FORM OF CONVERTIBLE
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of
February [●], 2024 (the “Subscription Date”), is by and among Aja Holdco, Inc., a Delaware corporation with offices located at 51 Astor Place, 10th Floor, New York, New York 10003 (the “Company”), ARYA Sciences Acquisition Corp IV, a company organized under the laws of the Cayman Islands with offices located at 51 Astor Place, 10th Floor, New York, New York 10003 (the “SPAC”), Adagio Medical, Inc., a Delaware corporation with offices located at 26051 Merit Circle, Suite 102, Laguna Hills, CA 92653 (the “Target” and together with the
Company and the SPAC, the “BC Parties”), and each of the investors listed on the Schedule of Buyers attached hereto (each individually, a “Buyer” and
collectively, the “Buyers”).
RECITALS
A. On February [●], 2024, the Company has entered into that
certain Business Combination Agreement (as in effect as of the date hereof, the “Business Combination Agreement”), by and among the Company, the SPAC, the Target, Aja Merger Sub 1, a Cayman Islands
exempted company and a wholly owned subsidiary of the Company (“SPAC Merger Sub”) and Aja Merger Sub 2, Inc., a Delaware corporation (“Target Merger Sub”),
pursuant to which, among other things, SPAC Merger Sub will merge with and into SPAC, with SPAC surviving such merger as a wholly-owned subsidiary of the Company, and Target Merger Sub will merge with and into the Target, with the Target
surviving such merger as a wholly-owned subsidiary of the Company, at the closing thereof (the “Business Combination Closing”, and such date, the “Business Combination
Closing Date”), and the Company shall be the public company successor to the SPAC (the “Business Combination”), as described in that certain registration statement on Form S-4 to be filed by
the Company with the United States Securities and Exchange Commission (the “SEC”) in connection with the Business Combination (the “S-4 BC Registration Statement”).
B. The Company and each Buyer is executing and delivering
this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506(b) of Regulation D (“Regulation D”) as promulgated by the SEC under the 1933 Act.
C. The Company has authorized a new series of senior
secured convertible notes of the Company, in the aggregate original principal amount of $20,000,000, substantially in the form attached hereto as Exhibit A (the “Notes”), which Notes shall be convertible into shares of Common Stock (as defined below) (the shares of Common Stock issuable pursuant to the terms of the Notes, including, without limitation, upon conversion or otherwise,
collectively, the “Conversion Shares”), in accordance with the terms of the Notes.
D. Each Buyer wishes to purchase, and the Company wishes to
sell, upon the terms and conditions stated in this Agreement, (i) a Note in the aggregate original principal amount set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers, and (ii) a warrant to initially acquire up to
that aggregate number of additional shares of Common Stock set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers, substantially in the form attached hereto as Exhibit B
(the “Warrants”) (as exercised, collectively, the “Warrant Shares”).
E. At the Closing, the parties hereto shall execute and
deliver a Registration Rights Agreement, in the form attached hereto as Exhibit C (the “Registration Rights Agreement”), pursuant to which the Company
has agreed to provide certain registration rights with respect to the Registrable Securities (as defined in the Registration Rights Agreement), under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state
securities laws.
F. The Notes, the Conversion Shares, the Warrants and the
Warrant Shares are collectively referred to herein as the “Securities.”
G. The Notes will rank
pari passu with all Other Notes (as defined in the Notes) and shall be senior to all outstanding and future indebtedness of the Company and its Subsidiaries (as defined below) (other than
Permitted Senior Indebtedness (as defined in the Notes) that may be issued after the date hereof) and the Notes will be secured by a first priority (except with respect to Permitted Liens (as defined in the Notes)) perfected security
interest in all of the existing and future assets of the Company and its direct and indirect Subsidiaries, including a pledge of all of the capital stock of each of the Subsidiaries (other than any Excluded Subsidiary (as defined in the
Security Agreement (as defined below)), as evidenced by (i) a security agreement in the form attached hereto as Exhibit D (the “Security Agreement”),
(ii) account control agreements with respect to certain accounts described in the Note and the Security Agreement, in form and substance reasonably acceptable to each Buyer, duly executed by the Company and each depositary bank (each, an “Controlled Account Bank”) in which each such account is maintained (the “Controlled Account Agreements”, and together with the Security Agreement, the Perfection
Certificate (as defined below) and the other security documents and agreements entered into in connection with this Agreement and each of such other documents and agreements, as each may be amended or modified from time to time,
collectively, the “Security Documents”), and (iii) a guaranty executed by each Subsidiary (other than any Excluded Subsidiary) of the Company, in the form attached hereto as Exhibit E (collectively, the “Guaranties”) pursuant to which each of them guarantees the obligations of the Company under the Transaction Documents (as defined below).
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:
1. PURCHASE AND SALE OF NOTES AND WARRANTS.
(a) Purchase of Notes and Warrants. Subject to the satisfaction (or
waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date (as defined below) a Note in
the original principal amount as is set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers along with Warrants to initially acquire up to that aggregate number of Warrant Shares as is set forth opposite such Buyer’s
name in column (4) on the Schedule of Buyers.
(b) Closing. The closing (the “Closing”) of the purchase of the Notes and the Warrants by the Buyers shall occur at the offices of Kelley Drye & Warren LLP, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007. The date
and time of the Closing (the “Closing Date”) shall be immediately following the time of the closing of the Business Combination on the Business Combination Closing Date, so long as the conditions to
the Closing set forth in Sections 6 and 7 below are satisfied or waived as of such date, and in any event no later than the first (1st) Business Day on which the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or
waived (or such other date as is mutually agreed to by the Company and each Buyer). As used herein “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in
The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems
(including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
(c) Purchase Price. The aggregate purchase price
for the Notes and the Warrants to be purchased by each Buyer (the “Purchase Price”) shall be the amount set forth opposite such Buyer’s name in column (5) on the Schedule of Buyers; provided, that to
the extent set forth on the Schedule of Buyers, a Buyer may satisfy its payment of the Purchase Price, in whole or in part, through the cancellation of (or transfer to the Company of) outstanding Indebtedness of the applicable BC Party then
held by such Buyer as specified opposite such Buyer’s name on the Schedule of Buyers attached hereto (each, a “Non-Cash Purchase Price Amount”). Each Buyer shall pay $1,000 for each $1,000 of
principal amount of Notes and related Warrants to be purchased by such Buyer at the Closing. Each Buyer and the Company agree that the Notes and the Warrants constitute an “investment unit” for purposes of Section 1273(c)(2) of the
Internal Revenue Code of 1986, as amended (the “Code”). The Buyers and the Company agree that the allocation of the Purchase Price, which is the issue price of such investment unit, between the Notes
and the Warrants in accordance with Section 1273(c)(2) of the Code and Treasury Regulation Section 1.1273-2(h) shall be an aggregate amount of $187,500 allocated to the Warrants and the balance of the Purchase Price allocated to the Notes,
and neither the Buyers nor the Company shall take any position inconsistent with such allocation in any tax return or in any judicial or administrative proceeding in respect of taxes.
(d) Form of Payment. On the Closing Date, (i) each
Buyer shall pay its respective Purchase Price (less, in the case of any Buyer, the amounts withheld pursuant to Section 4(g) and any
applicable Non-Cash Purchase Price Amount) to the Company for the Notes and the Warrants to be issued and sold to such Buyer at the Closing, by wire transfer of immediately available funds in accordance with the Flow of Funds Letter (as
defined below) and (ii) the Company shall deliver to each Buyer (A) a Note in the aggregate original principal amount as is set forth opposite such Buyer’s name in column (3) of the Schedule of Buyers, and (B) a Warrant pursuant to which
such Buyer shall have the right to initially acquire up to such aggregate number of Warrant Shares as is set forth opposite such Buyer’s name in column (4) of the Schedule of Buyers, in each case, duly executed on behalf of the Company and
registered in the name of such Buyer or its designee.
2. BUYER’S REPRESENTATIONS AND WARRANTIES.
Each Buyer, severally and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of the
Closing Date:
(a) Organization; Authority. Such Buyer is an
entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.
(b) No Public Sale or Distribution. Such Buyer (i)
is acquiring its Note and Warrants, (ii) upon conversion of its Note will acquire the Conversion Shares issuable upon conversion thereof, and (iii) upon exercise of its Warrants (other than pursuant to a Cashless Exercise (as defined in the
Warrants)) will acquire the Warrant Shares issuable upon exercise thereof, in each case, for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof in violation of applicable
securities laws, except pursuant to sales registered or exempted under the 1933 Act; provided, however, by making the representations herein, such Buyer does not agree, or make any representation or warranty, to hold any of the Securities
for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption from registration under the 1933 Act. Such Buyer does not
presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities in violation of applicable securities laws. For purposes of this Agreement, “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any Governmental Entity (as defined below) or any department or agency thereof.
(c) Accredited Investor Status. Such Buyer is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D.
(d) Reliance on Exemptions. Such Buyer understands
that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and
accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of
such Buyer to acquire the Securities.
(e) Information. Such Buyer and its advisors, if
any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities that have been requested by such Buyer. Such Buyer and its
advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify,
amend or affect such Buyer’s right to rely on the Company’s representations and warranties contained herein. Such Buyer understands that its investment in the Securities involves a high degree of risk. Such Buyer 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 Securities.
(f) No Governmental Review. Such Buyer 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 Securities or the fairness or suitability of the investment in the Securities nor
have such authorities passed upon or endorsed the merits of the offering of the Securities.
(g) Transfer or Resale. Such Buyer understands that
except as provided in the Registration Rights Agreement, the Investor Rights Agreement and Section 4(h) hereof: (i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the Company (if requested by the Company) an opinion of counsel, in a form reasonably acceptable to the
Company, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Buyer provides the Company with reasonable assurance that such
Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the
Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii)
neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. 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 and such pledge of Securities shall not be deemed to be a transfer, sale or assignment
of the Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction
Document (as defined in Section 3(b)), including, without limitation, this Section 2(g).
(h) Validity; Enforcement. This Agreement has been,
and the other Transaction Documents to which it is a party will be prior to or upon the Closing, duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of
such Buyer enforceable against such Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
(i) No Conflicts. The execution, delivery and performance by such Buyer
of this Agreement and the Transaction Documents to which it is a party and the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Buyer,
or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Buyer, except in the case of
clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its
obligations hereunder.
(j) Residency. Such Buyer is a resident of that jurisdiction specified
below its address on the Schedule of Buyers.
(k) No Reliance on Placement Agent.
(i) Such Buyer acknowledges and agrees that such Buyer is purchasing the Securities directly from the Company. Such Buyer further acknowledges that there have not been,
and such Buyer hereby agrees that it is not relying on, representations, warranties, covenants and agreements made to such Buyer by or on behalf of the Company, the SPAC, the Target and Chardan Capital Markets LLC (Chardan Capital Markets,
LLC and any of its affiliates, collectively, the “Placement Agent”), any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any
of the foregoing or any other person or entity, expressly or by implication, other than those representations, warranties, covenants and agreements in the Transaction Documents.
(ii) In making its decision to purchase the Securities, such Buyer has
relied solely upon independent investigation made by such Buyer. Without limiting the generality of the foregoing, such Buyer has not relied on any statements or other information provided by or on behalf of the Placement Agent or any of
its affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing concerning the BC Parties, the Business Combination, the Business Combination Agreement, the Transaction
Documents or the transactions contemplated hereby or thereby, the Securities or the offer and sale of the Securities.
(iii) Such Buyer acknowledges that no disclosure or offering document has
been prepared by the Placement Agent in connection with the offer and sale of the Securities.
(iv) Such Buyer acknowledges that neither the Placement Agent, nor any of
its affiliates nor any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing have made any independent investigation with respect to the Company, the SPAC, the Target or its
subsidiaries or any of their respective businesses, or the Securities or the accuracy, completeness or adequacy of any information supplied to such Buyer by any of the BC Parties, as applicable.
(v) Such Buyer acknowledges and is aware that the Placement Agent is
acting as the Company’s and the SPAC’s placement agent with respect to this offering of the Securities and Jefferies LLC is acting as placement agent in connection with a separate PIPE financing and as capital markets advisor to the SPAC.
(vi) Such Buyer acknowledges and agrees that no Placement Agent shall
have any 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 such Buyer, the
Company, the SPAC or any other person or entity), whether in contract, tort or otherwise, to such Buyer, or to any person claiming through such Buyer, in respect of this offering of the Securities or the Business Combination.
(l) No General Solicitation. Such Buyer became
aware of this offering of the Securities solely by means of direct contact between such Buyer and the BC Parties or a representative of one of the BC Parties, and the Securities were offered to such Buyer solely by direct contact between
such Buyer and the BC Parties or a representative thereof. Such Buyer did not become aware of this offering of the Securities, nor were the Securities offered to such Buyer, by any other means and none of the BC Parties, the Placement
Agent or their respective representatives or any person acting on behalf of any of them acted as investment advisor, broker or dealer to such Buyer. Such Buyer acknowledges that the Securities were not offered by any form of general
solicitation or general advertising. Such Buyer 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
Company, the SPAC, the Target, the Placement Agent, 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 Company expressly set forth in the Transaction Documents, the SPAC expressly set forth in the Transaction Documents and the Target expressly set forth in the Transaction Documents, in making its investment or decision to invest in the
Company.
(m) No Prohibited Investors. Such Buyer 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”) or in any Executive Order issued by the President of the United States and administered by OFAC (“OFAC List”), or a person or entity prohibited by any OFAC sanctions program, (ii) owned, directly or indirectly, or controlled by, or acting on behalf of, one or more persons that are named on the OFAC Lists; (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, Russia, Syria, the Crimea,
Donetsk or Luhansk regions 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 (each, a “Prohibited Investor”). Such agrees to provide law enforcement agencies, if requested
thereby, such records as required by applicable law, provided that such Buyer is permitted to do so under applicable law. If such Buyer 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”), such Buyer maintains
policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. To the extent required, it maintains policies and procedures reasonably designed for the screening of its investors against the
OFAC sanctions programs, including, without limitation, the OFAC List. To the extent required by applicable law, such Buyer maintains policies and procedures reasonably designed to ensure that the funds held by such Buyer and used to
purchase the Securities and any Warrant Shares were legally derived and were not obtained, directly or indirectly, from a Prohibited Investor.
(n) No “Bad Actors”. Neither such Buyer, nor any
person or entity with whom such Buyer shares beneficial ownership of the Notes, is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act.
(o) Certain Transactions. Other than consummating
the transactions contemplated hereunder, such Buyer has not, nor has any Person acting on behalf of or pursuant to any understanding with such Buyer (excluding any funds or investment vehicles not managed by the Buyer), executed any
purchases or sales, including Short Sales, or any “put equivalent position” as such term is defined in Rule 16a-1 under the Securities Exchange Act of 1934, as amended (the “1934 Act”) (a “Put Equivalent Position”)
of the securities of the SPAC during the period commencing as of the time that such Buyer first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the
transactions contemplated hereunder and ending immediately prior to the execution hereof. “Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the 1934 Act (but shall
not be deemed to include locating and/or borrowing shares of Common Stock).
3. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.
The Company represents and warrants to each of the Buyers (x) as of the Subscription Date (solely with respect to the representations and
warranties set forth in Sections 3(a) to 3(e) below) and (y) as of the time of the Closing (the “Closing Time”) with respect to all of the representations and warranties in this Section 3 as follows:
(a) Organization and Qualification. Each of the
Company and each of its Subsidiaries are entities duly organized and validly existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their properties and
to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every
jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be
expected to have a Company Material Adverse Effect (as defined below). As used in this Agreement, “Company Material Adverse Effect” means any material adverse effect on (i) the business, properties,
assets, liabilities, operations (including results thereof), or financial condition or prospects of the Company and its Subsidiaries (as defined below), taken as a whole, (ii) the transactions contemplated hereby or in any of the other
Transaction Documents or (iii) the authority or ability of the Company or any of its Subsidiaries to perform any of their respective obligations under any of the Transaction Documents (as defined below). As of the Closing Time, other than
the Persons (as defined below) set forth on Schedule 3(a) the Company has no Subsidiaries. “Subsidiary” means any Person in which the Company, directly or indirectly (including through or in
combination with another Subsidiary of the Company), owns more than twenty percent (20%) of the total voting power of capital stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the
election of the Person or Persons having the power to direct or cause the direction of the management and policies thereof. The Company represents and warrants that Adagio Medical GmbH, a company organized under the laws of Germany, is an
Excluded Subsidiary (as defined in the Security Agreement), and satisfies the requirements of such definition in the Security Agreement.
(b) Authorization; Enforcement; Validity. The
Company has the requisite power and authority to execute and deliver, and perform its obligations under this Agreement and the other Transaction Documents to which it is or will be a party and to issue the Securities in accordance with the
terms hereof and thereof. Each Subsidiary has the requisite power and authority to execute and deliver and perform its obligations under the Transaction Documents to which it is a party. The execution and delivery of this Agreement and
the other Transaction Documents by the Company and its Subsidiaries, and the consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes and
the reservation for issuance and issuance of the Conversion Shares issuable upon conversion of the Notes and the issuance of the Warrants and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise of the
Warrants) have been duly authorized by the Company’s board of directors and each of its Subsidiaries’ board of directors or other governing body, as applicable, and (other than (i) the filing with the SEC of such reports under Section 13(a)
or 15(d) of the Exchange Act as may be required in connection with this Agreement, the Transaction Documents, the Business Combination Agreement or the transactions contemplated hereby or thereby, (ii) compliance with the listing
requirements of the Principal Market (including, without limitation, filing a listing application with the Principal Market with respect to the Conversion Shares and the Warrant Shares), (iii) the filing with the SEC of one or more
Registration Statements in accordance with the requirements of the Registration Rights Agreement and any filings as may be required by any state securities agencies and (iv) stockholder approvals required pursuant to the Business
Combination Agreement to permit the consummation of the Business Combination (collectively, the “Required Approvals”), no further filing, consent or authorization is required by the Company, its
Subsidiaries, their respective boards of directors or their stockholders or other governing body. This Agreement has been, and the other Transaction Documents to which it is a party will be prior to or upon the Closing, duly executed and
delivered by the Company, and each constitutes the legal, valid and binding obligations of the Company (assuming that this Agreement and the other Transaction Documents to which the Company is or will be a party are or will be upon
execution thereof, as applicable, duly authorized, executed and delivered by the other Persons party thereto (if any)), enforceable against the Company in accordance with its respective terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as
rights to indemnification and to contribution may be limited by federal or state securities law. Prior to the Closing, the Transaction Documents to which each Subsidiary is a party will be duly executed and delivered by each such
Subsidiary, and shall constitute the legal, valid and binding obligations of each such Subsidiary (assuming that this Agreement and the other Transaction Documents to which such Subsidiary is or will be a party are or will be upon
execution thereof, as applicable, duly authorized, executed and delivered by the other Persons party thereto (if any)), enforceable against each such Subsidiary in accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and
except as rights to indemnification and to contribution may be limited by federal or state securities law. “Transaction Documents” means, collectively, this Agreement, the Notes, the Warrants, the
Investor Rights Agreement (as defined below), the Guaranties, the Security Documents, the Registration Rights Agreement, the Irrevocable Transfer Agent Instructions (as defined below) and each of the other agreements and instruments entered
into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.
(c) Issuance of Securities. The issuance of the
Notes and the Warrants are duly authorized and upon issuance in accordance with the terms of the Transaction Documents shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, mortgages,
defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances (collectively “Liens”) with respect to the issuance thereof. As of
the Closing, the Company shall have reserved from its duly authorized capital stock not less than the sum of (i) 100% of the maximum number of Conversion Shares issuable upon conversion of the Notes (assuming for purposes hereof that (x)
the Notes are convertible at the Alternate Conversion Price (as defined in the Notes), (y) interest on the Notes shall accrue through the forty-five month anniversary of the Closing Date and will be converted into shares of Common Stock at
a conversion price equal to the Alternate Conversion Price and (z) any such conversion shall not take into account any limitations on the conversion of the Notes set forth in the Notes), and (ii) the maximum number of Warrant Shares
initially issuable upon exercise of the Warrants (without taking into account any limitations on the exercise of the Warrants set forth therein). Upon issuance or conversion in accordance with the Notes or exercise in accordance with the
Warrants (as the case may be), the Conversion Shares and the Warrant Shares, respectively, when issued, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights or Liens with respect to the issue
thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Subject to the accuracy of the representations and warranties of the Buyers in this Agreement, the offer and issuance by the Company of the
Securities is exempt from registration under the 1933 Act.
(d) No Conflicts. The execution, delivery and
performance of the Transaction Documents by the Company and its Subsidiaries and the consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the
Notes, the Warrants, the Conversion Shares and the Warrant Shares and the reservation for issuance of the Conversion Shares and the Warrant Shares) will not (i) result in a violation of the Certificate of Incorporation (as defined below)
(including, without limitation, any certificate of designation contained therein), Bylaws (as defined below), certificate of formation, memorandum of association, articles of association, bylaws or other organizational documents of the
Company or any of its Subsidiaries, or any capital stock or other securities of the Company or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a
default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party (including, without
limitation, the Business Combination Agreement), or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, foreign, federal and state securities laws and regulations and the rules
and regulations of the Nasdaq Capital Market (the “Principal Market”) and including all applicable foreign, federal and state laws, rules and regulations) to which the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is subject or bound, except, in the case of any of clauses (ii) and (iii) above, as would not have a Company Material Adverse Effect.
(e) Consents. Neither the Company nor any
Subsidiary is required to obtain any consent from, approval of or authorization or order of, or make any designation, declaration or filing or registration with (other than the filing with the SEC of one or more Registration Statements in
accordance with the requirements of the Registration Rights Agreement, any filings as may be required by any state securities agencies and other consents and filings which have been obtained or made), any Governmental Entity (as defined
below) or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by the Transaction Documents, in each case, in accordance with the
terms hereof or thereof (other than the Required Approvals). All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be
obtained or effected on or prior to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which would reasonably be expected to prevent the Company or any of its Subsidiaries from
obtaining or effecting any of the registration, application or filings contemplated by the Transaction Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge of any facts or
circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. As of the time of initial issuance of the Notes and the Warrants, no stockholder approval shall be required for the
conversion in full of the Notes and/or the exercise in full of the Warrants, as applicable, in compliance with the rules and regulations of the Principal Market (including, without limitation, Nasdaq Stock Market Rule 5635). “Governmental Entity” means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government,
governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a
government or a public international organization or any of the foregoing.
(f) Acknowledgment Regarding Buyer’s Purchase of
Securities. The Company acknowledges and agrees that each Buyer is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no
Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate” (as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the
shares of Common Stock (as defined for purposes of Rule 13d-3 of the 1934 Act). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar
capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s and each Subsidiary’s decision to enter into the Transaction
Documents to which it is a party has been based solely on the independent evaluation by the Company, each Subsidiary and their respective representatives.
(g) No General Solicitation; Placement Agent’s Fees.
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 Securities. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer or its investment advisor)
relating to or arising out of the transactions contemplated hereby, including, without limitation, placement agent fees payable to the Placement Agent in connection with the sale of the Securities. The fees and expenses of the Placement
Agent to be paid by the Company or any of its Subsidiaries are as set forth on Schedule 3(g) attached hereto. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation,
attorney’s fees and out-of-pocket expenses) arising in connection with any such claim. The Company acknowledges that it has engaged the Placement Agent in connection with the sale of the Securities. Other than the Placement Agent, neither
the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection with the offer or sale of the Securities.
(h) 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 Securities under the 1933 Act, whether through integration with prior offerings or otherwise, or caused this offering of the Securities to require approval of stockholders of the Company for
purposes of the 1933 Act or under any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are
listed or designated for quotation. None of the Company, its Subsidiaries, their affiliates nor any Person acting on their behalf will take any action or steps that would require registration of the issuance of any of the Securities under
the 1933 Act (other than pursuant to the Registration Rights Agreement and the Investor Rights Agreement (as defined in the Notes)) or cause the offering of any of the Securities to be integrated with other offerings of securities of the
Company.
(i) Dilutive Effect. The Company understands and
acknowledges that the number of Conversion Shares and Warrant Shares will increase in certain circumstances. The Company further acknowledges that its obligation to issue the Conversion Shares pursuant to the terms of the Notes in
accordance with this Agreement and the Notes and the Warrant Shares upon exercise of the Warrants in accordance with this Agreement, the Notes and the Warrants is, in each case, absolute and unconditional regardless of the dilutive effect
that such issuance may have on the ownership interests of other stockholders of the Company.
(j) Application of Takeover Protections; Rights
Agreement. The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including, without
limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover provision under the Certificate of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its
incorporation or otherwise which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the Securities and any Buyer’s ownership of
the Securities. The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of shares
of Common Stock or a change in control of the Company or any of its Subsidiaries.
(k) SEC Documents; Financial Statements. From and
after the effective time of the S-4 BC Registration Statement, the Company has timely (after giving effect to any applicable grace period or extensions under applicable securities laws) filed all reports, schedules, forms, proxy statements,
statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the Closing Time and all exhibits and appendices included therein and
financial statements, notes and schedules thereto and documents incorporated by reference therein being collectively hereinafter referred to as the “SEC Documents”). The Company has delivered or has
made available to the Buyers or their respective representatives true, correct and complete copies of each of the SEC Documents not available on the EDGAR system. As of their respective dates (except to the extent that information
contained in any SEC Document has been superseded by a later filed SEC Document), the SEC Documents complied in all material respects with the requirements
of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not materially misleading. As of their respective dates, the
financial statements of the applicable BC Entities included in the SEC Documents complied in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect
as of the time of filing, or, if amended, as of the date of such amendment. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the
periods involved (“GAAP”), consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the applicable BC Entities as of the dates thereof and
the results of its operations and cash flows for the periods then ended (subject, (i) in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate, and (ii)
changes to historical accounting policies of the applicable BC Entities in connection with any order, directive, guideline, comment or recommendation from the SEC that is applicable to such BC Entity. The investor presentation relating to
the Business Combination attached hereto as Exhibit G does not as of the date hereof contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein not misleading, in the light of the circumstance under which they are or were made. The Company is not currently contemplating to amend or restate any of the financial statements (including, without
limitation, any notes or any letter of the independent accountants of the applicable BC Entities with respect thereto) included in the SEC Documents (the “Financial Statements”), nor is the Company
currently aware of facts or circumstances which would require the Company to amend or restate any of the Financial Statements, in each case, in order for any of the Financials Statements to be in compliance with GAAP and the rules and
regulations of the SEC. The Company has not been informed by its independent accountants that they recommend that the Company amend or restate any of the Financial Statements or that there is any need for the Company to amend or restate
any of the Financial Statements.
(l) Absence of Certain Changes. Since the date of
the Target’s most recent audited financial statements contained in the S-4 BC Registration Statement, there has been no material adverse change and no material adverse development in the business, assets, liabilities, properties, operations
(including results thereof), financial condition or prospects of the Company or any of its Subsidiaries, provided, however, that any change or effect that results from or relates to any MAE Exception shall be disregarded for purposes of
the foregoing. Since the date of the Target’s most recent audited financial statements contained in the S-4 BC Registration Statement, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any
material assets, individually or in the aggregate, outside of the ordinary course of business, other than sale of inventory or the abandonment of obsolete equipment or (iii) made any material capital expenditures, individually or in the
aggregate, outside of the ordinary course of business, other than the Business Combination. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy,
insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings
or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries, on a consolidated basis, immediately after giving effect to the Business Combination and the transactions contemplated
hereby to occur at the Closing, and assuming (x) the truth and accuracy of the representations and warranties of the Buyers set forth in Section and (y) compliance by the Buyers with their covenants and agreements set forth in this
Agreement, will not be Insolvent (as defined below). For purposes of this Section 3(l), “Insolvent” means, (i) with respect to the Company and its Subsidiaries, on a consolidated basis, (A) the
present fair saleable value of the Company’s and its Subsidiaries’ assets is less than the amount required to pay the Company’s and its Subsidiaries’ total Indebtedness (as defined below), (B) the Company and its Subsidiaries are unable to
pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company and its Subsidiaries intend to incur or believe that they will incur debts that would be
beyond their ability to pay as such debts mature; and (ii) with respect to the Company and each Subsidiary, individually, (A) the present fair saleable value of the Company’s or such Subsidiary’s (as the case may be) assets is less than the
amount required to pay its respective total Indebtedness, (B) the Company or such Subsidiary (as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured or (C) the Company or such Subsidiary (as the case may be) intends to incur or believes that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company nor
any of its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or in any transaction, for which the Company’s or such Subsidiary’s remaining assets constitute unreasonably small capital
with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.
(m) No Undisclosed Events, Liabilities, Developments or
Circumstances. No event, liability, development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries or any of their respective businesses,
properties, liabilities, prospects, operations (including results thereof) or financial condition, that (i) would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed with
the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced, (ii) could have a material adverse effect on any Buyer’s investment hereunder or (iii) could have a Company Material
Adverse Effect.
(n) Conduct of Business; Regulatory Permits.
Neither the Company nor any of its Subsidiaries is in violation of any term of or in default under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of preferred stock of
the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation, memorandum of association, articles of association, Certificate of Incorporation or certificate of incorporation or bylaws,
respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither the Company nor
any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for possible violations which could not, individually or in the aggregate, have a Company Material Adverse Effect. Without limiting
the generality of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of any facts or circumstances that could reasonably lead to delisting or
suspension of the Common Stock by the Principal Market in the foreseeable future. The Company and each of its Subsidiaries possess all material certificates, authorizations and permits (“Material Permits”)
issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Company
Material Adverse Effect. Except as would not and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) each Material Permit is in full force and effect in accordance with its
terms and (ii) no written notice of suspension, limitation, revocation, cancellation, modification or termination of any Material Permit has been received by the Company or any of its Subsidiaries.
(o) Foreign Corrupt Practices. Neither the Company,
the Company’s Subsidiaries or, to the Company’s knowledge, any director, officer, agent, employee, nor any other person acting for or on behalf of the foregoing (individually and collectively, a “Company
Affiliate”) have violated the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable anti-bribery or anti-corruption laws, nor has, to the Company’s knowledge, any Company
Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give, or authorized the giving of anything of value, to any officer, employee or any other person acting in an official
capacity for any Governmental Entity to any political party or official thereof or to any candidate for political office (individually and collectively, a “Government Official”) or to any person under
circumstances where such Company Affiliate knew or was aware of a high probability that all or a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to any Government Official, for the
purpose of:
(i) (A) influencing any act or decision of such Government Official in
his/her official capacity, (B) inducing such Government Official to do or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government Official to influence or affect any act
or decision of any Governmental Entity, or
(ii) assisting the Company or its Subsidiaries in obtaining or retaining
business for or with, or directing business to, the Company or its Subsidiaries.
(p) Sarbanes-Oxley Act. The Company and each
Subsidiary is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.
(q) Transactions With Affiliates. Except as set
forth on Schedule 3(q), there are no contracts between (a) the Company or any of its Subsidiaries, on the one hand, and (b) any employee, partner, director, officer or direct shareholder of 10% or more of the Common Stock (each Person
identified in this clause (b), a “Company Related Party”), other than (i) contracts with respect to a Company Related Party’s employment with the Company or its Subsidiaries entered into in the
ordinary course of business (including benefit plans and other ordinary course compensation). Except as set forth on Schedule 3(q), no Company Related Party (A) owns any interest in any material asset or property used in any business of the
Company or its Subsidiaries, (B) possesses, directly or indirectly, any material financial interest in, or is a director or executive officer of, any Person which is a supplier, vendor, partner, customer, lessor or other material business
relation of the Company or its Subsidiaries, (C) is a supplier, vendor, partner, customer, lessor, or other material business relation of the Company’s Subsidiaries or (D) owes any material amount to, or is owed any material amount by, the
Company or its Subsidiaries (other than accrued compensation, employee benefits, employee or director expense reimbursement, in each case, in the ordinary course of business). All contracts, arrangements, understandings, interests and other
matters that are required to be disclosed pursuant to this Section 3(r) are referred to herein as “Company Related Party Transactions”.
(r) Equity Capitalization.
(A) “Common
Stock” means (x) the Company’s shares of common stock, $0.0001 par value per share, and (y) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such
common stock.
(B) “Preferred
Stock” means (x) the Company’s blank check preferred stock, $0.0001 par value per share, the terms of which may be designated by the board of directors of the Company in a certificate of designations and (y) any capital stock into
which such preferred stock shall have been changed or any share capital resulting from a reclassification of such preferred stock (other than a conversion of such preferred stock into Common Stock in accordance with the terms of such
certificate of designations).
(ii) Authorized and Outstanding Capital Stock. As of the Closing
Time, the authorized capital stock of the Company will consist at least of 250,000,000 shares of Common Stock, of which approximately 12,800,000 shares of Common Stock are expected to be issued and outstanding at Closing (such number is
assuming that (i) all publicly held Class A ordinary shares of the SPAC that are not subject to any non-redemption and/or open market purchase commitment with the SPAC and the Company in connection with the Business Combination will be
redeemed at Closing, (ii) no additional securities will be sold by the Company prior to Closing, (iii) no Convertible Securities are exercised at Closing, and (iv) no securities are issued pursuant to any incentive plan or employee stock
purchase plan that the Company will adopt at Closing), and (B) such number of shares of Preferred Stock, which will be determined by mutual agreement by the SPAC and the Target pursuant to the Business Combination Agreement prior to the
Closing Date and of which none will be issued and outstanding. “Convertible Securities” means any capital stock
or other security of the Company or any of its Subsidiaries that is at any time and under any circumstances directly or indirectly convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to
acquire, any capital stock or other security of the Company (including, without limitation, Common Stock) or any of its Subsidiaries.
(iii) Valid Issuance; Available Shares; Affiliates. All of such
outstanding shares are duly authorized and have been, or upon issuance will be, validly issued and are fully paid and nonassessable. Schedule 3(r)(iii) sets forth the number of shares of Common Stock that as of Closing are
expected to be reserved for issuance pursuant to Convertible Securities (as defined below) (other than the Notes and the Warrants).
(iv) Existing Securities; Obligations. Except as disclosed in the
SEC Documents: (A) none of the Company’s or any Subsidiary’s shares, interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the Company or any Subsidiary; (B) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital
stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares, interests or capital stock of
the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any
shares, interests or capital stock of the Company or any of its Subsidiaries; (C) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities
under the 1933 Act (except pursuant to the Registration Rights Agreement and the Investor Rights Agreement (as defined in the Notes)); (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which
contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its
Subsidiaries; (E) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; and (F) neither the Company nor any Subsidiary has any stock appreciation
rights or “phantom stock” plans or agreements or any similar plan or agreement.
(v) Organizational Documents. The Company has furnished to the
Buyers true, correct and complete copies of the Company’s Certificate of Incorporation, as amended and as will be in effect after the Business Combination Closing and at the Closing Time (the “Certificate of Incorporation”), and the
Company’s bylaws, as amended and as will be in effect after the Business Combination Closing and at the Closing Time (the “Bylaws”).
(s) Indebtedness and Other Contracts. Neither the
Company nor any of its Subsidiaries, (i) except as disclosed on Schedule 3(s), has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness
of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound, (ii) has any financing statements securing obligations in any amounts filed in connection with the Company or any of its
Subsidiaries; (iii) is in material violation of any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not result, individually or in the
aggregate, in a Company Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers, has or is expected to have a
Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries have any liabilities or obligations required to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents, other than those incurred
in the ordinary course of the Company’s or its Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or could not reasonably be expected to have a Company Material Adverse Effect. For purposes of this
Agreement: (x) “Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of
property or services (including, without limitation, “capital leases” in accordance with GAAP) (other than trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired
with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations under any
leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G)
above; and (y) “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or
that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.
(t) Litigation. There is no action, suit,
arbitration, proceeding, inquiry or investigation before or by the Principal Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge of the Company, threatened in writing
against the Company or any of its Subsidiaries that, if adversely decided or resolved, has been or would reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole. Neither
the Company, its Subsidiaries nor any of their respective properties or assets is subject to any material order, writ, judgment, injunction, decree, determination or award of any Governmental Entity which would reasonably be expected to
have a Company Material Adverse Effect.
(u) Insurance. The Company and each of its
Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable to renew
its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Company Material Adverse Effect.
(v) Employee Relations. Neither the Company nor any
of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No executive officer (as defined in Rule
501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise
terminate such officer’s employment with the Company or any such Subsidiary. No current (or former) executive officer or other key employee of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such
executive officer or other key employee (as the case may be) does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all
federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either
individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect.
(w) Title.
(i) Real Property. Each of the Company and its Subsidiaries holds
good title to all real property, leases in real property, facilities or other interests in real property owned or held by the Company or any of its Subsidiaries (the “Real Property”) owned by the
Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all Liens and is not subject to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature
except for Permitted Liens (as defined in the Notes). Any Real Property held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material
and do not interfere in any material respect with the use made and proposed to be made of such property and buildings by the Company or any of its Subsidiaries.
(ii) Fixtures and Equipment. Each of the Company and its
Subsidiaries (as applicable) has good title to, or a valid leasehold interest in, the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used by the Company or its
Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”) except as would not reasonably be expected to have a Company Material Adverse Effect. Each of the Company
and its Subsidiaries owns all of its Fixtures and Equipment free and clear of all Liens except for Permitted Liens.
(x) Intellectual Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service
names, original works of authorship, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and registrations therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as now conducted, except where the failure to so own or possess would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect. The Company does not have any knowledge of any infringement by the Company or its Subsidiaries of Intellectual Property Rights of others. There is no written claim, action or proceeding
being made or brought, or to the knowledge of the Company, being threatened in writing, that is currently pending against the Company or any of its Subsidiaries regarding infringement of third party Intellectual Property Rights. The
Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their material Intellectual Property Rights.
(y) Environmental Laws. (i) The Company and its
Subsidiaries (A) are in compliance with any and all Environmental Laws (as defined below), (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (A), (B) and (C), the failure to so comply could be reasonably expected to have, individually
or in the aggregate, a Company Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans
or regulations issued, entered, promulgated or approved thereunder.
(ii) No Hazardous Materials:
(A) have been disposed of or otherwise released from any Real Property of
the Company or any of its Subsidiaries in violation of any Environmental Laws, which violation would have a Company Material Adverse Effect; or
(B) are present on, over, beneath, in or upon any Real Property or any
portion thereof in quantities that would constitute a violation of any Environmental Laws. No prior use by the Company or any of its Subsidiaries of any Real Property has occurred that violates any Environmental Laws, which violation
would have a Company Material Adverse Effect.
(iii) Except as would not reasonably be expected to result in a Company Material Adverse
Effect, neither the Company nor any of its Subsidiaries knows of any other person who or entity which has stored, treated, recycled, disposed of or otherwise located on any Real Property any Hazardous Materials, including, without
limitation, such substances as asbestos and polychlorinated biphenyls.
(iv) Except as would not reasonably be
expected to result in a Company Material Adverse Effect, none of the Real Properties are on any federal or state “Superfund” list or Liability Information System (“CERCLIS”) list or any state
environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related Liens.
(z) Subsidiary Rights. The Company or one of its
Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.
(aa) Tax Status. The Company and each of its
Subsidiaries (i) has filed all material tax returns, reports and declarations required to have been filed by it with any Governmental Entity, and (ii) has paid all material taxes and other governmental assessments and charges, in each case
in the nature of taxes, required to be paid by it that are shown or determined to be due on such returns, reports and declarations, except those being contested in good faith. There are no unpaid taxes in any material amount claimed in
writing to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign
investment company, as defined in Section 1297 of the Code.
(bb) Internal Accounting and Disclosure Controls.
The Company and each of its Subsidiaries maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective to provide, in all material respects, reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, including that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability and (iii) the unauthorized
acquisition, use or disposition of the Company's or each of its Subsidiaries' properties or assets could be prevented or timely detected. The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e)
under the 1934 Act) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods
specified in the rules and forms of the SEC, 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 1934 Act is
accumulated and communicated to the Company’s management, including its principal executive officer or officers and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure.
Except as disclosed in the SEC Documents, neither the Company nor any of its Subsidiaries has received any written notice from any accountant, Governmental Entity or other Person that there is a "material weakness" in the internal controls
over financial reporting of the Company or any of its Subsidiaries or a "significant deficiency" in the internal controls over financial reporting of the Company or any of its Subsidiaries.
(cc) Off Balance Sheet Arrangements. There is no
transaction, arrangement, or other relationship between the Company or any of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings and is not so
disclosed or that otherwise could be reasonably likely to have a Company Material Adverse Effect.
(dd) Investment Company Status. The Company is not,
and upon consummation of the sale of the Securities will not be, an “investment company,” an affiliate of an “investment company,” a company controlled by an “investment company” or an “affiliated person” of, or “promoter” or “principal
underwriter” for, an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended.
(ee) Acknowledgement Regarding Buyers’ Trading Activity.
It is understood and acknowledged by the Company that (A) each Buyer has made certain representations in Section 2(p) hereof, and (B) (i) except as set forth in Section 4(dd), following the public disclosure of the transactions
contemplated by the Transaction Documents, in accordance with the terms thereof, none of the Buyers have been asked by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries, to
desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or short) any securities of the Company, or “derivative” securities based on securities issued by the Company or to
hold any of the Securities for any specified term; (ii) except as set forth in Section 4(dd), any Buyer, and counterparties in “derivative” transactions to which any such Buyer is a party, directly or indirectly, presently may have a
“short” position in the Common Stock which was established prior to such Buyer’s knowledge of the transactions contemplated by the Transaction Documents; (iii) each Buyer shall not be deemed to have any affiliation with or control over any
arm’s length counterparty in any “derivative” transaction; and (iv) each Buyer may rely on the Company’s obligation to timely deliver shares of Common Stock upon conversion, exercise or exchange, as applicable, of the Securities as and when
required pursuant to the Transaction Documents for purposes of effecting trading in the Common Stock of the Company. The Company further understands and acknowledges that following the public disclosure of the transactions contemplated by
the Transaction Documents pursuant to the Press Release (as defined below) one or more Buyers may engage in hedging and/or trading activities (including, without limitation, the location and/or reservation of borrowable shares of Common
Stock) at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value and/or number of the Warrant Shares or Conversion Shares, as applicable, deliverable with
respect to the Securities are being determined and such hedging and/or trading activities (including, without limitation, the location and/or reservation of borrowable shares of Common Stock), if any, can reduce the value of the existing
stockholders’ equity interest in the Company both at and after the time the hedging and/or trading activities are being conducted. The Company acknowledges that such aforementioned hedging and/or trading activities, to the extent conducted
in compliance with Section 4(dd), do not constitute a breach of this Agreement, the Notes, the Warrants or any other Transaction Document or any of the documents executed in connection herewith or therewith.
(ff) Manipulation of Price. Neither the Company nor
any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting on their behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation of the price of any
security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities (other than the
Placement Agent), (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company or any of its Subsidiaries or (iv) paid or agreed to pay any Person for research services
with respect to any securities of the Company or any of its Subsidiaries.
(gg) U.S. Real Property Holding Corporation. The
Company is not, and has never been, a U.S. real property holding corporation within the meaning of Section 897 of the Code.
(hh) Registration Eligibility. The Company is
eligible to register the Registrable Securities (defined in the Registration Rights Agreement) for resale by the Buyers using Form S-1 promulgated under the 1933 Act.
(ii) Bank Holding Company Act; Regulation T, U or X.
(i) Neither the Company nor any of its
Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five
percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or affiliates exercises a controlling influence over
the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(ii) The sale of the Notes, the use of
proceeds thereof and the other transactions contemplated thereby or by the other Transaction Documents, will not violate or be inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System
of the United States
(jj) Illegal or Unauthorized Payments; Political
Contributions. Neither the Company nor any of its Subsidiaries nor, to the Company’s knowledge, any of the officers, directors, employees or other representatives of the Company or any of its Subsidiaries or any other Person acting
for or on behalf of any of the foregoing has, since January 1, 2022, directly or indirectly, made or authorized any payment, contribution or gift of money, property, or services in contravention of applicable law, (i) as a kickback or
bribe to any Person or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal political contributions not involving the use of funds of the Company or any of its
Subsidiaries.
(kk) Money Laundering. The Company and its
Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation, the laws, regulations
and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter V.
(ll) Management. Except as set forth in Schedule 3(mm)
hereto, during the past five year period, no current or former officer or director or, to the knowledge of the Company, no current ten percent (10%) or greater stockholder of the Company or any of its Subsidiaries has been the subject of:
(i) a petition under bankruptcy laws or any other insolvency or
moratorium law or the appointment by a court of a receiver, fiscal agent or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before the filing of such petition or such
appointment, or any corporation or business association of which such person was an executive officer at or within two years before the time of the filing of such petition or such appointment;
(ii) a conviction in a criminal proceeding or a named subject of a
pending criminal proceeding (excluding traffic violations that do not relate to driving while intoxicated or driving under the influence);
(iii) any order, judgment or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining any such person from, or otherwise limiting, the following activities:
(1) Acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person of any of the foregoing, or as
an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any
conduct or practice in connection with such activity;
(2) Engaging in any particular type of business practice; or
(3) Engaging in any activity in connection with the purchase or sale of
any security or commodity or in connection with any violation of securities laws or commodities laws;
(iv) any order, judgment or decree, not subsequently reversed, suspended
or vacated, of any authority barring, suspending or otherwise limiting for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph, or to be associated with persons engaged
in any such activity;
(v) a finding by a court of competent jurisdiction in a civil action or
by the SEC or other authority to have violated any securities law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently reversed, suspended or vacated; or
(vi) a finding by a court of competent jurisdiction in a civil action or
by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or vacated.
(mm) Stock Option Plans. Each stock option granted
by the Company was granted (i) in accordance with the terms of the applicable stock option plan of the Company and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would
be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no policy or practice of the
Company to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their
financial results or prospects.
(nn) No Disqualification Events. With respect to
Securities to be offered and sold hereunder in reliance on Rule 506(b) under the 1933 Act (“Regulation D Securities”), none of the Company, any of its predecessors, any affiliated issuer, any
director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power,
nor any promoter (as that term is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a “Disqualification Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the
extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided thereunder.
(oo) Other Covered Persons. The Company is not
aware of any Person (other than the Placement Agent) that has been or will be paid (directly or indirectly) remuneration for solicitation of Buyers or potential purchasers in connection with the sale of any Regulation D Securities.
(pp) No Additional Agreements. Except for the
Investor Rights Agreement and the Note Purchase Agreement , the Company does not have any agreement or understanding with any Buyer with respect to the transactions contemplated by the Transaction Documents other than as specified in the
Transaction Documents.
(qq) Public Utility Holding Act. None of the
Company nor any of its Subsidiaries is a “holding company,” or an “affiliate” of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.
(rr) Federal Power Act. None of the Company nor
any of its Subsidiaries is subject to regulation as a “public utility” under the Federal Power Act, as amended.
(ss) Ranking of Notes. Other than Permitted
Indebtedness (as defined in the Notes) secured by Permitted Liens (as defined in the Notes), if any, no Indebtedness of the Company, at the Closing, will be senior to, or pari passu with, the Notes
in right of payment, whether with respect to payment or redemptions, interest, damages, upon liquidation or dissolution or otherwise.
(tt) Cybersecurity. The Company 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 and its subsidiaries as currently conducted, and to the Company’s knowledge the IT Systems are free and clear of all
material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants that would reasonably be expected to have a Company Material Adverse Effect on the Company’s business. The Company and its Subsidiaries have
implemented and maintained commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous
operation, redundancy and security of all IT Systems and data, including “Personal Data,” used in connection with their businesses. “Personal Data” means (i) a natural person’s name, street address,
telephone number, e-mail address, photograph, social security number or tax identification number, driver’s license number, passport number, credit card number, bank information, or customer or account number; (ii) any information which
would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by the European Union General Data Protection Regulation (“GDPR”)
(EU 2016/679); (iv) any information which would qualify as “protected health information” under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical
Health Act (collectively, “HIPAA”); and (v) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any
data related to an identified person’s health or sexual orientation. To the Company’s knowledge, there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have been remedied without
material cost or liability or the duty to notify any other person or such, nor any incidents under internal review or investigations relating to the same except in each case, where such would not, either individually or in the aggregate,
reasonably be expected to result in a Company Material Adverse Effect. The Company and its Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or
arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from
unauthorized use, access, misappropriation or modification except in each case, where such would not, either individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect.
(uu) Compliance with Data Privacy Laws. The Company
and its Subsidiaries are in material compliance with all applicable state and federal data privacy and security laws and regulations, including without limitation HIPAA, and the Company and its Subsidiaries have taken commercially
reasonable actions to prepare to comply with, and since May 25, 2018, have been and currently are in compliance with, the GDPR (EU 2016/679) (collectively, the “Privacy Laws”) except in each case,
where such would not, either individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect. To ensure compliance with the Privacy Laws, the Company and its Subsidiaries have in place, comply with,
and take appropriate steps reasonably designed to ensure compliance in all material respects with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling, and analysis of
Personal Data (the “Policies”). The Company and its Subsidiaries have at all times made all material disclosures to users or customers to the extent required by applicable laws and regulatory rules
or requirements, and none of such disclosures made or contained in any Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws and regulatory rules or requirements in any material respect.
Neither the Company nor any Subsidiary: (i) has received notice of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge of any event or condition that
would reasonably be expected to result in any such notice; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Law; or (iii) is a party to any
order, decree, or agreement that imposes any obligation or liability under any Privacy Law.
(vv) No Assets or Liabilities. As of the date
hereof and as of the time immediately prior to the consummation of the Business Combination, the Company has no assets or liabilities other than the equity interests in Target Merger Sub and SPAC Merger Sub.
(ww) Disclosure. Except as disclosed prior to the
Closing Time, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents or counsel with any information that constitutes or could reasonably be expected to constitute
material, non-public information concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the other Transaction Documents. The Company understands and confirms that
each of the Buyers will rely on the foregoing representations in effecting transactions in securities of the Company. All of the written information furnished after the date hereof by or on behalf of the Company or any of its Subsidiaries
to each Buyer pursuant to or in connection with this Agreement and the other Transaction Documents, taken as a whole, will be true and correct in all material respects as of the date on which such information is so provided and will not
contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No event or
circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including results thereof) or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly disclosed. The Company acknowledges and agrees that no Buyer makes or has
made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.
3A REPRESENTATIONS AND WARRANTIES OF
SPAC
The SPAC represents and warrants to each of the Buyers, the Target and the Company that, as of the date hereof:
(a) Organization and Qualification. Each of the
SPAC and each of its SPAC Subsidiaries (as defined below) are entities duly organized and validly existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own
their properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the SPAC and each of its SPAC Subsidiaries is duly qualified as a foreign entity to do business and is in good
standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not
reasonably be expected to have a SPAC Material Adverse Effect (as defined below). As used in this Agreement, “SPAC Material Adverse Effect” means any material adverse effect on (i) the transactions
contemplated hereby or in any of the other Transaction Documents or any other agreements or instruments to be entered into in connection herewith or therewith or (iii) the authority or ability of the SPAC or any of its SPAC Subsidiaries to
perform any of their respective obligations under any of the Transaction Documents (as defined below). Other than the Persons (as defined below) set forth on Schedule 3A(a), the SPAC has no SPAC Subsidiaries. “SPAC Subsidiaries” means any Person, excluding the Company, in which the SPAC, directly or indirectly, (I) owns more than twenty percent (20%) of the total voting power of capital stock or other ownership interests entitled
(without regard to the occurrence of any contingency) to vote in the election of the Person or Persons having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other subsidiaries of that Person or a combination thereof or (II) controls or operates more than 20% of the business, operations or administration of such Person, and each of the foregoing,
is individually referred to herein as a “SPAC Subsidiary.” The SPAC Subsidiaries, the Target Subsidiaries and the Subsidiaries are collectively referred to herein as the “BC Subsidiaries”, and together with the BC Parties, the “BC Entities”.
(b) Authorization; Enforcement; Validity. The SPAC
has the requisite power and authority to execute and deliver, and perform its obligations under, this Agreement and the other Transaction Documents to which it is or will be a party execution and delivery of this Agreement and the other
Transaction Documents by the SPAC, and the consummation by the SPAC of the transactions contemplated hereby and thereby have been duly authorized by the SPAC’s board of directors, and no further consent or authorization is required by the
SPAC, its SPAC Subsidiaries, their respective boards of directors or their shareholders or other governing body. This Agreement has been, and the other Transaction Documents to which it is a party will be prior to or upon the Closing, duly
executed and delivered by the SPAC, and each constitutes the legal, valid and binding obligations of the SPAC (assuming that this Agreement and the other Transaction Documents to which the SPAC is or will be a party are or will be upon
execution thereof, as applicable, duly authorized, executed and delivered by the other Persons party thereto (if any)), enforceable against the SPAC in accordance with its respective terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as
rights to indemnification and to contribution may be limited by federal or state securities law.
(c) No Conflicts. The execution, delivery and
performance of the Transaction Documents by the SPAC and its SPAC Subsidiaries and the consummation by the SPAC and its SPAC Subsidiaries of the transactions contemplated hereby and thereby will not (i) result in a violation of the
certificate of formation, memorandum of association, articles of association, bylaws or other organizational documents of the SPAC or any of its SPAC Subsidiaries, or any capital stock or other securities of the SPAC or any of its SPAC
Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the SPAC or any of its SPAC Subsidiaries is a party (including, without limitation, the Business Combination Agreement), or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including, without limitation, foreign, federal and state securities laws and regulations and the rules and regulations of the Principal Market and including all applicable foreign, federal and state
laws, rules and regulations) to which the SPAC or any of its SPAC Subsidiaries or by which any property or asset of the SPAC or any of its SPAC Subsidiaries is subject or bound, except, in the case of any of clauses (ii) and (iii) above, as
would not have a SPAC Material Adverse Effect.
(d) Consents. Neither the SPAC nor any SPAC
Subsidiary is required to obtain any consent from, approval of or authorization or order of, or make any designation, declaration or filing or registration with (other than the Required Approvals), any Governmental Entity or any regulatory
or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by the Transaction Documents, in each case, in accordance with the terms hereof or
thereof. All consents, authorizations, orders, filings and registrations which the SPAC or any SPAC Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior to the Closing
Date, and neither the SPAC nor any of its SPAC Subsidiaries are aware of any facts or circumstances which might prevent the SPAC or any of its SPAC Subsidiaries from obtaining or effecting any of the registration, application or filings
contemplated by the Transaction Documents. Except as disclosed in the SPAC SEC Documents, the SPAC is not in violation of the requirements of the Principal Market.
(e) No General Solicitation. Neither the SPAC, nor
any of its SPAC 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 Securities.
(f) No Integrated Offering. None of the SPAC, its
SPAC 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 any of the Securities under the 1933 Act, whether through integration with prior offerings or otherwise, or cause this offering of the Securities to require approval of shareholders of the SPAC for purposes of the 1933 Act
or under any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the SPAC are listed or designated for
quotation. None of the SPAC, its SPAC Subsidiaries, their affiliates nor any Person acting on their behalf will take any action or steps that would require registration of any of the Securities under the 1933 Act or cause the offering of
any of the Securities to be integrated with other offerings of securities of the SPAC.
(g) SPAC SEC Documents; Financial Statements.
During the two (2) years prior to the date hereof, the SPAC has timely (after giving effect to any applicable grace period or extensions under applicable securities laws) filed all reports, schedules, forms, proxy statements, statements and
other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein and financial statements,
notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SPAC SEC Documents”). The SPAC has delivered or has made available to the Buyers or
their respective representatives true, correct and complete copies of each of the SPAC SEC Documents not available on the EDGAR system. As of their respective dates (except to the extent that information contained in any SPAC SEC Document has been superseded by a later timely filed SEC Report), the SPAC SEC Documents complied in all material respects with the requirements of the 1934 Act and
the rules and regulations of the SEC promulgated thereunder applicable to the SPAC SEC Documents, and none of the SPAC SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements
of the SPAC included in the SPAC SEC Documents complied in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time of filing, or, if
amended, as of the date of such amendment. Such financial statements have been prepared in accordance with GAAP, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or
the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the SPAC as of
the dates thereof and the results of its operations and cash flows for the periods then ended (subject, (i) in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the
aggregate, and (ii) changes to historical accounting policies of the SPAC in connection with any order, directive, guideline, comment or recommendation from the SEC that is applicable to the SPAC). To the knowledge of the SPAC, the
investor presentation relating to the Business Combination attached hereto as Exhibit G does not as of the date hereof contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein not misleading, in the light of the circumstance under which they are or were made. The SPAC is not currently contemplating to amend or restate any of the financial statements
(including, without limitation, any notes or any letter of the independent accountants of the SPAC with respect thereto) included in the SPAC SEC Documents (the “SPAC Financial Statements”), nor is
the SPAC currently aware of facts or circumstances which would require the SPAC to amend or restate any of the SPAC Financial Statements, in each case, in order for any of the SPAC Financials Statements to be in compliance with GAAP and the
rules and regulations of the SEC. The SPAC has not been informed by its independent accountants that they recommend that the SPAC amend or restate any of the SPAC Financial Statements or that there is any need for the SPAC to amend or
restate any of the SPAC Financial Statements.
(h) Absence of Certain Changes. Neither the SPAC
nor any of its SPAC Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the SPAC or any SPAC Subsidiary
have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so.
(i) No Undisclosed Events, Liabilities, Developments or
Circumstances; No Assets Other than as disclosed in the SPAC SEC Documents, no event, liability, development or circumstance has occurred or exists that could have a SPAC Material Adverse Effect. Other than as disclosed in the SPAC
SEC Documents, the SPAC has no assets or other property.
(j) Conduct of Business; Regulatory Permits.
Neither the SPAC nor any of its SPAC Subsidiaries is in violation of any term of or in default under its articles of association, any certificate of designation, preferences or rights of any other outstanding series of preferred shares of
the SPAC or any of its SPAC Subsidiaries or their organizational charter, certificate of formation, memorandum of association, articles of association or certificate of incorporation or bylaws, respectively. Neither the SPAC nor any of its
SPAC Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the SPAC or any of its SPAC Subsidiaries, and neither the SPAC nor any of its SPAC Subsidiaries will conduct its
business in violation of any of the foregoing, except in all cases for possible violations which could not, individually or in the aggregate, have a SPAC Material Adverse Effect. During the two years prior to the date hereof, (i) the
Ordinary Shares have been listed or designated for quotation on the Principal Market, (ii) trading in the Ordinary Shares has not been suspended by the SEC or the Principal Market and (iii) except as disclosed in the SPAC SEC Documents, the
SPAC has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Ordinary Shares from the Principal Market. The SPAC and each of its SPAC Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a SPAC Material Adverse Effect, and neither the SPAC nor any such SPAC Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or
permit. There is no agreement, commitment, judgment, injunction, order or decree binding upon the SPAC or any of its SPAC Subsidiaries or to which the SPAC or any of its SPAC Subsidiaries is a party which has or would reasonably be
expected to have the effect of prohibiting or materially impairing any business practice of the SPAC or any of its SPAC Subsidiaries, any acquisition of property by the SPAC or any of its SPAC Subsidiaries or the conduct of business by the
SPAC or any of its SPAC Subsidiaries as currently conducted other than such effects, individually or in the aggregate, which have not had and would not reasonably be expected to have a SPAC Material Adverse Effect on the SPAC or any of its
SPAC Subsidiaries.
(k) Foreign Corrupt Practices. Neither the SPAC,
the SPAC’s SPAC Subsidiaries or, to the SPAC’s knowledge, any director, officer, agent, employee, nor any other person acting for or on behalf of the foregoing (individually and collectively, a “SPAC
Affiliate”) have violated the FCPA or any other applicable anti-bribery or anti-corruption laws, nor has, to the SPAC’s knowledge, any SPAC Affiliate offered, paid, promised to pay, or authorized the payment of any money, or
offered, given, promised to give, or authorized the giving of anything of value, to any Government Official or to any person under circumstances where such SPAC Affiliate knew or was aware of a high probability that all or a portion of such
money or thing of value would be offered, given or promised, directly or indirectly, to any Government Official, for the purpose of:
(i) (A) influencing any act or decision of such Government Official in
his/her official capacity, (B) inducing such Government Official to do or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government Official to influence or affect any act
or decision of any Governmental Entity, or
(ii) assisting the SPAC or its SPAC Subsidiaries in obtaining or
retaining business for or with, or directing business to, the SPAC or its SPAC Subsidiaries.
(l) Transactions With Affiliates. Except as
discussed in the SPAC SEC Documents or as contemplated by the Business Combination Agreement, there are no contracts between (a) the SPAC or any of its SPAC Subsidiaries, on the one hand, and (b) any employee, partner, director, officer or
shareholder (direct or indirect) of the SPAC or its SPAC Subsidiaries, or, to the knowledge of the SPAC, any affiliate of any thereof, or any relative with a relationship no more remote than first cousin of any of the foregoing (each Person
identified in this clause (b), a “SPAC Related Party”), other than (i) contracts with respect to a SPAC Related Party’s employment with the SPAC or its SPAC Subsidiaries entered into in the ordinary
course of business (including benefit plans and other ordinary course compensation). Except as disclosed in the SPAC SEC Documents, no SPAC Related Party (A) owns any interest in any material asset or property used in any business of the
SPAC or its SPAC Subsidiaries, (B) possesses, directly or indirectly, any material financial interest in, or is a director or executive officer of, any Person which is a supplier, vendor, partner, customer, lessor or other material business
relation of the SPAC or its SPAC Subsidiaries, (C) is a supplier, vendor, partner, customer, lessor, or other material business relation of the SPAC’s SPAC Subsidiaries or (D) owes any material amount to, or is owed any material amount by,
the SPAC or its SPAC Subsidiaries (other than accrued compensation, employee benefits, employee or director expense reimbursement, in each case, in the ordinary course of business.
(m) Indebtedness and Other Contracts. Except as
disclosed in the SPAC SEC Documents, neither the SPAC nor any of its SPAC Subsidiaries, (i) has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing
Indebtedness of the SPAC or any of its SPAC Subsidiaries or by which the SPAC or any of its SPAC Subsidiaries is or may become bound, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which,
by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a SPAC Material Adverse Effect, (iii) has any financing statements securing obligations in any amounts filed in connection with the
SPAC or any of its SPAC Subsidiaries; (iv) is in violation of any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not result, individually or
in the aggregate, in a SPAC Material Adverse Effect, or (v) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the SPAC’s officers, has or is expected to have a
SPAC Material Adverse Effect. Neither the SPAC nor any of its SPAC Subsidiaries have any liabilities or obligations required to be disclosed in the SPAC SEC Documents which are not so disclosed in the SPAC SEC Documents, other than those
incurred in the ordinary course of the SPAC’s or its SPAC Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or could not have a SPAC Material Adverse Effect.
(n) Litigation. Except as disclosed in the SPAC SEC
Documents, there is no action, suit, arbitration, proceeding, inquiry or investigation before or by the Principal Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge
of the SPAC, threatened in writing against or affecting the SPAC or any of its SPAC Subsidiaries that, if adversely decided or resolved, has been or would reasonably be expected to be, individually or in the aggregate, material to the SPAC
and its SPAC Subsidiaries, taken as a whole. No director, officer or employee of the SPAC or any of its SPAC Subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation. Without
limitation of the foregoing, there has not been, and to the knowledge of the SPAC, there is not pending or contemplated, any investigation by the SEC involving the SPAC, any of its SPAC Subsidiaries. Neither the SPAC, its SPAC Subsidiaries
nor any of their respective properties or assets is subject to any material order, writ, judgment, injunction, decree, determination or award of any Governmental Entity which would reasonably be expected to have a SPAC Material Adverse
Effect.
(o) Tax Status. To the extent required, the SPAC
and each of its SPAC Subsidiaries (i) has filed all material tax returns, reports and declarations required to have been filed by it with any Governmental Entity, and (ii) has paid all material taxes and other governmental assessments and
charges, in each case in the nature of taxes, required to be paid by it that are shown or determined to be due on such returns, reports and declarations, except those being contested in good faith. There are no unpaid taxes in any material
amount claimed in writing to be due by the taxing authority of any jurisdiction, and the officers of the SPAC and its SPAC Subsidiaries know of no basis for any such claim.
(p) Off Balance Sheet Arrangements. There is no
transaction, arrangement, or other relationship between the SPAC or any of its SPAC Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the SPAC in its 1934 Act filings and is not so
disclosed or that otherwise could be reasonably likely to have a SPAC Material Adverse Effect.
(q) Illegal or Unauthorized Payments; Political
Contributions. Neither the SPAC nor any of its SPAC Subsidiaries nor, to the best of the SPAC’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees, agents or other
representatives of the SPAC or any of its SPAC Subsidiaries or any other business entity or enterprise with which the SPAC or any SPAC Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any
payment, contribution or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe to any Person or (ii) to any political organization, or the holder of or any aspirant to any
elective or appointive public office except for personal political contributions not involving the direct or indirect use of funds of the SPAC or any of its SPAC Subsidiaries.
(r) Money Laundering. The SPAC and its SPAC
Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation, the laws, regulations
and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter V.
(s) Management. Except as disclosed in the SPAC SEC
Documents, no current or former officer or director or, to the knowledge of the SPAC, no current ten percent (10%) or greater shareholder of the SPAC or any of its SPAC Subsidiaries has been the subject of:
(i) a petition under bankruptcy laws or any other insolvency or
moratorium law or the appointment by a court of a receiver, fiscal agent or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before the filing of such petition or such
appointment, or any corporation or business association of which such person was an executive officer at or within two years before the time of the filing of such petition or such appointment;
(ii) a conviction in a criminal proceeding or a named subject of a
pending criminal proceeding (excluding traffic violations that do not relate to driving while intoxicated or driving under the influence);
(iii) any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining any such person from, or otherwise limiting, the following activities:
(1) Acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person of any of the foregoing, or as
an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment SPAC, bank, savings and loan association or insurance SPAC, or engaging in or continuing any conduct or
practice in connection with such activity;
(2) Engaging in any particular type of business practice; or
(3) Engaging in any activity in connection with the purchase or sale of
any security or commodity or in connection with any violation of securities laws or commodities laws;
(iv) any order, judgment or decree, not subsequently reversed, suspended
or vacated, of any authority barring, suspending or otherwise limiting for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph, or to be associated with persons engaged
in any such activity;
(v) a finding by a court of competent jurisdiction in a civil action or
by the SEC or other authority to have violated any securities law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently reversed, suspended or vacated; or
(vi) a finding by a court of competent jurisdiction in a civil action or
by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or vacated.
(t) Disclosure. Except as disclosed in the 8-K
Filing (as defined below), the SPAC confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers (other than the Bridge Buyer) or their agents or counsel with any information that constitutes or could
reasonably be expected to constitute material, non-public information concerning the SPAC or any of its SPAC Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the other Transaction Documents. The
SPAC understands and confirms that each of the Buyers will rely on the foregoing representations in effecting transactions in securities of the SPAC. All disclosure provided to the Buyers regarding the SPAC and its SPAC Subsidiaries, their
businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the SPAC or any of its SPAC Subsidiaries is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not materially misleading. All of the written information furnished
after the date hereof by or on behalf of the SPAC or any of its SPAC Subsidiaries to each Buyer pursuant to or in connection with this Agreement and the other Transaction Documents, taken as a whole, will be true and correct in all material
respects as of the date on which such information is so provided and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. No event or circumstance has occurred or information exists with respect to the SPAC or any of its SPAC Subsidiaries or its or their business, properties, liabilities, prospects,
operations (including results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the SPAC but which has not been so
publicly disclosed. The SPAC acknowledges and agrees that no Buyer makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2. The
representations set forth in this Section 3A(t) shall be limited to information regarding the SPAC and not, for the avoidance of doubt, to information regarding the Target or its business, properties, liabilities, prospects, operations
(including results thereof) or conditions (financial or otherwise); each Buyer agrees that no such information with respect to the Target has been provided to such Buyer by the SPAC or anyone acting on its behalf.
3B REPRESENTATIONS AND WARRANTIES OF
TARGET
The Target represents and warrants to each of the Buyers, the Company and the SPAC that, each of the representations and warranties as set forth in
Article III of the Business Combination Agreement, mutatis mutandis, as qualified by the disclosures set forth in the Target disclosure schedules to the Business Combination Agreement, are true and
correct as of the Subscription Date (with such representations and warranties of the Target incorporated by reference herein, mutatis mutandis, solely for the purpose of the Target making such
representations and warranties as of the Subscription Date). For the avoidance of doubt, the Target is not making any representations or warranties as of the Closing Time pursuant to this Section 3B.
Except as disclosed in the 8-K Filing (as defined below), the Target confirms that neither it nor any other Person acting on its behalf has
provided any of the Buyers (other than the Bridge Buyer) or their agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information concerning the Target or any of its
subsidiaries (the “Target Subsidiaries”), other than the existence of the transactions contemplated by this Agreement and the other Transaction Documents. The Target understands and confirms that each
of the Buyers will rely on the foregoing representations in effecting transactions in securities of the Target. The investor presentation relating to the Business Combination attached hereto as Exhibit G
does not as of the date hereof contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading, in the light of the circumstance under which they are or were
made. No event or circumstance has occurred or information exists with respect to the Target or any of its Target Subsidiaries or its or their business, properties, liabilities, prospects, operations (including results thereof) or financial
conditions, which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Target but which has not been so publicly disclosed. The Target acknowledges and agrees that no Buyer
makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2. The representations set forth in this paragraph shall be limited to information
regarding the Target and not, for the avoidance of doubt, to information regarding the SPAC or its business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise); each Buyer agrees
that no such information with respect to the SPAC has been provided to such Buyer by the Target or anyone acting on its behalf.
4. COVENANTS.
(a) Reasonable Best Efforts. Each Buyer shall use
its reasonable best efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied by it as provided in Section 6 of this Agreement. Each BC Party shall use its reasonable best efforts to timely satisfy each of
the covenants hereunder and conditions to be satisfied by it as provided in Section 7 of this Agreement.
(b) Blue Sky. The Company shall, on or before the
Closing Date, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities for sale to the Buyers at the Closing pursuant to this Agreement under applicable
securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyers on or prior to the Closing Date. Without limiting
any other obligation of the Company under this Agreement, the Company shall timely make all filings and reports relating to the offer and sale of the Securities required under all applicable securities laws (including, without limitation,
all applicable federal securities laws and all applicable “Blue Sky” laws), and each BC Party shall comply with all applicable foreign, federal, state and local laws, statutes, rules, regulations and the like relating to the offering and
sale of the Securities to the Buyers.
(c) Reporting Status. From the Closing Date until
the date on which the Buyers shall have sold all of the Registrable Securities (the “Reporting Period”), the Company shall timely file all reports required to be filed with the SEC pursuant to the
1934 Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer require or otherwise permit such termination.
From the time Form S-3 is available to the Company for the registration of the Registrable Securities, the Company shall take all actions necessary to maintain its eligibility to register the Registrable Securities for resale by the Buyers
on Form S-3.
(d) Use of Proceeds. The Company will use the
proceeds from the sale of the Securities for (i) capital expenditures, (ii) working capital and general corporate purposes and operations and (iii) the repayment of the convertible promissory note in the principal amount of $7,000,000
issued to Perceptive Life Sciences Master Fund, Ltd. (the “Bridge Buyer”, and the Buyers excluding such Bridge Buyer, the “New Buyers”) on February [●], 2024
(such note, as amended, restated, supplemented or otherwise modified from time to time, the “Bridge Note”) pursuant to a note purchase agreement, dated February [●], 2024, by and between the Company,
the Target and the Bridge Buyer (as amended, restated, supplemented or otherwise modified from time to time, the “Note Purchase Agreement”), pursuant to, and in accordance with, the terms of the Note
Purchase Agreement, but not, except for the Bridge Note, directly or indirectly, for (x) except as set forth on Schedule 4(d), the satisfaction of any indebtedness of the Company or any of its Subsidiaries, (y) the redemption or repurchase
of any securities of the Company or any of its Subsidiaries, or (z) the settlement of any outstanding litigation.
(e) Financial Information. The Company agrees to
send the following to each Investor (as defined in the Registration Rights Agreement) during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the EDGAR system, within
one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, any interim reports or any consolidated balance sheets, income statements, stockholders’ equity
statements and/or cash flow statements for any period other than annual, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless the following are
either filed with the SEC through EDGAR or are otherwise widely disseminated via a recognized news release service (such as PR Newswire), on the same day as the release thereof, e-mail copies of all press releases issued by the Company or
any of its Subsidiaries and (iii) unless the following are filed with the SEC through EDGAR, copies of any notices and other information made available or given to the stockholders of the Company generally, contemporaneously with the making
available or giving thereof to the stockholders.
(f) Listing. On or prior to the Closing Date, the
Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Registrable Securities upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is
then listed or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation for quotation (as the case may be) of all Registrable Securities from time to time issuable
under the terms of the Transaction Documents on such national securities exchange or automated quotation system. The Company shall maintain the Common Stock’s listing or authorization for quotation (as the case may be) on the Principal
Market, The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq Global Select Market (each, an “Eligible Market”). Following the listing of
the Securities on or prior to the Closing Date, neither the Company nor any of its Subsidiaries shall take any action which could be reasonably expected to result in the delisting or suspension of the Common Stock on an Eligible Market.
The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(f).
(g) Fees. The Company shall reimburse the lead
Buyer (i) on or prior to the date hereof, a non-accountable amount of $50,000 and (ii) on or prior to the Closing Time, a non-accountable amount of $150,000 for all costs and expenses incurred by it or its affiliates in connection with the
structuring, documentation, negotiation and closing of the transactions contemplated by the Transaction Documents (including, without limitation, as applicable, all reasonable legal fees of outside counsel and disbursements of Kelley Drye
& Warren LLP, counsel to the lead Buyer, any other reasonable fees and expenses in connection with the structuring, documentation, negotiation and closing of the transactions contemplated by the Transaction Documents and due diligence
and regulatory filings in connection therewith) (the “Transaction Expenses”) and shall be withheld by the lead Buyer from its Purchase Price at the Closing; provided, that the Company shall promptly
reimburse Kelley Drye & Warren LLP on demand for any of such $200,000 of Transaction Expenses not so reimbursed through such withholding at the Closing and/or paid by a BC Party to Kelley Drye & Warren LLP on or prior to the
Closing. For the avoidance of doubt, the BC Parties hereby acknowledge and agree that nothing in this Section 4(g) shall limit a Buyer’s right for reimbursement of any reasonable and documented fees or expenses (including, without
limitation any reasonable and documents legal fees or expenses) in connection with the enforcement of the terms and conditions of any Transaction Document, any indemnification obligations in any Transaction Document or other reasonable and
documented amounts that may be due and payable to any Buyer in any other section of this Agreement or any other Transaction Document, as applicable. The Company shall be responsible for the payment of any placement agent’s fees, financial
advisory fees, Controlled Account Bank fees, transfer agent fees, DTC (as defined below) fees or broker’s commissions (other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby
(including, without limitation, any fees or commissions payable to the Placement Agent, who is the Company’s sole placement agent in connection with the transactions contemplated by this Agreement). The Company shall pay, and hold each
Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment. Except as otherwise set forth
in the Transaction Documents, each party to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyers.
(h) Pledge of Securities. Notwithstanding anything
to the contrary contained in this Agreement, the Company acknowledges and agrees that the Securities may be pledged by an Investor in connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the
Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or
otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document, including, without limitation, Section 2(g) hereof; provided that an Investor and its pledgee shall be required to comply with
the provisions of Section 2(g) hereof in order to effect a sale, transfer or assignment of Securities to such pledgee. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably
request in connection with a pledge of the Securities to such pledgee by a Buyer.
(i) Disclosure of Transactions and Other Material
Information.
(i) Disclosure of Transaction. The SPAC shall, on or before
9:00 a.m., New York time, on the first (1st) Business Day after the Subscription Date, issue a press release (the “Press Release”) reasonably acceptable to the Buyers disclosing all the material
terms of the transactions contemplated by the Transaction Documents. On or before 5:30 a.m., New York time, on the first (1st) Business Day after the Subscription Date, the SPAC shall file a Current Report on Form 8-K describing all the
material terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement (and all schedules to
this Agreement), the form of Notes, the form of the Warrants, the form of Guaranties, the form of Security Documents, the form of Investor Rights Agreement, and the form of the Registration Rights Agreement) (including all attachments,
the “8-K Filing”). From and after the filing of the 8-K Filing, the SPAC shall have disclosed all material, non-public information (if any) provided to any of the Buyers by any BC Entity or any of
their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the filing of the 8-K Filing, each BC Party acknowledges and agrees that
any and all confidentiality or similar obligations under any agreement, whether written or oral, between any BC Entity or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Buyers
or any of their affiliates, on the other hand, shall terminate.
(ii) Limitations on Disclosure. No BC Party shall, and the BC
Parties shall cause each BC Entity and each of its and their respective officers, directors, employees and agents not to, provide any Buyer with any material, non-public information regarding any BC Entity from and after the date hereof
without the express prior written consent of such Buyer (which may be granted or withheld in such Buyer’s sole discretion). In the event of a breach of any of the foregoing covenants, including, without limitation, Section 4(o) of this
Agreement, or any of the covenants or agreements contained in any other Transaction Document, by any BC Entity, or any of its or their respective officers, directors, employees and agents (as determined in the reasonable good faith
judgment of such Buyer), in addition to any other remedy provided herein or in the Transaction Documents, such Buyer shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of
such breach or such material, non-public information, as applicable, (provided that each BC Entity shall be consulted by such Buyer in connection with any such press release or other public disclosure prior to its release). No Buyer
shall have any liability to any BC Entity, or any of its or their respective officers, directors, employees, affiliates, stockholders or agents, for any such disclosure. To the extent that any BC Entity delivers any material, non-public
information to a Buyer without such Buyer’s consent, each BC Party hereby covenants and agrees that such Buyer shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis of, such material, non-public
information. Subject to the foregoing, neither the BC Entities nor any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, the Company shall be
entitled, without the prior approval of any Buyer, to make the Press Release and any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously
therewith, (ii) in a Form S-4 registration statement with respect to the Business Combination, (iii) in investor presentations relating to or in connection with the Business Combination and (iv) as is required by applicable law and
regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release). Without the prior written consent of the
applicable Buyer (which may be granted or withheld in such Buyer’s sole discretion), the Company or the SPAC shall not (and shall cause each of their subsidiaries and affiliates to not) disclose the name of such Buyer in any filing,
announcement, release or otherwise, except as required by the federal securities law or pursuant to other routine proceedings of regulatory authorities, or to the extent such disclosure is required by law, at the request of the staff of
the SEC or regulatory agency or under the rules and regulations of the Principal Market or Eligible Market, as applicable, in which case the Company or the SPAC will provide the Buyer with prior written notice (including by e-mail) of
such disclosure to the extent such announcements or other communications do not contain information previously disclosed in a public statement, press release or other communication that was approved by the Buyer in accordance with this
Section 4(i). Notwithstanding anything contained in this Agreement to the contrary and without implication that the contrary would otherwise be true, each BC Party expressly acknowledges and agrees that no Buyer shall have (unless
expressly agreed to by a particular Buyer after the date hereof in a written definitive and binding agreement executed by the applicable BC Party and such particular Buyer (it being understood and agreed that no Buyer may bind any other
Buyer with respect thereto)), any duty of confidentiality with respect to, or a duty not to trade on the basis of, any material, non-public information regarding any BC Entity.
(j) Additional Registration Statements. Until the
Applicable Date (as defined below) and at any time thereafter while any Registration Statement is not effective or the prospectus contained therein is not available for use or any Current Public Information Failure (as defined in the
Registration Rights Agreement) exists, no BC Party shall file a registration statement or an offering statement under the 1933 Act relating to securities that are not the Registrable Securities (other than a registration statement on Form
S-4 with respect to the Business Combination, a registration statement on Form S-8, a registration statement filed pursuant to the Investor Rights Agreement (as defined in the Notes), or such supplements or amendments the foregoing
registration statements or to registration statements that are outstanding and have been declared effective by the SEC as of the date hereof (solely to the extent necessary to keep such registration statements effective and available and
not with respect to any Subsequent Placement (as defined below))). “Applicable Date” means the earlier of (x) the first date on which the resale by the Buyers of all the Registrable Securities
required to be filed on the initial Registration Statement (as defined in the Registration Rights Agreement) pursuant to the Registration Rights Agreement is declared effective by the SEC (and each prospectus contained therein is available
for use on such date) or (y) the first date on which all of the Registrable Securities are eligible to be resold by the Buyers pursuant to Rule 144 (or, if a Current Public Information Failure has occurred and is continuing, such later date
after which the Company has cured such Current Public Information Failure).
(k) Additional Issuance of Securities. So long as
any Buyer beneficially owns any Notes or Warrants, the Company will not, without the prior written consent of the Required Holders, issue any Notes (other than to the Buyers as contemplated hereby) and the Company shall not issue any other
securities that would cause a breach or default under the Notes or the Warrants.
(l) Reservation of Shares. So long as any of the
Notes or Warrants remain outstanding, the Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than the sum of (i) 100% of the maximum number of shares of Common Stock
issuable upon conversion of all the Notes then outstanding (assuming for purposes hereof that (x) the Notes are convertible at the Alternate Conversion Price then in effect, (y) interest on the Notes shall accrue through the forty-five
month anniversary of the Closing Date and will be converted in shares of Common Stock at a conversion price equal to the Alternate Conversion Price then in effect and (z) any such conversion shall not take into account any limitations on
the conversion of the Notes set forth in the Notes), and (ii) the maximum number of Warrant Shares issuable upon exercise of all the Warrants then outstanding (without regard to any limitations on the exercise of the Warrants set forth
therein) (collectively, the “Required Reserve Amount”); provided that at no time shall the number of shares of Common Stock reserved pursuant to this Section 4(l) be reduced other than proportionally
in connection with any conversion, exercise and/or redemption, as applicable of Notes and Warrants. If at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to meet the Required Reserve Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation,
calling a special meeting of stockholders to authorize additional shares to meet the Company’s obligations pursuant to the Transaction Documents, in the case of an insufficient number of authorized shares, obtain stockholder approval of
an increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the
Required Reserve Amount.
(m) Conduct of Business. The business of the BC
Entities shall not be conducted in violation of any law, ordinance or regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually or in the aggregate, in a Material
Adverse Effect.
(n) Other Notes; Variable Securities. So long as
any Notes remain outstanding, each of the BC Entities shall be prohibited from effecting or entering into an agreement to effect any Subsequent Placement involving a Variable Rate Transaction (other than an equity line of credit provided by
an investment bank or an “at-the-market” offering). “Variable Rate Transaction” means a transaction in which any BC Entity (i) issues or sells any Convertible Securities either (A) at a conversion,
exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such Convertible Securities, or (B) with a
conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such Convertible Securities or upon the occurrence of specified or contingent events directly or indirectly related to
the business of one or more BC Entities or the market for the Common Stock, other than pursuant to a customary “weighted average” anti-dilution provision or (ii) enters into any agreement (other than an equity line of credit provided by an
investment bank or an “at-the-market” offering) whereby one or more BC Entities may sell securities at a future determined price (other than standard and customary “preemptive” or “participation” rights). Each Buyer shall be entitled to
obtain injunctive relief against any BC Entity to preclude any such issuance, which remedy shall be in addition to any right to collect damages. “Subsequent Placement” means any, direct or indirect,
issuance, offer, sale, grant of any option or right to purchase, or otherwise dispose of (or announcement of any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any
equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act), any Convertible Securities (as defined below), any debt, any preferred stock or
any purchase rights) of any BC Entity.
(o) Participation Right. At any time on or prior to
the first anniversary of the Closing Date, no BC Entity shall, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this Section 4(o). The Company acknowledges and agrees that the right
set forth in this Section 4(o) is a right granted by the Company, separately, to each Buyer.
(i) At least five (5) Trading Days prior to any proposed or intended
Subsequent Placement, the Company shall deliver to each Buyer a written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other
than: (A) if the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer
Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute
material, non-public information and (z) a statement informing such Buyer that it is entitled to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a
Buyer within three (3) Trading Days after the Company’s delivery to such Buyer of such Pre-Notice, and only upon a written request by such Buyer, the Company shall promptly, but no later than one (1) Trading Day after such request,
deliver to such Buyer an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which
Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or
exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (D) offer to issue and sell to or exchange with such Buyer in accordance with the terms of the
Offer such Buyer’s pro rata portion of 5% of the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the right to subscribe for under this Section 4(o) shall be (x) based on such Buyer’s pro rata
portion of the aggregate original principal amount of the Notes purchased hereunder by all Buyers (the “Basic Amount”), and (y) with respect to each Buyer that elects to purchase its Basic Amount, any additional portion of the Offered
Securities attributable to the Basic Amounts of other Buyers as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic Amounts (the “Undersubscription Amount”), which process
shall be repeated until each Buyer shall have an opportunity to subscribe for any remaining Undersubscription Amount.
(ii) To accept an Offer, in whole or in part, such Buyer must deliver a
written notice to the Company prior to the end of the fifth (5th) Business Day after such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion of such Buyer’s Basic Amount that such Buyer elects to purchase
and, if such Buyer shall elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the “Notice of Acceptance”). If the Basic Amounts subscribed for by all Buyers
are less than the total of all of the Basic Amounts, then each Buyer who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for, the
Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available
Undersubscription Amount”), each Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the total
Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the
terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Buyer a new Offer Notice and the Offer Period shall expire on the fifth (5th) Business Day after such Buyer’s receipt of such
new Offer Notice.
(iii) The Company shall have five (5) Business Days from the expiration
of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the “Refused Securities”) pursuant to a definitive agreement(s)
(the “Subsequent Placement Agreement”), but only to the offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more
favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the
consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent
Placement Agreement and any documents contemplated therein filed as exhibits thereto.
(iv) In the event the Company shall propose to sell less than all the
Refused Securities (any such sale to be in the manner and on the terms specified in Section 4(o)(iii) above), then each Buyer may, at its sole option and in its sole discretion, withdraw its Notice of Acceptance or reduce the number or
amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(o)(ii) above
multiplied by a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Buyers pursuant to
this Section 4(o) prior to such reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects to reduce the number or amount of Offered Securities specified in
its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Buyers in accordance with
Section 4(o)(i) above.
(v) Upon the closing of the issuance, sale or exchange of all or less
than all of the Refused Securities, such Buyer shall acquire from the Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to
Section 4(o)(iv) above if such Buyer has so elected, upon the terms and conditions specified in the Offer. The purchase by such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the
Company and such Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Buyer and its counsel.
(vi) Any Offered Securities not acquired by a Buyer or other Persons in
accordance with this Section 4(o) may not be issued, sold or exchanged until they are again offered to such Buyer under the procedures specified in this Agreement.
(vii) The Company and each Buyer agree that if any Buyer elects to
participate in the Offer, (x) neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”) shall include any term or
provision whereby such Buyer shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or
in connection with, any agreement previously entered into with the Company or any instrument received from the Company, and (y) any registration rights set forth in such Subsequent Placement Documents shall be similar in all material
respects to the registration rights contained in the Registration Rights Agreement.
(viii) Notwithstanding anything to the contrary in this Section 4(o) and
unless otherwise agreed to by such Buyer, the Company shall either confirm in writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the
Offered Securities, in either case, in such a manner such that such Buyer will not be in possession of any material, non-public information, by the fifth (5th) Business Day following delivery of the Offer Notice. If by such fifth (5th)
Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such Buyer, such transaction shall be deemed
to have been abandoned and such Buyer shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the
Offered Securities, the Company shall provide such Buyer with another Offer Notice and such Buyer will again have the right of participation set forth in this Section 4(o). The Company shall not be permitted to deliver more than one such
Offer Notice to such Buyer in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 4(o)(ii).
(ix) The restrictions contained in this Section 4(o) shall not apply in
connection with the issuance of any Excluded Securities (as defined in the Notes). The Company shall not circumvent the provisions of this Section 4(o) by providing terms or conditions to one Buyer that are not provided to all.
(p) Dilutive Issuances. For so long as any Notes or
Warrants remain outstanding, the Company shall not, in any manner, enter into or affect any Dilutive Issuance (as defined in the Notes) if the effect of such Dilutive Issuance is to cause the Company to be required to issue upon conversion
of any Notes or exercise of any Warrant any shares of Common Stock in excess of that number of shares of Common Stock which the Company may issue upon conversion of the Notes and exercise of the Warrants without breaching the Company’s
obligations under the rules or regulations of the Principal Market.
(q) Passive Foreign Investment Company. Following
the closing of the Business Combination, the Company shall conduct its business, and shall cause its Subsidiaries to conduct their respective businesses, in such a manner as will ensure that the Company will not be deemed to constitute a
passive foreign investment company within the meaning of Section 1297 of the Code.
(r) Restriction on Redemption and Cash Dividends.
So long as any Notes are outstanding, the Company shall not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written consent of the Buyers.
(s) Corporate Existence. So long as any Buyer
beneficially owns any Notes or Warrants, the Company shall not be party to any Fundamental Transaction (as defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth
in the Notes and the Warrants.
(t) Stock Splits. Until the Notes and all notes
issued pursuant to the terms thereof are no longer outstanding, the Company shall not effect any stock combination, reverse stock split or other similar transaction (or make any public announcement or disclosure with respect to any of the
foregoing) without the prior written consent of the Required Holders (as defined below); provided, however, that the Company may effect one (1) stock combination, reverse stock split or other similar transaction if necessary to comply with
the requirements of the Principal Market without the prior written consent of the Required Holders.
(u) Conversion and Exercise Procedures. Each of the
form of Exercise Notice (as defined in the Warrants) included in the Warrants and the form of Conversion Notice (as defined in the Notes) included in the Notes set forth the totality of the procedures required of the Buyers in order to
exercise the Warrants or convert the Notes. Except as provided in Section 5(d), no additional legal opinion, other information or instructions shall be required of the Buyers to exercise their Warrants or convert their Notes. The Company
shall honor exercises of the Warrants and conversions of the Notes and shall deliver the Conversion Shares and Warrant Shares in accordance with the terms, conditions and time periods set forth in the Notes and Warrants.
(v) Collateral Agent. Each Buyer hereby (i)
appoints Allegro Management LLC, as the collateral agent hereunder and under the other Security Documents (in such capacity, the “Collateral Agent”), and (ii) authorizes the Collateral Agent (and its
officers, directors, employees and agents) to take such action on such Buyer’s behalf in accordance with the terms hereof and thereof. The Collateral Agent shall not have, by reason hereof or any of the other Security Documents, a
fiduciary relationship in respect of any Buyer. Neither the Collateral Agent nor any of its officers, directors, employees or agents shall have any liability to any Buyer for any action taken or omitted to be taken in connection hereof or
any other Security Document except to the extent caused by its own gross negligence or willful misconduct, and each Buyer agrees to defend, protect, indemnify and hold harmless the Collateral Agent and all of its officers, directors,
employees and agents (collectively, the “Collateral Agent Indemnitees”) from and against any losses, damages, liabilities, obligations, penalties, actions, judgments, suits, fees, costs and expenses
(including, without limitation, reasonable attorneys’ fees, costs and expenses) incurred by such Collateral Agent Indemnitee, whether direct, indirect or consequential, arising from or in connection with the performance by such Collateral
Agent Indemnitee of the duties and obligations of Collateral Agent pursuant hereto or any of the Security Documents. The Collateral Agent shall not be required to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Holders, and such instructions shall be binding upon all holders of Notes; provided, however, that the
Collateral Agent shall not be required to take any action which, in the reasonable opinion of the Collateral Agent, exposes the Collateral Agent to liability or which is contrary to this Agreement or any other Transaction Document or
applicable law. The Collateral Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person, and with respect to all matters pertaining to this Agreement or any of the other Transaction Documents and its duties hereunder or thereunder, upon advice of counsel selected by it.
(w) Successor Collateral Agent.
(i) The Collateral Agent may resign from the performance of all its
functions and duties hereunder and under the other Transaction Documents at any time by giving at least fifteen (15) Business Days prior written notice to the Company and each holder of Notes. Such resignation shall take effect upon the
acceptance by a successor Collateral Agent of appointment pursuant to clauses (ii) and (iii) below or as otherwise provided below. If at any time the Collateral Agent (together with its affiliates) beneficially owns less than $100,000 in
aggregate principal amount of Notes, the Required Holders may, by written consent, remove the Collateral Agent from all its functions and duties hereunder and under the other Transaction Documents.
(ii) Upon any such notice of resignation or removal, the Required Holders
shall appoint a successor collateral agent. Upon the acceptance of any appointment as Collateral Agent hereunder by a successor agent, such successor collateral agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the collateral agent, and the Collateral Agent shall be discharged from its duties and obligations under this Agreement and the other Transaction Documents. After the Collateral Agent’s resignation or
removal hereunder as the collateral agent, the provisions of this Section 4(w) shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Collateral Agent under this Agreement and the other
Transaction Documents.
(iii) If a successor collateral agent shall not have been so appointed
within ten (10) Business Days of receipt of a written notice of resignation or removal, the Collateral Agent shall then appoint a successor collateral agent who shall serve as the Collateral Agent until such time, if any, as the Required
Holders appoint a successor collateral agent as provided above.
(iv) In the event that a successor Collateral Agent is appointed pursuant
to the provisions of this Section 4(w) that is not a Buyer or an affiliate of any Buyer (or the Required Holders or the Collateral Agent (or its successor), as applicable, notify the Company that they or it wants to appoint such a
successor Collateral Agent pursuant to the terms of this Section 4(w)), the Company and each Subsidiary thereof covenants and agrees to promptly take all actions reasonably requested by the Required Holders or the Collateral Agent (or its
successor), as applicable, from time to time, to secure a successor Collateral Agent reasonably satisfactory to the requesting part(y)(ies), in their sole discretion, including, without limitation, by paying all reasonable and customary
fees and expenses of such successor Collateral Agent, by having the Company and each Subsidiary thereof agree to indemnify any successor Collateral Agent pursuant to reasonable and customary terms and by each of the Company and each
Subsidiary thereof executing a collateral agency agreement or similar agreement and/or any amendment to the Security Documents reasonably requested or required by the successor Collateral Agent.
(x) Regulation M. The Company will not take any
action prohibited by Regulation M under the 1934 Act, in connection with the distribution of the Securities contemplated hereby.
(y) General Solicitation. None of the Company, any
of its affiliates (as defined in Rule 501(b) under the 1933 Act) or any person acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any form of general solicitation or
general advertising within the meaning of Regulation D, including: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii) any
seminar or meeting whose attendees have been invited by any general solicitation or general advertising.
(z) Integration. None of the Company, any of its
affiliates (as defined in Rule 501(b) under the 1933 Act), or any person acting on behalf of the Company or such affiliate will sell, offer for sale, or solicit offers to buy or otherwise negotiate in respect of any security (as defined in
the 1933 Act) which will be integrated with the sale of the Securities in a manner which would require the registration of the Securities under the 1933 Act or require stockholder approval under the rules and regulations of the Principal
Market and the Company will take all action that is appropriate or necessary to assure that its offerings of other securities will not be integrated for purposes of the 1933 Act or the rules and regulations of the Principal Market, with the
issuance of Securities contemplated hereby.
(aa) Notice of Disqualification Events. The Company
will notify the Buyers in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any
Issuer Covered Person.
(bb) Subsidiary Guarantee. For so long as any Notes
remain outstanding, upon any entity becoming a direct, or indirect, Subsidiary (other than an Excluded Subsidiary) of the Company, the Company shall cause each such Subsidiary (other than any Excluded Subsidiary) to become party to the
Guaranty by executing a joinder to the Guaranty reasonably satisfactory in form and substance to the Required Holders.
(cc) No Waiver of Lock-Up Provision of Investor Rights
Agreement. Following the closing of the Business Combination, neither Company, nor the Target, shall amend, waive, modify or fail to use best efforts to enforce the lock-up provision of the Investor Rights Agreement. For the
avoidance of doubt, no Buyer shall be a third party beneficiary of the Investor Rights Agreement.
(dd) Restrictions on Short Sales. Each Buyer,
severally and not jointly, agrees that, until the six month anniversary of the Closing Date, such Buyer shall not engage in any Short Sales or establish any Put Equivalent Position of the securities of the SPAC or the Company and, from and
after the six month anniversary of the Closing Date, such Buyer shall not engage in any Short Sales (excluding any sales of Common Stock then held by such Buyer at a time such Buyer has an existing “short” position) or establish any Put
Equivalent Position of the securities of the Company, as applicable, at a time the VWAP of the Common Stock is less than $10.00 per share (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar
events).
(ee) Transfer Taxes All stock transfer or other
similar taxes (other than income or similar taxes) which are required to be paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder shall be fully paid by the Company.
5. REGISTER; TRANSFER AGENT
INSTRUCTIONS; LEGEND.
(a) Register. The Company shall maintain at its
principal executive offices (or such other office or agency of the Company as it may designate by notice to each holder of Securities), a register for the Notes and the Warrants in which the Company shall record the name and address of the
Person in whose name the Notes and the Warrants have been issued (including the name and address of each transferee), the principal amount of the Notes held by such Person, the number of Conversion
Shares issuable pursuant to the terms of the Notes and the number of Warrant Shares issuable upon exercise of the Warrants held by such Person. The Company shall keep the register open and available at all times during business hours for
inspection of any Buyer or its legal representatives.
(b) Transfer Agent Instructions. The Company shall
issue irrevocable instructions to its transfer agent and any subsequent transfer agent (as applicable, the “Transfer Agent”) in a form acceptable to each of the Buyers (the “Irrevocable Transfer Agent Instructions”) to issue certificates or credit shares to the applicable balance accounts at The Depository Trust Company (“DTC”), registered in the name of
each Buyer or its respective nominee(s), for the Conversion Shares and the Warrant Shares in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes or the exercise of the Warrants (as the case
may be) upon effectiveness of the Registration Statement or resale in accordance with Rule 144, as applicable. The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in
this Section 5(b), and stop transfer instructions to give effect to Section 2(g) hereof, will be given by the Company to its transfer agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on
the books and records of the Company, as applicable, to the extent provided in this Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or transfer of the Securities in accordance with Section 2(g), the
Company shall permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified by such Buyer
to effect such sale, transfer or assignment. In the event that such sale, assignment or transfer involves Conversion Shares or Warrant Shares sold, assigned or transferred pursuant to an effective registration statement or in compliance
with Rule 144, the transfer agent shall issue such shares to such Buyer, assignee or transferee (as the case may be) without any restrictive legend in accordance with Section 5(d) below. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and
transfer, without the necessity of showing economic loss and without any bond or other security being required. The Company shall cause its counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to
the Company’s transfer agent on each Effective Date (as defined in the Registration Rights Agreement). Any fees (with respect to the transfer agent, counsel to the Company or otherwise) associated with the issuance of such opinion or the
removal of any legends on any of the Securities shall be borne by the Company.
(c) Legends. Each Buyer understands that the
Securities have been issued (or will be issued in the case of the Conversion Shares and the Warrant Shares) pursuant to an exemption from registration or qualification under the 1933 Act and applicable state securities laws, and except as
set forth below, the Securities shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock
certificates):
[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN]
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. 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) Removal of Legends. Certificates evidencing
Securities shall not be required to contain the legend set forth in Section 5(c) above or any other legend (i) while a registration statement (including a Registration Statement) covering the resale of such Securities is effective under the
1933 Act, (ii) following any sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such Securities are eligible to be sold, assigned or transferred under Rule 144 (provided that
a Buyer and its broker provide the Company with customary representations and other documentation reasonably acceptable to the Company and its transfer agent, which shall not include an opinion of Buyer’s counsel), (iv) in connection with a
sale, assignment or other transfer (other than under Rule 144), provided that such Buyer provides the Company with an opinion of counsel to such Buyer, in a generally acceptable form, to the effect that such sale, assignment or transfer of
the Securities may be made without registration under the applicable requirements of the 1933 Act or (v) if such legend is not required under applicable requirements of the 1933 Act (including, without limitation, controlling judicial
interpretations and pronouncements issued by the SEC). If a legend is not required pursuant to the foregoing, the Company shall no later than two (2) Trading Days (or such earlier date as required pursuant to the 1934 Act or other
applicable law, rule or regulation for the settlement of a trade initiated on the date such Buyer delivers such legended certificate representing such Securities to the Company) following the delivery by a Buyer to the Company or the
transfer agent (with notice to the Company) of a legended certificate representing such Securities (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, if
applicable), together with any other deliveries from such Buyer as may be required above in this Section 5(d), as directed by such Buyer, either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated
Securities Transfer Program (“FAST”) and such Securities are Conversion Shares or Warrant Shares, credit the aggregate number of shares of Common Stock to which such Buyer shall be entitled to such
Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer agent is not participating in FAST, issue and deliver (via reputable overnight courier) to such Buyer, a
certificate representing such Securities that is free from all restrictive and other legends, registered in the name of such Buyer or its designee (the date by which such credit is so required to be made to the balance account of such
Buyer’s or such Buyer’s designee with DTC or such certificate is required to be delivered to such Buyer pursuant to the foregoing is referred to herein as the “Required Delivery Date”, and the date
such shares of Common Stock are actually delivered without restrictive legend to such Buyer or such Buyer’s designee with DTC, as applicable, the “Share Delivery Date”). The Company shall be
responsible for any transfer agent fees or DTC fees with respect to any issuance of Securities or the removal of any legends with respect to any Securities in accordance herewith.
(e) Failure to Timely Deliver; Buy-In. If the
Company fails, for any reason or for no reason, to issue and deliver (or cause to be delivered) to a Buyer (or its designee) by the Required Delivery Date, either (I) if the Transfer Agent is not participating in FAST, a certificate for the
number of Conversion Shares or Warrant Shares (as the case may be) to which such Buyer is entitled and register such Conversion Shares or Warrant Shares (as the case may be) on the Company’s share register or, if the Transfer Agent is
participating in FAST, to credit the balance account of such Buyer or such Buyer’s designee with DTC for such number of Conversion Shares or Warrant Shares (as the case may be) submitted for legend removal by such Buyer pursuant to Section
5(d) above or (II) if the Registration Statement covering the resale of the Conversion Shares or Warrant Shares (as the case may be) submitted for legend removal by such Buyer pursuant to Section 5(d) above (the “Unavailable Shares”) is not available for the resale of such Unavailable Shares and the Company fails to promptly, but in no event later than as required pursuant to the Registration Rights Agreement (x) so notify such Buyer
and (y) deliver the Conversion Shares or Warrant Shares, as applicable, electronically without any restrictive legend by crediting such aggregate number of Conversion Shares or Warrant Shares (as the case may be) submitted for legend
removal by such Buyer pursuant to Section 5(d) above to such Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter
referred as a “Notice Failure” and together with the event described in clause (I) above, a “Delivery Failure”), then, in addition to all other remedies
available to such Buyer, the Company shall pay in cash to such Buyer on each day after the Share Delivery Date and during such Delivery Failure an amount equal to 2% of the product of (A) the sum of the number of shares of Common Stock not
issued to such Buyer on or prior to the Required Delivery Date and to which such Buyer is entitled, and (B) any trading price of the Common Stock selected by such Buyer in writing as in effect at any time during the period beginning on the
date of the delivery by such Buyer to the Company of the applicable Conversion Shares or Warrant Shares (as the case may be) and ending on the applicable Share Delivery Date. In addition to the foregoing, if on or prior to the Required
Delivery Date either (I) if the Transfer Agent is not participating in FAST, the Company shall fail to issue and deliver a certificate to a Buyer and register such shares of Common Stock on the Company’s share register or, if the Transfer
Agent is participating in FAST, credit the balance account of such Buyer or such Buyer’s designee with DTC for the number of shares of Common Stock to which such Buyer submitted for legend removal by such Buyer pursuant to Section 5(d)
above (ii) below or (II) a Notice Failure occurs, and if on or after such Trading Day such Buyer acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Buyer of
shares of Common Stock submitted for legend removal by such Buyer pursuant to Section 5(d) above that such Buyer is entitled to receive from the Company (a “Buy-In”), then the Company shall, within
two (2) Trading Days after such Buyer’s request and in such Buyer’s discretion, either (i) pay cash to such Buyer in an amount equal to such Buyer’s total purchase price (including brokerage commissions, stock loan costs and other
out-of-pocket expenses, if any) for the shares of Common Stock so acquired (including, without limitation, by any other Person in respect, or on behalf, of such Buyer) (the “Buy-In Price”), at which
point the Company’s obligation to so deliver such certificate or credit such Buyer’s balance account shall terminate and such shares shall be cancelled, or (ii) promptly honor its obligation to so deliver to such Buyer a certificate or
certificates or credit the balance account of such Buyer or such Buyer’s designee with DTC representing such number of shares of Common Stock that would have been so delivered if the Company timely complied with its obligations hereunder
and pay cash to such Buyer in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Conversion Shares or Warrant Shares (as the case may be) that the Company was required to deliver to
such Buyer by the Required Delivery Date multiplied by (B) the lowest Closing Sale Price (as defined in the Warrants) of the Common Stock on any Trading Day during the period commencing on the date of the delivery by such Buyer to the
Company of the applicable Conversion Shares or Warrant Shares (as the case may be) and ending on the date of such delivery and payment under this clause (ii). Nothing shall limit such Buyer’s right to pursue any other remedies available to
it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock (or to
electronically deliver such shares of Common Stock) as required pursuant to the terms hereof. Notwithstanding anything herein to the contrary, with respect to any given Notice Failure and/or Delivery Failure, this Section 5(e) shall not
apply to the applicable Buyer the extent the Company has already paid such amounts in full to such Buyer with respect to such Notice Failure and/or Delivery Failure, as applicable, pursuant to the analogous sections of the Note or Warrant,
as applicable, held by such Buyer.
(f) FAST Compliance. While any Warrants remain
outstanding, the Company shall maintain a transfer agent that participates in FAST.
6. CONDITIONS TO THE COMPANY’S
OBLIGATION TO SELL.
(a) The obligation of the Company hereunder to issue and
sell the Notes and the related Warrants to each Buyer at the Closing is subject to the satisfaction, at or before the Closing Time, of each of the following conditions, provided that these conditions
are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:
(i) Such Buyer shall have executed each of the other Transaction
Documents to which it is a party and delivered the same to the Company.
(ii) Such Buyer and each other Buyer shall have delivered to the Company
the Purchase Price (less, in the case of any Buyer, the amounts withheld pursuant to Section 4(g) and any applicable Non-Cash Purchase Price Amount) for the Note and the related Warrants being purchased by such Buyer at the Closing by
wire transfer of immediately available funds in accordance with the Flow of Funds Letter.
(iii) The representations and warranties of such Buyer shall be
true and correct in all material respects as of the date when made and as of the Closing Time as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and
correct as of such specific date), and such Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with
by such Buyer at or prior to the Closing Time.
(iv) The Business Combination Closing shall have occurred.
7. CONDITIONS TO EACH BUYER’S OBLIGATION
TO PURCHASE.
(a) The obligation of each Buyer hereunder to purchase its
Note and its related Warrants at the Closing is subject to the satisfaction, at or before the Closing Time, of each of the following conditions, provided that these conditions are for each Buyer’s
sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:
(i) The Company and each Subsidiary (as the case may be) shall have duly
executed and delivered to such Buyer each of the Transaction Documents to which it is a party and the Company shall have duly executed and delivered to such Buyer (A) a Note in such original principal amount as is set forth across from
such Buyer’s name in column (3) of the Schedule of Buyers and (B) a Warrant initially exercisable for such aggregate number of Warrant Shares as is set forth across from such Buyer’s name in column (4) of the Schedule of Buyers, in each
case, as being purchased by such Buyer at the Closing pursuant to this Agreement.
(ii) Such Buyer shall have received the opinion of Reed Smith LLP, the
Company’s counsel, dated as of the Closing Time, in the form acceptable to such Buyer.
(iii) The Company shall have delivered to such Buyer a copy of the
Irrevocable Transfer Agent Instructions, in the form acceptable to such Buyer, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.
(iv) The Company shall have delivered to such Buyer a certificate
evidencing the formation and good standing of the Company and each of its Subsidiaries (other than any Excluded Subsidiary) in each such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such
jurisdiction of formation as of a date within thirty (30) days of the Closing Time.
(v) The Company shall have delivered to such Buyer a certified copy of
the Certificate of Incorporation as certified by the Delaware Secretary of State within thirty (30) days of the Closing Time.
(vi) Each Subsidiary shall have delivered to such Buyer a certified copy
of its Certificate of Incorporation (or such equivalent organizational document) as certified by the Secretary of State (or comparable office) of such Subsidiary’s jurisdiction of incorporation within thirty (30) days of the Closing Time.
(vii) The Company and each Subsidiary (other than any Excluded
Subsidiary) shall have delivered to such Buyer a certificate, in the form reasonably acceptable to such Buyer, executed by the Secretary of the Company and each Subsidiary and dated as of the Closing Time, as to (i) the resolutions
consistent with Section 3(b) as adopted by the Company’s and each Subsidiary’s (other than any Excluded Subsidiary) board of directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation of the Company and
the organizational documents of each Subsidiary (other than any Excluded Subsidiary) and (iii) the Bylaws of the Company and the bylaws of each Subsidiary (other than any Excluded Subsidiary), each as in effect at the Closing.
(viii) Each and every representation and warranty of the Company shall be
true and correct in all material respects (except to the extent such representation or warranty is qualified by material or Company Material Adverse Effect, in which case it shall be true and correct in all respects) as of the date when
made and as of the Closing Time as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date) and the Company shall have
performed, satisfied and complied in all respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Time. Such Buyer shall have received a
certificate, duly executed by the Chief Executive Officer of the Company, dated as of the Closing Time, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form acceptable to such Buyer
(the “Officer’s Certificate”).
(ix) The Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of Common Stock
outstanding on the Closing Time immediately prior to the Closing.
(x) The Common Stock (A) shall be designated for quotation or listed
(as applicable) on the Principal Market and (B) shall not have been suspended, as of the Closing Time, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the Principal Market have
been threatened, as of the Closing Time, either (I) in writing by the SEC or the Principal Market or (II) by falling below the minimum maintenance requirements of the Principal Market.
(xi) The Company shall have obtained all governmental, regulatory or
third party consents and approvals, if any, necessary for the sale of the Securities, including without limitation, those required by the Principal Market, if any.
(xii) No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.
(xiii) Since the date of execution of this Agreement, no event or series
of events shall have occurred that reasonably would have or result in a Company Material Adverse Effect provided, however, that the definition of “Company Material Adverse Effect” for the purpose of this clause (xiii), will not include
any change or effect that results from or relates to (A) changes in law or interpretations thereof, or regulatory policy or interpretation, by any Governmental Entity so long as such change does not have a disproportionate effect on the
Company, (B) changes in applicable accounting rules or principles, including changes in GAAP, (C) general business or economic conditions, and changes, events, effects or conditions generally affecting the industries or markets in which
the Company operates, (D) national or international political or social conditions, including engagement in hostilities, acts of terror, sabotage or cyberterrorism or acts of war, (E) changes in conditions of the financial, banking,
capital or securities markets generally in the United States or any other country or region in the world, or changes therein, including changes in interest rates in the United States or any other country and changes in exchange rates for
the currencies of any countries, (F) the execution or public announcement of the Business Combination, this Agreement or the pendency or consummation of the transactions contemplated thereby and hereby, including the impact thereof on the
relationships, contractual or otherwise, of the Company or any of its Subsidiaries with employees, customers, investors, contractors, lenders, suppliers, vendors, partners, licensors, licensees, payors or other third parties related
thereto (provided that the exception in this clause (F) shall not apply to the representations and warranties set forth in Section 3 to the extent that its purpose is to address the consequences resulting from the public
announcement or pendency or consummation of the transactions contemplated by the Business Combination Agreement and this Agreement), (G) any hurricane, tornado, flood, earthquake, tsunami, natural disaster, mudslides, wild fires,
epidemics, pandemics (including COVID-19) or quarantines, acts of God or other natural disasters or comparable events in the United States or any other country or region in the world, or any escalation of the foregoing, (H) the number of
shares tendered for redemption by shareholders of the SPAC pursuant to the SPAC’s amended and restated articles of association, as may be amended, or (I) the expected non-compliance of the SPAC of Nasdaq IM-5101-2; provided, however,
that any change, event, effect or occurrence resulting from a matter described in any of the foregoing clauses (A) through (E) or (G) may be taken into account in determining whether a Company Material Adverse Effect has occurred or is
reasonably likely to occur to the extent such change, event, effect or occurrence has had or would reasonably be expected to have a disproportionate adverse effect on the Company relative to other participants operating in the industries
or markets in which the Company and its Subsidiaries operate (the above clauses (A) through (I), including the proviso above, being the “MAE Exceptions”).
(xiv) The Company shall have obtained approval of the Principal Market to
list or designate for quotation (as the case may be) the Conversion Shares and the Warrant Shares.
(xv) In accordance with the terms of the Security Documents, the Company
shall have delivered to the Collateral Agent (A) original certificates (I) representing the Subsidiaries’ (other than any Excluded Subsidiary) shares of capital stock to the extent such subsidiary is a corporation or otherwise has
certificated equity and (II) representing all other equity interests and all promissory notes required to be pledged thereunder, in each case, accompanied by undated stock powers and allonges executed in blank and other proper instruments
of transfer and (B) appropriate financing statements on Form UCC-1 to be duly filed in such office or offices as may be necessary or, in the opinion of the Collateral Agent, desirable to perfect the security interests purported to be
created by each Security Document.
(xvi) Within two (2) Business Days prior to the Closing, the Company
shall have delivered or caused to be delivered to each Buyer and the Collateral Agent (A) certified copies of requests for copies of information on Form UCC-11, listing all effective financing statements which name as debtor any BC Entity
and which are filed in such office or offices as may be necessary or, in the opinion of the Collateral Agent or the Buyers, desirable to perfect the security interests purported to be created by the Security Agreement, together with
copies of such financing statements, none of which, except as otherwise agreed in writing by the Collateral Agent, shall cover any of the Collateral (as defined in the Security Agreement), and the results of searches for any tax Lien and
judgment Lien filed against such Person or its property, which results, except as otherwise agreed to in writing by the Collateral Agent and the Buyers, shall not show any such Liens; and (B) a perfection certificate, duly completed and
executed by the Target and each of its Target Subsidiaries, in form reasonably satisfactory to the Buyers (the “Perfection Certificate”).
(xvii) The Collateral Agent shall have received the Security Agreement,
duly executed by the Company and each of its Subsidiaries.
(xviii) With respect to the Intellectual Property Rights, if any, of the
Company or any of its Subsidiaries, the Company and/or such Subsidiaries, as applicable, shall have duly executed and delivered to such Buyer each Assignment For Security for the Intellectual Property Rights of the Company and its
Subsidiaries, in the form attached as Exhibit A to the Security Agreement.
(xix) The Business Combination Closing shall have occurred.
(xx) The BC Parties shall have delivered to such Buyer, the investor
rights agreement, in the form attached hereto as Exhibit F (the “Investor Rights Agreement”), duly executed and delivered by the parties thereto (the
“IRA Parties”), which shall remain in full force and effect, pursuant to which the IRA Parties set forth on Schedule 7(a)(xx) shall have agreed not to directly, or indirectly, sell any securities of
the Company (including, without limitation, any securities issued pursuant to the Business Combination), the earlier of (A) 365 days after the Business Combination Closing Date (or 6 months after the Business Combination Closing Date in
the case of certain shareholders of Target and certain independent directors of the SPAC set forth on Schedule 7(a)(xx)) or (B) the first date subsequent to the Business Combination Closing Date with respect to which the closing price of
Common Stock has equaled or exceeded $12.00 per share (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) for any 20 Trading Days within any 30-Trading Day period commencing at least
150 days after the Business Combination Closing Date
(xxi) Such Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the
Company, setting forth the wire amounts of each Buyer and the wire transfer instructions of the Company (the “Flow of Funds Letter”).
(b) The obligation of Allegro Opportunities LLC hereunder
to purchase its Note and its related Warrants at the Closing is subject to the satisfaction, at or before the Closing Time, the following conditions, provided that this conditions is for Allegro
Opportunities LLC’s sole benefit and may be waived by Allegro Opportunities LLC at any time in its sole discretion by providing the Company with prior written notice thereof:
(i) As of the Closing Time, the Company shall have at least $48 million
in available unrestricted cash, in U.S. dollars, in one or more bank accounts in the United States (as reduced by $2 million (prorated for partial months) for each calendar month anniversary from November 30, 2023 until the Closing Time).
8. TERMINATION.
This Agreement shall terminate and be void and of no further force and effect with respect to a Buyer, and all rights and obligations of such Buyer
and each of the BC Parties with respect to such Buyer hereunder, shall terminate without any further liability on the part of any of such Persons in respect thereof, upon the earliest to occur of (a) such date and time as the Business
Combination Agreement is terminated in accordance with its terms, (b) upon the mutual written agreement of such Buyer and each of the BC Parties to terminate this Agreement with respect to such Buyer and (c) the delivery of a notice of
termination of this Agreement by such Buyer to each of the BC Parties at any time following August 13, 2024 (the "Outside Date") if the Closing has not occurred by the Outside Date; provided, however,
(i) the right of a Buyer to terminate this Agreement under this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have been consummated by the Outside Date was proximately
caused by such Buyer’s breach of any of its covenants or obligations in this Agreement (or if an affiliate of such Buyer is also a Buyer, such affiliate Buyer's breach of any of its covenants or obligations under this Agreement), either
individually or in the aggregate, and (ii) the abandonment of the sale and purchase of the Notes and the Warrants upon termination pursuant to clauses (b) or (c) of this Section 8 shall be applicable only to such Buyer that enters into such
mutual agreement to terminate or provides such written notice, provided further that no such termination shall affect any obligation of the Company under this Agreement to reimburse the lead Buyer for the expenses described in Section 4(g)
above. Nothing contained in this Section shall be deemed to release any party from any liability for any willful and material breach by such party of the terms and provisions of this Agreement or the other Transaction Documents prior to the
time of termination or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents or to pursue any other remedy available at law or in equity
to recover losses, liabilities or damages arising from any such willful and material breach.
9. MISCELLANEOUS.
(a) Governing Law; Jurisdiction; Jury Trial. 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 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 of the BC Parties hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that such suit, action or proceeding may not be brought or maintained in any such court, 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. Nothing contained herein shall be deemed or operate to preclude any Buyer from bringing suit or taking
other legal action against any BC Party in any other jurisdiction to collect on any BC Party’s obligations to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer. 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 UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY
OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY AND FOR ANY COUNTERCLAIM RELATING THERETO. IF THE SUBJECT MATTER OF ANY SUCH LEGAL DISPUTE IS ONE IN WHICH THE WAIVER OF JURY TRIAL IS PROHIBITED, NO PARTY
HERETO NOR ANY PERSON ASSERTING RIGHTS AS A THIRD PARTY BENEFICIARY SHALL ASSERT IN SUCH LEGAL DISPUTE A NONCOMPULSORY COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. FURTHERMORE, NO
PARTY HERETO NOR ANY PERSON ASSERTING RIGHTS AS A THIRD PARTY BENEFICIARY SHALL SEEK TO CONSOLIDATE ANY SUCH LEGAL DISPUTE WITH A SEPARATE ACTION OR OTHER LEGAL PROCEEDING IN WHICH A JURY TRIAL CANNOT BE WAIVED. 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 AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER
AND CERTIFICATIONS IN THIS SECTION.
(b) 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. In the event that any signature
is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
(c) Headings; Gender. The headings of this
Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. 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, unless otherwise explicitly specified herein.
(d) Severability; Maximum Payment Amounts. If any
provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended
to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so
modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially
impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace
the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding anything to the contrary
contained in this Agreement or any other Transaction Document (and without implication that the following is required or applicable), it is the intention of the parties that in no event shall amounts and value paid by the Company and/or any
of its Subsidiaries (as the case may be), or payable to or received by any of the Buyers, under the Transaction Documents (including without limitation, any amounts that would be characterized as “interest” under applicable law) exceed
amounts permitted under any applicable law. Accordingly, if any obligation to pay, payment made to any Buyer, or collection by any Buyer pursuant the Transaction Documents is finally judicially determined to be contrary to any such
applicable law, such obligation to pay, payment or collection shall be deemed to have been made by mutual mistake of such Buyer, the Company and its Subsidiaries and such amount shall be deemed to have been adjusted with retroactive effect
to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable law. Such adjustment shall be effected, to the extent necessary, by reducing or refunding, at the option of such Buyer, the
amount of interest or any other amounts which would constitute unlawful amounts required to be paid or actually paid to such Buyer under the Transaction Documents. For greater certainty, to the extent that any interest, charges, fees,
expenses or other amounts required to be paid to or received by such Buyer under any of the Transaction Documents or related thereto are held to be within the meaning of “interest” or another applicable term to otherwise be violative of
applicable law, such amounts shall be pro-rated over the period of time to which they relate.
(e) Entire Agreement; Amendments. This Agreement,
the other Transaction Documents and the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, any BC Entity, their
affiliates and Persons acting on their behalf, including, without limitation, any transactions by any Buyer with respect to Common Stock or the Securities, and the other matters contained herein and therein, and this Agreement, the other
Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein contain the entire understanding of the parties solely with respect to the matters covered herein and therein;
provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any agreements any Buyer has entered into with, or any instruments any Buyer has received from,
any BC Entity prior to the date hereof with respect to any prior investment made by such Buyer in any BC Entity or (ii) waive, alter, modify or amend in any respect any obligations of any BC Entity, or any rights of or benefits to any Buyer
or any other Person, in any agreement entered into prior to the date hereof between or among any BC Entity and any Buyer, or any instruments any Buyer received from any BC Entity prior to the date hereof, in each case, unrelated to this
Agreement and the transactions contemplated hereby, and all such agreements and instruments shall continue in full force and effect. For the avoidance of doubt, the terms of this Agreement and the other Transaction Documents supersede any
legally binding terms set forth in that certain “Financing Term Sheet: Secured Convertible Promissory Note” signed by the Target and the lead buyer. Except as specifically set forth herein or therein, neither any BC Party nor any Buyer
makes any representation, warranty, covenant or undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision of this Agreement may be amended other than by an instrument in
writing signed by the BC Parties and the Required Holders (as defined below), and any amendment to any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all Buyers and holders of
Securities, as applicable; provided that no such amendment shall be effective to the extent that it (A) applies to less than all of the holders of the Securities then outstanding or (B) imposes any obligation or liability on any Buyer
without such Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole discretion); and provided further that the provisions of Sections 4(v) and 4(w) above cannot be amended or waived without the additional prior
written approval of the Collateral Agent or its successor. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party, provided that the Required Holders may waive any provision of
this Agreement, and any waiver of any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable, provided that no such waiver shall be
effective to the extent that it (1) applies to less than all of the holders of the Securities then outstanding (unless a party gives a waiver as to itself only) or (2) imposes any obligation or liability on any Buyer without such Buyer’s
prior written consent (which may be granted or withheld in such Buyer’s sole discretion). No consideration (other than reimbursement of legal fees) shall be offered or paid to any Person to amend or consent to a waiver or modification of
any provision of any of the Transaction Documents unless the same consideration also is offered to all of the parties to the Transaction Documents, all holders of the Notes or all holders of the Warrants (as the case may be). From the date
hereof and while any Notes or Warrants are outstanding, no BC Entity shall be permitted to receive any consideration from a Buyer or a holder of Notes or Warrants that is not otherwise contemplated by the Transaction Documents in order to,
directly or indirectly, induce any BC Entity (i) to treat such Buyer or holder of Notes or Warrants in a manner that is more favorable than to other similarly situated Buyers or holders of Notes or Warrants, as applicable, or (ii) to treat
any Buyer(s) or holder(s) of Notes or Warrants in a manner that is less favorable than the Buyer or holder of Notes or Warrants that is paying such consideration; provided, however, that the determination of whether a Buyer has been treated
more or less favorably than another Buyer shall disregard any securities of the Company purchased or sold by any Buyer. No BC Entity has, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of
the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents.
Without limiting the foregoing, each BC Party confirms that, except as set forth in this Agreement, no Buyer (other than the Bridge Buyer) has made any commitment or promise or has any
other obligation to provide any financing to any BC Entity or otherwise. As a material inducement for each Buyer to enter into this Agreement, each BC Party expressly acknowledges and agrees that (x) no due diligence or other investigation
or inquiry conducted by a Buyer, any of its advisors or any of its representatives shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, such BC Party’s representations and
warranties contained in this Agreement or any other Transaction Document and (y) unless a provision of this Agreement or any other Transaction Document is expressly preceded by the phrase “except as disclosed in the SEC Documents,” nothing
contained in any of the SEC Documents shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, such BC Party’s representations and warranties contained in this Agreement or any other
Transaction Document. “Required Holders” means (I) prior to the Closing Date, each Buyer entitled to purchase Notes at the Closing and (II) on or after the Closing Date, each of Allegro Opportunities LLC and the Bridge Buyer.
(f) Notices. Any notices, consents, waivers or
other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by electronic
mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient’s email server that such e-mail
could not be delivered to such recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. The mailing
addresses and e-mail addresses for such communications shall be:
If to the Company:
Aja Holdco, Inc.
51 Astor Place, 10th Floor
New York, New York 10003
Telephone: 212-284-2300
Attention: Michael Altman, Chief Financial Officer
E-Mail: Michael@perceptivelife.com
With a copy (for informational purposes only) to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Telephone: 212-446-4756
|
|
|
Peter Seligson,P.C.,
Mathieu Kohmann, Esq.
|
|
|
|
peter.seligson@kirkland.com;
mathieu.kohmann@kirkland.com
|
and
Kirkland & Ellis LLP
Three Brickell City Centre
98 S.E. 7th Street, Suite 700
Miami, Florida 33131
Telephone: 305-432-5787
|
|
|
Whitney Bosworth, Esq.
|
|
|
|
whitney.bosworth@kirkland.com
|
and
Reed Smith LLP
1901 Avenue of Stars, Suite 700
Los Angeles, CA 90067
Attention: Michael Sanders
E-mail: MSanders@ReedSmith.com
and
Reed Smith LLP
599 Lexington Avenue
New York, NY 10022
Attention: Jennifer W. Cheng
Susan K. Nieto
E-mail: JCheng@reedsmith.com
SNieto@reedsmith.com
and
Reed Smith LLP
10 South Wacker Drive
Chicago, IL 60606-7507
Attention: Benjamin Brimeyer
E-mail: BBrimeyer@reedsmith.com
If to the Target:
Adagio Medical, Inc.
26051 Merit Circle, Suite 102
Laguna Hills, CA 92653
Attention: Olav Bergheim, Chief Executive Officer
E-Mail: obergheim@fjordventures.com
With a copy (for informational purposes only) to:
Reed Smith LLP
1901 Avenue of Stars, Suite 700
Los Angeles, CA 90067
Attention: Michael Sanders
E-mail: MSanders@ReedSmith.com
and
Reed Smith LLP
599 Lexington Avenue
New York, NY 10022
Attention: Jennifer W. Cheng
Susan K. Nieto
E-mail: JCheng@reedsmith.com
SNieto@reedsmith.com
and
Reed Smith LLP
10 South Wacker Drive
Chicago, IL 60606-7507
Attention: Benjamin Brimeyer
E-mail: BBrimeyer@reedsmith.com
If to the SPAC:
ARYA Sciences Acquisition Corp IV
51 Astor Place, 10th Floor
New York, New York 10003
Telephone: 212-284-2300
Attention: Michael Altman, Chief Financial Officer
E-Mail: Michael@perceptivelife.com
With a copy (for informational purposes only) to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Telephone: 212-446-4756
|
|
|
Peter Seligson,P.C.,
Mathieu Kohmann, Esq.
|
|
|
|
peter.seligson@kirkland.com; mathieu.kohmann@kirkland.com
|
and
Kirkland & Ellis LLP
Three Brickell City Centre
98 S.E. 7th Street, Suite 700
Miami, Florida 33131
Telephone: 305-432-5787
Attention: Whitney Bosworth, Esq.
E-Mail: whitney.bosworth@kirkland.com
If to the Transfer Agent:
Continental Stock Transfer & Trust Co.
1 State Street 30th Floor
New York, New York 10004-1561
Telephone: 212-845-5277
Attention: Stephen Jones
E-Mail: sjones@continentalstock.com
If to a Buyer, to its mailing address and e-mail address set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the Schedule
of Buyers,
with a copy (for informational purposes only) to:
Kelley Drye & Warren LLP
3 World Trade Center
175 Greenwich Street
New York, NY 10007
Telephone: (212) 808-7540
Attention: Michael A. Adelstein, Esq.
E-mail: madelstein@kelleydrye.com
or to such other mailing address and/or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change, provided that Kelley Drye & Warren LLP shall only be provided copies of notices sent to the lead Buyer. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s e-mail containing the time, date and recipient’s e-mail or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by e-mail or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.
(g) Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of any of the Notes and Warrants. No BC Party shall assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Required Holders, including, without limitation, by way of a Fundamental Transaction (as defined in the Warrants) (unless the Company is in compliance with the applicable provisions governing
Fundamental Transactions set forth in the Warrants) or a Fundamental Transaction (as defined in the Notes) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes).
Prior to the Closing, the Bridge Buyer may assign and transfer its rights and obligations under this Agreement with respect to the purchase of any or all Securities, which would otherwise be purchased by the Bridge Buyer, to any other
Person (each a “Permitted Assignee”), provided that the Bridge Buyer shall remain obligated to purchase such assigned Securities upon any breach by any such Permitted Assignee hereunder. Upon such an
assignment, the Schedule of Buyers shall be revised to reflect such assignment. A Buyer may assign some or all of its rights and obligations hereunder in connection with any transfer of any of its Securities without the consent of but upon
written notice (delivered promptly after the consummation of such assignment or transfer) to any BC Party and in compliance with any restrictions, limitations, requirements or procedures relating to any such transfer contained in this
agreement or any Transaction Document, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.
(h) No Third Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the Indemnitees referred to in
Section 9(k).
(i) Survival. The representations, warranties,
agreements and covenants shall survive the Closing. Each Buyer shall be responsible only for its own representations, warranties, agreements and covenants hereunder.
(j) Further Assurances. Each party shall do and
perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as 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.
(k) Indemnification. In consideration of each
Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in addition to all of each BC Party’s other obligations under the Transaction Documents, each BC Party, severally, shall defend,
protect, indemnify and hold harmless, to the extent permitted by applicable law, each Buyer and each holder of any Securities that is party to this Agreement and all of their stockholders, partners, members, officers, directors, employees
and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether
any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable and documented attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or warranty made by any BC Entity in any of the Transaction Documents, (ii) any breach of any covenant,
agreement or obligation of any BC Entity contained in any of the Transaction Documents or (iii) any cause of action, suit, proceeding or claim brought or made against such Indemnitee by a third party (including for these purposes a
derivative action brought on behalf of any BC Entity) or which otherwise involves such Indemnitee that arises out of or results from (A) the execution, delivery, performance or enforcement of any of the Transaction Documents, (B) any
transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (C) any disclosure properly made by such Buyer pursuant to Section 4(i), or (D) the status of such
Buyer or holder of the Securities either as an investor in any BC Entity pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest or
otherwise in any action or proceeding for injunctive or other equitable relief); provided, that in no event shall the Indemnified Liabilities include any actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities or damages or expenses to the extent arising from, resulting from or relating to any conduct by any Buyer which is finally judicially determined to constitute fraud. To the extent that the foregoing undertaking by a BC Entity
may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein,
the mechanics and procedures with respect to the rights and obligations under this Section 9(k) shall be the same as those set forth in Section 6 of the Registration Rights Agreement.
(l) Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality or
applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common Stock and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any
stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after the date of this Agreement. Notwithstanding anything in this Agreement to the contrary,
for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement to borrow, identification of the availability of,
and/or securing of, securities of the Company in order for such Buyer (or its broker or other financial representative) to effect short sales or similar transactions in the future.
(m) Remedies. Each Buyer and in the event of
assignment by Buyer of its rights and obligations hereunder, each holder of Securities, shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time
under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a
bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, each party hereto recognizes that in the event that such party fails to
perform, observe, or discharge any or all of its obligations under this Agreement or the Transaction Documents, any remedy at law may be inadequate relief to one or more other parties hereto. Each party hereto therefore agrees that each
party hereto shall be entitled to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual
damages and without posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall be cumulative and in addition to all other remedies available under this Agreement and the other
Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief).
(n) Withdrawal Right. Notwithstanding anything to
the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and any BC Entity does not timely perform
its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its sole discretion from time to time upon written notice to such applicable BC Entity, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights.
(o) Payment Set Aside; Currency. To the extent that
a BC Entity makes a payment or payments to any Buyer hereunder or pursuant to any of the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments or the proceeds
of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to such BC
Entity, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. Unless otherwise expressly
indicated, all dollar amounts referred to in this Agreement and the other Transaction Documents are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement and all other
Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published
in the Wall Street Journal on the relevant date of calculation.
(p) Judgment Currency.
(i) If for the purpose of obtaining or enforcing judgment against any BC
Entity in connection with this Agreement or any other Transaction Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 9(p) referred to as
the “Judgment Currency”) an amount due in US Dollars under this Agreement, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:
(1) the date actual payment of the amount due, in the case of any
proceeding in the courts of New York or in the courts of any other jurisdiction that will give effect to such conversion being made on such date: or
(2) the date on which the foreign court determines, in the case of any
proceeding in the courts of any other jurisdiction (the date as of which such conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the “Judgment Conversion Date”).
(ii) If in the case of any proceeding in the court of any jurisdiction
referred to in Section 9(p)(i)(2) above, there is a change in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay such adjusted amount as may
be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(iii) Any amount due from any BC Entity under this provision shall be due
as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of this Agreement or any other Transaction Document.
(q) Independent Nature of Buyers’ Obligations and Rights.
The obligations of each Buyer under the Transaction Documents are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any other Buyer under
any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and each BC Party acknowledges that the
Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Buyers are in any way acting in concert or as a group or entity, and no BC Entity shall
assert any such claim with respect to such obligations or the transactions contemplated by the Transaction Documents or any matters, and each BC Party acknowledges that the Buyers are not acting in concert or as a group, and no BC Entity
shall assert any such claim, with respect to such obligations or the transactions contemplated by the Transaction Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction Documents has been made by such
Buyer independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection with such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such
Buyer in connection with monitoring such Buyer’s investment in the Securities or enforcing its rights under the Transaction Documents. Each BC Party and each Buyer confirms that each Buyer has independently participated with the BC
Entities in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights
arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. The use of a single agreement to effectuate
the purchase and sale of the Securities contemplated hereby was solely in the control of the BC Parties, not the action or decision of any Buyer, and was done solely for the convenience of the BC Entities and not because it was required or
requested to do so by any Buyer. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between applicable BC Entities and a Buyer, solely, and not between the
Company, its Subsidiaries and the Buyers collectively and not between and among the Buyers.
[signature pages follow]
IN WITNESS WHEREOF, each Buyer, the
Target, the SPAC and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.
| |
COMPANY:
|
| |
AJA HOLDCO, INC.
|
IN WITNESS WHEREOF, each Buyer, the
Target, the SPAC and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.
| |
TARGET:
|
| |
ADAGIO MEDICAL, INC.
|
IN WITNESS WHEREOF, each Buyer, the
Target, the SPAC and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.
| |
SPAC:
|
| |
ARYA SCIENCES ACQUISITION CORP IV
|
IN WITNESS WHEREOF, each Buyer, the
Target, the SPAC and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.
| |
BUYER:
|
| |
ALLEGRO OPPORTUNITIES LLC
|
IN WITNESS WHEREOF, each Buyer, the Target
and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.
| |
BUYER:
|
| |
PERCEPTIVE LIFE SCIENCES MASTER FUND LTD.
|
SCHEDULE OF BUYERS
|
(1)
|
(2)
|
(3)
|
(5)
|
(6)
|
(7)
|
| |
|
|
|
|
|
|
|
Mailing Address and E-mail Address
|
Original Principal Amount of Notes
|
Aggregate
Number of
Warrant Shares
|
|
Legal Representative’s
Mailing Address and E-mail Address
|
| |
|
|
|
|
|
|
[***]
|
[***]
|
$7,500,000
|
562,500
|
$7,500,000
|
[***]
|
|
[***]
|
[***]
|
$12,500,000
|
937,500
|
$12,500,000*
|
[***]
|
|
TOTAL
|
$20,000,000
|
1,500,000
|
$20,000,000
|
|
* Subject to reduction in connection with any financing or commitment to financing (whether in the form of equity, debt, or Convertible Securities (other than the Notes))
based on the gross proceeds thereof, as may be specified at the option of such buyer, in writing to the Company prior to the Closing Date by such Buyer, pursuant to the terms of the Note Purchase Agreement.
Exhibit 10.8
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (this “Agreement”)
is made as of February 13, 2024, by and between Adagio Medical, Inc., a Delaware corporation (the “Company”), Aja Holdco, Inc., a Delaware corporation (“New Adagio”), and Perceptive Life Sciences Master Fund, Ltd. (the “Investor”).
WHEREAS, the Company has entered into
a Business Combination Agreement, dated the date hereof (as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), with New Adagio, ARYA Sciences
Acquisition Corp IV, a Cayman Islands exempted company (“ARYA”), Aja Merger Sub 1, a Cayman Islands exempted company and Aja Merger Sub 2, Inc., a Delaware corporation (the transactions contemplated in the Business Combination
Agreement, the “Transaction”);
WHEREAS, the Investor has agreed to
purchase, and the Company has agreed to issue and sell to the Investor, a convertible promissory note in the principal amount of $7,000,000 (the “Bridge Note Principal Amount” on the date hereof (the “Bridge Note Closing Date”),
substantially in the form attached as Exhibit A hereto (the “Bridge Note”), which shall automatically be cancelled (or transferred to New Adagio) in connection with the issuance of a senior secured convertible note by New
Adagio, substantially in the form attached as Exhibit B hereto (the “New Adagio Convertible Notes”) upon the consummation of the Transaction; and
WHEREAS, the Investor has committed to
purchase, on the terms and subject to the conditions set forth in the Business Combination Agreement, on the closing date of the Transaction (the “Transaction Closing Date”) an additional New Adagio Convertible Note (the “Closing
Date Convertible Note”) in an initial principal amount of $5,500,000 (the “Investor Convertible Note Commitment”) and warrants to purchase common stock of New Adagio (the “Common Stock”) in the form attached as Exhibit
C hereto (the “Warrants”).
NOW, THEREFORE, in consideration of
the mutual promises and covenants contained in this Agreement, and for other valuable consideration, the parties hereto agree as follows:
Section 1
Issuance of Bridge NOTE
1.1 Issuance of Bridge Note. Subject to the truth and accuracy of the representations and warranties of the Investor and Company herein (provided that, for the avoidance of
doubt, the Company shall not be required to make any representations on the Bridge Note Closing Date that are limited to the Convertible Note Closing) and the terms and conditions of this Agreement, the Company shall issue and sell to the
Investor the Bridge Note on the Bridge Note Closing in the Bridge Note Principal Amount. In exchange for the Bridge Note, the Investor will fund to the Company $7,000,000 on the date hereof (the “Bridge Note Purchase Price”).
1.2 Closing. The closing (the “Bridge Note Closing”) of the purchase and sale of the Bridge Note by the Investor and the Company shall take place remotely via the exchange of
signature pages, on the Bridge Note Closing Date.
1.3 Delivery of Bridge Note. At the Bridge Note Closing, (i) the Investor shall deliver to the Company a wire transfer (pursuant to wire transfer instructions separately provided by
the Company in writing to the Investor prior to the Bridge Note Closing Date) of immediately available funds in the amount of the Bridge Note Purchase Price (or payment by such other means as shall be acceptable to the Company), and (ii)
the Company shall execute and deliver to the Investor the Bridge Note, reflecting the name of the Investor, dated as of the date of the Bridge Note Closing and reflecting a principal amount drawn and outstanding under the Bridge Note
equal to the Bridge Note Principal Amount.
Section 2
ISSUANCE OF CONVERTIBLE NOTES AND
WARRANTS
2.1 Issuance of Convertible Note. On the Transaction Closing Date, subject to the conditions set forth in Section 2.4, New Adagio shall issue and deliver to the Investor:
(a) the Closing Date Convertible Note in the principal amount of the Investor Convertible Note Commitment, subject to adjustment as set forth in Section 3.1;
(b) a New Adagio Convertible Note in the principal amount of the Bridge Note Principal Amount, subject to adjustment as set forth in Section 3.1, pursuant to Section 2(a) of
the Bridge Note (the “Converted Bridge Note”); and
(c) Warrants to purchase 937,500 shares of Common Stock (the “Warrant Shares”), subject to adjustment as set forth in Section 3.2.
2.2 Closing. The closing (the “Convertible Note Closing”) of the purchase and sale of the Closing Date Convertible Note, the Converted Bridge Note and the Warrants (together,
the “Convert and Warrant Securities”) by the Investor and New Adagio shall take place remotely via the exchange of signature pages, on the Transaction Closing Date. On a date that is not less than five (5) business days from the
date on which New Adagio reasonably expects all conditions to the closing of the Transaction under the Business Combination Agreement to be satisfied or waived, New Adagio shall deliver written notice from (or on behalf of) New Adagio to
the Investor setting forth the target Transaction Closing Date (the “Closing Notice”), upon receipt of the Closing Notice, no later than three (3) business days prior to the anticipated closing date specified in the Closing Notice,
the Investor shall deliver to New Adagio the following: (i) signature pages to the Convert and Warrant Securities, which shall be automatically released from escrow on the Convertible Note Closing, and (ii) any other information that is
reasonably requested in writing in the Closing Notice in order for the Convert and Warrant Securities to be issued to the Investor, including, without limitation, the legal name of the person in whose name such securities are to be issued
and a duly executed Internal Revenue Service Form W-9 or W-8, as applicable.
2.3 Delivery of Securities. At the Convertible Note Closing, (i) the Investor shall deliver to New Adagio (a) a wire transfer (pursuant to wire transfer instructions included in the
Closing Notice (or otherwise separately provided by New Adagio in writing to the Investor at least three (3) business days prior to the Transaction Closing Date) of immediately available funds in the amount of the Investor Convertible
Note Commitment, as adjusted pursuant to Section 3.1, (or payment by such other means as shall be acceptable to New Adagio) and (b) the Bridge Note for cancellation, and (ii) New Adagio shall execute and deliver to the Investor
(x) the Converted Bridge Note, (y) the Closing Date Convertible Note, subject to adjustment as set forth in Section 3.1, and (z) Warrants, subject to adjustment as set forth in Section 3.2 and exercisable for the Warrant
Shares, in each case reflecting the name of the Investor, dated as of the Transaction Closing Date.
2.4 Closing Conditions
(a) The obligation of the Investor and New Adagio to consummate the purchase and sale of the Convert and Warrant Securities pursuant to this Agreement is subject to the following conditions:
(i) no applicable governmental authority shall have enacted, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation (whether temporary, preliminary or
permanent) which is then in effect and has the effect of making the consummation of the transactions contemplated hereby illegal or otherwise enjoining, restraining or prohibiting consummation of (x) the sale, purchase and issuance of the
Convert and Warrant Securities pursuant to this Agreement or (y) the Transaction;
(ii) (A) all conditions precedent to the closing of the Transaction set forth in Article 6 of the Business Combination Agreement shall have been satisfied (which shall be deemed satisfied if
mutually determined by the applicable parties to the Business Combination Agreement and other than those conditions under the Business Combination Agreement that, by their nature are to be satisfied in connection with the closing of the
Transaction, including to the extent that any such condition is dependent upon the consummation of the sale, purchase and issuance of the Convert and Warrant Securities pursuant to this Agreement) or waived by the applicable parties to
the Business Combination Agreement as provided therein and (B) the closing of the Transaction shall be scheduled to occur concurrently with or on the same date as the Convertible Note Closing or on such other date as is mutually agreed by
New Adagio and the Investor; and
(iii) The payment in full of the Existing Credit Facility (as defined in the Bridge Note) and the termination of the liens on and security interest in the assets of the Company granted in
connection therewith in a manner acceptable to the Investor.
(b) The obligation of New Adagio to consummate the sale and issuance of the Convert and Warrant Securities pursuant to this Agreement shall be subject to the conditions (which may be waived
in writing (email being sufficient) by New Adagio with the prior written consent of ARYA (not to be unreasonably withheld, conditioned or delayed)) that (i) all representations and warranties of the Investor or the Company contained in
this Agreement are true and correct in all material respects at and as of the Convertible Note Closing (except for (i) those representations and warranties qualified by materiality, which shall be true and correct in all respects as of
the Convertible Note Closing and (ii) those representations and warranties that speak as of a specified earlier date, which shall be so true and correct in all material respects (or, if qualified by materiality, in all respects) as of
such specified earlier date) and (ii) all obligations, covenants and agreements of the Investor or the Company required to be performed by it at or prior to the Convertible Note Closing shall have been performed in all material respects.
(c) The obligation of the Investor to consummate the purchase of the Convert and Warrant Securities pursuant to this Agreement shall be subject to the conditions (which may be waived in
writing (email being sufficient) by the Investor) that (i) all representations and warranties of New Adagio and the Company contained in this Agreement shall be true and correct in all material respects at and as of the Convertible Note
Closing (other than representations and warranties that are qualified as to materiality or a material adverse effect on the legal authority of New Adagio or the Company to comply in all material respects with the terms of this Agreement,
which representations and warranties shall be true and correct in all respects) at and as of the Convertible Note Closing (except for those representations and warranties that speak as of a specified earlier date, which shall be so true
and correct in all material respects as of such specified earlier date); (ii) New Adagio and the Company shall have performed, satisfied and complied in all material respects with all obligations, covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by it at or prior to the Convertible Note Closing; and (iii) no Event of Default (as defined in the Bridge Note) under the Bridge Note shall have occurred or be
continuing.
Section 3
REDUCTION OF INVESTOR COMMITMENT
3.1 Following the date hereof, if the Company, ARYA or New Adagio receives any financing or commitment for financing for which, in either case, the proceeds of such financing are available
to the Company, ARYA or New Adagio, as applicable, on or prior to the Transaction Closing Date (any such financing, an “Additional Financing”), whether in the form of equity, debt or convertible debt, other than pursuant to the
financing agreements set forth on Exhibit D hereto, the gross proceeds (notwithstanding any fees netted therefrom) of such Additional Financing shall be applied, in the sole discretion of the Investor, pursuant to written
instructions delivered by the Investor to the Company and New Adagio three (3) business days prior to the Convertible Note Closing:
(a) prior to the cancellation (or transfer to New Adagio) of the Bridge Note and issuance of the Converted Bridge Note, to repay and retire the Bridge Note, or such portion thereof as
directed by the Investor, and to deliver to the account specified by the Investor immediately available funds corresponding to the Bridge Note repayment request made by the Investor;
(b) to reduce the Investor Convertible Note Commitment; or
(c) a combination of (a) and (b).
Notwithstanding the foregoing or any
provision set forth herein, the Company shall be permitted to refinance the Existing Credit Facility and any further refinancing thereof.
3.2 To the extent that the gross proceeds of any Additional Financing is applied as set forth in Section 3.1, the number of Warrant Shares into which the Warrants may be exercised
shall be reduced in proportion to the amount that the sum of the Bridge Note Principal Amount and Investor Convertible Note Commitment is reduced pursuant to Section 3.1.
3.3 The Investor agrees that to the extent the gross proceeds of any Additional Financing is applied at the option of the Investor to reduce the Additional Cash (as defined in the Perceptive
PIPE Agreement (as defined below)) to be invested by the Investor pursuant to the subscription agreement, dated February 13, 2024, by and between the Investor, ARYA and New Adagio (the “Perceptive PIPE Agreement”), then such
Additional Financing may not also be applied as set forth in Section 3.1 hereof.
Section 4
Representations and Warranties of THE Investor
The Investor hereby represents,
warrants and covenants to the Company as follows:
4.1 Authorization, Etc. The Investor is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or formation; and all action on the
part of the Investor necessary for the authorization, execution and delivery of this Agreement and the other Transaction Documents (as defined herein) and the performance of all obligations of the Investor hereunder and thereunder has
been taken or will be taken prior to the issuance of the applicable Securities.
4.2 Validity. This Agreement and the other Transaction Documents to which the Investor is a party constitute valid and legally binding obligations of the Investor, enforceable against
the Investor in accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as
limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
4.3 Purchase for Own Account. The Investor is acquiring the Bridge Note and the Convert and Warrant Securities (together, the “Bridge and Convert Securities”) and any equity
securities directly or indirectly issuable upon conversion of the Bridge and Convert Securities (such equity securities together with the Bridge and Convert Securities, the “Securities”) solely for investment for the Investor’s own
account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. The
acquisition by the Investor of any of the Securities shall constitute confirmation of the representation by the Investor that the Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer
or grant participations to such person or to any third person, with respect to any of the Securities. The Investor has full power and authority to enter into this Agreement, the Bridge and Convert Securities and any document delivered
pursuant to any provision hereof or thereof (collectively, the “Transaction Documents”).
4.4 Disclosure of Information. The Investor has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the Securities, the
offering of the Securities and the business, properties, prospects and financial condition of the Company. The foregoing shall not modify, amend or otherwise affect the Investor’s right to rely on the Company’s representations and
warranties contained in this Agreement.
4.5 Investment Experience. The Investor is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic
risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Securities. If other than an individual, the Investor also
represents it has not been organized for the purpose of acquiring the Securities. The Investor acknowledges that any investment in the Securities involves a high degree of risk, and represents that it is able, without materially impairing
its financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of its investment.
4.6 Accredited Investor. The Investor is an “accredited investor” within the meaning of Regulation D under the Securities Act of 1933, as amended (the “Act”).
4.7 Restrictions on Transfer. The Investor understands that the Securities are characterized as “restricted securities” under the federal securities laws in as much as they are being
acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Act, only in certain limited circumstances. In
this connection, the Investor represents that it is familiar with Rule 144 promulgated under the Act, as presently in effect, and understands the resale limitations imposed thereby and by the Act. The Investor understands that the
Securities have not been and will not be registered under the Act and have not been and will not be registered or qualified in any state in which they are offered, and the Investor will not be able to resell or otherwise transfer his, her
or its Securities unless they are registered under the Act and registered or qualified under applicable state securities laws, or an exemption from such registration or qualification is available. The Investor has no immediate need for
liquidity in connection with this investment and does not anticipate that it will need to sell his, her or its Securities in the foreseeable future.
4.8 Further Limitations on Disposition. Prior to the closing of the Transaction, without in any way limiting the representations set forth above, the Investor further agrees not to
make any disposition of all or any portion of the Securities or assign any rights hereunder unless and until the transferee has agreed in writing for the benefit of the Company to be bound by this Agreement (including this ) and any other
agreement which the purchasers of new equity securities are required to execute and deliver, as provided for in Section 2 of the Bridge Note, and/or have entered into with the Company and by which the Investor is bound as of the date of
such disposition, and:
(a) There is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or
(b) An exemption from registration is available with respect to such proposed disposition;
4.9 Legends. The Investor understands and agrees that the Company will cause the legends set forth below or legends substantially equivalent thereto, to be placed upon the Securities,
together with any other legends that may be required by state or federal securities laws, or by any agreement to which the Investor may become party in accordance with the Securities or the Transaction:
THIS SECURITY AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR TRANSFERRED FOR VALUE DIRECTLY OR INDIRECTLY, IN THE ABSENCE
OF SUCH REGISTRATION UNDER THE ACT AND QUALIFICATION UNDER APPLICABLE STATE LAWS, OR PURSUANT TO AN EXEMPTION THEREFROM.
THIS SECURITY AND THE INDEBTEDNESS, RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE
IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT DATED AS OF FEBRUARY 13, 2024, AMONG THE COMPANY (AS DEFINED BELOW), THE INVESTOR (AS DEFINED BELOW), AND SILICON VALLEY BANK, A DIVISION OF FIRST-CITIZENS
BANK & TRUST COMPANY.
Section 5
Representations and Warranties of the Company
The Company hereby represents and
warrants to the Investor that:
5.1 Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has
all requisite power and authority to carry on its business as now conducted and as proposed to be conducted. The Company’s wholly-owned subsidiary, Adagio Medical GmbH, an entity organized under the laws of Germany (the “Subsidiary”)
is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and has all requisite power and authority to carry on its business as now conducted and as proposed to be conducted. The Company
and the Subsidiary are each duly qualified to transact business and are in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on their respective businesses or properties.
5.2 Authorization. All action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the
Bridge Note, the performance of all obligations of the Company hereunder and thereunder, and the authorization, issuance (or reservation for issuance), sale and delivery of the Bridge Note and any equity securities directly or indirectly
issuable upon conversion of the Bridge Note (such equity securities together with the Bridge Note, the “Bridge Securities”) has been taken or will be taken prior to the issuance of the applicable Bridge Securities. This Agreement
and the Bridge Note to which the Company is a party constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or
other equitable remedies.
5.3 Capitalization; Valid Issuance. Exhibit E attached hereto sets forth, as of the date hereof, all of the authorized, issued and outstanding equity securities of the Company
and the holders thereof. Except as set forth on Exhibit E, in the Agreement or in the Bridge Note, there are no equity securities of the Company issued, reserved for issuance or outstanding and no outstanding options, warrants,
convertible or exchangeable securities, securities exercisable for other securities, subscriptions, rights (including any preemptive rights), equity linked securities, calls or commitments of any character whatsoever to which the Company
is a party or may be bound requiring the issuance or sale of any equity securities of the Company. Except as set forth in Exhibit E, no stock plan, stock purchase, stock option or other agreement or understanding between the
Company and any holder of equity securities or rights to purchase equity securities provides for acceleration or other changes in the vesting provisions or terms of such agreements or understandings, or the lapse of a Company repurchase
right, upon the occurrence of any event. The Company has never adjusted or amended the exercise price of any stock options previously awarded, whether through amendment, cancellation, replacement grant, repricing, or any other means. To
the Company’s knowledge, no stock options, stock appreciation rights or other equity-based awards issued or granted by the Company are, or will be, subject to the penalties of Section 409A(a)(1) of the Internal Revenue Code of 1986, as
amended. All outstanding equity securities of the Company have been, or upon issuance will be, validly issued and are fully paid and nonassessable. The Company holds no equity securities or other ownership interests in any other person or
entity, other than the Subsidiary.
5.4 Financial Statements. The Company has provided to the Investor, a copy of the Company’s audited consolidated financial statements for the 12-month period ended December 31, 2022
(the balance sheet at December 31, 2022 being hereinafter referred to as the “Balance Sheet”, and all such financial statements being hereinafter referred to collectively as the “Financial Statements”). The Financial
Statements have been prepared in a manner consistent with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods covered (except that the Financial Statements have been prepared
without complete footnotes and are subject to year-end adjustments), and fairly present in all material respects the financial position and results of operations of the Company as of the date and for the periods covered thereby. At the
date of the Balance Sheet (the “Balance Sheet Date”), the Company and its Subsidiary have no liabilities or obligations, fixed, contingent, or otherwise, not reflected on the Balance Sheet (including liabilities which under GAAP
are not required to be reflected on the Balance Sheet) except for liabilities incurred in the ordinary course of business, which, individually or in the aggregate, are not material to the financial condition or operating results of the
Company. Except as disclosed in the Financial Statements, the Company is not a guarantor or indemnitor of any indebtedness of any other person or corporation.
5.5 Seniority of the Bridge Note. Except for, solely prior to the Convertible Note Closing, the Existing Credit Facility (as such term is defined in the Bridge Note), there is no
Indebtedness of the Company that ranks senior in right of payment to the Bridge Note, whether with respect to payment of principal, interest, redemption, fees, or penalties, or upon liquidation or dissolution of the Company, or otherwise.
The Investor, in its capacity as the Investor (as such term is defined in the 2023 Notes (as such term is defined in the Bridge Note)) and the holder of the 2023 Notes and the Second 2023 Notes Tranche, hereby consents to the issuance of
the Bridge Note and incurrence of Indebtedness by the Company pursuant to the Bridge Note. The Bridge Note shall rank pari passu in right of payment to the 2023 Notes and the Second 2023 Notes Tranche, whether with respect to
payment of principal, interest, redemption, fees, or penalties, or upon liquidation or dissolution of the Company, or otherwise. Prior to the earlier of (i) thirty (30) days following the issuance of the Bridge Note and (ii) the
consummation of the Transaction, the Company shall deliver to the Investor, in form and substance reasonably satisfactory to the Investor, an omnibus amendment (the “Omnibus Amendment”) to the convertible promissory notes issued by
the Company on October 27, 2022 (the “2022 Notes”), executed by the Company and the requisite investors holding the 2022 Notes, which subordinates the 2022 Notes to the Bridge Note issued and sold pursuant to this Agreement. As of
the Convertible Note Closing, the Closing Date Convertible Note and Converted Bridge Note shall rank pari passu in right of payment and liens to other New Adagio Convertible Notes that will be issued by New Adagio upon the
consummation of the Transaction, whether with respect to payment of principal, interest, redemption, fees, or penalties, or upon liquidation or dissolution of the Company or New Adagio, or otherwise.
5.6 Indebtedness.
(a) As of the Bridge Note Closing, other than the Existing Credit Facility, the 2022 Notes, the 2023 Notes and the Second 2023 Notes Tranche, neither the Company nor its Subsidiary (i)
has any outstanding Indebtedness in an amount in excess of $1,000,000 (excluding intercompany Indebtedness), (ii) is in violation of any term of or in default under any contract, agreement or instrument relating to any such Indebtedness,
except where such violations and defaults would not reasonably be expected to result, individually or in the aggregate, in a Company Material Adverse Effect, or (iii) is a party to any contract, agreement or instrument relating to any
such Indebtedness, the performance of which, in the judgment of the Company’s officers, has or would reasonably be expected to have or is expected to have a Company Material Adverse Effect. As of the Bridge Note Closing, without limiting
the foregoing, the Company hereby represents and warrants that immediately before and after entering into and giving effect to this Agreement, the Company is not in default, and there exists no event of default, under the Existing Credit
Facility, the 2022 Notes, the 2023 Notes or the Second 2023 Notes Tranche, whether as a result of the transactions contemplated by the Transaction Documents or otherwise.
(b) As of the Convertible Note Closing, neither the Company nor its Subsidiary (i) has any outstanding Indebtedness (other than with respect to the New Adagio Convertible Notes) and
other than Indebtedness expressly permitted under the New Adagio Convertible Notes, (ii) is in violation of any term of or in default under any contract, agreement or instrument relating to any such Indebtedness, except where such
violations and defaults would not reasonably be expected to result, individually or in the aggregate, in a Company Material Adverse Effect, or (iii) is a party to any contract, agreement or instrument relating to any such Indebtedness,
the performance of which, in the judgment of the Company’s officers, has or would reasonably be expected to have or is expected to have a Company Material Adverse Effect. For purposes of this Agreement, “Company Material Adverse Effect”
means (a) a material adverse change in, or a material adverse effect upon, the results of operations, business, properties or condition (financial or otherwise) of the Company; (b) a material impairment of the ability of the Company to
perform in any material respect any of its or their respective obligations under the Bridge Note or this Agreement; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability of this Agreement or the
Bridge Note.
5.7 Litigation. There is no lawsuit, litigation, action, inquiry, audit, examination or investigation, claim, complaint, charge, proceeding, suit or arbitration (in each case, whether
civil, criminal or administrative and whether public or private) by or before or otherwise involving any Authority (as defined herein) (“Action”) pending or to the Company’s knowledge, currently threatened against the Company that
questions the validity of the Transaction Documents, the right of the Company to enter into this Agreement and the other Transaction Documents to which it is a party, or to consummate the transactions contemplated hereby or thereby, or
that would reasonably be expected to result, either individually or in the aggregate, in a Company Material Adverse Effect. The Company is not a party or subject to the provisions of any order, writ, injunction, judgment, ruling, decree,
judicial or arbitral award, subpoena, verdict, determination or decision entered, issued or rendered by an Authority (as defined herein) (“Order”) that would reasonably be expected to result in a Company Material Adverse Effect.
For the purpose of this Agreement, “Authority” means any United States or non-United States (i) federal, state, local, municipal or other government, (ii) governmental or quasi-governmental entity or (iii) body exercising or
entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, including any arbitrator or arbitral tribunal (public or private).
5.8 Absence of Certain Changes. The Company represents that since December 31, 2023, there has been no material adverse change in the assets, operations or financial condition of the
Company taken as a whole. The Company has not taken any steps with any governmental agency or authority or any other regulatory or self-regulatory agency or authority to seek protection pursuant to any bankruptcy law nor does the Company
have any knowledge or reasonable basis to believe that its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. As of the Bridge Note Closing,
the Company is not, and, as of the Convertible Note Closing, after giving effect to the transactions contemplated hereby to occur at the Convertible Note Closing, New Adagio will not be Insolvent (as defined herein). For purposes of this
Section , “Insolvent” means, with respect to any person (i) such person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured in the
ordinary course, (ii) such person intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature in the ordinary course or (iii) such person has unreasonably small capital with which to
conduct the business in which it is engaged, as such business is now conducted. For purposes of the foregoing, the amount of any contingent liability at any time shall be computed as the amount that, in light of all facts and
circumstances existing at the time, represents the amount that could reasonably be expected to become an actual liability.
5.9 Absence of Required Consents; No Violations; Compliance with Laws. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or
filing with, any Authority on the part of the Company or its Subsidiary is required in connection with the consummation of the transactions contemplated by this Agreement, except for such filing(s) pursuant to applicable state securities
laws as may be necessary, which filings will be timely effected after the Bridge Note Closing or the Convertible Note Closing, as applicable. The Company is not in violation or default of any provision of the Company’s Amended and
Restated Certificate of Incorporation or the Company’s bylaws. The Company and its Subsidiary are in compliance in all material respects with all applicable federal, national, state, local, foreign, national, multinational or
supranational statutes, laws (including common law and, if applicable, fiduciary or similar duties), acts, statutes, ordinances, treaties, rules, codes and regulations (“Laws”) and Orders, and to the Company’s knowledge, neither of
them have been charged with any violation of any applicable Law or Order, except as would not reasonably be expected to be, individually or in the aggregate, material to the Company. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any Order
or contract or an event that results in the creation of any material lien, charge or encumbrance upon any material assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license,
authorization or approval applicable to the Company, its Subsidiary, or their respective businesses or operations or any of their respective assets or properties.
5.10 Taxes. The Company has either (i) timely filed or (ii) timely filed extensions, solely to the extent such extensions are sought in the ordinary course of business, for, all
federal, provincial, state, municipal, non-U.S. and other tax returns and reports required to be filed, and have timely paid all federal, provincial, state, municipal, non-U.S. and other taxes levied or imposed upon them or their
properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP and,
except for failures to file or pay as could not, either individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect. There are no tax audits, deficiencies, assessments or other claims with
respect to the Company that could, either individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect.
5.11 Offering. Subject in part to the truth and accuracy of the Investor’s representations set forth in of this Agreement, the offer, sale and issuance of the Bridge Securities by the
Company as contemplated by this Agreement are exempt from the registration requirements of the Act and will not result in a violation of the qualification or registration requirements of any applicable state securities laws, and neither
the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption.
5.12 Valid Issuance of Securities. As of the Convertible Note Closing, the equity securities issuable by the Company upon conversion of the Bridge Note have been or will have been
prior to their issuance duly and validly reserved for issuance, and when issued, sold and delivered in accordance with the terms of the Bridge Note, will be duly and validly issued, fully paid and nonassessable.
5.13 No “Bad Actor” Disqualification. The Company has exercised reasonable care to determine whether any Company Covered Person (as defined herein) is subject to any of the “bad actor”
disqualifications described in Rule 506(d)(1)(i) through (viii), as modified by Rules 506(d)(2) and (d)(3), under the Act (“Disqualification Events”). To the Company’s knowledge, no Company Covered Person is subject to a
Disqualification Event. The Company has complied, to the extent required, with any disclosure obligations under Rule 506(e) under the Act. For purposes of this Agreement, “Company Covered Persons” are those persons specified in
Rule 506(d)(1) under the Act; provided, however, that Company Covered Persons do not include (a) the Investor, or (b) any person or entity that is deemed to be an affiliated issuer of the Company solely as a result of the relationship
between the Company and the Investor.
5.14 Use of Proceeds. The Company shall use the proceeds of the Bridge Note (i) solely for working capital purposes for the operation of its business, and not for any personal, family
or household purpose and (ii) in compliance with all applicable Laws.
Section 6
Representations
and Warranties of New Adagio
New Adagio hereby represents and
warrants to the Investor that:
6.1 Organization, Good Standing and Qualification. New Adagio is duly incorporated and validly existing as a corporation in good standing under the laws of the State of Delaware. New
Adagio 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 Agreement and the
Convert and Warrant Securities.
6.2 Authorization. All action on the part of New Adagio, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the
Convert and Warrant Securities, the performance of all obligations of New Adagio hereunder and thereunder, and the authorization, issuance (or reservation for issuance), sale and delivery of the Convert and Warrant Securities and any
equity securities directly or indirectly issuable upon conversion of the Convert and Warrant Securities (such equity securities, the “Convert Equity Securities”) has been taken or will be taken prior to the issuance of the
applicable Convert Equity Securities. This Agreement and the Convert and Warrant Securities to which New Adagio is a party constitute valid and legally binding obligations of New Adagio, enforceable against New Adagio in accordance with
their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable remedies.
6.3 Capitalization; Valid Issuance. The authorized share capital of New Adagio (excluding the issued share capital) consists of one thousand (1,000) share of Common Stock and the
issued share capital of New Adagio consists of one (1) share of Common Stock. Immediately following the Convertible Note Closing, all of the issued and outstanding shares of Common Stock (A) shall be duly authorized, validly issued, fully
paid and nonassessable, (B) shall have been issued in compliance with applicable law and (C) shall not have been issued in breach or violation of any preemptive rights or contract. There are no shareholder agreements, voting trusts or
other agreements or understandings to which New Adagio is a party or by which it is bound relating to the voting of any securities of New Adagio, other than (1) as set forth in any form, report, statement, schedule, proxy and other
document filed by ARYA on or prior to the Convertible Note Closing and (2) as contemplated by the Business Combination Agreement.
6.4 Seniority of the Closing Date Convertible Note and the Converted Bridge Note. There is no Indebtedness of New Adagio that ranks senior in right of payment to the Closing Date
Convertible Note and the Converted Bridge Note, whether with respect to payment of principal, interest, redemption, fees, or penalties, or upon liquidation or dissolution of New Adagio, or otherwise. The Closing Date Convertible Note and
Converted Bridge Note shall rank pari passu in right of payment to other New Adagio Convertible Notes that will be issued by New Adagio upon the consummation of the Transaction, whether with respect to payment of principal,
interest, redemption, fees, or penalties, or upon liquidation or dissolution of New Adagio or the Company, or otherwise.
6.5 Indebtedness. As of the Bridge Note Closing, New Adagio has no outstanding Indebtedness. As of the Convertible Note Closing, except for the New Adagio Convertible Notes, neither
New Adagio nor any of its subsidiaries (i) have any outstanding Indebtedness other than Indebtedness expressly permitted under the New Adagio Convertible Notes to exist on the Transaction Closing Date, (ii) is in violation of any term of
or in default under any contract, agreement or instrument relating to any such Indebtedness, except where such violations and defaults would not reasonably be expected to result, individually or in the aggregate, in a New Adagio Material
Adverse Effect, or (iii) is a party to any contract, agreement or instrument relating to any such Indebtedness, the performance of which, in the judgment of New Adagio’s officers, has or would reasonably be expected to have or is expected
to have a New Adagio Material Adverse Effect. For purposes of this Agreement, “New Adagio Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the results of operations, business,
properties or condition (financial or otherwise) of New Adagio; (b) a material impairment of the ability of New Adagio to perform in any material respect any of its or their respective obligations under the the Closing Date Convertible
Note, the Converted Bridge Note or this Agreement; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability of this Agreement, the Closing Date Convertible Note or the Converted Bridge Note.
6.6 Litigation. There is no Action pending or to New Adagio’s knowledge, currently threatened against New Adagio that questions the validity of the Transaction Documents, the right of
New Adagio to enter into this Agreement and the other Transaction Documents to which it is a party, or to consummate the transactions contemplated hereby or thereby, that would prohibit the listing of the shares of Common Stock or Convert
Equity Securities, or the registration of, when issued in connection with the closing of the Transaction, the shares of Common Stock or Convert Equity Securities under the Exchange Act, or that would reasonably be expected to result,
either individually or in the aggregate, in a New Adagio Material Adverse Effect. New Adagio is not a party or subject to the provisions of any Order that would reasonably be expected to result in a New Adagio Material Adverse Effect.
6.7 Absence of Certain Changes. There has been no material adverse change in the assets, operations or financial condition of New Adagio taken as a whole. New Adagio has not taken any
steps with any governmental agency or authority or any other regulatory or self-regulatory agency or authority to seek protection pursuant to any bankruptcy law nor does New Adagio have any knowledge or reasonable basis to believe that
its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. After giving effect to the transactions contemplated hereby to occur at the
Convertible Note Closing, will not be Insolvent (as defined herein). For purposes of this Section 6.7, “Insolvent” means, with respect to any person (i) such person is unable to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and matured in the ordinary course, (ii) such person intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature
in the ordinary course or (iii) such person has unreasonably small capital with which to conduct the business in which it is engaged, as such business is now conducted. For purposes of the foregoing, the amount of any contingent liability
at any time shall be computed as the amount that, in light of all facts and circumstances existing at the time, represents the amount that could reasonably be expected to become an actual liability.
6.8 Absence of Required Consents; No Violations; Compliance with Laws. Assuming the accuracy of the representations and warranties of the Investor, no consent, approval, order or
authorization of, or registration, qualification, designation, declaration or filing with, any Authority on the part of New Adagio is required in connection with the consummation of the transactions contemplated by this Agreement, other
than (i) filings with the U.S. Securities and Exchange Commission, (ii) filings required by applicable state securities laws, (iii) filings required by Nasdaq, or such other applicable stock exchange on which shares of Common Stock will
be listed, (iv) those required to consummate the Transaction as provided under the Business Combination Agreement, and (v) those of which the failure to obtain would not be reasonably likely to have, individually or in the aggregate, a
New Adagio Material Adverse Effect. New Adagio is not in violation or default of any provision of New Adagio’s certificate of incorporation or New Adagio’s bylaws. New Adagio is in compliance in all material respects with all Laws and
Orders, and to New Adagio’s knowledge, neither of them have been charged with any violation of any applicable Law or Order, except as would not reasonably be expected to be, individually or in the aggregate, material to New Adagio. The
execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving
of notice, either a default under any Order or contract or an event that results in the creation of any material lien, charge or encumbrance upon any material assets of New Adagio or the suspension, revocation, impairment, forfeiture or
nonrenewal of any material permit, license, authorization or approval applicable to New Adagio, or its operations, assets or properties.
6.9 Taxes. New Adagio has either (i) timely filed or (ii) timely filed extensions, solely to the extent such extensions are sought in the ordinary course of business, for, all
federal, provincial, state, municipal, non-U.S. and other tax returns and reports required to be filed, and have timely paid all federal, provincial, state, municipal, non-U.S. and other taxes levied or imposed upon them or their
properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP and,
except for failures to file or pay as could not, either individually or in the aggregate, reasonably be expected to result in a New Adagio Material Adverse Effect. There are no tax audits, deficiencies, assessments or other claims with
respect to New Adagio that could, either individually or in the aggregate, reasonably be expected to result in a New Adagio Material Adverse Effect.
6.10 Offering. Subject in part to the truth and accuracy of the Investor’s representations set forth in of this Agreement, the offer, sale and issuance of the Convert and Warrant
Securities and the Convert Equity Securities by New Adagio as contemplated by this Agreement are exempt from the registration requirements of the Act and will not result in a violation of the qualification or registration requirements of
any applicable state securities laws, and neither New Adagio nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption.
6.11 Valid Issuance of Securities. The Convert Equity Securities have been or will have been prior to their issuance duly and validly reserved for issuance, and when issued, sold and
delivered in accordance with the terms of the applicable Convert and Warrant Securities, will be duly and validly issued, fully paid and nonassessable.
6.12 No “Bad Actor” Disqualification. New Adagio has exercised reasonable care to determine whether any New Adagio Covered Person (as defined herein) is subject to any of the “bad
actor” disqualifications described in Rule 506(d)(1)(i) through (viii), as modified by Rules 506(d)(2) and (d)(3), under the Act (“New Adagio Disqualification Events”). To New Adagio’s knowledge, no New Adagio Covered Person is
subject to a New Adagio Disqualification Event. New Adagio has complied, to the extent required, with any disclosure obligations under Rule 506(e) under the Act. For purposes of this Agreement, “New Adagio Covered Persons” are
those persons specified in Rule 506(d)(1) under the Act; provided, however, that New Adagio Covered Persons do not include (a) the Investor, or (b) any person or entity that is deemed to be an affiliated issuer of New Adagio solely as a
result of the relationship between New Adagio and the Investor.
6.13 Use of Proceeds. New Adagio shall use the proceeds of the Convert and Warrant Securities (i) solely for working capital purposes for the operation of its business, and not for any
personal, family or household purpose and (ii) in compliance with all applicable Laws.
Section 7
Miscellaneous
7.1 Termination. The obligation of the Investor and New Adagio to consummate the purchase and sale of the Convert and Warrant Securities pursuant to this Agreement shall terminate and
be void and of no further force and effect, and all rights and obligations of the parties hereunder with respect to such obligation shall terminate without any further liability on the part of any party in respect thereof, upon the
earliest to occur of (a) such date and time as the Business Combination Agreement is terminated in accordance with its terms, (b) upon the mutual written agreement of each of the parties hereto to terminate this Agreement, and (c) the
delivery of a notice of termination of this Agreement by the Investor to New Adagio following the date that is thirty (30) calendar days after the Termination Date (as defined in the Business Combination Agreement, and such thirtieth
calendar day, the “Outside Date”), if the Convertible Note Closing has not occurred by the Outside Date (provided, that the right to terminate this Agreement pursuant to this clause (c) shall not be available to the Investor if the
Investor’s breach of any of its covenants or obligations under this Agreement, either individually or in the aggregate, shall have proximately caused the failure of the consummation of the Transaction on or before the Outside Date) (the
termination events described in clauses (a)–(c) above, collectively, the “Termination Events”); provided that nothing herein will relieve any party from liability for any willful and material breach of any covenant, agreement,
obligation, representation or warranty hereunder 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 and material
breach. New Adagio shall notify the Investor of the termination of the Business Combination Agreement as promptly as practicable after the termination of the Business Combination Agreement. Except for Section 7.2 of this Agreement
which shall survive a Termination Event, this Agreement shall, upon the occurrence of a Termination Event, be void and of no further effect and any monies paid by the Investor to New Adagio in connection with the purchase and sale of the
Convert and Warrant Securities shall promptly (and in any event within one (1) business day) following the Termination Event be returned to the Investor.
7.2 Board Appointment. Within thirty (30) days following the Bridge Note Closing Date, the Company shall use its best efforts to take action necessary to procure the consent, or
commitment of the necessary shareholders to consent, to the nomination right of the Investor that permits the Investor to require the Company to appoint such number of directors designated by the Investor (such directors, the “Investor
Directors”) to serve on the board of directors of the Company (the “Board”) as would cause the Investor Directors to comprise a majority of the Board.
7.3 Survival. The warranties, representations and covenants of the Company, New Adagio and Investor contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement, the Bridge Note (and the Bridge Note Closing) and the Convertible Note (and the Convertible Note Closing) and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf
of the Investor, the Company or New Adagio.
7.4 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties (including transferees of any Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. The Investor may assign any or all of its rights or obligations under Section 2 to any Affiliate (as
defined herein) of the Investor; provided, however, that no such assignment shall relieve the Investor of any of its obligations hereunder except to the extent actually performed and the Investor shall remain liable, on a joint and
several basis and without duplication, for all its obligations under this Agreement until the termination of this Agreement except to the extent actually performed. For the purpose of this Agreement, “Affiliate” means with respect
to any person, any person which directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person.
7.5 Governing Law. This Agreement, each Transaction Document (unless otherwise expressly set forth therein), and all disputes and Actions arising out of or in connection with the
foregoing shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to conflict of law principles thereof.
7.6 Submission to Jurisdiction. Each of the parties irrevocably and unconditionally submits to the exclusive jurisdiction of the Chancery Court of the State of Delaware (or, if the
Chancery Court of the State of Delaware declines to accept jurisdiction, any federal court within the State of Delaware, and then, if such federal court declines to accept jurisdiction, any state or federal court within New York, New
York), for the purposes of any Action (i) arising under this Agreement or under any Transaction Document (unless otherwise expressly set forth therein) or (ii) in any way connected with or related or incidental to the dealings of the
parties in respect of this Agreement or any Transaction Document (unless otherwise expressly set forth therein) or any of the transactions contemplated hereby or any of the transactions contemplated thereby, and irrevocably and
unconditionally waives any objection to the laying of venue of any such Action in any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Action has been brought
in an inconvenient forum. Each party hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Action or cause thereof against such party (x) arising under
this Agreement or under any Transaction Document (unless otherwise expressly set forth therein) or (y) in any way connected with or related or incidental to the dealings of the parties in respect of this Agreement or any Transaction
Document (unless otherwise expressly set forth therein) or any of the transactions contemplated hereby or any of the transactions contemplated thereby, (a) any claim that such party is not personally subject to the jurisdiction of the
courts as described in this Section for any reason, (b) that such party or such party’s property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through
service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (x) the Action or cause thereof in any such court is brought against such party in an
inconvenient forum, (y) the venue of such Action or cause thereof against such party is improper; or (z) this Agreement, or the subject matter hereof, may not be enforced against such party in or by such courts. Each party agrees that
service of any process, summons, notice or document by registered mail to such party’s respective address set forth on their signature pages hereto shall be effective service of process for any such Action, demand, or cause thereof.
7.7 Waiver of Jury Trial. EACH OF THE PARTIES HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY PROCEEDING, CLAIM, DEMAND, ACTION, OR CAUSE OF
ACTION (I) ARISING UNDER THIS AGREEMENT OR UNDER ANY TRANSACTION DOCUMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES IN RESPECT OF THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY OF THE
TRANSACTIONS RELATED HERETO OR THERETO OR ANY FINANCING IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY, OR OTHERWISE. THE PARTIES EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH PROCEEDING, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION .
7.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same
instrument. Facsimile and electronic (including PDF) signatures shall be as effective as original signatures.
7.9 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
7.10 Notices. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and shall be
conclusively deemed to have been duly given (a) when hand delivered to the other party; (b) three business days after deposit in the U.S. mail with first class or certified mail receipt requested postage prepaid; or (c) the next business
day after deposit with a national overnight delivery service, postage prepaid, addressed to the Investor or the Company as set forth on their respective signature pages hereto. A party may change or supplement its address, or designate
additional addresses, for purposes of this Section by giving the other parties written notice of the new address in the manner set forth above.
7.11 Amendments and Waivers. Any term of this Agreement, the Bridge Notes or Convert and Warrant Securities may be amended and the observance of any term of this Agreement, the Bridge
Notes or Convert and Warrant Securities may be waived (either generally or in a particular instance and either retroactively or prospectively), only by prior written agreement between the Company, New Adagio and the Investor.
7.12 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance
of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
7.13 Expenses. Each of the Company, New Adagio and the Investor will bear all of its own expenses in connection with the preparation, execution and negotiation of the Transaction
Documents and the transactions contemplated hereby and thereby. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement or any of the other Transaction Documents, the prevailing party shall be
entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. Notwithstanding anything to the contrary contained herein, at the Bridge Note Closing, the
Company shall pay the reasonable fees and expenses of the Investor, in an amount not to exceed, in the aggregate, $35,000.
7.14 Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties with respect to the subject matter hereof and no party
shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein.
7.15 Non-Recourse. This Agreement may only be enforced against, and any action for breach of this Agreement may only be made against, the parties to this Agreement, and without
limiting the generality of the foregoing, none of the Representatives of any party to this Agreement shall have any liability arising out of or relating to this Agreement, the negotiation hereof or its subject matter or the transactions
contemplated hereby, including with respect to any claim (whether in tort, contract or otherwise) for breach of this 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 the avoidance of doubt, for claims pursuant to any Transaction Document by any party(ies) thereto against any other party(ies) thereto on the terms and subject to the conditions therein. “Representatives”
shall mean, with respect to a person, such person’s Affiliates and its and such Affiliates’ respective directors, officers, employees, advisors, agents, consultants, attorneys, accountants, investment bankers or other representatives.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties have executed this Note Purchase Agreement
as of the date first above written.
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COMPANY: |
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ADAGIO MEDICAL, INC. |
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By: |
/s/ John Dahldorf |
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Name: |
John Dahldorf |
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Title: |
Chief Financial Officer |
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Address for notices: |
26051 Merit Cir #102 |
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Laguna Hills, CA 92653 |
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Attn: John Dahldorf |
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Email: jdahldorf@adagiomedical.com |
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With a copy (which shall not constitute notice) to:
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Address: |
Reed Smith LLP |
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1901 Avenue of the Stars, Suite 700 |
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Los Angeles, CA 90067-6078 |
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Attn: Michael Sanders |
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Benjamin L. Brimeyer |
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Email: MSanders@reedsmith.com |
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BBrimeyer@reedsmith.com |
IN WITNESS WHEREOF, the parties have
executed this Note Purchase Agreement as of the date first above written.
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NEW ADAGIO |
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AJA HOLDCO, INC. |
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By: |
/s/ Michael Altman |
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Name: |
Michael Altman |
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Title: |
Authorized Signatory |
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Address for notices: |
Perceptive Advisors
51 Astor Place, 10th Floor
New York, NY 10003
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Attn: Michael Altman |
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Email: |
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Michael@perceptivelife.com |
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With a copy (which shall not constitute notice) to: |
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Address: |
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022 |
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Attn: Jonathan L. Davis, P.C. |
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Ryan K. Brissette, P.C. |
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Email: jonathan.davis@kirkland.com |
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ryan.brissette@kirkland.com |
IN WITNESS WHEREOF, the parties have
executed this Note Purchase Agreement as of the date first above written.
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THE INVESTOR: |
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PERCEPTIVE LIFE SCIENCES MASTER FUND, LTD. |
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By: |
/s/ Michael Altman |
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Name: |
Michael Altman |
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Title: |
Authorized Signatory |
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Address for notices: |
Perceptive Advisors
51 Astor Place, 10th Floor
New York, NY 10003
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Attn: Michael Altman |
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Email: |
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Michael@perceptivelife.com |
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With a copy (which shall not constitute notice) to: |
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Address: |
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022 |
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Attn: Jonathan L. Davis, P.C. |
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Ryan K. Brissette, P.C. |
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Email: jonathan.davis@kirkland.com |
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ryan.brissette@kirkland.com |
EXHIBIT A
Bridge Note
THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR TRANSFERRED FOR VALUE DIRECTLY OR INDIRECTLY, IN THE ABSENCE OF SUCH
REGISTRATION UNDER THE ACT AND QUALIFICATION UNDER APPLICABLE STATE LAWS, OR PURSUANT TO AN EXEMPTION THEREFROM.
THIS NOTE AND THE INDEBTEDNESS, RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN
THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT DATED AS OF FEBRUARY 13, 2024, AMONG THE COMPANY (AS DEFINED BELOW), THE INVESTOR (AS DEFINED BELOW), AND SILICON VALLEY BANK, A DIVISION OF FIRST-CITIZENS
BANK & TRUST COMPANY.
ADAGIO MEDICAL, INC.
CONVERTIBLE PROMISSORY NOTE
| Initial Principal Amount: $7,000,000 |
[●], 2024 |
FOR VALUE RECEIVED, Adagio Medical,
Inc., a Delaware corporation (the “Company”) promises to pay to Perceptive Life Sciences Master Fund, Ltd. (the “Investor”), or its registered assigns, the principal sum of SEVEN MILLION DOLLARS ($7,000,000), or such lesser
amount as shall equal the outstanding principal amount hereof (the “Principal Amount”), together with interest from the date of this convertible promissory note (this “Note”) on the unpaid principal balance at a rate equal
to 8% per annum (the “Interest Rate”), computed on the basis of the actual number of days elapsed and a year of 365 days. If an Event of Default (as defined below) occurs and is continuing, the Interest Rate shall increase to 12%
per annum while such Event of Default is continuing. The then-outstanding Principal Amount, together with any then unpaid and accrued interest payable hereunder, shall be due and payable upon the termination of the Business Combination
Agreement in accordance with its terms (the “Maturity Date”).
This Note is issued pursuant to that
certain Note Purchase Agreement dated as of the date hereof (the “Agreement”; together with this Note, the “Note Documents”) between the Company and the Investor, dated the date hereof. Capitalized terms used herein and not
otherwise defined have the meanings given them in the Agreement.
1. Payments.
(a) Interest. Interest on the Principal Amount will accrue at the then applicable Interest Rate and shall be payable on the Maturity Date.
(b) Dividends. Following the issuance date of this Note, when, as and if a dividend is declared on the Common Stock or any equivalents thereof, the Investor shall participate in such
dividend, in an amount determined on an as-converted basis as though this Note had been converted pursuant to Section 2 hereof.
(c) Voluntary Prepayment. This Note may not be prepaid without the consent of the Investor.
(d) Maturity. The Principal Amount and any accrued and unpaid interest, is due and payable on the Maturity Date.
(e) Change of Control Transaction; Liquidation Event. (A) In the event of: (i) a merger or consolidation of the Company with or into another person or entity; (ii) a reorganization,
business combination or the sale by the Company of its voting equity securities after the consummation of which the equityholders of the Company immediately before such transaction own in the aggregate less than fifty percent (50%) of the
Company’s equity value or voting power after the transaction; or (iii) the sale or exclusive license of a substantial portion of the Company’s intellectual property or the sale, lease or other disposition by the Company of all or
substantially all of its assets to another entity, in each case whether direct or indirect, whether in a single transaction or series of transactions, and whether by merger, consolidation, recapitalization, purchase or issuance of equity
securities, purchase of assets, tender offer or otherwise (collectively subsections (i), (ii), and (iii) of this Section 1(d), a “Change of Control Transaction”; provided, however, that the Transaction shall not constitute
a Change of Control Transaction hereunder) or (B) in the event that the Company liquidates, dissolves or winds up its business and affairs as a result of (i) a voluntary decision to cease operating or (ii) a proceeding described in either
of Section 3(e) or Section 3(f) (a “Liquidation Event”; provided, however, that the Transaction shall not constitute a Liquidation Event hereunder), unless this Note is converted pursuant to Section 2(b),
the Company shall, immediately upon the consummation of the Change of Control Transaction or the Liquidation Event and prior to any payment to the equityholders of the Company, pay to the Investor an amount equal to the greater of (x)
120% of the sum of (i) the then-outstanding Principal Amount and all accrued and unpaid interest hereunder plus (ii) all accrued and unpaid dividends owed to the Investor pursuant to Section 1(b) and (y) such amount of
proceeds as if all then-outstanding Principal Amount and any accrued and unpaid interest with respect to the Note had been converted into Common Stock (the “Liquidation Preference”).
2. Conversion. The Investor and the Company agree as follows:
(a) Business Combination Transaction Conversion. In the event of the consummation of the Transaction, effective upon the closing of the Transaction, this Note shall automatically be
cancelled (or transferred to New Adagio) in connection with the issuance of New Adagio Convertible Notes (in the form of the New Adagio Convertible Note attached as Exhibit B to the Agreement) to the Investor, pursuant to, and in
accordance with, the Agreement and the securities purchase agreement, dated February 13, 2024, by and among New Adagio, ARYA, the Company and the Investor. Any interest accrued on the Principal Amount shall be forfeited in connection with
a cancellation (or transfer of the Note to New Adagio) described in this Section 2(a).
(b) Post-Business Combination Termination Conversions. In the event of the termination or abandonment of the Transaction:
(i) Prior to a Qualified Financing (as defined below), the Investor may, at the sole discretion of the Investor exercisable at any time, convert all, but not less than all, of the
then-outstanding Principal Amount of this Note and any accrued and unpaid interest thereon into an amount of shares of the Company’s Series E Preferred Stock (as defined in the Company’s Certificate of Incorporation) equal to the to be
converted Principal Amount and any accrued and unpaid interest divided by the price per share/unit equal to $24,000,000 divided by the Company’s fully-diluted Common Stock equivalents at the time of the closing date of the conversion
pursuant to this Section 2(b) (assuming conversion of all securities convertible into Common Stock and exercise of all outstanding options and warrants, including all shares of Common Stock reserved and available for future grant
under any equity incentive or similar plan of the Company, and/or any equity incentive or similar plan to be created or increased in connection any financing, but excluding the shares of equity securities of the Company issuable upon the
conversion of this Note); provided, that the Company shall cause the shares of Series E Preferred Stock issued upon conversion of this Note to bear an aggregate liquidation preference amount equal to 120% of the then-outstanding
Principal Amount and accrued and unpaid interest under this Note at the time of conversion (and for the avoidance of doubt, the Company shall, if necessary, create a sub-series of the Series E Preferred Stock on identical terms to Series
E Preferred Stock, except that the aggregate liquidation preference of such sub-series will be an amount equal to 120% of the then-outstanding Principal Amount and accrued and unpaid interest under this Note at the time of conversion); or
(ii) In the event of any sale of a new series or class of preferred equity securities by the Company following the termination or abandonment of the Transaction with aggregate proceeds to the
Company of at least $10,000,000 (excluding conversion of the Note, the Second 2023 Notes Tranche (as defined below), the 2023 Notes (as defined below) and the 2022 Notes (as defined below)) (a “Qualified Financing”), Investor will
elect to convert the then-outstanding Principal Amount and any accrued and unpaid interest hereunder and under the 2023 Notes and the Second 2023 Notes Tranche into either (A) the Company’s Series E Preferred Stock, as described in
Section 2(b)(i) or (B) such securities, shares or units to be issued and sold in such Qualified Financing, in each case in an amount that is equal to (I) the to be converted Principal Amount and any accrued and unpaid interest divided
by (II) the price per share/unit equal to the lesser of (aa) 75% of the per share/unit price in such Qualified Financing and (bb) an amount equal to $24,000,000 divided by the number of fully-diluted Common Stock (or unit) equivalents at
the time of the Qualified Financing (assuming conversion of all securities convertible into Common Stock and exercise of all outstanding options and warrants, including all shares of Common Stock reserved and available for future grant
under any equity incentive or similar plan of the Company, and/or any equity incentive or similar plan to be created or increased in connection with the Qualified Financing, but excluding the shares of equity securities of the Company
issuable upon the conversion of this Note, the 2023 Notes, the Second 2023 Notes Tranche or in connection with the Qualified Financing). In the event that the preferred equity security issued in the Qualified Financing bears a liquidation
preference less than 120%, then the Company shall create a sub-series of such preferred security on identical terms to the security issued in the Qualified Financing, except that the aggregate liquidation preference of such sub-series
will be an amount equal to 120% of the then-outstanding Principal Amount and accrued and unpaid interest under this Note, the 2023 Notes and the Second 2023 Notes Tranche at the time of conversion. Notwithstanding the foregoing, nothing
herein shall be deemed to cause or require the conversion of any amount of principal or interest under this note in connection with a Qualified Financing, unless at the time of such Qualified Financing (x) the Company is not in breach or
default of any term or provision of this Note or the Agreement (and no such breach or default has previously occurred), (y) the Company certifies to Investor that the Company’s representations and warranties set forth in Sections 4.1,
4.2, 4.3, 4.6, 4.10, 4.11, 4.12, 4.13 and the first and second sentences of Section 4.9 of the Agreement are, in each case, true and correct in all material respects as of the date of the Qualified Financing, and (z) there has been no
Material Adverse Effect.
(c) Procedure. Solely in connection with a conversion pursuant to Section 2(b) above, the Investor shall execute and deliver to the Company all commercially reasonable
transaction documents (i) entered into by holders of the Company’s Series E Preferred Stock, or (ii) to be executed by other purchasers in a Qualified Financing, as applicable, with customary representations, covenants, warranties,
registration rights and transfer restrictions (including, without limitation, (A) the same registration rights granted to investors in the fourth amended and restated investors’ rights agreement, dated November 9, 2020, by and among the
Company and the Investor, and (B) a 180-day lock-up agreement in connection with an initial public offering on all shares held prior to the initial public offering; provided that all officers and directors of the Company enter into the
same lock-up agreement and if any shareholders (other than any non-management shareholders who individually hold less than two percent (2%) of the issued and outstanding shares of capital stock of the Company) execute lock-up agreements
with transfer restrictions for a shorter period of time or are exempted from transfer restrictions following the closing of the initial public offering, then such shorter transfer restrictions or exemption from transfer restrictions shall
also apply to the Investor). At least five (5) business days prior to the closing of a Qualified Financing, the Investor shall have received form final drafts of any documents to be executed by the Investor in such a Qualified Financing
and shall have the right to approve any such documents prior to the execution by other purchasers.
In the case of a conversion of this
Note pursuant to paragraphs (a) or (b) above, as applicable, the Investor shall deliver the original of this Note for cancellation (or an affidavit of loss in lieu thereof). Notwithstanding the forgoing, upon a conversion of this Note
pursuant to paragraphs (a) or (b) above, as applicable, this Note shall be deemed converted and of no further force and effect, whether or not delivered for cancellation. The Company shall, as soon as practicable thereafter and at
Investor’s option, issue and deliver to the Investor a certificate or certificates for the securities to which Investor shall be entitled upon such conversion or make appropriate book-entry notation on the books and records of the
post-Transaction company or the Company, as applicable, for the number of securities to which the Investor shall be entitled upon conversion of this Note.
3. Events of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note:
(a) Failure to Pay. The Company shall fail to pay when due any principal payment or any interest payment or other payment required under the terms of this Note; or
(b) Breaches of Covenants.
(i) The Company shall breach or otherwise fail to observe, keep or perform any of the provisions of Section 6; or
(ii) The Company shall fail to observe, keep or perform any other covenant, obligation, condition or agreement contained in any Note Document, and such failure shall continue for thirty (30)
days after the earlier of the Company’s (i) receipt of written notice to the Company of such failure or (ii) actual knowledge of such failure; or
(c) Breaches of Representations and Warranties. Any of the representations and warranties of the Company under any Note Document or hereafter made shall fail to be true and correct in
all material respects as of the date of this Note; or
(d) Other Payment Obligations. (i) As to Indebtedness (as defined herein) for borrowed money of the Company (other than the SVB Debt (as defined below)), in each case, in an
aggregate amount in excess of One Hundred Thousand Dollars ($100,000) at any time: (A) the Company shall fail to make any payment due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) on any such
Indebtedness and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness, (B) any other default shall exist under any agreement or instrument of the
Company related to any such Indebtedness or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument if the effect of such default or event is to accelerate, or
to permit the acceleration of, the maturity of such Indebtedness, or (C) any such Indebtedness shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled required payment) prior to the stated
maturity thereof and (ii) as to Indebtedness incurred under the Existing Credit Facility (the “SVB Debt”): (A) the Company shall fail to make any payment due (whether by scheduled maturity, required prepayment, acceleration, demand
or otherwise) on the SVB Debt and such failure shall continue after the applicable grace period, if any, specified in the Existing Credit Facility or (B) any other default shall exist under the Existing Credit Facility or any other
agreement or instrument of the Company related to the SVB Debt or any other event, shall occur and shall continue after the applicable grace period, if any, specified therein if the effect of such default or event is to accelerate the
maturity of the SVB Debt;
(e) Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all
or a substantial part of its property, (ii) admit in writing its inability to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, (v)
commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such
relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vi) take any action for the purpose of effecting any of the foregoing, including but
not limited to any board resolution approving the winding up, dissolution or liquidation of the Company; or
(f) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company, or of all or a substantial part
of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or any of its subsidiaries, if any, or the debts thereof under any bankruptcy, insolvency
or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within 45 days of commencement; or
(g) Judgements. A judgment or order shall be rendered against the Company and such judgment or order shall remain unsatisfied or undischarged and in effect for thirty (30) consecutive
days without a stay of enforcement or execution; provided that this Section 3(g) shall not apply (i) to any judgment for which the Company is fully insured (except for normal deductibles in connection therewith) and with
respect to which the insurer has assumed the defense and is not defending under reservation of right and with respect to which the Investor reasonably believes the insurer will pay the full amount thereof (except for normal deductibles in
connection therewith) or (ii) to the extent that the aggregate amount of all such judgments and orders does not exceed $250,000.
4. Rights of Investor upon Default. Upon the occurrence of any Event of Default (other than an Event of Default described in Sections 3(a), 3(e) or 3(f))
and at any time thereafter during the continuance of such Event of Default, the Investor may, by prior written notice to the Company, declare all outstanding obligations payable by the Company under this Note to be immediately due and
payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. Upon the occurrence of any Event of Default described in Sections 3(a), 3(e) or 3(f),
immediately and without notice to the Company, all outstanding obligations payable by the Company under this Note shall automatically become immediately due and payable. In addition, upon the occurrence and during the continuance of any
Event of Default, the Investor may exercise any other right power or remedy permitted to it by law, either by suit in equity or by action at law, or both.
5. Information Rights of Investor. As long as any Principal Amount, together with any accrued and unpaid interest, remains outstanding under this Note, the Company shall
deliver to the Investor all notices, information and copies of all documentation that the Company is required to deliver to SVB (as defined herein) pursuant to Section 5.3 of the Existing Credit Facility (as in effect on the date hereof)
concurrently with the delivery of such notices, information and documentation to SVB. Notwithstanding any notification obligations of the Company pursuant to the Existing Credit Facility, the Company shall also promptly (and in no event
later than three (3) business days after the Company becomes aware thereof) notify Investor of any proposal for, occurrence of, or any change in the status of, (a) any proposed material transaction involving the Company (including,
without limitation, any Change of Control Transaction, any transaction or a series of transactions involving the Company and/or any of its affiliates with one or more “special purpose acquisition”, “blank check” or similar companies
(whether by business combination, tender offer or otherwise)), (b) any equity investment or similar investment (including, without limitation, any convertible debt investment) in the Company and/or any of its affiliates, or (c) any
transfer or contemplated transfer of the Company’s equity securities giving rise to any tag-along, co-sale, right of first refusal, right of first offer, right of participation, preemptive rights, or other similar rights of any person, in
each case, other than the Transaction or the Transaction Financing Transactions. For purposes of this Note, “Transaction Financing Transactions” means the New Adagio Convertible Notes and the private investment in public equity of
ARYA and New Adagio to be consummated in connection with the consummation of the Transaction, as set forth in the Business Combination Agreement.
6. Negative Consent Rights. As long as any Principal Amount, together with any accrued and unpaid interest, remains outstanding under this Note, the Company shall not,
without the prior written consent of the Investor, (i) take any actions which are prohibited by Sections 6.1, 6.2, 6.3, 6.4 (provided that no additional Subordinated Debt (as defined in the Existing Facility as in effect on the date
hereof) shall be permitted; provided further that, notwithstanding the foregoing, the Company shall be permitted to refinance the Existing Credit Facility and any further refinancing thereof), 6.5 (other than Liens incurred refinancing
the Existing Credit Facility and any further refinancings thereof), 6.7, 6.8, 6.9 or 6.10 of the Existing Credit Facility (as in effect on the date hereof) or (ii) incur any additional Indebtedness of the Company unless such Indebtedness
is expressly subordinated to this Note on terms acceptable to the Investor. Notwithstanding the foregoing and anything to the contrary herein or in the Agreement, the consent of the Investor shall not be required for, and nothing herein
or in the Agreement shall prohibit, and the Company shall be permitted to, execute and deliver, and perform its obligations under, the contemplated Securities Purchase Agreement to be entered by and among Aja Holdo, Inc., a Delaware
corporation, ARYA, the Company, Allegro Opportunities LLC, and each of the other investors to be parties thereto as buyers (the “New Adagio Financing Agreement”).
7. Senior Indebtedness. The Company and the Investor agree that this Note is a general senior unsecured obligation of the Company ranking senior in right of payment to
any existing Indebtedness of the Company (other than the Existing Credit Facility) and any future Indebtedness of the Company (other than any Indebtedness incurred in connection with the New Adagio Financing Agreement). The Company and
the Investor agree that, to the extent and manner provided in that certain Subordination Agreement, made as of February 13, 2024, by and among the Investor and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (“SVB”),
the obligations evidenced by this Note are subordinated in right of payment to the prior payment in full of that certain Loan and Security Agreement dated as of February 3, 2023 (the “Existing Credit Facility”) among the Company
and SVB and any obligation thereunder (whether outstanding on the date hereof or thereafter created or incurred (other than unasserted contingent indemnification obligations and any unasserted contingent expense reimbursement obligations
that, at such time, have not been incurred)). Following the execution of the Omnibus Amendment by and among the Company and the investors holding the Company’s convertible notes dated October 27, 2022 (such convertible notes, the “2022
Notes”), the 2022 Notes will be subordinated to the Note. The Note is pari passu to (i) the convertible promissory note, dated March 27, 2023, issued by the Company to the Investor (the “2023 Initial Note”), (ii) each
of the convertible promissory notes, dated June 30, 2023, July 31, 2023, August 31, 2023, September 29, 2023, and October 26, 2023, issued by the Company to the Investor (collectively, the “2023 Delayed Draw Notes”, and together
with the 2023 Initial Note, the “2023 Notes”), (iii) the convertible promissory note, dated November 28, 2023, issued by the Company to the Investor (the “Second 2023 Initial Note”), and (iv) each of the convertible
promissory notes, dated December 13, 2023, December 28, 2023 and January 29, 2024, issued, and that may be issued subsequently to the date hereof, by the Company to the Investor (collectively, the “Second 2023 Delayed Draw Notes”,
and together with the 2023 Initial Note, the “Second 2023 Notes Tranche”). “Indebtedness” shall mean all amounts due in connection with (i) indebtedness of the Company to banks or other lending institutions regularly engaged
in the business of lending money (excluding venture capital, investment banking or similar institutions and their affiliates, which sometimes engage in lending activities but which are primarily engaged in investments in equity
securities), and (ii) any such indebtedness or any debentures, notes or other evidence of indebtedness issued in exchange for such indebtedness, or any indebtedness arising from the satisfaction of such indebtedness by a guarantor.
8. Miscellaneous.
(a) Transfer. This Note shall be registered. The Company will keep, at its principal executive office, books for the registration and registration of transfer of this Note. Prior to
presentation of this Note for registration of transfer, the Company shall treat the Investor as the owner and holder of this Note for all purposes whatsoever. The holder of this Note, at its option, may in person or by duly authorized
attorney surrender the same for exchange at the Company’s chief executive office, and promptly thereafter and at the Company’s expense, receive in exchange therefor one or more new Note(s), dated the date of this Note and registered in
the name of such person or persons as shall have been designated in writing by such holder or its attorney for the same principal amount as the then-outstanding Principal Amount and any accrued and unpaid interest. Upon receipt by the
Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it; or (b) in the
case of mutilation, upon surrender thereof, the Company, at its expense, will execute and deliver in lieu thereof a new Note executed in the same manner as this Note, in the same principal amount as the then-outstanding Principal Amount
and any accrued and unpaid interest and dated the date to which interest shall have been paid on this Note or, if no interest shall have yet been so paid, dated the date of this Note. This Note may not be transferred, assigned or
delegated by the Company without the prior written consent of the Investor. The Investor may assign this Note without the prior written consent of the Company to any of its affiliates, so long as the applicable assignee executes a joinder
to this Note, in form and substance reasonably satisfactory to the Company, pursuant to which such assignee agrees to be bound by the terms hereof as though such assignee were the Investor. This Note and all of the provisions hereof shall
inure to the benefit of the parties hereto and their respective permitted successors and assigns.
(b) Waiver and Amendment. This Note may not be amended, waived or modified without the prior explicit written agreement of the Company and the Investor.
(c) Notices. All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be in writing and delivered in the manner set forth
in the Agreement.
(d) Payment. Unless converted into the Company’s equity securities pursuant to the terms hereof or otherwise set forth herein, payment shall be made in lawful tender of the United
States.
(e) Usury. In the event any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an
amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.
(f) Governing Law. This Note and all disputes and Actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of the State
of Delaware, without giving effect to conflict of law principles thereof.
(g) Submission to Jurisdiction. Each of the parties irrevocably and unconditionally submits to the exclusive jurisdiction of the Chancery Court of the State of Delaware (or, if the
Chancery Court of the State of Delaware declines to accept jurisdiction, any federal court within the State of Delaware, and then, if such federal court declines to accept jurisdiction, any state or federal court within New York, New
York), for the purposes of any Action (i) arising under this Note or (ii) in any way connected with or related or incidental to the dealings of the parties in respect of this Note or any of the transactions contemplated hereby or any of
the transactions contemplated thereby, and irrevocably and unconditionally waives any objection to the laying of venue of any such Action in any such court, and further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such Action has been brought in an inconvenient forum. Each party hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in
any Action or cause thereof against such party (x) arising under this Note or (y) in any way connected with or related or incidental to the dealings of the parties in respect of this Note or any of the transactions contemplated hereby or
any of the transactions contemplated thereby, (a) any claim that such party is not personally subject to the jurisdiction of the courts as described in this Section 8(g) for any reason, (b) that such party or such party’s property
is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of
judgment or otherwise) and (c) that (x) the Action or cause thereof in any such court is brought against such party in an inconvenient forum, (y) the venue of such Action or cause thereof against such party is improper; or (z) this Note,
or the subject matter hereof, may not be enforced against such party in or by such courts. Each party agrees that service of any process, summons, notice or document by registered mail to such party’s respective address set forth on their
signature pages hereto shall be effective service of process for any such Action, demand, or cause thereof.
(h) Waiver of Jury Trial. EACH OF THE PARTIES HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY PROCEEDING, CLAIM, DEMAND, ACTION, OR CAUSE OF
ACTION (I) ARISING UNDER THIS NOTE OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES IN RESPECT OF THIS NOTE OR ANY OF THE TRANSACTIONS RELATED HERETO OR THERETO OR ANY FINANCING IN CONNECTION WITH
THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. EACH OF THE PARTIES HEREBY AGREES AND
CONSENTS THAT ANY SUCH PROCEEDING, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS NOTE WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH
SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS NOTE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8(H).
(i) Investor Protections. To the maximum extent permitted by law, the Company waives all rights to presentment, demand, protest or any other notice of any kind in respect of payment of this Note. No course of
dealing by any Investor, or the failure, forbearance or delay by any Investor in exercising any rights or remedies under this Note shall operate as a waiver of any event of default or of any right of the Investor hereunder. The Company
agrees to pay the Investor’s reasonable costs in collecting and enforcing this Note, including reasonable attorney’s fees.
(j) Counterparts. This Note may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile and electronic
(including PDF) signatures shall be as effective as original signatures.
[Signature Page Follows]
The Company has caused this Note to be issued as of the date first written
above.
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COMPANY: |
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ADAGIO MEDICAL, INC. |
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By: |
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Name: |
John Dahldorf |
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Title: |
Chief Financial Officer |
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THE INVESTOR: |
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PERCEPTIVE LIFE SCIENCES MASTER FUND, LTD. |
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By: |
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Name: |
Michael Altman |
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Title: |
Authorized Signatory |
EXHIBIT B
New Adagio Convertible Notes
[See attached.]
EXHIBIT C
Warrant
[See attached.]
EXHIBIT D
[Intentionally omitted.]
EXHIBIT E
CAPITALIZATION
[Intentionally omitted.]
Exhibit 10.9
[FORM OF WARRANT]
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. 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. THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH
ON THE FACE HEREOF PURSUANT TO SECTION OF THIS WARRANT.
Aja Holdco, Inc.
Warrant To Purchase Common Stock
Warrant No.:
Date of Issuance: [ ], 2024 (“Issuance Date”)
Aja Holdco, Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, [BUYER], the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth
below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or
replacement hereof, the “Warrant”), at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), _________________1 (subject to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined below) (the “Warrant Shares”, and such number of Warrant Shares, the “Warrant
Number”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 19. This Warrant is one of the Warrants to Purchase Common Stock (the “SPA Warrants”) issued
pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of [ ], 2024 (the “Subscription Date”), by and among the Company and the investors (the “Buyers”) referred to therein, as
amended from time to time (the “Securities Purchase Agreement”).
75% Warrant coverage
1.
EXERCISE OF WARRANT.
(a) Mechanics of Exercise. Subject to the terms and
conditions hereof (including, without limitation, the limitations set forth in Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date (an “Exercise Date”), in whole or in part, by
delivery (whether via electronic mail or otherwise) of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading Day
following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which
this Warrant was so exercised (the “Aggregate Exercise Price”) in cash or via wire transfer of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant to a
Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all
of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise
Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first (1st) Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit by facsimile or electronic mail an
acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder and the Company’s transfer agent (the “Transfer Agent”), which confirmation shall constitute
an instruction to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading Day following the date on which the Company has received such Exercise Notice (or such earlier
date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise Date), the Company shall (X) provided that the Transfer Agent
is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to
such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program (“FAST”),
upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of
Common Stock to which the Holder shall be entitled pursuant to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with
respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares (as the case may be). If
this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon
an exercise and upon surrender of this Warrant to the Company by the Holder, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than two (2) Business Days after any exercise and at its own
expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant,
less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall
be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. Notwithstanding the foregoing, except in the case where an exercise of this Warrant is validly made pursuant to a Cashless Exercise, the Company’s
failure to deliver Warrant Shares to the Holder on or prior to the later of (i) two (2) Trading Days after receipt of the applicable Exercise Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule
or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt of the Aggregate Exercise Price (or valid notice of a Cashless
Exercise) (such later date, the “Share Delivery Date”) shall not be deemed to be a breach of this Warrant. Notwithstanding anything to the contrary contained in this Warrant or the Registration Rights Agreement, after the effective
date of the Registration Statement (as defined in the Registration Rights Agreement) and prior to the Holder’s receipt of the notice of a Grace Period (as defined in the Registration Rights Agreement), the Company shall cause the Transfer
Agent to deliver unlegended shares of Common Stock to the Holder (or its designee) in connection with any sale of Registrable Securities (as defined in the Registration Rights Agreement) with respect to which the Holder 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, and for which the Holder has not yet settled. From the Issuance Date through and including the
Expiration Date, the Company shall maintain a transfer agent that participates in FAST.
(b) Exercise Price. For purposes of this Warrant,
“Exercise Price” means $24.00, subject to adjustment as provided herein.
(c) Company’s Failure to Timely Deliver Securities.
If the Company shall fail, for any reason or for no reason, on or prior to the Share Delivery Date, either (I) if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder (or its designee) a certificate for the
number of Warrant Shares to which the Holder is entitled and register such Warrant Shares on the Company’s share register or, if the Transfer Agent is participating in FAST, to credit the balance account of the Holder or the Holder’s
designee with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the case may be) or (II) if a Registration Statement covering the resale of the Warrant Shares that are the
subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares and the Company fails to promptly, but in no event later than as required pursuant to the
Registration Rights Agreement (x) so notify the Holder and (y) deliver the Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such
exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure” and
together with the event described in clause (I) above, a “Delivery Failure”), then, in addition to all other remedies available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery
Date and during such Delivery Failure an amount equal to 1% of the product of (A) the sum of the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled,
multiplied by (B) any trading price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise Date and ending on the applicable Share Delivery Date, and (Y) the
Holder, upon written notice to the Company, may void its Exercise Notice with respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided
that the voiding of an Exercise Notice shall not affect the Company’s obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise. In addition to the foregoing, if on or
prior to the Share Delivery Date either (I) the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, the Company shall fail to issue and deliver to the Holder (or its designee) a certificate and
register such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, the Transfer Agent shall fail to credit the balance account of the
Holder or the Holder’s designee with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below or (II) a Notice
Failure occurs, and if on or after such Share Delivery Date the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or any portion of the number of shares of Common Stock
issuable upon such exercise that the Holder is entitled to receive from the Company and has not received from the Company in connection with such Delivery Failure or Notice Failure, as applicable (a “Buy-In”), then, in addition to
all other remedies available to the Holder, the Company shall, within two (2) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase
price (including brokerage commissions, stock loan costs and other out-of-pocket expenses, if any) for the shares of Common Stock so acquired (including, without limitation, by any other Person in respect, or on behalf, of the Holder)
(the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate (and to issue such shares of Common Stock) or credit the balance account of such Holder or such Holder’s designee, as
applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation to
so issue and deliver to the Holder a certificate or certificates representing such Warrant Shares or credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to which
the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Warrant Shares multiplied by
(B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii) (the “Buy-In
Payment Amount”). Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the exercise of this Warrant as required pursuant to the terms hereof.
While this Warrant is outstanding, the Company shall cause its transfer agent to participate in FAST. In addition to the foregoing rights, (i) if the Company fails to deliver the applicable number of Warrant Shares upon an exercise
pursuant to Section 1 by the applicable Share Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return, as the case may be, any portion of this Warrant that
has not been exercised pursuant to such Exercise Notice; provided that the rescission of an exercise shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this
Section 1(c) or otherwise, and (ii) if a registration statement covering the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Warrant
Shares and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such registration statement and the Company has not already delivered the Warrant Shares underlying such Exercise Notice
electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit /
Withdrawal At Custodian system, the Holder shall have the option, by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any portion of this Warrant
that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to
this Section 1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless Exercise.
(d) Cashless Exercise. Notwithstanding anything
contained herein to the contrary (other than Section 1(f) below), if, at any time of exercise hereof following the one-year anniversary of the Form 10 Disclosure Filing Date, a Registration Statement (as defined in the Registration Rights
Agreement) is not effective (or the prospectus contained therein is not available for use) for the resale by the Holder of all of the Warrant Shares, then the Holder may, in its sole discretion, exercise this Warrant in whole or in part
and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of Warrant Shares
determined according to the following formula (a “Cashless Exercise”):
Net Number = (A x B) - (A x C)
B
For purposes of the foregoing formula:
A= the total number of shares with respect to which this Warrant is then being exercised.
B = as elected by the Holder: (i) the VWAP of the shares of Common Stock on the Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the
opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately
preceding the date of the applicable Exercise Notice or (z) the Bid Price of the shares of Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is executed during “regular trading
hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 1(a) hereof, or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise
Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close of “regular trading hours” on such Trading Day.
C = the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
If the Warrant Shares are issued in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of
the 1933 Act, the Warrant Shares take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated under the 1933 Act, as in effect on the Subscription Date, it is intended that the Warrant
Shares issued in a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the
Securities Purchase Agreement.
(e) Disputes. In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed
and resolve such dispute in accordance with Section 15.
(f) Limitations on Exercises. The Company shall
not effect the exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be null and void and
treated as if never made, to the extent that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the
shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties
shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and
(B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including other SPA Warrants)
beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 1(f). For purposes of this Section 1(f), beneficial ownership shall be
calculated in accordance with Section 13(d) of the 1934 Act. For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage,
the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the
SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported
Outstanding Share Number”). If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i)
notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 1(f), to
exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be acquired pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the “Reduction Shares”)
and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, the Company
shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the
event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of
the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the
Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after the
issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to
time increase (with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage to any
other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of SPA Warrants that is
not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for
any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph
with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) to the extent
necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 1(f) or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.
(g) Reservation of Shares.
(i) Required Reserve Amount. So long as
this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as shall be necessary
to satisfy the Company’s obligation to issue shares of Common Stock under the SPA Warrants then outstanding (without regard to any limitations on exercise) (the “Required Reserve Amount”); provided that at no time shall the number
of shares of Common Stock reserved pursuant to this Section 1(g)(i) be reduced other than proportionally in connection with any exercise or redemption of SPA Warrants or such other event covered by Section 2(a) below. The Required Reserve
Amount (including, without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the SPA Warrants based on number of shares of Common Stock issuable upon exercise of SPA Warrants
held by each holder on the Closing Date (without regard to any limitations on exercise) or increase in the number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall sell or
otherwise transfer any of such holder’s SPA Warrants, each transferee shall be allocated a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold
any SPA Warrants shall be allocated to the remaining holders of SPA Warrants, pro rata based on the number of shares of Common Stock issuable upon exercise of the SPA Warrants then held by such holders (without regard to any limitations
on exercise).
(ii) Insufficient Authorized Shares. If,
notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any time while any of the SPA Warrants remain outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to
satisfy its obligation to reserve the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount
sufficient to allow the Company to reserve the Required Reserve Amount for all the SPA Warrants then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an
Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized
shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of
Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure, the Company is able to obtain the written
consent of a majority of the shares of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and
submitting for filing with the SEC an Information Statement on Schedule 14C. In the event that the Company is prohibited from issuing shares of Common Stock upon an exercise of this Warrant due to the failure by the Company to have
sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization
Failure Shares to the Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such Authorization Failure Shares at a price equal to the sum of (i) the product of (x) such number
of Authorization Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the applicable Exercise Notice with respect to such Authorization
Failure Shares to the Company and ending on the date of such issuance and payment under this Section 1(g); and (ii) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of Authorization Failure Shares, any Buy-In Payment Amount, brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in this
Section 1(g) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement.
2. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 2.
(a) Stock Dividends and Splits. Without limiting
any provision of Section 3 or Section 4, if the Company, at any time on or after the Subscription Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise makes a distribution on
any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger
number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the
period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.
(b) Extraordinary Dividends. If the Company, at
any time while this Warrant is outstanding and unexpired, shall pay a dividend or make a distribution in cash, securities or other assets to the holders of the shares of Common Stock on account of such Common Stock (or other shares of the
Company’s capital stock into which this Warrant is convertible), other than (a) as described in subsection 2(a) above, or (b) Ordinary Cash Dividends (as defined below) (any such non-excluded event being referred to herein as an “Extraordinary
Dividend”), then the Exercise Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and/or the fair market value (as determined by the board of directors of
the Company, in good faith) of any securities or other assets paid on each share of Common Stock in respect of such Extraordinary Dividend. For purposes of this subsection 2(b), “Ordinary Cash Dividends” means any cash dividend or
cash distribution which, when combined on a per share basis, with the per share amounts of all other cash dividends and cash distributions paid on the Common Stock during the 365-day period ending on the date of declaration of such
dividend or distribution (as adjusted to appropriately reflect any of the events referred to in other subsections of this Section 2 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or
to the number of shares of Common Stock issuable on exercise of this Warrant) does not exceed $0.50.
(c) Number of Warrant Shares. Simultaneously with
any adjustment to the Exercise Price pursuant to this Section 2(a) or Section 2(b), the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on
exercise contained herein).
(d) Calculations. All calculations under this
Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at
any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
(e) Voluntary Adjustment By Company. Subject to
the rules and regulations of the Principal Market, the Company may at any time during the term of this Warrant, with the prior written consent of the Required Holders (as defined in the Securities Purchase Agreement), reduce the then
current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
3. [RESERVED].
4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase Rights. In addition to any
adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant,
issuance or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the
Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such
Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not
result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on
any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental Transactions. The Company shall
not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in the Securities
Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including
agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which is
exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior
to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction) and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the consummation
of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents
referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents
with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon
exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under
Section 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the
Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable
Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(f) hereof, the
Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any
other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common
Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable
Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable under Section 4(a) above, which shall continue to
be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or
subscription rights) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without
regard to any limitations on the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.
(c) Application. The provisions of this Section
shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations on the
exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable
upon exercise of this Warrant (or any such other warrant)).
5. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any
reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (a) shall
not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (b) shall take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant. Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day anniversary of the
Issuance Date, the Holder is not permitted to exercise this Warrant in full for any reason (other than pursuant to restrictions set forth in Section 1(f) hereof), the Company shall use its best efforts to promptly remedy such failure,
including, without limitation, obtaining such consents or approvals as necessary to permit such exercise into shares of Common Stock.
6. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share
capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any
right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or
subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.
7.
REISSUANCE OF WARRANTS.
(a) Transfer of Warrant. If this Warrant is to be
transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may
request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(b) Lost, Stolen or Mutilated Warrant. Upon receipt
by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall suffice as such
evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant,
the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
(c) Exchangeable for Multiple Warrants. This
Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of
Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants
for fractional shares of Common Stock shall be given.
(d) Issuance of New Warrants. Whenever the Company
is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant
Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same
as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.
8. NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with the terms hereof), including in reasonable detail a description of such action and the
reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth in reasonable
detail, and certifying, the calculation of such adjustment(s), (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of
Common Stock, or (B) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with
such notice being provided to the Holder, and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental Transaction. To the extent that any notice provided hereunder constitutes, or contains, material, non-public
information regarding the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities Purchase Agreement) pursuant to a Current Report on Form 8-K. If the Company or any
of its Subsidiaries provides material non-public information to the Holder that is not simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material non-public information, the Company hereby
covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of
the foregoing not to trade on the basis of, such material non-public information. It is expressly understood and agreed that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed
or challenged by the Company.
9. DISCLOSURE.
Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of this Warrant, unless the Company has in good faith determined that the matters relating to such notice do
not constitute material, non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York city time on the Business Day immediately following such notice delivery date, publicly
disclose such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company or any of its
Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication in such notice (or
notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information contained in the notice does not constitute material, non-public information relating to the
Company or any of its Subsidiaries. Nothing contained in this Section 9 shall limit any obligations of the Company, or any rights of the Holder, under Section 4(i) of the Securities Purchase Agreement.
10. ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any
information provided by the Company or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an officer of the Holder that explicitly provides for
such confidentiality and trading restrictions. In the absence of such an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by the Company, may possess and use
any information provided by the Company in connection with such trading activity, and may disclose any such information to any third party.
11. AMENDMENT
AND WAIVER. Except for Section 1(f) of this Warrant, which may not be amended, modified or waived, this Warrant may only be amended or modified by written instrument executed by both the Company and the Holder. Any amendment or
modification or so approved shall be binding upon all existing and future holders of this Warrant.
12. SEVERABILITY.
If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as
so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
13. GOVERNING
LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of
the State of New York, without giving effect to any 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. The
Company 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 the Company at the address set forth in Section 9(f) of the Securities
Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and 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. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit
or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other
court ruling in favor of the Holder. THE COMPANY 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 WITH OR ARISING OUT OF THIS
WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
14. CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall
not form part of, or affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Closing Date (as defined in the Securities
Purchase Agreement) in such other Transaction Documents unless otherwise consented to in writing by the Holder.
15. DISPUTE
RESOLUTION.
(a) Submission to Dispute Resolution.
(i) In the case of a dispute relating to the
Exercise Price, the Closing Sale Price, the Bid Price or fair market value or the arithmetic calculation of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating to the determination of any
of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving rise to
such dispute or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute relating to such Exercise Price, such
Closing Sale Price, such Bid Price or such fair market value or such arithmetic calculation of the number of Warrant Shares (as the case may be), at any time after the second (2nd) Business Day following such initial notice by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option,
select an independent, reputable investment bank to resolve such dispute.
(ii) The Holder and the Company shall each
deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance with the first sentence of this Section 15 and (B) written documentation supporting its position with respect to such dispute, in each
case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the Holder selected such investment
bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood and
agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no
longer be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based solely on
the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment
bank, neither the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii) The Company and the Holder shall cause such
investment bank to determine the resolution of such dispute and notify the Company and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses of such
investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final and binding upon all parties absent manifest error.
(b) Miscellaneous. The Company expressly
acknowledges and agrees that (i) this Section 15 constitutes an agreement to arbitrate between the Company and the Holder (and constitutes an arbitration agreement) under the rules then in effect § 7501, et seq. of the New York Civil
Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 15, (ii) the terms of this Warrant and each
other applicable Transaction Document shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all findings,
determinations and the like that such investment bank determines are required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute such investment bank shall apply such
findings, determinations and the like to the terms of this Warrant and any other applicable Transaction Documents, (iii) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in
this Section 15 to any state or federal court sitting in The City of New York, Borough of Manhattan, in lieu of utilizing the procedures set forth in this Section 15 and (iv) nothing in this Section 15 shall limit the Holder from
obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in this Section 15).
16. REMEDIES,
CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents,
at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual and consequential damages for any failure by the Company to comply
with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to
payments, exercises and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance
thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other equitable
relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The Company shall provide all information and documentation to the Holder that
is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including, without limitation, compliance with Section 2 hereof). The issuance of shares and certificates
for shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.
17. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the
holder otherwise takes action to collect amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership of the company or other proceedings affecting company
creditors’ rights and involving a claim under this Warrant, then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or
other proceeding, including, without limitation, attorneys’ fees and disbursements.
18. TRANSFER.
This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except as may otherwise be required by Section 2(g) of the Securities Purchase Agreement.
19. CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “1933 Act” means the Securities Act of 1933,
as amended, and the rules and regulations thereunder.
(b) “1934 Act” means the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder.
(c) “Affiliate” means, with respect to any
Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly or
indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(d) “Attribution Parties” means, collectively,
the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the Holder’s
investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or
any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For
clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(e) “Bid Price” means, for any security as of the
particular time of determination, the bid price for such security on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange or trading market
for such security, the bid price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not
apply, the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such security by
Bloomberg as of such time of determination, the average of the bid prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices) as
of such time of determination. If the Bid Price cannot be calculated for a security as of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall be the
fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures
in Section 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.
(f) “Bloomberg” means Bloomberg, L.P.
(g) “Business Day” means any day other than
Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch
locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
(h) “Closing Sale Price” means, for any security
as of any date, the last closing trade price for such security 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,
then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of
such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing does not apply, the last trade price of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any market makers for such security as reported in
The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale
Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute
shall be resolved in accordance with the procedures in Section 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.
(i) “Common Stock” means (i) the Company’s shares
of common stock, $0.0001 par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(j) “Convertible Securities” means any stock or
other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of
Common Stock.
(k) “Eligible Market” means The New York Stock
Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or the Principal Market.
(l) “Expiration Date” means the date that is the
seventh (7th) anniversary of the Issuance Date or, if such date falls on a day other than a Trading Day or on which trading does not take place on the
Principal Market (a “Holiday”), the next date that is not a Holiday.
(m) “Form 10 Disclosure Filing Date" means the date
on which the Company shall file with the SEC a Current Report on Form 8-K (or any other applicable form) that includes current “Form 10 information” (within the meaning of Rule 144) reflecting the Company’s status as an entity that is no
longer an issuer described in paragraph (i)(1)(i) of Rule 144.
(n) “Fundamental Transaction” means (A) that the
Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another
Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one
or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or
exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject
Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or
party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares
of Common Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities
whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of
Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of
Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify
its Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject Entities in the
aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in
outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner
whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock
not held by all such Subject Entities as of the date of this Warrant calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power
represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other shareholders of
the Company to surrender their shares of Common Stock without approval of the shareholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the
issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such
instrument or transaction.
(o) “Group” means a “group” as that term is used
in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
(p) “Notes” has the meaning ascribed to such term
in the Securities Purchase Agreement, and shall include all notes issued in exchange therefor or replacement thereof.
(q) “Options” means any rights, warrants or
options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(r) “Parent Entity” of a Person means an entity
that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent
Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(s) “Person” means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.
(t) “Principal Market” means the Nasdaq Capital
Market.
(u) “Registration Rights Agreement” means that
certain registration rights agreement, dated as of the Closing Date, by and among the Company and the initial holders of the Notes party thereto relating to, among other things, the registration of the resale of the Common Stock issuable
upon conversion of the Notes or otherwise pursuant to the terms of the Notes and exercise of the SPA Warrants, as may be amended from time to time.
(v) “SEC” means the United States Securities and
Exchange Commission or the successor thereto.
(w) “Subject Entity” means any Person, Persons or
Group or any Affiliate or associate of any such Person, Persons or Group.
(x) “Successor Entity” means the Person (or, if
so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been
entered into.
(y) “Trading Day” means, as applicable, (x) with
respect to all price or trading volume determinations relating to the Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock,
then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for
less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such
exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price or trading volume
determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.
(z) “VWAP” means, for any security as of any date,
the dollar volume-weighted average price for such security on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which
such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or, if the
foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at
4:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of
any of the market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated for such security on such date on any
of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved in accordance with the procedures in Section 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other
similar transaction during such period.
[signature page follows]
IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date
set out above.
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Aja Holdco, Inc. |
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EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
[ADAGIO MEDICAL HOLDINGS, INC.](F/K/A ARYA SCIENCES ACQUISITION CORP IV)
The undersigned holder hereby elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of [Adagio
Medical Holdings, Inc.](f/k/a ARYA Sciences Acquisition Corp IV), a Delaware corporation (the “Company”) as specified below. Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in
the Warrant.
1. Form of Exercise Price. The Holder intends that payment of the Aggregate Exercise Price shall be made as:
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a “Cash Exercise” with respect to _________________ Warrant Shares; and/or |
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a “Cashless Exercise” with respect to _______________ Warrant Shares; and/or |
In the event that the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant
hereto, the Holder hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date set forth below and (ii) if applicable, the Bid Price as of such time of execution of this
Exercise Notice was $________.
2. Payment of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all
of the Warrant Shares to be issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.
3. Delivery of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below,
__________ shares of Common Stock in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
☐ Check here if requesting delivery as a certificate to the following name and to the following address:
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Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: |
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Date: _____________ __, _____
__________________________
Name of Registered Holder
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Tax ID:____________________________ |
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EXHIBIT B
ACKNOWLEDGMENT
The Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged and agreed to by _______________.
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[Adagio Medical Holdings, Inc.](f/k/a ARYA Sciences Acquisition Corp IV) |
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Exhibit 10.10
FORM OF CONVERT
GUARANTY
This GUARANTY, dated as of __, 2024 (this “Guaranty”), is made by each of the undersigned (each a “Guarantor”, and collectively, the “Guarantors”), in favor of Allegro Management LLC, in its capacity as collateral agent (in such capacity, the “Collateral Agent” as hereinafter further defined) for the “Buyers” party to the Securities Purchase Agreement (each as defined below).
W I T N E S S E T H:
WHEREAS, AJA Holdco, Inc., a corporation organized under the laws of Delaware, with offices located at 51 Astor Place, 10th Floor, New York, New York 10003 (the “Company”), ARYA Sciences Acquisition Corp. IV, a company organized under the
laws of the Cayman Islands and each party listed as a “Buyer” on the Schedule of Buyers attached thereto (collectively, the “Buyers”) are parties to the
Securities Purchase Agreement, dated as of _____, 2024 (as amended, restated, extended, replaced or otherwise modified from time to time, the “Securities Purchase Agreement”), pursuant to which the
Company shall be required to sell, and the Buyers shall purchase or have the right to purchase, the “Notes” issued pursuant thereto (as such Notes may be amended, restated, extended, replaced or otherwise modified from time to time in
accordance with the terms thereof, collectively, the “Notes”);
WHEREAS, the Securities Purchase Agreement requires that the Guarantors execute and deliver to the Collateral Agent, (i) a guaranty
guaranteeing all of the obligations of the Company under the Securities Purchase Agreement, the Notes and the other Note Documents (as defined below); and (ii) a Security and Pledge Agreement, dated as of the date hereof, granting the
Collateral Agent a lien on and security interest in all of their assets and properties (the “Security Agreement”); and
WHEREAS, each Guarantor has determined that the execution, delivery and performance of this Guaranty directly benefits, and is in the best
interest of, such Guarantor.
NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities
Purchase Agreement, each Guarantor hereby agrees with each Buyer as follows:
SECTION 1. Definitions. Reference is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof. All terms used in this Guaranty and the recitals
hereto which are defined in the Securities Purchase Agreement or the Notes, and which are not otherwise defined herein shall have the same meanings herein as set forth therein. In addition, the following terms when used in the Guaranty
shall have the meanings set forth below:
“Bankruptcy Code” means Chapter 11 of Title 11 of the United States Code, 11 U.S.C §§ 101 et seq. (or
other applicable bankruptcy, insolvency or similar laws).
“Buyer” or “Buyers” shall have the meaning set forth in the
recitals hereto.
“Capital Stock” means (i) with respect to any Person that is a corporation, any and all shares,
interests, participations or other equivalents (however designated and whether or not voting) of corporate stock (including, without limitation, any warrants, options, rights or other securities exercisable or convertible into equity
interests or securities of such Person), and (ii) with respect to any Person that is not a corporation, any and all partnership, membership or other equity interests of such Person.
“Collateral” means all assets and properties of the Company and each Guarantor in which a security
interest is granted to the Collateral Agent pursuant to Section 3(a) of the Security Agreement.
“Collateral Agent” shall have the meaning set forth in the recitals hereto.
“Company” shall have the meaning set forth in the recitals hereto.
“Governmental Authority” means any nation, state, county, city, town, village, district, or other
political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity
and any court or other tribunal), multi-national organization or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature or
instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a government or a public international organization or any of the foregoing.
“Guaranteed Obligations” shall have the meaning set forth in Section 2 of this Guaranty.
“Guarantor” or “Guarantors” shall have the meaning set forth in
the recitals hereto.
“Indemnified Party” shall have the meaning set forth in Section 13(a) of this Guaranty.
“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of
the Bankruptcy Code or under any other bankruptcy or insolvency law, assignments for the benefit of creditors, or proceedings seeking reorganization, arrangement, or other similar relief.
“Note Documents” means, collectively, this Guaranty, as amended, modified, supplemented, renewed,
restated or replaced, the Securities Purchase Agreement, the Notes, and the Security Documents.
“Notes” shall have the meaning set forth in the recitals hereto.
“Obligations” shall have the meaning set forth in Section 4 of the Security Agreement.
“Paid in Full” or “Payment in Full” means the payment in full
in cash of all of the Guaranteed Obligations (other than contingent and indemnification obligations for which no claim has been asserted); provided, that, no written demand has been received by Collateral Agent within ninety (90) days of
such payment for the return of such payment, or any part thereof, as a preferential or fraudulent transfer pursuant to the Bankruptcy Code or any state law equivalent. If a demand under preceding proviso is received, the Guaranteed
Obligations will not be considered “Paid in Full” until the earlier of such demand being withdrawn or denied, and if payment is returned in connection with such demand, the Guaranteed Obligations will not be considered “Paid in Full”
until such time, if ever, that the payment in full in cash of all of the Guaranteed Obligations is subsequently satisfied.
“Securities Purchase Agreement” shall have the meaning set forth in the recitals hereto.
“Security Agreement” shall have the meaning set forth in the recitals hereto.
“Tax Code” means the Internal Revenue Code of 1986, as amended.
“Taxes” shall have the meaning set forth in the Section 12(a) of this Guaranty.
“Transaction Party” means the Company and each Guarantor, collectively, “Transaction Parties”.
SECTION 2. Guaranty.
(a) The Guarantors, jointly and severally, hereby unconditionally and irrevocably, guaranty to the Collateral Agent, for the benefit of the Collateral Agent and the Buyers, the punctual
payment, as and when due and payable, by stated maturity or otherwise, of all Obligations, including, without limitation, all interest, make-whole and other amounts that accrue after the commencement of any Insolvency Proceeding of the
Company or any Guarantor, whether or not the payment of such interest, make-whole and/or other amounts are enforceable or are allowable in such Insolvency Proceeding, and all fees, interest, premiums, penalties, causes of action, costs,
commissions, expense reimbursements, indemnifications and all other amounts due or to become due under any of the Note Documents (all of the foregoing collectively being the “Guaranteed Obligations”),
and agrees to pay any and all reasonable and documented out-of-pocket costs and expenses (including reasonable and documented fees and expenses of counsel to the Collateral Agent) incurred by the Collateral Agent in enforcing any rights
under this Guaranty or any other Note Document. Without limiting the generality of the foregoing, each Guarantor’s liability hereunder shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by
the Company to the Collateral Agent or any Buyer under the Securities Purchase Agreement and the Notes but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any
Transaction Party.
(b) Each Guarantor, and by its acceptance of this Guaranty, the Collateral Agent and each Buyer, hereby confirms that it is the intention of all such Persons that this Guaranty and the
Guaranteed Obligations of each Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
foreign, federal, provincial, state, or other applicable law to the extent applicable to this Guaranty and the Guaranteed Obligations of each Guarantor hereunder. To effectuate the foregoing intention, the Collateral Agent, the Buyers
and the Guarantors hereby irrevocably agree that the Guaranteed Obligations of each Guarantor under this Guaranty at any time shall be limited to the maximum amount as will result in the Guaranteed Obligations of such Guarantor under
this Guaranty not constituting a fraudulent transfer or conveyance.
SECTION 3. Guaranty Absolute; Continuing Guaranty; Assignments.
(a) The Guarantors, jointly and severally, guaranty that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Note Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Collateral Agent or any Buyer with respect thereto. The obligations of each Guarantor under this Guaranty are
independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against any Guarantor to enforce such obligations, irrespective of whether any action is brought against any Transaction Party or
whether any Transaction Party is joined in any such action or actions. The liability of any Guarantor under this Guaranty shall be as a primary obligor (and not merely as a surety) and shall be irrevocable, absolute and unconditional
irrespective of, and each Guarantor hereby irrevocably waives, to the extent permitted by law, any defenses it may now or hereafter have in any way relating to, any or all of the following:
(i) any lack of validity or enforceability of any Transaction Document;
(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to
departure from any Transaction Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Transaction Party or extension of the maturity of any Guaranteed
Obligations or otherwise;
(iii) any taking, exchange, release or non-perfection of any Collateral;
(iv) any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations;
(v) any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Transaction Party;
(vi) any manner of application of Collateral or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any
Collateral or any other collateral for all or any of the Guaranteed Obligations or any other Obligations of any Transaction Party under the Note Documents or any other assets of any Transaction Party or any of its Subsidiaries;
(vii) any failure of the Collateral Agent or any Buyer to disclose to any Transaction Party any information relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of any other Transaction Party now or hereafter known to the Collateral Agent or any Buyer (each Guarantor waiving any duty on the part of the Collateral Agent or any Buyer to disclose such
information);
(viii) taking any action in furtherance of the release of any Guarantor or any other Person that is liable for the Obligations from all or any part of any liability arising under or in
connection with any Transaction Document without the prior written consent of the Collateral Agent; or
(ix) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Collateral Agent or any Buyer that might
otherwise constitute a defense available to, or a discharge of, any Transaction Party or any other guarantor or surety other than the defense of Payment in Full of the Guaranteed Obligations.
(b) This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be
returned by the Collateral Agent, any Buyer, or any other Person upon the insolvency, bankruptcy or reorganization of any Transaction Party or otherwise, all as though such payment had not been made.
(c) This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until Payment in Full of the Guaranteed Obligations and shall not terminate for any reason prior to
the respective Maturity Date of each Note (other than Payment in Full of the Guaranteed Obligations) and (ii) be binding upon each Guarantor and its respective successors and assigns. This Guaranty shall inure to the benefit of and be
enforceable by the Collateral Agent, the Buyers, and their respective successors, and permitted pledgees, transferees and assigns. Without limiting the generality of the foregoing sentence, the Collateral Agent or any Buyer may pledge,
assign or otherwise transfer all or any portion of its rights and obligations under and subject to the terms of any Transaction Document to any other Person, and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to the Collateral Agent or such Buyer (as applicable) herein or otherwise, in each case as provided in the Securities Purchase Agreement or such Transaction Document.
SECTION 4. Waivers. To the extent permitted by applicable law, each Guarantor hereby waives promptness, diligence, protest, notice of acceptance and any other notice or formality of any
kind with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Collateral Agent exhaust any right or take any action against any Transaction Party or any other Person or any Collateral. Each
Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated herein and that the waiver set forth in this Section is knowingly made in contemplation of such benefits.
The Guarantors hereby waive any right to revoke this Guaranty, and acknowledge that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future. Without limiting the foregoing,
to the extent permitted by applicable law, each Guarantor hereby unconditionally and irrevocably waives (a) any defense arising by reason of any claim or defense based upon an election of remedies by the Collateral Agent or any Buyer
that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights of such Guarantor to proceed against any
of the other Transaction Parties, any other guarantor or any other Person or any Collateral, and (b) any defense based on any right of set-off or counterclaim against or in respect of the Guaranteed Obligations of such Guarantor
hereunder. Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of the Collateral Agent or any Buyer to disclose to such Guarantor any matter, fact or thing relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of any other Transaction Party or any of its Subsidiaries now or hereafter known by the Collateral Agent or a Buyer.
SECTION 5. Subrogation. No Guarantor may exercise any rights that it may now or hereafter acquire against any Transaction Party or any other guarantor that arise from the existence,
payment, performance or enforcement of any Guarantor’s obligations under this Guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in
any claim or remedy of the Collateral Agent or any Buyer against any Transaction Party or any other guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive from any Transaction Party or any other guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on account
of such claim, remedy or right, unless and until there has been Payment in Full of the Guaranteed Obligations. If any amount shall be paid to a Guarantor in violation of the immediately preceding sentence at any time prior to Payment
in Full of the Guaranteed Obligations and all other amounts payable under this Guaranty, such amount shall be held in trust for the benefit of the Collateral Agent and shall forthwith be paid to the Collateral Agent to be credited and
applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Transaction Document, or to be held as Collateral for any Guaranteed Obligations
or other amounts payable under this Guaranty thereafter arising. If (a) any Guarantor shall make payment to the Collateral Agent of all or any part of the Guaranteed Obligations, and (b) there has been Payment in Full of the Guaranteed
Obligations, the Collateral Agent will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by
subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.
SECTION 6. Representations, Warranties and Covenants.
(a) Each Guarantor hereby represents and warrants as of the date first written above as follows:
(i) such Guarantor (A) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of the jurisdiction of its
organization as set forth on the signature pages hereto, (B) has all requisite corporate, limited liability company or limited partnership power and authority to conduct its business as now conducted and as presently contemplated and to
execute, deliver and perform its obligations under this Guaranty and each other Transaction Document to which such Guarantor is a party, and to consummate the transactions contemplated hereby and thereby and (C) is duly qualified to do
business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary except where the failure to be so
qualified (individually or in the aggregate) would not result in a Material Adverse Effect.
(ii) The execution, delivery and performance by such Guarantor of this Guaranty and each other Transaction Document to which such Guarantor is a party (A) have been duly authorized by all
necessary corporate, limited liability company or limited partnership action, (B) do not and will not contravene its charter, articles, certificate of formation or by-laws, its limited liability company or operating agreement or its
certificate of partnership or partnership agreement, as applicable, or any applicable law or any contractual restriction binding on such Guarantor or its properties do not and will not result in or require the creation of any lien,
security interest or encumbrance (other than Permitted Liens) upon or with respect to any of its properties, and (C) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal
of any material permit, license, authorization or approval applicable to it or its operations or any of its properties, except in the case of clause (C) of this paragraph, as would not be reasonably expected to have a Material Adverse
Effect.
(iii) No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person is required in connection with the due execution, delivery
and performance by such Guarantor of this Guaranty or any of the other Transaction Documents to which such Guarantor is a party (other than expressly provided for in any of the Transaction Documents or which have been obtained or made).
(iv) This Guaranty has been duly executed and delivered by each Guarantor and is, and each of the other Transaction Documents to which such Guarantor is or will be a party, when executed
and delivered, will be, a legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, except as may be limited by the Bankruptcy Code or other applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or similar laws and equitable principles (regardless of whether enforcement is sought in equity or at law).
(v) There is no pending or, to the knowledge of such Guarantor, threatened (in writing) action, suit or proceeding against such Guarantor or to which any of the properties of such
Guarantor is subject, before any court or other Governmental Authority or any arbitrator that (A) would reasonably be expected to have a Material Adverse Effect or (B) relates to this Guaranty or any of the other Transaction Documents
to which such Guarantor is a party or any transaction contemplated hereby or thereby.
(vi) Such Guarantor (A) has read and understands the terms and conditions of the Securities Purchase Agreement and the other Transaction Documents, and (B) now has and will continue to have
independent means of obtaining information concerning the affairs, financial condition and business of the Company and the other Transaction Parties, and has no need of, or right to obtain from the Collateral Agent or any Buyer, any
credit or other information concerning the affairs, financial condition or business of the Company or the other Transaction Parties.
(b) Each Guarantor covenants and agrees that until Payment in Full of the Guaranteed Obligations, it will comply with each of the covenants (except to the extent applicable only to a
public company) which are set forth in Section of the Securities Purchase Agreement as if such Guarantor were a party thereto.
SECTION 7. Right of Set-off. Upon the occurrence and during the continuance of any Event of Default, the Collateral Agent and any Buyer may, and is hereby authorized to, at any time and
from time to time, without notice to the Guarantors (any such notice being expressly waived by each Guarantor) and to the fullest extent permitted by law, set-off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing by the Collateral Agent or any Buyer to or for the credit or the account of any Guarantor against any and all obligations of the Guarantors now or hereafter
existing under this Guaranty or any other Transaction Document, irrespective of whether or not the Collateral Agent or any Buyer shall have made any demand under this Guaranty or any other Transaction Document and although such
obligations may be contingent or unmatured. The Collateral Agent and each Buyer agrees to notify the relevant Guarantor promptly after any such set-off and application made by the Collateral Agent or such Buyer, provided that the
failure to give such notice shall not affect the validity of such set-off and application. The rights of the Collateral Agent or any Buyer under this Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Collateral Agent or such Buyer may have under this Guaranty or any other Transaction Document in law or otherwise.
SECTION 8. Limitation on Guaranteed Obligations.
(a) Notwithstanding any provision herein contained to the contrary, each Guarantor’s liability hereunder shall be limited to an amount not to exceed as of any date of determination the
greater of:
(i) the
amount of all Guaranteed Obligations, plus interest thereon at the applicable Interest Rate as specified in the Note; and
(ii) the
amount which could be claimed by the Collateral Agent from any Guarantor under this Guaranty without rendering such claim voidable or avoidable under the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act,
Uniform Fraudulent Conveyance Act or similar statute or common law after taking into account, among other things, Guarantor’s right of contribution and indemnification.
(b) Each Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the
guaranty hereunder or affecting the rights and remedies of the Collateral Agent or any Buyer hereunder or under applicable law.
(c) No payment made by the Company, any Guarantor, any other guarantor or any other Person or received or collected by the Collateral Agent or any other Buyer from the Company, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Guaranteed Obligations or
any payment received or collected from such Guarantor in respect of the Guaranteed Obligations), remain liable for the Guaranteed Obligations up to the maximum liability of such Guarantor hereunder until after all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been Paid in Full.
SECTION 9. Notices, Etc. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Guaranty must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or
(iii) one (1) Business Day after deposit with an nationally recognized overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. All notices and other communications
provided for hereunder shall be sent, if to any Guarantor, to the Company’s address and/or facsimile number, or if to the Collateral Agent or any Buyer, to it at its respective address and/or facsimile number, each as set forth in
Section 9(f) of the Securities Purchase Agreement.
SECTION 10. Governing Law; Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Guaranty 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 jurisdiction other
than the State of New York. Each Guarantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or
in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim,
obligation or defense 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 Section
9(f) of the Securities Purchase 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. Nothing contained herein shall be deemed or operate to preclude the Collateral Agent or the Buyers from bringing suit or taking other legal action against any Guarantor in any other jurisdiction to
collect on a Guarantor’s obligations or to enforce a judgment or other court ruling in favor of the Collateral Agent or a Buyer.
SECTION 11. WAIVER OF JURY TRIAL, ETC. EACH GUARANTOR 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 UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS GUARANTY, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
SECTION 12. Taxes.
(a) All payments made by any Guarantor hereunder or under any other Transaction Document shall be made in accordance with the terms of the respective Transaction Document and shall be made
without set-off, counterclaim, withholding, deduction or other defense. Without limiting the foregoing, all such payments shall be made free and clear of and without deduction or withholding for any present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes imposed on the net income of the Collateral Agent or any Buyer by the jurisdiction in which the Collateral Agent or such Buyer is
organized or where it has its principal lending office (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities, collectively or individually, "Taxes"). If any Guarantor shall be required to
deduct or to withhold any Taxes from or in respect of any amount payable hereunder or under any other Transaction Document:
(b) the amount so payable shall be increased to the extent necessary so that after making all required deductions and withholdings (including Taxes on amounts payable to the Collateral
Agent or any Buyer pursuant to this sentence) the Collateral Agent or each Buyer receives an amount equal to the sum it would have received had no such deduction or withholding been made,
(c) such Guarantor shall make such deduction or withholding,
(d) such Guarantor shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law, and
(e) as promptly as possible thereafter, such Guarantor shall send the Collateral Agent or each Buyer an official receipt (or, if an official receipt is not available, such other
documentation as shall be satisfactory to the Collateral Agent, as the case may be) showing payment. In addition, each Guarantor agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Guaranty or any other Transaction Document (collectively, "Other
Taxes").
(f) Each Guarantor hereby indemnifies and agrees to hold each Indemnified Party harmless from and against Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 12) paid by any Indemnified Party as a result of any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to,
this Guaranty or any other Transaction Document, and any liability (including penalties, interest and expenses for nonpayment, late payment or otherwise) arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be paid within thirty (30) days from the date on which the Collateral Agent or such Buyer makes written demand therefor, which demand shall identify the nature and
amount of such Taxes or Other Taxes.
(g) If any Guarantor fails to perform any of its obligations under this Section 12, such Guarantor shall indemnify the Collateral Agent and each Buyer for any taxes, interest or penalties
that may become payable as a result of any such failure. The obligations of the Guarantors under this Section 12 shall survive the termination of this Guaranty and the payment of the Obligations and all other amounts payable hereunder.
SECTION 13. Indemnification. Section 9(k) of the Securities Purchase Agreement is hereby incorporated by reference herein, mutatis mutandis.
SECTION 14. Miscellaneous.
(a) Each Guarantor will make each payment hereunder in lawful money of the United States of America and in immediately available funds to the Collateral Agent or each Buyer, at such
address specified by the Collateral Agent or such Buyer from time to time by notice to the Guarantors.
(b) No amendment or waiver of any provision of this Guaranty and no consent to any departure by any Guarantor therefrom shall in any event be effective unless the same shall be in writing
and signed by each Guarantor, the Collateral Agent and each Buyer, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
(c) No failure on the part of the Collateral Agent or any Buyer to exercise, and no delay in exercising, any right or remedy hereunder or under any other Transaction Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any right hereunder or under any Transaction Document preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies
of the Collateral Agent and the Buyers provided herein and in the other Transaction Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights and remedies of the
Collateral Agent and the Buyers under any Transaction Document against any party thereto are not conditional or contingent on any attempt by the Collateral Agent or any Buyer to exercise any of their respective rights or remedies under
any other Transaction Document against such party or against any other Person.
(d) Any provision of this Guaranty that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.
(e) This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until Payment in Full of the Guaranteed Obligations (other than inchoate indemnity obligations) and
shall not terminate for any reason prior to the respective Maturity Date of each Note (other than Payment in Full of the Guaranteed Obligations) and (ii) be binding upon each Guarantor and its respective successors and assigns. This
Guaranty shall inure, together with all rights and remedies of the Collateral Agent hereunder, to the benefit of and be enforceable by the Collateral Agent, the Buyers, and their respective successors, and permitted pledgees,
transferees and assigns. Without limiting the generality of the foregoing sentence, the Collateral Agent or any Buyer may pledge, assign or otherwise transfer all or any portion of its rights and obligations under and subject to the
terms of the Securities Purchase Agreement or any other Transaction Document to any other Person in accordance with the terms thereof, and such other Person shall thereupon become vested with all the benefits in respect thereof granted
to the Collateral Agent or such Buyer (as applicable) herein or otherwise, in each case as provided in the Securities Purchase Agreement or such Transaction Document. None of the rights or obligations of any Guarantor hereunder may be
assigned or otherwise transferred without the prior written consent of each Buyer.
(f) For so long as any Notes remain outstanding, upon any entity (other than an Excluded Subsidiary) becoming a direct, or indirect, Subsidiary of the Company, the Company shall cause each
such Subsidiary to become party to the Guaranty by executing a joinder to the Guaranty reasonably satisfactory in form and substance to the Required Holders.
(g) This Guaranty and the other Transaction Documents reflect the entire understanding of the transaction contemplated hereby and shall not be contradicted or qualified by any other
agreement, oral or written, entered into before the date hereof.
(h) Section headings herein are included for convenience of reference only and shall not constitute a part of this Guaranty for any other purpose.
SECTION 15. Currency Indemnity.
If, for the purpose of obtaining or enforcing judgment against Guarantor in any court in any jurisdiction, it becomes necessary to convert into
any other currency (such other currency being hereinafter in this Section 15 referred to as the “Judgment Currency”) an amount due under this Guaranty in any currency (the “Obligation Currency”) other than the Judgment Currency, the conversion shall be made at the rate of exchange prevailing on the Business Day immediately preceding (a) the date of actual payment of the
amount due, in the case of any proceeding in the courts of courts of the jurisdiction that will give effect to such conversion being made on such date, or (b) the date on which the judgment is given, in the case of any proceeding in the
courts of any other jurisdiction (the applicable date as of which such conversion is made pursuant to this Section 15 being hereinafter in this Section 15 referred to as the “Judgment
Conversion Date”).
If, in the case of any proceeding in the court of any jurisdiction referred to in the preceding paragraph, there is a change in the rate of
exchange prevailing between the Judgment Conversion Date and the date of actual receipt of the amount due in immediately available funds, the Guarantors shall pay such additional amount (if any, but in any event not a lesser amount) as
may be necessary to ensure that the amount actually received in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been
purchased with the amount of the Judgment Currency stipulated in the judgment or judicial order at the rate of exchange prevailing on the Judgment Conversion Date. Any amount due from the Guarantors under this Section 15 shall be
due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of this Guaranty.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed by its respective duly authorized officer, as of the date first above written.
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Adagio Medical, Inc. (f/k/a ARYA Sciences
Acquisition Corp. IV)
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By:
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Name: |
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Title: |
15
Exhibit 10.11
FORM OF CONVERT
SECURITY AND PLEDGE AGREEMENT
SECURITY AND PLEDGE AGREEMENT, dated as of [__], 2024 (this “Agreement”), made by AJA HOLDCO, INC., a corporation organized under the laws of the State of Delaware with offices located at 51 Astor Place,
10th Floor, New York, New York 10003 (the “Company”), and each of the undersigned direct and indirect and direct Subsidiaries (as defined below) of the Company from time to time, if any (each a “Grantor” and together with the Company, collectively, the “Grantors”), in favor of Allegro Management LLC with offices located at c/o Allegro Opportunities LLC,
17 State Street, Suite 2130, New York, NY 10004, in its capacity as collateral agent (together with its successors and assignees, in such capacity, the “Collateral Agent”) for the Noteholders (as
defined below) party to the Securities Purchase Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Company is party to that certain Securities Purchase Agreement, dated as of February [____ __], 2024 (as amended, modified, supplemented, extended, renewed, restated or replaced from time to time in accordance with the terms thereof, the “Securities
Purchase Agreement”) by and among the Company, ARYA Sciences Acquisition Corp IV and each party listed as a “Buyer” on the Schedule of Buyers attached thereto (each a “Buyer” and
collectively, the “Buyers”), pursuant to which the Company shall sell, and the Buyers shall purchase or have the right to purchase, the “Notes” issued pursuant thereto (as such Notes may be
amended, modified, supplemented, extended, renewed, restated or replaced from time to time in accordance with the terms thereof, collectively, the “Notes”);
WHEREAS, certain Grantors (other than the Company) from time to time (each a “Guarantor” and collectively, the “Guarantors”)
may execute and deliver one or more guarantees (as amended, modified, supplemented, extended, renewed, restated or replaced from time to time, each, a “Guaranty” and collectively, the “Guaranties”) in favor of the Collateral Agent, for the ratable benefit of itself and the Noteholders, with respect to the Company’s obligations under the Securities Purchase Agreement, the Notes and
the other Transaction Documents (as defined in the Securities Purchase Agreement);
WHEREAS, it is a condition precedent to the Buyers’ obligation to purchase the Notes that the Grantors shall have executed and delivered to the Collateral Agent this Agreement providing
for the grant to the Collateral Agent, for the ratable benefit of itself and the Noteholders, of a valid, enforceable, and perfected security interest in all personal property of each Grantor to secure all of the Company’s obligations
under the Transaction Documents and the Guarantors’ obligations under the Guaranties, as applicable; and
WHEREAS, the Grantors are Affiliates that are part of a common enterprise such that each Grantor will derive substantial direct and indirect financial and other benefits from the
consummation of the transactions contemplated under the Transaction Documents and, accordingly, the consummation of such transactions are in the best interests of each Grantor;
NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Grantor agrees with
the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, as follows:
SECTION 1. Definitions.
(a)
Reference is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof. All terms used in this Agreement and the
recitals hereto which are defined in the Securities Purchase Agreement, the Notes or in the Code, and which are not otherwise defined herein shall have the same meanings herein as set forth therein; provided that terms used
herein which are defined in the Code on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of the Code except as the Collateral Agent may otherwise determine in its sole and absolute
discretion.
(b)
Without limiting the generality of, and subject to the proviso at the end of, Section 1(a) of this Agreement, the following terms shall have the respective
meanings provided for in the Code: “Accounts”, “Account Debtor”, “Cash Proceeds”, “Certificate of Title”, “Chattel Paper”, “Commercial Tort Claim”, “Commodity Account”, “Commodity Contracts”, “Deposit Account”, “Documents”, “Electronic
Chattel Paper”, “Equipment”, “Fixtures”, “General Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”, “Letter-of-Credit Rights”, “Noncash Proceeds”, “Payment Intangibles”, “Proceeds”, “Promissory Notes”,
“Security”, “Record”, “Security Account”, “Software”, “Supporting Obligations” and “Uncertificated Securities”.
(c)
As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular
and plural forms of such terms:
“Bankruptcy Code” means Chapter 11 of Title 11 of the United States Code, 11 U.S.C §§ 101 et seq. (or other applicable bankruptcy, insolvency or
similar laws).
“Bankruptcy Event of Default” shall have the meaning set forth in the Note.
“Buyer” or “Buyers” shall have the meaning set forth in the recitals hereto.
“Capital Stock” means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock (including, without limitation, any warrants, options, rights or other securities exercisable or convertible into equity interests or securities of such Person), and (ii)
with respect to any Person that is not an individual or a corporation, any and all partnership, membership, trust or other equity interests of such Person.
“Closing Date” means the date the Company initially issues the Notes pursuant to the terms of the Securities Purchase Agreement.
“Code” means Articles 8 or 9 of the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if
perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “Code” means
the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.
“Collateral” shall have the meaning set forth in Section 3(a) of this Agreement.
“Collateral Agent” shall have the meaning set forth in the preamble hereto.
“Company” shall have the meaning set forth in the preamble hereto.
“Controlled Account Agreement” means a deposit account control agreement or securities account control agreement with respect to a Pledged
Account, pursuant to which the Collateral Agent is granted control over such Pledged Account in a manner that perfects its security interest in such Pledged Account under applicable law, all in form and substance satisfactory to the
Collateral Agent, as the same may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time.
“Controlled Account Bank” shall have the meaning set forth in Section 6(i) of this Agreement.
“Controlled Accounts” means the Deposit Accounts, Commodity Accounts, Securities Accounts of the Grantors listed on Schedule IV attached
hereto.
“Copyright Licenses” means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and
providing for the grant of any right to use or sell any works covered by any Copyright (including, without limitation, all Copyright Licenses set forth in Schedule II hereto).
“Copyrights” means all domestic and foreign copyrights, whether registered or not, including, without limitation, all copyright rights throughout
the universe (whether now or hereafter arising) in any and all media (whether now or hereafter developed), in and to all original works of authorship fixed in any tangible medium of expression, acquired or used by any Grantor
(including, without limitation, all copyrights described in Schedule II hereto), all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United
States Copyright Office or in any similar office or agency of the United States or any other country or any political subdivision thereof), and all reissues, divisions, continuations, continuations in part and extensions or renewals
thereof.
“Domestic Subsidiary” means any Subsidiary other than a Foreign Subsidiary.
“Event of Default” shall have the meaning set forth in Section 4(a) of the Notes.
“Excluded Collateral” means, collectively, (i) Excluded Equity, (ii) any permit, contract, lease, franchise, license, general intangible or any
contractual obligation entered into by a Grantor (A) that prohibits, constitutes a breach or default under or results in the termination of or gives rise to a right on the part of the parties thereto to terminate such permit, contract,
leases, franchise, license, general intangible or contractual obligations or requires the consent of any Person other than the Company and its Affiliates which has not been obtained as a condition to the creation by such Grantor of a
Lien on an right, title or interest in such permit, contract, lease, franchise, license, general intangible or contractual obligation, (B) to the extent that any requirement of law applicable thereto prohibits the creation of a Lien
thereon or (C) to the extent that a Lien thereon would give any other party a right to terminate such license, permit, general intangible or contractual obligation, but only, with respect to the prohibition in (A), (B) and (C), to the
extent, and for as long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the UCC or any other requirement of law (after giving effect to the applicable anti-assignment provisions of the
UCC) and other than proceeds and receivables thereof, and (iii) any United States intent-to-use trademark applications prior to the filing and acceptance of a “Statement of Use” or “Amendment to Allege Use” with respect thereto to the
extent that, and solely during the period in which, the grant, attachment or perfection of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications or any registrations
resulting therefrom under applicable federal law; provided, however, “Excluded Property” shall not include any proceeds, products, substitutions or replacements of Excluded Property (unless such proceeds, products, substitutions or
replacements would otherwise constitute Excluded Property).
“Excluded Equity” means such portion of the voting Capital Stock of any Foreign Subsidiary in excess of 65% of the issued and outstanding voting
Capital Stock of such Foreign Subsidiary at any time the pledging of more than 65% of the total outstanding voting Capital Stock of such Foreign Subsidiary would result in a material adverse tax consequence to a Grantor.
“Excluded Subsidiary” means any Subsidiary of the Company that (a) is a Foreign Subsidiary, (b) does not own any Intellectual Property and (c)
does not have assets which are material to the business of the Company and its Subsidiaries taken as a whole. Based upon information disclosed to Buyers as of the date hereof, Adagio Medical GmbH, a company organized under the laws of
Germany, is an Excluded Subsidiary, and shall remain an Excluded Subsidiary so long as it satisfies the foregoing requirements under this definition.
“Foreign Subsidiary” means any Subsidiary of a Grantor organized under the laws of a jurisdiction other than the United States, any of the states
thereof, Puerto Rico or the District of Columbia.
“GAAP” means U.S. generally accepted accounting principles consistently applied.
“Governmental Authority” means any nation or government, any Federal, state, city, town, municipality, county, local, foreign or other political
subdivision thereof or thereto and any department, commission, board, bureau, court, tribunal, instrumentality, agency or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
“Guaranteed Obligations” shall have the meaning set forth in Section 2 of each Guaranty.
“Guarantor” or “Guarantors” shall have the meaning set forth in the recitals hereto.
“Guaranty” or “Guaranties” shall have the meaning set forth in the recitals hereto.
“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law or law for the relief of debtors, any proceeding relating to assignments for the benefit of creditors, formal or informal moratoria, compositions, or extensions generally with creditors, or any proceeding
seeking reorganization, arrangement, or other similar relief.
“Intellectual Property” means, collectively, all intellectual property rights and assets, and all rights, interests and protections that are
associated with any of the foregoing, however arising, under the applicable laws of any jurisdiction throughout the world, whether registered or unregistered, including, without limitation, any and all: (a) Trademarks; (b) internet
domain names, whether or not trademarks, registered in any top-level domain by any authorized private registrar or Governmental Authority, web addresses, web pages, websites and related content; (c) accounts with YouTube, LinkedIn,
Twitter, Instagram, Facebook and other social media companies and the content found thereon (to the extent that such accounts and content are transferable pursuant to the terms, conditions, and policies of each applicable social media
platform); (d) Copyrights; (e) Patents; and (f) business and technical information, databases, data collections and other confidential and proprietary information and all rights therein, inventions, trade secrets, ideas, concepts,
methods, techniques, processes, proprietary information, technology, know-how, formulae, rights of publicity and other general intangibles of like nature, now existing or hereafter acquired.
“Intellectual Property Security Agreement” means the Intellectual Property Security Agreement required to be delivered pursuant to Section
6(h)(i) of this Agreement, substantially in the form attached hereto as Exhibit A.
“Licenses” means, collectively, the Copyright Licenses, the Trademark Licenses and the Patent Licenses.
“Lien” means any mortgage, lien, pledge, charge, security interest, adverse claim or other encumbrance upon or in any property or assets.
“Note Documents” means, collectively, this Agreement, as amended, modified, supplemented, renewed, restated or replaced, the Securities Purchase
Agreement, the Notes, each Guaranty and the other Security Documents.
“Material Subsidiary” means any Subsidiary other than an Excluded Subsidiary.
“Noteholders” means, at any time, the holders of the Notes at such time.
“Notes” shall have the meaning set forth in the recitals hereto.
“Obligations” shall have the meaning set forth in Section 4 of this Agreement.
“Paid in Full” or “Payment in Full” means the payment in full in cash of all of the Obligations (other
than contingent and indemnification obligations for which no claim has been asserted); provided, that, no written demand has been received by Collateral Agent within ninety (90) days of such payment for the return of such payment, or
any part thereof, as a preferential or fraudulent transfer pursuant to the Bankruptcy Code or any state law equivalent. If a demand under preceding proviso is received, the Obligations will not be considered “Paid in Full” until the
earlier of such demand being withdrawn or denied, and if payment is returned in connection with such demand, the Obligations will not be considered “Paid in Full” until such time, if ever, that the payment in full in cash of all of the
Obligations is subsequently satisfied.
“Patent Licenses” means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and
providing for the grant of any right to manufacture, use or sell any invention covered by any Patent (including, without limitation, all Patent Licenses set forth in Schedule II hereto).
“Patents” means all domestic and foreign letters patent, design patents, utility patents, and industrial designs (including, without limitation,
all domestic and foreign letters patent, design patents, utility patents, and industrial designs described in Schedule II hereto) (including, without limitation, applications, registrations and recordings in the United States
Patent and Trademark Office, or in any similar office or agency of the United States or any other country or any political subdivision thereof), and all reissues, reexaminations, divisions, continuations, continuations in part and
extensions or renewals thereof.
“Perfection Requirement” or “Perfection Requirements” shall have the meaning set forth in Section 5(j) of this Agreement.
“Permitted Liens” shall have the meaning set forth in the Notes.
“Pledged Accounts” means all of each Grantor’s right, title and interest in all of its Deposit Accounts, Commodity Accounts and Securities
Accounts (in all cases, including, without limitation, all Controlled Accounts.
“Pledged Collateral” shall have the meaning set forth in Section 2(a).
“Pledged Debt” shall have the meaning set forth in Section 2(a).
“Pledged Entity” means, each Person listed from time to time on Schedule IV hereto as a “Pledged Entity,” together with each other
Person, any right in or interest in or to all or a portion of whose Securities or Capital Stock is acquired or otherwise owned by a Grantor after the date hereof.
“Pledged Equity” means all of each Grantor’s right, title and interest in and to all of the Securities and Capital Stock, excluding Excluded
Equity, now or hereafter owned by such Grantor (including, without limitation, those interests listed opposite the name of such Grantor on Schedule IV), regardless of class or designation, including all substitutions therefor
and replacements thereof, all proceeds thereof and all rights relating thereto, also including, without limitation, any certificates representing such Securities and/or Capital Stock, the right to receive any certificates representing
any of such Securities and/or Capital Stock, all warrants, options, subscription, share appreciation rights and other rights, contractual or otherwise, in respect thereof, and the right to receive dividends, distributions of income,
profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in kind, and cash, instruments, and other property from time to time received, receivable, or otherwise distributed in respect of or in
addition to, in substitution of, on account of, or in exchange for any or all of the foregoing.
“Pledged Operating Agreements” means all of each Grantor’s rights, powers and remedies under the limited liability company operating agreements
of each of the Pledged Entities that is a limited liability company, as may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time.
“Pledged Partnership Agreements” means all of each Grantor’s rights, powers, and remedies under the general or limited partnership agreements of
each of the Pledged Entities that is a general or limited partnership, as may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time.
“Pledged Securities” means any Promissory Notes, stock certificates, limited liability membership interests or other Securities, certificates or
Instruments now or hereafter included in the Pledged Collateral, including all Pledged Equity, Pledged Debt and all other certificates, instruments or other documents representing or evidencing any Pledged Collateral.
“Securities Purchase Agreement” shall have the meaning set forth in the recitals hereto.
“Trademark Licenses” means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensor or licensee and
providing for the grant of any right concerning any Trademark, together with any goodwill connected with and symbolized by any such licenses, contracts or agreements and the right to prepare for sale or lease and sell or lease any and
all Inventory now or hereafter owned by any Grantor and now or hereafter covered by such licenses, contracts or agreements (including, without limitation, all Trademark Licenses described in Schedule II hereto).
“Trademarks” means all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names,
d/b/a’s, assumed names, Internet domain names, trade styles, designs, logos and other source or business identifiers and all general intangibles of like nature, now or hereafter owned, adopted, acquired or used by any Grantor
(including, without limitation, all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s, assumed names, Internet domain names, trade styles, designs, logos and
other source or business identifiers described in Schedule II hereto), all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Patent
and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof), and all reissues, extensions or renewals thereof, together with all goodwill of
the business symbolized by such marks.
SECTION 2. Pledge of Pledged Collateral
(a)
As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor hereby pledges to the
Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and
security interest in, all of such Grantor’s right, title and interest in, to and under all of the following, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired: (i) the Pledged Equity;
(ii) all Promissory Notes, Security and Instruments evidencing debt now owned or at any time hereafter acquired by it (including, without limitation, those listed opposite the name of such Grantor on Schedule IV) (the “Pledged
Debt”); (iii) subject to Section 2(g) and 2(h), all payments of principal or interest, dividends, distributions, cash, Promissory Notes, Securities, Instruments and other property from time to time received,
receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the Pledged Equity and the Pledged Debt; (iv) all rights and privileges of such Grantor with
respect to the Securities and other property referred to in clauses (i), (ii), and (iii) above; and (v) all Proceeds of, and Security Entitlements in respect of, any of the foregoing (the items referred to in clauses (i) through (v)
above being collectively referred to as the “Pledged Collateral”); provided that the Pledged Collateral shall not include any item referred to in clauses (i) through (v) above if, for so long as
and to the extent such item constitutes Excluded Collateral.
(b)
On the Closing Date (in the case of any Grantor that grants a Lien on any of its assets hereunder on the Closing Date) or on the date on which it becomes a party
to this Agreement pursuant to Section 6(m) (in the case of any other Grantor), each Grantor shall deliver or cause to be delivered to the Collateral Agent any and all Pledged Securities (other than any Uncertificated Securities,
but only for so long as such Securities remain uncertificated) to the extent such Pledged Securities, in the case of Promissory Notes and other Instruments evidencing debt, are required to be delivered pursuant to Section 2(c).
Thereafter, whenever such Grantor acquires any other Pledged Security (other than any Uncertificated Securities, but only for so long as such Uncertificated Securities remain uncertificated), such Grantor shall promptly, and in any
event within 30 days (or such longer period as the Collateral Agent may agree to in writing), deliver or cause to be delivered to the Collateral Agent such Pledged Security as Collateral hereunder to the extent such Pledged Securities,
in the case of Promissory Notes and Instruments evidencing debt, are required to be delivered pursuant to Section 2(c).
(c)
Each Grantor will cause all debt for borrowed money in an aggregate principal amount of $250,0000 or more owed to such Grantor by any other Person to be
evidenced by a duly executed Promissory Note, and shall cause each such Promissory Note to be pledged and delivered to the Collateral Agent, (i) on the date hereof, in the case of any such debt existing on the date hereof (or, in the
case of any Grantor that becomes a party hereto after the date hereof, on the date such Grantor becomes a party hereto, in the case of any such debt existing on such date) or (ii) promptly following the incurrence thereof, in the case
of any such debt incurred after the date hereof (or such other date), in each case pursuant to the terms hereof.
(d)
Upon delivery to the Collateral Agent, (i) any Pledged Securities required to be delivered pursuant to Section 2(b) and/or 2(c) shall be
accompanied by undated stock or note powers duly executed by the applicable Grantor in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral
Agent may reasonably request in order to effect the transfer of such Pledged Securities and (ii) all other property comprising part of the Pledged Collateral required to be delivered pursuant to Section 2(b) and/or 2(c)
shall be accompanied by undated proper instruments of assignment duly executed by the applicable Grantor and such other instruments or documents as the Collateral Agent may reasonably request in order to effect transfer of such Pledged
Collateral. Each delivery of Pledged Securities or other Pledged Collateral shall be accompanied by a schedule describing such Pledged Securities or Pledged Collateral, as the case may be, which schedule shall be deemed to supplement Schedule
IV and be made a part hereof; provided that failure to attach any such schedule hereto shall not affect the validity of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior
schedules so delivered.
(e)
The assignment, pledge, Lien, and security interest granted in Section 2(a) are granted as security only and shall not subject the Collateral Agent or any Buyer
to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Pledged Collateral.
(f)
If an Event of Default shall occur and be continuing and, other than in the case of a Bankruptcy Event of Default, the Collateral Agent shall have notified the
Grantors of its intent to exercise such rights, (a) the Collateral Agent, shall have the right (in its sole and absolute discretion) to cause each of the Pledged Securities to be transferred of record into the name of the Collateral
Agent or into the name of its nominee (as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or assigned in blank or in favor of the Collateral Agent and (b) to the extent permitted by the documentation governing
such Pledged Securities and applicable law, the Collateral Agent shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this
Agreement. Each Grantor will promptly give to the Collateral Agent copies of any material notices received by it with respect to Pledged Securities registered in the name of such Grantor. Each Grantor will take any and all actions
reasonably requested by the Collateral Agent to facilitate compliance with this Section 2(f).
(g)
Unless and until an Event of Default shall have occurred and be continuing and, other than in the case of a Bankruptcy Event of Default, the Collateral Agent
shall have notified the Grantors that the rights of the Grantors under this Section 2(g) are being suspended:
(i)
Each Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Collateral or any
part thereof for any purpose consistent with the terms of this Agreement and the other Transaction Documents.
(ii)
The Collateral Agent shall promptly execute and deliver to each Grantor, or cause to be executed and delivered to such Grantor, all such proxies, powers of
attorney and other instruments as such Grantor may reasonably request in writing for the purpose of enabling such Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to Section
2(g)(i), in each case as shall be specified in such request.
(iii)
Each Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of
the Pledged Collateral, to the extent (and only to the extent) that such dividends, interest, principal and other distributions are permitted by, the other Transaction Documents and applicable laws; provided that any noncash
dividends, interest, principal or other distributions that would constitute Pledged Equity or Pledged Debt, whether resulting from a subdivision, combination or reclassification of the outstanding equity interests of the issuer of any
Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or
otherwise, shall be and become part of the Pledged Collateral, and, if received by any Grantor, shall be held in trust for the benefit of the Collateral Agent and shall, to the extent required by Section 2(b) and/or 2(c)
be forthwith delivered to the Collateral Agent in the same form as so received (with any necessary endorsement or documents set forth in Section 2(d) or as otherwise reasonably requested by the Collateral Agent). So long as no
Event of Default has occurred and is continuing, the Collateral Agent shall promptly deliver to each Grantor any Pledged Securities in its possession if requested to be delivered to the issuer thereof in connection with any exchange or
redemption of such Pledged Securities.
(h)
Upon the occurrence and during the continuance of an Event of Default and, other than in the case of a Bankruptcy Event of Default, the Collateral Agent shall
have notified the Grantors of the suspension of the rights of the Grantors under Section 2(g)(iii), all rights of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive pursuant
to Section 2(g)(iii) shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other
distributions as part of the Pledged Collateral, subject to Section 2(k) and the last sentence of this Section 2(h). All dividends, interest, principal or other distributions received by any Grantor contrary to the
provisions of Section 2(g) or this Section 2(h) shall be held in trust for the benefit of the Collateral Agent and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with
any necessary endorsement reasonably requested by the Collateral Agent). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of Section 2(g) and/or this Section
2(h) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property, shall be held as security for the payment and performance of the Obligations and
shall be applied in accordance with the provisions of Section 8. After all Events of Default have been cured or waived, and the Grantors have delivered to the Collateral Agent a certificate of an executive officer to such
effect, the Collateral Agent shall promptly repay to each Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of Section
2(g)(iii) in the absence of an Event of Default and that remain in such account.
(i)
Upon the occurrence and during the continuance of an Event of Default and, other than in the case of a Bankruptcy Event of Default, the Collateral Agent shall
have notified the Grantors of the suspension of the rights of the Grantors under Section 2(g)(i), all rights of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to Section
2(g)(i), and the obligations of the Collateral Agent under Section 2(g)(ii), shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers subject to Section 2(k) and the last sentence of this Section 2(i); provided that, the Collateral Agent shall have the right from time to time
following and during the continuance of an Event of Default to permit the Grantors to exercise such rights. After all Events of Default have been cured or waived, and the Grantors have delivered to the Collateral Agent a certificate of
an executive officer to such effect, each Grantor shall have the exclusive right to exercise the voting and/or consensual rights and powers that such Grantor would otherwise be entitled to exercise pursuant to the terms of Section
2(g)(i), and the obligations of the Collateral Agent under Section 2(g)(ii) shall be reinstated.
(j)
Any notice given by the Collateral Agent to the Grantors under Section 2(f) or Section 2(g) (i) may be given by telephone if promptly confirmed
in writing, (ii) may be given with respect to one or more of the Grantors at the same or different times and (iii) may suspend the rights of the Grantors under Section 2(g)(i) or 2(g)(iii) in part without suspending all
such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s rights to give additional notices from time to time suspending other rights so long
as an Event of Default has occurred and is continuing.
(k)
Nothing contained in this Agreement shall be construed to make the Collateral Agent or any Buyer liable as a member of any limited liability company or as a
partner of any partnership, and neither the Collateral Agent nor any Buyer by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member
of any limited liability company or as a partner in any partnership. The parties hereto expressly agree that, unless the Collateral Agent shall become the absolute owner of Pledged Equity consisting of a limited liability company
interest or a partnership interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Collateral Agent, any Buyer, any Grantor and/or any other Person.
SECTION 3. Grant of Security Interest
(a)
As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor hereby pledges to the
Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and
security interest in, all of such Grantor’s right, title and interest in, to and under all personal property and assets of such Grantor, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired,
of every kind, nature and description, whether tangible or intangible (together with the Pledged Collateral, the “Collateral”), including, without limitation, the following:
(i)
all Accounts;
(ii)
all Chattel Paper (whether tangible or Electronic Chattel Paper);
(iii)
all Commercial Tort Claims, including, without limitation, those specified on Schedule VI hereto;
(iv)
all Documents;
(v)
all Equipment;
(vi)
all Fixtures;
(vii)
all General Intangibles (including, without limitation, all Payment Intangibles);
(viii)
all Goods;
(ix)
all Instruments;
(x)
all Inventory;
(xi)
all Investment Property (and, regardless of whether classified as Investment Property under the Code, all Pledged Equity, Pledged Operating Agreements and
Pledged Partnership Agreements);
(xii)
all Intellectual Property and all Licenses;
(xiii)
all Letter-of-Credit Rights;
(xiv)
all Pledged Accounts, all cash and other property from time to time deposited therein, and all monies and property in the possession or under the control of
the Collateral Agent or any Noteholder or any Affiliate, representative, agent or correspondent of the Collateral Agent or any such Noteholder;
(xv)
all Supporting Obligations;
(xvi)
all other tangible and intangible personal property of each Grantor (whether or not subject to the Code), including, without limitation, all Deposit
Accounts and other accounts and all cash and all investments therein, all proceeds, products, offspring, accessions, rents, profits, income, benefits, substitutions and replacements of and to any of the property of any Grantor described
in the preceding clauses of this Section 3(a) (including, without limitation, any proceeds of insurance thereon and all causes of action, claims and warranties now or hereafter held by each Grantor in respect of any of the items
listed above), and all books, correspondence, files and other Records, including, without limitation, all tapes, desks, cards, Software, data and computer programs in the possession or under the control of any Grantor or any other
Person from time to time acting for any Grantor, in each case, to the extent of such Grantor’s rights therein, that at any time evidence or contain information relating to any of the property described in the preceding clauses of this Section
3(a) or are otherwise necessary or helpful in the collection or realization thereof; and
(xvii)
all Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any and all of the foregoing Collateral;
in each case howsoever any Grantor’s interest therein may arise or appear (whether by ownership, security interest, claim or otherwise).
(b)
Notwithstanding anything herein to the contrary, the term “Collateral” shall not include any Excluded Collateral.
SECTION 4. Security for Obligations. The Lien and security interest created hereby in the Collateral constitutes continuing collateral security for all of the following
obligations, whether direct or indirect, absolute or contingent, and whether now existing or hereafter incurred (collectively, the “Obligations”):
(a)
(i) the payment by the Company and each other Grantor, as and when due and payable (by scheduled maturity, required prepayment, acceleration, demand or
otherwise), of all amounts from time to time owing by it in respect of the Securities Purchase Agreement, this Agreement, the Notes and the other Note Documents, and (ii) in the case of the Guarantors, the payment by such Guarantors, as
and when due and payable of all Guaranteed Obligations under the Guaranties, including, without limitation, in both cases, (A) all principal of, interest, make-whole and other amounts on the Notes (including, without limitation, all
interest, make-whole and other amounts that accrues after the commencement of any Insolvency Proceeding of any Grantor, whether or not the payment of such interest is enforceable or is allowable in such Insolvency Proceeding), and (B)
all fees, interest, premiums, penalties, contract causes of action, costs, commissions, expense reimbursements, indemnifications and all other amounts due or to become due under this Agreement or any of the other Note Documents; and
(b)
the due and punctual performance and observance by each Grantor of all of its other obligations from time to time existing in respect of any of the Note
Documents, including without limitation, with respect to any conversion or redemption rights of the Noteholders under the Notes.
SECTION 5. Representations and Warranties. Each Grantor represents and warrants as follows:
(a)
Schedule I hereto sets forth as of the date hereof (i) the exact legal name of each Grantor, and (ii) the state of incorporation, organization or
formation and the organizational identification number of each Grantor in such state. The information set forth in Schedule I hereto with respect to such Grantor is true and accurate as of the date hereof. Such Grantor has not
previously changed its name (or operated under any other name), jurisdiction of organization or organizational identification number from those set forth in Schedule I hereto except as disclosed in Schedule I hereto.
(b)
There is no pending or, to its knowledge, written notice threatening any action, suit, proceeding or claim affecting any Grantor before any Governmental
Authority or any arbitrator, or any order, judgment or award issued by any Governmental Authority or arbitrator, in each case, that may adversely affect the grant by any Grantor, or the perfection, of the Lien and security interest
purported to be created hereby in the Collateral, or the exercise by the Collateral Agent of any of its rights or remedies hereunder.
(c)
All material tax returns and other reports required by applicable law to be filed by any Grantor with any Governmental Authority have been filed, or extensions
have been obtained, and all material taxes, assessments and other governmental charges or levies imposed upon any Grantor or any property of any Grantor that are required to be paid by any Grantor on or prior to the date hereof have
been paid, except to the extent contested in good faith by proper proceedings.
(d)
All Equipment, Fixtures, Goods and Inventory of each Grantor now existing are, and all Equipment, Fixtures, Goods and Inventory of each Grantor hereafter
existing will be, located and/or based at the addresses specified therefor in Schedule III hereto, except that each Grantor will give the Collateral Agent written notice of any change in the location of any such Collateral
within thirty (30) days of such change, other than to locations set forth on Schedule III hereto or in transit with common carriers or temporarily out for repair or in the possession of contract manufacturers and other service
providers or in the temporary possession of employees outside of such locations under the ordinary course of business consistent with past practice (and with respect to which the Collateral Agent has filed financing statements and
otherwise fully perfected its Liens thereon). Each Grantor’s principal place of business and chief executive office, the place where each Grantor keeps its Records concerning the Collateral and
all originals of all Chattel Paper in which any Grantor has any right, title or interest are located at the addresses specified therefor in Schedule III hereto. None of the Accounts in which any Grantor has any right, title or
interest is or will be evidenced by Promissory Notes or other Instruments.
(e)
Set forth in Schedule IV hereto is a complete and accurate list, as of the date of this Agreement, of (i) all Pledged Debt, specifying the debtor thereof
and the outstanding principal amount thereof as of the Closing Date, Securities and other Instruments in which any Grantor has any right, title or interest, and (ii) each Pledged Account of each Grantor, together with the name and
address of each institution at which each such Pledged Account is maintained, the account number for each such Pledged Account and a description of the purpose of each such Pledged Account. Set forth in Schedule II hereto is a
complete and correct list as of the date hereof of each trade name used by each Grantor and the name of, and each trade name used by, each Person from which each Grantor has acquired any substantial part of the Collateral. All of the
Pledged Debt, to the best of the Grantors’ knowledge (provided that no such knowledge qualification applies to Pledged Debt issued by a Grantor or a Subsidiary), is the legal, valid and binding obligation of the issuer thereof,
enforceable against such issuer in accordance with its terms.
(f)
Set forth on Schedule II is a complete and correct list of the material Licenses (excluding Licenses to commercially available software) of the Grantors
existing on the date of this Agreement.
(g)
Each Grantor owns and controls, or otherwise possesses adequate rights to use, all of its Intellectual Property, except as would not have a material adverse
effect on the business of such Grantor. Schedule II hereto sets forth a true and complete list of all Intellectual Property registrations and applications for grant or registration of Intellectual Property owned by each Grantor
as of the date hereof. To the knowledge of each Grantor, all Intellectual Property which is necessary to the business of such Grantor is subsisting and in full force and effect, has not been adjudged invalid or unenforceable, is valid
and enforceable and has not been abandoned in whole or in part. Except as set forth in Schedule II, no Grantor has any knowledge of any infringement upon or conflict with the Patent, Trademark, Copyright, trade secret rights of
others and, to the knowledge of each Grantor, each Grantor is not now infringing or in conflict with any Patent, Trademark, Copyright, trade secret or similar rights of others, and to the knowledge of each Grantor, no other Person is
now infringing or in conflict in any material respect with any such properties, assets and rights owned or used by each Grantor, in each case, except as would not have a material adverse effect on the business of such Grantor. No
Grantor has received any notice that it is violating or has violated the Trademarks, Patents, Copyrights, inventions, trade secrets, proprietary information and technology, know-how, formulae, rights of publicity or other intellectual
property rights of any third party, in each case, except as would not have a material adverse effect on the business of such Grantor.
(h)
Each Grantor is and will be at all times the sole and exclusive owner of the Collateral in which such Grantor has granted a Lien and security interest hereunder
free and clear of any Liens, except for (i) Permitted Liens thereon and (ii) certain Intellectual Property rights of the Company which is jointly owned by the Company with certain third parties as described in Schedule II
hereto. No effective financing statement or other instrument similar in effect covering all or any part of the Collateral is on file in any recording or filing office except such as (i) may have been filed in favor of the Collateral
Agent and/or the Noteholders relating to this Agreement or the other Transaction Documents, or (ii) relate to Permitted Liens.
(i)
The exercise by the Collateral Agent of any of its rights and remedies hereunder will not contravene any law or any contractual restriction binding on or
otherwise affecting any Grantor or any of its properties and will not result in or require the creation of any Lien, upon or with respect to any of its properties other than as granted pursuant to this Agreement.
(j)
No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority, is required for (i) the grant by each Grantor, or
the perfection, of the Lien and security interest purported to be created hereby in the Collateral, or (ii) the exercise by the Collateral Agent of any of its rights and remedies hereunder, except for (A) the filing under the Code as in
effect in the applicable jurisdiction of the financing statements described in Schedule V hereto, all of which financing statements have been duly filed and are in full force and effect, (B) with respect to all Pledged Accounts,
and all cash and other property from time to time deposited therein, the execution of a Controlled Account Agreement with the depository or other institution with which the applicable Pledged Accounts are maintained, as provided in Section
, (C) with respect to Commodity Contracts, the execution of a control agreement with the commodity intermediary with which such Commodity Contract is carried, as provided in Section , (D) with respect to the perfection of
the security interest created hereby in the United States Intellectual Property and Licenses, the recording of the appropriate Intellectual Property Security Agreement in the United States Patent and Trademark Office or the United
States Copyright Office, as applicable, (E) with respect to the perfection of the security interest created hereby in foreign Intellectual Property and Licenses, registrations and filings in jurisdictions located outside of the United
States and covering rights in such jurisdictions relating to such foreign Intellectual Property and Licenses, (F) with respect to the perfection of the security interest created hereby in any Letter-of-Credit Rights, the consent of the
issuer of the applicable letter of credit to the assignment of proceeds as provided in the Code as in effect in the applicable jurisdiction, (G) with respect to Investment Property constituting uncertificated securities, the applicable
Grantor causing the issuer thereof either (i) to register the Collateral Agent as the registered owner of such securities or (ii) to agree in an authenticated record with such Grantor and the Collateral Agent that such issuer will
comply with instructions with respect to such securities originated by the Collateral Agent without further consent of such Grantor, such authenticated record to be in form and substance satisfactory to the Collateral Agent, (H) with
respect to Investment Property constituting certificated securities or instruments, such items to be delivered to and held by or on behalf of the Collateral Agent pursuant hereto in suitable form for transfer by delivery or accompanied
by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent, (I) with respect to any action that may be necessary to obtain control of Collateral constituting Commodity
Contracts, Electronic Chattel Paper or Letter of Credit Rights, the taking of such actions, and (J) the Collateral Agent having possession of all Documents, Chattel Paper, Instruments and cash constituting Collateral (subclauses (A)
through (J) each a “Perfection Requirement” and collectively, the “Perfection Requirements”).
(k)
This Agreement creates in favor of the Collateral Agent a legal, valid and enforceable Lien on and security interest in the Collateral, as security for the
Obligations (assuming that this Agreement and the other Transaction Documents are or will be upon execution thereof, as applicable, duly authorized, executed and delivered by the other Persons party thereto). Such Lien and security
interest is (or in the case of Collateral in which any Grantor obtains any right, title or interest after the date hereof, will be), subject only to Permitted Liens and the Perfection Requirements, a first priority (except with respect
to liens securing Permitted Senior Indebtedness), valid, enforceable and perfected Lien on and security interest in all personal property of each Grantor (other than Excluded Collateral).
(l)
As of the date hereof, no Grantor holds any Commercial Tort Claims having a value in excess of $100,000 or has knowledge of any pending Commercial Tort Claims
having a value in excess of $100,000, except for the Commercial Tort Claims described in Schedule VI.
(m)
All of the Pledged Equity is presently owned by the applicable Grantor as set forth in Schedule IV free and clear of all Liens other than Permitted
Liens, and is presently represented by the certificates listed on Schedule IV hereto (if applicable). As of the date hereof, there are no existing options, warrants, calls or commitments of any character whatsoever relating to
the Pledged Equity other than as contemplated and permitted by the Transaction Documents. Each Grantor is the sole holder of record and the sole beneficial owner of the Pledged Equity, as applicable. None of the Pledged Equity has
been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject. The Pledged Equity constitutes 100% or such other
percentage as set forth on Schedule IV of the issued and outstanding shares of Capital Stock of the applicable Pledged Entity. All of the Pledged Equity has been duly and validly authorized and issued by the issuer thereof and
in the case of Pledged Equity (other than Pledged Equity consisting of limited liability company interests or partnership interests which, pursuant to the relevant organizational or formation documents, cannot be fully paid and
non-assessable), is fully paid and non-assessable.
(n)
Such Grantor (i) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, organization or formation, (ii) has all requisite corporate, limited liability company or limited partnership power and authority to conduct its business as now conducted and as
presently contemplated and to execute and deliver this Agreement and each other Transaction Document to which such Grantor is a party, and to consummate the transactions contemplated hereby and thereby and (iii) is duly qualified to do
business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except where the failure to be so
qualified would not result in a Material Adverse Effect.
(o)
The execution, delivery and performance by each Grantor of this Agreement and each other Transaction Document to which such Grantor is a party (i) have been duly
authorized by all necessary corporate, limited liability company or limited partnership action, (ii) do not and will not contravene its charter or by-laws, limited liability company or operating agreement, certificate of partnership or
partnership agreement, as applicable, or any applicable law or any contractual restriction binding on such Grantor or its properties, (iii) do not and will not result in or require the creation of any Lien (other than pursuant to any
Transaction Document) upon or with respect to any of its assets or properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any material permit,
license, authorization or approval applicable to it or its operations or any of its assets or properties, except, in the case of clause (iv) as would not reasonably be expected to result in a Material Adverse Effect.
(p)
This Agreement has been duly executed and delivered by each Grantor and is the legal, valid and binding obligation of such Grantor, enforceable against such
Grantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or other similar laws and equitable principles (regardless of whether
enforcement is sought in equity or at law). Each of the other Transaction Documents to which any Grantor is or will be a party, when delivered, duly executed and delivered by such Grantor and the legal, valid and binding obligation of
such Grantor, enforceable against such Grantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or other similar laws and
equitable principles (regardless of whether enforcement is sought in equity or at law).
SECTION 6. Covenants as to the Collateral. Until all of the Obligations shall have been fully performed and Paid in Full, unless the Collateral Agent shall otherwise
consent in writing (in its sole and absolute discretion):
(a)
Further Assurances. Each Grantor will, at its expense, at any time and from time to time, promptly execute and deliver all further instruments and
documents and take all further action that the Collateral Agent may reasonably request in order to: (i) perfect and protect the Lien and security interest of the Collateral Agent created hereby; (ii) enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder in respect of the Collateral, including, without limitation, the Controlled Accounts; or (iii) otherwise effect the purposes of this Agreement, including, without limitation: (A)
marking conspicuously all Chattel Paper and, at the request of the Collateral Agent, each of its Records pertaining to the Collateral with a legend, in form and substance satisfactory to the Collateral Agent, indicating that such
Chattel Paper or Collateral is subject to the Lien and security interest created hereby, (B) delivering and pledging to the Collateral Agent each Promissory Note, Security (subject to the limitations set forth in Section 3),
Chattel Paper or other Instrument, in each case having a value in excess of $100,000, now or hereafter owned by any Grantor, duly endorsed and accompanied by executed instruments of transfer or assignment, all in form and substance
reasonably satisfactory to the Collateral Agent, (C) executing and filing (to the extent, if any, that any Grantor’s signature is required thereon) or authenticating the filing of, such financing or continuation statements, or
amendments thereto, as may be necessary or that the Collateral Agent may reasonably request in order to perfect and preserve the security interest created hereby, (D) furnishing to the Collateral Agent from time to time statements and
schedules further identifying and describing the Collateral and such other reports in connection with the Collateral in each case as the Collateral Agent may reasonably request, all in reasonable detail, (E) if any Collateral shall be
in the possession of a third party, notifying such Person of the Collateral Agent’s security interest created hereby and obtaining a written acknowledgment from such Person, in form and substance reasonably satisfactory to the
Collateral Agent, that such Person holds possession of the Collateral for the benefit of the Collateral Agent (for the ratable benefit of the Collateral Agent and the Noteholders), (F) if at any time after the date hereof, any Grantor
acquires or holds any Commercial Tort Claim having a value in excess of $100,000, promptly notifying the Collateral Agent in a writing signed by such Grantor setting forth a brief description of such Commercial Tort Claim and granting
to the Collateral Agent a Lien and security interest therein and in the Proceeds thereof, which writing shall incorporate the provisions hereof and shall be in form and substance reasonably satisfactory to the Collateral Agent and (G)
taking all actions required by the Code or by other law, as applicable, in any relevant Code jurisdiction, or by other law as applicable in any foreign jurisdiction.
(b)
Location of Collateral. Each Grantor will keep the Collateral (i) at the locations specified therefor on Schedule III hereto, or (ii) at such
other locations set forth on Schedule III or in transit with common carriers or temporarily out for repair or in the possession of contract manufacturers and other service providers or in the temporary possession of employees
outside of such locations under the ordinary course of business consistent with past practice (and with respect to which the Collateral Agent has filed financing statements and otherwise fully perfected its Liens thereon), or (iii) at
such other locations in the United States, provided that thirty (30) days prior to any change in the location of any Collateral to such other location, or upon the acquisition of any Collateral to be kept at such other locations, the
Grantors shall give the Collateral Agent written notice thereof and deliver to the Collateral Agent a new Schedule III indicating such new locations and such other written statements and schedules as the Collateral Agent may
require.
(c)
Condition of Equipment. Each Grantor will maintain or cause to be maintained and preserved in good condition, repair and working order, ordinary wear and
tear and casualty excepted, the Equipment (necessary or useful to its business) and will forthwith, or in the case of any loss or damage to any such Equipment of any Grantor within a commercially reasonable time after the occurrence
thereof, make or cause to be made all repairs, replacements and other improvements in connection therewith which are necessary or desirable, consistent with past practice, or which the Collateral Agent may request to such end. Any
Grantor will promptly furnish to the Collateral Agent a statement describing in reasonable detail any such loss or damage in excess of $50,000 per occurrence to any Equipment.
(d)
Each Grantor agrees to pay promptly when due all material taxes, assessments and governmental charges or levies imposed upon, and all material claims (including
claims for labor, materials and supplies) against, the Equipment and Inventory, except to the extent the validity thereof is being contested in good faith by proper proceedings
(e)
Insurance.
(i)
Each Grantor will, at its own expense, maintain insurance (including, without limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts and covering such risks, in such form and with responsible and reputable insurance companies or
associations as is required by any Governmental Authority having jurisdiction with respect thereto or as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and in any
event, in amount, adequacy and scope reasonably satisfactory to the Collateral Agent.
(ii)
To the extent requested by the Collateral Agent at any time and from time to time, each such policy shall (A) name the Collateral Agent as an additional
insured party and/or loss payee, as applicable, thereunder (without any representation or warranty by or obligation upon the Collateral Agent) as its interests may appear, and (B) provide that at least 30 days’ (or 10 days in the case
of non-payment of premium) prior written notice of cancellation, lapse, expiration or other adverse change shall be given to the Collateral Agent by the insurer. Any Grantor will, if so requested by the Collateral Agent, deliver to the
Collateral Agent original or duplicate policies of such insurance (including certificates demonstrating compliance with this Section 6(e)) and, as often as the Collateral Agent may reasonably request, a report of a reputable insurance
broker with respect to such insurance. Any Grantor will also, at the request of the Collateral Agent, execute and deliver instruments of assignment of such insurance policies and use commercially reasonable efforts to cause the
respective insurers to acknowledge notice of such assignment.
(iii)
Following and during the continuance of an Event of Default, all insurance payments in respect of each Grantor’s properties and business shall, at the
written request of the Collateral Agent, be paid to the Collateral Agent and applied as specified in Section hereof.
(f)
Provisions Concerning Name, Organization, Location, Accounts and Licenses.
(i)
Each Grantor will (A) give the Collateral Agent at least ten (10) days’ prior written notice of any change in such Grantor’s name, identity or
organizational structure, (B) maintain its jurisdiction of incorporation, organization or formation as set forth in Schedule I hereto, (C) promptly notify the Collateral Agent upon obtaining an organizational identification
number, if on the date hereof such Grantor did not have such identification number, and (D) keep adequate records concerning the Collateral and permit representatives of the Collateral Agent during normal business hours on reasonable
notice to such Grantor, to inspect and make abstracts from such records.
(ii)
The Collateral Agent shall have the right at any time following the occurrence and during the continuance of an Event of Default to notify the Account
Debtors or obligors under any Accounts of the assignment of such Accounts to the Collateral Agent and to direct such Account Debtors or obligors to make payment of all amounts due or to become due to any Grantor thereunder directly to
the Collateral Agent or its designated agent and, upon such notification and at the expense of any Grantor and to the extent permitted by applicable law, to enforce collection of any such Accounts and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as any Grantor might have done. After receipt by any Grantor of a notice from the Collateral Agent that the Collateral Agent has notified, intends to notify, or has
enforced or intends to enforce any Grantor’s rights against the Account Debtors or obligors under any Accounts as referred to in the proviso to the immediately preceding sentence, (A) all amounts and proceeds (including, without
limitation, Instruments) received by any Grantor in respect of the Accounts shall be received in trust for the benefit of the Collateral Agent hereunder (for the ratable benefit of the Collateral Agent and the Noteholders), shall be
segregated from other funds of any Grantor and shall be forthwith paid over to the Collateral Agent in the same form as so received (with any necessary endorsement) to be applied as specified in Section hereof, and (B) no
Grantor will adjust, settle or compromise the amount or payment of any Account or release wholly or partly any Account Debtor or obligor thereof or allow any credit or discount thereon. In addition, upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent may (in its sole and absolute discretion) direct any or all of the banks and financial institutions with which any Grantor either maintains a Deposit Account or a lockbox
(including, without limitation, any Controlled Account) or deposits the proceeds of any Accounts to send promptly to the Collateral Agent by wire transfer (to such deposit account as the Collateral Agent shall specify, or in such other
manner as the Collateral Agent shall direct) all or a portion of such Securities, cash, investments and other items held by such institution. Any such Securities, cash, investments and other items so received by the Collateral Agent
shall be applied as specified in accordance with Section hereof
(iii)
Each Grantor will duly perform and observe all of its material obligations under each material License and will take commercially reasonable actions to
maintain such Licenses in full force and effect.
(g)
Other Liens. No Grantor will create, suffer to exist or grant any Lien upon or with respect to any Collateral other than a Permitted Lien.
(h)
Intellectual Property.
(i)
If applicable, each Grantor shall duly execute and deliver the applicable Intellectual Property Security Agreement. Each Grantor will, and will use
commercially reasonable efforts to cause its licensees to, maintain the Intellectual Property necessary for the conduct of its business in full force and effect; provided, however, that no Grantor shall have an
obligation to use or to maintain any Intellectual Property (A) that relates solely to any product or work, that is no longer necessary or material or has been, or is in the process of being, discontinued, abandoned or terminated in the
ordinary course of business and consistent with the exercise of reasonable business judgment, (B) that is being replaced with Intellectual Property substantially similar to the Intellectual Property that may be abandoned or otherwise
become invalid, so long as the failure to use or maintain such Intellectual Property does not materially adversely affect the validity of such replacement Intellectual Property and so long as such replacement Intellectual Property is
subject to the Lien created by this Agreement and does not have a material adverse effect on the business of any Grantor or (C) that is substantially the same as other Intellectual Property that is in full force, so long the failure to
use or maintain such Intellectual Property does not materially adversely affect the validity of such replacement Intellectual Property and so long as such other Intellectual Property is subject to the Lien and security interest created
by this Agreement and does not have a material adverse effect on the business of any Grantor. Each Grantor will take commercially reasonable actions before the United States Patent and Trademark Office and the United States Copyright
Office or any similar office or agency in any other country or political subdivision thereof to maintain each registration of the Intellectual Property and application for registration of Intellectual Property that is owned by the
Grantor and necessary for the conduct of its business (other than the Intellectual Property described in the proviso to the immediately preceding sentence), including, without limitation, filing of renewals, affidavits of use,
affidavits of incontestability and opposition, interference and cancellation proceedings and payment of maintenance fees, filing fees, taxes or other governmental charges or fees. If any Intellectual Property necessary for the conduct
of the Grantor’s business (other than Intellectual Property described in the proviso to the second sentence of subsection (i) of this clause (h)) is infringed, misappropriated, diluted or otherwise violated in any material respect by a
third party, each Grantor shall (x) upon learning of such infringement, misappropriation, dilution or other violation, promptly notify the Collateral Agent and (y) promptly take such actions as such Grantor shall deem appropriate under
the circumstances to protect such Intellectual Property. Each Grantor shall furnish to the Collateral Agent from time to time upon its reasonable request statements and schedules further identifying and describing any registrations or
applications of Patent, Trademark or Copyright newly filed or acquired by the Grantor, following receipt by the Collateral Agent of any such statements or schedules, each Grantor shall modify this Agreement by amending Schedule II
hereto, as the case may be, to include any Intellectual Property, as the case may be, which is or hereafter becomes part of the Collateral under this Agreement and shall execute and authenticate such documents and do such acts as shall
be necessary or, in the reasonable judgment of the Collateral Agent, desirable to subject such Intellectual Property and Licenses to the Lien and security interest created by this Agreement. Notwithstanding anything herein to the
contrary, upon the occurrence and during the continuance of an Event of Default, no Grantor may abandon, surrender or cancel or otherwise permit any material Intellectual Property to become abandoned, surrendered, cancelled or invalid
without the prior written consent of the Collateral Agent (in its sole and absolute discretion), and if any material Intellectual Property is infringed, misappropriated, diluted or otherwise violated in any material respect by a third
party, each Grantor will take such reasonable action as the Collateral Agent shall deem appropriate under the circumstances to protect such Intellectual Property.
(ii)
Upon request of the Collateral Agent, any Grantor shall execute, authenticate and deliver any and all assignments, agreements, instruments, documents and
papers as the Collateral Agent may reasonably request to evidence the Collateral Agent’s security interest hereunder in any registrations or applications of Patents, Trademark or Copyright newly filed or acquired by the Grantor and the
General Intangibles of any Grantor relating thereto or represented thereby, and each Grantor hereby appoints the Collateral Agent its attorney-in-fact to execute and/or authenticate and file all such writings for the foregoing purposes,
all acts of such attorney being hereby ratified and confirmed, and such power (being coupled with an interest) shall be irrevocable until all Obligations are fully performed and Paid in Full.
(i)
[Reserved]
(j)
Pledged Accounts. Section 14(p) of the Notes is hereby incorporated by reference.
(k)
Control. Each Grantor hereby agrees to take any or all action that may be reasonably necessary or that the Collateral Agent may reasonably request in
order for the Collateral Agent to obtain “control” in accordance with Sections 9-105 through 9-107 of the Code with respect to the following Collateral: (i) Electronic Chattel Paper, (ii) Investment Property, and (iii) Letter-of-Credit
Rights, in each case, having a value in excess of $250,000.
(l)
Inspection and Reporting. Each Grantor shall permit the Collateral Agent, or any agent or representatives thereof or such attorneys, accountant or other
professionals or other Persons as the Collateral Agent may designate (at Grantors’ sole cost and expense), in each case (except during the continuation of an Event of Default) during normal business hours on reasonable notice to such
Grantor and in a manner that will not unreasonably burden the business operations of any Grantor, (i) to examine and make copies of and abstracts from any Grantor’s Records and books of account, (ii) to visit and inspect its
properties, (iii) to verify materials, leases, Instruments, Accounts, Inventory and other assets of any Grantor from time to time, and (iv) to conduct audits, physical counts, appraisals, valuations and/or examinations at the locations
of any Grantor. Each Grantor shall also permit the Collateral Agent, or any agent or representatives thereof or such attorneys, accountants or other professionals or other Persons as the Collateral Agent may designate to discuss such
Grantor’s affairs, finances and accounts with any of its directors, officers, attorneys, or independent accountants.
(m)
Future Subsidiaries. If any Grantor hereafter creates or acquires any Subsidiary (other than an Excluded Subsidiary), within thirty (30) days following
the creation or acquisition of such Subsidiary, such Grantor shall (i) if such Subsidiary is a Domestic Subsidiary, cause such Subsidiary to become a party to this Agreement as an additional “Grantor” hereunder, (ii) deliver to the
Collateral Agent updated Schedules to this Agreement, as appropriate (including, without limitation, an updated Schedule IV to reflect the grant by such Grantor of a Lien on and security interest in all Pledged Debt and Pledged
Equity now or hereafter owned by such Grantor), (iii) if such Subsidiary is a Domestic Subsidiary, cause such Subsidiary to duly execute and deliver a guaranty of the Obligations in favor of the Collateral Agent in form and substance
acceptable to the Collateral Agent, (iv) deliver to the Collateral Agent the stock certificates representing all of the Capital Stock of such Subsidiary, along with undated stock powers for each such certificates, executed in blank (or,
if any such shares of Capital Stock are uncertificated, confirmation and evidence reasonably satisfactory to the Collateral Agent that the security interest in such uncertificated securities has been transferred to and perfected by the
Collateral Agent, in accordance with Section 8-106 of the Code or any other similar or local or foreign law that may be applicable), and (v) duly execute and/or cause to be delivered to the Collateral Agent, in form and substance
acceptable to the Collateral Agent, such opinions of counsel and other documents as the Collateral Agent shall reasonably request with respect thereto; provided, however, that no Grantor shall be required to pledge any Excluded
Collateral. Each Grantor hereby authorizes the Collateral Agent to attach such updated Schedules to this Agreement and agrees that all Pledged Equity and Pledged Debt listed on any updated Schedule delivered to the Collateral Agent
shall for all purposes hereunder be considered Collateral. The Grantors agree that the pledge of the shares of Capital Stock acquired by a Grantor of a Foreign Subsidiary (other than an Excluded Subsidiary) may be supplemented by one or
more separate pledge agreements, deeds of pledge, share charges, or other similar agreements or instruments, executed and delivered by the relevant Grantor in favor of the Collateral Agent, which pledge agreements will provide for the
pledge of such shares of Capital Stock in accordance with the laws of the applicable foreign jurisdiction. With respect to such shares of Capital Stock, the Collateral Agent may, at any time and from time to time, in its sole
discretion, take actions in such foreign jurisdictions that will result in the perfection of the Lien created in such shares of Capital Stock.
SECTION 7. Additional Provisions Concerning the Collateral.
(a)
To the maximum extent permitted by applicable law, and for the purpose of taking any action that the Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, each Grantor hereby (i) authorizes the Collateral Agent at any time and from time to time to file, one or more financing or continuation statements, and amendments thereto, relating to the
Collateral (including, without limitation, any such financing statements that (A) describe the Collateral as “all assets” or “all personal property” (or words of similar effect) or that describe or identify the Collateral by type or in
any other manner as the Collateral Agent may determine regardless of whether any particular asset of such Grantor falls within the scope of Article 9 of the Code or whether any particular asset of such Grantor constitutes part of the
Collateral, and (B) contain any other information required by Part 5 of Article 9 of the Code for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment, including, without
limitation, whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor) and (iii) ratifies such authorization to the extent that the Collateral Agent has filed
any such financing or continuation statements, or amendments thereto, prior to the date hereof. A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(b)
Each Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact and proxy, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, in the Collateral Agent’s discretion, solely following the occurrence and during the continuance of an Event of Default, to take any action and to execute any instrument which the Collateral
Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, (i) to obtain and adjust insurance required to be paid to the Collateral Agent pursuant to Section hereof, (ii)
to ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any Collateral, (iii) to receive, endorse, and collect any drafts or other
Instruments, Documents and Chattel Paper in connection with clause (i) or (ii) above, (iv) to file any claims or take any action or institute any action, suit or proceedings which the Collateral Agent may deem necessary or desirable for
the collection of any Collateral or otherwise to enforce the rights of the Collateral Agent and the Noteholders with respect to any Collateral, (v) to execute assignments, licenses and other documents to enforce the rights of the
Collateral Agent and the Noteholders with respect to any Collateral, and (vi) to verify any and all information with respect to any and all Accounts. This power is coupled with an interest and is irrevocable until all of the
Obligations are fully performed and Paid in Full.
(c)
For the purpose of enabling the Collateral Agent to exercise rights and remedies hereunder, at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, and for no other purpose, each Grantor hereby grants to the Collateral Agent, to the extent assignable, an irrevocable (but terminable in accordance with this clause (c)), non-exclusive license
(exercisable without payment of royalty or other compensation to any Grantor) to use, assign, license or sublicense any Intellectual Property in which such Grantor now or hereafter has any right, title or interest, wherever the same may
be located, including, without limitation, in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout thereof, to the
extent that such license is permissible under the Grantor’s agreements with third parties regarding such Intellectual Property and applicable law; provided that (i) such license may be exercised, at the option of the Collateral Agent,
only when an Event of Default exists and is continuing, and (ii) any license or sublicense granted by the Collateral Agent to a third party with respect to such Intellectual Property shall include reasonable and customary terms and
conditions necessary to preserve the existence, validity and value of the affected Intellectual Property, including provisions requiring the continuing confidential handling of trade secrets, provisions requiring the use of appropriate
notices and prohibiting the use of false notices, quality control and inurement provisions with regard to Trademarks, patent designation provisions with regard to Patents, copyright notices and restrictions on decompilation and reverse
engineering of copyrighted software. Notwithstanding anything contained herein to the contrary, but subject to the provisions of the Securities Purchase Agreement that limit the right of any Grantor to dispose of its property, and Section
and Section hereof, so long as no Event of Default shall have occurred and be continuing, any Grantor may exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other actions with respect to
the Intellectual Property in the ordinary course of its business and as otherwise expressly permitted by any of the other Transaction Documents. In furtherance of the foregoing, unless an Event of Default shall have occurred and be
continuing, the Collateral Agent shall from time to time, upon the request of any Grantor, execute and deliver any instruments, certificates or other documents, in the form so requested, which such Grantor shall have certified are
appropriate (in such Grantor’s judgment) to allow it to take any action permitted above (including relinquishment of the license provided pursuant to this clause (c) as to any Intellectual Property). Further, upon the full performance
and Payment in Full of all of the Obligations, the Collateral Agent (subject to Section hereof) shall release and reassign to any Grantor all of the Collateral Agent’s right, title and interest in and to the Intellectual
Property, and the Licenses, all without recourse, representation or warranty whatsoever. The exercise of rights and remedies hereunder by the Collateral Agent shall not terminate the rights of the holders of any licenses or sublicenses
theretofore granted by each Grantor in accordance with the second sentence of this clause (c). Each Grantor hereby releases the Collateral Agent from any claims, causes of action and demands at any time arising out of or with respect
to any actions taken or omitted to be taken by the Collateral Agent under the powers of attorney granted herein other than actions taken or omitted to be taken through the Collateral Agent’s gross negligence or willful misconduct, as
determined by a final judgment of a court of competent jurisdiction no longer subject to appeal.
(d)
If any Grantor fails to perform any agreement or obligation contained herein beyond the expiration of any applicable cure period, the Collateral Agent may itself
perform, or cause performance of, such agreement or obligation, in the name of such Grantor or the Collateral Agent, and the expenses of the Collateral Agent incurred in connection therewith shall be payable by such Grantor pursuant to
Section 9 hereof and such obligation shall be secured by the Collateral.
(e)
The powers conferred on the Collateral Agent hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.
(f)
Anything herein to the contrary notwithstanding (i) each Grantor shall remain liable under the Licenses and otherwise with respect to any of the Collateral to
the extent set forth therein to perform all of its obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Collateral Agent of any of its rights or remedies hereunder shall not
release any Grantor from any of its obligations under the Licenses or otherwise in respect of the Collateral, and (iii) the Collateral Agent shall not have any obligation or liability by reason of this Agreement under the Licenses or
with respect to any of the other Collateral, nor shall the Collateral Agent be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned
hereunder
SECTION 8. Remedies Upon Event of Default; Application of Proceeds. If any Event of Default shall have occurred and be continuing:
(a)
The Collateral Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein, in any other Transaction
Document or otherwise available to it, all of the rights and remedies of a secured party upon default under the Code (whether or not the Code applies to the affected Collateral), and also may (i) take absolute control of the Collateral,
including, without limitation, transfer into the Collateral Agent’s name or into the name of its nominee or nominees (to the extent the Collateral Agent has not theretofore done so) and thereafter receive, for the ratable benefit of
itself and the Noteholders, all payments made thereon, give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright owner thereof, (ii) require each Grantor to,
and each Grantor hereby agrees that it will at its expense and upon request of the Collateral Agent forthwith, assemble all or part of its respective Collateral as directed by the Collateral Agent and make it available to the Collateral
Agent at a place or places to be designated by the Collateral Agent that is reasonably convenient to both parties, and the Collateral Agent may enter into and occupy any premises owned or leased by any Grantor where the Collateral or
any part thereof is located or assembled for a reasonable period in order to effectuate the Collateral Agent’s rights and remedies hereunder or under law, without obligation to any Grantor in respect of such occupation, and (iii)
without notice except as specified below and without any obligation to prepare or process the Collateral for sale, (A) sell the Collateral or any part thereof in one or more parcels at public or private sale (including, without
limitation, by credit bid), at any of the Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem commercially
reasonable and/or (B) lease, license or dispose of the Collateral or any part thereof upon such terms as the Collateral Agent may deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale or any other
disposition of its respective Collateral shall be required by law, at least ten (10) days’ notice to any Grantor of the time and place of any public sale or the time after which any private sale or other disposition of its respective
Collateral is to be made shall constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale or other disposition of any Collateral regardless of notice of sale having been given. The Collateral
Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor
hereby waives any claims against the Collateral Agent and the Noteholders arising by reason of the fact that the price at which its respective Collateral may have been sold at a private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount of the Obligations, even if the Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree, and waives all rights that
any Grantor may have to require that all or any part of such Collateral be marshaled upon any sale (public or private) thereof. Each Grantor hereby acknowledges that (i) any such sale of its respective Collateral by the Collateral
Agent shall be made without warranty, (ii) the Collateral Agent may specifically disclaim any warranties of title, possession, quiet enjoyment or the like, and (iii) such actions set forth in clauses (i) and (ii) above shall not
adversely affect the commercial reasonableness of any such sale of Collateral. In addition to the foregoing, (1) upon written notice to any Grantor from the Collateral Agent after and during the continuance of an Event of Default, such
Grantor shall cease any use of the Intellectual Property including in the Collateral for any purpose described in such notice; (2) the Collateral Agent may, at any time and from time to time after and during the continuance of an Event
of Default, upon ten (10) days’ prior notice to such Grantor, license, whether general, special or otherwise, and whether on an exclusive or a non-exclusive basis, any of the Intellectual Property, throughout the universe for such term
or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (3) the Collateral Agent may, at any time, pursuant to the authority granted in Section 7 hereof or otherwise
(such authority being effective upon the occurrence and during the continuance of an Event of Default), execute and deliver on behalf of such Grantor, one or more instruments of assignment of the Intellectual Property (or any
application or registration thereof), in form suitable for filing, recording or registration in any country.
(b)
Any cash held by the Collateral Agent as Collateral and all Cash Proceeds received by the Collateral Agent in respect of any sale or disposition of or collection
from, or other realization upon, all or any part of the Collateral shall be applied as follows (subject to the provisions of the Securities Purchase Agreement): first, to pay any fees, indemnities or expense reimbursements then
due to the Collateral Agent (including, without limitation, those described in Section 9 hereof); second, to pay any fees, indemnities or expense reimbursements then due to the Noteholders, on a pro rata basis; third
to pay interest due under the Notes owing to the Noteholders, on a pro rata basis; fourth, to pay or prepay principal in respect of the Notes, whether or not then due, owing to the Noteholders, on a pro rata basis; fifth,
to pay or prepay any other Obligations, whether or not then due, in such order and manner as the Collateral Agent shall elect, consistent with the provisions of the Securities Purchase Agreement. Any surplus of such cash or Cash
Proceeds held by the Collateral Agent and remaining after the full performance and Payment in Full of all of the Obligations shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of competent
jurisdiction shall direct.
(c)
In the event that the proceeds of any such sale, disposition, collection or realization are insufficient to pay all amounts to which the Collateral Agent and the
Noteholders are legally entitled, each Grantor shall be, jointly and severally, liable for the deficiency, together with interest thereon at the highest rate specified in the Notes for interest on overdue principal thereof or such other
rate as shall be fixed by applicable law, together with the costs of collection and the reasonable and documented out-of-pocket fees, costs, expenses and other charges of any attorneys employed by the Collateral Agent to collect such
deficiency.
(d)
To the extent that applicable law imposes duties on the Collateral Agent to exercise rights and remedies in a commercially reasonable manner, each Grantor
acknowledges and agrees that it is commercially reasonable for the Collateral Agent (i) to fail to incur expenses deemed significant by the Collateral Agent to prepare Collateral for disposition or otherwise to transform raw material or
work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to
remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection
specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business
as any Grantor, for expressions of interest in acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a
specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and
sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the
Collateral Agent against risks of loss, collection or disposition of Collateral or to provide to the Collateral Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the
Collateral Agent, to obtain the services of brokers, investment bankers, consultants, attorneys and other professionals to assist the Collateral Agent in the collection or disposition of any of the Collateral. Each Grantor acknowledges
that the purpose of this section is to provide non-exhaustive indications of what actions or omissions by the Collateral Agent would be commercially reasonable in the Collateral Agent’s exercise of rights and remedies against the
Collateral and that other actions or omissions by the Collateral Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this section. Without limitation of the foregoing, nothing contained in
this section shall be construed to grant any rights to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable law in the absence of this section.
(e)
The Collateral Agent shall not be required to marshal any present or future collateral security (including, but not limited to, this Agreement and the
Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of the Collateral Agent’s rights and remedies
hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising. To the extent that any Grantor lawfully may, each
Grantor hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of the Collateral Agent’s rights and remedies under this Agreement or under any other
instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully
may, each Grantor hereby irrevocably waives the benefits of all such laws.
SECTION 9. Indemnity and Expenses. Section 9(k) and Section 4(v) of the Securities Purchase Agreement are hereby incorporated by reference herein, mutatis mutandis.
SECTION 10. Notices, Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified mail, first-class postage
prepaid and return receipt requested), telecopied, e-mailed or delivered, if to any Grantor, to the Company’s address, or if to the Collateral Agent or any Noteholder, to it at its respective address, each as set forth in Section 9(f)
of the Securities Purchase Agreement; or as to any such Person, at such other address as shall be designated by such Person in a written notice to all other parties hereto complying as to delivery with the terms of this Section 10.
All such notices and other communications shall be effective (a) if sent by certified mail, return receipt requested, when received or five Business Days after deposited in the mails, whichever occurs first, (b) if telecopied or
e-mailed, when transmitted (during normal business hours) and confirmation is received, and otherwise, the day after the notice or communication was transmitted and confirmation is received, or (c) if delivered in person, upon
delivery. For the avoidance of doubt, all Foreign Subsidiaries, as Grantors, hereby appoint the Company as its agent for receipt of service of process and all notices and other communications in the United States at the address
specified below.
SECTION 11. Miscellaneous.
(a)
No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by each Grantor and the Required Holders (or Collateral
Agent as approved by the Required Holders), and no waiver of any provision of this Agreement, and no consent to any departure by each Grantor therefrom, shall be effective unless it is in writing and signed by each Grantor and the
Required Holders (or Collateral Agent as approved by the Required Holders), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No amendment, modification or
waiver of this Agreement shall be effective to the extent that it (1) applies to fewer than all of the holders of Notes or (2) imposes any obligation or liability on any holder of Notes without such holder’s prior written consent (which
may be granted or withheld in such holder’s sole and absolute discretion).
(b)
No failure on the part of the Collateral Agent to exercise, and no delay in exercising, any right or remedy hereunder or under any of the other Transaction
Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies of
the Collateral Agent or any Noteholder provided herein and in the other Transaction Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights and remedies of the
Collateral Agent or any Noteholder under any of the other Transaction Documents against any party thereto are not conditional or contingent on any attempt by such Person to exercise any of its rights or remedies under any of the other
Transaction Documents against such party or against any other Person, including but not limited to, any Grantor.
(c)
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining portions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.
(d)
This Agreement shall create a continuing Lien on and security interest in the Collateral and shall (i) remain in full force and effect until the Payment in Full
of the Obligations, and (ii) be binding on each Grantor and all other Persons who become bound as debtor to this Agreement in accordance with Section 9-203(d) of the Code and shall inure, together with all rights and remedies of the
Collateral Agent and the Noteholders hereunder, to the ratable benefit of the Collateral Agent and the Noteholders and their respective permitted successors, transferees and assigns. Without limiting the generality of clause (ii) of
the immediately preceding sentence, without notice to any Grantor, solely in connection with a transfer of the Notes permitted by the Transaction Documents, the Collateral Agent and the Noteholders may assign or otherwise transfer their
rights and obligations under this Agreement and any of the other Transaction Documents, to any other Person and such other Person shall thereupon become vested with all of the benefits in respect thereof granted to the Collateral Agent
and the Noteholders herein or otherwise. Upon any such assignment or transfer, all references in this Agreement to the Collateral Agent or any such Noteholder shall mean the assignee of the Collateral Agent or such Noteholder. None of
the rights or obligations of any Grantor hereunder may be assigned, delegated or otherwise transferred without the prior written consent of the Collateral Agent in its sole and absolute discretion, and any such assignment, delegation or
transfer without such consent of the Collateral Agent shall be null and void.
(e)
Upon the Payment in Full of the Obligations, (i) this Agreement and the security interests created hereby shall terminate and all rights to the Collateral shall
revert to the respective Grantor that granted such security interests hereunder, and (ii) the Collateral Agent will, upon any Grantor’s request and at such Grantor’s expense, (A) return to such Grantor such of the Collateral as shall
not have been sold or otherwise disposed of or applied pursuant to the terms hereof and (B) execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination, all without any
representation, warranty or recourse whatsoever.
(f)
Governing Law; Jurisdiction; Jury Trial.
(i) 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 provision or rule of law (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of New York.
(ii) Each Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim, defense or objection 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 Section 9(f) of the Securities Purchase 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. Nothing contained herein shall be deemed or operate to preclude the Collateral Agent or the Noteholders from bringing suit or taking other legal
action against any Grantor in any other jurisdiction to collect on a Grantor’s obligations or to enforce a judgment or other court ruling in favor of the Collateral Agent or a Noteholder.
(iii)
WAIVER OF JURY TRIAL, ETC. EACH GRANTOR IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
(iv)
Each Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding referred to in this
Section any special, exemplary, indirect, incidental, punitive or consequential damages.
(g)
Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.
(h)
This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an
original, but all of which taken together constitute one and the same Agreement. Delivery of any executed counterpart of a signature page of this Agreement by pdf, facsimile or other electronic transmission shall be effective as
delivery of a manually executed counterpart of this Agreement.
(i)
This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by the Collateral Agent, any Noteholder or any other Person (upon (i) the occurrence of any Insolvency Proceeding of any of the Company or any Grantor or (ii) otherwise, in all cases as though such payment had not
been made).
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and delivered by its officer thereunto duly authorized, as of the date first above written.
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GRANTORS |
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AJA HOLDCO, INC.
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By:
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Name:
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Title:
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ADAGIO MEDICAL, INC.
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(F/K/A ARYA SCIENCES ACQUISITION CORP IV)
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By:
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Name:
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Title:
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ACCEPTED BY:
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ALLEGRO MANAGEMENT LLC,
as Collateral Agent
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By:
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Name:
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Title:
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EXHIBIT A
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, modified, supplemented, renewed, restated or replaced from time to time, this “IP Security
Agreement”), dated [ , 2024], is made by the Persons listed on the signature pages hereof
(collectively, the “Grantors”) in favor of Allegro Management LLC, in its capacity as collateral agent (the “Collateral Agent”) for the Noteholders. All
capitalized terms not otherwise defined herein shall have the meanings respectively ascribed thereto in the Security Agreement (as defined below).
WHEREAS, AJA Holdco, Inc., a company organized under the laws of the State of Delaware (the “Company”) and each party listed as a “Buyer” therein
(collectively, the “Buyers”) are parties to that certain Securities Purchase Agreement, dated [ , 2024], pursuant to which the Company shall be required to sell, and the Buyers shall purchase or have the right to purchase, the “Notes” (as defined therein) issued pursuant thereto (as such Notes may be
amended, modified, supplemented, renewed, restated or replaced from time to time in accordance with the terms thereof, collectively, the “Notes”);
WHEREAS, it is a condition precedent to the purchase of the Notes under the Securities Purchase Agreement that each Grantor has executed and delivered that certain Security and Pledge
Agreement, dated [ , 2024], made by the Grantors to the Collateral Agent (as amended, modified, supplemented,
renewed, restated or replaced from time to time, the “Security Agreement”); and
WHEREAS, under the terms of the Security Agreement, the Grantors have granted to the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, a Lien on and
security interest in, among other property, certain intellectual property of the Grantors, and have agreed as a condition thereof to execute this IP Security Agreement for recording with the U.S. Patent and Trademark Office, the United
States Copyright Office and other governmental authorities.
WHEREAS, the Grantors have determined that the execution, delivery and performance of this IP Security Agreement directly benefits, and is in the best interest of, the Grantors.
NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Grantor agrees with
the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, as follows
SECTION 1. Grant of Security. As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor hereby pledges
to the Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on
and security interest in, all of such Grantor’s right, title and interest in, to and under the following (the “Collateral”):
(i)
the Patents and Patent applications set forth in Schedule A hereto;
(ii)
the Trademark and service mark registrations and applications set forth in Schedule B hereto (provided that no security interest shall be granted in
United States intent-to-use trademark applications to the extent that, and solely during the period in which, the grant, attachment or perfection of a security interest therein would impair the validity or enforceability of such
intent-to-use trademark applications or any registrations resulting therefrom under applicable federal law), together with the goodwill symbolized thereby;
(iii)
all Copyrights, including without limitation the copyright registrations and applications and exclusive copyright licenses set forth in Schedule C
hereto;
(iv)
all reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the foregoing, all rights in the foregoing
provided by international treaties or conventions, all rights corresponding thereto throughout the world and all other rights of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto;
(v)
any and all claims for damages and injunctive relief for past, present and future infringement, dilution, misappropriation, violation, misuse or breach with
respect to any of the foregoing, with the right, but not the obligation, to sue for and collect, or otherwise recover, such damages; and
(vi)
any and all Proceeds, including without limitation Cash and Noncash Proceeds of, collateral for, income, royalties and other payments now or hereafter due
and payable with respect to, and Supporting Obligations relating to, any and all of the collateral of or arising from any of the foregoing;
provided that, notwithstanding anything herein to the contrary, the term “Collateral” as used herein shall not include any Excluded Collateral.
SECTION 2. Security for Obligations. The grant of a Lien on and security interest in, the Collateral by each Grantor under this IP Security Agreement constitutes continuing
collateral security for the payment and performance of all Obligations of such Grantor now or hereafter existing under or in respect of the Notes and the Note Documents, whether direct or indirect, absolute or contingent, and whether
for principal, reimbursement obligations, interest, premiums, penalties, fees, indemnifications, contract causes of action, costs, expenses or otherwise.
SECTION 3. Recordation. Each Grantor authorizes and requests that the Register of Copyrights, the Commissioner for Patents and the Commissioner for Trademarks and any other
applicable government officer record this IP Security Agreement.
SECTION 4. Execution in Counterparts. This IP Security Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original, but all of which taken together constitute one and the same Agreement.
SECTION 5. Grants, Rights and Remedies. This IP Security Agreement has been entered into in conjunction with the provisions of the Security Agreement. Each Grantor does
hereby acknowledge and confirm that the grant of the Lien and security interest hereunder to, and the rights and remedies of, the Collateral Agent with respect to the Collateral are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated herein by reference as if fully set forth herein.
SECTION 6. Governing Law; Jurisdiction; Jury Trial.
(i)
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 provision or rule of law (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of New York.
(ii)
Each Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan,
for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim, defense or objection 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 Section 9(f) of the Securities Purchase 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. Nothing contained herein shall be deemed or operate to preclude the Collateral Agent or the Noteholders from bringing suit or taking other legal action against any
Grantor in any other jurisdiction to collect on a Grantor’s obligations or to enforce a judgment or other court ruling in favor of the Collateral Agent or a Noteholder.
(iii)
WAIVER OF JURY TRIAL, ETC. EACH GRANTOR IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
(iv)
Each Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding referred to in this
Section any special, exemplary, indirect, incidental, punitive or consequential damages.
[The remainder of the page is intentionally left blank]
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.
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AJA Holdco, Inc.
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By:
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Name:
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Address for Notices
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26051 Merit Circle, Suite 102,
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Laguna Hills, California, 92653
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IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.
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Adagio Medical, Inc. (f/k/a ARYA Sciences Acquisition Corp IV)
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By:
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Name:
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Address for Notices
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26051 Merit Circle, Suite 102,
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Laguna Hills, California, 92653
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