Item
1.01. Entry into a Material Definitive Agreement.
GX
Acquisition Corp. (“GX”) is a blank check company incorporated in Delaware on August 24, 2018 for the purpose
of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination
involving GX and one or more businesses. On January 8, 2021, GX entered into a Merger Agreement and Plan of Reorganization (the
“Merger Agreement”) with Alpha First Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary
of GX (“First Merger Sub”), Alpha Second Merger Sub, LLC, a Delaware limited liability company and a direct,
wholly owned subsidiary of GX (“Second Merger Sub”), and Celularity Inc., a Delaware corporation (“Celularity”).
Pursuant
to the Merger Agreement, at the closing of the transactions contemplated by the Merger Agreement (the “Closing”),
and in accordance with the Delaware General Corporation Law, as amended (“DGCL”), (i) First Merger Sub
will be merged with and into Celularity (the “First Merger”), with Celularity surviving the First Merger as
a wholly owned subsidiary of GX (Celularity, in its capacity as the surviving corporation of the First Merger, is sometimes referred
to as the “Surviving Corporation”); and (ii) immediately following the First Merger and as part of the same
overall transaction as the First Merger, the Surviving Corporation will be merged with and into Second Merger Sub (the “Second
Merger” and, together with the First Merger, the “Mergers”), with Second Merger Sub being the surviving
entity of the Second Merger (Second Merger Sub, in its capacity as the surviving entity of the Second Merger, is sometimes referred
to herein as the “Surviving Entity”) (steps (i) and (ii) collectively with the other transactions
described in the Merger Agreement, the “Business Combination”).
The
Merger Agreement
Merger
Consideration
The
aggregate merger consideration payable to stockholders of Celularity at the Closing consists of up to 147,327,224 newly issued
shares of Class A common stock of GX, par value $0.0001 per share (“GX Class A Common Stock”) valued
at approximately $10.15 per share.
Prior
to the Closing, Celularity will cause each share of preferred stock of Celularity, par value $0.0001 per share, designated as
Series A Preferred Stock, Series B Preferred Stock and Series X Preferred Stock, respectively (together, “Celularity
Preferred Stock”) that is issued and outstanding immediately prior to the effective time of the First Merger (the “Effective
Time”) to be automatically converted into a number of shares of common stock of Celularity, par value of $0.0001 per
share (“Celularity Common Stock”) at the then-effective conversion rate as calculated pursuant to the Amended
and Restated Certificate of Incorporation of Celularity, dated March 16, 2020, as may be amended, restated or otherwise modified
from time to time (the “Celularity Charter”).
At
the Effective Time, by virtue of the First Merger and without any action on the part of GX, First Merger Sub, Celularity or the
holders of any of the following securities:
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(a)
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each
share of Celularity Common Stock (including shares of Celularity Common Stock resulting from the conversion of shares of Celularity
Preferred Stock described above (including any shares of Celularity Preferred Stock issued for cash upon exercise of a warrant
to purchase Celularity’s Series B Preferred Stock (each, a “Celularity Warrant”) prior to or in connection
with the Closing)) that is issued and outstanding immediately prior to the Effective Time will be canceled and converted into
the right to receive the number of shares of GX Class A Common Stock equal to the Exchange Ratio (as defined below) (the “Per
Share Merger Consideration”);
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(b)
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each
share of Celularity capital stock held in the treasury of Celularity will be cancelled without any conversion thereof and no payment
or distribution will be made with respect thereto;
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(c)
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each
share of First Merger Sub common stock, par value $0.0001 per share, issued and outstanding immediately prior to the Effective
Time will be converted into and exchanged for one validly issued, fully paid and nonassessable share of common stock, par value
$0.0001 per share, of the Surviving Corporation;
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(d)
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each
Celularity Warrant (as to which no notice of exercise has been delivered to Celularity prior to the Closing) that is outstanding
immediately prior to the Effective Time (and which would otherwise be exercisable in accordance with its terms immediately following
the Effective Time) will, to the extent consistent with the terms of such Celularity Warrant, represent the right to purchase
shares of GX Class A Common Stock (and not Celularity Capital Stock) (each, a “Converted Warrant”) on the same
terms and conditions (including exercisability terms) as were applicable to such Celularity Warrant immediately prior to the Effective
Time, except that (A) each Converted Warrant will be exercisable for that number of shares of GX Class A Common Stock equal to
the product (rounded down to the nearest whole number) of (1) the number of Celularity Warrant Shares (as defined below) subject
to the Celularity Warrant immediately prior to the Effective Time and (2) the Exchange Ratio (as defined below); and (B) the per
share exercise price for each share of GX Class A Common Stock issuable upon exercise of the Converted Warrant will be equal to
the quotient (rounded up to the nearest whole cent) obtained by dividing (1) the per share exercise price for each share of Series
B Preferred Stock issuable upon exercise of such Celularity Warrant immediately prior to the Effective Time by (2) the Exchange
Ratio (as defined below); and
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(e)
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each
option to purchase Celularity Common Stock (each, a “Celularity Option”) that is outstanding immediately prior
to the Effective Time will be assumed by GX and converted into an option to purchase shares of GX Class A Common Stock (each,
a “Converted Option”), except that the assumption and conversion of any such Celularity Options that are incentive
stock options under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) will be effected
in a manner that is intended to be consistent with the applicable requirements of Section 424 of the Code and the applicable regulations
promulgated thereunder. Each Converted Option will have and be subject to the same terms and conditions (including vesting and
exercisability terms) as were applicable to such Celularity Option immediately before the Effective Time, except that (x) each
Celularity Option will be exercisable for that number of shares of GX Class A Common Stock equal to the product (rounded down
to the nearest whole number) of (1) the number of shares of Celularity Common Stock subject to the Celularity Option immediately
before the Effective Time and (2) the Exchange Ratio (as defined below); and (y) the per share exercise price for each share of
GX Class A Common Stock issuable upon exercise of the Converted Option will be equal to the quotient (rounded up to the nearest
whole cent) obtained by dividing (1) the exercise price per share of Celularity Common Stock of such Celularity Option immediately
before the Effective Time by (2) the Exchange Ratio (as defined below); except that the exercise price and the number of shares
of GX Class A Common Stock purchasable under each Converted Option will be determined in a manner consistent with the requirements
of Section 409A of the Code and the applicable regulations promulgated thereunder.
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(f)
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The
following terms have the respective meanings ascribed to them below:
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(i)
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“Celularity
Reference Share Value” means a dollar amount equal to (i) the sum of (a) $1,250,000,000 plus (b) the aggregate dollar
amount payable to Celularity upon the exercise of all Celularity Options and Celularity Warrants (as to which no notice of exercise
has been delivered to Celularity prior to the Closing) that are outstanding immediately prior to the Effective Time (and which
would otherwise be exercisable in accordance with its terms immediately following the Effective Time), calculated by adding the
sum of all exercise prices under such Celularity Options and Celularity Warrants (the “Aggregate Exercise Price”)
divided by (ii) the number of Fully Diluted Celularity Shares (as defined below).
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(ii)
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“Exchange
Ratio” means the quotient obtained by dividing (i) the Celularity Reference Share Value, by (ii) a dollar amount equal
to the quotient obtained by dividing (a) the aggregate amount on deposit in GX’s trust account as of two business days prior
to the date of the Closing, including interest earned on the funds held in GX’s trust account and not previously released
to GX to pay its taxes by (b) the shares of GX Class A Common Stock issued and sold as part of GX units in GX’s initial
public offering that remain outstanding as of two business days prior to the date of the Closing.
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(iii)
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“Fully
Diluted Celularity Shares” means, as of the Effective Time, a number of shares of Celularity Common Stock determined
as follows without duplication, and expressed in each case on a fully diluted and as-converted to Celularity Common Stock basis:
(i) the number of shares of Celularity Common Stock outstanding immediately prior to the Effective Time, (ii) the number of shares
of Celularity Common Stock issuable in respect of all unexpired, issued and outstanding Celularity Options, (iii) the number of
shares of Celularity Common Stock issuable upon the conversion of the Celularity Preferred Stock pursuant to the Merger Agreement
(including in respect of any Celularity Warrant Shares (as defined below) issued upon the exercise of a Celularity Warrant prior
to or in connection with the Closing) and (iv) the Celularity Warrant Shares (as defined below) to the extent the related Celularity
Warrant remains outstanding immediately prior to the Effective Time (and which would otherwise be exercisable in accordance with
its terms immediately following the Effective Time).
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(iv)
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“Celularity
Warrant Shares” means the number of shares of Celularity Common Stock that would be issuable upon the exercise of a
Celularity Warrant for cash and assuming the conversion of the Series B Preferred Stock underlying such outstanding Celularity
Warrant into Celularity Common Stock pursuant to the Merger Agreement.
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At
the effective time of the Second Merger (the “Second Effective Time”), by virtue of the Second Merger and without
any action on the part of GX, Surviving Corporation, Second Merger Sub or the holders of any securities of GX or the Surviving
Corporation or the Second Merger Sub: (x) each share of common stock of the Surviving Corporation issued and outstanding
immediately prior to the Second Effective Time will be canceled and will cease to exist without any conversion thereof or payment
therefor; and (y) each membership interest in Second Merger Sub issued and outstanding immediately prior to the Second Effective
Time will be converted into and become one validly issued, fully paid and non-assessable membership interest in the Surviving
Entity, which will constitute the only outstanding equity of the Surviving Entity.
Representations
and Warranties
The
Merger Agreement contains customary representations and warranties by GX, Celularity, First Merger Sub and Second Merger. The
representations and warranties of the respective parties to the Merger Agreement will not survive the Closing.
Covenants
The
Merger Agreement includes customary covenants of the parties with respect to operation of their respective businesses prior to
consummation of the Business Combination and efforts to satisfy conditions to consummation of the Business Combination. The Merger
Agreement contains additional covenants, including, among others, providing for (i) Celularity to prepare and deliver to GX certain
audited and unaudited consolidated financial statements of Celularity, (ii) GX to prepare and file a registration statement on
Form S-4 (together with all amendments thereto, the “Registration Statement”), which will include a document
that will serve as a proxy statement and prospectus of GX, and take certain other actions to obtain the requisite approval of
GX stockholders of certain proposals regarding the Business Combination, (iii) the parties to not solicit, initiate or knowingly
encourage any negotiations or enter into any agreements with respect to certain alternative transactions, (iv) the parties to
use reasonable best efforts to obtain necessary approvals from governmental authorities and (v) GX to use its reasonable best
efforts to cause the GX Class A Common Stock issued in connection with the Business Combination to be approved for listing on
the Nasdaq Capital Market at the Closing.
Conditions
to the Closing
The
obligations of GX, Celularity, First Merger Sub and Second Merger Sub to consummate the Business Combination, including the Mergers,
are subject to customary and other conditions of the respective parties, including, among others: (i) approval by GX’s
stockholders and by Celularity’s stockholders, (ii) GX having at least $5,000,001 of net tangible assets as of the
Closing, (iii) the expiration or termination of the waiting period under the HSR Act, (iv) the listing of the shares
of GX Class A Common Stock to be issued in connection with the Closing on the Nasdaq Capital Market and the effectiveness
of the Registration Statement, (v) no material adverse effect on Celularity and its subsidiaries or GX and its subsidiaries
having occurred and (vi) the effectiveness or execution, as applicable, of the agreements relating to the Business Combination
contemplated by the Merger Agreement.
Termination
The
Merger Agreement may be terminated under certain customary and limited circumstances prior to the Closing, including (i) by
mutual written consent of the parties, (ii) by either GX or Celularity if (a) the Closing has not occurred on or prior
to May 20, 2021 (the “Initial Outside Date”, as it may be extended below, the “Outside Date”);
except that, if prior to such date, GX’s stockholders have approved extending the deadline by which it must complete its
initial business combination (such deadline, the “Extension Date”), then the Initial Outside Date may be extended
by either GX or Celularity upon written notice to the other to the earlier of the Extension Date and June 30, 2021, except that
a party may not terminate the Merger Agreement if such party’s direct breach or violation of the Merger Agreement, or indirect
breach or violation of the Merger Agreement through its affiliates, is the principal cause of the failure of any closing condition
to be satisfied on or prior to the Outside Date, (b) a final and nonappealable order has been issued or governmental action
permanently restrains, enjoins or otherwise prohibits the Business Combination or (c) GX’s stockholder approval is
not obtained, (iii) by Celularity upon a breach by GX, First Merger Sub or Second Merger Sub if such breach gives rise to
a failure of a closing condition and cannot be cured or has not been cured within the earlier of 30 days’ notice by
Celularity and the Outside Date and (iv) by GX (a) upon a breach by Celularity if such breach gives rise to a failure
of a closing condition and cannot be cured or has not been cured within the earlier of 30 days’ notice by GX and the
Outside Date, (b) if Celularity fails to obtain the approval of Celularity stockholders required to adopt the Merger Agreement
and approve the Business Combination within five business days after the Registration Statement becomes effective or (c)
the Stockholder Support Agreements (as defined below) have not been delivered by a number of Celularity stockholders sufficient
to adopt the Merger Agreement and approve the Business Combination within 24 hours of the execution and delivery of the Merger
Agreement.
The
foregoing description of the Merger Agreement and the transactions contemplated thereby, including the Mergers, does not purport
to be complete and is qualified in its entirety by the terms and conditions of the Merger Agreement, a copy of which is attached
hereto as Exhibit 2.1 and is incorporated herein by reference. The Merger Agreement contains representations, warranties and covenants
that the respective parties made to each other as of the date of such agreement or other specific dates. The assertions embodied
in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are
subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Merger Agreement.
The Merger Agreement has been attached to provide investors with information regarding its terms. It is not intended to provide
any other factual information about GX or any other party to the Merger Agreement. In particular, the representations, warranties,
covenants and agreements contained in the Merger Agreement, which were made only for purposes of the Merger Agreement and as of
specific dates, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon
by the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual
risk between the parties to the Merger Agreement instead of establishing these matters as facts) and may be subject to standards
of materiality applicable to the contracting parties that differ from those applicable to GX’s investors and security holders.
GX investors and security holders are not third-party beneficiaries under the Merger Agreement and should not rely on the representations,
warranties, covenants and agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition
of any party to the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties
may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in GX’s
public disclosures.
PIPE
Subscription Agreements
On
January 8, 2021, concurrently with the execution of the Merger Agreement, GX entered into separate subscription agreements (the
“Subscription Agreements”) with investors (each, a “PIPE Investor”), pursuant to which the
PIPE Investors agreed to purchase, and GX agreed to sell to the PIPE Investors, an aggregate of 8,340,000 shares of GX Class A
Common Stock (the “PIPE Shares”), for a purchase price of $10.00 per share and an aggregate purchase price
of $83,400,000 million (the “PIPE Investment”), a portion of which is expected to be funded by (i) existing
Celularity investors and affiliates (the “Celularity-Related PIPE Investors”) and (ii) certain additional investors.
The
closing of the sale of the PIPE Shares (the “PIPE Closing”) pursuant to the Subscription Agreements is expected
to occur substantially concurrently with the Closing and is conditioned upon, among other customary closing conditions, the consummation
of the Business Combination and certain applicable regulatory approvals.
The
Subscription Agreements for the PIPE Investors (other than the Celularity-Related PIPE Investors, whose registration rights are
governed by the Amended and Restated Registration Rights Agreement described below), provide for certain registration rights.
In particular, GX is required to, as soon as practicable but no later than 15 business days after the Closing, submit or file
with the SEC a registration statement registering the resale of the PIPE Shares. Additionally, GX is required to use its reasonable
best efforts to have such registration statement declared effective by the SEC as soon as reasonably practicable after the filing
thereof but no later than the earlier of (i) the 15th business day following the filing date thereof if the SEC notifies
GX that it will “review” such registration statement and (ii) the 10th business day after the date GX is notified
(orally or in writing, whichever is earlier) by the SEC that such registration statement will not be “reviewed” or
will not be subject to further review. GX must use commercially reasonable efforts to keep the registration statement effective
until the earliest of: (A) the date the PIPE Investors no longer hold any registrable shares, (B) the date all registrable shares
held by the PIPE Investors may be sold without restriction under Rule 144 and (C) two years from the date of effectiveness of
the registration statement.
The
Subscription Agreements will terminate with no further force and effect upon the earliest to occur of: (a) such date and time
as the Merger Agreement is terminated in accordance with its terms; (b) the mutual written agreement of the parties to such Subscription
Agreement; (c) if any of the conditions to closing set forth in such Subscription Agreement are not satisfied on or prior to the
Closing and, as a result thereof, the transactions contemplated by the Subscription Agreement fail to occur; (d) the Outside Date
if the Closing has not occurred by such date; and (e) with respect to certain PIPE Investors, by written notice of any such PIPE
Investor to GX in the event the Merger Agreement is amended, supplemented or modified on or after the date hereof in a manner
that materially adversely affects such PIPE Investor without the prior written consent of such PIPE Investor.
The
foregoing description of the Subscription Agreements does not purport to be complete and is qualified in its entirety by the terms
and conditions of the form of Subscription Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein
by reference.
Stockholder
Support Agreements
On
January 8, 2021, in connection with the execution of the Merger Agreement, GX, Celularity and stockholders of Celularity holding
approximately 82% of Celularity’s shares of capital stock as of the date of the Merger Agreement executed stockholder
support agreements (the “Stockholder Support Agreements”), pursuant to which, among other things, such persons
have agreed (a) vote their shares Celularity common stock and preferred stock in favor of the adoption of the Merger Agreement
and the approval of the Business Combination contemplated by the Merger Agreement, subject to certain customary conditions and
(b) not to transfer any of their subject shares (or enter into any arrangement with respect thereto), subject to certain
customary exceptions.
The
foregoing description of the Stockholder Support Agreements does not purport to be complete and is qualified in its entirety by
the terms and conditions of the form of Stockholder Support Agreement, a copy of which is attached hereto as Exhibit 10.2 and
is incorporated herein by reference.
Sponsor
Support Agreement
On
January 8, 2021, in connection with the execution of the Merger Agreement, Celularity, GX, GX Sponsor LLC and the officers and
directors of GX executed a sponsor support agreement (the “Sponsor Support Agreement”), pursuant to which,
among other things, GX Sponsor LLC and the officers and directors of GX have agreed (a) to vote their shares of GX common
stock in favor of the adoption of the Merger Agreement and the approval of the Business Combination contemplated by the Merger
Agreement, as well as the other proposals to be set forth in the Registration Statement, subject to certain customary conditions,
(b) not to transfer any of their subject shares (or enter into any arrangement with respect thereto), subject to certain
customary exceptions and (c) to waive, to the fullest extent permitted by law, the ability to adjust the Initial Conversion Ratio
(as defined in GX’s Amended and Restated Certificate of Incorporation, dated as of May 20, 2019 (the “GX Charter”))
pursuant to the terms of the GX Charter in connection with the issuance of additional GX Class A Common Stock in the transactions
contemplated by the Merger Agreement.
The
foregoing description of the Sponsor Support Agreement does not purport to be complete and is qualified in its entirety by the
terms and conditions of the Sponsor Support Agreement, a copy of which is attached hereto as Exhibit 10.3 and is incorporated
herein by reference.
Registration
Rights Agreement
In
connection with the Closing, that certain registration rights agreement, dated May 20, 2019, will be amended and restated (as
amended and restated, the “Registration Rights Agreement”), and the Surviving Entity, the Sponsor, certain
stockholders of Celularity and certain PIPE Investors will enter into the Registration Rights Agreement at the Closing, pursuant
to which the Surviving Entity will agree to register for resale, pursuant to Rule 415 under the Securities Act of 1933, as amended
(the “Securities Act”), certain shares of GX Class A Common Stock and other equity securities of GX that are
held by the parties thereto from time to time.
The
Registration Rights Agreement will terminate on the earlier of (i) the seventh anniversary of the date of the Registration Rights
Agreement or (ii) with respect to any party thereto, on the date that such party no longer holds any Registrable Securities.
The
foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by
the terms and conditions of the form Registration Rights Agreement, a copy of which is attached as Exhibit A to the Merger Agreement,
filed as Exhibit 2.1 to this Current Report, and is incorporated herein by reference.
Lock-Up
Agreements
In
connection with the Closing, certain existing Celularity stockholders will each agree, subject to certain customary exceptions,
not to transfer the shares of GX Class A Common Stock held by such contracting parties until the earlier of (A) one year after
the Closing or (B) subsequent to the Closing, (x) if the last sale price of GX Class A Common Stock equals or exceeds $12.00 per
share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations or other similar transactions) for any
20 trading days within any 30-trading day period commencing at least 150 days after Closing or (y) the date on which GX completes
a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of GX’s stockholders
having the right to exchange their shares of GX Class A Common Stock for cash, securities or other property.
The
foregoing description of the Lock-Up Agreements is qualified in its entirety by reference to the full text of the form of Lock-Up
Agreement, a copy of which is included as Exhibit B to the Merger Agreement, filed as Exhibit 2.1 to this Current Report on Form
8-K (this “Current Report”), and incorporated herein by reference.