UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): August 6, 2020 (August 5, 2020)

 

MEGALITH FINANCIAL ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

 

Delaware   001-38633   82-3410369
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
  (IRS Employer
Identification No.)

 

535 5th Ave, 29th Floor, New York, NY 10017

(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code: (212) 235-0430

 

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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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.

 

Merger Agreement

 

This section describes the material provisions of the Merger Agreement (as defined below) but does not purport to describe all of the terms thereof. The following summary is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1. Unless otherwise defined herein, the capitalized terms used below are defined in the Merger Agreement.

 

The Merger

 

On August 6, 2020, Megalith Financial Acquisition Corp., a Delaware corporation (“Megalith”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among Megalith, MFAC Merger Sub Inc., a Pennsylvania corporation and (“Merger Sub”) a wholly-owned subsidiary of Megalith, BankMobile Technologies, Inc., a Pennsylvania corporation (“BankMobile”) and Customers Bank, a Pennsylvania state chartered bank and the sole stockholder of BankMobile (the “Stockholder”).

 

Pursuant to the Merger Agreement, at the closing of the transactions contemplated by the Merger Agreement (the “Closing”), BankMobile will merge with and into Merger Sub, with Merger Sub continuing as the surviving corporation (the “Surviving Corporation”).

 

Merger Consideration

 

The aggregate consideration to be paid pursuant to the Merger Agreement to the Stockholder will be an amount (the “Merger Consideration”) equal to: (i) $140,000,000 (the “Enterprise value”), minus (ii) $9,324,323 (“Sponsor Equity Adjustment”), plus (or minus, if negative) (iii) BankMobile’s net working capital less a target net working capital of $10,000,000, minus (iv) the aggregate amount of any outstanding indebtedness of BankMobile at Closing, and minus (v) the amount of any unpaid transaction expenses of BankMobile, Megalith’s transaction expenses and other liabilities of Megalith due and owing at the Closing.

 

The Merger Consideration will consist of cash and stock. The cash portion of the Merger Consideration (“Cash Consideration”) will be equal to (A) the amount of any proceeds of the PIPE Investment (described below under “Private Placement”); plus (B) an amount equal to one-half (1/2) of the difference between the (i) cash and cash equivalents of Megalith, including any funds in the trust account after giving effect to the completion of the redemption of shares of Megalith’s public stockholders (“Redemption”), less (ii) a cash reserve to be used for the benefit of the Surviving Corporation in the Merger, in the amount of $10,000,000 (such difference between clause (i) and (ii) which resulting amount if otherwise negative shall be equal to zero, being the “Remaining Trust Account Amount”); minus (C) Megalith’s transaction expenses and other liabilities of Megalith due and owing at the Closing; plus (D) the cash and cash equivalents of BankMobile; minus (E) BankMobile’s unpaid transaction expenses; minus (F) a cash reserve in the amount of $5,000,000. The stock portion of the Merger Consideration consists of a number of shares of Megalith’s Class A common stock (the “Merger Consideration Shares”) with an aggregate value equal to (the “Merger Consideration Share Amount”) (a) the Merger Consideration, minus (b) the Cash Consideration, with the Stockholder receiving a number of shares of Megalith Class A common stock equal to the Merger Consideration Share Amount, divided by $10.38 (the “Per Share Price”).

 

The Merger Consideration is subject to adjustment after the Closing based on confirmed amounts of the net working capital, the outstanding indebtedness of BankMobile and any unpaid transaction expenses of BankMobile, as of the Closing Date. If the adjustment is a negative adjustment in favor of Megalith, the Stockholder will deliver to Megalith a number of shares of Class A common stock of Megalith with a value equal to the absolute value of the adjustment amount (with each share valued at the Per Share Price). If the adjustment is a positive adjustment in favor of BankMobile, Megalith will issue to the Stockholder an additional number of shares of Class A common Stock of Megalith with a value equal to the adjustment amount (with each share valued at the Per Share Price). The Merger Consideration is also subject to reduction for the indemnification obligations of the Stockholder.

 

1

 

Representations and Warranties

 

The Merger Agreement contains customary representations and warranties by each of Megalith, BankMobile and the Stockholder. Many of BankMobile’s representations and warranties are qualified by materiality or Material Adverse Effect. “Material Adverse Effect” as used in the Merger Agreement means with respect to any party, any fact, event, occurrence, change or effect that has had or reasonably expected to have a material adverse effect to the business, assets, liabilities, results of operations or condition (financial or otherwise) of such party and its subsidiaries, taken as a whole, or the ability of such party or any of its subsidiaries on a timely basis to consummate the transactions contemplated by the Merger Agreement or the ancillary documents to which it is a party or bound or to perform its obligations thereunder, in each case subject to certain customary exceptions. Certain of the representations are subject to specified exceptions and qualifications contained in the Merger Agreement or in information provided pursuant to certain disclosure schedules to the Merger Agreement.

 

Covenants of the Parties

 

Under the Merger Agreement, each party agrees to use its commercially reasonable efforts to effect the Closing. The Merger Agreement also contains certain customary covenants by the parties during the period between the signing of the Merger Agreement and the earlier of the Closing or the termination of the Merger Agreement in accordance with its terms, including covenants regarding the conduct of their respective businesses, efforts, access, confidentiality and public announcements, the Megalith proxy statement for the transaction (which includes the adoption of a new equity incentive plan for Megalith with a number of awards thereunder equal to 10% of the issued and outstanding shares of Megalith immediately after the Closing), notice of breaches, no insider trading, indemnification of directors and officers, and other customary covenants. The parties also have agreed to the following covenants:

 

Each party is subject to a “no-shop” obligation between signing of the Merger Agreement and Closing and will not be allowed to solicit or discuss competing transactions with other potential parties during such time period.

 

The Megalith board of directors after the Closing will consist of at least seven directors, including (i) the chief executive officer of the Surviving Corporation after the Merger, (ii) two directors (at least one independent) designated by Megalith prior to the Closing, (iii) one director designated by BankMobile prior to the Closing, and (iv) no fewer than three and up to five persons mutually agreed upon by Megalith and BankMobile prior to the Closing, each of whom must qualify as an independent director.

 

Within 24 hours after the execution of the Merger Agreement, the Stockholder shall deliver a stockholder written consent approving the Merger and the Merger Agreement.

 

BankMobile shall use its best efforts to deliver audited financial statements in accordance with PCAOB auditing standards by a PCAOB qualified auditor for fiscal years ended December 31, 2019 and December 31, 2018 to Megalith by August 24, 2020, or as promptly as practicable thereafter.

 

During the interim period Megalith and BankMobile will negotiate in good faith the terms of the various transition agreements, including (i) a Transition Services Agreement, (ii) a License Agreement, (iii) a Deposit Servicing Agreement, and (iv) an Interchange Maintenance Agreement, all substantively consistent with the terms of the applicable term sheets attached as exhibits to the Merger Agreement.

 

2

 

Indemnification

 

Each party provides customary representations and warranties in the Merger Agreement, some of which survive the Closing. A breach of certain of these representations and warranties may result in indemnification obligations. The representations and warranties of BankMobile and Megalith relating to organization and standing, authorization and binding agreement, capitalization and subsidiaries, finders and brokers and with respect to the Stockholder, organization and standing, authorization and binding agreement, ownership of the shares of BankMobile and finders and brokers (collectively, the “Fundamental Reps”) survive the Closing until the first anniversary of the Closing. Claims based on fraud, willful misconduct or intentional misrepresentation (“Fraud Claims”) survive indefinitely. No other representations and warranties survive the Closing.

 

The Stockholder will provide indemnification for any breach of its Fundamental Reps and the Fundamental Reps of BankMobile and any Fraud Claims relating to BankMobile or against the Stockholder. Megalith will provide indemnification for any breach of its Fundamental Reps and any Fraud Claim against Megalith.

 

The maximum aggregate amount of indemnification payments to which an indemnifying party will be obligated to pay (other than with respect to Fraud Claims) is capped at an amount equal to the 15% of the Merger Consideration. Fraud claims are capped at an amount equal to the value of the Merger Consideration actually paid under the Merger Agreement.

 

Any indemnification claims against the Stockholder shall first be applied against the Merger Consideration Shares then owned by the Stockholder unless the Stockholder does not have any Merger Consideration Shares at such time, in which case it shall satisfy such indemnification claims with the payment of cash.

 

Indemnification is the sole remedy for breaches of the representations, warranties covenants and other agreements in the Merger Agreement except with respect to Fraud Claims, claims seeking injunctions, specific performance or other equitable relief, or claims under the terms of the ancillary documents.

 

Conditions to Consummation of the Merger

 

The consummation of the Merger is subject to customary Closing conditions unless waived, including:

 

the approval of Megalith’s stockholders;

 

approvals of any required governmental authorities and the expiration or termination of any anti-trust waiting periods;

 

receipt of specified third-party consents;

 

no law or order preventing the transactions;

 

no material uncured breach by the other party;

 

after giving effect to the Redemption and any PIPE investments, Megalith shall have at least $5,000,001 of net tangible assets as required by its charter;

 

Megalith shall have at least $10,000,000 of cash and cash equivalents, including funds remaining in the trust account (after giving effect to the Redemption), and the proceeds of any PIPE investments, prior to giving effect to payment of any of MFAC’s unpaid transaction expenses or other liabilities;

 

Megalith shall have amended its certificate of incorporation to (i) change its corporate name to BM Technologies Inc. or another mutually agreed upon name and to (ii) remove the provisions relating to being a blank-check company;

 

  The parties shall have entered into and delivered, among other things, the Transition Services Agreement and Registration Rights Agreement.

 

In addition, unless waived by BankMobile, the obligations of BankMobile to consummate the Merger are subject to the satisfaction of the following Closing conditions, in addition to customary certificates and other closing deliveries: (a) the representations and warranties of Megalith being true and correct as of the date of the Merger Agreement and as of the Closing (subject to Material Adverse Effect); (b) Megalith having performed in all material respects the respective obligations and complied in all material respects with their respective covenants and agreements under the Merger Agreement required to be performed or complied with on or prior the date of the Closing; (c) absence of any Material Adverse Effect with respect to Megalith since the date of the Merger Agreement which is continuing and uncured; (d) Megalith having delivered to BankMobile the Merger Consideration; and (e) a portion of BankMobile’s debt owed to the Stockholder in an amount equal to one half of the Remaining Trust Account Amount having been paid down by Megalith.

 

3

 

Unless waived by Megalith, the obligations of Megalith and Merger Sub to consummate the Merger are subject to the satisfaction of the following Closing conditions, in addition to customary certificates and other closing deliveries: (a) the representations and warranties of BankMobile and the Stockholder being true and correct as of the date of the Merger Agreement and as of the Closing (subject to Material Adverse Effect); (b) BankMobile having performed in all material respects the respective obligations and complied in all material respects with its covenants and agreements under the Merger Agreement required to be performed or complied with on or prior the date of the Closing; (c) absence of any Material Adverse Effect with respect to BankMobile as a whole since the date of the Merger Agreement which is continuing and uncured; and (d) each Lock-Up Agreements and Non-Competition Agreement being in full force and effect as of the Closing.

 

Termination

 

The Merger Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including:

 

by mutual agreement;

 

for the other party’s uncured breach;

 

if there is a government order preventing the Closing;

 

By either party if the Closing does not occur by November 25, 2020 (the “Outside Date”); provided that if Megalith seeks and receives stockholder approval for a charter amendment to extend the term it has to consummate a business combination (an “Extension”), Megalith can extend the Outside Date by the shortest of (i) three months, (ii) the period ending on the last day for Megalith to consummate a business combination after such Extension and (iii) such period as determined by Megalith;

 

By Megalith if there has been an event after the signing of the Merger Agreement that has had a Material Adverse Effect on BankMobile that is continuing and uncured;

 

By either party if the Megalith stockholders do not approve the Merger Agreement at the special meeting of Megalith stockholders; and

 

By Megalith if the Stockholder does not deliver the stockholder written consent within 24 hours after the execution and delivery of the Merger Agreement.

 

Trust Account Waiver

 

BankMobile and the Stockholder agree that each of them and each of their affiliates will not have any right, title, interest or claim of any kind in or to any monies in Megalith’s trust account held for its public shareholders, and agrees not to, and waives any right to, make any claim against the trust account (including any distributions therefrom).

 

Ancillary Agreements

 

During the period between signing of the Merger Agreement and Closing, Megalith, BankMobile and the Stockholder will negotiate in good faith the terms of certain agreements through which (i) the Stockholder will provide certain transition and other business services to the Surviving Corporation following the Closing and (ii) the Surviving Corporation will license to the Stockholder certain existing BankMobile mobile banking technology to allow the Stockholder to continue to service existing customers. The expected material terms of the (i) Transition Services Agreement, (ii) License Agreement, (iii) Deposit Servicing Agreement and (iv) Interchange Maintenance Agreement are set forth in term sheets attached as Exhibits A, B, C and D to the Merger Agreement.

 

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is attached to this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference.

 

The representations, warranties and covenants of each party set forth in the Merger Agreement have been made only for purposes of, and were and are solely for the benefit of the parties to, the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, the representations and warranties may not describe the actual state of affairs at the date they were made or at any other time, and investors should not rely on them as statements of fact. In addition, such representations and warranties (i) have certain limited exceptions, will not survive consummation of the Merger indefinitely unless otherwise stated in the Merger Agreement, and (ii) were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the parties’ public disclosures. Accordingly, the Merger Agreement is included with this filing only to provide investors with information regarding the terms of the Merger Agreement, and not to provide investors with any other factual information regarding Megalith, its respective affiliates or their respective businesses. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding Megalith, BankMobile or the Stockholder, their respective affiliates and their respective businesses included in the filings they make with the Securities and Exchange Commission.

 

4

 

Related Agreements

 

This section describes the material provisions of certain additional agreements entered into or to be entered into pursuant to the Merger Agreement (the “Related Agreements”) but does not purport to describe all of the terms thereof. The following summary is qualified in its entirety by reference to the complete text of each of the Related Agreements, copies of each of which are attached hereto as exhibits. Stockholders and other interested parties are urged to read such Related Agreements in their entirety.

 

Sponsor Share Letter

 

Concurrently with the execution of the Merger Agreement, Megalith’s sponsor, MFAC Investor Holdings, LLC (“Sponsor”), entered into a letter agreement (the “Sponsor Share Letter”) with Megalith and BankMobile, pursuant to which Sponsor agrees to (a) forfeit (i) all of its 6,195,778 private placement warrants unless $10 million remains in the trust account after the Redemption, in which case none of the warrants will be forfeited and (ii) 2,932,222 of its founder shares and (b) subject an additional 300,000 of its founder shares to potential vesting and forfeiture based on a stock-price based earnout over a seven year period from the Closing, and (c) transfer 101,703 of its founder shares to the Stockholder at Closing. Sponsor also acknowledged the transfer of (i) 178,495 of its founder shares to a private placement investor and it will also transfer 1,311,501 private placement warrants to such investor (unless such transfer would trigger a warrant price adjustment under section 4.3.2 of the warrant agreement), with such amounts subject to adjustment in accordance with the relevant investment documents.

 

Lock-Up Agreement

 

Simultaneously with the Closing, the Stockholder will enter into a lock-up agreement (the “Lock-up Agreement”) providing for a lock-up period commencing on the Closing Date and ending on the earlier of (x) 180 days from the Closing, (y) the date Megalith consummates a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party and (z) the date on which the closing sale price of the common stock of Megalith equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations and the like) for any twenty (20) trading days within any thirty (30) trading day period commencing at least ninety (90) days after the Closing; provided that commencing 90 days after the Closing the Stockholder may transfer shares in block trades or privately negotiated transactions if the transferee agrees to be bound by the Lock-Up Agreement.

 

Non-Competition and Non-Solicitation Agreement

 

Simultaneously with the Closing, the Stockholder will enter into a non-competition and non-solicitation agreement (the “Non-Competition Agreement”), pursuant to which it agrees not to compete with Megalith, BankMobile and their respective subsidiaries during the four-year period following the Closing and, during such four-year restricted period, not to solicit employees or customers or clients of such entities. The agreement also contains customary non-disparagement and confidentiality provisions.

 

Registration Rights Agreement

 

At the Closing, the Stockholder will enter into a registration rights agreement with Megalith providing for the right to three demand registrations, piggy-back registrations and shelf registrations with respect to the Merger Consideration Shares.

 

The foregoing descriptions of the Sponsor Share Letter, the Lock-Up Agreement, the Non-Competition Agreement and the Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the form of such agreements, which are attached to this Current Report on Form 8-K as Exhibits 10.1, 10.2, 10.3 and 10.4 and are incorporated herein by reference.

 

5

 

Private Placement

 

In connection with the proposed merger between Megalith and BankMobile (the “Merger”), Megalith entered into subscription agreements (the “Subscription Agreements”) with the investors named therein (the “PIPE Investors”), pursuant to which Megalith agreed to issue and sell to the PIPE Investors approximately $20,000,000 of Megalith Class A common stock immediately prior to closing of the Merger (the “PIPE Investment”). The PIPE Investment is conditioned on the concurrent closing of the merger and other customary closing conditions. The proceeds from the PIPE Investment will be used to fund a portion of the cash consideration for the Merger. The form of the Subscription Agreements is attached as Exhibit 10.5 hereto, and is incorporated herein by reference.

 

In connection with the Private Placement, the Sponsor, Megalith, and a PIPE Investor entered into an agreement (“Agreement to Transfer Sponsor Securities”), pursuant to which the Sponsor will transfer 178,495 founder shares and 1,311,501 private placement warrants to the PIPE Investor, unless such transfer would trigger a warrant price adjustment under section 4.3.2 of the warrant agreement. After the Closing until the PIPE Investor, its affiliates or managed funds collectively hold less than 15% of the issued and outstanding common stock of Megalith, the PIPE Investor will have the right to appoint one (1) member to the board of directors of Megalith, which appointee must be reasonably acceptable to the Nominating and Corporate Governance Committee of Megalith’s board of directors. The form of the Agreement to Transfer Sponsor Securities is attached as Exhibit 10.6 hereto, and is incorporated herein by reference.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The disclosure set forth above under the heading “Private Placement” in Item 1.01 of this Current Report is incorporated by reference into this Item 3.02. The Megalith Class A common stock issued in the PIPE Investment will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

 

Item 7.01 Regulation FD Disclosure.

 

On August 6, 2020, Megalith issued a press release announcing the execution of the Merger Agreement. The press release is attached hereto as Exhibit 99.1.

 

Attached as Exhibit 99.2 hereto is the investor presentation that will be used by Megalith.

 

The foregoing (including Exhibits 99.1 and 99.2) is being furnished pursuant to Item 7.01 and will not be deemed to be filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that section, nor will it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act.

 

6

 

Forward Looking Statements

 

Certain statements made herein are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “may”, “should”, “would”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “seem”, “seek”, “continue”, “future”, “will”, “expect”, “outlook” or other similar words, phrases or expressions. These forward-looking statements include statements regarding Megalith’s industry, future events, the proposed transaction between the parties, the estimated or anticipated future results and benefits of the combined company following the Merger, including the likelihood and ability of the parties to successfully consummate the proposed Merger, future opportunities for the combined company, and other statements that are not historical facts. These statements are based on the current expectations of Megalith’s management and are not predictions of actual performance. These statements are subject to a number of risks and uncertainties regarding Megalith’s businesses and the transaction, and actual results may differ materially. These risks, uncertainties, assumptions and other important factors include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement and the proposed Merger contemplated thereby; (2) the inability to complete the transactions contemplated by the Merger Agreement due to the failure to obtain approval of the stockholders of Megalith or other conditions to closing in the Merger Agreement; (3) the inability to meet the minimum cash requirements of the Merger Agreement due to the inability to consummate the PIPE Investment or the amount of cash available following any redemptions by Megalith stockholders; (4) the ability to meet NYSE’s listing standards following the consummation of the transactions contemplated by the Merger Agreement; (5) the risk that the proposed transaction disrupts current plans and operations of BankMobile as a result of the announcement and consummation of the transaction described herein; (6) the ability to recognize the anticipated benefits of the proposed Merger, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; (7) costs related to the proposed Merger; (8) changes in applicable laws or regulations; (9) the possibility that BankMobile may be adversely affected by other economic, business, and/or competitive factors; (10) Megalith’s ability to identify and integrate acquisition; and (11) other risks and uncertainties indicated from time to time in the final prospectus of Megalith, including those under “Risk Factors” therein, and other documents filed or to be filed with the Securities and Exchange Commission (“SEC”) by Megalith. There may be additional risks that Megalith presently does not know or that Megalith currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements provide Megalith’s expectations, plans or forecasts of future events and views as of the date of this communication. Megalith anticipates that subsequent events and developments will cause Megalith’s assessments to change. However, while Megalith may elect to update these forward-looking statements at some point in the future, Megalith specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Megalith’s assessments as of any date subsequent to the date of this communication.

  

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

The following exhibits are being filed herewith:

 

Exhibit No.   Description
2.1†   Agreement and Plan of Merger, dated August 6, 2020, by and among Megalith, Merger Sub, BankMobile, and the Stockholder.
10.1   Sponsor Share Letter, dated August 6, 2020, by and among Sponsor, Megalith and the Stockholder.
10.2   Form of Lock-up Agreement.
10.3   Form of Non-Competition Agreement.
10.4   Form of Registration Rights Agreement.
10.5   Form of Subscription Agreement.
10.6   Form of Agreement to Transfer Sponsor Securities, dated August 5, 2020, by and among Sponsor, Megalith and investors named therein.
99.1   Press Release, dated August 6, 2020.
99.2   Investor Presentation, dated August 6, 2020.

 

Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the Securities and Exchange Commission upon its request.

 

7

 

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.

 

  MEGALITH FINANCIAL ACQUISITION CORP.
     
  By: /s/ A.J. Dunklau
    Name: A.J. Dunklau
    Title: Chief Executive Officer
     
Dated: August 6, 2020    

 

 

 

8

 

 

Exhibit 2.1

 

 

 

AGREEMENT AND PLAN OF MERGER

 

by and among

 

Megalith Financial Acquisition Corp.,

as the Purchaser,

 

MFAC Merger Sub Inc.,
as Merger Sub,

 

Customers Bank,
in the capacity as the Company Stockholder,

 

and

 

BankMobile Technologies, Inc.,
as the Company,

 

Dated as of August 6, 2020

 

 

 

 

 

TABLE OF CONTENTS

 

  Page
   
I. merger 2
1.1. Merger 2
1.2. Effective Time 2
1.3. Effect of the Merger 2
1.4. Tax Treatment 2
1.5. Articles of Incorporation and Bylaws 3
1.6. Directors and Officers of the Transaction Surviving Corporation 3
1.7. Reserved 3
1.8. Amended Certificate of Incorporation the Purchaser 3
1.9. Merger Consideration 3
1.10. Effect of Merger on Company Stock 4
1.11. Surrender of Company Stock and Payment of Merger Consideration 4
1.12. Effect of Transaction on Merger Sub Stock 5
1.13. Closing Calculations 5
1.14. Merger Consideration Adjustment 6
1.15. Taking of Necessary Action; Further Action 7
   
II. CLOSING 8
2.1. Closing 8
   
III. representations and warranties of THE purchaser 8
3.1. Organization and Standing 8
3.2. Authorization; Binding Agreement 8
3.3. Governmental Approvals 9
3.4. Non-Contravention 9
3.5. Capitalization 9
3.6. SEC Filings and Purchaser Financials 10
3.7. Absence of Certain Changes 11
3.8. Compliance with Laws 11
3.9. Actions; Orders; Permits 11
3.10. Taxes and Returns 12
3.11. Employees and Employee Benefit Plans 12
3.12. Properties 12
3.13. Material Contracts 12
3.14. Transactions with Affiliates 13
3.15. Merger Sub Activities 13
3.16. Investment Company Act 13
3.17. Finders and Brokers 13
3.18. Ownership of the Merger Consideration Shares 13
3.19. Certain Business Practices 13
3.20. Insurance 14
3.21. Independent Investigation 14
   
Iv. representations and warranties of THE COMPANY 14
4.1. Organization and Standing 15
4.2. Authorization; Binding Agreement 15
4.3. Capitalization 15
4.4. Subsidiaries 16
4.5. Governmental Approvals 16
4.6. Non-Contravention 16
4.7. Financial Statements 17

 

-i-

 

4.8. Absence of Certain Changes 18
4.9. Compliance with Laws 18
4.10. Company Permits 18
4.11. Litigation 19
4.12. Material Contracts 19
4.13. Intellectual Property 21
4.14. Taxes and Returns 23
4.15. Real Property 24
4.16. Personal Property 25
4.17. Title to and Sufficiency of Assets 25
4.18. Employee Matters 25
4.19. Benefit Plans 26
4.20. Environmental Matters 28
4.21. Transactions with Related Persons 29
4.22. Insurance 30
4.23. Books and Records 30
4.24. Top Customers and Suppliers 30
4.25 Certain Business Practices 30
4.26 Investment Company Act 31
4.27. Finders and Brokers 31
4.28. Independent Investigation 31
4.29. Information Supplied 31
4.30. Disclosure 31
   
V. representations and warranties of COMPANY STOCKHOLDER 32
5.1. Organization and Standing 32
5.2. Authorization; Binding Agreement 32
5.3. Ownership 32
5.4. Non-Contravention 32
5.5  Finders and Brokers 32
5.6. QIB Status 32
   
VI. COVENANTS 33
6.1. Access and Information 33
6.2. Conduct of Business of the Company 34
6.3. Conduct of Business of the Purchaser 36
6.4. Annual and Interim Financial Statements 38
6.5. Purchaser Public Filings 38
6.6. No Solicitation 38
6.7. No Trading 39
6.8. Notification of Certain Matters 39
6.9. Efforts 40
6.10. Tax Matters 41
6.11. Further Assurances 41
6.12. The Proxy Statement 41
6.14. Public Announcements 43
6.15. Confidential Information 44
6.16. Documents and Information 45
6.17. Post-Closing Board of Directors and Executive Officers 45
6.18. Indemnification of Officers and Directors; Tail Insurance 46
6.19. Trust Account Proceeds 46

 

-ii-

 

6.20. PIPE Investment 47
6.21. Stockholder Written Consent 47
6.22. Audited Financial Statements 47
6.23. Transition Agreements 47
   
vII. survival and indemnification 48
7.1. Survival 48
7.2. Indemnification 48
7.3. Limitations and General Indemnification Provisions 49
7.4. Indemnification Procedures 50
7.5. Indemnification Payments 51
7.6. Exclusive Remedy 52
   
VIII. Closing conditions 52
8.1. Conditions of Each Party’s Obligations 52
8.2. Conditions to Obligations of the Company 53
8.3. Conditions to Obligations of the Purchaser 55
8.4. Frustration of Conditions 57
   
IX. TERMINATION AND EXPENSES 57
9.1. Termination 57
9.2. Effect of Termination 58
9.3. Fees and Expenses 58
   
x. WAIVERS 59
10.1. Waiver of Claims Against Trust 59
   
xI. MISCELLANEOUS 60
11.1. Notices 60
11.2. Binding Effect; Assignment 61
11.3. Third Parties 61
11.4. Arbitration 61
11.5. Governing Law; Jurisdiction 62
11.6. WAIVER OF JURY TRIAL 62
11.7. Specific Performance 62
11.8. Severability 63
11.9. Amendment 63
11.10. Waiver 63
11.11. Entire Agreement 63
11.12. Interpretation 64
11.13. Counterparts 65
11.14. Reserved 65
11.15. Reserved 65
11.16. Legal Representation 65
   
XII DEFINITIONS 66
12.1. Certain Definitions 66
12.2. Section References 76

 

-iii-

 

INDEX OF EXHIBITS

 

Exhibit

  Description
Exhibit A   Transition Services Agreement Term Sheet
Exhibit B   License Agreement Term Sheet
Exhibit C   Deposit Servicing Agreement Term Sheet
Exhibit D   Interchange Maintenance Agreement Term Sheet
Exhibit E   Form of Sponsor Share Letter
Exhibit F   Form of Amended Purchaser Organizational Documents
Exhibit G   Form of Lock-Up Agreement
Exhibit H   Form of Non-Competition Agreement
Exhibit I   Form of Registration Rights Agreement

 

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AGREEMENT AND PLAN OF MERGER

 

This Agreement and Plan of Merger (this “Agreement”) is made and entered into as of August 6, 2020 by and among (i) Megalith Financial Acquisition Corp, a company incorporated in Delaware (together with its successors, the “Purchaser”), (ii) MFAC Merger Sub Inc., a Pennsylvania corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub), (iii) Customers Bank, a Pennsylvania state chartered bank and the sole stockholder of the Company (defined below) (the “Company Stockholder”), and (iv) BankMobile Technologies, Inc., a Pennsylvania corporation (the “Company”). The Purchaser, Merger Sub, the Company Stockholder and the Company are sometimes referred to herein individually as a “Party” and, collectively, as the “Parties.”

 

RECITALS:

 

A. WHEREAS, the Company Stockholder directly owns all of the issued and outstanding capital stock of the Company;

 

B. WHEREAS, the Purchaser owns all of the issued and outstanding capital stock of Merger Sub, which was formed for the sole purpose of the Merger (as defined below);

 

C. WHEREAS, the Parties intend to effect the merger of the Company with and into, Merger Sub with the Merger Sub continuing as the surviving entity (the “Merger”), as a result of which (i) all of the issued and outstanding capital stock of the Company immediately prior to the Effective Time, shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, in exchange for the right for the Company Stockholder to receive the Merger Consideration (as defined herein), all upon the terms and subject to the conditions set forth in this Agreement and in accordance with the applicable provisions of the Pennsylvania Business Corporation Law (as amended, the “PBCL”), all in accordance with the terms of this Agreement;

 

D. WHEREAS, the boards of directors of the Company, the Purchaser and Merger Sub have each (i) determined that the Merger is fair, advisable and in the best interests of their respective companies and stockholders, (ii) approved this Agreement and the transactions contemplated hereby, including the Merger, upon the terms and subject to the conditions set forth herein, and (iii) determined to recommend to their respective stockholders the approval and adoption of this Agreement and the transactions contemplated hereby, including the Merger;

 

E. WHEREAS, concurrently with the closing of the Merger, (i) the Company Stockholder and the Purchaser shall enter into a transition services agreement, on commercially reasonable terms to be agreed between the parties prior to the closing of the Merger on terms substantially as set forth in Exhibit A (the “Transition Services Agreement”), (ii) the Company Stockholder and the Company shall enter into a license agreement on commercially reasonable terms to be agreed between the parties prior to the closing of the Merger on terms substantially as set forth in Exhibit B, granting the Company Stockholder a royalty-free ten (10) year non-exclusive license to use the Company’s mobile banking technology, (the “License Agreement”), (iii) the Company Stockholder and the Company shall enter into a deposit servicing agreement (the “Deposit Servicing Agreement”), on commercially reasonable terms to be agreed between the parties prior to the closing of the Merger on terms substantially as set forth in Exhibit C, (iv) and the Company Stockholder and the Company shall enter into an Interchange Maintenance Agreement (the “Interchange Maintenance Agreement,” and together with the License Agreement, Deposit Servicing Agreement, the “Transition Agreements”) on commercially reasonable terms to be agreed between the parties prior to the closing of the Merger on terms substantially as set forth in Exhibit D.

 

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F. WHEREAS, simultaneously with the execution and delivery of this Agreement, Purchaser’s sponsor, MFA Investor Holdings, LLC, a Delaware limited liability company (the “Sponsor”), is entering into a letter agreement with the Purchaser and the Company, (the “Sponsor Share Letter”), a copy of which is attached as Exhibit E hereto, pursuant to which the Sponsor is agreeing to (a) forfeit (i) all of the 6,195,778 private placement warrants that it acquired at the time of the Purchaser’s initial public offering; provided however that none of the private placement warrants shall be forfeited if the Purchaser retains funds in the Trust Account in excess of at least Ten Million Dollars ($10,000,000) after the Redemption (defined herein below) and (ii) 2,932,222 of the Founder Shares (as defined herein) that it owns as of the Closing; (b) subject an additional 300,000 of its Founder Shares to potential vesting and forfeiture pursuant to a stock-price based earn-out over a seven year period from the Closing; (c) transfer 101,703 Founder Shares to the Company Stockholder at the Closing; and (d) acknowledge the transfer to investors who are not affiliated with the Purchaser in connection with a PIPE Investment (defined below) of (i) 178,495 Founder Shares and (ii) 1,311,501 private placement warrants (unless such transfer would trigger a warrant price adjustment under section 4.3.2 of the warrant agreement); provided that the number of Founder Shares and private placement warrants transferred in clauses (c) and (d) above are subject to adjustment in accordance with the relevant investment documents.

 

G. WHEREAS, certain capitalized terms used herein are defined in Article XII hereof.

 

NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the Parties hereto agree as follows:

 

Article I
Merger

 

1.1 Merger. At the Effective Time, and subject to and upon the terms and conditions of this Agreement, and in accordance with the applicable provisions of the PBCL, Merger Sub and the Company shall consummate the Merger, pursuant to which the Company shall be merged with and into Merger Sub, following which the separate corporate existence of the Company shall cease and Merger Sub shall continue as the surviving corporation. Merger Sub, as the surviving corporation after the Merger, is hereinafter sometimes referred to as the “Surviving Corporation” (provided, that references to Merger Sub for periods after the Effective Time shall include the Surviving Corporation).

 

1.2 Effective Time. The Parties hereto shall cause the Merger to be consummated by filing the Statement of Merger for the merger of the Company with and into Merger Sub (the “Statement of Merger”) with the Secretary of State of the Commonwealth of Pennsylvania in accordance with the relevant provisions of the PBCL (the time of such filing, or such later time as may be specified in the Statement of Merger, being the “Effective Time”).

 

1.3 Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Statement of Merger and the applicable provisions of the PBCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of the Company and Merger Sub shall become the property, rights, privileges, agreements, powers and franchises, debts, Liabilities, duties and obligations of the Surviving Corporation, which shall include the assumption by the Surviving Corporation of any and all agreements, covenants, duties and obligations of the Company and Merger Sub set forth in this Agreement to be performed after the Effective Time.

 

1.4 Tax Treatment. For federal income tax purposes, the Merger is intended to constitute a “reorganization” within the meaning of Section 368 of the Code. The Parties adopt this Agreement as a “plan of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.

 

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1.5 Articles of Incorporation and Bylaws. At the Effective Time, the Articles of Incorporation and Bylaws of Merger Sub, each as in effect immediately prior to the Effective Time, shall automatically be amended and restated in their entirety to read identically to the Articles of Incorporation and Bylaws of the Company, as in effect immediately prior to the Effective Time, and such amended and restated Articles of Incorporation and Bylaws shall become the respective Articles of Incorporation and Bylaws of the Surviving Corporation; provided that the name of the Surviving Corporation in such Articles of Incorporation and Bylaws shall be changed to a name to be mutually agreed by the Parties.

 

1.6 Directors and Officers of the Surviving Corporation. At the Effective Time, the board of directors and executive officers of the Surviving Corporation shall be the board of directors and executive officers of the Purchaser, after giving effect to Section 6.17, each to hold office in accordance with the Articles of Incorporation and Bylaws of the Surviving Corporation until their respective successors are duly elected or appointed and qualified or their earlier death, resignation or removal.

 

1.7 Reserved.

 

1.8 Amended Certificate of Incorporation of the Purchaser. Prior to the Effective Time, the Purchaser shall adopt amended Delaware Organizational Documents in substantially the form attached as Exhibit F hereto, which shall amend the Purchaser’s Articles of Incorporation to (i) provide that the name of the Purchaser shall be changed to BM Technologies, Inc., or such other name as mutually agreed to by the Parties and (ii) remove and change certain provisions in the Articles of Incorporation related to the Purchaser’s status as a blank check company.

 

1.9 Merger Consideration.

 

(a) At the Closing, subject to and upon the terms and conditions of this Agreement, as consideration for the Merger, the Company Stockholder shall be entitled to receive from the Purchaser, an amount equal to (the “Merger Consideration”) (a) the Enterprise Value, minus (b) the Sponsor Equity Adjustment, plus (or minus if negative) (c) the Net Working Capital less the Target Net Working Capital Amount, minus (d) the amount of Closing Indebtedness, and minus (e) the amount of any unpaid Company Transaction Expenses, Purchaser’s transaction expenses and any other Liabilities of Purchaser due and owing at Closing. The Merger Consideration will be estimated at Closing based on the Estimated Closing Statement delivered pursuant to Section 1.13 and adjusted after Closing in accordance with Section 1.14.

 

(b) The Merger Consideration will be paid in the form of:

 

(i) an amount in cash (the “Cash Consideration”), which amount shall not be less than zero, equal to the sum of:

 

(A) The amount of any proceeds from PIPE Investment; plus

 

(B) An amount equal to one-half (1/2) of the difference between (i) the aggregate cash and cash equivalents of the Purchaser on hand or in bank accounts, including deposits in transit, minus the aggregate amount of outstanding and unpaid checks issued by or on behalf of the Purchaser as of such time, including any funds in the Trust Account after giving effect to the completion of the Redemption but excluding the proceeds of any PIPE Investment, less (ii) a cash reserve which shall be used for the benefit of the Surviving Corporation in an amount equal to Ten Million Dollars ($10,000,000) (the difference of the amounts in clause (i) and (ii) above, which resulting amount if otherwise negative shall be equal to zero, the “Remaining Trust Account Amount”); minus

 

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(C) the Purchaser’s transaction expenses and any other Liabilities of Purchaser due and owing at Closing; plus

 

(D) the aggregate cash and cash equivalents of the Company on hand or in bank accounts, including deposits in transit, minus the aggregate amount of outstanding and unpaid checks issued by or on behalf of the Company as of such time; minus

 

(E) the unpaid Company Transaction Expenses; minus

 

(F) a cash reserve of Five Million Dollars ($5,000,000).

 

(ii) a number of shares of Purchaser Class A Common Stock (the “Merger Consideration Shares”) with an aggregate value equal to (the “Merger Consideration Share Amount”): (a) the Merger Consideration, minus (b) the Cash Consideration, with the Company Stockholder receiving a number of shares of Purchaser Class A Common Stock equal to (i) the Merger Consideration Share Amount, divided by (ii) the Per Share Price; provided, that the Merger Consideration is subject to adjustment in accordance with Section 1.14 and reduction for the indemnification obligations of the Company Stockholder set forth in Article VII.

 

1.10 Effect of Merger on Company Stock. At the Effective Time, by virtue of the Merger and without any action on the part of any Party or the holders of any shares of capital stock of the Purchaser or Merger Sub:

 

(a) Company Stock. Subject to clause (b) below, all shares of Company Stock issued and outstanding immediately prior to the Effective Time will automatically be cancelled and cease to exist in exchange for the right to receive the Merger Consideration (as it may be adjusted after the Closing pursuant to Section 1.14), with the Company Stockholder being entitled to receive the Merger Consideration, without interest, upon surrender of its certificates representing shares of Company Common Stock (the “Company Certificates”). As of the Effective Time, the Company Stockholder shall cease to have any other rights in and to the Company or the Surviving Corporation.

 

(b) Treasury Stock. Notwithstanding clause (a) above or any other provision of this Agreement to the contrary, at the Effective Time, if there are any shares of Company Stock that are owned by the Company as treasury shares immediately prior to the Effective Time, such shares of Company Stock shall be canceled and shall cease to exist without any conversion thereof or payment therefor.

 

(c) Company Convertible Securities. At or prior to the Closing, the Company will terminate any issued and outstanding Company Convertible Securities, without any consideration, payment or Liability therefor.

 

1.11 Surrender of Company Stock and Disbursement of Merger Consideration.

 

(a) The Company Stockholder shall be entitled to receive the Merger Consideration in respect of the Company Stock represented by the Company Certificate(s) (excluding any Company Stock described in Sections 1.10(b), as soon as reasonably practicable after the Effective Time, but subject to the delivery to the Purchaser of the following items prior thereto: (i) the Company Certificate(s) for its Company Stock (or a Lost Certificate Affidavit), and (ii) such other documents as may be reasonably requested by the Purchaser. Until so surrendered, each Company Certificate shall represent after the Effective Time for all purposes only the right to receive such portion of the Merger Consideration (as it may be adjusted after the Closing pursuant to Section 1.14) attributable to such Company Certificate.

 

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(b) Notwithstanding anything to the contrary contained herein, in the event that any Company Certificate shall have been lost, stolen or destroyed, in lieu of delivery of a Company Certificate to the Exchange Agent, the Company Stockholder may instead deliver to the Purchaser an affidavit of lost certificate and indemnity of loss in form and substance reasonably acceptable to the Purchaser (a “Lost Certificate Affidavit”), which at the reasonable discretion of the Purchaser may include a requirement that the owner of such lost, stolen or destroyed Company Certificate deliver a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against the Purchaser or the Surviving Corporation with respect to the shares of Company Stock represented by the Company Certificates alleged to have been lost, stolen or destroyed. Any Lost Certificate Affidavit properly delivered in accordance with this Section 1.11(b) shall be treated as a Company Certificate for all purposes of this Agreement.

 

(c) All Purchaser Common Stock issued upon the surrender of Company Stock in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to such Company Stock. Notwithstanding the foregoing, none of the Surviving Corporation, the Purchaser or any Party hereto shall be liable to any Person for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

 

(d) Notwithstanding anything to the contrary contained herein, no fraction of a share of Purchaser Common Stock will be issued by virtue of the Merger or the transactions contemplated hereby, and each Person who would otherwise be entitled to a fraction of a share of Purchaser Common Stock (after aggregating all fractional shares of Purchaser Common Stock that otherwise would be received by such holder) shall instead have the number of shares of Purchaser Common Stock issued to such Person rounded down in the aggregate to the nearest whole share of Purchaser Common Stock.

 

1.12 Effect of Transaction on Merger Sub Stock. At the Effective Time, by virtue of the Merger and without any action on the part of any Party or the holders of any shares of capital stock of the Purchaser or Merger Sub, each share of Merger Sub Stock outstanding immediately prior to the Effective Time shall be converted into an equal number of shares of common stock of the Surviving Corporation, with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.

 

1.13 Closing Calculations. At least three (3) Business Days prior to the Closing Date, the Company shall deliver to the Purchaser a statement certified by the Company’s chief executive officer (the “Estimated Closing Statement”) setting forth a good faith calculation of the Company’s estimate of the Closing Indebtedness, Net Working Capital and Company Transaction Expenses, in each case, as of the Reference Time, and the resulting Merger Consideration and Merger Consideration Shares based on such estimates, in reasonable detail including for each component thereof, along with the amount owed to each creditor of the Company, and bank statements and other evidence reasonably necessary to confirm such calculations. Promptly upon delivering the Estimated Closing Statement to the Purchaser, if requested by the Purchaser, the Company will meet with the Purchaser to review and discuss the Estimated Closing Statement and the Company will consider in good faith the Purchaser’s comments to the Estimated Closing Statement and make any appropriate adjustments to the Estimated Closing Statement prior to the Closing, which adjusted Estimated Closing Statement, as mutually approved by the Company and the Purchaser both acting reasonably and in good faith, shall thereafter become the Estimated Closing Statement for all purposes of this Agreement. The Estimated Closing Statement and the determinations contained therein shall be prepared in accordance with the Accounting Principles and otherwise in accordance with this Agreement.

 

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1.14 Merger Consideration Adjustment.

 

(a) Within ninety (90) days after the Closing Date, Purchaser’s Chief Financial Officer (the “CFO”) shall deliver to the Disinterested Director Majority and the Company Stockholder a statement (the “Closing Statement”) setting forth (i) a consolidated balance sheet of the Company as of the Reference Time and (ii) a good faith calculation of the Closing Indebtedness, Net Working Capital and Company Transaction Expenses, in each case, as of the Reference Time, and the resulting Merger Consideration using the formula in Section 1.9. The Closing Statement shall be prepared, and the Closing Indebtedness, Net Working Capital, and Company Transaction Expenses and the resulting Merger Consideration and Merger Consideration Shares shall be determined in accordance with the Accounting Principles and otherwise in accordance with this Agreement.

 

(b) After delivery of the Closing Statement, each of the Company Stockholder and the Disinterested Director Majority, and their respective Representatives on their behalves, shall be permitted reasonable access to the books, records, working papers, files, facilities and personnel of the Company relating to the preparation of the Closing Statement. The Company Stockholder and the Disinterested Director Majority, and their respective Representatives on their behalves, may make inquiries of the CFO and related Purchaser and Company personnel and advisors regarding questions concerning or disagreements with the Closing Statement arising in the course of their review thereof, and Purchaser and the Company shall provide reasonable cooperation in connection therewith. If either the Company Stockholder or the Disinterested Director Majority (each, a “Representative Party”) has any objections to the Closing Statement, such Representative Party shall deliver to the CFO and the other Representative Party a statement setting forth its objections thereto (in reasonable detail) (an “Objection Statement”). If an Objection Statement is not delivered by a Representative Party within thirty (30) days following the date of delivery of the Closing Statement, then such Representative Party will have waived its right to contest the Closing Statement, all determinations and calculations set forth therein, and the resulting Merger Consideration set forth therein. If an Objection Statement is delivered within such thirty (30) day period, then the Company Stockholder and the Disinterested Director Majority shall negotiate in good faith to resolve any such objections for a period of twenty (20) days thereafter. If the Company Stockholder and the Disinterested Director Majority do not reach a final resolution within such twenty (20) day period, then upon the written request of either Representative Party (the date of receipt of such notice by the other Party, the “Independent Expert Notice Date”), the Representative Parties will refer the dispute to the Independent Expert for final resolution of the dispute in accordance with Section 1.14(c). For purposes hereof, the “Independent Expert” shall mean a mutually acceptable independent (i.e., no prior material business relationship with any party for the prior two (2) years) accounting firm appointed by the Disinterested Director Majority and the Company Stockholder, which appointment will be made no later than ten (10) days after the Independent Expert Notice Date); provided, that if the Independent Expert does not accept its appointment or if the Disinterested Director Majority and the Company Stockholder cannot agree on the Independent Expert, in either case within twenty (20) days after the Independent Expert Notice Date, either Representative Party may require, by written notice to the other Representative Party, that the Independent Expert be selected by the New York City Regional Office of the AAA in accordance with the AAA’s procedures. The parties agree that the Independent Expert will be deemed to be independent even though a Party or its Affiliates may, in the future, designate the Independent Expert to resolve disputes of the types described in this Section 1.14. The Parties acknowledge that any information provided pursuant to this Section 1.14 will be subject to the confidentiality obligations of Section 6.15.

 

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(c) If a dispute with respect to the Closing Statement is submitted in accordance with this Section 1.14 to the Independent Expert for final resolution, the Parties will follow the procedures set forth in this Section 1.14(c). Each of the Company Stockholder and the Disinterested Director Majority agrees to execute, if requested by the Independent Expert, a reasonable engagement letter with respect to the determination to be made by the Independent Expert. All fees and expenses of the Independent Expert will be borne by the Purchaser. Except as provided in the preceding sentence, all other costs and expenses incurred by the Company Stockholder in connection with resolving any dispute hereunder before the Independent Expert will be borne by the Company Stockholder, and all other costs and expenses incurred by the Disinterested Director Majority in connection with resolving any dispute hereunder before the Independent Expert will be borne by the Purchaser. The Independent Expert will determine only those issues still in dispute as of the Independent Expert Notice Date and the Independent Expert’s determination will be based solely upon and consistent with the terms and conditions of this Agreement. The determination by the Independent Expert will be based solely on presentations with respect to such disputed items by the Disinterested Director Majority and the Company Stockholder to the Independent Expert and not on the Independent Expert’s independent review; provided, that such presentations will be deemed to include any work papers, records, accounts or similar materials delivered to the Independent Expert by a Representative Party in connection with such presentations and any materials delivered to the Independent Expert in response to requests by the Independent Expert. Each of the Company Stockholder and the Disinterested Director Majority will use their reasonable efforts to make their respective presentations as promptly as practicable following submission to the Independent Expert of the disputed items, and each such Representative Party will be entitled, as part of its presentation, to respond to the presentation of the other Representative Party and any questions and requests of the Independent Expert. In deciding any matter, the Independent Expert will be bound by the provisions of this Agreement, including this this Section 1.14. It is the intent of the parties hereto that the activities of the Independent Expert in connection herewith are not (and should not be considered to be or treated as) an arbitration proceeding or similar arbitral process and that no formal arbitration rules should be followed (including rules with respect to procedures and discovery). The Company Stockholder and the Disinterested Director Majority will request that the Independent Expert’s determination be made within forty-five (45) days after its engagement, or as soon thereafter as possible, will be set forth in a written statement delivered to the Disinterested Director Majority and the Company Stockholder and will be final, conclusive, non-appealable and binding for all purposes hereunder (other than for fraud or manifest error).

 

(d) For purposes hereof, the term “Adjustment Amount” shall mean (x) the Merger Consideration as finally determined in accordance with this Section 1.14, less (y) the Merger Consideration that was issued at the Closing pursuant to the Estimated Closing Statement.

 

(i) If the Adjustment Amount is a positive number, then Purchaser shall, within ten (10) Business Days after such final determination of the Merger Consideration, issue to the Company Stockholder an additional number of shares of Purchaser Common Stock equal to (x) the Adjustment Amount, divided by (y) the Per Share Price. Such additional shares of Purchaser Common Stock shall be considered additional Merger Consideration under this Agreement and “Restricted Securities” under the Lock-Up Agreement.

 

(ii) If the Adjustment Amount is a negative number, then the Company Stockholder shall, within three (3) Business Days after such final determination, deliver to Purchaser a number of shares of Purchaser Common Stock with a value equal to the absolute value of the Adjustment Amount (with each share of Purchaser Common Stock valued at the Per Share Price). Purchaser will promptly cancel any shares of Purchaser Common Stock delivered to it by the Company Stockholder promptly after its receipt thereof.

 

1.15 Taking of Necessary Action; Further Action. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Company and Merger Sub, the officers and directors of the Company and Merger Sub are fully authorized in the name of their respective corporations or otherwise to take, and will take, all such lawful and necessary action, so long as such action is not inconsistent with this Agreement.

 

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Article II
CLOSING

 

2.1 Closing. Subject to the satisfaction or waiver of the conditions set forth in Article VIII, the consummation of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Ellenoff Grossman & Schole, LLP (“EGS”), counsel to the Purchaser, 1345 Avenue of the Americas, New York, NY 10105, on a date and at a time to be agreed upon by Purchaser and the Company, which date shall be no later than the second (2nd) Business Day after all the Closing conditions to this Agreement have been satisfied or waived, or at such other date, time or place as the Purchaser and the Company may agree (the date and time at which the Closing is actually held being the “Closing Date”).

 

Article III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

Except as set forth in (i) the disclosure schedules delivered by the Purchaser to the Company on the date hereof (the “Purchaser Disclosure Schedules”), the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer, or (ii) the SEC Reports that are available on the SEC’s website through EDGAR, the Purchaser represents and warrants to the Company, as of the date hereof and as of the Closing, as follows:

 

3.1 Organization and Standing. The Purchaser is a company duly incorporated, validly existing and in good standing under the Laws of Delaware. The Purchaser has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. The Purchaser is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed or in good standing can be cured without material cost or expense. The Purchaser has heretofore made available to the Company accurate and complete copies of its Organizational Documents, as currently in effect. The Purchaser is not in violation of any provision of its Organizational Documents in any material respect.

 

3.2 Authorization; Binding Agreement. The Purchaser has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is a party, to perform the Purchaser’s obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby, subject to obtaining the Required Stockholder Approval. The execution and delivery of this Agreement and each Ancillary Document to which it is a party and the consummation of the transactions contemplated hereby and thereby (a) have been duly and validly authorized by the board of directors of the Purchaser, and (b) other than the Required Stockholder Approval, no other corporate proceedings, other than as set forth elsewhere in the Agreement, on the part of the Purchaser are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which the Purchaser is a party shall be when delivered, duly and validly executed and delivered by the Purchaser and, assuming the due authorization, execution and delivery of this Agreement and such Ancillary Documents by the other parties hereto and thereto, constitutes, or when delivered shall constitute, the valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except to the extent that enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization and moratorium laws and other laws of general application affecting the enforcement of creditors’ rights generally or by any applicable statute of limitation or by any valid defense of set-off or counterclaim, and the fact that equitable remedies or relief (including the remedy of specific performance) are subject to the discretion of the court from which such relief may be sought (collectively, the “Enforceability Exceptions”).

 

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3.3 Governmental Approvals. Except as otherwise described in Schedule 3.3, no Consent of or with any Governmental Authority, on the part of the Purchaser is required to be obtained or made in connection with the execution, delivery or performance by the Purchaser of this Agreement and each Ancillary Document to which it is a party or the consummation by the Purchaser of the transactions contemplated hereby and thereby, other than (a) pursuant to Antitrust Laws, (b) such filings as contemplated by this Agreement, (c) any filings required with NYSE or the SEC with respect to the transactions contemplated by this Agreement, (d) applicable requirements, if any, of the Securities Act, the Exchange Act, and/or any state “blue sky” securities Laws, and the rules and regulations thereunder, and (e) where the failure to obtain or make such Consents or to make such filings or notifications, would not reasonably be expected to have a Material Adverse Effect on the Purchaser.

 

3.4 Non-Contravention. Except as otherwise described in Schedule 3.4, the execution and delivery by the Purchaser of this Agreement and each Ancillary Document to which it is a party, the consummation by the Purchaser of the transactions contemplated hereby and thereby, and compliance by the Purchaser with any of the provisions hereof and thereof, will not (a) conflict with or violate any provision of the Purchaser’s Organizational Documents, (b) subject to obtaining the Consents from Governmental Authorities referred to in Section 3.3 hereof, and the waiting periods referred to therein having expired, and any condition precedent to such Consent or waiver having been satisfied, conflict with or violate any Law, Order or Consent applicable to the Purchaser or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by the Purchaser under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien upon any of the properties or assets of the Purchaser under, (viii) give rise to any obligation to obtain any third party Consent or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any Purchaser Material Contract, except for any deviations from any of the foregoing clauses (b) or (c) that would not reasonably be expected to have a Material Adverse Effect on the Purchaser.

 

3.5 Capitalization.

 

(a) Purchaser is authorized to issue (i) 100,000,000 shares of Purchaser Class A Common Stock, (ii) 10,000,000 shares of Purchaser Class B Common Stock, and 1,000,000 shares of Purchaser Preferred Stock. The issued and outstanding Purchaser Securities as of the date of this Agreement are set forth on Schedule 3.5(a). There are no issued or outstanding shares of Purchaser Preferred Stock. All outstanding shares of Purchaser Common Stock are duly authorized, validly issued, fully paid and non-assessable and are not subject to or issued in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Delaware General Corporation Law (as amended, the “DGCL”) Purchaser’s Organizational Documents or any Contract to which Purchaser is a party. None of the outstanding Purchaser Securities has been issued in violation of any applicable securities Laws.

 

(b) Prior to giving effect to the Merger, Merger Sub is authorized to issue 1,000 shares of Merger Sub Stock, of which 1,000 shares are issued and outstanding, and all of which are owned by the Purchaser. Prior to giving effect to the transactions contemplated by this Agreement, other than Merger Sub, Purchaser does not have any Subsidiaries or own any equity interests in any other Person.

 

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(c) Except as set forth in Schedule 3.5(a) or Schedule 3.5(c) there are no (i) outstanding options, warrants, puts, calls, convertible securities, preemptive or similar rights, (ii) bonds, debentures, notes or other Indebtedness having general voting rights or that are convertible or exchangeable into securities having such rights or (iii) subscriptions or other rights, agreements, arrangements, Contracts or commitments of any character (other than this Agreement and the Ancillary Documents), (A) relating to the issued or unissued shares of Purchaser or (B) obligating Purchaser to issue, transfer, deliver or sell or cause to be issued, transferred, delivered, sold or repurchased any options or shares or securities convertible into or exchangeable for such shares, or (C) obligating Purchaser to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment for such capital shares. Other than the Redemption or as expressly set forth in this Agreement, there are no outstanding obligations of Purchaser to repurchase, redeem or otherwise acquire any shares of Purchaser or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any Person. Except as set forth in Schedule 3.5(c), there are no stockholder agreements, voting trusts or other agreements or understandings to which Purchaser is a party with respect to the voting of any shares of Purchaser.

 

(d) All Indebtedness of Purchaser as of the date of this Agreement is disclosed on Schedule 3.5(d). No Indebtedness of Purchaser contains any restriction upon (i) the prepayment of any of such Indebtedness, (ii) the incurrence of Indebtedness by Purchaser or (iii) the ability of Purchaser to grant any Lien on its properties or assets.

 

(e) Since the date of formation of Purchaser, and except as contemplated by this Agreement, Purchaser has not declared or paid any distribution or dividend in respect of its shares and has not repurchased, redeemed or otherwise acquired any of its shares, and Purchaser’s board of directors has not authorized any of the foregoing.

 

3.6 SEC Filings and Purchaser Financials.

 

(a) The Purchaser, since the IPO, has filed all forms, reports, schedules, statements, registration statements, prospectuses and other documents required to be filed or furnished by the Purchaser with the SEC under the Securities Act and/or the Exchange Act, together with any amendments, restatements or supplements thereto, and will file all such forms, reports, schedules, statements and other documents required to be filed subsequent to the date of this Agreement. Except to the extent available on the SEC’s web site through EDGAR, the Purchaser has delivered to the Company copies in the form filed with the SEC of all of the following: (i) the Purchaser’s annual reports on Form 10-K for each fiscal year of the Purchaser beginning with the first year the Purchaser was required to file such a form, (ii) the Purchaser’s quarterly reports on Form 10-Q for each fiscal quarter that the Purchaser filed such reports to disclose its quarterly financial results in each of the fiscal years of the Purchaser referred to in clause (i) above, (iii) all other forms, reports, registration statements, prospectuses and other documents (other than preliminary materials) filed by the Purchaser with the SEC since the beginning of the first fiscal year referred to in clause (i) above (the forms, reports, registration statements, prospectuses and other documents referred to in clauses (i), (ii) and (iii) above, whether or not available through EDGAR, are, collectively, the “SEC Reports”) and (iv) all certifications and statements required by (A) Rules 13a-14 or 15d-14 under the Exchange Act, and (B) 18 U.S.C. §1350 (Section 906 of SOX) with respect to any report referred to in clause (i) above (collectively, the “Public Certifications”). The SEC Reports (x) were prepared in all material respects in accordance with the requirements of the Securities Act and the Exchange Act, as the case may be, and the rules and regulations thereunder and (y) did not, as of their respective effective dates (in the case of SEC Reports that are registration statements filed pursuant to the requirements of the Securities Act) and at the time they were filed with the SEC (in the case of all other SEC Reports) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The Public Certifications are each true as of their respective dates of filing. As used in this Section 3.6, the term “file” shall be broadly construed to include any manner permitted by SEC rules and regulations in which a document or information is furnished, supplied or otherwise made available to the SEC. As of the date of this Agreement (A) the Purchaser Public Units, the shares of Purchaser Common Stock and the Purchaser Public Warrants are listed on NYSE; (B) the Purchaser has not received any written deficiency notice from NYSE relating to the continued listing requirements of such Purchaser Securities; (C) there are no Actions pending or, to the Knowledge of the Purchaser, threatened against the Purchaser by the Financial Industry Regulatory Authority with respect to any intention by such entity to suspend, prohibit or terminate the quoting of such Purchaser Securities on NYSE; and (D) such Purchaser Securities are in compliance with all of the applicable corporate governance rules of NYSE.

 

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(b) The financial statements and notes of the Purchaser contained or incorporated by reference in the SEC Reports (the “Purchaser Financials”), fairly present in all material respects the financial position and the results of operations, changes in stockholders’ equity, and cash flows of the Purchaser at the respective dates of and for the periods referred to in such financial statements, all in accordance with (i) GAAP methodologies applied on a consistent basis throughout the periods involved and (ii) Regulation S-X or Regulation S-K, as applicable (except as may be indicated in the notes thereto and for the omission of notes and audit adjustments in the case of unaudited quarterly financial statements to the extent permitted by Regulation S-X or Regulation S-K, as applicable).

 

(c) Except as and to the extent reflected or reserved against in the Purchaser Financials, the Purchaser has not incurred any Liabilities or obligations of the type required to be reflected on a balance sheet in accordance with GAAP that are not adequately reflected or reserved on or provided for in the Purchaser Financials, other than Liabilities of the type required to be reflected on a balance sheet in accordance with GAAP that have been incurred since the Purchaser’s formation in the ordinary course of business.

 

3.7 Absence of Certain Changes. Except as set forth in Schedule 3.7, the Purchaser has, (a) since its formation, conducted no business other than its formation, the public offering of its securities (and the related private offerings), public reporting and its search for an initial Business Combination as described in the IPO Prospectus (including the investigation of the Company and the negotiation and execution of this Agreement) and related activities and (b) since January 1, 2020, not been subject to a Material Adverse Effect on the Purchaser.

 

3.8 Compliance with Laws. The Purchaser is, and has since its formation been, in compliance with all Laws applicable to it and the conduct of its business except for such noncompliance which would not reasonably be expected to have a Material Adverse Effect on the Purchaser, and the Purchaser has not received written notice alleging any violation of applicable Law in any material respect by the Purchaser.

 

3.9 Actions; Orders; Permits. There is no pending or, to the Knowledge of the Purchaser, threatened material Action to which the Purchaser is subject which would reasonably be expected to have a Material Adverse Effect on the Purchaser. There is no material Action that the Purchaser has pending against any other Person. The Purchaser is not subject to any material Orders of any Governmental Authority, nor are any such Orders pending. The Purchaser holds all material Permits necessary to lawfully conduct its business as presently conducted, and to own, lease and operate its assets and properties, all of which are in full force and effect, except where the failure to hold such Consent or for such Consent to be in full force and effect would not reasonably be expected to have a Material Adverse Effect on the Purchaser.

 

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3.10 Taxes and Returns.

 

(a) The Purchaser has timely filed, or caused to be timely filed, all material Tax Returns required to be filed by it, which such Tax Returns are accurate and complete in all material respects, and has paid, collected or withheld, or caused to be paid, collected or withheld, all material Taxes required to be paid, collected or withheld, other than such Taxes for which adequate reserves in the Purchaser Financials have been established in accordance with GAAP. Schedule 3.10(a) sets forth each jurisdiction where the Purchaser files or is required to file a Tax Return. There are no audits, examinations, investigations or other proceedings pending against the Purchaser in respect of any Tax, and the Purchaser has not been notified in writing of any proposed Tax claims or assessments against the Purchaser (other than, in each case, claims or assessments for which adequate reserves in the Purchaser Financials have been established in accordance with GAAP or are immaterial in amount). There are no Liens with respect to any Taxes upon any of the Purchaser’s assets, other than Permitted Liens. The Purchaser has no outstanding waivers or extensions of any applicable statute of limitations to assess any material amount of Taxes. There are no outstanding requests by the Purchaser for any extension of time within which to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return.

 

(b) Since the date of its formation, the Purchaser has not (i) changed any Tax accounting methods, policies or procedures except as required by a change in Law, (ii) made, revoked, or amended any material Tax election, (iii) filed any amended Tax Returns or claim for refund or (iv) entered into any closing agreement affecting or otherwise settled or compromised any material Tax Liability or refund.

 

3.11 Employees and Employee Benefit Plans. The Purchaser does not (a) have any paid employees or (b) maintain, sponsor, contribute to or otherwise have any Liability under, any Benefit Plans.

 

3.12 Properties. The Purchaser does not own, license or otherwise have any right, title or interest in any material Intellectual Property. The Purchaser does not own or lease any material real property or material Personal Property.

 

3.13 Material Contracts.

 

(a) Except as set forth on Schedule 3.13(a), other than this Agreement and the Ancillary Documents, there are no Contracts to which the Purchaser is a party or by which any of its properties or assets may be bound, subject or affected, which (i) creates or imposes a Liability greater than $100,000, (ii) may not be cancelled by the Purchaser on less than sixty (60) days’ prior notice without payment of a material penalty or termination fee or (iii) prohibits, prevents, restricts or impairs in any material respect any business practice of the Purchaser as its business is currently conducted, any acquisition of material property by the Purchaser, or restricts in any material respect the ability of the Purchaser to engage in business as currently conducted by it or compete with any other Person (each, a “Purchaser Material Contract”). All Purchaser Material Contracts have been made available to the Company other than those that are exhibits to the SEC Reports.

 

(b) With respect to each Purchaser Material Contract: (i) the Purchaser Material Contract was entered into at arms’ length and in the ordinary course of business; (ii) the Purchaser Material Contract is legal, valid, binding and enforceable in all material respects against the Purchaser and, to the Knowledge of the Purchaser, the other parties thereto, and is in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability Exceptions); (iii) the Purchaser is not in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default in any material respect by the Purchaser, or permit termination or acceleration by the other party, under such Purchaser Material Contract; and (iv) to the Knowledge of the Purchaser, no other party to any Purchaser Material Contract is in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default by such other party, or permit termination or acceleration by the Purchaser under any Purchaser Material Contract.

 

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3.14 Transactions with Affiliates. Schedule 3.14 sets forth a true, correct and complete list of the Contracts and arrangements that are in existence as of the date of this Agreement under which there are any existing or future Liabilities or obligations between the Purchaser and any (a) present or former director, officer or employee or Affiliate of the Purchaser, or any immediate family member of any of the foregoing, or (b) record or beneficial owner of more than five percent (5%) of the Purchaser’s outstanding capital stock as of the date hereof.

 

3.15 Merger Sub Activities. Since its formation, Merger Sub has not engaged in any business activities other than as contemplated by this Agreement, does not own directly or indirectly any ownership, equity, profits or voting interest in any Person and has no assets or Liabilities except those incurred in connection with this Agreement and the Ancillary Documents to which it is a party and the Transactions, and, other than this Agreement and the Ancillary Documents to which it is a party, Merger Sub is not party to or bound by any Contract.

 

3.16 Investment Company Act. The Purchaser is not an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company”, or required to register as an “investment company”, in each case within the meaning of the Investment Company Act of 1940, as amended.

 

3.17 Finders and Brokers. Except as set forth on Schedule 3.17, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission from the Purchaser, the Company or any of their respective Affiliates in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of the Purchaser.

 

3.18 Ownership of the Merger Consideration Shares. All shares of Purchaser Common Stock to be issued and delivered to the Company Stockholder as Merger Consideration Shares in accordance with Article I shall be, upon issuance and delivery of such Purchaser Common Stock, fully paid and non-assessable, free and clear of all Liens, other than restrictions arising from applicable securities Laws, any applicable Lock-Up Agreement, the Registration Rights Agreement and any Liens incurred by the Company Stockholder, and the issuance and sale of such Purchaser Common Stock pursuant hereto will not be subject to or give rise to any preemptive rights or rights of first refusal.

 

3.19 Certain Business Practices.

 

(a) Neither the Purchaser, nor any of its Representatives acting on its behalf, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political parties or campaigns or violated any provision of the U.S. Foreign Corrupt Practices Act of 1977 or any other local or foreign anti-corruption or bribery Law, (iii) made any other unlawful payment or (iv) since the formation of the Purchaser, directly or indirectly, given or agreed to give any unlawful gift or similar benefit in any material amount to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder the Purchaser or assist it in connection with any actual or proposed transaction.

 

(b) The operations of the Purchaser are and have been conducted at all times in material compliance with money laundering statutes in all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority, and no Action involving the Purchaser with respect to any of the foregoing is pending or, to the Knowledge of the Purchaser, threatened.

 

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(c) None of the Purchaser or any of its directors or officers, or, to the Knowledge of the Purchaser, any other Representative acting on behalf of the Purchaser is currently identified on the specially designated nationals or other blocked person list or otherwise currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”), and the Purchaser has not, in the last five (5) fiscal years, directly or indirectly, used any funds, or loaned, contributed or otherwise made available such funds to any Subsidiary, joint venture partner or other Person, in connection with any sales or operations in any other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to, or otherwise in violation of, any U.S. sanctions administered by OFAC.

 

3.20 Insurance. Schedule 3.20 lists all insurance policies (by policy number, insurer, coverage period, coverage amount, annual premium and type of policy) held by the Purchaser relating to the Purchaser or its business, properties, assets, directors, officers and employees, copies of which have been provided to the Company. All premiums due and payable under all such insurance policies have been timely paid and the Purchaser is otherwise in material compliance with the terms of such insurance policies. All such insurance policies are in full force and effect, and to the Knowledge of the Purchaser, there is no threatened termination of, or material premium increase with respect to, any of such insurance policies. There have been no insurance claims made by the Purchaser. The Purchaser has each reported to its insurers all claims and pending circumstances that would reasonably be expected to result in a claim, except where such failure to report such a claim would not be reasonably likely to have a Material Adverse Effect on the Purchaser.

 

3.21 Subscriptions for PIPE Investment. Purchaser has received binding (subject to the Enforceability Exceptions) and duly executed subscription agreements (the “Subscription Agreements”) between Purchaser and investors (the “PIPE Investors”) in connection with a private placement, and/or backstop arrangement, and true and correct copies of such Subscription Agreements have been provided to the Company Stockholder (a “PIPE Investment”).

 

3.22 Independent Investigation. Without limiting Section 7.3(d) hereof, the Purchaser has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company, and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Company for such purpose. The Purchaser acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, it has relied solely upon its own investigation and the express representations and warranties of the Company set forth in this Agreement (including the related portions of the Company Disclosure Schedules) and in any certificate delivered to Purchaser pursuant hereto, and the information provided by or on behalf of the Company for the Proxy Statement; and (b) none of the Company nor its respective Representatives have made any representation or warranty as to the Company, or this Agreement, except as expressly set forth in this Agreement (including the related portions of the Company Disclosure Schedules) or in any certificate delivered to Purchaser pursuant hereto, or with respect to the information provided by or on behalf of the Company for the Proxy Statement.

 

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Article IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as set forth in the disclosure schedules delivered by the Company to the Purchaser on the date hereof (the “Company Disclosure Schedules”), the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer, the Company hereby represents and warrants to the Purchaser, as of the date hereof and as of the Closing, as follows:

 

4.1 Organization and Standing. The Company is a corporation duly incorporated, validly existing and in good standing under the PBCL and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. The Company is duly qualified or licensed and in good standing in the jurisdiction in which it is incorporated or registered and in each other jurisdiction where it does business or operates to the extent that the character of the property owned, or leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary. Schedule 4.1 lists all jurisdictions in which the Company is qualified to conduct business and all names other than its legal name under which the Company does business. The Company has provided to Purchaser accurate and complete copies of its Organizational Documents, each as amended to date and as currently in effect. The Company is not in violation of any provision of its Organizational Documents.

 

4.2 Authorization; Binding Agreement. The Company has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is or is required to be a party, to perform the Company’s obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each Ancillary Document to which the Company is or is required to be a party and the consummation of the transactions contemplated hereby and thereby, (a) have been duly and validly authorized by the Company’s board of directors and the Company Stockholder in accordance with the Company’s Organizational Documents, the PBCL, any other applicable Law or any Contract to which the Company or any of its stockholders is a party or by which it or its securities are bound and (b) no other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which the Company is or is required to be a party shall be when delivered, duly and validly executed and delivered by the Company and assuming the due authorization, execution and delivery of this Agreement and any such Ancillary Document by the other parties hereto and thereto, constitutes, or when delivered shall constitute, the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions. The Company’s board of directors, by resolutions duly adopted at a meeting duly called and held (i) determined that this Agreement and the Merger and the other transactions contemplated hereby are advisable, fair to, and in the best interests of, the Company and its stockholders, (ii) approved this Agreement and the Merger and the other transactions contemplated by this Agreement in accordance with the PBCL, and (iii) resolved to recommend that the Company Stockholder adopt this Agreement.

 

4.3 Capitalization.

 

(a) The Company is authorized to issue (i) 100,000,000 shares of Company Common Stock, 100 of which shares are issued and outstanding, (ii) 100,000,000 shares of Class B Common Stock, none of which are issued and outstanding, and (iii) 100,000,000 shares of Company Preferred Stock, none of which are outstanding or have been designated for issuance. Prior to giving effect to the transactions contemplated by this Agreement, all of the issued and outstanding Company Stock and other equity interests of the Company are set forth on Schedule 4.3(a), along with the beneficial and record owners thereof, all of which shares and other equity interests are owned free and clear of any Liens other than those imposed under the Company Charter. All of the outstanding shares and other equity interests of the Company have been duly authorized, are fully paid and non-assessable and not in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the PBCL, any other applicable Law, the Company Charter or any Contract to which the Company is a party or by which it or its securities are bound. The Company holds no shares or other equity interests of the Company in its treasury. None of the outstanding shares or other equity interests of the Company were issued in violation of any applicable securities Laws. The rights, privileges and preferences of the Company Preferred Stock are as stated in the Company Charter and as provided by the PBCL.

 

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(b) Other than as set forth on Schedule 4.3(b), there are no Company Convertible Securities, or preemptive rights or rights of first refusal or first offer, nor are there any Contracts, commitments, arrangements or restrictions to which the Company or, to the Knowledge of the Company, any of its stockholders is a party or bound relating to any equity securities of the Company, whether or not outstanding. There are no outstanding or authorized equity appreciation, phantom equity or similar rights with respect to the Company. Except as set forth on Schedule 4.3(b), there are no voting trusts, proxies, stockholder agreements or any other agreements or understandings with respect to the voting of the Company’s equity interests. Except as set forth in the Company Charter, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any equity interests or securities of the Company, nor has the Company granted any registration rights to any Person with respect to the Company’s equity securities. All of the Company’s securities have been granted, offered, sold and issued in compliance with all applicable securities Laws. As a result of the consummation of the transactions contemplated by this Agreement, no equity interests of the Company are issuable and no rights in connection with any interests, warrants, rights, options or other securities of the Company accelerate or otherwise become triggered (whether as to vesting, exercisability, convertibility or otherwise).

 

(c) Except as disclosed in the Company Financials, since January 1, 2020, the Company has not declared or paid any distribution or dividend in respect of its equity interests and has not repurchased, redeemed or otherwise acquired any equity interests of the Company, and the board of directors of the Company has not authorized any of the foregoing.

 

4.4 Subsidiaries. The Company has no Subsidiaries; provided, that, notwithstanding anything to the contrary contained in this Agreement, in the event of the breach of the foregoing representation and warranty, without limiting any rights or remedies available under this Agreement or applicable Law, any reference in this Agreement to the Company will include its Subsidiaries to the extent reasonably applicable. There are no Contracts to which the Company is a party or bound with respect to the voting (including voting trusts or proxies) of the equity interests of any other entity. The Company does not own or have any rights to acquire, directly or indirectly, any equity interests of, or otherwise Control, any Person. The Company is not a participant in any joint venture, partnership or similar arrangement. There are no outstanding contractual obligations of the Company to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person.

 

4.5 Governmental Approvals. Except as otherwise described in Schedule 4.5, no Consent of or with any Governmental Authority on the part of the Company is required to be obtained or made in connection with the execution, delivery or performance by the Company of this Agreement or any Ancillary Documents or the consummation by the Company of the transactions contemplated hereby or thereby other than (a) such filings as are expressly contemplated by this Agreement or (b) pursuant to Antitrust Laws.

 

4.6 Non-Contravention. Except as otherwise described in Schedule 4.6, the execution and delivery by the Company of this Agreement and each Ancillary Document to which the Company is or is required to be a party or otherwise bound, and the consummation by the Company of the transactions contemplated hereby and thereby and compliance by the Company with any of the provisions hereof and thereof, will not (a) conflict with or violate any provision of the Company’s Organizational Documents, (b) subject to obtaining the Consents from Governmental Authorities referred to in Section 4.5 hereof, the waiting periods referred to therein having expired, and any condition precedent to such Consent or waiver having been satisfied, conflict with or violate any Law, Order or Consent applicable to the Company or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by the Company under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien upon any of the properties or assets of the Company under, (viii) give rise to any obligation to obtain any third party Consent or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of any Company Material Contract, except for any deviations from any of the foregoing clauses (b) or (c) that would not reasonably be expected to have a Material Adverse Effect on the Company.

 

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4.7 Financial Statements.

 

(a) As used herein, the term “Company Financials” means the (i) unaudited financial statements of the Company (including, in each case, any related notes thereto), consisting of the balance sheets of the Company as of December 31, 2019 and December 31, 2018, and the related unaudited income statements, changes in stockholder equity and statements of cash flows for the fiscal years then ended, each prepared in accordance with GAAP, and (ii) the Company prepared financial statements, consisting of the balance sheet of the Company as of March 30, 2020 (the “Interim Balance Sheet Date”) and the related income statement, changes in stockholder equity and statement of cash flows for the three (3) months then ended, (iii) the unaudited financial statements of the Company, consisting of the balance sheet of the Company as of June 30, 2020, and the related unaudited income statement, changes in stockholder equity and statement of cash flows for the six (6) months then ended, and (iv) once available, the audited financial statements prepared pursuant to Section 6.22. True and correct copies of the Company Financials have been provided to the Purchaser. The Company Financials (i) accurately reflect the books and records of the Company as of the times and for the periods referred to therein, (ii) were prepared in accordance with GAAP, consistently applied throughout and among the periods involved (except that the interim statements exclude the footnote disclosures and other presentation items required for GAAP and exclude year-end adjustments, which will not be material in amount), and (iii) fairly present in all material respects the financial position of the Company as of the respective dates thereof and the consolidated results of the operations and cash flows of the Company for the periods indicated. The Company has not ever been subject to the reporting requirements of Sections 13(a) and 15(d) of the Exchange Act.

 

(b) The Company maintains accurate books and records reflecting its assets and Liabilities and maintains proper and adequate internal accounting controls that provide reasonable assurance that (i) the Company does not maintain any off-the-book accounts and that its assets are used only in accordance with its management directives, (ii) transactions are executed with management’s authorization, (iii) transactions are recorded as necessary to permit preparation of the financial statements of the Company and to maintain accountability for the Company’s assets, (iv) access to the Company’s assets is permitted only in accordance with management’s authorization, (v) the reporting of the Company’s assets is compared with existing assets at regular intervals and verified for actual amounts, and (vi) accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the collection of accounts, notes and other receivables on a current and timely basis. All of the financial books and records of the Company are complete and accurate in all material respects and have been maintained in the ordinary course consistent with past practice and in accordance with applicable Laws. The Company has not been subject to or involved in any material fraud that involves management or other employees who have a significant role in the internal controls over financial reporting of the Company. In the past five (5) years, neither the Company nor its Representatives has received any written complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or its internal accounting controls, including any material written complaint, allegation, assertion or claim that the Company has engaged in questionable accounting or auditing practices.

 

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(c) As of the date hereof, the Company does not have any Indebtedness other than the Indebtedness set forth on Schedule 4.7(c), which schedule sets for the amounts (including principal and any accrued but unpaid interest or other obligations) with respect to such Indebtedness. Except as disclosed on Schedule 4.7(c), no Indebtedness of the Company contains any restriction upon (i) the prepayment of any of such Indebtedness, (ii) the incurrence of Indebtedness by the Company, or (iii) the ability of the Company to grant any Lien on its properties or assets.

 

(d) Except as set forth on Schedule 4.7(d), the Company is not subject to any Liabilities or obligations (whether or not required to be reflected on a balance sheet prepared in accordance with GAAP), except for those that are either (i) adequately reflected or reserved on or provided for in the consolidated balance sheet of the Company and its Subsidiaries as of the Interim Balance Sheet Date contained in the Company Financials or (ii) not material and that were incurred after the Interim Balance Sheet Date in the ordinary course of business consistent with past practice (other than Liabilities for breach of any Contract or violation of any Law).

 

(e) All financial projections with respect to the Company that were delivered by or on behalf of the Company to the Purchaser or its Representatives were prepared in good faith using assumptions that the Company believes to be reasonable.

 

(f) All accounts, notes and other receivables, whether or not accrued, and whether or not billed, of the Company (the “Accounts Receivable”) arose from sales actually made or services actually performed in the ordinary course of business and represent valid obligations to the Company arising from its business. None of the Accounts Receivable are subject to any right of recourse, defense, deduction, return of goods, counterclaim, offset, or set off on the part of the obligor in excess of any amounts reserved therefore on the Company Financials. All of the Accounts Receivable are, to the Knowledge of the Company, fully collectible according to their terms in amounts not less than the aggregate amounts thereof carried on the books of the Company (net of reserves) within ninety (90) days.

 

4.8 Absence of Certain Changes. Except as set forth on Schedule 4.8, since December 31, 2019, the Company has (a) conducted its business only in the ordinary course of business consistent with past practice, (b) not been subject to a Material Adverse Effect and (c) has not taken any action or committed or agreed to take any action that would be prohibited by Section 6.2(b) (without giving effect to Schedule 6.2) if such action were taken on or after the date hereof without the consent of the Purchaser.

 

4.9 Compliance with Laws. The Company is not and has not been in material conflict or material non-compliance with, and is not in material default or violation of, nor has the Company received, since its inception, any written or, to the Knowledge of the Company, oral notice of any material conflict or non-compliance with, or material default or violation of, any applicable Laws by which it or any of its properties, assets, employees, business or operations are or were bound or affected.

 

4.10 Company Permit. The Company (and its employees who are legally required to be licensed by a Governmental Authority in order to perform his or her duties with respect to his or her employment with the Company), holds all Permits necessary to lawfully conduct in all material respects its business as presently conducted and as currently contemplated to be conducted, and to own, lease and operate its assets and properties (collectively, the “Company Permits”). The Company has made available to the Purchaser true, correct and complete copies of all material Company Permits, all of which material Company Permits are listed on Schedule 4.10. All of the Company Permits are in full force and effect, and no suspension or cancellation of any of the Company Permits is pending or, to the Company’s Knowledge, threatened. The Company is not in violation in any material respect of the terms of any Company Permit, and the Company has not received any written or, to the Knowledge of the Company, oral notice of any Actions relating to the revocation or modification of any Company Permit.

 

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4.11 Litigation. Except as described on Schedule 4.11, there is no (a) Action of any nature currently pending or, to the Company’s Knowledge, threatened, nor is there any reasonable basis for any Action to be made (and no such Action has been brought or, to the Company’s Knowledge, in the past three (3) years; or (b) Order now pending or outstanding or that was rendered by a Governmental Authority in the past three (3) years, in either case of (a) or (b) by or against the Company, its current or former directors, officers or equity holders (provided, that any litigation involving the directors, officers or equity holders of the Company must be related to the Company’s business, equity securities or assets), its business, equity securities or assets. The items listed on Schedule 4.11, if finally determined adversely to the Company, will not have, either individually or in the aggregate, a Material Adverse Effect upon the Company. Since the inception of the Company, none of the current or former officers, senior management or directors of the Company have been charged with, indicted for, arrested for, or convicted of any felony or any crime involving fraud.

 

4.12 Material Contracts.

 

(a) Schedule 4.12(a) sets forth a true, correct and complete list of, and the Company has made available to the Purchaser (including written summaries of oral Contracts), true, correct and complete copies of, each Contract to which the Company is a party or by which any the Company, or any of its properties or assets are bound or affected (each Contract required to be set forth on Schedule 4.12(a), a “Company Material Contract”) that:

 

(i) contains covenants that limit the ability of the Company (A) to compete in any line of business or with any Person or in any geographic area or to sell, or provide any service or product or solicit any Person, including any non-competition covenants, employee and customer non-solicit covenants, exclusivity restrictions, rights of first refusal or most-favored pricing clauses or (B) to purchase or acquire an interest in any other Person;

 

(ii) involves any joint venture, profit-sharing, partnership, limited liability company or other similar agreement or arrangement relating to the formation, creation, operation, management or control of any partnership or joint venture;

 

(iii) involves any exchange traded, over the counter or other swap, cap, floor, collar, futures contract, forward contract, option or other derivative financial instrument or Contract, based on any commodity, security, instrument, asset, rate or index of any kind or nature whatsoever, whether tangible or intangible, including currencies, interest rates, foreign currency and indices;

 

(iv) evidences Indebtedness (whether incurred, assumed, guaranteed or secured by any asset) of the Company having an outstanding principal amount in excess of $100,000;

 

(v) involves the acquisition or disposition, directly or indirectly (by merger or otherwise), of assets with an aggregate value in excess of $100,000 (other than in the ordinary course of business consistent with past practice) or shares or other equity interests of the Company or another Person;

 

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(vi) relates to any merger, consolidation or other business combination with any other Person or the acquisition or disposition of any other entity or its business or material assets or the sale of the Company, its business or material assets;

 

(vii) by its terms, individually or with all related Contracts, calls for aggregate payments or receipts by the Company under such Contract or Contracts of at least $100,000 per year or $250,000 in the aggregate;

 

(viii) is with any Top Customer or Top Supplier;

 

(ix) obligates the Company to provide continuing indemnification or a guarantee of obligations of a third party after the date hereof in excess of $100,000;

 

(x) is between the Company and any directors, officers or employees of the Company (other than at-will employment arrangements with employees entered into in the ordinary course of business consistent with past practice), including all non-competition, severance and indemnification agreements, or any Related Person;

 

(xi) obligates the Company to make any capital commitment or expenditure in excess of $100,000 (including pursuant to any joint venture);

 

(xii) relates to a material settlement entered into within three (3) years prior to the date of this Agreement or under which the Company has outstanding obligations (other than customary confidentiality obligations);

 

(xiii) provides another Person (other than the Company or any manager, director or officer of the Company) with a power of attorney;

 

(xiv) relates to the development, ownership, licensing or use of any Intellectual Property by, to or from the Company, other than Off-the-Shelf Software;

 

(xv) that will be required to be filed with the Proxy Statement under applicable SEC requirements or would otherwise be required to be filed by the Company as an exhibit for a Form S-1 pursuant to Items 601(b)(1), (2), (4), (9) or (10) of Regulation S-K under the Securities Act as if the Company was the registrant; or

 

(xvi) is otherwise material to the Company and not described in clauses (i) through (xv) above.

 

(b) Except as disclosed in Schedule 4.12(b), with respect to each Company Material Contract: (i) such Company Material Contract is valid and binding and enforceable in all respects against the Company and, to the Knowledge of the Company, each other party thereto, and is in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability Exceptions); (ii) the consummation of the transactions contemplated by this Agreement will not affect the validity or enforceability of any Company Material Contract; (iii) the Company is not in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute a material breach or default by the Company, or permit termination or acceleration by the other party thereto, under such Company Material Contract; (iv) to the Knowledge of the Company, no other party to such Company Material Contract is in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a material breach or default by such other party, or permit termination or acceleration by the Company, under such Company Material Contract; (v) the Company has not received written or, to the Knowledge of the Company, oral notice of an intention by any party to any such Company Material Contract that provides for a continuing obligation by any party thereto to terminate such Company Material Contract or amend the terms thereof, other than modifications in the ordinary course of business that do not adversely affect the Company in any material respect; and (vi) the Company has not waived any rights under any such Company Material Contract.

 

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4.13 Intellectual Property.

 

(a) Schedule 4.13(a)(i) sets forth: (i) all U.S. and foreign registered Patents, Trademarks, Copyrights and Internet Assets and applications owned or licensed by the Company or otherwise used or held for use by the Company in which the Company is the owner, applicant or assignee (“Company Registered IP”), specifying as to each item, as applicable: (A) the nature of the item, including the title, (B) the owner of the item, (C) the jurisdictions in which the item is issued or registered or in which an application for issuance or registration has been filed and (D) the issuance, registration or application numbers and dates; and (ii) all material unregistered Intellectual Property owned or purported to be owned by the Company. Schedule 4.13(a)(ii) sets forth all Intellectual Property licenses, sublicenses and other agreements or permissions (“Company IP Licenses”) (other than “shrink wrap,” “click wrap,” and “off the shelf” software agreements and other agreements for Software commercially available on reasonable terms to the public generally with license, maintenance, support and other fees of less than $20,000 per year (collectively, “Off-the-Shelf Software”), which are not required to be listed, although such licenses are “Company IP Licenses” as that term is used herein), under which the Company is a licensee or otherwise is authorized to use or practice any Intellectual Property, and describes (A) the applicable Intellectual Property licensed, sublicensed or used and (B) any royalties, license fees or other compensation due from the Company, if any. The Company owns, free and clear of all Liens (other than Permitted Liens), has valid and enforceable rights in, and has the unrestricted right to use, sell, license, transfer or assign, all Intellectual Property currently used, licensed or held for use by the Company, and previously used or licensed by the Company, except for the Intellectual Property that is the subject of the Company IP Licenses. No item of Company Registered IP that consists of a pending Patent application fails to identify all pertinent inventors, and for each Patent and Patent application in the Company Registered IP, the Company has obtained valid assignments of inventions from each inventor. Except as set forth on Schedule 4.13(a)(iii), all Company Registered IP is owned exclusively by the Company without obligation to pay royalties, licensing fees or other fees, or otherwise account to any third party with respect to such Company Registered IP, and the Company has recorded assignments of all Company Registered IP.

 

(b) The Company has a valid and enforceable license to use all Intellectual Property that is the subject of the Company IP Licenses applicable to the Company. The Company IP Licenses include all of the licenses, sublicenses and other agreements or permissions necessary to operate the Company as presently conducted. The Company has performed all obligations imposed on it in the Company IP Licenses, has made all payments required to date, and the Company is not, nor, to the Knowledge of the Company, is any other party thereto, in breach or default thereunder, nor has any event occurred that with notice or lapse of time or both would constitute a default thereunder. The continued use by the Company of the Intellectual Property that is the subject of the Company IP Licenses in the same manner that it is currently being used is not restricted by any applicable license of the Company. All registrations for Copyrights, Patents, Trademarks and Internet Assets that are owned by or exclusively licensed to the Company are valid, in force and in good standing with all required fees and maintenance fees having been paid with no Actions pending, and all applications to register any Copyrights, Patents and Trademarks are pending and in good standing, all without challenge of any kind. The Company is not party to any Contract that requires the Company to assign to any Person all of its rights in any Intellectual Property developed by the Company under such Contract.

 

(c) Schedule 4.13(c) sets forth all licenses, sublicenses and other agreements or permissions under which the Company is the licensor (each, an “Outbound IP License”), and for each such Outbound IP License, describes (i) the applicable Intellectual Property licensed, (ii) the licensee under such Outbound IP License, and (iii) any royalties, license fees or other compensation due to the Company, if any. The Company has performed all obligations imposed on it in the Outbound IP Licenses, and the Company is not, nor, to the Knowledge of the Company, is any other party thereto, in breach or default thereunder, nor has any event occurred that with notice or lapse of time or both would constitute a default thereunder.

 

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(d) No Action is pending or, to the Company’s Knowledge, threatened against the Company that challenges the validity, enforceability, ownership, or right to use, sell, license or sublicense, or that otherwise relates to, any Intellectual Property currently owned, licensed, used or held for use by the Company, nor, to the Knowledge of the Company, is there any reasonable basis for any such Action. The Company has not received any written or, to the Knowledge of the Company, oral notice or claim asserting or suggesting that any infringement, misappropriation, violation, dilution or unauthorized use of the Intellectual Property of any other Person is or may be occurring or has or may have occurred, as a consequence of the business activities of the Company, nor to the Knowledge of the Company is there a reasonable basis therefor. There are no Orders to which the Company is a party or its otherwise bound that (i) restrict the rights of the Company to use, transfer, license or enforce any Intellectual Property owned by the Company, (ii) restrict the conduct of the business of the Company in order to accommodate a third Person’s Intellectual Property, or (iii) other than the Outbound IP Licenses, grant any third Person any right with respect to any Intellectual Property owned by the Company. The Company is not currently infringing, and has not, in the past, infringed, misappropriated or violated any Intellectual Property of any other Person in any material respect in connection with the ownership, use or license of any Intellectual Property owned or purported to be owned by the Company or, to the Knowledge of the Company, otherwise in connection with the conduct of the respective businesses of the Company. To the Company’s Knowledge, no third party is currently, or in the past five (5) years has been, infringing upon, misappropriating or otherwise violating any Intellectual Property owned, licensed by, licensed to, or otherwise used or held for use by the Company (“Company IP”) in any material respect.

 

(e) All officers, directors, employees and independent contractors of the Company (and each of their respective Affiliates) have assigned to the Company all Intellectual Property arising from the services performed for the Company by such Persons and all such assignments of Company Registered IP have been recorded. No current or former officers, employees or independent contractors of the Company have claimed any ownership interest in any Intellectual Property owned by the Company. To the Knowledge of the Company, there has been no violation of the Company’s policies or practices related to protection of Company IP or any confidentiality or nondisclosure Contract relating to the Intellectual Property owned by the Company. The Company has made available to the Purchaser true and complete copies of all written Contracts referenced in subsections under which employees and independent contractors assigned their Intellectual Property to the Company. To the Company’s Knowledge, none of the employees of the Company is obligated under any Contract, or subject to any Order, that would materially interfere with the use of such employee’s best efforts to promote the interests of the Company, or that would materially conflict with the business of the Company as presently conducted or contemplated to be conducted. The Company has taken reasonable security measures in order to protect the secrecy, confidentiality and value of the material Company IP.

 

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(f) To the Knowledge of the Company, no Person has obtained unauthorized access to third party information and data (including personally identifiable information) in the possession of the Company, nor has there been any other material compromise of the security, confidentiality or integrity of such information or data, and no written or, to the Knowledge of the Company, oral complaint relating to an improper use or disclosure of, or a breach in the security of, any such information or data has been received by the Company. The Company has complied in all material respects with all applicable Laws and Contract requirements relating to privacy, personal data protection, and the collection, processing and use of personal information and its own privacy policies and guidelines. The operation of the business of the Company has not and does not violate any right to privacy or publicity of any third person, or constitute unfair competition or trade practices under applicable Law.

 

(g) The consummation of any of the transactions contemplated by this Agreement will not result in the material breach, material modification, cancellation, termination, suspension of, or acceleration of any payments with respect to, or release of source code because of (i) any Contract providing for the license or other use of Intellectual Property owned by the Company, or (ii) any Company IP License. Following the Closing, the Company shall be permitted to exercise, directly or indirectly through its Subsidiaries, all of the Company’s rights under such Contracts or Company IP Licenses to the same extent that the Company would have been able to exercise had the transactions contemplated by this Agreement not occurred, without the payment of any additional amounts or consideration other than ongoing fees, royalties or payments which the Company would otherwise be required to pay in the absence of such transactions.

 

4.14 Taxes and Returns.

 

(a) The Company has or will have timely filed, or caused to be timely filed, all federal, state, local and foreign Tax Returns required to be filed by it (taking into account all available extensions), which Tax Returns are true, accurate, correct and complete in all material respects, and has paid, collected or withheld, or caused to be paid, collected or withheld, all Taxes required to be paid, collected or withheld, other than such Taxes for which adequate reserves in the Company Financials have been established. The Company has complied with all applicable Laws relating to Tax.

 

(b) There is no Action currently pending or, to the Knowledge of the Company, threatened against the Company by a Governmental Authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

 

(c) The Company is not being audited by any Tax authority and has not been notified in writing or, to the Knowledge of the Company, orally by any Tax authority that any such audit is contemplated or pending. There are no claims, assessments, audits, examinations, investigations or other Actions pending against the Company in respect of any Tax, and the Company has not been notified in writing of any proposed Tax claims or assessments against it (other than, in each case, claims or assessments for which adequate reserves in the Company Financials have been established).

 

(d) There are no Liens with respect to any Taxes upon any of the Company’s assets, other than Permitted Liens.

 

(e) The Company has collected or withheld all Taxes currently required to be collected or withheld by it, and all such Taxes have been paid to the appropriate Governmental Authorities or set aside in appropriate accounts for future payment when due.

 

(f) The Company has no outstanding waivers or extensions of any applicable statute of limitations to assess any amount of Taxes. There are no outstanding requests by the Company for any extension of time within which to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return.

 

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(g) The Company has not made any change in accounting method (except as required by a change in Law) or received a ruling from, or signed an agreement with, any taxing authority that would reasonably be expected to have a material impact on its Taxes following the Closing.

 

(h) The Company has not participated in, or sold, distributed or otherwise promoted, any “reportable transaction,” as defined in U.S. Treasury Regulation section 1.6011-4.

 

(i) The Company has no Liability or potential Liability for the Taxes of another Person that are not adequately reflected in the Company Financials (i) under any applicable Tax Law, (ii) as a transferee or successor, or (iii) by contract, indemnity or otherwise (excluding commercial agreements entered into in the ordinary course of business the primary purpose of which is not the sharing of Taxes). The Company is not a party to or bound by any Tax indemnity agreement, Tax sharing agreement or Tax allocation agreement or similar agreement, arrangement or practice (excluding commercial agreements entered into in the ordinary course of business the primary purpose of which is not the sharing of Taxes) with respect to Taxes (including advance pricing agreement, closing agreement or other agreement relating to Taxes with any Governmental Authority) that will be binding on the Company with respect to any period following the Closing Date.

 

(j) The Company has not requested, nor is it the subject of or bound by any private letter ruling, technical advice memorandum, closing agreement or similar ruling, memorandum or agreement with any Governmental Authority with respect to any Taxes, nor is any such request outstanding.

 

(k) The Company: (i) has not constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of securities (to any Person or entity that is not a member of the consolidated group of which the Company is the common parent corporation) qualifying for, or intended to qualify for, Tax-free treatment under Section 355 of the Code (A) within the two-year period ending on the date hereof or (B) in a distribution which could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the transactions contemplated by this Agreement; or (ii) is not nor has ever been (A) a U.S. real property holding corporation within the meaning of Section 897(c)(2) of the Code, or (B) a member of any consolidated, combined, unitary or affiliated group of corporations for any Tax purposes other than a group of which the Company is or was the common parent corporation.

 

(l) The Company is not aware of any fact or circumstance that would reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.

 

4.15 Real Property. Schedule 4.15 contains a complete and accurate list of all premises currently leased or subleased or otherwise used or occupied by the Company for the operation of its business, and of all current leases, lease guarantees, agreements and documents related thereto, including all amendments, terminations and modifications thereof or waivers thereto (collectively, the “Company Real Property Leases”), as well as the current annual rent and term under each Company Real Property Lease. The Company has provided to the Purchaser a true and complete copy of each of the Company Real Property Leases, and in the case of any oral Company Real Property Lease, a written summary of the material terms of such Company Real Property Lease. The Company Real Property Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect. To the Knowledge of the Company, no event has occurred which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute a default on the part of the Company or any other party under any of the Company Real Property Leases, and the Company has not received notice of any such condition. The Company does not own nor has ever owned any real property or any interest in real property (other than the leasehold interests in the Company Real Property Leases).

 

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4.16 Personal Property. Each item of Personal Property which is currently owned, used or leased by the Company with a book value or fair market value of greater than Fifty Thousand Dollars ($50,000) is set forth on Schedule 4.16, along with, to the extent applicable, a list of lease agreements, lease guarantees, security agreements and other agreements related thereto, including all amendments, terminations and modifications thereof or waivers thereto (“Company Personal Property Leases”). Except as set forth in Schedule 4.16, all such items of Personal Property are in good operating condition and repair (reasonable wear and tear excepted consistent with the age of such items), and are suitable for their intended use in the business of the Company. The operation of the Company’s business as it is now conducted or presently proposed to be conducted is not dependent upon the right to use the Personal Property of Persons other than the Company, except for such Personal Property that is owned, leased or licensed by or otherwise contracted to the Company. The Company has provided to the Purchaser a true and complete copy of each of the Company Personal Property Leases, and in the case of any oral Company Personal Property Lease, a written summary of the material terms of such Company Personal Property Lease. The Company Personal Property Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect. To the Knowledge of the Company, no event has occurred which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute a default on the part of the Company or any other party under any of the Company Personal Property Leases, and the Company has not received notice of any such condition.

 

4.17 Title to and Sufficiency of Assets. The Company has good and marketable title to, or a valid leasehold interest in or right to use, all of its assets, free and clear of all Liens other than (a) Permitted Liens, (b) the rights of lessors under leasehold interests, (c) Liens specifically identified on the Interim Balance Sheet and (d) Liens set forth on Schedule 4.17. The assets (including Intellectual Property rights and contractual rights) of the Company constitute all of the assets, rights and properties that are used in the operation of the businesses of the Company as it is now conducted and presently proposed to be conducted or that are used or held by the Company for use in the operation of the business of the Company, and taken together, are adequate and sufficient for the operation of the business of the Company as currently conducted and as presently proposed to be conducted.

 

4.18 Employee Matters.

 

(a) Except as set forth in Schedule 4.18(a), the Company is not a party to any collective bargaining agreement or other Contract covering any group of employees, labor organization or other representative of any of the employees of the Company, and the Company has no Knowledge of any activities or proceedings of any labor union or other party to organize or represent such employees. There has not occurred or, to the Knowledge of the Company, been threatened any strike, slow-down, picketing, work-stoppage, or other similar labor activity with respect to any such employees. Schedule 4.18(a) sets forth all unresolved labor controversies (including unresolved grievances and age or other discrimination claims), if any, that are pending or, to the Knowledge of the Company, threatened between the Company and Persons employed by or providing services as independent contractors to the Company. No current officer or employee of the Company has provided the Company written or, to the Knowledge of the Company, oral notice of his or her plan to terminate his or her employment with the Company.

 

(b) Except as set forth in Schedule 4.18(b), the Company (i) is and has been in compliance in all material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment, health and safety and wages and hours, and other Laws relating to discrimination, disability, labor relations, hours of work, payment of wages and overtime wages, pay equity, immigration, workers compensation, working conditions, employee scheduling, occupational safety and health, family and medical leave, and employee terminations, and has not received written or, to the Knowledge of the Company, oral notice that there is any pending Action involving unfair labor practices against the Company, (ii) is not liable for any material past due arrears of wages or any material penalty for failure to comply with any of the foregoing, and (iii) is not liable for any material payment to any Governmental Authority with respect to unemployment compensation benefits, social security or other benefits or obligations for employees, independent contractors or consultants (other than routine payments to be made in the ordinary course of business and consistent with past practice). There are no Actions pending or, to the Knowledge of the Company, threatened against the Company brought by or on behalf of any applicant for employment, any current or former employee, any Person alleging to be a current or former employee, or any Governmental Authority, relating to any such Law or regulation, or alleging breach of any express or implied contract of employment, wrongful termination of employment, or alleging any other discriminatory, wrongful or tortious conduct in connection with the employment relationship.

 

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(c) Schedule 4.18(c) hereto sets forth a complete and accurate list as of the date hereof of all employees of the Company showing for each as of such date (i) the employee’s name, job title or description, employer, location, salary level (including any bonus, commission, deferred compensation or other remuneration payable (other than any such arrangements under which payments are at the discretion of the Company)), (ii) any bonus, commission or other remuneration other than salary paid during the fiscal year ending December 31, 2019, and (iii) any wages, salary, bonus, commission or other compensation due and owing to each employee during or for the fiscal year ending December 31, 2020. Except as set forth on Schedule 4.18(c), (A) no employee is a party to a written employment Contract with the Company and each is employed “at will”, and (B) the Company have paid in full to all their employees all wages, salaries, commission, bonuses and other compensation due to their employees, including overtime compensation, and the Company has no obligation or Liability (whether or not contingent) with respect to severance payments to any such employees under the terms of any written or, to the Company’s Knowledge, oral agreement, or commitment or any applicable Law, custom, trade or practice. Except as set forth in Schedule 4.18(c), each Company employee has entered into the Company’s standard form of employee non-disclosure, inventions and restrictive covenants agreement with the Company (whether pursuant to a separate agreement or incorporated as part of such employee’s overall employment agreement), a copy of which has been made available to the Purchaser by the Company.

 

(d) Schedule 4.18(d) contains a list of all independent contractors (including consultants) currently engaged by the Company, along with the position, the entity engaging such Person, date of retention and rate of remuneration, most recent increase (or decrease) in remuneration and amount thereof, for each such Person. Except as set forth on Schedule 4.18(d), all of such independent contractors are a party to a written Contract with the Company. Except as set forth on Schedule 4.18(d), each such independent contractor has entered into customary covenants regarding confidentiality, non-competition and assignment of inventions and copyrights in such Person’s agreement with the Company, a copy of which has been provided to the Purchaser by the Company. For the purposes of applicable Law, including the Code, all independent contractors who are currently, or within the last six (6) years have been, engaged by the Company are bona fide independent contractors and not employees of the Company. Each independent contractor is terminable on fewer than thirty (30) days’ notice, without any obligation of the Company to pay severance or a termination fee.

 

4.19 Benefit Plans.

 

(a) Set forth on Schedule 4.19(a) is a true and complete list of each Benefit Plan of the Company (each, a “Company Benefit Plan”). With respect to each Company Benefit Plan, there are no funded benefit obligations for which contributions have not been made or properly accrued and there are no unfunded benefit obligations that have not been accounted for by reserves, or otherwise properly footnoted in accordance with GAAP on the Company Financials. The Company is not and has not in the past been a member of a “controlled group” for purposes of Section 414(b), (c), (m) or (o) of the Code, nor does the Company have any Liability with respect to any collectively-bargained for plans, whether or not subject to the provisions of ERISA. No statement, either written or oral, has been made by the Company to any Person with regard to any Company Benefit Plan that was not in accordance with the Company Benefit Plan in any material respect.

 

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(b) Each Company Benefit Plan is and has been operated at all times in compliance with all applicable Laws in all material respects, including ERISA and the Code. Each Company Benefit Plan which is intended to be “qualified” within the meaning of Section 401(a) of the Code (i) has been determined by the IRS to be so qualified (or is based on a prototype plan which has received a favorable opinion letter) during the period from its adoption to the date of this Agreement and (ii) its related trust has been determined to be exempt from taxation under Section 501(a) of the Code or the Company have requested an initial favorable IRS determination of qualification and/or exemption within the period permitted by applicable Law. No fact exists which could adversely affect the qualified status of such Company Benefit Plans or the exempt status of such trusts.

 

(c) With respect to each Company Benefit Plan which covers any current or former officer, director, consultant or employee (or beneficiary thereof) of the Company, the Company has provided to Purchaser accurate and complete copies, if applicable, of: (i) all Company Benefit Plan texts and agreements and related trust agreements or annuity Contracts (including any amendments, modifications or supplements thereto); (ii) all summary plan descriptions and material modifications thereto; (iii) the three (3) most recent Forms 5500, if applicable, and annual report, including all schedules thereto; (iv) the most recent annual and periodic accounting of plan assets; (v) the three (3) most recent nondiscrimination testing reports; (vi) the most recent determination letter received from the IRS, if any; (vii) the most recent actuarial valuation; and (viii) all material communications with any Governmental Authority.

 

(d) With respect to each Company Benefit Plan: (i) such Company Benefit Plan has been administered and enforced in all material respects in accordance with its terms, the Code and ERISA; (ii) no breach of fiduciary duty has occurred; (iii) no Action is pending, or to the Company’s Knowledge, threatened (other than routine claims for benefits arising in the ordinary course of administration); (iv) no prohibited transaction, as defined in Section 406 of ERISA or Section 4975 of the Code, has occurred, excluding transactions effected pursuant to a statutory or administration exemption; and (v) all contributions and premiums due through the Closing Date have been made in all material respects as required under ERISA or have been fully accrued in all material respects on the Company Financials.

 

(e) No Company Benefit Plan is a “defined benefit plan” (as defined in Section 414(j) of the Code), a “multiemployer plan” (as defined in Section 3(37) of ERISA) or a “multiple employer plan” (as described in Section 413(c) of the Code) or is otherwise subject to Title IV of ERISA or Section 412 of the Code, and the Company has not incurred any Liability or otherwise could have any Liability, contingent or otherwise, under Title IV of ERISA and no condition presently exists that is expected to cause such Liability to be incurred. No Company Benefit Plan will become a multiple employer plan with respect to the Company immediately after the Closing Date. The Company does not currently maintain nor has ever maintained, nor is required currently or has ever been required to contribute to or otherwise participate in, a multiple employer welfare arrangement or voluntary employees’ beneficiary association as defined in Section 501(c)(9) of the Code.

 

(f) There is no arrangement under any Company Benefit Plan with respect to any employee that would result in the payment of any amount that by operation of Sections 280G or 162(m) of the Code would not be deductible by the Company and no arrangement exists pursuant to which the Company will be required to “gross up” or otherwise compensate any person because of the imposition of any excise tax on a payment to such person.

 

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(g) With respect to each Company Benefit Plan which is a “welfare plan” (as described in Section 3(1) of ERISA): (i) no such plan provides medical or death benefits with respect to current or former employees of the Company beyond their termination of employment (other than coverage mandated by Law, which is paid solely by such employees); and (ii) there are no reserves, assets, surplus or prepaid premiums under any such plan. The Company has complied with the provisions of Section 601 et seq. of ERISA and Section 4980B of the Code.

 

(h) The consummation of the transactions contemplated by this Agreement and the Ancillary Documents will not: (i) entitle any individual to severance pay, unemployment compensation or other benefits or compensation; (ii) accelerate the time of payment or vesting, or increase the amount of any compensation due, or in respect of, any individual; or (iii) result in or satisfy a condition to the payment of compensation that would, in combination with any other payment, result in an “excess parachute payment” within the meaning of Section 280G of the Code. The Company has not incurred any Liability for any Tax imposed under Chapter 43 of the Code or civil liability under Section 502(i) or (l) of ERISA.

 

(i) Except to the extent required by Section 4980B of the Code or similar state Law, the Company does not provide health or welfare benefits to any former or retired employee nor is obligated to provide such benefits to any active employee following such employee’s retirement or other termination of employment or service.

 

(j) All Company Benefit Plans can be terminated at any time as of or after the Closing Date without resulting in any Liability to the Surviving Corporation or Purchaser or their respective Affiliates for any additional contributions, penalties, premiums, fees, fines, excise taxes or any other charges or liabilities.

 

(k) Each Company Benefit Plan that is subject to Section 409A of the Code (each, a “Section 409A Plan”) as of the Closing Date is indicated as such on Schedule 4.19(k). No equity-based awards have been issued or granted by the Company that are, or are subject to, a Section 409A Plan. Each Section 409A Plan has been administered in compliance, and is in documentary compliance, with the applicable provisions of Section 409A of the Code, the regulations thereunder and other official guidance issued thereunder. The Company has no obligation to any employee or other service provider with respect to any Section 409A Plan that may be subject to any Tax under Section 409A of the Code. No payment to be made under any Section 409A Plan is, or to the Knowledge of the Company will be, subject to the penalties of Section 409A(a)(1) of the Code. There is no Contract or plan to which the Company is a party or by which it is bound to compensate any employee, consultant or director for penalty taxes paid pursuant to Section 409A of the Code.

 

4.20 Environmental Matters. Except as set forth in Schedule 4.20:

 

(a) The Company is and has been in compliance in all material respects with all applicable Environmental Laws, including obtaining, maintaining in good standing, and complying in all material respects with all Permits required for its business and operations by Environmental Laws (“Environmental Permits”), no Action is pending or, to the Company’s Knowledge, threatened to revoke, modify, or terminate any such Environmental Permit, and, to the Company’s Knowledge, no facts, circumstances, or conditions currently exist that could adversely affect such continued compliance with Environmental Laws and Environmental Permits or require capital expenditures to achieve or maintain such continued compliance with Environmental Laws and Environmental Permits.

 

(b) The Company is not the subject of any outstanding Order or Contract with any Governmental Authority or other Person in respect of any (i) Environmental Laws, (ii) Remedial Action, or (iii) Release or threatened Release of a Hazardous Material. The Company has not assumed, contractually or by operation of Law, any Liabilities or obligations under any Environmental Laws.

 

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(c) No Action has been made or is pending, or to the Company’s Knowledge, threatened against the Company or any assets of the Company alleging either or both that the Company may be in material violation of any Environmental Law or Environmental Permit or may have any material Liability under any Environmental Law.

 

(d) The Company has not manufactured, treated, stored, disposed of, arranged for or permitted the disposal of, generated, handled or Released any Hazardous Material, or owned or operated any property or facility, in a manner that has given or would reasonably be expected to give rise to any material Liability or obligation under applicable Environmental Laws. No fact, circumstance, or condition exists in respect of the Company or any property currently or formerly owned, operated, or leased by the Company or any property to which the Company arranged for the disposal or treatment of Hazardous Materials that could reasonably be expected to result in the Company incurring any material Environmental Liabilities.

 

(e) There is no investigation of the business, operations, or currently owned, operated, or leased property of the Company or, to the Company’s Knowledge, previously owned, operated, or leased property of the Company pending or, to the Company’s Knowledge, threatened that could lead to the imposition of any Liens under any Environmental Law or material Environmental Liabilities.

 

(f) To the Knowledge of the Company, there is not located at any of the properties of the Company any (i) underground storage tanks, (ii) asbestos-containing material, or (iii) equipment containing polychlorinated biphenyls.

 

(g) The Company has provided to the Purchaser all environmentally related site assessments, audits, studies, reports, analysis and results of investigations that have been performed in respect of the currently or previously owned, leased, or operated properties of the Company.

 

4.21 Transactions with Related Persons. Except as set forth on Schedule 4.21, neither the Company nor any of its Affiliates, nor any officer, director, manager, employee, trustee or beneficiary of the Company or any of its Affiliates, nor any immediate family member of any of the foregoing (whether directly or indirectly through an Affiliate of such Person) (each of the foregoing, a “Related Person”) is presently, or in the past three (3) years, has been, a party to any transaction with the Company, including any Contract or other arrangement (a) providing for the furnishing of services by (other than as officers, directors or employees of the Company), (b) providing for the rental of real property or Personal Property from or (c) otherwise requiring payments to (other than for services or expenses as directors, officers or employees of the Company in the ordinary course of business consistent with past practice) any Related Person or any Person in which any Related Person has an interest as an owner, officer, manager, director, trustee or partner or in which any Related Person has any direct or indirect interest (other than the ownership of securities representing no more than two percent (2%) of the outstanding voting power or economic interest of a publicly traded company). Except as set forth on Schedule 4.21, the Company does not have outstanding any Contract or other arrangement or commitment with any Related Person, and no Related Person owns any real property or Personal Property, or right, tangible or intangible (including Intellectual Property) which is used in the business of the Company. The assets of the Company do not include any receivable or other obligation from a Related Person, and the liabilities of the Company do not include any payable or other obligation or commitment to any Related Person.

 

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4.22 Insurance.

 

(a) Schedule 4.22(a) lists all insurance policies (by policy number, insurer, coverage period, coverage amount, annual premium and type of policy) held by the Company relating to the Company or its business, properties, assets, directors, officers and employees, copies of which have been provided to the Purchaser. All premiums due and payable under all such insurance policies have been timely paid and the Company is otherwise in material compliance with the terms of such insurance policies. Each such insurance policy (i) is legal, valid, binding, enforceable and in full force and effect and (ii) will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the Closing. The Company does not have any self-insurance or co-insurance programs. In the past three (3) years, the Company has not received any notice from, or on behalf of, any insurance carrier relating to or involving any adverse change or any change other than in the ordinary course of business, in the conditions of insurance, any refusal to issue an insurance policy or non-renewal of a policy.

 

(b) Schedule 4.22(b) identifies each individual insurance claim in excess of $50,000 made by the Company in the past three (3) years. The Company has reported to its insurers all claims and pending circumstances that would reasonably be expected to result in a claim, except where such failure to report such a claim would not be reasonably likely to be material to the Company. To the Knowledge of the Company, no event has occurred, and no condition or circumstance exists, that would reasonably be expected to (with or without notice or lapse of time) give rise to or serve as a basis for the denial of any such insurance claim. The Company has not made any claim against an insurance policy as to which the insurer is denying coverage.

 

4.23 Books and Records. All of the financial books and records of the Company are complete and accurate in all material respects and have been maintained in the ordinary course consistent with past practice and in accordance with applicable Laws.

 

4.24 Top Customers. Schedule 4.24 lists, by dollar volume received, as applicable, for each of (a) the twelve (12) months ended on December 31, 2019 and (b) the period from January 1, 2020 through the Interim Balance Sheet Date, the ten (10) largest customers of the Company (the “Top Customers”) and the ten largest suppliers of goods or services to the Target Companies (the “Top Suppliers”), and the amounts received and paid in such periods. The relationships of the Company with such customers are good commercial working relationships and (i) no Top Customer within the last twelve (12) months has cancelled or otherwise terminated, or, to the Company’s Knowledge, intends to cancel or otherwise terminate, any material relationships of such Person with the Company, (ii) no Top Customer has during the last twelve (12) months decreased materially or, to the Company’s Knowledge, threatened to stop, decrease or limit materially, or intends to modify materially its material relationships with the Company or intends to stop, decrease or limit materially its products or services to the Company or its usage or purchase of the products or services of the Company, (iii) to the Company’s Knowledge, no Top Customer intends to refuse to pay any amount due to the Company or seek to exercise any remedy against the Company, (iv) the Company has not within the past two (2) years been engaged in any material dispute with any Top Customer, and (v) to the Company’s Knowledge, the consummation of the transactions contemplated in this Agreement and the Ancillary Documents will not adversely affect the relationship of the Company with any Top Customer.

 

4.25 Certain Business Practices.

 

(a) Neither the Company, nor to its Knowledge, any of its Representatives acting on their behalf has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political parties or campaigns or violated any provision of the U.S. Foreign Corrupt Practices Act of 1977 or any other local or foreign anti-corruption or bribery Law or (iii) made any other unlawful payment. Neither the Company, nor to its Knowledge, any of its Representatives acting on its behalf has directly or indirectly, given or agreed to give any unlawful gift or similar benefit in any material amount to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder the Company or assist the Company in connection with any actual or proposed transaction.

 

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(b) The operations of the Company are and have been conducted at all times in all material respects in compliance with money laundering statutes in all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority, and no Action involving the Company with respect to any of the foregoing is pending or, to the Knowledge of the Company, threatened.

 

(c) Neither the Company nor any of its directors or officers, or, to the Knowledge of the Company, any other Representative acting on behalf of the Company is currently identified on the specially designated nationals or other blocked person list or otherwise currently subject to any U.S. sanctions administered by OFAC, and the Company has not in the last three (3) fiscal years, directly or indirectly, used any funds, or loaned, contributed or otherwise made available such funds to any Subsidiary, joint venture partner or other Person, in connection with any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to, or otherwise in violation of, any U.S. sanctions administered by OFAC.

 

4.26 Investment Company Act. The Company is not an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company,” or required to register as an “investment company,” in each case within the meaning of the Investment Company Act of 1940, as amended.

 

4.27 Finders and Brokers. Except as set forth in Schedule 4.27, the Company has not incurred nor will incur any Liability for any brokerage, finder’s or other fee or commission in connection with the transactions contemplated hereby.

 

4.28 Independent Investigation. The Company has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Purchaser, and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Purchaser for such purpose. The Company acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, it has relied solely upon its own investigation and the express representations and warranties of the Purchaser set forth in Agreement (including the related portions of the Purchaser Disclosure Schedules) and in any certificate delivered to the Company pursuant hereto; and (b) neither the Purchaser nor any of its Representatives have made any representation or warranty as to the Purchaser or this Agreement, except as expressly set forth in this Agreement (including the related portions of the Purchaser Disclosure Schedules) or in any certificate delivered to the Company pursuant hereto.

 

4.29 Information Supplied. None of the information supplied or to be supplied by the Company expressly for inclusion or incorporation by reference: (a) in any current report on Form 8-K, and any exhibits thereto or any other report, form, registration or other filing made with any Governmental Authority or stock exchange with respect to the transactions contemplated by this Agreement or any Ancillary Documents; (b) in the Proxy Statement; or (c) in the mailings or other distributions to the Purchaser’s stockholders and/or prospective investors with respect to the consummation of the transactions contemplated by this Agreement or in any amendment to any of documents identified in (a) through (c), will, when filed, made available, mailed or distributed, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. None of the information supplied or to be supplied by the Company expressly for inclusion or incorporation by reference in any of the Signing Press Release, the Signing Filing, the Closing Press Release and the Closing Filing will, when filed or distributed, as applicable, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, the Company makes no representation, warranty or covenant with respect to any information supplied by or on behalf of the Purchaser or its Affiliates.

 

4.30 Disclosure. No representations or warranties by the Company in this Agreement (as modified by the Company Disclosure Schedules) or the Ancillary Documents, (a) contains or will contain any untrue statement of a material fact, or (b) omits or will omit to state, when read in conjunction with all of the information contained in this Agreement, the Company Disclosure Schedules and the Ancillary Documents, any fact necessary to make the statements or facts contained therein not materially misleading.

 

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Article V

REPRESENTATIONS AND WARRANTIES OF COMPANY STOCKHOLDER

 

Except as set forth in the Company Disclosure Schedules, the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer, the Company Stockholder hereby represents and warrants to the Purchaser, as of the date hereof and as of the Closing, as follows:

 

5.1 Organization and Standing. The Company Stockholder is a corporation duly incorporated, validly existing and in good standing under the Laws of the jurisdiction of its formation and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted.

 

5.2 Authorization; Binding Agreement. The Company Stockholder has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is or is required to be a party, to perform the Company Stockholder’s obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which the Company Stockholder is or is required to be a party shall be when delivered, duly and validly executed and delivered by the Company Stockholder and assuming the due authorization, execution and delivery of this Agreement and any such Ancillary Document by the other parties hereto and thereto, constitutes, or when delivered shall constitute, the legal, valid and binding obligation of the Company Stockholder, enforceable against the Company Stockholder in accordance with its terms, subject to the Enforceability Exceptions..

 

5.3 Ownership. The Company Stockholder owns good, valid and marketable title to all of the Company Securities, free and clear of any and all Liens (other than those imposed by applicable securities Laws or the Company’s Organizational Documents). There are no proxies, voting rights, shareholders’ agreements or other agreements or understandings, to which the Company Stockholder is a party or by which the Company Stockholder is bound, with respect to the voting or transfer of any of the Company Stockholder’s Company Securities other than this Agreement. Upon delivery of the shares of Company Common Stock to Purchaser on the Closing Date in accordance with this Agreement, the entire legal and beneficial interest in the Company Securities and good, valid and marketable title to the Company Securities, free and clear of all Liens (other than those imposed by applicable securities Laws or those incurred by Purchaser), will pass to Purchaser.

 

5.4 Non-Contravention. The execution and delivery by the Company Stockholder of this Agreement and each Ancillary Document to which the Company Stockholder is or is required to be a party or otherwise bound, and the consummation by the Company Stockholder of the transactions contemplated hereby and thereby and compliance by the Company Stockholder with any of the provisions hereof and thereof, will not (a) conflict with or violate any provision of the Company Stockholder’s Organizational Documents, (b) conflict with or violate any Law or Order applicable to the Company Stockholder or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by the Company Stockholder under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien upon the shares of the Company’s capital stock, (viii) give rise to any obligation to obtain any third party Consent or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of any Contract to which the Company Stockholder is a party or its properties or assets are otherwise bound, except for any deviations from any of the foregoing clauses (a), (b) or (c) that would not reasonably be expected to have a Material Adverse Effect on the Company Stockholder.

 

5.5 Finders and Brokers. Except as set forth in Schedule 4.27, the Company Stockholder has not incurred nor will incur any Liability for any brokerage, finder’s or other fee or commission in connection with the transactions contemplated hereby.

 

5.6 QIB Status. The Company Stockholder is a “qualified institutional buyer” as defined in Rule 144A promulgated under the Securities Act. The Company Stockholder acknowledges that the Purchaser Common Stock it receives in the Merger may be offered, resold, pledged or otherwise transferred only (a) to Purchaser or a subsidiary thereof, (b) pursuant to a registration statement that has been declared effective under the Securities Act, or (c) pursuant to an available exemption from the registration requirements of the Securities Act, subject to compliance with any applicable securities laws of any jurisdiction.

 

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Article VI
COVENANTS

 

6.1 Access and Information.

 

(a) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with Section 9.1 or the Closing (the “Interim Period”), subject to Section 6.15, the Company shall give, and shall cause its Representatives to give, the Purchaser and its Representatives, at reasonable times during normal business hours and upon reasonable intervals and notice, reasonable access to all offices and other facilities and to all employees, properties, Contracts, agreements, commitments, books and records, financial and operating data and other information (including Tax Returns, internal working papers, client files, client Contracts and director service agreements), of or pertaining to the Company, as the Purchaser or its Representatives may reasonably request regarding the Company and its business, assets, Liabilities, financial condition, prospects, operations, management, employees and other aspects (including unaudited quarterly financial statements, including a consolidated quarterly balance sheet and income statement, a copy of each material report, schedule and other document filed with or received by a Governmental Authority pursuant to the requirements of applicable securities Laws, and independent public accountants’ work papers (subject to the consent or any other conditions required by such accountants, if any)) and cause each of the Company’s Representatives to reasonably cooperate with the Purchaser and its Representatives in their investigation; provided, however, that the Purchaser and its Representatives shall conduct any such activities in such a manner as not to unreasonably interfere with the business or operations of the Company.

 

(b) During the Interim Period, subject to Section 6.15, the Purchaser shall give, and shall cause its Representatives to give, the Company and its Representatives, at reasonable times during normal business hours and upon reasonable intervals and notice, reasonable access to all offices and other facilities and to all employees, properties, Contracts, agreements, commitments, books and records, financial and operating data and other information (including Tax Returns, internal working papers, client files, client Contracts and director service agreements), of or pertaining to the Purchaser or its Subsidiaries, as the Company or its Representatives may reasonably request regarding the Purchaser, its Subsidiaries and their respective businesses, assets, Liabilities, financial condition, prospects, operations, management, employees and other aspects (including unaudited quarterly financial statements, including a consolidated quarterly balance sheet and income statement, a copy of each material report, schedule and other document filed with or received by a Governmental Authority pursuant to the requirements of applicable securities Laws, and independent public accountants’ work papers (subject to the consent or any other conditions required by such accountants, if any)) and cause each of the Purchaser’s Representatives to reasonably cooperate with the Company and its Representatives in their investigation; provided, however, that the Company and its Representatives shall conduct any such activities in such a manner as not to unreasonably interfere with the business or operations of the Purchaser or any of its Subsidiaries.

 

6.2 Conduct of Business of the Company.

 

(a) Unless the Purchaser shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the Interim Period, except as expressly contemplated by this Agreement or the Ancillary Documents or as set forth on Schedule 6.2, the Company shall, and shall cause its Subsidiaries to, (i) conduct their respective businesses, in all material respects, in the ordinary course of business consistent with past practice, (ii) comply with all Laws applicable to the Company and its business, assets and employees, and (iii) take all commercially reasonable measures necessary or appropriate to preserve intact, in all material respects, their respective business organizations, to keep available the services of their respective managers, directors, officers, employees and consultants, and to preserve the possession, control and condition of their respective material assets, all as consistent with past practice.

 

(b) Without limiting the generality of Section 6.2(a) and except as contemplated by the terms of this Agreement or the Ancillary Documents as set forth on Schedule 6.2, during the Interim Period, without the prior written consent of the Purchaser (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall not:

 

(i) amend, waive or otherwise change, in any respect, its Organizational Documents, except as required by applicable Law;

 

(ii) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for any of its shares or other equity securities or securities of any class and any other equity-based awards, or engage in any hedging transaction with a third Person with respect to such securities;

 

(iii) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities;

 

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(iv) incur, create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise) in excess of $100,000 individually or $250,000 in the aggregate, make a loan or advance to or investment in any third party (other than advancement of expenses to employees in the ordinary course of business), or guarantee or endorse any Indebtedness, Liability or obligation of any Person in excess of $100,000 individually or $250,000 in the aggregate;

 

(v) increase the wages, salaries or compensation of its employees other than in the ordinary course of business, consistent with past practice, and in any event not in the aggregate by more than five percent (5%), or make or commit to make any bonus payment (whether in cash, property or securities) to any employee, or materially increase other benefits of employees generally, or enter into, establish, materially amend or terminate any Company Benefit Plan with, for or in respect of any current consultant, officer, manager director or employee, in each case other than as required by applicable Law, pursuant to the terms of any Company Benefit Plans or in the ordinary course of business consistent with past practice;

 

(vi) make or rescind any material election relating to Taxes, settle any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, file any amended Tax Return or claim for refund, or make any material change in its accounting or Tax policies or procedures, in each case except as required by applicable Law or in compliance with GAAP;

 

(vii) transfer or license to any Person or otherwise extend, materially amend or modify, permit to lapse or fail to preserve any material Company Registered IP, Company Licensed IP or other Company IP (excluding non-exclusive licenses of Company IP to Company customers in the ordinary course of business consistent with past practice), or disclose to any Person who has not entered into a confidentiality agreement any Trade Secrets;

 

(viii) terminate, or waive or assign any material right under, any Company Material Contract or enter into any Contract that would be a Company Material Contract, in any case outside of the ordinary course of business consistent with past practice;

 

(ix) fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;

 

(x) establish any Subsidiary or enter into any new line of business;

 

(xi) fail to use commercially reasonable efforts to keep in force insurance policies or replacement or revised policies providing insurance coverage with respect to its assets, operations and activities in such amount and scope of coverage substantially similar to that which is currently in effect;

 

(xii) revalue any of its material assets or make any material change in accounting methods, principles or practices, except to the extent required to comply with GAAP and after consulting with the Company’s outside auditors;

 

(xiii) waive, release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby), other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, the Company or its Affiliates) not in excess of $100,000 (individually or in the aggregate), or otherwise pay, discharge or satisfy any Actions, Liabilities or obligations, unless such amount has been reserved in the Company Financials;

 

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(xiv) close or materially reduce its activities, or effect any layoff or other personnel reduction or change, at any of its facilities;

 

(xv) acquire, including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets outside the ordinary course of business consistent with past practice;

 

(xvi) make capital expenditures in excess of $100,000 (individually for any project (or set of related projects) or $250,000 in the aggregate);

 

(xvii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;

 

(xviii) voluntarily incur any Liability or obligation (whether absolute, accrued, contingent or otherwise) in excess of $100,000 individually or $250,000 in the aggregate other than pursuant to the terms of a Company Material Contract or Company Benefit Plan;

 

(xix) sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;

 

(xx) enter into any agreement, understanding or arrangement with respect to the voting of equity securities of the Company;

 

(xxi) take any action that would reasonably be expected to significantly delay or impair the obtaining of any Consents of any Governmental Authority to be obtained in connection with this Agreement;

 

(xxii) accelerate the collection of any trade receivables or delay the payment of trade payables or any other liabilities other than in the ordinary course of business consistent with past practice;

 

(xxiii) enter into, amend, waive or terminate (other than terminations in accordance with their terms) any transaction with any Related Person (other than compensation and benefits and advancement of expenses, in each case, provided in the ordinary course of business consistent with past practice); or

 

(xxiv) authorize or agree to do any of the foregoing actions.

 

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6.3 Conduct of Business of the Purchaser.

 

(a) Unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the Interim Period, except as expressly contemplated by this Agreement or the Ancillary Documents or as set forth on Schedule 6.3, the Purchaser shall, and shall cause its Subsidiaries to, (i) conduct their respective businesses, in all material respects, in the ordinary course of business consistent with past practice, (ii) comply with all Laws applicable to the Purchaser and its Subsidiaries and their respective businesses, assets and employees, and (iii) take all commercially reasonable measures necessary or appropriate to preserve intact, in all material respects, their respective business organizations, to keep available the services of their respective managers, directors, officers, employees and consultants, and to preserve the possession, control and condition of their respective material assets, all as consistent with past practice. Notwithstanding anything to the contrary in this Section 6.3, nothing in this Agreement shall prohibit or restrict Purchaser from extending, in accordance with Purchaser’s Organizational Documents and the IPO Prospectus, the deadline by which it must complete its Business Combination (an “Extension”), and no consent of any other Party shall be required in connection therewith.

 

(b) Without limiting the generality of Section 6.3(a) and except as contemplated by the terms of this Agreement or the Ancillary Documents (including as contemplated by any PIPE Investment) or as set forth on Schedule 6.3, during the Interim Period, without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed), the Purchaser shall not, and shall cause its Subsidiaries to not:

 

(i) amend, waive or otherwise change, in any respect, its Organizational Documents except as required by applicable Law;

 

(ii) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for any of its equity securities or other security interests of any class and any other equity-based awards, or engage in any hedging transaction with a third Person with respect to such securities;

 

(iii) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its shares or other equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities;

 

(iv) incur, create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise) in excess of $100,000 individually or $250,000 in the aggregate, make a loan or advance to or investment in any third party, or guarantee or endorse any Indebtedness, Liability or obligation of any Person (provided, that this Section 6.3(b)(iv) shall not prevent the Purchaser from borrowing funds necessary to finance its ordinary course administrative costs and expenses and Expenses incurred in connection with the consummation of the Merger and the other transactions contemplated by this Agreement (including any PIPE Investment and the costs and expenses necessary for an Extension (such expenses, “Extension Expenses”), up to aggregate additional Indebtedness during the Interim Period of $1,000,000);

 

(v) make or rescind any material election relating to Taxes, settle any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, file any amended Tax Return or claim for refund, or make any material change in its accounting or Tax policies or procedures, in each case except as required by applicable Law or in compliance with GAAP;

 

(vi) amend, waive or otherwise change the Trust Agreement in any manner adverse to the Purchaser;

 

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(vii) terminate, waive or assign any material right under any Purchaser Material Contract;

 

(viii) fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;

 

(ix) establish any Subsidiary or enter into any new line of business;

 

(x) fail to use commercially reasonable efforts to keep in force insurance policies or replacement or revised policies providing insurance coverage with respect to its assets, operations and activities in such amount and scope of coverage substantially similar to that which is currently in effect;

 

(xi) revalue any of its material assets or make any material change in accounting methods, principles or practices, except to the extent required to comply with GAAP and after consulting the Purchaser’s outside auditors;

 

(xii) waive, release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby), other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, the Purchaser or its Subsidiary) not in excess of $100,000 (individually or in the aggregate), or otherwise pay, discharge or satisfy any Actions, Liabilities or obligations, unless such amount has been reserved in the Purchaser Financials;

 

(xiii) acquire, including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets outside the ordinary course of business;

 

(xiv) make capital expenditures in excess of $100,000 individually for any project (or set of related projects) or $250,000 in the aggregate (excluding for the avoidance of doubt, incurring any Expenses);

 

(xv) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than with respect to the Merger);

 

(xvi) voluntarily incur any Liability or obligation (whether absolute, accrued, contingent or otherwise) in excess of $100,000 individually or $250,000 in the aggregate (excluding the incurrence of any Expenses) other than pursuant to the terms of a Contract in existence as of the date of this Agreement or entered into in the ordinary course of business or in accordance with the terms of this Section 6.3 during the Interim Period;

 

(xvii) sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;

 

(xviii) enter into any agreement, understanding or arrangement with respect to the voting of Purchaser Securities;

 

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(xix) take any action that would reasonably be expected to significantly delay or impair the obtaining of any Consents of any Governmental Authority to be obtained in connection with this Agreement; or

 

(xx) authorize or agree to do any of the foregoing actions.

 

6.4 Annual and Interim Financial Statements. During the Interim Period, within thirty (30) calendar days following the end of each calendar month, each three-month quarterly period and each fiscal year, the Company shall deliver to the Purchaser an unaudited income statement and an unaudited balance sheet of the Company for the period from the Interim Balance Sheet Date through the end of such calendar month, quarterly period or fiscal year and the applicable comparative period in the preceding fiscal year, in each case accompanied by a certificate of the Chief Financial Officer of the Company to the effect that all such financial statements fairly present the financial position and results of operations of the Company as of the date or for the periods indicated, in accordance with GAAP, subject to year-end audit adjustments and excluding footnotes. From the date hereof through the Closing Date, the Company will also promptly deliver to the Purchaser copies of any audited financial statements of the Company that the Company’s certified public accountants may issue.

 

6.5 Purchaser Public Filings. During the Interim Period, the Purchaser will keep current and timely file all of its public filings with the SEC and otherwise comply in all material respects with applicable securities Laws and shall use its commercially reasonable efforts prior to the Closing to maintain the listing of the Purchaser Public Units, the Purchaser Common Stock and the Purchaser Public Warrants on NYSE; provided, that the Parties acknowledge and agree that from and after the Closing, the Parties intend to list on NYSE only the Purchaser Common Stock and the Purchaser Public Warrants.

 

6.6 No Solicitation.

 

(a) For purposes of this Agreement, (i) an “Acquisition Proposal” means any inquiry, proposal or offer, or any indication of interest in making an offer or proposal, from any Person or group at any time relating to an Alternative Transaction, and (ii) an “Alternative Transaction” means (A) with respect to the Company and its Affiliates, a transaction (other than the transactions contemplated by this Agreement) concerning the sale of (x) all or any material part of the business or assets of the Company (other than in the ordinary course of business consistent with past practice) or (y) any of the shares or other equity interests or profits of the Company, in any case, whether such transaction takes the form of a sale of shares or other equity interests, assets, merger, consolidation, issuance of debt securities, management Contract, joint venture or partnership, or otherwise and (B) with respect to the Purchaser and its Affiliates, a transaction (other than the transactions contemplated by this Agreement) concerning a Business Combination involving Purchaser.

 

(b) During the Interim Period, in order to induce the other Parties to continue to commit to expend management time and financial resources in furtherance of the transactions contemplated hereby, each Party shall not, and shall cause its Representatives to not, without the prior written consent of the Company and the Purchaser, directly or indirectly, (i) solicit, assist, initiate or facilitate the making, submission or announcement of, or intentionally encourage, any Acquisition Proposal, (ii) furnish any non-public information regarding such Party or its Affiliates or their respective businesses, operations, assets, Liabilities, financial condition, prospects or employees to any Person or group (other than a Party to this Agreement or their respective Representatives) in connection with or in response to an Acquisition Proposal, (iii) engage or participate in discussions or negotiations with any Person or group with respect to, or that could reasonably be expected to lead to, an Acquisition Proposal, (iv) approve, endorse or recommend, or publicly propose to approve, endorse or recommend, any Acquisition Proposal, (v) negotiate or enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Acquisition Proposal, or (vi) release any third Person from, or waive any provision of, any confidentiality agreement to which such Party is a party.

 

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(c) Each Party shall notify the others as promptly as practicable (and in any event within 48 hours) in writing of the receipt by such Party or any of its Representatives of (i) any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations regarding or constituting any Acquisition Proposal or any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations that could be expected to result in an Acquisition Proposal, and (ii) any request for non-public information relating to such Party or its Affiliates in connection with any Acquisition Proposal, specifying in each case, the material terms and conditions thereof (including a copy thereof if in writing or a written summary thereof if oral) and the identity of the party making such inquiry, proposal, offer or request for information. Each Party shall keep the others promptly informed of the status of any such inquiries, proposals, offers or requests for information. During the Interim Period, each Party shall, and shall cause its Representatives to, immediately cease and cause to be terminated any solicitations, discussions or negotiations with any Person with respect to any Acquisition Proposal and shall, and shall direct its Representatives to, cease and terminate any such solicitations, discussions or negotiations.

 

6.7 No Trading. The Company acknowledges and agrees that it is aware, and that the Company’s Affiliates are aware (and each of their respective Representatives is aware or, upon receipt of any material nonpublic information of the Purchaser, will be advised) of the restrictions imposed by U.S. federal securities laws and the rules and regulations of the SEC and NYSE promulgated thereunder or otherwise (the “Federal Securities Laws”) and other applicable foreign and domestic Laws on a Person possessing material nonpublic information about a publicly traded company. The Company hereby agrees that, while it is in possession of such material nonpublic information, it shall not purchase or sell any securities of the Purchaser (other than to engage in the Merger in accordance with Article I, communicate such information to any third party, take any other action with respect to the Purchaser in violation of such Laws, or cause or encourage any third party to do any of the foregoing.

 

6.8 Notification of Certain Matters. During the Interim Period, each Party shall give prompt notice to the other Parties if such Party or its Affiliates: (a) fails to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it or its Affiliates hereunder in any material respect; (b) receives any notice or other communication in writing from any third party (including any Governmental Authority) alleging (i) that the Consent of such third party is or may be required in connection with the transactions contemplated by this Agreement or (ii) any non-compliance with any Law by such Party or its Affiliates; (c) receives any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; (d) discovers any fact or circumstance that, or becomes aware of the occurrence or non-occurrence of any event the occurrence or non-occurrence of which, would reasonably be expected to cause or result in any of the conditions to the Closing set forth in Article VIII not being satisfied or the satisfaction of those conditions being materially delayed; or (e) becomes aware of the commencement or threat, in writing, of any Action against such Party or any of its Affiliates, or any of their respective properties or assets, or, to the Knowledge of such Party, any officer, director, partner, member or manager, in his, her or its capacity as such, of such Party or of its Affiliates with respect to the consummation of the transactions contemplated by this Agreement. No such notice shall constitute an acknowledgement or admission by the Party providing the notice regarding whether or not any of the conditions to the Closing have been satisfied or in determining whether or not any of the representations, warranties or covenants contained in this Agreement have been breached.

 

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6.9 Efforts.

 

(a) Subject to the terms and conditions of this Agreement, each Party shall use its commercially reasonable efforts, and shall cooperate fully with the other Parties, to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable Laws and regulations to consummate the transactions contemplated by this Agreement (including the receipt of all applicable Consents of Governmental Authorities) and to comply as promptly as practicable with all requirements of Governmental Authorities applicable to the transactions contemplated by this Agreement.

 

(b) In furtherance and not in limitation of Section 6.9(a), to the extent required under any Laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade (“Antitrust Laws”), each Party hereto agrees to make any required filing or application under Antitrust Laws, as applicable, at such Party’s sole cost and expense, with respect to the transactions contemplated hereby as promptly as practicable, to supply as promptly as reasonably practicable any additional information and documentary material that may be reasonably requested pursuant to Antitrust Laws and to take all other actions reasonably necessary, proper or advisable to cause the expiration or termination of the applicable waiting periods under Antitrust Laws as soon as practicable, including by requesting early termination of the waiting period provided for under the Antitrust Laws. Each Party shall, in connection with its efforts to obtain all requisite approvals and authorizations for the transactions contemplated by this Agreement under any Antitrust Law, use its commercially reasonable efforts to: (i) cooperate in all respects with each other Party or its Affiliates in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private Person; (ii) keep the other Parties reasonably informed of any communication received by such Party or its Representatives from, or given by such Party or its Representatives to, any Governmental Authority and of any communication received or given in connection with any proceeding by a private Person, in each case regarding any of the transactions contemplated by this Agreement; (iii) permit a Representative of the other Parties and their respective outside counsel to review any communication given by it to, and consult with each other in advance of any meeting or conference with, any Governmental Authority or, in connection with any proceeding by a private Person, with any other Person, and to the extent permitted by such Governmental Authority or other Person, give a Representative or Representatives of the other Parties the opportunity to attend and participate in such meetings and conferences; (iv) in the event a Party’s Representative is prohibited from participating in or attending any meetings or conferences, the other Parties shall keep such Party promptly and reasonably apprised with respect thereto; and (v) use commercially reasonable efforts to cooperate in the filing of any memoranda, white papers, filings, correspondence or other written communications explaining or defending the transactions contemplated hereby, articulating any regulatory or competitive argument, and/or responding to requests or objections made by any Governmental Authority.

 

(c) As soon as reasonably practicable following the date of this Agreement, the Parties shall reasonably cooperate with each other and use (and shall cause their respective Affiliates to use) their respective commercially reasonable efforts to prepare and file with Governmental Authorities requests for approval of the transactions contemplated by this Agreement and shall use all commercially reasonable efforts to have such Governmental Authorities approve the transactions contemplated by this Agreement. Each Party shall give prompt written notice to the other Parties if such Party or any of its Representatives receives any notice from such Governmental Authorities in connection with the transactions contemplated by this Agreement, and shall promptly furnish the other Parties with a copy of such Governmental Authority notice. If any Governmental Authority requires that a hearing or meeting be held in connection with its approval of the transactions contemplated hereby, whether prior to the Closing or after the Closing, each Party shall arrange for Representatives of such Party to be present for such hearing or meeting. If any objections are asserted with respect to the transactions contemplated by this Agreement under any applicable Law or if any Action is instituted (or threatened to be instituted) by any applicable Governmental Authority or any private Person challenging any of the transactions contemplated by this Agreement or any Ancillary Document as violative of any applicable Law or which would otherwise prevent, materially impede or materially delay the consummation of the transactions contemplated hereby or thereby, the Parties shall use their commercially reasonable efforts to resolve any such objections or Actions so as to timely permit consummation of the transactions contemplated by this Agreement and the Ancillary Documents, including in order to resolve such objections or Actions which, in any case if not resolved, could reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated hereby or thereby. In the event any Action is instituted (or threatened to be instituted) by a Governmental Authority or private Person challenging the transactions contemplated by this Agreement, or any Ancillary Document, the Parties shall, and shall cause their respective Representatives to, reasonably cooperate with each other and use their respective commercially reasonable efforts to contest and resist any such Action and to have vacated, lifted, reversed or overturned any Order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the transactions contemplated by this Agreement or the Ancillary Documents.

 

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(d) Prior to the Closing, each Party shall use its commercially reasonable efforts to obtain any Consents of Governmental Authorities or other third Persons as may be necessary for the consummation by such Party or its Affiliates of the transactions contemplated by this Agreement or required as a result of the execution or performance of, or consummation of the transactions contemplated by, this Agreement by such Party or its Affiliates, and the other Parties shall provide reasonable cooperation in connection with such efforts.

 

6.10 Tax Matters. Each of the Parties shall use its reasonable best efforts to cause the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code or such other tax treatment mutually agreed to by the Parties. None of the Parties shall (and each of the Parties shall cause their respective Subsidiaries not to) take any action, or fail to take any action, that could reasonably be expected to cause the Merger to fail to qualify as a “reorganization” within the meaning of Section 368(a) of the Code or such other tax treatment mutually agreed to by the Parties. The Parties intend to report and, except to the extent otherwise required by Law, shall report, for federal income tax purposes, the Merger as a “reorganization” within the meaning of Section 368(a) of the Code or such other tax treatment mutually agreed to by the Parties. The Parties agree to use reasonable best efforts to execute such amendments to this Agreement as may be reasonably required in order to obtain any other tax treatment mutually agreed to by the Parties, as applicable.

 

6.11 Further Assurances. The Parties hereto shall further cooperate with each other and use their respective commercially reasonable efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on their part under this Agreement and applicable Laws to consummate the transactions contemplated by this Agreement as soon as reasonably practicable, including preparing and filing as soon as practicable all documentation to effect all necessary notices, reports and other filings.

 

6.12 The Proxy Statement.

 

(a) As promptly as practicable after the date hereof, the Purchaser shall prepare with the reasonable assistance of the Company, and file with the SEC a proxy statement (as amended, the “Proxy Statement”) for the purpose of soliciting proxies from Purchaser stockholders for the matters to be acted upon at the Purchaser Special Meeting and providing the Public Stockholders an opportunity in accordance with the Purchaser’s Organizational Documents and the IPO Prospectus to have their shares of Purchaser Common Stock redeemed (the “Redemption”) in conjunction with the stockholder vote on the Stockholder Approval Matters. The Proxy Statement shall include proxy materials for the purpose of soliciting proxies from Purchaser stockholders to vote, at an extraordinary general meeting of Purchaser stockholders to be called and held for such purpose (the “Purchaser Special Meeting”), in favor of resolutions approving (i) the adoption and approval of this Agreement and the transactions contemplated hereby or referred to herein, including the Merger (and, to the extent required, the issuance of any shares in connection with the PIPE Investment), by the holders of shares of Purchaser Common Stock in accordance with the Purchaser’s Organizational Documents, the DGCL and the rules and regulations of the SEC and NYSE, (ii) the change of name of the Purchaser and the adoption and approval of the Amended Organizational Documents, (iii) adoption and approval of a new equity incentive plan in form and substance reasonably acceptable to the Company Stockholder and the Purchaser (the “Incentive Plan”), and which will provide for awards for a number of shares of Purchaser Common Stock equal to ten percent (10%) of the aggregate number of shares of Purchaser Common Stock issued and outstanding immediately after the Closing (giving effect to the Redemption), (iv) the appointment of the members of the Post-Closing Purchaser Board in accordance with Section 6.17 hereof, (v) such other matters as the Company and Purchaser shall hereafter mutually determine to be necessary or appropriate in order to effect the Merger and the other transactions contemplated by this Agreement (the approvals described in foregoing clauses (i) through (v), collectively, the “Stockholder Approval Matters”), and (vi) the adjournment of the Purchaser Special Meeting, if necessary or desirable in the reasonable determination of Purchaser. If on the date for which the Purchaser Special Meeting is scheduled, Purchaser has not received proxies representing a sufficient number of shares to obtain the Required Stockholder Approval, whether or not a quorum is present, Purchaser may make one or more successive postponements or adjournments of the Purchaser Special Meeting. In connection with the Proxy Statement, Purchaser will file with the SEC financial and other information about the transactions contemplated by this Agreement in accordance with applicable Law and applicable proxy solicitation and registration statement rules set forth in the Purchaser’s Organizational Documents, the DGCL and the rules and regulations of the SEC and NYSE. Purchaser shall cooperate and provide the Company (and its counsel) with a reasonable opportunity to review and comment on the Proxy Statement and any amendment or supplement thereto prior to filing the same with the SEC. The Company shall provide Purchaser with such information concerning the Company and its stockholders, officers, directors, employees, assets, Liabilities, condition (financial or otherwise), business and operations that may be required or appropriate for inclusion in the Proxy Statement, or in any amendments or supplements thereto, which information provided by the Company shall be true and correct and not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not materially misleading.

 

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(b) Purchaser shall take any and all reasonable and necessary actions required to satisfy the requirements of the Securities Act, the Exchange Act and other applicable Laws in connection with the Proxy Statement, the Purchaser Special Meeting and the Redemption. Each of Purchaser and the Company shall, and shall cause each of its Subsidiaries to, make their respective directors, officers and employees, upon reasonable advance notice, available to the Company, Purchaser and, after the Closing, the Disinterested Director Majority, and their respective Representatives in connection with the drafting of the public filings with respect to the transactions contemplated by this Agreement, including the Proxy Statement, and responding in a timely manner to comments from the SEC. Each Party shall promptly correct any information provided by it for use in the Proxy Statement (and other related materials) if and to the extent that such information is determined to have become false or misleading in any material respect or as otherwise required by applicable Laws. Purchaser shall amend or supplement the Proxy Statement and cause the Proxy Statement, as so amended or supplemented, to be filed with the SEC and to be disseminated to Purchaser stockholders, in each case as and to the extent required by applicable Laws and subject to the terms and conditions of this Agreement and the Purchaser’s Organizational Documents.

 

(c) Purchaser, with the assistance of the other Parties, shall promptly respond to any SEC comments on the Proxy Statement and shall otherwise use its commercially reasonable efforts to cause the Proxy Statement to “clear” comments from the SEC. Purchaser shall provide the Company with copies of any written comments, and shall inform the Company of any material oral comments, that Purchaser or its Representatives receive from the SEC or its staff with respect to the Proxy Statement, the Purchaser Special Meeting and the Redemption promptly after the receipt of such comments and shall give the Company a reasonable opportunity under the circumstances to review and comment on any proposed written or material oral responses to such comments.

 

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(d) As soon as practicable following the Proxy Statement “clearing” comments from the SEC, Purchaser shall distribute the definitive Proxy Statement to Purchaser’s stockholders and the Company Stockholder, and, pursuant thereto, shall call the Purchaser Special Meeting in accordance with the DGCL for a date no later than thirty (30) days following the filing of the definitive Proxy Statement.

 

(e) Purchaser shall comply with all applicable Laws, any applicable rules and regulations of NYSE, Purchaser’s Organizational Documents and this Agreement in the preparation, filing and distribution of the Proxy Statement, any solicitation of proxies thereunder, the calling and holding of the Purchaser Special Meeting and the Redemption.

 

6.13 Listing and Public Information. Purchaser shall use its commercially reasonable efforts to cause the Purchaser Common Stock that will be issued in connection with the Merger and the transactions contemplated hereby to be approved for listing on the NYSE, subject to official notice of issuance, prior to the Effective Time. After the Closing and for such time that the Company Stockholder is an “affiliate” of the Purchaser for the purposes of the Securities Act and the Exchange Act, unless otherwise agreed to by the Company Stockholder and a Disinterested Director Majority, Purchaser shall file or furnish with the SEC such annual, quarterly and periodic reports pursuant to Section 13 or Section 15(d) of the Exchange Act that would be required by Section 12, Section 13 or Section 15(d) of the Exchange Act in respect of a security listed and registered on a national securities exchange.

 

6.14 Public Announcements.

 

(a) The Parties agree that during the Interim Period no public release, filing or announcement concerning this Agreement or the Ancillary Documents or the transactions contemplated hereby or thereby shall be issued by any Party or any of their Affiliates without the prior written consent of the Purchaser and the Company (which consent shall not be unreasonably withheld, conditioned or delayed), except as such release or announcement may be required by applicable Law or the rules or regulations of any securities exchange, in which case the applicable Party shall use commercially reasonable efforts to allow the other Parties reasonable time to comment on, and arrange for any required filing with respect to, such release or announcement in advance of such issuance.

 

(b) The Parties shall mutually agree upon and, as promptly as practicable after the execution of this Agreement (but in any event within four (4) Business Days thereafter), issue a press release announcing the execution of this Agreement (the “Signing Press Release”). Promptly after the issuance of the Signing Press Release, the Purchaser shall file a current report on Form 8-K (the “Signing Filing”) with the Signing Press Release and a description of this Agreement as required by Federal Securities Laws, which the Company shall review, comment upon and approve (which approval shall not be unreasonably withheld, conditioned or delayed) prior to filing (with the Company reviewing, commenting upon and approving such Signing Filing in any event no later than the third (3rd) Business Day after the execution of this Agreement). The Parties shall mutually agree upon and, as promptly as practicable after the Closing (but in any event within four (4) Business Days thereafter), issue a press release announcing the consummation of the transactions contemplated by this Agreement (the “Closing Press Release”). Promptly after the issuance of the Closing Press Release, the Purchaser shall file a current report on Form 8-K (the “Closing Filing”) with the Closing Press Release and a description of the Closing as required by Federal Securities Laws which the Company Stockholder and the Disinterested Director Majority shall review, comment upon and approve (which approval shall not be unreasonably withheld, conditioned or delayed) prior to filing. In connection with the preparation of the Signing Press Release, the Signing Filing, the Closing Filing, the Closing Press Release, or any other report, statement, filing notice or application made by or on behalf of a Party to any Governmental Authority or other third party in connection with the transactions contemplated hereby, each Party shall, upon request by any other Party, furnish the Parties with all information concerning themselves, their respective directors, officers and equity holders, and such other matters as may be reasonably necessary or advisable in connection with the transactions contemplated hereby, or any other report, statement, filing, notice or application made by or on behalf of a Party to any third party and/ or any Governmental Authority in connection with the transactions contemplated hereby.

 

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6.15 Confidential Information.

 

(a) The Company and the Company Stockholder hereby agrees that during the Interim Period and, in the event that this Agreement is terminated in accordance with Article IX, for a period of two (2) years after such termination, they shall, and shall cause their respective Representatives to: (i) treat and hold in strict confidence any Purchaser Confidential Information, and will not use for any purpose (except in connection with the consummation of the transactions contemplated by this Agreement or the Ancillary Documents, performing their obligations hereunder or thereunder, enforcing their rights hereunder or thereunder, or in furtherance of their authorized duties on behalf of the Purchaser or its Subsidiaries), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise make available to any third party any of the Purchaser Confidential Information without the Purchaser’s prior written consent; and (ii) in the event that the Company, the Company Stockholder or any of their respective Representatives, during the Interim Period or, in the event that this Agreement is terminated in accordance with Article IX, for a period of two (2) years after such termination, becomes legally compelled to disclose any Purchaser Confidential Information, (A) provide the Purchaser to the extent legally permitted with prompt written notice of such requirement so that the Purchaser or an Affiliate thereof may seek, at Purchaser’s cost, a protective Order or other remedy or waive compliance with this Section 6.15(a), and (B) in the event that such protective Order or other remedy is not obtained, or the Purchaser waives compliance with this Section 6.15(a), furnish only that portion of such Purchaser Confidential Information which is legally required to be provided as advised in writing by outside counsel and to exercise its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such Purchaser Confidential Information. In the event that this Agreement is terminated and the transactions contemplated hereby are not consummated, the Company and the Company Stockholder shall, and shall cause their respective Representatives to, promptly deliver to the Purchaser or destroy (at Purchaser’s election) any and all copies (in whatever form or medium) of Purchaser Confidential Information and destroy all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based thereon; provided, however, that the Company and the Company Stockholder and their respective Representatives shall be entitled to keep any records required by applicable Law or bona fide record retention policies; and provided, further, that any Purchaser Confidential Information that is not returned or destroyed shall remain subject to the confidentiality obligations set forth in this Agreement.

 

(b) The Purchaser hereby agrees that during the Interim Period and, in the event that this Agreement is terminated in accordance with Article IX, for a period of two (2) years after such termination, it shall, and shall cause its Representatives to: (i) treat and hold in strict confidence any Company Confidential Information, and will not use for any purpose (except in connection with the consummation of the transactions contemplated by this Agreement or the Ancillary Documents, performing its obligations hereunder or thereunder or enforcing its rights hereunder or thereunder), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise make available to any third party any of the Company Confidential Information without the Company’s prior written consent; and (ii) in the event that the Purchaser or any of its Representatives, during the Interim Period or, in the event that this Agreement is terminated in accordance with Article IX, for a period of two (2) years after such termination, becomes legally compelled to disclose any Company Confidential Information, (A) provide the Company to the extent legally permitted with prompt written notice of such requirement so that the Company may seek, at the Company’s sole expense, a protective Order or other remedy or waive compliance with this Section 6.15(b) and (B) in the event that such protective Order or other remedy is not obtained, or the Company waives compliance with this Section 6.15(b), furnish only that portion of such Company Confidential Information which is legally required to be provided as advised in writing by outside counsel and to exercise its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such Company Confidential Information. In the event that this Agreement is terminated and the transactions contemplated hereby are not consummated, the Purchaser shall, and shall cause its Representatives to, promptly deliver to the Company or destroy (at the Purchaser’s election) any and all copies (in whatever form or medium) of Company Confidential Information and destroy all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based thereon; provided, however, that the Purchaser and its Representatives shall be entitled to keep any records required by applicable Law or bona fide record retention policies; and provided, further, that any Company Confidential Information that is not returned or destroyed shall remain subject to the confidentiality obligations set forth in this Agreement. Notwithstanding the foregoing, the Purchaser and its Representatives shall be permitted to disclose any and all Company Confidential Information to the extent required by the Federal Securities Laws.

 

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6.16 Documents and Information. After the Closing Date, the Purchaser and the Company shall, and shall cause their respective Subsidiaries to, until the seventh (7th) anniversary of the Closing Date, retain all books, records and other documents pertaining to the business of the Company in existence on the Closing Date and make the same available for inspection and copying by the Disinterested Director Majority during normal business hours of the Company and its Subsidiaries, as applicable, upon reasonable request and upon reasonable notice. No such books, records or documents shall be destroyed after the seventh (7th) anniversary of the Closing Date by the Purchaser or its Subsidiaries (including the Company) without first advising the Disinterested Director Majority in writing and giving the Disinterested Director Majority a reasonable opportunity to obtain possession thereof.

 

6.17 Post-Closing Board of Directors and Executive Officers.

 

(a) The Parties shall take all necessary action, including causing the directors of the Purchaser to resign, so that effective as of the Closing, the Purchaser’s board of directors (the “Post-Closing Purchaser Board”) will consist of at least seven individuals. Immediately after the Closing, the Parties shall take all necessary action to designate and appoint to the Post-Closing Purchaser Board (i) the Chief Executive Officer of the Surviving Corporation, (ii) two persons that are designated by the Purchaser prior to the Closing (the “Purchaser Directors”), at least one of whom shall qualify as an independent director under NYSE rules, (iii) one person designated by the Company prior to the Closing (the “Company Director”), (iv) no fewer than three persons and up to five persons mutually agreed upon by Purchaser and the Company prior to Closing, each of whom shall be required to qualify as an independent director under NYSE rules. Subject to resignations provided by the Company’s directors, the board of directors of the Surviving Corporation immediately after the Closing shall be the same as the board of directors of the Company immediately prior to the Closing. At or prior to the Closing, the Purchaser will provide each member of the Post-Closing Board with a customary director indemnification agreement, in form and substance reasonable acceptable to such director.

 

(b) The Parties shall take all action necessary, including causing the executive officers of Purchaser to resign, so that the individuals serving as the chief executive officer and chief financial officer, respectively, of Purchaser immediately after the Closing will be the same individuals (in the same office) as that of the Company immediately prior to the Closing (unless, at its sole discretion, the Company desires to appoint another qualified person to either such role, in which case, such other person identified by the Company shall serve in such role).

 

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(c) The Parties hereby acknowledge and agree that after the Closing, the Disinterested Director Majority is authorized and shall have the sole right to act and make or provide any determinations, consents, agreements, settlements or notices on behalf of the Purchaser under this Agreement and to enforce the Purchaser’s rights and remedies under this Agreement, in each case with respect to (i) any Merger Consideration adjustments under Section 1.14, (ii) Fraud Claims against the Company Stockholder, (iii) any indemnification claims under Article VII) and (iv) any amendments or waivers under Sections 11.9 and 11.10. Nothing in this Section 6.17(c) shall restrict the right or authorization of the Post-Closing Purchaser Board (including, without limitation, any directors that are executive officers of Purchaser) to act and make or provide any determinations, consents, agreements, settlements or notices on behalf of the Purchaser under this Agreement and to enforce of Purchaser’s rights and remedies under this Agreement, in each case other than with respect to the matters set forth in clauses (i), (ii) or (iii) of the preceding sentence

 

6.18 Indemnification of Directors and Officers; Tail Insurance.

 

(a) The Parties agree that all rights to exculpation, indemnification and advancement of expenses existing in favor of the current or former directors and officers of the Purchaser, Merger Sub or the Company and each Person who served as a director, officer, member, trustee or fiduciary of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise at the request of the Purchaser, Merger Sub or the Company (the “D&O Indemnified Persons”) as provided in their respective Organizational Documents or under any indemnification, employment or other similar agreements between any D&O Indemnified Person and the Purchaser, Merger Sub or the Company, in each case as in effect on the date of this Agreement, shall survive the Closing and continue in full force and effect in accordance with their respective terms to the extent permitted by applicable Law. For a period of six (6) years after the Effective Time, the Purchaser shall cause the Organizational Documents of the Purchaser and the Surviving Corporation to contain provisions no less favorable with respect to exculpation and indemnification of and advancement of expenses to D&O Indemnified Persons than are set forth as of the date of this Agreement in the Organizational Documents of the Purchaser, Merger Sub and the Company to the extent permitted by applicable Law. The provisions of this Section 6.18 shall survive the consummation of the Merger and are intended to be for the benefit of, and shall be enforceable by, each of the D&O Indemnified Persons and their respective heirs and representatives.

 

(b) For the benefit of the Purchaser’s, Merger Sub’s, and the Company’s directors and officers, the Purchaser shall be permitted prior to the Effective Time to obtain and fully pay the premium for a “tail” insurance policy that provides coverage for up to a six-year period from and after the Effective Time for events occurring prior to the Effective Time (the “D&O Tail Insurance”) that is substantially equivalent to and in any event not less favorable in the aggregate than the Purchaser’s or the Company’s, existing policy, as applicable or, if substantially equivalent insurance coverage is unavailable, the best available coverage. If obtained, the Purchaser shall maintain the D&O Tail Insurance in full force and effect, and continue to honor the obligations thereunder, and the Purchaser shall timely pay or caused to be paid all premiums with respect to the D&O Tail Insurance.

 

6.19 Trust Account Proceeds. The Parties agree that after the Closing, the funds in the Trust Account, after taking into account payments for the Redemption, and any proceeds received by Purchaser from any PIPE Investment shall first be used to pay (i) the Purchaser’s accrued Expenses, (ii) the Purchaser’s deferred Expenses (including cash amounts payable to the IPO Underwriter and any legal fees) of the IPO and (iii) any loans owed by the Purchaser to the Sponsor for any Expenses (including deferred Expenses), other administrative costs and expenses incurred by or on behalf of the Purchaser or Extension Expenses and (iii) any other Liabilities of the Purchaser as of the Closing. Such Expenses, as well as any Expenses that are required to be paid by delivery of the Purchaser’s securities, will be paid at the Closing. Any remaining cash will be used for working capital and general corporate purposes of the Purchaser and the Surviving Corporation.

 

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6.20 PIPE Investment. Purchaser shall not permit any material amendment or modification to be made to, or any waiver of any material provision or remedy under, or any material replacements or terminations of, the Subscription Agreements between Purchaser and the PIPE Investors for the PIPE Investment in any manner other than (i) as expressly provided for by the terms of the Subscription Agreements or (ii) to reflect any permitted assignments or transfers of the Subscription Agreements by the applicable PIPE Investors pursuant to the Subscription Agreements, without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed; provided that the parties acknowledge that any proposed amendment, modification or waiver of the Subscription Agreements that affects the offering price of the securities of the Purchaser pursuant to the Subscription Agreements may be rejected by the Company in its sole discretion). Without limiting the generality of the foregoing, Purchaser shall give the Company prompt (and, in any event within three (3) Business Days) written notice: (A) of any proposed amendment to any Subscription Agreement; (B) of any material breach or default (or any event or circumstance that, with or without notice, lapse of time or both, could give rise to any breach or default) by any party to any Subscription Agreement known to Purchaser; and (C) of the receipt of any written notice or other written communication from any party to any Subscription Agreement with respect to any actual, potential or claimed expiration, lapse, withdrawal, breach, default, termination or repudiation by any party to any Subscription Agreement or any provisions of any Subscription Agreement.

 

6.21 Stockholder Written Consent. Within twenty-four (24) hours after the execution and delivery of this Agreement, the Company Stockholder shall deliver to the Purchaser the Stockholder Written Consent duly executed by the Company Stockholder.

 

6.22 Audited and Interim Financial Statements.

 

(a) During the Interim Period, within thirty (30) calendar days following the end of each three-month quarterly period and each fiscal year, the Company shall deliver to the Purchaser an unaudited income statement and an unaudited balance sheet of the Company for the period from the Interim Balance Sheet Date through the end of such quarterly period or fiscal year and the applicable comparative period in the preceding fiscal year, in each case accompanied by a certificate of the Chief Financial Officer of the Company to the effect that all such financial statements fairly present the consolidated financial position and results of operations of the Company as of the date or for the periods indicated, in accordance with GAAP, subject to year-end audit adjustments and excluding footnotes.

 

(b) The Company shall use best efforts to deliver to the Purchaser by August 24, 2020, or as promptly as practicable thereafter, audited financial statements for the fiscal years ended December 31, 2019 and 2018, which financial statements shall have been audited in accordance with PCAOB auditing standards by a PCAOB qualified auditor. Such audited financial statements shall be accompanied by a certificate of the Chief Financial Officer of the Company to the effect that such financial statements fairly present the financial position and results of operations of the Company as of the date or for the periods indicated, in accordance with GAAP, subject to year-end audit adjustments and excluding footnotes.

 

6.23 Transition Agreements. During the Interim Period, the Purchaser and the Company Stockholder shall negotiate in good faith the terms and conditions of (i) the Transition Services Agreement substantively consistent with the terms set forth on Exhibit A, (ii) the License Agreement substantively consistent with the terms set forth on Exhibit B, (iii) the Deposit Servicing Agreement substantively consistent with the terms set forth on Exhibit C and (iv) the Interchange Maintenance Agreement substantively consistent with the terms set forth on Exhibit D, and each which shall be in form and substance reasonably acceptable to the Purchaser and the Company Stockholder.

 

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Article VII
SURVIVAL

 

7.1 Survival.

 

(a) The representations and warranties of (i) the Company contained in Sections 4.1 (Organization and Standing), 4.2 (Authorization; Binding Agreement), 4.3 (Capitalization), 4.4 (Subsidiaries), 4.27 (Finders and Brokers) and of the Company Stockholder in Sections 5.1 (Organization and Standing), 5.2 (Authorization; Binding Agreement), 5.3 (Ownership), 5.5 (Finders and Brokers) (such representations and warranties collectively, the “Company Fundamental Reps”) shall survive the Closing through and until and including the first (1st) anniversary of the Closing Date and (ii) Fraud Claims related to the Company shall survive indefinitely. Other than the Company Fundamental Reps and Fraud Claims, no representations and warranties of the Company and the Company Stockholder contained in this Agreement shall survive the Closing, and from and after the Closing, the Company shall not have any further obligations, nor shall any claim be asserted or action be brought against the Company and the Company Stockholder with respect thereto. The covenants and agreements made by the Company and/or the Company Stockholder in this Agreement or in any certificate or instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such covenants or agreements, shall not survive the Closing, except for those covenants and agreements contained herein and therein that by their terms apply or are to be performed in whole or in part after the Closing (which such covenants shall survive the Closing and continue until fully performed in accordance with their terms).

 

(b) The representations and warranties of (i) the Purchaser contained in Sections 3.1 (Organization and Standing), 3.2 (Authorization; Binding Agreement), 3.5 (Capitalization), 3.17 (Finders and Brokers) (such representations and warranties collectively, the “Purchaser Fundamental Reps”) shall survive the Closing through and until and including the first (1st) anniversary of the Closing Date and (ii) Fraud Claims related to the Purchaser shall survive indefinitely. Other than the Purchaser Fundamental Reps and Fraud Claims, no representations and warranties of the Purchaser contained in this Agreement shall survive the Closing, and from and after the Closing, the Purchaser shall not have any further obligations, nor shall any claim be asserted or action be brought against the Purchaser with respect thereto. The covenants and agreements made by the Purchaser in this Agreement or in any certificate or instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such covenants or agreements, shall not survive the Closing, except for those covenants and agreements contained herein and therein that by their terms apply or are to be performed in whole or in part after the Closing (which such covenants shall survive the Closing and continue until fully performed in accordance with their terms).

 

7.2 Indemnification.

 

(a) Subject to the terms and conditions of this Article VII, from and after the Closing, the Company Stockholder and its successors and assigns (each, with respect to any claim made pursuant to this Agreement, a “Company Indemnifying Party”) will indemnify, defend and hold harmless the Purchaser, its Affiliates and each of their respective officers, directors, managers, employees, successors and permitted assigns (each, with respect to any claim made pursuant to this Agreement, a “Purchaser Indemnified Party”) from and against any and all losses, Actions, Orders, Liabilities, damages (including consequential damages), diminution in value, Taxes, interest, penalties, Liens, amounts paid in settlement, costs and expenses (including reasonable expenses of investigation and court costs and reasonable attorneys’ fees and expenses), (any of the foregoing, a “Loss”) paid, suffered or incurred by, or imposed upon, any Purchaser Indemnified Party to the extent arising in whole or in part out of or resulting directly or indirectly from (whether or not involving a Third Party Claim): (a) the breach of any Fundamental Rep made by the Company or the Company Stockholder set forth in this Agreement or in any certificate delivered by the Company or the Company Stockholder; or (b) any Fraud Claim relating to the Company or against the Company Stockholder.

 

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(b) Subject to the terms and conditions of this Article VII, from and after the Closing, the Purchaser and its successors and assigns (each, with respect to any claim made pursuant to this Agreement, a “Purchaser Indemnifying Party” and, together with the Company Indemnifying Party, the “Indemnifying Party”) will indemnify, defend and hold harmless the Company Stockholder, its Affiliates and each of its officers, directors, managers, employees, successors and permitted assigns (each, with respect to any claim made pursuant to this Agreement, a “Company Indemnified Party” and, together with the Purchaser Indemnified Party, the “Indemnified Party”) from and against any and all Losses paid, suffered or incurred by, or imposed upon, any Company Indemnified Party to the extent arising in whole or in part out of or resulting directly or indirectly from (whether or not involving a Third Party Claim): (a) the breach of any Purchaser Fundamental Rep set forth in this Agreement or in any certificate delivered by the Purchaser; or (b) any Fraud Claim against the Purchaser.

 

7.3 Limitations and General Indemnification Provisions.

 

(a) The maximum aggregate amount of indemnification payments to which the Indemnifying Party will be obligated to pay in the aggregate (excluding Fraud Claims) shall not exceed an amount equal to 15% of the value of the Merger Consideration, and in the case of Fraud Claims, shall not exceed an amount equal to the value of the Merger Consideration actually paid (based on the Per Share Price).

 

(b) In no event shall any Indemnified Party be entitled to recover or make a claim for any amounts in respect of, and in no event shall Losses be deemed to include, (i) any punitive, special or exemplary damages except to the extent actually paid to a third party in a Third Party Claim or (ii) any loss, liability, damage or expense to the extent included in the calculation of Closing Indebtedness, Net Working Capital or Transactions Expenses and that resulted in an adjustment to the Merger Consideration.

 

(c) Solely for purposes of determining the amount of Losses under this Article VII (and, for the avoidance of doubt, not for purposes of determining whether there has been a breach giving rise to the indemnification claim), all of the representations, warranties and covenants set forth in this Agreement (including the disclosure schedules hereto) or any Ancillary Document that are qualified by materiality, Material Adverse Effect or words of similar import or effect will be deemed to have been made without any such qualification.

 

(d) No investigation or knowledge by an Indemnified Party or the Disinterested Director Majority or their respective Representatives of a breach of a representation, warranty, covenant or agreement of an Indemnifying Party shall affect the representations, warranties, covenants and agreements of the Indemnifying Party or the recourse available to the Indemnified Parties under any provision of this Agreement, including this Article VII, with respect thereto.

 

(e) The amount of any Losses suffered or incurred by any Indemnified Party shall be reduced by the amount of any insurance proceeds paid to the Indemnified Party or any Affiliate thereof as a reimbursement with respect to such Losses (and no right of subrogation shall accrue to any insurer hereunder, except to the extent that such waiver of subrogation would prejudice any applicable insurance coverage), net of the costs of collection and the increases in insurance premiums resulting from such Loss or insurance payment.

 

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7.4 Indemnification Procedures.

 

(a) The Disinterested Director Majority shall have the sole right to act on behalf of the Purchaser Indemnified Parties with respect to any indemnification claims made pursuant to this Article VII, including bringing and settling any indemnification claims hereunder and receiving any notices on behalf of the Purchaser Indemnified Parties. The Company Stockholder shall have the sole right to act on behalf of the Company Indemnified Parties with respect to any indemnification claims made pursuant to this Article VII, including bringing and settling any indemnification claims hereunder and receiving any notices on behalf of the Company Indemnified Parties.

 

(b) In order to make a claim for indemnification hereunder, the Disinterested Director Majority on behalf of a Purchaser Indemnified Party or the Company Stockholder on behalf of a Company Indemnified Party (as applicable, the “Notifying Person”) must provide written notice (a “Claim Notice”) of such claim to (A) the Company Stockholder, in the case of a claim on behalf of a Purchaser Indemnified Party or (B) the Disinterested Director Majority, in the case of a claim on behalf of a Company Indemnified Party (such Person entitled to receive notice under clauses (A) or (B) as applicable), the “Notified Person”), which Claim Notice shall include (i) a reasonable description of the facts and circumstances which relate to the subject matter of such indemnification claim to the extent then known and (ii) the amount of Losses suffered by the Indemnified Party in connection with the claim to the extent known or reasonably estimable (provided, that the Notifying Person, may thereafter in good faith adjust the amount of Losses with respect to the claim by providing a revised Claim Notice to the Notified Person.

 

(c) In the case of any claim for indemnification under this Article VII arising from a claim of a third party (including any Governmental Authority) (a “Third Party Claim”), the Notifying Person must give a Claim Notice with respect to such Third Party Claim to the Notified Person promptly (but in no event later than thirty (30) days) after the Indemnified Party’s receipt of notice of such Third Party Claim; provided, that the failure to give such notice will not relieve the Indemnifying Party of its indemnification obligations except to the extent that the defense of such Third Party Claim is materially and irrevocably prejudiced by the failure to give such notice. The Notified Person will have the right to defend and to direct the defense against any such Third Party Claim in its name and at its expense, and with counsel selected by the Notified Person, unless (i) the Notified Person fails to acknowledge fully to the Notifying Person the obligations of the Indemnifying Party to the Indemnified Party within twenty (20) days after receiving notice of such Third Party Claim or contests, in whole or in part, its indemnification obligations therefor or (ii) at any time while such Third Party Claim is pending, (A) there is a conflict of interest between the Notified Person on behalf of the Indemnifying Party and Notifying Person on behalf of the Indemnified Party in the conduct of such defense, (B) the applicable third party alleges a Fraud Claim, or (C) such claim is criminal in nature, could reasonably be expected to lead to criminal proceedings, or seeks an injunction or other equitable relief against the Indemnified Party. If the Notified Person elects on behalf of Indemnifying Party, and is entitled, to compromise or defend such Third Party Claim, it will within twenty (20) days (or sooner, if the nature of the Third Party Claim so requires) notify the Notifying Person of its intent to do so, and the Notifying Person and the Indemnified Party will, at the request and expense of the Indemnifying Party, cooperate in the defense of such Third Party Claim. If the Notified Person elects not to, or at any time is not entitled under this Section 7.4 to, compromise or defend such Third Party Claim, fails to notify the Notifying Person of its election as herein provided or refuses to acknowledge or contests its obligation to indemnify under this Agreement, the Notifying Person on behalf of the Indemnified Party may pay, compromise or defend such Third Party Claim. Notwithstanding anything to the contrary contained herein, the Indemnifying Party will have no indemnification obligations with respect to any such Third Party Claim which is settled by the Indemnified Party or the Notifying Person without the prior written consent of the Notified Party on behalf of the Indemnifying Party (which consent will not be unreasonably withheld, delayed or conditioned); provided, however, that notwithstanding the foregoing, the Indemnified Party will not be required to refrain from paying any Third Party Claim which has matured by a final, non-appealable Order, nor will it be required to refrain from paying any Third Party Claim where the delay in paying such claim would result in the foreclosure of a Lien upon any of the property or assets then held by the Indemnified Party or where any delay in payment would cause the Indemnified Party material economic loss. The Notified Party’s right to direct the defense will include the right to compromise or enter into an agreement settling any Third Party Claim; provided, that no such compromise or settlement will obligate the Indemnified Party to agree to any settlement that that requires the taking or restriction of any action (including the payment of money and competition restrictions) by the Indemnified Party other than the execution of a release for such Third Party Claim and/or agreeing to be subject to customary confidentiality obligations in connection therewith, except with the prior written consent of the Notifying Person on behalf of the Indemnified Party (such consent to be withheld, conditioned or delayed only for a good faith reason). Notwithstanding the Notified Party’s right to compromise or settle in accordance with the immediately preceding sentence, the Notified Party may not settle or compromise any Third Party Claim over the objection of the Notifying Person on behalf of the Indemnified Party; provided, however, that consent by the Notifying Person on behalf of the Indemnified Party to settlement or compromise will not be unreasonably withheld, delayed or conditioned. The Notifying Person on behalf of the Indemnified Party will have the right to participate in the defense of any Third Party Claim with counsel selected by it subject to the Notified Person’s right to direct the defense.

 

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(d) With respect to any direct indemnification claim that is not a Third Party Claim, the Notified Person will have a period of thirty (30) days after receipt of the Claim Notice to respond thereto. If the Notified Person does not respond within such thirty (30) days, the Notified Person on behalf of the Indemnifying Party will be deemed to have accepted responsibility for the Losses set forth in such Claim Notice subject to the limitations on indemnification set forth in this Article VII and will have no further right to contest the validity of such Claim Notice. If the Notified Person responds within such thirty (30) days and rejects such claim in whole or in part, the Notifying Person on behalf of the Indemnified Party will be free to pursue such remedies as may be available under this Agreement (subject to Section 11.4), any Ancillary Documents or applicable Law.

 

7.5 Indemnification Payments. Any indemnification claims against the Company Stockholder shall first be applied against the Merger Consideration Shares then owned by the Company Stockholder; provided that if the Company Stockholder does not have any Merger Consideration Shares at such time, it shall satisfy such indemnification claims with the payment of cash. Any indemnification obligation of an Indemnifying Party under this Article VII will be paid within five (5) Business Days after the determination of such obligation in accordance with Section 7.3(a). The provisions of this Article VII notwithstanding, at its sole discretion and without limiting any other rights of the Indemnified Parties under this Agreement or any Ancillary Document or at law or equity, to the extent that an Indemnified Party is entitled to indemnification hereunder, if the Indemnifying Party fails or refuses to promptly indemnify such Indemnified Party as provided herein then such Indemnified Party may offset the full amount to which such Indemnified Party is entitled, in whole or in part, by reducing the amount of any payment or other obligation due to the Company Stockholder, in the case of a claim on behalf of a Purchaser Indemnified Party, or due to the Purchaser, in the case of a claim on behalf of a Company Indemnified Party, pursuant to this Agreement or any Ancillary Document, including any amounts owed by Purchaser or by the Company Stockholder, as applicable, pursuant to any outstanding indemnification claim. Notwithstanding anything to the contrary contained herein, any indemnification payments by the Company Stockholder will be made to Purchaser or its successors. With respect to any indemnification payment, the value of each share of Purchaser Common Stock for purposes of determining the indemnification payment shall be the Purchaser Share Price on the date that the indemnification claim is finally determined in accordance with this Article VII. Any shares of Purchaser Common Stock received by Purchaser as an indemnification payment shall be promptly cancelled by Purchaser after its receipt thereof. Without limiting any of the foregoing or any other rights of the Purchaser Indemnified Parties under this Agreement or any Ancillary Document or at law or equity, in the event that a Company Indemnifying Party fails or refuses to promptly indemnify a Purchaser Indemnified Party as provided herein or otherwise fails or refuses to make any payments required under any Ancillary Document, in either case, where it is established that such Company Indemnifying Party is obligated to provide such indemnification or to make such payment, the applicable Purchaser Indemnified Party shall, in its sole discretion, be entitled to claim a portion of the shares of Purchaser Common Stock then owned by such Company Indemnifying Party up to an amount equal in value (based on the then current Purchaser Share Price) to the amount owed by such Company Indemnifying Party. In the event that such Company Indemnifying Party fails to promptly transfer any such shares of Purchaser Common Stock pursuant to this Section 7.5, the Disinterested Director Majority on behalf of Purchaser shall be and hereby is authorized as the attorney-in-fact for such Indemnifying Party to transfer such shares of Purchaser Common Stock to the proper recipient thereof as required by this Section 7.5, and may transfer such shares of Purchaser Common Stock and cancel the stock certificates for such shares on the books and records of Purchaser and issue new stock certificates to such transferee and may instruct its agents and any exchanges on which Purchaser Common Stock is listed or traded to do the same.

 

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7.6 Exclusive Remedy. From and after the Closing, except with respect to Fraud Claims or claims seeking injunctions, specific performance or other equitable relief (including pursuant to Section 11.7), or claims under the terms of the Ancillary Documents, indemnification pursuant to this Article VII shall be the sole and exclusive remedy for the Parties with respect to matters arising under this Agreement of any kind or nature, including for any misrepresentation or breach of any warranty, covenant, or other provision contained in this Agreement or in any certificate or instrument delivered pursuant to this Agreement or otherwise relating to the subject matter of this Agreement, including the negotiation and discussion thereof.

 

Article VIII
CLOSING CONDITIONS

 

8.1 Conditions to Each Party’s Obligations. The obligations of each Party to consummate the Merger and the other transactions described herein shall be subject to the satisfaction or written waiver (where permissible) by the Company and the Purchaser of the following conditions:

 

(a) Required Stockholder Approval. The Stockholder Approval Matters that are submitted to the vote of the stockholders of the Purchaser at the Purchaser Special Meeting in accordance with the Proxy Statement shall have been approved by the requisite vote of the stockholders of the Purchaser at the Purchaser Special Meeting in accordance with the Purchaser’s Organizational Documents, applicable Law and the Proxy Statement (the “Required Stockholder Approval”).

 

(b) Antitrust Laws. Any waiting period (and any extension thereof) applicable to the consummation of this Agreement under any Antitrust Laws shall have expired or been terminated.

 

(c) Requisite Regulatory Approvals. All Consents required to be obtained from or made with any Governmental Authority in order to consummate the transactions contemplated by this Agreement shall have been obtained or made.

 

(d) Requisite Consents. The Consents required to be obtained from or made with any third Person (other than a Governmental Authority) in order to consummate the transactions contemplated by this Agreement that are set forth in Schedule 8.1(d) shall have each been obtained or made.

 

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(e) No Adverse Law or Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) or Order that is then in effect and which has the effect of making the transactions or agreements contemplated by this Agreement illegal or which otherwise prevents or prohibits consummation of the transactions contemplated by this Agreement.

 

(f) Net Tangible Assets Test. Upon the Closing, after giving effect to the Redemption and any PIPE Investment, the Purchaser shall have net tangible assets of at least $5,000,001.

 

(g) Minimum Cash Condition. Upon the Closing, the Purchaser shall have cash and cash equivalents, including funds remaining in the Trust Account (after giving effect to the completion and payment of the Redemption) and the proceeds of any PIPE Investment, prior to giving effect to the payment of Purchaser’s unpaid Expenses or Liabilities, at least equal to Ten Million U.S. Dollars ($10,000,000).

 

(h) Purchaser Amended Certificate of Incorporation. The Purchaser shall have amended its Certificate of Incorporation in accordance with Section 1.8.

 

(i) Appointment to the Board. The members of the Post-Closing Purchaser Board shall have been elected or appointed as of the Closing consistent with the requirements of Section 6.17.

 

8.2 Conditions to Obligations of the Company. In addition to the conditions specified in Section 8.1, the obligations of the Company to consummate the Merger and the other transactions contemplated by this Agreement are subject to the satisfaction or written waiver (by the Company) of the following conditions:

 

(a) Representations and Warranties. All of the representations and warranties of the Purchaser set forth in this Agreement and in any certificate delivered by or on behalf of the Purchaser pursuant hereto shall be true and correct on and as of the date of this Agreement and on and as of the Closing Date as if made on the Closing Date, except for (i) those representations and warranties that address matters only as of a particular date (which representations and warranties shall have been accurate as of such date), (ii) for all representations and warranties other than those set forth in Section 3.5, any failures to be true and correct that (without giving effect to any qualifications or limitations as to materiality or Material Adverse Effect), individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect on, or with respect to, the Purchaser, and (iii) with respect to the representations and warranties set forth in Section 3.5, any failures to be true and correct that would not be material to Purchaser.

 

(b) Agreements and Covenants. The Purchaser shall have performed in all material respects all of the Purchaser’s obligations and complied in all material respects with all of the Purchaser’s agreements and covenants under this Agreement to be performed or complied with by it on or prior to the Closing Date.

 

(c) No Purchaser Material Adverse Effect. No Material Adverse Effect shall have occurred with respect to the Purchaser since the date of this Agreement which is continuing and uncured.

 

(d) Merger Consideration. Purchaser shall have delivered to Company Stockholder the Merger Consideration.

 

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(e) Payment of Company Indebtedness. A portion of the Company Indebtedness owed to the Company Stockholder in an amount equal to one-half (1/2) of the Remaining Trust Account Amount shall have been paid down by Purchaser.

 

(f) Closing Deliveries.

 

(i) Officer Certificate. The Purchaser shall have delivered to the Company a certificate, dated the Closing Date, signed by an executive officer of the Purchaser in such capacity, certifying as to the satisfaction of the conditions specified in Sections 8.2(a), 8.2(b) and 8.2(c).

 

(ii) Secretary Certificate. The Purchaser shall have delivered to the Company a certificate from its secretary or other executive officer certifying as to, and attaching, (A) copies of the Purchaser’s Organizational Documents as in effect as of the Closing Date (after giving effect to the amendment to Purchaser’s Certificate of Incorporation pursuant to Section 1.8), (B) the resolutions of the Purchaser’s board of directors authorizing and approving the execution, delivery and performance of this Agreement and each of the Ancillary Documents to which it is a party or by which it is bound, and the consummation of the transactions contemplated hereby and thereby, (C) evidence that the Required Stockholder Approval has been obtained and (D) the incumbency of officers authorized to execute this Agreement or any Ancillary Document to which the Purchaser is or is required to be a party or otherwise bound.

 

(iii) Good Standing. The Purchaser shall have delivered to the Company a good standing certificate (or similar documents applicable for such jurisdictions) for the Purchaser certified as of a date no earlier than thirty (30) days prior to the Closing Date from the proper Governmental Authority of the Purchaser’s jurisdiction of organization and from each other jurisdiction in which the Purchaser is qualified to do business as a foreign entity as of the Closing, in each case to the extent that good standing certificates or similar documents are generally available in such jurisdictions.

 

(iv) Lock-Up Agreement. The Company shall have received a Lock-Up Agreement between the Purchaser and the Company Stockholder, substantially in the form of Exhibit G attached hereto (the “Lock-Up Agreement”), duly executed by the Purchaser.

 

(v) Non-Competition Agreement. The Company shall have received Non-Competition Agreement from the Company Stockholder in favor of and for the benefit of the Purchaser, the Company and each of the other Covered Parties (as defined therein), substantially in the form of Exhibit H attached hereto (the “Non-Competition Agreement”) duly executed by the Purchaser.

 

(vi)  Transition Services Agreement. The Company Stockholder shall have received the Transition Services Agreement, duly executed by the Purchaser.

 

(vii) License Agreement. The Company Stockholder shall have received the License Agreement, duly executed by Purchaser.

 

(viii) Registration Rights Agreement. The Company Stockholder shall have received from Purchaser a registration rights agreement covering the Merger Consideration Shares received by the Company Stockholder, substantially in the form of Exhibit I attached hereto (the “Registration Rights Agreement”), duly executed by the Purchaser.

 

(ix) Deposit Servicing Agreement. The Company Stockholder shall have received the Deposit Servicing Agreement, duly executed by Purchaser.

 

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(x) Interchange Maintenance Agreement. The Company Stockholder shall have received the Interchange Maintenance Agreement, duly executed by Purchaser.

 

8.3 Conditions to Obligations of the Purchaser. In addition to the conditions specified in Section 8.1, the obligations of the Purchaser and Merger Sub to consummate the Merger and the other transactions contemplated by this Agreement are subject to the satisfaction or written waiver (by the Purchaser) of the following conditions:

 

(a) Representations and Warranties. All of the representations and warranties of the Company and the Company Stockholder set forth in this Agreement and in any certificate delivered by or on behalf of the Company or the Company Stockholder pursuant hereto shall be true and correct on and as of the date of this Agreement and on and as of the Closing Date as if made on the Closing Date, except for (i) those representations and warranties that address matters only as of a particular date (which representations and warranties shall have been accurate as of such date), and (ii) for all representations and warranties other than those set forth in Section 4.3, any failures to be true and correct that (without giving effect to any qualifications or limitations as to materiality or Material Adverse Effect), individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect on, or with respect to, the Company, taken as a whole and (iii) with respect to the representations and warranties set forth in Section 4.3, any failures to be true and correct that would not be material to the Company.

 

(b) Agreements and Covenants. The Company shall have performed in all material respects all of its obligations and complied in all material respects with all of its agreements and covenants under this Agreement to be performed or complied with by it on or prior to the Closing Date.

 

(c) No Material Adverse Effect. No Material Adverse Effect shall have occurred with respect to the Company taken as a whole since the date of this Agreement which is continuing and uncured.

 

(d) Certain Ancillary Documents. Each Lock-Up Agreement and Non-Competition Agreement shall be in full force and effect in accordance with the terms thereof as of the Closing.

 

(e) Closing Deliveries.

 

(i) Officer Certificate. The Purchaser shall have received a certificate from the Company, dated as the Closing Date, signed by an executive officer of the Company in such capacity, certifying as to the satisfaction of the conditions specified in Sections 8.3(a), 8.3(b) and 8.3(c)

 

(ii) Secretary Certificate. The Company shall have delivered to the Purchaser a certificate executed by the Company’s secretary certifying as to the validity and effectiveness of, and attaching, (A) copies of the Company’s Organizational Documents as in effect as of the Closing Date (immediately prior to the Effective Time), (B) the requisite resolutions of the Company’s board of directors authorizing and approving the execution, delivery and performance of this Agreement and each Ancillary Document to which the Company is or is required to be a party or bound, and the consummation of the Merger and the other transactions contemplated hereby and thereby, and the adoption of the Surviving Corporation Organizational Documents, and recommending the approval and adoption of the same by the Company Stockholder at a duly called meeting of stockholders, (C) resolutions or written consent of the Company Stockholder authorizing the transaction and approving this Agreement (the “Stockholder Written Consent”) and (D) the incumbency of officers of the Company authorized to execute this Agreement or any Ancillary Document to which the Company is or is required to be a party or otherwise bound.

 

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(iii) Good Standing. The Company shall have delivered to the Purchaser good standing certificates (or similar documents applicable for such jurisdictions) for the Company certified as of a date no earlier than thirty (30) days prior to the Closing Date from the proper Governmental Authority of the Company’s jurisdiction of organization and from each other jurisdiction in which the Company is qualified to do business as a foreign corporation or other entity as of the Closing, in each case to the extent that good standing certificates or similar documents are generally available in such jurisdictions.

 

(iv) Certified Charter. The Company shall have delivered to the Purchaser a copy of the Company Charter, as in effect as of immediately prior to the Effective Time, certified by the Secretary of State of the Commonwealth of Pennsylvania as of a date no more than ten (10) Business Days prior to the Closing Date.

 

(v) Employment Agreements. The Purchaser shall have received employment agreements, in each case effective as of the Closing, in form and substance reasonably acceptable to the Company and the Purchaser, between each of the persons set forth Schedule 8.3(e)(v) hereto and the Company or the Purchaser, as noted in Schedule 8.3(e)(v), each such employment agreement duly executed by the parties thereto.

 

(vi) Legal Opinion. Purchaser shall have received a duly executed opinion from the Company’s counsel or counsels, in form and substance reasonably satisfactory to the Purchaser, addressed to the Purchaser and dated as of the Closing Date.

 

(vii) Resignations. Subject to the requirements of Section 5.18, the Purchaser shall have received written resignations, effective as of the Closing, of each of the directors and officers of the Company as requested by the Purchaser prior to the Closing, provided, however, certain executives of the Company shall enter into employment agreements as provided in Section 7.3(e)(v).

 

(viii) Lock-Up Agreement. The Purchaser shall have received the Lock-Up Agreement, duly executed by Company Stockholder.

 

(ix) Non-Competition Agreement. The Purchaser shall have received Non-Competition Agreement, duly executed by the Company Stockholder.

 

(x) Transition Services Agreement. The Purchaser shall have received the Transition Services Agreement, duly executed by the Company Stockholder.

 

(xi) License Agreement. The Purchaser shall have received the License Agreement, duly executed by the Company Stockholder.

 

(xii) Registration Rights Agreement. The Purchaser shall have received the Registration Rights Agreement, duly executed by the Company Stockholder.

 

(xiii) Deposit Servicing Agreement. The Purchaser shall have received the Deposit Servicing Agreement, duly executed by the Company Stockholder.

 

(xiv) Interchange Maintenance Agreement. The Purchaser shall have received the Interchange Maintenance Agreement, duly executed by the Company Stockholder.

 

(xv) Termination of Certain Contracts. The Purchaser shall have received evidence reasonably acceptable to the Purchaser that the Contracts involving the Company and/or Company Stockholder or other Related Persons set forth on Schedule 8.3(e)(xv) shall have been terminated with no further obligation or Liability of the Company thereunder.

 

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8.4 Frustration of Conditions. Notwithstanding anything contained herein to the contrary, no Party may rely on the failure of any condition set forth in this Article VIII to be satisfied if such failure was caused by the failure of such Party or its Affiliates (or with respect to the Company or Company Stockholder) failure to comply with or perform any of its covenants or obligations set forth in this Agreement.

 

Article IX
TERMINATION AND EXPENSES

 

9.1 Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing as follows:

 

(a) by mutual written consent of the Purchaser and the Company;

 

(b) by written notice by the Purchaser or the Company if any of the conditions to the Closing set forth in Article VIII have not been satisfied or waived by November 25, 2020 (the “Outside Date”) (provided, that if Purchaser seeks and obtains an Extension, Purchaser shall have the right by providing written notice thereof to the Company to extend the Outside Date for an additional period equal to the shortest of (i) three (3) additional months, (ii) the period ending on the last date for Purchaser to consummate its Business Combination pursuant to such Extension and (iii) such period as determined by Purchaser); provided, however, the right to terminate this Agreement under this Section 9.1(b) shall not be available to a Party if the breach or violation by such Party or its Affiliates of any representation, warranty, covenant or obligation under this Agreement was the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date;

 

(c) by written notice by either the Purchaser or the Company if a Governmental Authority of competent jurisdiction shall have issued an Order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, and such Order or other action has become final and non-appealable; provided, however, that the right to terminate this Agreement pursuant to this Section 9.1(c) shall not be available to a Party if the failure by such Party or its Affiliates to comply with any provision of this Agreement has been a substantial cause of, or substantially resulted in, such action by such Governmental Authority;

 

(d) by written notice by the Company to Purchaser, if (i) there has been a breach by the Purchaser of any of its representations, warranties, covenants or agreements contained in this Agreement, or if any representation or warranty of the Purchaser shall have become untrue or inaccurate, in any case, which would result in a failure of a condition set forth in Section 8.2(a) or Section 8.2(b) to be satisfied (treating the Closing Date for such purposes as the date of this Agreement or, if later, the date of such breach), and (ii) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (A) twenty (20) days after written notice of such breach or inaccuracy is provided to the Purchaser or (B) the Outside Date; provided, that the Company shall not have the right to terminate this Agreement pursuant to this Section 9.1(d) if at such time the Company is in material uncured breach of this Agreement;

 

(e) by written notice by the Purchaser to the Company, if (i) there has been a breach by the Company of any of its representations, warranties, covenants or agreements contained in this Agreement, or if any representation or warranty of such Parties shall have become untrue or inaccurate, in any case, which would result in a failure of a condition set forth in Section 8.3(a) or Section 8.3(b) to be satisfied (treating the Closing Date for such purposes as the date of this Agreement or, if later, the date of such breach), and (ii) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (A) twenty (20) days after written notice of such breach or inaccuracy is provided to the Company or (B) the Outside Date; provided, that the Purchaser shall not have the right to terminate this Agreement pursuant to this Section 9.1(e) if at such time the Purchaser is in material uncured breach of this Agreement;

 

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(f) by written notice by the Purchaser to the Company, if there shall have been a Material Adverse Effect on the Company following the date of this Agreement which is uncured and continuing;

 

(g) by written notice by either the Purchaser or the Company to the other, if the Purchaser Special Meeting is held (including any adjournment or postponement thereof) and has concluded, the Purchaser’s stockholders have duly voted, and the Required Stockholder Approval was not obtained; or

 

(h) by written notice by the Purchaser to the Company, if the Stockholder Written Consent from the Company Stockholder shall not have been delivered to Purchaser within twenty-four (24) hours after the execution and delivery of this Agreement, or if such Stockholder Written Consent shall thereafter be rescinded, revoked or otherwise become ineffective.

 

9.2 Effect of Termination. This Agreement may only be terminated in the circumstances described in Section 9.1 and pursuant to a written notice delivered by the applicable Party to the other applicable Parties, which sets forth the basis for such termination, including the provision of Section 9.1 under which such termination is made. In the event of the valid termination of this Agreement pursuant to Section 9.1, this Agreement shall forthwith become void, and there shall be no Liability on the part of any Party or any of their respective Representatives, and all rights and obligations of each Party shall cease, except: (i) Sections 6.14, 6.15, 9.3, 10.1, Article XI and this Section 9.2 shall survive the termination of this Agreement, and (ii) nothing herein shall relieve any Party from Liability for any willful breach of any representation, warranty, covenant or obligation under this Agreement or any Fraud Claim against such Party, in either case, prior to termination of this Agreement (in each case of clauses (i) and (ii) above, subject to Section 10.1). Without limiting the foregoing, and except as provided in Sections 9.3 and this Section 9.2 (but subject to Section 10.1) and subject to the right to seek injunctions, specific performance or other equitable relief in accordance with Section 11.7, the Parties’ sole right prior to the Closing with respect to any breach of any representation, warranty, covenant or other agreement contained in this Agreement by another Party or with respect to the transactions contemplated by this Agreement shall be the right, if applicable, to terminate this Agreement pursuant to Section 9.1.

 

9.3 Fees and Expenses. Subject to Sections 10.1, all Expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such expenses. As used in this Agreement, “Expenses” shall include all out-of-pocket expenses (including all fees and expenses of counsel, accountants, investment bankers, financial advisors, financing sources, experts and consultants to a Party hereto or any of its Affiliates) incurred by a Party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution or performance of this Agreement or any Ancillary Document related hereto and all other matters related to the consummation of this Agreement. With respect to the Purchaser, Expenses shall include any and all deferred expenses (including fees or commissions payable to the underwriters and any legal fees) of the IPO upon consummation of a Business Combination and any Extension Expenses.

 

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Article X
WAIVERS

 

10.1 Waiver of Claims Against Trust. Reference is made to the IPO Prospectus. The Company and the Company Stockholder each hereby represents and warrants that it has read the IPO Prospectus and understands that Purchaser has established the Trust Account containing the proceeds of the IPO and the overallotment shares acquired by Purchaser’s underwriters and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of Purchaser’s public stockholders (including overallotment shares acquired by Purchaser’s underwriters) (the “Public Stockholders”) and that, except as otherwise described in the IPO Prospectus, Purchaser may disburse monies from the Trust Account only: (a) to the Public Stockholders in the event they elect to redeem their shares of Purchaser Common Stock in connection with the consummation of its initial business combination (as such term is used in the IPO Prospectus) (“Business Combination”) or in connection with an amendment to Purchaser’s Organizational Documents to extend Purchaser’s deadline to consummate a Business Combination, (b) to the Public Stockholders if the Purchaser fails to consummate a Business Combination within 21 months after the closing of the IPO, subject to extension by amendment to Purchaser’s Organizational Documents, (c) with respect to any interest earned on the amounts held in the Trust Account, amounts necessary to pay for any taxes, and (d) to Purchaser after or concurrently with the consummation of a Business Combination. For and in consideration of Purchaser entering into this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of the Company and the Company Stockholder hereby agrees on behalf of itself and its Affiliates that, notwithstanding anything to the contrary in this Agreement, none of the Company or the Company Stockholder nor any of their respective Affiliates do now or shall at any time hereafter have any right, title, interest or claim of any kind in or to any monies in the Trust Account or distributions therefrom, or make any claim against the Trust Account (including any distributions therefrom), regardless of whether such claim arises as a result of, in connection with or relating in any way to, this Agreement or any proposed or actual business relationship between Purchaser or any of its Representatives, on the one hand, and the Company, the Company Stockholder or any of their respective Representatives, on the other hand, or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (collectively, the “Released Claims”). Each of the Company and the Company Stockholder on behalf of itself and its Affiliates hereby irrevocably waives any Released Claims that any such Party or any of its Affiliates may have against the Trust Account (including any distributions therefrom) now or in the future as a result of, or arising out of, any negotiations, contracts or agreements with Purchaser or its Representatives and will not seek recourse against the Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of this Agreement or any other agreement with Purchaser or its Affiliates). The Company and the Company Stockholder each agrees and acknowledges that such irrevocable waiver is material to this Agreement and specifically relied upon by Purchaser and its Affiliates to induce Purchaser to enter in this Agreement, and each of the Company and the Company Stockholder further intends and understands such waiver to be valid, binding and enforceable against such Party and each of its Affiliates under applicable Law. To the extent that the Company or the Company Stockholder or any of their respective Affiliates commences any Action based upon, in connection with, relating to or arising out of any matter relating to Purchaser or its Representatives, which proceeding seeks, in whole or in part, monetary relief against Purchaser or its Representatives, each of the Company and the Company Stockholder hereby acknowledges and agrees that its and its Affiliates’ sole remedy shall be against funds held outside of the Trust Account and that such claim shall not permit such Party or any of its Affiliates (or any Person claiming on any of their behalves or in lieu of them) to have any claim against the Trust Account (including any distributions therefrom) or any amounts contained therein. In the event that the Company or the Company Stockholder or any of their respective Affiliates commences Action based upon, in connection with, relating to or arising out of any matter relating to Purchaser or its Representatives which proceeding seeks, in whole or in part, relief against the Trust Account (including any distributions therefrom) or the Public Stockholders, whether in the form of money damages or injunctive relief, Purchaser and its Representatives, as applicable, shall be entitled to recover from the Company, the Company Stockholder and their respective Affiliates, as applicable, the associated legal fees and costs in connection with any such Action, in the event Purchaser or its Representatives, as applicable, prevails in such Action. This Section 10.1 shall survive termination of this Agreement for any reason and continue indefinitely.

 

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Article XI
MISCELLANEOUS

 

11.1 Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by facsimile or other electronic means (including email), with affirmative confirmation of receipt, (iii) one Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable Party at the following addresses (or at such other address for a Party as shall be specified by like notice):

 

 If to the Purchaser or Merger Sub at or prior to the Closing, to:

Megalith Financial Acquisition Corp.
535 5th Avenue, 29th Floor

New York, New York
Attn: A.J. Dunklau
Telephone No.: (212) 235-0438
Email: aj@megalithfinancial.com

with a copy (which will not constitute notice) to:

Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Attn: Matthew A. Gray, Esq.
Facsimile No.: (212) 370-7889
Telephone No.: (212) 370-1300
Email: mgray@egsllp.com

If to the Company or the Surviving Corporation, to:

BankMobile Technologies, Inc.
1015 Penn Avenue, Suite 103

Wyomissing, PA 19610

Attn: Bob Ramsey, CFO
Telephone No.: (484) 926-7118
Email: rramsey@bankmobile.com

with a copy (which will not constitute notice) to:

Nelson Mullins Riley & Scarborough
101 Constitution Avenue, NW, Suite 900
Washington, DC 20001
Attn: Jonathan H. Talcott, Esq.
Facsimile No.: (202) 689-2862
Telephone No.: (202) 689-2806
Email: jon.talcott@nelsonmullins.com

If to the Company Stockholder to:

Customers Bank
1015 Penn Avenue, Suite 103

Wyomissing, PA 19610
Attn: Carla Leibold, CFO
Telephone No.: (484) 923-8802

Email: cleibold@customersbank.com

with a copy (which will not constitute notice) to:

Nelson Mullins Riley & Scarborough
101 Constitution Avenue, NW, Suite 900
Washington, SC 20001
Attn: Jonathan H. Talcott, Esq.
Facsimile No.: (202) 689-2862
Telephone No.: (202) 689-2806
Email: jon.talcott@nelsonmullins.com

If to the Purchaser after the Closing, to:

BM Technologies, Inc.
1015 Penn Avenue, Suite 103

Wyomissing, PA 19610

Attn: Board of Directors

with a copy (which will not constitute notice) to:

Nelson Mullins Riley & Scarborough
101 Constitution Avenue, NW, Suite 900
Washington, DC 20001
Attn: Jonathan H. Talcott, Esq.
Facsimile No.: (202) 689-2862
Telephone No.: (202) 689-2806
Email: jon.talcott@nelsonmullins.com

and

Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Attn: Matthew A. Gray, Esq.
Facsimile No.: (212) 370-7889
Telephone No.: (212) 370-1300
Email: mgray@egsllp.com

 

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11.2 Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. This Agreement shall not be assigned by operation of Law or otherwise without the prior written consent of the Purchaser and the Company (and after the Closing, the Disinterested Director Majority and the Company Stockholder), and any assignment without such consent shall be null and void; provided that no such assignment shall relieve the assigning Party of its obligations hereunder.

 

11.3 Third Parties. Except for the rights of the D&O Indemnified Persons set forth in Section 6.18, which the Parties acknowledge and agree are express third party beneficiaries of this Agreement, nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any Person that is not a Party hereto or thereto or a successor or permitted assign of such a Party.

 

11.4 Arbitration. Any and all disputes, controversies and claims (other than applications for a temporary restraining order, preliminary injunction, permanent injunction or other equitable relief or application for enforcement of a resolution under this Section 11.4, and any dispute to be determined by the Independent Expert in accordance with Section 1.14) arising out of, related to, or in connection with this Agreement or the transactions contemplated hereby (a “Dispute”) shall be governed by this Section 11.4. A party must, in the first instance, provide written notice of any Disputes to the other parties subject to such Dispute, which notice must provide a reasonably detailed description of the matters subject to the Dispute. The parties involved in such Dispute shall seek to resolve the Dispute on an amicable basis within ten (10) Business Days of the notice of such Dispute being received by such other parties subject to such Dispute (the “Resolution Period”); provided, that if any Dispute would reasonably be expected to have become moot or otherwise irrelevant if not decided within sixty (60) days after the occurrence of such Dispute, then there shall be no Resolution Period with respect to such Dispute. Any Dispute that is not resolved during the Resolution Period may immediately be referred to and finally resolved by arbitration pursuant to the then-existing Expedited Procedures (as defined in the AAA Procedures) of the Commercial Arbitration Rules (the “AAA Procedures”) of the AAA. Any party involved in such Dispute may submit the Dispute to the AAA to commence the proceedings after the Resolution Period. To the extent that the AAA Procedures and this Agreement are in conflict, the terms of this Agreement shall control. The arbitration shall be conducted by one arbitrator nominated by the AAA promptly (but in any event within five (5) Business Days) after the submission of the Dispute to the AAA and reasonably acceptable to each party subject to the Dispute, which arbitrator shall be a commercial lawyer with substantial experience arbitrating disputes under acquisition agreements. The arbitrator shall accept his or her appointment and begin the arbitration process promptly (but in any event within five (5) Business Days) after his or her nomination and acceptance by the parties subject to the Dispute. The proceedings shall be streamlined and efficient. The arbitrator shall decide the Dispute in accordance with the substantive law of the state of New York. Time is of the essence. Each party subject to the Dispute shall submit a proposal for resolution of the Dispute to the arbitrator within twenty (20) days after confirmation of the appointment of the arbitrator. The arbitrator shall have the power to order any party to do, or to refrain from doing, anything consistent with this Agreement, the Ancillary Documents and applicable Law, including to perform its contractual obligation(s); provided, that the arbitrator shall be limited to ordering pursuant to the foregoing power (and, for the avoidance of doubt, shall order) the relevant party (or parties, as applicable) to comply with only one or the other of the proposals. The arbitrator’s award shall be in writing and shall include a reasonable explanation of the arbitrator’s reason(s) for selecting one or the other proposal. The seat of arbitration shall be in New York County, State of New York. The language of the arbitration shall be English.

 

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11.5 Governing Law; Jurisdiction. This Agreement shall be governed by, construed and enforced in accordance with the Laws of the State of New York without regard to the conflict of laws principles thereof. Subject to Sections 1.14 and 11.4, all Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court located in New York, New York (or in any appellate court thereof) (the “Specified Courts”). Subject to Sections 1.14 and 11.4, each Party hereto hereby (a) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any Party hereto and (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Specified Court. Each Party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each Party irrevocably consents to the service of the summons and complaint and any other process in any other Action relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such Party at the applicable address set forth in Section 11.1. Nothing in this Section 11.5 shall affect the right of any Party to serve legal process in any other manner permitted by Law.

 

11.6 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.6.

 

11.7 Specific Performance. Each Party acknowledges that the rights of each Party to consummate the transactions contemplated hereby are unique, recognizes and affirms that in the event of a breach of this Agreement by any Party, money damages may be inadequate and the non-breaching Parties may have not adequate remedy at law, and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by an applicable Party in accordance with their specific terms or were otherwise breached. Accordingly, each Party shall be entitled to seek an injunction or restraining order to prevent breaches of this Agreement and to seek to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or to prove that money damages would be inadequate, this being in addition to any other right or remedy to which such Party may be entitled under this Agreement, at law or in equity.

 

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11.8 Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.

 

11.9 Amendment. This Agreement may be amended, supplemented or modified only by execution of a written instrument signed by the Purchaser, the Company, and the Company Stockholder; provided that any amendment, supplement or modification of this Agreement after the Closing shall also require the prior written consent of the Disinterested Director Majority.

 

11.10 Waiver. The Purchaser on behalf of itself and its Affiliates, the Company on behalf of itself and its Affiliates, and the Company Stockholder on behalf of itself and the Company Stockholder, may in its sole discretion (i) extend the time for the performance of any obligation or other act of any other non-Affiliated Party hereto, (ii) waive any inaccuracy in the representations and warranties by such other non-Affiliated Party contained herein or in any document delivered pursuant hereto and (iii) waive compliance by such other non-Affiliated Party with any covenant or condition contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party or Parties to be bound thereby (including by the Disinterested Director Majority or the Company Stockholder in lieu of such Party to the extent provided in this Agreement). Notwithstanding the foregoing, no failure or delay by a Party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder. Notwithstanding the foregoing, any waiver of any provision of this Agreement after the Closing shall also require the prior written consent of the Disinterested Director Majority.

 

11.11 Entire Agreement. This Agreement and the documents or instruments referred to herein, including any exhibits and schedules attached hereto, which exhibits and schedules are incorporated herein by reference, together with the Ancillary Documents, embody the entire agreement and understanding of the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein or the documents or instruments referred to herein, which collectively supersede all prior agreements and the understandings among the Parties with respect to the subject matter contained herein.

 

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11.12 Interpretation. The table of contents and the Article and Section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the Parties and shall not in any way affect the meaning or interpretation of this Agreement. In this Agreement, unless the context otherwise requires: (a) any pronoun used shall include the corresponding masculine, feminine or neuter forms, and words in the singular, including any defined terms, include the plural and vice versa; (b) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity; (c) any accounting term used and not otherwise defined in this Agreement or any Ancillary Document has the meaning assigned to such term in accordance with GAAP; (d) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; (e) the words “herein,” “hereto,” and “hereby” and other words of similar import shall be deemed in each case to refer to this Agreement as a whole and not to any particular Section or other subdivision of this Agreement; (f) the word “if” and other words of similar import when used herein shall be deemed in each case to be followed by the phrase “and only if”; (g) the term “or” means “and/or”; (h) any reference to the term “ordinary course” or “ordinary course of business” shall be deemed in each case to be followed by the words “consistent with past practice”; (i) any agreement, instrument, insurance policy, Law or Order defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument, insurance policy, Law or Order as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes, regulations, rules or orders) by succession of comparable successor statutes, regulations, rules or orders and references to all attachments thereto and instruments incorporated therein; (j) except as otherwise indicated, all references in this Agreement to the words “Section,” “Article”, “Schedule” and “Exhibit” are intended to refer to Sections, Articles, Schedules and Exhibits to this Agreement; and (k) the term “Dollars” or “$” means United States dollars. Any reference in this Agreement to a Person’s directors shall include any member of such Person’s governing body and any reference in this Agreement to a Person’s officers shall include any Person filling a substantially similar position for such Person. Any reference in this Agreement or any Ancillary Document to a Person’s stockholders or stockholders shall include any applicable owners of the equity interests of such Person, in whatever form, including with respect to the Purchaser its stockholders under DGCL, as then applicable, or its Organizational Documents. The Parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement. To the extent that any Contract, document, certificate or instrument is represented and warranted to by the Company to be given, delivered, provided or made available by the Company, in order for such Contract, document, certificate or instrument to have been deemed to have been given, delivered, provided and made available to the Purchaser or its Representatives, such Contract, document, certificate or instrument shall have been posted to the electronic data site maintained on behalf of the Company for the benefit of the Purchaser and its Representatives and the Purchaser and its Representatives have been given access to the electronic folders containing such information.

 

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11.13 Counterparts. This Agreement and each Ancillary Document may be executed and delivered (including by facsimile or other electronic transmission) in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

 

11.14 Reserved.

 

11.15 Reserved.

 

11.16 Legal Representation. The Parties agree that, notwithstanding the fact that EGS may have, prior to Closing, jointly represented the Purchaser, Merger Sub, and/or the Sponsor in connection with this Agreement, the Ancillary Documents and the transactions contemplated hereby and thereby, and has also represented the Purchaser and/or its Affiliates in connection with matters other than the transaction that is the subject of this Agreement, EGS will be permitted in the future, after Closing, to represent the Sponsor, or its Affiliates in connection with matters in which such Persons are adverse to the Purchaser or any of its Affiliates, including any disputes arising out of, or related to, this Agreement. The Company and the Company Stockholder, who are or have the right to be represented by independent counsel in connection with the transactions contemplated by this Agreement, hereby agree, in advance, to waive (and to cause their Affiliates to waive) any actual or potential conflict of interest that may hereafter arise in connection with EGS’s future representation of one or more of the Sponsor, or its Affiliates in which the interests of such Person are adverse to the interests of the Purchaser, the Company and/or the Company Stockholder or any of their respective Affiliates, including any matters that arise out of this Agreement or that are substantially related to this Agreement or to any prior representation by EGS of the Purchaser, Merger Sub, the Sponsor, or any of their respective Affiliates. The Parties acknowledge and agree that, for the purposes of the attorney-client privilege, the Sponsor shall be deemed the clients of EGS with respect to the negotiation, execution and performance of this Agreement and the Ancillary Documents. All such communications shall remain privileged after the Closing and the privilege and the expectation of client confidence relating thereto shall belong solely to the Sponsor, shall be controlled by the Sponsor and shall not pass to or be claimed by the Purchaser or the Surviving Corporation; provided, further, that nothing contained herein shall be deemed to be a waiver by the Purchaser or any of its Affiliates (including, after the Effective Time, the Surviving Corporation and its Affiliates) of any applicable privileges or protections that can or may be asserted to prevent disclosure of any such communications to any third party.

 

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Article XII
DEFINITIONS

 

12.1 Certain Definitions. For purpose of this Agreement, the following capitalized terms have the following meanings:

 

AAA” means the American Arbitration Association or any successor entity conducting arbitrations.

 

Accounting Principles” means in accordance with GAAP as in effect at the date of the financial statement to which it refers or if there is no such financial statement, then as of the Closing Date, using and applying the same accounting principles, practices, procedures, policies and methods (with consistent classifications, judgments, elections, inclusions, exclusions and valuation and estimation methodologies) used and applied by the Company in the preparation of the latest audited Company Financials.

 

Action” means any notice of noncompliance or violation, or any claim, demand, charge, action, suit, litigation, audit, settlement, complaint, stipulation, assessment or arbitration, or any request (including any request for information), inquiry, hearing, proceeding or investigation, by or before any Governmental Authority.

 

Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person. For the avoidance of doubt, Sponsor shall be deemed to be an Affiliate or the Purchaser prior to the Closing

 

Ancillary Documents” means each agreement, instrument or document attached hereto as an Exhibit, and the other agreements, certificates and instruments to be executed or delivered by any of the Parties hereto in connection with or pursuant to this Agreement.

 

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Benefit Plans” of any Person means any and all deferred compensation, executive compensation, incentive compensation, equity purchase or other equity-based compensation plan, employment or consulting, severance or termination pay, holiday, vacation or other bonus plan or practice, hospitalization or other medical, life or other insurance, supplemental unemployment benefits, profit sharing, pension, or retirement plan, program, agreement, commitment or arrangement, and each other employee benefit plan, program, agreement or arrangement, including each “employee benefit plan” as such term is defined under Section 3(3) of ERISA, maintained or contributed to or required to be contributed to by a Person for the benefit of any employee or terminated employee of such Person, or with respect to which such Person has any Liability, whether direct or indirect, actual or contingent, whether formal or informal, and whether legally binding or not.

 

Business Day” means any day other than a Saturday, Sunday or a legal holiday on which commercial banking institutions in New York, New York are authorized to close for business, excluding as a result of “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems, including for wire transfers, of commercially banking institutions in New York, New York are generally open for use by customers on such day.

 

Closing Indebtedness” means, as of the Reference Time, the aggregate amount of all Indebtedness of the Company determined in accordance with the Accounting Principles.

 

Code” means the Internal Revenue Code of 1986, as amended, and any successor statute thereto, as amended. Reference to a specific section of the Code shall include such section and any valid treasury regulation promulgated thereunder.

 

Company Charter” means the Articles of Incorporation of the Company, as amended and effective under the PBCL, prior to the Effective Time.

 

Company Common Stock means the common stock, par value $1.00 per share, of the Company.

 

Company Class B Common Stock means the Class B Non-voting common stock, par value $1.00 per share, of the Company.

 

Company Confidential Information” means all confidential or proprietary documents and information concerning the Company or any of its Representatives, furnished in connection with this Agreement or the transactions contemplated hereby; provided, however, that Company Confidential Information shall not include any information which, (i) at the time of disclosure by the Purchaser or its Representatives, is generally available publicly and was not disclosed in breach of this Agreement or (ii) at the time of the disclosure by the Company or its Representatives to the Purchaser or its Representatives was previously known by such receiving party without violation of Law or any confidentiality obligation by the Person receiving such Company Confidential Information.

 

Company Convertible Securities” means, collectively, any options, warrants or rights to subscribe for or purchase any capital stock of the Company or securities convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire any capital stock of the Company.

 

Company Preferred Stock means the preferred stock, no par value, of the Company.

 

Company Stock” means any shares of the Company Common Stock, Company Class B Common Stock and the Company Preferred Stock.

 

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Company Transaction Expenses” means all fees and expenses of the Company incurred or payable as of the Closing and not paid prior to the Closing (i) in connection with the consummation of the transactions contemplated hereby, including any amounts payable to professionals (including investment bankers, brokers, finders, attorneys, accountants and other consultants and advisors) retained by or on behalf of the Company, (ii) any change in control bonus, transaction bonus, retention bonus, termination or severance payment or payment relating to terminated options, warrants or other equity appreciation, phantom equity, profit participation or similar rights, in any case, to be made to any current or former employee, independent contractor, director or officer of the Company at or after the Closing pursuant to any agreement to which the Company is a party prior to the Closing which become payable (including if subject to continued employment) as a result of the execution of this Agreement or the consummation of the transactions contemplated hereby and (iii) any sales, use, real property transfer, stamp, stock transfer or other similar transfer Taxes imposed on Purchaser, Merger Sub or the Company in connection with the Merger or the other transactions contemplated by this Agreement.

 

Consent” means any consent, approval, waiver, authorization or Permit of, or notice to or declaration or filing with any Governmental Authority or any other Person.

 

Contracts” means all contracts, agreements, binding arrangements, bonds, notes, indentures, mortgages, debt instruments, purchase order, licenses (and all other contracts, agreements or binding arrangements concerning Intellectual Property), franchises, leases and other instruments or obligations of any kind, written or oral (including any amendments and other modifications thereto).

 

Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled”, “Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing a Person (the “Controlled Person”) shall be deemed Controlled by (a) any other Person (i) owning beneficially, as meant in Rule 13d-3 under the Exchange Act, securities entitling such Person to cast ten percent (10%) or more of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive ten percent (10%) or more of the profits, losses, or distributions of the Controlled Person; (b) an officer, director, general partner, partner (other than a limited partner), manager, or member (other than a member having no management authority that is not a Person described in clause (a) above) of the Controlled Person; or (c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew, mother-in-law, father-in-law, sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a trust for the benefit of an Affiliate of the Controlled Person or of which an Affiliate of the Controlled Person is a trustee.

 

Copyrights” means any works of authorship, mask works and all copyrights therein, including all renewals and extensions, copyright registrations and applications for registration and renewal, and non-registered copyrights.

 

Disinterested Director ” means an independent directors (i.e., such independent director is not the Company Stockholder, an Affiliate of the Company Stockholder, or an officer, director, manager, employee, trustee or beneficiary of the Company Stockholder, nor an immediate family member of any of the foregoing) then serving on the Post-Closing Purchaser Board.

 

Disinterested Director Majority” means the vote or consent of a majority of the Disinterested Directors.

 

Enterprise Value” means an amount equal to One Hundred Forty Million U.S. Dollars ($140, 000,000).

 

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Environmental Law” means any Law in any way relating to (a) the protection of human health and safety, (b) the protection, preservation or restoration of the environment and natural resources (including air, water vapor, surface water, groundwater, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), or (c) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of Hazardous Materials, including the Comprehensive Environmental Response, Compensation and Liability Act, 42 USC. Section 9601 et. seq., the Resource Conservation and Recovery Act, 42 USC. Section 6901 et. seq., the Toxic Substances Control Act, 15 USC. Section 2601 et. seq., the Federal Water Pollution Control Act, 33 USC. Section 1151 et seq., the Clean Air Act, 42 USC. Section 7401 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 USC. Section 111 et. seq., Occupational Safety and Health Act, 29 USC. Section 651 et. seq. (to the extent it relates to exposure to Hazardous Substances), the Asbestos Hazard Emergency Response Act, 15 USC. Section 2601 et. seq., the Safe Drinking Water Act, 42 USC. Section 300f et. seq., the Oil Pollution Act of 1990 and analogous state acts.

 

Environmental Liabilities” means, in respect of any Person, all Liabilities, obligations, responsibilities, Remedial Actions, Losses, damages, costs, and expenses (including all reasonable fees, disbursements, and expenses of counsel, experts, and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand by any other Person or in response to any violation of Environmental Law, whether known or unknown, accrued or contingent, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, to the extent based upon, related to, or arising under or pursuant to any Environmental Law, Environmental Permit, Order, or Contract with any Governmental Authority or other Person, that relates to any environmental, health or safety condition, violation of Environmental Law, or a Release or threatened Release of Hazardous Materials.

 

ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended.

 

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

 

Fraud Claim” means any claim based in whole or in part upon fraud, willful misconduct or intentional misrepresentation.

 

Founder Shares” 4,232,222 shares of Purchaser Class B common stock initially purchased by the Sponsor in a private placement prior to the IPO, and shares of Purchaser Class A Common Stock issued upon the conversion of such Purchaser Class B Common Stock.

 

GAAP” means generally accepted accounting principles as in effect in the United States of America.

 

Governmental Authority” means any federal, state, local, foreign or other governmental, quasi-governmental or administrative body, instrumentality, department or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.

 

Hazardous Material” means any waste, gas, liquid or other substance or material that is defined, listed or designated as a “hazardous substance”, “pollutant”, “contaminant”, “hazardous waste”, “regulated substance”, “hazardous chemical”, or “toxic chemical” (or by any similar term) under any Environmental Law, or any other material regulated, or that could result in the imposition of Liability or responsibility, under any Environmental Law, including petroleum and its by-products, asbestos, polychlorinated biphenyls, radon, mold, and urea formaldehyde insulation.

 

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Indebtedness” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money (including the outstanding principal and accrued but unpaid interest), (b) all obligations for the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business), (c) any other indebtedness of such Person that is evidenced by a note, bond, debenture, credit agreement or similar instrument, (d) all obligations of such Person under leases that should be classified as capital leases in accordance with GAAP, (e) all obligations of such Person for the reimbursement of any obligor on any line or letter of credit, banker’s acceptance, guarantee or similar credit transaction, in each case, that has been drawn or claimed against, (f) all obligations of such Person in respect of acceptances issued or created, (g) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically or upon the happening of a contingency, (h) all obligations secured by an Lien on any property of such Person, (i) any premiums, prepayment fees or other penalties, fees, costs or expenses associated with payment of any Indebtedness of such Person and (j) all obligation described in clauses (a) through (i) above of any other Person which is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss.

 

Intellectual Property” means all of the following as they exist in any jurisdiction throughout the world: Patents, Trademarks, Copyrights, Trade Secrets, Internet Assets, Software and other intellectual property, and all licenses, sublicenses and other agreements or permissions related to the preceding property.

 

Internet Assets” means any and all domain name registrations, web sites and web addresses and related rights, items and documentation related thereto, and applications for registration therefor.

 

IPO” means the initial public offering of Purchaser Public Units pursuant to the IPO Prospectus.

 

IPO Prospectus” means the final prospectus of the Purchaser, dated as of August 23, 2018, and filed with the SEC on August 24, 2018 (File No. 333-226270).

 

IPO Underwriter” means Chardan Capital Markets, LLC.

 

IRS” means the U.S. Internal Revenue Service (or any successor Governmental Authority).

 

Knowledge” means, with respect to (i) the Company, the actual knowledge of the executive officers or directors of the Company, after reasonable inquiry or (ii) any other Party, (A) if an entity, the actual knowledge of its directors and executive officers, after reasonable inquiry, or (B) if a natural person, the actual knowledge of such Party after reasonable inquiry.

 

Law” means any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, Order or Consent that is or has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority.

 

Liabilities” means any and all liabilities, Indebtedness, Actions or obligations of any nature (whether absolute, accrued, contingent or otherwise, whether known or unknown, whether direct or indirect, whether matured or unmatured, whether due or to become due and whether or not required to be recorded or reflected on a balance sheet under GAAP or other applicable accounting standards), including Tax liabilities due or to become due.

 

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Lien” means any mortgage, pledge, security interest, attachment, right of first refusal, option, proxy, voting trust, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof), restriction (whether on voting, sale, transfer, disposition or otherwise), any subordination arrangement in favor of another Person, or any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar Law.

 

Material Adverse Effect” means, with respect to any specified Person, any fact, event, occurrence, change or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect upon (a) the business, assets, Liabilities, results of operations or financial condition of such Person and its Subsidiaries, taken as a whole, or (b) the ability of such Person or any of its Subsidiaries on a timely basis to consummate the transactions contemplated by this Agreement or the Ancillary Documents to which it is a party or bound or to perform its obligations hereunder or thereunder; provided, however, that for purposes of clause (a) above, any changes or effects directly or indirectly attributable to, resulting from, relating to or arising out of the following (by themselves or when aggregated with any other, changes or effects) shall not be deemed to be, constitute, or be taken into account when determining whether there has or may, would or could have occurred a Material Adverse Effect: (i) general changes in the financial or securities markets or general economic or political conditions in the country or region in which such Person or any of its Subsidiaries do business; (ii) changes, conditions or effects that generally affect the industries in which such Person or any of its Subsidiaries principally operate; (iii) changes in GAAP or other applicable accounting principles or mandatory changes in the regulatory accounting requirements applicable to any industry in which such Person and its Subsidiaries principally operate; (iv) conditions caused by acts of God, terrorism, war (whether or not declared) or natural disaster; (v) any failure in and of itself by such Person and its Subsidiaries to meet any internal or published budgets, projections, forecasts or predictions of financial performance for any period (provided that the underlying cause of any such failure may be considered in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur to the extent not excluded by another exception herein) and (vi), with respect to the Purchaser, the consummation and effects of the Redemption (or any redemption in connection with the Extension); provided further, however, that any event, occurrence, fact, condition, or change referred to in clauses (i) - (iv) 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 such Person or any of its Subsidiaries compared to other participants in the industries in which such Person or any of its Subsidiaries primarily conducts its businesses. Notwithstanding the foregoing, with respect to the Purchaser, the amount of the Redemption (or any redemption in connection with the Extension, if any) or the failure to obtain the Required Stockholder Approval shall not be deemed to be a Material Adverse Effect on or with respect to the Purchaser.

 

Merger Sub Stock” means the shares of common stock, par value $0.001 per share, of Merger Sub.

 

Net Working Capital” means, as of the Reference Time, (i) all current assets of the Company, including cash, minus (ii) all current liabilities of the Company (excluding, without duplication, Indebtedness and unpaid Company Transaction Expenses), as determined in accordance with the Accounting Principles.

 

NYSE” means the New York Stock Exchange.

 

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Order” means any order, decree, ruling, judgment, injunction, writ, determination, binding decision, verdict, judicial award or other action that is or has been made, entered, rendered, or otherwise put into effect by or under the authority of any Governmental Authority.

 

Organizational Documents” means, with respect to any Person that is an entity, its certificate of incorporation or formation, bylaws, operating agreement, memorandum and articles of association or similar organizational documents, in each case, as amended.

 

Patents” means any patents, patent applications and the inventions, designs and improvements described and claimed therein, patentable inventions, and other patent rights (including any divisionals, provisionals, continuations, continuations-in-part, substitutions, or reissues thereof, whether or not patents are issued on any such applications and whether or not any such applications are amended, modified, withdrawn, or refiled).

 

PCAOB” means the U.S. Public Company Accounting Oversight Board (or any successor thereto).

 

Per Share Price” means $10.38 (as equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the like after the Closing).

 

Permits” means all federal, state, local or foreign or other third-party permits, grants, easements, consents, approvals, authorizations, exemptions, licenses, franchises, concessions, ratifications, permissions, clearances, confirmations, endorsements, waivers, certifications, designations, ratings, registrations, qualifications or orders of any Governmental Authority or any other Person.

 

Permitted Liens” means (a) Liens for Taxes or assessments and similar governmental charges or levies, which either are (i) not delinquent or (ii) being contested in good faith and by appropriate proceedings, and adequate reserves have been established with respect thereto, (b) other Liens imposed by operation of Law arising in the ordinary course of business for amounts which are not due and payable and as would not in the aggregate materially adversely affect the value of, or materially adversely interfere with the use of, the property subject thereto, (c) Liens incurred or deposits made in the ordinary course of business in connection with social security, (d) Liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the ordinary course of business, or (e) Liens arising under this Agreement or any Ancillary Document.

 

Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.

 

Personal Property” means any machinery, equipment, tools, vehicles, furniture, leasehold improvements, office equipment, plant, parts and other tangible personal property.

 

Purchaser Class A Common Stock” means the shares of Class A common stock, par value $0.0001 per share, of the Purchaser, along with any equity securities paid as dividends or distributions after the Closing with respect to such shares or into which such shares are exchanged or converted after the Closing.

 

Purchaser Class B Common Stock” means the shares of Class B common stock, par value $0.0001 per share, of the Purchaser.

 

Purchaser Common Stock” means the shares of Purchaser Class A Common Stock and Purchaser Class B Common Stock, collectively.

 

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Purchaser Confidential Information” means all confidential or proprietary documents and information concerning the Purchaser or any of its Representatives; provided, however, that Purchaser Confidential Information shall not include any information which, (i) at the time of disclosure by the Company, the Company Stockholder or any of their respective Representatives, is generally available publicly and was not disclosed in breach of this Agreement or (ii) at the time of the disclosure by the Purchaser or its Representatives to the Company, the Company Stockholder or any of their respective Representatives, was previously known by such receiving party without violation of Law or any confidentiality obligation by the Person receiving such Purchaser Confidential Information. For the avoidance of doubt, from and after the Closing, Purchaser Confidential Information will include the confidential or proprietary information of the Company.

 

Purchaser Preferred Stock” means the shares of preferred stock, par value $0.0001 per share, of Purchaser.

 

Purchaser Private Warrants” means one (1) whole warrant entitling the holder thereof to purchase one (1) share of Purchaser Class A Common Stock at a purchase price of $11.50 per share

 

“Purchaser Units” means the units issued in the IPO (including overallotment units acquired by Purchaser’s underwriter) consisting of one (1) share of Purchaser Class A Common Stock and one Purchaser Public Warrant.

 

Purchaser Public Warrants” means one (1) whole warrant that was included in as part of each Purchaser Public Unit, entitling the holder thereof to purchase one (1) share of Purchaser Class A Common Stock at a purchase price of $11.50 per share.

 

Purchaser Securities” means the Purchaser Units, the Purchaser Common Stock, the Purchaser Preferred Stock and the Purchaser Warrants, collectively.

 

Purchaser Share Price” means an amount equal to the VWAP of the Purchaser Common Stock over the twenty (20) Trading Days ending at the close of business on the principal securities exchange or securities market on which the Purchaser Common Stock are then traded immediately prior to the date of determination, as equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the like after the date of this Agreement.

 

“Purchaser Warrants” means Purchaser Private Warrants and Purchaser Public Warrants, collectively.

 

Reference Time” means the close of business of the Company on the Closing Date (but without giving effect to the transactions contemplated by this Agreement, including any payments by Purchaser hereunder to occur at the Closing, but treating any obligations in respect of Indebtedness, Company Transaction Expenses or other liabilities that are contingent upon the consummation of the Closing as currently due and owing without contingency as of the Reference Time).

 

Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, or leaching into the indoor or outdoor environment, or into or out of any property.

 

Remedial Action” means all actions to (i) clean up, remove, treat, or in any other way address any Hazardous Material, (ii) prevent the Release of any Hazardous Material so it does not endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (iii) perform pre-remedial studies and investigations or post-remedial monitoring and care, or (iv) correct a condition of noncompliance with Environmental Laws.

 

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Representatives” means, as to any Person, such Person’s Affiliates and the respective managers, directors, officers, employees, independent contractors, consultants, advisors (including financial advisors, counsel and accountants), agents and other legal representatives of such Person or its Affiliates.

 

SEC” means the U.S. Securities and Exchange Commission (or any successor Governmental Authority).

 

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

 

Software” means any computer software programs, including all source code, object code, and documentation related thereto and all software modules, tools and databases.

 

SOX” means the U.S. Sarbanes-Oxley Act of 2002, as amended.

 

Sponsor Equity Adjustment” means an amount equal to $9,324,323, which represents the product of (x) (i) 1,000,000 shares of Purchaser Class B Common Stock originally issued to the Sponsor prior to the IPO less (ii) the 101,703 shares of Purchaser Class B Common Stock which shall be transferred by the Sponsor to the Company Stockholder pursuant to the Sponsor Share Letter, multiplied by (y) $10.38 per share.

 

Subsidiary” means, with respect to any Person, any corporation, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons will be deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons will be allocated a majority of partnership, association or other business entity gains or losses or will be or control the managing director, managing member, general partner or other managing Person of such partnership, association or other business entity. A Subsidiary of a Person will also include any variable interest entity which is consolidated with such Person under applicable accounting rules.

 

Target Net Working Capital Amount” means an amount equal to Ten Million U.S. Dollars ($10,000,000).

 

Tax Return” means any return, declaration, report, claim for refund, information return or other documents (including any related or supporting schedules, statements or information) filed or required to be filed in connection with the determination, assessment or collection of any Taxes or the administration of any Laws or administrative requirements relating to any Taxes.

 

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Taxes” means (a) all direct or indirect federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, value-added, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, social security and related contributions due in relation to the payment of compensation to employees, excise, severance, stamp, occupation, premium, property, windfall profits, alternative minimum, estimated, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto, (b) any Liability for payment of amounts described in clause (a) whether as a result of being a member of an affiliated, consolidated, combined or unitary group for any period or otherwise through operation of law and (c) any Liability for the payment of amounts described in clauses (a) or (b) as a result of any tax sharing, tax group, tax indemnity or tax allocation agreement with, or any other express or implied agreement to indemnify, any other Person.

 

Trade Secrets” means any trade secrets, confidential business information, concepts, ideas, designs, research or development information, processes, procedures, techniques, technical information, specifications, operating and maintenance manuals, engineering drawings, methods, know-how, data, mask works, discoveries, inventions, modifications, extensions, improvements, and other proprietary rights (whether or not patentable or subject to copyright, trademark, or trade secret protection).

 

Trademarks” means any trademarks, service marks, trade dress, trade names, brand names, internet domain names, designs, logos, or corporate names (including, in each case, the goodwill associated therewith), whether registered or unregistered, and all registrations and applications for registration and renewal thereof.

 

Trading Day” means any day on which shares of Purchaser Common Stock are actually traded on the principal securities exchange or securities market on which the Purchaser Common Stock are then traded.

 

Trust Account” means the trust account established by Purchaser with the proceeds from the IPO pursuant to the Trust Agreement in accordance with the IPO Prospectus.

 

Trust Agreement” means that certain Investment Management Trust Agreement, dated as of August 23, 2018, as it may be amended, by and between the Purchaser and the Trustee, as well as any other agreements entered into related to or governing the Trust Account.

 

Trustee” means Continental Stock Transfer & Trust Company, in its capacity as trustee under the Trust Agreement.

 

VWAP” means, for any security as of any date(s), the dollar volume-weighted average price for such security on the principal securities exchange or securities market on which such security is then traded during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported by OTC Markets Group Inc. If the VWAP cannot be calculated for such security on such date(s) on any of the foregoing bases, the VWAP of such security on such date(s) shall be the fair market value as determined reasonably and in good faith by a majority of the disinterested independent directors of the board of directors (or equivalent governing body) of the applicable issuer. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.

 

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12.2 Section References. The following capitalized terms, as used in this Agreement, have the respective meanings given to them in the Section as set forth below adjacent to such terms:

 

Term   Section
AAA Procedures       11.4
Accounts Receivable       4.7(f)
Acquisition Proposal       6.6(a)
Adjustment Amount       1.14(d)
Agreement       Preamble
Alternative Transaction       6.6(a)
Antitrust Laws       6.9(b)
Business Combination       10.1
Cash Consideration       1.9(b)(i)
CFO       1.14(a)
Claim Notice       7.4(b)
Closing       2.1
Closing Date       2.1
Closing Filing       6.14(b)
Closing Press Release       6.14(b)
Closing Purchaser Board       6.17(a)
Closing Statement       1.14(a)
Company       Preamble
Company Benefit Plan       4.19(a)
Company Certificates       1.10(a)
Company Director       6.17(a)
Company Disclosure Schedules       Article IV
Company Financials       4.7(a)
Company Fundamental Reps       7.1(a)
Company Indemnified Party       7.2(b)
Company Indemnifying Party       7.2(a)
Company IP       4.13(d)
Company IP Licenses       4.13(a)
Company Material Contracts       4.12(a)
Company Permits       4.10
Company Personal Property Leases       4.16
Company Real Property Leases       4.15
Company Registered IP       4.13(a)
Company Stockholder       Preamble
Deposit Servicing Agreement       Recitals
D&O Indemnified Persons       6.18(a)
D&O Tail Insurance       6.18(b)
DGCL       3.5(a)
Dispute       11.4
Effective Time       1.2
EGS       2.1
Enforceability Exceptions       3.2
Environmental Permits       4.20(a)
Estimated Closing Statement       1.13

 

76

 

Term   Section
Expenses       9.3
Extension       6.3(a)
Extension Expenses       6.3(b)(iv)
Federal Securities Laws       6.7
Incentive Plan       6.12(a)
Indemnified Parties       7.2(b)
Indemnifying Parties       7.2(b)
Independent Expert       1.14(b)
Independent Expert Notice Date       1.14(b)
Interchange Maintenance Agreement       Recitals
Interim Balance Sheet Date       4.7(a)
Interim Period       6.1(a)
License Agreement       Recitals
Lock-Up Agreement       8.2(f)(iv)
Loss       7.2(a)
Lost Certificate Affidavit       1.11(b)
Merger       Recitals
Merger Consideration       1.9(a)
Merger Consideration Share Amount       1.9(b)(ii)
Merger Consideration Shares       1.9(b)(ii)
Merger Sub       Preamble
Non-Competition Agreement   8.2(f)(v)
Notified Person       7.4(b)
Notifying Person       7.4(b)
Objection Statement       1.14(b)
OFAC       3.19(c)
Off-the-Shelf Software       4.13(a)
Outbound IP License       4.13(c)
Outside Date       9.1(b)
Party(ies)       Preamble
PBCL       Recitals
PIPE Investment       3.21
PIPE Investors       3.21
Post-Closing Purchaser Board       6.17(a)
Proxy Statement       6.12(a)
Public Certifications       3.6(a)
Public Stockholders       10.1
Purchaser       Preamble
Purchaser Directors       6.17(a)
Purchaser Disclosure Schedules       Article III
Purchaser Financials       3.6(b)
Purchaser Fundamental Reps       7.1(b)
Purchaser Indemnified Party       7.2(a)
Purchaser Indemnifying Party       7.2(b)

 

77

 

Term   Section
Purchaser Material Contract       3.13(a)
Purchaser Special Meeting       6.12(a)
Redemption       6.12(a)
Registration Rights Agreement       8.2(f)(viii)
Related Person       4.21
Released Claims       10.1
Remaining Trust Account Amount       1.9(b)(i)(B)
Representative Party       1.14(b)
Required Stockholder Approval       8.1(a)
Resolution Period       11.4
SEC Reports       3.6(a)
Section 409A Plan       4.19(k)
Signing Filing       6.14(b)
Signing Press Release       6.14(b)
Specified Courts       11.5
Sponsor       Recitals
Sponsor Share Letter   Recitals
Statement of Merger       1.2
Stockholder Approval Matters       6.12(a)
Stockholder Written Consent       8.2(f)(ii)
Subscription Agreements       3.21
Surviving Corporation       1.1
Third Party Claim       7.4(c)
Top Customers       4.24
Top Suppliers       4.24
Transition Agreements        Recitals
Transition Services Agreement        Recitals

 

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IN WITNESS WHEREOF, each Party hereto has caused this Agreement and Plan of Merger to be signed and delivered as of the date first written above.

 

  The Purchaser:
   
  MEGALITH FINANCIAL ACQUISITION CORP.
     
  By: /s/ A.J. Dunklau
    Name:  A.J. Dunklau
    Title: President and Chief Executive Officer
       
  Merger Sub:
   
  MFAC MERGER SUB INC.
     
  By: /s/ A.J. Dunklau
    Name: A.J. Dunklau
    Title: President
       
  The Company:
   
  BANKMOBILE TECHNOLOGIES, INC.
     
  By: /s/ Luvleen Sidhu
    Name: Luvleen Sidhu
    Title: Chief Executive Officer
       
  The Company Stockholder:
   
  CUSTOMERS BANK, solely in the capacity as the Company Stockholder hereunder
     
  By: /s/ Richard Ehst
    Name: Richard Ehst
    Title: President and Chief Executive Officer

 

[Signature Page to Merger Agreement] 

 

 

 

Exhibit A

 

Form of Transition Services Agreement

 

Period: From the Closing Date until eighteen months following the Closing Date
Scope of Services:

Customers Bank shall provide the following services to the Company:

●    Consulting to support transition;

●    Computers and Access, including access change requests and password resets and necessary access to IT systems;

●    Transfer and access to email and related data retention;

●    Data center operations transition services;

●    Governance assistance;

●    Audit and compliance services;

●    Staffing and training services;

●    Accounting transition services;

●    Information Security

●    Cyber Security

●    Legal assistance with the transfer of contracts, relationships, and customer agreements.

Fees: $12,500 per month plus any expenses associated with the services provided
Other Terms: Customary representations, warranties and termination, standards of performance, issue resolution, migration planning, IP and confidentiality provisions, and change of control provisions for an agreement between two unaffiliated parties in an arm’s length transaction.

 

A-1

 

Exhibit B

 

License Agreement Term Sheet

 

Period: From the Closing Date until the tenth anniversary of the Closing Date
Licensor: Surviving Corporation
Licensee: Customers Bank
Licensed Technology: Existing BankMobile mobile banking technology to service Customers Bank’s existing customers
Scope of License:

Use of Licensed Technology to service Customers Bank’s existing customers and new customers (so long as such activities do not compete with the Surviving Company)

Technology may only be used for direct-to-consumer or employees of Customers Bank’s customers

Fees: Royalty-free
Other Terms:

License is non-exclusive

Licenses is non-transferrable

Valued at $10 million to Customers Bank

Customary representations, warranties, terms of use and termination provisions for an agreement between two unaffiliated parties in an arm’s length transaction.

BankMobile may terminate early upon payment of $1 million per year or portion of year remaining in the term.

 

B-1

 

Exhibit C

 

Deposit Servicing Agreement Term Sheet

 

Period: From the Closing Date until December 31, 2022
Services:

To include:

 

(i)           Servicing of deposit accounts generated for Customers Bank by Surviving Corporation for new and existing Customers;

(ii)          Providing customer support;

(iii)         Ensuring operational compliance with applicable laws and regulations;

(iv)         Providing accounting support;

(v)          Other services to be agreed upon between Customers Bank and Surviving Corporation.

For the avoidance of doubt, all technology, operations, regulatory support, call center and other support for all non-interest-bearing and interest-bearing deposit accounts will be managed by Surviving Corporation.

 

The Surviving Corporation shall perform the services in a prudent and efficient manner and in accordance with all applicable law and industry practice.

Servicing Fees:

Customers Bank will pay Surviving Corporation:

 

(i)           150 basis points for deposit servicing; and

(ii)          150 basis points for net interest margin sharing;

 

in each case to be calculated based upon average monthly balances for all deposit accounts generated for Customers Bank by Surviving Corporation; provided, however, that any interest paid by Customers Bank for such deposit accounts in excess of 30 bp shall be subtracted from such fee.

 

The Servicing Fees shall be calculated and paid by Customers Bank to Surviving Corporation monthly and in accordance with all applicable legal, regulatory, and accounting principles.

 

Customers Bank will bear all uninsured fraud-related losses incurred on the deposit accounts owned by Customers Bank and serviced by the Surviving Corporation on behalf of Customers Bank.

Other Terms:

Customary representations, warranties and termination provisions for an agreement between two unaffiliated parties in an arm’s length transaction.

 

Mutual indemnification.

 

Non-exclusive.

 

Non-transferable.

 

C-1

 

Exhibit D

 

Interchange Maintenance Agreement Term Sheet

 

Period: From the Closing Date until December 31, 2022
Terms:

Customers Bank will pay to the Surviving Corporation:

 

(i)           an amount equal to all debit card interchange revenues on demand deposit accounts generated by Surviving Corporation for Customers Bank; and

(ii)          the difference between post-Durbin and pre-Durbin interchange revenues on such accounts.

 

Methodology to determine pre-Durbin rates will be established and back tested to ensure an acceptable level of accuracy and such methodology will be agreed on by both parties.

 

Surviving Corporation shall use its best efforts to find alternative Durbin-exempt banks for such accounts as soon as practicable after the Closing Date.

Other Terms:

Customary representations, warranties and termination provisions for an agreement between two unaffiliated parties in an arm’s length transaction.

 

Mutual indemnification.

 

 

D-1

 

 

Exhibit 10.1

 

MFA Investor Holdings LLC
535 5th Avenue, 29th Floor

New York, New York 10017

August 6, 2020

 

Megalith Acquisition Corp.
535 5th Avenue, 29th Floor

New York, New York 10017
Attn: A.J. Dunklau, Chief Executive Officer

 

Re: Sponsor Share Letter

 

Dear Andrew:

 

Reference is hereby made to that certain Agreement and Plan of Merger Agreement, dated as of August 6, 2020 (as it may be amended, the “Merger Agreement”) by and among Megalith Acquisition Corp., a Delaware corporation (including any successor thereto, “Purchaser”), MFAC Merger Sub Inc., a Pennsylvania corporation and a wholly-owned subsidiary of Purchaser (“Merger Sub”), BankMobile Technologies, Inc., a Pennsylvania corporation (the “Company”), and Customers Bank, a Pennsylvania state chartered bank and the sole stockholder of the Company (“CUBI”). Any capitalized term used but not defined herein will have the meanings ascribed thereto in the Merger Agreement.

 

In order to induce the Company to enter into the Merger Agreement, MFA Investor Holdings LLC, a Delaware limited liability company (“Sponsor”), has agreed to enter into this letter agreement (this “Agreement”) relating to (i) the 4,232,222 shares of Class B common stock par value $0.0001 per share, of Purchaser (the “Founder Shares”) purchased by Sponsor in a private placement prior to Purchaser’s initial public offering, and (ii) the 6,195,778 warrants to purchase shares of Class A common stock, par value $0.0001 per share (“Class A Common Stock”), of Purchaser (the “Sponsor Warrants”), purchased by Sponsor in a private placement concurrent with Purchaser’s initial public offering.

 

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Sponsor and each of the undersigned parties hereby agrees as follows:

 

1. The Sponsor hereby agrees to, upon and subject to the Closing, transfer and assign, subject to and in accordance with the terms and conditions of this Agreement, to CUBI all of its right, title and interest in and to 101,703 Founder Shares (the “CUBI Transferred Shares”). The parties hereto acknowledge that, prior to the Closing Sponsor shall also transfer (i) 178,495 Founder Shares (the “SPC Transferred Shares”, and together with the CUBI Transferred Shares, the “Transferred Shares”), and (ii) 1,311,501 Sponsor Warrants (unless such transfer would trigger a warrant price adjustment under section 4.3.2 of the warrant agreement), to Schechter Private Capital, LLC (“SPC”), in connection with a private placement of approximately Twenty Million Dollars ($20,000,000) of Class A Common Stock of Purchaser, in accordance with the terms and conditions set forth in that certain Subscription Agreement with Purchaser and that certain Agreement to Transfer Sponsor Securities, dated August 6, 2020 (the “SPC Sponsor Share Agreement”), among Purchaser, the Sponsor, SPC and Continental Stock Transfer and Trust Company. Notwithstanding the forgoing, if the number of SPC Transferred Shares decreases to 167,659 shares and the number of Sponsor Warrants transferred to SPC increases to 1,419,864 in accordance with the terms of the SPC Sponsor Share Agreement, the number of CUBI Transferred Shares shall be increased to 112,539 shares.

 

 

 

2. The CUBI Transferred Shares will be transferred by Sponsor to CUBI as a “permitted transferee” (as defined in the Letter Agreement, dated as of August 23, 2018 (as it may, subject to the terms hereof be amended, the “Insider Letter”), by and among Purchaser and Sponsor) of Sponsor under Section 7(c) of the Insider Letter, and accordingly CUBI hereby agrees to become bound by the transfer restrictions in the Insider Letter with respect to its CUBI Transferred Shares that apply to the Sponsor thereunder, in addition to the other restrictions set forth in this Agreement.

 

3. The Sponsor hereby agrees, upon and subject to the Closing, to forfeit all of the Sponsor Warrants held by Sponsor at the time of the Closing (the “Forfeited Warrants”). In order to effectuate such forfeiture, upon the Closing, the Sponsor shall deliver the Forfeited Warrants to Purchaser in certificated or book entry form (at the election of the Sponsor) for cancellation by Purchaser. Notwithstanding the foregoing, none of the Sponsor warrants shall be forfeited if Purchaser retains funds in the Trust Account at the Closing in excess of at least Ten Million Dollars ($10,000,000) after the Redemption but prior to taking into account transaction expenses.

 

4. The Sponsor hereby agrees, upon and subject to the Closing, to forfeit 2,932,222 of the Founder Shares held by the Sponsor at the time of the Closing (the “Forfeited Shares”). In order to effectuate such forfeiture, upon the Closing, the Sponsor shall deliver the Forfeited Shares to Purchaser in certificated or book entry form (at the election of the Sponsor) for cancellation by Purchaser.

 

5. Sponsor hereby agrees that, upon and subject to the Closing, it will not sell, transfer or otherwise dispose of, or hypothecate or otherwise grant any interest in or to, 300,000 of the Founder Shares retained by Sponsor after the transfer of the Transferred Shares to CUBI and SPC (the “Earnout Shares”), unless and until a Release Event has occurred. In the event that a Release Event has not occurred on or prior to the date which is seven (7) years following the Closing Date (the “Termination Date” and, the period from the Closing Date until and including the Termination Date, the “Earnout Period”) with respect to the Earnout Shares, Sponsor, hereby agrees to forfeit the Earnout Shares that have not been subject to a Release Event. In order to effectuate such forfeiture in the event that a Release Event has not theretofore occurred with respect to the Earnout Shares, upon the Termination Date, Sponsor shall deliver the Earnout Shares that have not been subject to a Release Event to Purchaser in certificated or book entry form (at the election of such party) for cancellation by Purchaser. The share certificates representing the Earnout Shares shall contain a legend relating to transfer restrictions imposed by this Agreement and the risk of forfeiture associated with the Earnout Shares. Such legend shall be removed upon the request of Sponsor following a Release Event.

 

6. Until and unless the Earnout Shares are forfeited, Sponsor shall have full ownership rights to its Earnout Shares, including the right to vote such shares and to receive dividends and distributions thereon.

 

7. The Earnout Shares shall vest and no longer be subject to forfeiture as follows (each a “Release Event”):

 

(a) The Earnout Shares shall vest and no longer be subject to forfeiture or the transfer restrictions in this Agreement if either (i) the VWAP of Purchaser Class A Common Stock on the principal exchange on which such securities are then listed or quoted shall have been at or above $15.00 for twenty (20) trading days (which need not be consecutive) over a thirty (30) trading day period at any time during the Earnout Period; or (ii) Purchaser sells shares of its capital stock in a secondary offering for at least $15.00 per share (the “Stock Price Trigger”), in each case subject to equitable adjustment for share splits, share dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the shares of Purchaser Common Stock after the Closing; provided, however, that the Stock Price Trigger shall be reduced by the amount of the aggregate cash or the fair market value of any securities or other assets paid or payable by Purchaser to the holders of Shares of Purchaser Class A Common Stock, on a per share basis, as an extraordinary dividend or distribution following the Closing.

 

2

 

 

(b) all of the Earnout Shares shall vest and no longer be subject to forfeiture or the transfer restrictions in this Agreement upon the first of any of the following to occur:

 

(i) if Purchaser is merged, consolidated or reorganized with or into another Person (an “Acquiror”) and as a result of such merger, consolidation or reorganization, less than 50.1% (whether by voting or economic rights) of the outstanding equity securities or other capital interests of the Acquiror or surviving or resulting entity is owned in the aggregate by the shareholders of Purchaser, directly or indirectly, immediately prior to such merger, consolidation or reorganization, excluding from such computation the interests of the Acquiror or any Affiliate of the Acquiror (the “Pre-Transaction Purchaser Equityholders”);

 

(ii) Purchaser and/or its subsidiaries sell, assign, transfer or otherwise dispose of (including by bulk reinsurance outside of the ordinary course of business consistent with past practice), in one or a series of related transactions, all or substantially all of the assets of Purchaser and its Subsidiaries, taken as a whole, to an Acquiror, less than 50.1% (whether by voting or economic rights) of the outstanding equity securities or other capital interests of which, immediately following such sale, assignment or transfer, is owned in the aggregate by the Pre-Transaction Purchaser Equityholders; or

 

(iii) a Schedule 13D or Schedule 14D report (or any successor schedule form or report), each as promulgated pursuant to the Exchange Act, is filed with the SEC disclosing that any person or group (as the terms “person” and “group” are used in Section 13(d) or Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder) has become the beneficial owner (as the term “beneficial owner” is defined in Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of a percentage of shares of the outstanding Shares of Purchaser Class A Common Stock as shall be greater than the percentage of such shares that, at the date of such filing, is held by any other person or group that held more than 50% of the voting or economic power of Purchaser immediately after the Closing.

 

8. Notwithstanding anything to the contrary herein, at or prior to the Closing, Sponsor may transfer any Sponsor Earnout Shares to any third-party investor who provides equity or debt financing for the transactions contemplated by the Merger Agreement without the consent of any party hereto, and any Sponsor Earnout Shares so transferred shall reduce the number of Sponsor Earnout Shares hereunder. Unless otherwise agreed in writing by Sponsor and the investor receiving such shares, any such transferred Sponsor Earnout Shares shall not be subject to the terms and conditions of this Agreement (but shall continue to be subject to the provisions of the Insider Letter).

 

9. Purchaser and Sponsor hereby each agree, that without the prior written consent of the Company, they will not, prior to the Closing, seek or agree to a waiver, amendment or termination of Sections 1 or 7 of the Insider Letter (or related definitions).

 

10. Subject to Section 8 above, no party hereto may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other parties; provided, that in the event that Sponsor liquidates and distributes to its members all securities of Purchaser that it owns in accordance with its organizational documents, Sponsor may, without obtaining the consent of any other party hereto, transfer the Sponsor Earnout Shares and its rights and obligations under this Agreement to its members so long as such members agree in writing to be bound by the terms of this Agreement that apply to Sponsor hereunder. Any purported assignment in violation of this Section 10 shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Agreement shall be binding on the undersigned and their respective successors and permitted assigns.

 

3

 

 

11. This Agreement (including the Merger Agreement to the extent incorporated herein) constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof; provided, that for the avoidance of doubt, nothing herein shall affect the terms and conditions of the Insider Letter.

 

12. This Agreement may not be changed, amended or modified as to any particular provision, except by a written instrument executed by all parties hereto. No provision of this Agreement may be waived except in a writing signed by the party against whom enforcement of such waiver is sought. No failure or delay by a party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder.

 

13. Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing and shall be sent in the same manner as provided in Section 12.1 of the Merger Agreement. Unless otherwise specified in writing by such party, notices to the Sponsor shall be sent to MFA Investor Holdings LLC, 535 5th Avenue, 29th Floor, New York, New York 10017 attn: A.J. Dunklau, CEO and notices to CUBI shall be sent to the address of the Company Stockholder set forth in in the Merger Agreement.

 

14. This Agreement shall be construed, interpreted and enforced in a manner consistent with the provisions of the Merger Agreement. The provisions set forth in Sections 11.3 through 11.8, 11.12 and 11.13, of the Merger Agreement, as in effect as of the date hereof, are hereby incorporated by reference into, and shall be deemed to apply to, this Agreement as if all references to the “Agreement” in such sections were instead references to this Agreement, and the references therein to the “Parties” were instead to the parties to this Agreement.

 

15. This Agreement shall terminate at such time, if any, as the Merger Agreement is terminated in accordance with its terms prior to the Closing, and upon such termination this Agreement shall be null and void and of no effect whatsoever, and the parties hereto shall have no obligations under this Agreement.

 

{Remainder of Page Left Blank; Signature Page Follows}

 

4

 

 

Please indicate your agreement to the foregoing by signing in the space provided below.

 

  MFA INVESTOR HOLDINGS LLC
   
  By: /s/ Bhanu Choudhrie
  Name: Bhanu Choudhrie
  Title: Managing Member

 

Accepted and agreed, effective as of the date first set forth above:

 

MEGALITH ACQUISITION CORP.  
   
By: /s/ A.J. Dunklau  
Name: A.J. Dunklau  
Title: President and Chief Executive Officer  
   
CUSTOMERS BANK  
   
By: /s/ Richard Ehst  
Name: Richard Ehst  
Title: President and Chief Executive Officer  

 

Address for Notice:  
   
Address: 1015 Penn Avenue, Suite 103  
 

Wyomissing, PA 19160

 
 

Attn: Carla Leibold, CFO

 
 

Tel: 484-923-8802

 
  Email: cleibold@customersbank.com  

 

 

 

5

 

 

Exhibit 10.2

  

FORM OF LOCK-UP AGREEMENT

 

THIS LOCK-UP AGREEMENT (this “Agreement”) is made and entered into as of [●], 2020, by and between (i) Megalith Financial Acquisition Corp., a Delaware corporation, which will be known after the consummation of the transactions contemplated by the Merger Agreement (as defined below) as “BM Technologies, Inc.” (including any successor entity thereto, the “Purchaser”), and (ii) Customers Bank, a Pennsylvania state chartered bank and the sole stockholder of the Company (defined below) (“Holder”). Any capitalized term used but not defined in this Agreement will have the meaning ascribed to such term in the Merger Agreement.

 

WHEREAS, on August 6, 2020, (i) the Purchaser, (ii) MFAC Merger Sub Inc., a Pennsylvania corporation and a wholly-owned subsidiary of the Purchaser (Merger Sub”), (iii) Holder, and (iv) BankMobile Technologies, Inc., a Pennsylvania corporation (the “Company”), entered into that certain Agreement and Plan of Merger (as amended from time to time in accordance with the terms thereof, the “Merger Agreement”), pursuant to which the Company will merge with and into Merger Sub, with Merger Sub continuing as the surviving entity (the “Merger”), and as a result of which, (a) all of the issued and outstanding capital stock of the Company, immediately prior to the consummation of the Merger (the “Closing”), shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, in exchange for the Merger Consideration, all upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the applicable provisions of the PBCL;

 

WHEREAS, immediately prior to the Closing, Holder is the sole holder of the Company Stock; and

 

WHEREAS, pursuant to the Merger Agreement, and in view of the valuable consideration to be received by Holder thereunder, the parties desire to enter into this Agreement, pursuant to which the Merger Consideration Shares received by Holder in the Merger (all such securities, together with any securities paid as dividends or distributions with respect to such securities or into which such securities are exchanged or converted, the Restricted Securities) shall become subject to limitations on disposition as set forth herein.

 

 NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and intending to be legally bound hereby, the parties hereby agree as follows:

 

 

 

 

1. Lock-Up Provisions.

 

(a) Holder hereby agrees not to, during the period commencing from the Closing and ending on the earliest of (x) one hundred and eighty (180) days after the date of the Closing, and (y) the date after the Closing on which the Purchaser consummates a liquidation, merger, capital stock exchange, reorganization or other similar transaction with an unaffiliated third party that results in all of Purchaser’s stockholders having the right to exchange their shares of Purchaser Common Stock for cash, securities or other property, and (z) the date on which the closing sale price of the Purchaser Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations and the like) for any twenty (20) trading days within any thirty (30) trading day period commencing at least ninety (90) days after the Closing (the “Lock-Up Period”): (i) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Restricted Securities, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Restricted Securities, or (iii) publicly disclose the intention to do any of the foregoing, whether any such transaction described in clauses (i), (ii) or (iii) above is to be settled by delivery of Restricted Securities or other securities, in cash or otherwise (any of the foregoing described in clauses (i), (ii) or (iii), a “Prohibited Transfer”). The foregoing sentence shall not apply to the transfer of any or all of the Restricted Securities owned by Holder (I) by gift, will or intestate succession upon the death of Holder, (II) to any Permitted Transferee, (III) pursuant to a court order or settlement agreement related to the distribution of assets in connection with the dissolution of marriage or civil union or (IV) commencing ninety (90) days after the Closing, in block trades or privately negotiated transactions; provided, however, that in any of cases (I), (II), (III) or (IV) it shall be a condition to such transfer that the transferee executes and delivers to the Purchaser an agreement stating that the transferee is receiving and holding the Restricted Securities subject to the provisions of this Agreement applicable to Holder, and there shall be no further transfer of such Restricted Securities except in accordance with this Agreement. As used in this Agreement, the term “Permitted Transferee” shall mean: (1) the members of Holder’s immediate family (for purposes of this Agreement, “immediate family” shall mean with respect to any natural person, any of the following: such person’s spouse or domestic partner, the siblings of such person and his or her spouse or domestic partner, and the direct descendants and ascendants (including adopted and step children and parents) of such person and his or her spouses or domestic partners and siblings), (2) any trust for the direct or indirect benefit of Holder or the immediate family of Holder, (3) if Holder is a trust, to the trustor or beneficiary of such trust or to the estate of a beneficiary of such trust, (4) in the case of an entity, partners, members or stockholders of such entity that receive such transfer as a distribution, (5) to any affiliate of Holder, and (6) any transferee whereby there is no change in beneficial ownership. Holder further agrees to execute such agreements as may be reasonably requested by Purchaser that are consistent with the foregoing or that are necessary to give further effect thereto.

 

(b) If any Prohibited Transfer is made or attempted contrary to the provisions of this Agreement, such purported Prohibited Transfer shall be null and void ab initio, and Purchaser shall refuse to recognize any such purported transferee of the Restricted Securities as one of its equity holders for any purpose. In order to enforce this Section 1, Purchaser may impose stop-transfer instructions with respect to the Restricted Securities of Holder (and Permitted Transferees and assigns thereof) until the end of the Lock-Up Period.

 

(c) During the Lock-Up Period, each certificate evidencing any Restricted Securities shall be stamped or otherwise imprinted with a legend in substantially the following form, in addition to any other applicable legends:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A LOCK-UP AGREEMENT, DATED AS OF [●], 2020, BY AND AMONG THE ISSUER OF SUCH SECURITIES (THE “ISSUER”) AND THE ISSUER’S SECURITY HOLDER NAMED THEREIN, AS AMENDED. A COPY OF SUCH LOCK-UP AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”

 

(d) For the avoidance of any doubt, Holder shall retain all of its rights as a stockholder of the Purchaser during the Lock-Up Period, including the right to vote any Restricted Securities.

 

 

 

 

2. Miscellaneous.

 

 

(a) Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns. This Agreement and all obligations of Holder are personal to Holder and may not be transferred or delegated by Holder at any time. The Purchaser may freely assign any or all of its rights under this Agreement, in whole or in part, to any successor entity (whether by merger, consolidation, equity sale, asset sale or otherwise) without obtaining the consent or approval of Holder.

 

(b) Third Parties. Nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any person or entity that is not a party hereto or thereto or a successor or permitted assign of such a party.

 

(c) Governing Law; Jurisdiction. This Agreement and any dispute or controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of law principles thereof. All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court located in New York, New York (or in any appellate courts thereof) (the “Specified Courts”). Each party hereto hereby (i) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto and (ii) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Specified Court. Each party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each party irrevocably consents to the service of the summons and complaint and any other process in any other action or proceeding relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such party at the applicable address set forth in Section 2(f). Nothing in this Section 2(c) shall affect the right of any party to serve legal process in any other manner permitted by applicable law.

 

(d) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 2(d).

 

(e) Interpretation. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement. In this Agreement, unless the context otherwise requires: (i) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (ii) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; (iii) the words “herein,” “hereto,” and “hereby” and other words of similar import in this Agreement shall be deemed in each case to refer to this Agreement as a whole and not to any particular section or other subdivision of this Agreement; and (iv) the term “or” means “and/or”. The parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

 

 

 

 

(f) Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by facsimile or other electronic means, with affirmative confirmation of receipt, (iii) one Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be specified by like notice):

 

If to the Purchaser after the Closing, to:

 

BM Technologies, Inc.

1015 Penn Avenue, Suite 103

Wyomissing, PA 19610

With copies to (which shall not constitute notice):

 

Nelson Mullins Riley & Scarborough
101 Constitution Avenue, NW, Suite 900
Washington, DC 20001
Attn: Jonathan H. Talcott, Esq.
Facsimile No.: (202) 689-2862
Telephone No.: (202) 689-2806
Email: jon.talcott@nelsonmullins.com

 

and

 

Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Attn: Matthew A. Gray, Esq.
Facsimile No.: (212) 370-7889
Telephone No.: (212) 370-1300
Email: mgray@egsllp.com

 

If to Holder, to: the address set forth below Holder’s name on the signature page to this Agreement.

 

(g) Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Purchaser and Holder. No failure or delay by a party in exercising any right hereunder shall operate as a waiver thereof. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

 

(h) Authorization on Behalf of the Purchaser. The parties acknowledge and agree that notwithstanding anything to the contrary contained in this Agreement, any and all determinations, actions or other authorizations under this Agreement on behalf of the Purchaser, including enforcing the Purchaser’s rights and remedies under this Agreement, or providing any waivers with respect to the provisions hereof, shall solely be made, taken and authorized by the Disinterested Director Majority. In the event that the Purchaser at any time does not have any Disinterested Directors, so long as Holder has any remaining obligations under this Agreement, the Purchaser will promptly appoint one in connection with this Agreement. Without limiting the foregoing, in the event that Holder or Holder’s Affiliate serves as a director, officer, employee or other authorized agent of the Purchaser or any of its current or future Affiliates, Holder and/or Holder’s Affiliate shall have no authority, express or implied, to act or make any determination on behalf of the Purchaser or any of its current or future Affiliates in connection with this Agreement or any dispute or Action with respect hereto.

 

 

 

 

(i) Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.

 

(j) Specific Performance. Holder acknowledges that its obligations under this Agreement are unique, recognizes and affirms that in the event of a breach of this Agreement by Holder, money damages will be inadequate and Purchaser will have no adequate remedy at law, and agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by Holder in accordance with their specific terms or were otherwise breached. Accordingly, the Purchaser shall be entitled to an injunction or restraining order to prevent breaches of this Agreement by Holder and to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or to prove that money damages would be inadequate, this being in addition to any other right or remedy to which the Purchaser may be entitled under this Agreement, at law or in equity.

 

(k) Entire Agreement. This Agreement constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled; provided, that, for the avoidance of doubt, the foregoing shall not affect the rights and obligations of the parties under the Merger Agreement or any Ancillary Document. Notwithstanding the foregoing, nothing in this Agreement shall limit any of the rights or remedies of the Purchaser or any of the obligations of Holder under any other agreement between Holder and the Purchaser or any certificate or instrument executed by Holder in favor of the Purchaser, and nothing in any other agreement, certificate or instrument shall limit any of the rights or remedies of the Purchaser or any of the obligations of Holder under this Agreement.

 

(l) Further Assurances. From time to time, at another party’s request and without further consideration (but at the requesting party’s reasonable cost and expense), each party shall execute and deliver such additional documents and take all such further action as may be reasonably necessary to consummate the transactions contemplated by this Agreement.

 

(m) Counterparts; Facsimile.  This Agreement may also be executed and delivered by facsimile signature or by email in portable document format in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Lock-Up Agreement as of the date first written above.

 

  Purchaser:
   
  MEGALITH FINANCIAL ACQUISITION CORP.
   
  By:                        
  Name:
  Title:

 

{Additional Signature on the Following Page}

 

{Signature Page to Lock-Up Agreement}

  

 

 

 

IN WITNESS WHEREOF, the parties have executed this Lock-Up Agreement as of the date first written above. 

 

Holder:  
   
Name of Holder:  Customers Bank  
   
By:                     
Name:  
Title:  

 

Number of Shares and Type of Company Stock:

  

Company Stock:___________________________________________

________________________________________________________

 

Address for Notice:

 

Address:________________________________________________

_______________________________________________________ 
_______________________________________________________


Facsimile No.: ____________________________________________

Telephone No.:___________________________________________

Email:__________________________________________________:

 

 

{Signature Page to Lock-Up Agreement}

 

 

 

 

Exhibit 10.3

 

FORM OF NON-COMPETITION AND NON-SOLICITATION AGREEMENT

 

THIS NON-COMPETITION AND NON-SOLICITATION AGREEMENT (this “Agreement”) is being executed and delivered as of [●] 2020, by Customers Bank, a Pennsylvania state chartered bank and the sole stockholder of the Company (defined below) (the “subject Party”) in favor of and for the benefit of Megalith Financial Acquisition Corp., a Delaware corporation, which will be known after the consummation of the transactions contemplated by the Merger Agreement (as defined below) as “BM Technologies, Inc.” (including any successor entity thereto, the “Purchaser”), BankMobile Technologies, Inc., a Pennsylvania corporation (the Company”), and each of the Purchaser’s and/or the Company’s respective Affiliates, successors and direct and indirect Subsidiaries (collectively with the Purchaser and the Company, the “Covered Parties”). Any capitalized term used, but not defined in this Agreement will have the meaning ascribed to such term in the Merger Agreement.

 

WHEREAS, on August 6, 2020, (i) the Purchaser, (ii) MFAC Merger Subsidiary Inc., a Pennsylvania corporation and a wholly-owned subsidiary of the Purchaser (Merger Sub”), the Subject Party, (iii) the Subject Party and (iv) the Company, entered into that certain Agreement and Plan of Merger (as amended from time to time in accordance with the terms thereof, the “Merger Agreement”), pursuant to which, subject to the terms and conditions thereof, the Company merged with and into Merger Sub, with Merger Sub continuing as the surviving entity (the “Merger”), and with the Company’s stockholder receiving shares of the Purchaser’s common stock;

 

WHEREAS, as of the Closing Date, the Company provides a digital disbursement platform for colleges, universities and other higher educational institutions, student banking services through the disbursements platform, the T-Mobile Money product, white label digital banking services, and workplace banking services to clients with 999 employees or less (the “Business”);

 

WHEREAS, in connection with, and as a condition to the execution and delivery of the Merger Agreement and the consummation of the Merger and the other transactions contemplated thereby (the “Transactions”), and to enable the Purchaser to secure more fully the benefits of the Transactions, including the protection and maintenance of the goodwill and confidential information of the Company, the Purchaser has required that the Subject Party enter into this Agreement;

 

WHEREAS, the Subject Party is entering into this Agreement in order to induce the Purchaser and Merger Sub to consummate the Transactions, pursuant to which the Subject Party will directly or indirectly receive a material benefit; and

 

WHEREAS, the Subject Party, as the former sole stockholder of the Company, has contributed to the value of the Company and has obtained extensive and valuable knowledge and confidential information concerning the business of the Company.

 

NOW, THEREFORE, in order to induce the Purchaser to consummate the Transactions, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Subject Party hereby agrees as follows:

 

1. Restriction on Competition.

 

(a) Restriction. The Subject Party hereby agrees that during the period from the Closing until the four (4) year anniversary of the Closing Date (the “Termination Date”), and such period from the Closing until the Termination Date, the “Restricted Period”), the Subject Party will not, and will cause its Affiliates not to, without the prior written consent of Purchaser (which may be withheld in its sole discretion), anywhere in the United States or in any other markets in which the Covered Parties are engaged, or are actively contemplating to become engaged, in the Business as of the Closing Date or during the Restricted Period (the “Territory”), directly or indirectly engage in the Business (other than through a Covered Party) or own, manage, finance or control, or participate in the ownership, management, financing or control of, or become engaged or serve as an officer, director, member, partner, employee, agent, consultant, advisor or representative of, a business or entity (other than a Covered Party) that engages in the Business (a “Competitor”). Notwithstanding the foregoing, (i) a request by the Subject Party for prior written consent to engage in white label digital banking services with identified customers within the Territory shall not be unreasonably withheld, conditioned or delayed and (ii) the Subject Party and its Affiliates may own passive investments of no more than two percent (2%) of any class of outstanding equity interests in a Competitor that is publicly traded, so long as the Subject Party and its Affiliates and immediate family members are not involved in the management or control of such Competitor (“Permitted Ownership”).

 

 

 

(b) Acknowledgment. The Subject Party acknowledges and agrees, that (i) the Subject Party possesses knowledge of confidential information of the Company and the Business, (ii) the Subject Party’s execution of this Agreement is a material inducement to Purchaser to consummate the Transactions and to realize the goodwill of the Company, for which the Subject Party and/or its Affiliates will receive a substantial direct or indirect financial benefit, and that the Purchaser would not have entered into the Merger Agreement or consummated the Transactions but for the Subject Party’s agreements set forth in this Agreement, (iii) it would impair the goodwill of the Company and reduce the value of the assets of the Company and cause serious and irreparable injury if the Subject Party were to use its ability and knowledge by engaging in the Business in competition with a Covered Party, and/or to otherwise breach the obligations contained herein and that the Covered Parties would not have an adequate remedy at law because of the unique nature of the Business, (iv) the Subject Party and its Affiliates have no intention of engaging in the Business (other than through the Covered Parties) during the Restricted Period other than through Permitted Ownership, (v) the relevant public policy aspects of restrictive covenants, covenants not to compete and non-solicitation provisions have been discussed, and every effort has been made to limit the restrictions placed upon the Subject Party to those that are reasonable and necessary to protect the Covered Parties’ legitimate interests, (vi) the Covered Parties conduct and intend to conduct the Business everywhere in the Territory and compete with other businesses that are or could be located in any part of the Territory, (vii) the foregoing restrictions on competition are fair and reasonable in type of prohibited activity, geographic area covered, scope and duration, (viii) the consideration provided to the Subject Party under this Agreement and the Merger Agreement is not illusory, and (ix) such provisions do not impose a greater restraint than is necessary to protect the goodwill or other business interests of the Covered Parties.

 

2. No Solicitation; No Disparagement.

 

(a) No Solicitation of Employees and Consultants. The Subject Party agrees that, during the Restricted Period, the Subject Party will not, and will not permit its Affiliates to, without the prior written consent of the Purchaser (which may be withheld in its sole discretion), either on its own behalf or on behalf of any other Person (other than, if applicable, a Covered Party in the performance of the Subject Party’s duties on behalf of the Covered Parties), directly or indirectly: (i) hire or engage as an employee, independent contractor, consultant or otherwise any Covered Personnel (as defined below); (ii) solicit, induce, encourage or otherwise knowingly cause (or attempt to do any of the foregoing) any Covered Personnel to leave the service (whether as an employee, consultant or independent contractor) of any Covered Party; or (iii) in any way interfere with or attempt to interfere with the relationship between any Covered Personnel and any Covered Party; provided, however, the Subject Party and its Affiliates will not be deemed to have violated this Section 2(a) if any Covered Personnel voluntarily and independently solicits an offer of employment from the Subject Party or its Affiliate (or other Person whom any of them is acting on behalf of) by responding to a general advertisement or solicitation program conducted by or on behalf of the Subject Party or its Affiliate (or such other Person whom any of them is acting on behalf of) that is not targeted at such Covered Personnel or Covered Personnel generally, so long as such Covered Personnel is not hired. For purposes of this Agreement, “Covered Personnel” shall mean any Person who is or was an employee, consultant or independent contractor of the Covered Parties, as of the Closing Date, at any time during the Restricted Period and as of the relevant time of determination.

 

2

 

(b) Non-Solicitation of Customers and Suppliers. The Subject Party agrees that, during the Restricted Period, the Subject Party and its Affiliates will not, without the prior written consent of the Purchaser (which may be withheld in its sole discretion), individually or on behalf of any other Person (other than, if applicable, a Covered Party in the performance of the Subject Party’s duties on behalf of the Covered Parties), directly or indirectly: (i) solicit, induce, encourage or otherwise knowingly cause (or attempt to do any of the foregoing) any Covered Customer (as defined below) to (A) cease being, or not become, a client or customer of any Covered Party with respect to the Business or (B) reduce the amount of business of such Covered Customer with any Covered Party, or otherwise alter such business relationship in a manner adverse to any Covered Party, in either case, with respect to or relating to the Business; (ii) knowingly interfere with or disrupt (or attempt to interfere with or disrupt) the contractual relationship between any Covered Party and any Covered Customer; (iii) divert any business with any Covered Customer relating to the Business from a Covered Party; (iv) solicit for business, provide services to, engage in or do business with, any Covered Customer for products or services that are part of the Business; or (v) interfere with or disrupt (or attempt to interfere with or disrupt), any Person that was a vendor, supplier, distributor, agent or other service provider of a Covered Party at the time of such interference or disruption, for a purpose competitive with a Covered Party as it relates to the Business. For purposes of this Agreement, a “Covered Customer” shall mean any Person who is or was an actual customer or client (or prospective customer or client with whom a Covered Party actively marketed or made or taken specific action to make a proposal) of a Covered Party, as of the Closing Date, at any time during the Restricted Period and as of the relevant time of determination.

 

(c) Non-Disparagement. The Subject Party agrees that from and after the Closing until the Second (2nd) anniversary of the end of the Restricted Period, the Subject Party and its Affiliates will not, directly or indirectly engage in any conduct that involves the making or publishing (including through electronic mail distribution or online social media) of any written or oral statements or remarks (including the repetition or distribution of derogatory rumors, allegations, negative reports or comments) that are disparaging, deleterious or damaging to the integrity, reputation or good will of one or more Covered Parties or their respective management, officers, employees, independent contractors or consultants. Notwithstanding the foregoing, subject to Section 3 below, the provisions of this Section 2(c) shall not restrict the Subject Party from providing truthful testimony or information in response to a subpoena or investigation by a Governmental Authority or in connection with any legal action by the Subject Party against any Covered Party under this Agreement, the Merger Agreement or any other Ancillary Document that is asserted by the Subject Party in good faith.

 

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3. Confidentiality. From and after the Closing Date, the Subject Party will, and will cause its Representatives to, keep confidential and not (except, if applicable, in the performance of the Subject Party’s duties on behalf of the Covered Parties) directly or indirectly use, disclose, reveal, publish, transfer or provide access to, any and all Covered Party Information without the prior written consent of the Purchaser (which may be withheld in its sole discretion). As used in this Agreement, “Covered Party Information” means all material and information relating to the business, affairs and assets of any Covered Party, including material and information that concerns or relates to such Covered Party’s bidding and proposal, technical, computer hardware or software, administrative, management, operational, data processing, financial, marketing, sales, human resources, business development, planning and/or other business activities, regardless of whether such material and information is maintained in physical, electronic, or other form, that is: (A) gathered, compiled, generated, produced or maintained by such Covered Party through its Representatives, or provided to such Covered Party by its suppliers, service providers or customers; and (B) intended and maintained by such Covered Party or its Representatives, suppliers, service providers or customers to be kept in confidence. The obligations set forth in this Section 3 will not apply to any Covered Party Information where the Subject Party can prove that such material or information: (i) is known or available through other lawful sources not bound by a confidentiality agreement with, or other confidentiality obligation to, any Covered Party; (ii) is or becomes publicly known through no violation of this Agreement or other non-disclosure obligation of the Subject Party or any of its Representatives; (iii) is already in the possession of the Subject Party at the time of disclosure through lawful sources not bound by a confidentiality agreement or other confidentiality obligation as evidenced by the Subject Party’s documents and records; or (iv) is required to be disclosed pursuant to an order of any administrative body or court of competent jurisdiction (provided that (A) the applicable Covered Party is given reasonable prior written notice, (B) the Subject Party cooperates (and causes its Representatives to cooperate) with any reasonable request of any Covered Party to seek to prevent or narrow such disclosure and (C) if after compliance with clauses (A) and (B) such disclosure is still required, the Subject Party and its Representatives only disclose such portion of the Covered Party Information that is expressly required by such order, as it may be subsequently narrowed).

 

4. Representations and Warranties. The Subject Party hereby represents and warrants, to and for the benefit of the Covered Parties as of the date of this Agreement and as of the Closing Date, that: (a) the Subject Party has full power and capacity to execute and deliver, and to perform all of the Subject Party’s obligations under, this Agreement; and (b) neither the execution and delivery of this Agreement nor the performance of the Subject Party’s obligations hereunder will result directly or indirectly in a violation or breach of any agreement or obligation by which the Subject Party is a party or otherwise bound. By entering into this Agreement, the Subject Party certifies and acknowledges that the Subject Party has carefully read all of the provisions of this Agreement, and that the Subject Party voluntarily and knowingly enters into this Agreement.

 

5. Remedies. The covenants and undertakings of the Subject Party contained in this Agreement relate to matters which are of a special, unique and extraordinary character and a violation of any of the terms of this Agreement may cause irreparable injury to the Covered Parties, the amount of which may be impossible to estimate or determine and which cannot be adequately compensated. The Subject Party agrees that, in the event of any breach or threatened breach by the Subject Party of any covenant or obligation contained in this Agreement, each applicable Covered Party will be entitled to seek the following remedies (in addition to, and not in lieu of, any other remedy at law or in equity or pursuant to the Merger Agreement or the other Ancillary Documents that may be available to the Covered Parties, including monetary damages), and a court of competent jurisdiction may award: (i) an injunction, restraining order or other equitable relief restraining or preventing such breach or threatened breach, without the necessity of proving actual damages or posting bond or security, which the Subject Party expressly waives; and (ii) recovery of the Covered Party’s attorneys’ fees and costs incurred in enforcing the Covered Party’s rights under this Agreement. The Subject Party hereby consents to the award of any of the above remedies to the applicable Covered Party in connection with any such breach or threatened breach. The Subject Party hereby acknowledges and agrees that in the event of any breach of this Agreement, any value attributed or allocated to this Agreement (or any other non-competition agreement with the Subject Party) under or in connection with the Merger Agreement shall not be considered a measure of, or a limit on, the damages of the Covered Parties.

 

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6. Survival of Obligations. The expiration of the Restricted Period will not relieve the Subject Party of any obligation or liability arising from any breach by the Subject Party of this Agreement during the Restricted Period. The Subject Party further agrees that the time period during which the covenants contained in Section 1 and Section 2 of this Agreement will be effective will be computed by excluding from such computation any time during which the Subject Party is in violation of any provision of such Sections.

 

7. Miscellaneous.

 

(a) Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by facsimile or other electronic means, with affirmative confirmation of receipt, (iii) one Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be specified by like notice):

 

If to Purchaser (or any other Covered Party), to:

 

BM Technologies, Inc.

1015 Penn Avenue, Suite 103

Wyomissing, PA 19610

Attn: Board of Directors

 

with a copy (that will not constitute notice) to:

 

Nelson Mullins Riley & Scarborough
101 Constitution Avenue, NW, Suite 900
Washington, DC 20001
Attn: Jonathan H. Talcott, Esq.
Facsimile No.: (202) 689-2862
Telephone No.: (202) 689-2806
Email: jon.talcott@nelsonmullins.com

 

and

 

Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Attn: Matthew A. Gray, Esq.
Facsimile No.: (212) 370-7889
Telephone No.: (212) 370-1300
Email: mgray@egsllp.com

If to the Subject Party, to:
the address below the Subject Party’s name on the signature page to this Agreement.

 

(b) Integration and Non-Exclusivity. This Agreement, the Merger Agreement and the other Ancillary Documents contain the entire agreement between the Subject Party and the Covered Parties concerning the subject matter hereof. Notwithstanding the foregoing, the rights and remedies of the Covered Parties under this Agreement are not exclusive of or limited by any other rights or remedies which they may have, whether at law, in equity, by contract or otherwise, all of which will be cumulative (and not alternative). Without limiting the generality of the foregoing, the rights and remedies of the Covered Parties, and the obligations and liabilities of the Subject Party and its Affiliates, under this Agreement, are in addition to their respective rights, remedies, obligations and liabilities (i) under the laws of unfair competition, misappropriation of trade secrets, or other requirements of statutory or common law, or any applicable rules and regulations and (ii) otherwise conferred by contract, including the Merger Agreement and any other written agreement between the Subject Party or its Affiliate and any of the Covered Parties. Nothing in the Merger Agreement will limit any of the obligations, liabilities, rights or remedies of the Subject Party or the Covered Parties under this Agreement, nor will any breach of the Merger Agreement or any other agreement between the Subject Party or its Affiliate and any of the Covered Parties limit or otherwise affect any right or remedy of the Covered Parties under this Agreement. If any term or condition of any other agreement between the Subject Party or its Affiliate and any of the Covered Parties conflicts or is inconsistent with the terms and conditions of this Agreement, the more restrictive terms will control as to the Subject Party or its Affiliate, as applicable.

 

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(c) Severability; Reformation. Each provision of this Agreement is separable from every other provision of this Agreement. If any provision of this Agreement is found or held to be invalid, illegal or unenforceable, in whole or in part, by a court of competent jurisdiction, then (i) such provision will be deemed amended to conform to applicable laws so as to be valid, legal and enforceable to the fullest possible extent, (ii) the invalidity, illegality or unenforceability of such provision will not affect the validity, legality or enforceability of such provision under any other circumstances or in any other jurisdiction, and (iii) the invalidity, illegality or unenforceability of such provision will not affect the validity, legality or enforceability of the remainder of such provision or the validity, legality or enforceability of any other provision of this Agreement. The Subject Party and the Covered Parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision. Without limiting the foregoing, if any court of competent jurisdiction determines that any part hereof is unenforceable because of the duration, geographic area covered, scope of such provision, or otherwise, such court will have the power to reduce the duration, geographic area covered or scope of such provision, as the case may be, and, in its reduced form, such provision will then be enforceable. The Subject Party will, at a Covered Party’s request, join such Covered Party in requesting that such court take such action.

 

(d) Amendment; Waiver. This Agreement may not be amended or modified in any respect, except by a written agreement executed by the Subject Party, the Purchaser and Disinterested Director Majority (or their respective permitted successors or assigns). No waiver will be effective unless it is expressly set forth in a written instrument executed by the waiving party (and if such waiving party is a Covered Party, the Disinterested Director Majority) and any such waiver will have no effect except in the specific instance in which it is given. Any delay or omission by a party in exercising its rights under this Agreement, or failure to insist upon strict compliance with any term, covenant, or condition of this Agreement will not be deemed a waiver of such term, covenant, condition or right, nor will any waiver or relinquishment of any right or power under this Agreement at any time or times be deemed a waiver or relinquishment of such right or power at any other time or times.

 

(e) Dispute Resolution. Any dispute, difference, controversy or claim arising in connection with or related or incidental to, or question occurring under, this Agreement or the subject matter hereof (other than applications for a temporary restraining order, preliminary injunction, permanent injunction or other equitable relief or application for enforcement of a resolution under this Section 7(e)) (a “Dispute”) shall be governed by this Section 7(e). A party must, in the first instance, provide written notice of any Disputes to the other parties subject to such Dispute, which notice must provide a reasonably detailed description of the matters subject to the Dispute. Any Dispute that is not resolved may at any time after the delivery of such notice immediately be referred to and finally resolved by arbitration pursuant to the then-existing Expedited Procedures of the Commercial Arbitration Rules (the “AAA Procedures”) of the American Arbitration Association (the “AAA”). Any party involved in such Dispute may submit the Dispute to the AAA to commence the proceedings after the Resolution Period. To the extent that the AAA Procedures and this Agreement are in conflict, the terms of this Agreement shall control. The arbitration shall be conducted by one arbitrator nominated by the AAA promptly (but in any event within five (5) Business Days) after the submission of the Dispute to the AAA and reasonably acceptable to each party subject to the Dispute, which arbitrator shall be a commercial lawyer with substantial experience arbitrating disputes under acquisition agreements. The arbitrator shall accept his or her appointment and begin the arbitration process promptly (but in any event within five (5) Business Days) after his or her nomination and acceptance by the parties subject to the Dispute. The proceedings shall be streamlined and efficient. The arbitrator shall decide the Dispute in accordance with the substantive law of the State of New York. Time is of the essence. Each party shall submit a proposal for resolution of the Dispute to the arbitrator within twenty (20) days after confirmation of the appointment of the arbitrator. The arbitrator shall have the power to order any party to do, or to refrain from doing, anything consistent with this Agreement, the Ancillary Documents and applicable Law, including to perform its contractual obligation(s); provided, that the arbitrator shall be limited to ordering pursuant to the foregoing power (and, for the avoidance of doubt, shall order) the relevant party (or parties, as applicable) to comply with only one or the other of the proposals. The arbitrator’s award shall be in writing and shall include a reasonable explanation of the arbitrator’s reason(s) for selecting one or the other proposal. The seat of arbitration shall be in New York County, State of New York. The language of the arbitration shall be English.

 

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(f) Governing Law; Jurisdiction. This Agreement shall be governed by, construed and enforced in accordance with the Laws of the State of New York without regard to the conflict of laws principles thereof. Subject to Section 7(e), all Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court located in New York, New York (or in any appellate courts thereof) (the “Specified Courts”). Subject to Section 7(e), each party hereto hereby (a) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto, (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Specified Court and (c) waives any bond, surety or other security that might be required of any other party with respect thereto. Each party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law or in equity. Each party irrevocably consents to the service of the summons and complaint and any other process in any other action or proceeding relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such party at the applicable address set forth in Section 7(a). Nothing in this Section 7(f) shall affect the right of any party to serve legal process in any other manner permitted by Law.

 

(g) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7(g). ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 7(g) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

 

(h) Successors and Assigns; Third Party Beneficiaries. This Agreement will be binding upon the Subject Party and the Subject Party’s estate, successors and assigns, and will inure to the benefit of the Covered Parties, and their respective successors and assigns. No Covered Party may assign any or all of its rights under this Agreement, at any time, in whole or in part, to any Person without first obtaining the consent or approval of the Subject Party (which consent shall not be unreasonably withheld, conditioned or delayed). The Subject Party agrees that the obligations of the Subject Party under this Agreement are personal and will not be assigned by the Subject Party. Each of the Covered Parties are express third party beneficiaries of this Agreement and will be considered parties under and for purposes of this Agreement.

 

7

 

(i) Disinterested Director Majority Authorized to Act on Behalf of Covered Parties. The parties acknowledge and agree that the Disinterested Director Majority is authorized and shall have the sole right to act on behalf of Purchaser and the other Covered Parties under this Agreement, including the right to enforce the Purchaser’s rights and remedies under this Agreement. Without limiting the foregoing, in the event that the Subject Party serves as a director, officer, employee or other authorized agent of a Covered Party, the Subject Party shall have no authority, express or implied, to act or make any determination on behalf of a Covered Party in connection with this Agreement or any dispute or Action with respect hereto.

 

(j) Construction. The Subject Party acknowledges that the Subject Party has been represented by counsel, or had the opportunity to be represented by counsel of the Subject Party’s choice. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be applied in the construction or interpretation of this Agreement. Neither the drafting history nor the negotiating history of this Agreement will be used or referred to in connection with the construction or interpretation of this Agreement. The headings and subheadings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. In this Agreement: (i) the words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation”; (ii) the definitions contained herein are applicable to the singular as well as the plural forms of such terms; (iii) whenever required by the context, any pronoun shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (iv) the words “herein,” “hereto,” and “hereby” and other words of similar import shall be deemed in each case to refer to this Agreement as a whole and not to any particular Section or other subdivision of this Agreement; (v) the word “if” and other words of similar import when used herein shall be deemed in each case to be followed by the phrase “and only if”; (vi) the term “or” means “and/or”; and (vii) any agreement or instrument defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement or instrument as from time to time amended, modified or supplemented, including by waiver or consent and references to all attachments thereto and instruments incorporated therein.

 

(k) Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. A photocopy, faxed, scanned and/or emailed copy of this Agreement or any signature page to this Agreement, shall have the same validity and enforceability as an originally signed copy.

 

(l) Effectiveness. This Agreement shall be binding upon the Subject Party upon the Subject Party’s execution and delivery of this Agreement, but this Agreement shall only become effective upon the consummation of the Transactions. In the event that the Merger Agreement is validly terminated in accordance with its terms prior to the consummation of the Transactions, this Agreement shall automatically terminate and become null and void, and the parties shall have no obligations hereunder.

 

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

8

 

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Non-Competition and Non-Solicitation Agreement as of the date first written above.

 

  Subject Party:
     
  Customers Bank
     
  By:           
  Name:   
  Title:  

 

  Address for Notice:
     
  Address:                                 
     
  1015 Penn Avenue, Suite 103
  Wyomissing, PA 19610
  Attn: Carla Leibold, CFO
  Telephone No.: (484) 923-8802
  Email: cleibold@customersbank.com
   
     
     

 

{Signature Page to Non-Competition Agreement}

 

 

 

Acknowledged and accepted as of the date first written above:

 

The Purchaser:

 

MEGALITH FINANCIAL ACQUISITION CORP.  
     
By:              
Name:      
Title:    

 

The Company:

 

BANKMOBILE TECHNOLOGIES, INC.  
     
By:             
Name:    
Title:    

 

{Signature Page to Non-Competition Agreement}

 

 

 

Exhibit 10.4

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of [●], 2020 by and between (i) Megalith Financial Acquisition Corp., a Delaware corporation (“Purchaser”), and (ii) Customers Bank, a Pennsylvania state-chartered bank (the “Investor”).

 

WHEREAS, on August 6, 2020, (i) Purchaser, (ii) MFAC Merger Sub Inc., a Pennsylvania corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub), (iii) the Investor and (iv) BankMobile Technologies, Inc., a Pennsylvania corporation (the “Company”), entered into that certain Agreement and Plan of Merger (as amended from time to time in accordance with the terms thereof, the “Merger Agreement”);

 

WHEREAS, pursuant to the Merger Agreement, subject to the terms and conditions thereof, upon the consummation of the transactions contemplated thereby (the “Closing”), among other matters, the Company will merge with and into Merger Sub, with Merger Sub continuing as the surviving entity and a wholly-owned subsidiary of Purchaser, and with the Investor, as the Company’s sole stockholder, receiving a mix of cash and shares of the Purchaser’s Class A common stock (the “Merger Consideration Shares”), all upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the provisions of applicable law;

 

WHEREAS, in connection with the Closing, the Investor will enter into a lock-up agreement with Purchaser (as amended from time to time in accordance with the terms thereof, a “Lock-Up Agreement”), pursuant to which Investor will agree not to transfer the Merger Consideration Shares for a certain period of time after the Closing as stated in the Lock-Up Agreement; and

 

WHEREAS, the parties desire to enter into this Agreement to provide the Investor with certain rights relating to the registration of the Merger Consideration Shares received by the Investor under the Merger Agreement, including any additional Merger Consideration Shares issued after the Closing pursuant to Section 1.14 of the Merger Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1. DEFINITIONS. Any capitalized term used but not defined in this Agreement will have the meaning ascribed to such term in the Merger Agreement. The following capitalized terms used herein have the following meanings:

 

Agreement” means this Agreement, as amended, restated, supplemented, or otherwise modified from time to time.

 

Closing” is defined in the recitals to this Agreement.

 

Company” is defined in the recitals to this Agreement.

 

Demand Registration” is defined in Section 2.1.1.

 

Demanding Holder” is defined in Section 2.1.1.

 

Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.

 

 

 

Founder Registration Rights Agreement” means that certain Registration Rights Agreement, dated as of August 23, 2018, by and among Purchaser, MFA Investor Holdings LLC and Chardan Capital Markets, LLC, as amended from time to time in accordance with the terms thereof.

 

Founder Securities” means those securities included in the definition of “Registrable Security” specified in the Founder Registration Rights Agreement.

 

Indemnified Party” is defined in Section 4.3.

 

Indemnifying Party” is defined in Section 4.3.

 

Investor(s)” is defined in the preamble to this Agreement, and includes any transferee of the Registrable Securities (so long as they remain Registrable Securities) of the Investor permitted under this Agreement and the Lock-Up Agreement.

 

Investor Indemnified Party” is defined in Section 4.1.

 

Lock-Up Agreement” is defined in the recitals to this Agreement.

 

Maximum Number of Securities” is defined in Section 2.1.4.

 

Merger Agreement” is defined in the recitals to this Agreement.

 

Piggy-Back Registration” is defined in Section 2.2.1.

 

PIPE Investment” is defined in the Merger Agreement.

 

Pro Rata” is defined in Section 2.1.4.

 

Proceeding” is defined in Section 6.9.

 

Purchaser” is defined in the preamble to this Agreement, and shall include Purchaser’s successors by merger, acquisition, reorganization or otherwise.

 

Purchaser Common Stock” means shares of Class A common stock, par value $0.0001 per share, of the Purchaser, and Class B common stock, par value $0.0001 per share of the Purchaser, along with any equity securities paid as dividends or distributions after the Closing with respect to such shares or into which such shares are exchanged or converted after the Closing.

 

Register,” “Registered” and “Registration” mean a registration or offering effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.

 

Registrable Securities” means all of the Merger Consideration Shares, including any shares of Purchaser Common Stock issued after the Closing pursuant to Section 1.14 of the Merger Agreement. Registrable Securities include any warrants, capital shares or other securities of Purchaser issued as a dividend or other distribution with respect to or in exchange for or in replacement of the foregoing securities. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when: (a) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (b) such securities shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by Purchaser and subsequent public distribution of them shall not require registration under the Securities Act; (c) such securities shall have ceased to be outstanding; or (d) such securities are freely saleable under Rule 144 without volume limitations. Notwithstanding anything to the contrary contained herein, securities shall only be “Registrable Securities” under this Agreement if they are held by the Investor or a transferee of the Investor permitted under this Agreement and the Lock-Up Agreement.

 

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Registration Statement” means a registration statement filed by Purchaser with the SEC in compliance with the Securities Act and the rules and regulations promulgated thereunder for a public offering and sale of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities (other than a registration statement on Form S-4 or Form S-8, or their successors, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another entity).

 

Rule 144” means Rule 144 promulgated under the Securities Act.

 

SEC” means the United States Securities and Exchange Commission or any successor thereto.

 

Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.

 

Short Form Registration” is defined in Section 2.3.

 

Specified Courts” is defined in Section 6.9.

 

Underwriter” means a securities dealer who purchases any Registrable Securities as principal in an underwritten offering and not as part of such dealer’s market-making activities.

 

2. REGISTRATION RIGHTS.

 

2.1 Demand Registration.

 

2.1.1 Request for Registration. Subject to Section 2.4, at any time and from time to time after the Closing, Investors holding a majority-in-interest of the Registrable Securities then issued and outstanding may make a written demand for registration under the Securities Act of all or part of their Registrable Securities (a “Demand Registration”). Any demand for a Demand Registration shall specify the number of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. Within thirty (30) days following receipt of any request for a Demand Registration, Purchaser will notify all other Investors holding Registrable Securities of the demand, and each Investor holding Registrable Securities who wishes to include all or a portion of such Investor’s Registrable Securities in the Demand Registration (each such Investor including shares of Registrable Securities in such registration, a “Demanding Holder”) shall so notify Purchaser within fifteen (15) days after the receipt by the Investor of the notice from Purchaser. Upon any such request, the Demanding Holders shall be entitled to have their Registrable Securities included in the Demand Registration, subject to Section 2.1.4 and the provisos set forth in Section 3.1.1. Purchaser shall not be obligated to effect more than an aggregate of three (3) Demand Registrations under this Section 2.1.1 in respect of all Registrable Securities. Notwithstanding anything in this Section 2.1 to the contrary, Purchaser shall not be obligated to effect a Demand Registration, (i) if a Piggy-Back Registration had been available to the Demanding Holder(s) within the one hundred twenty (120) days preceding the date of request for the Demand Registration, (ii) within sixty (60) days after the effective date of a previous registration effected with respect to the Registrable Securities pursuant this Section 2.1, or (iii) during any period (not to exceed one hundred eighty (180) days) following the closing of the completion of an offering of securities by Purchaser if such Demand Registration would cause Purchaser to breach a “lock-up” or similar provision contained in the underwriting agreement for such offering.

 

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2.1.2 Effective Registration. A Registration will not count as a Demand Registration until the Registration Statement filed with the SEC with respect to such Demand Registration has been declared effective and Purchaser has complied in all material respects with its obligations under this Agreement with respect thereto; provided, however, that if, after such Registration Statement has been declared effective, the offering of Registrable Securities pursuant to a Demand Registration is interfered with by any stop order or injunction of the SEC or any other governmental agency or court, the Registration Statement with respect to such Demand Registration will be deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding Holders thereafter elect to continue the offering; provided, further, that Purchaser shall not be obligated to file a second Registration Statement until a Registration Statement that has been filed is counted as a Demand Registration or is terminated.

 

2.1.3 Underwritten Offering. If a majority-in-interest of the Demanding Holders so elect and advise Purchaser as part of their written demand for a Demand Registration, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. In such event, the right of any Demanding Holder to include its Registrable Securities in such registration shall be conditioned upon such Demanding Holder’s participation in such underwritten offering and the inclusion of such Demanding Holder’s Registrable Securities in the underwritten offering to the extent provided herein. All Demanding Holders proposing to distribute their Registrable Securities through such underwritten offering shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such underwritten offering by a majority-in-interest of the Investors initiating the Demand Registration and reasonably acceptable to Purchaser.

 

2.1.4 Reduction of Offering. If the managing Underwriter or Underwriters for a Demand Registration that is to be an underwritten offering advises Purchaser and the Demanding Holders in writing that the dollar amount or number of Registrable Securities which the Demanding Holders desire to sell, taken together with all other shares of Purchaser Common Stock or other securities which Purchaser desires to sell and the shares of Purchaser Common Stock or other securities, if any, as to which Registration by Purchaser has been requested pursuant to written contractual piggy-back registration rights held by other security holders of Purchaser who desire to sell, exceeds the maximum dollar amount or maximum number of shares that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of securities, as applicable, the “Maximum Number of Securities”), then Purchaser shall include in such Registration: (i) first, the Registrable Securities as to which Demand Registration has been requested by the Demanding Holders and the Founder Securities for the account of any Persons who have exercised demand registration rights pursuant to the Founder Registration Rights Agreement during the period under which the Demand Registration hereunder is ongoing (all pro rata in accordance with the number of securities that each applicable Person has requested be included in such registration, regardless of the number of securities held by each such Person, as long as they do not request to include more securities than they own (such proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the shares of Purchaser Common Stock or other securities that Purchaser desires to sell that can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the Registrable Securities of Investors as to which registration has been requested pursuant to Section 2.2 and the Founder Securities as to which registration has been requested pursuant to the applicable written contractual piggy-back registration rights of the Founder Registration Rights Agreement, Pro Rata among the holders thereof based on the number of securities requested by such holders to be included in such registration, that can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the shares of Purchaser Common Stock or other securities for the account of other Persons that Purchaser is obligated to register pursuant to written contractual arrangements with such Persons that can be sold without exceeding the Maximum Number of Securities. In the event that Purchaser securities that are convertible into shares of Purchaser Common Stock are included in the offering, the calculations under this Section 2.1.4 shall include such Purchaser securities on an as-converted to Purchaser Common Stock basis.

 

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2.1.5 Withdrawal. If a majority-in-interest of the Demanding Holders disapprove of the terms of any underwritten offering or are not entitled to include all of their Registrable Securities in any offering, such majority-in-interest of the Demanding Holders may elect to withdraw from such offering by giving written notice to Purchaser and the Underwriter or Underwriters of their request to withdraw prior to the effectiveness of the Registration Statement filed with the SEC with respect to such Demand Registration. If the majority-in-interest of the Demanding Holders withdraws from a proposed offering relating to a Demand Registration in such event, then such registration shall not count as a Demand Registration provided for in Section 2.1.

 

2.2 Piggy-Back Registration.

 

2.2.1 Piggy-Back Rights. Subject to Section 2.4, if at any time after the Closing Purchaser proposes to file a Registration Statement under the Securities Act with respect to the Registration of or an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities, by Purchaser for its own account or for security holders of Purchaser for their account (or by Purchaser and by security holders of Purchaser including pursuant to Section 2.1), other than a Registration Statement (i) filed in connection with any employee share option or other benefit plan, (ii) for an exchange offer or offering of securities solely to Purchaser’s existing security holders, (iii) for an offering of debt that is convertible into equity securities of Purchaser, or (iv) for a dividend reinvestment plan, then Purchaser shall (x) give written notice of such proposed filing to Investors holding Registrable Securities as soon as practicable but in no event less than ten (10) days before the anticipated filing date, which notice shall describe the amount and type of securities to be included in such Registration or offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, of the offering, and (y) offer to Investors holding Registrable Securities in such notice the opportunity to register the sale of such number of Registrable Securities as such Investors may request in writing within five (5) days following receipt of such notice (a “Piggy-Back Registration”). To the extent permitted by applicable securities laws with respect to such registration by Purchaser or another demanding security holder, Purchaser shall use its best efforts to cause (i) such Registrable Securities to be included in such registration and (ii) the managing Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration on the same terms and conditions as any similar securities of Purchaser and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All Investors holding Registrable Securities proposing to distribute their securities through a Piggy-Back Registration that involves an Underwriter or Underwriters shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such Piggy-Back Registration.

 

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2.2.2 Reduction of Offering. If the managing Underwriter or Underwriters for a Piggy-Back Registration that is to be an underwritten offering advises Purchaser and Investors holding Registrable Securities proposing to distribute their Registrable Securities through such Piggy-Back Registration in writing that the dollar amount or number of shares of Purchaser Common Stock or other Purchaser securities which Purchaser desires to sell, taken together with the shares of Purchaser Common Stock or other Purchaser securities, if any, as to which registration has been demanded pursuant to written contractual arrangements with Persons other than the Investors holding Registrable Securities hereunder, the Registrable Securities as to which registration has been requested under this Section 2.2, and the shares of Purchaser Common Stock or other Purchaser securities, if any, as to which registration has been requested pursuant to the written contractual piggy-back registration rights of other security holders of Purchaser, exceeds the Maximum Number of Securities, then Purchaser shall include in any such registration:

 

(a) If the registration is undertaken for Purchaser’s account: (i) first, the shares of Purchaser Common Stock or other securities that Purchaser desires to sell that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Investors as to which registration has been requested pursuant to this Section 2.2 and the Founder Securities as to which registration has been requested pursuant to the applicable written contractual piggy-back registration rights under the Founder Registration Rights Agreement, Pro Rata among the holders thereof based on the number of securities requested by such holders to be included in such registration, that can be sold without exceeding the Maximum Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the shares of Purchaser Common Stock or other equity securities for the account of other Persons that Purchaser is obligated to register pursuant to separate written contractual arrangements with such Persons that can be sold without exceeding the Maximum Number of Securities;

 

(b) If the registration is a “demand” registration undertaken at the demand of Demanding Holders pursuant to Section 2.1: (i) first, the shares of Purchaser Common Stock or other securities for the account of the Demanding Holders and the Founder Securities for the account of any Persons who have exercised demand registration rights pursuant to the Founder Registration Rights Agreement during the period under which the Demand Registration hereunder is ongoing, Pro Rata among the holders thereof based on the number of securities requested by such holders to be included in such registration, that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the shares of Purchaser Common Stock or other securities that Purchaser desires to sell that can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the Registrable Securities of Investors as to which registration has been requested pursuant to this Section 2.2 and the Founder Securities as to which registration has been requested pursuant to the applicable written contractual piggy-back registration rights under the Founder Registration Rights Agreement, Pro Rata among the holders thereof based on the number of securities requested by such holders to be included in such registration, that can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the shares of Purchaser Common Stock or other equity securities for the account of other Persons that Purchaser is obligated to register pursuant to separate written contractual arrangements with such Persons that can be sold without exceeding the Maximum Number of Securities;

 

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(c) If the registration is a “demand” registration undertaken at the demand of holders of Founder Securities under the Founder Registration Rights Agreement: (i) first, the Founder Securities for the account of the demanding holders and the Registrable Securities for the account of Demanding Holders who have exercised demand registration rights pursuant to Section 2.1 during the period under which the demand registration under the Founder Registration Rights Agreement is ongoing, Pro Rata among the holders thereof based on the number of securities requested by such holders to be included in such registration, that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the shares of Purchaser Common Stock or other securities that Purchaser desires to sell that can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the Registrable Securities of Investors as to which registration has been requested pursuant to this Section 2.2 and the Founder Securities as to which registration has been requested pursuant to the applicable written contractual piggy-back registration rights under the Founder Registration Rights Agreement, Pro Rata among the holders thereof based on the number of securities requested by such holders to be included in such registration, that can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the shares of Purchaser Common Stock or other equity securities for the account of other Persons that Purchaser is obligated to register pursuant to separate written contractual arrangements with such Persons that can be sold without exceeding the Maximum Number of Securities; and

 

(d) If the registration is a “demand” registration undertaken at the demand of Persons other than either Demanding Holders under Section 2.1 or the holders of Founder Securities exercising demand registration rights under the Founder Registration Rights Agreement: (i) first, the shares of Purchaser Common Stock or other securities for the account of the demanding Persons that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the shares of Purchaser Common Stock or other securities that Purchaser desires to sell that can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the Registrable Securities of Investors as to which registration has been requested pursuant to this Section 2.2 and the Founder Securities as to which registration has been requested pursuant to the applicable written contractual piggy-back registration rights under the Founder Registration Rights Agreement, Pro Rata among the holders thereof based on the number of securities requested by such holders to be included in such registration, that can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the shares of Purchaser Common Stock or other equity securities for the account of other Persons that Purchaser is obligated to register pursuant to separate written contractual arrangements with such Persons that can be sold without exceeding the Maximum Number of Securities.

 

In the event that Purchaser securities that are convertible into shares of Purchaser Common Stock are included in the offering, the calculations under this Section 2.2.2 shall include such Purchaser securities on an as-converted to Purchaser Common Stock basis. Notwithstanding anything to the contrary above, to the extent that the registration of an Investor’s Registrable Securities would prevent Purchaser or the demanding shareholders from effecting such registration and offering, such Investor shall not be permitted to exercise Piggy-Back Registration rights with respect to such registration and offering.

 

2.2.3 Withdrawal. Any Investor holding Registrable Securities may elect to withdraw such Investor’s request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written notice to Purchaser of such request to withdraw prior to the effectiveness of the Registration Statement. Purchaser (whether on its own determination or as the result of a withdrawal by Persons making a demand pursuant to written contractual obligations) may withdraw a Registration Statement at any time prior to the effectiveness of such Registration Statement without any liability to the applicable Investor, subject to the next sentence and the provisions of Section 4. Notwithstanding any such withdrawal, Purchaser shall pay all expenses incurred in connection with such Piggy-Back Registration as provided in Section 3.3 (subject to the limitations set forth therein) by Investors holding Registrable Securities that requested to have their Registrable Securities included in such Piggy-Back Registration.

 

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2.3 Short Form Registrations. After the Closing, subject to Section 2.4, Investors holding Registrable Securities may at any time and from time to time, request in writing that Purchaser register the resale of any or all of such Registrable Securities on Form S-3 or any similar short-form registration which may be available at such time and applicable to such Investor’s Registrable Securities (“Short Form Registration”); provided, however, that Purchaser shall not be obligated to effect such request through an underwritten offering. Upon receipt of such written request, Purchaser will promptly give written notice of the proposed registration to all other Investors holding Registrable Securities, and, as soon as practicable thereafter, effect the registration of all or such portion of such Investors’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities, if any, of any other Investors joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from Purchaser; provided, however, that Purchaser shall not be obligated to effect any such registration pursuant to this Section 2.3: (i) if Short Form Registration is not available to Purchaser for such offering; or (ii) if Investors holding Registrable Securities, together with the holders of any other securities of Purchaser entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at any aggregate price to the public of less than $1,000,000. Registrations effected pursuant to this Section 2.3 shall not be counted as Demand Registrations effected pursuant to Section 2.1.

 

2.4 Restriction of Offerings. Notwithstanding anything to the contrary contained in this Agreement, the Investors shall not be entitled to request, and Purchaser shall not be obligated to effect, or to take any action to effect, any registration (including any Demand Registration or Piggy-Back Registration) pursuant to this Section 2 with respect to any Registrable Securities that are subject to the transfer restrictions under the Lock-Up Agreement.

 

3. REGISTRATION PROCEDURES.

 

3.1 Filings; Information. Whenever Purchaser is required to effect the registration of any Registrable Securities pursuant to Section 2, Purchaser shall use its best efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method(s) of distribution thereof as expeditiously as practicable, and in connection with any such request:

 

3.1.1 Filing Registration Statement. Purchaser shall use its best efforts to, as expeditiously as possible after receipt of a request for a Demand Registration pursuant to Section 2.1, prepare and file with the SEC a Registration Statement on any form for which Purchaser then qualifies or which counsel for Purchaser shall deem appropriate and which form shall be available for the sale of all Registrable Securities to be registered thereunder in accordance with the intended method(s) of distribution thereof, and shall use its reasonable efforts to cause such Registration Statement to become effective and use its reasonable efforts to keep it effective for the period required by Section 3.1.3; provided, however, that Purchaser shall have the right to defer any Demand Registration for up to ninety (90) days, and any Piggy-Back Registration for such period as may be applicable to deferment of any demand registration to which such Piggy-Back Registration relates, in each case if Purchaser shall furnish to Investors requesting to include their Registrable Securities in such registration a certificate signed by the Chief Executive Officer, Chief Financial Officer or Chairman of Purchaser stating that, in the good faith judgment of the Board of Directors of Purchaser, it would be materially detrimental to Purchaser and its shareholders for such Registration Statement to be effected at such time or the filing would require premature disclosure of material information which is not in the interests of Purchaser to disclose at such time; provided further, however, that Purchaser shall not have the right to exercise the right set forth in the immediately preceding proviso more than twice in any 365-day period in respect of a Demand Registration hereunder.

 

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3.1.2 Copies. Purchaser shall, prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to Investors holding Registrable Securities included in such registration, and such Investors’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such Registration Statement (including each preliminary prospectus), and such other documents as Investors holding Registrable Securities included in such registration or legal counsel for any such Investors may request in order to facilitate the disposition of the Registrable Securities owned by such Investors.

 

3.1.3 Amendments and Supplements. Purchaser shall prepare and file with the SEC such amendments, including post-effective amendments, and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and in compliance with the provisions of the Securities Act until all Registrable Securities and other securities covered by such Registration Statement have been disposed of in accordance with the intended method(s) of distribution set forth in such Registration Statement or such securities have been withdrawn or until such time as the Registrable Securities cease to be Registrable Securities as defined by this Agreement.

 

3.1.4 Notification. After the filing of a Registration Statement, Purchaser shall promptly, and in no event more than five (5) Business Days after such filing, notify Investors holding Registrable Securities included in such Registration Statement of such filing, and shall further notify such Investors promptly and confirm such advice in writing in all events within five (5) Business Days after the occurrence of any of the following: (i) when such Registration Statement becomes effective; (ii) when any post-effective amendment to such Registration Statement becomes effective; (iii) the issuance or threatened issuance by the SEC of any stop order (and Purchaser shall take all actions required to prevent the entry of such stop order or to remove it if entered); and (iv) any request by the SEC for any amendment or supplement to such Registration Statement or any prospectus relating thereto or for additional information or of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of the securities covered by such Registration Statement, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and promptly make available to Investors holding Registrable Securities included in such Registration Statement any such supplement or amendment; except that before filing with the SEC a Registration Statement or prospectus or any amendment or supplement thereto, including documents incorporated by reference, Purchaser shall furnish to Investors holding Registrable Securities included in such Registration Statement and to the legal counsel for any such Investors, copies of all such documents proposed to be filed sufficiently in advance of filing to provide such Investors and legal counsel with a reasonable opportunity to review such documents and comment thereon; provided that such Investors and their legal counsel must provide any comments promptly (and in any event within five (5) Business Days) after receipt of such documents.

 

3.1.5 State Securities Laws Compliance. Purchaser shall use its reasonable efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as Investors holding Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may reasonably request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of Purchaser and do any and all other acts and things that may be necessary or advisable to enable Investors holding Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that Purchaser shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph or take any action to which it would be subject to general service of process or to taxation in any such jurisdiction where it is not then otherwise subject.

 

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3.1.6 Agreements for Disposition. To the extent required by the underwriting agreement or similar agreements, Purchaser shall enter into reasonable customary agreements (including, if applicable, an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities. The representations, warranties and covenants of Purchaser in any underwriting agreement which are made to or for the benefit of any Underwriters, to the extent applicable, shall also be made to and for the benefit of Investors holding Registrable Securities included in such Registration Statement. No Investor holding Registrable Securities included in such Registration Statement shall be required to make any representations or warranties in the underwriting agreement except, if applicable, with respect to such Investor’s organization, good standing, authority, title to Registrable Securities, lack of conflict of such sale with such Investor’s material agreements and organizational documents, and with respect to written information relating to such Investor that such Investor has furnished in writing expressly for inclusion in such Registration Statement.

 

3.1.7 Cooperation. The principal executive officer of Purchaser, the principal financial officer of Purchaser, the principal accounting officer of Purchaser and all other officers and members of the management of Purchaser shall reasonably cooperate in any offering of Registrable Securities hereunder, which cooperation shall include the preparation of the Registration Statement with respect to such offering and all other offering materials and related documents, and participation in meetings with Underwriters, attorneys, accountants and potential investors.

 

3.1.8 Records. Purchaser shall make available for inspection by Investors holding Registrable Securities included in such Registration Statement, any Underwriter participating in any disposition pursuant to such Registration Statement and any attorney, accountant or other professional retained by any Investor holding Registrable Securities included in such Registration Statement or any Underwriter, all financial and other records, pertinent corporate documents and properties of Purchaser, as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause Purchaser’s officers, directors and employees to supply all information reasonably requested by any of them in connection with such Registration Statement; provided that Purchaser may require execution of a reasonable confidentiality agreement prior to sharing any such information.

 

3.1.9 Opinions and Comfort Letters. Purchaser shall request its counsel and accountants to provide customary legal opinions and customary comfort letters, to the extent so reasonably required by any underwriting agreement.

 

3.1.10 Earnings Statement. Purchaser shall comply with all applicable rules and regulations of the SEC and the Securities Act, and make available to its shareholders if reasonably required, as soon as reasonably practicable, an earnings statement covering a period of twelve (12) months, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

 

3.1.11 Listing. Purchaser shall use its best efforts to cause all Registrable Securities that are shares of Purchaser Common Stock included in any registration to be listed on such national security exchange as similar securities issued by Purchaser are then listed or, if no such similar securities are then listed, in a manner satisfactory to Investors holding a majority-in-interest of the Registrable Securities included in such registration.

 

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3.1.12 Road Show. If the registration involves the registration of Registrable Securities involving gross proceeds in excess of $50,000,000, Purchaser shall use its reasonable efforts to make available senior executives of Purchaser to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in any underwritten offering.

 

3.2 Obligation to Suspend Distribution. Upon receipt of any notice from Purchaser of the happening of any event of the kind described in Section 3.1.4(iv), or in the event that the financial statements contained in the Registration Statement become stale, or in the event that the Registration Statement or prospectus included therein contains a misstatement of material fact or omits to state a material fact due to a bona fide business purpose, or, in the case of a resale registration on Short Form Registration pursuant to Section 2.3 hereof, upon any suspension by Purchaser, pursuant to a written insider trading compliance program adopted by Purchaser’s Board of Directors, of the ability of all “insiders” covered by such program to transact in Purchaser’s securities because of the existence of material non-public information, each Investor holding Registrable Securities included in any registration shall immediately discontinue disposition of such Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Investor receives the supplemented or amended prospectus contemplated by Section 3.1.4(iv) or the Registration Statement is updated so that the financial statements are no longer stale, or the restriction on the ability of “insiders” to transact in Purchaser’s securities is removed, as applicable, and, if so directed by Purchaser, each such Investor will deliver to Purchaser all copies, other than permanent file copies then in such Investor’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice.

 

3.3 Registration Expenses. Subject to Section 4, Purchaser shall bear all reasonable costs and expenses incurred in connection with any Demand Registration pursuant to Section 2.1, any Piggy-Back Registration pursuant to Section 2.2, and any registration on Short Form Registration effected pursuant to Section 2.3, and all reasonable expenses incurred in performing or complying with its other obligations under this Agreement, whether or not the Registration Statement becomes effective, including: (i) all registration and filing fees; (ii) fees and expenses of compliance with securities or “blue sky” laws (including fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities); (iii) printing expenses; (iv) Purchaser’s internal expenses (including all salaries and expenses of its officers and employees); (v) the fees and expenses incurred in connection with the listing of the Registrable Securities as required by Section 3.1.11; (vi) Financial Industry Regulatory Authority fees; (vii) fees and disbursements of counsel for Purchaser and fees and expenses for independent certified public accountants retained by Purchaser (including the expenses or costs associated with the delivery of any opinions or comfort letters requested pursuant to Section 3.1.9); (viii) the reasonable fees and expenses of any special experts retained by Purchaser in connection with such registration; and (ix) the reasonable fees and expenses (up to a maximum of $15,000 in the aggregate in connection with such registration) of one legal counsel selected by Investors holding a majority-in-interest of the Registrable Securities included in such registration for such legal counsel’s review, comment and finalization of the proposed Registration Statement and other relevant documents. Purchaser shall have no obligation to pay any underwriting discounts or selling commissions attributable to the Registrable Securities being sold by the holders thereof, which underwriting discounts or selling commissions shall be borne by such holders. Additionally, in an underwritten offering, all selling security holders and Purchaser shall bear the expenses of the Underwriter pro rata in proportion to the respective amount of securities each is selling in such offering.

 

3.4 Information. Investors holding Registrable Securities included in any Registration Statement shall provide such information as may reasonably be requested by Purchaser, or the managing Underwriter, if any, in connection with the preparation of such Registration Statement, including amendments and supplements thereto, in order to effect the registration of any Registrable Securities under the Securities Act pursuant to Section 2 and in connection with the obligation to comply with federal and applicable state securities laws. Investors selling Registrable Securities in any offering must provide all questionnaires, powers of attorney, custody agreements, stock powers, and other documentation reasonably requested by Purchaser or the managing Underwriter.

 

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4. INDEMNIFICATION AND CONTRIBUTION.

 

4.1 Indemnification by Purchaser. Subject to the provisions of this Section 4.1 below, Purchaser agrees to indemnify and hold harmless each Investor, and each Investor’s officers, employees, affiliates, directors, partners, members, attorneys and agents, and each Person, if any, who controls an Investor (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, an “Investor Indemnified Party”), from and against any expenses, losses, judgments, claims, damages or liabilities, whether joint or several, arising out of or based upon any untrue statement of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to such Registration Statement, or arising out of or based upon any omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by Purchaser of the Securities Act or any rule or regulation promulgated thereunder applicable to Purchaser and relating to action or inaction required of Purchaser in connection with any such registration (provided, however, that the indemnity agreement contained in this Section 4.1 shall not apply to amounts paid in settlement of any such claim, loss, damage, liability or action if such settlement is effected without the consent of Purchaser, such consent not to be unreasonably withheld, delayed or conditioned); and Purchaser shall promptly reimburse the Investor Indemnified Party for any legal and any other expenses reasonably incurred by such Investor Indemnified Party in connection with investigating and defending any such expense, loss, judgment, claim, damage, liability or action; provided, however, that Purchaser will not be liable in any such case to the extent that any such expense, loss, claim, damage or liability arises out of or is based upon any untrue statement or omission made in such Registration Statement, preliminary prospectus, final prospectus, or summary prospectus, or any such amendment or supplement, in reliance upon and in conformity with information furnished to Purchaser, in writing, by such selling holder or Investor Indemnified Party expressly for use therein. Purchaser also shall indemnify any Underwriter of the Registrable Securities, their officers, affiliates, directors, partners, members and agents and each Person who controls such Underwriter on substantially the same basis as that of the indemnification provided above in this Section 4.1.

 

4.2 Indemnification by Holders of Registrable Securities. Subject to the provisions of this Section 4.2 below, each Investor selling Registrable Securities will, in the event that any registration is being effected under the Securities Act pursuant to this Agreement of any Registrable Securities held by such selling Investor, indemnify and hold harmless Purchaser, each of its directors and officers and each Underwriter (if any), and each other selling holder and each other Person, if any, who controls another selling holder or such Underwriter within the meaning of the Securities Act, against any losses, claims, judgments, damages or liabilities, whether joint or several, insofar as such losses, claims, judgments, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to the Registration Statement, or arise out of or are based upon any omission to state a material fact required to be stated therein or necessary to make the statement therein not misleading, if the statement or omission was made in reliance upon and in conformity with information furnished in writing to Purchaser by such selling Investor expressly for use therein (provided, however, that the indemnity agreement contained in this Section 4.2 shall not apply to amounts paid in settlement of any such claim, loss, damage, liability or action if such settlement is effected without the consent of the indemnifying Investor, such consent not to be unreasonably withheld, delayed or conditioned), and shall reimburse Purchaser, its directors and officers, each Underwriter and each other selling holder or controlling Person for any legal or other expenses reasonably incurred by any of them in connection with investigation or defending any such loss, claim, damage, liability or action. Each selling Investor’s indemnification obligations hereunder shall be several and not joint and shall be limited to the amount of any net proceeds actually received by such selling Investor.

 

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4.3 Conduct of Indemnification Proceedings. Promptly after receipt by any Person of any notice of any loss, claim, damage or liability or any action in respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such Person (the “Indemnified Party”) shall, if a claim in respect thereof is to be made against any other Person for indemnification hereunder, notify such other Person (the “Indemnifying Party”) in writing of the loss, claim, judgment, damage, liability or action; provided, however, that the failure by the Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which the Indemnifying Party may have to such Indemnified Party hereunder, except and solely to the extent the Indemnifying Party is actually prejudiced by such failure. If the Indemnified Party is seeking indemnification with respect to any claim or action brought against the Indemnified Party, then the Indemnifying Party shall be entitled to participate in such claim or action, and, to the extent that it wishes, jointly with all other Indemnifying Parties, to assume control of the defense thereof with counsel satisfactory to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume control of the defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that in any action in which both the Indemnified Party and the Indemnifying Party are named as defendants, the Indemnified Party shall have the right to employ separate counsel (but no more than one such separate counsel) to represent the Indemnified Party and its controlling Persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Indemnified Party against the Indemnifying Party, with the fees and expenses of such counsel to be paid by such Indemnifying Party if, based upon the written opinion of counsel of such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. No Indemnifying Party shall, without the prior written consent of the Indemnified Party (acting reasonably), consent to entry of judgment or effect any settlement of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such judgment or settlement includes an unconditional release of such Indemnified Party from all liability arising out of such claim or proceeding.

 

4.4 Contribution.

 

4.4.1 If the indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of any loss, claim, damage, liability or action referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnified Parties and the Indemnifying Parties in connection with the actions or omissions which resulted in such loss, claim, damage, liability or action, as well as any other relevant equitable considerations. The relative fault of any Indemnified Party and any Indemnifying Party shall be determined by reference to, among other things, whether the untrue statement of a material fact or the omission to state a material fact relates to information supplied by such Indemnified Party or such Indemnifying Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

4.4.2 The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding Section 4.4.1.

 

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4.4.3 The amount paid or payable by an Indemnified Party as a result of any loss, claim, damage, liability or action referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 4.4, no Investor holding Registrable Securities shall be required to contribute any amount in excess of the dollar amount of the net proceeds (after payment of any underwriting fees, discounts, commissions or taxes) actually received by such Investor from the sale of Registrable Securities which gave rise to such contribution obligation. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

5. RULE 144.

 

5.1 Rule 144. Purchaser covenants that it shall file any reports required to be filed by it under the Securities Act and the Exchange Act and shall take such further action as Investors holding Registrable Securities may reasonably request, all to the extent required from time to time to enable such Investors to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rule 144 may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

 

6. MISCELLANEOUS.

 

6.1 Other Registration Rights. Purchaser represents and warrants that as of the date of this Agreement, no Person, other than the holders of (i) Registrable Securities, (ii) Founder Securities and (iii) securities acquired in the PIPE Investment, has any right to require Purchaser to register any of Purchaser’s share capital for sale or to include Purchaser’s share capital in any registration filed by Purchaser for the sale of share capital for its own account or for the account of any other Person.

 

6.2 Assignment; No Third Party Beneficiaries. This Agreement and the rights, duties and obligations of Purchaser hereunder may not be assigned or delegated by Purchaser in whole or in part, unless Purchaser first provides Investors holding Registrable Securities at least ten (10) Business Days prior written notice; provided that no assignment or delegation by Purchaser will relieve Purchaser of its obligations under this Agreement unless Investors holding a majority-in-interest of the Registrable Securities provide their prior written consent, which consent must not be unreasonably withheld, delayed or conditioned. This Agreement and the rights, duties and obligations of Investors holding Registrable Securities hereunder may be freely assigned or delegated by such Investor in conjunction with and to the extent of any transfer of Registrable Securities by such Investor which is permitted by the Lock-Up Agreement; provided that no assignment by any Investor of its rights, duties and obligations hereunder shall be binding upon or obligate Purchaser unless and until Purchaser shall have received (i) written notice of such assignment and (ii) the written agreement of the assignee, in a form reasonably satisfactory to Purchaser, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties, to the permitted assigns of the Investors or of any assignee of the Investors. This Agreement is not intended to confer any rights or benefits on any Persons that are not party hereto other than as expressly set forth in Section 4 and this Section 6.2.

 

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6.3 Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by facsimile or other electronic means, with affirmative confirmation of receipt, (iii) one Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be specified by like notice):

 

If to Purchaser, to:

 

BM Technologies, Inc.

1015 Penn Avenue, Suite 103

Wyomissing, PA 19610

Attn: Board of Directors

With copies to (which shall not constitute notice):

 

Nelson Mullins Riley & Scarborough
101 Constitution Avenue, NW, Suite 900
Washington, DC 20001
Attn: Jonathan H. Talcott, Esq.
Facsimile No.: (202) 689-2862
Telephone No.: (202) 689-2806
Email: jon.talcott@nelsonmullins.com

If to Investor, to:

 

Customers Bank
1015 Penn Avenue, Suite 103
Wyomissing, PA 19610

Attn: Carla Leibold, CFO
Telephone No.: (484) 923-8802
Email: cleibold@customersbank.com

With copies to (which shall not constitute notice):

 

Nelson Mullins Riley & Scarborough
101 Constitution Avenue, NW, Suite 900
Washington, DC 20001
Attn: Jonathan H. Talcott, Esq.
Facsimile No.: (202) 689-2862
Telephone No.: (202) 689-2806
Email: jon.talcott@nelsonmullins.com

 

6.4 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible that is valid and enforceable. Notwithstanding anything to the contrary contained in this Agreement, in the event that a duly executed copy of this Agreement is not delivered to Purchaser by a Person receiving Exchange Shares in connection with the Closing, such Person failing to provide such signature shall not be a party to this Agreement or have any rights or obligations hereunder, but such failure shall not affect the rights and obligations of the other parties to this Agreement as amongst such other parties.

 

6.5 Entire Agreement. This Agreement (together with the Merger Agreement, and the Lock-Up Agreement to the extent incorporated herein, and including all agreements entered into pursuant hereto or thereto or referenced herein or therein and all certificates and instruments delivered pursuant hereto and thereto) constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties, whether oral or written, relating to the subject matter hereof; provided, that, for the avoidance of doubt, the foregoing shall not affect the rights and obligations of the parties under the Merger Agreement or any other Ancillary Document or the rights or obligations of the parties under the Founder Registration Rights Agreement.

 

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6.6 Interpretation. Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement. In this Agreement, unless the context otherwise requires: (i) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (ii) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; (iii) the words “herein,” “hereto,” and “hereby” and other words of similar import in this Agreement shall be deemed in each case to refer to this Agreement as a whole and not to any particular section or other subdivision of this Agreement; and (iv) the term “or” means “and/or”. The parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

 

6.7 Amendments; Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written agreement or consent of Purchaser (after the Closing by a majority of the Disinterested Independent Directors) and Investors holding a majority-in-interest of the Registrable Securities; provided, that any amendment or waiver of this Agreement which affects an Investor in a manner materially and adversely disproportionate to other Investors will also require the consent of such Investor. No failure or delay by a party in exercising any right hereunder shall operate as a waiver thereof. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

 

6.8 Remedies Cumulative. In the event a party fails to observe or perform any covenant or agreement to be observed or performed under this Agreement, the other parties may proceed to protect and enforce its rights by suit in equity or action at law, whether for specific performance of any term contained in this Agreement or for an injunction against the breach of any such term or in aid of the exercise of any power granted in this Agreement or to enforce any other legal or equitable right, or to take any one or more of such actions, without being required to post a bond. None of the rights, powers or remedies conferred under this Agreement shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to any other right, power or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.

 

6.9 Governing Law; Jurisdiction. This Agreement shall be governed by, construed and enforced in accordance with the Laws of the State of New York without regard to the conflict of laws principles thereof. Each party hereto hereby (i) submits to the exclusive jurisdiction of any state or federal court located in the County of New York in the State of New York (or in any appellate court thereof) (the “Specified Courts”) for the purpose of any claim, action, litigation or other legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby (a “Proceeding”), and (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Proceeding is brought in an inconvenient forum, that the venue of the Proceeding is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Specified Court. Each party agrees that a final judgment in any Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law. Each party irrevocably consents to the service of the summons and complaint and any other process in any Proceeding, on behalf of itself, or its property, by personal delivery of copies of such process to such party at the applicable address set forth in Section 6.3. Nothing in this Section 6.9 shall affect the right of any party to serve legal process in any other manner permitted by applicable Law.

 

6.10 WAIVER OF TRIAL BY JURY. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT, COUNTERCLAIM OR OTHER PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE ACTIONS OF THE INVESTORS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

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6.11 Authorization to Act on Behalf of Purchaser. The parties acknowledge and agree that from and after the Closing, the Disinterested Independent Directors, by vote, consent, approval or determination of a majority of the Disinterested Independent Directors, is authorized and shall have the sole right to act on behalf of Purchaser under this Agreement, including the right to enforce Purchaser’s rights and remedies under this Agreement. Without limiting the foregoing, in the event that an Investor serves as a director, officer, employee or other authorized agent of Purchaser, such Investor shall have no authority, express or implied, to act or make any determination on behalf of Purchaser in connection with this Agreement or any dispute or Action with respect hereto.

 

6.12 Termination of Merger Agreement. This Agreement shall be binding upon each party upon such party’s execution and delivery of this Agreement, but this Agreement shall only become effective upon the Closing. In the event that the Merger Agreement is validly terminated in accordance with its terms prior to the Closing, this Agreement shall automatically terminate and become null and void and be of no further force or effect, and the parties shall have no obligations hereunder.

 

6.13 Counterparts. This Agreement may be executed in multiple counterparts (including by facsimile or pdf or other electronic document transmission), each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument.

 

{REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW}

 

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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered as of the date first written above.

 

  Purchaser:
   
  MEGALITH FINANCIAL ACQUISITION CORP.

 

  By:                 
  Name:
  Title:

 

  Investor:
   
  CUSTOMERS BANK

 

  By:              
  Name:
  Title:

 

 

{Signature Page to Registration Rights Agreement}

 

 

 

 

 

Exhibit 10.5

 

SUBSCRIPTION AGREEMENT

 

Megalith Financial Acquisition Corp.

 

  August 5, 2020

 

Ladies and Gentlemen:

 

In connection with the proposed business combination (the “Transaction”) between Megalith Financial Acquisition Corp., a Delaware corporation (the “Company”), and BankMobile Technologies, Inc., a Pennsylvania corporation (“BankMobile”), pursuant to that certain Agreement and Plan of Merger, dated effective as of [ ], 2020, among the Company, BankMobile and the other parties thereto (as may be amended and/or restated, the “Transaction Agreement”), the Company is seeking commitments to purchase shares (the “Shares”) of the Company’s Class A Common Stock, par value $0.0001 per share, for a purchase price of $10.38 per share (the “Purchase Price”). The Company is offering the Shares in a private placement in which the Company expects to raise an aggregate of $20,002,872. In connection therewith, the undersigned and the Company agree as follows:

 

1. Subscription. As of the date written above (the “Subscription Date”), the undersigned hereby irrevocably subscribes for and agrees to purchase from the Company such number of Shares as is set forth on the signature page of this Subscription Agreement at the Purchase Price and on the terms provided for herein.

 

2. Closing; Delivery of Shares.

 

a. The closing of the sale of Shares contemplated hereby (the “Closing”) is contingent upon the substantially concurrent consummation of the Transaction. The Closing shall occur on the date of, and immediately prior to, the consummation of the Transaction. Upon (i) satisfaction of the conditions set forth in Section 3 below and (ii) not less than two (2) business days’ written notice (which may be via email) from (or on behalf of) the Company to the undersigned (the “Closing Notice”), that the Company reasonably expects the closing of the Transaction to occur on a date that is not less than two (2) business days from the date of the Closing Notice, the undersigned shall deliver to the Company on the closing date specified in the Closing Notice (the “Closing Date”) the Purchase Price for the Shares subscribed by wire transfer of United States dollars in immediately available funds to the account specified by the Company in the Closing Notice against delivery to the undersigned of the Shares in certificated form as set forth in Section 2(b) below. This Subscription Agreement shall terminate and be of no further force or effect, without any liability to either party hereto, if the Company notifies the undersigned in writing that it has abandoned its plans to move forward with the Transaction and/or terminates the undersigned’s obligations without the delivery of the Shares having occurred.

 

b.  Immediately upon the Closing, the Company shall deliver (or cause the delivery of) the Shares in certificated form with restrictive legends in the amount as set forth on the signature page to each of the undersigned as indicated on the signature page or to a custodian designated by such undersigned, as applicable, as indicated below.

 

3. Closing Conditions. In addition to the condition set forth in the first sentence of Section 2(a) above, the Closing is also subject to the conditions that, on the Closing Date:

 

a. no suspension of the qualification of the Shares for offering or sale or trading in any jurisdiction, or initiation or threatening of any proceedings for any of such purposes, shall have occurred;

 

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b. all representations and warranties of the Company and the undersigned 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 Material Adverse Effect (as defined herein), which representations and warranties shall be true in all respects) at and as of the Closing Date (except for representations and warranties made as of a specific date, which shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Material Adverse Effect, which representations and warranties shall be true in all respects) as of such date), and consummation of the Closing shall constitute a reaffirmation by each of the Company and the undersigned of each of the representations, warranties and agreements of each such party contained in this Subscription Agreement as of the Closing Date;

 

c. no applicable governmental authority shall have enacted, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation (whether temporary, preliminary or permanent) which is then in effect and has the effect of making consummation of the transactions contemplated hereby illegal or otherwise restraining or prohibiting consummation of the transactions contemplated hereby, and no governmental authority shall have instituted or threatened in writing a proceeding seeking to impose any such restraint or prohibition;

 

d. all conditions precedent to the closing of the Transaction set forth in Article VIII of the Transaction Agreement, shall have been satisfied or waived (other than those conditions which, by their nature, are to be satisfied at the closing of the Transaction); and

 

e. The Company shall have received a signed copy of an “investor representation letter” in substantially the form attached as Schedule A hereto no later than the Closing Date.

 

4. Company Representations and Warranties. The Company represents and warrants to the undersigned that:

 

a. The Company is a Delaware corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has the corporate power 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. The Shares have been duly authorized and, when issued and delivered to the undersigned against full payment therefor in accordance with the terms of this Subscription Agreement, 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 Company’s Amended and Restated Certificate of Incorporation or under the laws of the State of Delaware.

 

c. This Subscription Agreement has been duly authorized, executed and delivered by the Company and is enforceable against the Company 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.

 

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d. Subject to the receipt of the Shareholder Subscription Approval (as defined in the Transaction Agreement), the issuance and sale of the Shares and the compliance by the Company with all of the provisions of this Subscription Agreement and the consummation of the transactions herein will be done in accordance with the NYSE marketplace rules and will not 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 Company or any of its subsidiaries pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, license, lease or any other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company is subject, which would have a material adverse effect on the business, properties, financial condition, stockholders’ equity or results of operations of the Company (a “Material Adverse Effect”) or materially affect the validity of the Shares or the legal authority of the Company to comply in all material respects with the terms of this Subscription Agreement; (ii) result in any violation of the provisions of the organizational documents of the Company; 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 Company or any of its properties that would have a Material Adverse Effect or materially affect the validity of the Shares or the legal authority of the Company to comply with this Subscription Agreement; subject, in the case of the foregoing clauses (i) and (iii) with respect to the consummation of the transactions therein contemplated.

 

e. The Company has not entered into any agreement or arrangement entitling any agent, broker, investment banker, financial advisor or other person to any broker’s or finder’s fee or any other commission or similar fee in connection with the transactions contemplated by this Subscription Agreement for which the undersigned could become liable. The Company is not aware of any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Shares.

 

f. The Company understands that the foregoing representations and warranties shall be deemed material and to have been relied upon by the undersigned.

 

g. The Company is not, and immediately after receipt of payment for the Shares, will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

h. Assuming the accuracy of the subscriber representations and warranties set forth in Section 5, in connection with the offer, sale and delivery of the Shares in the manner contemplated by this Agreement, it is not necessary to register the Shares under the Securities Act.

 

5. Subscriber Representations, Warranties and Covenants. The undersigned represents and warrants to the Company that:

 

a. At the time the undersigned was offered the Shares, it was, and as of the date hereof, the undersigned is (i) an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”), in each case, satisfying the requirements set forth on Schedule A hereto, and (ii) is acquiring the Shares only for his, her or its own account and (iii) not for the account of others, and not on behalf of any other account or person or 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 on Schedule A following the signature page hereto).

 

b. The undersigned understands 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 delivered at the Closing have not been registered under the Securities Act. The undersigned understands that the Shares may not be resold, transferred, pledged or otherwise disposed of by the undersigned absent an effective registration statement under the Securities 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 Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and in each of cases (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 Shares delivered at the Closing shall contain a legend to such effect. The undersigned acknowledges that the Shares will not be eligible for resale pursuant to Rule 144A promulgated under the Securities Act. The undersigned understands and agrees that the Shares, until registered under an effective registration statement, will be subject to transfer restrictions and, as a result of these transfer restrictions, the undersigned may not be able to readily resell the Shares and may be required to bear the financial risk of an investment in the Shares for an indefinite period of time. The undersigned understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Shares.

 

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c. The undersigned understands and agrees that the undersigned is purchasing Shares directly from the Company. The undersigned further acknowledges that there have been no representations, warranties, covenants and agreements made to the undersigned by the Company, or any of its officers or directors, expressly (other than those representations, warranties, covenants and agreements included in this Subscription Agreement) or by implication.

 

d. The undersigned’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 undersigned acknowledges and agrees that the undersigned has received such information as the undersigned deems necessary in order to make an investment decision with respect to the Shares. Without limiting the generality of the foregoing, the undersigned acknowledges that it has reviewed (i) the Company’s filings (the “Company SEC Filings”) with the United States Securities and Exchange Commission, as amended (the “SEC”), (ii) the investor presentation dated July 27, 2020 and (iii) the financial and related information for the year ended December 31, 2019 of BankMobile ((i), (ii) and (iii) together, the “Investor Disclosure Package”). The undersigned represents and agrees that the undersigned and the undersigned’s professional advisor(s), if any, have had the full opportunity to ask the Company’s management questions, receive such answers and obtain such information as the undersigned and such undersigned’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Shares. The undersigned further acknowledges that the information contained in the Investor Disclosure Package is preliminary and subject to change, and that any changes to the information contained in the Investor Disclosure Package, including, without limitation, any changes based on updated information or changes in terms of the Transaction, shall in no way affect the undersigned’s obligation to purchase the Shares hereunder, except as otherwise provided herein.

 

f. The undersigned became aware of this offering of the Shares solely by means of direct contact between the undersigned and the Company and the Shares were offered to the undersigned solely by direct contact between the undersigned and the Company or a representative of the Company. The undersigned acknowledges that the Company represents and warrants that the Shares (i) were not offered by any form of general solicitation or general advertising 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 undersigned has a substantive pre-existing relationship with the Company for the offering of the Shares.

 

g. The undersigned 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 Investor Disclosure Package and in the Company SEC Filings. The undersigned 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 undersigned has sought such accounting, legal and tax advice as the undersigned has considered necessary to make an informed investment decision.

 

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h. Alone, or together with any professional advisor(s), the undersigned 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 undersigned and that the undersigned is able at this time and in the foreseeable future to bear the economic risk of a total loss of the undersigned’s investment in the Company. The undersigned acknowledges specifically that a possibility of total loss exists.

 

i. In making its decision to purchase the Shares, the undersigned has relied solely upon independent investigation made by the undersigned.

 

j. The undersigned understands 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 or the accuracy or adequacy of the Investor Disclosure Package or the Company SEC Filings.

 

k. The undersigned has been duly formed or incorporated and is validly existing in good standing under the laws of its jurisdiction of incorporation or formation.

 

l. The execution, delivery and performance by the undersigned of this Subscription Agreement are within the powers of the undersigned, 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 undersigned is a party or by which the undersigned is bound, and, if the undersigned is not an individual, will not violate any provisions of the undersigned’s charter 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 undersigned is an individual, has legal competence and capacity to execute the same or, if the undersigned is not an individual the signatory has been duly authorized to execute the same, and this Subscription Agreement constitutes a legal, valid and binding obligation of the undersigned, enforceable against the undersigned in accordance with its terms.

 

m. Neither the due diligence investigation conducted by the undersigned in connection with making its decision to acquire the Shares nor any representations and warranties made by the undersigned herein shall modify, amend or affect the undersigned’s right to rely on the truth, accuracy and completeness of the Company’s representations and warranties contained herein.

 

n. The undersigned 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) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (iii) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (collectively, a “Prohibited Investor”). The undersigned agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that the undersigned is permitted to do so under applicable law. If the undersigned 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 undersigned 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 for the screening of its investors against the OFAC sanctions programs, including the OFAC List. To the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by the undersigned and used to purchase the Shares were legally derived.

 

o. The undersigned will deliver on the Closing Date a signed copy of the “investor representation letter” in substantially the form attached as Schedule A hereto.

 

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6. Registration Rights. The Company agrees that, within thirty (30) business days after the consummation of the Transaction, the Company (or its successor) will file with the SEC (at the Company’s sole cost and expense) a registration statement registering the resale of the Shares (the “Registration Statement”), and the Company shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof. The Company agrees that the Company will cause such Registration Statement or another registration statement (which may be a “shelf” registration statement) to remain effective until the earlier of (i) two years from the issuance of the Shares, or (ii) on the first date on which the undersigned can sell all of its Shares (or shares received in exchange therefor) under Rule 144 of the Securities Act without limitation as to the manner of sale or the amount of such securities that may be sold. The undersigned agrees to disclose its beneficial ownership, as determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”), of Shares to the Company (or its successor) upon request to assist the Company in making the determination described above. The Company’s obligations to include the Shares in the Registration Statement are contingent upon the undersigned furnishing in writing to the Company such information regarding the undersigned, the securities of the Company held by the undersigned and the intended method of disposition of the Shares as shall be reasonably requested by the Company to effect the registration of the Shares, and shall execute such documents in connection with such registration as the Company may reasonably request that are customary of a selling stockholder in similar situations. The Company may delay filing or suspend the use of any such registration statement if it determines that in order for the registration statement to not contain a material misstatement or omission, an amendment thereto would be needed, or if such filing or use could materially affect a bona fide business or financing transaction of the Company or would require premature disclosure of information that could materially adversely affect the Company; provided, that, the Company shall use commercially reasonable efforts to make such registration statement available for the sale by the undersigned of such securities as soon as practicable thereafter.

 

7. 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 earlier to occur of (a) such date and time as the Transaction Agreement is terminated in accordance with its terms, (b) upon the mutual written agreement of each of the parties hereto to terminate this Subscription Agreement or (c) the transactions contemplated by this Subscription Agreement are not consummated prior to November 30, 2020; 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 such breach. The Company shall promptly notify the undersigned of the termination of the Transaction Agreement promptly after the termination of such agreement.

 

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8. Trust Account Waiver. Reference is made to the final prospectus of the Company, filed with the SEC (File No. 333-226270) (the “Prospectus”), and dated as of April 23, 2018. The Company shall provide the undersigned with a copy of the Prospectus upon request and the undersigned hereby represents and warrants that it has read the Prospectus and understands that the Company has established a trust account (the “Trust Account”) containing the proceeds of its initial public offering (the “IPO”) and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of the Company’s public stockholders (including overallotment shares acquired by the Company’s underwriters, the “Public Stockholders”), and that, except as otherwise described in the Prospectus, the Company may disburse monies from the Trust Account only: (a) to the Public Stockholders in the event they elect to redeem their Company shares in connection with the consummation of the Company’s initial business combination (as such term is used in the Prospectus) (the “Business Combination”) or in connection with an extension of the deadline to consummate a Business Combination, (b) to the Public Stockholders if the Company fails to consummate a Business Combination within eighteen (18) months after the closing of the IPO, (c) with respect to any interest earned on the amounts held in the Trust Account, as necessary to pay any franchise or income taxes or (d) to the Company after or concurrently with the consummation of a Business Combination. For and in consideration of the Company entering into this Subscription Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned hereby agrees on behalf of itself and its respective affiliates that, notwithstanding anything to the contrary in this Subscription Agreement, neither the Company nor any of its respective affiliates do now or shall at any time hereafter have any right, title, interest or claim of any kind in or to any monies in the Trust Account or distributions therefrom, or make any claim against the Trust Account (including any distributions therefrom, regardless of whether such claim arises as a result of, in connection with or relating in any way to this Subscription Agreement between the Company or its Representatives (as defined below), on the one hand, and the Company or its Representatives, on the other hand, this Subscription Agreement or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (any and all such claims are collectively referred to hereafter as the “Released Claims”). The undersigned, on behalf of itself and its affiliates, hereby irrevocably waives any Released Claims that the undersigned or its affiliates may have against the Trust Account now (including any distributions therefrom) or in the future as a result of, or arising out of, any negotiations, contracts or agreements with the Company or its Representatives and will not seek recourse against the Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of any agreement with the Company or its affiliates). The undersigned agrees and acknowledges that such irrevocable waiver is material to this Subscription Agreement and specifically relied upon by the Company and its affiliates to induce the Company to enter in this Subscription Agreement, and the Company further intends and understands such waiver to be valid, binding and enforceable against the undersigned and each of its affiliates under applicable law. To the extent the undersigned or any of its affiliates commences any action or proceeding based upon, in connection with, relating to or arising out of any matter relating to the Company or its Representatives, which proceeding seeks, in whole or in part, monetary relief against the Company or its Representatives, the undersigned hereby acknowledges and agrees that the Company’s and its affiliates’ sole remedy shall be against funds held outside of the Trust Account and that such claim shall not permit the Company or its affiliates (or any person claiming on any of their behalves or in lieu of any of them) to have any claim against the Trust Account (including any distributions therefrom) or any amounts contained therein. In the event the Company any of its affiliates commences any action or proceeding based upon, in connection with, relating to or arising out of any matter relating to the Company or its Representatives, which proceeding seeks, in whole or in part, relief against the Trust Account (including any distributions therefrom) or the Public Stockholders, whether in the form of money damages or injunctive relief, the Company and its Representatives, as applicable, shall be entitled to recover from the undersigned and its affiliates the associated legal fees and costs in connection with any such action, in the event the Company or its Representatives, as applicable, prevails in such action or proceeding. For purposes of this Subscription Agreement, “Representatives” with respect to any person shall mean such person’s affiliates and its and its affiliate’s respective directors, officers, employees, consultants, advisors, agents and other representatives.

 

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9. Miscellaneous.

 

a. Neither this Subscription Agreement nor any rights that may accrue to the undersigned hereunder (other than the Shares acquired hereunder, if any) may be transferred or assigned.

 

b. The Company may request from the undersigned such additional information as the Company may deem necessary to evaluate the eligibility of the undersigned to acquire the Shares, and the undersigned shall provide such information to the Company upon such request, it being understood by the undersigned that the Company may reject the undersigned’s subscription prior to the Closing Date in the event the undersigned fails to provide such additional information requested by the Company to evaluate the undersigned’s eligibility.

 

c. The undersigned acknowledges that the Company and others will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement. Prior to the Closing, the undersigned agrees to promptly notify the Company if any of the acknowledgments, understandings, agreements, representations and warranties set forth herein are no longer accurate. The undersigned agrees that the purchase by the undersigned of Shares from the Company will constitute a reaffirmation of the acknowledgments, understandings, agreements, representations and warranties herein (as modified by any such notice) by the undersigned as of the time of such purchase.

 

d. The Company is entitled to rely upon this Subscription Agreement and 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. The undersigned shall consult with the Company in issuing any press release or making any other public statement with respect to the transactions contemplated hereby, and the undersigned shall not issue any such press release or make any such public statement without the prior consent (such consent not to be unreasonably withheld or delayed) of the Company, provided that the consent of the Company shall not be required if such disclosure is required by law, in which case the undersigned shall promptly provide the other party with prior notice of such disclosure.

 

e. All 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 except by an instrument in writing, signed by the party against whom enforcement of such modification, waiver, or termination is sought.

 

h. This Subscription Agreement 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. This Subscription Agreement shall not confer any rights or remedies upon any person other than the parties hereto, and their respective successor and assigns.

 

i. 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 invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this 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.

 

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l. The parties hereto 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 and 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.

 

m. THIS SUBSCRIPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER STATE. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS SUBSCRIPTION AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.

 

n. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication.

 

Notice to the Company shall be given to:

 

Megalith Financial Acquisition Corp.

535 Fifth Avenue, 29th Floor 

New York, New York 10017 

Attn.: A.J. Dunklau, Chief Executive Officer

 

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

 

Ellenoff Grossman & Schole LLP 

1345 Avenue of the Americas

New York, New York 10105

Attn.: Tamar Donikyan, Esq.

tdonikyan@egsllp.com

 

10.  Non-Reliance and Exculpation. The undersigned 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 contained in this Subscription Agreement, in making its investment or decision to invest in the Company. The undersigned agrees that no other purchaser pursuant to this Subscription Agreement or any other Subscription Agreement related to the private placement of the Shares (including the respective controlling persons, members, officers, directors, partners, agents, or employees of any purchaser) shall be liable to any other purchaser pursuant to this Subscription Agreement or any other Subscription Agreement related to the private placement of the Shares for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Shares.

  

[SIGNATURE PAGES FOLLOW] 

 

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

 

MEGALITH FINANCIAL ACQUISITION CORP.  
     
By:    
  Name: A.J. Dunklau  
  Title: Chief Executive Officer  

 

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[PURCHASER SIGNATURE PAGES TO SUBSCRIPTION AGREEMENT]

 

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

 

Name(s) of Subscriber: ________________________________________________________

Signature of Authorized Signatory of Subscriber: __________________________________

Name of Authorized Signatory: ____________________________________________________

Title of Authorized Signatory: _____________________________________________________

Email Address of Authorized Signatory: ______________________________________________

Facsimile Number of Authorized Signatory: _____________________________________________

Address for Notice to Subscriber:

 

Address for Delivery of Shares to Subscriber (if not same as address for notice):

 

Subscription Amount: $_________________

 

Shares: _________________

 

EIN Number: _______________________

 

[SIGNATURE PAGES CONTINUE]

 

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SCHEDULE A

 

INVESTOR REPRESENTATION LETTER

 

 

12

 

 

Exhibit 10.6

 

FORM OF AGREEMENT TO TRANSFER SPONSOR SECURITIES

 

August 5, 2020

[Name of Transferee]

[Address of Transferee]

 

Ladies and Gentlemen:

 

Reference is made to that certain (i) Subscription Agreement, dated as of August 5, 2020 (the “Subscription Agreement”), by and among Megalith Financial Acquisition Corp., a Delaware corporation (the “Company”) and the undersigned (the “Transferee”), (ii) the Letter Agreement, dated as of August 23, 2018 (the “Insider Letter”), by and among the Company, MFA Investor Holdings LLC (“Sponsor”), and the members of Sponsor named therein and (iii) the Warrant Agreement, dated August 23, 2018, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant Agreement”). Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed thereto in the Subscription Agreement.

 

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Sponsor, the Company, [●] (“Investor”) and the Transferee hereby agree as follows:

 

1. On or prior to the execution of the Subscription Agreement, Investor shall deliver, or cause to be delivered, no less than 50% of the total funds committed to purchase Shares pursuant to the Subscription Agreement by Investor and/or its affiliates and/or managed fund(s) to an omnibus account controlled by Investor or an escrow account at a nationally recognized financial institution. Investor hereby commits to fund any shortfall between the funds held in such account and the total amount of Shares subscribed for by Investor and/or its affiliates and/or managed fund(s) pursuant to the Subscription Agreement at the Closing.

 

2. Subject to, and effective with no further action by any party hereto (except as expressly provided herein), upon the consummation of the Transaction under the Transaction Agreement, the Sponsor hereby transfers and assigns to the Transferee all of its right, title and interest in and to such number of (i) shares of Class B Common Stock, par value $0.0001 per share, of the Company and (ii) private placement warrant issued concurrently with the Company’s initial public offering owned by the Sponsor as set forth on the signature page hereto (such shares, the “Transferred Sponsor Shares”, such warrants, the “Transferred Sponsor Warrants and the Transferred Sponsor Shares and Transferred Sponsor Warrants, together, the “Transferred Sponsor Securities”), subject to the terms of this Agreement. The balance of Transferred Sponsor Shares and Transferred Sponsor Warrants transferred to the undersigned shall be determined by the Company to maximize the number of Transferred Sponsor Shares to be received by the undersigned to reflect an effective issue price of $9.50 per share for the Shares issued pursuant to the Subscription Agreement. Notwithstanding anything to the contrary contained herein, in no event shall the number of Transferred Sponsor Securities transferred pursuant to this Agreement reduce the effective issue price of the Shares issued pursuant to the Subscription Agreement to below $9.50 per share or otherwise trigger an adjustment of the Warrant Price (as defined in the Warrant Agreement) pursuant to Section 4.3.2 of the Warrant Agreement.

 

3. For the period commencing on the closing of the Transaction and terminating on the date on which Investor and/or its affiliates and/or managed fund(s) collectively hold less than 15% of the issued and outstanding shares of Common Stock of the Company, the undersigned shall have the right to appoint one (1) member (the “Appointee”) to the board of directors (the “Board”) of the Company, which Appointee shall be reasonably acceptable to the Nominating and Corporate Governance Committee of the Board.

 

   

 

 

4. In the event of a liquidation, dissolution or winding up of the Company, the holders of the Shares shall have the right to receive, out of any funds available for return to holders of the Company’s Common Stock, a return of the aggregate Purchase Price paid for the Shares before any other holders of Common Stock receive the proceeds of any such liquidation, dissolution or winding up of the Company. Notwithstanding the foregoing, the holders of the Shares shall have no right to receive such return of capital if the Company’s Common Stock is listed on the NYSE or another national securities exchange at the Closing of the Transaction.

 

5. The Transferee hereby acknowledges that the Transferred Sponsor Securities are subject to the terms and conditions of the Insider Letter and Warrant Agreement, and agrees to accept the Transferred Sponsor Shares subject to such restrictions applying to such Transferred Sponsor Securities under the Insider Letter and Warrant Agreement, and the Transferee agrees to comply with such restrictions. The Transferee hereby agrees that notwithstanding paragraph 1 above, as a requirement and condition precedent to the Transferee receiving the Transferred Sponsor Securities under this Agreement, the Transferee must first execute and deliver to the Company and the Sponsor a joinder agreement in form and substance reasonably acceptable to the Company and the Sponsor to become bound by the terms and conditions to the Insider Letter that apply to the Sponsor and its members as “Founder” under the Insider Letter as if the Transferee were the original party thereto.

 

6. The Transferee further agrees to accept the Transferred Sponsor Securities subject to any restrictions under the Insider Letter and Warrant Agreement that apply to the holder of such securities after the Transaction Closing, and agrees to comply with such restrictions as if it were the “Insider” or “Sponsor” party thereto.

 

7. This Agreement (and to the extent referenced or incorporated herein, the Subscription Agreement, the Insider Letter and the Warrant Agreement) constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof. This Agreement may not be changed, amended, modified or waived to any particular provision, except by a written instrument executed by all parties hereto.

 

8. No party hereto may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other parties. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Agreement shall be binding on the parties and their respective successors and assigns.

 

9. Any notice, consent or request to be given in connection with this Agreement shall be in writing and be delivered in accordance with the requirements of Section 9(n) of the Subscription Agreement, with the address of the Sponsor for such purposes being:

 

 Notice to the Sponsor shall be given to:

 

[       ]

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

 

Ellenoff Grossman & Schole LLP 
1345 Avenue of the Americas
New York, New York 10105
Attention: Tamar Donikyan, Esq.
Email: tdonikyan@egsllp.com
Telephone: (212) 370-1300

 

10. The terms of this Agreement shall be interpreted, enforced, governed by and construed in a manner consistent with the provisions of the Subscription Agreement.

 

11. This Agreement shall terminate at such time, if any, as the Transaction Agreement or the Subscription Agreement is terminated in accordance with its terms, and upon such termination this Agreement shall be null and void and of no effect whatsoever, and the parties hereto shall have no further obligations under this Agreement.

 

{Signature page follows}

 

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Please indicate your agreement to the foregoing by signing in the space provided below.

 

  MFA INVESTOR HOLDINGS, LLC
     
  By:           
  Name:
  Title:
     
  MEGALITH FINANCIAL ACQUISITION CORP.
     
  By:                      
  Name:  A.J. Dunklau
  Title: Chief Executive Officer

 

Accepted and agreed to as of the date first set forth above:

 

INVESTOR
     
By:                
Name:  
Title  
     
[NAME OF TRANSFEREE]  
     
By:    
Name:  
Title:  

 

{Signature Page to Sponsor Share Transfer Agreement}

 

   

 

 

The undersigned Escrow Agent has received a copy of this Agreement and the Subscription Agreement and acknowledges and accepts this Agreement as of the date first set forth above:

 

CONTINENTAL STOCK TRANSFER AND TRUST COMPANY, as Escrow Agent

 

By:                      
Name:    
Title:    

 

 

{Signature Page to Sponsor Share Transfer Agreement}

 

 

 

 

 

Exhibit 99.1

 

BankMobile Technologies, a Subsidiary of Customers Bank, and Megalith Financial Acquisition Corp. Agree to Combine to Bring a Digital Banking Platform to the Public Market under the New Name BM Technologies

   

BankMobile is one of the largest digital banking platforms in the country with over 2 million accounts

 

BankMobile Management to Lead Combined Company

 

MFAC has Binding Commitments for a $20 Million Private Placement for the Business Combination  

 

Transaction Enterprise Value of $140 Million

 

Investor Calls on Thursday August 6th: MFAC and BankMobile Technologies at 2pm; Customers Bancorp at 4pm 

 

NEW YORK, NY, August 6, 2020 – BankMobile Technologies, a subsidiary of Customers Bank, and one of America’s largest digital banking platforms, and Megalith Financial Acquisition Corp (NYSE: MFAC) (“MFAC”), a special purpose acquisition company, announced today that they have entered into a definitive merger agreement.  Upon closing of the transaction, the combined company (the “Company”) will operate as BM Technologies Inc. and expects to be listed on the NYSE. The transaction reflects an enterprise value for the Company of $140 million. All BMT serviced deposits and loans will remain at Customers Bank immediately after the closing of the transaction. Upon the closing of the transaction, BM Technologies will be a financial technology company bringing banks and business partners together through its digital banking platform.

  

With over 2 million accounts, BankMobile Technology, Inc. (“BMT” or “BankMobile”) is one of the largest digital banking platforms in the country. Launched in January 2015, BankMobile’s mission has been to provide a compliant, mobile-first banking experience that is simple, affordable, and consumer-friendly. Named “Most Innovative Bank” by LendIt in 2019, BankMobile’s B2B2C Go-To-Market-Strategy leverages a multi-partner distribution model to generate high volume, low cost, customer acquisitions.

 

Today, BankMobile provides its Banking-as-a-Service (“BaaS”) platform to colleges and universities through BankMobile Disbursements, which reaches approximately one in every three college students in the country. Additionally, BankMobile recently announced the execution of an agreement with Google to introduce digital bank accounts, which will be available to its customers. BankMobile has also expanded its White-Label strategy most recently with T-Mobile for the launch of T-Mobile MONEY.

 

“We are thrilled to partner with MFAC to become a public company. In an era when digital banking continues to expand, we look forward to building our business over the coming years and taking advantage of all strategic opportunities,” said BankMobile CEO Luvleen Sidhu.

 

A.J. Dunklau, CEO of MFAC said, “There has been rapid growth of digital banking platforms, or neobanks, as many customers search for less burdensome access to banking services. We believe that BankMobile’s approach to collaborate with distribution partners and partner banks, positions it well to continue to grow as an increasing number of non-banks are looking to offer financial services to their existing customers. Accordingly, we believe that the opportunity to bring BankMobile to the public markets as a stand-alone company is highly attractive.”

 

BankMobile Highlights

 

Opportunity to disrupt massive U.S. banking market
o Consumer preferences are changing rapidly, and banks are slow to adapt
o Americans paid $34B in overdraft fees alone in 2017
o Non-Banks increasingly want to engage their customers via financial services; however, the technical and regulatory challenges are substantial

 

 

 

 

B2B2C model delivers high-volume, low-cost customer acquisitions
o By partnering with very large companies with established brand equity and loyal customer bases, BankMobile is able to leverage its technology and significantly reduce its customers acquisition costs while providing substantial benefits to its business partners
o BankMobile’s customer acquisition cost today averages less than $10 per new account

 

Collaborations with industry leading companies
o Recently announced an execution of an agreement with Google to introduce digital bank accounts built on BankMobile’s existing infrastructure.
o Partnership with T-Mobile in offering T-Mobile MONEY

 

Highly attractive distribution channel through market leading position in higher education reaches one in every three college students
o BankMobile provides its “Banking-as-a-Service” (BaaS) to colleges and universities through its BankMobile Disbursements business, which reaches more than five million students on 722 campuses nationwide

 

Unique offering delivers a full-service digital banking platform, connecting customers with a partner bank
o In addition to its omni-channel digital banking apps delivered on a modern technology platform, BankMobile provides full-service banking support and access to a bank partner
o The full-service digital banking platform includes back-office support, state of the art mobile-first onboarding systems, deposit operations, fraud management, and customer care

 

Attractive financial profile
o Enterprise Value of $140 million at only 1.3x 2021E Revenues and 1.0x 2022E Revenues

 

Highly experienced and recognized management team and board
o Executive management team averages 24 years of industry experience
o
o CEO, Luvleen Sidhu, graduate of Harvard University and Wharton School and recognized as 2019 Fintech Woman of the Year by LendIt Fintech
o
o Very experienced board of independent directors expected to be named shortly

 

Transaction Summary

 

The business combination transaction reflects an enterprise value for the Company of approximately $140 million. Customers Bank is to receive approximately $97 million in consideration comprised of cash, stock in the Company, and approximately $10 million in value attributed to a new technology license with BMT, with the total consideration subject to potential adjustment based on certain factors described in the merger agreement for the business combination (the “Merger Agreement”). In addition, at the closing, Customers Bank may be repaid a portion of the $40 million debt owed to it by BMT with the new Company assuming any unpaid debt. MFAC has received binding commitments of approximately $20 million for a common stock private placement, which commitments exceed the minimum cash closing condition required by the Merger Agreement. MFAC’s sponsor entity will forfeit the vast majority of its founder shares at the closing of the Transactions. The cash component of the consideration will be funded by a portion of MFAC’s cash in trust as well as a private placement from institutional investors and MFAC’s sponsor that will close concurrently with the closing of the business combination, in addition to BankMobile’s cash on its balance sheet in excess of an agreed upon cash reserve. The balance of the consideration will consist of shares of common stock in the combined Company, each to be valued at $10.38 per share. Customers Bank is expected to remain the largest investor in the Company by rolling over significant equity into the combined Company. Customers Bank will be subject to a standard lock-up period, but plans to reduce its ownership stake in BM Technologies gradually after the closing of the transaction.

 

In light of the relationship between MFAC’s sponsor and certain officers and directors of BankMobile’s ultimate parent entity Customers Bankcorp Inc. (“CUBI”), both MFAC and CUBI appointed special committees consisting of independent directors with full access to counsel and financial advisors. The special committees of each party reviewed this transaction and made unanimous recommendations to their respective boards of directors for approval.

 

  2  
 

 

The transaction is structured as a forward subsidiary merger, whereby BankMobile will merge with a newly-formed subsidiary of MFAC, with MFAC’s merger subsidiary continuing as the surviving entity and a wholly-owned subsidiary of MFAC. At the closing of the transaction, MFAC will change its name to BM Technologies.

 

The business combination and related equity financing (together, the “Transactions”) are expected to close in the fourth quarter 2020, pending MFAC stockholder approval and regulatory approval.

 

Advisors

 

Raymond James is acting as financial advisor to BankMobile and Customers Bank. Nelson Mullins Riley and Scarborough and Stradley Ronon Stevens & Young, LLP are acting as legal counsel to Customers Bank.

 

Boenning and Scattergood is acting as financial advisor to Customers Bancorp’s special committee and provided a fairness opinion for the transaction to the special committee. Duane Morris LLP is acting as independent counsel to Customers Bancorp’s special committee.

 

Keefe, Bruyette, & Woods, - a Stifel Company is acting as financial advisor and capital markets advisor to MFAC. Chardan is also acting as a capital markets advisor to MFAC. Ellenoff Grossman & Schole is acting as legal counsel to MFAC. Vantage Point Advisors is acting as a financial advisor to MFAC’s special committee and provided a fairness opinion for the transaction to the special committee.

 

Investor Call Details

 

MFAC and BMT will provide more information relating to the transaction on a pre-recorded investor call on Thursday, August 6 at 2:00 p.m. ET.

 

Date:      Thursday, August 6, 2020 
Time:      2:00 PM EDT 
Dial-in:      +1 (877) 770-3647
Participant Code:      59288071

 

Customers Bancorp will host a live investor call with Q&A on Thursday, August 6 at 4:00 p.m. ET.

 

Date:      Thursday, August 6, 2020 
Time:      4:00 PM EDT 
Dial-in:      +1 (800) 357-9083
Participant Code:      303651

 

Please dial in at least 10 minutes before the start of the call to ensure timely participation. A playback of the call will be available beginning August 6, 2020 at 7:00 PM EDT until 7:00 PM EDT on September 5, 2020. To listen, call within the United States 888-203-1112. Please use the replay passcode 7501016.

 

About BankMobile

 

Established in 2015, BankMobile Technologies is a division of Customers Bank and is among the largest mobile-first banking platforms in the U.S., offering checking and savings accounts, personal loans and credit cards. BankMobile, named the “Most Innovative Bank” by LendIt Fintech in 2019, provides an alternative banking experience to the traditional model. It is focused on technology, innovation, easy-to-use products and education with the mission of being “customer-obsessed” and creating “customers for life.” BankMobile employs a multi-partner distribution model, known as “Banking-as-a-Service” (BaaS), that enables the company to acquire customers at higher volumes and substantially lower expense than traditional banks. Its efficient operating model enables it to provide low-cost banking services to low/middle-income Americans who have been left behind by the high-fee model of “traditional” banks. Today, BankMobile Technologies provides its BaaS platform to colleges and universities and currently serves over two million account-holders at 722 campuses (covering one out of every three students in the U.S.). BankMobile Technologies is operating as the digital banking division of Customers Bank, which is a Federal Reserve regulated and FDIC-insured commercial bank. BankMobile is a technology company and is not a bank and does not provide banking services. For more information, please visit: www.bankmobile.com.

 

  3  
 

 

About Customers Bank

 

Customers Bancorp, Inc. is a bank holding company located in West Reading, Pennsylvania engaged in banking and related businesses through its bank subsidiary, Customers Bank. Customers Bank is a community-based, full-service bank with assets of approximately $17.9 billion at June 30, 2020. A member of the Federal Reserve System with deposits insured by the Federal Deposit Insurance Corporation, Customers Bank is an equal opportunity lender that provides a range of banking services to small and medium-sized businesses, professionals, individuals, and families through offices in Pennsylvania, Illinois, New York, Rhode Island, Massachusetts, New Hampshire and New Jersey. Committed to fostering customer loyalty, Customers Bank uses a High Tech/High Touch strategy that includes use of industry-leading technology to provide customers better access to their money, as well as Concierge Banking® by appointment at customers’ homes or offices 12 hours a day, seven days a week. Customers Bank offers a continually expanding portfolio of loans to small businesses, multi-family projects, mortgage companies and consumers. Customers Bancorp, Inc.'s voting common shares are listed on the New York Stock Exchange under the symbol CUBI. Additional information about Customers Bancorp, Inc. can be found on its website, http://www.customersbank.com.

 

About Megalith Financial Acquisition Corp

 

Megalith Financial Acquisition Corp. is a blank check company incorporated in Delaware for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, with a focus on the fintech or financial services industries. MFAC consummated its initial public offering on the NYSE in August 2018 and is listed under the symbol “MFAC”.

 

Forward Looking Statements

 

This press release contains, and certain oral statements made by representatives of MFAC, BankMobile and CUBI and their respective affiliates, from time to time may contain certain statements that are not historical facts but are “forward-looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “plan,” “intend,” “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “target,” “project,” “predict,” “intend,” “plan” and “outlook” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include estimated financial information, including forward-looking statements with respect to revenues and earnings, as well as forward-looking statements with respect to performance, strategies, prospects and other aspects of the businesses of MFAC, CUBI, Customers Bank and BankMobile, or the combined Company following completion of the proposed Transactions, which are based on current expectations that are subject to risks and uncertainties and are not predictions of actual performance. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement and the proposed Transactions; (2) the inability to complete the transactions contemplated by the Merger Agreement due to the failure to obtain approval of the stockholders of MFAC, any required regulatory approvals, or other conditions to closing in the Merger Agreement; (3) MFAC’s inability to meet the minimum cash requirements of the Merger Agreement due to a failure to complete the equity private placement or the amount of cash available following any redemptions by MFAC’s public stockholders; (4) the ability to meet NYSE listing standards following the consummation of the Transactions; (5) the risk that the proposed transaction disrupts current plans and operations of BankMobile as a result of the announcement and consummation of the Transactions; (6) the ability of CUBI and Customers Bank to recognize the anticipated benefits of the proposed Transactions, which may be affected by, among other things, competition, the ability of management to operate the combined Company as a stand-alone public company, the ability of the combined Company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees, and the costs involved in CUBI and Customers Bank continuing to provide certain services to the combined Company; (7) costs related to the proposed Transactions; (8) changes in applicable laws or regulations; (9) the possibility that the combined Company may be adversely affected by other economic, business, and/or competitive factors; and (10) other risks and uncertainties indicated from time to time in other documents filed or to be filed with the Securities and Exchange Commission (“SEC”) by MFAC or CUBI. Readers are cautioned that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on the current beliefs and assumptions by management of each of MFAC, CUBI, Customers Bank and BMT as of the date hereof and speak only as of the date they are made. Each of MFAC, CUBI, Customers Bank and BMT disclaims any obligation to update any forward-looking statement whether written or oral, except as may be required under applicable law.

 

  4  
 

 

For a more complete discussion of the assumptions, risks and uncertainties with respect to CUBI, you are encouraged to review the filings CUBI makes with the SEC, including its most recent annual report on Form 10-K for the year ended December 31, 2019, subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K, including any amendments thereto, that update or provide information in addition to the information included in those Form 10-K and Form 10-Q filings, if any. For a more complete discussion of the assumptions, risks and uncertainties with respect to MFAC, you are encouraged to review the filings MFAC makes with the SEC, including its most recent annual report on Form 10-K for the year ended December 31, 2019, subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K, including any amendments thereto, that update or provide information in addition to the information included in those Form 10-K and Form 10-Q filings, if any.

 

No Offer or Solicitation

 

This press release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities pursuant to the proposed transactions or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

 

No Assurances

 

There can be no assurance that the Transactions described herein will be completed, nor can there be any assurance, if such Transactions are completed, that the potential benefits of combining the companies will be realized. The description of the transactions contained herein is only a summary and is qualified in its entirety by reference to the definitive agreements relating to the Transactions, copies of which will be filed by MFAC with the SEC as an exhibit to a Current Report on Form 8-K.

 

Important Information about the Transactions and Where to Find It

 

In connection with the Transactions described herein, MFAC will file relevant materials with the SEC, including a definitive proxy statement for MFAC’s shareholders. Promptly after filing the definitive proxy statement with the SEC, MFAC will mail the proxy statement and a proxy card to each shareholder entitled to vote at the special meeting relating to the Transactions. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSACTIONS THAT MFAC WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT MFAC, BANKMOBILE AND THE TRANSACTIONS. The preliminary proxy statement, the definitive proxy statement and other relevant materials in connection with the transactions (when they become available), and any other documents filed by MFAC with the SEC, may be obtained free of charge at the SEC’s website (www.sec.gov) or by writing to Megalith Financial Acquisition Corp. at 535 5th Avenue, 29th Floor, New York, New York 10017.

 

Participants in Solicitation

 

MFAC and BankMobile and their respective directors, executive officers and employees and other persons may be deemed to be participants in the solicitation of proxies from the holders of MFAC common stock in respect of the proposed Transactions. Information about MFAC’s directors and executive officers and their ownership of MFAC’s common stock is set forth in MFAC’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC, as modified or supplemented by any Form 3 or Form 4 filed with the SEC since the date of such filing. Other information regarding the interests of the participants in the proxy solicitation will be included in the proxy statement pertaining to the proposed Transactions when it becomes available. These documents can be obtained free of charge from the sources indicated above.

 

For Customers Bancorp investor and media inquiries, please contact:

 

Customers Bancorp

Bob Ramsey

Director of Investor Relations, Customers Bancorp

rramsey@customersbank.com

484-926-7118

 

For Megalith Financial Acquisition Corp investor and media inquiries, please contact:

 

Megalith Financial Acquisition Corp.

A.J. Dunklau

Chief Executive Officer

aj@megalithfinancial.com

212-235-0438

 

 

5

 

Exhibit 99.2

 

BM Technologies, Inc. created by the Business Combination of BankMobile Technologies & Megalith FinancialAcquisition A Banking-as-a-Service pioneer, enabling non-banks to build financial services for their customers August2020

 

 

This presentation (the “Presentation”) contemplates the purchase by Megalith Financial Acquisition (“MFAC”) of BankMobile Technologies, Inc. (“BankMobile” or the “Company”) from Customers Bank, by which BankMobile will become a subsidiary of MFAC (“theTransaction”). BankMobile is Not aBank BM Technologies is Not a Bank and it does not provide banking services. BankMobile is a technology provider that facilitates deposits and banking services between a customer and an FDIC insured partner bank. Any reference in this presentation to “banking” or “banking services” is in reference to BankMobile providing services between customers and a partner bank. The BankMobile brand and trademark is only used in reference to services being provided between a customer and an FDICinsured partner bank No Offer orSolicitation This Presentation is for informational purposes only and is neither an offer to sell or purchase, nor a solicitation of an offer to sell, buy or subscribe for any securities, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offering of securities shall be made except by means of a prospectus meeting the requirements of section 10 of the Securities Act of 1933, as amended (the “Securities Act”), or an exemptiontherefrom. Forward-LookingStatements This Presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. This information is, where applicable, based on estimates, assumptions and analysis that management believes, as of the date hereof, provide a reasonable basis for the information contained herein. Forward-looking statements can generally be identified by the use of forward-looking words such as “may”, “will”, “would”, “could”, “expect”, “intend”, “plan”, “aim”, “estimate”, “target”, “anticipate”, “believe”, “continue”, “objectives”, “outlook”, “guidance” or other similar words, and include statements regarding plans, strategies, objectives, targets, estimates, projections, and expected financial performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those projections and forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information, cost savings, synergies and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors. There can be no assurance that the estimates and assumptions made in preparing the financial projections and forecasts will prove accurate, that the projected results will be realized or that actual results will not be significantly higher or lower than projected. The Company's financial performance and results of operations will be subject to a variety of risks, including but not limited to general economic conditions, consumer adoption, and the operations and performance of its partners, including white-label partners. All information herein speaks only as of the date hereof unless otherwise specified. Management undertakes no duty to update, add to or otherwise revise or correct any of the information contained herein, whether as a result of new information supplied, future events, inaccuracies that become apparent after the date hereof or otherwise. Forecasts and estimates regarding industry and end markets are based on sources believed to be reliable, however, there can be no assurance these forecasts and estimates will prove accurate in whole or inpart. Use ofProjections This Presentation contains financial forecasts with respect to, among other things, income sources, revenue growth, and equity values. These unaudited financial projections should not be relied upon as being necessarily indicative of future results. The inclusion of the unaudited financial projections in this Presentation is not an admission or representation that such information is material. The assumptions and estimates underlying the unaudited financial projections 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 unaudited financial projections. There can be no assurance that the prospective results are indicative of future performance or that actual results will not differ materially from those presented in the unaudited financial projections. Inclusion of the unaudited financial projections in this Presentation should not be regarded as a representation by any person that the results contained in the unaudited financial projections will beachieved. IndustryandMarketData Theinformationcontainedherealsoincludesinformationprovidedbythirdparties,suchamarketresearchfirms.Inparticular,BankMobilehasrelieduponindependentresearchfromAccenture,ARKInvestmentManagementLLC,FactSetResearchSystems,FT PartnersResearch,PWC&S&PGlobalMarketIntelligenceformarketandindustryinformationtobeusedbyBankMobile.NoneofMFAC,thesponsorofMFAC,BankMobile,BMT,CustomersBankanditsaffiliatesandanythirdpartiesthatprovidedinformation toMFACorBankMobile,provideguaranteesoftheaccuracy,completenessandtimelinessoravailabilityoftheinformation.NoneofMFAC,BankMobile,CustomersBanknoranyoftheirrespectiveaffiliates,noranyoftheresearchproviders,areresponsiblefor anyerrorsoromissionsorconclusionsformtheuseofsuchcontent. Non-GAAP FinancialMeasures This Presentation includes certain non-GAAP financial measures that management reviews to evaluate its business, measure its performance and make strategic decisions. Management believes that such non-GAAP financial measures provide useful information to investors and others in understanding and evaluating its operating results in the same manner as management. EBITDA is a non-GAAP financial measure that represents net income prior to interest expense, net, other expense, net, income taxes, and depreciation and amortization, as adjusted to add back certain non-cash and non-recurring charge. EBITDA and any other ratio or metrics derived therefrom are financial measures not calculated in accordance with GAAP and should not be considered as substitutes for revenue, net income, operating profit, or any other operating performance measure calculated in accordance with GAAP. Using these non-GAAP financial measures to analyze the business would have material limitations because their calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may find significant. In addition, although other companies in its industry may report measures titled EBITDA or similar measures, such non-GAAP financial measures may be calculated differently from how management calculates its non-GAAP financial measures, which reduces their overall usefulness as comparative measures. Because of these limitations, you should consider EBITDA alongside other financial performance measures, including net income and other financial results presented in accordance withGAAP. |2 Disclaimer

 

 

Table ofContents I. Introduction II. TransactionSummary III. BankMobileOverview IV. FinancialInformation V. Appendix

 

 

|4 Management PresentingToday LuvleenSidhu CEO andCo-Founder BobRamsey Chief FinancialOfficer IndustryExperience 9+Years IndustryExperience 20+ Years • As BankMobile's Chief Financial Officer, Bob Ramsey oversees the bank’s financial operations, including planning, risk, andreporting • Prior to joining BankMobile, Ramsey served as senior equity research analyst at FBR Capital Markets, where he covered community banks, regional banks, super- regional banks, consumer finance and fintech companies during his 13-yeartenure • Ramsey is a Chartered Financial Analyst (CFA). He holds a Bachelor of Arts degree in Managerial economics from Hampden-Sydney College and a Master of Business Administration degree from the College of William and Mary FinTechWoman of theYear (1) Expertise in Scaling andBuilding Billion Dollar Companies in RelatedIndustries Total Board Experience of50+ Years in RelatedIndustries Track Record of CreativeDeal Structuring and Partnership Development A.J.Dunklau CEO The MFAC Board is aValue-Add Partner toBankMobile • LuvleenSidhuistheChiefExecutiveOfficerandCo- FounderofBankMobile • AftergraduatingfromHarvardandWhartonshewasa managementconsultantatBooz&co.intheirfinancial servicespractice • Sidhu is a recognized leader in the industry and wasnamed one of Crain’s New York Business 2020 40 Under 40 and a “Rising Star in Banking & Finance” in2020 • Before attending business school at Wharton, she was analyst at Neuberger Berman and also worked as adirector of corporate development at Customers Bank. While at the company, Sidhu introduced several growth projects, including partnering with a New York City-based start-up to improve the banking experience through innovative technology • Sidhu has been featured regularly in the media including on CNBC, Bloomberg Radio, Yahoo Finance, Fox News Radio and in The Wall Street Journal,Forbes.com, American Banker, Crain’s New York, FoxNews.com,among others P P P MFAC Board Leadership orBoard Experience 1) 2019 LendIt Fintech Industry Awards

 

 

|5 Where Does BankMobile Technologies StandToday? Delivering Full-Featured Digital Banking Platform to Large Scale Non-BankPartners …Award Winning BankingTechnology, Focused on Banking Services for Millennials& Middle IncomeAmericans… xCustomer-centricapproach xProvides an affordable, easy-to-useproduct xSimplifies banking for theconsumer xCreates customers for life with full suite of banking products, including checking, savings, personal loans, credit cards and studentrefinancing xCreates attractivereturns xProprietary Banking-as-a-Service(“BaaS”) technology xAllows for greater speed and cost effectiveness in bank roll out forpartners xHigh-volume, low-cost customer acquisition model xServes ~1 in 3 U.S. students on 722 campuses (4) xLaunched partnership with T-Mobile via the T- Mobile MONEY checkingaccount xPlanned 2021 launch of digital bank account with GooglePay xOver 2M accounts (1) x~300K accounts opened annually (2) x~$812M in 2020EDeposits x$72M in 2020ERevenue x$6M in 2020E Adjusted EBITDA (3) One of America’s LargestDigital BankingPlatforms… Expert in B2B2CBanking… 1) Data as of6/30/2020 2) Per BankMobilemanagement 3) EBITDA is a Non-GAAP financial measure; see page 39 for reconciliations to Non- GAAP financial measures and disclaimers on forward lookingfinancials 4) Based on market share for Signed Student Enrollments (“SSEs”) (the number of students enrolled at higher-ed institutions); Assumes ~3M SSEs are considered non- addressable (beauty schools, trucking schools, etc.); Data per BankMobile’s internal sales database and estimated student market size and National Center for EducationStatistics“EnrollmentandEmployeesinPostsecondaryInstitutions,Fall2015; FinancialStatisticsAcademicLibraries,FiscalYear2015”, February2017

 

 

|6 Consumers Are Recalibrating Their BankingNeeds New Digital Options, Remote Necessities and Poor Customer Experiences Are DrivingChange 1) Accenture Consumer Retail Banking Survey Summary, July2017 2) PWC Consumer Banking Survey,2019 3) Forbes, “Consumers Shelled Out $1B in Monthly Bank Maintenance Fees”,2019 1 in2 consumers switch theirprimary banks due to discounts and promotions onfees (1) 1 in3 consumers switch primary banks for a better interestrate on theirdeposits (2) 50% of consumers likely will notopen their next account with the bank they currentlyuse (2) 63% of consumers areusing mobile channels more frequently (2) 59% of employees claim financial or money challenges as the #1cause of stress in theirlives (4) 10% of income spent on feescharged by payday lenders and other financial serviceproviders (5) Consumers are Looking for an Affordable Banking Alternative (3)(5) x 1 in 3 Americans live paycheck topaycheck x Americans pay $34B a year in overdraftfees x The average overdraft fee is$33.36 x Big banks require at least $1,500 in a basic checking account to waive their monthly maintenance fee, which averages$10.99 x Women pay 18% more in overdraft fees than men (five per year) dueto lower-than-averageearnings x The average fee to withdraw money from an out-of-network ATM has hit a record high of $4.72, up 33% over the pastdecade Consumer Preferences are Changing, with Banks Slow toAdapt 4) PWC Employee Wellness Survey,2019 5) The Cornerstone Performance Report,2017

 

 

|7 Non-Banks Want to Engage Customers via FinancialServices Higher-Ed, Retailers and Large Employers All Have Untapped Financial UseCases Higher-Ed institutions send tens of billions in payments each year to students, creating administrative complexity and resulting in high overheadcosts Large employers struggle with implementing and integrating financial wellness capabilities into their existing HRstrategy Onerous and complex regulations regarding disbursement of federalfunds Inefficient and expensive processing, fulfilment and reconciliation of student loan refunddisbursements Time-consuming interactions between schools, staff andstudents Employers struggle to retain talent when their staff are not thrivingfinancially Human resources departments lack compelling financial wellness programs for theiremployees Tighter labor markets have created an acute talent shortage, requiring employers todifferentiate Consumer-centric brands constantly refine strategies to better attract, engage and retaincustomers Higher-EdInstitutions ConsumerFocusedBrands LargeEmployers Traditional retailers struggle to differentiate ina commoditized market without creating“race-to-the-bottom” Lack of passive income opportunities and centralized consumer dataaggregation Competition and changing customer expectations are exposing undifferentiated rewardsprograms

 

 

|8 BankMobile Solves Multiple Parties’ Pain Points in OneSolution Resulting in High-Volume, Low-Cost CustomerAcquisition B2B2CApproach Examples of BankMobile Solutions within 3Verticals Higher-EdBanking x Distribute financial aid refunds and otherdisbursements x Eliminate administrative burden andcomplexity x Offer students access to bankingservices x Reduce processing costs annually by ~$125K /year (1) White-Label Banking x Offer financial services through white-label partnerships (2) x Attract customers by improving banking experience in historically- underserved segments x Deliver customizable, partner branded rewards and special offers to further driveloyalty x Create net-new, passive revenue streams for partners with lower customerattrition WorkplaceBanking x Deploy differentiated financial services in conjunction with financial wellness strategy x Represents the first benefit that earns employee's money via interest-bearing accounts, no fees and unique cost-saving opportunities x Easily accessible benefits through HRportal 1) Compared to existing campus processing costs; Approximation based on internal BankMobileestimates 2) Deposits are held with bankpartner BankPartners Planned Launchin 2021

 

 

|9 BankMobile Evolving into a PremierBrand Fast Growing Digital Banking TechnologyPlatforms 2020+: RapidExpansion2015 -2017: EarlyDays xBankMobile founded in 2015 to “digitize”the traditional bankingexperience Product Higher-Ed xAcquired Higher One’s Student Checking and Refund DisbursementBusiness xIntegrated new functionality andtechnology xRepositioned the business (fees,compliance) Well-positioned for long-term growth and continued marginexpansion BankMobile Evolution and Continued GrowthElements 2018 –2019: Business Model and ProductInnovation xPartnered to develop T-MobileMONEY Partnerships Platform xFocused on expanding B2B2Cstrategy xCollaboration with Google Payannounced August 3 rd –Will plan to launch in2021 xContinue to acquire new Higher-Edclients xFurther expand within existing customerbase xAdd additional White-LabelPartners xInvest in strategic M&Aopportunities Long-Term Growth xBankMobile invested heavily to create its Banking-as-a-Service xBuilt out the technological infrastructure to roll out white-label checking, savings, Point-of-Sale (“POS”) financing, credit card, personal loans and studentrefinance Investment Technology Direct-To- Consumer Higher-Ed Higher-Ed Higher-Ed Higher-Ed Pipeline of White-Label and StrategicPartnerships Today Note:BMTechnologiesisNotaBankanddoesnotprovidebankingservices.BankMobileisatechnologyproviderthatfacilitatesdepositsandbankingservices betweenacustomerandanFDICinsuredpartnerbank.Anyreferenceinthis presentation to “banking” or “banking services” is in reference to BankMobile providing services between a customers and a partner bank. The BankMobile brand and trademark is only used in reference to services being provided between a customerandanFDICinsuredpartnerbank.TheBankMobilebrandisonlyusedinreferencetoservicesprovidedincollaborationwithanFDICinsuredsponsorbank.

 

 

|10 ▪ Megalith Financial Acquisition Corp (NYSE: MFAC) has entered into a definitive agreement to acquire BankMobile Technologies ▪ This transaction is subject to customary regulatoryapprovals Transaction Structure (1) ▪ Transaction valued at an implied post-money enterprise value of $140mm (2) , which equates to 1.3x multiple on 2021E Revenue of $104.0mm (3) 6.5x multiple on 2021E EBITDA of $21.5mm (3) Valuation ▪ Transaction to be funded through a combination of MFAC common stock, cash held in the MFAC trust account, proceeds received from newly issued shares through a PIPE transaction and assumed debt of $40mm (2) ▪ Pro forma net leverage of 2.1x based upon 2020E Adjusted EBITDA of $6.3mm (3)(4) Cap Structure &Leverage ▪ MFAC public equity investors (original SPAC investors) are expected to own 28.3% of the combined (5) ▪ Shares issued to PIPE Investors are expected to own 25.0% (5) ▪ Customers Bank is expected to own 46.7% (5) Pro FormaOwnership ▪ MFAC will remain a Delaware corporation, and as the post-closing company will remain listed on theNYSE ▪ The public company will be renamed BM Technologies,Inc. Listing 1) 2) 3) See “Proposed Transaction Structure” on slide 38 and “Proposed Capitalization and Ownership” on slide37 4) See “Proposed Capitalization and Ownership” on slide 37 for calculation; Reflects debt prior to partial paydown from cash in MFAC’s trustaccount 5) Forecasted Revenue, EBITDA and Adjusted EBITDA set forth on “Income Statement History and Forecast“ and “Reconciliation to Non-GAAP Financial Measures” on slides 22, 30 and 39,respectively Net leverage defined as net debt at closing / 2020E forecasted adjusted EBITDA; See “Reconciliation to Non-GAAP Financial Measures” on slides 39 and 40 See ownership table on slide 37 “Proposed Capitalization and Ownership”; Assumes the full $33.2 million cash held in the trust account by MFAC related to existing MFAC public stockholders will not be redeemed upon Transaction closing, shares will remain outstanding and cash willbeavailable for use in the Transaction; Assumes aggregate PIPE investment of $20.0mm; See slide 37 for materialassumptions BankMobile Evolving into a PremierBrand

 

 

|11 TransactionBackground Why is BankMobile Technologies (“BMT”) Being Divested? Why is BMT Positioned as an IndependentCompany? BMT -A standalone subsidiary of CustomersBank Banking-as-a-Service ▪Remove Growth Constraints overlaid byparent ▪Aligns management, board and investors primary focus without distraction of otherbusinesses ▪As independent entity, BMT will more easily establish new bank partners who will enable BMT to offer credit and other financial products to existingcustomers. ▪The legacy of being owned by a bank provides the core expertise and systems to safely, securely plug into new BaaS users that require such expertise without the limitations imposed by being owned by a regulatedentity ▪BMTbecomesastandaloneFinTechcompanywithits owncapitalsourcesandsectorvaluationmetrics;and notgovernedbybankvaluations Reasons forDivestment A.BankMobile Technologies (“BMT”), a subsidiary of Customers Bank (“Customers”), will be subject to reduced interchange income if it remains wholly-owned by CUBI, due to the Durbin Amendment (part of Dodd- Frank banking reform of 2011). When a bankcrosses $10b in assets on December 31 st , it becomes subject to the Durbin Amendment, and interchange income is significantly reduced. Customers is now subject to the DurbinAmendment. B.Customers Bancorp (“CUBI”) has made recent strategic decisions to focus on its largest commercial lending lines of business. BMT is a smaller operating unit which focuses on retail deposit customers and retail banking- as-a-service (BaaS); BMT does not fit CUBI’s core commercial banking focus and is beingdivested. C.From a regulatory and business focus point of view,CUBI wishes to be a “Business oriented Community Bank.” . A. “Durbin Fee Challenge” B. Realigned Priorities &Focus C.Regulation 1) Customers is divesting BankMobile Technologies 2) BMT will also have debt outstanding held by CUBI in amount of $40 (1) million; which is also part of the purchase price paid (it is BM Technologies Inc.’s intention to pay off the debt as soon aspossible) 3) Customers will contractually agree to provide the same Deposit Related Fees and Durbin Exempt Interchange Rate (Fees) through 2022 to enable BMT a stable “runway” of revenue while BMT establishes additional bank partnerships to replaceCUBI See Proposed Capitalization and Ownership and Proposed Transaction Structure on pages 37 and 38, respectively ▪BMT can more easily delivers a full-service, centralized and customer-centric experience while alleviating the back-office and administrative burden for white-label partners ▪Better positioned to capitalize on trends away from branch basedbanking Transaction Related Independent Platform BetterPositioned Customers Bank (“CUBI”) is divestingBMT 1 2 3 Note: Framework based on full divestiture from the parentbank 1) Reflects debt prior to partial paydown from cash in MFAC’s trustaccount

 

 

Business Overview

 

 

|13 Key InvestmentHighlights High-Volume, Low-Cost, Customer AcquisitionStrategy 2 Our “Bank-as-a-Service” Delivers a Full-Featured Digital Banking Platform toPartners 4 Opportunity to Disrupt Massive U.S. BankingMarket 1 Highly-Attractive BusinessModel 7 Attractive Distribution Channel Through Market Leadership Position in HigherEducation 6 5 Unique CompetitivePosition 3 Collaborations with Large, Highly AttractiveBrands

 

 

|14 Opportunity to Disrupt Massive U.S. BankingMarket 1) Source: USBL “Banks Ranked by Total Assets”, June2019. BankMobile is able to capture deposits for Partner Banks from the dissatisfied customers of big banks and undercut smaller banks struggling with customeracquisition COMMUNITYBANKS (<$1B ASSETS) MEGA BANKS ($1T+ASSETS) SUPER-REGIONAL BANKS ($250B-$1TASSETS) CORE REGIONAL BANKS ($50B-$250BASSETS) SMALL REGIONAL BANKS ($10B-$50BASSETS) MICROBANKS ($1B-$10BASSETS) TOP ~0.2%OF BANKS COVER ~50%OF ASSETS ALL OTHER BANKS COVER REMAINING ~50% 1 Banks Have Consolidated, but Fragmentation RemainsHigh Industry-wide headwinds have driven significant asset consolidation, with big banks holding 50% of deposits and struggling with customer satisfaction while the 99.8% of other banks hold the other 50% of deposits, yet struggle to acquire customers at a lowcost Asset Concentration in Banking,June2019 (1) The BankMobileSolution BankMobile is pairing with white-label partners and partner banks to beat large and small banks through high-volume, low-cost customer acquisition driven by its full-featured BaaSplatform

 

 

|15 $250 $350 $250 $1,500 $1,500 $400 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 CreditCards Retail CheckingAccounts ConsumerLending High-Volume, Low-Cost Customer AcquisitionStrategy Implemented B2B2C Approach in the Higher-Ed and TelecomIndustry BankMobile achieves a lower Customer Acquisition Cost relative to others in the banking industry by leveraging itsdisruptive distribution model, which leverages its partners’ loyal customer base and brandaffinity BankMobileCustomerAcquisition Estimated Industry Customer AcquisitionCost (1)(2) 1) ARK Investment Management LLC, “Customer Acquisition Costs Per Customer For Financial Products”,2018 2) BankMobile’sCACiscalculatedbased onLTMtotalMarketingandClientOperationsexpensesnetofsubscriptionfeespaidtoBankMobileforHigherEdclients;divided byLTMnewly activeaccounts 3) If the subscription fees paid by Higher Ed institutions to service their disbursements business were backed out of the net cost of acquisition, BankMobile’s CAC wouldbe $26.78 x BankMobile drives customer acquisition and marketing engine through a differentiated distributionmodel x Rapid penetration into partners’loyal, ingrained customerbase x Ability to leverage partners’ brand equityto establish trust and accelerateadoption x Derives significantly lower customer acquisition cost than a traditional bank by leveraging existing customerbase 2 Implied CACCost Differential upto $1,490 BankMobile CAC:$9.63 (3)

 

 

|16 • BankMobile and T-Mobile partnered to launch T-Mobile MONEY in2019 • Offers no account fees and 4% interest on balances up to $3k for T-Mobilecustomers RelationshipOverview Win –WinRelationship x Strong customer retention program forT-Mobile x New BankMobile customers (deposits for PartnerBanks) PartnershipHighlights “Traditional banks aren’t mobile-first, and they’re definitely not customer-first. As more and more people use their smartphones to manage money, we saw an opportunity to address another customer pain point,” said John Legere, former CEO of T-Mobile (April 2019) (1) 1) PerT-Mobilepressrelease;Bye,“BigBanks.Hello,T-MobileMONEYIntroducingYourNo-Fee,Interest-Earning,Mobile-FirstCheckingAccount”–April18 th ,2019 3a Collaborations with Large, Highly AttractiveBrands White-Label Banking Case Study: T-MobileMONEY

 

 

|17 On August 3 rd 2020, BankMobile announced an execution of an agreement with Google to introduce digital bankaccounts Highlights x Google Pay will provide the front-end userexperience x The product will be built upon BankMobile’s existing bankinginfrastructure x Product will be offered through BankMobile’s existing higher education distribution channel which serves approximately one in three college students through relationships with 722campuses x Planned launch in2021 Win –WinRelationship x Increase the percentage of college students that choose to receive a disbursement through the opening of a BankMobileaccount x Provide students new tools that will assist in budgeting and offer personal financialinsights PartnershipHighlights “Google is excited to partner with BankMobile in enabling a digital experience that is equitable for all and meets the evolving needs of a new generation of customers. We believe that we can use our technology expertise to benefit users, banks and the entire financial ecosystem.” -Felix Lin, Vice President at Google (August 2020) (1) “We are thrilled to be collaborating with Google to offer our student customers enhanced digital bank accounts. Many of our student customers today are struggling to manage their money as they work part-time and attend school. Through our collaboration with Google we believe we can provide these students with the appropriate financial tools to helpthem navigate through these difficult situations successfully” –Luvleen Sidhu, CEO, BankMobile (August 2020) (1) 3b Collaborations with Large, Highly AttractiveBrands Recently Announced Collaboration with GooglePay Relationship Overview 1) Source per PressRelease: BankMobile Announces a Collaboration to Offer Digital Bank Accounts –8/3/2020

 

 

|18 Core BankingSystems Payments Checking Savings Credit AzureCloud Digital Activity Data Partner Data Bank Product Data x Alldigitalchannelsandbanktechnologiesdelivered includingmobile,web,Alexa,APIsandUSpayment systems x Out of the box capabilities supported including customer care, compliance, fraud mgmt., deposit / loan operations and debit cardprinting x Flexible connections to banks via partner-specific bankingAPIs “Bank as a ServiceOffering” Omni-Channel DigitalBanking Modern TechnologyPlatform Full-Service BankingSupport BankPartnerships x Frictionless onboarding and omni-channelapps x Full primary bank relationship support, including transfers, remote deposit capture, P2P, bill pay, ATMs, cash-in and physical/digital debitcards x Gamified cross-industry offers andperks x Near-real-time APIs with aggregated data enables partner-specialized, customer-centric experiences x Core banking systems provide primary account features at ultra-highreliability x Modern cloud enables consistent re-use across multiple partners, tested on millions ofaccounts 4a BankMobile Technologies Delivers a Full-Service Digital BankingPlatform Key Capabilities, Products and TechnologyPlatform A B C D BaaSOffering A A . Branded DigitalBanking Apps B B . Modern Cloud-Based TechnologyPlatform BankMobile brings the whole banktopartners… … with a tailored signup and brandedbankUX… … enabled by tech designed for partnerintegration Partner BaaS Customer HubAPIs Note:BMTechnologiesisNotaBankanddoesnotprovidebankingservices.BankMobileisatechnologyproviderthatfacilitates depositsandbankingservices betweenacustomerandanFDICinsuredpartnerbank.Anyreferenceinthis presentation to “banking” or “banking services” is in reference to BankMobile providing services between a customers and a partner bank. The BankMobile brand and trademark is only used in reference to services being provided between a customer and an FDIC insured partnerbank

 

 

|19 continued -Deliver Full-Service Banking Platform to Partners’Customers Attracts Customers Through Digital Channels and Provides Back-Office Support in OneSolution BankMobile delivers a full-service, centralized and customer-centric experience while alleviating the back-office and administrative burden for white-labelpartners Deposit Operations Compliance Solutions (KYC, AML, BSA,Etc.) Call Center Operations Physical ATMAccess DebitCard Issuance Information Security Fraud Management DataAnalytics /Reporting Core Processing Loan Underwriting Regulatory Approvals Established BankLicense Streamlined PaymentRails Integrated, FlexibleAPIs FDIC InsuredDeposits C C . Full-Service BankingSupport Access to a PartnerBank D 4b Note:BMTechnologiesisNotaBankanddoesnotprovidebankingservices.BankMobileisatechnologyproviderthatfacilitates depositsandbankingservices betweenacustomerandanFDICinsuredpartnerbank.Anyreferenceinthis presentation to “banking” or “banking services” is in reference to BankMobile providing services between a customers and a partner bank. The BankMobile brand and trademark is only used in reference to services being provided between a customer and an FDIC insured partnerbank

 

 

Deep experience in B2B2C banking Modern digital banking platform with customer- centric approach Ability to roll-out a bank to partners in months, notyears Providefullback-office supportforwhite-label partners Extreme partner tailoring to allow for seamless onboarding and customized perks Durbin advantage provides attractive interchange revenue sharepotential |20 RepresentativeFirms Competitive Differentiation TraditionalBanks “NeoBanks” Banking-as-a- Service Full-BaaS Model Complete digital banking platform including back office support (compliance, deposit operations, fraud management, customer care,etc.) 4 0 0 2 Revenue Share / Great ConsumerPrices Small bank interchange/big bankmaturity 4 0 0 3 Extreme PartnershipTailoring Deep customer experienceintegration 4 0 1 2 Fintech with Heavy BankingExperience Blend of innovation and strong bankingdiscipline 4 2 2 Speed toMarket Months to deploy full feature digital bankplatform 4 0 1 2 Complete Digital BankingPlatform Illustrative CompetitiveLandscape The BankMobileAdvantage 5 CompetitivePositioning

 

 

|21 Distribution Through Market Leadership Position inHigher-Ed Deeply Embedded Campus Relationships Allow for Customer Acquisition and “Customer for Life”Strategy U.S. Higher-Ed Student DisbursementMarketShare (1) Benefit of the Higher-EdBusiness x Access to ~1 in every 3 college students in theU.S. x Ability to create “customer for life” through selling additional financial services products as studentsgraduate x Proven scale generating $60M+ in annual revenues with ~2M accounts currently on the platform x Scalable technology distributing more than $10B of payments ayear Note: SSEs refers to Signed StudentEnrollment 1) 2) Per BankMobile’sinternalsalesdatabaseandestimatedstudentmarketsizebasedonSSEs NationalCenterforEducationStatistics.“EnrollmentandEmployeesinPostsecondaryInstitutions,Fall 2015;FinancialStatisticsAcademic Libraries, Fiscal Year 2015”, February2017 3) 4) 5) ~3M SSEs are considered non-addressable (beauty schools, trucking schools, etc.) RepresentsoneminustheannualSSEattritionoverbeginningoftheyearSSEcount Includescreditunions,regionalbanks,othersoftwareproviders,unknown,etc. Total Addressable Market is 20M students and replenishes everyyear (2)(3) 31% Software 19% Other (5) 18% 2% In-HouseCapabilities 30% Regionaland National Banks Payment Providers Exclusive, Long-Term and Contractual CampusRelationships x Long-term embedded university client base of 722campuses x SSE retention rate of over98% (4) x Average client tenure > 5years x Typical new contract term is 3 –5 years with auto-renewal periods of variouslengths x Active pipeline of ~1Mstudents x Expect prepaid providers to be a minimal threat as regulations have made it more difficult for prepaidoperators x BMT is in active implementation and negotiations on 2 new Partnerships that are intended to increase product offerings to schools and increase adoption of BMT products bySSEs. x BMT’s mix of SSE’s is weighted towards local, two-yearinstitutions x Management believes BMT’s segment exposure could perform better than more expensive, private, four-year schools, by offering a better value proposition particularly if remote learning becomes more common orrequired ? 87% of SSE at better value “public”schools ? Active pipeline of schools with ~1MSSEs RecentDevelopments 6

 

 

|22 Income Statement –Historical &Forecasted Source: BankMobile management projections for 2020E –2022E Note: 2021 –2022 forecasted figures incorporate additional public company cost upon consummation of the transaction. Forward looking financial projections assume white label business achieves significant forecasted growth. These figures are subject to significant business, economic, regulatoryandcompetitiveuncertaintiesandcontingencies,manyofwhicharebeyondthecontroloftheCompanyandits management. 1)2019 financials are shown pro forma for BankMobile’s current deposit servicing and expense agreements with Customers Bank 2) EBITDAisaNon-GAAPfinancialmeasure;seepage39forreconciliationstoNon-GAAPfinancialmeasures 2019 Pro Forma (1) 2020E 2021E 2022E Less: OpEx (Excl. Depreciation & Amortization)($mm) 63.4 67.2 82.6 94.1 (2) EBITDA($mm) ($2.6) $5.3 $21.5 $50.3 Less: Interest Expense($mm) 0.5 1.4 0.6 0.3 Less: Depreciation and Amortization($mm) 9.3 13.0 14.7 16.7 TotalRevenues($mm) $60.8 $72.4 $104.0 $144.4 Average ServicedDeposits 29% 96% 69% TotalRevenues 19% 44% 39% OpEx (Excl. Depreciation &Amortization) 6% 23% 14% EBITDA - 308% 134% Net Income - - 442% Historical & Projected IncomeStatementRevenue Breakout by MajorCategories CardRevenue OtherFees UniversityFees DepositServicing Fees Pre-Tax Net Income($mm) ($12.4) ($9.2) $6.2 $33.3 Less: Tax Expense($mm) (3.0) (2.2) 1.5 8.0 Net Income($mm) ($9.4) ($7.0) $4.7 $25.3 AccountFees Monthly account fees, wire fees andcard replacementfees Average Serviced Deposits($mm) $548.5 $705.9 $1,381.4 $2,335.0 YoY Growth Interchange and MasterCard incentive incomebased on card activity and out-of-network ATMfees Various nominal other fees, including fees associated with cashdeposits Subscription and transactional fees charged to colleges based on enrollment size, competitive marketplace and disbursement channels andoptions Fee charged to partner bank(s) based onaverage balances of serviceddeposits Highly Attractive BusinessModel 7

 

 

|23 Federal &Private Colleges &Universities Loan orGrant: $10,000 Refund: $1,500 $260Billion Total Aid and Non-Federal Loans for 2018 &2019 (1) Disbursement Tuition: $8,500 BankMobile RevenueOpportunities Higher-EdPartners • Subscription Fees from Higher-EdClients • Transaction Fees from Higher-EdClients Student and Non-Student CustomerAccounts • Interchange Revenue on CustomerActivity • Service Fees for Wire, Foreign ATMTransactions • Account Maintenance Fees forNon-Students • Deposit Servicing Income from Invested DepositBalances ACH Transfer to Another Bank orCheck Students 1) CollegeBoard, “Trends in Student Aid2019”. Travel andOther Housing andFood Books Eliminating Complexity forSchools: xDisbursement Timing xService & StaffingNeeds xDepartment of EdCompliance xAudits &Record Keeping xTechnology Demands or Collaboration on enhanced offering planned to launch2021 + Case Study: Higher EducationBusiness Illustrative Example of how Student Loans or Grants flow to Higher Education Institutions and onto Students (how proceedsflow)

 

 

|24 Higher-Ed Business Unit ValueCreation Subscription and OtherFees Low-Cost Consumer Deposits ManageDisbursement Process Card Usage Drives Interchange Fees Paid by Merchant, Customer Pays Some Account and Usage Fees (e.g., ATM, Card Re-Issue,etc.) AccountHolder BankPartners Higher-EdCampus Fees fromBank Partners Benefits of a BankMobileAccount ▪ High tech digital banking product ▪ Competitive interestrates ▪ Student focused special discounts from partners (digital study tools from Bartleby and financial support services from Billshark) ▪ Free national ATMaccess ▪ Financialeducation ▪ Lowfees Disbursement Distributed Through BankMobile VibeAccount

 

 

|25 White-Label BaaS MarketOpportunity Key Market Attributes of TargetPartners Established Brand Equity Ability to leverage market-trusted image in co-branded marketing materials, as well as UX andApp Immense, Captive CustomerBase Massive, underserved customer bases provide a deep pipeline of sticky customers to marketto Diverse MarketingChannels Deeply ingrained marketing channels to promote co-branded platform and increaseawareness Numerous Natural CheckoutMoments Effortless, omni-channel checkout points retain customer dollars within the Banking-as-a-Serviceecosystem Strong Customer Loyalty Immensely loyal, existing customer base in need of financial and digitalbanking solutions 1) RepresentscustomerreachofidentifiedWhite-LabelprospectsinitiatedinpartnershipconversationswithBankMobile;BankMobileacknowledgesthatthereislikelytobecustomeroverlapamongstwhite-labelcustomersandindustryverticals >50Million Prospects ~150Million Prospects >200Million Prospects Massive Identified AddressableMarket ExistingIdentified Market Customer Pipeline related to New White- LabelPartners (1) TotalIdentified Market

 

 

|26 Competitive Economics Deep Experience Launched Partnershipwith T-Mobile viaTMM Proven Service& DeliveryModel ~2.0Million Accounts Competitive Advantage Large BanksUnable to Compete on InterchangeAlone SmallBanksUnable InvestAdequate$to BuildBaaSPlatform Regulators Waryof Allowing Fintechs Without Banking Acumen toScale (1) Chartered, FDIC-Insured, Not-PrepaidPartners Low AcquisitionCosts, High AdoptionRates Digital First/ Branchless NaturalCheckout Moments Large Aggregatorsof Consumers Deep Expertisein B2B2CBanking TrustedBrands Our B2B2CDifferentiation “DurbinExempt” Interchange-Only Model Attractive RevenueShare Low FeeBanking withBenefits ReducedOn-Partner Expense 1) The Wallstreet Journal; “Judge Denies Federal Authority to Issue Fintech Bank Charters” –October2019 Note: BM Technologies is Not a Bank and does not provide banking services. BankMobile is a technology provider that facilitates deposits and banking services between a customer and an FDIC insured partner bank. Any reference in this presentation to “banking” or “banking services”isinreferencetoBankMobileproviding servicesbetweenacustomersand apartnerbank.TheBankMobilebrandand trademarkisonlyused in referencetoservicesbeingprovided betweenacustomerand anFDICinsured partnerbank

 

 

|27 Experienced ManagementTeam Vision and Experience toExecute ~24 Years Average Industry Experience ManagementTeam By theNumbers 309 FTEs (2) 1) 2019 LendIt Fintech Industry Awards 2) As of6/30/2020 BobRamsey Chief Financial Officer IndustryExperience 20+ Years RobertDiegel Chief OperatingOfficer Industry Experience 35+ Years WarrenTaylor Chief Customer Officer andCo-Founder Industry Experience 35+ Years RobertSavino Chief ProductOfficer Industry Experience 21+ Years Industry Recognition Most Innovative Bank LuvleenSidhu CEO andCo-Founder FinTechWoman of theYear (1) Industry Experience 9+Years AndrewCrawford Chief CommercialOfficer IndustryExperience 23+ Years RegineFiddler Chief MarketingOfficer Industry Experience 16+ Years Key IndustryExpertise FinTech Banking Compliance / Risk Management Operations Finance DigitalMarketing

 

 

CONFIDENTIAL|28 Tremendous Platform GrowthOpportunity Multiple Levers to AccelerateGrowth Expand Student Adoption and Create Long-Term Customer Relationships by Expanding Access to Credit Products Add New White-LabelPartners Strategic M&A Expand Distribution Channels and ProductOfferings x Drive strong organic growth by successfully executing on our customer acquisition and engagementstrategies x Continue RFP process and strategic discussions with vetted blue-chip, white-label partners to tap into their loyal customerbases x Distribute the platform through new channels to open up incrementalTAM x Capitalize on robust universe of marketplace lenders, Personal Financial Management (“PFM”) players, and vertical higher-ed software acquisitiontargets Further Expand Within Existing White-Label Partnerships x Continue to add newSSEs x Increase adoption rates through newpartnerships x Expand bank partnerships to expand access tocredit

 

 

Financial Information

 

 

|30 2019 Pro Forma (1) 2020E 2021E 2022E Total Revenues($mm) $60.8 $72.4 $104.0 $144.4 Less: OpEx (Excl. Depreciation & Amortization)($mm) 63.4 67.2 82.6 94.1 (2) EBITDA($mm) ($2.6) $5.3 $21.5 $50.3 Less: Interest Expense($mm) 0.5 1.4 0.6 0.3 Less: Depreciation and Amortization($mm) 9.3 13.0 14.7 16.7 Pre-Tax Net Income($mm) ($12.4) ($9.2) $6.2 $33.3 Less: Tax Expense($mm) (3.0) (2.2) 1.5 8.0 Net Income($mm) ($9.4) ($7.0) $4.7 $25.3 Average Serviced Deposits ($mm) $548.5 $705.9 $1,381.4 $2,335.0 YoYGrowth Average ServicedDeposits 29% 96% 69% TotalRevenues 19% 44% 39% OpEx (Excl. Depreciation & Amortization) 6% 23% 14% EBITDA - 308% 134% NetIncome Source: BankMobile management projections for 2020E –2022E - - 442% Income Statement –Historical &Forecasted 1)2019 financials are shown pro forma for BankMobile’s current deposit servicing and expense agreements with Customers Bank 2) EBITDAisaNon-GAAPfinancialmeasure;seepage39forreconciliationstoNon-GAAPfinancialmeasures Note: 2021 –2022 forecasted figures incorporate additional public company cost upon consummation of the transaction. Forward looking financial projections assume white label business achieves significant forecasted growth. These figures are subject to significant business, economic, regulatoryandcompetitiveuncertaintiesandcontingencies,manyofwhicharebeyondthecontroloftheCompanyandits management.

 

 

|31 Revenue 21% 2021E (4) • Signed Student Enrollments(“SSEs”) Source: BankMobilemanagement 1) Data as of the period end6/30/2020 2) Represents one minus the annual SSE attrition over beginning of the year SSEcount 3) Reflects last twelve-month data for the period end6/30/2020 $10.8bn Total Student Refund Dollars Processed (3) $663mm EoPServiced Deposits (1) $2.5bn Debit Spend (3) 4) Reflects forecasted full year 2021 data; Forecasted Revenue and EBITDA set forth on “Income Statement History and Forecast“ on slide 22 & 30; EBITDA is a Non- GAAP financial measure which can be reconciled on page 39; Forward looking financial projections assume white label business achieves significant forecasted growth. These figures are subject to significant business, economic, regulatory and competitive uncertainties and contingencies, many of which are beyond the control of the Company and itsmanagement >5mm * SSEs (1) BankMobile ServesApproximately 1 in 3 of all US CollegeStudents $61mm >2mm Accounts (1) 98% Higher-Ed Client Retention (by SSEs) (1)(2) LTM as of6/30/20 Revenue $104mm 2021E (4) EBITDAMargin Financial & OperatingHighlights BankMobile (BMT)’s Model has enabled it to establish a highly attractive financial & operatingprofile

 

 

|32 $401 $812 $1,601 $2,632 2019 ProForma (2) 2020E 2021E 2022E $60.8 $72.4 $104.0 $144.4 2019 ProForma (2) 2020E 2021E 2022E $525 $693 Q22019 Q22020 FinancialOverview Significant Growth and Scale Growth Drivers (1) Forecasted DepositGrowth ($ inmillions) $663 Q22019 Q22020 ($ inmillions) 33%CAGR RevenueProjection 45% $456 32% End of Period ServicedDeposits DebitSpend Projected End of Period ServicedDeposits ($ inmillions) ($ inmillions) 1) Data as of the quarter ended6/30/2020 2) 2019 financials are shown pro forma for BankMobile’s current deposit servicing and expense agreements with CustomersBank Projected AnnualRevenue 87%CAGR Note: 2021 –2022 forecasted figures incorporate additional public company cost upon consummation of the transaction. Forward looking financial projections assume white label business achieves significant forecasted growth. These figures are subject to significant business, economic, regulatory and competitive uncertainties and contingencies, many of which are beyond the control of the Company and itsmanagement.

 

 

|33 $69 $725 $209 $178 $400 $700 $550 $375 BankMobile Chime Varo Stash NuBank N26 Revolut Monzo 1.3x 7.4x 9.2x 6.2x 6.5x 18.7x 25.3x 13.0x Mobile & online B2B Payments& Prepaid ValuationOverview ▪ Enterprise Value multiples are valued at a significant discount when looking at 2021E EBITDAand revenue Public ComparableCompanies (1) Public Comparable Companies (1) EV / 2021E EBITDAMultiples B2B Payments & PrepaidComparables FleetCor 9.3x 16.8x Edenred 7.5x 18.5x WEX 4.9x 11.1x Bill.com 33.9x NM GreenDot 1.3x 6.4x EMLPayments 4.0x 13.0x Median 6.2x 13.0x EnterpriseValue/ 2021ERev. 2021EEBITDA Bank TechComparables FIS 8.0x 17.6x Intuit 9.3x 23.3x Fiserv 5.6x 14.4x ADP 4.0x 17.0x JackHenry 7.4x 24.0x Temenos 11.0x 26.7x Q2 11.3x NM ACIWorldwide 3.0x 11.0x Bottomline Tech. 4.4x 19.7x Median 7.4x 18.7x Mobile & OnlineComparables PayPal 9.0x 31.5x Shopify 37.2x NM Square 9.2x NM AdyenNV 45.9x NM Pagseguro 7.6x 19.2x Median 9.2x 25.3x EV / 2021E RevenueMultiples Source: Capital IQ & FactSet Research Systems, Inc.; Market data as of8/4/2020 Note: Multiples exclude valuations less than 0.0x and greater than 50.0x; Peer data reflects consensusestimates 1) 2) Reflects median values for comparable companies in each respective industry ForecastedRevenueandEBITDAaresetforthon“IncomeStatementHistoryandForecast“onslide22&30;EBITDA isaNon-GAAPfinancialmeasurewhichcanbereconciled onpage39 Mobile & online B2BPayments& BankMobile (2) BankTech Prepaid BankMobile (2) BankTech Average:$448mm Valuation ($mm) Accounts (3) (millions) $140mm $5,800mm $418mm $800mm $10,000mm $3,500mm $5,500mm $1,500mm 2mm 8mm 2mm 5mm 25mm 5mm 10mm 4mm ▪ Private market valuations for US and Int’l Neobanks using disclosed valuations and number of accounts (3) Valuation / Customers($mm) 3) FT Partners Research, “The Rise of Challenger Banks”, Business Insider, TechCrunch and Bloomberg; References to number of customers is assumed to applyaccounts

 

 

|34 InvestmentThesis Unique Opportunity to Invest in a Premier Brand Positioned for SignificantGrowth Strong FinancialProfile ~$72M 2020ERevenue 19% 2020E RevenueGrowth RapidMarket Expansion Positioned For SignificantGrowth New White-Label PartnerAdditions Distribution Channel and ProductOffering Expansion Best-in-Class DigitalBank Sophisticated Capabilities Dynamic ConsumerData Frictionless Onboarding Powerful CustomerAcquisition Proprietary Infrastructure Recognized MarketLeader Among theLargest Digital Banking Platforms Full Suite ofBanking Products Through PartnerBanks Proprietary“BaaS” Technology Planned 2021Launch of Collaboration with GooglePay High Volume, Low Cost AcquisitionModel ~$812M 2020E EoPDeposits 29% 2020E Avg. DepositGrowth 27% 2020E Debit SpendGrowth StrategicM&A White-LabelPartner Expansion Higher-Ed White-Label Partnerships Workplace Banking

 

 

Appendix

 

 

|36 Higher-Ed RecentDevelopments COVID-19 and BankMobile’s Higher-Ed Market -RecentDevelopments ▪Educational institutions expect classes to continue in the fall, but implementation strategies may range from social-distancing on-campus to full remotelearning ▪BMT believes the medium-and long-term impact of COVID-19 on its higher education business will beneutral-to-positive ▪In the short term, the education segment may be insulated from broader economic challenges as education historically has had a countercyclical tilt where enrollment increases in an environment with fewer jobs and fewer high-payingjobs ▪BMT has seen deposit inflows associated with federal CARES stimuluspayments - Over $82mm of stimulus payments have been deposited directly into BankMobile Vibeaccounts - Additionally, there has been $51mm of school federal payments deposited intoVibe

 

 

|37 Proposed Capitalization andOwnership 8) Reflects pro forma intercompany debt after partialpaydown 9) Includes maximum cash reserve of $5.0mm held by BankMobile and an estimated $10.3mm of cash allocated to BankMobile’sbalance sheet by cash held in the trust account by MFAC 10) ForecastedRevenue, EBITDAand Adjusted EBITDA setforthon“IncomeStatementHistoryandForecast“and“ReconciliationtoNon-GAAPFinancialMeasures”onslides22,30 and39,respectively Proposed Sources & UsesAnalysis Total Proposed Equity CapitalizationSummary (1) Capitalization atClosing SharePrice $10.38 Total SharesOutstanding 11.3 BMT Pro Forma EquityValue $117.2 NWCAdjustment (0.9) Estimated Transaction Expenses 5.0 Proposed Sources($mm) CUBI Rollover Equity (1) $54.7 PIPE Proceeds 20.0 Pre-Closing Cash on B/S atMFAC 33.2 Net Debt at Close (2) 13.4 BankMobile Excess Cash Net of Reserve Adjustment (3) Total 5.3 $126.6 Proposed Uses($mm) $31.9 54.7 5.0 Cash -Consideration to Equity (1)(4) Stock Consideration: $10.38 per share (1) Estimated TransactionExpenses Cash to Pro Forma BalanceSheet 10.0 DebtRepayment 11.6 Net Debt at Close (2) 13.4 $126.6 BankMobile Excess Cash Net of Reserve Adjustment (3) Adjusted EquityValue Debt at Close (8) Cash at Close (9) EnterpriseValue 5.3 $126.6 28.4 (15.0) $140.0 BMT 2020E Adjusted EBITDA ($mm) (10) BMT 2021E EBITDA ($mm) (10) BMT 2021E Revenue ($mm) (10) $6.3 $21.5 $104.0 EV / 2020EAdjustedEBITDA 22.1x EV /2021EEBITDA 6.5x EV /2021ERevenue 1.3x ShareCount %of Party (millions) Total 3.2 2.8 28.3% 25.0% SharesIssuedtoCUBI 5.3 46.7% Total 11.3 100.0% Note: Analysis assumes the full $33.2 million cash held in the trust account by MFAC related to existing MFAC public stockholders will not be redeemed upon Transaction closing, shares will remain outstanding and cash will be available for use in the Transaction Note: Net Working Capital at close is $0.9mm above target level resulting in an upward adjustment to the mergerconsideration 1) Total non-cash merger consideration to equity includes downward deal value adjustment of $13.4mm related to sponsor equity adjustments, net working capital adjustments andtransaction expenses 2) Estimated at closing 12/31/2020; See page 39 “Reconciliation to Non-GAAP Financial Measures” for closing net debtcalculation 3) Cash held by BankMobile in excess of $5.0mm will serve as additional cash consideration to Customers Bank; Based on estimated cash at closing of$10.3mm 4) Cashconsiderationincludes$20.0mmofproceedsrelatedtothePIPEoffering(netof$5.0mminestimatedtransactionexpenses),$5.3mmexcesscashheldby BankMobileatcloseand anadditional$11.6mm ofcashheld in escrowinMFAC’strustaccount 5) Assuming no redemptions for publicstockholders 6) BasedontotalPIPEinvestmentof$20.0mm andMFAC’sshareprice$10.38;Includesretainedfoundersharesof0.7m frominitialfounderinvestment;Excludes.3m foundersharessubjecttovestingandforfeitureunlessthestockpricereaches$15persharefor20 outof30 days 7) Reflects total non-cash merger consideration to equity, issuance based on MFAC share price of$10.38 MFAC Shareholders (5) PIPE Investors (6) (7)

 

 

|38 Proposed TransactionStructure MFAC Public shareholders have the optionto: (a) continue to own, in connection withthe closing, MFAC sharesor (b) redeem shares for a portion ofthe $33.2mm intrust Megalith Financial AcquisitionCorp. (“Purchaser” or“MFAC”) (NYSE listed company to berenamed BM Technologies,Inc.) (“MFACSponsor”) MFAC Public Shareholders MFACSponsor Members (1) PIPEInvestment PIPEInvestors BankMobileTechnologies, Inc. (“TheCompany”) MFAC Sponsor and Investors contribute capital to single PIPE investment; MFACSponsor relinquishes “Class B”shares Customers Bancorp,Inc (“CUBI”) CustomersBank (“Seller of Company”;“Lender toCompany”) CUBI owns 100% of CustomersBank MFAC issues shares and cash to Customers Bank, the sole stockholder ofBankMobile Shares in theCompany Obligation ona $40mmCredit Facility (1) MFAC Sponsor transfers additional “Class B” shares to CUBI as part of the aggregatedconsideration BankMobile merges into MFAC Merger SubInc. Shares inMFAC issued forcash Prior to Transaction closing, 100% ownership of BankMobile Technologies,Inc. MFAC Merger SubInc. MFAC Merger Sub Inc. established as a wholly- owned subsidiary ofMFAC

 

 

|39 Reconciliation to Non-GAAP Financial Measures Source: BankMobile managementprojections Note: 2021 –2022 forecasted figures incorporate additional public company cost upon consummation of the transaction. Forward looking financial projections assume white label business achieves significant forecasted growth. These figures are subject to significant business, economic, regulatory and competitive uncertainties and contingencies, many of which are beyond the control of the Company and itsmanagement. ($ shown inmillions) 2019 Pro Forma (1) 2020E 2021E 2022E Pre-Tax NetIncome ($12.4) ($9.2) $6.2 $33.3 Addback of Interest Expense (2) 0.5 1.4 0.6 0.3 Addback of Depreciation &Amortization 9.3 13.0 14.7 16.7 EBITDA ($2.6) $5.3 $21.5 $50.3 Addback of Merger RelatedExpenses 0.1 0.1 0.0 0.0 Addback of DOESettlement 1.0 1.0 0.0 0.0 Adjusted EBITDA ($1.5) $6.3 $21.5 $50.3 EBITDA ($2.6) $5.3 $21.9 $50.7 Revenue 60.8 72.4 104.0 144.4 EBITDAMargin (4%) 7% 21% 35% 1) 2019 financials are shown pro forma for BankMobile’s current deposit servicing and expense agreements with CustomersBank 2) Reflects cost of intercompanydebt .

 

 

|40 Reconciliation to Non-GAAP Financial Measures(Continued) Source: BankMobile managementprojections 1) Assumes $33.2mm cash held in escrow at MFAC related to existing MFAC investors will not be redeemed upon Transaction closing; Assumes 50% of trust cash in excess of $10.0 mm will serve as proceeds used to partially paydown existing intercompanydebt 2020E BankMobile Estimated Debt atClosing $40.0 Trust Cash Allocated for Debt Paydown (1) (11.6) Pro Forma Estimated Debt atClosing $28.4 Beginning BankMobileCash $10.3 Less: BankMobile Excess Cash Used in Cash Consideration (2) (5.3) Plus: Cash Held in MFAC Trust Allocated to BalanceSheet 10.0 Estimated Closing Cash on BalanceSheet $15.0 Pro Forma Estimated Debt atClosing $28.4 Less: Estimated Closing Cash on BalanceSheet 15.0 Estimated Net Debt atClose $13.4 AdjustedEBITDA 6.3 Net Leverage Ratio (Net Debt / AdjustedEBITDA) 2.1x 2) Cash held by BankMobile in excess of $5.0mm will serve as additional cash consideration to CustomersBank