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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): November 21, 2022

 

Industrial Tech Acquisitions II, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   001-41213   85-1213962
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (IRS Employer
Identification No.)

 

5090 Richmond Ave, Suite 319
Houston, Texas
  77056
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: 713-599-1300

 

Not Applicable
(Former name or former address, if changed since last report)

 

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

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on which
registered
         
Units, each consisting of one share of Class A common stock and one-half of one redeemable warrant   ITAQU   The Nasdaq Stock Market LLC
         
Class A common stock, par value $0.0001 per share   ITAQ   The Nasdaq Stock Market LLC
         
Redeemable warrants, each whole warrant exercisable for one share of Class A common stock for $11.50 per share   ITAQW   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§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, which is filed as an exhibit to this Form 8-K. The stockholders of the issuer and other interested parties are urged to read the Merger Agreement its entirety because it is the primary legal document that governs the Business Combination (as defined below). Unless otherwise defined herein, the capitalized terms used below have the meanings given to them in the Merger Agreement.

 

General Terms and Effects; Merger Consideration

 

On November 21, 2022, Industrial Tech Acquisitions II, Inc., a Delaware corporation (“ITAQ”) entered into an Agreement and Plan of Merger (as may be amended or supplemented from time to time, the “Merger Agreement”) with NEXT Renewable Fuels, Inc., a Delaware corporation (the “Company” or “NEXT”), and ITAQ Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of ITAQ (“Merger Sub”), pursuant to which Merger Sub will be merged with and into NEXT, and NEXT will become a wholly-owned subsidiary of ITAQ, which will change its corporate name to “NXTCLEAN Fuels Inc.,” or such other name as mutually agreed to by the ITAQ and NEXT (the merger of Merger Sub into NEXT and the transactions contemplated by the Merger Agreement collectively, the “Transaction” or the “Business Combination”). ITAQ and NEXT, following effectiveness of the Business Combination are both referred to herein as the “Combined Company.”

 

Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, following the closing (the “Closing”) of the Business Combination, Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity and wholly-owned subsidiary of ITAQ, and with each stockholder holder of NEXT (collectively, the “Company Securityholders”) receiving newly-issued ITAQ securities, including, as applicable, shares of ITAQ Class A common stock and/or options or warrants pursuant to which ITAQ Class A common stock will be issued, as further described below.

 

Prior to, and contingent upon, the Closing, the Company is to effect a recapitalization (the “Recapitalization”) pursuant to which all convertible debt shall be converted into common stock. The total number of shares of ITAQ Class A Common Stock (“ITAQ Class A Common Stock”) to be issued to the Company stockholders, including holders of Company Options and Company Warrants (the “Merger Consideration”) shall be determined by dividing (i) $450,000,000, which is the value of the Merger Consideration, by (ii) the Redemption Price, which is an amount equal to the price at which each public share of ITAQ Class A Common Stock may be redeemed pursuant to the redemption provisions of ITAQ’s certificate of incorporation. The number of shares of ITAQ Class A Common Stock to be issued in respect of each share of Company Common Stock, determined after completion of the Recapitalization (the “Conversion Ratio”), shall be determined by dividing the Merger Consideration by the Total Company Shares. The “Total Company Shares” shall mean the sum of (i) the number of shares of Company Common Stock outstanding after giving effect to the Recapitalization (excluding (x) any shares held by the Company or a subsidiary of the Company, and (y) any shares of Company Common Stock issuable upon conversion or exercise of the certain specified convertible securities and warrants), (ii) the number of shares of Company Common Stock issued pursuant to a proposed equity financing by the Company (iii) the number of shares of Company Common Stock issuable upon exercise of outstanding Company Options, and, with certain exclusions, Company Warrants. No fractional shares of ITAQ Class A Common Stock shall be issued to holders of Company Common Stock, and any fractional shares will be rounded down in the aggregate to the nearest whole share of Purchaser Class A Common Stock.

 

1

 

 

Each option or warrant exercisable for Company common stock that is not exercised prior to the Closing will be assumed by ITAQ and automatically converted into an option or warrant exercisable for shares of ITAQ Class A Common Stock, in each case subject to the equivalent terms and conditions as the option or warrant exercisable for Company common stock, with the number of shares of ITAQ Class A Common Stock and the exercise price being adjusted to reflect the Conversion Ratio.

 

Representations and Warranties

 

The Merger Agreement contains representations and warranties made by each of the Company and ITAQ as of the date of the Merger Agreement or other specified dates. Certain of the representations and warranties are qualified by materiality or Material Adverse Effect (as hereinafter defined), as well as information provided in the disclosure schedules to the Merger Agreement. As used in the Merger Agreement, “Material Adverse Effect” means, with respect to any specified person or entity, any change or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect upon (i) the business, assets, liabilities, results of operations or condition (financial or otherwise) of such person or entity and its subsidiaries, taken as a whole, or (ii) the ability of such person or entity or any of its subsidiaries on a timely basis to consummate the transactions contemplated by the Merger Agreement or the ancillary documents relating to the Merger Agreement to which such person or entity is a party or bound or to perform the obligations of such person or entity thereunder, in each case, subject to certain customary exceptions.

 

No Survival

 

The representations and warranties of the parties contained in the Merger Agreement terminate as of, and do not survive, the Closing, and there are no indemnification rights for another party’s breach. The covenants and agreements of the parties contained in the Merger Agreement do not survive the Closing, except those covenants and agreements to be performed after the Closing, which covenants and agreements will survive until fully performed.

 

Covenants of the Parties

 

Each party agreed in the Merger Agreement to use its commercially reasonable efforts to effectuate the Closing. The Merger Agreement also contains certain customary covenants by each of the parties during the Interim Period, including (i) the provision of access to their properties, books and personnel; (ii) the operation of their respective businesses in the ordinary course of business; (iii) the delivery of certain specified financial statements by the Company to ITAQ, including the delivery by December 15, 2022 of audited financial statements for the year ended December 31, 2021; (iv) ITAQ’S public filings; (v) no insider trading; (vi) notifications of certain breaches, consent requirements or other matters; (vii) efforts to consummate the Closing; (viii) tax matters; (ix) further assurances; (x) public announcements; and (xi) confidentiality. During the Interim Period, ITAQ with the assistance of the Company, will use its commercially reasonable efforts to enter into agreements with investors pursuant to which the Investors will agree to purchase from ITAQ at the Closing the securities to have such terms and conditions as shall be acceptable to ITAQ subject to the approval of the Company, such approval not to be unreasonably withheld, delayed or conditioned, of up to $50,000,000 or such other amount as may be acceptable to ITAQ, and ITAQ agreed to obtain the waiver of the deferred underwriters’ fees due to the underwriters of its initial public offering in connection with the Business Combination. The Merger Agreement also contains certain customary post-Closing covenants regarding (a) indemnification of directors and officers and the purchase of tail directors’ and officers’ liability insurance; and (b) use of Trust Account proceeds. In addition, the Company agreed to obtain its required stockholder approvals in the manner required under its organizational documents and applicable law for, among other things, the adoption and approval of the Merger Agreement, Ancillary Documents and the Transaction, and agreed to enforce the Voting Agreements in connection therewith.

 

Registration Statement on Form S-4

 

The parties made customary covenants regarding the registration statement on Form S-4 to be filed by ITAQ (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), in connection with the registration under the Securities Act of the shares of ITAQ Class A Common Stock to be issued pursuant to the Merger Agreement as the Merger Consideration. The Registration Statement also will contain the ITAQ proxy statement to solicit proxies from ITAQ’s stockholders to approve, among other things, (i) the Merger Agreement and the Transactions, including the Merger and the issuance of ITAQ securities in connection with the Transaction; (ii) the amendment of the ITAQ Certificate of Incorporation to change the name of ITAQ to “NXTCLEAN Fuels Inc.,” or such other name as mutually agreed to by ITAQ and the Company, to eliminate provisions relating to ITAQ’s status as a SPAC and include provisions appropriate for a privately-owned corporation; (iii) the adoption the Equity Incentive Plan with terms acceptable to ITAQ and the Company; and (iv) the election of the members of the ITAQ’s board of directors following the closing, as described below.

 

2

 

 

Directors and Officers of ITAQ

 

The parties will take all necessary action to designate and nominate to ITAQ’s board of directors seven directors, of which one person shall be designated by ITAQ prior to the closing and (ii) six persons that are designated by the Company prior to the Closing, at least four of whom shall qualify as independent directors under Nasdaq rules. ITAQ will provide each director with a customary director indemnification agreement, in form and substance reasonably acceptable to such director. The parties further agreed to 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 Company immediately prior to the Closing shall become the chief executive officer and chief financial officer of ITAQ on the Closing Date (unless, at its sole discretion, the Company desires to appoint another qualified person reasonably acceptable to ITAQ to either such role, in which case, such other person identified by the Company shall serve in such role).

 

Effective on the Closing Date, ITAQ and certain key employees of the Company will enter into employment agreements, effective as of the Closing, in form and substance reasonably acceptable to ITAQ and the Company. The agreement with the Company’s chief executive officer includes the grant of options, which are not included in the Total Company Shares used to compute the Conversion Ratio.

 

Company Equity Financing

 

The Company agreed to use its commercially reasonable efforts to enter into agreements with accredited investors with respect to the Company Equity Financing, the proceeds of which may be used by the Company for working capital. A Company Equity Financing means a private placement of Company securities pursuant to subscription agreements entered into between the Company and investors prior to the Closing on terms reasonably acceptable to ITAQ. To the extent that the Company Equity Financing involves the issuance of convertible securities, all such convertible securities shall be converted into Company Common Stock on or prior to the Closing Date. Such shares of Company Common Stock and any shares of Company Common Stock issuable upon exercise of any warrants which issued as part of the Company Equity Financing and not exercised prior to the Closing Date shall be included in computing the Total Company Shares.

 

Investor Notes

 

In November 2022, the Company entered into a strategic investment agreement with United Airlines Ventures, a subsidiary of United Airlines Holdings, Inc. (“United”), pursuant to which the Company issued to United 500,000 shares of Company Common Stock at $5.00 per share and warrants to purchase up to 4,000,000 shares of Company Common Stock at exercise price of $5.00 per share and United could continue to invest up to a total of $37.5 million, as long as the Company meets certain milestones.

 

The agreement contemplates that the Company and its operating subsidiary would issue to United $15 million in secured convertible notes (the “Investor Notes”), which would be jointly issued by the Company and its operating subsidiary and would be convertible into ITAQ Class A Common Stock at an agreed upon discount, with the Company issuing notes of like tenor to strategic investors and other approved investors as part of an issuance of notes in the maximum principal amount of $50,000,000 or such other amount as is acceptable to the Company, ITAQ and, if the amount is less than $50,000,000, United. The terms of the Notes are to be acceptable to the Company subject to the consent of ITAQ, such consent not to be unreasonably delayed, denied or conditioned. ITAQ agreed that it would consent to the issuance of the ITAQ Class A Common Stock in connection with the conversion of these notes. See “Agreement with United” below.

 

No Solicitation of Acquisition Proposals

 

Each party also agreed during the Interim Period not to solicit or enter into any inquiry, proposal or offer, or any indication of interest in making an offer or proposal for an alternative competing transactions, to notify the others as promptly as practicable in writing of the receipt of any inquiries, proposals or offers, requests for information or requests relating to an alternative competing transaction or any requests for non-public information relating to such transaction, and to keep the other party informed of the status of any such inquiries, proposals, offers or requests for information.

 

3

 

 

Conduct of the Company and ITAQ Pending Closing

 

Under the Merger Agreement, during the Interim Period, the Company has agreed, except as expressly contemplated by other provisions of the Merger Agreement, or as set forth in disclosure schedules, required by applicable law, or unless ITAQ otherwise consents in writing (such consent not to be unreasonably withheld, conditioned or delayed), to, and to cause each of its subsidiaries to, conduct its business in the ordinary course and in material compliance with law and to in all material respects use commercially reasonable efforts necessary or appropriate to maintain its business and organization, including refraining from doing any of the following (subject to certain exceptions contained in the Merger Agreement and the disclosure schedules thereto):

 

  amend, waive or otherwise change, in any respect, its organizational documents, except as required by applicable law;

 

  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, except for certain exceptions as contemplated by the Merger Agreement, or engage in any hedging transaction with a third Person with respect to such securities;

  

  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;

 

  incur, create, assume, prepay or otherwise become liable for any indebtedness (directly, contingently or otherwise) in excess of $200,000 individually or $500,000 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 $200,000 individually or $500,000 in the aggregate;

 

  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 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;

 

  make or rescind any material election relating to taxes, settle any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to material taxes, file any amended tax return or claim for refund, or make any material change in its method of tax accounting, in each case except as required by applicable law or in compliance with GAAP;

 

  transfer or license to any person or otherwise extend, materially amend or modify, permit to lapse or fail to preserve any material Company intellectual property, Company licensed intellectual property or other Company intellectual property (excluding non-exclusive licenses of Company IP to 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;

 

  terminate, 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;

 

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

 

  establish any subsidiary other than in the ordinary course of business as currently conducted or enter into any new line of business;

 

4

 

 

  fail to use commercially reasonable efforts to keep in force material 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;

  

  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’ outside auditors;

 

  waive, release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or investigation relating to the Merger 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, its subsidiaries or its Affiliates) not in excess of $200,000 individually or $500,000 in the aggregate;

 

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

 

  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;

 

  make capital expenditures in excess of $200,000 individually for any project (or set of related projects) or $500,000 in the aggregate;

 

  adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization other than as provided in the Merger Agreement;
     
  enter into any agreement or understanding, including any informal agreement, which could result in the payment of a transaction bonus to any person whether prior to or subsequent to the Closing

 

  other than with respect to the Investor Notes voluntarily incur any liability or obligation (whether absolute, accrued, contingent or otherwise) in excess of $200,000 individually or $500,000 in the aggregate other than pursuant to the terms of a Company material contract or Company Benefit Plan or otherwise in the ordinary course of business;
     
  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;

 

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

 

  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 the Merger Agreement, including, but not limited to the Key Environmental Permits;

 

 

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;

     
  incur any Indebtedness unless such Indebtedness is convertible into Company Common Stock pursuant to the Recapitalization on terms reasonably acceptable to the Purchaser;

 

  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

 

  authorize or agree to do any of the foregoing actions.

 

5

 

 

Additionally, under the Merger Agreement, during the Interim Period, ITAQ has agreed, except as expressly contemplated by other provisions of the Merger Agreement, required by applicable law, or unless the Company otherwise consents in writing (such consent not to be unreasonably withheld, delayed or conditioned), to, and to cause each of its subsidiaries to, conduct its business in the ordinary course and in material compliance with law and to use commercially reasonable efforts to maintain its business and organization and existing relationships intact, including refraining from doing any of the following (subject to certain exceptions contained in the Merger Agreement and the disclosure schedules thereto):

 

  amend, waive or otherwise change, in any respect, its organizational documents except as required by applicable law;

 

  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;

 

  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;

 

  incur, create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise) in excess of $200,000 individually or $500,000 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 ITAQ shall not be prevented from borrowing funds, including from Industrial Tech Partners II, LLC(the “Sponsor”) 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 the PIPE financing transactions and any Extension Expenses);

 

  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;

 

  amend, waive or otherwise change the Trust Agreement in any manner adverse to the ITAQ;

 

  terminate, waive or assign any material right under any ITAQ material contract or enter into any Contract that would be a ITAQ material contract;

 

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

 

  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;

 

  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 ITAQ’s outside auditors;

 

  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, ITAQ or its Subsidiary) not in excess of $200,000 (individually or in the aggregate), or otherwise pay, discharge or satisfy any Actions, Liabilities or obligations, unless such amount has been reserved in the ITAQ financials;

 

6

 

 

  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;

 

  make capital expenditures in excess of $200,000 individually for any project (or set of related projects) or $500,000 in the aggregate (excluding for the avoidance of doubt, incurring any Expenses);

 

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

 

  except with respect to the PIPE financing, voluntarily incur any Liability or obligation (whether absolute, accrued, contingent or otherwise) in excess of $200,000 individually or $500,000 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 the Merger Agreement during the Interim Period;

 

  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;

 

  enter into any agreement, understanding or arrangement with respect to the voting of ITAQ securities;

 

  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

 

  authorize or agree to do any of the foregoing actions.

 

Conditions to Closing

 

The Merger Agreement contains conditions to Closing, including the following mutual conditions of the parties (unless waived): (i) approval of the stockholders of ITAQ and the Company; (ii) approvals of, or completion of any filings required to be made with, any governmental authorities (“Regulatory Approvals”) and completion of any antitrust expiration periods, in each case, as applicable; (iii) no law or order preventing the Transaction; (iv) upon the Closing, ITAQ having net tangible assets of at least $5,000,001 after redemptions and any PIPE investment; (v) the members of the post-Closing ITAQ board of directors shall have been elected or appointed as of the Closing consistent with the requirements of the Merger Agreement, and (vi) the Registration Statement shall have been declared effective by the SEC and no stop-order being in effect.

 

In addition, unless waived by the Company, the obligations of the Company to consummate the Transaction are subject to the satisfaction of the following additional Closing conditions, in addition to the delivery by ITAQ of customary certificates and other Closing deliverables: (i) the representations and warranties of ITAQ being true and correct as of the date of the Merger Agreement and the date of the Closing, except to the extent made as of a particular date (subject to certain materiality qualifiers); (ii) ITAQ having performed in all material respects its obligations and complied in all material respects with its covenants and agreements under the Merger Agreement required to be performed or complied with by it on or prior to the date of the Closing; (iii) the absence of any Material Adverse Effect with respect to ITAQ since the date of the Merger Agreement which is continuing and uncured; (iv) the total of the proceeds from the PIPE Offering plus the amount remaining in the Trust Account after Redemptions, net of expenses, not being less than $50,000,000.

 

Unless waived by ITAQ, the obligations of ITAQ and Merger Sub to consummate the Transaction are subject to the satisfaction of the following additional Closing conditions, in addition to the delivery by the Company of customary certificates and other Closing deliverables: (i) the representations and warranties of the Company being true and correct as of the date of the Merger Agreement and the date of the Closing, except to the extent made as of a particular date (subject to certain materiality qualifiers); (ii) the Company having performed in all material respects its obligations and complied in all material respects with its covenants and agreements under the Merger Agreement required to be performed or complied with or by it on or prior to the date of the Closing; (iii) the absence of any Material Adverse Effect with respect to the Company and its subsidiaries since the date of the Merger Agreement which is continuing and uncured; and (iv) the execution of the Lock-Up Agreements, Employment Agreements and Non-Competition Agreements being in full force and effect and the Recapitalization having been completed as required under the Merger Agreement.

 

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Termination

 

The Merger Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including: (a) by mutual written consent of ITAQ and the Company; (b) by either ITAQ or the Company if any of the conditions to Closing have not been satisfied or waived by July 14, 2023 (the “Outside Date,” (provided that, if (A) ITAQ obtains an extension of the period of time in which it is required to complete an initial business combination, ITAQ may extend the Outside Date for additional periods equal to the shortest of (i) three additional months in the aggregate, (ii) the period ending on the last date for ITAQ to consummate a business combination pursuant to the latest of any such extensions, or (iii) such period as determined by ITAQ, and (B) if, on or prior to July 14, 2023, the SEC has not declared the Registration Statement effective, the Outside Date shall be automatically extended to August 31, 2023, provided that a breach or violation of the Merger Agreement shall not give rise to a right of termination of the Merger Agreement by either party; (c) by either ITAQ or the Company if a governmental authority of competent jurisdiction has issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting the Transaction, and such order or other action has become final and non-appealable; (d) by either ITAQ or the Company in the event of the other party’s uncured breach, if such breach would result in the failure of a closing condition (and so long as the terminating party is not also in breach under the Merger Agreement); (e) by ITAQ if there has been a Material Adverse Effect on the Company and its subsidiaries following the date of the Merger Agreement that is uncured and continuing; (f) by either ITAQ or the Company if the stockholders of ITAQ do not approve the Merger Agreement and the Transaction at a special meeting held by ITAQ; and (gi) by either ITAQ or the Company if the Company holds a general meeting or special meeting of stockholders, as applicable, to approve the Merger Agreement and the Transaction and such approval is not obtained.

 

If the Merger Agreement is terminated, all further obligations of the parties under the Merger Agreement (except for certain obligations related to publicity, confidentiality, fees and expenses, trust fund waiver, no recourse, termination and general provisions) will terminate, and no party to the Merger Agreement will have any further liability to any other party thereto except for liability for actual fraud (as defined under Delaware corporate law) or for willful breach of the Merger Agreement prior to termination. The Merger Agreement does not provide for any termination fees. ITAQ and the Company agreed to each be responsible for 50% of any filing fees and expenses under any applicable antitrust laws.

 

Trust Account Waiver

 

The Company agreed on behalf of itself and its affiliates that neither it nor its affiliates will have any right, title, interest of any kind in or to any monies in ITAQ’S Trust Account held for its public stockholders, and agreed not to, and waived any right to, make any claim against the Trust Account (including any distributions therefrom) other than in connection with the Closing.

  

Governing Law

 

The Merger Agreement is governed by the laws of the State of Delaware and the parties are subject to exclusive jurisdiction of federal and state courts located in the State of Delaware (and any appellate courts thereof).

 

A copy of the Merger Agreement is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference, and the foregoing description of the Merger Agreement is qualified in its entirety by reference thereto. 

 

The Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of such agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The Merger Agreement has been filed with this Current Report on Form 8-K in order to provide investors with information regarding its terms. It is not intended to provide any other factual information about ITAQ, the Company, Merger Sub or any other party to the Merger Agreement. In particular, the representations, warranties, covenants and agreements contained in the Merger Agreement, which were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts) and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors and reports and documents filed with the SEC. Investors should not rely on the representations, warranties, covenants and agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition of any party to the Merger Agreement. In addition, the representations, warranties, covenants and agreements and other terms of the Merger Agreement may be subject to subsequent waiver or modification. Moreover, information concerning the subject matter of the representations and warranties and other terms may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in ITAQ’S public disclosures.

 

8

 

 

Related Agreements

 

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

 

Voting and Support Agreements

 

Simultaneously with the execution and delivery of the Merger Agreement, ITAQ and the Company have entered into Voting and Support Agreements (collectively, the “Voting Agreements”) with certain stockholders of the Company required to approve the Transaction. Under the Voting Agreements, each Company Securityholder party thereto unconditionally and irrevocably agreed to vote all of such stockholder’s shares of the Company (i) in favor of the Merger, the Merger Agreement and the Transaction and the other matters to be submitted to the Company Securityholder for approval in connection with the Transaction and each Company Securityholder party thereto has agreed to take (or not take, as applicable) certain other actions in support of the Merger Agreement and the Transaction, and (ii) to vote the shares in opposition to: (A) any acquisition proposal and any and all other proposals (x) for the acquisition of the Company, or (y) which are in competition with or materially inconsistent with the Merger Agreement or the Ancillary Documents in each case in the manner and subject to the conditions set forth in the Voting Agreements. The Voting Agreements prevent transfers of the Company shares held by the Company Securityholder party thereto between the date of the Voting Agreement and the date of Closing, except for certain permitted transfers where the recipient also agrees to comply with the Voting Agreement.

 

Lock-Up Agreements

 

The Company agreed that promptly following the execution and delivery of the Merger Agreement, certain stockholders of the Company entered into Lock-Up Agreements with ITAQ. Pursuant to the Lock-Up Agreements, each Company Securityholder party thereto agreed not to, during the period commencing from the Closing and ending upon the earlier to occur of the one (1) year anniversary of the Closing (subject to early release if the Company consummates a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party): (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 ITAQ 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 such ITAQ restricted securities, or (iii) publicly disclose the intention to do any of the foregoing, whether any such transaction described in clauses (i) or (ii) above is to be settled by delivery of the ITAQ restricted securities or other securities, in cash or otherwise (in each case, subject to certain limited permitted transfers where the recipient takes the shares subject to the restrictions in the Lock-Up Agreement).

 

Non-Competition Agreements

 

The Company agreed that promptly following the execution and delivery of the Merger Agreement, certain Company executive officers will enter into Non-Competition Agreements in favor of the Company and ITAQ and their respective present and future successors and direct and indirect subsidiaries. Under the Non-Competition Agreements, the Company executive officers signatory thereto will agree not to compete with ITAQ, the Company and their respective affiliates during the three-year period following the Closing and, during such three-year restricted period, not to solicit employees or customers of such entities. The Non-Competition Agreements also contain customary confidentiality and non-disparagement provisions.

 

Sponsor Voting Agreement

 

Simultaneously with the execution and delivery of the Merger Agreement, the Company and ITAQ entered into a Sponsor Voting Agreement (the “Sponsor Voting Agreement”) with the Sponsor, pursuant to, and on the terms and subject to the conditions of which, the Sponsor has agreed among other things to vote its shares of ITAQ, and take certain other actions, in support of the Business Combination.

 

Agreement with United

 

On November 10, 2022, the Company executed an agreement with United, pursuant to which United purchased 500,000 shares of Company common stock at $5.00 per shares and the Company issued to United warrants to purchase 4,000,000 shares of Company Common Stock at an exercise price of $5.00 per share. Pursuant to the agreement, United could invest as much as a total of $37.5 million into NEXT, as long as NEXT meets certain milestone targets. In connection with the initial United investment the Company and its operating subsidiary would issue United up to $15 million in secured convertible notes which would be jointly issued by the Company and the Company’s operating subsidiary, and would be convertible into ITAC Class A Common Stock at an agreed upon discount, with the Company issuing notes of like tenor to strategic investors and other approved investors as part of an issuance of notes in the maximum principal amount of $50 million or such other amount, the terms of the notes to be acceptable to the Company subject to the consent of ITAQ, such consent not to be unreasonably delayed, denied or conditioned.

 

9

 

 

Additional Information and Where to Find It

 

ITAQ and the Company will file relevant materials with the SEC including the Registration Statement to be filed by ITAQ, which will include a prospectus with respect to ITAQ’S securities to be issued in connection with the Transaction, and a proxy statement of ITAQ (the “Proxy Statement”), to be used at the meeting of ITAQ’S stockholders to approve the proposed merger and related matters. INVESTORS AND SECURITY HOLDERS OF ITAQ ARE URGED TO READ THE REGISTRATION STATEMENT, ANY AMENDMENTS THERETO AND OTHER RELEVANT DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, ITAQ AND THE BUSINESS COMBINATION. When available, the Proxy Statement contained in the Registration Statement and other relevant materials for the Transaction will be mailed to stockholders of ITAQ as of a record date to be established for voting on the proposed business combination. Investors and security holders will also be able to obtain copies of the Registration Statement, including the Proxy Statement contained therein, and other documents containing important information about each of the companies once such documents are filed with the SEC, without charge, at the SEC’s web site at www.sec.gov.

 

Forward-Looking Statements

 

This report contains, and certain oral statements made by representatives of ITAQ and the Company and their respective affiliates, from time to time may contain, “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. ITAQ’S and the Company’s actual results may differ from their expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “anticipate,” “believe,” “budget,” “continues,” “could,” “expect,” “estimate,” “forecast,” “future,” “intend,” “may,” “might,” “strategy,” “opportunity,” “plan,” “possible,” “potential,” “project,” “will,” “should,” “predicts,” “scales,” “representative of,” “valuation,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, ITAQ’S and the Company’s expectations with respect to future performance of the Company, anticipated financial impacts of the Transaction (including future revenue, pro forma enterprise value and cash balance), the anticipated addressable market for the Company, the satisfaction of the closing conditions to the Transaction, the future held by the respective management teams of ITAQ or the Company, the pre-money valuation of the Company (which is subject to certain inputs that may change prior to the Closing of the Transaction and is subject to adjustment after the Closing of the Transaction), the level of redemptions of ITAQ’S public stockholders and the timing of the Closing of the Transaction. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Most of these factors are outside the control of ITAQ and are difficult to predict. Factors that may cause such differences include, but are not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all; (ii) the risk that the transaction may not be completed by ITAQ’s business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by ITAQ; (iii) the failure to satisfy the conditions to the consummation of the transaction, including the adoption of the business combination agreement by the shareholders of ITAQ and NEXT; (iv) the risk that a large percentage of ITAQ’s public stockholders will exercise their redemption rights under ITAQ’s certificate of incorporation; (v) the risk that the net tangible book value of ITAQ after giving effect to the merger and any equity financing will be less than $5,000,001; (vi) receipt of certain governmental and regulatory approvals; (vi) the lack of a third-party valuation; (vii) the occurrence of any event, change or other circumstance that could give rise to the termination of the business combination agreement; (viii) the effect of the announcement or pendency of the transaction on NEXT’s business relationships, performance, and business generally; (ix) the risk that NEXT’s refinery construction costs and cost of debt will significantly exceeds NEXT’s current estimates; (x) the risk that, following the Closing, NEXT will not be able to raise the necessary funding, on acceptable terms, if at all, to complete construction of its proposed facilities or to cover its operating costs before NEXT generates revenue; (xi) the risk of any delay in the construction of NEXT’s facilities and that any delay in the completion of NEXT’s Oregon refinery could delay the commencement of operations and the generation of revenue by NEXT; (xii) the risk that NEXT’s costs will be greater than anticipated and revenue will be less than anticipated; (xiii) risks that the transaction disrupts current plans and operations of NEXT as a result; (xiv) the outcome of any legal proceedings that may be instituted against NEXT, ITAQ or others related to the business combination agreement or the transaction; (xv) ITAQ’s ability to meet Nasdaq Global Markets listing standards at or following the consummation of the transaction; (xvi) NEXT’s ability to recognize the anticipated benefits of the transaction, may be affected by a variety of factors, including changes in the competitive and highly regulated industries in which NEXT operates, variations in performance across competitors and partners, changes in laws and regulations affecting NEXT’s business and the ability of NEXT and the post-combination company to retain its management and key employees; (xvii) the ability of NEXT to implement business plans, forecasts, and other expectations after the completion of the transaction (xviii) the risk that NEXT may fail to keep pace with rapid technological developments to provide new and innovative products or make substantial investments in unsuccessful new products; (xix) the ability to attract new customers and to retain existing customers in order to continue to expand; (xx) NEXT’s ability to hire and retain qualified personnel; (xxi) the risk that the post-combination company experiences difficulties in managing its growth and expanding operations; (xxii) the risk that NEXT will not meet the milestones for funding; (xxiii) the risk of product liability or regulatory lawsuits or proceedings relating to NEXT’s business; (xxiv) cybersecurity risks; (xxv) the effects of COVID-19 or other public health crises or other climate related conditions, including wildfires, on NEXT’s business and results of operations and the global economy generally; and (xxvi) costs related to the transaction, and (xxvii) other risks and uncertainties to be identified in the Registration Statement /Proxy Statement (when available) relating to the Transaction, including those under “Risk Factors” therein, and in other filings with the SEC made by ITAQ or the Company including risks related to the ability of the Combined Company, following the closing, generate the level of business anticipated by the Company, and all other risks related to the Company’s business, including its failure to have sufficient financing before it can generate revenues, which are not anticipated to be before 2025, including additional costs resulting from delays which may result in the date on which the Combined Company will be able to generate revenue. Any projections are for illustrative purposes only and should not be relied upon as necessarily being indicative of future results. The assumptions and estimates underlying such financial forecast information are inherently uncertain and are subject to a wide variety of significant business, economic, competitive, and other risks and uncertainties that could cause, and are likely to cause, actual results to differ materially from those contained in any prospective financial information. ITAQ and the Company caution that the foregoing list of factors is not exclusive, and caution readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Readers are referred to the most recent reports filed with the SEC by ITAQ. None of ITAQ or the Company undertakes or accepts any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, subject to applicable law.

 

10

 

 

Important Information About the Transaction and Where to Find It

 

ITAQ will file a proxy statement and other relevant documents with the SEC. Stockholders and other interested persons are urged to read the proxy statement and any other relevant documents filed with the SEC when they become available because they will contain important information about ITAQ, the Company and the proposed Business Combination. Stockholders and other interested persons will be able to obtain a free copy of the proxy statement (when filed), as well as other filings by ITAQ containing information about ITAQ, NEXT and the proposed Business Combination, without charge, at the SEC’s website located at www.sec.gov.

 

Participants in the Solicitation

 

ITAQ and the Company and their respective directors and officers and other members of management and employees may be deemed participants in the solicitation of proxies in connection with the proposed Transaction. ITAQ stockholders and other interested persons may obtain, without charge, more detailed information regarding directors and officers of ITAQ in final prospectus filed with the SEC on January 13, 2022, ITAQ’s annual report on Form 10-K for the year ended December 31, 2021 and its Form 10-Q for the quarter and nine months ended September 30, 2022, and the Registration Statement/Proxy Statement and other relevant materials that will be filed with the SEC in connection with the proposed Business Combination when they become available. These documents can be obtained free of charge from the sources indicated above.

 

No Offer or Solicitation

 

This communication shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed business combination. This communication 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 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, or a valid exemption from registration thereunder.

 

Item 7.01. Regulation FD Disclosure. 

 

On November 21, 2022, ITAQ and the Company issued a joint press release announcing their entry into the Merger Agreement. The press release is furnished as Exhibit 99.1.

 

The investor presentation that ITAQ and the Company prepared for use in connection with the announcement of the Merger Agreement is furnished as Exhibit 99.2.

 

On November 15, 2022, the Company and United issued a press release announcing United’s strategic investment in NEXT. The press release is furnished as Exhibit 99.3.

 

Exhibits 99.1, 99.2 and 99.3 are being furnished pursuant to Item 7.01 of Form 8-K and will not be deemed to be filed for purposes of Section 18 of the Securities 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.

 

 

11

 

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.   Description
     
2.1*   Agreement and Plan of Merger, dated as of November 21, 2022, by and among ITAQ, NEXT and Merger Sub.
     
10.1   Form of Voting Agreement, dated as of November 21, 2022, by and among ITAQ, NEXT and certain stockholders of NEXT.
     
10.2   Form of Lock-Up Agreement by and between ITAQ, and certain stockholders of NEXT.
     
10.3   Form of Non-Competition Agreement by and among ITAQ, NEXT and certain stockholders of NEXT.
     
10.4   Sponsor Voting Agreement dated November 21, 2022 by and among ITAQ, NEXT and the Sponsor.
     
99.1   Press Release dated November 21, 2022.
     
99.2   Investor Presentation dated November 2022.
     
99.3   Press Release for United Agreement dated November 15, 2022.
     
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

* The exhibits, schedules or similar attachments to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish supplementally to the SEC a copy of all omitted exhibits, schedules or similar attachments upon its request.

 

12

 

 

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.

 

  Industrial Tech Acquisitions II, Inc.
     
  By: /s/  E. Scott Crist
    Name: E. Scott Crist
    Title:   Chief Executive Officer
     
Dated: November 21, 2022    

 

 

13

 

Exhibit 2.1 

 

EXECUTION COPY

 

 

 

AGREEMENT AND PLAN OF MERGER

 

by and among

 

INDUSTRIAL TECH ACQUISITIONS II, INC.,

as the Purchaser,

 

ITAQ MERGER SUB INC.,
as Merger Sub,

 

and

 

NEXT RENEWABLE FUELS, INC.,
as the Company,

 

Dated as of November 21, 2022

 

 

 

 

 

 

TABLE OF CONTENTS

 

  Page
   
I. MERGER 3
1.1. Merger 3
1.2. Transaction Effective Time 3
1.3. Effect of the Merger 3
1.4. Tax Treatment 3
1.5. Certificate of Incorporation and Bylaws 3
1.6. Post-Closing Board of Directors of the Purchaser 3
1.7. Amended Purchaser Charter 3
1.8. Pre-Closing Company Recapitalization 4
1.9. Merger Consideration 4
1.10. Effect of Merger on Company Securities 4
1.11. Issuance of Merger Consideration 6
1.12. Effect of Transaction on Merger Sub Stock 7
1.13. Taking of Necessary Action; Further Action 7
1.14. Appraisal and Dissenter’s Rights 7
   
II. CLOSING 7
2.1. Closing 7
   
III. representations and warranties of THE purchaser 8
3.1. Organization and Standing 8
3.2. Authorization; Binding Agreement 8
3.3. Governmental Approvals 8
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 12
3.10. Taxes and Returns 12
3.11. Employees and Employee Benefit Plans 13
3.12. Properties 13
3.13. Material Contracts 14
3.14. Transactions with Affiliates 14
3.15. Merger Sub Activities 14
3.16. Investment Company Act 14
3.17. Finders and Brokers 14
3.18. Ownership of Stockholder Merger Consideration 14
3.19. Certain Business Practices 15
3.20. Insurance 15
3.21. Independent Investigation 15
3.22. Information Supplied 16
3.23. No Other Representations 16
   
Iv. representations and warranties of THE COMPANY 17
4.1. Organization and Standing 17
4.2. Authorization; Binding Agreement 17
4.3. Capitalization 17
4.4. Subsidiaries 19
4.5. Governmental Approvals 19
4.6. Non-Contravention 19

 

-i-

 

 

4.7. Financial Statements 20
4.8. Absence of Certain Changes 21
4.9. Compliance with Laws 21
4.10. Company Permits 21
4.11. Litigation 22
4.12. Material Contracts 22
4.13. Intellectual Property 24
4.14. Taxes and Returns 26
4.15. Real Property 27
4.16. Personal Property 27
4.17. Title to and Sufficiency of Assets 28
4.18. Employee Matters 28
4.19. Benefit Plans 29
4.20. Environmental Matters 29
4.21. Transactions with Related Persons 30
4.22. Company Insurance 31
4.23. Books and Records 31
4.24. Top Customers and Suppliers 31
4.25 Certain Business Practices 31
4.26. Investment Company Act 32
4.27. Finders and Brokers 32
4.28. Independent Investigation 32
4.29. Information Supplied 32
4.30. Disclosure    
4.31. No Other Representations 33
   
V. COVENANTS 33
5.1. Access and Information 33
5.2. Conduct of Business of the Company 34
5.3. Conduct of Business of the Purchaser 37
5.4. Annual and Interim Financial Statements 39
5.5. Purchaser Public Filings 40
5.6. No Solicitation 40
5.7. No Trading 41
5.8. Notification of Certain Matters 41
5.9. Efforts 41
5.10. Tax Matters 43
5.11. Further Assurances 43
5.12. The Registration Statement 43
5.13. Company Stockholder Meeting 44
5.14. Public Announcements 45
5.15. Confidential Information 45
5.16. Documents and Information 46
5.17. Post-Closing Board of Directors and Executive Officers 46
5.18. Indemnification of Officers and Directors; Tail Insurance 47
5.19. Trust Account Proceeds 47
5.20. Employment Agreements 47
5.21 Company Equity Financing 48
5.22. PIPE Offering 48
5.23. Investor Notes 48
5.24. Purchaser Share Agreements 48

 

-ii-

 

 

VI. Closing conditions 49
6.1. Conditions of Each Party’s Obligations 49
6.2. Conditions to Obligations of the Company 50
6.3. Conditions to Obligations of the Purchaser 51
6.4. Frustration of Conditions 52
   
VII. TERMINATION AND EXPENSES 52
7.1. Termination 52
7.2. Effect of Termination 53
7.3. Fees and Expenses 53
   
VIII. tRUST WAIVER 54
8.1. Waiver of Claims Against Trust 54
   
Ix. MISCELLANEOUS 54
9.1. Survival 54
9.2. Non-Recourse 55
9.3. Notices 55
9.4. Binding Effect; Assignment 56
9.5. Third Parties 56
9.6. Arbitration 56
9.7. Governing Law; Jurisdiction 57
9.8. WAIVER OF JURY TRIAL 57
9.9. Specific Performance 57
9.10. Severability 57
9.11. Amendment 58
9.12. Waiver 58
9.13. Entire Agreement 58
9.14. Interpretation 58
9.15. Counterparts 59
9.16. Legal Representation 59
   
XI DEFINITIONS 59
10.1. Certain Definitions 59
10.2. Section References 69

 

INDEX OF EXHIBITS

 

Exhibit Description
   
Exhibit A Form of Voting Agreement
Exhibit B Form of Lock-Up Agreement
Exhibit C Form of Non-Competition Agreement
Exhibit D Form of Amended Purchaser Charter
Exhibit E Form of Sponsor Support Agreement

 

-iii-

 

 

AGREEMENT AND PLAN OF MERGER

 

This Agreement and Plan of Merger (this “Agreement”) is made and entered into as of November 21, 2022 by and among (i) Industrial Tech Acquisitions II, Inc., a Delaware corporation (the “Purchaser”), (ii) ITAQ Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (Merger Sub”), and (iii) NEXT Renewable Fuels, Inc., a Delaware corporation (the “Company”). The Purchaser, Merger Sub and the Company are sometimes referred to herein individually as a “Party” and, collectively, as the “Parties”.

 

RECITALS:

 

A. The business of the Company, directly and indirectly through its subsidiaries, will be to turn recycled organic materials into renewable transportation fuels;

 

B. 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. The Parties intend to effect the merger (the “Merger”) of Merger Sub with and into the Company, with the Company continuing as the surviving entity, 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 each Company Stockholder to receive its portion of the Merger Consideration (as defined herein) in the manner provided in this Agreement, (ii) the Company, as the surviving corporation, will be a wholly-owned subsidiary of the Purchaser, and (iii) the Company Options (as defined herein) outstanding at the Effective Time shall be assumed (with adjustments to the number and exercise price of such assumed Company Options to reflect the Conversion Ratio (as defined herein)), by Purchaser with the result that such assumed Company Options shall be replaced with Assumed Options (as defined herein) exercisable into shares of Purchaser Class A Common Stock, all upon the terms and subject to the conditions set forth in this Agreement and in accordance with the applicable provisions of the Delaware General Corporation Law (as amended, the “DGCL”);

 

D. 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. The Purchaser has received voting and support agreements in the form attached as Exhibit A hereto (collectively, the “Voting Agreements”) signed by the Company and certain holders of Company Stock (as defined herein) sufficient to approve the Merger and the other transactions contemplated by this Agreement (including any separate class or series votes of Company Preferred Stock (as defined herein));

 

F. Promptly following the execution and delivery of this Agreement, the Significant Company Holders (as defined herein) will each enter into a Lock-Up Agreement with Purchaser, the form of which is attached as Exhibit B hereto (each, a “Lock-Up Agreement”), which Lock-Up Agreements will become effective as of the Closing;

 

G. Promptly following the execution and delivery of this Agreement, certain Company Stockholders and management personnel will each enter into a Non-Competition and Non-Solicitation Agreement in favor of Purchaser and the Company, the form of which is attached as Exhibit C hereto (each, a “Non-Competition Agreement”), which Non-Competition Agreements will become effective as of the Closing;

 

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H. Prior to, and contingent upon, the Closing, the Company shall effect a recapitalization (as described further in Section 1.8 below) pursuant to which all convertible debt shall be converted into Company Common Stock;

 

I. Subsequent to the date of this Agreement, in connection with the PIPE Offering (as defined below), the Purchaser shall use its commercially reasonable efforts to enter into subscription agreements containing terms and conditions acceptable to the Purchaser, subject to the approval of the Company, such approval not to be unreasonably withheld, delayed or conditioned, (each, a “Subscription Agreement”) with certain investors for an aggregate investment of at least $50 million in a private placement in the Purchaser to be consummated immediately prior to or simultaneously with the Closing (the “PIPE Offering”);

 

J. Prior to or simultaneously with the execution and delivery of this Agreement, the Sponsor (as defined herein) has entered into a Sponsor Support Agreement with the Company, the form of which is attached as Exhibit E hereto (the “Sponsor Support Agreement”), which Sponsor Support Agreement will become effective as of the Closing;

 

K. The Parties intend that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code (as defined herein);

 

L. On November 10, 2022, the Company executed an agreement with United Airline Ventures, Ltd. (“United”) which provides for, among other things, a series of debt and equity investments by United in the Company and its subsidiary, NEXT Renewable Fuels Oregon, LLC, a Delaware limited liability company (“NEXT Oregon”) in an aggregate amount up to $37.5 million and it is engaged in negotiations with respect to the definitive agreements relating to such investments (the “United Investments”);

 

M. In connection with the United Investments, (i) the Company issued to United 500,000 shares of Common Stock at a purchase price of $5.00 per share (the “United Shares”), (ii) the Company issued to United warrants to purchase up to four million (4,000,000) shares of the Company’s common stock at an exercise price of $5.00 per share; and (iii) the Company and NEXT Oregon would issue to United $15 million in secured convertible notes (the “United Note”) which would be jointly issued by the Company and NEXT Oregon and would be convertible into Company Common Stock at an agreed upon discount, with the Company issuing notes of like tenor to strategic investors and other approved investors as part of an issuance of notes in the maximum principal amount of $50,000,000 or such other amount, the terms of the Notes to be acceptable to the Company subject to the consent of the Purchaser, such consent not to be unreasonably delayed, denied or conditioned (collectively, with the United Note, the “Investor Notes” and, together with the United Shares and the United Warrants, the “United Securities”); and

 

N. Certain capitalized terms used herein are defined in Article X 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:

 

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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 DGCL, Merger Sub and the Company shall consummate the Merger, pursuant to which Merger Sub shall be merged with and into the Company, following which the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation and a wholly-owned subsidiary of the Purchaser. The Company, as the surviving corporation after the Merger, is hereinafter sometimes referred to as the “Surviving Corporation” (provided, that references to the Company 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 Certificate of Merger for the merger of Merger Sub with and into the Company (the “Certificate of Merger”) with the Secretary of State of the State of Delaware in accordance with the relevant provisions of the DGCL (the time of such filing, or such later time as may be specified in the Certificate 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 Certificate of Merger and the applicable provisions of the DGCL. 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 Merger Sub and the Company 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 Merger Sub and the Company 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.

 

1.5 Certificate of Incorporation and Bylaws. At the Effective Time, the Certificate of Incorporation and Bylaws of the Company, each as in effect immediately prior to the Effective Time, shall automatically be amended and restated in their entirety to read identically to the Certificate of Incorporation and Bylaws of Merger Sub, as in effect immediately prior to the Effective Time, except that the corporate name of the Company shall not be changed, and such amended and restated Certificate of Incorporation and Bylaws shall become the respective Certificate of Incorporation and Bylaws of the Surviving Corporation

 

1.6 Post-Closing Board of Directors of the Purchaser. At the Effective Time, the board of directors and executive officers of the Purchaser shall be individuals determined in accordance with Section 5.17, each to hold office in accordance with the Certificate of Incorporation and Bylaws of the Purchaser until their respective successors are duly elected or appointed and qualified or their earlier death, resignation or removal.

 

1.7 Amended Purchaser Charter. Effective upon the Effective Time, the Purchaser shall amend and restate its Certificate of Incorporation in the form attached as Exhibit D hereto (the “Amended Purchaser Charter”), which shall, among other matters, amend the Purchaser’s Certificate of Incorporation to (i) provide that the name of the Purchaser shall be changed to “NXTCLEAN Fuels Inc.”, or such other name as mutually agreed to by the Purchaser and the Company; (ii) remove and change certain provisions in the Certificate of Incorporation related to the Purchaser’s status as a blank check company; and (iii) provide for a classified board with three classes of directors.

 

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1.8 Pre-Closing Company Recapitalization. On or prior to the Closing Date, subject to the completion of the Merger, all convertible debt shall be converted into Company Common Stock, so that at the closing the Company Common Stock shall be the only class of capital stock outstanding and all convertible debt shall be converted (the “Recapitalization”).

 

1.9 Merger Consideration. As consideration for the Merger, the Company Security Holders collectively shall be entitled to receive from the Purchaser, in the aggregate, the number of Purchaser Securities determined as follows.

 

(a) The total number of shares of Purchaser Class A Common Stock to be issued to the Company stockholders, including holders of Company Options and Company Warrants (the “Merger Consideration”) shall be determined by dividing (i) Four Hundred Fifty Million Dollars ($450,000,000) by (ii) the Redemption Price.

 

(b) The number of shares of Purchaser Class A Common Stock to be issued in respect of each share of Company Common Stock, determined after completion of the Recapitalization (the “Conversion Ratio”), shall be determined by dividing the Merger Consideration by the Total Company Shares. The “Total Company Shares” shall mean the sum of (i) the number of shares of Company Common Stock outstanding after giving effect to the Recapitalization (excluding (x) any Excluded Shares and (y) any shares of Company Common Stock issuable upon conversion or exercise of the Investor Notes and the United Warrants), (ii) the number of shares of Company Common Stock issued pursuant to the Company Equity Financing, (iii) the number of shares of Company Common Stock issuable upon exercise of outstanding Company Options, and (iv) the number of shares of Company Common Stock issuable upon exercise of outstanding Company Warrants (excluding the United Warrants). No fractional shares of Purchaser Class A Common Stock shall be issued to holders of Company Common Stock, and any fractional shares will be rounded down in the aggregate to the nearest whole share of Purchaser Class A Common Stock.

 

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

 

(a) Company Stock. Subject to clauses (b) and (c) below, all shares of Company Common Stock issued and outstanding immediately prior to the Effective Time (after giving effect to the Recapitalization), will automatically be cancelled and cease to exist in exchange for the right to receive the Merger Consideration, with each Company Stockholder entitled to receive its pro rata share of the Merger Consideration as provided in Section 1.11. As of the Effective Time, each Company Stockholder shall cease to have any other rights in and to the Company or the Surviving Corporation (other than the rights set forth in Section 1.14 of this Agreement).

 

(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 Company Securities that are owned by the Company as treasury shares or any Company Securities owned by any direct or indirect Subsidiary of the Company immediately prior to the Effective Time (the “Excluded Shares”), such Company Securities shall be canceled and shall cease to exist without any conversion thereof or payment therefor.

 

(c) Dissenting Shares. Each of the Dissenting Shares issued and outstanding immediately prior to the Effective Time shall be cancelled and cease to exist in accordance with Section 1.14 and shall thereafter represent only the right to receive the applicable payments set forth in Section 1.14 except to the extent that the stockholder’s demand for appraisal rights is withdrawn in the manner provided in the DGCL.

 

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(d) Company Options. Each outstanding Company Option shall be assumed by the Purchaser and shall become an option (each, an “Assumed Option”) to purchase the number of shares of Purchaser Class A Common Stock determined by multiplying the number of shares of Company Common Stock subject to the Company Option by the Conversion Ratio and the exercise price per share of Purchaser Class A Common Stock shall be determined by dividing the exercise price of the Company Option by the Conversion Ratio, and the Assumed Option shall reflect the Purchaser as the issuer of the Assumed Option. Subject to the subsequent sentence, each Assumed Option will be subject to the terms and conditions set forth in its applicable Non-Statutory Stock Option Agreement (except any references therein to the Company or Company Common Stock will instead mean the Purchaser and Purchaser Class A Common Stock, respectively). The Purchaser shall take all corporate action necessary to reserve for future issuance, and shall maintain such reservation for so long as any of the Assumed Options remain outstanding, a sufficient number of shares of Purchaser Class A Common Stock for delivery upon the exercise of such Assumed Option.

 

(e) United Warrants and Company Warrants. Each United Warrant and each Company Warrant (in each case, whether vested or unvested) that is issued and outstanding immediately prior to the Effective Time shall be assumed by the Purchaser and shall be a warrant (each, an “Assumed Warrant”) to purchase the number of shares of Purchaser Class A Common Stock determined by multiplying the number of shares of Company Common Stock subject to each such warrant by the Conversion Ratio and the exercise price per share of Purchaser Class A Common Stock shall be determined by dividing the exercise price of each such warrant by the Conversion Ratio, and the Assumed Warrants shall reflect the Purchaser as the issuer of the Assumed Warrants. Subject to the subsequent sentence, each Assumed Warrant will be subject to the same terms and conditions as the United Warrant or Company Warrant, as the case may be, (except any references therein to the Company or Company Common Stock will instead mean the Purchaser and Purchaser Class A Common Stock, respectively). The Purchaser shall take all corporate action necessary to reserve for future issuance, and shall maintain such reservation for so long as any of the Assumed Warrants remain outstanding, a sufficient number of shares of Purchaser Class A Common Stock for delivery upon the exercise of the Assumed Warrants.

 

(f) Investor Notes. Each outstanding Investor Note together with all accrued and unpaid interest shall be converted into the right to receive a number of shares of Purchaser Class A Common Stock determined in accordance with the terms of the Investor Note, which terms shall be reasonably acceptable to the Purchaser. The Purchaser consents to the issuance of Purchaser Class A Common Stock upon conversion of the Investor Note.

 

(g) Preferred Stock. In the event that the Company proposed to issue any shares of Company Preferred Stock, the terms of such Company Preferred Stock and the terms of conversion of such Company Preferred Stock into securities of Purchaser shall be mutually acceptable to the Company and the Purchaser. If applicable, the rights, preferences, privileges and limitations to be set forth in a certificate of designation relating to any Purchaser Preferred Stock shall be mutually acceptable to the Company and the Purchaser. The certificate of designation for such Purchaser Preferred Stock shall be filed with the Secretary of State of Delaware as part of the Certificate of Merger.

 

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1.11 Issuance of Merger Consideration.

 

(a) Prior to the Effective Time, the Purchaser shall appoint its transfer agent, Continental Stock Transfer & Trust Company, or another agent reasonably acceptable to the Company (the “Transfer Agent”), for the purpose of issuing the Purchaser Class A Common Stock issuable as the Merger Consideration. At or prior to the Effective Time, the Purchaser shall instruct the Transfer Agent to issue the Purchaser Class A Common Stock representing the Merger Consideration to issue such shares in accordance with written instructions from the Company. All stock certificate representing Company Common Stock prior to the Recapitalization shall be cancelled and the Company shall instruct the Transfer Agent to issue to the Company’s stockholders such number of shares of Purchaser Class A Common Stock as are issuable pursuant to this Section 1, such shares shall be issued on a book entry basis, and the Transfer Agent shall provide to each Company Stockholder advise as to the number of shares owned by such Company Stockholder and any legends relating to such shares.

 

(b) Each Company Stockholder, including stockholders who converted convertible debt pursuant to the Recapitalization, shall be entitled to receive its pro rata share, based upon the Conversion Ratio, of the Merger Consideration as provided in this Section 1 as soon as reasonably practicable after the Effective Time. It shall be a condition to the obligation of the Company to have the shares of Purchaser Class A Common Stock issued to any Company stockholder that such stockholder shall have executed any lock-up required of such stockholder.

 

(c) If any portion of the Merger Consideration is to be delivered or issued to a Person other than the Person in whose name the Company Common Stock is registered, it shall be a condition to the issuance of such shares of Purchaser Class A Common Stock that (i) the transfer of such Company Stock shall have been permitted in accordance with the terms of the Company’s Organizational Documents and any stockholders agreement with respect to the Company, each as in effect immediately prior to the Effective Time, (ii) such Company stock certificate shall be properly endorsed or shall otherwise be in proper form for transfer and, (iii) the recipient of such portion of the Merger Consideration, or the Person in whose name such portion of the Merger Consideration is delivered or issued, shall have already executed and delivered, if such Person is an officer, director or a Significant Company Holder, counterparts to a Lock-Up Agreement, and such other Transmittal Documents as are reasonably deemed necessary by the Transfer Agent or the Purchaser (the “Transmittal Documents”) and (iv) the Person requesting such delivery shall pay to the Company any transfer or other Taxes or fees required as a result of such delivery to a Person other than the registered holder of such Company Common Stock or establish to the satisfaction of the Company that such Tax has been paid or is not payable.

 

(d) After the Effective Time, there shall be no further registration of transfers of Company Stock.

 

(e) All securities issued pursuant to this Section 1.11 shall be deemed to have been issued in full satisfaction of all rights pertaining to such Company Securities.

 

(f) The Purchaser shall not issue Assumed Options for Company Options until it shall have received from each holder thereof a duly executed counterpart to the agreement for the Assumed Option in a form mutually acceptable to the Company and the Purchaser, which among other matters will release the Company from its obligations with respect to the Company Option.

 

(g) The Purchaser shall not issue Assumed Warrants for United Warrants or Company Warrants until it shall have received from each holder thereof) a duly executed counterpart to the agreement for the Assumed Warrant, which among other matters will release the Company from its obligations with respect to such warrant, with the Company’s obligations with respect to such warrant being replaced by the obligations of the Purchaser with respect to such warrant as set forth in such warrant..

 

(h) 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 Class A Common Stock issued to such Person rounded down in the aggregate to the nearest whole share of Purchaser Class A Common Stock.

 

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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 Company Securities or the holders of any shares of capital stock of the Purchaser or Merger Sub, each share of Merger Sub Common 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 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.

 

1.14 Appraisal and Dissenter’s Rights. No Company Stockholder who has validly exercised its appraisal rights pursuant to Section 262 of the DGCL (a “Dissenting Stockholder”) with respect to its Company Stock (such shares, “Dissenting Shares”) shall be entitled to receive any portion of the Merger Consideration with respect to the Dissenting Shares owned by such Dissenting Stockholder unless and until such Dissenting Stockholder shall have effectively withdrawn or lost its appraisal rights under the DGCL. Each Dissenting Stockholder shall be entitled to receive only the payment resulting from the procedure set forth in Section 262 of the DGCL with respect to the Dissenting Shares owned by such Dissenting Stockholder. The Company shall give the Purchaser (i) prompt notice of any written demands for appraisal, attempted withdrawals of such demands, and any other instruments served pursuant to applicable Laws that are received by the Company relating to any Dissenting Stockholder’s rights of appraisal and (ii) the opportunity to direct all negotiations and proceedings with respect to demand for appraisal under the DGCL. The Company shall not, except with the prior written consent of the Purchaser, voluntarily make any payment with respect to any demands for appraisal, offer to settle or settle any such demands or approve any withdrawal of any such demands. Notwithstanding anything to the contrary contained in this Agreement, for all purposes of this Agreement, the Merger Consideration shall be reduced by the pro rata share of any Dissenting Stockholders attributable to any Dissenting Shares and the Dissenting Stockholders shall have no rights to any portion of the Merger Consideration with respect to any Dissenting Shares.

 

Article II
CLOSING

 

2.1 Closing. Subject to the satisfaction or waiver of the conditions set forth in Article VI, 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 (including remotely) as the Purchaser and the Company may agree (the date and time at which the Closing is actually held being the “Closing Date”).

 

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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 (other than disclosures in the “Risk Factors” or “Special Note Regarding Forward-Looking Statements” sections of such reports and other disclosures that are similarly predictive or forward-looking in nature), provided, however, that nothing disclosed in such SEC Reports shall be deemed to be a qualification of, or modification to, the representations and warranties set forth in Section 3.1, Section 3.2, Section 3.3, Section 3.4, Section 3.5 and Section 3.7, the Purchaser and Merger Sub jointly and severally represent and warrant 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. Merger Sub is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. Each of the Purchaser and Merger Sub has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Each of the Purchaser and Merger Sub 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. Each of the Purchaser and Merger Sub has heretofore made available to the Company accurate and complete copies of its Organizational Documents, as currently in effect. Neither the Purchaser nor the Merger Sub is in violation of any provision of its Organizational Documents in any material respect.

 

3.2 Authorization; Binding Agreement. Each of the Purchaser and Merger Sub 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 its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby, subject to obtaining the Required Purchaser 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 Merger Sub and by the Purchaser as sole stockholder of Merger Sub, and (b) other than the Required Purchaser Stockholder Approval, no other corporate proceedings, other than as set forth elsewhere in this 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 or Merger Sub is a party shall be when delivered, duly and validly executed and delivered by the Purchaser and Merger Sub 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 and Merger Sub, enforceable against the Purchaser and Merger Sub 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”).

 

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 or Merger Sub is required to be obtained or made in connection with the execution, delivery or performance by the Purchaser or Merger Sub of this Agreement and each Ancillary Document to which the Purchaser or Merger Sub is a party or the consummation by the Purchaser and Merger Sub 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 Nasdaq 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.

 

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3.4 Non-Contravention. Except as otherwise described in Schedule 3.4, the execution and delivery by the Purchaser and Merger Sub of this Agreement and each Ancillary Document to which it is a party, the consummation by the Purchaser and Merger Sub of the transactions contemplated hereby and thereby, and compliance by the Purchaser and Merger Sub with any of the provisions hereof and thereof, will not (a) conflict with or violate any provision of the Purchaser’s or Merger Sub’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, Merger Sub, or any of their respective 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 (a), (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 111,000,000 shares of capital stock, par value $0.0001 per share, of which 110,000,000 shares are Purchaser Common Stock (with 100,000,000 shares being Purchaser Class A Common Stock and 10,000,000 shares being Purchaser Class B Common Stock), and 1,000,000 shares are Purchaser Preferred Stock. The issued and outstanding Purchaser Securities as of the date of this Agreement are set forth on Schedule 3.5(a). As of the date of this Agreement, there are no issued or outstanding shares of Purchaser Preferred Stock and no class or series of Purchaser Preferred Stock has been authorized by Purchaser’s Board of Directors. 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 DGCL, Purchaser’s Organizational Documents or any Contract to which Purchaser is a party. None of the outstanding Purchaser Securities have 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 Common Stock, par value $0.001 per share, 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, Purchaser does not have any Subsidiaries or own any equity interests in any other Person other than Merger Sub.

 

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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 Purchaser’s obligation to redeem from the Trust Account the Purchaser’s Class A Common Stock upon exercise by public holders of Purchases Class A Common Stock of their right of redemption as provided in Purchaser’s certificate of incorporation (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 stockholders 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”). Except for any changes (including any required revisions to or restatements of the Purchaser Financials (defined below) or the SEC Reports) to (A) the Purchaser’s historical accounting of the Purchaser Warrants as equity rather than as liabilities that may be required as a result of the Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) that was issued by the SEC on April 12, 2021, and related guidance by the SEC, (B) the Purchaser’s accounting or classification of Purchaser’s outstanding redeemable shares as temporary, as opposed to permanent, equity that may be required as a result of related statements by the SEC staff or recommendations or requirements of Purchaser’s auditors, or (C) the Purchaser’s historical or future accounting relating to any other guidance from the SEC staff after the date hereof relating to non-cash accounting matters (clauses (A) through (C), collectively, “SEC SPAC Accounting Changes”), 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, and 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 Purchaser Class A Common Stock and the Purchaser Public Warrants are listed on Nasdaq, (B) the Purchaser has not received any written deficiency notice from Nasdaq 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 Nasdaq (D) such Purchaser Securities are in compliance with all of the applicable corporate governance rules of Nasdaq, and (E) there are no outstanding or unresolved comments in comment letters received from the SEC with respect to the SEC Reports.

 

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(b) Except for any SEC SPAC Accounting Changes, 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 for any SEC SPAC Accounting Changes or 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. As of the date of this Agreement, except as set forth on 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 Target Companies and the negotiation and execution of this Agreement) and related activities and (b) since December 31, 2021 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 in all material respects with all Laws applicable to it and the conduct of its business, and the Purchaser has not received written notice alleging any violation of applicable Law in any material respect by the Purchaser.

 

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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. 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.

 

3.10 Taxes and Returns.

 

(a) Each of the Purchaser and the Merger Sub 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 and the Merger Sub files or is required to file a Tax Return.

 

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

 

(c) Neither the Purchaser nor the Merger Sub is not being audited by any Tax authority or has been notified in writing or, to the Knowledge of the Purchaser, orally by any Tax authority that any such audit is contemplated or pending. To the Knowledge of the Purchaser, there are no claims, assessments, audits, examinations, investigations or other Actions pending against the Purchaser or the Merger Sub in respect of any Tax, and neither the Purchaser nor the Merger Sub has 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 Purchaser Financials have been established).

 

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

 

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

 

(f) Neither the Purchaser nor the Merger Sub has any outstanding waivers or extensions of any applicable statute of limitations to assess any amount of Taxes. There are no outstanding requests by the Purchaser or the Merger Sub 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.

 

(g) Neither the Purchaser nor the Merger Sub will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any of the following that occurred or exists on or prior to the Closing Date: (A) a “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law) or (B) a change in the accounting method of the Purchaser or the Merger Sub pursuant to Section 481 of the Code or any similar provision of the Code or the corresponding Tax Laws of any nation, state or locality.

 

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(h) Neither the Purchaser nor the Merger Sub has participated in, or sold, distributed or otherwise promoted, any “reportable transaction,” as defined in U.S. Treasury Regulation section 1.6011-4.

 

(i) Neither the Purchaser nor the Merger Sub is a party to or bound by any Tax indemnity agreement, Tax sharing agreement or Tax allocation agreement (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 or closing agreement with any Governmental Authority) that will be binding on the Purchaser or the Merger Sub with respect to any period ending after the Closing Date.

 

(j) Neither the Purchaser nor the Merger Sub has requested, or is it the subject of or bound by any private letter ruling from any Governmental Authority with respect to any Taxes, nor is any such request outstanding.

 

(k) Neither the Purchaser nor the Merger Sub: (i) has 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 or has been 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) for any taxable period for which the statute of limitations has not expired.

 

(l) The Purchaser 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.

 

(m) Since the date of its formation, neither the Purchaser nor the Merger Sub has (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.

 

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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 $200,000, (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.

 

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, 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”, 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; provided, however, that the Purchaser is aware of positions taken by the SEC to the effect that SPACS are or may be considered investment companies, and this representation is subject to any final position taken by the SEC with respect to a SPAC being an investment company.

 

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 Target Companies 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 Concerning Stockholder Merger Consideration. All shares of Purchaser Class A Common Stock to be issued and delivered to the Company Stockholders as Stockholder Merger Consideration in accordance with Article I shall be, upon issuance and delivery of such Purchaser Class A Common Stock upon the effectiveness of the Merger, fully paid and non-assessable, free and clear of all Liens, other than restrictions arising from applicable securities Laws, any applicable Lock-Up Agreement and any Liens incurred by any Company Stockholder, and the issuance and sale of such Purchaser Class A Common Stock pursuant hereto will not be subject to or give rise to any preemptive rights or rights of first refusal. All such shares of Purchaser Class A Common Stock, when issued, will have been registered pursuant to the Securities Act.

 

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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.

 

(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 material claim.

 

3.21 Independent Investigation. 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 Target Companies, 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 Target Companies 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 Registration Statement; and (b) none of the Company nor its respective Representatives have made any representation or warranty as to the Target Companies, 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 Registration Statement.

 

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3.22 Information Supplied. None of the information supplied or to be supplied by the Purchaser expressly for inclusion or incorporation by reference: (a) in any report, form, registration or other filing made with any Governmental Authority (including the SEC) with respect to the transactions contemplated by this Agreement or any Ancillary Documents; (b) in the Registration Statement; or (c) in the mailings or other distributions to the Company’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 Purchaser 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 Purchaser makes no representation, warranty or covenant with respect to any information supplied by or on behalf of the Company or its Affiliates.

 

3.23 No Other Representations. Except for the representations and warranties expressly made by the Purchaser in this Article III (as modified by the Purchaser Disclosure Schedules) or as expressly set forth in an Ancillary Document, neither the Purchaser nor any other Person on its behalf makes any express or implied representation or warranty with respect to any of the Purchaser or the Merger Sub or their respective business, operations, assets or Liabilities, or the transactions contemplated by this Agreement or any of the other Ancillary Documents, and the Purchaser and Merger Sub each hereby expressly disclaims any other representations or warranties, whether implied or made by the Purchaser, Merger Sub or any of their respective Representatives. Except for the representations and warranties expressly made by the Purchaser and Merger Sub in this Article III (as modified by the Purchaser Disclosure Schedules) or in an Ancillary Document, the Purchaser hereby expressly disclaims all liability and responsibility for any representation, warranty, projection, forecast, statement or information made, communicated or furnished (orally or in writing) to the Company or any of its Representatives (including any opinion, information, projection or advice that may have been or may be provided to the Company or any of its Representatives by any Representative of the Purchaser or Merger Sub), including any representations or warranties regarding the probable success or profitability of the businesses of the Purchaser or Merger Sub.

 

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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 DGCL 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. Each Subsidiary of the Company is a corporation or other entity duly formed, validly existing and in good standing under the Laws of its jurisdiction of organization 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. Each Target 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 any Target Company is qualified to conduct business and all names other than its legal name under which any Target Company does business. The Company has provided to the Purchaser accurate and complete copies of its Organizational Documents and the Organizational Documents of each of its Subsidiaries, each as amended to date and as currently in effect. No Target Company is in violation of any provision of its Organizational Documents in any material respect.

 

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, subject to obtaining the Required Company Stockholder Approval. 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 in accordance with the Company’s Organizational Documents, the DGCL, any other applicable Law or any Contract to which the Company is a party or by which it or its securities are bound and (b) other than the Required Company Stockholder Approval, 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 DGCL, (iii) directed that this Agreement be submitted to the Company’s stockholders for adoption and (iv) resolved to recommend that the Company stockholders adopt this Agreement. The Voting Agreements delivered by the Company include holders of Company Stock representing at least the Required Company Stockholder Approval, and such Voting Agreements are in full force and effect.

 

4.3 Capitalization.

 

(a) The Company is authorized to issue 50,000,000 shares of Company Common Stock, of which 8,651,071 shares are issued and outstanding, which, for the avoidance of doubt, includes the United Shares. The Company is authorized to issue 10,000,000 shares of Company Preferred Stock, of which no shares are issued and outstanding. 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), which sets forth a list of the beneficial and record owners of all shares of Company Stock, 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 DGCL, 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 DGCL.

 

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(b) The Company has reserved 3,960,000 shares of Company Common Stock for issuance to officers, directors, employees and consultants of the Company for issuance upon exercise of currently outstanding Company Options. Schedule 4.3(b) sets forth the beneficial and record owners of all outstanding Company Options (including the grant date, number and type of shares issuable thereunder, the exercise price, the expiration date and any vesting schedule). 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). The United Securities have been approved by the Company’s Board of Directors and the shares of Company Common Stock issuable upon exercise of the United Warrants and conversion of the Investor Notes have or will, at the Closing, have been authorized and when issued pursuant to the terms of the United Warrants and the Investor Notes will be duly and validly authorized and issued, fully paid and non-assessable.

 

(c) Each grant of a Company Option was duly authorized no later than the date on which the grant of such Company Option was by its terms to be effective by all necessary corporate action, and (i) the stock option agreement governing such grant was duly executed and delivered by each party thereto; (ii) each such grant was made in accordance with all applicable Laws; (iii) the per share exercise price of each Company Option was equal or greater than the fair market value of a share of Company Common Stock on the applicable grant date; and (iv) each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company.

 

(d) Except as disclosed in the Company Financials, since January 1, 2021, 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.

 

(e) Schedule 4.3(e) lists and describes each agreement and class of agreements (other than Company Options, Company Warrants, United Warrants and the Investor Notes), to which the Company (and not Purchaser) is a party and which provide for the issuance by the Purchaser of shares of Purchaser Class A Common Stock, such agreements being referred to as the “Purchaser Stock Agreements.

 

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4.4 Subsidiaries. Schedule 4.4 sets forth the name of each Subsidiary of the Company, and with respect to each Subsidiary (a) its jurisdiction of organization, (b) its authorized shares or other equity interests (if applicable), (c) the number of issued and outstanding shares or other equity interests and the record holders and beneficial owners thereof and (d) its Tax election to be treated as a corporate or a disregarded entity under the Code and any state or applicable non-U.S. Tax laws, if any. All of the outstanding equity securities of each Subsidiary of the Company are duly authorized and validly issued, fully paid and non-assessable (if applicable), and were offered, sold and delivered in compliance with all applicable securities Laws, and owned by one or more of the Company or its Subsidiaries free and clear of all Liens (other than those, if any, imposed by such Subsidiary’s Organizational Documents). There are no Contracts to which the Company or any of its Affiliates is a party or bound with respect to the voting (including voting trusts or proxies) of the equity interests of any Subsidiary of the Company other than the Organizational Documents of any such Subsidiary. There are no outstanding or authorized options, warrants, rights, agreements, subscriptions, convertible securities or commitments to which any Subsidiary of the Company is a party or which are binding upon any Subsidiary of the Company providing for the issuance or redemption of any equity interests of any Subsidiary of the Company. There are no outstanding equity appreciation, phantom equity, profit participation or similar rights granted by any Subsidiary of the Company. No Subsidiary of the Company has any limitation, whether by Contract, Order or applicable Law, on its ability to make any distributions or dividends to its equity holders or repay any debt owed to another Target Company. Except for the equity interests of the Subsidiaries listed on Schedule 4.4, the Company does not own or have any rights to acquire, directly or indirectly, any equity interests of, or otherwise Control, any Person. None of the Company or its Subsidiaries is a participant in any joint venture, partnership or similar arrangement. There are no outstanding contractual obligations of the Company or its Subsidiaries to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person. No Affiliate of the Company or of any executive officer or director of the Company is engaged in any business similar to that of the Company.

 

4.5 Governmental Approvals. Except as otherwise described in Schedule 4.5, no Consent of or with any Governmental Authority on the part of any Target 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, (b) pursuant to Antitrust Laws or (c) where the failure to obtain or make such Consents or to make such filings or notifications, would not, individually or in the aggregate, have or reasonably be expected to have a material and adverse effect upon the Target Companies, taken as a whole, or their respective abilities to perform their obligations under this Agreement or the Ancillary Documents or consummate the transactions contemplated hereby or thereby, in any case, in any material respect.

 

4.6 Non-Contravention. Except as otherwise described in Schedule 4.6, the execution and delivery by the Company (or any other Target Company, as applicable) of this Agreement and each Ancillary Document to which any Target Company is or is required to be a party or otherwise bound, and the consummation by any Target Company of the transactions contemplated hereby and thereby and compliance by any Target Company with any of the provisions hereof and thereof, will not (a) conflict with or violate any provision of any Target 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 any Target 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 any Target 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 any Target 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 (a), (b) or (c) that would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect upon the Target Companies.

 

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4.7 Financial Statements.

 

(a) As used herein, the term “Company Financials” means the (i) unaudited consolidated financial statements of the Target Companies (including, in each case, any related notes thereto), consisting of the consolidated balance sheets of the Target Companies as of December 31, 2021 and December 31, 2020, and the related consolidated unaudited statements of operations, changes in stockholder equity and statements of cash flows for the fiscal years then ended, (the “Year-End Company Financials”), (ii) the Company prepared unaudited financial statements, consisting of the consolidated balance sheet of the Target Companies as of September 30, 2022 (the “Interim Balance Sheet Date”) and the related consolidated income statement, changes in stockholder equity and statement of cash flows for the nine months ended September 30, 2022 and 2021. True and correct copies of the Company Financials have been provided to the Purchaser. Except as set forth in Schedule 4.7(a) with respect to the nine-months ended September 30, 2022 financial statements, the Company Financials (i) accurately reflect the books and records of the Target Companies 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 unaudited statements exclude the footnote disclosures and other presentation items required for GAAP and exclude year-end adjustments which will not be material in amount), (iii) comply with all applicable accounting requirements under the Securities Act and the rules and regulations of the SEC thereunder, and (iv) fairly present in all material respects the consolidated financial position of the Target Companies as of the respective dates thereof and the consolidated results of the operations and cash flows of the Target Companies for the periods indicated. No Target Company has 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 the Target Companies’ assets and Liabilities and maintains proper and adequate internal accounting controls that provide reasonable assurance that (i) each Target Company does not maintain any off-the-book accounts and that each Target Company’s assets are used only in accordance with such Target Company’s management directives, (ii) transactions are executed with management’s authorization, (iii) transactions are recorded as necessary to permit preparation of the consolidated financial statements of the Target Companies and to maintain accountability for each Target Company’s assets, (iv) access to each Target Company’s assets is permitted only in accordance with management’s authorization, (v) the reporting of each Target 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 Target Companies 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. No Target Company has 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 any Target Company. In the past five (5) years, no Target Company or its Representatives has received any written complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of any Target Company or its internal accounting controls, including any material written complaint, allegation, assertion or claim that any Target Company has engaged in questionable accounting or auditing practices.

 

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(c) The Target Companies do 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 and identified which indebted is a Convertible Security. Except as set forth in Schedule 4.7(c), all Indebtedness of the Target Companies is convertible and will be converted into Company Common Stock pursuant to the Recapitalization. No Indebtedness of any Target Company contains any restriction upon (i) the prepayment of any of such Indebtedness, (ii) the incurrence of Indebtedness by any Target Company, or (iii) the ability of the Target Companies to grant any Lien on their respective properties or assets.

 

(d) Except as set forth on Schedule 4.7(d), no Target Company is 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) No Target Company has any accounts receivable.

 

(f) The Target Companies have, or will have upon completion of the Company Equity Financing, sufficient working capital to meet its working capital requirements for twelve months following completion of the Company Equity Financing.

 

(g) The financial projections set forth on Schedule 4.7(g) were prepared in good faith using assumptions that the Company believes to be reasonable and which are set forth on said Schedule 4.7(g).

 

4.8 Absence of Certain Changes. Except as set forth on Schedule 4.8, since December 31, 2021, each Target 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 5.2(b) (without giving effect to Schedule 5.2) if such action were taken on or after the date hereof without the consent of the Purchaser.

 

4.9 Compliance with Laws. No Target Company is or has been in material conflict or material non-compliance with, or in material default or violation of, nor has any Target Company received, since January 1, 2017, 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 Permits. Each Target 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 any Target Company), holds all Permits necessary to lawfully conduct in all material respects its business as presently 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. No Target Company is in violation in any material respect of the terms of any Company Permit, and no Target Company has 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. Schedule 4.10 also sets forth any permits or licenses which the Company does not have as of the date of this Agreement which are material to the conduct by the Company of its business and proposed business as currently contemplated including the status of the Company’s application for the Key Environmental Permits.

 

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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 (and no such Action has been brought or, to the Company’s Knowledge, threatened in the past five (5) years); or (b) Order now pending or outstanding or that was rendered by a Governmental Authority in the past five (5) years, in either case of (a) or (b) by or against any Target Company, its current or former directors, officers or equity holders (provided, that any litigation involving the directors, officers or equity holders of a Target Company must be related to the Target 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 Target Companies, will not have, either individually or in the aggregate, a Material Adverse Effect upon any Target Company. In the past five (5) years, none of the current or former officers, senior management or directors of any Target 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 material Contract to which any Target Company is a party or by which any Target 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”), including each Contract that:

 

(i) contains covenants that limit the ability of any Target 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 any Target Company having an outstanding principal amount in excess of $200,000

 

(v) involves the acquisition or disposition, directly or indirectly (by merger or otherwise), of assets with an aggregate value in excess of $200,000 (other than in the ordinary course of business consistent with past practice) or shares or other equity interests of any Target 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 any Target Company, its business or material assets;

 

(vii) by its terms, individually or with all related Contracts, calls for aggregate payments or receipts by the Target Companies under such Contract or Contracts of at least $200,000 per year or $500,000 in the aggregate;

 

(viii) is with any Top Supplier;

 

(ix) obligates the Target Companies to provide continuing indemnification or a guarantee of obligations of a third party after the date hereof;

 

(x) is between any Target Company and any directors, officers or employees of a Target 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 Target Companies to make any capital commitment or expenditure in excess of $200,000 (including obligations pursuant to any joint venture, strategic alliance or similar agreement);

 

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

 

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

 

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

 

(xv) that will be required to be filed with the Registration 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 any Target Company and outside of the ordinary course of business 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 Target Company party thereto 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 in any material respect; (iii) no Target Company 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 a material breach or default by any Target 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 any Target Company, under such Company Material Contract; (v) no Target Company has 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 any Target Company in any material respect; and (vi) no Target Company has waived any material rights under any such Company Material Contract.

 

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4.13 Intellectual Property

 

(a) Other than the corporate name registrations for Next Renewable Fuels, Inc. (registered with the Delaware Secretary of State), Next Renewable Fuels Oregon, LLC (registered with the Delaware Secretary of State), GoLoBioMass, LLC (registered with the Texas Secretary of State), and DeepBlu H2, LLC (registered with the Texas Secretary of State), the Internet Assets set forth on Schedule 4.13(a)(i), the Company IP Licenses set forth on Schedule 4.13(a)(ii), and the Trademark application set forth on Schedule 4.13(d), the Target Companies do not own or have any rights in any (i) applied-for or registered Intellectual Property or (ii) material unregistered Intellectual Property. The Company and its subsidiaries have the legal right to use their corporate names. Schedule 4.13(a)(ii) sets forth all Intellectual Property licenses, sublicenses and other agreements (“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 $50,000 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 a Target Company is a licensee or otherwise is authorized to use or practice any Intellectual Property. Except as set forth on Schedule 4.13(a)(iii), each Target Company owns, free and clear of all Liens (other than Permitted Liens), has valid and enforceable title in, and has the unrestricted right to use, sell, license, transfer, or assign all the Internet Assets.

 

(b) Each Target Company has a valid and enforceable license to use all Intellectual Property that is the subject of the Company IP Licenses applicable to such Target Company. The Company IP Licenses include all of the licenses, sublicenses and other agreements or permissions necessary to operate the Target Companies as presently conducted. Each Target Company has performed all obligations imposed on it in the Company IP Licenses, has made all payments required to date, and such Target Company is not, nor, to the Knowledge of the Company, is any other party thereto, in breach or default thereunder, nor, to the Knowledge of the Company, has any event occurred that with notice or lapse of time or both would constitute a default thereunder. The continued use by the Target Companies 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 any Target Company. All registrations for the Internet Assets that are owned by any Target Company are valid, in force, and in good standing with all required fees having been paid. No Target Company is party to any Contract that requires a Target Company to assign to any Person all of its rights in any Intellectual Property developed by a Target Company under such Contract.

 

(c) No Target Company is the licensor with respect to any Intellectual Property.

 

(d) No Action is pending or, to the Company’s Knowledge, threatened against a Target 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 Target Companies, nor, to the Knowledge of the Company, is there any reasonable basis for any such Action. No Target Company has 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 any Target Company, nor to the Knowledge of the Company is there a reasonable basis therefor. There are no Orders to which any Target Company is a party or its otherwise bound that (i) restrict the rights of a Target Company to use, transfer, license or enforce any Intellectual Property owned by a Target Company, (ii) restrict the conduct of the business of a Target Company in order to accommodate a third Person’s Intellectual Property, or (iii) grant any third Person any right with respect to any Intellectual Property owned by a Target Company. To the Company’s Knowledge, no Target Company is currently infringing, or has, in the past five (5) years, 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 a Target Company or, to the Knowledge of the Company, otherwise in connection with the conduct of the respective businesses of the Target Companies. 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 any Target Company (“Company IP”) in any material respect.

 

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(e) No current or former officers, employees or independent contractors of a Target Company have claimed any ownership interest in any Intellectual Property owned by a Target Company. To the Knowledge of the Company, there has been no violation of a Target Company’s policies or practices related to protection of Company IP or any confidentiality or nondisclosure Contract relating to the Intellectual Property owned by a Target Company. To the Company’s Knowledge, none of the employees of any Target 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 Target Companies, or that would materially conflict with the business of any Target Company as presently conducted or contemplated to be conducted. Each Target Company has taken reasonable security measures in order to protect the secrecy and confidentiality of such Target Company’s Trade Secrets, if any, and value of the material Company IP.

 

(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 a Target 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 a Target Company. Each Target 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. To the Knowledge of the Company, the operation of the business of the Target Companies 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 a Target 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 Target Companies’ rights under such Contracts or Company IP Licenses to the same extent that the Target Companies 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 Target Companies would otherwise be required to pay in the absence of such transactions.

 

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4.14 Taxes and Returns.

 

(a) Each Target Company has or will have timely filed, or caused to be timely filed, all federal and other material 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 material Taxes required to be paid, collected or withheld, other than such Taxes for which adequate reserves in the Company Financials have been established.

 

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

 

(c) No Target Company is being audited by any Tax authority or has been notified in writing or, to the Knowledge of the Company, orally by any Tax authority that any such audit is contemplated or pending. To the Knowledge of the Company, there are no claims, assessments, audits, examinations, investigations or other Actions pending against a Target Company in respect of any Tax, and no Target Company has 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 Target Company’s assets, other than Permitted Liens.

 

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

 

(f) No Target Company has any outstanding waivers or extensions of any applicable statute of limitations to assess any amount of Taxes. There are no outstanding requests by a Target 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.

 

(g) No Target Company will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any of the following that occurred or exists on or prior to the Closing Date: (A) a “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law) or (B) a change in the accounting method of a Target Company pursuant to Section 481 of the Code or any similar provision of the Code or the corresponding Tax Laws of any nation, state or locality.

 

(h) No Target Company has participated in, or sold, distributed or otherwise promoted, any “reportable transaction,” as defined in U.S. Treasury Regulation section 1.6011-4.

 

(i) No Target Company is a party to or bound by any Tax indemnity agreement, Tax sharing agreement or Tax allocation agreement (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 or closing agreement with any Governmental Authority) that will be binding on any Target Company with respect to any period ending after the Closing Date.

 

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(j) No Target Company has requested, or is it the subject of or bound by any private letter ruling from any Governmental Authority with respect to any Taxes, nor is any such request outstanding.

 

(k) No Target Company: (i) has 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 or has been 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) for any taxable period for which the statute of limitations has not expired.

 

(l) No Target Company is 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 a Target Company for the operation of the business of a Target Company, 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 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 a Target Company or any other party under any of the Company Real Property Leases, and no Target Company has received written or, to the Knowledge of the Company, oral notice of any such condition. No Target Company owns or has ever owned any real property or any interest in real property (other than the leasehold interests in the Company Real Property Leases).

 

4.16 Personal Property. Each item of Personal Property which is currently owned, used or leased by a Target 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 Target Companies. The operation of each Target 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 a Target Company, except for such Personal Property that is owned, leased or licensed by or otherwise contracted to a Target 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 a Target Company or any other party under any of the Company Personal Property Leases, and no Target Company has received notice of any such condition.

 

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4.17 Title to and Sufficiency of Assets. Each Target 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 balance sheet as of the Interim Balance Sheet Date included in the Company Financials and (d) Liens set forth on Schedule 4.17. The assets (including Intellectual Property rights and contractual rights) of the Target Companies constitute all of the assets, rights and properties that are used in the operation of the businesses of the Target Companies as it is now conducted and presently proposed to be conducted or that are used or held by the Target Companies for use in the operation of the businesses of the Target Companies, and taken together, are adequate and sufficient for the operation of the businesses of the Target Companies as currently conducted and as presently proposed to be conducted.

 

4.18 Employee Matters

 

(a) Except as set forth on Schedule 4.18(a), no Target Company is a party to any collective bargaining agreement or other Contract covering a group of employees or labor organization, 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 material 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 any Target Company and Persons employed by or providing services as independent contractors to a Target Company. No current officer, director, or member of senior management of a Target Company has provided any Target Company written or, to the Knowledge of the Company, oral notice of his or her plan to terminate his or her employment with any Target Company.

 

(b) Each Target 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 a Target 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) to its Knowledge, 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 a Target Company brought by or on behalf of any applicant for employment, any current or former employee or any Governmental Authority alleging any violation of applicable labor and employment Laws or regulations or breach of contract or any other discriminatory, wrongful or tortious conduct in connection with the employment relationship. No Target Company has implemented or plans to implement any plant closing or employee layoffs that would trigger notice obligations under the WARN Act.

 

(c) Schedule 4.18(c) hereto sets forth a complete and accurate list as of the date hereof of all employees of the Target Companies showing for each as of such date (i) the employee’s name, job title or description, employer, location, exempt or non-exempt status, 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 Target Companies)), (ii) any bonus, commission or other remuneration other than salary paid during the fiscal year ending December 31, 2021 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, 2021. Except as set forth on Schedule 4.18(c), (A) no employee is a party to a written employment Contract with a Target Company and each is employed “at will”, and (B) the Target Companies have paid in full to all their employees all wages, salaries, commission, bonuses and other compensation due to their employees, including overtime compensation, and no Target Company has any 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 Target Company employee has entered into the Company’s standard form of employee non-disclosure, inventions and restrictive covenants agreement with a Target 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.

 

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(d) Schedule 4.18(d) contains a list of all independent contractors (including consultants) currently engaged by any Target 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 a Target Company. Except as set forth on Schedule 4.18(d), each such independent contractor has entered into customary covenants regarding confidentiality, non-solicitation and assignment of inventions and copyrights in such Person’s agreement with a Target 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 a Target Company are bona fide independent contractors and not employees of a Target Company. Each independent contractor is terminable on fewer than thirty (30) days’ notice, without any obligation of any Target Company to pay severance or a termination fee.

 

4.19 Benefit Plans. Except as set forth in Schedule 4.19, no Target Company maintains, sponsors, contributes to or otherwise has any Liability under, any Benefit Plans and no Target Company has maintained, sponsored, contributed to or otherwise had any Liability under any Benefit Plan. No Target Company and no ERISA Affiliate thereof has maintained, contributed to, or had an obligation to contribute to (a) a “defined benefit plan” (as defined in Section 414(j) of the Code), (b) a “multiemployer plan” (as defined in Section 3(37) of ERISA) or (c) a “multiple employer plan” (as described in Section 413(c) of the Code). Each Target Company and each ERISA Affiliate thereof has complied with the provisions of Section 601 et seq. of ERISA and Sections 4980B, 4980D, 4980H, 6055, and 6056 of the Code, to the extent applicable, such no Target Company has incurred (whether or not assessed) any material Tax or other penalty. “ERISA Affiliate” means each person (as defined in Section 3(9) of ERISA) which together with any Target Company or any of its Subsidiaries would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.

 

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

 

(a) Each Target 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) No Target Company is 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. No Target Company has 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 any Target Company or any assets of a Target Company alleging either or both that a Target Company may be in material violation of any Environmental Law or Environmental Permit or may have any material Liability under any Environmental Law, including any Liability resulting from the prior ownership of any real property currently owned by any Target Company.

 

(d) No Target Company has 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 under applicable Environmental Laws. No fact, circumstance, or condition exists in respect of any Target Company or any property currently or formerly owned, operated, or leased by any Target Company or any property to which a Target Company arranged for the disposal or treatment of Hazardous Materials that could reasonably be expected to result in a Target Company incurring any material Environmental Liabilities.

 

(e) To the Company’s Knowledge, there is no investigation of the business, operations, or currently owned, operated, or leased property of a Target Company or, to the Company’s Knowledge, previously owned, operated, or leased property of a Target 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 a Target 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 any Target Company.

 

4.21 Transactions with Related Persons. Except as set forth on Schedule 4.21, no Target Company nor any of its Affiliates, nor any officer, director, manager, employee, trustee or beneficiary of a Target 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 a Target Company, including any Contract or other arrangement (a) providing for the furnishing of services by (other than as officers, directors or employees of the Target 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 Target 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, no Target Company has 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 any Target Company. The assets of the Target Companies do not include any receivable or other obligation from a Related Person, and the liabilities of the Target Companies do not include any payable or other obligation or commitment to any Related Person.

 

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4.22 Company 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 a Target Company relating to a Target 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 Target Companies are 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) to the Knowledge of the Company, will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the Closing. No Target Company has any self-insurance or co-insurance programs. Since the Company’s formation, no Target Company has received any notice from, or on behalf of, any insurance carrier relating to or involving any adverse change or any material change other than in the ordinary course of business, in the conditions of insurance, any refusal to issue an insurance policy, other than in the ordinary course of business, or non-renewal of a policy.

 

(b) Each Target 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 Target Companies. No Target Company has 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 Target Companies 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 in all material respects.

 

4.24 Customers and Suppliers. The Target Companies have had no customers since January 1, 2021. Schedule 4.24 lists, by dollar volume received or paid, as applicable, for each of (a) the twelve (12) months ended on December 31, 2021 and (b) the period from January 1, 2022 through the Interim Balance Sheet Date, the ten largest suppliers of goods or services to the Target Companies (the “Top Suppliers”), along with the amounts of such dollar volumes. Schedule 4.24 also lists any agreements and the status of any negotiation with respect to any agreements pursuant to which any Target Company may provide fuel to any person. Copies of each such agreement have been provided to the Purchaser. The relationships of each Target Company with such suppliers are good commercial working relationships and (i) no Top Supplier within the last twelve 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 a Target Company, (ii) no Top Supplier has during the last twelve 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 a Target Company or intends to stop, decrease or limit materially its products or services to any Target Company or its usage or purchase of the products or services of any Target Company, (iii) to the Company’s Knowledge, no Top Supplier intends to refuse to pay any amount due to any Target Company or seek to exercise any remedy against any Target Company, (iv) no Target Company has within the past two (2) years been engaged in any material dispute with any Top Supplier, 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 any Target Company with any Top Supplier.

 

4.25 Certain Business Practices.

 

(a) No Target Company, nor any of their respective 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. No Target Company, nor any of their respective Representatives acting on their 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 any Target Company or assist any Target Company in connection with any actual or proposed transaction.

 

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(b) The operations of each Target Company are and have been conducted at all times 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 a Target Company with respect to any of the foregoing is pending or, to the Knowledge of the Company, threatened.

 

(c) No Target Company or any of their respective directors or officers, or, to the Knowledge of the Company, any other Representative acting on behalf of a Target 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 no Target Company has 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. No Target Company is an “investment company”, 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 on Schedule 4.27, no Target Company has incurred or 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 Registration 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.

 

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4.30 No Other Representations. Except for the representations and warranties expressly made by the Company in this Article IV (as modified by the Company Disclosure Schedules) or as expressly set forth in an Ancillary Document, neither the Company nor any other Person on its behalf makes any express or implied representation or warranty with respect to any of the Target Companies or their respective business, operations, assets or Liabilities, or the transactions contemplated by this Agreement or any of the other Ancillary Documents, and the Company hereby expressly disclaims any other representations or warranties, whether implied or made by the Company or any of its Representatives. Except for the representations and warranties expressly made by the Company in this Article IV (as modified by the Company Disclosure Schedules) or in an Ancillary Document, the Company hereby expressly disclaims all liability and responsibility for any representation, warranty, projection, forecast, statement or information made, communicated or furnished (orally or in writing) to the Purchaser, Merger Sub or any of their respective Representatives (including any opinion, information, projection or advice that may have been or may be provided to the Purchaser, Merger Sub or any of their respective Representatives by any Representative of the Company), including any representations or warranties regarding the probable success or profitability of the businesses of the Target Companies.

 

Article V
COVENANTS

 

5.1 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 7.1 or the Closing (the “Interim Period”), subject to Section 5.15, the Company shall give, and shall direct 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 appropriate officers and employees, and to respective 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 Target Companies, as the Purchaser or its Representatives may reasonably request regarding the Target Companies 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 instruct 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 Target Companies. Notwithstanding the foregoing, the Company may restrict or otherwise prohibit access to any documents or information to the extent that (a) any applicable Law requires the Company to restrict or otherwise prohibit access to such documents or information; (b) access to such documents would be in violation of the HSR Act, Sherman Act, or any applicable non-U.S. antitrust or competition laws; (c) access to such documents or information would give rise to a material risk of waiving any attorney-client privilege, work product doctrine or other similar privilege applicable to such documents or information; or (d) such documents or information are reasonably pertinent to any adverse legal proceeding between the Company and its Affiliates, on the one hand, and Purchaser and its Affiliates, on the other hand. Nothing in this Section 5.1 will be construed to require the Company, any of its Subsidiaries or any of their respective Representatives to prepare any reports, statements, analyses, appraisals, opinions or other information not otherwise prepared in the ordinary course of business.

 

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(b) During the Interim Period, subject to Section 5.15, the Purchaser shall give, and shall direct 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 appropriate officers and 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 direct 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. Notwithstanding the foregoing, the Purchaser may restrict or otherwise prohibit access to any documents or information to the extent that (a) any applicable Law requires the Purchaser to restrict or otherwise prohibit access to such documents or information; (b) access to such documents would be in violation of the HSR Act, Sherman Act, or any applicable non-U.S. antitrust or competition laws; (c) access to such documents or information would give rise to a material risk of waiving any attorney-client privilege, work product doctrine or other similar privilege applicable to such documents or information; or (d) such documents or information are reasonably pertinent to any adverse legal proceeding between the Company and its Affiliates, on the one hand, and Purchaser and its Affiliates, on the other hand. Nothing in this Section 5.1 will be construed to require the Purchaser, any of its Subsidiaries or any of their respective Representatives to prepare any reports, statements, analyses, appraisals, opinions or other information not otherwise prepared in the ordinary course of business.

 

5.2 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, as required by applicable Law (including COVID-19 Measures) or as set forth on Schedule 5.2, 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 Target Companies 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.

 

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(b) Without limiting the generality of Section 5.2(a) and except as contemplated by the terms of this Agreement or the Ancillary Documents, as required by applicable Law (including COVID-19 Measures) or as set forth on Schedule 5.2, 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, 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 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 except for (x) the issuance of Company Options in connection with employee compensation in the ordinary course of business consistent with past practice, and (y) other issuances of Company equity securities or Company Convertible Securities which are expressly provided for in this Agreement;

 

(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;

 

(iv) incur, create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise) in excess of $200,000 individually or $500,000 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 $200,000 individually or $500,000 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 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;

 

(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 IP or Company IP Licenses (excluding non-exclusive licenses of Company IP to Target 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;

 

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(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 other than in the ordinary course of business as currently conducted 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, a Target Company or its Affiliates) not in excess of $200,000 (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;

 

(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 $200,000 (individually for any project (or set of related projects) or $500,000 in the aggregate);

 

(xvii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization other than as provided in this Agreement;

 

(xviii) enter into any agreement or understanding, including any informal agreement, which could result in the payment of a transaction bonus to any person whether prior to or subsequent to the Closing.

 

(xix) Other than with respect to the Investor Notes, voluntarily incur any Liability or obligation (whether absolute, accrued, contingent or otherwise) in excess of $200,000 individually or $500,000 in the aggregate other than pursuant to the terms of a Company Material Contract;

 

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(xx) 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;

 

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

 

(xxii) 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, including, but not limited to the Key Environmental Permits;

 

(xxiii) 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;

 

(xxiv) incur any Indebtedness unless such Indebtedness is convertible into Company Common Stock pursuant to the Recapitalization on terms reasonably acceptable to the Purchaser.

 

(xxv) 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

 

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

 

5.3 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 as required by applicable Law (including COVID-19 Measures) or as set forth on Schedule 5.3, 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 5.3, 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 5.3(a) and except as contemplated by the terms of this Agreement or the Ancillary Documents (or as contemplated by the PIPE Offering), as required by applicable Law (including COVID-19 Measures) or as set forth on Schedule 5.3, during the Interim Period, without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed), the Purchaser and Merger Sub shall not:

 

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

 

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(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 $200,000 individually or $500,000 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 5.3(b)(iv) shall not prevent the Purchaser from borrowing funds, including borrowing from the Sponsor, 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 the PIPE Investment and any other financing contemplated by this Agreement) and any costs and expenses necessary for an Extension (such expenses, “Extension Expenses”);

 

(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;

 

(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 $200,000 (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;

 

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(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 $200,000 individually for any project (or set of related projects) or $500,000 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) except with respect to the PIPE Offering, voluntarily incur any Liability or obligation (whether absolute, accrued, contingent or otherwise) in excess of $200,000 individually or $500,000 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 5.3 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;

 

(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.

 

5.4 Annual and Interim Financial Statements.

 

(a) Not later than December 15, 2022, the Company will deliver the Year-End Company Financials audited by Marcum LLP, an independent PCAOB registered auditor, prepared in accordance with GAAP and PCAOB standards.

 

(b) The Company shall use its best efforts to deliver its financial statements for the year ended December 31, 2022 by February 15, 2023 audited by Marcum LLP.

 

(c) 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 consolidated statement of operations and an unaudited consolidated balance sheet of the Target Companies 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 consolidated financial position and results of operations of the Target Companies 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 consolidated financial statements of the Target Companies that the Target Companies’ certified public accountants may issue.

 

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5.5 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 Class A Common Stock and the Purchaser Public Warrants on Nasdaq; provided, that the Parties acknowledge and agree that from and after the Closing, the Parties intend to list on Nasdaq only the Purchaser Class A Common Stock and the Purchaser Public Warrants.

 

5.6 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 Target Companies (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 Target Companies, 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.

 

(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.

 

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5.7 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 Nasdaq 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.

 

5.8 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 VI 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.

 

5.9 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.

 

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(b) In furtherance and not in limitation of Section 5.9(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.

 

5.10 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. 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. 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.

 

5.11 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.

 

5.12 The Registration 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 registration statement on Form S-4 (as amended or supplemented from time to time, and including the Proxy Statement contained therein, the “Registration Statement”) in connection with the registration under the Securities Act of the shares of Purchaser Class A Common Stock to be issued under this Agreement as the Merger Consideration, which Registration Statement will also contain 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 Class A Common Stock redeemed (the “Redemption”) in conjunction with the stockholder vote on the Purchaser Stockholder Approval Matters. The Proxy Statement shall include proxy materials for the purpose of soliciting proxies from Purchaser stockholders to vote, at a special 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 the issuance of the Merger Consideration pursuant to this Agreement (and, to the extent required, the issuance of any shares in connection with the PIPE Offering or any other financing which involves the issuance of Purchaser Common Stock), by the holders of Purchaser Common Stock in accordance with the Purchaser’s Organizational Documents, the DCGL and the rules and regulations of the SEC and Nasdaq; (ii) the adoption and approval of the Amended Purchaser Charter; (iii) adoption and approval of an equity incentive plan in form and substance mutually acceptable to the Company and the Purchaser (the “Incentive Plan”), 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 Recapitalization, the Redemption and the PIPE Offering); (iv) the appointment of the members of the Post-Closing Purchaser Board in accordance with Section 5.17 hereof, such appointment to be effective on the Closing Date; (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 “Purchaser 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 Purchaser 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 Registration 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 Nasdaq. Purchaser shall cooperate and provide the Company (and its counsel) with a reasonable opportunity to review and comment on the Registration 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 Target Companies and their stockholders, officers, directors, employees, assets, Liabilities, condition (financial or otherwise), business and operations that may be required or appropriate for inclusion in the Registration 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 Registration Statement, the Purchaser Special Meeting and the Redemption, and the Company shall assist in such efforts and shall provide such information concerning the Company, its financial statements and its management as is necessary for inclusion in the Registration Statement. 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 their respective Representatives in connection with the drafting of the public filings with respect to the transactions contemplated by this Agreement, including the Registration 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 Registration 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 Registration Statement and cause the Registration 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 Company, shall promptly respond to any SEC comments on the Registration Statement and shall otherwise use its commercially reasonable efforts to cause the Registration Statement to “clear” comments from the SEC and become effective. 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 Registration 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.

 

(d) As soon as practicable following the Registration Statement “clearing” comments from the SEC and becoming effective, Purchaser shall distribute the Registration Statement to Purchaser’s stockholders and the Company Stockholders, 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 effectiveness of the Registration Statement.

 

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

 

5.13 Company Stockholder Meeting. As promptly as practicable after the Registration Statement has become effective, the Company will call a meeting of its stockholders in order to obtain the Required Company Stockholder Approval (the “Company Special Meeting”), and the Company shall use its reasonable best efforts to solicit from the Company Stockholders proxies in favor of the Required Company Stockholder Approval prior to such Company Special Meeting, and to take all other actions necessary or advisable to secure the Required Company Stockholder Approval, including enforcing the Voting Agreements.

 

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5.14 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 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.

 

5.15 Confidential Information.

 

(a) The Company hereby agrees that, during the Interim Period and, in the event that this Agreement is terminated in accordance with Article VII, 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 or any of its Representatives, during the Interim Period or, in the event that this Agreement is terminated in accordance with Article VII, 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 5.15(a), and (B) in the event that such protective Order or other remedy is not obtained, or the Purchaser waives compliance with this Section 5.15(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 shall, and shall cause its 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 its 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.

 

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(b) The Purchaser hereby agrees that during the Interim Period and, in the event that this Agreement is terminated in accordance with Article VII, 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 VII, 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 5.15(b) and (B) in the event that such protective Order or other remedy is not obtained, or the Company waives compliance with this Section 5.15(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.

 

5.16 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 Target Companies in existence on the Closing Date and make the same available for inspection and copying during normal business hours of the Company and its Subsidiaries, as applicable, upon reasonable request and upon reasonable notice.

 

5.17 Post-Closing Board of Directors and Executive Officers.

 

(a) Effective as of the Closing, the Purchaser’s board of directors (the “Post-Closing Purchaser Board”) will consist of seven (7) individuals, of which one person shall be designated by the Purchaser prior to the Closing (the “Purchaser Director”) and (ii) six persons that are designated by the Company prior to the Closing (the “Company Directors”), at least four of whom shall qualify as an independent director under Nasdaq rules (each and “Independent Director, and together with the Purchaser Director and the Company Directors, the “Directors” and each individually a “Director”). At or prior to the Closing, the Purchaser will provide each Director with a customary director indemnification agreement, in form and substance reasonably 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 Company immediately prior to the Closing shall become the chief executive officer and chief financial officer of the Purchaser on the Closing Date (unless, at its sole discretion, the Company desires to appoint another qualified person reasonably acceptable to the Purchaser to either such role, in which case, such other person identified by the Company shall serve in such role).

 

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5.18 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 or Merger Sub 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 or Merger Sub (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 or Merger Sub, 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 and Merger Sub to the extent permitted by applicable Law. The provisions of this Section 5.18 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 and Merger Sub’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 existing policy 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.

 

5.19 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 the PIPE Offering shall first be used to pay (i) the Purchaser’s accrued Expenses, (ii) the Purchaser’s deferred Expenses (including 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.

 

5.20 Employment Agreements. Effective on the Closing Date, the Purchaser shall enter into employment agreements with key executive listed on Schedule 5.20 (the “New Employment Agreements”), which agreements shall be mutually satisfactory to the Company, the Purchaser and the employee. The employment with the chief executive officer shall also include options the terms of which are set forth on Schedule 5.20. For the avoidance of doubt, the Purchaser Common Stock issuable upon exercise of such options (i) are in addition to the shares covered by the Incentive Plan and are not included in Total Company Shares.

 

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5.21 Company Equity Financing. Subsequent to the date of this Agreement, the Company shall use its commercially reasonable efforts to enter into agreements with accredited investors with respect to the Company Equity Financing, the proceeds of which may be used by the Company for working capital. To the extent that the Company Equity Financing involves the issuance of Convertible Securities, all of such Convertible Securities shall be converted into Company Common Stock on or prior to the Closing Date. Such shares of Company Common Stock and any shares of Company Common Stock issuable upon exercise of any warrants which issued as part of the Company Equity Financing and not exercised prior to the Closing Date shall be included in computing the Total Company Shares.

 

5.22 PIPE Offering. Without limiting anything to the contrary contained herein, during the Interim Period, the Purchaser with the assistance of the Company, will use its commercially reasonable efforts to enter into Subscription Agreements with investors (the “PIPE Investors”) pursuant to which the PIPE Investors will agree to purchase from the Purchaser at the Closing securities of the Company, the securities to have such terms and conditions as shall be acceptable to the Purchaser subject to the approval of the Company, such approval not to be unreasonably withheld, delayed or conditioned, of up to $50,000,000 or such other amount as may be acceptable to the Purchaser. The Company shall, and shall cause its Representatives to, reasonably cooperate with the Purchaser in connection with such PIPE Offering (including having the Company’s senior management participate in any investor meetings and roadshows as reasonably requested by Purchaser). In the event that all conditions in the Subscription Agreements have been satisfied, the Purchaser shall use its commercially reasonable efforts to take, or to cause to be taken, all actions required, necessary or that it otherwise deems to be proper or advisable to consummate the transactions contemplated by the Subscription Agreements on the terms described therein, including using its commercially reasonable efforts to enforce its rights under the Subscription Agreements to cause the PIPE Investors to pay to (or as directed by) the Purchaser the subscription amount under each PIPE Investor’s applicable Subscription Agreement in accordance with its terms.

 

5.23 Investor Notes. The Company shall use its commercially reasonable efforts to enter into agreements with United and other strategic investors and the Purchaser pursuant to which the subscribers agree to purchase Investor Notes in the aggregate principal amount of $50,000,000 or such other amount as is acceptable to the Company, the Purchaser and, if the amount is less than $50,000,000, United. A strategic investor shall mean an investor who, in addition to purchasing equity securities, including the Investor Notes, has a business relationship with the Company which the Company considers material to the development of the Company’s business; provided, however, that a PIPE Investor may, with the approval of the Purchaser and the Company, subscribe for Investor Notes. The terms of the subscriptions for the Investor Notes and the terms of the Investor Notes shall be acceptable to the Company subject to the approval of the Purchaser, such approval not to be unreasonably withheld, delayed or conditioned. The Investor Notes shall automatically convert at or immediately prior to the Effective Time at an agreed-upon discount into Purchaser Class A Common Stock. Any Convertible Securities issued pursuant to such agreements shall not be required to be converted prior to the Closing Date.

 

5.24 Purchaser Share Agreements. The Purchaser shall obtain approval by its board of directors of the issuance of any shares of Purchaser Class A Common Stock issuable pursuant to the Purchaser Share Agreements.

 

5.25 Waiver of Deferred Fees. Following the execution of this Agreement, and in no event later than thirty (30) days from the date of this Agreement, the Purchaser shall obtain a written waiver in regard to any fee or commission payable pursuant to the agreement listed in Schedule 3.4 of the Purchaser Disclosure Schedule.

 

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Article VI
CLOSING CONDITIONS

 

6.1 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 Purchaser Stockholder Approval. The Purchaser 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 pursuant to Section 5.12 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 Purchaser Stockholder Approval”).

 

(b) Required Company Stockholder Approval. The Company Special Meeting shall have been held in accordance with the DGCL and the Company’s Organizational Documents, and at such meeting, the requisite vote of the Company Stockholders (including any separate class or series vote that is required, whether pursuant to the Company’s Organizational Documents, any stockholder agreement or otherwise) shall have authorized, approved and consented to, the execution, delivery and performance of this Agreement and each of the Ancillary Documents to which the Company is or is required to be a party or bound, and the consummation of the transactions contemplated hereby and thereby, including the Merger (the “Required Company Stockholder Approval”).

 

(c) 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.

 

(d) 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.

 

(e) 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 6.1(e) shall have each been obtained or made.

 

(f) 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.

 

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

 

(h) Composition of 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 5.17.

 

(i) Registration Statement. The Registration Statement shall have been declared effective by the SEC and shall remain effective as of the Closing, and no stop order or similar order shall be in effect with respect to the Registration Statement.

 

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6.2 Conditions to Obligations of the Company. In addition to the conditions specified in Section 6.1, 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), and (ii) 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.

 

(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) Minimum Funding. The total of the proceeds from the PIPE Offering plus the amount remaining in the Trust Account after Redemptions, net of Expenses, shall not be less than $50,000,000.

 

(e) 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 6.2(a), 6.2(b) and 6.2(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, (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 Purchaser 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) Sponsor Support Agreement. The Sponsor Support Agreement shall be in effect as of the Closing Date.

 

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6.3 Conditions to Obligations of the Purchaser. In addition to the conditions specified in Section 6.1, 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 set forth in this Agreement and in any certificate delivered by or on behalf of the Company 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) 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 Target Companies, taken as a whole.

 

(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 Target Companies taken as a whole since the date of this Agreement which is continuing and uncured.

 

(d) New Employment Agreements. The executives named in Section 5.20 shall have entered into the New Employment Agreements with the Purchaser.

 

(e) Recapitalization. The Recapitalization shall have been completed and the Company shall have provided documentation confirming the effectiveness of the Recapitalization.

 

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

 

(g) 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 6.3(a), 6.3(b) and 6.3(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 Stockholders at a duly called meeting of stockholders, (C) evidence that the Required Company Stockholder Approval has been obtained 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.

 

(iii) Good Standing. The Company shall have delivered to the Purchaser good standing certificates (or similar documents applicable for such jurisdictions) for each Target Company certified as of a date no earlier than thirty (30) days prior to the Closing Date from the proper Governmental Authority of the Target Company’s jurisdiction of organization and from each other jurisdiction in which the Target 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.

 

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(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 State of Delaware as of a date no more than ten (10) Business Days prior to the Closing Date.

 

(v) Registered Agent Letter. The Purchaser shall receive a copy of the letter, executed by all parties thereto, in the agreed form, to the Delaware registered agent of the Company from the client of record of such registered agent instructing it to take instruction from the Purchaser (or its nominees) from Closing.

 

(vi) Termination of Certain Contracts. The Purchaser shall have received evidence reasonably acceptable to the Purchaser that the Contracts involving the Target Companies and/or Company Security Holders or other Related Persons set forth on Schedule 6.3(g)(vi) have been terminated with no further obligation or Liability of any Target Company thereunder.

 

(vii) Key Environmental Permits. The Key Environmental Permits shall be in full force and effect.

 

6.4 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 VI to be satisfied if such failure was caused by the failure of such Party or its Affiliates (or with respect to the Company, any Target Company or Company Stockholder) to comply with or perform any of its covenants or obligations set forth in this Agreement.

 

Article VII
TERMINATION AND EXPENSES

 

7.1 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 VI have not been satisfied or waived by July 14, 2023 (the “Outside Date”) (provided, that (A) 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, and (B) if the SEC has not declared the Registration Statement effective on prior to July 14, 2023, the Outside Date shall be automatically extended to August 31, 2023; provided, however, the right to terminate this Agreement under this Section 7.1(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 7.1(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;

 

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(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 6.2(a) or Section 6.2(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 7.1(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 6.3(a) or Section 6.3(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 7.1(e) if at such time the Purchaser is in material uncured breach of this Agreement;

 

(f) by written notice by the Purchaser to the Company, if there shall have been a Material Adverse Effect on the Target Companies taken as a whole 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 Purchaser Stockholder Approval was not obtained; or

 

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

 

7.2 Effect of Termination. This Agreement may only be terminated in the circumstances described in Section 7.1 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 7.1 under which such termination is made. In the event of the valid termination of this Agreement pursuant to Section 7.1, 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 5.14, 5.15, 7.3, 8.1, Article IX and this Section 7.2 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 8.1). Without limiting the foregoing, and except as provided in Sections 7.3 and this Section 7.2 (but subject to Section 8.1) and subject to the right to seek injunctions, specific performance or other equitable relief in accordance with Section 9.9, 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 7.1.

 

7.3 Fees and Expenses. Subject to Sections 8.1, 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. Notwithstanding the foregoing, the Purchaser and the Company each agree to each be responsible for fifty percent (50%) of all filing fees and expenses under any applicable Antitrust Laws, including the fees and expenses relating to any pre-merger notification required the Hart-Scott-Rodino Antitrust Improvements Act of 1976 as amended (“Antitrust Expenses”).

 

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Article VIII
tRUST WAIVER

 

8.1 Waiver of Claims Against Trust. Reference is made to the IPO Prospectus. The Company 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 Class A 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 18 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 up to $100,000 in dissolution expenses, 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, the Company hereby agrees on behalf of itself and its Affiliates that, notwithstanding anything to the contrary in this Agreement, neither the Company nor any of its 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 or any of its 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”). The Company 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 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 the Company 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 any of its 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, the Company 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 any of its 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, and its 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 8.1 shall survive termination of this Agreement for any reason and continue indefinitely.

 

Article IX
MISCELLANEOUS

 

9.1 Survival. The representations and warranties of the Parties contained in this Agreement or in any certificate or instrument delivered by or on behalf of the Parties pursuant to this Agreement shall not survive the Closing, and from and after the Closing, the Parties and their respective Representatives shall not have any further obligations, nor shall any claim be asserted or action be brought against the Parties or their respective Representatives with respect thereto. The covenants and agreements made by the Parties 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).

 

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9.2 Non-Recourse. This Agreement may only be enforced against, and any claim or cause of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby may only be brought against, the entities that are expressly named as Parties and then only with respect to the specific obligations set forth herein with respect to such Party. Except to the extent a Party (and then only to the extent of the specific obligations undertaken by such Party in this Agreement), (a) no past, present or future director, officer, employee, sponsor, incorporator, member, partner, stockholder, Affiliate, agent, attorney, advisor or representative or Affiliate of any Party and (b) no past, present or future director, officer, employee, sponsor, incorporator, member, partner, stockholder, Affiliate, agent, attorney, advisor or representative or Affiliate of any of the foregoing shall have any liability (whether in contract, tort, equity or otherwise) for any one or more of the representations, warranties, covenants, agreements or other obligations or liabilities of any one or more of the Purchaser, Merger Sub or the Company under this Agreement of or for any claim based on, arising out of, or related to this Agreement or the transactions contemplated hereby.

 

9.3 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 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:

 

Industrial Tech Acquisitions II, Inc.
5090 Richmond Ave, Suite 319
Houston, Texas, 77056
Attn: R. Greg Smith, CFO
Telephone: (713) 599-1300
Email: greg@texasventures.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: Richard I. Anslow, Esq. (ext. 7194)
Asher S. Levitsky P.C. (ext. 7152)
Telephone No.: (212) 370-1300
Email: ranslow@egsllp.com
alevitsky@egsllp.com

 

If to the Company or the Surviving Corporation, to:

 

NEXT Renewable Fuels, Inc.
11767 Katy Freeway
Suite 700
Houston, Texas 77079
Attn: Chris Efird, CEO, and
David Kane, CFO
Telephone No.: 281.541.7311
Email: chris@nextrenewables.com
david@nextrenewables.com

 

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

 

ArentFox Schiff LLP
1717 K Street NW
Washington, DC 20006
Attn: Ralph De Martino, Esq.

Nick Tipsord, Esq.

Telephone No.: 202.724.6848
Email: Ralph.DeMartino@afslaw.com
Nick.Tipsord@afslaw.com

 

If to the Purchaser after the Closing, to:

 

NEXTCLEAN Fuels

11767 Katy Freeway
Suite 700
Houston, Texas 77079
Attn: Chris Efird, CEO, and
David Kane, CFO
Telephone No.: 281.541.7311
Email: chris@nextrenewables.com
david@nextrenewables.com

 

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

 

ArentFox Schiff LLP
1717 K Street NW
Washington, DC 20006
Attn: Ralph De Martino, Esq.

Nick Tipsord, Esq.

Telephone No.: 202.724.6848
Email: Ralph.DeMartino@afslaw.com
Nick.Tipsord@afslaw.com

 

and

 

Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Attn: Richard I. Anslow, Esq. (ext. 7194)

Asher S. Levitsky P.C. (ext. 7152)

Facsimile No.: (212) 370-7889

Telephone No.: (212) 370-1300

Email: ranslow@egsllp.com

alevitsky@egsllp.com

 

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9.4 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, any assignment without such consent shall be null and void; provided that no such assignment shall relieve the assigning Party of its obligations hereunder.

 

9.5 Third Parties. Except for the rights of the D&O Indemnified Persons set forth in Section 5.18, 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.

 

9.6 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 9.6) arising out of, related to, or in connection with this Agreement or the transactions contemplated hereby (a “Dispute”) shall be governed by this Section 9.6. 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 Delaware. 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 the State of Delaware. The language of the arbitration shall be English.

 

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9.7 Governing Law; Jurisdiction. This Agreement shall be governed by, construed and enforced in accordance with the Laws of the State of Delaware without regard to the conflict of laws principles thereof. Subject to Section 9.6, all Actions arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court located in the State of Delaware (or in any appellate court thereof) (the “Specified Courts”). Subject to Section 9.6, 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 9.3. Nothing in this Section 9.7 shall affect the right of any Party to serve legal process in any other manner permitted by Law.

 

9.8 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 9.8.

 

9.9 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.

 

9.10 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.

 

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9.11 Amendment. This Agreement may be amended, supplemented or modified only by execution of a written instrument signed by the Purchaser and the Company.

 

9.12 Waiver. The Purchaser on behalf of itself and its Affiliates, the Company on behalf of itself and its Affiliates, 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. 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.

 

9.13 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.

 

9.14 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 the DGCL 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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9.15 Counterparts. This Agreement and each Ancillary Document may be executed and delivered (including by facsimile, pdf 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.

 

9.16 Legal Representation. The Parties agree that, notwithstanding the fact that EGS may have, prior to Closing, jointly represented the Purchaser and 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, which is have the right to be represented by independent counsel in connection with the transactions contemplated by this Agreement, hereby agrees, in advance, to waive (and to cause its 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 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, any 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 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.

 

Article X
DEFINITIONS

 

10.1 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 Target Companies in the preparation of the latest Year-End 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.

 

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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.

 

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, and whether formal or informal.

 

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 Company Cash” means, as of the Reference Time, the aggregate cash and cash equivalents of the Target Companies 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 Target Companies as of such time.

 

Closing Net Indebtedness” means, as of the Reference Time, (i) the aggregate amount of all Indebtedness of the Target Companies, less (ii) the Closing Company Cash, in each case of clauses (i) and (ii), on a consolidated basis and as 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 Certificate of Incorporation of the Company, as amended and effective under the DGCL, prior to the Effective Time.

 

Company’s Closing Date Debt” shall mean the principal amount of Indebtedness for borrowed money which is outstanding on the Closing Date, after giving effect to the Recapitalization and shall exclude capital lease obligations.

 

Company Common Stock means Company’s common stock, par value $0.001 per share.

 

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Company Confidential Information” means all confidential or proprietary documents and information concerning the Target Companies or any of their respective 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, the Company Options and any other options, warrants or rights to subscribe for or purchase any capital stock of the Company or equity or debt securities convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire any capital stock of the Company or any other agreement or instrument pursuant to the terms of which additional shares of any capital stock of the Company may be issued.

 

Company Equity Financing” means a private placement of Company Securities pursuant to subscription agreements entered into between the Company and investors prior to the Closing on terms reasonably acceptable to the Purchaser.

 

Company Option” means an option (whether vested or unvested) to purchase Company Stock that was granted by the Company’s board of directors and, for the avoidance of doubt, excludes the United Securities.

 

Company Preferred Stock” means the preferred stock, par value $0.001 per share, of the Company.

 

Company Securities” means, collectively, the Company Stock, the Company Options and any other Company Convertible Securities and, for the avoidance of doubt, excludes the United Securities.

 

Company Security Holders” means, collectively, the holders of Company Securities.

 

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

 

Company Stockholders” means, collectively, the holders of Company Stock.

 

Company Warrant” means each warrant to purchase shares of Company Common Stock and includes any warrants issued as part of the Company Equity Financing, but excludes (i) the United Warrants and (ii) any warrants issued in connection with any financing other than the Company Equity Financing.

 

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).

 

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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.

 

COVID-19” means SARS-CoV-2 or COVID-19, and any evolutions thereof or any other related or associated epidemics, pandemics or disease outbreaks.

 

COVID-19 Measures” means any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other Law, directive, guidelines or recommendations by any Governmental Authority (including the Centers for Disease Control and the World Health Organization) in each case in connection with, related to or in response to COVID-19, including the Coronavirus Aid, Relief, and Economic Security Act (CARES) or any changes thereto.

 

Environmental Law” means any Law 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 a 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.

 

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

 

Fully-Diluted Company Shares” means the total number of issued and outstanding shares of Company Common Stock, (a) after giving effect to the Recapitalization or otherwise treating shares of Company Preferred Stock on an as-converted to Company Common Stock basis and (b) treating all outstanding Company Convertible Securities as fully vested and as if the Company Convertible Security had been exercised as of the Effective Time, but excluding any Company Securities issuable pursuant to the United Warrants.

 

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, including petroleum and its by-products, asbestos, polychlorinated biphenyls, radon, mold, and urea formaldehyde insulation.

 

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 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 January 11, 2022 and filed with the SEC on January 13, 2022 (File No. 333-254594).

 

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IPO Underwriters” means Wells Fargo Securities, LLC.

 

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

 

Key Environmental Permits” mean (i) the Oregon Department of Environmental Quality Air Contaminant Discharge Permit - Impacts to Air Quality; (ii) Clean Water Act Section 404 Water Quality Certification - Impact to Water Quality and (iii) U.S. Army Corp of Engineers Clean Water Act Section 401 Clean Water Act Permit - Impacts to Wetland.

 

Knowledge” means, with respect to (i) the Company, the actual knowledge of the executive officers or directors of any Target 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.

 

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.

 

Losses” means any and all losses, Actions, Orders, Liabilities, damages, 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).

 

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, prospects or condition (financial or otherwise) 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 applicable Laws (including COVID-19 Measures) or 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), natural disaster or pandemic (including COVID-19) or the worsening thereof; (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 Purchaser Stockholder Approval shall not be deemed to be a Material Adverse Effect on or with respect to the Purchaser.

 

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

 

Nasdaq” means the Nasdaq Capital Market.

 

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).

 

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 (v) Liens arising under this Agreement or any Ancillary Document.

 

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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.

 

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, collectively, the shares of Purchaser Class A Common Stock and the Purchaser Class B Common Stock. For the avoidance of doubt, any reference in this Agreement to Purchaser Common Stock from and after the Closing shall mean the Purchaser Class A Common Stock.

 

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, or any of 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 Purchaser or its Representatives to the Company, or its 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 Target Companies.

 

Purchaser Convertible Securities” means, collectively, any options, warrants or rights to subscribe for or purchase any class of capital stock of the Purchaser or equity or debt securities convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire any class or capital stock of the Purchaser or any other agreement or instrument pursuant to the terms of which additional shares of any capital stock of the Purchaser may be issued.

 

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

 

Purchaser Private Warrants” means one 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 Public Warrants” means one whole redeemable warrant that was included in as part of each Purchaser 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.

 

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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-half (1/2) of one Purchaser Public Warrant.

 

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

 

Redemption Price” means an amount equal to the price at which each public share of Purchaser Class A Common Stock is redeemed or converted pursuant to the Redemption (as equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the like after the Closing).

 

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, 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 environment.

 

Remedial Action” means all actions related to Environmental Laws 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 environment, (iii) perform pre-remedial studies and investigations or post-remedial monitoring and care, or (iv) correct a condition of noncompliance with Environmental Laws.

 

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.

 

Significant Company Holder” means any Company Stockholder who (i) is an executive officer or director of the Company or (ii) owns more than two percent (2%) of the issued and outstanding shares of the Company (treating any Company Convertible Securities on an as-converted to Company Common Stock basis).

 

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” means Industrial Tech Partners II, LLC.

 

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.

 

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Target Company” means any one of the Company and its direct and indirect Subsidiaries, and “Target Companies” means all of the Company and its direct and indirect Subsidiaries.

 

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.

 

Taxes” means (a) all 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, any other Person (other than an agreement entered into in the ordinary course of business and not primarily related to Taxes).

 

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 Class A Common Stock are actually traded on the principal securities exchange or securities market on which the Purchaser Class A Common Stock are then traded.

 

Transaction Expenses” means all fees and expenses of any of the Target Companies 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 any Target 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 any Target Company at or after the Closing pursuant to any agreement to which any Target 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, (iii) the Company’s portion of any Antitrust Expenses in accordance with Section 7.3 that have not been paid prior to the Closing, and (iv) any sales, use, real property transfer, stamp, stock transfer or other similar transfer Taxes imposed on Purchaser, Merger Sub or any Target Company in connection with the Merger or the other transactions contemplated by this Agreement.

 

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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 January 11, 2020, 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.

 

WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar federal, state, local or foreign Laws.

 

10.2 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   9.6
Acquisition Proposal   5.6(a)
Agreement   Preamble
Alternative Transaction   5.6(a)
Amended Purchaser Charter   1.7
Antitrust Expenses   7.3
Antitrust Laws   5.9(b)
Assumed Option   1.10(d)
Assumed Warrant   1.10(e)
Business Combination   8.1
Certificate of Merger   1.2
Closing   2.1
Closing Date   2.1
Closing Filing   5.14(b)
Closing Press Release   5.14(b)
Company   Preamble
Company Certificates   1.11(a)
Company Disclosure Schedules   Article IV
Company Financials   4.7(a)
Company IP   4.13(d)

 

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Term   Section
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 Special Meeting   5.13
Conversion Ratio   1.9
D&O Indemnified Persons   5.18(a)
D&O Tail Insurance   5.18(b)
DCGL   Recitals
Directors   5.17(a)
Dispute   9.6
Dissenting Shares   1.14
Dissenting Stockholder   1.14
Effective Time   1.2
EGS   2.1
Enforceability Exceptions   3.2
Environmental Permits   4.20(a)
     
Expenses   7.3
Extension   5.3(a)
Extension Expenses   5.3(a)(iv)
Federal Securities Laws   5.7
Incentive Plan   5.12(a)
Interim Balance Sheet Date   4.7(a)
Interim Period   5.1(a)
Lock-Up Agreement   Recitals
Lost Certificate Affidavit   1.11(d)
Merger   Recitals
Merger Consideration   1.9
Merger Sub   Preamble
NEXT Oregon   Recitals
Non-Competition Agreement   Recitals
OFAC   3.19(c)
Off-the-Shelf Software   4.13(a)
Outbound IP License   4.13(c)
Outside Date   7.1(b)
Party(ies)   Preamble
PIPE Offering   Preamble
PIPE Investors   3.22
PIPE Securities   3.22
Post-Closing Purchaser Board   5.17(a)
Proxy Statement   5.12(a)
Public Certifications   3.6(a)
Public Stockholders   8.1
Purchaser   Preamble

 

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Term   Section
Purchaser Disclosure Schedules   Article III
Purchaser Financials   3.6(b)
Purchaser Material Contract   3.13(a)
Purchaser Stockholder Approval Matters   5.12(a)
Purchaser Special Meeting   4.3(e)
Purchaser Stock Agreement   5.12(a)
Recapitalization   1.18
Redemption   5.12(a)
Registration Statement   5.12(a)
Related Person   4.21
Released Claims   8.1
Required Company Stockholder Approval   6.1(b)
Required Purchaser Stockholder Approval   6.1(a)
Resolution Period   9.6
SEC Reports   3.6(a)
SEC SPAC Accounting Changes   3.6(a)
Signing Filing   5.14(b)
Signing Press Release   5.14(b)
Specified Courts   9.7
Merger Consideration   1.9
Sponsor Support Agreement   Recitals
Subscription Agreement   Recitals
Surviving Corporation   1.1
Top Suppliers   4.24
Transmittal Documents   1.11(c)
Transfer Agent   1.11(a)
United Investments   Recitals
United Notes   Recitals
United Shares   Recitals
United Securities   Recitals
United Warrants   Recitals
Voting Agreements   Recitals
Year-End Company Financials   4.7(a)

 

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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:
   
  Industrial Tech Acquisitions II, Inc.
   
  By: /s/ R. Greg Smith
    Name:  R. Greg Smith
    Title: CFO

 

  Merger Sub:
   
  ITAQ Merger Sub Inc.
   
  By: /s/ R. Greg Smith
    Name:  R. Greg Smith
    Title: CFO

 

  The Company:
   
  NEXT Renewable Fuels, Inc.
   
  By: /s/ Chris Efird
    Name:  Chris Efird
    Title: CEO

 

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Exhibit 10.1

 

FORM OF VOTING AND SUPPORT AGREEMENT

 

This Voting and Support Agreement (this “Agreement”) is made as of November [●], 2022, by and among (i) Industrial Tech Acquisitions II, Inc., a Delaware corporation (together with its successors, the “Purchaser”), (ii) NEXT Renewable Fuels, Inc., a Delaware corporation (the “Company”), and (iii) the undersigned holder (“Holder”) of capital stock and/or securities convertible into capital stock of the Company. Any capitalized term used but not defined in this Agreement will have the meaning ascribed to such term in the Merger Agreement.

 

WHEREAS, on or about the date hereof, (i) the Purchaser, (ii) ITAQ Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub”), and (iii) 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, upon the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), (a) Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving as the surviving entity (the “Surviving Corporation”), following which, (ii) the Company Security Holders will receive Merger Consideration, in each case upon the terms and subject to the conditions set forth in the Merger Agreement (such transactions, together with the other transactions contemplated by the Merger Agreement, the “Transactions”), all upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the applicable provisions of the DGCL;

 

WHEREAS, it is a condition to the consummation of the Merger that, on or prior to the Closing Date, all convertible debt shall be converted into Company Common Stock, so that at the closing all convertible debt shall be converted, in accordance with the terms of the Merger Agreement (the “Recapitalization”);

 

WHEREAS, the Board of Directors of the Company has (a) approved and declared advisable the Merger Agreement, the Ancillary Documents, the Merger and the other transactions contemplated by any such documents (collectively, the “Transactions”), (b) determined that the Transactions are fair to and in the best interests of the Company and its stockholders (the “Company Stockholders”) and (c) recommended the approval and the adoption by each of the Company Stockholders of the Merger Agreement, the Ancillary Documents, the Merger, and the other Transactions; and

 

WHEREAS, as a condition to the willingness of the Purchaser to enter into the Merger Agreement, and as an inducement and in consideration therefor, and in view of the valuable consideration to be received by Holder thereunder, and the expenses and efforts to be undertaken by the Purchaser and the Company to consummate the Transactions, the Purchaser, the Company and Holder desire to enter into this Agreement in order for Holder to provide certain assurances to the Purchaser regarding the manner in which Holder is bound hereunder to vote any shares of capital stock of the Company which Holder beneficially owns, acquires, holds or otherwise has voting power (the “Shares”) during the period from and including the date hereof through and including the date on which this Agreement is terminated in accordance with its terms (the “Voting Period”) with respect to the Merger Agreement, the Recapitalization, the Merger, the Ancillary Documents and the Transactions.

 

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. Covenant to Vote in Favor of Transactions. Holder agrees, with respect to all of the Shares (and, in the case of Section 1(b) and Section 1(f), all of the Securities (as defined below)):

 

 

 

(a) during the Voting Period, at each meeting of the Company Stockholders or any class or series thereof, and in each written consent or resolutions of any of the Company Stockholders in which Holder is entitled to vote or consent, Holder hereby unconditionally and irrevocably agrees to be present for such meeting and vote (in person or by proxy), or consent to any action by written consent or resolution with respect to, as applicable, the Shares (i) in favor of, and adopt, the Merger, the Recapitalization, the Merger Agreement, the Ancillary Documents, any amendments to the Company’s Organizational Documents, and all of the other Transactions (and any actions required in furtherance thereof), (ii) in favor of the other matters set forth in the Merger Agreement, and (iii) to vote the Shares in opposition to: (A) any Acquisition Proposal and any and all other proposals (x) for the acquisition of the Company, or (y) which are in competition with or materially inconsistent with the Merger Agreement or the Ancillary Documents; (B) other than as contemplated by the Merger Agreement, any material change in (x) the present capitalization of the Company or any amendment of the Company’s Organizational Documents or (y) the Company’s corporate structure or business; or (C) any other action or proposal involving any Target Company that is intended, or would reasonably be expected, to prevent, impede, interfere with, delay, postpone or adversely affect in any material respect the Transactions or would reasonably be expected to result in any of the conditions to the Closing under the Merger Agreement not being fulfilled;

 

(b) to execute and deliver all related documentation and take such other action in support of the Merger, the Recapitalization, the Merger Agreement, any Ancillary Documents, any of the Transactions, as shall reasonably be requested by the Company or the Purchaser in order to carry out the terms and provision of this Section 1, including, without limitation, (i) execution and delivery to the Company of a Letter of Transmittal and the Transmittal Documents, (ii) if applicable, delivery of Holder’s Company Certificate, duly endorsed for transfer, to the Company or the Transfer Agent, as applicable, and any similar or related documents and such other documents as may be reasonably requested by the Company, the Purchaser or the Transfer Agent, as applicable, (iii) if applicable, delivery of instrument(s) contemplating the conversion or exchange of each of Holder’s Company Convertible Securities, as applicable, for shares of Company Class A Common Stock (or other similar documentation reasonably requested by the Purchaser, the Company or the Transfer Agent), (iv) if applicable, delivery of the Assumed Warrants, Assumed Options or instrument(s) of exercise thereunder, duly endorsed for transfer or notice of exercise, to the Company or the Transfer Agent, as applicable, and any similar or related documents and such other documents as may be reasonably requested by the Purchaser, the Company or the Transfer Agent, (v) any actions by written consent of the Company Stockholders presented to Holder, and (vi) any applicable Ancillary Documents (including, without limitation, a Lock-Up Agreement and a Non-Competition Agreement), customary instruments of conveyance and transfer, and any consent, waiver, governmental filing, and any similar or related documents;

 

(c) except for transfers expressly permitted by, and effected in accordance with, Section 3(b), not to deposit, and to cause their Affiliates not to deposit, except as provided in this Agreement, any Shares owned by Holder or his/her/its Affiliates in a voting trust or subject any Shares to any arrangement or agreement with respect to the voting of such Shares, unless specifically requested to do so by the Company and the Purchaser in connection with the Merger Agreement, the Ancillary Documents and any of the Transactions;

 

(d) except as contemplated by the Merger Agreement or the Ancillary Documents, make, or in any manner participate in, directly or indirectly, a “solicitation” of “proxies” or consents (as such terms are used in the rules of the SEC) or powers of attorney or similar rights to vote, or seek to advise or influence any Person with respect to the voting of, any shares of the Company capital stock in connection with any vote or other action with respect to the Transactions, other than to recommend that stockholders of the Company vote in favor of adoption of the Merger Agreement and the Transactions and any other proposal the approval of which is a condition to the obligations of the parties under the Merger Agreement (and any actions required in furtherance thereof and otherwise as expressly provided by Section 1 of this Agreement);

 

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(e) to refrain from exercising any dissenters’ rights or rights of appraisal under applicable Law at any time with respect to the Merger, the Merger Agreement, the Ancillary Documents and any of the Transactions, including pursuant to the DGCL; and

 

(f) without limiting Sections 1(a) and 1(b) above, to: (i) approve, consent to, participate in the Recapitalization and convert all shares of Company Preferred Stock and Company convertible debt held by Holder for shares of Company Common Stock at the applicable conversion ratio (including any accrued or declared but unpaid dividends or interest) as set forth in the Company Charter in accordance with the terms of the Merger Agreement.

 

2. Other Covenants.

 

(a) No Transfers. Holder agrees that during the Voting Period it shall not, and shall cause its Affiliates not to, without the Purchaser’s prior written consent, (A) offer for sale, sell (including short sales), transfer, tender, pledge, encumber, assign or otherwise dispose of (including by gift) (collectively, a “Transfer”), or enter into any contract, option, derivative, hedging or other agreement or arrangement or understanding (including any profit-sharing arrangement) with respect to, or consent to, a Transfer of, any or all of the Securities (as defined below); (B) grant any proxies or powers of attorney with respect to any or all of the Securities; (C) permit to exist any lien of any nature whatsoever (other than those imposed by this Agreement, applicable securities Laws or the Company’s Organizational Documents, as in effect on the date hereof) with respect to any or all of the Securities; or (D) take any action that would have the effect of preventing, impeding, interfering with or adversely affecting Holder’s ability to perform its obligations under this Agreement. The Company hereby agrees that it shall not permit any Transfer of the Securities in violation of this Agreement. Holder agrees with, and covenants to, the Purchaser that Holder shall not request that the Company register the Transfer (book-entry or otherwise) of any certificate or uncertificated interest representing any Security during the term of this Agreement without the prior written consent of the Purchaser, and the Company hereby agrees that it shall not effect any such Transfer.

 

(b) Permitted Transfers. Section 2(a) shall not prohibit a Transfer of Shares by Holder (i) to any family member or trust for the benefit of any family member, (ii) to any stockholder, member or partner of Holder, if an entity, (iii) to any Affiliate of Holder, or (iv) to any person or entity if and to the extent required by any non-consensual Order, by divorce decree or by will, intestacy or other similar applicable Law, so long as, in the case of the foregoing clauses (i), (ii), (iii) and (iv), the assignee or transferee agrees to be bound by the terms of this Agreement and executes and delivers to the parties hereto a written consent and joinder memorializing such agreement. During the term of this Agreement, the Company will not register or otherwise recognize the transfer (book-entry or otherwise) of any Shares or any certificate or uncertificated interest representing any of Holder’s Shares, except as permitted by, and in accordance with, this Section 2(b).

 

(c) Changes to of Securities. In the event of a stock dividend or distribution, or any change in the shares of capital stock of the Company by reason of any stock dividend or distribution, stock split, recapitalization, combination, conversion, exchange of shares or the like, the term “Securities” shall be deemed to refer to and include the Securities as well as all such stock dividends and distributions and any securities into which or for which any or all of the Securities may be changed or exchanged or which are received in such transaction. Holder agrees during the Voting Period to notify the Purchaser and the Company promptly in writing of the number and type of any changes to Holder’s ownership of or voting control with respect to Securities, upon Holder’s acquisition or commitment to acquire any additional Securities or upon any other changes involving Holder relating to capital stock or securities convertible or exercisable for capital stock of the Company.

 

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(d) Compliance with Merger Agreement. Holder agrees to not during the Voting Period take or agree or commit to take any action that would make any representation and warranty of Holder contained in this Agreement inaccurate in any material respect. Holder further agrees that it shall use its commercially reasonable efforts to cooperate with the Purchaser to effect the Merger, the Recapitalization, all other Transactions, the Merger Agreement, the Ancillary Documents and the provisions of this Agreement. During the Voting Period, Holder shall not authorize or permit any of its Representatives to, directly or indirectly, take any action that the Company is prohibited from taking pursuant to Section 4.2 of the Merger Agreement (unless the Purchaser shall have consented thereto).

 

(e) Registration Statement. During the Voting Period, Holder agrees to provide to the Purchaser, the Company and their respective Representatives any information regarding Holder or the Securities that is reasonably requested by the Purchaser, the Company or their respective Representatives for inclusion in the Registration Statement.

 

(f)   Publicity. Holder shall not issue any press release or otherwise make any public statements with respect to the Transactions or the transactions contemplated herein without the prior written approval of the Company and the Purchaser. Holder hereby authorizes the Company and the Purchaser to publish and disclose in any announcement or disclosure required by the SEC, Nasdaq or the Registration Statement (including all documents and schedules filed with the SEC in connection with the foregoing), Holder’s identity and ownership of the Securities and the nature of Holder’s commitments and agreements under this Agreement, the Merger Agreement and any other Ancillary Documents.

 

3. Representations and Warranties of Holder. Holder hereby represents and warrants to the Purchaser and the Company as follows:

 

(a) Binding Agreement. Holder (i) if a natural person, is of legal age to execute this Agreement and is legally competent to do so and (ii) if not a natural person, is (A) a corporation, limited liability company, company or partnership duly organized and validly existing under the laws of the jurisdiction of its organization and (B) has all necessary power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. If Holder is not a natural person, the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby by Holder has been duly authorized by all necessary corporate, limited liability or partnership action on the part of Holder, as applicable. This Agreement, assuming due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of Holder, enforceable against Holder in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles). Holder understands and acknowledges that the Purchaser is entering into the Merger Agreement in reliance upon the execution and delivery of this Agreement by Holder.

 

(b) Ownership of Securities. As of the date hereof, Holder has beneficial ownership over the type and number of the Shares and, to the extent applicable, the other securities issued by the Company set forth under Holder’s name on the signature page hereto (collectively, the “Securities”), is the lawful owner of such Securities, has the sole power to vote or cause to be voted such Securities (to the extent such Securities have associated voting rights), and has good and valid title to such Securities, free and clear of any and all pledges, mortgages, encumbrances, charges, proxies, voting agreements, liens, adverse claims, options, security interests and demands of any nature or kind whatsoever, other than those imposed by this Agreement, applicable securities Laws or the Company’s Organizational Documents, as in effect on the date hereof. There are no claims for finder’s fees or brokerage commission or other like payments in connection with this Agreement or the transactions contemplated hereby payable by Holder pursuant to arrangements made by Holder. Except for the Shares and other securities of the Company set forth under Holder’s name on the signature page hereto, as of the date of this Agreement, Holder is not a beneficial owner or record holder of any: (i) equity securities of the Company, (ii) securities of the Company having the right to vote on any matters on which the holders of equity securities of the Company may vote or which are convertible into or exchangeable for, at any time, equity securities of the Company or (iii) options, warrants or other rights to acquire from the Company any equity securities or securities convertible into or exchangeable for equity securities of the Company.

 

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(c) No Conflicts. No filing with, or notification to, any Governmental Authority, and no consent, approval, authorization or permit of any other person is necessary for the execution of this Agreement by Holder, the performance of its obligations hereunder or the consummation by it of the transactions contemplated hereby. None of the execution and delivery of this Agreement by Holder, the performance of its obligations hereunder or the consummation by it of the transactions contemplated hereby shall (i) conflict with or result in any breach of the certificate of incorporation, bylaws or other comparable organizational documents of Holder, if applicable, (ii) result in, or give rise to, a violation or breach of or a default under any of the terms of any Contract or obligation to which Holder is a party or by which Holder or any of the Securities or its other assets may be bound, or (iii) violate any applicable Law or Order, except for any of the foregoing in clauses (i) through (iii) as would not reasonably be expected to impair Holder’s ability to perform its obligations under this Agreement in any material respect.

 

(d) No Inconsistent Agreements. Holder hereby covenants and agrees that, except for this Agreement, which will be terminated at the Closing, Holder (i) has not entered into, nor will enter into at any time while this Agreement remains in effect, any voting agreement or voting trust with respect to the Securities inconsistent with Holder’s obligations pursuant to this Agreement, (ii) has not granted, nor will grant at any time while this Agreement remains in effect, a proxy, a consent or power of attorney with respect to the Securities and (iii) has not entered into any agreement or knowingly taken any action (nor will enter into any agreement or knowingly take any action) that would make any representation or warranty of Holder contained herein untrue or incorrect in any material respect or have the effect of preventing Holder from performing any of its material obligations under this Agreement.

 

4. Miscellaneous.

 

(a) Termination. Notwithstanding anything to the contrary contained herein, this Agreement shall automatically terminate, and none of the Purchaser, the Company or Holder shall have any rights or obligations hereunder, upon the earliest to occur of (i) the mutual written consent of the Purchaser, the Company and Holder, (ii) the Effective Time (following the performance of the obligations of the parties hereunder required to be performed at or prior to the Effective Time), and (iii) the date of termination of the Merger Agreement in accordance with its terms. The termination of this Agreement shall not prevent any party hereunder from seeking any remedies (at law or in equity) against another party hereto or relieve such party from liability for such party’s breach of any terms of this Agreement. Notwithstanding anything to the contrary herein, the provisions of this Section 4(a) shall survive the termination of this Agreement. 

 

(b) 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 assigned, transferred or delegated by Holder at any time without the prior written consent of the Purchaser and the Company, and any purported assignment, transfer or delegation without such consent shall be null and void ab initio. Each of the Company and 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.

 

5

 

 

(c) 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 that is not a party hereto or thereto or a successor or permitted assign of such a party.

 

(d) 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 Delaware, 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 the State of Delaware (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 or referred to in Section 4(g). Nothing in this Section 4(d) shall affect the right of any party to serve legal process in any other manner permitted by applicable law.

 

(e) 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 4(e).

 

(f)   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; (iv) the term “or” means “and/or” and (v) the term “Affiliate” shall mean, with respect to any specified person, any other person or group of persons acting together that, directly or indirectly, through one or more intermediaries controls, is controlled by or is under common control with such specified person (where the term “control” (and any correlative terms) means the possession, direct or indirect, 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). 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.

 

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(g)    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 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, to:

 

Industrial Tech Acquisitions II, Inc.
5090 Richmond Ave, Suite 319
Houston, Texas, 77056
Attn: Greg Smith
Telephone: (713) 599-1300
Email: greg@texasventures.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: Richard I. Anslow, Esq. (ext. 7194)
Asher S. Levitsky P.C. (ext. 7152)
Telephone No.: (212) 370-1300
Email: ranslow@egsllp.com
alevitsky@egsllp.com

If to the Company, to:

 

NEXT Renewable Fuels, Inc.
11767 Katy Freeway
Suite 700
Houston, Texas 77079
Attn: Chris Efird, CEO, and
David Kane, CFO
Telephone No.: 281.541.7311
Email: chris@nextrenewables.com
david@nextrenewables.com

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

 

ArentFox Schiff LLP
1717 K Street NW
Washington, DC 20006
Attn: Ralph De Martino, Esq.

Nick Tipsord, Esq.

Telephone No.: 202.724.6848
Email: Ralph.DeMartino@afslaw.com
Nick.Tipsord@afslaw.com

 

If to Holder, to: the address set forth under Holder’s name on the signature page hereto, with a copy (which will not constitute notice) to, if not the party sending the notice, each of the Company and the Purchaser (and each of their copies for notices hereunder).  
     

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(h) 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, the Company and the 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.

 

(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 the Company and the Purchaser will not have 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 Holder in accordance with their specific terms or were otherwise breached. Accordingly, the Company and 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 such party may be entitled under this Agreement, at law or in equity.

 

(k) Expenses. Each party shall be responsible for its own fees and expenses (including the fees and expenses of investment bankers, accountants and counsel) in connection with the entering into of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby; provided, that in the event of any Action arising out of or relating to this Agreement, the non-prevailing party in any such Action will pay its own expenses and the reasonable documented out-of-pocket expenses, including reasonable attorneys’ fees and costs, reasonably incurred by the prevailing party.

 

(l)   No Partnership, Agency or Joint Venture. This Agreement is intended to create a contractual relationship among Holder, the Company and the Purchaser, and is not intended to create, and does not create, any agency, partnership, joint venture or any like relationship among the parties hereto or among any other Company shareholders entering into voting agreements with the Company or the Purchaser. Holder is not affiliated with any other holder of securities of the Company entering into a voting agreement with the Company or the Purchaser in connection with the Merger Agreement and has acted independently regarding its decision to enter into this Agreement. Nothing contained in this Agreement shall be deemed to vest in the Company or the Purchaser any direct or indirect ownership or incidence of ownership of or with respect to any Securities.

 

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

 

(n) Entire Agreement. This Agreement (together with the Merger Agreement to the extent referred to herein) 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.

 

(o) Counterparts; Facsimile. 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 Page Follows]

 

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

 

  The Purchaser:
   
  Industrial Tech Acquisitions II, Inc.
     
  By:                 
  Name:  
  Title:  

 

[Signature Page to Voting Agreement]

 

 

 

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

 

  The Company:
   
  NEXT Renewable Fuels, Inc.
     
  By:                 
  Name:  
  Title:  

 

[Signature Page to Voting Agreement]

 

 

 

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

 

Holder:  
   
By:    
Name:    
   

 

Number and Type of Securities:

 

Company Stock

 

__________ shares of Company Common Stock

__________ shares of Company Preferred Stock

 

Other Company Securities

_______________________________________ [specify type, number/amount and shares into which securities are convertible or exercisable, as applicable]

 

Address for Notice:  
   
Address:    
   
   
Telephone No.:    
Email: ___________________________________________________:  

 

[Signature Page to Voting Agreement]

 

 

 

Schedule 1

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 10.2

 

FORM OF LOCK-UP AGREEMENT

 

THIS LOCK-UP AGREEMENT (this “Agreement”) is made and entered into as of November 14, 2022 by and among (i) Industrial Tech Acquisitions II, Inc., a Delaware corporation, (including any successor entity thereto, the “Purchaser”) and (ii) the undersigned (“Holder”). Any capitalized term used but not defined in this Agreement will have the meaning ascribed to such term in the Merger Agreement (defined below).

 

WHEREAS, on or about the date hereof, (i) the Purchaser, (ii) ITAQ Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub”), and (iii) NEXT Renewable Fuels, Inc., a Delaware 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 Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity (the “Merger”), and as a result of which, (a) all of the issued and outstanding Company Common Stock 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 each Company Stockholder to receive its portion of the Merger Consideration in the manner provided in the Merger Agreement, (b) the Company, as the surviving corporation, will be a wholly-owned subsidiary of the Purchaser, and (c) the Company Options outstanding at the Effective Time shall be assumed (with adjustments to the number and exercise price of such assumed Company Options to reflect the Conversion Ratio, by Purchaser with the result that such assumed Company Options shall be replaced with Assumed Options exercisable into shares of Purchaser Class A Common Stock, all upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the applicable provisions of the of the DGCL;

 

WHEREAS, as of the date hereof, Holder is a holder of the Company Securities in such amounts as set forth underneath Holder’s name on the signature page hereto; 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, and/or the Assumed Options and all Purchaser Class A Common Stock underlying the Assumed Options 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 (the “Lock-Up Period”) commencing from the Closing and ending on the earlier of (A) the one (1) year anniversary of the date of the Closing and (B) the date after the Closing on which Purchaser consummates a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party that results in all of Purchaser’s stockholders having the right to exchange their equity holdings in Purchaser for cash, securities or other property: (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 (as defined below) or (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; provided, however, that in any of cases (I), (II) or (III) 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: (A) 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 spouse or domestic partner and siblings), (B) any trust for the direct or indirect benefit of Holder or the immediate family of Holder, (C) if Holder is a trust, the trustor or beneficiary of such trust or to the estate of a beneficiary of such trust, (D) if Holder is an entity, as a distribution to limited partners, shareholders, members of, or owners of similar equity interests in Holder upon the liquidation and dissolution of Holder, and (E) any affiliate of Holder. 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 [●], 2022, BY AND AMONG THE ISSUER OF SUCH SECURITIES (THE “ISSUER”), A CERTAIN REPRESENTATIVE OF THE ISSUER NAMED THEREIN AND THE ISSUER’S SECURITY HOLDERS NAMED THEREIN. 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, subject to the terms of the Merger Agreement and, the Voting Agreement.

 

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2. Miscellaneous.

 

(a) Termination of Merger Agreement. Notwithstanding anything to the contrary contained herein, in the event that the Merger Agreement is terminated in accordance with its terms prior to the Closing, this Agreement and all rights and obligations of the parties hereunder shall automatically terminate and be of no further force or effect.

 

(b) 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.

 

(c) 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.

 

(d) 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 Delaware, 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 Delaware (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(g). Nothing in this Section 2(d) shall affect the right of any party to serve legal process in any other manner permitted by applicable law.

 

(e) 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(e).

 

(f) 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 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.

 

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(g) 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 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, at or prior to the Closing, to:   With a copy (which will not constitute notice) to:
     
Industrial Tech Acquisitions II, Inc.   Ellenoff Grossman & Schole LLP
5090 Richmond Ave, Suite 319   1345 Avenue of the Americas, 11th Floor
Houston, Texas, 77056   New York, New York 10105
Attn:  R. Greg Smith, CFO   Attn:  Richard I. Anslow, Esq. (ext. 7194)
Telephone: (713) 599-1300   Asher S. Levitsky P.C. (ext. 7152)
Email:  greg@texasventures.com   Telephone No.: (212) 370-1300
    Email:  ranslow@egsllp.com
      alevitsky@egsllp.com
If to the Purchaser after the Closing, to:   with a copy (which shall not constitute notice) to:
     
NXTCLEAN Fuels Inc.   ArentFox Schiff LLP
11767 Katy Freeway   1717 K Street NW
Suite 700   Washington, DC 20006
Houston, Texas 77079   Attn: Ralph De Martino, Esq.                   
Attn: Chris Efird, CEO, and   Nick Tipsord, Esq.
David Kane, CFO   Telephone No.: 202.724.6848
Telephone No.: 281.541.7311   Email:  Ralph.DeMartino@afslaw.com
Email:  chris@nextrenewables.com   Nick.Tipsord@afslaw.com
david@nextrenewables.com  
    and
     
    Ellenoff Grossman & Schole LLP
    1345 Avenue of the Americas, 11th Floor
    New York, New York 10105
    Attn: Richard I. Anslow, Esq. (ext. 7194)
    Asher S. Levitsky P.C. (ext. 7152)
    Telephone No.: (212) 370-1300
    Email:  ranslow@egsllp.com
      alevitsky@egsllp.com
       

If to Holder, to:  the address set forth under Holder’s name on the signature page hereto, with a copy (which will not constitute notice) to, if not the party sending the notice, the Purchaser.

 

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(h) 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.

 

(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 such party may be entitled under this Agreement, at law or in equity.

 

(k) Entire Agreement. This Agreement, together with the Merger Agreement to the extent referred to herein, 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 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 executed this Lock-Up Agreement as of the date first written above.

 

  Purchaser:
   
  Industrial Tech Acquisitions II, Inc.
   
  By:        
  Name:
  Title:

 

{Additional Signature on the Following Page}

 

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

 

Holder:  
   
Name of Holder: [ _____________]  
   
By:                  
Name:    
Title:    

 

Number of Shares, Options and Other Company Securities:  
   
Company Common Stock:  
 
   
Company Options:  
 
   
Other Company Securities:  
 
   
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 [●], 2022, by [___]1 (the “Subject Party”) in favor of and for the benefit of Industrial Tech Acquisitions II, Inc., a Delaware corporation, (including any successor entity thereto, the “Purchaser”), NEXT Renewable Fuels, Inc., a Delaware corporation (the “Company”), and each of the Purchaser’s and/or the Company’s respective present and future 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 or about the date hereof, (i) the Purchaser, (ii) ITAQ Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub”), and (iii) 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, upon the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), (a) Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving as the surviving entity (the “Surviving Corporation”), following which, (ii) the Company Security Holders will receive Merger Consideration, in each case upon the terms and subject to the conditions set forth in the Merger Agreement (such transactions, together with the other transactions contemplated by the Merger Agreement, the “Transactions”);

 

WHEREAS, the Company, directly and indirectly through its subsidiaries, will turn recycled organic materials into renewable transportation fuels (collectively, the “Business”);

 

WHEREAS, in connection with, and as a condition to the execution and delivery of the Merger Agreement and the consummation of 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 and its Subsidiaries, 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 to enter into the Merger Agreement and consummate the Transactions, pursuant to which the Subject Party will directly or indirectly receive a material benefit; and

 

WHEREAS, the Subject Party, as a former and/or current holder of capital stock and/or securities convertible into capital stock of the Company has contributed to the value of the Company and its Subsidiaries and has obtained extensive and valuable knowledge and confidential information concerning the Business of the Company and its Subsidiaries.2

 

NOW, THEREFORE, in order to induce the Purchaser to enter into the Merger Agreement and 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 three (3) year anniversary of the Closing Date (the “Restricted Period”) the Subject Party will not, and will cause its Affiliates not to, without the prior written consent of the Purchaser (which may be withheld in its sole discretion), anywhere in the United States or in any other markets, countries or territories 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, contractor, advisor or representative of, a business or entity (other than a Covered Party) that engages in the Business (a “Competitor”). Notwithstanding the foregoing, 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”).

 

 

1Non-compete agreements to be signed by certain Company Stockholders and management personnel.

2To include a reference to securities held by management personnel, if a major stockholder.

 

 

 

 

(b) Acknowledgment. The Subject Party acknowledges and agrees, based upon the advice of legal counsel which the Subject Party acknowledges has been sought by and provided to the Subject Party to its satisfaction and the Subject Party’s own education, experience and training, that (i) the Subject Party possesses knowledge of confidential information of the Company and its Subsidiaries and the Business, (ii) the Subject Party’s execution of this Agreement is a material inducement to the Purchaser and the Company to consummate the Transactions and to realize the goodwill of the Company and its Subsidiaries, for which the Subject Party and/or its Affiliates will receive a substantial direct or indirect financial benefit which the Subject Party agrees constitutes adequate consideration for entering into this Agreement, and that the Purchaser and the Company 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 its Subsidiaries and reduce the value of the assets of the Company and its Subsidiaries 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 and do not impose an undue hardship on the Subject Party and will not prevent the Subject Party from earning a living, (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 and its Affiliates will not, 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 such date of the relevant act prohibited by this Section 2(a) or during the one (1) year period preceding such date.

 

(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) and a majority of the Disinterested Independent Directors, 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) 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, contractor or client (or prospective customer, contractor 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 such date of the relevant act prohibited by this Section 2(b) or during the one (1) year period preceding such date.

 

(c) Non-Disparagement. The Subject Party agrees that from and after the Closing until the three (3) year 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 or its Affiliates 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 or its Affiliate against any Covered Party under this Agreement, the Merger Agreement or any other Ancillary Document that is asserted by the Subject Party or its Affiliate 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 information, computer hardware or software, administrative, management, operational, data processing, financial, marketing, customers, sales, human resources, employees, vendors, 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. Covered Party Information also includes information disclosed to any Covered Party by a third party to the extent that a Covered Party has an obligation of confidentiality in connection therewith. 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 or other confidentiality obligation with respect to such material or information; (ii) is or becomes publicly known through no violation of Law, 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 and Specific Performance. 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 obtain 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 that monetary damages would be insufficient 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. Subject Party further acknowledges that its obligations under this Agreement are unique, recognizes and affirms that in the event of a breach of this Agreement by Subject Party, 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 Subject Party 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 Subject Party 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 such party may be entitled under this Agreement, at law or in equity.

 

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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 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, at or prior to the Closing, Purchaser, to:   With a copy (which will not constitute notice) to:
     
Industrial Tech Acquisitions II, Inc.   Ellenoff Grossman & Schole LLP
5090 Richmond Ave, Suite 319   1345 Avenue of the Americas, 11th Floor
Houston, Texas, 77056   New York, New York 10105
Attn:  R. Greg Smith                                      Attn: Richard I. Anslow, Esq. (ext. 7194)         
Telephone: (713) 599-1300     Asher S. Levitsky P.C. (ext. 7152)
Email: greg@texasventures.com   Telephone No.: (212) 370-1300
    Email: ranslow@egsllp.com
      alevitsky@egsllp.com
     
If to the Purchaser after the Closing, to:   with a copy (which shall not constitute notice) to:
     
NEXTCLEAN Fuels, Inc.   ArentFox Schiff LLP
11767 Katy Freeway   1717 K Street NW
Suite 700   Washington, DC 20006
Houston, Texas 77079   Attn: Ralph De Martino, Esq.
Attn: Chris Efird, CEO, and   Nick Tipsord, Esq.
David Kane, CFO   Telephone No.: 202.724.6848
Telephone No.: 281.541.7311   Email: Ralph.DeMartino@afslaw.com
Email: chris@nextrenewables.com   Nick.Tipsord@afslaw.com
david@nextrenewables.com  
    and
     
    Ellenoff Grossman & Schole LLP
    1345 Avenue of the Americas, 11th Floor
    New York, New York 10105
    Attn: Richard I. Anslow, Esq. (ext. 7194)
      Asher S. Levitsky P.C. (ext. 7152)
    Telephone No.: (212) 370-1300
    Email: ranslow@egsllp.com
      alevitsky@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, together with the Merger Agreement to the extent referred to herein, 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. 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. 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. 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. 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.

 

(e) Dispute Resolution. Any and all disputes, controversies and claims (other than applications for specific performance, a temporary restraining order, preliminary injunction, permanent injunction or other equitable relief or application for enforcement of a resolution under this Section 7(e)) arising out of, related to, or in connection with this Agreement or the transactions contemplated hereby (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. 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 Delaware. 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 the State of Delaware. The language of the arbitration shall be English.

 

(f) Governing Law; Jurisdiction. This Agreement shall be governed by, construed and enforced in accordance with the Laws of the State of Delaware 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 the State of Delaware (or in any appellate court 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 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 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.

 

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(g) 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 7(g).

 

(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. Each Covered Party may freely assign any or all of its rights under this Agreement, at any time, in whole or in part, to any Person which acquires, in one or more transactions, at least a majority of the equity securities (whether by equity sale, merger or otherwise) of such Covered Party or all or substantially all of the assets of such Covered Party and its Subsidiaries, taken as a whole, without obtaining the consent or approval of the Subject Party. 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.

 

(i) Authorization on Behalf of Covered Parties. The parties acknowledge and agree that enforcement of the Purchaser and/or any other Covered Parties’ rights and remedies, and the grant of any waivers or amendments under this Agreement may be made, taken and authorized on behalf of the Covered Parties only following the affirmative vote or consent of a majority of the Disinterested Independent Directors. For purposes of this Agreement, a “Disinterested Independent Director” means an independent director (as defined under the rules and regulations of The Nasdaq Stock Market) serving on the Purchaser’s board of directors at the applicable time of determination, that is not a pre-Closing Company shareholder, an Affiliate of a pre-Closing Company shareholder, or an officer, director, manager, employee, trustee or beneficiary of a pre-Closing Company shareholder or its Affiliate, nor an immediate family member of any of the foregoing. Without limiting the foregoing, in the event that a pre-Closing Company shareholder or its Affiliate serves as a director, officer, employee or other authorized agent of the Purchaser, the pre-Closing Company shareholder or its Affiliate shall have no authority, express or implied, to act or make any determination on behalf of the Purchaser in connection with this Agreement or any dispute, action or legal proceeding respect hereto.

 

(j) Construction. 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 shall include any applicable owners of the equity interests of such Person, in whatever form, including with respect to the Purchaser its stockholders under the DGCL 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.

 

(k) Counterparts. This Agreement may be executed and delivered (including by pdf 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.

 

(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]

 

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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:
   
  [__________]
     
   
  Name:
   
  Signing in [his/her] capacity as a stockholder of the Company.
                          
  Address for Notice:
   
  Address:                                                     
   
   
  Telephone No.:  
  Email:  

 

{Signature Page to Non-Competition Agreement}

 

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Acknowledged and accepted as of the date first written above:  
   
The Purchaser:  
   
Industrial Tech Acquisitions II, Inc.  
   
By:                     
Name:    
Title:    

 

 

 

 

The Company:  
   
NEXT Renewable Fuels, Inc.  
     
By:             
Name:    
Title:    

 

{Signature Page to Non-Competition Agreement}

 

 

 

 

 

Exhibit 10.4

 

SPONSOR VOTING AGREEMENT

 

This Voting Agreement (this “Agreement”) is made as of November 21, 2022, by and among (i) NEXT Renewable Fuels, Inc., a Delaware corporation (the “Company”), (ii) Industrial Tech Acquisitions II, Inc., a Delaware corporation (together with its successors, “Purchaser”), and (iii) the undersigned stockholder of Purchaser (“Holder”). Any capitalized term used but not defined in this Agreement will have the meaning ascribed to such term in the Merger Agreement (as defined below).

 

WHEREAS, on or about the date hereof, (i) the Purchaser, (ii) ITAQ Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (“Merger Sub”), and (iii) 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, upon the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), (a) Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving as the surviving entity (the “Surviving Corporation”) and a wholly-owned subsidiary of Purchaser, and (ii) the Company Security Holders will receive Merger Consideration, in each case upon the terms and subject to the conditions set forth in the Merger Agreement (such transactions, together with the other transactions contemplated by the Merger Agreement, the “Transactions”), all upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the applicable provisions of the DGCL;

 

WHEREAS, as of the date hereof, the Holder is the record and beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the “Exchange Act”)) of and is entitled to dispose of and vote the Purchaser Common Stock set forth on the signature page of this Agreement which shares and any additional Purchaser Common Stock (or any securities convertible into or exercisable or exchangeable for Purchaser Common Stock) in which the Holder acquires record or beneficial ownership after the date hereof, including by purchase, as a result of a share dividend, share split, recapitalization, combination, reclassification, exchange or change of such shares, or upon exercise or conversion of any securities, the “Shares”);

 

WHEREAS, the Board of Directors of Purchaser has (a) approved and declared advisable the Transactions, (b) determined that the Transactions are fair to and in the best interests of Purchaser and its stockholders (the “Purchaser Stockholders”) and (c) recommended the approval and the adoption by each of Purchaser Stockholders of the Merger Agreement, the Merger, the Ancillary Documents, the Transactions and the other Required Purchaser Stockholder Approval Matters; and

 

WHEREAS, as a condition to the willingness of the Company to enter into the Merger Agreement, and as an inducement and in consideration therefor, and in view of the valuable consideration to be received by Holder thereunder, and the expenses and efforts to be undertaken by the Company and Purchaser to consummate the Transactions, the Company, Purchaser and Holder desire to enter into this Agreement in order for Holder to provide certain assurances to the Company regarding the manner in which Holder is bound hereunder, in its capacity as a stockholder of Purchaser, to vote the Shares during the period from and including the date hereof through and including the date on which this Agreement is terminated in accordance with its terms (the “Voting Period”) with respect to the Merger Agreement, the Merger, the Ancillary Documents and the Transactions.

 

 

 

 

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. Covenant to Vote in Favor of Transactions. Holder agrees, with respect to all of the Shares, during the Voting Period, the Holder will:

 

(a) at each meeting of the Purchaser Stockholders or any class or series thereof, and in each written consent or resolutions of any of the Purchaser Stockholders in which Holder is entitled to vote or consent, Holder hereby unconditionally and irrevocably agrees to be present for such meeting and vote (in person or by proxy), or consent to any action by written consent or resolution with respect to, as applicable, the Shares (A) in favor of: (i) the adoption and approval of this Agreement and the Transactions, (ii) the approval of the Amended Purchaser Charter, (iii) such other matters as the Company and Purchaser shall hereafter mutually determine to be necessary or appropriate in order to effect the Transactions, and (iv) the adjournment of the Purchaser Special Meeting, if necessary or desirable in the reasonable determination of Purchaser and (B) to vote the Shares in opposition to: (i) any Acquisition Proposal and (ii) any other action or proposal involving Purchaser that is intended, or would reasonably be expected, to prevent, impede, interfere with, delay, postpone or adversely affect in any material respect the Transactions or would reasonably be expected to result in any of the conditions to the Closing under the Merger Agreement not being fulfilled;

 

(b) to execute and deliver all related documentation and take such other action in support of the Merger, the Merger Agreement, any Ancillary Documents and any of the Transactions as shall reasonably be requested by the Company or Purchaser in order to carry out the terms and provision of this Section 1, including, without limitation, (i) any actions by written consent of Purchaser Stockholders presented to Holder with respect to the matters in Section 1(a), and (ii) any applicable Ancillary Documents, and any consent, waiver, governmental filing, and any similar or related documents;

 

(c) not to deposit, and to cause its Affiliates not to deposit, except as provided in this Agreement, any Shares owned by Holder or his/her/its Affiliates in a voting trust or subject any Shares to any arrangement or agreement with respect to the voting of such Shares, unless specifically requested to do so by Purchaser and the Company in connection with the Merger Agreement, the Ancillary Documents and any of the Transactions; and

 

(d) except as contemplated by the Merger Agreement or the Ancillary Documents, not make, or in any manner participate in, directly or indirectly, a “solicitation” of “proxies” or consents (as such terms are used in the rules of the SEC) or powers of attorney or similar rights to vote, or seek to advise or influence any Person with respect to the voting of, any shares of the Company capital stock in connection with any vote or other action with respect to the Transactions, other than to recommend that stockholders of Purchaser vote in favor of adoption of the Merger Agreement and the Transactions and any other proposal the approval of which is a condition to the obligations of the Company or Purchaser under the Merger Agreement (and any actions required in furtherance thereof and otherwise as expressly provided by Section 1 of this Agreement).

 

2. Grant of Proxy. During the Voting Period, Holder, with respect to all of the Shares, hereby irrevocably grants to, and appoints, Purchaser and any designee of Purchaser (determined in Purchaser’s sole discretion) as Holder’s attorney-in-fact and proxy, with full power of substitution and resubstitution, for and in Holder’s name, to vote, or cause to be voted (including by proxy or written consent, if applicable) any Shares owned (whether beneficially or of record) by Holder, solely on the matters and in the manner specified in Section 1 above. The proxy and attorney-in-fact granted by Holder pursuant to this Section 2 are irrevocable and are granted in consideration of Purchaser entering into this Agreement and the Company and Purchaser entering into the Merger Agreement and incurring certain related fees and expenses. Holder hereby affirms that such irrevocable proxy is coupled with an interest by reason of the Merger Agreement and, except upon the termination of this Agreement in accordance with Section 5(a), is intended to be irrevocable. The proxy and power of attorney granted hereunder shall terminate upon the termination of this Agreement. Holder and Purchaser each agrees that Purchaser shall exercise (and shall not fail to exercise) its rights as attorney-in-fact and proxy in accordance with the provisions of Section 1 of this Agreement.

 

2

 

 

3. Other Covenants.

 

(a) No Transfers. Holder agrees that during the Voting Period it shall not, and shall cause its Affiliates not to, without the joint written consent of Purchaser and the Company, (A) offer for sale, sell (including short sales), transfer, tender, pledge, encumber, assign or otherwise dispose of (including by gift) (collectively, a “Transfer”), or enter into any contract, option, derivative, hedging or other agreement or arrangement or understanding (including any profit-sharing arrangement) with respect to, or consent to, a Transfer of, any or all of the Shares; (B) grant any proxies or powers of attorney with respect to any or all of the Shares; or (C) permit to exist any lien of any nature whatsoever (other than those imposed by this Agreement, applicable securities Laws or the Purchaser Organizational Documents, as in effect on the date hereof) with respect to any or all of the Shares; or (D) take any action that would have the effect of preventing, impeding, interfering with or adversely affecting Holder’s ability to perform its obligations under this Agreement. Purchaser hereby agrees that it shall not permit any Transfer of the Shares in violation of this Agreement. Holder agrees with, and covenants to, the Company and Purchaser that Holder shall not request that Purchaser register the Transfer (book-entry or otherwise) of any certificate or uncertificated interest representing any Shares during the term of this Agreement without the prior written consent of the Company, and Purchaser hereby agrees that it shall not effect any such Transfer.

 

(b) Permitted TransfersSection 3(a) shall not prohibit a Transfer of Shares by Holder (i) to any family member or trust for the benefit of any family member, (ii) to any stockholder, member or partner of Holder, if an entity, (iii) to any Affiliate of Holder, or (iv) to any person or entity if and to the extent required by any non-consensual Order, by divorce decree or by will, intestacy or other similar Applicable Law so long as, in the case of the foregoing clauses (i), (ii), (iii) and (iv), the assignee or transferee agrees to be bound by the terms of this Agreement and executes and delivers to the parties hereto a written consent and joinder memorializing such agreement. During the term of this Agreement, Purchaser will not register or otherwise recognize the transfer (book-entry or otherwise) of any Shares or any certificate or uncertificated interest representing any of Holder’s Shares, except as permitted by, and in accordance with, this Section 3(b).

 

(c) Changes to Shares. In the event of a share dividend or distribution, or any change in the share capital of Purchaser by reason of any share dividend or distribution, share split, recapitalization, combination, conversion, exchange of shares or the like, the term “Shares” shall be deemed to refer to and include the Shares as well as all such share dividends and distributions and any securities into which or for which any or all of the Shares may be changed or exchanged or which are received in such transaction. Holder agrees, during the Voting Period, to notify the Company and Purchaser promptly in writing of any changes in Holder’s ownership of Purchaser securities.

 

(d) Compliance with Merger Agreement. Holder agrees that, during the Voting Period, Holder will not take or agree or commit to take any action that would make any representation and warranty of Holder contained in this Agreement inaccurate in any material respect, except for transfers as permitted by, and in accordance with, Section 3(b) above.

 

(e) Registration Statement. During the Voting Period, Holder agrees to provide to Purchaser and its Representatives any information regarding Holder or the Shares that is reasonably requested by the Purchaser or its Representatives for inclusion in the Registration Statement.

 

(f) Publicity. Holder shall not issue any press release or otherwise make any public statements with respect to the Transactions or the transactions contemplated herein without the prior written approval of Purchaser and the Company, unless such information was already made available publicly by Purchaser or the Company. Nothing herein shall (a) restrict Holder’s right to furnish or disclose to its limited partners, members or stockholders, any information with respect to the Transactions or the transactions contemplated herein or (b) grant Holder any right to disclose information which Holder is prohibited from disclosing pursuant to a non-disclosure agreement. Holder understands that, prior to the announcement by Purchaser and the Company, the Merger Agreement and related agreements and the terms thereof constitute material non-public information and may not be used or disclosed by the Holder. Holder hereby authorizes Purchaser and the Company to publish and disclose in any announcement or disclosure required by the SEC or Nasdaq (including all documents and schedules filed with the SEC in connection with the foregoing), Holder’s identity and ownership of the Shares and the nature of Holder’s commitments and agreements under this Agreement, the Merger Agreement and any other Ancillary Documents.

 

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4. Representations and Warranties of Holder. Holder hereby represents and warrants to the Company as follows, except to the extent set forth in a schedule delivered by Holder to the Company and Purchaser prior to the execution by the Holder of this Agreement:

 

(a) Binding Agreement. Holder (i) if a natural person, is of legal age to execute this Agreement and is legally competent to do so and (ii) if not a natural person, is (A) a corporation, limited liability company, company or partnership duly organized and validly existing under the laws of the jurisdiction of its organization and (B) has all necessary power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. If Holder is not a natural person, the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby by Holder has been duly authorized by all necessary corporate, limited liability or partnership action on the part of Holder, as applicable. This Agreement, assuming due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of Holder, enforceable against Holder in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles). Holder understands and acknowledges that the Company is entering into the Merger Agreement in reliance upon the execution and delivery of this Agreement by Holder.

 

(b) Ownership of Shares. As of the date hereof, Holder has beneficial ownership over the type and number of the Shares set forth under Holder’s name on the signature page hereto, is the lawful owner of such Shares, has the sole power to vote or cause to be voted such Shares, and has good and valid title to such Shares, free and clear of any and all pledges, mortgages, encumbrances, charges, proxies, voting agreements, liens, adverse claims, options, security interests and demands of any nature or kind whatsoever, other than those imposed by this Agreement, applicable securities Laws or Purchaser Organizational Documents, as in effect on the date hereof. There are no claims for finder’s fees or brokerage commission or other like payments in connection with this Agreement or the transactions contemplated hereby payable by the Company or Purchaser pursuant to arrangements made by Holder. Except for the Shares and other securities of Purchaser set forth under Holder’s name on the signature page hereto, as of the date of this Agreement, Holder is not a beneficial owner or record holder of any: (i) equity securities of Purchaser, (ii) securities of Purchaser having the right to vote on any matters on which the holders of equity securities of Purchaser may vote or which are convertible into or exchangeable for, at any time, equity securities of Purchaser or (iii) options, warrants or other rights to acquire from Purchaser any equity securities or securities convertible into or exchangeable for equity securities of Purchaser.

 

(c) No Conflicts. Other than the filings, notices and reports pursuant to, in compliance with or required to be made under the Exchange Act, if any, no filing with, or notification to, any Governmental Authority, and no consent, approval, authorization or permit of any other person is necessary for the execution of this Agreement by Holder, the performance of its obligations hereunder or the consummation by it of the transactions contemplated hereby, which, if required, has not been obtained prior to the date hereof. None of the execution and delivery of this Agreement by Holder, the performance of its obligations hereunder or the consummation by it of the transactions contemplated hereby shall (i) conflict with or result in any breach of the certificate of incorporation, bylaws or other comparable organizational documents of Holder, if applicable, (ii) result in, or give rise to, a violation or breach of or a default under any of the terms of any Contract or obligation to which Holder is a party or by which Holder or any of the Shares or its other assets may be bound, or (iii) violate any applicable Law or Order, except for any of the foregoing in clauses (i) through (iii) as would not reasonably be expected to impair Holder’s ability to perform its obligations under this Agreement in any material respect.

 

(d) No Inconsistent Agreements. Holder hereby covenants and agrees that, except for this Agreement, Holder (i) has not entered into, nor will enter into at any time while this Agreement remains in effect, any voting agreement or voting trust with respect to the Shares inconsistent with Holder’s obligations pursuant to this Agreement, (ii) has not granted, nor will grant at any time while this Agreement remains in effect, a proxy, a consent or power of attorney with respect to the Shares and (iii) has not entered into any agreement or knowingly taken any action (nor will enter into any agreement or knowingly take any action) that would make any representation or warranty of Holder contained herein untrue or incorrect in any material respect or have the effect of preventing Holder from performing any of its material obligations under this Agreement. Notwithstanding anything to the contrary contained in this Agreement, Purchaser and the Company hereby acknowledge that the Shares are subject to certain transfer restrictions and voting obligations (consistent with the obligations under this Agreement) under the letter agreement, dated January 11, 2022 (the “Insider Letter”), among Purchaser, Holder and other parties thereto.

 

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5. Miscellaneous.

 

(a) Termination. Notwithstanding anything to the contrary contained herein, this Agreement shall automatically terminate, and none of the Company, Purchaser or Holder shall have any rights or obligations hereunder, upon the earliest to occur of (i) the mutual written consent of the Company, Purchaser and Holder, (ii) the Effective Time (following the performance of the obligations of the parties hereunder required to be performed at or prior to the Effective Time), (iii) the date of termination of the Merger Agreement in accordance with its terms, (iv) at the election of Holder, any amendment to the Merger Agreement or any waiver of any provision of the Merger Agreement which amendment or waiver is adverse to Holder in a manner disproportionate to the other Purchaser Stockholders as a whole and which has not been approved by the Board of Directors of Purchaser, and (v) if the Outside Date is extended for a period of more than thirty (30) days unless such further extension has received the approval of the Board of Directors of Purchaser. The termination of this Agreement shall not prevent any party hereunder from seeking any remedies (at law or in equity) against another party hereto or relieve such party from liability for such party’s material breach of, or fraud committed in connection with, this Agreement prior to such termination. Notwithstanding anything to the contrary herein, the provisions of this Section 5(a) shall survive the termination of this Agreement. 

 

(b) 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. Except for transfers as permitted by, and in accordance with, Section 3(b) above, this Agreement and all obligations of Holder are personal to Holder and may not be assigned, transferred or delegated by Holder at any time without the prior written consent of the Company and Purchaser, and any purported assignment, transfer or delegation without such consent shall be null and void ab initio.

 

(c) 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 that is not a party hereto or thereto or a successor or permitted assign of such a party.

 

(d) 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 Delaware, 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 the State of Delaware (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 or referred to in Section 5(h). Nothing in this Section 5(d) shall affect the right of any party to serve legal process in any other manner permitted by applicable law.

 

(e) 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 5(e).

 

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(f) 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 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) the term “including” (and with correlative meaning “include”) 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 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.

 

(g) Capacity as a Purchaser Stockholder. Holder signs this Agreement solely in Holder’s capacity as a stockholder of Purchaser, and not in Holder’s capacity as a director, officer or employee of Purchaser. Notwithstanding anything herein to the contrary, nothing herein shall in any way restrict a director or officer of Purchaser in the exercise of his or her fiduciary duties as a director or officer of Purchaser or prevent or be construed to create any obligation on the part of any director or officer of Purchaser from taking any action in his or her capacity as such director or officer.

 

(h) Notices. All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) by email or other electronic means, with affirmative confirmation of receipt, (iii) one Business Day after being sent, if sent by reputable, nationally recognized international overnight courier service or (iv) five (5) 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:   with a copy (which will not constitute notice) to:
     
Industrial Tech Acquisitions II, Inc.   Ellenoff Grossman & Schole LLP
5090 Richmond Ave, Suite 319   1345 Avenue of the Americas, 11th Floor
Houston, Texas, 77056   New York, New York 10105
Attn: R. Greg Smith, CFO   Attn: Richard I. Anslow, Esq. (ext. 7194)             
Telephone: (713) 599-1300     Asher S. Levitsky P.C. (ext. 7152)
Email: greg@texasventures.com   Telephone No.: (212) 370-1300
    Email: ranslow@egsllp.com
      alevitsky@egsllp.com
     
If to the Company:   with a copy (which will not constitute notice) to:
     
NEXT Renewable Fuels, Inc.   ArentFox Schiff LLP
11767 Katy Freeway   1717 K Street NW
Suite 700   Washington, DC 20006
Houston, Texas 77079   Attn:  Ralph De Martino, Esq.
Attn: Chris Efird, CEO, and   Nick Tipsord, Esq.
  David Kane, CFO   Telephone No.: 202.724.6848
Telephone No.: 281.541.7311    
Email: chris@nextrenewables.com   Email: Ralph.DeMartino@afslaw.com
  david@nextrenewables.com     Nick.Tipsord@afslaw.com

If to Holder, to: the address set forth under Holder’s name on the signature page hereto, with a copy (which will not constitute notice) to sneuhauser@egsllp.com, if not the party sending the notice, each of Purchaser and the Company (and each of their copies for notices hereunder).

 

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(i) 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, in the case of an amendment, with the written consent of the Company, Purchaser and the Holder, or, in the case of a waiver, with the written consent of the party against whom the waiver is to be effective. 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 waiver of any other provisions hereof by such party, nor shall any such waiver be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

 

(j) 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, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. 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.

 

(k) 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 that the Company will not have 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 Company 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 such party may be entitled under this Agreement, at law or in equity.

 

(l) Expenses. Each party shall be responsible for its own fees and expenses (including the fees and expenses of investment bankers, accountants and counsel, if applicable) in connection with the entering into of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby; provided, that in the event of any Action arising out of or relating to this Agreement, the non-prevailing party in any such Action will pay its own expenses and the reasonable documented out-of-pocket expenses, including reasonable attorneys’ fees and costs, reasonably incurred by the prevailing party.

 

(m) No Partnership, Agency or Joint Venture. This Agreement is intended to create a contractual relationship among Holder, Purchaser and the Company, and is not intended to create, and does not create, any agency, partnership, joint venture or any like relationship among the parties hereto or among any other Purchaser stockholders entering into voting agreements with Purchaser or the Company. Holder has acted independently regarding its decision to enter into this Agreement. Nothing contained in this Agreement shall be deemed to vest in Purchaser or the Company any direct or indirect ownership or incidence of ownership of or with respect to any Shares. All rights, ownership and economic benefits of Holder in and relating to the Shares of the Holder shall remain vested in and belong to the Holder, and the Company shall have no authority to manage, direct, restrict, regulate, govern or administer any of the policies or operations of Purchaser or exercise any power or authority to direct the Holder in the voting or disposition of any of the Shares, except as otherwise provided herein.

 

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

 

(o) Entire Agreement. This Agreement (together with the Merger Agreement and the Insider Letter to the extent referred to herein) 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, any Ancillary Document or the Insider Letter. Notwithstanding the foregoing, nothing in this Agreement shall limit any of the rights or remedies of Purchaser or the Company or any of the obligations of Holder under any other agreement between Holder and Purchaser or the Company or any certificate or instrument executed by Holder in favor of Purchaser or the Company, and nothing in any other agreement, certificate or instrument shall limit any of the rights or remedies of Purchaser or the Company or any of the obligations of Holder under this Agreement.

 

(p) Counterparts; Facsimile. This Agreement may also be executed and delivered by facsimile or electronic 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.

 

(q) Non-Recourse. This Agreement may only be enforced against, and any claim or cause of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby may only be brought against, the entities that are expressly named as parties hereto, and then only with respect to the specific obligations set forth herein with respect to such party. Except to the extent a named party to this Agreement (and then only to the extent of the specific obligations undertaken by such named party in this Agreement), (a) no past, present or future director, officer, employee, incorporator, member, partner, stockholder, affiliate, agent, attorney, advisor or representative or affiliate of any named party to this Agreement and (b) no past, present or future director, officer, employee, incorporator, member, partner, stockholder, affiliate, agent, attorney, advisor or representative or affiliate of any of the foregoing shall have any liability (whether in contract, tort, equity or otherwise) for any one or more of the representations, warranties, covenants, agreements or other obligations or liabilities of any one or more of Purchaser, the Company or the Holder under this Agreement of or for any claim based on, arising out of, or related to this Agreement or the transactions contemplated hereby provided that such other person does not take or direct or cause Holder to take any action in contravention of the Holder’s obligations under this Agreement.

 

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

 

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

 

  Company:
   
  NEXT Renewable Fuels, Inc.
     
  By: /s/ Chris Efird
  Name:  Chris Efird
  Title: CEO

 

{Signature Page to Sponsor Voting Agreement}

 

 

 

  

  Purchaser:
   
  Industrial Tech Acquisitions II, Inc.
     
  By: /s/ R. Greg Smith
  Name:  R. Greg Smith
  Title: CFO

 

{Signature Page to Sponsor Voting Agreement}

 

 

 

 

Holder:  
   

Industrial Tech Partners II, LLC

 

 
By: /s/ E. Scott Crist     
Name:  E. Scott Crist     
Title:

Individually1 and as Managing Member of

Industrial Tech Partners II, LLC.

 

 

Number and Type of Shares:  
   
Purchaser Class A Common Stock:          0           
   
Purchaser Class B Common Stock: 4,312,500  
   
Purchaser warrants or other securities convertible into Purchaser securities: 8,037,500  
   
Address for Notice:  
   
Address: c/o Industrial Tech Acquisitions II, Inc.  
5090 Richmond Ave, Suite 319,  
Houston, Texas 77056.  
   
Telephone No.: (713) 599-1300  
Email: scott@texasventures.com  

 

{Holder Signature Page to Sponsor Voting Agreement}

 

 

 

 

 

Exhibit 99.1

 

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NEXT Renewable Fuels, Inc. to Become Publicly Traded Via

Combination with Industrial Tech Acquisitions II, Inc. Resulting

Company to be Named NXTCLEAN Fuels, Inc.

 

~ Combination creates a large-scale, renewable diesel and sustainable aviation fuel, pure-play public company and feedstock aggregator

 

~ Multi-prong strategy anchored on a 50,000 barrel per day renewable diesel and sustainable aviation fuel refinery in Oregon

 

~ First greenfield renewable diesel refinery on the West Coast in more than 40 years will be one of the largest producers of renewable diesel and sustainable aviation fuel in North America

 

~ Transaction is expected to close during 2023 ~

 

HOUSTON, Nov. 21, 2022 (GLOBE NEWSWIRE) -- NEXT Renewable Fuels, Inc. (“NXT” or the “Company”), a next generation fuels company dedicated to sustainably producing clean, low-carbon fuels from organic feedstock, and Industrial Tech Acquisitions II, Inc. (“ITAQ”) (Nasdaq: ITAQ), a special purpose acquisition company, today announced the signing of a business combination agreement expected to result in a newly combined company to be known as NXTCLEAN Fuels, Inc. The boards of directors of NXT and ITAQ have each approved the transaction.

 

“West Coast states are demanding a clean fuels conversion of the transportation and aviation industries with aggressive targets necessitating rapid increases in clean fuel supplies,” commented Christopher Efird, Chief Executive Officer and Executive Chairman of NXT. “NXT is advancing toward becoming one of the largest US-based suppliers of clean fuels for these markets and is investigating and pursuing potential vertical expansion into other clean fuels.”

 

ITAQ raised gross proceeds of approximately $172.5 million in its initial public offering, its stock is traded on the Nasdaq Global Market. ITAQ’s objective is to identify and consummate an initial business combination with a target that can benefit from the investment, operating, and innovating experience of ITAQ’s management team and sponsor.

 

Scott Crist, Chief Executive Officer and Chairman of ITAQ, stated, “Renewable diesel and sustainable aviation fuel are the most desired liquid fuels in the world, and there is an urgent global need for more. NXT has a multi-prong business plan and is developing a strategically positioned facility along the Columbia River in Oregon.”

 

 

 

 

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NXT Investment Highlights:

 

A next generation fuels company dedicated to sustainably producing clean, low-carbon fuels

 

NXT’s strategic growth platform allows access to high-growth clean fuels market, leveraging advantages from the renewable diesel (RD) and sustainable aviation fuel (SAF) business to access multiple complementary markets, including renewable natural gas

 

Management team has spent six years in Oregon developing deep roots and strong relationships, and has secured necessary support for the first facility, having access to more than 600 acres in and around multi-modal industrial complex at Port Westward, Oregon

 

NXT has received the majority of its key permits and expects to begin construction upon completion of an Environmental Impact Statement (“EIS”) currently underway with the US Army Corp of Engineers

 

Management has strategic relationships that have led to strong feedstock and product offtake agreements, including with companies such as BP and Shell, that NXT believes it will lead the way to financial stability while paving the path to growth opportunities in other decarbonization-centric markets

 

United Airlines Ventures, a subsidiary of United Airlines Holdings, Inc. (Nasdaq: UAL), entered into a strategic investment agreement with NXT pursuant to which it invested in NXT and could continue to invest as much as $37.5 million, as long as NXT meets certain milestones

 

Clear pathway to profitability upon commencement of RD/SAF production, which is projected for 2026; the Company expects to be EBITDA positive in its first full year of production

 

NXT will be the first of its kind public investment opportunity in a large-scale, pure-play combined RD/SAF production facility serving a large, essential and well-established market.

 

Led by a seasoned management team, representing more than 100 years of combined experience in finance, refining, chemical manufacturing, renewable fuels, real estate, and industrial project development

 

Transaction Summary

 

The combined company is expected to have an implied post-money pro forma enterprise value of approximately $530 million and an equity value of approximately $666 million at closing, assuming no redemptions by ITAQ public shareholders. Assuming no redemptions by ITAQ public shareholders, the transaction is expected to deliver up to approximately $176 million of cash held in ITAQ’s trust account. The conditions to NXT’s closing include the amount remaining in the trust account after any redemptions by ITAQ’s public stockholders, plus the net proceeds of any private financing completed by ITAQ, is at least $50 million. ITAQ has retained England & Company for a private capital raise, if necessary.

 

In the transaction, a newly formed subsidiary of ITAQ will merge with NXT, with NXT surviving as a wholly owned subsidiary of ITAQ. Pursuant to the merger, all pre-closing stockholders and holders of convertible debt of NXT will receive common stock of ITAQ, which will continue after the closing as a publicly traded company under the name NXTCLEAN Fuels, Inc. The transaction, which has been approved by the boards of directors of both NXT and ITAQ, is expected to close late in the second quarter of 2023, subject to shareholder approvals and other customary closing conditions.

 

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Additional Information

 

Advisors

 

England & Company is acting as financial advisor to ITAQ. ArentFox Schiff LLP is acting as legal counsel to NXT. Ellenoff Grossman & Schole LLP is acting as legal counsel to ITAQ.

 

About NEXT Renewable Fuels, Inc.

 

NXT is a next generation fuels company dedicated to sustainably producing clean, low-carbon fuels to address state and national mandates to decarbonize transportation fuels. The Company’s first project is a 50,000 barrel-per-day (“BPD”)/750 million gallon-per-year (“GPY”) RD/SAF refinery in Oregon with easy multi-modal access to the West Coast demand markets. The project is advancing through permitting and expects to begin construction upon completion of an Environmental Impact Statement (“EIS”) currently underway with the US Army Corp of Engineers. RD and SAF are highly profitable liquid transportation fuels worldwide. To learn more about NXT, please visit www.nextrenewables.com.

 

About Industrial Tech Acquisitions II, Inc.

 

ITAQ is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities. ITAQ is sponsored by Texas Ventures, a leading technology and venture capital firm with expertise in capital markets and structured finance. The firm provides guidance, insight and capital to assist entrepreneurial teams and managers who have the desire and talent to build exceptional companies. The Texas Ventures’ approach is to identify emerging trends and opportunities prior to recognition by the broader marketplace, and to take a proactive approach in working with entrepreneurs and managers who have the determination to build world-class companies.

 

Additional Information and Where to Find It

 

This press release relates to the transaction but does not contain all the information that should be considered concerning the transaction and is not intended to form the basis of any investment decision or any other decision in respect of the transaction. ITAQ intends to file a registration statement on Form S-4 with the SEC relating to the transaction that will include a proxy statement of ITAQ and a prospectus of ITAQ. When available, the definitive proxy statement/prospectus and other relevant materials will be sent to all ITAQ shareholders as of a record date to be established for voting on the transaction. ITAQ will file other documents regarding the transaction with the SEC. Before making any voting decision, investors and securities holders of ITAQ are urged to read the registration statement, the proxy statement/prospectus and all other relevant documents filed, or that will be filed, with the SEC in connection with the transaction as they become available because they will contain important information about ITAQ, NXT and the transaction.

 

Investors and securities holders will be able to obtain free copies of the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC by ITAQ through the website maintained by the SEC at www.sec.gov. In addition, the documents filed by ITAQ may be obtained free of charge from ITAQ’s website at https://www.texasventures.com/industrial-tech-acquisitions-inc or by written request to ITAQ at Industrial Tech Acquisitions II, 5090 Richmond Ave, Suite 319, Houston, TX 77056.

 

The information contained on, or that can be accessed through, ITAQ’s website, NXT’s website or any other website is not a part of this press release.

 

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Participants in Solicitation

 

ITAQ, NXT, and their respective directors and officers may be deemed participants in the solicitation of proxies from ITAQ’s shareholders in connection with the transaction. Information about ITAQ’s directors and executive officers and their ownership of ITAQ’s securities is set forth in ITAQ’s filings with the SEC, including ITAQ’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the SEC on April 11, 2022. To the extent that such persons’ holdings of ITAQ’s securities have changed since the amounts disclosed in ITAQ’s Annual Report on Form 10-K, such changes will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the names and interests in the transaction of ITAQ’s and NXT’s respective directors and officers and other persons who may be deemed participants in the transaction may be obtained by reading the proxy statement/prospectus regarding the transaction when it becomes available. You may obtain free copies of these documents as described in the preceding paragraph.

 

Forward-Looking Statements

 

This press release contains certain forward-looking statements within the meaning of the federal securities laws with respect to the transaction between NXT and ITAQ, including statements regarding the benefits of the transaction, the anticipated timing of the completion of the transaction, the products to be offered by NXT and the markets in which it will operate, the expected total addressable market for NXT’s proposed products, the sufficiency of the net proceeds of the proposed transaction to fund NXT’s operations and business plans and NXT’s projected future results including the extent of redemptions by ITAQ’s public stockholders. These forward-looking statements are generally identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause future events to differ materially from the forward-looking statements in this press release, including, but not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all; (ii) the risk that the transaction may not be completed by ITAQ’s business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by ITAQ; (iii) the failure to satisfy the conditions to the consummation of the transaction, including the adoption of the business combination agreement by the shareholders of ITAQ and NXT, (iv) the risk that a large percentage of ITAQ’s public stockholders will exercise their redemption rights under ITAQ’s certificate of incorporation, (v) the risk that the net tangible book value of ITAQ after giving effect to the merger and any equity financing will be less than $5,000,001; (vi) receipt of certain governmental and regulatory approvals; (vi) the lack of a third-party valuation; (vii) the occurrence of any event, change or other circumstance that could give rise to the termination of the business combination agreement; (viii) the effect of the announcement or pendency of the transaction on NXT’s business relationships, performance, and business generally; (ix) the risk that NXT’s refinery construction costs and cost of debt will significantly exceeds NXT’s current estimates; (x) the risk that, following the Closing, NXT will not be able to raise the necessary funding, on acceptable terms, if at all, to complete construction of its proposed facilities or to cover its operating costs before NXT generates revenue; (xi) the risk of any delay in the construction of NXT’s facilities and that any delay in the completion of NXT’s Oregon refinery could delay the commencement of operations and the generation of revenue by NXT; (xii) the risk that NXT’s costs will be greater than anticipated and revenue will be less than anticipated; (xiii) risks that the transaction disrupts current plans and operations of NXT as a result; (xiv) the outcome of any legal proceedings that may be instituted against NXT, ITAQ or others related to the business combination agreement or the transaction; (xv) ITAQ’s ability to meet Nasdaq Global Markets listing standards at or following the consummation of the transaction; (xvi) NXT’s ability to recognize the anticipated benefits of the transaction, may be affected by a variety of factors, including changes in the competitive and highly regulated industries in which NXT operates, variations in performance across competitors and partners, changes in laws and regulations affecting NXT’s business and the ability of NXT and the post-combination company to retain its management and key employees; (xvii) the ability of NXT to implement business plans, forecasts, and other expectations after the completion of the transaction (xviii) the risk that NXT may fail to keep pace with rapid technological developments to provide new and innovative products or make substantial investments in unsuccessful new products; (xix) the ability to attract new customers and to retain existing customers in order to continue to expand; (xx) NXT’s ability to hire and retain qualified personnel; (xxi) the risk that the post-combination company experiences difficulties in managing its growth and expanding operations; (xxii) the risk that NXT will not meet the milestones for funding; (xxiii) the risk of product liability or regulatory lawsuits or proceedings relating to NXT’s business; (xxiv) cybersecurity risks; (xxv) the effects of COVID-19 or other public health crises or other climate related conditions, including wildfires, on NXT’s business and results of operations and the global economy generally; and (xxvi) costs related to the transaction. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of ITAQ’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, the registration statement on Form S-4 and the proxy statement/prospectus discussed above and other documents filed by ITAQ from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and NXT and ITAQ assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Neither NXT nor ITAQ gives any assurance that either NXT or ITAQ will achieve its expectations.

 

4

 

 

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Description automatically generated with low confidence

 

No Offer or Solicitation

 

This press release is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the transaction and shall not constitute an offer to sell, or a solicitation of an offer to buy, the securities of ITAQ or NXT, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, or exemptions therefrom.

 

Non-GAAP Financial Measures

 

This press release uses EBITDA, which is a Non-GAAP financial measure, to present the financial performance of NXT. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, NXT’s operating results or cash flow from operations or any other measure of performance as determined in accordance with GAAP. We believe the Non-GAAP financial measures are useful to investors because such results provide insights into underlining trends in NXT’s business. The presentation of these measures may not be comparable to similarly titled measures of other companies’ reports. You should review NXT’s audited financial statements for the year ended December 31, 2021 and its unaudited financial statements for the nine months ended September 30, 2021, which will be included in the registration statement to be filed in connection with the proposed transactions.

 

Investor Contacts

 

Shannon Devine
MZ Group North America
203-741-8811
shannon.devine@mzgroup.us

 

Lisa Russell

Industrial Tech Acquisitions II, Inc.

713-599-1300

lisa@texasventures.com

 

Source: Industrial Tech Acquisitions II, Inc. and NXTCLEAN Fuels, Inc.

 

 

5

 

 

Exhibit 99.2

 

LEADING THE WAY in renewable fuels November 2022

 

 

Disclaimer Forward - Looking Statements: This presentation (this “Presentation”) contains certain forward - looking statements within the meaning of the federal securitie s laws with respect to the transaction (the “Proposed Business Combination”) between Industrial Tech Acquisitions II, Inc. (“ SPAC” or “ITAQ”) and NEXT Renewable Fuels, Incs . (“NXT” or the “Company”) , including statements regarding the benefits of the transaction, the anticipated timing of the completion of the transaction , t he products to be offered by NXT and the markets in which it will operate, the expected total addressable market for NXT’s pr opo sed products, the sufficiency of the net proceeds of the proposed transaction to fund NXT’s operations and business plans and NXT’s projected future result s i ncluding the extent of redemptions by ITAQ’s public stockholders. These forward - looking statements are generally identified by t he words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continu e,” “will likely result,” and similar expressions. Forward - looking statements are predictions, projections and other statements abo ut future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause future events to differ materi all y from the forward - looking statements in this presentation, including, but not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all; (ii) the risk that the transaction may not be completed by ITAQ’s business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by ITAQ; (iii) the failure to satisfy the conditions to the consummation of the trans ac tion, including the adoption of the business combination agreement by the shareholders of ITAQ and NXT, (iv) the risk that a large percentage of ITAQ’s public stockholders will exerc ise their redemption rights under ITAQ’s certificate of incorporation; (v) the risk that the net tangible book value of ITAQ afte r giving effect to the merger and any equity financing will be less than $5,000,001; (vi) receipt of certain governmental and regulatory approvals; (vi) the lack of a third - party valuation; (vii) the o ccurrence of any event, change or other circumstance that could give rise to the termination of the business combination agre eme nt; (viii) the effect of the announcement or pendency of the transaction on NXT’s business relationships, performance, and business generally; (ix) the risk that NXT’s refinery construct ion costs and cost of debt will significantly exceed NXT’s current estimates; (x) the risk that, following the closing, NXT will no t be able to raise the necessary funding, on acceptable terms, if at all, to complete construction of its proposed facilities or to cover its operating costs before NXT generates revenue; (xi) the risk of any delay in the construction of NXT’s facilities and that any delay in the completion of NXT’s Oregon refinery could delay t he commencement of operations and the generation of revenue by NXT; (xii) the risk that NXT’s costs will be greater than anticipated and revenue will be less than anticipated; (xiii) risks that th e transaction disrupts current plans and operations of NXT as a result; (xiv) the outcome of any legal proceedings that may b e i nstituted against NXT, ITAQ or others related to the business combination agreement or the transaction; (xv) ITAQ’s ability to meet Nasdaq Global Markets listing standards at or following the consumm ati on of the transaction; (xvi) NXT’s ability to recognize the anticipated benefits of the transaction, may be affected by a var iet y of factors, including changes in the competitive and highly regulated industries in which NXT operates, variations in performance across competitors and partners, changes in laws and re gul ations affecting NXT’s business and the ability of NXT and the post - combination company to retain its management and key employe es; (xvii) the ability of NXT to implement business plans, forecasts, and other expectations after the completion of the transaction; (xviii) the risk that NXT may fail to keep pace wi th rapid technological developments to provide new and innovative products or make substantial investments in unsuccessful new p rod ucts; (xix) the ability to attract new customers and to retain existing customers in order to continue to expand; (xx) NXT’s ability to hire and retain qualified personnel; (xxi) the risk tha t the post - combination company experiences difficulties in managing its growth and expanding operations; (xxii) the risk that NX T will not meet the milestones for funding; (xxiii) the risk of product liability or regulatory lawsuits or proceedings relating to NXT’s business; (xxiv) cybersecurity risks; (xxv) the effects of COV ID - 19 or other public health crises or other climate related conditions, including wildfires, on NXT’s business and results of o perations and the global economy generally; and, (xxvi) costs related to the transaction. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the oth er risks and uncertainties described in the “Risk Factors” section of ITAQ’s Annual Report on Form 10 - K, Quarterly Reports on Form 10 - Q, the registration statement on Form S - 4 and the proxy statement/prospectus discussed above and other documents filed by ITAQ from time to time with the SEC. These filings identify an d address other important risks and uncertainties that could cause actual events and results to differ materially from those con tained in the forward - looking statements. Forward - looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward - looking statement s, and NXT and ITAQ assume no obligation and do not intend to update or revise these forward - looking statements, whether as a re sult of new information, future events, or otherwise. Neither NXT nor ITAQ gives any assurance that either NXT or ITAQ will achieve its expectations . Industry and Market Data: Although all information and opinions expressed in this Presentation, including market data and other statistical information , w ere obtained from sources believed to be reliable and are included in good faith, ITAQ and NXT have not independently verifie d t he information and make no representation or warranty, express or implied, as to its accuracy or completeness. Some data is also based on the good faith es timates of ITAQ and NXT, which are derived from their respective reviews of internal sources as well as the independent sourc es described above. This Presentation contains preliminary information only, is subject to change at any time, and, is not, and should not be assumed to be, complete or to constitute a ll the information necessary to adequately make an informed decision regarding your engagement with ITAQ and NXT. Use of Projections: This Presentation contains projected financial information with respect to NXT. Such projected financial information constitu tes forward - looking information, and is for illustrative purposes only and should not be relied upon as being indicative of future results. The assumptions and estimates underlying such financial forecast information are inherently uncertain and are subject to a wide variety of significant business, econo mic , competitive, and other risks and uncertainties that could cause actual results to differ materially from those contained in th e prospective financial information. See “Forward - Looking Statements” paragraph above. Actual results may, and are likely to, differ materially from the results contemplated by the financial fore cas t information contained in this Presentation, and the inclusion of such information in this Presentation should not be regard ed as representation by any person that the results reflected in such forecasts will be achieved. Neither ITAQ’s nor NXT’s independent auditors have audited, reviewed, compiled, or performed any pro cedures with respect to the projections for the purpose of their inclusion in this Presentation, and accordingly, neither of the m expressed an opinion or provided any other form of assurance with respect thereto for the purpose of this Presentation. Important Information for Investors and Shareholders: If the Proposed Business Combination is pursued, ITAQ will file a proxy statement and other relevant documents with the SEC. St ockholders and other interested persons are urged to read the proxy statement and any other relevant documents filed with the SE C when they become available because they will contain important information about ITAQ, NXT, and the Proposed Business Combina tio n. Stockholders will be able to obtain a free copy of the proxy statement (when filed), as well as other filings containing i nfo rmation about ITAQ, NXT, and the Proposed Business Combination, without charge, at the SEC’s website located at www.sec.gov . Participants in Solicitation: ITAQ, NXT, and their directors and executive officers and other persons may be deemed to be participants in the solicitations o f proxies from ITAQ’s stockholders in respect of the Proposed Business Combination and the other matters set forth in the pro xy statement. Information regarding ITAQ’s directors and executive officers is available in its Annual Report on Form 10 - K for the fiscal year ended December 31, 20 21. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirec t i nterests, by security holdings or otherwise, will be contained in the proxy statement relating to the Proposed Business Combination when it becomes available. Financial Information: Non - GAAP Financial Measures: The financial information and data contained in this Presentation is unaudited and does not conform to Regulation S - X, promulga ted under the Securities Act of 1933, as amended. Accordingly, such information and data may not be included in, may be adjus ted in, or may be presented differently in, the proxy statement to be field by ITAQ with the SEC. Some of the financial information and dat a contained in this Presentation, such as revenue, run - rate revenue, EBIT, EBITDA, run - rate EBITDA, EBTIDA Margin have not been prepared in accordance with United States generally accepted accounting principles (“GAAP”). ITAQ and NXT believe these non - GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to NXT’s financial condition and results of op erations. NXT’s management uses these non - GAAP measures for trend analyses, for purposes of determining management incentive compensation and for budgeting and planning purposes. I TAQ and NXT believe that the use of these non - GAAP financial measures provides an additional tool for investors to use in evaluatin g projected operating results and trends in and in comparing NXT’s financial measures with other similar companies, many of which present similar non - GAAP financial information in the same manner as NXT, although other companies may not define non - GAAP information in the same manner as NXT. Management does not consider these non - GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these no n - G AAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in NXT’s fi nancial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgement by management about which expense and income are excluded or included i n d etermining these non - GAAP financial measures. In order to compensate for these limitations, management presents non - GAAP financi al measures in connection with GAAP results, and any non - GAAP information should read in context of the GAAP financial statements. Trademarks and Trade Names: NXT and ITAQ own or have the rights to various trademarks, service marks, and trade names that they use in connection with th e operation of their respective businesses. This Presentation also contains trademarks, service marks, and trade names of third pa rties, which are the property of their respective owners. The use or display of third parties’ trademarks, service marks, trade names, or products in this Pre sen tation is not intended to, and does not imply, a relationship with NXT or ITAQ, or an endorsement or sponsorship by or of NXT or ITAQ. Solely for convenience, the trademarks, service marks, and trade names referred to in this Presentation may appear with the ®, TM, or SM symbols, but such references are not intended t o i ndicate, in any way, that ITAQ or NXT will not assert, to the fullest extent under applicable law, their rights or the right of the applicable licensor to these trademarks, service marks, and trade names. Risk Factors: For a description of the risks relating to an investment in NXT, including in business and operations, we refer you to “Risks Re lating to NXT” in the Appendix to this Presentation. 2

 

 

ITAQ + NXT Merger Creates Renewable Fuels Leader Transaction Overview • Industrial Tech Acquisitions II, Inc. (“ITAQ”), a publicly listed special purpose acquisition company with $176 million in cash currently held in trust, has agreed to combine with NEXT Renewable Fuels, Inc. (the “Company”) • Upon closing, the business will be conducted under the name NXTClean Fuels, Inc. ("NXT") (1) Assumes no PIPE offering and no redemptions to cash in trust for ITAQ Overview • Create pure - play renewable diesel (“RD”) and sustainable aviation fuel (“SAF”) public enterprise • Secure financing to fund NXT’s business plan and the accelerate path to construction of NXT’s first facility • NXT will receive merger consideration of $450 million in ITAQ common stock and options • NXT shareholders and option holders will roll 100% of their equity into the business • Per the Business Combination Agreement (“BCA”), the amount remaining in the Trust Account after redemptions plus the proceeds from any proposed PIPE Offering, net of expenses, shall not be less $50 million • Pro - forma for the transaction, ITAQ will have approximately $176 million of cash on the balance sheet (1) • ITAQ and/or the Company will seek to raise additional capital to be dedicated to engineering costs, land acquisition, site work, and facilities acquisitions, as well as to ensure the required minimum cash at closing condition of the BCA • NXT is supported by offtake and supply agreements with, and investment from Shell, BP, and Chevron • NXT recently held the initial closing of an up to $37.5 million milestone - driven investment from United Ventures, an affiliate of United Airlines Strategic Rationale Transaction Summary 3

 

 

Christopher Efird Chairperson and CEO Gene Cotten President David Kane Senior Vice President & Controller Daniel Kim Chief Strategic Officer & Director NXT Leadership Years in Industry 30+ 30+ 30+ 20+ The NXT management team represents more than 100 years of combined experience in finance, refining, chemical manufacturing, renewable fuels, real estate, and industrial project development both nationwide and in the Pacific Northwest Career Milestones Led or co - led the investment in eighteen growth - stage companies that then became public Worked as a senior executive for several major energy companies and provided scoping evaluations for 20+ RD projects Served as CFO for numerous small and medium sized companies, raising equity and debt in private and public markets Focused on the development of sustainable alternative energy platforms with The Pilot Company in a key business development role Bob Armstrong Chief Commercial Officer 20+ Traded crude oil, natural gas, power, refined products, and RINs for multiple blue - chip companies, and served in a key business development role at a leading midstream company 4

 

 

Industrial Tech Acquisitions II Overview Highly Experienced Leadership ITAQ is a Nasdaq - listed SPAC (NASDAQ:ITAQ) which completed its $172.5 million IPO in January 2022 The ITAQ team is comprised of experienced venture capital and technology industry professionals with significant experience building and investing in disruptive technology companies Scott Crist Chairman & CEO • CEO of Osperity, a leader in AI for industrial computer vision • 30+ years of experience across various technology verticals • Former CEO & Chairman of Infrastructure Networks, a leading 5G - LTE company • Founded, built, and successfully grew multiple businesses as an investor and CEO Greg Smith CFO • 35+ years of demonstrated corporate finance and management experience • Former CFO of Infrastructure Networks, a leading 5G - LTE company • Former CEO and founder of ERF Wireless, a high - speed broadband provider Andrew Clark Director • 30+ years of experience across the technology, industrial, and energy sectors • Founder and principal at The Castell Group, an investment and advisory firm • Current Director at TapNpay, AETolls, and Texas Halo Fund Harvin Moore Director • 30+ years technology experience as an entrepreneur, advisor, and investor • Former Co - chairman of the Houston Aerospace and Aviation Regional Task Force • Former CEO of Houston Exponential, a technology - focused accelerator Aruna Viswanathan Director • 30+ years of experience building and investing in technology companies • Co - founder and COO of AlphaX Decision Sciences, a provider of AI software • Former Partner at Clearspring Capital Group with notable exits (sale to IBM) 5

 

 

• NXT is a next generation fuels company dedicated to sustainably producing clean, low - carbon fuels • First project being permitted and developed is a 50,000 barrel - per - day (“BPD”) / 750 million gallon - per - year (“ GPY”) RD/ SAF refinery in Oregon with easy access to the West Coast demand markets • RD and SAF are highly profitable liquid transportation fuels worldwide and there is an urgent global need for more of it • NXT’s future plans include hydrogen and clean renewable natural gas (“RNG”) production, and proprietary feedstock aggregation • For its first facility in Oregon, NXT has negotiated long - term offtake agreements and memoranda of understanding (“MOU”) for 90% of nameplate production, implying approximately $10.7 billion of future revenue under the first 5 years of operation • 2/3 of offtake is RD • 1/3 of offtake is SAF • 100% of feedstock supply is contracted from BP under a long - term agreement • Production expected to begin before the end of the 1H 2026 • NXT has secured state permits and anticipates final permit approval in late 2023 • Renewable Identification Numbers (“RINS”), Low Carbon Fuel Standard (“LCFS”), Clean Fuels Program (“CFP”), and newly instated Inflation Reduction Act (“IRA”) hydrogen production credits will enhance margins Investors and Partners: NXT Overview Source: Energy Information Agency, NXT Management Merger valuation is less than 1 times projected first full operating year’s EBITDA 6

 

 

Why RD/SAF? Why NXTClean Fuels? Transaction Details NXT and ITAQ – Strong Rationale From All Angles 7

 

 

8 Why Renewable Diesel/SAF?

 

 

Lowest Carbon Footprint, Highly Profitable Substitute for Petroleum Diesel • One of the cheapest, quickest, and lowest carbon footprints of all renewable fuel alternatives • Multiple lifecycle cost analyses have proven RD to be ¼ of the carbon footprint of electric vehicles and lower than all other fuel alternatives to fossil fuels (2) • No incremental spending needed on conversion or new infrastructure • RD’s higher cetane content burns cleaner and requires less maintenance • NXT RD facility will be one of the largest RD/SAF facilities in the continental U.S. Large, Established Total Addressable Renewable Diesel Market Eager for Change 1 • Diesel accounts for 25% of total energy consumption by the U.S. transportation sector (1) , approximately 47 billion GPY • NXT will produce a drop - in renewable diesel replacement for petroleum diesel, 100% compatible without blending • RD is fully compatible with existing infrastructure for transport and storage • Most diesel engine manufacturers have approved use of RD 2 Source: (1) Energy Information Agency, (2) Crown Oil, NXT Management, (3) JP Morgan Why RD/SAF? Sustainable Aviation Fuels Market Poised For Takeoff • Most airlines have publicly committed to 10% SAF use by 2030, with FedEx and Deutsche Post leading with 30% targets (3) • With established lifecycle assessment methodologies, such as CORSIA, SAF reduces greenhouse gases (“GHG”) by up to 80% compared to fossil jet fuel use • In order to reach expected and government mandated SAF demand, capacity will have to grow at a CAGR of 87% • There are no other scalable alternative fuels that can help airlines achieve the mandate levels 3 9

 

 

1 1 Renewable Diesel’s Differentiators 1 Large, Established Total Addressable Market Eager for Change Source : (1) Institute of Mechanical Engineers Energy Information Agency, NXT Management; (2) Crown Oil RD is a drop - in replacement for petroleum - based diesel made from vegetable oils, fats, and greases. IT IS NOT BIODIESEL • Direct substitute at 100% - no blending required • No engine modification required and does not void engine warranty • Fully compatible with existing infrastructure for transport and storage • Higher cetane (70+ vs 40 for petroleum diesel), improving engine performance and lowering maintenance cost • Only 40% of total wheel - to - well emissions of electric vehicles (2) • As much as a 75% reduction in GHG Emissions compared to petroleum diesel (1) • Meets all ASTM D975 specification for on - road diesel throughout the United States • Chemically indistinguishable from petroleum diesel. Every part of RD can be found in petroleum diesel, but without the impurities and contaminants 1 10

 

 

1 • With nearly all diesel engine manufacturers approving the use of renewable diesel in their engines, the total addressable market for renewable diesel is effectively the entire diesel market • The principal limitations for renewable diesel are profitability and feedstock supply • NXT has an agreement with BP to supply 100% of its production feedstock requirements 2.0 2.5 3.0 3.5 4.0 4.5 5.0 1990 2005 2020 2035E 2050E million barrels/day U.S. Diesel Demand (1) Manufacturers that have approved use of RD in engines (2) : Source: (1) U.S. Energy Information Agency 2020, Neste, NXT Management; (2) Per the ASTM D975 standard Large, Established Total Addressable Market Eager for Change Renewable Diesel Market Opportunity 11

 

 

2 As businesses struggle with the cost of upgrading to electric vehicles, renewable diesel can be used directly without the nee d t o blend, immediately reducing CO 2 emissions by approximately 75% • Smaller Cradle - to - Grave Carbon Footprint from reduction in tailpipe and GHG emissions • Efficient Combustion – High ce tane number (70+) ensures efficient and clean combustion • Meets ASTM D975 pa raffinic fuel standard and is approved for use by most diesel engine manufacturers • Drop - in - Fuel – No blending limits, can be used neat (100%) or in any blend • RD is a 100% substitute unlike biodiesel, which has a 20% blending limit Fuel Type Current Total CO 2 Emissions* Estimated Total CO 2 Emissions 2030* Petroleum Diesel 140 132 100% Renewable Diesel 46 46 Battery Electric Vehicles (mixed grid energy) 117 94 Battery Electric Vehicles (green energy) 58 58 Crad le - to - Grave/Well - to - Wheel Life Cycle Analysis (LCA) * Emissions measured in g/km 2 Lowest Carbon Footprint, Highly Profitable Substitute for Petroleum Diesel Leading Solution to Reduce Carbon Emissions Source: Crown Oil, Institute of Mechanical Engineers, Western Global Renewable Diesel Advantages • Fully compatible with existing infrastructure, so no additional investment needed • Lower maintenance compared to other renewable fuels due to cleaner “burn” • Storage up to 10 years vs. 12 months for petroleum diesel • - 40 Σ Fahrenheit freeze point vs 14 Σ Fahrenheit for petroleum diesel • Higher flash point, increasing safety relative to petroleum counterpart 12

 

 

2 Reduces CO 2 Emissions Ability to use Existing Infrastructure RIN Credit Received Profitable to CO 2 Emitter Lowest Carbon Footprint, Highly Profitable Substitute for Petroleum Diesel Maintenance & Safety Renewable Diesel Biodiesel Electric Vehicles X X Source: Crown Oil, Institute of Mechanical Engineers Petroleum Diesel X X X Leading Solution to Reduce Carbon Emissions 13

 

 

2 • The following have state - level programs implemented to lower carbon emissions from the transportation sector: • Oregon • California • British Columbia • Washington • Proposals have been made in New York, Canada, and more • Low carbon intensity (“CI”) fuels like RD generate LCFS credits The Market is Supportive of NXT’s Business Model Renewable Fuel Standards Low Carbon Fuel Standards Source: NXT Management Projections, EIA, EPA, McKinsey • Federal Mandate to incorporate renewable content into transportation fuels • Authorized under the Energy Policy Act in 2005 • Expanded under the Energy Independence and Security Act of 2007 • Producing RD generates RINs • RD qualifies for “biomass - based diesel” D4 RINs • At full capacity (750 million GPY), NXT will sell 1,275 million RINS per year – accounting for 1/3 of revenue Lowest Carbon Footprint, Highly Profitable Substitute for Petroleum Diesel 14

 

 

3 0 20 40 60 80 100 120 140 160 180 2020 2025 2030 2035 2040 billion gallons/year Expected SAF Mandate Total Jet fuel Demand Coalition Notable Companies Represented SAF Target Companies Committed 10% by 2030 30% by 2030 30% by 2035 In order to reach expected and government mandated 2030 SAF demand, global SAF capacity must achieve an 87% CAGR Mandated Global Jet Fuel Demand SAF Market Demand Drivers Select SAF Corporate Commitments Sustainable Aviation Fuels Market Poised For Takeoff Sustainable Aviation Fuel Market Opportunity Source: U.S. Energy Information Agency, Mckinsey & Company, International Air Transport Association 15

 

 

3 Vegetable Oils and Residual Fats Feedstocks are collected and treated to remove impurities Hydrotreatment Pretreated oils and fats are hydro treated with high - pressure hydrogen to remove oxygen and separate the water Isomerization Cold flow properties are managed to ensure compatibility with existing infrastructure and engines Fractionation Non - condensable gases are removed. The remaining liquid is distilled to separate renewable diesel Leveraging Common Refining Process Source:NextChem • The refining process to make RD and SAF is identical to petroleum diesel and jet fuel with exception to pretreatment. This al low s both products to be chemically identical and function as a 100% drop - in replacement for petroleum diesel and jet fuel, respectively Low - Carbon H2 and Zero CI Electricity Separation Isomerization Carbon Sequestration Product Separation Feedstocks: • Vegetable Oil • Used Cooking Oil • Animal Fats • Fish Oil • Algae Oil • Seed Oil Pretreatment Unit Deoxygenation Reactor Water By - Products Sustainable Aviation Fuel Renewable Diesel Sustainable Aviation Fuels Market Poised For Takeoff 16

 

 

Why NXTClean Fuels?

 

 

Why NXTClean Fuels? Source: NXT Management Strategic Growth Platform that Addresses the Energy Transition 4 • NXT intends to leverage its first RD/SAF refinery into a broader clean fuels enterprise • NXT’s strategic growth plans include development of: • Excess low carbon intensity hydrogen that can be used to supply nearby customers • Renewable feedstock aggregation & consolidation including terminal development with the possibility for pretreatment and custom blending • Multi - site, high - capacity biomass based RNG production First Project: Exceptional Logistics Providing Access to West Coast Markets • NXT has access to over 600 acres in and around Port Westward, Oregon • Port Westward is a deep - water port located strategically close to the Columbia River • NXT’s agreement with the Port provides usage of the dock, road, rail, and utilities infrastructure in connection with its renewable energy projects and SAF production (with some upgrades included) • The NXT refinery will be in commercial proximity of all major West Coast demand centers, allowing for the benefit of California LCFS and/or Oregon CFP tax credits 1 Earned Rare Welcome Into Environmentally Sensitive Markets • Successful in permitting in one of the most rigorous states (Oregon), provides high barriers to entry • Developed deep roots in Oregon and specifically the local community where the plant will be located, garnering essential community support 2 Feedstock and Offtake Agreements with Major Energy Producers • 100% of the feedstock required will be supplied through a long - term agreement with BP • 90% of nameplate production negotiated under long - term offtake agreements and MOUs • 2/3 with several major producers under long - term contracts • 1/3 with one of the top U.S. airlines under MOU • Potential offtakers are expected to be investors in NXT at closing • At projected market prices, the offtake agreements and MOUs generate over $10.7 billion in revenues over the initial 5 years of operation 3 18

 

 

1 • Feedstock and renewable fuel transloading to be provided by nearby Columbia Pacific Bio Refinery (“CPBR”) via NXT’s planned pipeline connection • Port Westward was created by the US Army in 1942 as a munitions depot. The port is self scouring, eliminating the need for continuous dredging • Onsite storage tanks currently owned by PGE will be available to hold feedstock inventory builds by late 2023 First Project: Exceptional Logistics Providing Access to West Coast Markets NXT Site Outline Road Access NXT Rail Branch NXT Pipeline CPBR Pipeline NXT currently has access to over 600 acres of land in and around Port Westward, Oregon. This includes the ownership of 25 acres, and the 80 - year lease of 120 acres, of industrially zoned land (145 contiguous acres of industrial land) constituting the NXT refinery site and associated easements and right of ways. NXT is also leasing an additional 480 acres of agricultural land for a wetland’s mitigation project • Agreement with the Port provides usage of the dock, road, rail, and utilities infrastructure in connection with its renewable energy projects and SAF production (with some upgrades included) • NXT is permitting and will construct a refinery that will have 50,000 bpd of RD/SAF production capacity. All permits are expected to be granted by late 2023. Initial operations expected to commence before the end of the 1H 2026 • Located in deep water (50’ – 70’), 53 miles from the mouth of the Columbia River and equidistant to Portland, the NXT refinery dock is within a three - day sail of all major West Coast demand centers • Workforce availability sufficient from surrounding industrial communities once focused on timber (Oregon + Washington) • Estimated total installed cost costs of approximately $3 billion after including inflation and tight labor market contingencies At full build - out, NXT’s Port Westward refinery will be among the largest advanced renewable diesel production facilities in the world At full build - out, NXT’s Port Westward refinery will be among the largest advanced renewable diesel production facilities in the world At full build - out, NXT’s Port Westward refinery will be among the largest advanced renewable diesel production facilities in the world Optimal Site Location 19 Source: NXT Management

 

 

3 COLUMBIA COUNTY x Land Use Approval | GRANTED x Conditional Use Permit | GRANTED OREGON DEPARTMENT OF STATE LANDS x Removal/Fill Permit - Fill in Wetlands | GRANTED OREGON DEPARTMENT OF ENERGY x Energy Facility Siting Council Exemption Request | GRANTED OREGON DEPARTMENT OF ENVIROMENTAL QUALITY x Air Contaminant Discharge Permit - Impacts to Air Quality | GRANTED □ 401 Water Quality Certification - Impact to Water Quality | 2023 US ARMY CORP OF ENGINEERS □ 404 Clean Water Act Permit - Impacts to Wetland | 2023 KEY PERMITS | ANTICIPATED ISSUANCE » Building Permits All key permits have been filed. NXT anticipates final permit approval in late 2023 Local building permits and ministerial approvals not shown Earned Rare Welcome Into Most Difficult Markets Source: NXT Management Permitting Path Succeeding Despite Difficult Regulations 2 20

 

 

4 . Feedstock and Offtake Agreements with Major Energy Producers Initially 5 Years Up to 50,000 barrels per day Price adjustments based on the carbon intensity of particular feedstocks Right of First Refusal to supply all additional NXT facilities Term : Quantity : Carbon Intensity Adjustments : Future Facilities : BP Global Feedstock Supply Agreement 4,702 2,955 1,071 400 245 0 1,000 2,000 3,000 4,000 5,000 Total Soybean Oil Animal Fats Corn Oil Used Cooking Oil millions gallons Potential U.S. Feedstock for Renewable Diesel Production • Given that NXT intends to assure supply of feedstock to ensure operations at near full capacity, the Company has elected to enter a global term contract with the renewable fuels trading arm of BP • The agreement will supply 100% of the feedstock required for the NXT Port Westward refinery to operate at full capacity • Working in conjunction with BP, NXT is actively engaged in proprietary feedstock sourcing to drive its feedstock carbon intensity as low as possible. These activities include various fish grease and used cooking oil suppliers in Asia, Pacific Northwest fish waste and greases, camelina production in the upper Midwest, and woody biomass pyrolytic biocrude, among others • BP will be an investor in NXT at closing Feedstock Agreement Supports Full Production Source: NXT Management Source: JP Morgan, USDA 3 21

 

 

2 Source: NXT Management 3 Offtake Agreements Negotiated for 90% of Production Feedstock and Offtake Agreements with Major Energy Producers NXT has entered into a t erm sheet with a major airline to negotiate SAF offtake that could total 200 million GPY Total contracted RD offtake value over initial five - years of operations estimated at $7.2 billion NXT has negotiated RD offtake agreements with several Major energy producers at agreed upon pricing and delivery terms Potential SAF offtake value over initial term is estimated to be in excess of $3.6 billion 22

 

 

4 NOTE: Other than the H2 at Port Westward for NXT use only, none of the initiatives described in this section are included in any projected performance or models Diversified Clean Fuels Platform Source: NXT Management 4 Strategic Growth Platform that Addresses the Energy Transition NXT is creating a clean fuels platform • NEXT Renewable Fuels is focused on RD/SAF, with an initial production facility in Port Westward, Oregon • DeepBluH2 will be focused on clean hydrogen and RNG production using byproducts from the existing plant as well as: • Independent gaseous fuels facility, using local woody biomass as a feedstock, helping address the forest fire dilemma while generating biosynthetic green hydrogen and RNG at scale • GoLo Biomass will be focused on diversifying NXT’s supply of renewable feedstock and developing proprietary supplier access through independent sourcing, terminaling , and bespoke blending for its own use as well as for other producers • To execute on the vision of a leading specialty clean fuel producer, NXT expects to form a ‘Development Triad” of three operating subsidiaries (one focused on RD and SAF, one focused on hydrogen and one focused on feedstocks) Liquid Fuels Hydrogen and RNG Feedstocks 23

 

 

8 Transaction Details

 

 

High - Growth Clean Fuels Platform Investment Highlights Source: NXT Management • NXT intends to access multiple complementary markets that can enhance profitability/margins • NXT has identified many other opportunities such as hydrogen production within Oregon • Strong relations with offtake partners and local government in Oregon lead the way to new markets and opportunities • No current pure - play, large - scale, RD/SAF public investment opportunity, making NXT the first of its kind in a large and well - established market • As a large - scale decarbonizing solution for a highly - visible and crucial sector, ITAQ believes NXT warrants a valuation in - line with future multiples of market peers • NXT compares favorably in key benchmarks against relevant comparable companies Attractive Valuation Projected Profitability Once Operational • NXT expects to begin construction late in 2023, commencing operations by end of 1H 2026 • The Company expects to be immediately profitable bolstered by feedstock and offtake agreements and MOUs • NXT management estimates 33% EBITDA margin with over $2.6 billion in revenue in the first full year of operations • NXT’s management team represents more than 100 years of combined experience in finance, refining, chemical manufacturing, renewable fuels, real estate, and industrial project development • Management has strategic relationships that have led to feedstock, offtake, and other ongoing valuable discussions/actions Strong Leadership 25

 

 

Sources ($ in millions) Rollover Equity $450 Cash in Trust 176 Total Sources $626 Uses ($ in millions) Rollover Equity $450 Cash to NXT Balance Sheet 156 Estimated Fees (20) Total Uses $626 Overview of Business Combination ($ in millions, except per share values ) Share Price $10.00 Proforma Shares Outstanding (2) 66,562,500 Equity Value $666 Plus: Existing NXT Debt $20 Less: Existing NXT Cash - Less: Cash to NXT Balance Sheet $(156) Enterprise Value $530 Illustrative Pro Forma Valuation Illustrative Sources and Uses (1) 66.56 million PF Shares Outstanding % ownership / millions of shares) Existing NXT Shareholders 67.6% / 45.00 ITAQ Public Shareholders 25.9% / 17.25 ITAQ Sponsor Promote 6.5% / 4.31 Pro Forma Ownership (2) 26 (1) Cash in Trust value as of 11/17/2022 and assumes no redemptions from public shareholders of ITAQ (2) Existing NXT share count is presented as - if all in - the - money options and warrants will be exercised on a cashless basis at closing

 

 

Statement of Operations Pre - Operating Operating ($ in millions) 2023 2024 2025 2026 (1) 2027 2028 2029 Revenues Renewable diesel $0.00 $0.00 $0.00 $656.93 $1,003.53 $1,074.99 $1,148.93 SAF tolling & recovery fees - - - 272.42 440.55 470.43 501.20 RINs/credits - - - 1,000.23 1,604.14 1,709.08 1,816.73 Total Revenues - - - 1,929.57 3,048.22 3,254.51 3,466.86 Cost of Goods Sold Renewable feedstocks - - - 1,190.13 1,820.50 1,989.94 2,177.05 Other direct cost 1.39 1.39 11.05 106.73 162.14 174.98 187.53 Indirect cost 0.05 0.28 1.34 21.94 28.84 30.77 31.32 Total Cost of Goods Sold 1.44 1.67 12.39 1,318.80 2,011.48 2,195.69 2,395.90 Gross Profit (1.44) (1.67) (12.39) 610.77 1,036.74 1,058.82 1,070.96 Non - operating expenses 0.51 0.71 1.59 22.97 28.21 28.13 26.59 Depreciation and amortization 0.00 0.00 0.00 113.54 154.41 154.66 155.06 Operating Income (1.95) (2.38) (13.99) 474.26 $54.12 876.03 889.31 Interest expense 0.00 0.00 0.00 (132.66) (154.24) (131.45) (108.11) Income taxes, net of credits 0.00 0.00 0.00 29.58 (13.77) (41.47) (63.24) Net Income (Loss) After Taxes ($1.95) ($2.38) ($13.99) $371.18 $686.11 $703.10 $717.96 EBITDA ($1.95) ($2.38) ($13.99) $587.80 $1,008.53 $1,030.69 $1,044.37 Financial Overview Source: NXT Management Strong Financials and High Barriers to Entry Projections are based solely on the first renewable diesel/SAF project and are not inclusive of anticipated growth projects; (1) Assumes a partial year of operations (229/350 operating days estimated) 27

 

 

• Published results of publicly traded producers indicate margins of $1.60/gal versus $0.13/gal. for petroleum diesel. NXT estimates a margin of $1.59/gal. after customer revenue share Financial Overview Source: NXT Management Strong Financials and High Barriers to Entry ($500) $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 2025 2026 2027 2028 2029 $ in millions Revenue and EBITDA Forecast Renewable Diesel SAF Tolling & Recovery Fees RINs/Credits EBITDA (200) - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2023 2024 2025 2026 2027 2028 2029 $ in millions CapEx vs EBITDA CapEx EBITDA 28

 

 

Key Criteria Defining Best Comps: • Recognized adjacent industry leaders within the broader renewables landscape with energy transition focus • Huge total addressable markets • Traditional petroleum refiners • Because of NXT’s unique and disruptive business model, no perfect public comp was found • Management believes i nvestors will find correlation and best comparison to leading peers in the general renewable fuels in dustry and other decarbonizing fuel solution companies • Market could focus on predictability of business, long - term growth opportunities, margin profile, and strategic competitive advantages Drop - in Renewable Fuels Peers Other Decarbonizing Fuel Solutions Peers Pure - Play RD/SAF Public Investment Opportunity 29

 

 

11.0x 8.2x 7.6x 3.2x 3.1x 2.3x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 3.5x 1.3x 1.2x 0.6x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x Peer Benchmarking Source: CapIQ as of 11/16/22 EV / 2026 E Revenue EV / 2026 E EBITDA Median: 5.4x Mean: 5.9x Median: 1.3x Mean: 1.7x 30

 

 

Implied Enterprise Value/EBITDA Implied Enterprise Value/Revenue Proforma Post - Money Enterprise Value $5,300 ($ in millions) $5,014 $530 5.9x 2026E Projected Run - Rate EBITDA 1.7x 2026E Projected Run - Rate Revenue 0.6x 2026E Projected Run - Rate EBITDA Transaction Represents an Attractive Discount to Peers Selected EV/Revenue and EV/EBITDA mean multiples derived from NXT’s public peers’ 2026E revenue multiples Implied enterprise value calculated by applying the selected revenue and EBITDA mean multiples to NXT’s 2026E run - rate revenue and EBITDA, respectively (1) Implied enterprise value based on these mean multiples results in a value range with a midpoint 9.7x greater than NXT’s post - money enterprise value 90% Discount 89% Discount (1) Assumes the NXT refinery becomes operational in Q2 2026, scaling to full production in 2026. Run - rate 2026E EBITDA of $898 milli on and run - rate revenue of $2.95 billion assumes NXT operates at a full 350 days instead of the actual 229 days estimated 31

 

 

Appendix

 

 

Public Comparables Public Comparables . ($ in millions, unless otherwise stated) Market Enterprise EV/Revenue EV/EBITDA Gross Margin EBITDA Margin Company Value Value 2025E 2026E 2025E 2026E 2025E 2026E 2025E 2026E Neste Oyj $36,730 $38,302 1.6x n/a 10.4x 11.0x n/a n/a 15.3% n/a Darling Ingredients 11,636 15,060 n/a n/a 7.7x 8.2x n/a n/a n/a n/a Archaea Energy 2,154 3,746 4.0x 3.5x 9.2x 7.6x 47.0% 51.0% 43.2% 45.7% Montauk Renewables 1,673 1,650 5.0x n/a 10.5x n/a 55.0% n/a 47.9% n/a Clean Energy Fuels 1,613 1,564 1.9x 1.2x 20.1x 3.2x 33.1% n/a 9.8% 38.1% Aemetis 205 546 0.7x 0.6x 3.1x 2.3x 30.5% 30.7% 23.3% 25.8% Gevo 540 206 1.0x 1.3x 2.4x 3.1x 73.7% 76.4% 41.0% 43.0% First Quartile $1,076 $1,055 1.1x 1.1x 5.4x 3.2x 33.1% 40.9% 17.3% 35.1% Median $1,673 $1,650 1.7x 1.3x 9.2x 5.4x 47.0% 51.0% 32.2% 40.6% Mean $7,793 $8,725 2.4x 1.7x 9.0x 5.9x 47.9% 52.7% 30.1% 38.2% Third Quartile $6,895 $9,403 3.5x 1.9x 10.4x 8.1x 55.0% 63.7% 42.7% 43.7% (1) Clean Energy Fuels Corp. 2025 EBITDA adjusted from CapIQ reported numbers to account for significant investment activities. Source: CapIQ as of 11/16/22 33

 

 

Construction Budget Assumptions Construction Budget Plant and equipment $ 1,739.5 Engineering, excluding major components 213.8 Site work 75.8 Catalyst 72.0 Preliminary engineering and permitting 15.9 Process license fees 12.5 Land 7.2 Construction period interest 146.2 Escalation & contingency 389.0 Total Project Capital Cost $ 2,671.9 Note: Estimates from NXT management are subject to revision based upon additional engineering studies and future cost adjustm ent s and updates. Capital costs and construction budget was prepared on November 17, 2022. Actual costs may increase if increases in CPI and cost of debt exceed NXT management’s current expectations 34 ($ in millions)

 

 

Legislative Support for NXT’s Business Model Source: K&L Gates Base Rate Wage & Apprenticeship Eligible for Direct Pay? Eligible for Transferability? Timeline Total Credit Available Section 45 V Hydrogen Production Tax Credit • $0.60/kilogram of clean hydrogen produced Rate is multiplied by 5 if wage and apprenticeship requirements are met Yes Yes 2023 - 2033 Hydrogen Production: $3.00/kilogram (1) Section 45 Z Clean Fuel Production Credit • $0.20/gallon of transportation fuel • $0.35/gallon of SAF Rate is multiplied by 5 if wage and apprenticeship requirements are met Yes Yes 2025 - 2027 Transportation Fuel: $1.00/gallon SAF : $1.75 per gallon (1) Actual amount received is based on the lifecycle GHG emissions. NXT expected to receive 25% of the total credit with wage an d apprenticeship requirement bonus. 35

 

 

Low Carbon Fuel Standard • LCFS and similar programs are designed to decrease the carbon intensity of California's transportation fuel pool and provide an increasing range of low - carbon and renewable alternatives • Low carbon fuels below the benchmark generate credits, while fuels above the CI benchmark generate deficits • A deficit generator meets its compliance obligation by ensuring that the number of credits it earns or otherwise acquires from another party is equal to, or greater than, the deficits it has incurred Program Summary: NXT’s Involvement: • NXT’s low carbon intensive renewable diesel generates significant credits in all LCFS markets • NXT can stack these credits with RINs to improve overall profitability British Columbia 20% reduction of 2010 GHG levels by 2030 California 40% reduction of GHG emissions by 2030 Oregon 20% reduction of 2015 GHG intensity by 2030 Washington 95% reduction in GHG emissions by 2050 Source: EIA, CARB, EPA 36

 

 

Renewable Fuel Standard • Enacted by Congress in 2005, the Renewable Fuel Standard (“RFS”) program establishes minimum renewable volumes to be blended int o traditional petroleum - based fuel products • To comply with the program, a refiner or importer of gasoline or diesel fuel must either blend renewable fuel into transporta tio n fuel or obtain a RIN credit to meet is Renewable Volume Obligation (“RVO”) • Based on the category of biofuel, renewable fuels are classified by “D - Code” which fulfill different RVO categories • RVOs are established annually by the EPA and determine the percentage renewable blend threshold and corresponding RINs an obl iga ted party must obtain for compliance • RINs can be generated by blending renewable fuel products with petroleum - based fuels. Once generated, the blender may sell the R INs independently from the fuel product Renewable Fuel Producer Non - Renewable Fuel Refinery or Importer Blended Fuel Service Station Blender Separated RINs RVO Fulfilled Renewable Fuel Attached RINs RVO Non - Renewable Fuel RINs generated simultaneous with Renewable Fuel creation RVO incurred simultaneous with non - renewable fuel creation or importation RIN separated due to blending and retired to fulfill RVO Source: Aemetis, EPA 37

 

 

Source:NextChem RD produced (gallons) LCFS Credits per RD gallon LCFS Credits per RD gallon Gross LCFS Revenue RD produced (gallons) D4 RINs per gallon D4 RIN Credit Price Gross D4 RIN Revenue LCFS Calculation: • LCFS credits are generated depending on the carbon intensity, LCFS price, and how much is produced • Certain feedstocks used for renewable diesel production have lower carbon intensity scores D4 RIN Calculation: • Revenue from RINs is calculated by multiplying the amount of gallons produced, the amount of RINs per gallon, and the D4 credit price Credit Calculations 38

 

 

$1.17 $1.42 $1.67 $1.92 $2.17 $2.42 $2.67 $2.18 155 240 325 410 495 580 665 $2.43 214 299 384 469 554 639 725 $2.68 273 358 443 529 614 699 784 $2.93 332 418 503 588 673 758 843 $3.18 392 477 562 647 732 817 902 $3.43 451 536 621 706 791 877 962 $3.68 510 595 680 766 851 936 1,021 NXT Model Assumptions and Sensitivity Analysis NXT assumes the following key assumptions in its model used for the financial projections in this presentation : • Operations will commence Q2 2026 • Revenues are derived from offtake agreements and MOU negotiations • Agreed upon split of LCFS and RIN revenue with offtakers • 33% of the annual production yield is SAF • All SAF volume is tolled • Diesel prices in model assumptions range from $2.78 - $2.93/gallon • D4 RIN prices/gallon in model assumptions range from $1.92 - $ 1.99 • RIN multiplier of 1.7x in accordance with the D4 category of RINs for renewable diesel as per EPA guidelines • Assumes Blenders Tax Credit is renewed • Naphtha and LPG do not provide additional revenue directly as they are used as feedstock for hydrogen production. This reduces the overall CI of refined products which increase revenues • Assumes long term CPI increase of 1.8% annually for operation period, but 7.5% for project cost escalations pre - commercial operation date • Feedstock prices are basketed and based on March 2022 spot prices • Adjusted future feedstock prices change based on NXT Management assumptions • Assumes base weighted feedstock CI of 44.29 in 2026, decreasing in subsequent years • Assumes total capital costs estimated at approximately $3 billion • Financed through 65% senior debt, with the balance in mezzanine debt and equity • Senior Debt is assumed at a 7% interest rate during construction and 7% long term • Mezzanine Debt is assumed at an annual interest rate of 8% 2026 Projected EBITDA Sensitivity Analysis (EBITDA $ in millions) Gallon Price of Diesel Source: NXT Management RIN Price per Credit 39

 

 

Risks Relating to NXT • Our commercial success depends on our ability to develop and operate production facilities for the commercial production of r ene wable diesel. • Our limited history makes it difficult to evaluate our business and prospects and may increase the risks associated with your in vestment. • Our management has identified conditions that raise substantial doubt about our ability to continue as a going concern, inclu din g those set forth below. • Although information in this Presentation assumes no redemptions by ITAQ public stockholders, it is very unlikely that there wil l be no redemptions, and neither we nor ITAQ can predict the extent of such redemptions, which may be significant. • We may need to raise additional funds in the near future, particularly if a large percentage of ITAQ’s public stockholders ex erc ise their redemption rights, and these funds may not be available when needed. • Borrowings at higher levels than projected and interest at higher rates than projected may impair our ability to operate prof ita bly or generate the anticipated EBITDA • We may be unable to qualify for existing federal and state level low - carbon fuel credits and the carbon credit markets may not d evelop as quickly or efficiently as we anticipate or at all. • In order to construct our proposed commercial production facilities, we expect to face a long and variable design, fabricatio n, and construction development cycle that requires significant resource commitments and may create fluctuations in whether and when revenue is recognized and may have an adverse effect on our business. • Fluctuations in the price of product inputs, including animal fat, vegetable oil, and other feedstocks, is likely to affect o ur cost structure. • Fluctuations in petroleum prices and customer demand patterns may reduce demand for renewable fuels and bio - based chemicals. A p rolonged environment of low petroleum prices or reduced demand for renewable fuels or biofuels could have a material adverse effect on our long - term business prospects, financial condition and results of operations . • We may face substantial competition from companies with greater resources and financial strength, which could adversely affec t o ur performance and growth. • Our proposed growth projects may not be completed or, if completed, may not perform as expected. Our project development acti vit ies may consume a significant portion of our management’s focus, and if not successful, reduce our profitability. • We may not be able to develop, maintain and grow strategic relationships, identify new strategic relationship opportunities, or form strategic relationships, in the future. • We may acquire or invest in additional companies, which may divert our management's attention, result in additional dilution to our stockholders, and consume resources that are necessary to sustain our business with no assurance that such investment will not have a negative effect on our business going forward. • Fluctuations in the price and availability of energy to power our facilities may harm our performance. • We may be subject to liabilities and losses that may not be covered by insurance. • Renewable diesel has not previously been used as a commercial fuel in significant amounts. • The use of our fuel may subject us to product liability risks and we may become subject to product liability claims, which co uld harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims. • Liabilities and costs associated with hazardous materials, contamination and other environmental conditions may require us to co nduct investigations or remediation or expose us to other liabilities, either of which may adversely impact our operations and financial condition. • Our operations, and future planned operations, are subject to certain environmental health and safety laws or permitting requ ire ments, which could result in increased compliance costs or additional operating costs and restrictions. Failure to comply with such laws and regulations could result in substantial fines or other limitations that co uld adversely impact our financial results or operations. • Increased focus on sustainability or other ESG matters could impact our operations. • Failure of third parties to manufacture quality products or provide reliable services in accordance with schedules, prices, q ual ity and volumes that are acceptable to us could cause delays in developing and operating our commercial production facilities, which could damage our reputation, adversely affect our strategic relationships or adversel y a ffect our ability to operate profitably. • We may be unable to successfully perform under future supply and distribution agreements to provide our renewable diesel, whi ch could harm our commercial prospects. • Third parties on whom we may rely for transportation services are subject to complex federal, state and other laws that could ad versely affect our operations. • Our business operations may be significantly disrupted upon the occurrence of a catastrophic event, information technology sy ste m failures or cyberattack. • Our facilities and processes may fail to produce renewable diesel at the volumes, rates, and costs we expect. • We may in the future use hedging arrangements to address certain risks, but the use of such derivative instruments could have a material adverse impact on our results of operations. 40

 

 

Risks Relating to NXT • Business interruptions, including those related to the widespread outbreak of an illness, pandemic (such as Covid - 19), fire, adv erse weather conditions and the effects of climate change, particularly as it affects the Pacific Northwest, where we propose to operate, terrorism and other catastrophic events, may have an adverse impact on our business a nd results of our operations. • Even if we are successful in completing our first commercial production facility and consistently produce renewable diesel on a commercial scale, we may not be successful in commencing and expanding commercial operations to support the growth of our business. • We are a development stage company with a history of net losses, we are currently not profitable, and we may not achieve or m ain tain profitability. If we incur substantial losses and are not able to raise the funds to cover the losses, we may have to curtail our operations, which may prevent us from successfully developing, operating and expanding our bu siness. • Our actual costs may be greater than expected in developing our commercial production facilities or growth projects, causing us to realize significantly lower profits or greater losses. • Disruption in the supply chain, including increases in costs, shortage of materials or other disruption of supply, or in the wor kforce could materially adversely affect our business. • We may not be able to obtain, or comply with terms and conditions for, government grants, loans, and other incentives for whi ch we may apply for in the future, which may limit our opportunities to expand our business. • We may expand our operations globally, which would subject us to anti - corruption, anti - bribery, anti - money laundering, trade com pliance, economic sanctions and similar laws of countries in addition to the United States, and non - compliance with such laws may subject us to criminal or civil liability and harm our business, financial condition and/or re sults of operations. We may also be subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls. Further, we may be at a competitive disadvantage to foreign companies that are not subject to laws that affect United States companies including the Foreign Corrupt Practices Act. • Agreements containing confidentiality provisions and restrictive covenants with employees, consultants and other third - parties m ay not adequately prevent disclosures of trade secrets and other proprietary information. • We may be subject to intellectual property rights claims by third parties, which could be costly to defend, could require us to pay significant damages and, if we are unsuccessful in defending such claims, could limit our ability to use certain technologies and compete. • We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed conf ide ntial information or alleged trade secrets of third parties or competitors or are in breach of noncompetition or non - solicitation agreements with our competitors or their former employers. • Our business and prospects depend significantly on our ability to build our brand. We may not succeed in continuing to establ ish , maintain, and strengthen our brand, and our brand and reputation could be harmed by negative publicity regarding our company or products. • If we fail to comply with our obligations under license or technology agreements with third parties or are unable to license rig hts to use technologies on reasonable terms, we may be required to pay damages and could potentially lose license rights that are critical to our business. • Our projections are subject to significant risks, assumptions, estimates and uncertainties, including assumptions regarding a dop tion of renewable fuels. As a result, our projected revenues, market share, expenses and profitability may differ materially from our expectations in any given quarter or fiscal year. • If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting stand ard s or interpretations change, our operating results could be adversely affected. • Inflation may adversely affect us by increasing costs of our business. • The alternative fuel industry is rapidly evolving and may be subject to significant changes and developments in alternative t ech nologies may adversely affect the demand for our fuel if we are not able to adapt to use the most current available technologies and processes. • Concerns regarding the environmental impact of renewable diesel production could affect public policy which could impair our abi lity to operate at a profit and substantially harm our revenues and operating margins. • If we lose key personnel, including key management personnel, or are unable to attract and retain additional personnel, it co uld make it more difficult for us to pursue strategic relationships or develop our own products or otherwise have a material adverse effect on our business. • Our management team has limited experience in operating a public company. • We will incur significant increased expenses and administrative burdens as a public company, which could have an adverse effe ct on our business, financial condition and results of operations. • The requirements of being a public company may strain NXTClean Fuels’ resources, divert management's attention and affect its ability to attract and retain qualified board members and offi ce rs. • From time to time, we may be involved in litigation, regulatory actions or government investigations and inquiries, which cou ld have an adverse impact on our profitability and consolidated financial position. 41

 

 

AN INTRODUCTION | SPRING 2022 | WWW.NXTRENEWABLES.COM thank you.

 

Exhibit 99.3

 

 

United Becomes First U.S. Airline to Invest in Biofuel Refinery

 

NEXT’s flagship facility will provide a unique strategic location and assets to distribute biofuel throughout the West Coast, could increase United’s sustainable aviation fuel supply

 

United has invested in more sustainable aviation fuel production than any other airline in the world*

 

CHICAGO, Nov. 15, 2022 – Today, United Airlines Ventures (UAV) announced a strategic investment in NEXT Renewable Fuels (NEXT), which is permitting a flagship biofuel refinery in Port Westward, Oregon, with expected production beginning in 2026. NEXT is a Houston-based company developing the biorefinery which, at full production, could produce up to 50,000 barrels per day of Sustainable Aviation Fuel (SAF), renewable diesel, and other renewable fuels. UAV could invest as much as $37.5 million into NEXT, as long as the company meets certain milestone targets.

 

“Right now, one of the biggest barriers to increasing supply and lowering costs of sustainable fuel is that we don’t have the infrastructure in place to transport it efficiently, but NEXT’s strategic location and assets solve that problem and provide a blueprint for future facilities that need to be built,” said Michael Leskinen, President of United Airline Ventures. “We believe this investment will not only bolster NEXT’s ambitions and create near-term solutions to expand our SAF supply, but further demonstrates our commitment toward producing SAF at the scale necessary to decarbonize the aviation industry.”

 

NEXT’s biorefinery offers several unique benefits including access to a deep-water port, an existing industrial-grade dock, and multi-modal logistics options, which facilitates access to feedstock options and fast-growth SAF offtake markets on the west coast. NEXT has secured an agreement with BP for sourcing 100 percent of its feedstock, further de-risking supply issues smaller facilities have historically experienced. NEXT has also received a crucial air permit from the State of Oregon. Once all the necessary approvals and permits are obtained and the biorefinery is operational, it has the potential to be used as a platform to scale SAF and deploy additional future technologies.

 

*Based on airline offtake agreements for future purchases of sustainable aviation fuel (SAF)

 

 

 

 

“The clean fuels industry is taking off and our access to feedstocks, multi-modal distribution, and major industry players positions us to be a leading SAF supplier on the West Coast,” said Christopher Efird, CEO and Chairperson of NEXT. “United’s investment in NEXT strengthens our resolve to be one of the clean fuels leaders in the transportation sector.”

 

Today’s announcement marks UAV’s fifth SAF-related technology investment, and its first investment directly in a biorefinery. United has been an industry leader in advocating for alternative jet fuel for years – including investing in more SAF production than any other airline in the world and flying the world’s first passenger flight using 100% SAF in one engine. United also launched the Eco-Skies Alliance program, which among its 30 corporate participants, has collectively purchased more than 7 million gallons of sustainable aviation fuel.

 

Launched in 2021, UAV is a first-of-its-kind sustainability-focused ventures fund that targets startups, upcoming technologies, and concepts that will complement United’s goal of net zero emissions by 2050 – without relying on traditional carbon offsets such as voluntary offsets or planting trees. To date, UAV’s portfolio includes SAF producers and other companies advancing technologies including carbon utilization, hydrogen-electric engines, electric regional aircraft and air taxis.

 

About United

 

United’s shared purpose is “Connecting People. Uniting the World.” From our U.S. hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C., United operates the most comprehensive global route network among North American carriers. United is bringing back our customers’ favorite destinations and adding new ones on its way to becoming the world’s best airline. For more about how to join the United team, please visit www.united.com/careers and more information about the company is at www.united.com. United Airlines Holdings, Inc., the parent company of United Airlines, Inc., is traded on the Nasdaq under the symbol “UAL”. For further information about our environmental impact, review United’s Corporate Responsibility Report and Annual Report on Form 10-K, available at crreport.united.com and ir.united.com.

 

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About NEXT

 

NEXT is a next generation fuels company dedicated to sustainably producing clean, low-carbon fuels. The Company’s first project is a 50,000 barrel-per-day (“BPD”)/750 million gallon-per-year(“GPY”) RD/SAF refinery in Oregon with easy multi-modal access to the West Coast demand markets. The project is advancing through permitting and expects to begin construction upon completion of an Environmental Impact Statement (“EIS”) currently underway with the US Army Corp of Engineers. RD and SAF are high margin liquid transportation fuels worldwide and there is an urgent global demand for increased supply. To learn more about NEXT, please visit www.nextrenewables.com.

 

United Airlines Cautionary Statement Regarding Forward-Looking Statements

 

This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that are not statements of historical facts are, or may be deemed to be, forward-looking statements. Such forward-looking statements are based on historical performance and current expectations, estimates, forecasts and projections about our future financial results, goals, plans, commitments, strategies and objectives and involve inherent risks, assumptions and uncertainties, known or unknown, including internal or external factors that could delay, divert or change any of them, that are difficult to predict, may be beyond our control and could cause our future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements. These risks, assumptions, uncertainties and other factors include, among others, the parties’ ability to satisfy certain conditions and any delay or inability of United Airlines to realize the expected benefits of the investment. No forward-looking statement can be guaranteed. Forward-looking statements in this press release should be evaluated together with the many risks and uncertainties that affect United’s business and market, particularly those identified in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections in United’s Annual Report on Form 10-K for the year ended December 31, 2021, as updated by our subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission. The forward-looking statements included in this document are made only as of the date of this document and except as otherwise required by applicable law or regulation, United undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise.

 

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NEXT Cautionary Statement Regarding Forward-Looking Statements

 

All statements other than statements of historical facts contained in press release are forward-looking statements. Forward-looking statements may generally be identified by the use of words such as “believe,” “may,” “will,” “estimate,” “continue,” “intend,” “expect,” “should,” “would,” “plan,” “project,” “forecast,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding estimates and forecasts of other financial and performance metrics, projections of market opportunity and market share. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of NEXT’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ from assumptions, and such differences may be material. Many actual events and circumstances are beyond the control of NEXT. These forward-looking statements are subject to a number of risks and uncertainties, including changes in domestic and foreign business, market, financial, political and legal conditions, including the risk that any required regulatory approvals are not obtained, are delayed, or are subject to unanticipated conditions that could adversely affect the actual results; risks related to the rollout of NEXT’s business and the timing of expected business milestones; the effects of competition on NEXT’s business. If any of these risks materialize or NEXT’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that NEXT presently does not know or that NEXT currently does not believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect NEXT’s expectations, plans or forecasts of future events and views as of the date of this press release. NEXT anticipates that subsequent events and developments will cause NEXT’s assessments to change. However, while NEXT may elect to update these forward-looking statements at some point in the future, NEXT specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing NEXT’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements. Neither NEXT nor any of its affiliates have any obligation to update this press release.

 

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