BRAC Broad Capital Acquisition Corporation

Item 1.01. Entry into a Material Definitive Agreement.

Agreement and Plan of Merger and Business Combination Agreement

On January 18, 2023, Broad Capital Acquisition Corp., a Delaware corporation (the “Company”), entered into a definitive Agreement and Plan of Merger and Business Combination Agreement (the “BCA”) with Openmarkets Group Pty Ltd, an Australian proprietary limited company (the “Target”), BMYG OMG Pty Ltd, an Australian proprietary limited company (the “Shareholder”), and Broad Capital LLC, a Delaware limited liability company, solely in its capacity as the Company’s sponsor (the “Indemnified Party Representative”). The Company, Target, Shareholder, and the Indemnified Party Representative, as well as the to-be-formed Purchaser and Merger Sub (each of which are defined below), are sometimes referred to herein individually as a “Party” and, collectively, as the “Parties.”

Business Combination

Pursuant to the BCA, prior to the closing (the “Closing”) of the contemplated transactions (collectively, the “Business Combination”), the Parties will cause the Company to move its domicile from the State of Delaware to Australia by merging a to-be-formed Delaware corporation (“Merger Sub”), which shall be wholly-owned by a to-be-formed Australian corporation (the “Purchaser”) with and into the Company, with the Company continuing as the surviving entity and a wholly-owned subsidiary of the Purchaser (the “Redomestication Merger”). As a result of the Redomestication Merger, (i) each issued and outstanding share of the Company’s common stock, par value $0.000001 per share (the “Company Common Stock”), will convert into the right to receive one ordinary share of the Purchaser (the “Purchaser Shares”); (ii) each of the Company’s units (the “Company Units”), comprised of one share of Company Common Stock and one right to receive one-tenth of one share of Company Common Stock upon the Closing (each a “Company Right”), shall convert into the right to receive one unit of the Purchaser, comprised of one Purchaser Share and one right to receive one-tenth of one Purchaser Share upon the Closing (each a “Purchaser Right”); and (iii) each Company Right shall be converted into the right to receive one Purchaser Right.

Following the Redomestication Merger, the Company and the Purchaser will cause the Company to liquidate, such that all assets of the Company are, or shall be, transferred to the Purchaser and all liabilities of the Company are, or shall be, assumed by the Purchaser (the “Liquidation”). Additionally, the Company will cause all of its contracts to be assigned to and assumed by the Purchaser.

Following the Redomestication Merger and Liquidation, the Shareholder will contribute all of the issued and outstanding ordinary shares of the Target to the Purchaser in exchange for 9,000,000 Purchaser Shares (the “Exchange Consideration”), which shares shall have a deemed value of $10.00 per share for the purposes of all calculations and adjustments under the BCA, with such Exchange Consideration subject to adjustment based on the Target’s net indebtedness, working capital, and indemnification obligations following the Closing as detailed in the BCA (the “Acquisition Contribution and Exchange”). Any adjustments to the Exchange Consideration shall be made from Purchaser Shares placed in escrow pursuant to the Escrow Agreement (as defined below) (the “Escrow Shares”), which Escrow Shares shall be released to either the Purchaser or the Shareholder based on the nature of the adjustment to the Exchange Consideration. Additionally, in the event the Target’s net working capital at the Closing (the “Net Working Capital”) exceeds the Target’s pre-Closing estimated net working capital (the “Estimated Net Working Capital”), the Shareholder will receive additional Purchaser Shares in an amount equal to the difference between the Net Working Capital and the Estimated Net Working Capital (the “Adjustment Exchange Consideration”). Further, in addition to the Escrow Shares and the Adjustment Exchange Consideration, an additional 2,000,000 Purchaser Shares may be paid to the Shareholder based on certain performance benchmarks following the Closing as detailed in the BCA (the “Earnout”).

In connection with the Closing, the Purchaser shall cause its board of directors to consist of seven (7) directors, which shall include not less than four (4) independent directors under Nasdaq rules requiring a majority of directors to be independent, with two of such directors to be designated by the Indemnified Party Representative (one of which shall be independent) and the remaining directors, both independent and not independent, to be designated by the Target prior to the Closing.

Representations and Warranties; Covenants

Pursuant to the BCA, the Parties made customary representations and warranties for transactions of this type. Aside from certain representations and warranties made by the Target regarding litigation, actions, or other matters that are brought or initiated against the Target prior to the Closing or that may arise following the Closing, the representations and warranties made by the Company, the Purchaser, the Target, and the Shareholder will not survive the Closing. In addition, the Parties agreed to be bound by certain covenants that are customary for transactions of this type, including obligations of the Parties to use their best efforts to operate their respective businesses in the ordinary course, and to refrain from taking certain specified actions without the prior written consent of the applicable Party, in each case, subject to certain exceptions and qualifications. Additionally, the Parties have agreed not to solicit, negotiate, or enter into a competing transaction. The covenants of the Parties generally will not survive the Closing, subject to certain exceptions, including certain covenants and agreements that by their terms are to be performed in whole or in part after the Closing.

Conditions to Each Party’s Obligation to Close

Pursuant to the BCA, the obligations of the Parties to consummate the Business Combination are subject to the satisfaction or waiver of certain customary closing conditions of the respective Parties, including, without limitation: (i) the representations and warranties of the respective Parties being true and correct subject to the materiality standards contained in the BCA; (ii) material compliance by the Parties of their respective pre-closing covenants and agreements, subject to the standards contained in the BCA; (iii) the approval by the Purchaser’s stockholders of the Business Combination; (iv) the absence of any Material Adverse Effect (as defined in the BCA) with respect to the Company, with respect to the Purchaser, or with respect to the Target since the effective date of the BCA that is continuing and uncured; (v) the expiration or termination, as applicable, of any waiting period (and any extension thereof) applicable to the consummation of the BCA under any antitrust laws; (vi) the receipt of all consents required to be obtained from or made with any governmental authority in order to consummate the transactions contemplated by the BCA; (vii) the receipt of any approvals required under the Australian Foreign Acquisitions and Takeovers Act 1975 (Cth); (viii) the Purchaser having at least $5,000,001 in tangible net assets upon the Closing; (ix) the Target having at least A$7,000,000 in cash or cash equivalents upon the Closing; (x) the entry into certain ancillary agreements as of the Closing; (xi) the receipt by the Purchaser of copies of all third-party consents identified in the BCA in a form and substance reasonably satisfactory to the Purchaser, which consents shall not have been revoked at the time of the Closing; (xii) the continued listing of the Purchaser Shares and the Purchaser Rights on the Nasdaq Capital Market and the approval of the listing of the Purchaser Shares to be issued to the Shareholder in connection with the Business Combination on the Nasdaq Capital Market; and (xiii) the receipt of certain closing deliverables.

Termination

The BCA may be terminated under certain customary and limited circumstances at any time prior to the Closing, including, among others, (i) by the mutual written consent of the Purchaser and the Target; (ii) by the Purchaser, if any of the representations or warranties of the Shareholder or the representations or warranties of the Target set forth in the BCA shall not be true and correct, or if the Target has failed to perform any covenant or agreement on the part of the Target set forth in the BCA, in each case such that the conditions to the Closing set forth in the BCA would not be satisfied and the breach or breaches causing such representations or warranties not to be true and correct, or the failure to perform any covenant or agreement, as applicable, are not cured (or waived by the Purchaser) by the earlier of (a) the Outside Date (as defined below) or (b) 20 business days after written notice thereof is delivered to the Target; (iii) by the Target or the Shareholder, if any of the representations or warranties of the Purchaser set forth in the BCA shall not be true and correct, or if the Purchaser has failed to perform any covenant or agreement on its part set forth in the BCA, in each case such that the conditions to the Closing set forth in the BCA would not be satisfied and the breach or breaches causing such representations or warranties not to be true and correct, or the failure to perform any covenant or agreement, as applicable, are not cured (or waived by the Target) by the earlier of (a) the Outside Date or (b) 20 business days after written notice thereof is delivered to the Purchaser; (iv) by any of the Target, the Shareholder, or the Purchaser: (a) on or after June 30, 2023, or such later date agreed by the Parties in writing (the “Outside Date”), if the Acquisition Contribution and Exchange shall not have been consummated prior to the Outside Date; (b) if any order having the effect of prohibiting or preventing the Closing shall be in effect and shall have become final and non-appealable; or (c) if any of the matters to be approved pursuant to the Proxy Statement shall fail to receive the required votes to approve such matter (unless the special meeting called to approve such matters has been adjourned or postponed, in which case at the final adjournment or postponement thereof); (v) by the Purchaser, (a) in the event that the Target has not delivered to the Purchaser by February 19, 2023, or such later date as agreed by the Parties in writing, the Audited 2021/2022 Financial Statements (as defined in the BCA), or (b) in the event certain actions or other matters contemplated by the BCA would prevent the Purchaser from closing the Business Combination by the Outside Date or would prevent the Target from delivering certain closing deliverables; or (vi) by the Target, if it notifies the Purchaser in accordance with the BCA that it wishes to pursue an Alternative Proposal (as defined in the BCA).

In the event the BCA is terminated pursuant to clauses (ii) or (vi) of the above paragraph, the Target must pay the Purchaser a breakup fee equal to $5,000,000 plus the amount of the Purchaser’s reasonable and documented out-of-pocket expenses incurred in connection with the BCA and the transactions contemplated thereunder. In the event the BCA is terminated pursuant to clause (v) of the above paragraph, the Target must reimburse the Purchaser for its reasonable and documented out-of-pocket expenses incurred in connection with the BCA and the transactions contemplated thereunder.

The foregoing description of the BCA does not purport to be complete and is qualified in its entirety by reference to the full text of the BCA filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference. The BCA provides investors with information regarding its terms and is not intended to provide any other factual information about the Parties. In particular, the assertions embodied in the representations and warranties contained in the BCA were made as of the execution date of the BCA only and are qualified by information in confidential disclosure schedules provided by the Parties in connection with the signing of the BCA. These disclosure schedules contain information that modifies, qualifies, and creates exceptions to the representations and warranties set forth in the BCA. Moreover, certain representations and warranties in the BCA may have been used for the purpose of allocating risk between the parties rather than establishing matters of fact. Accordingly, you should not rely on the representations and warranties in the BCA as characterizations of the actual statements of fact about the parties.

Escrow Agreement

Prior to the Closing, the Company (and the Purchaser as the successor entity thereto), the Shareholder, and a mutually agreed upon escrow agent shall enter into an escrow agreement (the “Escrow Agreement”), pursuant to which, among other things, the parties shall cause a certain number of Purchaser Shares, including the Escrow Shares to be held in escrow for use in connection with any adjustments to the Exchange Consideration, 1,607,000 Purchaser Shares to be held in escrow for use in connection with the indemnification obligations of the Target, and 2,000,000 Purchaser Shares to be held in escrow for use in connection with the Earnout.

Lock-up Agreement

At the Closing, the Company (and the Purchaser as the successor entity thereto), the Shareholder, and any person or entity who receives shares on behalf of the Shareholder shall enter into a lock-up agreement (the “Lock-Up Agreement”), pursuant to which, among other things, and subject to certain exceptions, the Purchaser Shares held by the Shareholder or any such other person or entity will be locked-up for a period of up to twelve months from the date of the Closing, in accordance with the terms set forth therein.

Non-Competition Agreement

At the Closing, the Company (and the Purchaser as the successor entity thereto) and its affiliates, successors, and indirect and direct subsidiaries, the Target and its affiliates, successors, and indirect and direct subsidiaries, and the Shareholder shall enter into a non-competition and non-solicitation agreement (the “Non-Competition Agreement”), pursuant to which, among other things, the Shareholder will agree not to (i) compete with the business of the post-combination company for a period of five (5) years following the Closing, among other matters, or (ii) solicit the employees or customers of the Company, the Target, or their affiliates for a period of five (5) years following the Closing, among other matters.

Registration Rights Agreement

At the Closing, the Company (and the Purchaser as the successor entity thereto) and the Shareholder shall enter into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which, among other things, the Purchaser will be obligated to file a registration statement to register the resale of the Purchaser Shares held by the Shareholder. The Registration Rights Agreement will also provide the Shareholder with “piggy-back” registration rights, subject to certain requirements and customary conditions.