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): December 6, 2021 (November 30, 2021)

CHP MERGER CORP.
(Exact name of registrant as specified in its charter)

Delaware
 
001-39140
 
84-2590924
(State or other jurisdiction of incorporation or organization)
 
(Commission File Number)
 
(I.R.S. Employer Identification Number)

25 Deforest Avenue, Suite 198
Summit, New Jersey
 
07901
(Address of principal executive offices)
 
(Zip Code)

Registrant’s telephone number, including area code: (212) 508-7090

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 to 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
Units, each consisting of one share of Class A common stock, $0.0001 par value, and one half of one warrant
 
CHPMU
 
The Nasdaq Stock Market LLC
Class A common stock included as part of the units
 
CHPM
 
The Nasdaq Stock Market LLC
Warrants included as part of the units, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share
  CHPMW  
The Nasdaq Stock Market 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 1.01.
Entry into a Material Definitive Agreement.

Business Combination Agreement Amendment
 
As previously disclosed, on November 14, 2021, CHP Merger Corp. (“CHP” or the “Company”), entered into a business combination agreement, by and among CHP, Accelerate Merger Sub, Inc., a wholly owned subsidiary of CHP (“Merger Sub”), and Integrity Implants Inc. d/b/a Accelus (“Accelus”) (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”). If the Business Combination Agreement is approved by CHP’s stockholders and the transactions contemplated by the Business Combination Agreement are consummated, Merger Sub will merge with and into Accelus (the “Merger”), with Accelus surviving the Merger as a wholly owned subsidiary of CHP. In addition, upon the effectiveness of the Proposed Charter (as defined below), CHP will be renamed Accelus, Inc. and is referred to herein as “New Accelus” following the consummation of the transactions described below (collectively, the “Business Combination”).
 
On November 30, 2021, the Company, Merger Sub and Accelus entered into a First Amendment to the Business Combination Agreement (the “Business Combination Agreement Amendment”) to reflect an Investment Agreement, dated as of November 30, 2021, between Accelus, CHP Acquisition Holdings, LLC (the “Sponsor”), and certain CHP Investors (the “Investment Agreement”), pursuant to which the Sponsor and such CHP Investors have committed to invest in certain convertible notes of Accelus (the “Convertible Notes”) or Series D Preferred Shares of Accelus ("Series D"), and Accelus has agreed to use the proceeds of the Convertible Notes and Series D so issued to, among other things, fund the Company’s previously announced monthly contributions of $0.0333 per share into the trust account (the “Monthly Contributions). In connection with the foregoing, the Business Combination Agreement Amendment (i) amended certain covenants to allow for the issuance of the Convertible Notes, (ii) amended the a condition to closing that no breach has occurred under the A&R Sponsor Letter Agreement (as defined below) and (iii) added a termination right in the event that the Sponsor or CHP Investors fail to fund any Monthly Contribution pursuant to the Investment Agreement and the amount in trust drops below $60,000,000.
 
The foregoing summary of the Business Combination Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the actual Business Combination Agreement Amendment which is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference.
 
Amended and Restated Sponsor Letter Agreement
 
As previously disclosed, concurrently with the execution of the Business Combination Agreement, CHP Acquisition Holdings, LLC (the “Sponsor”), James Deal, Jack Krouskup, Ken Goulet, CHP and Accelus entered into a sponsor letter agreement, dated as of November 14, 2021 (the “Sponsor Letter Agreement”), pursuant to which the Sponsor and each other holder of CHP Class B common stock has agreed to, among other things, (i) vote in favor of the transaction proposals (including the proposal to approve the Business Combination Agreement and the related transactions contemplated therein) at a special meeting of the stockholders, (ii) be bound by and subject to certain other covenants and agreements of the Business Combination Agreement, as if they were directly party thereto, (iii) waive any adjustment to the conversion ratio set forth in the governing documents of CHP or any other anti-dilution or similar protection with respect to the CHP Class B common stock (whether resulting from the transactions contemplated by the Business Combination Agreement or otherwise), (iv) transfer 1,600,000 warrants, each such warrant granting the holder the right to purchase one share of New Accelus common stock at an exercise price of $11.50 per share (the “Sponsor Warrants”), to certain stockholders of Accelus, (v)  forfeit a number of shares of CHP Class B common stock (“Sponsor Shares”) and Sponsor Warrants determined by the formula set forth in the Sponsor Letter Agreement, (vi) in the case of the Sponsor, be subject to certain vesting terms with respect to its CHP Class B common stock and Sponsor Warrants as set forth in the Sponsor Letter Agreement, (vii) not redeem or otherwise exercise any right to redeem any of his, her or its CHP equity securities; and (viii) be bound by certain transfer restrictions with respect to his, her or its CHP equity securities prior to the Closing, in each case, on the terms and subject to the conditions set forth in the Sponsor Letter Agreement.
 
In connection with the Investment Agreement, Accelus, the Company and the Sponsor entered into an Amended and Restated Sponsor Letter Agreement, dated as of November 30, 2021 (the “A&R Sponsor Letter Agreement”), pursuant to which the Company and the Sponsor agreed, in addition to the representations and covenants included in the Sponsor Letter Agreement, to (i) transfer a number of Sponsor Shares to be agreed among the Sponsor and Accelus prior to the closing of the Business Combination to make whole the Accelus shareholders in respect of the dilution arising from the additional investment underlying the aggregate amount of Monthly Contributions (the “Transferred Sponsor Shares”), (ii) adjust the formula for the forfeiture of Sponsor Shares included in the Sponsor Letter Agreement to account for the aggregate amount of Monthly Contributions and the Transferred Sponsor Shares and (iii) adjust the amount of Sponsor Shares subject to the vesting terms included in the Sponsor Letter Agreement.
 
The foregoing description of the A&R Sponsor Letter Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the A&R Sponsor Letter Agreement filed as Exhibit 10.1 hereto and incorporated by reference herein.

Important Information about the Business Combination and Where to Find It

In connection with the proposed Business Combination, the Company intends to file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 (the “Registration Statement”), which will include a preliminary proxy statement/prospectus and a definitive proxy statement/prospectus, and certain other related documents, which will be both the proxy statement to be distributed to holders of shares of the Company’s common stock in connection with the Company’s solicitation of proxies for the vote by the Company’s stockholders with respect to the Business Combination and other matters as may be described in the Registration Statement, as well as the prospectus relating to the offer and sale of the securities of the Company to be issued in the Business Combination. The Company’s stockholders and other interested persons are advised to read, when available, the preliminary proxy statement/prospectus included in the Registration Statement and the amendments thereto and the definitive proxy statement/prospectus, as well as other documents filed with the SEC in connection with the proposed Business Combination, as these materials will contain important information about the parties to the Business Combination Agreement, the Company and the proposed Business Combination. After the Registration Statement is declared effective, the definitive proxy statement/prospectus and other relevant materials for the proposed Business Combination will be mailed to stockholders of the Company as of a record date to be established for voting on the proposed Business Combination and other matters as may be described in the Registration Statement. Stockholders will also be able to obtain copies of the preliminary proxy statement/prospectus, the definitive proxy statement/prospectus, and other documents filed with the SEC that will be incorporated by reference therein, without charge, once available, at the SEC’s web site at www.sec.gov, or by directing a request to: CHP Merger Corp., 25 Deforest Avenue, Suite 108, Summit, NJ 07901.

Participants in the Solicitation

The Company and its directors and executive officers may be deemed participants in the solicitation of proxies from the Company’s stockholders with respect to the Business Combination. A list of the names of those directors and executive officers and a description of their interests in the Company will be contained in the Registration Statement for the Business Combination, when available, and will be available free of charge at the SEC’s web site at www.sec.gov, or by directing a request to CHP Merger Corp., 25 Deforest Avenue, Suite 108, Summit, NJ 07901. Additional information regarding the interests of such participants will be contained in the Registration Statement when available.

          Accelus and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the Business Combination. A list of the names of such directors and executive officers and information regarding their interests in the Business Combination will be contained in the Registration Statement when available.

Forward-Looking Statements

This Current Report on Form 8-K includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The Company’s and Accelus’s actual results may differ from their expectations, estimates and projections and consequently, you should not rely on these forward looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s and Accelus’s expectations with respect to future performance and anticipated financial impacts of the Business Combination, the satisfaction of the closing conditions to the Business Combination and the timing of the completion of the Business Combination. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside the Company’s and Accelus’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) the ability of CHP and Accelus prior to the Business Combination, and New Accelus following the Business Combination, to meet the closing conditions in the Business Combination Agreement, including due to failure to obtain approval of the stockholders of CHP and Accelus or certain regulatory approvals, or failure to satisfy other conditions to closing in the Business Combination Agreement; (2) the occurrence of any event, change or other circumstances, including the outcome of any legal proceedings that may be instituted against CHP and Accelus following the announcement of the Business Combination Agreement and the transactions contemplated therein, that could give rise to the termination of the Business Combination Agreement or could otherwise cause the transactions contemplated therein to fail to close; (3) the inability to obtain or maintain the listing of the combined company’s common stock on the Nasdaq, as applicable, following the Business Combination; (4) the risk that the Business Combination disrupts current plans and operations as a result of the announcement and consummation of the Business Combination; (5) the inability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of the combined company to grow and manage growth profitably and retain its key employees; (6) costs related to the Business Combination; (7) changes in applicable laws or regulations; (8) the inability of the combined company to raise financing in the future; (9) the success, cost and timing of Accelus’s and the combined company’s product development activities; (10) the inability of Accelus or the combined company to obtain and maintain regulatory approval for their products, and any related restrictions and limitations of any approved product; (11) the inability of Accelus or the combined company to identify, in-license or acquire additional technology; (12) the inability of Accelus or the combined company to maintain Accelus’s existing license, manufacturing, supply and distribution agreements; (13) the inability of Accelus or the combined company to compete with other companies currently marketing or engaged in the development of treatments for the indications that Accelus is currently pursuing for its product candidates; (14) the size and growth potential of the markets for Accelus’s and the combined company’s products and services, and each of their ability to serve those markets, either alone or in partnership with others; (15) the pricing of Accelus’s and the combined company’s products and services and reimbursement for medical procedures conducted using Accelus’s and the combined company’s products and services; (16) Accelus’s and the combined company’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing; (17) Accelus’s and the combined company’s financial performance; (18) the impact of COVID-19 on Accelus’s business and/or the ability of the parties to complete the Business Combination; and (19) other risks and uncertainties indicated from time to time in the proxy statement/prospectus relating to the Business Combination, including those under “Risk Factors” in the Registration Statement, and in the Company’s other filings with the SEC.

The Company cautions that the foregoing list of factors is not exclusive. The Company cautions investors not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.

 No Offer or Solicitation

This Current Report on Form 8-K shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Business Combination. This Current Report on Form 8-K shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.

Item 9.01.
Financial Statements and Exhibits.


(d)
Exhibits.

Exhibit
Number
 
Description
 
2.1
 
Amendment to Business Combination Agreement, dated as of November 30, 2021, by and among CHP Merger Corp., Accelerate Merger Sub, Inc., and Integrity Implants Inc.
   
Amendment to Sponsor Letter Agreement, dated as of November 30, 2021, by and among CHP Acquisition Holdings, LLC, CHP Merger Corp., and Integrity Implants Inc.

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.

Dated: December 6, 2021
 
   
 
CHP MERGER CORP.
   
 
By:
/s/ James T. Olsen
 
Name:
James T. Olsen
 
Title:
Chief Executive Officer


Exhibit 2.1

EXECUTION VERSION
FIRST AMENDMENT TO
 
BUSINESS COMBINATION AGREEMENT
 
This FIRST AMENDMENT TO BUSINESS COMBINATION AGREEMENT (the “Amendment”), dated as of November 30, 2021, is entered into by and among each of CHP Merger Corp., a Delaware corporation (“CHP”), Accelerate Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and Integrity Implants Inc., a Delaware corporation (the “Company”).  CHP, Merger Sub and the Company shall be referred to herein from time to time collectively as the “Parties”.
 
WHEREAS, the Parties have entered into a Business Combination Agreement dated as of November 14, 2021 (as amended from time to time the “BCA”);
 
WHEREAS, the Parties hereto have agreed to (i) enter into an Investment Agreement (as defined below) dated as of the date hereof among the Company, the Sponsor and certain CHP Investors, providing for additional investments in the Company and certain additional contributions to the Trust Account  (the “Monthly Contributions” as defined in the Investment Agreement), subject to the terms and conditions detailed in the Investment Agreement and (ii) cause the Sponsor Support Agreement to be amended as of the date hereof to provide for the transfer of certain CHP Class B Common Shares from the Sponsor to certain Company Stockholders immediately prior to and conditional upon the Closing under the BCA; and
 
WHEREAS, the Parties hereto desire to amend certain terms of the BCA in order to reflect the transactions contemplated by the Investment Agreement and the amended Sponsor Support Agreement.
 
NOW, THEREFORE, in consideration of the mutual promises herein contained and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:
 
Section 1.    Definitions.  All capitalized terms not otherwise defined herein have the meanings set out in the BCA.
 
Section 2.    Amendments to the BCA.  As of the date hereof, the following sections of the BCA are hereby amended as set forth below:
 
(a)          The following definitions shall be amended and restated in their entirety:
 
“Aggregate Transaction Proceeds” means (A) the aggregate cash proceeds available for release to any CHP Party from the Trust Account in connection with the transactions contemplated hereby (after, for the avoidance of doubt, giving effect to all of the CHP Stockholder Redemptions and the payment of all Unpaid CHP Expenses (excluding premiums for D&O insurance incurred pursuant to Section 5.15) and reasonable legal, accounting and financial advisor expenses that are Unpaid Company Expenses, excluding any fees or other amounts payable pursuant to the Piper Letter (as defined in the Company Disclosure Schedules)) plus (B) an amount equal to (i) the aggregate amount invested by CHP Investors in the Company pursuant to the Investment Agreement minus (ii) the aggregate Extension Premium.
 
“Ancillary Documents” means the Sponsor Support Agreement, the Investors’ Rights Agreement, the Transaction Support Agreement, the Investment Agreement, the Letters of Transmittal and each other agreement, document, instrument and/or certificate contemplated by the foregoing or by this Agreement executed or to be executed in connection with the transactions contemplated hereby, in each case as amended from time to time.
 
“CHP Investors” means the Sponsor, AHA and any Affiliate of the foregoing, together with any investor who is a Permitted Person (as defined in the Investment Agreement) and enters the Investment Agreement as an investing party thereunder from time to time prior to the Closing.
 
“Consideration Share Number” means 41,100,000 minus the Net Debt Figure (which may be positive or negative) where the “Net Debt Figure” means (a) (x) the Indebtedness of the Group Companies (excluding any Indebtedness incurred pursuant to the Investment Agreement) minus (y) the total cash of the Group Companies (in each case as of the most recent practicable date (not earlier than 10 days prior to Closing), as calculated in accordance with GAAP) divided by (b) $10, rounded to the nearest whole number.
 
“Permitted Additional Indebtedness” means “ (i) ordinary course trade payables, (ii) Indebtedness incurred under or pursuant to the Company’s loan and security agreement and related warrant agreement with Eastward Fund Management LLC, as amended in each case in connection with the provision of a maximum loan amount of $24 million and related increase in outstanding Company Warrants held by Eastward from 426,590 to 568,786 (including the Unearned Eastward Warrants), and (iii) any Extension Premium Convertible Notes issued by the Company pursuant to the terms of the Investment Agreement; provided that on and from the date on which CHP Investors have completed an investment of greater than or equal to $13,732,464.34 in the Series D Capital Raise, any further Indebtedness incurred under subsection (ii) shall not be deemed Permitted Additional Indebtedness.
 
“Series D Capital Raise” means the Company’s ongoing Series D funding round (including the amount raised from CHP Investors) up to a maximum of $20 million in the aggregate incurred after the date hereof, such fundraising being on the same terms and conditions as in effect prior to the date hereof and disclosed to CHP.
 
(b)          The following definitions shall be inserted:
 
“Extension Premium” means the amount, up to a maximum of $3,732,464.34 actually paid by the Company into the Trust Account pursuant to the terms of the Investment Agreement.
 
“Extension Premium Convertible Notes” means any Convertible Notes issued by the Company under and in accordance with the Investment Agreement.
 
“Investment Agreement” means the investment agreement by and among the Sponsor, CHP, the Company and the other parties thereto, dated as of November 30, 2021, as amended from time to time.          
 
-2-
(c)          Section 5.1(b)(iv) shall be amended and restated as follows:
 
“ transfer, issue, sell, grant, pledge or otherwise directly or indirectly dispose of, or subject to a Lien, (A) any Equity Securities of any Group Company or (B) any options, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating any Group Company to issue, deliver or sell any Equity Securities of any Group Company, in each case other than (i) in connection with the Series D Capital Raise or Permitted Additional Indebtedness or as allowed in Section 5.1(b)(vii) or (ii) in connection with the valid exercise of any option, warrant, convertible note or similar instrument (x) outstanding on the date hereof in accordance with the terms of the Company Equity Plan and the underlying grant, award or similar agreement or otherwise or (y) permitted to be issued under this Section 5.1(b)(iv);”
 
(d)          Section 5.19 (Incentive Equity Plan; Unearned Eastward Warrants) shall be retitled “Incentive Equity Plan; Unearned Eastward Warrants; Extension Premium Convertible Notes”, and a new sub-section 5.19(c) shall be added to such Section as follows:
 
“The parties shall cooperate to ensure that the shares of New CHP Common Stock to which any holder is entitled following the Closing under the terms of the Extension Premium Convertible Notes shall be duly authorized and issued promptly following the Closing in accordance with the terms of the Extension Premium Convertible Notes.”
 
(e)          Section 7.2(g) shall be amended and restated as follows:
 
“no breach of the Sponsor Support Agreement as it relates to the vesting provisions of the Sponsor’s Equity Securities or transfer of Sponsor’s warrants or CHP Class B Common Stock shall have occurred;”
 
(f)          the following termination right shall be added as new Section 8.1(j):
 
“by the Company if (i) CHP Investors fail to fund any part of the Extension Premium pursuant to the Investment Agreement and (ii) following such event as a result of a CHP Stockholder Redemption occurring prior to the Closing, the Trust Account holds less than $60,000,000; provided that, the Company shall not have a termination right pursuant to this Section 8.1(j) in the event that it has violated Section 2.3 of the Investment Agreement.”
 
Section 3.    Miscellaneous.
 
(a)          References to the BCA.  Upon the effectiveness of this Amendment, each reference in the BCA to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like import shall mean and be a reference to the BCA as amended hereby, and each reference to the BCA in any other document, instrument or agreement executed and/or delivered in connection with the BCA shall mean and be a reference to the BCA as amended hereby.  References in the BCA to “the date of this Agreement”, “the date hereof” or words of like import shall continue to mean the date of execution of the BCA, November 14, 2021.
 
(b)          No Other Changes.  Except as specifically amended by this Amendment, the BCA and all other Ancillary Documents shall remain in full force and effect and are hereby ratified and confirmed.
 
-3-
(c)          No Waiver.  The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Party under the BCA or any other document, instrument or agreement executed in connection therewith, nor constitute a waiver of any provision contained therein, except as  specifically set forth herein
 
(d)          Entire Agreement.  This Amendment, together with the BCA and the Ancillary Documents as amended on or around the date hereof including the Investment Agreement, constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof.
 
(e)          Incorporation by Reference.  The following sections of the BCA shall apply to this Amendment to the same extent as they apply to the BCA, mutatis mutandis: Sections 9.2 (Entire Agreement; Assignment), 9.3 (Amendment), 9.5 (Governing Law), 9.7 (Construction; Interpretation), 9.10 (Severability), 9.11 (Counterparts; Electronic Signatures), 9.15 (Waiver of Jury Trial) and 9.16 (Submission to Jurisdiction).
 
-4-
IN WITNESS WHEREOF, each of the Parties has caused this Amendment to be duly executed on its behalf as of the day and year first above written.
 
 
CHP MERGER CORP.
     
 
By:

 
Name:
 
 
Title:
 

 
ACCELERATE MERGER SUB, INC.
   
 
By:
 
 
Name:
 
 
Title:
 

 
INTEGRITY IMPLANTS INC.
   
 
By:
 
 
Name:
 
 
Title:
 

 
-5-
Exhibit 10.1

EXECUTION VERSION

AMENDED AND RESTATED SPONSOR LETTER AGREEMENT
 
This AMENDED AND RESTATED SPONSOR LETTER AGREEMENT (this “Agreement”), dated as of November 30, 2021, is made by and among CHP Acquisition Holdings, LLC, a Delaware limited liability company (the “Sponsor”), a holder of CHP Merger Corp., a Delaware corporation (“CHP”) Class B Common Stock and the Other Class B Stockholders that are signatories hereto (each, a “CHP Stockholder”, and collectively, the “CHP Stockholders”), CHP, and Integrity Implants Inc., a Delaware corporation (the “Company”).  The CHP Stockholders, CHP and the Company shall be referred to herein from time to time collectively as the “Parties”.  Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Business Combination Agreement (as defined below).
 
WHEREAS, CHP, the Company and certain other Persons party thereto entered into that certain Business Combination Agreement, dated as of the date hereof (as it may be amended, restated or otherwise modified from time to time in accordance with its terms, the “Business Combination Agreement”);
 
WHEREAS, each CHP Stockholder is the record and beneficial owner of the number of shares of CHP Class B Common Stock set forth on the signature page hereto (together with any other Equity Securities of CHP that the CHP Stockholder holds of record or beneficially, as of the date of this Agreement, or acquires record or beneficial ownership after the date hereof, collectively, the “Subject CHP Equity Securities”);
 
WHEREAS, at the Effective Time, by virtue of the Merger pursuant to the transactions contemplated by the Business Combination Agreement, each share of CHP Class B Common Stock issued and outstanding as of immediately prior to the Effective Time will be automatically canceled and extinguished and converted into one (1) share of New CHP Common Stock (the “Conversion”); and
 
WHEREAS, the CHP Stockholders acknowledge and agree that the Company would not have entered into and agreed to consummate the transactions contemplated by the Business Combination Agreement (in accordance with the terms and subject to the conditions set forth therein) without the CHP Stockholders entering into this Agreement and agreeing to be bound by the agreements, covenants and obligations contained in this Agreement.
 
NOW, THEREFORE, in consideration of the premises and the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, each intending to be legally bound, hereby agree as follows:
 
1.          Voting; BCA; Anti-Dilution.
 
a.          Agreement to Vote; No Redemption. The CHP Stockholders (severally and not jointly) hereby agree to vote at any meeting of the stockholders of CHP, and in any action by written consent of the stockholders of CHP, all of such CHP Stockholders’ Subject CHP Equity Securities in favor of the Transaction Proposals.  The CHP Stockholders (severally and not jointly) hereby agree that they shall not redeem, or submit a request to CHP’s transfer agent or otherwise exercise any right to redeem, any Subject CHP Equity Securities.
 
b.          BCA. The CHP Stockholders shall be (severally and not jointly) bound by and subject to (i) Sections 5.3(a) (Confidentiality) and 5.4(a) (Public Announcements) of the Business Combination Agreement to the same extent as such provisions apply to the parties to the Business Combination Agreement, as if the CHP Stockholders are directly party thereto, and (ii) the first sentence of Section 5.6(b) (Exclusive Dealing) of the Business Combination Agreement to the same extent as such provisions apply to CHP, as if the CHP Stockholders are directly party thereto.
 
c.          Anti-Dilution Waiver. The CHP Stockholders hereby (severally and not jointly) waive any adjustment to the conversion ratio set forth in the Governing Documents of CHP or any other anti-dilution or similar protection with respect to the CHP Class B Common Stock (whether resulting from the transaction contemplated by the Business Combination Agreement or otherwise).
 
2.          Effective Time Transfers and Forfeitures.
 
a.          Transfers. The CHP Stockholders hereby agree to transfer, effective as of the immediately after the Effective Time and after giving effect to the Conversion, or to cause to be transferred, (i) 1,600,000 Sponsor Warrants for distribution to certain stockholders of the Company as identified by the Company in its discretion prior to Closing (the “Transferred Sponsor Warrants”), which shall be subject to the vesting conditions set forth on Schedule A and (ii) a number of Sponsor Shares to be agreed among Sponsor and the Company prior to Closing to make whole the Company shareholders in respect of the dilution arising from the additional investment underlying the Extension Premium (such resulting number, the “Transferred Sponsor Shares”). Except as set forth herein, the CHP Stockholders (severally and not jointly) hereby agree not to, directly or indirectly, (i) sell, assign, transfer (including by operation of law), place a lien on, pledge, dispose of or otherwise encumber any of its Subject CHP Equity Securities or otherwise agree to do any of the foregoing (each, a “Transfer”), (ii) deposit any of its Subject CHP Equity Securities into a voting trust or enter into a voting agreement or arrangement or grant any proxy or power of attorney with respect to any of its Subject CHP Equity Securities that conflicts with any of the covenants or agreements set forth in this Agreement, (iii) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect acquisition or sale, assignment, transfer (including by operation of law) or other disposition of any of its Subject CHP Equity Securities, (iv) engage in any hedging or other transaction which is designed to, or which would (either alone or in connection with one or more events, developments or events (including the satisfaction or waiver of any conditions precedent)), lead to or result in a sale or disposition of its Subject CHP Equity Securities even if such Subject CHP Equity Securities would be disposed of by a person other than the CHP Stockholder or (v) take any action that would have the effect of preventing or materially delaying the performance of its obligations.
 
b.          Forfeitures. In the event (A) the total cash delivered to the Surviving Company at Closing from the Trust Account plus (B) an amount equal to (i) any additional cash invested by CHP Investors in the Company pursuant to the Investment Agreement minus (ii) the aggregate Extension Premium, before giving effect to the payment of any CHP Expenses and Company Expenses (the “Delivered Cash”) is less than $150,000,000, then effective as of the Effective Time following the Conversion, the CHP Stockholders hereby agree to forfeit, for no additional consideration, the number of Sponsor’s New CHP Common Shares (the “Sponsor Shares”) and warrants to acquire New CHP Common Shares at an exercise price of $11.50 per share (the “Sponsor Warrants”) set forth in the table below, based on the condition set forth in each such applicable row:
 
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Condition (at Closing)
   
Number of forfeited Sponsor Shares
   
Number of forfeited Sponsor Warrants
 
 
Delivered Cash equals less than $75,000,000
   
34.375% of the sum of (i) 6,000,000 minus (ii) the Transferred Sponsor Shares.
   
2,200,000
 
 
Delivered Cash equals at least $75,000,000 but less than $100,000,000.
   
23.4375% of the sum of (i) 6,000,000 minus (ii) the Transferred Sponsor Shares.
   
1,500,000
 
 
Delivered Cash equals at least $100,000,000 but less than $125,000,000.
   
15.625% of the sum of (i) 6,000,000 minus (ii) the Transferred Sponsor Shares.
   
1,000,000
 
 
Delivered Cash equals at least $125,000,000 but less than $150,000,000.
   
7.8125% of the sum of (i) 6,000,000 minus (ii) the Transferred Sponsor Shares.
   
500,000
 
 
Delivered Cash equals $150,000,000 or more.
   
0
   
0
 

3.          Vesting Sponsor Shares and Sponsor Warrants.
 
a.          Vesting Terms. The Sponsor agrees that, after taking into account any forfeiture of Sponsor Shares and Sponsor Warrants in accordance with Section 2b, and subject to the Closing and immediately after the Effective Time and the Conversion, a total of (i) 31.25% of the sum of (i) 6,000,000 minus (ii) the Transferred Sponsor Shares (the “Vesting Shares”) and (ii) 2,000,000 Sponsor Warrants  (the “Vesting Warrants”) shall be subject to the following performance vesting terms: (1) 50% of the Vesting Shares and Vesting Warrants shall vest at such time as a $13.00 stock price level is achieved, and (2) the remaining 50% of the Vesting Shares and Vesting Warrants shall vest at such time as a $16.00 stock price level is achieved, in each case, on or before the seventh (7th) anniversary of the Closing Date; provided, that if CHP consummates a transaction after the Closing which results in the holders of New CHP Common Shares having the right to exchange their Shares for cash, securities or other property, the Vesting Shares and Vesting Warrants will be released from all remaining vesting restrictions in connection with the consummation of such transaction and will become immediately vested in full immediately prior to such transaction. Such stock price levels will be equitably adjusted on account of any share split, reverse share split or similar equity restructuring transaction.
 
b.          Transfers; Forfeiture. The Sponsor agrees that it shall not (and will cause its affiliates not to) Transfer any unvested Vesting Shares or Vesting Warrants prior to the date such Vesting Shares or Vesting Warrants, as applicable, become vested pursuant to this paragraph 3. Vesting Shares and Vesting Warrants that do not vest in accordance with the terms of paragraph 3(a) shall be forfeited and cancelled, without any consideration therefore. The Sponsor further agrees that to the extent the Sponsor or its Affiliates invests in the Series D Capital Raise prior to the Stockholder Written Consent Deadline, at the time of such investment the Sponsor or such Affiliates shall agree to sign the Company Stockholder Written Consent in their capacity as Series D Stockholders on or before the Stockholder Written Consent Deadline.
 
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c.          Stock Price Level. For purposes of this paragraph 3, the “stock price level” will be considered achieved only when the VWAP of a share of New CHP Common Shares on the NASDAQ (or other exchange or other market where the New CHP Common Shares is then traded) is greater than or equal to the applicable vesting threshold price over any twenty (20) trading days within any thirty (30) trading day period.
 
4.          CHP Stockholders Representations and Warranties.  The CHP Stockholders represent and warrant to the Company (severally and not jointly each with respect to it/him/her self) as follows:
 
a.          The CHP Stockholder is, if incorporated, a limited liability company or other applicable business entity duly organized or formed, as applicable, validly existing and in good standing (or the equivalent thereof, if applicable, in each case, with respect to the jurisdictions that recognize the concept of good standing or any equivalent thereof) under the Laws of its jurisdiction of formation or organization (as applicable).
 
b.          The CHP Stockholder has the requisite corporate, limited liability company, legal capacity or other similar power and authority to execute and deliver this Agreement, to perform its covenants, agreements and obligations hereunder.  The execution and delivery of this Agreement has been duly authorized by all necessary corporate (or other similar) action on the part of the CHP Stockholder that is not a natural person.  This Agreement has been duly and validly executed and delivered by the CHP Stockholder and constitutes a valid, legal and binding agreement of the CHP Stockholder (assuming that this Agreement is duly authorized, executed and delivered by the Company), enforceable against the CHP Stockholder in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Laws affecting generally the enforcement of creditors’ rights and subject to general principles of equity).
 
5.          Termination.  This Agreement shall automatically terminate, without any notice or other action by any Party, with no further rights or obligations of any party hereto upon the earlier of (a) the Effective Time; and (b) the termination of the Business Combination Agreement in accordance with its terms; provided, that Section 2 (Effective Time Transfers and Forfeitures) Section 3 (Vesting Sponsor Shares and Sponsor Warrants) and this Section 5 through Section 7, as well as all related definitions, shall not terminate by reason of the Effective Time until the earlier of (x) the seventh (7th) anniversary of the Closing Date; and (y) the termination of the Business Combination Agreement in accordance with its terms.  Upon termination of this Agreement as provided in the immediately preceding sentence, none of the Parties shall have any further obligations or Liabilities under, or with respect to, this Agreement, except for such obligations or Liabilities pursuant to Section 3.  Notwithstanding the foregoing or anything to the contrary in this Agreement, the termination of this Agreement pursuant to Section 5(b) shall not affect any Liability on the part of any Party for a willful breach of any covenant or agreement set forth in this Agreement prior to such termination.
 
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6.          No Third Party Beneficiaries.  This Agreement shall be for the sole benefit of the Parties and their respective successors and permitted assigns and is not intended, nor shall be construed, to give any Person, other than the Parties and their respective successors and assigns, any legal or equitable right, benefit or remedy of any nature whatsoever by reason of this Agreement.  Nothing in this Agreement, expressed or implied, is intended to or shall constitute the Parties, partners or participants in a joint venture.
 
7.          Incorporation by Reference.  Sections 9.1 (Non-Survival), 9.2 (Entire Agreement; Assignment), 9.3 (Amendment), 9.5 (Governing Law), 9.7 (Construction; Interpretation), 9.10 (Severability), 9.11 (Counterparts; Electronic Signatures), 9.15 (Waiver of Jury Trial), 9.16 (Submission to Jurisdiction) and 9.17 (Remedies) of the Business Combination Agreement are incorporated herein and shall apply to this Agreement mutatis mutandis.
 
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be duly executed on its behalf as of the day and year first above written.
 
 
INTEGRITY IMPLANTS INC.
   
 
By:

   
Name:
   
Title:

Signature Page to Sponsor Support Letter
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be duly executed on its behalf as of the day and year first above written.
 
 
CHP ACQUISITION HOLDINGS, LLC,
 
a Delaware Limited Liability Company
   
 
By:

   
Name:
   
Title:

 
CHP Class B Common Stock:


Signature Page to Sponsor Support Letter
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be duly executed on its behalf as of the day and year first above written.
 
 
CHP MERGER CORP.
   
 
By:

   
Name: James T. Olsen
   
Title: Chief Executive Officer

Signature Page to Sponsor Support Letter
Schedule A
 
Transferred Sponsor Warrant Vesting
 
Vesting Terms. (1) 50% of the Transferred Sponsor Warrants shall vest at such time as a $13.00 stock price level is achieved, and (2) the remaining 50% of the Transferred Sponsor Warrants shall vest at such time as a $16.00 stock price level is achieved, in each case, on or before the seventh (7th) anniversary of the Closing Date; provided, that if CHP consummates a transaction after the Closing which results in the holders of New CHP Common Shares having the right to exchange their Shares for cash, securities or other property, the Transferred Sponsor Warrants will be released from all remaining vesting restrictions in connection with the consummation of such transaction and will become immediately vested in full immediately prior to such transaction. Such stock price levels will be equitably adjusted on account of any share split, reverse share split or similar equity restructuring transaction.
 
Stock Price Level. For purposes of this Schedule A, the “stock price level” will be considered achieved only when the VWAP of a share of New CHP Common Shares on the NASDAQ Exchange (or other exchange or other market where the New CHP Common Shares is then traded) is greater than or equal to the applicable vesting threshold price over any twenty (20) trading days within any thirty (30) trading day period.