BROAD CAPITAL ACQUISITION CORP. Item 1.01. Entry into a Material Definitive Agreement.
Agreement and Plan of Merger and Business Combination Agreement
On
Business Combination
Pursuant to the BCA, prior to the closing (the "Closing") of the contemplated
transactions (collectively, the "Business Combination"), the Parties will cause
the Company to move its domicile from the
Following the Redomestication Merger, the Company and the Purchaser will cause the Company to liquidate, such that all assets of the Company are, or shall be, transferred to the Purchaser and all liabilities of the Company are, or shall be, assumed by the Purchaser (the "Liquidation"). Additionally, the Company will cause all of its contracts to be assigned to and assumed by the Purchaser.
Following the Redomestication Merger and Liquidation, the Shareholder will
contribute all of the issued and outstanding ordinary shares of the Target to
the Purchaser in exchange for 9,000,000 Purchaser Shares (the "Exchange
Consideration"), which shares shall have a deemed value of
In connection with the Closing, the Purchaser shall cause its board of directors to consist of seven (7) directors, which shall include not less than four (4) independent directors under Nasdaq rules requiring a majority of directors to be independent, with two of such directors to be designated by the Indemnified Party Representative (one of which shall be independent) and the remaining directors, both independent and not independent, to be designated by the Target prior to the Closing.
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Representations and Warranties; Covenants
Pursuant to the BCA, the Parties made customary representations and warranties for transactions of this type. Aside from certain representations and warranties made by the Target regarding litigation, actions, or other matters that are brought or initiated against the Target prior to the Closing or that may arise following the Closing, the representations and warranties made by the Company, the Purchaser, the Target, and the Shareholder will not survive the Closing. In addition, the Parties agreed to be bound by certain covenants that are customary for transactions of this type, including obligations of the Parties to use their best efforts to operate their respective businesses in the ordinary course, and to refrain from taking certain specified actions without the prior written consent of the applicable Party, in each case, subject to certain exceptions and qualifications. Additionally, the Parties have agreed not to solicit, negotiate, or enter into a competing transaction. The covenants of the Parties generally will not survive the Closing, subject to certain exceptions, including certain covenants and agreements that by their terms are to be performed in whole or in part after the Closing.
Conditions to
Pursuant to the BCA, the obligations of the Parties to consummate the Business
Combination are subject to the satisfaction or waiver of certain customary
closing conditions of the respective Parties, including, without limitation: (i)
the representations and warranties of the respective Parties being true and
correct subject to the materiality standards contained in the BCA; (ii) material
compliance by the Parties of their respective pre-closing covenants and
agreements, subject to the standards contained in the BCA; (iii) the approval by
the Purchaser's stockholders of the Business Combination; (iv) the absence of
any Material Adverse Effect (as defined in the BCA) with respect to the Company,
with respect to the Purchaser, or with respect to the Target since the effective
date of the BCA that is continuing and uncured; (v) the expiration or
termination, as applicable, of any waiting period (and any extension thereof)
applicable to the consummation of the BCA under any antitrust laws; (vi) the
receipt of all consents required to be obtained from or made with any
governmental authority in order to consummate the transactions contemplated by
the BCA; (vii) the receipt of any approvals required under the Australian
Foreign Acquisitions and Takeovers Act 1975 (Cth); (viii) the Purchaser having
at least
Termination
The BCA may be terminated under certain customary and limited circumstances at
any time prior to the Closing, including, among others, (i) by the mutual
written consent of the Purchaser and the Target; (ii) by the Purchaser, if any
of the representations or warranties of the Shareholder or the representations
or warranties of the Target set forth in the BCA shall not be true and correct,
or if the Target has failed to perform any covenant or agreement on the part of
the Target set forth in the BCA, in each case such that the conditions to the
Closing set forth in the BCA would not be satisfied and the breach or breaches
causing such representations or warranties not to be true and correct, or the
failure to perform any covenant or agreement, as applicable, are not cured (or
waived by the Purchaser) by the earlier of (a) the Outside Date (as defined
below) or (b) 20 business days after written notice thereof is delivered to the
Target; (iii) by the Target or the Shareholder, if any of the representations or
warranties of the Purchaser set forth in the BCA shall not be true and correct,
or if the Purchaser has failed to perform any covenant or agreement on its part
set forth in the BCA, in each case such that the conditions to the Closing set
forth in the BCA would not be satisfied and the breach or breaches causing such
representations or warranties not to be true and correct, or the failure to
perform any covenant or agreement, as applicable, are not cured (or waived by
the Target) by the earlier of (a) the Outside Date or (b) 20 business days after
written notice thereof is delivered to the Purchaser; (iv) by any of the Target,
the Shareholder, or the Purchaser: (a) on or after
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In the event the BCA is terminated pursuant to clauses (ii) or (vi) of the above
paragraph, the Target must pay the Purchaser a breakup fee equal to
The foregoing description of the BCA does not purport to be complete and is qualified in its entirety by reference to the full text of the BCA filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference. The BCA provides investors with information regarding its terms and is not intended to provide any other factual information about the Parties. In particular, the assertions embodied in the representations and warranties contained in the BCA were made as of the execution date of the BCA only and are qualified by information in confidential disclosure schedules provided by the Parties in connection with the signing of the BCA. These disclosure schedules contain information that modifies, qualifies, and creates exceptions to the representations and warranties set forth in the BCA. Moreover, certain representations and warranties in the BCA may have been used for the purpose of allocating risk between the parties rather than establishing matters of fact. Accordingly, you should not rely on the representations and warranties in the BCA as characterizations of the actual statements of fact about the parties.
Escrow Agreement
Prior to the Closing, the Company (and the Purchaser as the successor entity thereto), the Shareholder, and a mutually agreed upon escrow agent shall enter into an escrow agreement (the "Escrow Agreement"), pursuant to which, among other things, the parties shall cause a certain number of Purchaser Shares, including the Escrow Shares to be held in escrow for use in connection with any adjustments to the Exchange Consideration, 1,607,000 Purchaser Shares to be held in escrow for use in connection with the indemnification obligations of the Target, and 2,000,000 Purchaser Shares to be held in escrow for use in connection with the Earnout.
Lock-up Agreement
At the Closing, the Company (and the Purchaser as the successor entity thereto), the Shareholder, and any person or entity who receives shares on behalf of the Shareholder shall enter into a lock-up agreement (the "Lock-Up Agreement"), pursuant to which, among other things, and subject to certain exceptions, the Purchaser Shares held by the Shareholder or any such other person or entity will be locked-up for a period of up to twelve months from the date of the Closing, in accordance with the terms set forth therein.
Non-Competition Agreement
At the Closing, the Company (and the Purchaser as the successor entity thereto) and its affiliates, successors, and indirect and direct subsidiaries, the Target and its affiliates, successors, and indirect and direct subsidiaries, and the Shareholder shall enter into a non-competition and non-solicitation agreement (the "Non-Competition Agreement"), pursuant to which, among other things, the Shareholder will agree not to (i) compete with the business of the post-combination company for a period of five (5) years following the Closing, . . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
2.1* Agreement and Plan of Merger and Business Combination Agreement
Cover Page Interactive Data File (Embedded within the Inline XBRL
104 document and included in Exhibit)
* Certain of the exhibits and schedules to this exhibit have been
omitted in accordance with Regulation S-K Item 601(b)(2). The
Company agrees to furnish supplementally a copy of all omitted
exhibits and schedules to the SEC upon its request.
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