CHAA Catcha Investment Corp

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

  

 

CURRENT REPORT

Pursuant to Section 13 or Section 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): June 6, 2024

  

 

Catcha Investment Corp

(Exact name of registrant as specified in its charter)

 

  

Cayman Islands		001-40061		98-1574476
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification Number)

 

3 Raffles Place #06-01, Bharat Building, Singapore		048617
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: +65 6325-2788

 

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☒

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A Ordinary Shares, par value $0.0001 per share		CHAA		NYSE American LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

Item 8.01. Other Events.

 

As previously announced, on August 3, 2023, Catcha Investment Corp, a Cayman Islands exempted company limited by shares (“Catcha”), entered into that certain Business Combination Agreement (as amended on October 2, 2023, January 31, 2024, February 16, 2024 and May 21, 2024, the “Business Combination Agreement”) with Crown LNG Holding AS, a private limited liability company incorporated under the laws of Norway (“Crown”), Crown LNG Holdings Limited, a private limited company incorporated under the laws of Jersey, Channel Islands (the “PubCo”), and CGT Merge II Limited, a Cayman Islands exempted company limited by shares providing for the combination of Catcha, Crown and PubCo (such transaction, the “Business Combination”).

 

April 2024 Notes

 

On April 30, 2024, PubCo entered into subscription agreements with certain investors with respect to convertible promissory notes issuable upon closing of the Business Combination (the “April 2024 Notes”) with an aggregate original principal amount of $1.05 million for an aggregate purchase price of $1.0 million, reflecting a 5% original issue discount.

 

The April 2024 Notes bear interest at an annual rate of 10% and mature on the first anniversary of the issuance of the applicable note (the date of such issuance, the “Issuance Date”). Interest on the April 2024 Notes is payable in cash or in-kind through the issuance of additional April 2024 Notes, at the option of PubCo.

 

The April 2024 Notes are convertible into ordinary shares, no par value, of PubCo (“PubCo Ordinary Shares”) at the option of the holder. The number of ordinary shares issuable upon conversion of the April 2024 Notes is determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”). “Conversion Amount” means the sum of (A) the portion of the principal of a note to be converted, redeemed or otherwise with respect to which this determination is being made, (B) accrued and unpaid interest with respect to such principal of the applicable note, and (C) any other unpaid amounts, if any. “Conversion Price” means $10.00 initially at the date of issuance of the April 2024 Notes. The Conversion Price will reset to 95% of the lowest closing volume weighted average price observed over the 5 trading days immediately preceding the 270th calendar day following the Issuance Date, subject to a minimum price of $2.50 (the “Minimum Price”).

 

PubCo has the option to redeem the April 2024 Notes in full at any time after the Issuance Date and prior to maturity thereof upon 10 Trading Days’ (as defined in the April 2024 Notes) notice for cash at a redemption price equal to 110% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon.

 

The foregoing description of the April 2024 Notes does not purport to be complete and is qualified in its entireties by reference to the April 2024 Notes, a form of which is attached as Exhibit 99.1, to this Current Report on Form 8-K and incorporated herein by reference.

 

PIPE

 

On May 6, 2024, PubCo and Catcha entered into a subscription agreement (the “PIPE Subscription Agreement”) for a private placement (the “PIPE”) with certain accredited investor (the “Purchaser”). Pursuant to the PIPE Subscription Agreement, the Purchaser has agreed to purchase an aggregate of 176,470 PubCo Ordinary Shares, at a price per share of $8.50, representing aggregate gross proceeds of $1.5 million.

 

On May 14, 2024, PubCo and Catcha entered into additional subscription agreements (together with the PIPE Subscription Agreement above, the “PIPE Subscription Agreements”) for a private placements with certain accredited investor who are existing shareholders of Crown (the “Existing Shareholder Purchasers”). Pursuant to the PIPE Subscription Agreement, the Existing Shareholder Purchasers have agreed to purchase an aggregate of 26,393 PubCo Ordinary Shares (together with the PubCo Ordinary Shares to be purchased by the Purchaser, the “PIPE Shares”), at a price per share of $10.00, representing aggregate gross proceeds of $263.9 thousand.

 

The PIPE Subscription Agreements contain customary representations and warranties of Catcha, PubCo, the Purchaser, and the Existing Shareholder Purchasers, and customary conditions to closing, as well as customary indemnification obligations. Pursuant to the PIPE Subscription Agreements, PubCo has agreed to register the resale of the PIPE Shares and is required to prepare and file a registration statement with the U.S. Securities and Exchange Commission no later than thirty days following the closing date of the Business Combination.

 

 

The purchase agreement for the April 2024 Notes and the PIPE Subscription Agreements are conditioned upon the closing of the Business Combination prior to the Outside Date set forth in the Business Combination Agreement as of the date of each such agreement. As the Outside Date has been subsequently amended to June 17, 2024 and may need to be further amended if PubCo is unable to obtain approval to list its securities on Nasdaq or the NYSE American by June 17, 2024, Catcha cannot provide any assurance that the investors party to such agreements will waive such condition and consummate the investments pursuant thereto.

 

The foregoing description of the PIPE Subscription Agreement does not purport to be complete and is qualified in its entirety by reference to the PIPE Subscription Agreement, a form of which is attached as Exhibit 99.2, to this Current Report on Form 8-K and incorporated herein by reference.

 

Securities Lending Agreement

 

On May 22, 2024, PubCo entered into a securities lending agreement (the “Securities Lending Agreement”) with Millennia Capital Partners Limited (the “Lender”) pursuant to which the Lender agreed to loan PubCo up to $4.0 million (the “Loan”) at fifty-five (55%) Loan to Value of the current market value of 730,000 shares of Crown pledged to the Lender (“Transferred Collateral”). “Loan to Value” means the ratio of the Loan to the value of the Transferred Collateral, calculated by dividing the amount borrowed by the fair market value of the Transferred Collateral. The Loan matures thirty-six (36) months after the Closing Date (as defined in the Securities Lending Agreement) and bears interest at an annual rate of 6.0% to be paid quarterly.

 

The foregoing description of the Securities Lending Agreement does not purport to be complete and is qualified in its entirety by reference to the Securities Lending Agreement, a copy of which is attached as Exhibit 99.3, to this Current Report on Form 8-K and incorporated herein by reference.

 

Securities Purchase Agreement

 

On June 4, 2024, PubCo entered into a a definitive securities purchase agreement (the “Securities Purchase Agreement”; together with the April 2024 Notes, the PIPE and the Securities Lending Agreement, the “Financing Agreements”) with Helena Special Opportunities LLC (the “Investor”), an affiliate of Helena Partners Inc., a Cayman-Islands based advisor and investor, providing for up to approximately USD$27 million in funding through a private placement for the issuance of convertible notes (the “SPA Notes”). Capitalized terms used but not defined in the description below shall have the meanings ascribed thereto in the Securities Purchase Agreement.

 

Pursuant to the Securities Purchase Agreement, the Company will issue the SPA Notes and warrants (the “Warrants”) to the Investor across multiple tranches (the “Tranches”) consisting of an initial tranche (the “Initial Tranche”) of (i) an aggregate principal amount of $2.95 million and including an original issue discount (“OID”) of up to an aggregate of $442,500, plus Warrants to purchase a number of PubCo Ordinary Shares equal to the applicable Warrant Share Amounts (defined below). The second tranche (the “Second Tranche”) consists of an aggregate principal amount of SPA Notes of up to $2.95 million and including an OID of up to $442,500 and Warrants to purchase a number of PubCo Ordinary Shares equal to the applicable Warrant Share Amounts with respect to such Tranche. The Securities Purchase Agreement contemplates up to five subsequent Tranches, each of which will be in an aggregate principal amount of SPA Notes of $2.95 million each and each including an OID of $442,5000 and Warrants to purchase a number of PubCo Ordinary Shares equal to the applicable Warrant Share Amounts with respect to such Tranches. The purchase price of an SPA Note and its accompanying Warrant will be computed by subtracting the portion of the OID represented by such SPA Note from the portion of the principal amount represented by such SPA Note (a “Purchase Price”).

 

The Closing of the purchase of each Tranche shall be subject to certain terms and conditions, including but not limited to:

 

(a)

Initial Tranche. Closing of the Initial Tranche shall occur on closing of the Business Combination

(b)

The Second Tranche. Closing of the Second Tranche shall not occur prior to the date that is the earlier of (i) the date that is 90 days following the Closing Date of the Initial Tranche and (ii) such date as the Notes and Warrants issuable in such Tranche may be resold pursuant to an effective registration statement pursuant to Rule 144 under the 1933 Act.

(c)

Third and Fourth Tranches.

a.

Closing of each such Tranche shall be for only one Tranche of Notes having an initial aggregate Principal Amount equal to the greater of (i) $50,000 and (ii) the lesser of (x) two and one half times the median of the value of shares traded over each of the thirty (30) Trading Days preceding the Closing Day for such Tranche, and (y) $2.95 million, and

b.

the Closing Date of such Tranche shall not occur prior to the date that is the earlier of (i) the date that is 90 days following the Closing Date of the previous Tranche and (ii) such date as the Company and the Investor shall mutually agree.

 

(d)

Fifth, Sixth and Seventh Tranches. Closing of any subsequent Tranche shall occur on such date as the Company and the Investor shall mutually agree, if at all; provided that the Closing of any subsequent Tranche shall be for only one Tranche of Notes having an initial aggregate Principal Amount equal to the greater of (i) $50,000 and (ii) the lesser of (x) two and one half times the median of the value of shares traded over each of the 30 Trading Days preceding the Closing Date for such Tranche, and (y) $2.95 million.

 

Cohen & Company Capital Markets, a division of J.V.B Financial Group, LLC. acted as placement agent to PubCo for the facility described above.

 

The foregoing description of the Securities Purchase Agreement, the SPA Notes, the Warrants, and the Warrant Shares does not purport to be complete and is qualified in its entirety by the full text of the Securities Purchase Agreement, which is attached hereto as Exhibit 99.4, and is incorporated herein by reference.

 

 

Supplemental Disclosures

 

The information set forth above and below in this Current Report on Form 8-K supplements the proxy statement/prospectus dated February 15, 2024 (the “Proxy Statement/Prospectus”) that was mailed by Catcha to its shareholders in connection with its extraordinary general meeting of shareholders (the “extraordinary general meeting”) to be held to consider and approve, among other things, the Business Combination Agreement.

 

PubCo filed the Proxy Statement/Prospectus with the Securities and Exchange Commission (the “SEC”) as part of a registration statement on Form F-4 (Registration No. 333-274832), which was declared effective by the SEC on February 14, 2024. Capitalized terms used in this Current Report on Form 8-K and not otherwise defined herein have the respective meanings ascribed to them in the Proxy Statement/Prospectus.

 

This supplemental disclosure should be read in conjunction with the Proxy Statement/Prospectus, and if there is any inconsistency between the information in the Proxy Statement/Prospectus and the information set forth herein, you should rely on the information herein.

 

Share Ownership Distribution

 

It is anticipated that, upon completion of the Business Combination, and assuming no holders of Catcha Class A Ordinary Shares exercise their redemption rights, after taking into account shares redeemed by Catcha’s shareholders in connection with the Extension Meetings, and assuming that Polar Multi-Strategy Master Fund (“Polar”) elects to receive Class A Ordinary Shares pursuant to the Subscription Agreement (as described in the proxy statement/prospectus):

 

●

Assuming no PubCo Warrants will be exercised and no April 2024 Notes are converted, (i) Catcha’s public shareholders will retain an ownership interest of approximately 1.9% of the outstanding PubCo Ordinary Shares; (ii) the Sponsor will own approximately 10.5% of the outstanding PubCo Ordinary Shares; (iii) Crown Shareholders (including the Existing Shareholder Purchasers) will own approximately 85.4% of the outstanding PubCo Ordinary Shares; (iv) Cohen & Company Capital Markets (“CCM”) will own approximately 0.1% of the outstanding PubCo Ordinary Shares; (v) the Purchaser will own approximately 0.3% of the outstanding PubCo Ordinary Shares and (vi) Polar will own approximately 1.6% of the outstanding PubCo Ordinary Shares; and

 

●

Assuming all the PubCo Warrants were exercised for cash and all of the April 2024 Notes are converted at the Conversion Price of $10.00 per share, (i) Catcha’s public shareholders will retain an ownership interest of approximately 1.6% of the outstanding PubCo Ordinary Shares; (ii) the Sponsor will own approximately 8.6% of the outstanding PubCo Ordinary Shares; (iii) Crown Shareholders (including the Existing Shareholder Purchasers) will own approximately 70.0% of the outstanding PubCo Ordinary Shares; (iv) CCM will own approximately 0.1% of the outstanding PubCo Ordinary Shares; (v) the Purchaser will own approximately 0.2% of the outstanding PubCo Ordinary Shares;   (vi) Polar will own approximately 1.3% of the outstanding PubCo Ordinary Shares and (vii) the April 2024 Notes holder will own approximately 0.1% of the outstanding PubCo Ordinary Shares; however, the PubCo Warrants are subject to restrictions on the timing of their exercise and may also be exercisable on a cashless basis by reference to the fair market value of the PubCo Ordinary Shares and these percentages are therefore indicative only.

 

Sources and Uses of Funds for the Business Combination

 

The following tables summarize the sources and uses for funding the Business Combination, assuming

 

(i) none of Catcha’s outstanding public shares are redeemed in connection with the Business Combination,

(ii) 50% of Catcha’s outstanding public shares are redeemed in connection with the Business Combination and (iii) all of Catcha’s outstanding public shares are redeemed in connection with the Business Combination, assuming Catcha will only proceed with the Business Combination if it will have net tangible assets of at least $5,000,001 upon consummation of the Business Combination and a majority of the shares voted at the extraordinary general meeting are voted in favor of the Business Combination, in each case after taking into account shares redeemed by Catcha’s shareholders in connection with the Extension Meeting.

 

 

Sources & Uses

Assuming No Redemptions

 

Source of Funds (in millions)						Uses of Funds (in millions)
Crown Shareholders		$	600.0			Crown Shareholders		$	600.0
Cash Held in Trust (1)			15.7			Cash on Balance Sheet			17.0
Initial Tranche of Securities Purchase Agreement			2.5			Estimated Transaction Expenses paid in cash (2)			4.0
April 2024 Notes			1.0
PIPE Financing			1.8
Total Sources		$	621.0			Total Uses		$	621.0

 

Sources & Uses

Assuming 50% Redemptions

 

Source of Funds (in millions)						Uses of Funds (in millions)
Crown Shareholders		$	600.0			Crown Shareholders		$	600.0
Cash Held in Trust (1)			15.7			Cash on Balance Sheet			9.1
Initial Tranche of Securities Purchase Agreement			2.5			Catcha Investment Corp redemption			7.9
April 2024 Notes			1.0			Estimated Transaction Expenses paid in cash (2)			4.0
PIPE Financing			1.8
Total Sources		$	621.0			Total Uses		$	621.0

 

Sources & Uses

Assuming Maximum Redemptions

 

Source of Funds (in millions)						Uses of Funds (in millions)
Crown Shareholders		$	600.0			Crown Shareholders		$	600.0
Cash Held in Trust (1)			15.7			Cash on Balance Sheet			1.3
Initial Tranche of Securities Purchase Agreement			2.5			Catcha Investment Corp redemption			15.7
April 2024 Notes			1.0			Estimated Transaction Expenses paid in cash (2)			4.0
PIPE Financing			1.8
Total Sources		$	621.0			Total Uses		$	621.0

 

(1) Cash in Trust Account as of May 25, 2024.

(2) Represents an estimate of transaction expenses. Actual amounts may vary and may include expenses unknown at this time.

 

As a result of the transactions contemplated by the Business Combination Agreement, Catcha expects PubCo to have between $1.3 million and $17.0 million in cash on hand on its balance sheet as discussed above.

 

 

Risk Factors

 

Upon consummation of the Business Combination, Pubco will have a significant number of outstanding convertible notes which will be subject to reset provisions to the conversion price.The conversion of such convertible notes at a reduced conversion price could result in an issuance of a large number of Pubco Ordinary Shares, significant dilution, and an adverse impact on the price of Pubco Ordinary Shares.

 

On April 30, 2024, PubCo entered into subscription agreements with certain investors with respect to the April 2024 Notes which has an aggregate original principal amount of $1.05 million for an aggregate purchase price of $1.0 million. The April 2024 Notes will be convertible into PubCo Ordinary Shares at the option of the holder. The conversion price will initially be $10.00 at the date of issuance of the April 2024 Notes. However, the Conversion Price will reset to 95% of the lowest closing volume weighted average price observed over the 5 trading days immediately preceding the 180th calendar day following the date of issuance of the April 2024 Notes, subject to the “Minimum Price” of $2.50. If the Conversion Price is lowered to the Minimum Price of $2.50, up to 400,000 PubCo Ordinary Shares would be issuable upon conversion thereof

 

On June 4, 2024, PubCo entered into a entered into a definitive securities purchase agreement with an institutional investor with respect to the issuance of up to approximately $21 million aggregate principal amount of convertible notes pursuant to a convertible note facility, providing for the issuance of such Facility Notes in up to seven tranches of approximately $2.9 million. Such Facility Notes would be convertible at a conversion price of $10.00, subject to a reset to a discount to a trailing volume-weighted average price as of the time of each conversion. The Facility Notes are expected to have a minimum conversion price, giving effect to any such reset, of only $0.50. The conversion of the Facility Notes in full would result in the issuance of more than 40,000,000 PubCo Ordinary Shares.

 

If conversion of the April 2024 Notes and the Facility Notes occurs at a reduced conversion price, a large number of PubCo Ordinary Shares could be issued, leading to substantial dilution to our stockholders’ equity and the market price of PubCo Ordinary Shares may decrease as a result of the additional selling pressure in the market. Any downward pressure on the trading price of PubCo Ordinary Shares caused by the sale, or potential sale, of shares issuable upon conversion of the convertible notes could also encourage short sales by third parties, creating additional selling pressure on our share price.

 

Pubco may not be able to draw down the full amount of the capital available under the financing agreements it has entered into, should the required terms and conditions under the respective terms and conditions of the financing agreements not be met.

 

On May 22, 2024, PubCo entered into a securities lending agreement with Millennia Capital Partners Limited pursuant to which the Lender agreed to loan PubCo up to $4.0 million at fifty-five (55%) Loan to Value of the current market value of 730,000 shares of PubCo pledged to the Lender. If the value of the shares decline due to market conditions or any other reasons, the amount available under the loan to PubCo may be reduced, or Lender may require PubCo to furnish additional securities or cash to Lender to increase the collateral.

 

On June 4, 2024, PubCo entered into a entered into a definitive securities purchase agreement with an institutional investor with respect to the issuance of up to approximately $21 million aggregate principal amount of convertible notes pursuant to a convertible note facility, providing for the issuance of such Facility Notes in up to seven tranches of approximately $2.9 million. The issue sizes of the third and subsequent tranches are subject to certain trading volume conditions of PubCo shares, and may be limited to two and one half times the median of the value of shares traded over each of the thirty trading days preceding the closing date for such Tranche.

 

If the terms and conditions for the draw down of capital under each of these financing agreements are not met, PubCo may be limited in terms of the amount of capital it may be able to draw down, which could have an adverse impact on the financial and operating conditions of the company.

 

 

Item 9.01. Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit		Description
99.1		Form of April 2024 Note
99.2		Form of PIPE Subscription Agreement
99.3		Securities Lending Agreement, dated as of May 22, 2024, by and between Crown LNG Holdings Limited and Millennia Capital Partners Limited.
99.4		Securities Purchase Agreement, dated as of June 4, 2024, by and among Crown LNG Holdings Limited and each investor identified on the signature pages thereto.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Catcha Investment Corp
By:	/s/ Patrick Grove
Name:	Patrick Grove
Title:	Chairman and Chief Executive Officer

 

Dated: June 7, 2024

 

 

Exhibit 99.1

 

SUBSCRIPTION AGREEMENT

 

This Subscription Agreement (this “Subscription Agreement”) is being entered into as of April 30^th 2024, by and between Crown LNG Holdings Limited, a private limited company incorporated under the laws of Jersey, Channel Islands (the “Issuer”) and the undersigned subscriber (the “Investor”), in connection with the Business Combination Agreement, dated as of August 3, 2023, as amended on October 2, 2023, January 31, 2024 and February 16, 2024 (as may be further amended, supplemented or otherwise modified from time to time, the “Transaction Agreement”), by and among Catcha Investment Corp, an exempted company limited by shares incorporated under the laws of the Cayman Islands (“SPAC”), the Issuer, Crown LNG Holding AS, a private limited liability company incorporated under the laws of Norway (the “Company”) and the other parties thereto providing for the combination of SPAC, the Issuer and the Company, on the terms and subject to the conditions therein (the “Transaction”). In connection with the Transaction, the Investor is committing to purchase, contingent upon, and substantially concurrently with the closing of the Transaction a convertible promissory note in the aggregate principal amount of $526,315 (the “Note”), which is convertible into ordinary shares in the capital of the Issuer, no par value (the “Shares”), in a private placement for a purchase price of $500,000 (the “Purchase Price”). The Note is part of a series of Notes with identical terms other than the aggregate principal amount and Purchase Price, for which other investors are entering into additional subscription agreements on substantially the same terms as this Subscription Agreement concurrently herewith.

 

In connection therewith, and in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, set forth herein, and intending to be legally bound hereby, each of the Investor and the Issuer acknowledges and agrees as follows:

 

1. Subscription. The Investor hereby irrevocably subscribes for and agrees to purchase from the Issuer the Note on the terms and subject to the conditions provided for herein. The Investor acknowledges and agrees that the Issuer reserves the right to accept or reject the Investor’s subscription for the Note for any reason or for no reason, in whole or in part, at any time prior to its acceptance, and the same shall be deemed to be accepted by the Issuer only when this Subscription Agreement is signed by a duly authorized person by or on behalf of the Issuer; the Issuer may do so in counterpart form.

 

2. Closing. The closing of the sale of the Note contemplated hereby (the “Closing”) is contingent upon the consummation of the Transaction. Upon (a) satisfaction or waiver of the conditions set forth in Section 3 below and (b) delivery of written notice from (or on behalf of) the Issuer to the Investor (the “Closing Notice”), that the Issuer reasonably expects all conditions to the Closing to be satisfied or waived, the Investor shall deliver to the Issuer on the closing date specified in the Closing Notice (the “Closing Date”), the Purchase Price by wire transfer of United States dollars in immediately available funds to the account(s) specified by the Issuer in the Closing Notice. The Investor shall also deliver to the Issuer any other information that is reasonably requested in the Closing Notice in order for the Issuer to issue the Note. As soon as practicable following, but not later than one (1) business day after the Closing Date, the Issuer shall issue the Note; provided, however, that the Issuer’s obligation to issue the Note to the Investor is contingent upon the Issuer having received the Purchase Price in full accordance with this Section 2. For purposes of this Subscription Agreement, “business day” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York, Hong Kong or the Cayman Islands are authorized or required by law to close.

 

3. Closing Conditions.

 

a. The obligation of the parties hereto to consummate the purchase and sale of the Shares pursuant to this Subscription Agreement is subject to the satisfaction or valid waiver by the Issuer, on the one hand, and the Investor on the other hand, of the condition that all conditions precedent to the closing of the Transaction under the Transaction Agreement shall have been satisfied (as determined by the parties to the Transaction Agreement and other than those conditions under the Transaction Agreement which, by their nature, are to be fulfilled at the closing of the Transaction, including to the extent that any such condition is dependent upon the consummation of the purchase and sale of the Note pursuant to this Subscription Agreement) or waived.

 

 

b. The obligation of the Issuer to consummate the issuance and sale of the Note pursuant to this Subscription Agreement shall be subject to the satisfaction or valid waiver by the Issuer of the additional conditions that all representations and warranties of the Investor contained in this Subscription Agreement are true and correct in all material respects at and as of the Closing Date, and consummation of the Closing shall constitute a reaffirmation by the Investor of each of the representations and warranties of the Investor contained in this Subscription Agreement as of the Closing Date.

 

c. The obligation of the Investor to consummate the purchase of the Note pursuant to this Subscription Agreement shall be subject to the satisfaction or valid waiver by the Investor of the additional conditions that (i) all representations and warranties of the Issuer contained in this Subscription Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Issuer Material Adverse Effect (as defined herein), which representations and warranties shall be true in all respects) at and as of the Closing Date, and consummation of the Closing shall constitute a reaffirmation by the Issuer of each of their respective representations and warranties contained in this Subscription Agreement as of the Closing Date, (ii) all obligations, covenants and agreements of the Issuer required by the Subscription Agreement to be performed by it at or prior to the Closing Date shall have been performed in all material respects and (iii) the Investor shall have delivered the Purchase Price to Issuer in compliance with the terms of this Subscription Agreement.

 

4. Further Assurances. At or prior to the Closing Date, the parties hereto shall execute and deliver or cause to be executed and delivered such additional documents and take such additional actions as the parties reasonably may deem to be practical and necessary in order to consummate the subscription as contemplated by this Subscription Agreement.

 

5. Issuer Representations and Warranties. The Issuer represents and warrants to the Investor that:

 

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

 

b. As of the Closing Date, subject to the receipt of the Purchase Price in accordance with the terms of this Subscription Agreement, the conversion of the Note in accordance with its terms and registration on the Issuer’s register of members, the Shares will be duly authorized and, when issued and delivered to the Investor upon conversion of the Note in accordance with its terms and registered on the Issuer’s register of members, the Shares will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under the Issuer’s memorandum and articles of association (as may be amended and/or restated from time to time) in effect on the Closing Date or under the Jersey Companies Law.

 

c. This Subscription Agreement has been duly authorized, executed and delivered by the Issuer and, assuming that this Subscription Agreement constitutes the valid and binding agreement of the Investor, this Subscription Agreement is enforceable against the Issuer in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, or (ii) principles of equity, whether considered at law or equity.

 

d. The issuance and sale of the Note and, upon conversion thereof, the Shares, and the compliance by the Issuer with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Issuer pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer is a party or by which the Issuer is bound or to which any of the property or assets of the Issuer is subject that would reasonably be expected to have a material adverse effect on the ability of the Issuer to timely comply in all material respects with the terms of this Subscription Agreement (an “Issuer Material Adverse Effect”); (ii) result in any violation of the provisions of the organizational documents of the Issuer; or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that would reasonably be expected to have an Issuer Material Adverse Effect.

 

 

e. Assuming the accuracy of the Investor’s representations and warranties set forth in Section 6, no registration under the Securities Act of 1933, as amended (the “Securities Act”) is required for the offer and sale of the Note by the Issuer to the Investor hereunder. The Note (i) was not offered by any form of general solicitation or general advertising and (ii) to the Issuer’s knowledge are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.

 

6. Investor Representations and Warranties. The Investor represents and warrants to the Issuer that:

 

a. The Investor, or each of the funds managed by or affiliated with the Investor for which the Investor is acting as nominee, as applicable, (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act), in each case, satisfying the applicable requirements set forth on Schedule A, and accordingly, understands that the offering meets the exemptions from filing under FINRA Rule 5123(b)(1)(C) or (J), (ii) is acquiring the Note only for his, her or its own account and not for the account of others, or if the Investor is subscribing for the Note as a fiduciary or agent for one or more investor accounts, the Investor has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Note with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act (and shall provide the requested information set forth on Schedule A). The Investor (i) is an “institutional account” as defined by FINRA Rule 4512(c), (ii) is a sophisticated investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities and (iii) exercised independent judgment in evaluating the Investor’s participation in the purchase of the Note, and (z) understands that the offering meets (i) the exemptions from filing under FINRA Rule 5123(b)(1)(A) and (ii) the institutional customer exemption under FINRA Rule 2111(b). The information provided by the Investor on Schedule A is true and correct in all respects.

 

b. The Investor acknowledges and agrees that the Note is being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Note and Shares have not been registered under the Securities Act. The Investor acknowledges and agrees that the Note or Shares may not be offered, resold, transferred, pledged or otherwise disposed of by the Investor absent an effective registration statement under the Securities Act except (i) to the Issuer or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and in each of clauses (i) and (iii) in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates representing the Note or Shares shall contain a restrictive legend to such effect. The Investor acknowledges and agrees that the Note and Shares will be subject to transfer restrictions and, as a result of these transfer restrictions, the Investor may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Note or Shares and may be required to bear the financial risk of an investment in the Note or Shares for an indefinite period of time. The Investor acknowledges and agrees that the Note and Shares will not be eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act until at least one year from the Closing Date. The Investor acknowledges and agrees that it has been advised to consult legal counsel and tax and accounting advisors prior to making any offer, resale, transfer, pledge or disposition of the Note or any of the Shares.

 

c. The Investor acknowledges and agrees that the Investor is purchasing the Note directly from the Issuer. The Investor further acknowledges that there have been no representations, warranties, covenants and agreements made to the Investor by or on behalf of the Issuer, the Company, 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 of the Issuer expressly set forth in Section 5 of this Subscription Agreement.

 

d. The Investor’s acquisition and holding of the Note or Shares will not constitute or result in a non-exempt prohibited transaction under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, Section 4975 of the Internal Revenue Code of 1986, as amended, or any applicable similar law.

 

 

e. The Investor acknowledges and agrees that the Investor has received such information as the Investor deems necessary in order to make an investment decision with respect to the Note, including, with respect to the Issuer, the Company, the Transaction and the business of the Company and its subsidiaries. Without limiting the generality of the foregoing, the Investor acknowledges that he, she or it has reviewed the respective filings of SPAC and the Issuer with the U.S. Securities and Exchange Commission (the “SEC”). The Investor acknowledges and agrees that the Investor and the Investor’s professional advisor(s), if any, have had the full access to and opportunity to ask such questions, receive such answers and obtain such financial and other information and an opportunity to review such information as the Investor and such Investor’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Note.

 

f. The Investor became aware of this offering of the Note solely by means of direct contact between the Investor and the Issuer, the Company or a representative of the Issuer or the Company, and the Note was offered to the Investor solely by direct contact between the Investor and the Issuer, the Company or a representative of the Issuer or the Company. The Investor did not become aware of this offering of the Note, nor was the Note offered to the Investor, by any other means. The Investor acknowledges that the Note (i) was not offered by any form of general solicitation or general advertising or, to its knowledge, general solicitation and (ii) is not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. The Investor acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Issuer, the Company, any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), other than the representations and warranties of the Issuer contained in Section 5 of this Subscription Agreement.

 

g. The Investor acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Note and Shares, including those set forth in the Issuer’s and SPAC’s respective filings with the SEC. The Investor has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Note and Shares, and the Investor has sought such accounting, legal and tax advice as the Investor has considered necessary to make an informed investment decision and the Investor has made its own assessment and has satisfied itself concerning relevant tax and other economic considerations relative to its purchase of the Note. The Investor is able to sustain a complete loss on its investment in the Note or Shares, has no need for liquidity with respect to its investment in the Note or Shares and has no reason to anticipate any change in circumstances, financial or otherwise, which may cause or require any sale or distribution of all or any part of the Note or Shares.

 

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

 

i. In making its decision to purchase the Note, the Investor has relied solely upon independent investigation made by the Investor. Without limiting the generality of the foregoing, the Investor has not relied on any statements or other information provided by or on behalf of SPAC, the Issuer, the Company, or any of its respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing concerning the Issuer, the Company, the Transaction, the Transaction Agreement, this Subscription Agreement or the transactions contemplated hereby or thereby, the Note or the offer and sale of the Note.

 

j. The Investor acknowledges that (i) the Company, SPAC and the Issuer currently may have, and later may come into possession of, information regarding the Company, the SPAC and the Issuer that is not known to the Investor and that may be material to a decision to enter into this transaction to purchase the Note (“Excluded Information”), (ii) the Investor has determined to enter into the this transaction to purchase the Note notwithstanding its lack of knowledge of the Excluded Information, and (iii) neither the Company, nor SPAC or the Issuer shall have liability to the Investor, and the Investor hereby to the extent permitted by law waive and releases any claims it may have against the Company, SPAC or the Issuer, with respect to the nondisclosure of the Excluded Information.

 

 

k. The Investor acknowledges that certain information provided to the Investor was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections.

 

l. The Investor acknowledges and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Note or Shares or made any findings or determination as to the fairness of this investment.

 

m. The Investor, if not an individual, has been duly formed or incorporated and is validly existing and is in good standing under the laws of its jurisdiction of formation or incorporation, with power and authority to enter into, deliver and perform its obligations under this Subscription Agreement.

 

n. The execution, delivery and performance by the Investor of this Subscription Agreement are within the powers of the Investor, have been duly authorized and will not constitute or result in a breach or default under or conflict with any order, ruling or regulation of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which the Investor is a party or by which the Investor is bound, and, if the Investor is not an individual, will not violate any provisions of the Investor’s organizational documents, including, without limitation, its incorporation or formation papers, bylaws, indenture of trust or partnership or operating agreement, as may be applicable. The signature on this Subscription Agreement is genuine, and the signatory, if the Investor is an individual, has legal competence and capacity to execute the same or, if the Investor is not an individual, the signatory has been duly authorized to execute the same, and, assuming that this Subscription Agreement constitutes the valid and binding obligation of the Issuer, this Subscription Agreement constitutes a legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.

 

o. The Investor is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons 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 List; (iii) organized, incorporated, established, located, resident or born in, or a citizen, national or the government, including any political subdivision, agency or instrumentality thereof, of, Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine or any other country or territory embargoed or subject to substantial trade restrictions by the United States, (iv) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (each, a “Prohibited Investor”). The Investor agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that the Investor is permitted to do so under applicable law. If the Investor 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”), the Investor 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 to ensure compliance with OFAC-administered sanctions programs, including for the screening of its investors against the OFAC sanctions programs, including the OFAC List. To the extent required by applicable law, the Investor maintains policies and procedures reasonably designed to ensure that the funds held by the Investor and used to purchase the Shares were legally derived and were not obtained, directly or indirectly, from a Prohibited Investor.

 

p. The Investor is not currently (and at all times through Closing will refrain from being or becoming) a member of a “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) acting for the purpose of acquiring, holding or disposing of equity securities of SPAC (within the meaning of Rule 13d-5(b)(1) under the Exchange Act).

 

q. No foreign person (as defined in Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. §4565), and all rules and regulations issued and effective thereunder (together, the “DPA”)) in which the national or subnational governments of a single foreign state have a “substantial interest” (as defined in the DPA) will acquire a “substantial interest” (as defined in the DPA) in the Issuer as a result of the purchase of Note by the Investor hereunder such that a filing before the Committee on Foreign Investment in the United States would be required under the DPA, and no such foreign person will have “control” (as defined in the DPA) over the Issuer from and after the Closing as a result of the purchase of the Note by the Investor hereunder.

 

 

r. The Investor has or has commitments to have and, when required to deliver payment to the Issuer pursuant to Section 2 above, will have, sufficient funds to pay the Purchase Price and consummate the purchase and sale of the Note pursuant to this Subscription Agreement.

 

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

 

t. If the Investor is an employee benefit plan that is subject to Title I of ERISA, a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, the Investor represents and warrants that (i) neither SPAC, the Issuer nor, to the Investor’s knowledge, any of SPAC’s or the Issuer’s respective affiliates (the “Transaction Parties”) has acted as the Plan’s fiduciary, or has been relied on for advice, with respect to its decision to acquire and hold the Note or Shares, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Note or Shares and (ii) the acquisition and holding of the Note or Shares will not result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code.

 

u. No broker, finder or other financial consultant is acting on the Investor’s behalf in connection with this Subscription Agreement or the transactions contemplated hereby in such a way as to create any liability of the Issuer or SPAC for the payment of any fees, costs, expenses or commissions.

 

7. Registration Rights.

 

a. In the event that the Shares are not registered in connection with the consummation of the Transaction, the Issuer agrees that, within thirty (30) calendar days after the Closing Date (or within ninety (90) calendar days following the Closing Date if the Issuer is required to include therein additional financial information that is not included in the registration statement on Form F-4 at the time of the closing of the Transaction), it will file or cause to be filed, with the SEC (at the its sole cost and expense) a registration statement registering the resale of the Shares (the “Registration Statement”), and it shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof but no later than the earlier of (a) sixty (60) calendar days (or one hundred and twenty (120) calendar days if the SEC notifies the Issuer that it will “review” such Registration Statement) following the initial filing date thereof and (b) ten (10) business days after the Issuer 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 (the “Effective Date”); provided, however, that if the SEC is closed for operations due to a government shutdown, the Effectiveness Date shall be extended by the same amount of days that the Commission remains closed for operations, provided, further, that the Issuer’s obligations to include the Shares in the Registration Statement are contingent upon the Investor furnishing in writing to the Issuer such information regarding the Investor, the securities of the Issuer held by the Investor, the intended method of disposition of the Shares (which shall be limited to non-underwritten public offerings) and such other information as shall be reasonably requested by the Issuer to effect the registration of the Shares, and the Investor shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling shareholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement (i) as permitted hereunder and (ii) as may be necessary in connection with the preparation and filing of a post-effective amendment to the Registration Statement following the filing of the Issuer’s Annual Report on Form 20-F or 10-K for its first completed fiscal year. With respect to the information to be provided by Subscriber pursuant to this Section 8(a), the Issuer shall request such information from the Investor at least five (5) Business Days prior to the anticipated filing date of the Registration Statement, and the Issuer shall provide a draft of the Registration Statement to the Investor for review at least three (3) Business Days in advance of filing the Registration Statement. In connection with the foregoing, Investor shall not be required to execute any lock-up or similar agreement or otherwise be subject to any contractual restriction on the ability to transfer the Shares. The Issuer agrees to, except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to cause such Registration Statement, or another shelf registration statement that includes the Shares to be sold pursuant to this Subscription Agreement, to remain effective until the earliest of (i) the fifth anniversary of the Closing, (ii) the date on which the Investor ceases to hold any Note issued pursuant to this Subscription Agreement or Shares issued upon conversion thereof, or (iii) on the first date on which the Investor is able to sell all of its Shares issued upon conversion of the Note issued pursuant to this Subscription Agreement (or shares received in exchange therefor) under Rule 144 promulgated under the Securities Act (“Rule 144”) without the public information, volume or manner of sale limitations of such rule (such date, the “End Date”).

 

 

b. Prior to the End Date, the Issuer will use commercially reasonable efforts to qualify the Shares for listing on the applicable stock exchange. The Investor agrees to disclose its ownership to the Issuer upon request to assist it in making the determination with respect to Rule 144 described in clause (iii) above. The Issuer may amend the Registration Statement so as to convert the Registration Statement to a Registration Statement on Form F-3 at such time after the Issuer becomes eligible to use such Form F-3. The Investor acknowledges and agrees that the Issuer may suspend the use of any such registration statement if it determines that in order for such registration statement not to contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act. The Issuer’s obligations to include the Shares issued upon conversion of the Note (or shares issued in exchange therefor) for resale in the Registration Statement are contingent upon the Investor furnishing in writing to the Issuer such information regarding the Investor, the securities of the Issuer held by the Investor and the intended method of disposition of such Shares, which shall be limited to non-underwritten public offerings, as shall be reasonably requested by the Issuer to effect the registration of such Shares, and shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling stockholder in similar situations.

 

c. Notwithstanding anything to the contrary in this Subscription Agreement, the Issuer shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require the Investor not to sell under the Registration Statement or to suspend the effectiveness thereof, if (x) the use of the Registration Statement would require the inclusion of financial statements that are unavailable for reasons beyond the Issuer’s control, (y) the Issuer determines that in order for the Registration Statement to not contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act, or if (z) such filing or use could materially affect a bona fide business or financing transaction of the Issuer or its subsidiaries or would require additional disclosure by the Issuer in the Registration Statement of material information that the Issuer has a bona fide business purpose for keeping confidential (each such circumstance, a “Suspension Event”). Upon receipt of any written notice from the Issuer of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, the Investor agrees that it will immediately discontinue offers and sales of the Shares under the Registration Statement until the Investor receives copies of a supplemental or amended prospectus that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales; provided, for the avoidance of doubt, that the Issuer shall not include any material non-public information in any such written notice. If so directed by the Issuer, the Investor will deliver to the Issuer or destroy all copies of the prospectus covering the Shares in the Investor’s possession.

 

d. Indemnification

 

(i) The Issuer agrees to indemnify and hold harmless, to the extent permitted by law, the Investor, its directors, and officers, employees, and agents, and each person who controls the Investor (within the meaning of the Securities Act or the Exchange Act) from and against any and all out-of-pocket losses, claims, damages, liabilities and expenses (including, without limitation, any reasonable and documented attorneys’ fees and expenses incurred in connection with defending or investigating any such action or claim) caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement, prospectus included in any Registration Statement or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Issuer by or on behalf of the Investor expressly for use therein.

 

 

(ii) The Investor agrees to indemnify and hold harmless the Issuer, its directors and officers and agents and each person who controls the Issuer (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including, without limitation, reasonable and documented attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by or on behalf of the Investor expressly for use therein. In no event shall the liability of the Investor be greater in amount than the dollar amount of the net proceeds received by the Investor upon the sale of the Shares issued upon conversion of the Note purchased pursuant to this Subscription Agreement giving rise to such indemnification obligation.

 

(iii) Any person entitled to indemnification herein shall (1) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (2) permit such indemnifying party to assume the defense of such claim with counsel it elects in its sole discretion. If such defense is assumed, the indemnifying party will not be liable to the indemnified party for any legal or other expenses incurred by the indemnified party and shall not be subject to any liability for any settlement made by the indemnified party without its consent. An indemnifying party who elects not to assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of legal counsel to any indemnified party a conflict of interest exists between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

(iv) The indemnification provided for under this Subscription Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, employee, agent, affiliate or controlling person of such indemnified party and shall survive the transfer of the Shares issued upon conversion of the Note purchased pursuant to this Subscription Agreement.

 

(v) If the indemnification provided under this Section 7(d) from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by or on behalf of, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 7(d) from any person who was not guilty of such fraudulent misrepresentation. Any contribution pursuant to this Section 7(d) by any seller of Shares shall be limited in amount to the amount of net proceeds received by such seller from the sale of such Shares pursuant to the Registration Statement. Notwithstanding anything to the contrary herein, in no event will any party be liable for consequential, special, exemplary or punitive damages in connection with this Subscription Agreement.

 

 

8. Additional Investor Agreement. The Investor agrees that, from the date of this Subscription Agreement, none of the Investor or any person or entity acting on behalf of the Investor or pursuant to any understanding with the Investor will engage in any hedging or other transactions or arrangements (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or similar instrument, including without limitation equity repurchase agreements and securities lending arrangements, however, described or defined) designed or intended, or which could reasonably be expected to lead to or result in, a sale, loan, pledge or other disposition or transfer (whether by the Investor or any other person) of any economic consequences of ownership, in whole or in part, directly or indirectly, physically or synthetically, of any securities of SPAC prior to the Closing, whether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of securities of SPAC, in cash or otherwise, or to publicly disclose the intention to undertake any of the foregoing; provided that the provisions of this Section 8 shall not apply to long sales (including sales of securities held by the Investor prior to the date of this Subscription Agreement and securities purchased by the Investor in the open market after the date of this Subscription Agreement) other than those effectuated through derivatives transactions and similar instruments.

 

9. Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earliest to occur of (a) such date and time as the Transaction Agreement is terminated in accordance with its terms without being consummated, (b) upon the mutual written agreement of each of the parties hereto, the SPAC and the Company to terminate this Subscription Agreement, and (c) 30 days after the Outside Date (as defined in the Transaction Agreement as in effect on the date hereof), if the Closing has not occurred by such date other than as a result of a breach of the Investor’s obligations hereunder (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 breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from any such willful breach. The Issuer shall notify the Investor in writing of the termination of the Transaction Agreement promptly after the termination of such agreement. Upon the occurrence of any Termination Event, this Subscription Agreement shall be void and of no further effect and any monies paid by the Investor to the Issuer in connection herewith shall promptly (and in any event within two (2) business days) following the Termination Event be returned to the Investor.

 

10. Trust Account Waiver. The Investor acknowledges that SPAC is a blank check company with the powers and privileges to effect a merger, asset acquisition, reorganization or similar business combination involving SPAC and one or more businesses or assets. The Investor further acknowledges that, as described in SPAC’s prospectus relating to its initial public offering dated February 11, 2021 (the “Prospectus”) available at www.sec.gov, substantially all of SPAC’s assets consist of the cash proceeds of SPAC’s initial public offering and private placement of its securities, and substantially all of those proceeds have been deposited in a trust account (the “Trust Account”) for the benefit of SPAC, its public shareholders and the underwriters of SPAC’s initial public offering. Except with respect to interest earned on the funds held in the Trust Account that may be released to SPAC to pay its tax obligations and to fund certain of its working capital requirements, the cash in the Trust Account may be disbursed only for the purposes set forth in the Prospectus. For and in consideration of SPAC entering into this Subscription Agreement, the receipt and sufficiency of which are hereby acknowledged, the Investor hereby irrevocably waives any and all right, title and interest, or any claim of any kind it has or may have in the future, in or to any monies held in the Trust Account, and agrees not to seek recourse against the Trust Account as a result of, or arising out of, this Subscription Agreement; provided, however, that nothing in this Section 10 shall be deemed to limit the Investor’s right, title, interest or claim to any monies held in the Trust Account by virtue of its record or beneficial ownership of shares of SPAC currently outstanding on the date hereof, pursuant to a validly exercised redemption right with respect to any such shares of SPAC, except to the extent that the Investor has otherwise agreed with SPAC to not exercise such redemption right.

 

 

11. Miscellaneous.

 

a. Neither this Subscription Agreement nor any rights that may accrue to the parties hereunder (other than the Note acquired hereunder or the Shares issuable upon conversion thereof, if any) may be transferred or assigned without the prior written consent of each of the other parties hereto; provided that (i) this Subscription Agreement and any of the Investor’s rights and obligations hereunder may be assigned to any fund or account managed by the same investment manager as the Investor or by a controlled affiliate (as defined in Rule 12b-2 of the Exchange Act) of such investment manager without the prior consent of SPAC and the Issuer and (ii) the Investor’s rights under Section 8 may be assigned to an assignee or transferee of the Shares; provided further that prior to such assignment any such assignee shall agree in writing to be bound by the terms hereof; provided, that no assignment pursuant to clause (i) of this Section 11(a) shall relieve the Investor of its obligations hereunder.

 

b. The Issuer may request from the Investor such additional information as the Issuer may deem necessary to register the resale of the Shares and evaluate the eligibility of the Investor to acquire the Shares, and the Investor shall promptly provide such information as may reasonably be requested to the extent readily available; provided, that, the Issuer agrees to keep any such information provided by Investor confidential except (i) as necessary to include in any registration statement the Issuer is required to file hereunder, (ii) as required by the federal securities law or pursuant to other routine proceedings of regulatory authorities or (iii) to the extent such disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of any national securities exchange on which SPAC’s securities are listed or the Issuer’s securities will be listed for trading. The Investor acknowledges and agrees that if it does not provide the Issuer with such requested information, the Issuer may not be able to register the Investor’s Shares for resale pursuant to Section 8 hereof. The Investor acknowledges that SPAC and/or the Issuer may file a copy of this Subscription Agreement (or a form of this Subscription Agreement) with the SEC as an exhibit to a periodic report or a registration statement of SPAC and/or the Issuer.

 

c. The Investor acknowledges that SPAC, the Issuer, the Company and others will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement, including Schedule A hereto. Prior to the Closing, the Investor agrees to promptly notify SPAC, the Issuer and the Company if any of the acknowledgments, understandings, agreements, representations and warranties set forth in Section 6 above are no longer accurate in any material respect (other than those acknowledgments, understandings, agreements, representations and warranties qualified by materiality, in which case the Investor shall notify SPAC and the Issuer if they are no longer accurate in any respect). The Investor acknowledges and agrees that the purchase by the Investor of the Note from the Issuer will constitute a reaffirmation of the acknowledgments, understandings, agreements, representations and warranties herein (as modified by any such notice) by the Investor as of the time of such purchase.

 

d. Each of the Issuer and the Investor acknowledges and agrees that each representation, warranty, covenant and agreement of the Issuer and the Investor hereunder is being made also for the benefit of the Company after the Closing.

 

e. SPAC, the Issuer and the Company are each entitled to rely upon this Subscription Agreement and each is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

 

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

 

g. This Subscription Agreement may not be modified, waived or terminated (other than pursuant to the terms of Section 9 above) except by an instrument in writing, signed by each of the parties hereto, provided, however, that no modification or waiver by the Issuer of the provisions of this Subscription Agreement shall be effective without the prior written consent of the Company and the SPAC (other than modifications or waivers that are solely ministerial in nature or otherwise immaterial and do not affect any economic or any other material term of this Subscription Agreement). No failure or delay of either party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have hereunder.

 

 

h. This Subscription Agreement (including the schedule hereto) constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof. Except as set forth in Section 7(d), Section 9, Section 11(c), Section 11(d), Section 11(e), Section 11(g), this Section 11(h), Section 12 and the last sentence of Section 11(l), with respect to the persons specifically referenced therein, this Subscription Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successors and assigns, and the parties hereto acknowledge that such persons so referenced are third party beneficiaries of this Subscription Agreement with right of enforcement for the purposes of, and to the extent of, the rights granted to them, if any, pursuant to the applicable provisions; provided, that, notwithstanding anything to the contrary contained in this Subscription Agreement, each of the Company and the SPAC is an intended third party beneficiary of each of the provisions of this Subscription Agreement and may rely on such provisions.

 

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

 

j. If any provision of this Subscription Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.

 

k. This Subscription Agreement may be executed in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.

 

l. The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement, without posting a bond or undertaking and without proof of damages, to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise. The parties hereto acknowledge and agree that each of the Company and the SPAC shall be entitled to specifically enforce the Investor’s obligations to fund the Subscription Amount and the provisions of the Subscription Agreement of which each of the Company and the SPAC is an express third party beneficiary, in each case, on the terms and subject to the conditions set forth herein.

 

m. This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of New York (regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof) as to all matters (including any action, suit, litigation, arbitration, mediation, claim, charge, complaint, inquiry, proceeding, hearing, audit, investigation or reviews by or before any governmental entity related hereto), including matters of validity, construction, effect, performance and remedies.

 

 

n. Each party hereto hereby, and any person asserting rights as a third party beneficiary may do so only if he, she or it, irrevocably agrees that any action, suit or proceeding between or among the parties hereto, whether arising in contract, tort or otherwise, arising in connection with any disagreement, dispute, controversy or claim arising out of or relating to this Subscription Agreement or any related document or any of the transactions contemplated hereby or thereby (“Legal Dispute”) shall be brought only to the exclusive jurisdiction of the state or federal courts located in the State of New York, and each party hereto hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding that is brought in any such court has been brought in an inconvenient forum. During the period a Legal Dispute that is filed in accordance with this Section 11(n) is pending before a court, all actions, suits or proceedings with respect to such Legal Dispute or any other Legal Dispute, including any counterclaim, cross-claim or interpleader, shall be subject to the exclusive jurisdiction of such court. Each party hereto and any person asserting rights as a third party beneficiary may do so only if he, she or it hereby waives, and shall not assert as a defense in any Legal Dispute, that (a) such party is not personally subject to the jurisdiction of the above named courts for any reason, (b) such action, suit or proceeding may not be brought or is not maintainable in such court, (c) such party’s property is exempt or immune from execution, (d) such action, suit or proceeding is brought in an inconvenient forum, or (e) the venue of such action, suit or proceeding is improper. A final judgment in any action, suit or proceeding described in this Section 11(n) following the expiration of any period permitted for appeal and subject to any stay during appeal shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable laws. EACH OF THE PARTIES HERETO AND ANY PERSON ASSERTING RIGHTS AS A THIRD PARTY BENEFICIARY MAY DO SO ONLY IF HE, SHE OR IT IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY CLAIMS OR COUNTERCLAIMS ASSERTED IN ANY LEGAL DISPUTE RELATING TO THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY 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 SUBSCRIPTION 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.

 

p. Any notice or communication required or permitted hereunder to be given to the Investor shall be in writing and either delivered personally, emailed or sent by overnight mail via a reputable overnight carrier, or sent by certified or registered mail, postage prepaid, to such address(es) or email address(es) set forth on the signature page hereto, and shall be deemed to be given and received (i) when so delivered personally, (ii) when sent, with no mail undeliverable or other rejection notice, if sent by email, or (iii) three (3) business days after the date of mailing to the address below or to such other address or addresses as the Investor may hereafter designate by notice to SPAC and the Issuer.

 

12. Non-Reliance and Exculpation. The Investor acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation, other than the statements, representations and warranties of the Issuer expressly contained in Section 5 of this Subscription Agreement in making its investment or decision to invest in the Issuer. The Investor acknowledges and agrees that none of (i) any other investor pursuant to this Subscription Agreement or any other subscription agreement related to the private placement of the Note (including the investor’s respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), or (ii) any other party to the Transaction Agreement or any Non-Party Affiliate (other than the Issuer and SPAC with respect to the previous sentence), shall have any liability (including in contract, tort, under federal or state securities laws or otherwise) to the Investor, or to any other investor, pursuant to, arising out of or relating to this Subscription Agreement or any other subscription agreement related to the private placement of the Note, the negotiation hereof or thereof or its subject matter, or the transactions contemplated hereby or thereby, including, without limitation, with respect to any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Note or with respect to any claim (whether in tort, contract or otherwise) for breach of this Subscription Agreement or in respect of any written or oral representations made or alleged to be made in connection herewith, as expressly provided herein, or for any actual or alleged inaccuracies, misstatements or omissions with respect to any information or materials of any kind furnished by SPAC, the Issuer, the Company or any Non-Party Affiliate concerning SPAC, the Issuer, the Company, any of their respective controlled affiliates, this Subscription Agreement or the transactions contemplated hereby. For purposes of this Subscription Agreement, “Non-Party Affiliates” means each former, current or future officer, director, employee, partner, member, manager, direct or indirect equityholder or affiliate of SPAC, the Issuer, the Company, any of SPAC’s, the Issuer’s the Company’s or any family member of the foregoing.

 

 

13. Disclosure. SPAC shall, by 5:30 p.m., New York City time, on the fourth (4th) business day immediately following the date of this Subscription Agreement, issue one or more press releases or file with the SEC a Current Report on Form 8-K (collectively, the “Disclosure Document”) disclosing all material terms of the transactions contemplated hereby and any other material, nonpublic information that SPAC and/or the Issuer has provided to the Investor at any time prior to the filing of the Disclosure Document. Upon the issuance of the Disclosure Document, to the knowledge of SPAC, the Investor shall not be in possession of any material, non-public information received from SPAC or any of its officers, directors, or employees or agents, and the Investor shall no longer be subject to any confidentiality or similar obligations under any current agreement, whether written or oral, with SPAC, the Issuer or any of their respective affiliates, relating to the transactions contemplated by this Subscription Agreement. Notwithstanding anything in this Subscription Agreement to the contrary, SPAC shall not publicly disclose the name of the Investor or any of its affiliates or advisers, or include the name of the Investor or any of its affiliates or advisers in any press release or in any filing with the SEC or any regulatory agency or trading market, without the prior written consent of the Investor, except (i) as required by the federal securities law or pursuant to other routine proceedings of regulatory authorities, (ii) to the extent such disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of any national securities exchange on which SPAC’s securities are listed for trading or (iii) to the extent such announcements or other communications contain only information previously disclosed in a public statement, press release or other communication previously approved in accordance with this Section 13.

 

SIGNATURE PAGES FOLLOW

 

 

IN WITNESS WHEREOF, the Investor has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first written above.

 

Name of Investor:
INVESTOR
By:	/s/ Melih Odemis
Name:	MELIH ODEMIS

 

[Signature Page to Subscription Agreement]

 

 

IN WITNESS WHEREOF, the Issuer has accepted this Subscription Agreement as of the date first written above.

 

	Crown LNG Holdings
	By:	/s/ Joern Husemoen
	Name:	Joern Husemoen
	Title:	Director

 

[Signature Page to Subscription Agreement]

 

 

SCHEDULE A

 

ELIGIBILITY REPRESENTATIONS OF THE INVESTOR

 

A.

QUALIFIED INSTITUTIONAL BUYER STATUS

 

(Please check the applicable subparagraphs):

 

IR We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act (a “QIB”)).

 

B.

INSTITUTIONAL ACCREDITED INVESTOR STATUS

 

(Please check the applicable subparagraphs):

 

☐ We are an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act or an entity in which all of the equity holders are accredited investors within the meaning of Rule 501(a) under the Securities Act), and have marked and initialed the appropriate box on the following page indicating the provision under which we qualify as an “accredited investor.”

 

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

 

☐ Any bank, registered broker or dealer, insurance company, registered investment company, business development company, or small business investment company;

 

☐ Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

 

☐ Any employee benefit plan, within the meaning of the Employee Retirement Income Security Act of 1974, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5,000,000;

 

☐ Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

 

☐ Any trust with assets in excess of $5,000,000, not formed to acquire the securities offered, whose purchase is directed by a sophisticated person;

 

☐ Any entity, of a type not listed above, not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000; or

 

☐ Any entity in which all of the equity owners are “accredited investors” under Rule 501(a) under the Securities Act meeting one or more of the above tests.

 

This page should be completed by the Investor and constitutes a part of the Subscription Agreement.

 

 

THIS CONVERTIBLE PROMISSORY NOTE (THIS “NOTE”) AND THE SECURITIES INTO WHICH IT MAY BE CONVERTED HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE. THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

CROWN LNG HOLDINGS LIMITED

CONVERTIBLE PROMISSORY NOTE

 

Principal Amount: $ 526,315

Dated as of March [20], 2024 (the “Closing”)

 

FOR VALUE RECEIVED and subject to the terms and conditions set forth herein, Crown LNG Holdings Limited., a private limited company incorporated under the laws of Jersey, Channel Islands (the “Maker”), promises to pay to the order MELIH ODEMIS (the “Payee”), in lawful money of the United States of America, the principal amount of Five Hundred and Twenty Six Thousand and Three Hundred and Fifteen Dollars ($526,315), together with accrued and unpaid interest thereon at the rate set forth in Section 2 below, on the terms and subject to the conditions set forth in this Note. Except for any payments on this Note which shall or may be made through the issuance of Shares (as defined below) or additional Notes, all payments on this Note shall be made by check or wire transfer of immediately available funds or as otherwise determined by the Maker to such account as the Payee may from time to time designate by written notice in accordance with the provisions of this Note.

 

This Note was issued pursuant to that certain Subscription Agreement, dated as of March 20^th 2024, by and between the Maker and the Payee (the “Subscription Agreement”) and is part of a series of Notes with identical terms other than the aggregate principal amount thereof, issued to other investors party to additional subscription agreements with the Maker on substantially the same terms as such Subscription Agreement. In the event of a conflict between the terms of this Note and the terms of the Subscription Agreement, the terms of this Note shall prevail.

 

1. Principal. The principal amount hereunder, and any other amounts due pursuant to Section 2 hereof that have been accrued but not paid, shall be due and payable on the first anniversary of the Closing (the “Maturity Date”), unless accelerated upon the occurrence of an Event of Default (as defined below) and subject to the earlier Redemption of this Note for cash pursuant to Section 5 hereof at the option of the Maker. For the avoidance of doubt, the amounts due pursuant to this Section 1 and Section 2 hereof following an Event of Default shall be payable by check or wire transfer of immediately available funds. The Maturity Date can be extended to second anniversary of the Closing, at the election of the Maker.

 

Under no circumstances shall any individual, including but not limited to any officer, director, employee or shareholder of the Maker, be obligated personally for any obligations or liabilities of the Maker hereunder.

 

2. Interest. Interest shall accrue at the fixed rate of ten percent (10%) per annum, on the unpaid amount of this Note from and after the Closing. Interest shall be payable quarterly in arrears on each of June 28, 2024, September 30, 2024, December 30, 2024 and the Maturity Date. Interest shall be paid in cash; provided, that, the Maker may elect to pay accrued interest in-kind through the issuance of an additional Convertible Promissory Note in a principal amount equal to such accrued interest payment then due and payable and containing the same terms hereof except for the issuance date thereof.

 

3. Events of Default. The occurrence of any of the following shall constitute an event of default (“Event of Default”):

 

(a) Failure to Make Required Payments. Failure by the Maker to pay interest due pursuant to this Note within ten (10) business days after the dates specified above, if so elected by the Payee.

 

 

(b) Voluntary Bankruptcy, Etc. The commencement by the Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of the Maker or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of the Maker generally to pay its debts as such debts become due, or the taking of corporate action by the Maker in furtherance of any of the foregoing.

 

(c) Involuntary Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of the Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Maker or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) consecutive days.

 

4. Conversion.

 

(a) Conversion Right. At any time or times on or after the Closing, the Payee shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into validly issued, fully paid and non-assessable Shares in accordance with this Section, at the Conversion Rate (as defined below). 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 (as defined below)) that may be payable with respect to the issuance and delivery of ordinary shares upon conversion of any Conversion Amount.

 

(b) Conversion Rate. The number of ordinary shares issuable upon conversion of any Conversion Amount pursuant to Section 3(b) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).

 

(i)

“Conversion Amount” means the sum of (A) the portion of the Principal of this Note to be converted, redeemed or otherwise with respect to which this determination is being made, (B) accrued and unpaid Interest with respect to such Principal of this Note, and (C) any other unpaid amounts, if any.

 

(ii)

“Conversion Price” means $10.00 initially at Closing. The Conversion Price will reset to Ninety Five percent (95%) of the lowest closing Volume Weighted Average Price observed over the five trading days immediately preceding the 180th calendar day following Closing, subject to a minimum price of $2.50, subject to adjustment as provided herein (such Conversion Price following such reset, the “Reset Conversion Price”).

 

For purposes of this Note, the following capitalized terms have the following meanings:

 

“Trading Day” means a day on which trading in Shares occurs on New York Stock Exchange, NASDAQ or other national securities exchanges.

 

“Volume Weighted Average Price” means, for any Trading Day, the per share volume weighted average price of a Share as displayed under the heading “Bloomberg VWAP” on the applicable Bloomberg page (or, if such page is not available, its equivalent successor page) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or, if such volume weighted average price is unavailable, the market value of one Share on such Trading Day, determined, using a volume weighted average price method, by a nationally recognized independent investment banking firm selected by Maker). The Volume Weighted Average Price will be determined without regard to after-hours trading or any other trading outside of the primary trading session. The Volume Weighted Average Price shall be adjusted to reflect appropriately the effect of any share split, share subdivision, split-up, reverse share split, share consolidation, share subdivision, share dividend or distribution (including any dividend or distribution of securities convertible into Shares), extraordinary cash dividend, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Shares occurring during the applicable measurement period.

 

 

(c) Remaining Principal. All accrued and unpaid principal of this Note that is not then converted into Shares, shall continue to remain outstanding and to be subject to the conditions of this Note.

 

(d) Fractional Shares; Effect of Conversion. No fractional Shares shall be issued upon conversion of this Note. In lieu of any fractional Shares to the Payee upon conversion of this Note, the Maker shall pay to the Payee an amount equal to the product obtained by multiplying the Conversion Price by the fraction of a Share not issued pursuant to the previous sentence. Upon conversion of this Note in full and the payment of any amounts specified in this Section, this Note shall be cancelled and void without further action of the Maker or the Payee, and the Maker shall be forever released from all its obligations and liabilities under this Note.

 

5. Redemption

 

(a) The Maker may, at its sole option, at any time following the Closing and prior to the Maturity Date, redeem the Note (a “Redemption”), in full, but not in part, on a redemption date set forth in notice of such redemption (such date, the “Redemption Date”), which Redemption Date shall be at least ten (10) Trading Days after notice of such Redemption (the “Redemption Notice”) is delivered by the Marker to the Payee in accordance with Section 9 below, at a redemption price equal to 110% of the aggregate principal amount thereof, plus any accrued and unpaid interest thereon as of the Redemption Date.

 

(b) Nothing in this Section 5 shall prohibit the Investor from exercising its option to convert the Note pursuant to Section 3(b) after delivery of such Redemption Notice and prior to the Redemption Date.

 

6. Remedies.

 

(a) Upon the occurrence of an Event of Default specified in Section 4(a) hereof, the Payee may, by written notice to the Maker, declare this Note to be due immediately and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable thereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.

 

(b) Upon the occurrence of an Event of Default specified in Sections 4(b) or 4(c), the unpaid principal balance of this Note, and all other sums payable with regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part of the Payee.

 

7. Waivers. The Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by the Payee under the terms of this Note, and all benefits that might accrue to the Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension of time for payment; and the Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may be sold upon any such writ in whole or in part in any order desired by the Payee.

 

8. Unconditional Liability. The Maker hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by the Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by the Payee with respect to the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice to the Maker or affecting the Maker’s liability hereunder.

 

 

9. Notices. All notices, statements or other documents that are required or contemplated by this Note shall be in writing and delivered (i) personally or sent by first class registered or certified mail, overnight courier service to the address designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing by such party, or (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally or by facsimile or electronic transmission; one (1) business day after delivery to an overnight courier service; or five (5) days after mailing if sent by first class registered or certified mail.

 

10. Construction. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.

 

11. Severability. Any provision contained in this Note 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 provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

12. Transferability and Assignability. This Note and all rights hereunder are transferable, in whole or in part, by surrendering such Note to the Maker duly endorsed for transfer or accompanied by a duly executed instrument of transfer naming the new Payee, together with written instructions for the issuance of one or more new Notes specifying the respective principal amounts of each new Note and the name of each new Payee therefor. Upon such transfer and, if required, any payments, the Maker shall execute and deliver a new Note in the name of the transferee, as applicable, and in the denomination or denominations as specified, and if applicable shall issue to the transferer a new Note evidencing the portion of this Note not so transferred, and this Note shall promptly be cancelled. In lieu of the foregoing procedures, Payee may assign a Note to a new party by sending written notice to the Maker of such assignment specifying the new Payee; in such case, the Maker shall promptly acknowledge such assignment in writing to both the old and new Payee.

 

13. Amendment; Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent of the Maker and the Payee.

 

14. Successors and Assigns. The rights and obligations of the Maker and the Payee hereunder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of any party hereto (by operation of law or otherwise) with the prior written consent of the other party hereto and any attempted assignment without the required consent shall be void.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned as of the day and year first above written.

 

		By:	/s/ Joern Husemoen
		Name:	Joern Husemoen
		Title:	Director

 

Acknowledged and agreed as of the date first above written.
INVESTOR
By:	/s/ Melih Odemis
Name:	MELIH ODEMIS

 

 

21

Exhibit 99.2

 

SUBSCRIPTION AGREEMENT

 

This Subscription Agreement (this “Subscription Agreement”) is being entered into as of 6th of May 2024, by and among Catcha Investment Corp., an exempted company limited by shares incorporated under the laws of the Cayman Islands (“SPAC”), Crown LNG Holdings Limited, a private limited company incorporated under the laws of Jersey, Channel Islands (the “Issuer”) and the undersigned subscriber (the “Investor”), in connection with the Business Combination Agreement, dated as of August 3, 2023, as amended on October 2, 2023 (as may be further amended, supplemented or otherwise modified from time to time, the “Transaction Agreement”), by and among SPAC, the Issuer, Crown LNG Holding AS, a private limited liability company incorporated under the laws of Norway (the “Company”) and the other parties thereto providing for the combination of SPAC, the Issuer and the Company, on the terms and subject to the conditions therein (the “Transaction”). In connection with the Transaction, the Issuer is seeking commitments from interested investors to purchase, contingent upon, and substantially concurrently with the closing of the Transaction, that number of ordinary shares in the capital of the Issuer (the “Shares”) as set forth on the signature page of this Subscription Agreement in a private placement for a purchase price of US$8.50 per share (the “Per Share Purchase Price”). The aggregate purchase price to be paid by the Investor for the subscribed Shares as set forth on the signature page hereto (the “Subscribed Shares”) is referred to herein as the “Subscription Amount.”

 

In connection therewith, and in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, set forth herein, and intending to be legally bound hereby, each of the Investor, the Issuer and SPAC acknowledges and agrees as follows:

 

1. Subscription. The Investor hereby irrevocably subscribes for and agrees to purchase from the Issuer the number of Shares set forth on the signature page of this Subscription Agreement on the terms and subject to the conditions provided for herein. The Investor acknowledges and agrees that the Issuer reserves the right to accept or reject the Investor’s subscription for the Shares for any reason or for no reason, in whole or in part, at any time prior to its acceptance, and the same shall be deemed to be accepted by the Issuer only when this Subscription Agreement is signed by a duly authorized person by or on behalf of the Issuer; the Issuer may do so in counterpart form.

 

2. Closing. The closing of the sale of the Shares contemplated hereby (the “Closing”) is contingent upon the substantially concurrent consummation of the Transaction. The Closing shall occur on the date of, and substantially concurrently with and conditioned upon the consummation of, the Transaction. Upon (a) satisfaction or waiver of the conditions set forth in Section 3 below and (b) delivery of written notice from (or on behalf of) the Issuer to the Investor (the “Closing Notice”), that the Issuer reasonably expects all conditions to the closing of the Transaction to be satisfied or waived on a date that is not less than five (5) business days from the date on which the Closing Notice is delivered to the Investor, the Investor shall deliver to the Issuer, three (3) business days prior to the closing date specified in the Closing Notice (the “Closing Date”), the Subscription Amount by wire transfer of United States dollars in immediately available funds to the account(s) specified by the Issuer in the Closing Notice, to be held in escrow until the Closing with a reputable law firm or financial institution. The Subscription Amount shall only be released to the Issuer upon Closing. If for any reason the Closing or the Transaction does not happen, or Investor’s Shares are not issued, the Subscription Amount shall be returned to the Investor without any deductions.

 

The Investor shall also deliver to the Issuer any other information that is reasonably requested in the Closing Notice in order for the Issuer to issue the Investor’s Shares, including, without limitation, the legal name of the person in whose name such Shares are to be issued and a duly executed Internal Revenue Service Form W-9 or W-8, as applicable. As soon as practicable following, but not later than one (1) business day after the Closing Date, the Issuer shall (1) issue a number of Shares to the Investor set forth on the signature page to this Subscription Agreement and subsequently cause such Shares to be registered in book entry form in the name of the Investor on the Issuer’s register of members and (2) deliver to the Investor a copy of the records of the Issuer’s transfer agent or other evidence showing the Investor as the owner of the Shares on and as of the Closing Date; provided, however, that the Issuer’s obligation to issue the Shares to the Investor is contingent upon the Issuer having received the Subscription Amount in full accordance with this Section 2. If the Closing does not occur within ten (10) business days following the Closing Date specified in the Closing Notice, unless otherwise agreed to in writing by SPAC, the Issuer and Investor, the Issuer shall promptly (but not later than one (1) business day thereafter) return the Subscription Amount in full to the Investor. For purposes of this Subscription Agreement, “business day” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York, Hong Kong or the Cayman Islands are authorized or required by law to close.

  

 

3. Closing Conditions.

 

a. The obligation of the parties hereto to consummate the purchase and sale of the Shares pursuant to this Subscription Agreement is subject to the satisfaction or valid waiver by SPAC and the Issuer, on the one hand, and the Investor on the other hand, of the condition that all conditions precedent to the closing of the Transaction under the Transaction Agreement shall have been satisfied (as determined by the parties to the Transaction Agreement and other than those conditions under the Transaction Agreement which, by their nature, are to be fulfilled at the closing of the Transaction, including to the extent that any such condition is dependent upon the consummation of the purchase and sale of the Shares pursuant to this Subscription Agreement) or waived and the closing of the Transaction shall be scheduled to occur concurrently with or on the same date as the Closing Date.

 

b. The obligation of the Issuer to consummate the issuance and sale of the Shares pursuant to this Subscription Agreement shall be subject to the satisfaction or valid waiver by the Issuer of the additional conditions that (i) all representations and warranties of the Investor contained in this Subscription Agreement are true and correct in all material respects at and as of the Closing Date, and consummation of the Closing shall constitute a reaffirmation by the Investor of each of the representations and warranties of the Investor contained in this Subscription Agreement as of the Closing Date and (ii) all obligations, covenants and agreements of the Investor required to be performed by it at or prior to the Closing Date shall have been performed in all material respects.

 

c. The obligation of the Investor to consummate the purchase of the Shares pursuant to this Subscription Agreement shall be subject to the satisfaction or valid waiver by the Investor of the additional conditions that (i) all representations and warranties of the Issuer and SPAC contained in this Subscription Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality, Issuer Material Adverse Effect or SPAC Material Adverse Effect (as defined herein), which representations and warranties shall be true in all respects) at and as of the Closing Date, and consummation of the Closing shall constitute a reaffirmation by each of the Issuer and SPAC of each of their respective representations and warranties contained in this Subscription Agreement as of the Closing Date, (ii) all obligations, covenants and agreements of the Issuer required by the Subscription Agreement to be performed by it at or prior to the Closing Date shall have been performed in all material respects and (iii) the Investor shall have delivered the Subscription Amount to Issuer in compliance with the terms of this Subscription Agreement.

 

4. Further Assurances. At or prior to the Closing Date, the parties hereto shall execute and deliver or cause to be executed and delivered such additional documents and take such additional actions as the parties reasonably may deem to be practical and necessary in order to consummate the subscription as contemplated by this Subscription Agreement.

 

5. Issuer Representations and Warranties. The Issuer represents and warrants to the Investor that:

 

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

 

b. As of the Closing Date, subject to the receipt of the Subscription Amount in accordance with the terms of this Subscription Agreement and registration on the Issuer’s register of members, the Shares will be duly authorized and, when issued and delivered to the Investor against full payment therefor in accordance with the terms of this Subscription Agreement and registered on the Issuer’s register of members, the Shares will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under the Issuer’s memorandum and articles of association (as may be amended and/or restated from time to time) in effect on the Closing Date or under the Jersey Companies Law.

 

c. This Subscription Agreement has been duly authorized, executed and delivered by the Issuer and, assuming that this Subscription Agreement constitutes the valid and binding agreement of SPAC and the Investor, this Subscription Agreement is enforceable against the Issuer in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, or (ii) principles of equity, whether considered at law or equity.

 

 

d. The issuance and sale of the Shares and the compliance by the Issuer with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Issuer pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer is a party or by which the Issuer is bound or to which any of the property or assets of the Issuer is subject that would reasonably be expected to have a material adverse effect on the ability of the Issuer to timely comply in all material respects with the terms of this Subscription Agreement (an “Issuer Material Adverse Effect”); (ii) result in any violation of the provisions of the organizational documents of the Issuer; or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that would reasonably be expected to have an Issuer Material Adverse Effect.

 

e. Assuming the accuracy of the Investor’s representations and warranties set forth in Section 6, no registration under the Securities Act of 1933, as amended (the “Securities Act”) is required for the offer and sale of the Shares by the Issuer to the Investor hereunder. The Shares (i) were not offered by any form of general solicitation or general advertising and (ii) to the Issuer’s knowledge are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.

 

6. Investor Representations and Warranties. The Investor represents and warrants to SPAC and the Issuer that:

 

a. The Investor, or each of the funds managed by or affiliated with the Investor for which the Investor is acting as nominee, as applicable, (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act), in each case, satisfying the applicable requirements set forth on Schedule A, and accordingly, understands that the offering meets the exemptions from filing under FINRA Rule 5123(b)(1)(C) or (J), (ii) is acquiring the Shares only for his, her or its own account and not for the account of others, or if the Investor is subscribing for the Shares as a fiduciary or agent for one or more investor accounts, the Investor has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act (and shall provide the requested information set forth on Schedule A). The Investor (i) is an “institutional account” as defined by FINRA Rule 4512(c), (ii) is a sophisticated investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities and (iii) exercised independent judgment in evaluating the Investor’s participation in the purchase of the Shares, and (z) understands that the offering meets (i) the exemptions from filing under FINRA Rule 5123(b)(1)(A) and (ii) the institutional customer exemption under FINRA Rule 2111(b). The information provided by the Investor on Schedule A is true and correct in all respects.

 

b. The Investor acknowledges and agrees that the Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Shares have not been registered under the Securities Act. The Investor acknowledges and agrees that the Shares may not be offered, resold, transferred, pledged or otherwise disposed of by the Investor absent an effective registration statement under the Securities Act except (i) to the Issuer or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and in each of clauses (i) and (iii) in accordance with any applicable securities laws of the states and other jurisdictions of the United States. The Investor acknowledges and agrees that it has been advised to consult legal counsel and tax and accounting advisors prior to making any offer, resale, transfer, pledge or disposition of any of the Shares.

 

 

c. The Investor acknowledges and agrees that the Investor is purchasing the Shares directly from the Issuer. The Investor further acknowledges that there have been no representations, warranties, covenants and agreements made to the Investor by or on behalf of SPAC, the Issuer, the Company, 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 of the Issuer expressly set forth in Section 5 of this Subscription Agreement and those representations, warranties, covenants and agreements of SPAC expressly set forth in Section 7 of this Subscription Agreement.

 

d. The Investor’s acquisition and holding of the Shares will not constitute or result in a non- exempt prohibited transaction under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, Section 4975 of the Internal Revenue Code of 1986, as amended, or any applicable similar law.

 

e. The Investor acknowledges and agrees that the Investor has received such information as the Investor deems necessary in order to make an investment decision with respect to the Shares, including, with respect to SPAC, the Issuer, the Company, the Transaction and the business of the Company and its subsidiaries. Without limiting the generality of the foregoing, the Investor acknowledges that he, she or it has reviewed the respective filings of SPAC and the Issuer with the U.S. Securities and Exchange Commission (the “SEC”). The Investor acknowledges and agrees that the Investor and the Investor’s professional advisor(s), if any, have had the full access to and opportunity to ask such questions, receive such answers and obtain such financial and other information and an opportunity to review such information as the Investor and such Investor’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Shares.

 

f. The Investor became aware of this offering of the Shares solely by means of direct contact between the Investor and SPAC, the Issuer, the Company or a representative of SPAC, the Issuer or the Company, and the Shares were offered to the Investor solely by direct contact between the Investor and SPAC, the Issuer, the Company or a representative of SPAC, the Issuer or the Company. The Investor did not become aware of this offering of the Shares, nor were the Shares offered to the Investor, by any other means. The Investor acknowledges that the Shares (i) were not offered by any form of general solicitation or general advertising or, to its knowledge, general solicitation and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. The Investor 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, SPAC, the Issuer, the Company, any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), other than the representations and warranties of the Issuer contained in Section 5 of this Subscription Agreement and of SPAC contained in Section 7 of this Subscription Agreement, in making its investment or decision to invest in the Issuer.

 

g. The Investor acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Shares, including those set forth in the Issuer’s and SPAC’s respective filings with the SEC. The Investor has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares, and the Investor has sought such accounting, legal and tax advice as the Investor has considered necessary to make an informed investment decision and the Investor has made its own assessment and has satisfied itself concerning relevant tax and other economic considerations relative to its purchase of the Shares. The Investor is able to sustain a complete loss on its investment in the Shares, has no need for liquidity with respect to its investment in the Shares and has no reason to anticipate any change in circumstances, financial or otherwise, which may cause or require any sale or distribution of all or any part of the Shares.

 

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

 

i. In making its decision to purchase the Shares, the Investor has relied solely upon independent investigation made by the Investor. Without limiting the generality of the foregoing, the Investor has not relied on any statements or other information provided by or on behalf of SPAC, the Issuer, the Company, or any of its respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing concerning the Issuer, the Company, the Transaction, the Transaction Agreement, this Subscription Agreement or the transactions contemplated hereby or thereby, the Shares or the offer and sale of the Shares.

 

 

j. The Investor acknowledges that (i) the Company, SPAC and the Issuer currently may have, and later may come into possession of, information regarding the Company, the SPAC and the Issuer that is not known to the Investor and that may be material to a decision to enter into this transaction to purchase the Shares (“Excluded Information”), (ii) the Investor has determined to enter into the this transaction to purchase the Shares notwithstanding its lack of knowledge of the Excluded Information, and (iii) neither the Company, nor SPAC or the Issuer shall have liability to the Investor, and the Investor hereby to the extent permitted by law waive and releases any claims it may have against the Company, SPAC or the Issuer, with respect to the nondisclosure of the Excluded Information.

 

k. The Investor acknowledges that certain information provided to the Investor was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections.

 

l. The Investor acknowledges and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Shares or made any findings or determination as to the fairness of this investment.

 

m. The Investor, if not an individual, has been duly formed or incorporated and is validly existing and is in good standing under the laws of its jurisdiction of formation or incorporation, with power and authority to enter into, deliver and perform its obligations under this Subscription Agreement.

 

n. The execution, delivery and performance by the Investor of this Subscription Agreement are within the powers of the Investor, have been duly authorized and will not constitute or result in a breach or default under or conflict with any order, ruling or regulation of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which the Investor is a party or by which the Investor is bound, and, if the Investor is not an individual, will not violate any provisions of the Investor’s organizational documents, including, without limitation, its incorporation or formation papers, bylaws, indenture of trust or partnership or operating agreement, as may be applicable. The signature on this Subscription Agreement is genuine, and the signatory, if the Investor is an individual, has legal competence and capacity to execute the same or, if the Investor is not an individual, the signatory has been duly authorized to execute the same, and, assuming that this Subscription Agreement constitutes the valid and binding obligation of SPAC and the Issuer, this Subscription Agreement constitutes a legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.

 

o. The Investor is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons 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 List; (iii) organized, incorporated, established, located, resident or born in, or a citizen, national or the government, including any political subdivision, agency or instrumentality thereof, of, Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine or any other country or territory embargoed or subject to substantial trade restrictions by the United States, (iv) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (each, a “Prohibited Investor”). The Investor agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that the Investor is permitted to do so under applicable law. If the Investor 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”), the Investor 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 to ensure compliance with OFAC-administered sanctions programs, including for the screening of its investors against the OFAC sanctions programs, including the OFAC List. To the extent required by applicable law, the Investor maintains policies and procedures reasonably designed to ensure that the funds held by the Investor and used to purchase the Shares were legally derived and were not obtained, directly or indirectly, from a Prohibited Investor.

 

 

p. The Investor is not currently (and at all times through Closing will refrain from being or becoming) a member of a “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) acting for the purpose of acquiring, holding or disposing of equity securities of SPAC (within the meaning of Rule 13d-5(b)(1) under the Exchange Act).

 

q. No foreign person (as defined in Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. §4565), and all rules and regulations issued and effective thereunder (together, the “DPA”)) in which the national or subnational governments of a single foreign state have a “substantial interest” (as defined in the DPA) will acquire a “substantial interest” (as defined in the DPA) in the Issuer as a result of the purchase of Shares by the Investor hereunder such that a filing before the Committee on Foreign Investment in the United States would be required under the DPA, and no such foreign person will have “control” (as defined in the DPA) over the Issuer from and after the Closing as a result of the purchase of Shares by the Investor hereunder.

 

r. The Investor has or has commitments to have and, when required to deliver payment to the Issuer pursuant to Section 2 above, will have, sufficient funds to pay the Subscription Amount and consummate the purchase and sale of the Shares pursuant to this Subscription Agreement.

 

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

 

t. If the Investor is an employee benefit plan that is subject to Title I of ERISA, a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, the Investor represents and warrants that (i) neither SPAC, the Issuer nor, to the Investor’s knowledge, any of SPAC’s or the Issuer’s respective affiliates (the “Transaction Parties”) has acted as the Plan’s fiduciary, or has been relied on for advice, with respect to its decision to acquire and hold the Subscribed Shares, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Subscribed Shares and (ii) the acquisition and holding of the Subscribed Shares will not result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code.

 

u. No broker, finder or other financial consultant is acting on the Investor’s behalf in connection with this Subscription Agreement or the transactions contemplated hereby in such a way as to create any liability of the Issuer or SPAC for the payment of any fees, costs, expenses or commissions.

 

7. SPAC Representations and Warranties. SPAC represents and warrants to the Investor that:

 

a. SPAC is an exempted company duly incorporated, validly existing and in good standing under the laws of the Cayman Islands. SPAC 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 Subscription Agreement.

 

b. This Subscription Agreement has been duly authorized, executed and delivered by SPAC and, assuming that this Subscription Agreement constitutes the valid and binding agreement of the Issuer and the Investor, this Subscription Agreement is enforceable against SPAC in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, or (ii) principles of equity, whether considered at law or equity.

 

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

 

 

d. As of their respective filing dates, each form, report, statement, schedule, prospectus, proxy, registration statement and other documents filed by SPAC with the SEC prior to the date of this Subscription Agreement (the “SEC Documents”) complied in all material respects with the requirements of the Exchange Act applicable to the SEC Documents and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents. None of the SEC Documents filed under the Exchange Act, contained, when filed or, if amended prior to the date of this Subscription Agreement, as of the date of such amendment with respect to those disclosures that are amended, any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, that SPAC makes no such representation or warranty with respect to the proxy statement of SPAC to be filed in connection with the approval of the Transaction Agreement by the shareholders of SPAC or any other information relating to the Company or any of its affiliates included in any SEC Document or filed as an exhibit thereto. To the knowledge of SPAC, there are no material outstanding or unresolved comments in comment letters from the SEC staff with respect to any of the SEC Documents.

 

8. Registration Rights.

 

a. In the event that the Shares are not registered in connection with the consummation of the Transaction, the Issuer agrees that, within thirty (30) calendar days after the Closing Date (or within ninety (90) calendar days following the Closing Date if the Issuer is required to include therein additional financial information that is not included in the registration statement on Form F-4 at the time of the closing of the Transaction), it will file or cause to be filed, with the SEC (at the its sole cost and expense) a registration statement registering the resale of the Shares (the “Registration Statement”), and it shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof but no later than the earlier of (a) sixty (60) calendar days (or one hundred and twenty (120) calendar days if the SEC notifies the Issuer that it will “review” such Registration Statement) following the initial filing date thereof and (b) ten (10) business days after the Issuer 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 (the “Effective Date”); provided, however, that if the SEC is closed for operations due to a government shutdown, the Effectiveness Date shall be extended by the same amount of days that the Commission remains closed for operations, provided, further, that the Issuer’s obligations to include the Shares in the Registration Statement are contingent upon the Investor furnishing in writing to the Issuer such information regarding the Investor, the securities of the Issuer held by the Investor, the intended method of disposition of the Shares (which shall be limited to non- underwritten public offerings) and such other information as shall be reasonably requested by the Issuer to effect the registration of the Shares, and the Investor shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling shareholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement (i) as permitted hereunder and (ii) as may be necessary in connection with the preparation and filing of a post-effective amendment to the Registration Statement following the filing of the Issuer’s Annual Report on Form 20-F or 10-K for its first completed fiscal year. With respect to the information to be provided by Subscriber pursuant to this Section 8(a), the Issuer shall request such information from the Investor at least five (5) Business Days prior to the anticipated filing date of the Registration Statement, and the Issuer shall provide a draft of the Registration Statement to the Investor for review at least three (3) Business Days in advance of filing the Registration Statement. In connection with the foregoing, Investor shall not be required to execute any lock-up or similar agreement or otherwise be subject to any contractual restriction on the ability to transfer the Shares. The Issuer agrees to, except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to cause such Registration Statement, or another shelf registration statement that includes the Shares to be sold pursuant to this Subscription Agreement, to remain effective until the earliest of (i) the fifth anniversary of the Closing, (ii) the date on which the Investor ceases to hold any Shares issued pursuant to this Subscription Agreement, or (iii) on the first date on which the Investor is able to sell all of its Shares issued pursuant to this Subscription Agreement (or shares received in exchange therefor) under Rule 144 promulgated under the Securities Act (“Rule 144”) without the public information, volume or manner of sale limitations of such rule (such date, the “End Date”).

 

 

b. Prior to the End Date, the Issuer will use commercially reasonable efforts to qualify the Shares for listing on the applicable stock exchange. The Investor agrees to disclose its ownership to the Issuer upon request to assist it in making the determination with respect to Rule 144 described in clause (iii) above. The Issuer may amend the Registration Statement so as to convert the Registration Statement to a Registration Statement on Form F-3 at such time after the Issuer becomes eligible to use such Form F-3. The Investor acknowledges and agrees that the Issuer may suspend the use of any such registration statement if it determines that in order for such registration statement not to contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act. The Issuer’s obligations to include the Shares issued pursuant to this Subscription Agreement (or shares issued in exchange therefor) for resale in the Registration Statement are contingent upon the Investor furnishing in writing to the Issuer such information regarding the Investor, the securities of the Issuer held by the Investor and the intended method of disposition of such Shares, which shall be limited to non-underwritten public offerings, as shall be reasonably requested by the Issuer to effect the registration of such Shares, and shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling stockholder in similar situations.

 

c. Notwithstanding anything to the contrary in this Subscription Agreement, the Issuer shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require the Investor not to sell under the Registration Statement or to suspend the effectiveness thereof, if (x) the use of the Registration Statement would require the inclusion of financial statements that are unavailable for reasons beyond the Issuer’s control, (y) the Issuer determines that in order for the Registration Statement to not contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act, or if (z) such filing or use could materially affect a bona fide business or financing transaction of the Issuer or its subsidiaries or would require additional disclosure by the Issuer in the Registration Statement of material information that the Issuer has a bona fide business purpose for keeping confidential (each such circumstance, a “Suspension Event”). Upon receipt of any written notice from the Issuer of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, the Investor agrees that it will immediately discontinue offers and sales of the Shares under the Registration Statement until the Investor receives copies of a supplemental or amended prospectus that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales; provided, for the avoidance of doubt, that the Issuer shall not include any material non- public information in any such written notice. If so directed by the Issuer, the Investor will deliver to the Issuer or destroy all copies of the prospectus covering the Shares in the Investor’s possession.

 

d. Indemnification

 

(i) The Issuer agrees to indemnify and hold harmless, to the extent permitted by law, the Investor, its directors, and officers, employees, and agents, and each person who controls the Investor (within the meaning of the Securities Act or the Exchange Act) from and against any and all out-of-pocket losses, claims, damages, liabilities and expenses (including, without limitation, any reasonable and documented attorneys’ fees and expenses incurred in connection with defending or investigating any such action or claim) caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement, prospectus included in any Registration Statement or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Issuer by or on behalf of the Investor expressly for use therein.

 

(ii) The Investor agrees to indemnify and hold harmless the Issuer, its directors and officers and agents and each person who controls the Issuer (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including, without limitation, reasonable and documented attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by or on behalf of the Investor expressly for use therein. In no event shall the liability of the Investor be greater in amount than the dollar amount of the net proceeds received by the Investor upon the sale of the Shares purchased pursuant to this Subscription Agreement giving rise to such indemnification obligation.

 

 

(iii) Any person entitled to indemnification herein shall (1) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (2) permit such indemnifying party to assume the defense of such claim with counsel it elects in its sole discretion. If such defense is assumed, the indemnifying party will not be liable to the indemnified party for any legal or other expenses incurred by the indemnified party and shall not be subject to any liability for any settlement made by the indemnified party without its consent. An indemnifying party who elects not to assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of legal counsel to any indemnified party a conflict of interest exists between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

(iv) The indemnification provided for under this Subscription Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, employee, agent, affiliate or controlling person of such indemnified party and shall survive the transfer of the Shares purchased pursuant to this Subscription Agreement.

 

(v) If the indemnification provided under this Section 8(d) from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by or on behalf of, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 8d from any person who was not guilty of such fraudulent misrepresentation. Any contribution pursuant to this Section 8d by any seller of Shares shall be limited in amount to the amount of net proceeds received by such seller from the sale of such Shares pursuant to the Registration Statement. Notwithstanding anything to the contrary herein, in no event will any party be liable for consequential, special, exemplary or punitive damages in connection with this Subscription Agreement.

 

9. Additional Investor Agreement. The Investor agrees that, from the date of this Subscription Agreement, none of the Investor or any person or entity acting on behalf of the Investor or pursuant to any understanding with the Investor will engage in any hedging or other transactions or arrangements (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or similar instrument, including without limitation equity repurchase agreements and securities lending arrangements, however, described or defined) designed or intended, or which could reasonably be expected to lead to or result in, a sale, loan, pledge or other disposition or transfer (whether by the Investor or any other person) of any economic consequences of ownership, in whole or in part, directly or indirectly, physically or synthetically, of any securities of SPAC prior to the Closing, whether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of securities of SPAC, in cash or otherwise, or to publicly disclose the intention to undertake any of the foregoing; provided that the provisions of this Section 9 shall not apply to long sales (including sales of securities held by the Investor prior to the date of this Subscription Agreement and securities purchased by the Investor in the open market after the date of this Subscription Agreement) other than those effectuated through derivatives transactions and similar instruments.

 

 

10. Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earliest to occur of (a) such date and time as the Transaction Agreement is terminated in accordance with its terms without being consummated, (b) upon the mutual written agreement of each of the parties hereto and the Company to terminate this Subscription Agreement, and (c) 30 days after the Outside Date (as defined in the Transaction Agreement as in effect on the date hereof), if the Closing has not occurred by such date other than as a result of a breach of the Investor’s obligations hereunder (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 breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from any such willful breach. The Issuer shall notify the Investor in writing of the termination of the Transaction Agreement promptly after the termination of such agreement. Upon the occurrence of any Termination Event, this Subscription Agreement shall be void and of no further effect and any monies paid by the Investor to the Issuer in connection herewith shall promptly (and in any event within two (2) business days) following the Termination Event be returned to the Investor.

 

11. Trust Account Waiver. The Investor acknowledges that SPAC is a blank check company with the powers and privileges to effect a merger, asset acquisition, reorganization or similar business combination involving SPAC and one or more businesses or assets. The Investor further acknowledges that, as described in SPAC’s prospectus relating to its initial public offering dated February 11, 2021 (the “Prospectus”) available at www.sec.gov, substantially all of SPAC’s assets consist of the cash proceeds of SPAC’s initial public offering and private placement of its securities, and substantially all of those proceeds have been deposited in a trust account (the “Trust Account”) for the benefit of SPAC, its public shareholders and the underwriters of SPAC’s initial public offering. Except with respect to interest earned on the funds held in the Trust Account that may be released to SPAC to pay its tax obligations and to fund certain of its working capital requirements, the cash in the Trust Account may be disbursed only for the purposes set forth in the Prospectus. For and in consideration of SPAC entering into this Subscription Agreement, the receipt and sufficiency of which are hereby acknowledged, the Investor hereby irrevocably waives any and all right, title and interest, or any claim of any kind it has or may have in the future, in or to any monies held in the Trust Account, and agrees not to seek recourse against the Trust Account as a result of, or arising out of, this Subscription Agreement; provided, however, that nothing in this Section 11 shall be deemed to limit the Investor’s right, title, interest or claim to any monies held in the Trust Account by virtue of its record or beneficial ownership of shares of SPAC currently outstanding on the date hereof, pursuant to a validly exercised redemption right with respect to any such shares of SPAC, except to the extent that the Investor has otherwise agreed with SPAC to not exercise such redemption right.

 

12. Miscellaneous.

 

a. Neither this Subscription Agreement nor any rights that may accrue to the parties hereunder (other than the Shares acquired hereunder, if any) may be transferred or assigned without the prior written consent of each of the other parties hereto; provided that (i) this Subscription Agreement and any of the Investor’s rights and obligations hereunder may be assigned to any fund or account managed by the same investment manager as the Investor or by a controlled affiliate (as defined in Rule 12b-2 of the Exchange Act) of such investment manager without the prior consent of SPAC and the Issuer and (ii) the Investor’s rights under Section 8 may be assigned to an assignee or transferee of the Shares; provided further that prior to such assignment any such assignee shall agree in writing to be bound by the terms hereof; provided, that no assignment pursuant to clause (i) of this Section 12 shall relieve the Investor of its obligations hereunder.

 

b. The Issuer may request from the Investor such additional information as the Issuer may deem necessary to register the resale of the Shares and evaluate the eligibility of the Investor to acquire the Shares, and the Investor shall promptly provide such information as may reasonably be requested to the extent readily available; provided, that, the Issuer agrees to keep any such information provided by Investor confidential except (i) as necessary to include in any registration statement the Issuer is required to file hereunder, (ii) as required by the federal securities law or pursuant to other routine proceedings of regulatory authorities or (iii) to the extent such disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of any national securities exchange on which SPAC’s securities are listed or the Issuer’s securities will be listed for trading. The Investor acknowledges and agrees that if it does not provide the Issuer with such requested information, the Issuer may not be able to register the Investor’s Shares for resale pursuant to Section 8 hereof. The Investor acknowledges that SPAC and/or the Issuer may file a copy of this Subscription Agreement (or a form of this Subscription Agreement) with the SEC as an exhibit to a periodic report or a registration statement of SPAC and/or the Issuer.

 

 

c. The Investor acknowledges that SPAC, the Issuer, the Company and others will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement, including Schedule A hereto. Prior to the Closing, the Investor agrees to promptly notify SPAC, the Issuer and the Company if any of the acknowledgments, understandings, agreements, representations and warranties set forth in Section 6 above are no longer accurate in any material respect (other than those acknowledgments, understandings, agreements, representations and warranties qualified by materiality, in which case the Investor shall notify SPAC and the Issuer if they are no longer accurate in any respect). The Investor acknowledges and agrees that each purchase by the Investor of Shares from the Issuer will constitute a reaffirmation of the acknowledgments, understandings, agreements, representations and warranties herein (as modified by any such notice) by the Investor as of the time of such purchase.

 

d. Each of the Issuer and the Investor acknowledges and agrees that each representation, warranty, covenant and agreement of the Issuer and the Investor hereunder is being made also for the benefit of the Company after the Closing.

 

e. SPAC, the Issuer and the Company are each entitled to rely upon this Subscription Agreement and each is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

 

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

 

g. This Subscription Agreement may not be modified, waived or terminated (other than pursuant to the terms of Section 10 above) except by an instrument in writing, signed by each of the parties hereto, provided, however, that no modification or waiver by the Issuer of the provisions of this Subscription Agreement shall be effective without the prior written consent of the Company (other than modifications or waivers that are solely ministerial in nature or otherwise immaterial and do not affect any economic or any other material term of this Subscription Agreement). No failure or delay of either party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have hereunder.

 

h. This Subscription Agreement (including the schedule hereto) constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof. Except as set forth in Section 8(d), Section 10, Section 12(c), Section 12(d), Section 12(e), Section 12(g), this Section 12(h), Section 13 and the last sentence of Section 12(l), with respect to the persons specifically referenced therein, this Subscription Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successors and assigns, and the parties hereto acknowledge that such persons so referenced are third party beneficiaries of this Subscription Agreement with right of enforcement for the purposes of, and to the extent of, the rights granted to them, if any, pursuant to the applicable provisions; provided, that, notwithstanding anything to the contrary contained in this Subscription Agreement, the Company is an intended third party beneficiary of each of the provisions of this Subscription Agreement and may rely on such provisions.

 

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

 

 

j. If any provision of this Subscription Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.

 

k. This Subscription Agreement may be executed in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.

 

l. The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement, without posting a bond or undertaking and without proof of damages, to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise. The parties hereto acknowledge and agree that the Company shall be entitled to specifically enforce the Investor’s obligations to fund the Subscription Amount and the provisions of the Subscription Agreement of which the Company is an express third party beneficiary, in each case, on the terms and subject to the conditions set forth herein.

 

m. If any change in the number, type or classes of authorized shares of the Issuer (including the Shares), other than as contemplated by the Transaction Agreement or any agreement contemplated by the Transaction Agreement, shall occur between the date hereof and immediately prior to the Closing by reason of reclassification, recapitalization, stock split (including reverse stock split) or combination, exchange or readjustment of shares, or any stock dividend, the number of Shares issued to the Investor shall be appropriately adjusted to reflect such change.

 

n. This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of New York (regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof) as to all matters (including any action, suit, litigation, arbitration, mediation, claim, charge, complaint, inquiry, proceeding, hearing, audit, investigation or reviews by or before any governmental entity related hereto), including matters of validity, construction, effect, performance and remedies.

 

o. Each party hereto hereby, and any person asserting rights as a third party beneficiary may do so only if he, she or it, irrevocably agrees that any action, suit or proceeding between or among the parties hereto, whether arising in contract, tort or otherwise, arising in connection with any disagreement, dispute, controversy or claim arising out of or relating to this Subscription Agreement or any related document or any of the transactions contemplated hereby or thereby (“Legal Dispute”) shall be brought only to the exclusive jurisdiction of the state or federal courts located in the State of New York, and each party hereto hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding that is brought in any such court has been brought in an inconvenient forum. During the period a Legal Dispute that is filed in accordance with this Section 12(o) is pending before a court, all actions, suits or proceedings with respect to such Legal Dispute or any other Legal Dispute, including any counterclaim, cross-claim or interpleader, shall be subject to the exclusive jurisdiction of such court. Each party hereto and any person asserting rights as a third party beneficiary may do so only if he, she or it hereby waives, and shall not assert as a defense in any Legal Dispute, that (a) such party is not personally subject to the jurisdiction of the above named courts for any reason, (b) such action, suit or proceeding may not be brought or is not maintainable in such court, (c) such party’s property is exempt or immune from execution, (d) such action, suit or proceeding is brought in an inconvenient forum, or (e) the venue of such action, suit or proceeding is improper. A final judgment in any action, suit or proceeding described in this Section 12(o) following the expiration of any period permitted for appeal and subject to any stay during appeal shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable laws. EACH OF THE PARTIES HERETO AND ANY PERSON ASSERTING RIGHTS AS A THIRD PARTY BENEFICIARY MAY DO SO ONLY IF HE, SHE OR IT IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY CLAIMS OR COUNTERCLAIMS ASSERTED IN ANY LEGAL DISPUTE RELATING TO THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY 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 SUBSCRIPTION 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.

 

 

p. Any notice or communication required or permitted hereunder to be given to the Investor shall be in writing and either delivered personally, emailed or sent by overnight mail via a reputable overnight carrier, or sent by certified or registered mail, postage prepaid, to such address(es) or email address(es) set forth on the signature page hereto, and shall be deemed to be given and received (i) when so delivered personally, (ii) when sent, with no mail undeliverable or other rejection notice, if sent by email, or (iii) three (3) business days after the date of mailing to the address below or to such other address or addresses as the Investor may hereafter designate by notice to SPAC and the Issuer.

 

13. Non-Reliance and Exculpation. The Investor acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation, other than the statements, representations and warranties of the Issuer expressly contained in Section 5 of this Subscription Agreement and those statements, representations and warranties of SPAC expressly contained in Section 7, in making its investment or decision to invest in the Issuer. The Investor acknowledges and agrees that none of (i) any other investor pursuant to this Subscription Agreement or any other subscription agreement related to the private placement of the Shares (including the investor’s respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), or (ii) any other party to the Transaction Agreement or any Non-Party Affiliate (other than the Issuer and SPAC with respect to the previous sentence), shall have any liability (including in contract, tort, under federal or state securities laws or otherwise) to the Investor, or to any other investor, pursuant to, arising out of or relating to this Subscription Agreement or any other subscription agreement related to the private placement of the Shares, the negotiation hereof or thereof or its subject matter, or the transactions contemplated hereby or thereby, including, without limitation, with respect to any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Shares or with respect to any claim (whether in tort, contract or otherwise) for breach of this Subscription Agreement or in respect of any written or oral representations made or alleged to be made in connection herewith, as expressly provided herein, or for any actual or alleged inaccuracies, misstatements or omissions with respect to any information or materials of any kind furnished by SPAC, the Issuer, the Company or any Non-Party Affiliate concerning SPAC, the Issuer, the Company, any of their respective controlled affiliates, this Subscription Agreement or the transactions contemplated hereby. For purposes of this Subscription Agreement, “Non- Party Affiliates” means each former, current or future officer, director, employee, partner, member, manager, direct or indirect equityholder or affiliate of SPAC, the Issuer, the Company, any of SPAC’s, the Issuer’s the Company’s or any family member of the foregoing.

 

14. Disclosure. SPAC shall, by 9:00 a.m., New York City time, on the third (3rd) business day immediately following the date of this Subscription Agreement, issue one or more press releases or file with the SEC a Current Report on Form 8-K (collectively, the “Disclosure Document”) disclosing all material terms of the transactions contemplated hereby and any other material, nonpublic information that SPAC and/or the Issuer has provided to the Investor at any time prior to the filing of the Disclosure Document. Upon the issuance of the Disclosure Document, to the knowledge of SPAC, the Investor shall not be in possession of any material, non-public information received from SPAC or any of its officers, directors, or employees or agents, and the Investor shall no longer be subject to any confidentiality or similar obligations under any current agreement, whether written or oral, with SPAC, the Issuer or any of their respective affiliates, relating to the transactions contemplated by this Subscription Agreement. Notwithstanding anything in this Subscription Agreement to the contrary, SPAC shall not publicly disclose the name of the Investor or any of its affiliates or advisers, or include the name of the Investor or any of its affiliates or advisers in any press release or in any filing with the SEC or any regulatory agency or trading market, without the prior written consent of the Investor, except (i) as required by the federal securities law or pursuant to other routine proceedings of regulatory authorities, (ii) to the extent such disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of any national securities exchange on which SPAC’s securities are listed for trading or (iii) to the extent such announcements or other communications contain only information previously disclosed in a public statement, press release or other communication previously approved in accordance with this Section 14.

  

SIGNATURE PAGES FOLLOW

 

 

IN WITNESS WHEREOF, the Investor has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first written above.

 

Name of Investor:			State/Country of Formation or Domicile: UNITED KINGDOM
INVESTOR
By:	/s/ CHHIBBER, SIRV PARVESH
Name:	CHHIBBER, SIRV PARVESH
Title:	Authorized Signature
Name in which Shares are to be registered (if different):
Investor’s EIN:
Business Address-Street: 106 DRUMMOND STREET			Mailing Address-Street (if different):
City, State, Zip: LONDON NW1 2HN			City, State, Zip:
Attn: CHHIBBER, SIRV PARVESH			Attn:
Telephone No.:			Telephone No.:
Facsimile No.:			Facsimile No.:
Number of Shares subscribed for: 176,470
Aggregate Subscription Amount: $1,499,995.00			Price Per Share: $8.50

 

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

 

[Signature Page to Subscription Agreement]

 

 

	Catcha Investment Corp.
	By:	/s/ Lucas Robert Elliot
	Name:	Lucas Robert Elliott
	Title:	President and Director

 

[Signature Page to Subscription Agreement]

 

 

IN WITNESS WHEREOF, the Issuer has accepted this Subscription Agreement as of the date first written above.

 

	Crown LNG Holdings
	By:	/s/ Joern Husemoen
	Name:	Joern Husemoen
	Title:	Director

 

[Signature Page to Subscription Agreement]

 

 

SCHEDULE A

 

ELIGIBILITY REPRESENTATIONS OF THE INVESTOR

 

A.

QUALIFIED INSTITUTIONAL BUYER STATUS

 

(Please check the applicable subparagraphs):

 

☐ We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act (a “QIB”)).

 

B.

INSTITUTIONAL ACCREDITED INVESTOR STATUS (Please check the applicable subparagraphs):

 

þ We are an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act or an entity in which all of the equity holders are accredited investors within the meaning of Rule 501(a) under the Securities Act), and have marked and initialed the appropriate box on the following page indicating the provision under which we qualify as an “accredited investor.”

 

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

 

☐ Any bank, registered broker or dealer, insurance company, registered investment company, business develo ment company, or small business investment company;

 

☐ Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

 

☐ Any employee benefit plan, within the meaning of the Employee Retirement Income Security Act of 1974, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5,000,000;

 

☐ Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

 

☐ Any trust with assets in excess of $5,000,000, not formed to acquire the securities offered, whose purchase is directed by a sophisticated person;

 

þ Any entity, of a type not listed above, not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000; or

 

☐ Any entity in which all of the equity owners are “accredited investors” under Rule 501(a) under the Securities Act meeting one or more of the above tests.

 

This page should be completed by the Investor and constitutes a part of the Subscription Agreement.

 

 

-17-

Exhibit 99.3

 

 

SECURITIES LENDING AGREEMENT

 

This Securities Lending Agreement (“Agreement”) is made on 22^nd May 2024 (“Effective Date”) by and between Millennia Capital Partners Limited, with its principal place of business at OMC Chambers, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands (“Lender”) and Crown LNG Holdings Limited with a principal place of residence or business located at 3rd Floor, 4 Esplanade, St Helier, Jersey, JE4 9WG (“Borrower”). Capitalized terms not otherwise defined herein shall have the meanings provided in Section 1. Each a “Party”, collectively the “Parties”.

 

THIS AGREEMENT IS NOT AN OFFER OR SOLICITATION TO PURCHASE OR SELL SECURITIES. BORROWER SHOULD NOT EXECUTE THIS AGREEMENT AND OTHER LOAN DOCUMENTS UNLESS BORROWER HAS: (1) READ AND FULLY UNDERSTANDS THE CONTENTS HEREIN; (2) DETERMINED THAT THE TRANSACTIONS CONTEMPLATED HEREIN ARE APPROPRIATE FOR BORROWER AFTER CONSIDERING BORROWER’S FINANCIAL SITUATION AND NEEDS, TAX STATUS, INVESTMENT OBJECTIVES, INVESTMENT TIME HORIZON, LIQUIDITY NEEDS, RISK TOLERANCE, AND ANY OTHER CONDITION OR CONCERN RELEVANT TO BORROWER; AND (3) HAS CAPACITY AND WHEREWITHAL TO POST MARGIN IN THE EVENT OF MARGIN-CALL. IN EXECUTING THIS AGREEMENT BORROWER ACKNOWLEDGES THAT ALL OF THESE CONDITIONS HAVE BEEN SATISFIED AND THAT BORROWER AT ALL TIMES THROUGHOUT HAD CONSULTED LEGAL AND FINANCIAL COUNSEL TO ASSIST IT IN MAKING DECISIONS.

 

WITNESSETH

 

WHEREAS, the Borrower is desirous to pledge certain Collateral and in return has requested that the Lender provides one or more loans to Borrower;

 

WHEREAS, the Lender has agreed to extend one or more collateralized loans to Borrower on the terms set forth herein and Borrower is hereby agreeing to accept a Loan from Lender as determined by Lender and the herein Terms and Conditions;

 

WHEREAS, upon execution of this Agreement, Lender’s Lien and security interest over the Collateral are hereby affirmed, ratified provided for and established, and from time to time the Parties hereto may enter into transactions in which Borrower will obtain Securities Loans from Lender secured by Collateral Transferred to Lender. Each such transaction shall be governed by this Agreement, which may be amended by the Parties in writing from time to time, and includes any supplemental terms or conditions contained in any Loan Document, as applicable, hereunder;

 

NOW THEREFORE, in consideration of mutual promises and other good, valuable, and sufficient consideration and mutual covenants, provided for, bargained and accepted, the adequacy and receipt of which is hereby acknowledged, both monetary and in kind, which consideration has materialized and will continue to materialize during the Term thereof, the Parties agree that the fair value of consideration each Party is delivering, accepting, have already exchanged and will continue to exchange, equals to or exceeds the fair value that it is receiving and bargained for, and that such consideration is reasonably just, equitable, fair, sufficient and adequate, the Parties hereto intending to be bound by mutual promises, representations and warranties hereby, agree as follows:

 

 

 

 

SECTION 1

 

DEFINITIONS

 

1.1 Defined Terms

 

“Acceleration” means when there is an Event of Default and all funds, sums and amounts due to Lender are accelerated and become due and owed at that time.

 

“Acknowledgment” means a writing from the Custodial Broker acknowledging receipt of the Collateral.

 

“Addendum” means a document executed by both Parties amending or supplementing the herein Agreement in written form.

 

“Advance” shall refer to any sum of money provided by Lender to Borrower or to Borrowers designated account and in all such cases such funds shall be deemed to be a Loan.

 

“Agreement” means this Agreement and any other addendums or documents in written form which combined constitute as one Agreement, part and parcel.

 

“Amendment” means a document executed by both Parties which will amend this Agreement and alter its content.

 

“Approved Loan Amount” means the maximum sum of money or proportionate part thereof that the Lender is willing and able to extend to Borrower in accordance with the Transferred Collateral deposited with Custodial Broker.

 

“Borrower” means the individual or corporate entity as Borrower described herein, whose intention it is to borrow funds from the herein specified Lender.

 

“Borrower’s Account” An account belonging exclusively to Borrower and maintained at a commercial bank or the Depository Broker.

 

“Business Day” means any day other than Saturday, Sunday, or a holiday observed by the Custodial Broker, bank, Transfer Agent, or the principal securities exchange for the securities underlying the Collateral.

 

“Cash Collateral” means Loan Principal Amount deposited by Lender into Borrowers account at the commercial bank or Depository Broker. The Cash Collateral amount is restricted until such time as it is released by Lender and shall equal the amount to be disbursed by the Lender relative to LTV and Underwriting criterion thereof and can be adjusted or withdrawn by Lender.

 

“Closing” means when the Loan is funded, and Borrower receives the Principal.

 

“Closing Date” means a date within three (3) Business Days after the Delivery Date and Verification.

 

“Closing Statement” shall mean a document issued and executed by Lender at Closing, followed by funding of the Loan which outlines final provisions and terms of the Loan. The Closing Statement will list out gross funding amount as well as net funding amount after deduction of all customary expenses.

 

“Collateral” means the securities in electronic form pledged to a Custodial Broker. The securities must be freely trading, unrestricted, uncontested by third-Parties, free of any regulatory constraints or limitations, having all necessary announcements filed and made so as not to inhibit the trading, disposal or transfer of the securities. For avoidance of doubt, all dividends, rights, title and interest remain with the borrower until an event of default.

 

“Confirmation” means a document issued by Lender which references the final provisions and financial terms of the Loan prior to disbursement of the Proceeds.

 

“Control Account” when applicable, shall be the account owned by the Borrower into which the pledged collateral owned by Borrower with all rights, title and interest will be deposited as Collateral for the Loan. For avoidance of doubt, all associated rights and titles remain with the borrower until an event of default.

 

  

 

 

“Conversions and Calculations” means a process of converting one form of currency into another country’s usable currency based on prevailing exchange rates at the time that the Calculation is made, which Calculation shall be made at the sole Discretion of Lender.

 

“Cure Period” means five (5) Business Days during which Borrower can remedy curable Event of Default of this Agreement without penalty, each of which remedy, if provided, is described in Section 11 hereof.

 

“Currency” means that the Parties agree that the Loan shall be funded and computed in currency of the United States Dollar (“USD”). If the Collateral is a security which is priced and traded in a market and currency other than USD the Parties hereby agree to convert to USD at Discretion of Lender for all purposes to the nearest round number and calculate the currency exchange rate to USD from the currency of the market in which the security is traded, according to the rate of a bank decided by the Lender.

 

“Custodial Broker” shall have the same meaning as “Custody Broker” and means a regulated financial institution selected by Lender as custodian for the Collateral.

 

“Custodial Broker Fee” shall mean an annual fee charged by Custodial Broker for custody and maintenance of the Transferred Collateral deposited into the Control Account during the Loan Term. At no time will the fee exceed one (1%) percent per year of value of the Collateral as determined on Transfer Day. First year fee is due and payable to Custodial Broker directly. In subsequent years and thereafter, the said fee shall be due and payable to Lender yearly within three (3) days of the yearly anniversary of the Effective Date, beginning with the second anniversary, without reminder or further demand.

 

“Default Interest” shall mean the rate which Borrower will pay, computed annually starting from the Notice of Event of Default, until all sums due Lender are fully satisfied and discharged. The Default Interest rate shall be the Interest charged herein plus an additional one and one half (1.5%) percent per month, or the maximum amount allowed under the law, whichever is less.

 

“Delivery Day” means one (1) Business Day after the Transferred Collateral has been received and posted to Control Account at the Custodial Broker and is the date on which Delivery Day is recorded and dispatched to Lender after Custodial Broker’s validation that Collateral has transferred to the Control Account, settled and is ready for a loan.

 

“Depository Broker” means any securities depository, clearing corporation, dematerialized book entry system or similar system for the central handling of Securities.

 

“Discretion of Lender” means that the Lender has the sole power or right to decide or act according to its own judgment or freedom of choice.

 

“Encumber” has the same meaning as Encumbrance.

 

“Encumbrance” is a legal claim on property that affects the owner’s ability to transfer ownership of the property or to mortgage it, lien or pledge it to any other person or entity. Borrower will not be able to encumber the Collateral to any other person or entity.

 

Encumbrance includes any variation of and shall mean a lien, burden, transfer, pledge, mortgage, borrow, pawn, hypothecation, rehypothecation, repledge, charge, conveyance, repo, transfer or assignment of security interest in Transferred Collateral, restriction, legal charge or cloud on title with all such rights granted to Lender during the Loam Term.

 

“Event of Default” means any of the events specified in Section 11.1 hereof as a result of an incurable Event of Default in this or any other loan agreement.

 

“Fair Market Price” hereinafter known as (“FMP”) and mean the lowest of: (a) the average final trading price of the Collateral traded on five (5) consecutive Business Days prior to its transfer to Custodial Broker and recorded as Delivery Day.

 

“Fair Market Value” hereinafter known as (“FMV”) shall mean the sum, in the currency specified herein, equating to the FMP for each share of stock of the Collateral, multiplied by the total number of such shares Transferred to Lender, cumulative sum of which is the FMV.

 

 

 

 

“Forbearance” shall mean that the Lender will refrain from enforcing the terms of this Agreement in exchange of payment by Borrower, modification of this Agreement or other good and considerable value tendered to Lender.

 

“Forfeiture” means forfeiture of the Collateral as provided herein with all rights, title and interest transferred to Lender as a result of incurable Event of Default. The Collateral is seized and impounded by Lender as a result of Borrowers willful refusal to comply with the conditions of this Agreement which remain uncured, or as a result of other conditions.

 

“Hybrid Loan” shall have the same meaning as a Loan with respect to its purpose but shall mean that this Agreement is structured as an Investment and a Loan, resulting in a Hybrid Loan and Investment.

 

“Interest” means the rate which the Lender charges for the use of its funds expressed as a percentage of Principal borrowed. Interest is computed annually based on all the sums advanced to Borrower or on Borrowers behalf, including that of Cash Collateral and shall be paid to Lender quarterly.

 

“Invest” shall have the same meaning as herein Investment.

 

“Investment” shall mean that this Loan may be construed as a speculative Investment. Borrower being considered a sophisticated professional investor, and Borrower being aware of all the risks associated with making a major Investment where the outcome is unpredictable.

 

“Investment Risk” means that margin borrowing entails risk which is commensurate with any type of a speculative investment where the results and the outcome are both unpredictable and whereby the consequences could be materially negative. Borrower is fully informed of all risks, is a seasoned professional investor and is prepared to accept an unpredictable outcome having realized that this is a speculative undertaking.

 

“Issuer” shall mean a publicly traded corporate entity that has issued and distributed the shares of its stock on any given publicly traded stock exchange, whose shares comprise part or all of the Collateral.

 

“Lender” means specifically the legal entity described herein, whose intention it is to lend funds to Borrower, all under the terms and conditions of this Agreement and provision stated thereof.

 

“Lenders Discretion” shall also mean, “satisfactory to,” “determined by,” “at the Discretion of,” or other similar terms, whereby such terms shall mean at the sole and exclusive determination acceptable to Lender.

 

“Lenders Remedy” shall mean the termination of this Agreement with all rights and covenants of survivorship, specifically termination of the Loan and retention of the Collateral whereby it is Forfeited to Lender to satisfy all of Borrowers Obligations as provided herein, which may result because of incurable Event of Default by Borrower.

 

“Lien” means an Encumbrance, however described herein, of any kind and type concerning the subject Collateral. A Lien is granted by Borrower onto Lender during duration of this Agreement, until fully satisfied and released by Lender. The Lien shall consist of transfer of all rights of Collateral to Lender, which rights shall include rights to Encumbrance on title and ownership. The Lien will be released, and Collateral returned to Borrower at Loan Maturity. For avoidance of doubt, all associated rights and titles remain with the borrower until an event of default.

 

“Lien Rights” refers to a Lien and has the same meaning.

 

“Loan” means the total amount Advanced to Borrower and due under this Agreement, including all interest, costs, fees, and expenses due to Lender are included within this definition. The Loan includes all fees, costs, sums and charges due to Lender under this Agreement. The Loan shall mean full sum or proportional allotment of funds borrowed by Borrower or Advanced by Lender on behalf of Borrower and all or any part thereof will remain outstanding until fully satisfied and discharged. At the sole Discretion of Lender, all conversions and calculations shall be rounded to the nearest number for convenience purposes.

 

“Loan Documents” means all agreements and ancillary documents between Borrower and Lender in connection with this Agreement, all as amended or extended from time to time, including any other documents, instruments, Addendums, exhibits, or statements delivered in connection with the Loan, and each document is to be read and construed together in a manner to give meaning and effect to all its provisions.

 

 

 

 

“Loan Maturity” shall mean the date when the Loan will mature and all Obligations hereunder will be due and payable by Borrower to Lender.

 

“Loan to Value” (“LTV”) means ratio of the Loan to the value of Collateral. The LTV is calculated by dividing the amount borrowed by the FMV.

 

“Lock Up” shall mean the period agreed to by Borrower and Lender during which the subject Loan may not be pre-paid by the Borrower.

 

“Market Impact” In the event the Collateral experiences a Material Event, change in underwriting, restriction, Borrowers willful lack of cooperation, or material change in average daily trading volume or price, or negative market dynamics, negative financial implications of Issuer, or regulatory non- compliance by Issuer, then Lender shall have the right to halt or adjust funding based on new underwriting or until such circumstances are dissipated or cured.

 

“Market Price” means the current sale price of the Collateral trading on any given exchange, either during the normal exchange hours or the last price when the exchange closes for the balance of the trading day.

 

“Material Event” means any event or possible outcome which may undermine or alter the value of Collateral or prejudice Lenders Lien. A Material Event will accelerate an Event of Default without a Cure Period and provide for disposition of Collateral.

 

“Maturity” shall have the same meaning as Loan Maturity.

 

“Maturity Date” shall have the meaning provided in Section 4.1.

 

“Obligations” shall mean all obligations and liabilities of Borrower to Lender of every kind, type, nature and description, arising out of this Agreement or any other Loan Document.

 

“Origination Fee” means a one-time fee charged by Lender and deducted from the Principal at Closing.

The subject fee is a commission paid-out to referral agents, including but not limited to documentation and loan preparation fees

 

“Pay-Off Amount” means the amount in USD that you will need to pay to satisfy the Terms of the Loan. The Pay-Off Amount shall be requested of Lender by Borrower in writing ten (10) Business Days in advance of the actual Pay-Off Date. The Pay-Off Amount shall be sent by wire transfer in USD to the Depository Broker at least three (3) Business Days prior to the Pay-Off Date.

 

“Pay-Off Date” means the date determined by Lender on which Borrower will tender the Pay-Off Amount to Lender in exchange for Lender releasing the Lien on the Collateral being held at the Depository Broker.

 

“Parties” when capitalized, the word means both Borrower and Lender and no other. When not capitalized, shall refer to any other third party.

 

“Principal” means the amount of money borrowed by Borrower under Section 3.1(a) hereof, or the actual amount funded. For purposes of this Agreement, the Principal represents any sum of money, in whole or in part or any combination thereof and in any currency, deposited by Lender into Borrowers commercial bank account or Control Account at the Custodial Broker or advanced to any party on Borrowers behalf in accordance with the terms and provisions of this Agreement.

 

“Proceeds” means the Principal less any Origination Fee (defined herein), costs, or expenses, if applicable, not paid in advance by Borrower.

 

“Professional Investor” means that if Borrower is an individual, the Borrower is deemed to be a sophisticated person as determined by Borrowers residency or place of domicile.

 

“Proof of Funds” means written proof in a manner acceptable to Lender of cash or liquid securities held in the Borrower’s name.

 

“Registry Agent” shall have the same meaning as Transfer Agent.

 

“Security Interest” means an enforceable legal claim and lien on Collateral that has been pledged to the Lender to obtain a loan.

 

 

 

 

“Statement of Knowledge” shall mean any statements, representations or warranties which are based upon the knowledge of the Borrower, constructive or otherwise, whether Borrower knew or should have known or was expected to know.

 

“Stock Exchange” shall mean any publicly traded stock exchange where the securities of Issuer are traded.

 

“Sub-Custodial” shall mean any regulated financial institution which may sub-custody the Collateral for and on-behalf of the Custodial Broker.

 

“Term” means the period beginning on Closing Day and ending on Maturity Date. In the event of the Loan being paid out proportionately in tranches, the Term shall begin when each tranche (if any) is funded to Borrower.

 

“Terms and Conditions” shall mean all of the terms, provisions, covenants, rights, obligations, warranties, representations and conditions.

 

“Top-Up” means that in the event of a Valuation Event, the Borrower must transfer to Custodial Broker cash or additional securities in accordance with Section 10 of this Agreement and prop-up the Control Account which value has deteriorated.

 

“Trading Day” shall mean any day other than Saturday, Sunday or any other day on which the Stock Exchange on which the shares of Issuer trade is open, functioning and trading under its applicable rules.

 

“Tranche” means segments or parts created from a whole, which at all times is determined at the Discretion of Lender.

 

“Transaction” shall mean the contemplated Loan and this Agreement.

 

“Transfer Agent” means the entity selected by Issuer to maintain and record the ownership of shares by Issuer of securities.

 

“Transferred Collateral” shall mean securities of Issuer owned by Borrower free and clear, pledged to the Lender as security for the Loan. For avoidance of doubt, all associated rights and titles remain with the borrower until and event of default.

 

“Underwriting” means Lender’s Discretionary analyses of Collateral and Borrower with respect to risk and Loan qualification. The Collateral and Principal may be impacted by due diligence as well as underlying financial and economic market dynamics at the time of Loan disbursement.

 

“Valuation Event” means that the Market Price of the Collateral and the underlying securities or its trading volume has fallen below a pre-defined level reflected in the Closing Statement, creating a material condition where funding must cease until in Lenders sole Discretion, such condition is resolved.

 

“Verification” means the period in time during which Lender will verify the validity of Collateral for efficacy and legitimacy in accordance with its risk management policy.

 

“Voting Rights” means the right of legal title holder to vote on matters of corporate policy.

 

 

 

 

SECTION 2

 

FUNDING PREREQUISITES

 

2.1 Notwithstanding anything in this Agreement to the contrary, the Lender’s obligation to fund the Loan is subject to the following conditions precedent: (a) execution of this Agreement; (b) Lender’s receipt of Custodial Broker acknowledgment that the Transferred Collateral has been deposited, verified and ready for a Loan; (c) Lender’s, Custodial Brokers and Borrower’s execution of a Custodial Management Agreement (“CMA”) with Custodial Broker; (d) furnish evidence of title; (e) Borrowers and Lender’s cooperation with any due diligence; (f) that all matters are in a manner, substance and form satisfactory to Lender and its counsel; and (g) no occurrence of an event that would be considered an Event of Default.

 

SECTION 3

 

LOAN TERMS

 

3.1 Principal and Interest.

 

(a)

Subject to the terms and conditions of this Agreement, the Borrower or its nominee will pledge to Lender by transferring into the designated custodian account; up to 730,000 shares of Crown LNG Holdings AS and (hereinafter (“Transferred Collateral”), which shares Lender as consideration for the subject Loan Facility, Thus, Lender hereby agrees to make advances to the Borrower up to United States Dollars Four Million (USD$4,000,000) hereinafter (“Approved Loan Amount”) at Fifty-five Percent (55%) Loan to Value (“LTV”) of the current Market Value of the securities comprising the Transferred Collateral whichever is higher.

 

(b)

Lender shall deposit United States Dollars Four Million (USD$4,000,000) account of Borrower at the Custodial Broker or an account designated by the borrower.

 

(c)

The Borrower shall be entitled to the appreciation, should there be any, of the Market Value of the Collateral if the Loan is repaid in full by the Maturity Date.

 

(d)

The Term Loan shall bear 6.00% effective interest per year calculated annually on outstanding sum of money advanced to Borrower or on Borrower’s behalf and shall be payable quarterly. Interest shall be paid as set forth in Section 3.4(b) below.

 

3.2 Collateral Currency. If Collateral is a security which is priced in a currency other than United States Dollar (“USD”), the Parties hereto agree to convert the Market Value to USD for all purposes related to this Agreement. Any currency conversion shall be effected by a bank selected by Lender.

 

3.3 Dividends. Any dividends received on account of the Collateral shall be credited to the Borrower’s account at the Custodial Broker against the Principal at Loan Maturity. Dividends may not be used to offset any sums due to Lender prior to the Maturity Date. If an Event of Default occurs and is not timely cured, at Lenders sole Discretion, the dividends shall be used to satisfy Borrower’s obligations hereunder.

 

3.4 Payments.

 

(a)

Payments of interest and principal must be made by wire transfer, certified check, or any method as may be directed by Lender.

 

(b)

The Lender shall deduct the first interest payment due here under from the Proceeds. The second interest payment shall be due on the first Business Day of each and every 90 days following the Closing Date and interest thereon shall be calculated based on the actual number of days elapsed from the Closing Date, and interest thereon shall be calculated based on the actual number of days elapsed from the due date of the previous interest payment.

 

 

 

 

3.5 Fees and Expenses.

 

(a)

Origination Fee. Borrower shall pay Lender five percent (5%) of the approved loan amount (the “Origination Fee”) non-refundable and fully earned upon execution of each tranche and Borrow hereby authorizes Lender to deduct the said Fees from the Principal at Closing from the funds Advanced by Lender.

 

(b)

Potential Principal Increases. If the Market Value of the Collateral increases, Borrower may request in writing that Lender increase the Principal at the same loan-to-value ratio as provided herein. In its sole, reasonable Discretion Lender may determine whether to extend additional funding in addition to the Principal. Borrower may avail itself of the right to request additional funding no more than once every three (3) months. Any such increase shall be affected by a written Amendment to this Agreement.

 

(c)

Prepayment. During the first Twelve (12) months, there shall be no prepayment, unless (a) there has been a Change in Collateral event or (b) Lender grants written permission for prepayment. Any prepayment of principal shall be accompanied by accrued and unpaid interest on the amount prepaid to the date of such prepayment. For purposes of this Agreement, “Change in Collateral” means substantially all of the equity of the Issuer is acquired in a cash or stock and cash transaction and the stock or security representing the Collateral ceases to be publicly traded.

 

(d)

Application of Payments. Funds received from or on behalf of the Borrower pursuant to the terms and provisions of this Loan Agreement shall be applied in the following manner:

 

(1)

The payment of fees, penalties and expenses due pursuant to any provision of the Loan and related documents, then

 

(2)

All Obligations, other than accrued and/or unpaid interest or any portion of the outstanding Principal, then

 

(3)

The payment of accrued and/or unpaid interest, then

 

(4)

When specifically allowed by the Loan Agreement, payment of the outstanding Principal balance, and then

 

(5)

The balance, if any, returned to Borrower

 

SECTION 4

 

TERM AND MATURITY

 

4.1 Maturity Date. On the Thirty Sixth (36) Month after the Closing Date (the “Maturity Date”) the outstanding balance of the Facility shall be due and payable. Lender may extend the Maturity Date at the request of the Borrower, which extension must be evidenced in writing and If, within five (5) Business Days after the Maturity Date Lender has not received the full amount due hereunder, Lender will notify Borrower in writing of an Event of Default.

 

 

 

 

4.2 Notice of Intent to Repay. Borrower shall notify Lender in writing that Borrower intends to repay any outstanding balances on the Maturity Date no later than thirty (30) calendar days before the Maturity Date and not earlier than sixty (60) calendar days before the Maturity date by requesting the Pay-Off Amount, and Borrower shall provide Proof of Funds to repay all amounts outstanding under this Agreement no later than fourteen (14) Business Days before the Maturity Date.

 

4.3 Loan Termination; Return of Collateral to Borrower. This Agreement shall terminate (1) upon satisfaction of all of Borrower’s obligations hereunder, or (2) if an Event of Default has occurred and persists beyond the Cure Period, whichever is earlier, or (3) upon Lender’s notification to Borrower. Within three (3) Business Days of Borrower’s satisfaction of its Obligations hereunder Lender will release and discharge the Lien on the Collateral and return the Collateral, and all received dividends of the Collateral to Borrower. Notwithstanding the foregoing, this Agreement shall be reinstated as if the Loan had not been paid if any payment in respect of the obligations hereunder is declared to be a fraudulent conveyance, preferential transfer, is required to be returned by Lender for any reason, or is rescinded or invalidated for any reason whatsoever. Borrower acknowledges that corporate action by Issuer may modify the Collateral. Cash or securities tendered to Lender as a result of a Valuation Event are part of the Collateral to be returned to Borrower upon satisfaction of its obligations hereunder.

 

4.4 Closing. Provided the conditions in Section 2 herein are satisfied, then the Closing Date shall occur no later than three (3) Business Days after the Delivery Day, and within three (3) Business Days of the Closing Date and Verification, the Proceeds shall be paid to Borrowers Account at a commercial bank or Borrowers Account at the Custodial Broker.

 

SECTION 5

 

LOAN ATTRIBUTES

 

5.1 Restrictions on Collateral. Upon an incurable Event of Default Lender may request the Custodial Broker to dispose the Collateral in Lender’s control and Borrower shall have no further redemption rights in the Collateral. Lender will credit the Borrower for any dividends received or credited to the Lender’s account, and such credit will be returned to borrower at maturity of the Loan. No dividends will be credited to Borrower if the Issuer does not pay them to the Custodial Broker for any reason whatsoever. Upon written request by Borrower to Lender, the Borrower may use dividends received by Lender to offset any interest due to Lender prior to the Maturity Date.

 

5.2 First Lien and Security Interest. This Agreement constitutes a valid Term Loan between the Parties, and the Lender will hold and be entitled to a first priority Lien and security interest in the Transferred Collateral over any other party or creditor, and there are no defenses or offsets to the Borrowers obligations to others pursuant to this Agreement or any other Loan Document. Borrower represents and hereby assures that no lien of any type is to be granted nor was granted to any other lender or third-party and neither will the same Collateral be pledged in any way to any other lender or creditor.

 

5.3 Non-Recourse. Lender agrees that the Term Loan is non-recourse, and Lender will (1) seek recourse against only the Collateral for satisfaction of Borrower’s payment obligations hereunder and (2) make no claim against Borrower or any affiliate, successor, or assign of Borrower (“Borrower’s Affiliates”) or institute any action or proceeding hereunder against Borrower or any of Borrower’s Affiliates for any deficiency remaining after crediting the Collateral to any amounts due Lender; provided, however, that notwithstanding the foregoing Lender may enforce Borrower’s indemnification obligations set forth in Section 13 herein.

 

5.4 No Benefit Not Stated. Borrower is not entitled to receive any benefit, privilege or right not specifically stated herein. During the Loan Term, all benefits of the Collateral, implied, stated and realized shall at all times inure to the Lenders benefit first, until such time as the Loan is satisfied and all of Borrowers financial Obligations are extinguished.

 

5.5 Conditions Precedent. The obligations of Lender to make a Loan to Borrower is subject to the satisfaction of the following conditions precedent to the satisfaction of Lender:

 

(a)

Duly executed Securities Lending Agreement;

 

 

 

 

(b)

The delivery of the securities in electronic form to the Custodial Broker;

 

(c)

Lender has received written confirmation of Collateral transferred to Lenders Control Account at Custodial Broker;

 

(d)

Verification of Collateral;

 

(e)

That all matters, documentation, facts, announcements, representations and regulatory compliance with respect to the Collateral, the Issuer and the Loan have been met and are in final form and substance satisfactory to Lenders Underwriting team and general counsel as well as the Custodial Broker.

 

SECTION 6

 

BORROWER’S UNDERTAKINGS AND WARRANTIES

 

6.1 Actions Adverse to Interest of Collateral. At no time will the Borrower take actions which are adverse to the interests of the Collateral and its value. Nor can the Borrower take or vote upon any action to undermine, subvert, weaken, compromise or diminish the value of Collateral or securities of Issuer. Subject to approval by the lender, the borrower may request to issue additional shares.

 

6.2 Announcements. Borrower agrees to timely make any and all announcements required by the regulatory agency or Stock Exchange where said securities trade. If Borrower shall refuse or fail to timely make the appropriate Announcement, the Lender may do so on its own accord and on behalf of Borrower.

 

6.3 Collateral is Unencumbered. Borrower represents and warrants to Lender that as of the Effective Date, the securities comprising the Collateral are Borrower’s property, freely transferable, may be hypothecated and free and clear of any Liens, restrictions, or encumbrances whatsoever, and that Borrower has the right to transfer them, and is not a defendant in any lawsuit where the ownership and control of the securities transferred as Collateral is in question, challenged or subject to confiscation or court order.

 

6.4 Due Diligence. At any time, Lender or its retained Third Party may conduct Due Diligence on the Borrower, the Collateral and Issuer, and Borrower agrees to further cooperate with the Lender and the Third Party conducting such Due Diligence. The Due Diligence may be retained by Lender and used in its Underwriting and risk assessment.

 

6.5 Full Disclosure. Borrower further represents and warrants that all statements and documentation it has provided to Lender directly or through its agents in connection with this Agreement are true, complete, and do not omit any material facts or information, which if provided, would have impacted Underwriting prudency. Borrower consents to provide to Lender any and all relevant material information which is necessary for any Lender to conduct a prudent risk assessment evaluation of Issuer and Borrower.

 

6.6 Further Assurances. Borrower represents and warrants that it shall facilitate the transactions contemplated in this Agreement in a timely fashion and in good faith, including executing any further documents required to affect the purposes of this Agreement. Borrower agrees to provide information necessary to the contemplated transaction in a timely, complete, and accurate manner.

 

6.7 Knowledge. None of the rights of Borrower arising as the legal and beneficial owner of the Collateral have been surrendered, cancelled or terminated. Borrower has no knowledge of any material non-public information, inside information or similar terms as defined by applicable law with respect to governing the Issuer, which has not been generally disclosed to Lender or the public.

 

6.8 Non-Reliance. Borrower is acting for its own account and it has made its own independent decisions to enter into this Agreement and as to whether this transaction is suitable and appropriate or proper for it based upon its own paid advisers it has deemed necessary. Borrower further represents and warrants that it has not relied, and that neither Lender nor its employees, assignees, agents, directors or shareholders has made, any representation, advice, or recommendation with respect to the purchase or sale of securities or this Loan, amounts or timing of funding, either directly or through publication. Any written or oral statements of fact prior to the execution of this Agreement are purged and forever deleted, merged, disregarded and held for naught. Only this Agreement in its written form shall be enforceable and decisive with respect to any dealing between Borrower and Lender. Borrower will not have any right or remedy rising out of any representation, warranty or other statement not expressly set out in this Agreement.

 

  

 

 

6.9 No Third-Party Recourse. Borrower hereby agrees that that Borrower will not bring any action or claim against any third party providing any assistance or service to Lender in connection with this Agreement, including, but not limited to, the Transfer Agent, the Custodial Broker, or any agent, assignee, or referral source of the Lender (collectively, the “Lender Third- Parties”; each, a “Lender Third-Party”) who may be acting for or on behalf of the Lender in connection with this Agreement. Borrower hereby agrees to release, absolve, and forever discharge each Lender Third-Party for any liability arising from or in any way relating to actions performed by that Lender Third-Party in connection with this Agreement.

 

6.10 Professional Investor. Borrower represents and warrants to Lender that Borrower is a “Professional Investor” or an Accredited Investor, that both phrases imply the same, as defined by the Borrower’s domicile or by domicile of Issuer. If Borrower is an entity, the key benefactors of the entity are Professional or Accredited Investors.

 

6.11 Regulatory Compliance. Borrower acknowledges that it is the sole responsibility of the Borrower to comply with any regulatory requirements pertaining to the Collateral and to bear any costs related thereto. Regulatory Compliance includes announcements and filings of any type.

 

6.12 Risk of Loss. Borrower represents and warrants to Lender that Borrower will execute this Agreement only if Borrower fully understands the potential risks presented by borrowing against securities on margin, which is highly speculative, and specifically that Borrower may lose and forfeit the Collateral if Borrower cannot repay the Loan, nor be able to post margin or for any other reason which may arise as a result of Event of Default. Borrower is aware of all such risks, has in fact consulted legal professionals throughout the negotiation process and is fully aware of all risks and consequences of margin borrow.

 

SECTION 7

 

BORROWER’S ACKNOWLEDGEMENT

 

7.1 Borrower is aware that market conditions may cause the value of securities to decline, acknowledges that Lender is not responsible for any decline or degradation in the value of the Collateral, and understands that a decline in the Collateral’s value may require the Borrower to furnish additional securities or cash to Lender to increase the Fair Market Value of the Collateral. Borrower understands the risks related to stock lending and has the financial means to post margin upon the occurrence of the events set forth in Sections 11.

 

7.2 Borrower acknowledges and understands that if an Event of Default occurs and is not cured, Lender will seize the Collateral for its own benefit to satisfy all the Obligations of Borrower.

 

7.3 Borrower is an insider of the Issuer of the securities comprising the Collateral.

 

 

 

 

SECTION 8

 

LENDER’S UNDERTAKINGS AND WARRANTIES

 

8.1 Lender represents and warrants to Borrower that:

 

(a)

At no time shall the Lender be responsible for any price devaluation, crash, volatility or erratic trading activity of any type. Nor will Lender be responsible for any earnings of Issuer, reporting due by Issuer or any other act or responsibility owed by Issuer to the public at large or to any government body or agency of the Collateral or any news or announcements as a result of this Agreement; the delivery of the securities in electronic form to the Custodial Broker;

 

(b)

Provided that all the requirements for the Loan have been satisfied, if the Lender fails to initiate disbursement of the Loan within three (3) Business Days of the Closing and Verification Date, Borrower shall have the right to terminate this Agreement and request the return of the Collateral;

 

(c)

Any Voting Rights whatsoever shall remain with the Borrower, attached to the securities of Issuer or shall be controlled by the person or entity to whom Borrower had assigned them. The Lender shall not retain Voting Rights when they are not assigned on to the Lender. Voting Rights specifically not assigned to the Lender and accepted by the Lender, may not be re-assigned back or transferred on to Borrower. The Lender may reassign only those Voting Rights which it acknowledges written acceptance of.

 

SECTION 9

 

LENDER’S ACKNOWLEDGEMENT

 

9.1 Lender and its loan officers have not provided legal or tax advice of any kind to Borrower in connection with this Agreement or any other matter. Lender has recommended that prior to executing this Agreement Borrower consult a professional tax advisor to determine the tax implications, if any, of engaging in the transactions contemplated by this Agreement. Lender is not an insider of the Issuer of the securities comprising the Collateral. Lender does not provide investment advice and its lending officers and sales personnel are prohibited from so doing.

 

SECTION 10

 

LENDER’S RIGHTS AND REMEDIES

 

10.1 Upon the occurrence of an incurable Event of Default: (i) this Agreement shall continue with respect to the rights granted to Lender; (ii) the Lender may exercise any or all rights and remedies available to the Lender whether available under this Agreement or available at law or in equity: (iii) nor shall Lender be required to account to the Borrower or any other person for the proceeds payable to the Lender on account of any realization or other dealing in respect of the Transferred Collateral; (iv) any bona fide purchaser of the Collateral from the Lender shall acquire the Collateral absolutely, free from any claim or right of whatever kind by the Borrower.

 

10.2 Prior to or post an Event of Default, the Lender shall not be obligated to exhaust its recourse against the Borrower or any other person or persons or against any other security it may hold in respect to the Obligations before realizing upon or otherwise dealing with the Collateral in such manner as Lender may consider desirable in its own right. The obligations of Lender are contingent upon the obligations of Borrower being performed in entirety. Should the Borrower fail to comply with the herein Terms and Conditions, the Lender will not be obligated to fulfill its commitments either.

 

 

 

 

SECTION 11

 

EVENTS OF DEFAULT

 

11.1 Events of Default. In order for there to not be an Event of Default, the Borrower must fulfill in the performance, adherence and observance of any covenant, condition or provision contained in this Agreement and any other Loan Document. In furtherance thereof, the following are Events of Default, which, if not remedied during the applicable Cure Period, if any, shall terminate this Agreement and provide for Acceleration of Loan:

 

(a)

Borrower has failed to make any payment or sum due under this Agreement when due or has defaulted on any other obligation or representation hereunder which, if it can be cured, is not cured within the Cure Period;

 

(b)

The securities comprising the Collateral are (A) delisted or (B) their trading is halted for five (5) or more Business Days for any reason other than a Change in Collateral; or verification of an acquisition or a lending institution or equity partner notifies the Issuer of a default, which would or could have a material adverse effect on the value of the publicly traded securities of Issuer, and which default has not been cured at the time of disclosure of such default;

 

(c)

A lending institution or equity partner notifies the Issuer of a default, which would or could have a material adverse effect on the value of the publicly traded securities of Issuer, and which default has not been cured at the time of disclosure of such default;

 

(d)

If any of the representations or warranties contained within this Agreement, any other Loan Document or loan application was withheld or shall be materially untrue or misleading;

 

(e)

Insolvency of Borrower or the Issuer;

 

(f)

Borrower informs Lender of its inability to or its intention not to perform its obligations hereunder or otherwise disaffirms, rejects, challenges or repudiates this Agreement or any of its obligations hereunder or disavows Lenders Security Interest into the Collateral; or

 

(g)

There has been a decline of more than thirty per cent (30%) of the FMP used to calculate the Principal amount as reflected by the average of the last sale price on a national or international securities exchange (the “Default Floor”). If a Valuation Event occurs, then the Borrower will, without additional demand and within five (5) Business Days, automatically transfer to the Custodial Broker a top-up of shares or cash equal to twenty percent (20%) more than the FMV of the Collateral comprising of additional Collateral and cure the herein deficiency within the prescribed time allotted and thereafter a new FMP is established at twenty-five percent (25%) of the original FMP. There shall not be a limit to the number of Valuation Events for purposes of this clause.

 

11.2 Notwithstanding the Cure Period of five (5) Business Days, in the Event of Default, the Lender; should market conditions require, has the discretion to accelerate the liquidation of the collateral.

 

11.3 Remedy. If any of the foregoing Event(s) of Default are not cured within the designated Cure Period, Lender shall Accelerate and terminate this Agreement, and all amounts due hereunder shall be immediately due and the Collateral shall be forfeited to Lender together with all rights, title and interest. Borrower shall not seek any legal or equitable remedy, right of redemption, including injunctive relief, from any authority, including, but not limited to, any court, government agency, regulatory authority, transfer agent, stock exchange, or central depository, to prevent, stall or delay Lender from enforcing its rights over the Collateral as a result of an incurable Event of Default. Nothing contained herein shall obligate the Lender to maximize sales proceeds, sell at market, on any specific platform or exchange, or at any specific price, provide accountability on the forfeited Collateral or to qualify the return to Borrower remaining balance of any proceeds.

 

11.4 Suspension of Funding. If an Event of Default is triggered, the Lender shall have the right to suspend any further Loan funding.

 

 

 

 

SECTION 12

 

ARBITRATION IN THE EVENT OF DISPUTE

 

12.1 The Parties hereby agree that any dispute(s) arising out of or in connection with this Agreement, including any question as to its existence, validity, termination, shall be settled by arbitration conducted at and resolved by the latest Singapore International Arbitration Centre rules in force when the Notice of Arbitration is submitted by three (3) arbitrators, save for in- person hearing. In such a case, each Party to the arbitration shall, in accordance with the said rules, appoint one (1) arbitrator and the arbitrators so appointed by the Parties shall in turn mutually select one (1) additional arbitrator. Irrespective of a global pandemic, the place of arbitration shall be Singapore and the proceedings shall be conducted in-person in the English language. The award shall be final and legally binding on the Parties and shall be subject to enforcement in any courts having jurisdiction over the Parties.

 

SECTION 13

 

INDEMNIFICATION AND LIMITATION OF LIABILITY

 

13.1 In no event shall Lender be liable to the Borrower or to any third-party for any indirect, special, consequential, incidental, or punitive damages, opportunity costs, or lost profits arising from or in any way relating to this Agreement, even if Lender has been advised of the possibility of such damages, costs, or lost profits. Borrower for itself, its successors and assigns, agrees to indemnify and hold harmless each of the Lender, any affiliate controlling, controlled by, or under common control with the Lender, and each of their respective officers, directors, and employees (the “Indemnified Parties”), from and against any and all claims, damages, losses, liabilities, fines, penalties, and expenses (including reasonable attorneys’ fees) which may be asserted against any Indemnified Party by any individual, entity, or regulatory or governmental authority arising from or in any way relating to Borrower’s breach of a representation, warranty, or covenant other than payment obligations respecting the Loan hereunder. This Section shall survive the any termination of this Agreement. Either Party shall indemnify and hold the other Party harmless against any and all claims, demands, proceedings, suits, actions, damages, liabilities, losses, expenses and costs (which shall include, but not limited to all costs of defense, investigation and accounting and legal fees) to which the other Party may become subject as a result of the defaulting Party’s fraud, negligence, willful misconduct or breach of any obligation under this Agreement.

 

SECTION 14

 

CONFIDENTIALITY

 

14.1 This Section shall govern the disclosure by a Party to the other Party of certain of the disclosing Party’s confidential and proprietary information in connection with this Agreement.

 

14.2 Confidential Information, as defined herein, is being disclosed solely to enable the Parties to enter into and perform the Agreement. “Confidential Information” means confidential or proprietary information of the disclosing Party disclosed by or on behalf of the disclosing Party in oral, written, or other tangible form or otherwise learned by the receiving Party in connection with this Agreement that should reasonably be believed to be confidential or proprietary to the disclosing Party, including but not limited to the disclosing Party’s: business practices; sources and methods; customer information; list of clients; banking information; trade secrets; and other confidential or proprietary matters related to the disclosing Party. For the avoidance of doubt, the contents of this Agreement are Confidential Information. The receiving Party: (1) shall not use Confidential Information except in connection with this Agreement; (2) will hold Confidential Information in strictest confidence and shall not disclose Confidential Information to others, except for its employees or agents who require Confidential Information in order to carry out the receiving Party’s obligations under this Agreement and who are subject to binding obligations of confidentiality and restricted use at least as protective as those of this Agreement; (3) will protect the confidentiality of Confidential Information using at least the same level of efforts and measures used to protect its own confidential information, and at least commercially reasonable efforts and measures, including, without limitation, limiting access to Confidential Information commensurate with matters pertaining to this Agreement; and (4) will notify the disclosing Party as promptly as practicable of any unauthorized use or disclosure of Confidential Information by receiving Party, its employees, or agents of which receiving Party becomes aware; provided, however, that the obligations of this Section shall not apply to any Confidential Information that: (A) Recipient knew prior to learning it under this Agreement, as demonstrated by written records predating this Agreement; (B) is now, or becomes in the future, publicly available information other than by an act or omission of the receiving Party; (C) a third party discloses to the receiving Party, without any confidentiality obligations and without any breach of any direct or indirect obligation of confidentiality to disclosing Party, as shown by the receiving Party’s written records contemporaneous with such third- party disclosure; or (D) the receiving Party independently develops without use of or reference to Confidential Information, as demonstrated by the receiving Party’s independent written records contemporaneous with such development.

 

 

 

 

14.3 Notwithstanding other provisions of this Agreement, the receiving Party may disclose Confidential Information to the extent and to the persons or entities requested or required under applicable governmental law, rule, regulation, or order provided that receiving Party (1) first gives prompt written notice of such disclosure requirement to disclosing Party so as to enable disclosing Party, at its sole expense, may seek to limit such disclosure and (2) reasonably cooperates at disclosing Party’s request in any such efforts by disclosing Party.

 

SECTION 15

 

MISCELLANEOUS

 

15.1 Amendments. No amendment or modification to this Agreement (including any Loan Document) shall be valid unless approved or provided for in writing by Lender, provided however, Borrower’s banking information is not part of this Agreement and may be changed unilaterally but such change must be written and executed by the Borrowers authorized representative(s).

 

15.2 Assignment. Either Party may assign this Agreement in whole or in part without advance notice to the other Party but shall notify the other Party in writing thereafter.

 

15.3 Acting as Principal. Each Party hereto represents and warrants that it is entering into this Agreement as principal and not as agent of any person or entity.

 

15.4 Authority to Execute. Each Party hereto represents and warrants that (1) it has the power to execute and deliver this Agreement, to enter into the transactions contemplated hereby and to perform its obligations hereunder, (2) it has taken all necessary action to authorize such execution, deliver, and performance, and (3) this Agreement constitutes a legal, valid, and binding obligation enforceable against it in accordance with its terms.

 

15.5 Bilateral Drafting. Each of the Parties to this Agreement acknowledges that it and their respective counsel jointly contributed to the drafting of this Agreement, and further agrees that the presumption that a contract must be construed against its drafter shall be inapplicable to interpretation of any portion of this Agreement. Borrower hereby waives any rule of construction that requires ambiguities in agreements to be construed against the drafter.

 

15.6 Clog on Redemption. This Agreement is not a mortgage and will not be construed as a mortgage by the Parties or any tribunal or court of law. This is a Hybrid Loan requiring an Investment through Transfer of Collateral to Lender. In case there is an Event of Default, Borrower shall not have equity of redemption or right to redeem the Transferred Collateral and no incurable Event of Default shall be construed as a clog on equity of redemption and Lenders right to forfeiture of the Collateral will trump and supersede any right of redemption. No provision of this Agreement or any action of Lender upon an incurable Event of Default will be construed as a clog on equity of redemption and Lenders right to forfeiture of Collateral is absolute and final. Borrower shall be able to redeem the Collateral after the Lock-Up period, provided that all Obligations of Borrower are satisfied, and the Loan has not experienced an incurable Event of Default.

 

 

 

 

15.7 Consideration. The provisions in this Agreement constitute adequate, fair and sufficient consideration and any argument for lack thereof is hereby expressly waived and shall not be raised. For purposes of this provision, consideration does in fact include Lender advising, coordinating, arranging, and consulting in the financial structure of this Agreement, sufficiency of which is hereby acknowledged. Consideration will include monetary and non-monetary exchanges, services, and other covenants, which are mutually recognized, provided and exchanged.

 

15.8 Conversion. Lender reserves the right to dispose the collateral upon an incurable Event of Default. Such conduct shall not take place to deteriorate market value of the Collateral and will be conducted in strict observance in order to maintain market price and integrity of the Collateral. However, at no time will the Lender be responsible for degradation of the of the stock value, whether owing to action(s) or inaction(s) of Lender.

 

15.9 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.

 

15.10 Damages. Neither liquidated damages nor forfeiture by Lender shall constitute a penalty, rather enforcement events prescribed herein shall represent the satisfaction of Borrower’s obligations as renumeration and reflect a true and genuine pre- estimate of costs incurred by Lender for services associated with this Agreement.

 

15.11 Errors and Omissions. Borrower expressly agrees and acknowledges that it has had reasonable opportunity to obtain the assistance of its own counsel to fully review and participate in the negotiation and revision of any of the terms, provisions, covenants, representations, warranties, and conditions of this Agreement prior to execution; and the decision of whether or not to seek advice of counsel with respect to this Agreement is the sole responsibility of Borrower. Therefore, under no circumstances shall Lender be liable to Borrower for any errors or omissions in this Agreement that may be disadvantageous to Borrower, or which may result in claims of actual or alleged or perceived harm to Borrower. Borrower further expressly agrees and acknowledges that any errors or omissions and balance of equities in the Agreement shall be strictly construed to favor the Lender. Once this Agreement is fully executed by both Parties, Borrower fully and completely waives all rights to correct any such errors or omissions, or to seek redress against Lender for any such errors or omissions, whether by arbitration, lawsuit or any other equitable remedy. In addition, if Borrower, or anyone on its behalf, makes a demand or claim for liability against Lender that arises out of, results from, or relates in any way to any such error or omission in this Agreement, Borrower shall indemnify, defend, and hold harmless Lender from any such liability which may be incurred as the result of such demand or claim, including court costs and attorneys’ fees. Lender hereby expressly disclaims any implied warranty or representation as a result of any error or omission.

 

15.12 Fiduciary Duty. This Agreement is not intended to create or impose any Fiduciary Duty between the Parties. No dealing of any type between the Parties shall create or imply a Fiduciary Duty or any other duty, including the implied covenant of good faith and fair dealing. This Agreement does not and shall not imply or present the appearance that there is a trustee or Fiduciary Duty of any type. Borrower is not entitled to common law rights which are not expressly identified and provided for herein. The Parties hereby waive, to the fullest extent permitted by applicable law, any and all Fiduciary Duties that, absent such waiver, may be implied by law, and in doing so, recognize, acknowledge and agree that their duties and obligations to one another are only as expressly set forth in this Agreement. Lender does not owe any specific accountability to Borrower which is not stated within this Agreement.

 

15.13 Force Majeure. “Force Majeure” means one or more temporary or permanent events, conditions, or circumstances preventing Lender from fulfilling a responsibility under this Agreement and includes, without limitation, acts of God, fire, flood, riot, war, stock market crash, civil unrest, terrorism, natural disasters, storms, population quarantine, epidemics, failures of utilities or telecommunications providers, government or regulatory actions, material volatility in securities of Issuer, or unscheduled bank holidays. Notwithstanding anything in this Agreement, Lender will not be liable to the Borrower for failure to fulfill any of its obligations hereunder to the extent it is prevented or impeded by Force Majeure. If Lender is prevented by Force Majeure from fulfilling its obligations hereunder, it shall, to the extent practicable, provide Borrower with initial oral notice of its incapacity, and as soon as possible thereafter shall provide a detailed, written narrative explaining its circumstances. Lender will make its best efforts to circumscribe or neutralize the Force Majeure, will notify the Borrower in writing of the removal of the Force Majeure condition, and will notify Borrower when it will resume performance of its obligations hereunder. This clause is applicable to Lender only and does not apply to Borrower and at no time will the Borrower use this clause to dismiss, extend or invalidate its responsibilities under the Terms and Conditions of this Agreement.

 

 

 

 

15.14 General Release. For consideration herein provided, Borrower hereby releases, absolves and forever discharges Lender and their respective successors, assigns, partners, directors, officers, shareholders, agents, attorneys, transferees, and employees from any and all claims, legal fees, loses, set-offs, demands, cross-actions, controversies, causes of action, suits, damages, rights, torts, accusations of fraud, failings to act, negligence, liabilities and obligations, at law or in equity whatsoever, known or unknown, whether past, present or future, actual or contingent, now held, owned or possessed by Borrower, or which Borrower may, as a result of any actions or inactions occurring on or prior or after the execution of this Agreement, and hereafter hold or claim to hold or be entitled to under common law or statutory right, arising, directly or indirectly out of the Loan or any of the Loan Documents or any of the documents, instruments or any other transactions contemplated thereby. Borrower understands and agrees that this is a full, final and complete release and agrees that this release may be pleaded as an absolute and the final bar to any or all suit or suits pending, or which may hereafter be filed or prosecuted by Borrower, or anyone claiming by, through or under Borrower, in respect of any of the matters described herein may hereafter be had from anyone whomsoever.

 

15.15 Each Party to Bear Own Costs. Lender and Borrower shall each pay its own costs and expenses incurred in the negotiation, preparation, execution or enforcement of this Agreement.

 

15.16 Governing Law. This Agreement is be governed by the laws of Hong Kong without regard to conflicts of laws.

 

15.17 Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

15.18 Hong Kong Disclosure. Borrower hereby attests that the Hong Kong Money Lenders Ordinance (“MLO”) does not apply to this transaction by virtue of one or more of below exemptions afforded under the MLO which the Borrower is claiming by attesting under oath, which exemptions include:

 

(a) this loan is deemed to be a commercial loan; b) Borrower is a Professional/Accredited investor and does not meet the protection covenants of the MLO; c) this loan is made to a company secured by a mortgage, charge, lien or other encumbrance, d) the loan is made to a company there the loan forms a part of a transaction involving the export or import, as the case may be, of those goods or services: e) the loan is made to a company that has a paid up share capital of not less than $1,000,000 HKD or an equivalent amount in any other approved currency; f) the loan is made bona fide for the purchase of immovable property on the security of a mortgage of that property and a loan made bona fide to refinance such a mortgage; g) a loan upon terms involving the issue by a company of debentures or other securities in respect of which a prospectus has been registered under the Companies Ordinance (Cap.32. (Amended 28 of 2012 ss. 912 & 920); h) a loan made to a company the shares or debentures of which of which are listed on a recognized stock market as defined in section 1 of Part 1 of Schedule 1 to the Securities a nd Futures Ordinance (Cap.571); or (Replaced 5 of 2002 s. 407), by any other stock market declared in writing, by the Securities and Futures Commission referred to in section 3(1) of the Securities and Futures Ordinance (Cap.571), to be approved for the purposes of this paragraph; i) a loan made to the subsidiary of a company referred to in paragraph 14.

 

Alternatively, the Lender hereby certifies that the Lender transacted in insufficient number of loans in a 12-month period to be considered a money lender; this loan is incidental to the business of the Lender and is not its primary business; the Lender did not solicit or induce a loan from the Borrower and is consummated outside the jurisdictional territory of Hong Kong and the Lender does not engage in, advertises or announces itself to be in the business as a money lender.

 

15.19 Inconsistent Clauses. It is possible that this Agreement and any additional Loan Documents or Addendums may accidently contain clauses or provisions which may appear to be inconsistent or conflicting. It is mutually agreed between the Parties that should a dispute arise as to the inconsistent or conflicting clauses or provisions; the Lender reserves the right to strike any such inconsistent or conflicting clause or provision and retain the clause or provision most favorable to Lender. Should any court of law or arbitration tribunal similarly deem that the Loan Documents contain inconsistent or conflicting clauses or provision, the same will be incorporated whereby the surviving clause or provision which will survive and be enforceable will be the one which will be most favorable to Lender.

 

 

 

 

15.20 Integration. This Agreement is the final agreement between the Parties hereto and supersedes all prior understandings, agreements, and communications regarding the matters set forth herein and any previous material, discussions or understanding are hereby purged.

 

15.21 Mitigation. The Lender is not required to undertake any action to mitigate Lenders damages or amounts owed by Borrower to Lender.

 

15.22 Entire Agreement. This Agreement may only be amended in writing and signed by both Parties as an Addendum. This Agreement contains the whole agreement between the Parties and neither Party has relied upon any oral or written representation made to it by the other Party, its employees or agents. Each Party has made its own independent investigations into all matters relevant to this Agreement.

 

15.23 Āon-Disparagement. The Borrower agrees not to make, or to incite or encourage any other person to make, any communication disparaging to, or critical of, the Lender, Custodial Broker or sub-Custodial, its affiliates, or any of their respective officers, directors, or employees.

 

15.24 Āotices. No Notice of any type is due by one Party to the other unless and specifically stated herein. Any notice regarding this Agreement shall be in writing, and may be sent by regular or express mail, electronic mail, or by courier to the Party at the address set forth below, and shall be deemed received upon the earlier of the date such notices are dispatched or received.

 

To Lender:

 

Millennia Capital Partners Limited

 

OMC Chambers, Wickhams Cay 1,

 

Road Town, Tortola, British Virgin Islands

 

Email: admin@millenniacp.com

 

To Borrower:

 

CROWN LNG HOLDINGS LIMITED

 

CO/ Ogier Global (Jersey) Limited

 

3rd Floor, 4 Esplanade

 

St Helier, Jersey

 

JE4 9WG

 

Email: CFO@CROWNLNG.COM

 

A Party shall designate a new address for notices by written notice in writing to the other Party.

 

 

 

 

15.24 Severability. If any provision of this Agreement is unenforceable, then such provision will be amended as necessary in Lenders favor to render it valid and enforceable or, if such amendment is impermissible or impracticable, the extant provision shall be removed, and the remainder of this Agreement shall be enforceable.

 

15.25 Singular, Plural, etc. In this Agreement, words importing the singular shall include the plural and vice versa and words importing gender or gender neutral, will include masculine, feminine and neutral gender to include an entity. Unless the context otherwise requires, any reference to a “party” herein is a reference to a party hereto. Any references to “including” or “includes” means “including (or includes) without limitation”. A Party means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust or unincorporated organization.

 

15.26 Statement of Knowledge. For purposes of this Agreement, the Borrower shall be deemed to have knowledge of a particular fact or matter referenced herein, unless otherwise qualified hereunder means a statement of the Borrower declaring knowledge of the actual facts or circumstances to which such phrase relates having made inquiries or investigations in connection with such facts and circumstances, Borrower having conducted reasonably diligent inquiry into the relevant subject matter.

 

15.27 Suitability. Borrower has carefully considered, and has discussed with the Borrowers own professional legal, tax and financial advisers the suitability of this Agreement and Investment and has fully considered for purposes of this Loan the risks of this Investment, and understands that (i) this loan is an Investment and is suitable only for the investor who is able to bear the economic consequences of losing its entire Investment, (ii) the margin loan backed by the Securities is a speculative Investment which involves a high degree of risk, (iii) that there is lack of predictability in final loan amount, (iv) potential forfeiture of the Collateral, (v) that there are various unforeseen financial implications, independent and dependent on actions of Borrower, including the fluctuating and final value of the Collateral; and (vi) Borrowers inability to receive back the Collateral in the Event of Default and its adverse or diminished or non-existent value.

 

15.28 Survival. All of the Borrower’s representations, warranties, promises, waivers, obligations, releases, indemnities and covenants made in this Agreement shall survive any termination of this Agreement, and all of the Lender’s rights, benefits, and interests shall survive the termination of this Agreement.

 

15.29 Termination. Early Termination or rescission is not permitted under the Agreement and this Agreement will be valid and in full force and effect after its execution for its full term provided for herein. This Agreement can only be terminated after its full maturity or as stipulated herein and for no other reason. All enforcement covenants, warranties, representations, conditions, releases of liability and waivers will survive termination. No other equitable relief may be obtained, but only which is hereby expressly agreed upon in writing by the Parties and here so stated.

 

15.30 Validity. All of the terms and conditions of this Agreement shall be in full force and effect upon its execution and is irrespective of the amount funded by Lender. After the execution of this Agreement by both Parties, it is mutually understood and agreed that this Agreement may only be terminated by Lender in writing upon written release by Lender of Borrowers Obligations. A waiver or omission of any one covenant or provision shall not invalidate any other covenant or provision. At no time will the amount funded weight-in on the validity or enforceability of this Agreement.

 

 

 

 

15.31 Waiver. No waiver of any provision of this Agreement shall be effective unless agreed to in writing by the Party against whom such waiver is asserted, including any and all Events of Default by Borrower. By exercising, omitting, delaying or failing to exercise any of its rights, options or elections afforded to Lender hereunder, the Lender shall not be deemed to have waived any breach or declaration of an Event of Default on the part of Borrower or to have released Borrower from any obligations hereunder, unless such waiver is in writing and is signed by the Lender. In all circumstances, the Lender reserves the right to delay the declaration of an Event of Default, should the Lender in its sole opinion choose to do so, and no such delay shall in any way be deemed to have been a waiver. Borrower will not undermine the Collateral, nor seek injunctive relief from any court of law, regulatory body, transfer agent, or stock exchange requesting to invalidate, suspend, limit, impede, terminate or restrict this Agreement during its Term. Injunctive relief by Borrower or any interference by Borrower or central depository agency shall be an immediate and an incurable Event of Default. Borrower will not interfere in any way or challenge the validity or enforceability of this Agreement and the same shall be a Breach thereof. Borrower will not take any suit or action against third Parties or affiliates who may be acting on behalf of or for the Lender within the scope of this Agreement any dispute or controversy with third Parties arising from this Agreement will solely be limited to this Agreement which must be resolved in accordance with the arbitration agreed to herein. It is hereby agreed that third Parties such as the Depository Broker, Global Custodial, sub-custodians, Transfer Agent, referral sources or other affiliates, agents, or assignees of Lender facilitating the scope of this Agreement are hereby indemnified, released, forever discharged and absolved from any claim, controversy or action whatsoever. In case of an incurable Event of Default, unjust enrichment, right of redemption, overreaching and extreme remedy is hereby forever waived by the Borrower and the Borrower will not assert any right or claim against the forfeited collateral or against Lenders arbitrary, self-serving and subjective interpretation and enforcement of this Agreement. No waiver is asserted or claimed against the Lender which affirms Lenders dominion and right to foreclose, deal-in or transact in the Collateral. Borrower agrees and acknowledges that Lender reserves the right to, in Lenders sole discretion, to unilaterally alter and modify the terms and conditions of this Agreement to reflect any changes in laws, policies, rules or regulations of any stock exchange or Custodian Broker, errors in this Agreement or any other Loan Document, due diligence or any material discoveries to Collateral or Issuer, which in Lenders sole opinion may violate law or regulations or undermine Lenders Collateral or expose Lender to unnecessary risk, including as a result of Material Event or Market Impact, and up to the moiety or more of the Collateral may be unfunded against and all claims against the Lender are hereby discharged and held for naught. The Lender shall not be obligated to exhaust its recourse against the Collateral or any person or against any other security it may hold in respect to Obligations of Borrower, before realizing upon or otherwise dealing with the Collateral in such manner as Lender may consider necessary or benefiting in its own right. Partial payments or payments accepted after their due date shall not invalidate, waive or diminish Lenders rights afforded herein.

 

15.32 Waiver of Redemption Rights. This is a Stock Loan and Borrower expressly waives the benefit of all laws now existing or hereafter enacted providing for redemption of a right or redemption from any sale of Collateral made under this Loan as a result of incurable Event of Default and Borrower hereby releases all rights of redemption to which Borrower would otherwise be entitled, when the Collateral is forfeited and disposed of as a result of an incurable Event of Default.

 

 

 

 

OTHER IMPORTAĀT DISCLOSURES

 

BY AGREEING TO AND ACCEPTING THIS AGREEMENT BORROWER AGREES AND ACKNOWLEDGES THAT HE, SHE, OR IT HAS READ AND FULLY UNDERSTANDS THE IMPORTANT DISCLOSURES DESCRIBING RISKS AND CHARACTERISTICS OF THE LOAN, INCLUDING, BUT NOT LIMITED TO: POTENTIAL LACK OF REGULATORY PROTECTION; RISKS ASSOCIATED WITH EACH TYPE OF COLLATERAL IF MORE THAN ONE APPLIES; LENDER’S RIGHT TO LIQUIDATE THE COLLATERAL IN CASE OF AN EVENT OF DEFAULT; INABILITY OR REFUSAL TO POST MARGIN WHEN REQUIRED, AND FACTORS THAT DETERMINE THE AMOUNT OF FUNDING RECEIVED FROM LENDER OR LOAN AMOUNT PAID TO BORROWER IN CONNECTION WITH THE COLLATERAL. AT ALL TIMES THE LENDER WILL HAVE DOMINION OVER THE TRANSFERRED COLLATERAL INCLUDING FULL LIEN AND ENCUMBRANCE RIGHTS OVER THE TITLE. FOR AVOIDANCE OF DOUBT, ALL ASSOCIATED RIGHTS AND TITLES REMAIN WITH THE BORROWER UNTIL AN EVENT OF DEFAULT. MARKET CONDITIONS MAY CAUSE THE COLLATERAL TO DECLINE AND LENDER IS NOT RESPONSIBLE FOR ITS DEGRADATION. FUNDING AT ALL TIMES IS BASED ON MARKET CONDITIONS AND MATERIAL CHANGES MAY CAUSE UNDERWRITING TO CHANGE, FUNDING TO BE PROPORTIONATE TO RISK OR SUSPENDED. BORROWER WILL NOT USE LOAN PROCEEDS FOR ANY ILLEGAL ACTIVITY.

 

BORROWER UNDERSTANDS THAT MARKET CONDITIONS OR FORCE MAJEURE MAY CAUSE LENDER TO ADVANCE THE LOAN IN DISBURSEMENTS OR POSTPONE FUNDING, THE COLLATERAL TO REMAIN WITH THE LENDER. A DEFAULT OF THIS HYBRID LOAN WILL CAUSE FORFEITURE OF THE COLLATERAL. A DEFAULT WILL CANCEL LENDERS OBLIGATIONS TO BORROWER. BORROWER CONCEDES TO LENDERS RIGHT TO TRANSACT IN THE COLLATERAL. LENDER DOES NOT GUARANTEE FUNDING DUE TO VOLATILITY OF THE COLLATERAL AND ALL FUNDING IS AT LENDERS SOLE DISCRETION UNTIL DISBURSEMENT.

 

BY AGREEING TO AND ACCEPTING THIS AGREEMENT BORROWER AFFIRMS THAT HE, SHE, OR IT HAS DETERMINED THAT ACCEPTING THE LOAN AND PARTICIPATING IN THE TRANSACTIONS CONTEMPLATED HEREIN ARE APPROPRIATE FOR BORROWER AND THAT IN MAKING SUCH DETERMINATION BORROWER HAS CONSIDERED BORROWER’S FINANCIAL SITUATION AND NEEDS, TAX STATUS, INVESTMENT OBJECTIVES, INVESTMENT TIME HORIZON, LIQUIDITY NEEDS, RISK TOLERANCE, AND ANY OTHER RELEVANT INFORMATION. BORROWER UNDERSTANDS THAT LENDER HAS MADE NO DETERMINATION AS TO THE SUITABILITY OF THE LOAN OR THIS INVESTMENT FOR BORROWER. DURING THE LOAN TERM, UNTIL OBLIGATIONS OF BORROWER ARE SATISFIED, ALL BENEFITS, PROCEEDS AND PROFITS OF THE COLLATERAL INURE TO THE BENEFIT OF LENDER. FOR AVOIDANCE OF DOUBT, ALL ASSOCIATED RIGHTS AND TITLES REMAIN WITH THE BORROWER UNTIL AND EVENT OF DEFAULT. NO NOTICE OF ANY TYPE IS DUE TO BORROWER OTHER THAN THE NOTICES PROVIDED FOR HEREIN. DURING THE PENDENCY OF THE LOAN, BORROWER IS NOT ENTITLED TO RECEIVE OR RETAIN ANY BENEFITS OR RIGHTS NOT SPECIFICALLY STATED OR CONTEMPLATED HEREIN. AT ALL TIMES FUNDING IS AT THE DISCRETION OF LENDER AND COMMENSURATE TO MARKET RISKS AND COLLATERAL FUNDAMENTALS. A MATERIAL EVENT MAY ACCELERATE EVENT OF DEFAULT WITHOUT AN OPPORTUNITY TO CURE AND PROVIDE FOR UNTIMELY DISPOSITION OF COLLATERAL.

 

 

 

 

IN WITNESS WHEREOF the Parties have executed this Agreement as of the Effective Date and have agreed to proceed in accordance with all the conditions, covenants, warranties, assurances and provisions herein stated.

 

Millennia Capital Partners Limited
Signed:	/s/ Benjamin Loo
Name:	Benjamin Loo
Title:	Director
Crown LNG Holdings
Signed:	/s/ Joern Husemoen
Name:	Joern Skule Husemoen
Title:	Authorized Signatory - Director

 

 

 

 

 

 

 

 

 

 

 

 

THIS PAGE IS INTENTIONALLY LEFT BLANK

 

 

 

 

 

 

 

 

 

 

Exhibit 99.4

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (as amended, supplemented, restated and/or modified from time to time, this “Agreement”) is entered into as of June 4, 2024, by and between Crown LNG Holdings Limited., a private limited company organized under the laws of Jersey, Channel Islands (the “Company”), and each investor identified on the signature pages hereto (each, including its successors and assigns, an “Investor” and collectively, the “Investors”).

 

BACKGROUND

 

A. The board of directors (the “Board of Directors”) of the Company has authorized the issuance to each of the Investors of certain Notes (as defined below) and Warrants (as defined below).

 

B Each Investor desires to purchase certain Notes and Warrants on the terms and conditions set forth in this Agreement.

 

NOW THEREFORE, in consideration of the foregoing recitals and the covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each Investor hereby agree as follows:

 

1. DEFINITIONS. As used in this Agreement, the following terms shall have the following meanings specified or indicated below, and such meanings shall be equally applicable to the singular and plural forms of such defined terms:

 

“1933 Act” means the Securities Act of 1933, as amended.

 

“1934 Act” means the Securities Exchange Act of 1934, as amended.

 

“Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified.

 

“Aggregate Outstanding Amount” means the sum of (a) the outstanding Aggregate Principal Amount plus (b) the aggregate accrued and unpaid interest and all other amounts owing to all Investors under the Notes as of the applicable measurement date.

 

“Aggregate Principal Amount” has the meaning set forth in Section 2.1. “Agreement” has the meaning set forth in the preamble.

 

“Board of Directors” has the meaning set forth in the recitals.

 

“Business Combination Date” means the date upon which the merger transactions contemplated by the Merger Agreement are consummated.

 

“Business Day” means any day other than a Saturday, Sunday or any other day on which banks are permitted or required to be closed in New York City.

 

 

“Change of Control” means, with respect to the Company:

 

(a)

other than a shareholder that holds such a position at the date of this Agreement, if a Person comes to have beneficial ownership, control or direction over more than fifty percent (50%) of the voting rights attached to any class of voting securities of the Company; or

 

(b)

the sale or other disposition in a single transaction, or in a series of transactions, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole to any Person.

 

“Closing” has the meaning set forth in Section 2.1.

 

“Closing Date” has the meaning set forth in Section 2.1.

 

“Closing Equity Conditions” means, during the period in question, (a) there is a sufficient number of authorized but unissued and otherwise unreserved Ordinary Shares for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (b) there has been no Event of Default and no existing event which, with the passage of time or the giving of notice, would constitute an Event of Default, and (c) the Ordinary Shares shall be DWAC Eligible.

 

“Code” has the meaning set forth in Section 2.1.

 

"Commitment Fee” has the meaning set forth in Section 5.18.

 

“Commitment Shares” means 1,500,000 Ordinary Shares issuable to the Lead Investor as of the date hereof as of the Initial Closing Date. The Commitment Shares shall be deemed earned upon the date they are due to be issued.

 

“Company” has the meaning set forth in the preamble.

 

“Company Articles of Association and Memorandum of Association” means the Articles of Association and the memorandum of association governing the Company.

 

“Conversion Shares” means the Ordinary Shares issuable upon the full or any partial conversion of a Note.

 

“Dollar Volume” means the product of (i) the closing sales price of the Ordinary Shares on a Trading Day preceding the applicable date of determination multiplied by (ii) the trading volume of the Ordinary Shares on such date of determination as reported by the Trading Market.

 

“DWAC Eligible” means that (a) the Ordinary Shares are eligible at the Depository Trust Company (“DTC”) for full services pursuant to DTC’s Operational Arrangements, including, without limitation, transfer through DTC’s Deposit and Withdrawal at Custodian (“DWAC”) service, (b) the Transfer Agent is approved as an agent in DTC’s Fast Automated Securities Transfer Program, (c) the Conversion Shares are otherwise eligible for delivery to the third-party purchaser in the resale thereof by the Investor via DWAC, and (d) the Transfer Agent does not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.

 

 

“Effectiveness Date” has the meaning set forth in the Registration Rights Agreement.

 

“Equity Interests” means and includes the Ordinary Shares and any Ordinary Share Equivalents.

 

“Event of Default” has the meaning set forth in Section 7.1.

 

“Exempted Securities” means (a) equity securities issued by reason of a dividend, stock split, split-up or other distribution on Ordinary Shares, (b) Ordinary Shares or rights, warrants or options to purchase Ordinary Shares issued to employees or directors of, or consultants or advisors to, the Company or any of its Subsidiaries pursuant to a plan, agreement or arrangement approved by the Board of Directors (“Equity Plans”), (c) Ordinary Shares or rights, warrants or options to purchase Ordinary Shares issued to a seller of stock or assets to the Company or any of its subsidiaries as acquisition consideration pursuant to the acquisition of another corporation by the Company by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement, (d) Ordinary Shares or rights, warrants or options to purchase Ordinary Shares issued to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction resulting in aggregate proceeds, in a single or multiple transactions, not to exceed $5,000,000.00, or (e) securities issued upon the exercise or exchange of or conversion of any Securities or Exempted Securities issued hereunder and/or rights or other securities exercisable or exchangeable for or convertible into Ordinary Shares issued and outstanding on the date of this Agreement as disclosed on Schedule 1 hereto, provided that such rights and securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities or to extend the term of such securities.

 

“Funding Amount” shall mean, in respect of any Investor, the amount identified as such on the signature page hereto executed by such Investor, but not to exceed an aggregate amount of Twenty Million Six Hundred Fifty Thousand and zero/100 Dollars ($20,650,000.00).

 

“Investor” has the meaning set forth in the preamble.

 

“Investor Group” shall mean, in respect of each Investor, such Investor plus any other Person with which such Investor is considered to be part of a group under Section 13 of the 1934 Act or with which the Investor otherwise files reports under Sections 13 and/or 16 of the 1934 Act.

 

“Investor Party” has the meaning set forth in Section 5.13.

 

“Investor Shares” means the Conversion Shares, the Commitment Shares and the Warrant Shares, and any other shares issued or issuable to the Investors pursuant to this Agreement or the Notes or the Warrants.

 

“IP Rights” has the meaning set forth in Section 3.9.

 

“Law” means any law, rule, regulation, order, judgment or decree, including, without limitation, any federal and state securities laws.

 

“Lead Investor” means Helena Special Opportunities LLC.

 

 

“Losses” has the meaning set forth in Section 5.13.

 

“Market Capitalization” means, as of any date of determination, the product of (a) the number of issued and outstanding Ordinary Shares as of such date (exclusive of any Ordinary Shares issuable upon the exercise of options or warrants or conversion of any convertible securities), multiplied by (b) the closing price of the Ordinary Shares on the Trading Market on the date of determination.

 

“Material Adverse Effect” means any material adverse effect on (i) the businesses, properties, assets, operations, results of operations or financial condition of the Company, or the Company and its Subsidiaries, taken as a whole or, (ii) the ability of the Company to consummate the transactions contemplated by this Agreement or to perform its obligations hereunder or under the Notes; provided, however, that none of the following shall be deemed either alone or in combination to constitute, and none of the following shall be taken into account in determining whether there has been or would be, a Material Adverse Effect: (a) any adverse effect resulting from or arising out of general economic conditions; (b) any adverse effect resulting from or arising out of general conditions in the industries in which the Company and the Subsidiaries operate; (c) any adverse effect resulting from any changes to applicable Law; or (d) any adverse effect resulting from or arising out of any natural disaster or any acts of terrorism, sabotage, military action or war or any escalation or worsening thereof; provided, further, that any event, occurrence, fact, condition or change referred to in clauses (a) through (d) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition or change has a disproportionate effect on the Company and/or the Subsidiaries compared to other participants in the industries in which the Company and the Subsidiaries operate.

 

“Maximum Percentage” means 4.99%; provided, that if at any time after the date hereof an Investor Group beneficially owns in excess of 4.99% of any class of Equity Interests in the Company that is registered under the 1934 Act (excluding any Equity Interests deemed beneficially owned by virtue of a Note), then the Maximum Percentage shall automatically increase to 9.99% so long as the Investor Group owns in excess of 4.99% of such class of Equity Interests (and shall, for the avoidance of doubt, automatically decrease to 4.99% upon the Investor Group ceasing to own in excess of 4.99% of such class of Equity Interests).

 

“Merger Agreement” means that certain Business Combination Agreement, dated August 3, 2023 and as amended on October 2, 2023 and as further amended on January 31, 2024, as may be amended from time to time, by and among the entities known as of such date as Catcha Investment Corp., a Cayman Islands exempted company, the Company, CGT Merge II Limited, a Cayman Islands exempted company and Crown LNG Holdings AS, a private limited liability company incorporated under the laws of Norway.

 

“Money Laundering Laws” has the meaning set forth in Section 3.25.

 

“New Securities” means, collectively, equity or debt securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity or debt securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity or debt securities.

 

 

“Note” has the meaning set forth in Section 2.1.

 

“OFAC” has the meaning set forth in Section 3.22.

 

“Ordinary Shares” means the ordinary shares of the Company.

 

“Ordinary Share Equivalent” means any convertible security or warrant, option or other right to subscribe for or purchase any Ordinary Share or any convertible security convertible into Ordinary Shares.

 

“Offer Notice” has the meaning set forth in Section 10.1.

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Principal Amount” means the principal amount of the Note(s) as of the applicable date of determination.

 

“Proceedings” has the meaning set forth in Section 3.5(c).

 

“Prohibited Transaction” means a transaction with a third party or third parties in which the Company issues or sells (or arranges or agrees to issue or sell) any debt, equity or equity-linked securities (including options or warrants) that are convertible into, exchangeable or exercisable for, or include the right to receive Ordinary Shares at a conversion, repayment, exercise or exchange rate or other price that:

 

(a) varies over time based upon a discount to the future trading prices of, or quotations for, Ordinary Shares; or

 

(b) is subject to being reset (i) if such securities are issued to an investor not in the business of investing in transactions similar to those contemplated by the Transaction Documents, on more than three (3) instances in connection with anti-dilution provisions or other similar price protection provisions, or (ii) if such securities are issued to an investor in the business of investing in transactions similar to those contemplated by the Transaction Documents, after the initial issuance of such debt, equity or equity-linked security in connection with anti-dilution provisions or other similar price protection provisions.

 

Notwithstanding the foregoing, and for the avoidance of doubt, rights issuances, shareholder purchase plans, or Equity Plans shall not be deemed to be a Prohibited Transaction.

 

“Reference Dollar Volume” means two and one half times the median of the Dollar Volume over the thirty (30) Trading Days preceding the applicable date of determination.

 

“Registration Condition” means (i) in respect of the Initial Tranche, that the Commitment Shares may be resold pursuant to an effective registration statement or pursuant to Rule 144 under the 1933 Act, and (ii) in respect of each Subsequent Tranche, the Investor Shares issuable in respect of the Notes and Warrant to be issued in the applicable Closing of such Subsequent Tranche may be resold pursuant to an effective registration statement pursuant to Rule 144 under the 1933 Act, in each case without a restrictive legend being affixed on the Securities received by the counterparty to such resale.

 

 

“Registration Rights Agreement” means a Registration Rights Agreement, in the form of Exhibit C hereto, among the Company and the Investors.

 

“Required Minimum” means, as of any date, two (2) times the maximum aggregate number of Ordinary Shares then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Conversion Shares issuable upon conversion in full of the Notes and Warrant Shares issuable upon exercise in full of the Warrants, ignoring any conversion or exercise limits set forth therein based, as of the date if initial Closing, on a conversion price of $0.50 and an exercise price of $10.00, respectively.

 

“Requisite Holder” means the Lead Investor or any successor in interest to the Lead Investor that is mutually agreed to by the Lead Investor and the Company. For the purposes of clarity hereunder, only one entity shall serve as the Requisite Holder at any time hereunder and the affirmative action or consent by the Requisite Holder shall bind all Investors hereunder.

 

“SEC” means the United States Securities and Exchange Commission.

 

“SEC Documents” has the meaning set forth in Section 3.5.

 

“Securities” means the Notes, the Warrants, the Commitment Shares and the Investor Shares.

 

“Securities Termination Event” means either of the following has occurred:

 

(a) trading in securities generally in the United States has been suspended or limited for a consecutive period of greater than three (3) Business Days; or

 

(b) a banking moratorium has been declared by the United States or the New York State authorities and is continuing for a consecutive period of greater than three (3) Business Days.

 

“Shareholder Approval” means the approval of the holders of the requisite number of the outstanding Ordinary Shares to ratify and approve all of the transactions contemplated by the Transaction Documents, including the issuance of all of the Investor Shares (as such term is defined in each of such documents) issued and potentially issuable to the Investor thereunder, all as may be required by the applicable rules and regulations of the Trading Market (or any successor entity).

 

“Subsidiaries” and “Subsidiary” have the meaning set forth in Section 3.4(a).

 

“Subsidiary Guarantee” means a guarantee, in the form of Exhibit E hereto issued by the Subsidiaries, of the Company’s obligations under this Agreement and the Notes.

 

“Trading Day” means a day on which the Ordinary Shares are traded on a Trading Market.

 

 

“Trading Market” means whichever of the New York Stock Exchange, NYSE American, or the Nasdaq Stock Market (including the Nasdaq Global Market or the Nasdaq Capital Market), on which the Ordinary Shares are listed or quoted for trading on the date in question.

 

“Tranche” has the meaning set forth in Section 2.1.

 

“Transaction Documents” means this Agreement, the Notes, the Registration Rights Agreement, the Subsidiary Guarantee, the Transfer Agent Instruction Letter, and any other documents or agreements executed or delivered in connection with the transactions contemplated hereunder.

 

“Transfer Agent” means Continental Stock Transfer & Trust Company having its offices at 1 State Street, 30th Floor, New York, NY 10004-1571.

 

“Transfer Agent Instruction Letter” means a letter of irrevocable instructions addressed by the Company to the Transfer Agent, acceptable to the Investor in its sole discretion.

 

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Ordinary Shares for such date (or the nearest preceding date) on the Trading Market on which the Ordinary Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Ordinary Shares are traded on OTCQB or OTCQX , the volume weighted average sales price of the Ordinary Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Ordinary Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Shares are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per Ordinary Share so reported, or (d) in all other cases, the fair market value of an Ordinary Share as determined by an independent appraiser selected in good faith by the Lead Investor and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“Warrant” has the meaning set forth in Section 2.1.

 

“Warrant Shares” means the Ordinary Shares issuable upon the full or any partial exercise of a Warrant.

 

“Warrant Share Amount” means in respect of any Warrant issued in a Closing the initial amount of Ordinary Shares for which such Warrant may be exercised and which shall be equal to the applicable Principal Amount of the Note issued to the applicable Investor in such Closing multiplied by Fifty Percent (50%) and divided by the $10.00.

 

 

2. PURCHASE AND SALE OF THE NOTES.

 

2.1 Purchase and Sale of the Notes. Subject to the terms and conditions set forth herein, the Company shall issue and sell to each Investor, and each Investor shall purchase from the Company, convertible promissory notes, in the form attached hereto as Exhibit A (each, a “Note” and together, the “Notes”), in an amount up to the principal amount set forth on the signature page hereto executed by such Investor and ordinary share purchase warrants, in the form attached hereto as Exhibit B (each, a “Warrant” and together, the “Warrants”). Subject to the terms and conditions set forth herein, the sale and purchase of Notes and Warrants shall be conducted in tranches (each, a “Tranche” and together, the “Tranches”) consisting of (x) an initial tranche (the “Initial Tranche”) of (i) an aggregate Principal Amount of Notes of Two Million Nine Hundred Fifty Thousand and zero/100 Dollars ($2,950,000.00) and including an original issue discount of Four Hundred Forty-Two Thousand Five Hundred and Zero/100 United States Dollars ($442,500.00), to cover the Investors’ accounting fees, due diligence fees, monitoring, and/or other transactional costs incurred in connection with the purchase and sale of the Notes issued in connection with such Tranche and (ii) Warrants to purchase a number of Ordinary Shares equal to the applicable Warrant Share Amounts with respect to such Tranche, (y) a second tranche (the “Second Tranche”) (i) an aggregate Principal Amount of Notes of Two Million Nine Hundred Fifty Thousand and zero/100 Dollars ($2,950,000.00) and including an original issue discount of Four Hundred Forty-Two Thousand Five Hundred and Zero/100 United States Dollars ($442,500.00), to cover the Investors’ accounting fees, due diligence fees, monitoring, and/or other transactional costs incurred in connection with the purchase and sale of the Notes issued in connection with such Tranche and (ii) Warrants to purchase a number of Ordinary Shares equal to the applicable Warrant Share Amounts with respect to such Tranche, and (z) up to five subsequent Tranches of (i) an aggregate Principal Amount of Notes of up to Two Million Nine Hundred Fifty Thousand and zero/100 Dollars ($2,950,000.00) each and including an original issue discount of up to Four Hundred Forty-Two Thousand Five Hundred and Zero/100 United States Dollars ($442,500.00) each, to cover the Investors’ accounting fees, due diligence fees, monitoring, and/or other transactional costs incurred in connection with the purchase and sale of the Notes issued in connection with each such Tranches and (ii) Warrants to purchase a number of Ordinary Shares equal to the applicable Warrant Share Amounts with respect to such Tranches. The purchase price of a Note and its accompanying Warrant shall be computed by subtracting the portion of the OID represented by that such Note from the portion of the Principal Amount represented by such Note (a “Purchase Price”). For purposes of this Agreement and the other Transaction Documents, the aggregate Principal Amounts of all the Notes, shall be referred to together as, the “Aggregate Principal Amount; the aggregate original issue discounts of the Notes shall be referred to together as, the “OID; and the aggregate Funding Amounts of all of the Notes, shall be referred to together as, the “Aggregate Funding Amount”.

 

2.2 Closings. Each sale of Notes and Warrants in a Tranche shall occur in one or more closing (each, a “Closing”) with the date upon which such Closing shall occur being referred to as, a “Closing Date”, and more specifically as follows:

 

(a) Initial Tranche. Subject to the terms and conditions set forth herein, the Closing of the Initial Tranche shall occur on the Business Combination Date provided that the Registration Condition shall have been met in respect of the Commitment Shares.

 

(b) The Second Tranche. Subject to the terms and conditions set forth herein and provided that no event having a Material Adverse Effect shall have occurred prior thereto, the Closing of the Second Tranche shall occur on such date as the Company may request in writing to the Lead Investor upon no less than five (5) Business Days’ notice; provided that the Closing Date of such Tranche shall not occur prior to the date that is the earlier of (i) the date that is 90 (ninety) days following the Closing Date of the Initial Tranche (or if such date is not a Trading Date, the next succeeding Trading Day) and (ii) such date as the Registration Condition shall have been met for the Investor Shares issuable in respect of the Notes and Warrants issuable in such Tranche.

 

 

(c) Third and Fourth Tranches. Subject to the terms and conditions set forth herein and provided that no event having a Material Adverse Effect shall have occurred prior thereto, the Closing of the third Tranche and fourth Tranche shall occur on such date as the Company may request in writing to the Lead Investor upon no less than five (5) Business Days’ notice, provided that;

 

(i) the Closing of each such Tranche shall be for only one Tranche of Notes having an initial aggregate Principal Amount equal to the greater of (i) Fifty Thousand and zero/100 Dollars ($50,000.00) and (ii) the lesser of (x) Reference Dollar Volume on the Trading Day preceding the Closing Date for such Tranche, and (y) Two Million Nine Hundred Fifty Thousand and zero/100 Dollars ($2,950,000.00); and

 

(ii) the Closing Date of such Tranche shall not occur prior to the date that is the earlier of (i) the date that is 90 (ninety) days following the Closing Date of the previous Tranche (or if such date is not a Trading Date, the next succeeding Trading Day) and (ii) such date as the Company and the Lead Investor shall mutually agree.

 

(d) Fifth, Sixth and Seventh Tranches. Subject to the terms and conditions set forth herein and the Closing of the second Tranche, third Tranche and fourth Tranche, the Closing of any subsequent Tranche shall occur on such date as the Company and the Lead Investor shall mutually agree, if at all; provided that the Closing of any subsequent Tranche shall be for only one Tranche of Notes having an initial aggregate Principal Amount equal to the greater of (i) Fifty Thousand and zero/100 Dollars ($50,000.00) and (ii) the lesser of (x) Reference Dollar Volume on the Trading Day preceding the Closing Date for such Tranche, and (y) Two Million Nine Hundred Fifty Thousand and zero/100 Dollars ($2,950,000.00).

 

(e) Generally, in Respect of Closings. Subject to the terms and conditions set forth herein, each Closing, including payment for and delivery of the Notes and Warrants in respect of such Closing, shall take place remotely via the exchange of documents and signatures.

 

2.3 Priority of Obligation. As an inducement for the Investor to enter into this Agreement and to purchase the Note, all obligations of the Company pursuant to this Agreement and the Notes shall be senior in payment to any subsequent Indebtedness (as defined in the Notes).

 

2.4 Pro Rata Payments. The Company and each Investor hereby agree that, notwithstanding anything to the contrary contained herein or in the Notes, to the extent the Company is obligated to make any payments hereunder or under the Notes to the Investors (or offers to make any prepayments hereunder or thereunder), all such payments shall be applied to outstanding principal amount of the Notes held by all Investors on a pro rata basis based on the Aggregate Outstanding Amount at the time of such prepayment. If any Investor shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of outstanding amounts under the Notes resulting in such Investor receiving payment of a proportion of the Aggregate Outstanding Amount at the time of such prepayment greater than its pro rata share thereof as provided herein, then the Investor receiving such greater proportion shall (a) notify the other Investors of such fact, and (b) purchase (for cash at face value) participations in the principal amount owing to the other Investors under the applicable Notes, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Investors ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Notes and other amounts owing them. The Company consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Investor acquiring a participation pursuant to the foregoing arrangement may exercise against the Company rights of setoff and counterclaim with respect to such participation as fully as if such Investor were a direct creditor of the Company in the amount of such participation.

 

 

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to each Investor and covenants with each Investor that, the following representations and warranties are true and correct that as of the date hereof and as of each Closing Date:

 

3.1 Organization and Qualification. The Company is a company duly incorporated and validly existing in good standing under the Laws of Jersey, Channel Islands, and has the requisite corporate power and authority to own its properties and to carry on its business as now being conducted. The Company is duly qualified to do business and is in good standing in every jurisdiction in which the ownership of its 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 have a Material Adverse Effect.

 

3.2 Authorization; Enforcement; Compliance with Other Instruments. The Company and each Subsidiary has the requisite corporate power and authority to execute the Transaction Documents, and if applicable, to issue and sell the Notes and Warrants pursuant hereto, and to perform its obligations under the Transaction Documents, including issuing the Investor Shares and Commitment Shares on the terms set forth in this Agreement. The execution and delivery of the Transaction Documents by the Company and each Subsidiary and the issuance and sale of the Securities by the Company pursuant hereto have been duly and validly authorized by the Company’s Board of Directors and each Subsidiary’s board of directors, shareholder(s), or member(s), as applicable and no further consent or authorization is required by the Company, any Subsdiaries, the Company's Board of Directors, their respective shareholders or members or any other Person in connection therewith, assuming the accuracy of each Investor’s representations in Section 4, and except such as have been waived and other than such filings as are required to be made under applicable Laws. The Transaction Documents have been duly and validly executed and delivered by the Company and each Subsidiary to which they are a party and constitute valid and binding obligations of the Company and each Subsidiary, enforceable against the Company and each 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 creditors’ rights and remedies.

 

  

3.3 No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and each Subsidiary and the issuance and sale of the Notes and Warrants hereunder and issuance of the Commitment Shares by the Company will not (a) conflict with or result in a violation of the Company Articles of Association and Memorandum of Association, (b) conflict with, or constitute a material default (or an event which, with notice or lapse of time or both, would become a material default) under, or give to others any right of termination, amendment, acceleration or cancellation of, any material agreement to which the Company or any of the Subsidiaries is a party, or (c) violate in any material respect any Law or any rule or regulation of the Trading Market applicable to the Company or any of the Subsidiaries or by which any of their properties or assets are bound or affected. Assuming the accuracy of each Investor’s representations in Section 4 and subject to the making of the filings referred to in Section 6 and receipt of the Shareholder Approval, (i) no approval or authorization will be required from any governmental authority or agency, regulatory or self-regulatory agency or other third party (including the Trading Market) in connection with the issuance of the Notes and the other transactions contemplated by this Agreement (including the issuance of the Conversion Shares upon conversion of the Notes), (ii) the issuance of (x) the Notes, and the issuance of the Conversion Shares upon the conversion of the Notes, (y) the Warrants, and the issuance of the Warrant Shares upon the exercise of the Warrants, and (z) the Commitment Shares, will be exempt from the registration and qualification requirements under the 1933 Act and all applicable state securities Laws.

 

3.4 Capitalization and Subsidiaries.

 

(a) As of the Business Combination Date, the Company expects that 70,069,882 Ordinary Shares will be issued and outstanding minus up to 1,364,882 Ordinary Shares, the holders of which may exercise redemption rights in connection with the Business Combination. The Conversion Shares, when issued upon conversion of a Note in accordance with its terms, will be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof. The Warrant Shares, when issued upon exercise of a Warrant in accordance with its terms, will be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof. The Commitment Shares, when issued in accordance with the terms of this Agreement will be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof. Other than as provided in Schedule 3.4(a), no Ordinary Shares are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company. The Company Articles of Association and Memorandum of Association on file with the SEC are true and correct copies of the Company Articles of Association and Memorandum of Association as in effect as of the date hereof. The Company is not in violation of any provision of the Company Articles of Association or Memorandum of Association nor is any Subsidiary in violation of its organization documents.

 

 

(b) Schedule 3.4(b) lists each direct and indirect subsidiary of the Company (each, a “Subsidiary” and collectively, the “Subsidiaries”) and indicates for each Subsidiary (i) the authorized capital stock or other Equity Interest of such Subsidiary as of the date hereof and the expected amount as of the date of the Business Combination Date, (ii) the number and kind of shares or other ownership interests of such Subsidiary that are issued and outstanding as of the date hereof and the expected amount as of the date of the Business Combination Date, and (iii) the owner of such shares or other ownership interests as of the date hereof and as of the Business Combination Date. No Subsidiary has any outstanding stock options, warrants or other instruments pursuant to which such Subsidiary may at any time or under any circumstances be obligated to issue any shares of its capital stock or other Equity Interests other than as described in the Merger Agreement. Each Subsidiary is duly organized and validly existing in good standing under the laws of its jurisdiction of formation, except to the extent that the failure to be in good standing would not have a Material Adverse Effect, and has all requisite power and authority to own its properties and to carry on its business as now being conducted.

 

(c) Other than as provided in Schedule 3.4(c) or as described in the Merger Agreement, neither the Company nor any Subsidiary is bound by any agreement or arrangement pursuant to which it is obligated to register the sale of any securities under the 1933 Act. Other than as provided in Schedule 3.4(c) or as set forth in the Merger Agreement, there are no outstanding securities of the Company or any of the Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem or purchase any security of the Company or any Subsidiary. Other than as provided in Schedule 3.4(c), after the Business Combination Date there will be no outstanding securities or instruments containing anti- dilution or similar provisions that will be triggered by the issuance of the Notes, the Warrants, the Commitment Shares or the Investor Shares. Neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.

 

(d) The issuance and sale of any of the Securities will not obligate the Company to issue Ordinary Shares or other securities to any Person other than the Investors and, other than as provided in Schedule 3.4(d), will not result in the adjustment of the exercise, conversion, exchange, or reset price of any outstanding securities.

 

3.5 SEC Documents; Financial Statements.

 

(a) As of the date hereof and each Closing Date and except as set forth on Schedule 3.5(a), the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act since October 2, 2023 (all of the foregoing filed prior to the date hereof, as they have been amended since the time of their filing, and all exhibits included therein and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). As of their respective filing dates, 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 to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

 

(b) As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) consistently applied, and audited by a firm that is a member of the Public Company Accounting Oversight Board, during the periods involved (except as may be otherwise indicated in such financial statements or the notes thereto, except in the case of pro forma statements or, in the case of unaudited interim statements, except to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the consolidated financial position of the Company as of the dates thereof and the consolidated results of its operations and consolidated cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

 

(c) Except as disclosed in the SEC Documents, the Company and each of the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain asset accountability, (iii) reasonable controls to safeguard assets are in place and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

3.6 Litigation and Regulatory Proceedings. Except as disclosed in Schedule 3.6, there are no actions, causes of action, suits, claims, proceedings, inquiries or investigations (collectively, “Proceedings”) before or by any court, public board, government agency, self- regulatory organization or body pending or, to the knowledge of the executive officers of Company or any of the Subsidiaries, threatened against or affecting the Company or any of the Subsidiaries, the Ordinary Shares or any other class of issued and outstanding shares of the Company, or any of the Company’s or the Subsidiaries’ officers or directors in their capacities as such, which adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect; and, to the knowledge of the executive officers of the Company, there is no reason to believe that there is any basis for any such Proceeding.

 

3.7 No Undisclosed Events, Liabilities or Developments. Except for the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3.7, no event, development or circumstance has occurred or exists, or to the knowledge of the executive officers of the Company is reasonably anticipated to occur or exist that (a) would reasonably be anticipated to have a Material Adverse Effect or (b) would be required to be disclosed by the Company under applicable securities Laws and which has not been publicly announced.

 

3.8 Compliance with Law. Except as disclosed in Schedule 3.8, the Company and each of the Subsidiaries have conducted and are conducting their respective businesses in compliance in all material respects with all applicable Laws and are in compliance in all material respects with the rules and regulations of the Trading Market. Except as disclosed in Schedule 3.8 Documents, the Company is not aware of any facts which could reasonably be anticipated to lead to a delisting of the Ordinary Shares by the Trading Market in the future.

 

 

3.9 Employee Relations. Neither the Company nor any Subsidiary is involved in any union labor dispute nor, to the knowledge of the Company, is any such dispute threatened. Neither the Company nor any Subsidiary is a party to any collective bargaining agreement. No executive officer (as defined in Rule 501(f) of the 1933 Act) has notified the Company that such officer intends to leave the Company’s employ or otherwise terminate such officer’s employment with the Company.

 

3.10 Intellectual Property Rights. The Company and each Subsidiary owns or possesses or can acquire on reasonable terms adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights (collectively, “IP Rights”) used in or reasonably necessary to conduct their respective businesses as now conducted. None of the material IP Rights of the Company or any of the Subsidiaries are expected to expire or terminate within three (3) years from the date of this Agreement. Neither the Company nor any Subsidiary has received any notice alleging that it is infringing, misappropriating or otherwise violating any IP Rights of any other Person. No written notice of a claim has been received by, and no Proceeding is pending against, the Company or any Subsidiary alleging that the Company or any Subsidiary is infringing, misappropriating or otherwise violating the IP Rights of any other Person, and, to the Company’s knowledge, no such claim or Proceeding is threatened, and the Company is not aware of any facts or circumstances which might give rise to any such claim or Proceeding. The Company and the Subsidiaries have taken commercially reasonable security measures to protect the secrecy, confidentiality and value of all of their material IP Rights.

 

3.11 Environmental Laws. Except, in each case, as would not be reasonably anticipated to have a Material Adverse Effect, the Company and the Subsidiaries (a) are in compliance with any and all applicable Laws relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants, (b) have received and hold all permits, licenses or other approvals required of them under all such Laws to conduct their respective businesses and (c) are in compliance with all terms and conditions of any such permit, license or approval.

 

3.12 Title to Assets. The Company and the Subsidiaries have good and marketable title to all personal property (other than IP Rights, which is addressed in Section 3.10) owned by them which is material to their respective businesses, in each case free and clear of all liens, encumbrances and defects except those set forth on Schedule 3.12. Any real property and facilities held under lease by the Company or any Subsidiary are held under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and the Subsidiaries.

 

3.13 Insurance. The Company and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company reasonably believes to be prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. Neither the Company nor any of the Subsidiaries has been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it will not be able to renew all existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers.

 

 

3.14 Regulatory Permits. The Company and the Subsidiaries have in full force and effect all certificates, approvals, authorizations and permits from all regulatory authorities and agencies necessary to own, lease or operate their respective properties and assets and conduct their respective businesses, and neither the Company nor any Subsidiary has received any notice of Proceedings relating to the revocation or modification of any such certificate, approval, authorization or permit, except for such certificates, approvals, authorizations or permits with respect to which the failure to hold would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

3.15 No Materially Adverse Contracts, Etc. Neither the Company nor any of the Subsidiaries is (a) subject to any charter, corporate or other legal restriction, or any judgment, decree or order which in the judgment of the Company’s officers has or would reasonably be expected in the future to have a Material Adverse Effect or (b) a party to any contract or agreement which in the judgment of the Company’s management has or would reasonably be anticipated to have a Material Adverse Effect.

 

3.16 Taxes. Other than as provided on Schedule 3.16, the Company and the Subsidiaries each has made or filed, or caused to be made or filed, all United States federal, and applicable state, local and non-U.S. tax returns, reports and declarations required by any jurisdiction to which it is subject and has paid all taxes and other governmental assessments and charges that are material in amount, required to be paid by it, regardless of whether such amounts are shown or determined to be due on such returns, reports and declarations, except those being contested in good faith by appropriate proceedings and for which it has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and, to the knowledge of the Company, there is no basis for any such claim.

 

3.17 Solvency. After giving effect to the receipt by the Company of the proceeds from the transactions contemplated by this Agreement, (a) the Company’s book value of its assets exceeds the Company’s book value of existing debts and other liabilities (ignoring any potential contingent liabilities) as they mature; and (b) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets at book value, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt at book value when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). Except as disclosed as set forth in Schedule 3.17, the Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction.

 

3.18 Investment Company. The Company is not, and is not an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

3.19 Certain Transactions. Other than as disclosed in Schedule 3.19, there are no contracts, transactions, arrangements or understandings between the Company or any of its Subsidiaries, on the one hand, and any director, officer or employee thereof on the other hand, that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC in the Company’s Form 20-F or proxy statement pertaining to an annual meeting of shareholders.

 

 

3.20 No General Solicitation. Neither the Company, nor any of its Affiliates, nor any person acting on its 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 Notes pursuant to this Agreement.

 

3.21 Acknowledgment Regarding the Investors’ Purchase of the Notes. The Company’s Board of Directors has approved the execution of the Transaction Documents and the issuance and sale of the Notes and Warrants, based on its own independent evaluation and determination that the terms of the Transaction Documents are reasonable and fair to the Company and in the best interests of the Company and its shareholders. The Company is entering into this Agreement and is issuing and selling the Notes and Warrants voluntarily. The Company has had independent legal counsel of its own choosing review the Transaction Documents and advise the Company with respect thereto. The Company acknowledges and agrees that each Investor is acting solely in the capacity of an arm’s length purchaser with respect to its Notes and Warrants and the transactions contemplated hereby and that neither such Investor nor any person affiliated with such Investor is acting as a financial advisor to, or a fiduciary of, the Company (or in any similar capacity) with respect to execution of the Transaction Documents or the issuance of the Notes and Warrants or any other transaction contemplated hereby.

 

3.22 No Brokers’, Finders’ or Other Advisory Fees or Commissions. Except as set forth on Schedule 3.22 and except for certain fees which may be payable to Cohen & Company Capital Markets, a division of J.V.B Financial Group, LLC, as placement agent to the Company, no brokers, finders or other similar advisory fees or commissions will be payable by the Company or any Subsidiary or by any of their respective agents with respect to the issuance of the Notes or the Warrants or any of the other transactions contemplated by this Agreement.

 

3.23 OFAC. None of the Company nor any of the Subsidiaries nor, to the best knowledge of the Company, any director, officer, agent, employee, affiliate or person acting on behalf of the Company and/or any Subsidiary has been or is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”); and the Company will not directly or indirectly use any proceeds received from the Investor, or lend, contribute or otherwise make available such proceeds to its Subsidiaries or to any affiliated entity, joint venture partner or other person or entity, to finance any investments in, or make any payments to, any country or person currently subject to any of the sanctions of the United States administered by OFAC.

 

3.24 No Foreign Corrupt Practices. None of the Company or any of the Subsidiaries has, directly or indirectly: (a) made or authorized any contribution, payment or gift of funds or property to any official, employee or agent of any governmental authority of any jurisdiction except as otherwise permitted under applicable Law; or (b) made any contribution to any candidate for public office, in either case, where either the payment or the purpose of such contribution, payment or gift was, is, or would be prohibited under the Foreign Corrupt Practices Act or the rules and regulations promulgated thereunder or under any other legislation of any relevant jurisdiction covering a similar subject matter applicable to the Company or its Subsidiaries and their respective operations and the Company has instituted and maintained policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance with such legislation.

 

 

3.25 Anti-Money Laundering. The operations of each of the Company and the Subsidiaries are and have been conducted at all times in compliance with all applicable anti-money laundering laws, regulations, rules and guidelines in its jurisdiction of association and in each other jurisdiction in which such entity, as the case may be, conducts business (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental authority involving the Company or its Subsidiaries with respect to any of the Money Laundering Laws is, to the best knowledge of the Company, pending, threatened or contemplated.

 

3.26 Disclosure. The Company confirms that neither it, nor to its knowledge, any other Person acting on its behalf has provided the Investor or its agents or counsel with any information that the Company believes constitutes material, non-public information. The Company understands and confirms that the Investor will rely on the foregoing representations and covenants in effecting transactions in securities of the Company. All disclosures provided to the Investor regarding the Company, its business and the transactions contemplated hereby, furnished by or on behalf of the Company (including the Company’s representations and warranties set forth in this Agreement) are true and correct in all material respects and do 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 light of the circumstances under which they were made, not misleading.

 

3.27 Available Ordinary Shares. As of Business Combination Date, the Company has capacity under the rules and regulations of the Trading Market to issue up to at least 13,734,130 Ordinary Shares (or securities convertible into or exercisable for Ordinary Shares) without obtaining Shareholder Approval; provided, however, that Shareholder Approval shall not be required to the extent that the Company relies upon “home country” exceptions from the corporate governance requirements of the Trading Market if Shareholder Approval is not required under the laws of Jersey and as a result of such reliance the Trading Market does not impose an issuance cap on the number of Ordinary Shares which may be issued under the Transaction Documents.

 

3.28 Indebtedness. Except for as listed on Schedule 3.28, as of the Business Combination Date the Company or any Subsidiary has no outstanding Indebtedness. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $100,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $100,000 due under leases required to be capitalized in accordance with IFRS. Except as set forth on Schedule 3.28, neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

 

3.29 No Other Representations. Except for the representations and warranties set forth in this Agreement and in other Transaction Documents, the Company makes no other representations or warranties to the Investors.

 

4. REPRESENTATIONS AND WARRANTIES OF EACH INVESTOR. Each Investor represents and warrants to the Company as follows:

 

4.1 Organization and Qualification. Such Investor is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its association or formation.

 

4.2 Authorization; Enforcement; Compliance with Other Instruments. Such Investor has the requisite power and authority to enter into the Transaction Documents and to perform its obligations thereunder. The execution and delivery by such Investor of the Transaction Documents to which it is a party have been duly and validly authorized by such Investor’s governing body, as necessary, and no further consent or authorization is required. The Transaction Documents to which it is a party have been duly and validly executed and delivered by such Investor and constitute valid and binding obligations of such Investor, enforceable against such Investor in accordance with their 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 creditors’ rights and remedies.

 

4.3 No Conflicts. The execution, delivery and performance of the Transaction Documents to which it is a party by such Investor and the purchase of a Note by such Investor will not (a) conflict with or result in a violation of such Investor’s organizational documents, if applicable, (b) conflict with, or constitute a material default (or an event which, with notice or lapse of time or both, would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, contract, indenture mortgage, indebtedness or instrument to which such Investor is a party, or (c) violate any Law applicable to such Investor or by which any of such Investor’s properties or assets are bound or affected. No approval or authorization will be required from any governmental authority or agency, regulatory or self-regulatory agency or other third party in connection with the purchase of a Note and the other transactions contemplated by this Agreement.

 

4.4 Investment Intent; Accredited Investor. Each Investor is purchasing its Note and Warrant for its own account, for investment purposes, and not with a view towards distribution. Such Investor is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D of the 1933 Act. Such Investor has, by reason of its business and financial experience, such knowledge, sophistication and experience in financial and business matters and in making investment decisions of this type that it is capable of (a) evaluating the merits and risks of an investment in its Notes, Warrants and the Investor Shares and making an informed investment decision, (b) protecting its own interests and (c) bearing the economic risk of such investment for an indefinite period of time. Such Investor is not an entity formed for the specific purpose of acquiring its Notes, Warrants and the Investor Shares.

 

 

4.5 Acknowledgement of Risk; Opportunity to Discuss. Each Investor acknowledges that an investment in the Company is speculative and subject to numerous risks, including those risks described in the SEC Documents. Each Investor has reviewed and understands the risks related to the Company and its business as described in the SEC Documents. Each Investor has received all materials relating to the business, finance and operations of the Company and the Subsidiaries as it has requested and has had an opportunity to discuss the business, management and financial affairs of the Company and the Subsidiaries with the Company’s management. In making its investment decision, such Investor has relied solely on its own due diligence performed on the Company by its own representatives.

 

4.6 Restricted Securities. Each Investor understands that its Notes, Warrants and the Investor Shares are being offered in a transaction not involving any public offering within the meaning of the 1933 Act and that its Note and the Investor Shares may not been registered under the 1933 Act except as otherwise required under the Transaction Documents. The Investor understands that its Notes, Warrants and the Investor Shares may not be offered, resold, transferred, pledged or otherwise disposed of by the Investor absent an effective registration statement under the 1933 Act, except (i) to the Company or a Subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the 1933 Act or (iii) pursuant to an applicable exemption from the registration requirements of the 1933 Act, and, in each of cases (ii) and (iii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any book-entry position or certificates representing its Notes, Warrants or Investor Shares shall contain a notation or restrictive legend, as applicable, to such effect substantially in the form attached hereto as Exhibit A, and as a result of these transfer restrictions, the Investor may not be able to readily offer, resell, transfer, pledge or otherwise dispose of its Notes, Warrants or Investor Shares and may be required to bear the financial risk of an investment in its Notes, Warrants and Investor Shares for an indefinite period of time. The Investor acknowledges and agrees that (i) its Note, Warrants and Investor Shares will not be eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the 1933 Act (“Rule 144”) until the date that is at least one year from the date that the Company filed “Form 10 information” with the SEC reflecting its status as an entity that is no longer an issuer described in Rule 144(i)(1)(i)) and (ii) additional conditions to any such transaction may apply under Rule 144 and other applicable securities laws to the extent that the Investor is at such time, or has been at any time in the immediately preceding three months, an “affiliate” of the Company within the meaning of Rule 144. The Investor understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of its Notes, Warrants or Investor Shares.

 

4.7 Exculpation Among Investors. Each Investor acknowledges that it is not relying upon any Person, other than the Company and its officers and directors, in making its investment or decision to invest in the Company. Each Investor agrees that neither the Lead Investor, any Investor nor the respective controlling Persons, officers, directors, partners, agents, or employees of any Investor shall be liable to any other Investor for any action heretofore taken or omitted to be taken by any of them in connection with the purchase of the Notes.

 

4.8 No Other Representations. Except for the representations and warranties set forth in this Agreement and in other Transaction Documents, such Investor makes no other representations or warranties to the Company.

 

 

5. OTHER AGREEMENTS OF THE PARTIES.

 

5.1 Restrictions on Transfer. The Investor Shares, when issued, will be restricted and book-entry positions or certificates relating to the same shall bear a restrictive legend unless sold pursuant to an effective registration statement or available for resale pursuant to Rule 144 under the 1933 Act.

 

5.2 Furnishing of Information. As long as an Investor owns Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the 1934 Act. As long as an Investor owns Securities, if the Company is not required to file reports pursuant to the 1934 Act, it will prepare and furnish to such Investor and make publicly available in accordance with Rule 144(c) such information as is required for such Investor to sell the Investor Shares under Rule 144. The Company further covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to enable such Person to sell such Investor Shares without registration under the 1933 Act within the limitation of the exemptions provided by Rule 144 or other applicable exemptions.

 

5.3 Integration. The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the 1933 Act) that will be integrated with the offer or sale of the Securities in a manner that would require the registration under the 1933 Act of the sale of the Securities to the Investor.

 

5.4 Notification of Certain Events. The Company shall give prompt written notice to each Investor of (a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the consummation of the transactions contemplated by this Agreement or any other Transaction Document, or (b) any Proceeding pending or, to the Company’s knowledge, threatened against a party relating to the transactions contemplated by this Agreement or any other Transaction Document.

 

5.5 Available Shares. The Company shall at all times keep authorized and available for issuance, free of preemptive rights, the Required Minimum of Ordinary Shares. If the Company determines at any time that it does not have a sufficient number of authorized Ordinary Shares to keep available for issuance as described in this Section 5.4, the Company shall use all commercially reasonable efforts to increase the number of authorized Ordinary Shares by seeking approval from its shareholders for the authorization of such additional shares.

 

5.6 Use of Proceeds. The Company will use the proceeds from the sale of the Notes to fund its general working capital and to make certain expenses as contemplated pursuant to the terms of Merger Agreement.

 

5.7 Repayment of Notes. If the Company issues any debt, including any subordinated debt or convertible debt (other than the Notes), then the Investors will have the option (exercisable in writing by the Requisite Holders) to cause the Company to immediately, utilize 15% of the aggregate proceeds of such issuance to repay the Notes on a pro rata basis based on the Aggregate Principal Amount and accrued, but unpaid, Interest (as defined in the Notes) outstanding on the date of funding of such debt. If the Company issues any Equity Interests for cash as part of a financing transaction (other than in connection with an “at the market” funding program), then the Investors will have the option (exercisable in writing by the Requisite Holders) to cause the Company to direct 15% of such proceeds from such issuance to repay the Notes on a pro rata basis based on the Aggregate Principal Amount outstanding on the date of closing of such issuance. The Company will notify the Investors no later than two (2) Business Days prior to the public announcement of any such debt or Equity Interest financing and provide the Investors (with the written approval of the Requisite Holders agree) to opportunity to exercise the option set forth in the preceding sentence; it being agreed, however, that, notwithstanding such notice to the Investors, the Company shall not be under an obligation to make a public announcement regarding such debt or Equity Interest financing until it is legally required to do so.

 

  

5.8 Reserved.

 

5.9 Reserved.

 

5.10 Prohibited Transactions; Limitation on At the Market Offerings. The Company hereby covenants and agrees not to enter into any Prohibited Transactions without the prior written consent of the Requisite Holders, until the one-year anniversary of the date of this Agreement. The Company hereby covenants and agrees without the prior written consent of the Requisite Holders not to utilize any “at the market” offering program in respect of its Ordinary Shares, except as permitted hereunder, until such time as each Note has been repaid in full and/or converted into Conversion Shares.

 

5.11 ELOC, ATM or Similar Transactions. The Company hereby covenants and agrees not to enter into any equity line of credit transactions, at-the-market transaction or similar transaction without the prior written consent of the Requisite Holders, until each Note have been repaid in full and/or has been converted into Conversion Shares.

 

5.12 Securities Laws Disclosure; Publicity. The Company shall, within one (1) Trading Day following the date hereof, file a Form 6-K report or other public disclosure disclosing the material terms of the transactions contemplated hereby and including this Agreement as an exhibit thereto; provided, that the Company may not issue such press release or file such Form 6- K or other public disclosure without the prior written consent (including by electronic mail) of the Requisite Holder, which shall not be unreasonably withheld or delayed. The Company shall not issue any press release nor otherwise make any such public statement regarding the Investors or the Transaction Documents without the prior written consent (including by electronic mail) of the Requisite Holder, except (i) if such disclosure is required by Law, in which case the Company shall (a) ensure that such disclosure is restricted and limited in content and scope to the maximum extent permitted by Law to meet the relevant disclosure requirement and (b) provide a copy of the proposed disclosure to the Requisite Holders for review prior to release and the Company shall incorporate the reasonable comments of the Requisite Holder or (ii) to the extent such press release or public statement contains only information previously disclosed in a press release or public statement previously approved in accordance with the foregoing clause (i). Each Investor will promptly provide any information reasonably requested by the Company or any of its Affiliates for any regulatory application or filing made or to be made or approval sought in connection with the transactions contemplated by this Agreement (including filings with the SEC). Following the execution of this Agreement, each Investor and its Affiliates and/or advisors may, upon receiving the prior written consent of the Requisite Holder, place announcements on their respective corporate websites and in financial and other newspapers and publications (including, without limitation, customary “tombstone” advertisements) describing such Investor’s relationship with the Company under this Agreement and including the name and corporate logo of the Company. Notwithstanding anything herein to the contrary, to comply with United States Treasury Regulations Section 1.6011-4(b)(3)(i), each of the Company and each Investor, and each employee, representative or other agent of the Company or such Investor, may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment, and the U.S. federal and state income tax structure, of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to such recipient.

 

5.13 Indemnification of the Investors.

 

(a) The Company will indemnify and hold each Investor, its Affiliates and their respective directors, officers, managers, shareholders, members, partners, employees and agents and permitted successors and assigns (each, an “Investor Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation and defense (collectively, “Losses”) that any such Investor Party may suffer or incur as a result of or relating to:

 

(i) any material breach or inaccuracy of any representation, warranty, covenant or agreement made by the Company in any Transaction Document;

 

(ii) any material misrepresentation made by the Company in any Transaction Document or in any SEC Document;

 

(iii) any material omission to state any material fact necessary in order to make the statements made in any SEC Document, in light of the circumstances under which they were made, not misleading;

 

(iv) any Proceeding before or by any court, public board, government agency, self-regulatory organization or body based upon, or resulting from the execution, delivery, performance or enforcement of any of the Transaction Documents or the consummation of the transactions contemplated thereby, and whether or not such Investor is party thereto by claim, counterclaim, crossclaim, as a defendant or otherwise, or if such Proceeding is based upon, or results from, any of the items set forth in clauses (i) through (iii) above;

 

except, in the case of clauses (ii) and (iii) above, to the extent, but only to the extent, that such misrepresentation or omission is based upon information regarding such Investor furnished in writing to the Company by or on behalf of the Investor expressly for use therein or the Investor has omitted a material fact from such information or otherwise violated the 1933 Act, 1934 Act or any state securities law or any rule or regulation thereunder.

 

 

(b) If any action shall be brought against any Investor Party in respect of which indemnity may be sought pursuant to this Agreement, such Investor Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Investor Party. Any Investor Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Investor Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Investor Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Investor Party under this Agreement (i) for any settlement by an Investor Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Investor Party’s breach of any of the representations, warranties, covenants or agreements made by such Investor Party in this Agreement or in the other Transaction Documents.

 

(c) In addition to the indemnity contained herein, the Company will reimburse each Investor Party for its reasonable legal and other expenses (including the cost of any investigation, preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred.

 

(d) The provisions of this Section 5.122 shall survive the termination or expiration of this Agreement.

 

5.14 Non-Public Information. Except to the extent necessary to fulfill its notice, disclosure or similar obligations hereunder or under any Transaction Document, the Company covenants and agrees that neither it nor any other Person acting on its behalf will provide the Investors or their agents or counsel with any information that the Company believes constitutes material, non-public information. Except in connection with the fulfillment of its notice, disclosure or similar obligations hereunder or under any Transaction Document, to the extent the Company provides an Investor with material, non-public information, the Company shall publicly disclose such information within forty-eight (48) hours of providing the information to such Investor, provided that if the last day of any such time period is not a Trading Day, such time period shall be extended to 9:30 a.m., New York City Time, on the next Trading Day following the day on which it would otherwise end. The Company understands and confirms that the Investors shall be relying on the foregoing representation in effecting transactions in securities of the Company. In the event that the Company fails to comply with its obligations under this Section 5.13, a liquidated damages charge of 1.5% of the outstanding principal balance of each Note will be assessed and will become immediately due and payable each month while such failure remains uncured to the Investors at their election in the form of a cash payment or added to the balance of the respective Note.

 

5.15 Share Transfer Agent. The Company’s share transfer agent is Continental Stock Transfer & Trust Company. To the Company’s knowledge, such transfer agent participates in the Depository Trust Company Fast Automated Securities Transfer program. For so long as any Investor holds Investor Securities, the Company shall not change its share transfer agent without the prior written consent of the Requisite Holder.

 

5.16 Intended Tax Treatment. Each Investor and the Company agree that for U.S. federal income tax purposes, and applicable state, local and non-U.S. income tax purposes, the Notes are not intended to be treated as indebtedness. No Investor nor the Company shall take any position on any tax return, or in any audit, claim, investigation, inquiry or proceeding in respect of taxes inconsistent with such intentions, unless otherwise required pursuant to a final determination within the meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, or any analogous provision of applicable state, local or non-U.S. law. Concurrently with the execution and delivery of this Agreement, each Investor agrees to execute and deliver to the Company an IRS Form W-8 or W-9 (as applicable with respect to such Investor).

 

 

5.17 Set-Off.

 

(a) Each Investor may, subject to the provisions of Section 2.4 hereof, set off any of its obligations to the Company (whether or not due for payment), against any of the Company’s obligations to such Investor (whether or not due for payment) under this Agreement and/or any other Transaction Document.

 

(b) Each Investor may do anything necessary to effect any set-off undertaken in accordance with this Section 5.16 (including varying the date for payment of any amount payable by the Investor to the Company).

 

(c) The Company may set off any of its obligations to an Investor (whether or not due for payment), against any of such Investor's obligations to the Company (whether or not due for payment) under this Agreement and/or any other Transaction Document.

 

(d) The Company may do anything necessary to effect any set-off undertaken in accordance with this Section 5.16 (including varying the date for payment of any amount payable by the Company to an Investor).

 

5.18 No Repricing. The Company shall not, without the prior written consent of the Requisite Holder, (i) authorize the amendment of any outstanding note, option, warrant, or other derivative security convertible, exercisable or exchangeable for Ordinary Shares to reduce the conversion, exercise or exchange price of any such security or (ii) grant a replacement note, option, warrant or other derivative security convertible, exercisable or exchangeable for Ordinary Shares for the purpose of reducing the conversion, exercise or exchange price of any such security being replaced; provided that this Section 5.17 shall not apply to amendments to or grants in respect of any option granted pursuant to an Equity Plan that is outstanding as of the date of this Agreement.

 

5.19 Commitment Shares and Commitment Fee. As consideration for entering into this Agreement, on the date of the initial Closing the Company shall pay to the Lead Investor a commitment fee of Two Hundred Fifty-Eight Thousand One Hundred Twenty Five and zero/100 Dollars ($258,125.00) and shall issue to the Lead Investor to the Commitment Shares, which will be deemed fully earned on such date as such fee is paid and such Commitment Shares are issued. In its sole discretion, in lieu of cash payment of the foregoing amount the Lead Investor may choose to accept a convertible promissory note or notes substantially in the form of Exhibit A hereto having an initial principal amount equal to the amount of the commitment fee required to be paid pursuant to this Section 5.18.

 

 

6. CLOSING CONDITIONS

 

6.1 Conditions Precedent to the Obligations of each Investor. The obligation of each Investor to fund its Note at each Closing is subject to the satisfaction or waiver by the Investor, at or before such Closing, or, as specified below, only at or before the initial Closing, of each of the following conditions:

 

(a) General Conditions Precedent.

 

(i) Required Documentation. Solely with respect to the initial Closing, the Company must have delivered to the Investor (i) a duly executed certificate of an officer of the Company and each Subsidiary party to the Subsidiary Guarantee, appending thereto (A) copies of duly executed resolutions or consents of the directors, members or manager, as applicable, of such party, approving and consenting to such party’s execution, performance of its obligations under the applicable Transaction Documents and the transactions contemplated thereby, (B) a certificate of good standing or equivalent document dated no more than five days prior to the date hereof, in respect of such party, (C) true and correct copies of the organizational documents of such party, and (D) incumbency signatures of such party, and (ii) copies of each Transaction Document, duly executed by the Company, the applicable Subsidiaries or the Transfer Agent, as applicable;

 

(ii) Consents and Permits. The Company must have obtained and delivered to such Investor copies of all necessary permits, approvals, and registrations necessary to effect this Agreement, the Transaction Documents and any of the transactions contemplated hereby or thereby.

 

(iii) The Business Combination Closing. The Business Combination Date must be occurring on such Closing Date or have occurred, resulting in consummation of the transactions contemplated by the Merger Agreement and the listing for trading of the Ordinary Shares on the Trading Market and the “Minimum Cash” provision in Section 9.2(f) of the Merger Agreement requiring there to be a minimum amount of cash shall not have been amended to provide for an amount as of the Business Combination Date of less than

$5,000,000.

 

(iv) No Event(s) of Default. No Event of Default has occurred and no Event of Default would result from the execution of this Agreement or any of the Transaction Documents or the transactions contemplated hereby or thereby.

 

(v) Representations and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material respects as of the date when made and as of such Closing as though made on and as of such date;

 

 

(vi) Performance. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to such Closing;

 

(vii) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents;

 

(viii) No Suspensions of Trading in the Ordinary Shares; Listing. Trading in the Ordinary Shares shall not have been suspended by the SEC or any Trading Market (except for any suspensions of trading of not more than one day on which the Trading Market is open solely to permit dissemination of material information regarding the Company) at any time since the date of execution of this Agreement, and the Ordinary Shares shall have been at all times since such date listed for trading on a Trading Market;

 

(ix) Limitation on Beneficial Ownership. The issuance of a Note or Warrant to such Investor shall not cause such Investor Group to become, directly or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder) of a number of Equity Interests of a class that is registered under the 1934 Act which exceeds the Maximum Percentage of the Equity Interests of such class that are outstanding at such time; and

 

(x) Funds Flow Request. The Company shall have delivered to the Lead Investor a flow of funds request, substantially in the form set out in Exhibit D.

 

(xi) Non-Public Information. The Company shall, on or before 9:30 a.m., New York City Time, on or prior to the first business day after the date of each Closing, release or file, as applicable, a press release or a Current Report on Form 6-K or other applicable public disclosure describing the terms of the Closing (the “Cleansing Release”). From and after the filing of the Cleansing Release, the Company shall have disclosed all material, non-public information (if any) provided up to such time to each Investor by the Company or any of its officers, directors, employees or agents. In addition, upon the filing of the Cleansing Release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement with respect to the transactions contemplated hereby or as otherwise disclosed in the Cleansing Release, whether written or oral, between the Company, or any of its officers, directors, affiliates, employees or agents, on the one hand, and any of the Investors or any of their affiliates, on the other hand, shall terminate.

 

(xii) Opinions of Counsel. Solely with respect to the initial Closing, the Lead Investor shall have received opinions from United States and Jersey counsel to the Company and Subsidiaries in forms reasonably acceptable to the Lead Investor.

 

(xiii) Closing Equity Conditions. Each of the Closing Equity Conditions shall have been satisfied.

 

 

(xiv) Lock-Up Agreements. The directors, officers and major shareholders (3% or more of the outstanding authorized Ordinary Shares immediately following the Business Combination Date) of the Company shall have entered into a lock-up agreement, solely with respect to the Ordinary Shares, in a form reasonably acceptable to by the Lead Investor, that shall provide that for a period beginning on the Business Combination Date, such Persons shall not sell into the market pursuant to Rule 144 or pursuant to a then effective registration statement any Ordinary Shares.

 

(b) Specific Closing Conditions. The closing conditions set forth in Section 2.2 relating to the Tranche being funded on such Closing Date shall be met.

 

6.2 Conditions Precedent to the Obligations of the Company. The obligation of the Company to issue a Note to an Investor at the Closing is subject to the satisfaction or waiver by the Company, at or before such Closing, of each of the following conditions:

 

(a) Required Documentation. Such Investor must have delivered to the Company copies of each Transaction Document to which the Investor is a party, duly executed by the Investor;

 

(b) Representations and Warranties. The representations and warranties of such Investor contained herein shall be true and correct in all material respects as of the date when made and as of such Closing Date as though made on and as of such date;

 

(c) Performance. The Investors shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to such Closing; and

 

(d) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

 

7. EVENTS OF DEFAULT

 

7.1 Events of Default. The occurrence of any of the following events shall be an “Event of Default” under this Agreement:

 

(a) an Event of Default under a Note;

 

(b) any of the representations or warranties made by the Company or any of its agents, officers, directors, employees or representatives in any Transaction Document or public filing being inaccurate, false or misleading in any material respect, as of the date as of which it is made or deemed to be made, or any certificate or financial or other written statements furnished by or on behalf of the Company to the Investor or any of its representatives, is inaccurate, false or misleading, in any material respect, as of the date as of which it is made or deemed to be made, or on any Closing Date; or

 

(c) a failure by the Company to comply with any of its covenants or agreements set forth in this Agreement, including those set forth in Section 5 in all material respects.

 

 

7.2 Investor Right to Investigate an Event of Default. If in the reasonable opinion of the Requisite Holder, an Event of Default has occurred, or is or may be continuing:

 

(a) the Requisite Holder may notify the Company that it wishes to investigate such purported Event of Default;

 

(b) the Company shall cooperate with the Requisite Holder in such investigation;

 

(c) the Company shall comply with all reasonable requests made by the Requisite Holder to the Company in connection with any investigation by the Requisite Holder and shall (i) provide all information requested by the Requisite Holder in relation to the Event of Default to the Requisite Holder; provided that the Requisite Holder agrees that any materially price sensitive information and/or non-public information will be subject to confidentiality, and (ii) provide all such requested information within three (3) Business Days of such request.; and

 

(d) the Company shall pay all reasonable costs incurred by the Requisite Holder in connection with any such investigation.

 

7.3 Remedies Upon an Event of Default

 

(a) If an Event of Default occurs pursuant to Section 7.1(a), each Investor shall have such remedies as are set forth in their Note.

 

(b) If an Event of Default occurs pursuant to Section 7.1(b) or Section 7.1(c) and is not remedied following written notice provided by the Requisite Holder to the Company within (i) two (2) Business Days for an Event of Default occurring by the Company’s failure to comply with Section 7.1(c), or (ii) ten (10) Business Days for an Event of Default occurring pursuant to Section 7.1(b), the Requisite Holder may declare, by written notice to the Company, effective immediately, all outstanding obligations by the Company under the Transaction Documents to be immediately due and payable in immediately available funds and the Investors shall have no obligation to consummate any Closing under this Agreement or to accept the conversion of any Note into Conversion Shares.

 

(c) If any Event of Default occurs and is not remedied following written notice provided by the Requisite Holders to the Company within (i) two (2) Business Days for an Event of Default occurring by the Company’s failure to comply with Section 7.1(c), or (ii) ten (10) Business Days for an Event of Default occurring pursuant to Section 7.1(b), the Requisite Holders may, by written notice to the Company, terminate this Agreement effective as of the date set forth in the Requisite Holder’s notice.

 

 

8. TERMINATION

 

8.1 Events of Termination. This Agreement:

 

(a) may be terminated:

 

(i) by the Requisite Holder on the occurrence or existence of a Securities Termination Event or a Change of Control;

 

(ii) by either the Company or the Requisite Holder, by written notice to the other party, effective immediately, if the applicable Closing has not occurred within thirty (30) Business Days of the date specified in Section 2.2 of this Agreement or such later date as the Company and the Requisite Holder agree in writing, provided that the right to terminate this Agreement under this Section 8.1(a)(iii) is not available to any party that is in material breach of or material default under this Agreement or whose failure to fulfill any obligation under this Agreement has been the principal cause of, or has resulted in the failure of the applicable Closing to occur; or

 

(iii) by the Requisite Holder, in accordance with Section 7.3(c).

 

(b) will automatically terminate, without further action by the parties, on the date that is twenty-four (24) from the date of this Agreement.

 

8.2 Effect of Termination.

 

(a) Upon termination of this Agreement, no Investor will be required to fund any further amount after the date of termination of the Agreement, provided that termination will not affect any undischarged obligation under this Agreement, and any obligation of the Company to pay or repay any amounts owing to the Investor hereunder and which have not been repaid at the time of termination.

 

(b) Nothing in this Agreement will be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or to impair the right of any party to compel specific performance by any other Party of its obligations under this Agreement.

 

 

9. RESERVED

 

10. RIGHTS TO FUTURE STOCK ISSUANCES. Subject to the terms and conditions of this Section and applicable securities laws, if at any time during the period ending 18 months after the Closing Date of the initial Closing, the Company proposes to offer or sell any New Securities, the Company shall offer to the Investors the opportunity to purchase up to ten percent (10%) of such New Securities (such amount, the “Offered Securities”). Such offer may only be accepted with the prior written approval of an Investor. If accepted by an Investor, it shall be afforded the opportunity to purchase its Pro Rata Portion (as defined below). The Investors shall be entitled to apportion the right of first offer hereby granted to them in such proportions as they deem appropriate among themselves and their Affiliates.

 

10.1 The Company shall give notice no fewer than three (3) Business Days in advance of the proposed date of the sale of New Securities (the “Information Notice”) to the Requisite Holder and each Investor, requesting if such Requisite Holder and Investors would desire to receive further information regarding the proposed sale. In the event that any Investor does not affirmatively respond to the Information Notice within two (2) Business Days of receipt thereof, the Company may proceed with the sale; provided that obligations and rights set forth in this Section 10 shall not be in force and effective for a period with respect to any non-affirming Investor for a period of 45 days following the delivery of the Information Notice; provided, further that the obligations and rights set forth in this Section 10 shall automatically renew following the expiration of such period. If an Investor affirmatively responds to the Information Notice, such sale shall be subject to the obligations and rights set forth in this Section 10.

 

10.2 The Company shall give notice no fewer than two (2) Business Days following receipt of an affirmative response to the Information Notice (the “Offer Notice”) to the Requisite Holder and each Investor, stating (a) its bona fide intention to offer such New Securities, (b) the number of such New Securities to be offered, and (c) the price and terms, if any, upon which it proposes to offer such New Securities.

 

10.3 By notification to the Company within five (5) days after the Offer Notice is given, the Requisite Holder and each Investor may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to their Pro Rata Portion of the Offered Securities. “Pro Rata Portion” means the ratio of (x) Securities purchased by an Investor participating under this Section 10.3 and (y) the sum of the aggregate Securities purchased by all Investors participating under this 10.3. The closing of any sale pursuant to this Section shall occur within the later of ninety (90) days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Section 10.4.

 

10.4 The Company may, during the ninety (90) day period following the expiration of the period provided in Section 10.3, offer and sell the remaining portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of the New Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Investors in accordance with this Section.

 

 

10.5 The right of first offer in this Section shall not be applicable to offers, issuances, sales or other transactions related to Exempted Securities, or any New Securities registered for sale under the 1933 Act.

 

11. GENERAL PROVISIONS

 

11.1 Fees and Expenses. Prior to the date of this Agreement, the Company has paid the Lead Investor $25,000 as an advance the expenses payable under this Section 11.1. At the initial Closing, the Company shall reimburse the Lead Investor for actual and reasonably documented due diligence, travel and legal fees and expenses related to the preparation and negotiation of the Transaction Documents and disbursements of its counsel, Lucosky Brookman LLP it being understood that Lucosky Brookman LLP have not rendered any legal advice to the Company in connection with the transactions contemplated hereby and that the Company has relied for such matters on the advice of its own counsel; provided that the foregoing cap maybe increased if in the reasonable discretion of the Lead Investor the legal services required to draft and negotiate the Transaction Documents exceeds those initially contemplated by the Parties. In the event that this Agreement is terminated prior to the occurrence of the initial Closing, the Company shall reimburse the Lead Investor for all actual and reasonably documented due diligence and legal fees and expenses, including the reasonable and documented fees and disbursements of its counsel, Lucosky Brookman LLP. Except as specified above, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of the Transaction Documents. The Company shall pay all stamp and other taxes and duties levied in connection with the sale of the Notes.

 

11.2 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via email at the email address specified in this Section prior to 5:00 p.m. (New York time) on a Business Day, (b) the next Business Day after the date of transmission, if such notice or communication is delivered via email at the email address specified in this Section on a day that is not a Business Day or later than 5:00 p.m. (New York time) on any date and earlier than 11:59 p.m. (New York time) on such date, (c) the Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows:

 

If to the Company:

 

Email:

Attention:

 

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

 

Attention:

 

If to an Investor, such address set forth on the signature page hereto executed by such Investor;

 

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

 

 

11.3 Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Agreement will not in any way be affected or impaired thereby.

 

11.4 Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware, without reference to principles of conflict of laws or choice of laws.

 

11.5 Jurisdiction and Venue. Any action, proceeding or claim arising out of, or relating in any way to this Agreement shall be brought and enforced in the New York Supreme Court, County of New York (Commercial Division), or in the United States District Court for the Southern District of New York. The Company and the Investors irrevocably submit to the jurisdiction of such courts, which jurisdiction shall be exclusive, and hereby waive any objection to such exclusive jurisdiction or that such courts represent an inconvenient forum. The prevailing party in any such action shall be entitled to recover its reasonable and documented attorneys’ fees and out-of-pocket expenses relating to such action or proceeding.

 

11.6 WAIVER OF RIGHT TO JURY TRIAL. THE COMPANY AND THE INVESTORS HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.

 

11.7 Survival. The representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Securities.

 

11.8 Entire Agreement. The Transaction Documents, together with the Exhibits and Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

11.9 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and the Requisite Holders. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

 

 

11.10 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. 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. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.

 

11.11 Successors and Assigns. This Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the Company and the Investors and their respective successors and assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Requisite Holders. Each Investor may assign any or all of its rights under this Agreement to any Person to whom such Investor assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the “Investor” and such transferee is an accredited investor.

 

11.12 Further Assurances. Each party hereto 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 the 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.

 

11.13 Counterparts. This Agreement may be executed in identical counterparts, each 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 parties. Signature pages delivered by facsimile or e-mail shall have the same force and effect as an original signature.

 

11.14 Specific Performance. Each of the Company and each Investor acknowledges that monetary damages alone would not be adequate compensation to the other parties hereto for a breach of this Agreement and the Company or the Requisite Holders may seek an injunction or an order for specific performance from a court of competent jurisdiction if (a) the Company or an Investor fails to comply or threatens not to comply with this Agreement or (b) on the one hand, the Company has reason to believe that an Investor will not comply with this Agreement or, on the other hand, the Requisite Holders have reason to believe that the Company will not comply with this Agreement.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the undersigned have executed this Securities Purchase Agreement as of the date first set forth above.

 

COMPANY:
CROWN LNG HOLDINGS LIMITED
By:	/s/ Joern Husemoen
Name:	Joern Husemoen
Title:	Director

 

 

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

Name of Investor:	Helena Special Opportunities LLC
Signature of Authorized Signatory of Investor:	/s/ Lawrence Cutler
Name of Authorized Signatory:	Lawrence Cutler
Title of Authorized Signatory:	Authorized Signatory
Email Address of Authorized Signatory:	lcutler@arenaco.com
Facsimile Number of Authorized Signatory:	N/A
Address for Notice to Investor:	2500 Westchester Ave. Suite 401 Purchase, NY 10577
Address for Delivery of Securities to Investor (if not same as address for notice):
Funding Amount of initial Note:	$2,507,500.00
Principal amount of initial Note:	$2,950,000.00

 

  

EXHIBIT A

 

FORM OF NOTE

 

[See attached]

 

 

EXHIBIT B

 

FORM OF WARRANT

 

[See attached]

 

 

EXHIBIT C

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

[See attached]

 

 

EXHIBIT D

 

FLOW OF FUNDS REQUEST

 

Crown LNG Holdings Limited – Securities Purchase Agreement – Flow of Funds Request

 

In connection with the Securities Purchase Agreement, dated June 4, 2024 (the “Agreement”) between Crown LNG Holdings Limited (the “Company”),                     (the “Investor”) and the other investors signatory thereto, the Company irrevocably authorizes the Investor to distribute such funds as set out below, in the manner set out below, at the Closing.

 

Capitalized terms used but not otherwise defined in this letter will have the meaning given to such terms in the Agreement.

 

Item	Amount
Closing	$
	$
Total	$

 

Please transfer the net amount of US $                           due at the Closing, to the following bank account:

 

Bank ID type:

Bank ID:

Bank Name:

Bank Address 1:

Bank Address 2:

Recipient Account (if appropriate enter the IBAN): Recipient name:

Recipient Address 1:

Recipient Address 2:

 

Yours sincerely,

 

CROWN LNG HOLDINGS LIMITED

 

By:
Name
Title

 

 

EXHIBIT E

 

FORM OF SUBSIDAIRY GUARANTEE

 

[See attached]

 

 

 

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