereof, in a private placement for a purchase price of $10.00 per share (the “Per Share Subscription Price”);

 

WHEREAS, the maximum purchase price to be paid by each Subscriber for its subscribed Equity Support Shares pursuant to Section  1 hereof is referred to herein as the “Maximum Subscription Amount” (and, collectively for all Subscribers, the “Total Maximum Subscription Amount”) and is set forth across from each Subscriber’s name on Schedule B;

 

WHEREAS, prior to closing, the Issuer and each Subscriber will execute a Pledge and Security Agreement (the “Pledge Agreement”) whereby the Issuer will grant to each Subscriber a first priority security interest in the applicable securities accounts (each account, as set out in the Pledge and Security Agreement in respect of the relevant Subscriber who exercises control over such account, the “Collateral Account” and all such accounts collectively, the “Collateral Accounts”), which grant will survive the Transaction Closing, as hereby confirmed and ratified by the Issuer; and

 

WHEREAS, prior to closing, the Issuer, each Subscriber (in respect of its applicable Collateral Account) and U.S. Bank, National Association or another nationally recognized intermediary reasonably acceptable to the Subscribers and not affiliated with the Issuer or the SPAC (the “Securities Intermediary”) will execute a Securities Account Control Agreement (the “Control Agreement”) governing the Collateral Accounts;

 

 

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, set forth herein, and intending to be legally bound hereby, each of the Subscribers and the Issuer acknowledges and agrees as follows:

 

1.              Subscription and Collateral Account.

 

(i) Subject to the terms and conditions set forth in this Equity Support Agreement, by the earlier of (A) five (5) business days after the Redemption Election Deadline and (B) two (2) business days before the anticipated Closing (as defined below), the Issuer will notify each Subscriber in writing of the number of the Equity Support Shares that it requires such Subscriber to purchase immediately prior to the Transaction Closing. In no event will the Total Shaolin Shares (as defined below) be greater than the number of Shares that would result in all the Subscribers, together with each person subject to aggregation of Issuer Ordinary Shares (as defined in the Transaction Agreement) (for the purposes of this Equity Support Agreement, the “Issuer Ordinary Shares”) with any of the Subscribers under Section 13 or Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and rules promulgated thereunder, including any “group” of which any of the Subscribers or their affiliates are a part, directly or indirectly beneficially owning (as such term is defined for purposes of Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) in excess of 9.9% of the outstanding Issuer Ordinary Shares immediately following the Transaction Closing (such excess, the “Maximum Ownership Adjustment”), and the Total Shaolin Shares will be reduced by the Maximum Ownership Adjustment pro rata across the Equity Support Shares of each Subscriber.

 

(ii) Each Subscriber hereby irrevocably subscribes for and agrees to purchase from the Issuer, at the Per Share Subscription Price, the number of the Equity Support Shares determined pursuant to this Section 1(ii), and the Issuer agrees to sell such Equity Support Shares to such Subscriber at the Per Share Subscription Price. The aggregate number of the Equity Support Shares for all Subscribers (the “Total Shaolin Shares”) shall be a number of Shares determined by the Issuer, not to exceed the lesser of (1) 5,000,000 and (2) the sum of (y) the number of Shares actually purchased or funded for purchase pursuant to the PIPE Investment (such Shares subscribed in the PIPE Investment, the “PIPE Shares”); and (z) fifty percent (50%) of any outstanding Shares that are not Redeeming SPAC Shares (as defined in the Transaction Agreement), provided that such Shares that are not Redeeming SPAC Shares are not the result of an Excluded Financing. For each Subscriber the number of its Equity Support Shares shall be a pro rata portion of the Total Shaolin Shares, based on the ratio that the Maximum Subscription Amount of such Subscriber bears to the Total Maximum Subscription Amount.

 

(iii) Substantially concurrently with the consummation of the Transaction, the Issuer shall deposit or cause to be deposited directly into the Collateral Account of each relevant Subscriber an amount of cash in USD equal to (1) the sum of (x) USD 10.40 multiplied by the number of First Period Subscriber Shares (as defined below), plus (y) USD 10.60 multiplied by the number of Second Period Subscriber Shares (as defined below), plus (z) USD 10.90 multiplied by the number of Third Period Subscriber Shares (as defined below) (items (x), (y) and (z) collectively, for each relevant Subscriber, the “Collateral Account Deposit”), minus (2) the Subscription Amount (as defined below).

 

2.              Closing. The closing of the sale of the Equity Support Shares contemplated hereby (the “Closing”) shall occur on the closing date (the “Closing Date”) and is expected to occur substantially concurrently with the Transaction Closing. Subject to the satisfaction or waiver of the conditions set forth in this Section  2 and in Section  3 below, upon delivery of written notice from (or on behalf of) the Issuer to each Subscriber (the “Closing Notice”), that the Issuer reasonably expects all conditions to the Transaction Closing to be satisfied or waived on an expected Closing Date that is not less than ten (10) business days from the date on which the Closing Notice is delivered to the Subscribers, each Subscriber shall deliver to the Collateral Account, on the expected Closing Date specified in the Closing Notice, the amount equal to (x) the number of its Equity Support Shares, multiplied by (y) the Per Share Subscription Price (as applicable to such Subscriber, the “Subscription Amount”) by wire transfer of United States dollars in immediately available funds to the Collateral Account; provided, that, as a condition to each Subscriber’s obligation to deliver the Subscription Amount to the Collateral Account, the Issuer shall have made (i) the Collateral Account Deposit minus the Subscription Amount (as evidenced by a statement from the Collateral Account issued by the Securities Intermediary) and (ii) have paid or caused to be paid to each Subscriber an amount in USD (the “Option Premium”) equal to the product of (x) USD 0.10 multiplied by (y) a pro rata portion of 5,000,000, based on the ratio that the Maximum Subscription Amount of such Subscriber bears to the Total Maximum Subscription Amount, as set forth in Schedule B (the “Option Premium Payment”). On the Closing Date and prior to the release of the Subscription Amount by each Subscriber, the Issuer shall (i) issue the Equity Support Shares against payment of the Subscription Amount to each Subscriber and cause the Equity Support Shares to be registered in book entry form in the name of such Subscriber on the Issuer’s share register (which book entry records shall contain an appropriate notation concerning transfer restrictions of the Equity Support Shares, in accordance with applicable securities laws of the states of the United States and other applicable jurisdictions), and will provide to such Subscriber evidence of such issuance from the Issuer’s transfer agent (the “Transfer Agent”), (ii) deposit or cause to be deposited each Collateral Account Deposit directly to the Collateral Account (less, for the avoidance of doubt, the Subscription Amount) , and (iii) pay or cause to be paid to each Subscriber the Option Premium Payment. For purposes of this Equity Support Agreement, “business day” shall mean a day, other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close. Prior to or at the Closing, each Subscriber shall deliver to the Issuer a duly completed and executed Internal Revenue Service Form W-9 or appropriate Form W-8. In the event the consummation of the Transaction does not occur within two (2) business days after the Closing Date under this Equity Support Agreement, the Issuer shall promptly (but not later than two (2) business days thereafter) return the Subscription Amount to each Subscriber by wire transfer of U.S. dollars in immediately available funds to the account specified by such Subscriber, and any book entries for the Equity Support Shares shall be deemed repurchased and cancelled; provided that, unless this Equity Support Agreement has been terminated pursuant to Section 8 hereof, such return of funds shall not terminate this Equity Support Agreement or relieve any Subscriber of its obligation to purchase the Equity Support Shares at the Closing.

 

 

3.              Closing Conditions. The obligation of the parties hereto to consummate the purchase and sale of the Equity Support Shares pursuant to this Equity Support Agreement is subject to the following conditions: (a) there shall not be in force any injunction or order from an entity having jurisdiction that enjoins or prohibits the issuance and sale of the Equity Support Shares under this Equity Support Agreement; (b) all conditions precedent to the Transaction Closing under the Transaction Agreement shall have been satisfied or waived (as determined by the parties to the Transaction Agreement and other than those conditions under the Transaction Agreement which, by their nature, are to be fulfilled at or substantially contemporaneously with the Transaction Closing); (c) (i) solely with respect to each Subscriber’s obligation to close, the representations and warranties made by the Issuer, and (ii) solely with respect to the Issuer’s obligation to close, the representations and warranties made by the applicable Subscriber in this Equity Support Agreement shall be true and correct in all material respects as of the Closing Date other than (x) those representations and warranties which are qualified by materiality, Material Adverse Effect or similar qualification, which shall be true and correct in all respects as of the Closing Date, and (y) those representations and warranties expressly made as of an earlier date, which shall be true and correct in all material respects (or, if qualified by materiality, Material Adverse Effect or similar qualification, all respects) as of such date, in each case without giving effect to the consummation of the Transactions; (d) solely with respect to each Subscriber’s obligation to close, at or prior to the Transaction Closing, Issuer shall have received cash proceeds from the PIPE Investment of at least $45.0 million in an aggregate amount, all of which shall be immediately available to Issuer upon the Transaction Closing (the “PIPE Cash”); (e) solely with respect to each Subscriber’s obligation to close, there shall have been no notice of default delivered pursuant to, an event of default occurring or be continuing under, and no acceleration of amounts outstanding under the indenture dated December 30, 2021, between the Issuer and Wilmington Savings Fund Society, FSB, as trustee governing the Issuer’s $50 million aggregate principal amount of convertible notes; (f) solely with respect to each Subscriber’s obligation to close, the applicable Collateral Account Deposit and the Option Premium Payment shall have been completed and each Subscriber shall have a valid and perfected first priority security interest in their applicable Collateral Accounts and shall have control (within the meaning of Section 8-106 and 9-106 of the Uniform Commercial Code as in effect in the State of New York) of the Collateral Accounts pursuant to the Control Agreement, such Control Agreement and the Pledge Agreement to be in the form and substance reasonably satisfactory to such Subscriber and such Pledge Agreement has been ratified by the Issuer and the Issuer shall have paid to the Securities Intermediary or deposited into the Collateral Account the maximum amount of the Securities Intermediary’s fees and expenses payable pursuant to the Control Agreement; (g) solely with respect to each Subscriber’s obligation to close, on the Closing Date the Issuer shall have delivered to the Subscribers a solvency certificate (the “Solvency Certificate”) with respect to the Issuer signed by a director, the chief executive officer or the chief financial officer of the Issuer certifying as to the solvency of the Issuer as of the date hereof, (if different) the date of each Pledge Agreement and as of and immediately after the Closing Date within the same certificate, which Solvency Certificate is reasonably satisfactory to the Subscribers; (h) solely with respect to each Subscriber’s obligation to close, the forms of representation letters and certificates required from such Subscriber and its broker (nominee) have been agreed to by the parties, and such representation letters and certificates shall have been executed by such Subscriber’s broker (nominee) and delivered to the Issuer and its counsel prior to the Transaction Closing so that the Equity Support Shares will be delivered to each Subscriber or such Subscriber’s nominee through the facilities of The Depository Trust Company (the “DTC”), maintained in the form of book entries on the books of the DTC and allowed to be settled through the DTC’s regular book-entry settlement services without any restrictive legend within five (5) business days after the Effectiveness Deadline (as defined below); (i) solely with respect to each Subscriber’s obligation to close, the Issuer shall have caused its Cayman Islands counsel to deliver to the Subscribers at the Transaction Closing an opinion regarding the validity of this Equity Support Agreement and the transactions contemplated hereby, such opinion to be in form and substance reasonably satisfactory to the Subscribers; (j) (A) solely with respect to each Subscriber’s obligation to close, the Issuer shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Equity Support Agreement to be performed, satisfied or complied with by it at or prior to the Closing, and (B) solely with respect to the Issuer’s obligation to close, the applicable Subscriber shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Equity Support Agreement to be performed, satisfied or complied with by it at or prior to the Closing. For the avoidance of doubt, PIPE Cash excludes (1) any proceeds raised pursuant to an Excluded Financing (as defined below) and (2) proceeds from the Trust Account (as defined below); and (k) solely with respect to each Subscriber's obligation to close, on or before the Closing Date the Issuer shall have delivered to the Subscribers certified copies of resolutions of the board of directors and the Shaolin transaction committee passed expressly authorizing this Equity Support Agreement, each Pledge Agreement and each Control Agreement, in form and substance reasonably satisfactory to the Subscribers.

 

 

4.              Further Assurances. At the Closing, the parties hereto shall execute and deliver such additional documents and take such additional actions as the parties reasonably may deem to be practical and necessary in order to consummate the subscription as contemplated by this Equity Support Agreement.

 

5.

Issuer Representations and Warranties. The Issuer represents and warrants to each Subscribers that:

 

(a)              The Issuer is an exempted company duly incorporated, validly existing and in good standing under the laws of the Cayman Islands. The Issuer has all power (corporate or otherwise) and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver and perform its obligations under this Equity Support Agreement. As of the Closing Date, the Issuer will be duly incorporated, validly existing and in good standing under the laws of the Cayman Islands.

 

(b)              As of the Closing Date, all the Equity Support Shares will be duly authorized and, when issued and delivered to each Subscriber against full payment therefor in accordance with the terms of this Equity Support Agreement, the Equity Support Shares will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under the Issuer’s memorandum and articles of association (as in effect at such time of issuance) or under the Companies Act, as amended, of the Cayman Islands.

 

(c)              This Equity Support Agreement has been duly authorized, executed and delivered by the Issuer and, assuming that this Equity Support Agreement constitutes the valid and binding agreement of each Subscriber, this Equity Support Agreement is enforceable against the Issuer in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, or (ii) principles of equity, whether considered at law or equity.

 

(d)              The issuance and sale by the Issuer of all the Equity Support Shares pursuant to this Equity Support Agreement, and the performance of its obligations hereunder and under each Pledge Agreement and Control Agreement and the transactions contemplated thereby, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Issuer or any of its subsidiaries pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer or any of its subsidiaries is a party (including without limitation the Transaction Agreement) or by which the Issuer or any of its subsidiaries is bound or to which any of the property or assets of the Issuer is subject that would reasonably be expected to have a material adverse effect on the business, financial condition or results of operations of the Issuer and its subsidiaries, taken as a whole (a “Material Adverse Effect”), or materially affect the validity of the Equity Support Shares or the legal authority of the Issuer to comply in all material respects with its obligations under this Equity Support Agreement; (ii) result in any violation of the provisions of the organizational documents of the Issuer; or (iii) result in any violation of any law, statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that would reasonably be expected to have a Material Adverse Effect or materially affect the validity of the Equity Support Shares or the legal authority of the Issuer to comply in all material respects with its obligations under this Equity Support Agreement.

 

 

(e)              As of their respective filing dates, all reports required to be filed by the Issuer with the U.S. Securities and Exchange Commission (the “SEC”) since January 13, 2021 (the “SEC Reports”) complied in all material respects with the applicable requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder. As of the date hereof, there are no material outstanding or unresolved comments in comment letters received by the Issuer from the staff of the Division of Corporation Finance of the SEC with respect to any of the SEC Reports.

 

(f)               The Issuer is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, domestic or foreign, self-regulatory organization or other person in connection with the issuance of the Equity Support Shares pursuant to this Equity Support Agreement, other than (i) filings with the SEC, (ii) filings required by applicable state securities laws, (iii) the filings required in accordance with Section 16 of this Equity Support Agreement; (iv) those required by The Nasdaq Stock Market LLC, including with respect to obtaining approval of the Issuer’s stockholders, and (v) those the failure of which to obtain would not be reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(g)              As of the date hereof, the Issuer has not received any written communication from a governmental authority that alleges that the Issuer is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(h)              Assuming the accuracy of each Subscriber’s representations and warranties set forth in Section 6 of this Equity Support Agreement, no registration under the Securities Act of 1933, as amended (the “Securities Act”), is required for the offer and sale of the Equity Support Shares by the Issuer to each Subscribers.

 

(i)               Neither the Issuer nor any person acting on its behalf has offered or sold the Equity Support Shares by any form of general solicitation or general advertising in violation of the Securities Act.

 

(j)               Following the Transaction Closing, the issued and outstanding Shares of the Issuer will be registered pursuant to Section 12(b) of the Exchange Act. Following the Closing, the Equity Support Shares are expected to be registered under the Exchange Act.

 

(k)              The Issuer is not under any obligation to pay any broker’s fee or commission in connection with the sale of the Equity Support Shares.

 

(l)               The Issuer is not, and the Issuer after the consummation of the transaction contemplated hereby, will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

 

(m)             The Issuer is, and the Issuer after the consummation of the transaction contemplated hereby will be, an “eligible contract participant” (as such term is defined in Section 1a(18) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(18)(C) of the Commodity Exchange Act).

 

(n)              Neither the Issuer nor the Issuer after the consummation of the transaction contemplated hereby (as applicable, following the Collateral Account Deposit, the Option Premium Payment and any payment pursuant to Section 13(a) hereof) (i) is, or shall be, “insolvent” (as such term is defined in Section 101(32) of the Bankruptcy Code (Title 11 of the United States Code)) and (ii) for the purposes of Cayman Islands law, is and will be unable to pay its debts.

 

(o)              The Issuer, the SPAC, Cartesian Capital Group, LLC, the indirect controlling person of the Issuer (the “Issuer Shareholder ”) and/or their respective advisors (collectively, the “Project Maple Parties”) have not, directly or indirectly, negotiated or entered into an Excluded Financing with any other parties for the benefit of the Issuer, the SPAC, the shareholders of the Issuer or the shareholders of the SPAC. For the avoidance of doubt, the ATM Agreement is expressly permitted and discussing, negotiating, and closing such a facility shall not be a breach of this Section 5(o).

 

 

(p)              As of the date hereof, each of the Issuer and the Issuer Shareholder are not a party to any agreement with any third parties containing “most favored nation” clauses that (i) could be reasonably expected to be breached by this Equity Support Agreement and/or (ii) could be reasonably expected to create “tag-along” rights in favor of any third parties.

 

(q)              The Issuer (i) is capable of evaluating independently the risks and benefits to it that may arise in respect of the transactions contemplated by this Equity Support Agreement; (ii) has determined based on its own independent review and such professional advice as it deems appropriate that this Equity Support Agreement and the transactions contemplated hereby are (A) are fully consistent with its financial needs, objectives and condition, (B) comply and are fully consistent with all investment policies, guidelines and other restrictions applicable to it, and (C) are a fit, proper and suitable for it (including as to any legal, regulatory, tax, accounting or economic consequences arising from such transaction), notwithstanding the substantial risks inherent therein, including in particular but without limitation, the provisions of Sections 7, 13 and 15.

 

(r)               (i) The directors of the Issuer have concluded that (A) the this Equity Support Agreement and the transactions contemplated hereby are suitable for it, for its commercial benefit and in its best interests, in light of its own business objectives, financial condition and expertise and (B) this Equity Support Agreement has been duly approved and authorized by directors of the Issuer after due consideration by them of the foregoing matters and those referred to in Section 5(q) above.

 

6.              Subscribers Representations and Warranties. Each Subscriber represents and warrants to the Issuer that:

 

(a)              Such Subscriber (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of 501(a)(1), (2), (3) or (7) under the Securities Act), in each case, satisfying the applicable requirements set forth on Schedule A, (ii) is an “institutional account” (as defined in FINRA Rule 4512(c)), (iii) is not an underwriter (as defined in Section 2(a)(11) of the Securities Act) and is aware that the sale of the Equity Support Shares is being made in reliance on a private placement exemption from registration under the Securities Act and is acquiring the Equity Support Shares only for its own account and not for the account of others, or if such Subscriber is subscribing for the Equity Support Shares as a fiduciary or agent for one or more investor accounts, such Subscriber has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account, and (iv) is not acquiring the Equity Support Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act. Such Subscriber has completed Schedule A following the signature page hereto and the information contained therein is accurate and complete.

 

(b)              Such Subscriber is a sophisticated investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, including its participation in the Transaction and has exercised independent judgment in evaluating its participation in the purchase of the Equity Support Shares. Such Subscriber has determined based on its own independent review and such professional advice as it deems appropriate that such Subscriber’s purchase of the Equity Support Shares and participation in the Transaction (i) are fully consistent with its financial needs, objectives and condition, (ii) comply and are fully consistent with all investment policies, guidelines and other restrictions applicable to it, (iii) have been duly authorized and approved by all necessary action, (iv) do not and will not violate or constitute a default under such Subscriber’s charter, by-laws or other constituent document or under any law, rule, regulation, agreement or other obligation by which it is bound and (v) are a fit, proper and suitable investment for such Subscriber, notwithstanding the substantial risks inherent in investing in or holding the Equity Support Shares. Such Subscriber is able to bear the substantial risks associated with its purchase of the Equity Support Shares, including but not limited to loss of its entire investment therein.

 

 

(c)              Such Subscriber acknowledges and agrees that the Equity Support Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act, that the Equity Support Shares have not been registered under the Securities Act and the Issuer is not required to register the Equity Support Shares except as set forth in Section 7 of this Equity Support Agreement. Such Subscriber acknowledges and agrees that the Equity Support Shares may not be offered, resold, transferred, pledged or otherwise disposed of by the Subscribers absent an effective registration statement under the Securities Act except (i) to the Issuer or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and, in each case, in accordance with any applicable securities laws of the states of the United States and other applicable jurisdictions, and that any certificates or book entry records representing the Equity Support Shares shall contain a restrictive legend to such effect. Such Subscriber acknowledges and agrees that the Equity Support Shares will be subject to these securities law transfer restrictions and, as a result of these transfer restrictions, the Subscribers may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Equity Support Shares and may be required to bear the financial risk of an investment in the Equity Support Shares for an indefinite period of time. Such Subscriber acknowledges and agrees that the Equity Support Shares will not be eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 (“Rule 144”) promulgated under the Securities Act until at least one year from the date that the Issuer files a Current Report on Form 8-K following the Closing Date that includes the “Form 10” information required under applicable SEC rules and regulations, subject to Section 10 hereof. The Subscribers shall not engage in hedging transactions with regard to the Equity Support Shares unless in compliance with the Securities Act. Such Subscriber acknowledges and agrees that it has been advised to consult legal counsel and tax and accounting advisors prior to making any offer, resale, transfer, pledge or disposition of any of the Equity Support Shares.

 

(d)              Such Subscriber acknowledges and agrees that such Subscriber is purchasing the Equity Support Shares from the Issuer. Such Subscriber further acknowledges that there have been no representations and warranties, made to such Subscriber by or on behalf of the Issuer or any of its respective affiliates or any control persons, officers, directors, employees, agents or representatives of any of the foregoing or any other person or entity, expressly or by implication, other than those representations and warranties of the Issuer expressly set forth in Section 5 of this Equity Support Agreement.

 

(e)              Such Subscriber acknowledges and agrees that such Subscriber has received, reviewed and understood the offering materials made available to it in connection with the Transaction, and has received and has had an adequate opportunity to review, such financial and other information as such Subscriber deems necessary in order to make an investment decision with respect to the Equity Support Shares, including, with respect to the Issuer, the Transaction and the business of the Issuer and its subsidiaries. Such Subscriber acknowledges that certain information received was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in such projections. Without limiting the generality of the foregoing, such Subscriber acknowledges that it has reviewed the Issuer’s filings with the SEC. Such Subscriber acknowledges and agrees that such Subscriber and such Subscriber’s professional advisor(s), if any: (i) has conducted its own investigation of the Issuer and the Equity Support Shares; (ii) has had access to, and an adequate opportunity to review, financial and other information as it deems necessary to make a decision to purchase the Equity Support Shares; (iii) has been offered the opportunity to ask questions of the Issuer and received answers thereto, including on the financial information, as it deemed necessary in connection with its decision to purchase the Equity Support Shares; and (iv) has made its own assessment and has satisfied itself concerning the relevant tax and other economic considerations relevant to its investment in the Equity Support Shares. Such Subscriber further acknowledges that the information provided to it is preliminary and subject to change, and that any changes to such information, including, without limitation, any changes based on updated information or changes in terms of the Transaction, shall in no way affect such Subscriber’s obligation to purchase the Equity Support Shares hereunder.

 

 

(f)               Such Subscriber became aware of this offering of the Equity Support Shares solely by means of direct contact between such Subscriber and the Issuer or a representative of the Issuer, and the Equity Support Shares were offered to such Subscriber solely by direct contact between such Subscriber and the Issuer or a representative of the Issuer. Such Subscriber did not become aware of this offering of the Equity Support Shares, nor were the Equity Support Shares offered to such Subscriber, by any other means. Such Subscriber acknowledges that the Equity Support Shares (i) were not offered by any form of general solicitation or general advertising and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. Such Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Issuer, any of its affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), other than the representations and warranties of the Issuer contained in Section  5 of this Equity Support Agreement, in making its investment or decision to invest in the Issuer. Such Subscriber is relying exclusively on its own sources of information, investment analysis and due diligence (including professional advice that it deems appropriate) with respect to the Transaction, the Equity Support Shares and the business, condition (financial and otherwise), management, operations, properties and prospects of the Issuer, including but not limited to all business, legal, regulatory, accounting, credit and tax matters. Based on such information as such Subscriber has deemed appropriate, such Subscriber has independently made its own analysis and decision to enter into this Equity Support Agreement.

 

(g)              Such Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Equity Support Shares, including those set forth in the Issuer’s filings with the SEC. Such Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Equity Support Shares, and such Subscriber has sought such accounting, legal and tax advice as such Subscriber has considered necessary to make an informed investment decision. Such Subscriber is able to fend for itself in the transactions contemplated herein, has exercised its independent judgment in evaluating its investment in the Equity Support Shares, is a sophisticated investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, and such Subscriber has sought such accounting, legal and tax advice as such Subscriber has considered necessary to make an informed investment decision. Such Subscriber acknowledges that the Subscribers shall be responsible for any of the Subscribers’ tax liabilities that may arise as a result of the transactions contemplated by this Equity Support Agreement, and that the Issuer has not provided any tax advice or any other representation or guarantee regarding the tax consequences of the transactions contemplated by the Equity Support Agreement.

 

(h)              Alone, or together with any professional advisor(s), such Subscriber has been furnished with all materials that it considers relevant to an investment in the Equity Support Shares, has had a full opportunity to ask questions of and receive answers from the Issuer or any person or persons acting on behalf of the Issuer concerning the terms and conditions of an investment in the Equity Support Shares, has adequately analyzed and fully considered the risks of an investment in the Equity Support Shares and determined that the Equity Support Shares are a suitable investment for such Subscriber and that such Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of such Subscriber’s investment in the Equity Support Shares. Such Subscriber acknowledges specifically that a possibility of total loss exists.

 

(i)               In making its decision to purchase the Equity Support Shares, such Subscriber has relied solely upon independent investigation made by such Subscriber and the representations and warranties of the Issuer in Section 5.

 

(j)               Such Subscriber acknowledges and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Equity Support Shares or made any findings or determination as to the fairness of this investment.

 

(k)              Such Subscriber has been duly formed or incorporated and is validly existing and is in good standing under the laws of its jurisdiction of formation or incorporation, with power and authority to enter into, deliver and perform its obligations under this Equity Support Agreement.

 

(l)               The execution, delivery and performance by such Subscriber of this Equity Support Agreement are within the powers of such Subscriber, have been duly authorized and will not constitute or result in a breach or default under or conflict with any order, ruling or regulation of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which such Subscriber is a party or by which such Subscriber is bound, and will not violate any provisions of such Subscriber’s organizational documents, including, without limitation, its incorporation or formation papers, bylaws, indenture of trust or partnership or operating agreement, as may be applicable. The signature of such Subscriber on this Equity Support Agreement is genuine, and the signatory has legal competence and capacity to execute the same or the signatory has been duly authorized to execute the same, and, assuming that this Equity Support Agreement constitutes the valid and binding agreement of the Issuer, this Equity Support Agreement constitutes a legal, valid and binding obligation of such Subscriber, enforceable against such Subscriber in accordance with its terms except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.

 

 

(m)             Neither the Subscribers nor any of their officers, directors, managers, managing members, general partners or any other person acting in a similar capacity or carrying out a similar function, is: (i) a person named on the Specially Designated Nationals and Blocked Persons List, the Foreign Sanctions Evaders List, the Sectoral Sanctions Identification List, or any other similar list of sanctioned persons administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), or any similar list of sanctioned persons administered by the European Union or any individual European Union member state, including the United Kingdom (collectively, “Sanctions Lists”); (ii) directly or indirectly owned or controlled by, or acting on behalf of, one or more persons on a Sanctions List; (iii) organized, incorporated, established, located in, or a citizen, national, or the government, including any political subdivision, agency, or instrumentality thereof, of, Cuba, Iran, North Korea, Syria, Venezuela, the Crimea region of Ukraine, or any other country or territory embargoed or subject to substantial trade restrictions by the United States, the European Union or any individual European Union member state, including the United Kingdom; (iv) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515; or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (collectively, a “Prohibited Investor”). Such Subscriber represents that if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.) (the “BSA”), as amended by the USA PATRIOT Act of 2001 (the “PATRIOT Act”), and its implementing regulations (collectively, the “BSA/PATRIOT Act”), that such Subscriber maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. Such Subscriber also represents that it maintains policies and procedures reasonably designed to ensure compliance with sanctions administered by the United States, the European Union, or any individual European Union member state, including the United Kingdom, to the extent applicable to it. Such Subscriber further represents that the funds held by such Subscriber and used to purchase the Equity Support Shares were legally derived and were not obtained, directly or indirectly, from a Prohibited Investor.

 

(n)              If any Subscriber is or is acting on behalf of (i) an employee benefit plan that is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (ii) a plan, an individual retirement account or other arrangement that is subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), (iii) an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement described in clauses (i) and (ii) (each, an “ERISA Plan”), or (iv) an employee benefit plan that is a governmental plan (as defined in Section 3(32) of ERISA), a church plan (as defined in Section 3(33) of ERISA), a non-U.S. plan (as described in Section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing clauses (i), (ii) or (iii) but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code (collectively, “Similar Laws”, and together with ERISA Plans, “Plans”), such Subscriber represents and warrants that (A) neither the Issuer nor any of its affiliates has provided investment advice or has otherwise acted as the Plan’s fiduciary, with respect to its decision to acquire and hold the Equity Support Shares, and none of the parties to the Transaction is or shall at any time be the Plan’s fiduciary with respect to any decision in connection with such Subscriber’s investment in the Equity Support Shares; and (B) its purchase of the Equity Support Shares will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or any applicable Similar Law.

 

(o)              Such Subscriber has or has commitments to have and, when required to deliver payment to the Issuer pursuant to Section  2 above, reasonably believes it will have, sufficient funds to pay the Subscription Amount and consummate the purchase and sale of the Equity Support Shares pursuant to this Equity Support Agreement.

 

 

7.              Registration Rights.

 

(a)              The Issuer agrees that, within fifteen (15) calendar days following the Closing Date (such deadline, the “Filing Deadline”), the Issuer will submit to or file with the SEC a registration statement for a shelf registration on Form F-1 or Form F-3 (if the Issuer is then eligible to use a Form F-3 shelf registration) (the “Registration Statement”), in each case, covering the resale of the Total Shaolin Shares acquired by each Subscriber pursuant to this Equity Support Agreement (all such Issuer Ordinary Shares, the “Registrable Equity Support Shares”) on a delayed or continuous basis pursuant to Rule 415 under the Securities Act. The Issuer shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) thirty (30) calendar days following the Filing Deadline if the SEC notifies the Issuer that it will “review” the Registration Statement (including a limited review) and (ii) the third (3rd) business day after the date the Issuer is notified (orally or in writing, whichever is earlier) by the SEC that the Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effectiveness Deadline”). The Issuer’s obligations to include the Registrable Equity Support Shares of a Subscriber in the Registration Statement are contingent upon such Subscriber furnishing in writing to the Issuer such information regarding such Subscriber or its permitted assigns, the securities of the Issuer held by such Subscriber and the intended method of disposition of the Registrable Equity Support Shares (which shall be limited to non-underwritten public offerings) as shall be reasonably requested by the Issuer to effect the registration of the Registrable Equity Support Shares at least five (5) business days in advance of the expected filing date of the Registration Statement. Each Subscriber shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling stockholder in similar situations, including providing that the Issuer shall be entitled to postpone the effectiveness or use of the Registration Statement, and all deadlines pertaining to the Issuer pursuant to the first sentence of this Section 7(a) shall be delayed, but not excused, by the number of business days following such deadline until each Subscriber provides such information and will be deemed the applicable “Filing Deadline” and the “Effectiveness Deadline”; further provided that the Subscribers shall not in connection with the foregoing be required to execute any lock-up or similar agreement or otherwise be subject to any contractual restriction on the ability to transfer the Registrable Equity Support Shares. Notwithstanding the foregoing, if the SEC prevents the Issuer from including any or all of the shares proposed to be registered under a Registration Statement due to limitations on the use of Rule 415 under the Securities Act for the resale of the Shares pursuant to this Section 7 by the applicable stockholders or otherwise, such Registration Statement shall register for resale such number of Shares which is equal to the maximum number of Shares as is permitted to be registered by the SEC. In such event, the number of Shares to be registered for each other selling stockholder named in such Registration Statement shall be reduced pro rata among all such other selling stockholders first and fully, before the number of all Registrable Equity Support Shares to be registered shall be reduced (in which case, it shall be reduced pro rata among the Subscribers). In the event the Issuer amends the Registration Statement in accordance with the foregoing, the Issuer will use its commercially reasonable efforts to file with the SEC, as promptly as allowed by the SEC, one or more registration statements to register the resale of those Registrable Equity Support Shares that were not registered on the initial Registration Statement, as so amended. For as long as any Subscriber holds Equity Support Shares, the Issuer will use commercially reasonable efforts to file all reports for so long as the condition in Rule 144(c)(1) (or Rule 144(i)(2), if applicable) is required to be satisfied, and provide all customary and reasonable cooperation, necessary to enable the Subscribers to resell the Equity Support Shares pursuant to Rule 144 of the Securities Act (in each case, when Rule 144 of the Securities Act becomes available to the Subscribers). Any failure by the Issuer to file the Registration Statement by the Filing Deadline or to effect such Registration Statement by the Effectiveness Deadline shall not otherwise relieve the Issuer of its obligations to file or effect the Registration Statement as set forth above in this Section 7. The Issuer agrees to file a Registration Statement with respect to the PIPE Shares pursuant to the PIPE Investment and the other common equity shares for resale with the SEC within the same time period described above (which, for the avoidance of doubt, will not alter the Issuer’s obligation to comply with the remainder of this Section 7.) Upon a Registration Statement covering the Registrable Equity Support Shares becoming effective, the Issuer shall promptly notify in writing each Subscriber and each broker (nominee) that signed an acknowledgement pursuant to Section 3(h) that such Registration Statement has become effective.

 

 

(b)              Notwithstanding anything to the contrary in this Equity Support Agreement, the Issuer shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require the Subscribers not to sell under the Registration Statement or to suspend the effectiveness thereof, if (x) the use of the Registration Statement would require the inclusion of financial statements that are unavailable for reasons beyond the Issuer’s control, (y) the Issuer’s board of directors determines that in order for the Registration Statement to not contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act, or if (z) such filing or use could materially affect a the negotiation or consummation of a bona fide business or financing transaction of the Issuer or its subsidiaries or would require additional disclosure by the Issuer in the Registration Statement of material information that the Issuer has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Registration Statement would be expected, in the reasonable determination of Issuer’s board of directors to cause the Registration Statement to fail to comply with applicable disclosure requirements (each such circumstance, a “Suspension Event”); provided, however, that the Issuer may not delay or suspend the Registration Statement (i) on more than two occasions or for more than forty-five (45) total calendar days, in each case during any three-month period, or (ii) on more than three occasions or for more than ninety (90) total calendar days, in each case during any twelve-month period. Upon receipt of any written notice from the Issuer of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, each Subscriber agrees that it will immediately discontinue offers and sales of the Registrable Equity Support Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until such Subscriber receives copies of a supplemental or amended prospectus (which the Issuer agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales; provided, for the avoidance of doubt, that the Issuer shall not include any material non-public information in any such written notice. If so directed by the Issuer, each Subscriber will deliver to the Issuer or, in such Subscriber’s sole discretion destroy, all copies of the prospectus covering the Registrable Equity Support Shares in such Subscriber’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Registrable Equity Support Shares shall not apply (i) to the extent such Subscriber is required to retain a copy of such prospectus (a) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (b) in accordance with a bona fide pre-existing document retention policy or (ii) to copies stored electronically on archival servers as a result of automatic data back-up. Upon the occurrence of (y) a Suspension Event or (z) a post-effective amendment to a suspended Registration Statement becoming effective (a “Suspension Cure”), the Issuer shall promptly notify in writing each Subscriber and each broker (nominee) that signed an acknowledgement pursuant to Section 3(h) of the Suspension Event and/or Suspension Cure.

 

(c)

Piggyback Registration.

 

(i)           In the event that (A) there is not an effective Registration Statement covering the total number of Registrable Equity Support Shares that is on file with the SEC and (B) the Issuer or any shareholder of the Issuer proposes to conduct a registered offering of, or if the Issuer proposes to file a Registration Statement under the Securities Act with respect to the registration of, equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities (including pursuant to the ATM Agreement), for its own account or for the account of shareholders of the Issuer, other than a Registration Statement (or any registered offering with respect thereto) (i) filed in connection with any employee stock option or other benefit plan, (ii) pursuant to a Registration Statement on Form F-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), or (iii) filed in connection with a confidentially marketed public offering by the Issuer of primary shares, then the Issuer shall give written notice of such proposed offering to each Subscriber (a “Piggyback Notice”) as soon as practicable but not less than ten (10) days before the anticipated filing date of such Registration Statement or, in the case of a registration in which securities of the Issuer are sold to an underwriter in a firm commitment underwriting for distribution to the public (an “Underwritten Offering”) pursuant to a shelf registration, the applicable “red herring” prospectus or prospectus supplement used for marketing such offering, which Piggyback Notice shall (A) describe the amount and type of securities to be included in such offering, the proposed filing date, the intended method(s) of distribution, the name of the proposed managing underwriter or underwriters, if any, in such offering and to the extent then known a good faith estimate of the proposed minimum offering price, and (B) offer to each Subscriber the opportunity to include in such registered offering such number of Registrable Equity Support Shares as such Subscriber may request in writing within five (5) days after receipt of such Piggyback Notice (such registered offering, a “Piggyback Registration”). The Issuer shall, in good faith, cause such Registrable Equity Support Shares 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 Equity Support Shares requested by each Subscriber pursuant to this Section 7(c) to be included therein on the same terms and conditions as any similar securities of the Issuer included in such registered offering and to permit the sale or other disposition of such Registrable Equity Support Shares in accordance with the intended method(s) of distribution thereof. The inclusion of Registrable Equity Support Shares in a Piggyback Registration shall be subject to each Subscriber’s agreement to enter into an underwriting agreement in customary form with the underwriter(s) selected for such Underwritten Offering, if applicable.

 

 

(d)

Registration Priority.

 

(i)           The Issuer shall include in any Registration Statement, including but not limited to any Piggyback Registration, before including any shares of Issuer Ordinary Shares or other equity securities proposed to be sold by the Issuer or by other holders of Issuer stock or other equity securities, the Registrable Equity Support Shares held by each Subscriber (if any) that such Subscriber has requested be included in such Registration Statement. Notwithstanding anything to the contrary in this Equity Support Agreement, (A) the Issuer hereby agrees and covenants that it will not grant, or enter into an agreement or arrangement pursuant to which the Issuer agrees to grant, rights to register any Issuer Ordinary Shares (or securities convertible into or exchangeable for Issuer Ordinary Shares) pursuant to the Securities Act in a manner that has the purpose or effect of circumventing, or on terms that contradict, the priority right of each Subscriber set forth in this Section 7(d)(i), and (B) the Issuer represents and warrants that, to the knowledge of the Issuer, SPAC has not granted, or agreed to grant, any registration rights that will survive the Transaction Closing.

 

(ii)          If the SEC prevents the Issuer from including any or all of the shares proposed to be registered under any Registration Statement in which Registrable Equity Support Shares are included, including but not limited to any Piggyback Registration where each Subscriber (if any) has requested to be included in such Registration Statement, due to limitations on the use of Rule 415 under the Securities Act for the resale of the Shares pursuant to this Section 7 by the applicable stockholders or otherwise, such Registration Statement shall register for resale such number of Shares which is equal to the maximum number of Shares as is permitted to be registered by the SEC. In such event, the number of Shares to be registered for each other selling stockholder named in such Registration Statement shall be reduced pro rata among all such other selling stockholders first and fully, before the number of all Registrable Equity Support Shares to be registered shall be reduced (in which case, it shall be reduced pro rata among the Subscribers).

 

(iii)         The Issuer represents and warrants that the priority rights afforded to each Subscriber pursuant to Section 7(d) of this Equity Support Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions and in the event of a conflict between any such agreement or agreements and Section 7(d) of this Equity Support Agreement, the terms of Section 7(d) of this Equity Support Agreement shall prevail.

 

(e)

Private Placement Procedure.

 

(i)           In the event that there is not an effective Registration Statement covering the total number of Registrable Equity Support Shares that is on file with the SEC for each VWAP Trading Day during any Reference Period (including an Accelerated Reference Period) (any such event, a “Registration Unavailability Event”), upon a written request of any Subscriber, the Issuer shall facilitate the resale of such number of Registrable Equity Support Shares as will be requested by such Subscriber (in its sole discretion) up to the lesser of (y) the number of the applicable Period Subscriber Shares and (z) the number of Registrable Equity Support Shares held by such Subscriber as of the date of such request in a private placement to be completed on or prior to the last VWAP Trading Day of such Reference Period and satisfactory to such Subscriber in form and substance, including, without limitation, by providing customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to such Subscriber and/or any designated purchaser of the Registrable Equity Support Shares from such Subscriber, due diligence rights (for such Subscriber and/or any designated purchaser of the Registrable Equity Support Shares from such Subscriber), opinions and certificates and such other documentation as is customary for private placements of equity securities, as is acceptable to such Subscriber (in which case, the Calculation Agent shall make any adjustments to the terms of this Equity Support Agreement that are necessary, in its good faith and commercially reasonable judgment, to compensate such Subscriber for any customary liquidity discount from the public market price of the Shares incurred on the sale of the Registrable Equity Support Shares in a private placement) (collectively, the “Private Placement Procedure”); provided, that if the Issuer complies with the Private Placement Procedure, the requesting Subscriber shall use commercially reasonable efforts to sell such applicable Registrable Equity Support Shares that are subject to the request for the Private Placement Procedures; provided, further that no Subscriber shall be obligated to sell any Registrable Equity Support Shares to (i) any Affiliate (as defined in Rule 144 as of the date hereof) of the Issuer or of the SPAC or (ii) any person that is the direct or indirect “beneficial owner” (determined in accordance with Rule 13d-3 under the Exchange Act) of Issuer Ordinary Shares exceeding 9.9% of the voting power of the Issuer Ordinary Shares, in each case, at a price lower than the arithmetic averages of the Daily VWAPs for each VWAP Trading Day during the applicable Reference Period up to the date of any such proposed sale.

 

 

(f)

Reference Price

 

(i)           Notwithstanding the definition of the “Reference Price”, upon the occurrence of a Registration Unavailability Event on any VWAP Trading Day during any Reference Period, the Reference Price (the “Adjusted Reference Price”) for such Reference Period in respect of a Subscriber will be a weighted average amount calculated by the Calculation Agent as follows:

 

ARP = (A + B) / C, where:

 

ARP–

Adjusted Reference Price

 

A–

(x) the arithmetic average of the Daily VWAPs for the full VWAP Trading Days, if any, within the applicable Reference Period, starting from the first VWAP Trading Day thereof, that preceded the first (if applicable) Registration Unavailability Event within the Reference Period (excluding the VWAP Trading Day on which the Registration Unavailability Event has occurred) multiplied by (y) the number of such full VWAP Trading Days, if any;

  

B–

(x) if upon the occurrence of a Registration Unavailability Event such Subscriber has requested the Private Placement Procedure pursuant to Section 7(e), the net aggregate proceeds actually received on or prior to 5 p.m. US Eastern Time on the Business Day immediately following the final VWAP Trading Day of each Reference Period (after any brokerage, underwriting, legal or other fees related to the Private Placement that are not reimbursed by Issuer) by such Subscriber divided by the number of Issuer Ordinary Shares offered by such Subscriber pursuant to the Private Placement Procedure or (y) if upon the occurrence of a Registration Unavailability Event and until the end of the applicable Reference Period such Subscriber has not requested the Private Placement Procedure pursuant to Section 7(e), starting from (and including) the VWAP Trading Day on which such Registration Unavailability Event has occurred, the arithmetic average of the Daily VWAPs for the full VWAP Trading Days remaining in the applicable Reference Period, in each case (x) and (y), multiplied by (z) such number of the full VWAP Trading Days remaining in the applicable Reference Period; and

 

C–

the total number of the VWAP Trading Days in the applicable Reference Period;

 

it being understood that the component “A” will be deemed “0” and the Adjusted Reference Price will be determined based on the components “B” and “C” of the formula above, if (1) the Registration Unavailability Event ceases to exist during such Reference Period if it commenced prior to the start of such Reference Period, or (2) if the Registration Unavailability Event exists as of the first VWAP Trading Day of a Reference Period.

 

 

The provisions of this clause (e) will apply mutatis mutandis to any Accelerated Reference Period(s).

 

The parties agree and acknowledge that the provisions of this Section 7(f) are explicitly subject to Section 15.

 

(g)

At its expense the Issuer shall:

 

(i)           use its commercially reasonable efforts to keep such registration, and any qualification, exemption or compliance under state securities laws which the Issuer determines to obtain, continuously effective with respect to Total Shaolin Shares, and to keep the applicable Registration Statement or any subsequent shelf registration statement free of any material misstatements or omissions, until the earlier of the following: (A) the date all Total Shaolin Shares held by the Subscribers may be sold without restriction under Rule 144, including, without limitation, any volume and manner of sale restrictions which may be applicable to affiliates under Rule 144 and without the requirement for the Issuer to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), and (B) two (2) years from the date of effectiveness of the Registration Statement (the period of time during which the Issuer is required hereunder to keep a Registration Statement effective is referred to herein as the “Registration Period”);

 

(ii)

during the Registration Period, advise the Subscribers, as expeditiously as

 

practicable:

 

(1)            when a Registration Statement or any amendment thereto has been filed with the SEC and when such Registration Statement or any post-effective amendment thereto has become effective;

 

(2)            after it shall receive notice or obtain knowledge thereof, of any request by the SEC for amendments or supplements to any Registration Statement or the prospectus included therein (“Prospectus”) or for additional information;

 

(3)            of the issuance by the SEC of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for such purpose;

 

(4)            of the receipt by the Issuer of any notification with respect to the suspension of the qualification of the Registrable Equity Support Shares included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and

 

(5)            subject to the provisions in this Equity Support Agreement, of the occurrence of any event that requires the making of any changes in any Registration Statement or Prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading.

 

Notwithstanding anything to the contrary set forth herein, the Issuer shall not, when so advising the Subscribers of such events, provide the Subscribers with any material, nonpublic information regarding the Issuer other than to the extent that providing notice to the Subscribers of the occurrence of the events listed in (1) through (5) above in itself constitutes material, nonpublic information regarding the Issuer, in which case such Subscriber may use and disclose such material non-public information publicly and/or to any potential purchaser of the Issuer Ordinary Shares from such Subscriber, as applicable;

 

 

(iii)         use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement as soon as reasonably practicable;

 

(iv)         upon the occurrence of any event contemplated above, except for such times as the Issuer is permitted hereunder to suspend, and has suspended, the use of a Prospectus forming a part of a Registration Statement, the Issuer shall use its commercially reasonable efforts to as soon as reasonably practicable prepare a post-effective amendment to such Registration Statement or a supplement to the related Prospectus, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Equity Support Shares included therein, such Prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

(v)          use its commercially reasonable efforts to cause all Registrable Equity Support Shares to be listed on each securities exchange or market, if any, on which the Issuer Ordinary Shares have been listed;

 

(vi)         use its commercially reasonable efforts (1) to take all other steps necessary to effect the registration of the Registrable Equity Support Shares contemplated hereby and (2) to file all reports and other materials required to be filed by the Exchange Act so long as the Issuer is subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144 to enable Subscriber to sell the Registrable Equity Support Shares under Rule 144 for so long as the Subscriber holds Registrable Equity Support Shares;

 

(vii)        (1) cause the Transfer Agent to remove the notation concerning transfer restrictions of the Equity Support Shares referenced in Section 2, at each Subscriber’s request and reasonably promptly upon such request, when the Registrable Equity Support Shares are sold pursuant to Rule 144 under the Securities Act or the Registration Statement or may be sold without restriction under Rule 144; and

 

(2) within five (5) business days after the Effectiveness Deadline, cause the Transfer Agent to deliver the Equity Support Shares to each Subscriber or such Subscriber’s nominee through the facilities of the DTC maintained in the form of book entries on the books of the DTC and allowed to be settled through the DTC’s regular book-entry settlement services without any restrictive legend; provided, in the case of clause (2), the Issuer has received such representation letters and certificates from such Subscriber and its broker (nominee) as may be reasonably requested by the Issuer (it being understood and agreed between the parties that representation letters and certificates delivered in the form agreed to as a condition precedent to this Equity Support Agreement pursuant to Section 3(h) shall be deemed sufficient for purposes of this clause). In connection therewith, if required by the Transfer Agent, the Issuer will promptly cause an opinion of counsel to be delivered to and maintained with the Transfer Agent, together with any other authorizations, certificates and directions required by the Transfer Agent that authorize and direct the Transfer Agent to transfer such Registrable Equity Support Shares without any such legend;

 

(viii)       promptly notify in writing, or cause its counsel to promptly notify in writing, each broker (nominee) that signed an acknowledgement pursuant to Section 3(h) in the event that (1) a Registration Statement covering the Registrable Equity Support Shares is effective, (2) a Registration Statement covering the Registrable Equity Support Shares ceases to be effective and (3) in the case of clause (2), such Registration Statement has become effective;

 

(ix)         use its commercially reasonable efforts to allow the Subscribers to review disclosure regarding the Subscribers in the Registration Statement; and

 

 

(x)          otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by any Subscriber, consistent with the terms of this Equity Support Agreement, in connection with the registration of the Registrable Equity Support Shares.

 

(h)

Indemnification.

 

(i)           The Issuer agrees to indemnify, to the extent permitted by law, each Subscriber (to the extent a seller under the Registration Statement), its officers, directors, partners, members, managers, employees, stockholders, advisers and agents, and each person who controls such Subscriber (within the meaning of the Securities Act or the Exchange Act), to the extent permitted by law, against all losses, claims, damages, liabilities and reasonable and documented out of pocket expenses (including reasonable and documented outside attorneys’ fees of one law firm (and one firm of local counsel)) caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading, except insofar as the same are caused by or contained in any information or affidavit so furnished in writing to the Issuer by or on behalf of such Subscriber expressly for use therein and except with respect to sales made during a Suspension Event.

 

(ii)          In connection with any Registration Statement in which any Subscriber is participating, such Subscriber shall furnish (or cause to be furnished) to the Issuer in writing such information and affidavits as the Issuer reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify the Issuer, its directors and officers and each person or entity who controls the Issuer (within the meaning of the Securities Act or the Exchange Act) against any losses, claims, damages, liabilities and expenses (including, without limitation, reasonable outside attorneys’ fees) resulting from any untrue or alleged untrue statement of material fact contained or incorporated by reference in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading, but only to the extent that such untrue statement or omission is contained (or not contained in, in the case of an omission) in any information or affidavit so furnished in writing by on behalf of such Subscriber expressly for use therein; provided, however, that the liability of each Subscriber shall be several and not joint with any other investor whose securities are covered by the same Registration Statement and shall be in proportion to and limited to the net proceeds received by such Subscriber from the sale of Registrable Equity Support Shares giving rise to such indemnification obligation.

 

(iii)         Any person or entity entitled to indemnification herein shall (A) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s or entity’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (B)  unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement includes a statement or admission of fault and culpability on the part of such indemnified party or which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

 

(iv)         The indemnification provided for under this Equity Support Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person or entity of such indemnified party and shall survive the transfer of securities.

 

(v)          If the indemnification provided under this Section 7(h) from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations; provided, however, that the liability of each Subscriber shall be limited to the net proceeds received by such Subscriber from the sale of Registrable Equity Support Shares giving rise to such indemnification obligation. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by (or not made by, in the case of an omission), or relates to information supplied by (or not supplied by, in the case of an omission), such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 7(h)(i), (ii) and (iii) above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 7(h)(v) from any person or entity who was not guilty of such fraudulent misrepresentation.

 

(i)            Registration and Private Placement Procedure Expenses. The Registration and Private Placement Procedure Expenses incurred in connection with any registration or Private Placement Procedure shall be borne by the Issuer. For purposes of this Equity Support Agreement, “Registration and Private Placement Procedure Expenses” shall mean the documented, out-of-pocket expenses of any registration or Private Placement Procedure, including, without limitation, the following (but not including and underwriter or brokerage fees):

 

(i)           all registration, listing 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 Issuer shares are then listed;

 

(ii)          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 the Registrable Equity Support Shares and the fees and expenses of any “qualified independent underwriter” as such term is defined in FINRA Rule 5121);

 

(iii)         printing, messenger, telephone and delivery expenses;

 

(iv)         fees and disbursements of counsel for the Issuer;

 

(v)          fees and disbursements of all independent registered public accountants of the Issuer and any other persons, including special experts, retained by the Issuer, incurred in connection with such registration;

 

 

(vi)         all expenses in connection with the preparation, printing and filing of a Registration Statement, any Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to any Subscribers, underwriters and dealers and all expenses incidental to delivery of the Registrable Equity Support Shares;

 

(vii)        the expenses incurred in connection with making “road show” presentations and holding meetings with potential investors to facilitate the sale of the Registrable Equity Support Shares in an Underwritten Offering; and

 

(viii)       all fees and expenses incurred in connection with the Private Placement Procedure (including each Subscriber’s documented legal fees not to exceed $75,000 in the aggregate).

  

8.              Termination. This Equity Support Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof except for the provisions of this Section 8 and Section 7(h) (a) upon the termination of the Transaction under the Transaction Agreement, (b) upon the mutual written agreement of each of the parties hereto to terminate this Equity Support Agreement, (c) if the conditions to Closing set forth in Section 3 of this Equity Support Agreement are not satisfied, or capable of being satisfied, on or prior to the Closing and, as a result thereof, the transactions contemplated by this Equity Support Agreement will not be or are not consummated at the Closing or (d)  if the Transaction Closing has not occurred by the earlier of August 31, 2022 or five (5) calendar days from the Termination Date (as defined in the Transaction Agreement); provided that nothing herein will relieve any party from liability for any breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from any such willful breach. The Issuer shall notify the Subscribers of the termination of the Transaction Agreement promptly after the termination of such agreement. Immediately upon the termination of this Equity Support Agreement in accordance with this Section 8 (and in any event within one (1) business day after such termination), (x) any monies paid by each Subscriber in connection herewith shall be returned to such Subscriber and (y) the Issuer shall be obligated to pay the Option Premium to each Subscriber, notwithstanding such termination.

 

9.              No Transfer Restrictions. The Total Shaolin Shares shall not be subject to any Transfer Restriction other than (x) the restriction on Short Sales (as defined below) set forth in Section 10 and (y) restrictions on transfer under applicable securities laws. “Transfer Restriction” shall mean any direct or indirect limitation, condition to or restriction on the ability of the Subscribers to offer, sale, lease, assign, encumber, loan, pledge, grant a security interest with respect to, hypothecate, dispose of or otherwise transfer (by operation of law or otherwise), either voluntary or involuntary, or enter into any contract, option or other arrangement or understanding with respect to any of the foregoing, any Total Shaolin Shares (whether owned beneficially or of record).

 

10.            Subscribers Covenant. Each Subscriber hereby agrees that, from and after the date hereof, none of such Subscriber, its controlled affiliates, or any person or entity acting on behalf of such Subscriber or any of its controlled affiliates or pursuant to any understanding with such Subscriber or any of its controlled affiliates shall enter into any Short Sales with respect to the equity or equity-linked securities of the Issuer, if applicable, at a price per Share (or, if such Short Sale is in the form of a derivative, at the strike price per Share) less than $10.40. For purposes of this Section 10, “Short Sales” shall include (i) all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, including transactions through non-U.S. broker dealers or foreign regulated brokers, and (ii) all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), but excluding this Equity Support Agreement and bona fide margin agreements to which such Subscriber may be or may become a party (collectively, “Restricted Short Sales”). For the avoidance of doubt, the parties agree that (A) this Equity Support Agreement shall not, in whole or in part, constitute a Short Sale, (B) each Subscriber shall be permitted to effect a Short Sale of Equity Support Shares to the extent such Short Sale is necessary or appropriate for such Subscriber to facilitate a delivery of the corresponding number of the Issuer Ordinary Shares in freely transferable form without any restrictive legends through the facilities of the DTC from the Issuer or the Transfer Agent, as applicable, (C) the purchase of put options, sale of call options or delta negative trades in other equity-linked derivatives or securities with strike prices or the functional equivalent that are equal to or greater than the USD 10.40 shall not be deemed to be Short Sales, and (D) Short Sales, to the extent such Short Sale is a substitute or a replacement of a Short Sale that was not a Restricted Short Shale when entered into and is made by an affiliate of any Subscriber in connection with any novation of this Equity Support Agreement permitted hereunder shall not be prohibited by this Section 10. Further, the parties agree that the Total Shaolin Shares, or any portion thereof, may be pledged by the Subscribers in connection with bona fide margin agreements, which shall not be deemed to be a transfer, sale or assignment of such shares restricted by the provisions of this Section 10. The restrictions provided in this Section 10 shall cease to be binding upon the Subscribers (x) upon the occurrence of, and immediately from the date of, any Acceleration Event, if (A) a Registration Effectiveness Adjustment Event has occurred and is continuing or (B) the Registration Statement covering the resale of the Total Shaolin Shares is not effective for any other reason, in each case, as of the date of such Acceleration Event and (y) if any Acceleration Event has occurred and continuing, immediately from the date of any Registration Effectiveness Adjustment Event or if the Registration Statement covering the resale of the Total Shaolin Shares is not, or ceases to be effective, for any other reason, in each case, during the pendency of such Acceleration Event. For every Share for which each Subscriber directly or indirectly enters into a Restricted Short Sale at a Share price below $10.40, the Reference Price for an equal number of the Shares that are the Total Shaolin Shares shall be deemed to be $10.40.

 

 

11.

[Intentionally Left Blank]

 

12.            Voting. Prior to the earlier to occur of the Termination Date and the Transaction Closing, each Subscriber irrevocably and unconditionally agrees that it shall, at any meeting of the stockholders of the SPAC (whether annual or special and whether or not an adjourned or postponed meeting), however called, appear at such meeting or otherwise cause the Class A ordinary shares, par value $0.0001 per share (the “SPAC Shares”) held by such Subscriber at the record date of such meeting, if any, to be counted as present thereat for the purpose of establishing a quorum and vote, or cause to be voted at such meeting, and consent to any written consent of the stockholders of the SPAC, all SPAC Shares held by such Subscriber consistent with the recommendation of the Board of Directors of the SPAC with respect to the matters presented at such meeting or in connection with such written consent. Notwithstanding anything herein to the contrary, this Section 12 shall not require any Subscriber to be present (in person or by proxy) or vote (or cause to be voted), any of the SPAC Shares held by such Subscriber, if any, to (i) amend, modify or waive any provision of the Transaction Agreement and the other transaction documents related thereto in a manner that adversely affects such Subscriber in its capacity as a stockholder of the SPAC in any material respect, and such Subscriber shall not be obligated to vote in favor of the adoption of the Transaction Agreement if it is amended in any such respect; or (ii) amend the SPAC’s memorandum and articles of association to extend the time period in which the SPAC must consummate an initial business combination.

 

13.

Release of Collateral Account

 

(a)

Collateral Account Releases.

 

(i)             On or prior to 5 p.m. US Eastern Time on the Business Day immediately following the final VWAP Trading Day of each Reference Period, the Issuer shall pay to each Subscriber in immediately available funds in USD the applicable Reference Period Payment. Following such payment, each Subscriber shall instruct the Securities Intermediary to release the applicable Issuer Release Amount from the Collateral Account to the Issuer at the wire instructions to be provided by the Issuer to such Subscriber prior to the First Reference Period. If such Reference Period Payment is not made by the Issuer in full and on time, then each Subscriber shall instruct Securities Intermediary to (i) release the applicable Reference Period Payment from the Collateral Account to such Subscriber at the following wire instructions as in Annex A, and (ii) release the applicable Issuer Release Amount from the Collateral Account to the Issuer at the wire instructions to be provided by the Issuer to such Subscriber prior to the First Reference Period. The parties agree that payments under this Section 13(a) shall be treated for U.S. federal income tax purposes as termination payments under Section 1234A of the Code.

 

(ii)            Following the conclusion of, as applicable, the Third Reference Period or the final Accelerated Reference Period and the payment or release of the Reference Period Payment for the Third Reference Period or for the final Accelerated Reference Period pursuant to the immediately preceding subsection, each Subscriber shall reasonably promptly instruct the Securities Intermediary to release the outstanding balance of the Collateral Account to the Issuer.

 

 

(iii)           Notwithstanding anything to the contrary herein, in the event of a Delisting or Insolvency Filing, the Reference Price shall immediately be deemed to be USD 0 (the “Delisted/Insolvent Price”) for the applicable Reference Period and all succeeding Reference Periods (if any), the start (if a Reference Period has not yet started) of each Reference Period and the end of each Reference Period shall be deemed to be accelerated to the date of such Delisting or Insolvency Filing, and each Subscriber shall instruct the Securities Intermediary to release the outstanding balance of the Collateral Account to such Subscriber. The parties agree and acknowledged that the provisions of this Section 13(a)(iii) are explicitly subject to Section 15.

 

(iv)           Notwithstanding anything to the contrary herein, if at any time the Calculation Agent determines that the amount in any Collateral Account is insufficient to fund the maximum amount of the remaining Reference Period Payment(s) (assuming, for purposes of such calculation, that the Daily VWAP for each remaining VWAP Trading Day is USD 0), it shall notify the applicable Subscriber and the Issuer of such deficiency and the Issuer shall be obligated, within two (2) Business Days, to deliver an amount in cash in USD to such Collateral Account to cure such deficiency.

 

(b)

Dispute Resolution.

 

(i)            In the event that a party (the “Disputing Party”) does not agree with any determination made (or the failure to make any determination) by the Calculation Agent, the Disputing Party shall have the right, by delivering notice within one (1) Business Day of such determination, to require that the Calculation Agent have such determination reviewed by a disinterested third party that is a leading dealer in the U.S. corporate equity derivatives market and that is not an Affiliate of either party (a “Third Party Dealer”). Such Third Party Dealer shall be jointly selected by the parties within one (1) Business Day after the Disputing Party’s exercise of its rights hereunder (once selected, such Third Party Dealer shall be the “Substitute Calculation Agent”). If the parties are unable to agree on a Substitute Calculation Agent within the prescribed time, each of the parties shall elect a Third Party Dealer and such two dealers shall agree on a third Third Party Dealer by the end of the subsequent Business Day. Such third Third Party Dealer shall be deemed to be the Substitute Calculation Agent. Any exercise by the Disputing Party of its rights hereunder must be in writing and shall be delivered to the Calculation Agent not later than the first (1st) Business Day following the Business Day on which the Calculation Agent notifies the Disputing Party of any determination made (or of the failure to make any determination). Any determination by the Substitute Calculation Agent shall be binding in the absence of a manifest error and shall be made as soon as possible but no later than the second (2nd) Business Day following the

 

Substitute Calculation Agent’s appointment. The costs of such Substitute Calculation Agent and, if applicable, nominating Third Party Dealers shall be borne by (a) the Disputing Party if the Substitute Calculation Agent substantially agrees with the Calculation Agent or (b) the non-Disputing Party if the Substitute Calculation Agent does not substantially agree with the Calculation Agent. If, after following the procedures and within the specified time frames set forth above, a binding determination is not achieved, the original determination of the Calculation Agent shall apply.

 

(ii)            Notwithstanding anything to the contrary herein, in the event that the Issuer disputes any determination in good faith made by the Calculation Agent, the Issuer shall not be entitled to the release of any funds from the Collateral Account, including pursuant to Section 13(a)(i) or (a)(ii), during the pendency of the dispute and the utilization of the dispute resolution procedures set forth in Section 13(b)(i).

 

(c)

Acceleration Events.

 

(i)             The Issuer hereby covenants and agrees to notify each Subscriber of the occurrence of any Acceleration Event that it is, or reasonably should be aware of as promptly as practicable thereafter and, to the extent that the occurrence of such Acceleration Event would constitute material non-public information with respect to the Issuer or the Issuer Ordinary Shares, simultaneously with such notice to file a Form 8-K with the SEC disclosing the occurrence of such Acceleration Event. In addition to the foregoing, to the extent any Subscriber reasonably believes any information related to such Acceleration Event received from the Issuer constitutes material non-public information with respect to the Issuer or the Issuer Ordinary Shares that has not been disclosed to the market generally by the Issuer, such Subscriber may use and disclose such material non-public information publicly and/or to any potential purchaser of Issuer Ordinary Shares from such Subscriber.

 

 

(ii)            Following the occurrence of an Acceleration Event, each Subscriber shall have the right, exercisable on or prior to the fifth (5th) Business Day following the date when such Subscriber has received a notice from such Acceleration Event from the Issuer, to accelerate any and all the remaining Reference Periods, at the election of such Subscriber, pursuant to the proviso set forth in the definition of the “Reference Period” (and each such new Reference Period, as accelerated, shall be deemed to be an “Accelerated Reference Period”). For the avoidance of doubt, such right may, at the sole discretion of each Subscriber, be exercised prior to the receipt of such notice from the Issuer. If any Subscriber makes such election, it shall reasonably promptly notify the Issuer of such acceleration in reasonable detail, including (i) the applicable Acceleration Event, (ii) the number of Total Shaolin Shares that such acceleration is being applied to, (iii) the applicable Reference Period Commencement Date(s) and (iv) the length of the applicable Reference Period(s).

 

Definitions: For purposes of the preceding Section 13, the following definitions shall apply:

 

“Acceleration Event” shall mean, as determined by the Calculation Agent:

 

(a)

That the Daily VWAP of the Issuer Ordinary Shares shall be less than USD 5.00 for any 10 VWAP Trading Days (whether or not consecutive) during any consecutive 15 VWAP Trading Day period, as determined by the Calculation Agent;

 

(b)

That if, on any Trading Day, the closing price for the Issuer Ordinary Shares is more than 40% lower than the closing price on the immediately preceding Trading Day (the “Prior Closing Price”) and the Prior Closing Price was less than USD 10.40;

 

(c)

The Issuer Ordinary Shares cease to be listed on any of The New York Stock Exchange, The Nasdaq Global Market or The Nasdaq Global Select Market (or any of their respective successors) and are not listed on The New York Stock Exchange, The Nasdaq Global Market or The Nasdaq Global Select Market on the immediately following Trading Day (a “Delisting”);

 

(d)

The receipt by the Issuer or any of their respective directors or officers solely with respect to their positions as officers and directors of the Issuer, of a “Wells Notice” from the SEC that the SEC intends to recommend or commence a civil or criminal enforcement action against such Person with respect to their positions with the Issuer;

 

(e)

On any VWAP Trading Day (“Day 1”) in which there has been any announcement or disclosure between 4pm ET on the immediately prior VWAP Trading Day (“Day 0”) and 9:30am ET on Day 1 that the Issuer’s financial statements for any reporting period contain a material misstatement or omission, the Daily VWAP of Day 1 decreases by at least 20% from the Daily VWAP of Day 0; provided, that if such announcement or disclosure is released during the regular trading hours on Day 1, an “Acceleration Event” shall mean that the Closing Price for Day 1 decreased by at least 20% from the Closing Price on Day 0;

 

(f)

The receipt by the Issuer of a negative going concern opinion from the Issuer’s auditor;

 

(g)

The resignation of the Issuer’s auditor; provided that such resignation does not result from a reorganization of such auditor or from any disputes, as determined by the Calculation Agent, regarding the Issuer’s financial statements;

 

 

(h)

A default by the Issuer or any of its Significant Subsidiaries with respect to any one or more mortgages, agreements or other instruments under which there is outstanding, or by which there is secured or evidenced, any indebtedness for money borrowed of at least USD 30.0 million dollars (or its foreign currency equivalent) in the aggregate, whether such indebtedness exists as of the date hereof or is thereafter created, where such default results in such indebtedness becoming or being declared due and payable before its stated maturity;

 

(i)

Any Insolvency Filing;

 

(j)

The occurrence of any Announcement Event; or

 

(k)

The Daily Unrestricted Liquidity is less than (x) if the Issuer has not made or announced any cash dividends, distributions, Spin-Outs, share buybacks or transfers, in each instance, to the holders of the Issuer Ordinary Shares on or after the Transaction Closing, USD 10.0 million for a period of any ten (10) consecutive Business Days, or (y) if the Issuer has made or announced any cash dividends, distributions, Spin-Outs, share buybacks or transfers, in each instance, to the holders of the Issuer Ordinary Shares on or after the Transaction Closing, USD 20.0 million for a period of any two (2) consecutive Business Days.

 

“Acquisition Transaction” shall mean any transaction or event that the Calculation Agent determines is reasonably likely to be consummated or completed and, if consummated or completed, would constitute a Merger Event or the occurrence of any Merger Event.

 

“Announcement Event” shall mean (i) the announcement by the Issuer, any of its subsidiaries or a Valid Third Party Entity of an Acquisition Transaction, and (ii) an announcement by the Issuer or any of its subsidiaries that the Issuer or any of its subsidiaries has entered into an agreement or a letter of intent to enter into an Acquisition Transaction.

 

“Business Day” shall mean, solely for purposes of this Section 13, any day other than a Saturday, a Sunday or any day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.

 

“Calculation Agent” shall mean, initially (and in respect of its portion of this Equity Support Agreement), the Subscriber, subject to Section 13(b) hereof. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by the Issuer, the Calculation Agent shall promptly (but in any event within three Trading Days) provide to the Issuer by e- mail to the e-mail address provided by the Issuer in such request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such determination or calculation (including any assumptions used in making such determination or calculation), it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such determination or calculation or any information that may be proprietary or confidential or subject to an obligation not to disclose such information. Whenever the Calculation Agent is required to act or to exercise judgment in any way, it will do so in good faith and in a commercially reasonable manner.

 

“Daily Unrestricted Liquidity” shall mean the unrestricted cash held by the Issuer and its subsidiaries and availability of any amounts to be borrowed under any revolving credit facilities. For the avoidance of doubt, such amount shall not include any restricted cash, customer cash or any amounts held in the Collateral Account.

 

“Daily VWAP” shall mean, for any Trading Day or VWAP Trading Day (as applicable), the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “SLCR US

 

<equity> AQR”, it being understood that immediately following the Transaction Closing, such page is expected to be replaced with “THCH US <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day or VWAP Trading Day (or if such volume-weighted average price is unavailable, the market value of one Issuer Ordinary Share on such Trading Day or VWAP Trading Day determined, using a volume weighted average method, by the Calculation Agent). The “Daily VWAP” shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours or, for the avoidance of doubt, any sales pursuant to the ATM Agreement.

 

 

“First Period Subscriber Shares” shall be a number of Issuer Ordinary Shares equal to one-third of the Equity Support Shares, rounded down.

 

“First Reference Price Commencement Date” shall mean the 85th calendar day immediately following the date of the Closing (as defined in the Transaction Agreement.

 

“First Reference Period” shall mean, subject to the proviso to the definition of the “Reference Period”, the 25 consecutive VWAP Trading Days beginning on, and including, the First Reference Period Commencement Date.

 

“First Reference Period Payment” shall mean an amount equal to the number of First Period Subscriber Shares multiplied by (i) if the Reference Price for the First Reference Period is less than USD 10.40, an amount equal to USD 10.40 minus the Reference Price (including, if applicable, an Adjusted Reference Price or Delisted/Insolvent Price) for the First Reference Period, or (ii) if the Reference Price (including, if applicable, an Adjusted Reference Price) for the First Reference Period is greater than or equal to USD 10.40, zero.

 

“Insolvency Filing” shall mean that the Issuer or any of the Issuer’s Significant Subsidiaries is unable or admits in writing its inability to pay its debts as they fall due, institutes or has instituted against it by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organization or the jurisdiction of its head or home office, or it consents to a proceeding seeking a judgment of insolvency or bankruptcy or any other relief (including, without limitation, provisional liquidation, restructuring, an application for the appointment of a liquidator, provisional liquidator or restructuring officer or an application for an order for a meeting of its creditors, shareholders or any class of either in respect of a compromise or arrangement in respect of it) under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official or any other person or it consents in writing via an authorized representative to such a petition or its voluntary liquidation or voluntary winding-up commences.

 

“Issuer Release Amount” shall mean (i) with respect to the First Reference Period, an amount equal to (x) the First Period Subscriber Shares multiplied by (y) the lesser of USD 10.40 and the Reference Price for the First Reference Period; (ii) with respect to the Second Reference Period, an amount equal to (x) the Second Period Subscriber Shares multiplied by (y) the lesser of USD 10.60 and the Reference Price for the Second Reference Period; and (iii) with respect to the Third Reference Period, an amount equal to (x) the Third Period Subscriber Shares multiplied by (y) the lesser of USD 10.90 and the Reference Price for the Third Reference Period; provided that in no event shall the Issuer Release Amount cause the principal balance of the Collateral Account to be less than the maximum possible amount of the remaining Reference Period Payments and, if the Issuer Release Amount at any point will do so, the Issuer Release Amount shall be deemed to be reduced to the maximum amount that would not cause any such deficiency.

 

“Merger Event” shall mean any transaction or event, or series of related transaction(s) and/or event(s), that is, or results in, or would, if consummated, result in, (a) a reclassification or change of the Issuer Ordinary Shares that results in a transfer of or an irrevocable commitment to transfer all of the Issuer Ordinary Shares outstanding to another Person; (b) (i) a consolidation, amalgamation, merger or binding share exchange of the Issuer with or into, or a sale or other disposition of all or substantially all of the Issuer’s consolidated assets to, another Person, or any transaction similar to the foregoing (other than, in each case, a consolidation, amalgamation, merger or binding share exchange in which the Issuer is the continuing Person and the Issuer Ordinary Shares are not exchanged for, or converted into, any other securities or property), or (ii) any acquisition or similar transaction (including pursuant to a consolidation, amalgamation, merger or binding share exchange) by the Issuer or any Subsidiary thereof, excluding (A) any transaction between the Issuer and any of its wholly-owned Subsidiaries or among any such wholly-owned Subsidiaries and (B) any transaction for which (x) the Issuer or the relevant Subsidiary is the continuing Person and the Issuer Ordinary Shares are not exchanged for, or converted into, any other securities or property, and (y) either (1) the enterprise value of the Person or Persons being acquired (or, in the case of an acquisition of assets, the fair market value thereof) is less than 50% of the enterprise value of the Issuer or (2) such transaction will not have a material effect on the volatility, liquidity, trading volume or borrowing cost of the Issuer Ordinary Shares or the credit quality of the Issuer or the relevant Subsidiary, in each case, as of the date on which the transaction is announced, as reasonably determined by the Calculation Agent or (c) a takeover offer, tender offer, exchange offer, solicitation, proposal or other event by any Person in which such Person purchases or obtains, or, if such transaction or event were consummated, would purchase or obtain, 100% of the outstanding Issuer Ordinary Shares (other than such Issuer Ordinary Shares owned or controlled by such other Person), in each case, as reasonably determined by the Calculation Agent.

 

 

“Period Subscriber Shares” shall mean the First Period Subscriber Shares, the Second Period Subscriber Shares or the Third Period Subscriber Shares (as applicable in context).

 

“Potential Adjustment Event” shall mean (i) the issuance by the Issuer of Issuer Ordinary Shares as a dividend on substantially all Issuer Ordinary Shares, or if the Issuer effects a split or a combination of the Issuer Ordinary Shares, (ii) the distribution by the Issuer to all or substantially all holders of Issuer Ordinary Shares rights, options or warrants entitling such holders, for a period of not more than sixty (60) calendar days after the date such distribution is announced, to subscribe for or purchase Issuer Ordinary Shares at a price per share that is less than the average of the closing price per Issuer Ordinary Shares for the ten consecutive Trading Days ending on, and including, the Trading Day immediately before the date such distribution is announced, (iii) any distribution by the Issuer of Issuer Ordinary Shares, evidences of its indebtedness or other assets or property of the Issuer, or rights, options or warrants to acquire Issuer Ordinary Shares or other securities, to all or substantially all holders of the Issuer Ordinary Shares, other than cash dividends, (iv) a Spin-Off, (v) a Split-Off or (vi) a Tender Offer. Following the occurrence of a Potential Adjustment Event, the Calculation Agent shall make commercially reasonable adjustments to this Section 13 to account for the dilutive or concentrative effect of such Potential Adjustment Event. Promptly, but in any event within five (5) Trading Days following such determination, the Calculation Agent shall notify the Issuer of any such adjustment.

 

“Reference Period” shall mean the First Reference Period, the Second Reference Period, or the Third Reference Period, as the case may be, including any Accelerated Reference Period; provided that upon the occurrence of an Acceleration Event, each Subscriber shall have the right to adjust, in its sole discretion, (i) the applicable Reference Period Commencement Date and any and all succeeding Reference Period Commencement Dates to fall on any Trading Day from (and including) the date on which the Acceleration Event has occurred until (and including) the fifth (5th) Business Day following the later of (x) the date on which the Acceleration Event has occurred and (y) the date on which such Subscriber received notice from the Issuer of such Acceleration Event (provided that, for the avoidance of doubt, the remaining Reference Periods may, in whole or in part, overlap at the election of any Subscriber), and (ii) the length of the applicable Reference Period and any and all succeeding Reference Periods, and in no event shall any Accelerated Reference Period consist of less than fifteen (15) VWAP Trading Days. Any Reference Period (other than an Accelerated Reference Period) shall be extended by no more than six (6) VWAP Trading Days a maximum of one (1) time in any Reference Period, as determined by the Calculation Agent, if (a) across such Reference Period the aggregate volume of Issuer Ordinary Shares is fewer than 2,500,000 in total, as determined by the Calculation Agent by reference to the Bloomberg Page “SLCR US <equity> HP”, it being understood that immediately following the Transaction Closing, such page is expected to be replaced with “THCH US <equity> HP” (or its equivalent successor if such page is not available) and (b) the Issuer has fulfilled its obligations in Section 7. For the avoidance of doubt, the maximum length of any Reference Period, following an extension pursuant to the provisions in the immediately prior sentence, shall never be greater than thirty-one (31) VWAP Trading Days, and during such extension, the provisions of Section 7 shall remain in force.

 

“Reference Period Commencement Date” shall mean the First Reference Period Commencement Date, the Second Reference Period Commencement Date, or the Third Reference Period Commencement Date, as applicable.

 

“Reference Period Payment” shall mean (i) with respect to the First Reference Period, the First Reference Period Payment, (ii) with respect to the Second Reference Period, the Second Reference Period Payment, and (iii) with respect to the Third Reference Period, the Third Reference Period Payment.

 

“Reference Price” shall mean, subject to Section 7(f) and Section 13(a)(iii) and with respect to any Reference Period, the arithmetic averages of the Daily VWAPs for each VWAP Trading Day in such Reference Period, as determined by the Calculation Agent.

 

 

“Registration Effectiveness Adjustment Event” shall mean (i) the Registration Statement, covering the resale of the Total Shaolin Shares is not declared effective by the SEC (or otherwise does not become effective) for any reason on or subsequent to the Effectiveness Deadline or (ii) after its effective date, such Registration Statement ceases for any reason to remain continuously effective as to the Total Shaolin Shares thereunder.

 

“Registration Filing Adjustment Event” shall mean a Registration Statement is not submitted to or filed with the SEC on or prior to the Filing Deadline; provided that such event shall cease to continue if a Registration Statement is declared effective by the Effectiveness Deadline, immediately upon such effectiveness.

 

“Regulatory Disruption” shall mean an event any Subscriber concludes, upon consultation with external counsel, that it is reasonably appropriate with respect to any legal, regulatory or self-regulatory requirements or related policies and procedures (in the case of any self-regulatory requirements or related policies and procedures, solely to the extent such self-regulatory requirements or related policies and procedures are consistently applied in good faith to all similarly situated counterparties in all similar contexts) for it to refrain from effecting transactions with respect to Issuer Ordinary Shares on any Scheduled Trading Day or Days, as notified reasonably promptly to the Issuer.

 

“Relevant Stock Exchange” shall mean the Nasdaq Capital Market (“Nasdaq”), or, if the Issuer Ordinary Shares are not then listed on Nasdaq, the principal other U.S. national or regional securities exchange on which the Issuer Ordinary Shares are then listed.

 

“Scheduled Trading Day” means any day on which the Relevant Stock Exchange is scheduled to be open for reading for its regular trading session.

 

“Second Period Subscriber Shares” shall be a number of Issuer Ordinary Shares equal to one-third of the Equity Support Shares, rounded down.

 

“Second Reference Price Commencement Date” shall mean the 145^th calendar day immediately following the date of the Closing (as defined in the Transaction Agreement).

 

“Second Reference Period” shall mean, subject to the proviso in the definition of the “Reference Period”, the 25 consecutive VWAP Trading Days beginning on, and including, the Second Reference Price Commencement Date.

 

“Second Reference Period Payment” shall mean an amount equal to the Second Period Subscriber Shares multiplied by (i) if the Reference Price for the Second Reference Period is less than USD 10.60, an amount equal to USD 10.60 minus the Reference Price (including, if applicable, an Adjusted Reference Price or Delisted/Insolvent Price) for the Second Reference Period, or (ii) if the Reference Price (including, if applicable, an Adjusted Reference Price) for the Second Reference Period is greater than or equal to USD 10.60, zero.

 

“Significant Subsidiary” shall mean with respect to any Person, any Subsidiary of such Person that constitutes a “significant subsidiary” (as defined in Rule 1-02(w) of Regulation S-X under the Exchange Act) of such Person.

 

“Spin-Off” shall mean any distribution, issuance or dividend to holders of the Issuer Ordinary Shares of any capital stock or other securities of another issuer owned (directly or indirectly) by the Issuer or any Subsidiary thereof.

 

“Split-Off” shall mean any exchange offer by the Issuer or any Subsidiary thereof for Issuer Ordinary Shares in which the consideration to be delivered to exchanging holders of the Issuer Ordinary Shares is capital stock or other securities of another issuer owned (directly or indirectly) by the Issuer.

 

“Tender Offer” shall mean a takeover offer, tender offer, exchange offer, solicitation, proposal or other event that results, or would result if consummated, in any Person purchasing, or having beneficial ownership (within the meaning of Section 13(d) of the Exchange Act) of more than 10% of the outstanding voting units of the Issuer, as reasonably determined by the Calculation Agent, based upon the making of filings with governmental or self-regulatory agencies or such other information as any Calculation Agent deems relevant.

 

 

“Third Period Subscriber Shares” shall be a number of Issuer Ordinary Shares equal to the Equity Support Shares minus the sum of (i) the First Period Subscriber Shares and (ii) the Second Period Subscriber Shares.

 

“Third Reference Price Commencement Date” shall mean the 235^th calendar day immediately following the date of the Closing (as defined in the Transaction Agreement).

 

“Third Reference Period” shall mean, subject to the proviso in the definition of the “Reference Period”, the 25 consecutive VWAP Trading Days beginning on, and including, the Third Reference Price Commencement Date.

 

“Third Reference Period Payment” shall mean an amount equal to the Third Period Subscriber Shares multiplied by (i) if the Reference Price for the Third Reference Period is less than USD 10.90, an amount equal to USD 10.90 minus the Reference Price (including, if applicable, an Adjusted Reference Price or Delisted/Insolvent Price) for the Third Reference Period, or (ii) if the Reference Price (including, if applicable, an Adjusted Reference Price) for the Third Reference Period is greater than or equal to USD 10.90, zero.

 

“Trading Day” shall mean any day on which trading in the Issuer Ordinary Shares generally occurs on the principal U.S. national or regional securities exchange on which the Issuer Ordinary Shares are then listed. If the Issuer

 

Ordinary Shares are not so listed or traded, then “Trading Day” means a Business Day.

 

“Valid Third Party Entity” shall mean in respect of any transaction, any third party (or its affiliate, agent or representative) that has a bona fide intent to enter into or consummate such transaction (it being understood and agreed that in determining whether such third party has such a bona fide intent, the Calculation Agent may take into consideration the effect of the relevant announcement by such third party (or its affiliate, agent or representative) on the Issuer Ordinary Shares and/or options relating to the Issuer Ordinary Shares).

 

“VWAP Market Disruption Event” shall mean, with respect to any date, (A) the failure by the Relevant Stock Exchange to open for trading during its regular trading session on such date; or (B) the occurrence or existence of a Regulatory Disruption which the Calculation Agent determines is material.

 

“VWAP Trading Day” means a Scheduled Trading Day on which (A) there is no VWAP Market Disruption Event or Regulatory Disruption; and (B) trading in the Issuer Ordinary Shares generally occurs on the Relevant Stock Exchange; provided that, if a VWAP Market Disruption Event or Regulatory Disruption occurs, the Calculation Agent shall determine if such VWAP Trading Day is (i) a disrupted day in full, in which case such day shall not be a VWAP Trading Day, or (ii) a disrupted day in part, in which case the Calculation Agent shall determine the VWAP for such VWAP Trading Day based on the volume-weighted average price of trades in the Issuer Ordinary Shares on such VWAP Trading Day effected before the applicable Regulatory Disruption based on the <VAP> screen on Bloomberg or similar, as determined by the Calculation Agent if the Issuer Ordinary Shares are not so listed or traded on a Relevant

 

Stock Exchange, then “VWAP Trading Day” means a Business Day.

 

14.            Miscellaneous.

 

(a)           At the Transaction Closing, the Issuer and the Issuer Shareholder, as applicable and on a joint and several basis, shall reimburse each Subscriber for all of such Subscriber’s reasonable and documented legal expenses (including the reasonable and documented fees and expenses of such Subscriber’s external legal counsel) incurred in connection with the Transaction; provided that such amount shall not exceed $150,000 in the aggregate without the prior written consent of the Issuer (not to be unreasonably withheld, delayed or conditioned).

 

(b)           In the event that a Company Termination Fee (as defined in the Transaction Agreement) is payable to the SPAC or its designees, or a SPAC Termination Fee (as defined in the Transaction Agreement) is payable to the Company or its designees, the Issuer shall be liable to each Subscriber for the reimbursement of legal expenses in Section 14(a).

 

(c)           In the event that a Company Termination Fee is payable to SPAC or its designees, or a SPAC Termination Fee (as defined in the Transaction Agreement) is payable to the Issuer or its designees, the Issuer shall pay to each Subscriber the Option Premium.

 

 

(d)           Following the execution of this Equity Support Agreement, none of the Project Maple Parties shall, directly or indirectly, negotiate or enter into an Excluded Financing with any other parties for the benefit of the Issuer, the SPAC, the shareholders of the Issuer or the shareholders of the SPAC. “Excluded Financing” shall mean any non-redemption or investment agreement, arrangement, contract or similar that (i) does not provide cash proceeds that are immediately available to the Issuer and/or the SPAC upon the Transaction Closing; (ii) includes a share buyback obligation or (iii) provides a valuation period that would precede, overlap with or follow, in whole or in part, any Reference Periods in this Agreement. An Excluded Financing shall include, but not be limited to, a financing that is a “backstop”, equity support, contingent capital, standby equity purchase, redemption recapture or similar agreement, arrangement, contract or similar. For the avoidance of doubt, the ATM Agreement is expressly permitted and discussing, negotiating, and closing such a facility shall not be a breach of this Section 14(d).

 

(e)           Neither this Equity Support Agreement nor any rights that may accrue to the Subscribers hereunder (other than the Equity Support Shares acquired hereunder, if any) may be transferred or assigned; provided that any Subscriber may transfer and assign its rights and obligations under this Equity Support Agreement to one or more of its affiliates and other investment funds, co-investors or accounts managed or advised by the investment manager who acts on behalf of such Subscriber or an affiliate thereof, including the rights pursuant to Section 7 hereunder.

 

(f)            The Issuer may request from the Subscribers such additional information as the Issuer may deem necessary in connection with the inclusion of the Equity Support Shares in the Registration Statement, and each Subscriber shall provide such information as may reasonably be requested. Each Subscriber acknowledges that the Issuer may file a copy of this Equity Support Agreement with the SEC as an exhibit to a current or periodic report or a registration statement of the Issuer.

 

(g)           Each Subscriber acknowledges that the Issuer will rely on the acknowledgments, understandings, agreements, representations and warranties of such Subscriber contained in this Equity Support Agreement. Prior to the Closing, each Subscriber agrees to promptly notify the Issuer if any of the acknowledgments, understandings, agreements, representations and warranties of such Subscriber set forth herein are no longer accurate. Each Subscriber acknowledges and agrees that each purchase by such Subscriber of Equity Support Shares from the Issuer will constitute a reaffirmation of the acknowledgments, understandings, agreements, representations and warranties herein (as modified by any such notification) by such Subscriber as of the time of such purchase.

 

(h)           The Issuer and each Subscriber are each entitled to rely upon this Equity Support Agreement and each is irrevocably authorized to produce this Equity Support Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

 

(i)            All of the representations and warranties contained in this Equity Support Agreement shall survive the Closing. All of the covenants and agreements made by each party hereto in this Equity Support Agreement shall survive the Closing until the applicable statute of limitations or in accordance with their respective terms, if a shorter period.

 

(j)            This Equity Support Agreement may not be modified, waived or terminated (other than pursuant to the terms of Section  8 above) except by an instrument in writing, signed by each of the parties hereto. No failure or delay of either party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties and third-party beneficiaries hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have hereunder.

 

(k)           This Equity Support Agreement (including the schedules, annexes and exhibits hereto) constitutes the entire agreement, and supersedes all other prior term sheets, agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof; provided, however, that the parties acknowledge and agree that this Equity Support Agreement shall not terminate, release or otherwise supersede the exclusivity obligation of the SPAC set forth in any term sheet among the SPAC, an affiliate of the Subscribers and the other parties thereto related to the matters set forth herein. This Equity Support Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successor and assigns.

 

 

(l)            Except as otherwise provided herein, this Equity Support Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.

 

(m)          If any provision of this Equity Support Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Equity Support Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.

 

(n)           This Equity Support Agreement may be executed in one or more counterparts (including by electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.

 

(o)           The Issuer acknowledges that in the event of a breach of this Equity Support Agreement by the Issuer, the SPAC, or their advisors, substantial injury could result to the Subscribers and monetary damages may not be a sufficient remedy for such breach. Therefore, in the event that the Issuer or the SPAC engage in, or threaten to engage in any act which violates any provision of this Equity Support Agreement, the Subscribers shall be entitled, in addition to all other remedies which may be available to it under law or in equity, to injunctive relief (including, without limitation, temporary restraining orders, or preliminary or permanent injunctions) and specific enforcement of the terms of this Agreement. The Subscribers shall not be required to post a bond or other security in connection with the granting of any such relief.

 

(p)           Section headings and titles contained herein are intended for convenience and reference only and are not intended to define, limit or describe the scope or intent of any provision of this Equity Support Agreement.

 

(q)           THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK (OR, TO THE EXTENT SUCH COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION, THE SUPERIOR COURT OF THE STATE OF NEW YORK, OR THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW YORK) SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS EQUITY SUPPORT AGREEMENT AND THE DOCUMENTS REFERRED TO IN THIS EQUITY SUPPORT AGREEMENT AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR INTERPRETATION OR ENFORCEMENT HEREOF OR ANY SUCH DOCUMENT THAT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS EQUITY SUPPORT AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND DETERMINED BY SUCH A NEW YORK STATE OR FEDERAL COURT. THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH SUCH ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED IN THIS SECTION 14(q) OF THIS EQUITY SUPPORT AGREEMENT OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW SHALL BE VALID AND SUFFICIENT SERVICE THEREOF. THIS EQUITY SUPPORT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD OTHERWISE REQUIRED THE APPLICATION OF THE LAW OF ANY OTHER STATE.

 

 

(r)           EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS EQUITY SUPPORT AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS EQUITY SUPPORT AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS EQUITY SUPPORT AGREEMENT (WHETHER BASED ON CONTRACT, TORT, STATUTE OR ANY OTHER THEORY). EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) 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; (II) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THE FOREGOING WAIVER; (III) SUCH PARTY MAKES THE FOREGOING WAIVER VOLUNTARILY; AND (IV) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS EQUITY SUPPORT AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 14(r).

 

15.            Parties’ Acknowledgements. The parties agree that (i) the Issuer’s obligations to register the Total Shaolin Shares by the Effectiveness Deadline and maintain the effectiveness of a Registration Statement covering the Total Shaolin Shares during the Registration Period, as contemplated by Section 7 and (ii) the Issuer’s continued solvency and its listing on any of The New York Stock Exchange, The Nasdaq Global Market or the Nasdaq Global Select Market (or any of their respective successors) are each an integral part of this Equity Support Agreement and, in view of the uncertainty, impracticability and extreme difficulty (if not impossibility) of estimating damages that may result from an the Issuer’s breach of such registration obligations or from a Delisting or Insolvency Filing, including because of the parties’ inability to predict future share prices, interest and stock borrow rates, future trading volumes and other relevant market-based factors, the parties mutually agree that the terms of the Adjusted Reference Price and the Delisted/Insolvent Price represent, and are intended by the parties to be, a reasonable estimate of each Subscriber’s anticipated damages as a result of such the Issuer’s breach, and not penalties. The Adjusted Reference Price and the Delisted/Insolvent Price shall be deemed to be the liquidated damages sustained by each Subscriber, and the Issuer agrees that the terms of the Adjusted Reference Price and the Delisted/Insolvent Price are reasonable under the circumstances currently existing. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE ISSUER EXPRESSLY WAIVES THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE ADJUSTED REFERENCE PRICE AND/OR THE DELISTED/INSOLVENT PRICE OR ANY PAYMENTS REQUIRED BY SECTION 13 IN CONNECTION WITH A BREACH OF THE ISSUER’S OBLIGATIONS UNDER SECTION 7 OR A DELISTING OR INSOLVENCY EVENT. The Issuer expressly agrees that (i) the terms of the Adjusted Reference Price and Delisted/Insolvent Price are reasonable and are the product of an arm’s length negotiated transaction between sophisticated business people, ably represented by counsel, (ii) the Adjusted Reference Price and Delisted/Insolvent Price shall be accounted for in the payments contemplated by this Equity Support Agreement notwithstanding the then prevailing market rates for registered the Issuer Ordinary Shares or any other securities at the time payment is made, (iii) there has been a course of conduct between the Subscribers and the Issuer giving specific consideration in this Equity Support Agreement for such agreement to include the Adjusted Reference Price and Delisted/Insolvent Price, and (iv) the Issuer shall be estopped hereafter from claiming differently than as agreed to in this paragraph. the Issuer expressly acknowledges that its agreement to include the Adjusted Reference Price and Delisted/Insolvent Price for the benefit of the Subscribers as herein described is a material inducement to the Subscribers to purchase the Equity Support Shares hereunder.

 

16.            Press Releases. All press releases or other public communications relating to the transactions contemplated hereby between the Issuer and the Subscribers, and the method of the release for publication thereof, shall prior to the Closing be subject to the prior approval of (i) the Issuer, and (ii) to the extent such press release or public communication references the any Subscriber or its affiliates or investment advisers by name, such Subscriber, which approval shall not be unreasonably withheld or conditioned; provided, that neither the Issuer nor the Subscribers shall be required to obtain consent pursuant to this Section 16 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 16. The restriction in this Section 16 shall not apply to the extent the public announcement is required by applicable securities law, any governmental authority or stock exchange rule; provided, that in such an event, the applicable party shall use its commercially reasonable efforts to consult with the other party in advance as to its form, content and timing.

 

 

17.            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 (in each case in this clause (iv), solely if receipt is confirmed, but excluding any automated reply, such as an out-of-office notification), addressed as follows:

 

If to the Subscribers, to:

 

Shaolin Capital Management

7620 NE 4th Court, Miami, FL 33138

Attn: Rahul Singhal, Anthony Giraulo

E-mail:

rahul.singhal@shaolincapital.com;

anthony.giraulo@shaolincapital.com;

pipes@shaolincapital.com;

shaolinoperations@shaolincapital.com

 

If to the Issuer, to:

 

TH International Limited

c/o Cartesian Capital Group LLC

505 5th Avenue, 15th Floor

New York, NY 10017

Attn: Peter Yu, Gregory Armstrong

E-mail:

peter.yu@cartesiangroup.com;

gregory.armstrong@cartesiangroup.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.

 

[SIGNATURE PAGES FOLLOW]

 

 

IN WITNESS WHEREOF, each Subscriber has executed or caused this Equity Support Agreement to be executed by its duly authorized representative as of the date set forth below.

 

Name of Subscriber:			State/Country of Formation or Domicile:
Shaolin Capital Management LLC			Delaware
By:	/s/ David Puritz		Date: March 8, 2022
Name:	David Puritz
Title:	Managing Partner
Subscriber’s EIN:  83-2760736
Name in which Shares are to be registered:
Shaolin Capital Partners Master Fund Ltd
Business Address:			Mailing Address-Street (if different):
DMS Corporate Services Ltd PO Box 1344,			7620 NE 4th Court, Miami, FL 33138
DMS House,
George Town, KY1-1108 Cayman Islands
Telephone No.: (212) 433-4310
Maximum Number of Equity Support Shares
Subscribed For: 5,000,000
Maximum Subscription Amount: $50,000,000

 

[Signature Page to Equity Support Agreement]

 

 

IN WITNESS WHEREOF, the Issuer has accepted this Equity Support Agreement as of the date set forth below.

 

	THE INTERNATIONAL LIMITED
	By:	/s/ Paul Hong
		Name:	Paul Hong
		Title:	Director

 

Date: March 8, 2022

 

 

SCHEDULE A

 

ELIGIBILITY REPRESENTATIONS OF THE SUBSCRIBERS

 

A.

QUALIFIED INSTITUTIONAL BUYER STATUS (Please check the applicable subparagraphs):

 

x

We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act).

 

B.

INSTITUTIONAL ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs):

 

1.

x We are an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) or an entity in which all of the equity holders are accredited investors within the meaning of Rule 501(a) under the Securities Act, and have marked and initialed the appropriate box on the following page indicating the provision under which we qualify as an “accredited investor.”

 

2.

x We are not a natural person.

 

Rule 501(a), in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Each Subscriber has indicated, by marking and initialing the appropriate box below, the provision(s) below which apply to such Subscriber and under which such Subscriber accordingly qualifies as an “accredited investor.”

 

¨

Any bank, registered broker or dealer, insurance company, registered investment company, business development company, or small business investment company;

 

¨

Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

 

¨

Any employee benefit plan, within the meaning of the Employee Retirement Income Security Act of 1974, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5,000,000;

 

¨

Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

 

¨

Any trust with assets in excess of $5,000,000, not formed to acquire the securities offered, whose purchase is directed by a sophisticated person; or

 

x

Any entity in which all of the equity owners are accredited investors meeting one or more of the above tests.

 

This page should be completed by each Subscriber
and constitutes a part of this Equity Support Agreement.

 

[Schedule A to Equity Support Agreement]

 

 

SCHEDULE B

 

Subscriber		Maximum Subscription Amount				Equity Support Shares (maximum)				Option Premium
Shaolin Capital		$	50,000,000				5,000,000			$	500,000
Management LLC

 

[Schedule B to Equity Support Agreement]

 

 

ANNEX A

 

Subscriber wire instructions

 

Correspondent Bank: Barclays Capital

 

Beneficiary Bank: The Bank of New York Mellon

 

Beneficiary Bank SWIFT Code: IRVTUS3N

 

Beneficiary Bank Address: 240 Greenwich Street, New York, NY 10286

 

Beneficiary Bank Account Number: 8900693037

 

FFC: Shaolin Capital Master Fund LTD

 

FFC Account Number: 21031161

 

[Annex A to Equity Support Agreement]

 

 

 

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the use of our report dated September 23, 2021, with respect to the consolidated financial statements of TH International Limited, included herein and to the reference to our firm under the heading “Experts” in the prospectus.

 

/s/ KPMG Huazhen LLP

 

Shanghai, China

March 28, 2022

 

 

 

Exhibit 23.2

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the use in the Proxy Statement/Prospectus constituting a part of this Registration Statement on Form F-4 Amendment No. 3 of our report dated March 29, 2021, relating to the financial statements of Silver Crest Acquisition Corporation which is contained in that Proxy Statement/Prospectus. We also consent to the reference to us under the caption “Experts” in the Proxy Statement/Prospectus.

 

/s/ WithumSmith+Brown, PC

 

New York, New York

March 28, 2022

 

 

 

Exhibit 107 (EX-FILING FEES)

 

Calculation of Filing Fee Tables

 

F-4
(Form Type)

 

TH International Limited
(Exact Name of Registrant as Specified in its Charter)

 

Table 1: Newly Registered and Carry Forward Securities

 

		Security Type		Security Class Title		Fee Calculation Rule				Amount Registered (1)(8)				Proposed Maximum Offering Price Per Unit				Maximum Aggregate Offering Price				Fee Rate				Amount of Registration Fee (7)
Fees Previously Paid		Equity		Ordinary Shares	(4)		457	(c)			43,125,000			$	9.77	(2)		$	421,115,625			$	0.0001091			$	45,943.71
		Equity		Warrants	(5)		457	(g)			26,150,000			—		(3)			—				—				—
		Equity		Ordinary Shares underlying Warrants	(6)		457	(f)(1)			26,150,000			$	12.09	(3)		$	316,153,500			$	0.0001091			$	34,492.35
		Total Offering Amounts																								$	80,436.06
		Total Fees Previously Paid																								$	80,436.06
		Net Fee Due																								$	0

 

(1)	All securities being registered will be issued by TH International Limited, a Cayman Islands exempted company (“THIL”), in connection with the Merger Agreement described in this registration statement and the proxy statement/prospectus included herein, which provides for, among other things, the merger of Miami Swan Ltd, a Cayman Islands exempted company and wholly-owned subsidiary of THIL (“Merger Sub”) with and into Silver Crest Acquisition Corporation, a Cayman Islands exempted company (“Silver Crest”) (such merger, the “First Merger”), with Silver Crest surviving the First Merger as a wholly owned subsidiary of THIL (Silver Crest as the surviving entity of the First Merger, the “Surviving Entity”). Immediately following the consummation of the First Merger and as part of the same overall transaction, the Surviving Entity will merge with and into THIL (such merger, the “Second Merger” and together with the First Merger, the “Mergers”), with THIL surviving the Second Merger (such transactions, collectively, the “Business Combination”). As a result of the Business Combination, (i) each outstanding Class B ordinary share of Silver Crest, par value $.0001 per share (“Silver Crest Class B Shares”), will be converted into one Class A ordinary share of Silver Crest, par value $.0001 per share (“Silver Crest Class A Shares”), (ii) each Silver Crest Class A Share will be converted into the right of the holder thereof to receive one ordinary share of THIL (“THIL Ordinary Shares”) and (iii) each issued and outstanding warrant to purchase Silver Crest Class A Shares (“Silver CrestWarrants”) will be converted into a corresponding warrant to purchase THIL Ordinary Shares (“THIL Warrants”).
(2)	Based on the average of the high ($9.78) and low ($9.75) prices of Silver Crest Class A Shares on the Nasdaq Stock Market (“Nasdaq”) on September 17, 2021 (within five business days prior to the initial filing of this registration statement).
(3)	Based on the sum of (i) the average of the high ($0.61) and low ($0.57) prices for Silver Crest Warrants on Nasdaq on September 17, 2021 (within five business days prior to the initial filing of this registration statement) and (ii) the exercise price of Silver Crest Warrants ($11.50). Consistent with the response to Question 240.06 of the Securities Act Rules Compliance and Disclosure Interpretations, the registration fee with respect to THIL Warrants has been allocated to the THIL Ordinary Shares underlying THIL Warrants and those THIL Ordinary Shares are included in the registration fee.
(4)	Represents THIL Ordinary Shares issuable in exchange for outstanding Silver Crest Class A Shares pursuant to the Mergers.
(5)	Represents THIL Warrants, each whole warrant entitling the holder to purchase one THIL Ordinary Share, to be issued in exchange for Silver Crest Warrants.
(6)	Represents THIL Ordinary Shares underlying THIL Warrants.
(7)	Calculated by multiplying the proposed maximum aggregate offering price of securities to be registered by 0.0001091, which rate was in effect from the initial filing of this registration statement through September 30, 2021, and previously paid in connection with the initial filing of this registration statement on September 23, 2021.
(8)	Pursuant to Rule 416(a), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from share splits, share dividends or similar transactions.