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): January 20, 2022 (January 18, 2022)
ACE Convergence Acquisition Corp.
(Exact name of registrant as specified in its charter)
| Cayman Islands | 001-39406 | N/A |
| (State or other jurisdiction | (Commission | (I.R.S. Employer |
| of incorporation) | File Number) | Identification No.) |
| 1013 Centre Road, Suite 403S | |
| Wilmington, DE | 19805 |
| (Address of principal executive offices) | (Zip Code) |
(302) 633-2102
(Registrant’s telephone number, including area code)
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:
| x | 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 Class A ordinary share, $0.0001 par value, and one-half of one Warrant to purchase one Class A ordinary share | ACEVU | The Nasdaq Stock Market LLC | ||
| Class A ordinary shares, $0.0001 par value per share | ACEV | The Nasdaq Stock Market LLC | ||
| Warrants to purchase Class A ordinary shares | ACEVW | 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 x
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. |
Subscription Agreement
On January 18, 2022, ACE Convergence Acquisition Corp. (“ACE”) entered into a Subscription Agreement (the “Subscription Agreement”) with Tempo Automation, Inc. (“Tempo Automation”), OCM Tempo Holdings, LLC (“OCM”) and Tor Asia Credit Opportunity Master Fund II LP (“Tor”). Pursuant to the Subscription Agreement, OCM, an affiliate of Oaktree Capital Management, L.P. (collectively with its affiliates or affiliated investment funds and/or managed or controlled accounts, “Oaktree”), has committed to purchase $175 million in aggregate principal amount of ACE’s 13% convertible senior notes due 2025 concurrently with the closing (the “Closing”) of the previously announced business combination between ACE and Tempo Automation, which Closing is subject to the satisfaction or waiver of the conditions stated in the Agreement and Plan of Merger (the “Merger Agreement”), dated as of October 13, 2021, by and among ACE, Tempo Automation and ACE Convergence Subsidiary Corp., and other customary closing conditions. The Subscription Agreement also provides for the purchase of $25 million in aggregate principal amount of ACE’s 13% convertible senior notes due 2025 concurrently with the Closing by Tor, an investment partner of ACE, which investment replaces the previously announced investment in ACE’s 12% convertible senior notes due 2025 by an affiliate of ACE’s sponsor, ACE Convergence Acquisition LLC, as disclosed under Item 1.02 to this Current Report on Form 8-K below, which disclosure is incorporated by reference to this Item 1.01 to the extent required herein.
The obligations of the parties to consummate the transactions contemplated by the Subscription Agreement are conditioned upon, among other things: (i) the domestication of ACE as a Delaware corporation and the shares of domesticated common stock underlying the notes having been conditionally approved for listing on the Nasdaq Stock Market LLC, (ii) no governmental authority having enacted, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation that has the effect of making consummation of the transactions contemplated by the Subscription Agreement illegal, or otherwise restraining, prohibiting or enjoining consummation of such transactions, and no such governmental authority having instituted or threatened in writing a proceeding seeking to impose any such restraint or prohibition, subject to certain limited exceptions, (iii) all documentation as reasonably necessary or desirable to effectuate the transactions contemplated by the Subscription Agreement or the Indenture (as defined therein) having been duly executed and delivered, (iv) all conditions precedent to the closing of the Transactions (as defined in the Subscription Agreement) having been satisfied or waived, subject to certain exceptions, and the closing of each of the Transactions occurring substantially concurrently with or immediately following the Closing (as defined in the Subscription Agreement), (v) with respect to ACE’s obligation to close, all representations and warranties of each Subscriber (as defined in the Subscription Agreement) being true and correct in all material respects, and the Subscribers having performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Subscription Agreement, in each case subject to certain exceptions, and (vi) with respect to a Subscriber’s obligation to close, (a) all representations and warranties of ACE being true and correct in all material respects, subject to certain exceptions, (b) ACE having performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Subscription Agreement, (c) there having been no amendment, waiver or modification to any of the Transaction Agreements (as defined in the Subscription Agreement) that would reasonably be expected to adversely affect the Subscribers in any manner, or to the merger/purchase consideration and/or closing consideration (including earn-outs or similar payments) set forth in any of the Transaction Agreements, in each case without the Lead Subscriber’s (as defined in the Subscription Agreement) prior written consent, (d) there not having occurred any Company Material Adverse Effect (as defined in the Merger Agreement) or any material adverse effect as it relates to each of Compass AC Holdings, Inc. (“Compass”) and Whizz Systems, Inc. (“Whizz”), (e) there being no indebtedness other than Permitted Indebtedness (as defined in the Subscription Agreement) (f) ACE, Tempo Automation, Compass, Whizz or any of their respective subsidiaries not having issued any equity interests other than as described in the Subscription Agreement, (g) unless otherwise approved in writing by the Lead Subscriber, none of ACE, Tempo Automation, Compass, Whizz or any of their respective subsidiaries having entered into any debt, equity or other financing or related transaction to raise capital in connection with consummation of the Transactions, except for Permitted Indebtedness and as contemplated under clause (f) above, (h) ACE having paid certain fees and expenses of the Subscribers incurred in connection with the Subscription Agreement, (i) the Subscribers having received certain opinions of counsel to ACE, Tempo Automation, Compass and Whizz and each of their respective subsidiaries, (j) there having not been any Default or Event of Default (each, as defined in the Subscription Agreement), (k) there being no less than an amount equal to $25 million, plus certain other amounts, in unrestricted cash and cash equivalents on ACE’s consolidated balance sheet on a pro forma basis after giving effect to the Transactions and (l) each Subscriber having received certain information in order to complete such Subscriber’s “Know your Customer” or Anti-Money Laundering Laws (each, as defined in the Subscription Agreement) investigation as may be required under such Subscriber’s internal compliance policies or anti-money laundering policies.
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The closings under the Subscription Agreement will occur substantially concurrently with the Closing. The Subscription Agreement also contemplates a registration rights agreement, pursuant to which ACE will agree that it shall, within six months following the Closing, submit to or file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement covering the resale of certain shares of domesticated ACE’s common stock and other equity securities of domesticated ACE that are held by the parties thereto from time to time, and shall use its commercially reasonable efforts to have such registration statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (a) the 90th calendar day following the filing date thereof if the SEC notifies ACE that it will “review” such registration statement and (b) the 10th business day after the date ACE is notified by the SEC that such registration statement will not be “reviewed” or will not be subject to further review.
Additionally, pursuant to the Subscription Agreement, each Subscriber agrees to waive any and all claims against the trust account established in connection with ACE’s initial public offering.
The Subscription Agreement will terminate and be of no further force and effect upon the earliest to occur of (a) termination of the Merger Agreement, (b) written agreement of ACE and the Lead Subscriber, (c) written notice by ACE or the Lead Subscriber if, on the closing date of the Transactions, any of the conditions to Closing (as defined in the Subscription Agreement) with respect to the Lead Subscriber have not been satisfied and, as a result thereof, the transactions contemplated by the Subscription Agreement are not consummated, or (d) written notice by the Lead Subscriber to ACE as a result of (i) the termination of either of those certain transaction agreements between Tempo Automation and each of Whizz and Compass, (ii) the Agreement End Date (as defined in the Merger Agreement), or (iii) six months after the date of the Subscription Agreement, in each case if the Closing (as defined in the Subscription Agreement) with respect to the Lead Subscriber shall not have occurred. Notwithstanding the foregoing, each Subscriber other than the Lead Subscriber shall have the right to terminate the Subscription Agreement, solely with respect to itself, if the Closing (as defined in the Subscription Agreement) with respect to the Lead Subscriber has occurred but the Closing (as defined in the Subscription Agreement) with respect to such other Subscriber has not occurred as a result of any of the conditions to Closing (as defined in the Subscription Agreement) set forth in Sections 2(c) or 2(e) of the Subscription Agreement having not been satisfied.
Oaktree Side Letter
In connection with entry into the Subscription Agreement, on January 18, 2022, ACE, Tempo Automation and OCM entered into a Letter Agreement (the “Oaktree Side Letter”), pursuant to which Oaktree shall have the right (but not the obligation), commencing on the Closing Date (as defined in the Oaktree Side Letter) and ending on the date Oaktree no longer holds or controls notes in an aggregate principal amount that is at least 50% of the aggregate principal amount of notes purchased by Oaktree on the Closing Date, to appoint two individuals to attend, as board observers and participants in a nonfiduciary and non-voting capacity, each meeting of the board of directors of domesticated ACE and any duly authorized committee thereof. The Oaktree Side Letter also provides for certain liquidity reporting requirements of ACE to Oaktree, and provides Oaktree with certain access and inspection rights of ACE’s or any of its subsidiaries’ respective properties and records.
The Oaktree Side Letter will automatically terminate upon the earliest to occur of (a) the termination of the Subscription Agreement (other than a termination in connection with the Closing (as defined in the Subscription Agreement)), (b) the time at which all of the notes held by Oaktree or any transferee of any of Oaktree’s rights thereunder are converted into Common Stock (as defined in the Oaktree Side Letter), and (c) the time at which Oaktree or any transferee of any of Oaktree’s rights thereunder no longer owns or controls at least $25 million in aggregate principal amount of the notes.
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Tor Side Letter
In connection with entry into the Subscription Agreement, on January 18, 2022, ACE, Tempo Automation and Tor entered into an Information Rights and Confidentiality Agreement (the “Tor Side Letter”), which provides for certain liquidity reporting requirements of ACE to Tor, and provides Tor with certain access and inspection rights of ACE’s or any of its subsidiaries’ respective properties and records.
The Tor Side Letter will automatically terminate upon the earliest to occur (a) the termination of the Subscription Agreement (other than a termination in connection with the Closing (as defined in the Subscription Agreement)), (b) the time at which all of the notes held by Tor (and/or one or more of its affiliates or affiliated investment funds and/or managed or controlled accounts) are converted into Common Stock (as defined in the Tor Side Letter), and (c) with respect to Tor and/or one or more of its affiliates or affiliated investment funds and/or managed or controlled accounts, the time at which Tor (and/or one or more of its affiliates or affiliated investment funds and/or managed or controlled accounts) no longer owns or controls at least $25 million in aggregate principal amount of the notes.
Promissory Notes
As previously announced, on or prior to October 13, 2021, ACE entered into subscription agreements with certain investors, pursuant to, and on the terms and subject to the conditions of which, certain investors collectively subscribed for 8,200,000 shares of domesticated ACE’s common stock for an aggregate purchase price equal to $82 million, pursuant to certain subscription agreements (the “Common Stock Subscription Agreements”).
On January 18, 2022, ACE and Tempo Automation entered into Convertible Promissory Notes (the “Promissory Notes”) with certain of such investors, pursuant to which such investors agreed to loan to Tempo Automation up to an aggregate $5 million, which loans may be converted into common stock of ACE at a conversion price of $10.00 per share. Pursuant to the Promissory Notes, the principal balances of such notes shall reduce the “Subscription Amount” (as defined in the Common Stock Subscription Agreements) of such investors on a dollar-for-dollar basis.
The foregoing descriptions of the Subscription Agreement, the Oaktree Side Letter, the Tor Side Letter, the Common Stock Subscription Agreements and the Promissory Notes do not purport to be complete and are qualified in their entirety by the terms and conditions of the full text of the Subscription Agreement, a copy of which is attached hereto as Exhibit 10.1, the full text of the Oaktree Side Letter, a copy of which is attached hereto as Exhibit 10.2, the full text of the Tor Side Letter, a copy of which is attached hereto as Exhibit 10.3, the full text of the Common Stock Subscription Agreements, the form of which was previously filed as Exhibit 10.1 to ACE’s Current Report on Form 8-K filed with the SEC on October 14, 2021, and the full text of the Promissory Notes, the form of which is attached hereto as Exhibit 10.4, each of which is incorporated herein by reference.
| Item 1.02 | Termination of a Material Definitive Agreement. |
As previously announced, on October 13, 2021, an affiliate of ACE’s sponsor committed to purchase no less than $25 million of ACE’s 12% convertible senior notes due 2025 pursuant to a Note Subscription Agreement (the “Note Subscription Agreement”). On January 18, 2022, ACE, Tempo Automation and such affiliate of ACE’s sponsor entered into a Letter Agreement (the “Termination Agreement”), pursuant to which the Note Subscription Agreement was terminated in its entirety in accordance with its terms.
The foregoing descriptions of the Note Subscription Agreement and the Termination Agreement do not purport to be complete and are qualified in their entirety by the terms and conditions of the full text of the Note Subscription Agreement, which was previously filed as Exhibit 10.2 to ACE’s Current Report on Form 8-K filed with the SEC on October 14, 2021, and the full text of the Termination Agreement, which is attached hereto as Exhibit 10.5, each of which is incorporated by reference herein.
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| Item 3.02 | Unregistered Sales of Equity Securities. |
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 3.02 to the extent required herein. The shares of common stock to be issued in connection with the Subscription Agreement and the Promissory Notes will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act.
Additional Information and Where to Find It
Additional information about the proposed transaction (the “Tempo Transaction”) between Tempo Automation, Inc. (collectively with its subsidiaries and pro forma for its acquisition of Compass AC Holdings, Inc. and Whizz Systems, Inc., “Tempo”) and ACE, including a copy of the Merger Agreement and investor presentation, was provided in a Current Report on Form 8-K filed by ACE with the SEC on October 14, 2021, and is available at www.sec.gov. In connection with the Tempo Transaction, ACE has filed a registration statement on Form S-4 (the “Registration Statement”) with the SEC, which includes a preliminary proxy statement to be distributed to holders of ACE’s ordinary shares in connection with ACE’s solicitation of proxies for the vote by ACE’s shareholders with respect to the Tempo Transaction and other matters as described in the Registration Statement, as well as the prospectus relating to the offer of securities to be issued to Tempo stockholders in connection with the Tempo Transaction. After the Registration Statement has been declared effective, ACE will mail a definitive proxy statement, when available, to its shareholders. The Registration Statement includes information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies to ACE’s shareholders in connection with the Tempo Transaction. ACE will also file other documents regarding the Tempo Transaction with the SEC. Before making any voting decision, investors and security holders of ACE and Tempo are urged to read the Registration Statement, the proxy statement/prospectus contained therein, and all other relevant documents filed or that will be filed with the SEC in connection with the Tempo Transaction as they become available because they will contain important information about the Tempo Transaction.
Investors and security holders can obtain free copies of the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC by ACE through the website maintained by the SEC at www.sec.gov. In addition, the documents filed by ACE may be obtained free of charge from ACE’s website at acev.io or by written request to ACE at ACE Convergence Acquisition Corp., 1013 Centre Road, Suite 403S, Wilmington, DE 19805.
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Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements within the meaning of the federal securities laws with respect to the proposed business combination (the “Proposed Business Combination”) between Tempo and ACE, including statements regarding the benefits of the Proposed Business Combination, the anticipated timing of the Proposed Business Combination, the services offered by Tempo and the markets in which it operates, and Tempo’s projected future results. These forward-looking statements generally are 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 that could cause the actual results to differ materially from the expected results. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including but not limited to: (i) the risk that the Proposed Business Combination may not be completed in a timely manner or at all, which may adversely affect the price of ACE’s securities, (ii) the risk that the acquisition by Tempo Automation, Inc. of each of Compass AC Holdings, Inc. and Whizz Systems, Inc. may not be completed in a timely manner or at all, (iii) the risk that the Proposed Business Combination may not be completed by ACE’s business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by ACE, (iv) the failure to satisfy the conditions to the consummation of the Proposed Business Combination, including the receipt of the requisite approvals of ACE’s shareholders and Tempo’s stockholders, respectively, the satisfaction of the minimum trust account amount following redemptions by ACE’s public shareholders and the receipt of certain governmental and regulatory approvals, (v) the lack of a third party valuation in determining whether or not to pursue the Proposed Business Combination, (vi) the occurrence of any event, change or other circumstance that could give rise to the termination of the agreement and plan of merger, (vii) the effect of the announcement or pendency of the Proposed Business Combination on Tempo’s business relationships, performance, and business generally, (viii) risks that the Proposed Business Combination disrupts current plans of Tempo and potential difficulties in Tempo employee retention as a result of the Proposed Business Combination, (ix) the outcome of any legal proceedings that may be instituted against Tempo or against ACE related to the agreement and plan of merger or the Proposed Business Combination, (x) the ability to maintain the listing of ACE’s securities on The Nasdaq Stock Market LLC, (xi) the price of ACE’s securities may be volatile due to a variety of factors, including changes in the competitive and highly regulated industries in which Tempo plans to operate, variations in performance across competitors, changes in laws and regulations affecting Tempo’s business and changes in the combined capital structure, (xii) the ability to implement business plans, forecasts, and other expectations after the completion of the Proposed Business Combination, and identify and realize additional opportunities, (xiii) the risk of downturns in the highly competitive industry in which Tempo operates, (xiv) the impact of the global COVID-19 pandemic, (xv) the enforceability of Tempo’s intellectual property, including its patents, and the potential infringement on the intellectual property rights of others, cyber security risks or potential breaches of data security, (xvi) the ability of Tempo to protect the intellectual property and confidential information of its customers, (xvii) the risk of downturns in the highly competitive additive manufacturing industry, and (xviii) other risks and uncertainties described in ACE’s registration statement on Form S-1 (File No. 333-239716), which was originally filed with the SEC on July 6, 2020 (as amended, the “Form S-1”), and Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 17, 2021, and subsequently amended (as amended, the “Form 10-K”), and its subsequent Quarterly Reports on Form 10-Q. The foregoing list of factors is not exhaustive. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by investors as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of the Form S-1, the Form 10-K, Quarterly Reports on Form 10-Q, the Registration Statement, the proxy statement/prospectus contained therein, and the other documents filed by ACE 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. These risks and uncertainties may be amplified by the COVID-19 pandemic, which has caused significant economic uncertainty. 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 Tempo and ACE 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, except as required by securities and other applicable laws. Neither Tempo nor ACE gives any assurance that either Tempo or ACE, respectively, will achieve its expectations.
No Offer or Solicitation
This communication is for informational purposes only and does not constitute an offer or invitation for the sale or purchase of securities, assets or the business described herein or a commitment to ACE with respect to any of the foregoing, and this communication shall not form the basis of any contract, nor is it a solicitation of any vote, consent, or approval in any jurisdiction pursuant to or in connection with the Tempo Transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.
Participants in Solicitation
ACE and Tempo, and their respective directors and executive officers, may be deemed participants in the solicitation of proxies of ACE’s shareholders in respect of the Tempo Transaction. Information about the directors and executive officers of ACE is set forth in ACE’s Form 10-K for the period ended December 31, 2020, as amended. Additional information regarding the identity of all potential participants in the solicitation of proxies to ACE’s shareholders in connection with the proposed Tempo Transaction and other matters to be voted upon at the special meeting, and their direct and indirect interests, by security holdings or otherwise, is set forth in ACE’s proxy statement. Investors may obtain such information by reading such proxy statement.
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| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| * | Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. ACE agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. |
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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.
| ACE Convergence Acquisition Corp. | |||
| Date: January 20, 2022 | By: | /s/ Behrooz Abdi | |
| Name: | Behrooz Abdi | ||
| Title: | Chief Executive Officer | ||
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Exhibit 10.1
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into on January 18, 2022, by and among (i) ACE Convergence Acquisition Corp., a Cayman Islands exempted company limited by shares (which entity shall migrate to and domesticate as a Delaware corporation prior to the Closing, the “Company”), (ii) Tempo Automation, Inc., a Delaware corporation (“Tempo”) (solely for purposes of the agreements and obligations set forth in Section 7(e)), and (iii) each of the undersigned subscribers (each a “Subscriber” and collectively, the “Subscribers”).
WHEREAS, this Subscription Agreement is being entered into in connection with (i) the Agreement and Plan of Merger, dated as of October 13, 2021 (as may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among the Company, Tempo and ACE Convergence Subsidiary Corp., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Tempo Merger Sub”), pursuant to which, among other things, Tempo Merger Sub will merge with and into Tempo, with Tempo surviving such merger as a wholly owned subsidiary of the Company and the Company shall change its name to “Tempo Automation Holdings, Inc.”; (ii) the Agreement and Plan of Merger, dated as of October 13, 2021 (as may be amended, supplemented or otherwise modified from time to time, the “Compass Combination Agreement”), by and among Tempo, Compass AC Holdings, Inc., a Delaware corporation (“Compass”), Aspen Acquisition Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of Tempo (“Compass Merger Sub”), and the other parties thereto, pursuant to which, among other things, Compass Merger Sub will merge with and into Compass, with Compass surviving such merger as a wholly owned subsidiary of Tempo; and (iii) the Agreement and Plan of Merger, dated as of August 13, 2021 (as may be amended, supplemented or otherwise modified from time to time, the “Whizz Combination Agreement” and, collectively with the Business Combination Agreement and the Compass Combination Agreement, and including all exhibits and schedules thereto, the “Transaction Agreements”), by and among Tempo, Whizz Systems, Inc., a California corporation (“Whizz”), and the other parties thereto, pursuant to which, among other things, Tempo will purchase all the outstanding common stock of Whizz from the sellers thereunder, resulting in Whizz becoming a wholly owned subsidiary of Tempo (the transactions described in the foregoing clauses (i), (ii) and (iii), each a “Transaction” and collectively, the “Transactions”);
WHEREAS, prior to the closing of the Transactions (and as more fully described in the Business Combination Agreement), the Company will domesticate as a Delaware corporation in accordance with Section 388 of the General Corporation Law of the State of Delaware and Part XII of the Cayman Islands Companies Law (2020 Revision) (the “Domestication”);
WHEREAS, in connection with the Transactions, the Subscribers desire to subscribe for and purchase from the Company, on a several (and not joint and several) basis, following the Domestication and substantially concurrently with the closing of the Business Combination Agreement (the “BCA Closing”), that principal amount of the Company’s convertible senior notes due 2025 (the “Notes”) set forth in Exhibit A attached hereto on the terms, and subject to the conditions, set forth in the form of indenture attached hereto as Exhibit B (the “Indenture”) (the Notes subscribed by the Subscribers, the “Subscribed Notes”) for an aggregate purchase price equal to 99.0% of the principal amount of the Subscribed Notes (the “Purchase Price”), and the Company desires to issue and sell to the Subscribers the Subscribed Notes in consideration of the payment of the Purchase Price by or on behalf of the Subscribers to the Company; and
WHEREAS, in connection with the issuance of the Notes on the closing date of the Transactions (the “Closing Date”), the Company and U.S. Bank, National Association, as trustee (the “Trustee”), will enter into the Indenture.
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Subscription. Subject to the terms and conditions hereof, at the Closing (as defined below), each Subscriber hereby severally (but not jointly) agrees to subscribe for and purchase, and the Company hereby agrees to issue and sell to the Subscriber, upon the payment of the respective Purchase Price, the Subscribed Notes set forth for each such Subscriber on Exhibit A attached hereto (such subscription and issuance, the “Subscription”). Each Subscriber has the right to designate, in accordance with Section 2(b), using a designation notice in a form to be agreed between the Company and the Lead Subscriber (such notice, a “Designation Notice”), that some or all of its Subscribed Notes be issued in the name of and delivered to an affiliate or any investment fund or separately managed accounts which such Subscriber or its affiliates controls or manages. Each Subscriber acknowledges and agrees that, as a result of the Domestication, the Subscribed Notes that will be issued pursuant hereto shall be securities of a Delaware corporation (and not securities of a Cayman Islands exempted company).
2. Closing.
a. The consummation of each Subscription contemplated hereby (each, a “Closing”) shall occur on the Closing Date following the Domestication and substantially concurrently with the BCA Closing.
b. At least twelve (12) Business Days before the anticipated Closing Date, the Company shall deliver written notice to each Subscriber (the “Closing Notice”) specifying (i) the anticipated Closing Date, (ii) such Subscriber’s Purchase Price, (iii) the wire instructions for delivery of such Subscriber’s Purchase Price to an escrow account of a third party escrow agent mutually acceptable to the Company and the Lead Subscriber (defined below) (the “Escrow Agent” and such account, the “Escrow Account”), on the terms and subject to the conditions set forth in an escrow agreement (which escrow agreement shall be in form and substance acceptable to the Company and the Lead Subscriber (as defined below), and entered into by the Company, each Subscriber and the Escrow Agent prior to the Subscribers funding into the Escrow Account as contemplated hereunder), and (iv) its good faith belief that each of the closing conditions set forth in Sections 2(c) and (2)(e) will be satisfied on or prior to Closing. No later than two (2) Business Days after receiving the Closing Notice (and in any event at least three (3) Business Days prior to the anticipated Closing Date), each Subscriber shall deliver to the Company such information as is reasonably requested in the Closing Notice in order for the Company to issue the Subscribed Notes to the Subscriber (or its respective designee(s) as set forth in the Designation Notice), including, without limitation, a duly completed and executed Internal Revenue Service Form W-9 or appropriate Form W-8. Each Subscriber shall deliver to the Company, at least three (3) Business Days prior to the anticipated Closing Date specified in the Closing Notice, one or more duly completed Designation Notices, if applicable, and each Subscriber shall deliver to the Escrow Account its respective Purchase Price in cash via wire transfer, which shall be delivered to the Company on the Closing Date against delivery by the Company to the Subscriber (or its respective designee(s), as applicable) of the respective Subscribed Notes in book entry form, to the extent the Notes are eligible, pursuant to the DWAC procedures of The Depository Trust Company (“DTC”), which will act as securities depository for the Notes, free and clear of any liens or other restrictions (other than those arising under the Indenture, this Subscription Agreement or state or federal securities laws), in the name of a custodian designated by the Subscribers (or its respective designee(s), as applicable), which custodian shall have properly posted such DWAC for release by the Trustee through the facilities of DTC. Notwithstanding the foregoing, each Subscriber shall be obligated to deliver to the Escrow Account its respective Purchase Price only following completion of a customary investigation required under such Subscriber’s “Know your Customer” or Anti-Money Laundering Laws (as defined below) compliance policies or its anti-money laundering policies, provided that such Subscriber shall use its commercially reasonable efforts to complete such investigation as promptly as practicable following the date hereof. In the event that the consummation of the Transactions does not occur within three (3) Business Days after the anticipated Closing Date specified in the Closing Notice, the Escrow Agent shall promptly (but in no event later than one (1) Business Day thereafter) return the funds so delivered by each Subscriber (or its respective designee(s), as applicable) by wire transfer in immediately available funds to the account specified by such Subscriber (or its respective designee(s), as applicable). The failure of the Closing to occur on the Closing Date shall not, in and of itself, terminate this Subscription Agreement or otherwise relieve any party of any of its obligations hereunder, including the obligation of the Subscriber to purchase the Subscribed Notes at the Closing. For purposes of this Subscription Agreement, “Business Day” means any day other than a Saturday, Sunday or a day on which the Federal Reserve Bank of New York is closed.
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c. The Closing with respect to each Subscriber shall be subject to the satisfaction or valid waiver (to the extent a valid waiver is capable of being issued) by the Company, on the one hand, and such Subscriber, on the other hand, of the conditions that, on the Closing Date:
(i) the Domestication shall have occurred, and the shares of Domesticated Common Stock, including the shares of Domesticated Common Stock underlying the Notes (the “Underlying Shares”) shall have been conditionally approved for listing on The Nasdaq Stock Market LLC (“NASDAQ”), subject to any requirement to have a sufficient number of round lot holders of the Domesticated Common Stock. For purposes of this Subscription Agreement, “Domesticated Common Stock” shall mean the common stock of the Company, par value $0.0001 per share, immediately following the Domestication.
(ii) no governmental authority shall have enacted, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation (whether temporary, preliminary or permanent) that is then in effect and has the effect of making consummation of the transactions contemplated hereby illegal or otherwise restraining, prohibiting or enjoining consummation of the transactions contemplated hereby (except in the case of a governmental authority located outside the United States where such judgment, order, law, rule or regulation would not be reasonably expected to have a Company Material Adverse Effect (as defined below) or have a material adverse effect on the Company’s ability to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Notes); and no such governmental authority shall have instituted or threatened in writing a proceeding seeking to impose any such restraint or prohibition (except in the case of a governmental authority located outside the United States where such restraint or prohibition would not be reasonably expected to have a Company Material Adverse Effect or have a material adverse effect on the Company’s ability to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Notes);
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(iii) (A) the Indenture and the Registration Rights Agreement, in substantially the same forms attached hereto as Exhibit B and Exhibit C, respectively, together with any amendments thereto and the completion of any bracketed or incomplete sections thereof, in each case, in form and substance acceptable to the Company and the Subscriber of at least a majority of the aggregate principal amount of the Subscribed Notes (the “Lead Subscriber”), and (B) such other documentation as reasonably necessary or desirable to effectuate the transactions contemplated by this Subscription Agreement or the Indenture, in each case, in form and substance reasonably acceptable to the Company and the Lead Subscriber, shall be, in the case of subsections (A) and (B), duly executed by each of the applicable parties thereto and delivered to each other party; and
(iv) all conditions precedent to the closing of the Transactions set forth in the Transaction Agreements shall have been satisfied or waived, as determined by the parties to the Transaction Agreements (other than those conditions under the Transaction Agreements which, by their nature, are to be fulfilled simultaneously with the closing of the Transactions, including to the extent that any such condition is dependent upon the consummation of the purchase and sale of the Subscribed Notes pursuant to this Subscription Agreement), and the closing of each of the Transactions shall occur substantially concurrently with or immediately following the Closing.
d. The obligation of the Company to consummate the Closing with respect to a Subscriber shall be subject to the satisfaction or valid waiver by the Company of the additional conditions that, on the Closing Date:
(i) all representations and warranties of such Subscriber contained in this Subscription Agreement are true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Subscriber Material Adverse Effect (as defined below), which representations and warranties shall be true in all respects) at and as of the Closing Date, and consummation of the Closing shall constitute a reaffirmation by such Subscriber of each of the representations and warranties of such Subscriber contained in this Subscription Agreement as of the Closing; and
(ii) the Subscribers shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing, except where the failure of such performance or compliance would not reasonably be expected to prevent, materially delay, or materially impair the ability of the Company to consummate the Closing.
e. The obligation of a Subscriber to consummate the Closing with respect to such Subscriber shall be subject to the satisfaction or valid waiver by such Subscriber of the additional conditions that, on the Closing Date:
(i) all representations and warranties of the Company contained in this Subscription Agreement are true and correct in all material respects (other than representations and warranties that are qualified as to materiality or Company Material Adverse Effect, which representations and warranties shall be true in all respects) at and as of the Closing Date, and consummation of the Closing shall constitute a reaffirmation by the Company of each of the representations and warranties of the Company contained in this Subscription Agreement as of the Closing Date;
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(ii) the Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing;
(iii) there shall have been no amendment, waiver or modification (A) to any of the Transaction Agreements in effect as of the date hereof that would reasonably be expected to adversely affect the Subscribers in any manner, or (B) to the merger/purchase consideration and/or closing consideration (including earn-outs or similar payments) set forth in any of the Transaction Agreements in effect as of the date hereof, in each case without having received the Lead Subscriber’s prior written consent;
(iv) there shall not, in the determination of the Lead Subscriber, have occurred (A) any “Company Material Adverse Effect” (as defined in the Business Combination Agreement) or (B) any “Material Adverse Effect” as it relates to each “Company” (in each case, as defined in the Compass Combination Agreement and the Whizz Combination Agreement) (subclauses (A) and (B) hereof, collectively, a “Company Material Adverse Effect” for purposes of this Subscription Agreement);
(v) there shall be no other Indebtedness (as defined in the Indenture) other than (A) the Notes in an aggregate principal amount equal to two hundred million dollars ($200,000,000), (B) the Indebtedness set forth on Schedule 2(e)(v)(C) hereof, (C) Indebtedness approved in writing by the Lead Subscriber prior to the closing of the Transactions and (D) indebtedness of the Company or Tempo that will be paid off at closing of the Transactions (subclauses (A) through (D), collectively, “Permitted Indebtedness”);
(vi) none of the Company, Tempo, Compass, Whizz or any of their respective direct or indirect subsidiaries shall have issued, or agreed to issue, any equity interests prior to the Closing Date, other than (A) the Notes, (B) as described in or contemplated under the Transaction Agreements in effect as of the date hereof, (C) the issuance by Tempo of up to $10,000,000 of convertible promissory notes to existing investors of Tempo that are convertible into either Domesticated Common Stock in connection with the closing of the Transactions or equity securities of Tempo in the event the closing of the Transactions does not occur, (D) the issuance of equity interests in Tempo in connection with the settlement of stock options and other equity incentive awards in the ordinary course of business, and (E) as may be approved in writing by the Lead Subscriber;
(vii) unless otherwise approved in writing by the Lead Subscriber, none of the Company, Tempo, Compass, Whizz or any of their respective direct or indirect subsidiaries shall have entered into any debt, equity or other financing or related transaction to raise capital in connection with consummation of the Transactions, including, without limitation, any redemption recapture transaction or similar arrangement, except for Permitted Indebtedness and as contemplated under clause (vi) above;
(viii) the Company shall have paid all reasonable and documented out-of-pocket fees and expenses of the Subscribers incurred in connection with this Subscription Agreement, including, without limitation, the reasonable and documented fees and expenses of Stroock & Stroock & Lavan LLP, as counsel to the Subscribers, to the extent invoiced at least one (1) Business Day prior to the Closing Date;
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(ix) the Subscribers shall have received opinions of counsel (including, without limitation, local counsel in Malaysia) to the Company and each of Tempo, Compass and Whizz and each of their subsidiaries, dated as of the Closing Date, covering customary corporate law and securities law matters, subject to customary qualifications and assumptions, which shall be in form and substance acceptable to the Lead Subscriber;
(x) there shall be no Default or Event of Default (each as defined in the Indenture) under the Indenture as of the Closing Date on a pro forma basis after giving effect to the Transactions (including, for the avoidance of doubt, after giving effect to any cash payments to the Placement Agents (as defined below), any advisors, any executives or directors, or any other persons in connection with the Transactions);
(xi) there shall be no less than an amount equal to (x) $25 million plus (y) any amounts outstanding under the Company’s asset-based credit facility plus (z) the aggregate amount of any (A) trade payables of Tempo, Compass, Whizz and each of their respective subsidiaries that are past due by more than thirty (30) calendar days and (B) other payables, including any accrued but unpaid fees and expenses of legal and financial advisors, in connection with the Transactions, this Subscription Agreement and any other financing arrangements in connection with the Transactions, in unrestricted cash and cash equivalents on the Company’s consolidated balance sheet on a pro forma basis after giving effect to the Transactions; and
(xii) such Subscriber shall have received any necessary information reasonably and timely requested of the Escrow Agent in order to complete such Subscriber’s “Know your Customer” or Anti-Money Laundering Laws (as defined below) investigation as may be required under such Subscriber’s internal compliance policies or anti-money laundering policies as of the date hereof.
3. Company Representations and Warranties. For purposes of this Section 3, the term “Company” shall refer to (x) with respect to the representations and warranties made as of the date hereof (except as provided in clause (y)), the Company and (y) (i) with respect to representations and warranties in subsections (f), (i), (k) and (n) of this Section 3 made as of the date hereof and (ii) the representations and warranties made as of the Closing Date, the combined company after giving effect to the Domestication and the Transactions as of the Closing Date. The Company represents and warrants to the Subscribers and the Placement Agents that on the date hereof and as of the Closing Date:
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a. The Company (i) is, as of the date hereof, an exempted company duly incorporated, validly existing and in good standing under the laws of the Cayman Islands (to the extent such concept exists in such jurisdiction), (ii) has the requisite power and authority to own, lease and operate its properties, to carry on its business as it is now being conducted and to enter into and perform its obligations under this Subscription Agreement, and (iii) is duly licensed or qualified to conduct its business and, if applicable, is in good standing under the laws of each jurisdiction (other than its jurisdiction of incorporation) in which the conduct of its business or the ownership of its properties or assets requires such license or qualification, except, with respect to the foregoing clause (iii), where the failure to be in good standing would not reasonably be expected to have a Company Material Adverse Effect. As of the Closing Date, following the Domestication, the Company will be duly incorporated, validly existing as a corporation and in good standing under the laws of the State of Delaware.
b. As of the Closing Date, (i) the Subscribed Notes will be duly authorized and, when issued and delivered to the Subscribers against full payment therefor in accordance with the terms of this Subscription Agreement, will be validly issued and will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except that the enforcement thereof may be subject to applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by equitable principles relating to enforceability (collectively, the “Enforceability Exceptions”), and will not have been issued in violation of any preemptive rights created under the Company’s organizational documents or the laws of the State of Delaware and (ii) the Indenture will be duly authorized by the Company and, when duly authorized, executed and delivered by the Trustee, will constitute a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that the enforcement thereof may be subject to the Enforceability Exceptions.
c. The Subscribed Notes are not, and following the Closing, will not be, subject to any Transfer Restriction. The term “Transfer Restriction” means any condition to or restriction on the ability of the undersigned or any other holder of the Subscribed Notes to pledge, sell, assign or otherwise transfer the Subscribed Notes under any organizational document, policy or agreement of, by or with the Company, but excluding the restrictions on transfer to be described in the Indenture and Section 4(e) of this Subscription Agreement with respect to the status of the Subscribed Notes as “restricted securities”.
d. This Subscription Agreement has been duly authorized, executed and delivered by the Company, and assuming the due authorization, execution and delivery of the same by the Subscribers, this Subscription Agreement shall constitute a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.
e. The execution and delivery of this Subscription Agreement, the issuance and sale of the Subscribed Notes, the issuance and delivery of the Underlying Shares in accordance with the terms of the Indenture, and the compliance by the Company with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject; (ii) the organizational documents of the Company; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Company Material Adverse Effect or have a material adverse effect on the Company’s ability to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Notes.
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f. Assuming the accuracy of the representations and warranties of the Subscribers, the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self-regulatory organization (including NASDAQ or other person in connection with the execution, delivery and performance of this Subscription Agreement (including, without limitation, the issuance of the Subscribed Notes)), other than (i) filings required by applicable state securities laws, (ii) the filing of a registration statement to register the resale of the Underlying Shares pursuant to a shelf registration statement, (iii) those required by NASDAQ, including with respect to obtaining stockholder approval, (iv) those required to consummate each Transactions as provided under the Transaction Agreements, as applicable, (v) the filing of notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, if applicable, and (vi) the failure of which to obtain would not be reasonably expected to have a Company Material Adverse Effect or have a material adverse effect on the Company’s ability to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Notes.
g. Except as set forth in any amendments thereto, as of their respective dates, all reports required to be filed by the Company with the Commission (the “SEC Reports”) complied in all material respects with the requirements of the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission promulgated thereunder, in each case as actually in effect as of the respective dates of filing, and, except as set forth in any amendments thereto, none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports (as amended) comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments.
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h. As of the date hereof and as of immediately prior to the Domestication, the authorized share capital of the Company is $55,500.00 divided into (i) 500,000,000 Class A ordinary shares of the Company of par value $0.0001 each (“Class A Common Stock”), 23,000,000 of which are issued and outstanding as of the date of this Subscription Agreement, (ii) 50,000,000 Class B ordinary shares of the Company of par value $0.0001 per share (“Class B Common Stock”), of which 5,750,000 shares are issued and outstanding as of the date of this Subscription Agreement, and (iii) 5,000,000 preference shares of par value $0.0001 each, of which no shares are issued and outstanding as of the date of this Subscription Agreement (the “Preferred Shares”). As of the date of this Subscription Agreement, 11,500,000 warrants to purchase one (1) share of Class A Common Stock at an exercise price of eleven dollars fifty cents ($11.50) that were included in the units sold as part of the Company’s initial public offering and 6,600,000 warrant to purchase one (1) share of Class A Common Stock at an exercise price of eleven dollars fifty cents ($11.50) issued to ACE Convergence Acquisition LLC, a Delaware limited liability company, (collectively, the “Warrants”) are issued and outstanding. As of the date hereof, no shares of Class A Common Stock were subject to issuance upon exercise of outstanding options; provided that certain of the shares of Class A Common Stock and warrants are underlying units consisting of one share of Class A Common Stock and one-half of one warrant. As of the date hereof and as of the Closing Date, other than the Notes and the Permitted Indebtedness, the Company had no outstanding Indebtedness. As of the date hereof, all (i) issued and outstanding shares of Class A Common Stock and Class B Common Stock have been duly authorized and validly issued, are fully paid and non-assessable and are not subject to preemptive rights and (ii) issued and outstanding Warrants constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. Following the Domestication, all issued and outstanding shares of Domesticated Common Stock shall be duly authorized and validly issued, fully paid and non-assessable and not subject to any preemptive rights. As of the date hereof, the Company is not aware of any outstanding options, warrants or other rights to subscribe for, purchase or acquire from the Company any Domesticated Common Stock or other equity interests in the Company except to the extent disclosed in the SEC Reports or the Transaction Agreements. As of the date hereof, other than Merger Sub, the Company has no subsidiaries and does not own, directly or indirectly, interests or investments (whether equity or debt) in any person, whether incorporated or unincorporated, in each case, other than as set forth in the SEC Reports or the Transaction Agreements. There are no stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting, transfer or registration of any equity interests, other than as set forth in the SEC Reports or the Transaction Agreements. There are no securities or instruments issued by or to which the Company is a party containing anti-dilution or similar provisions that will be triggered by the issuance of (i) the Subscribed Notes or (ii) the Underlying Shares other than the rights of holders of Class B Common Stock, which have been waived as set forth in the SEC Reports and the Transaction Agreements.
i. Except for such matters as have not had and would not be reasonably expected to have a Company Material Adverse Effect or have a material adverse effect on the Company’s ability to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Notes, as of the date hereof, there is no (i) suit, action, proceeding or arbitration before a governmental authority or arbitrator pending, or, to the knowledge of the Company, threatened in writing against the Company or (ii) judgment, decree, injunction, ruling or order of any governmental authority or arbitrator outstanding against the Company.
j. As of the date hereof, the issued and outstanding Class A ordinary shares are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on NASDAQ under the symbol “ACEV” (it being understood that the trading symbol will be changed in connection with the Transactions). Following the Domestication, the Domesticated Common Stock shall be registered under the Exchange Act. There is no suit, action, proceeding or investigation pending or, to the knowledge of the Company, threatened against the Company by NASDAQ or the Commission with respect to any intention by such entity to deregister the Class A ordinary shares or prohibit or terminate the listing of the Class A ordinary shares on NASDAQ. The Company will file a listing application with NASDAQ for the Domesticated Common Stock (including the Underlying Shares) and such application has been, or prior to Closing will be, approved by NASDAQ, subject to any requirement to have a sufficient number of round lot holders of the Domesticated Common Stock.
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k. Assuming the accuracy of the Subscribers’ representations and warranties set forth in Section 4 of this Subscription Agreement, no registration under the Securities Act is required for the offer and sale of the Subscribed Notes by the Company to the Subscribers.
l. Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Subscribed Notes.
m. Except for the Placement Agents, no broker or finder is entitled to any brokerage or finder’s fee or commission from the Company solely in connection with the sale of the Subscribed Notes to the Subscribers.
n. Except for such matters as have not had and would not be reasonably expected to have a Company Material Adverse Effect or have a material adverse effect on the Company’s ability to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Notes, the Company is, and has been since its inception, in compliance with all state and federal laws applicable to the conduct of its business. The Company has not received any written, or to its knowledge, other communication from a governmental entity that alleges that the Company is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not be reasonably expected to have, individually or in the aggregate, a Company Material Adverse Effect or have a material adverse effect on the Company’s ability to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Notes. Except for such matters as have not had and would not be reasonably expected to have, individually or in the aggregate, a Company Material Adverse Effect or have a material adverse effect on the Company’s ability to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Notes, there is no (i) action, lawsuit, claim or other proceeding, in each case by or before any governmental authority pending, or, to the knowledge of the Company, threatened against the Company or (ii) judgment, decree, injunction, ruling or order of any governmental entity or arbitrator outstanding against the Company.
o. The Company has not in the past nor will it hereafter take any action to sell, offer for sale or solicit offers to buy any securities of the Company that could result in the initial sale of the Subscribed Notes not being exempt from the registration requirements of Section 5 of the Securities Act.
p. The Form S-4 Registration Statement of the Company on file with the Commission as of the date hereof, as modified by all materials available in the electronic data room made available as of the date hereof to the Subscribers in connection with the Transactions, does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
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q. The Company is not an “investment company” required to register under the Investment Company Act of 1940, as amended.
r. Neither the Company and its executives and directors, nor any of its Subsidiaries and their respective executives and directors, is, and following the Closing, will not be (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) (ii) an agent, department, or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program, or (iii) otherwise blocked, subject to sanctions under or engaged in any activity in violation of other United States economic sanctions, including but not limited to, the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and Divestment Act or any similar law or regulation with respect to Iran or any other country, the Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any economic sanctions regulations administered and enforced by the United States or any enabling legislation or executive order relating to any of the foregoing (collectively, “U.S. Economic Sanctions”) (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (i), clause (ii) or clause (iii), a “Blocked Person”). Company has not been notified that its name appears or may in the future appear on a state list of Persons that engage in investment or other commercial activities in Iran or any other country that is subject to U.S. Economic Sanctions.
s. No part of the proceeds from the sale of the Notes hereunder constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Company, directly or indirectly, (i) in connection with any investment in, or any transactions or dealings with, any Blocked Person, or (ii) otherwise in violation of U.S. Economic Sanctions.
t. Neither the Company and its executives and directors, nor any of its Subsidiaries and their respective executives and directors, is or has been, and following the Closing, will not be or have been (i) in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti-Money Laundering Laws”) or any U.S. Economic Sanctions violations, (ii) under investigation by any governmental authority for possible violation of Anti-Money Laundering Laws or any U.S. Economic Sanctions violations, (iii) assessed civil penalties under any Anti-Money Laundering Laws or any U.S. Economic Sanctions, or (iv) subject to seizure or forfeiture of any of its funds in an action under any Anti-Money Laundering Laws. The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company is and, following the Closing, will continue to be in compliance with all applicable current and future Anti-Money Laundering Laws and U.S. Economic Sanctions.
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u. Neither the Company and its executives and directors, nor any of its Subsidiaries and their respective executives and directors, is or has been, and following the Closing, will not be or have been (i) charged with, or convicted of bribery or any other anticorruption related activity under any applicable law or regulation in a U.S. or any non-U.S. country or jurisdiction, including but not limited to, the U.S. Foreign Corrupt Practices Act (collectively, “Anti-Corruption Laws”), (ii) under investigation by any U.S. or non-U.S. governmental authority for possible violation of Anti-Corruption Laws, (iii) assessed civil or criminal penalties under any Anti-Corruption Laws or (iv) the target of sanctions imposed by the United Nations or the European Union.
v. Neither the Company and its executives and directors, nor any of its Subsidiaries and their respective executives and directors, within the last five years, directly or indirectly offered, promised, given, paid or authorized the offer, promise, giving or payment of anything of value to a U.S. or non-U.S. governmental authority official or a commercial counterparty for the purposes of: (i) influencing any act, decision or failure to act by such governmental authority official in his or her official capacity or such commercial counterparty, (ii) inducing a governmental authority official to do or omit to do any act in violation of the governmental authority official’s lawful duty, or (iii) inducing a governmental authority official or a commercial counterparty to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity; in each case in order to obtain, retain or direct business or to otherwise secure an improper advantage in violation of any applicable law or regulation or which would cause any such person to be in violation of any law or regulation applicable to such person.
w. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for any improper payments, including bribes, to any U.S. or non-U.S. governmental authority official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage. The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company is and will continue to be in compliance with all applicable current and future Anti-Corruption Laws.
x. Tempo is, and has been for the 5-year period prior to the date hereof, in material compliance with all applicable U.S. trade sanctions, including those administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), and all U.S. export and reexport control laws and regulations imposed, administered, or enforced by the U.S. government, including the Arms Export Control Act (22 U.S.C. § 1778), the International Emergency Economic Powers Act (50 U.S.C. §§ 1701–1706), the Export Control Reform Act of 2018 (50 U.S.C. §§ 4801-4861), the International Traffic in Arms Regulations (22 C.F.R. Parts 120–130), and the Export Administration Regulations (15 C.F.R. Parts 730-774).
y. Compass possesses all material facility security clearances and Compass’s employees possess all material personnel security clearances necessary to conduct Compass’s business as it is currently being conducted. Compass is conducting its business in compliance in all material respects with the requirements applicable to the facility security clearances used in the conduct of its business, including those set forth in the National Industrial Security Program Operating Manual, any other applicable national industrial security regulations, and any Government Contracts. Except as would not reasonably be expected to be material to Compass, there are no unresolved adverse audit or other materially adverse findings with the U.S. Department of Defense, Defense Counterintelligence and Security Agency (“DCSA”) (formerly known as the Defense Security Service (“DSS”)) or any other cognizant security agency (“CSA”) concerning the facility security clearances used in the conduct of its business, and Compass holds at least a “satisfactory” rating from DCSA, DSS or any other CSA with respect to such facility security clearances.
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4. Subscriber Representations and Warranties. Each Subscriber represents and warrants to the Company and the Placement Agents, solely with respect to itself and not with respect to any other Subscriber, that:
a. Subscriber (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or formation, and (ii) has the requisite power and authority to enter into and perform its obligations under this Subscription Agreement.
b. This Subscription Agreement has been duly executed and delivered by Subscriber, and assuming the due authorization, execution and delivery of the same by the Company and the other Subscribers, this Subscription Agreement shall constitute the valid and legally binding obligation of Subscriber, enforceable against Subscriber in accordance with its terms, except as such enforceability may be subject to the Enforceability Exceptions.
c. The execution and delivery of this Subscription Agreement, the purchase of the Subscribed Notes and the compliance by Subscriber with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of Subscriber pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Subscriber is a party or by which Subscriber is bound or to which any of the property or assets of Subscriber is subject; (ii) the organizational documents of Subscriber; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over Subscriber or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Subscriber Material Adverse Effect. For purposes of this Subscription Agreement, a “Subscriber Material Adverse Effect” means an event, change, development, occurrence, condition or effect with respect to Subscriber that would reasonably be expected to have a material adverse effect on Subscriber’s ability to consummate the purchase of the Subscribed Notes.
d. Subscriber (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act) satisfying the applicable requirements set forth on Annex A hereto and an “institutional account” as defined in FINRA Rule 4512(c), (ii) is acquiring the Subscribed Notes only for its own account and not for the account of others, or if Subscriber is subscribing for the Subscribed Notes as a fiduciary or agent for one or more investor accounts, each owner of each such account is independently a qualified institutional buyer or an institutional “accredited investor” and Subscriber has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Subscribed Notes with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or the securities law of any other jurisdiction (and shall provide the requested information set forth in Annex A). Subscriber is not an entity formed for the specific purpose of acquiring the Subscribed Notes. Accordingly, the Subscriber understands that the offering meets the exemptions from filing under FINRA Rule 5123(b)(1)(C) or (J).
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e. Subscriber understands that the Subscribed Notes and the Underlying Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Subscribed Notes and the Underlying Shares have not been registered under the Securities Act. Subscriber understands that the Subscribed Notes and the Underlying Shares may not be resold, transferred, pledged or otherwise disposed of by Subscriber absent an effective registration statement under the Securities Act, except (i) to the Company or a subsidiary thereof, or (ii) pursuant to an applicable exemption from the registration requirements of the Securities Act, and, in each case, in accordance with any applicable securities laws of the applicable states, other jurisdictions of the United States and other applicable jurisdictions, and that any book-entry position or certificates representing the Subscribed Notes and the Underlying Shares shall contain a restrictive legend to such effect. Subscriber understands and agrees that the Subscribed Notes and the Underlying Shares will be subject to transfer restrictions under applicable securities laws and, as a result of these transfer restrictions, Subscriber may not be able to readily offer, resell, transfer, pledge or otherwise dispose of the Subscribed Notes or the Underlying Shares and may be required to bear the financial risk of an investment in the Subscribed Notes for an indefinite period of time. Subscriber understands and agrees that the Subscribed Notes and the Underlying Shares will not be immediately eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act until at least one year from the Closing Date. Subscriber understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Subscribed Notes or the Underlying Shares. Each book entry for the Subscribed Notes and the Underlying Shares shall contain a notation, and each certificate (if any) evidencing the Notes shall be stamped or otherwise imprinted with a legend, in substantially the following form:
THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
(2) AGREES FOR THE BENEFIT OF TEMPO AUTOMATION HOLDINGS, INC. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT:
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(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT AND IS EFFECTIVE AT THE TIME OF SUCH TRANSFER, OR
(C) TO A PERSON THAT YOU REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR
(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
f. Subscriber understands and agrees that Subscriber is purchasing the Subscribed Notes directly from the Company. Subscriber further acknowledges that there have not been, and Subscriber hereby agrees that it is not relying on, any representations, warranties, covenants or agreements made to Subscriber by the Company, any other party to the Transactions or any other person or entity (including the Placement Agents (as defined below)), expressly or by implication, other than those representations, warranties, covenants and agreements of the Company set forth in this Subscription Agreement, and Subscriber is not relying on any representations, warranties or covenants other than those expressly set forth herein. Subscriber acknowledges that certain information provided by the Company was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections. Subscriber acknowledges that such projections were prepared without the participation of the Placement Agents and that the Placement Agents do not assume responsibility for independent verification of, or the accuracy or completeness of, such projections.
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g. In making its decision to purchase the Subscribed Notes, Subscriber has relied solely upon independent investigation made by Subscriber and upon the representations, warranties and covenants set forth herein. Subscriber acknowledges and agrees that Subscriber has received such information as Subscriber deems necessary in order to make an investment decision with respect to the Subscribed Notes, including with respect to the Company and the Transactions. Without limiting the generality of the foregoing, Subscriber acknowledges that Subscriber has reviewed the Company’s filings with the Commission. Subscriber represents and agrees that Subscriber and Subscriber’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as Subscriber and such undersigned’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Subscribed Notes. Subscriber acknowledges and agrees that none of Citigroup Global Markets Inc. (“Citi”) and Jefferies LLC (“Jefferies”), acting as placement agents to the Company (collectively, the “Placement Agents” and each of them a “Placement Agent”), nor any affiliate of a Placement Agent has provided Subscriber with any information or advice with respect to the Subscribed Notes nor is such information or advice necessary or desired. Neither any Placement Agent nor any of its affiliates has made or makes any representation as to the Company, any of its direct or indirect subsidiaries, or the quality or value of the Subscribed Notes and the Placement Agent and any of its respective affiliates may have acquired non-public information with respect to the Company, Tempo, Compass or Whizz which Subscriber agrees need not be provided to it. In connection with the issuance of the Subscribed Notes to Subscriber, the Placement Agents are acting solely as placement agents to the Company in connection with the Transactions, and none of the Placement Agents, nor any of their respective affiliates, or any control persons, officers, directors, employees, agents or representatives of any of the foregoing, are acting as an underwriter or in any other capacity and shall not be construed as a financial advisor or fiduciary to Subscriber.
h. Subscriber became aware of this offering of the Subscribed Notes solely by means of direct contact between Subscriber and the Company or by means of contact from a Placement Agent and/or their respective advisors (including, without limitation, attorneys, accountants, bankers, consultants and financial advisors), agents, control persons, representatives, affiliates, directors, officers, managers, members, and/or employees, and/or the representatives of such persons (such parties referred to collectively as “Representatives”). The Subscribed Notes were offered to Subscriber solely by direct contact between Subscriber and the Company, a Placement Agent, and/or their respective Representatives. Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person or entity (including, without limitation, the Company, any Placement Agent, Tempo, Compass, Whizz and/or their respective Representatives), other than the representations and warranties contained in this Subscription Agreement, in making its investment or decision to invest in the Company. Subscriber did not become aware of this offering of the Subscribed Notes, nor were the Subscribed Notes offered to Subscriber, by any other means, and none of the Company, any Placement Agent or their respective Representatives acted as investment advisor, broker or dealer to Subscriber. Subscriber acknowledges that the Company represents and warrants that the Subscribed Notes (i) were not offered by any form of general solicitation or general advertising and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.
i. Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Subscribed Notes and the Underlying Shares, including those set forth in the SEC Reports. Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Subscribed Notes and the Underlying Shares, and Subscriber has had an opportunity to seek, and has sought, such accounting, legal, business and tax advice as Subscriber has considered necessary to make an informed investment decision. Subscriber acknowledges that it (i) is a sophisticated investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities and (ii) has exercised independent judgment in evaluating its participation in the purchase of the Subscribed Notes. Subscriber understands that the purchase and sale of the Subscribed Notes hereunder meets (i) the exemptions from filing under FINRA Rule 5123(b)(1)(A) and (ii) the institutional customer exemption under FINRA Rule 2111(b).
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j. Alone, or together with any professional advisor(s), Subscriber represents and acknowledges that Subscriber has adequately analyzed and fully considered the risks of an investment in the Subscribed Notes and the Underlying Shares and determined that the Subscribed Notes and the Underlying Shares are a suitable investment for Subscriber and that Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of Subscriber’s investment in the Company. Subscriber acknowledges specifically that a possibility of total loss exists.
k. Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Subscribed Notes and the Underlying Shares (if any) or made any findings or determination as to the fairness of this investment.
l. Subscriber is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons administered by OFAC or in any Executive Order issued by the President of the United States and administered by OFAC, or a person or entity prohibited by any OFAC sanctions program, or a person or entity whose property and interests in property subject to U.S. jurisdiction are otherwise blocked under any U.S. laws, Executive Orders or regulations, (ii) a person or entity listed on the Sectoral Sanctions Identifications (“SSI”) List maintained by OFAC or otherwise determined by OFAC to be subject to one or more of the Directives issued under Executive Order 13662 of March 20, 2014, or on any other of the OFAC Consolidated Sanctions Lists, (iii) an entity owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more persons described in subsections (i) or (ii), (iv) a person or entity named on the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) Denied Persons List, Entity List, or Unverified List (“BIS Lists”) (collectively with (i) through (iv), a “Restricted Person”) or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank. Subscriber agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that Subscriber is permitted to do so under applicable law. Subscriber represents that if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001 and its implementing regulations (collectively, the “BSA/PATRIOT Act”), that Subscriber maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. Subscriber also represents that, to the extent required, it maintains policies and procedures reasonably designed for the screening of its investors against the OFAC and BIS sanctions programs, including for Restricted Persons, and otherwise to ensure compliance with all applicable sanctions and embargo laws, statutes, and regulations. Subscriber further represents and warrants that, to the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by Subscriber and used to purchase the Subscribed Notes were legally derived.
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m. Subscriber does not have, as of the date hereof, and during the 30-day period immediately prior to the date hereof such Subscriber has not, and during the period beginning as of the date hereof until and including the date that is two trading days following the Closing such Subscriber will not have, entered into, any “put equivalent position” as such term is defined in Rule 16a-1 under the Exchange Act or short sale positions with respect to the securities of the Company.
n. If Subscriber is an employee benefit plan that is subject to Title I of the Employee Retirement Income Securities Act of 1974, as amended (“ERISA”), a plan, an individual retirement account or other arrangement that is subject to Section 4975 of the Internal Revenue Code of 1086, as amended (the “Code”) or an employee benefit plan that is a governmental plan (as defined in Section 3(32) of ERISA), a church plan (as defined in Section 3(33) of ERISA), a non-U.S. plan (as described in Section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Internal Revenue Code of 1986, as amended, or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or Section 4975 of the Code, the Subscriber represents and warrants that (i) neither the Company, nor any of its respective affiliates (the “Transaction Parties”) has acted as the Plan’s fiduciary, or has been relied on for advice, with respect to its decision to acquire and hold the Subscribed Notes, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Subscribed Notes and the Underlying Shares and (ii) none of the acquisition, holding and/or transfer or disposition of the Subscribed Notes and the Underlying Shares will result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code or any similar law or regulation.
o. Subscriber at the time specified herein will have sufficient funds to pay the Purchase Price pursuant to Section 2(b) of this Subscription Agreement.
p. No disclosure or offering document has been prepared by any Placement Agent or any of their respective affiliates in connection with the offer and sale of the Subscribed Notes. Each Placement Agent and each of its Representatives have made no independent investigation with respect to the Company or the Subscribed Notes or the accuracy, completeness or adequacy of any information supplied to the Subscriber by the Company.
q. Subscriber agrees that the Placement Agents may rely upon the representations and warranties made by Subscriber to the Company in this Subscription Agreement.
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r. None of the Placement Agents, nor any of their respective affiliates, nor any control persons, officers, directors, employees, agents or representatives of any of the foregoing has (a) made and will not make any representation or warranty, whether express or implied, of any kind or character and has not provided any advice or recommendation in connection with the Transactions, (b) made any independent investigation with respect to the Company, Tempo, Compass or Whizz or their respective subsidiaries or any of their respective businesses, or the Subscribed Notes or the accuracy, completeness or adequacy of any information supplied to Subscriber by the Company, (c) any responsibility with respect to (i) any representations, warranties or agreements made by any person or entity under or in connection with the Transactions or any of the documents furnished pursuant thereto or in connection therewith, or the execution, legality, validity or enforceability (with respect to any person) or any thereof, or (ii) the business, affairs, financial condition, operations, properties or prospects of, or any other matter concerning Tempo, Compass or Whizz or the Transactions, and (d) any liability or obligation (including without limitation, for or with respect to any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements incurred by Subscribers, the Company, Tempo, Compass or Whizz or any other person or entity), whether in contract, tort or otherwise, to Subscriber, or to any person claiming through Subscriber, in respect of the Transactions.
s. Subscriber acknowledges that Citi is acting as a Placement Agent and is also acting as financial advisor to Tempo in connection with the Transaction. Subscriber acknowledges that Jefferies is acting as financial advisor and capital markets advisor to the Company in connection with the Transaction and is also a Placement Agent. Subscriber understands and acknowledges that Jefferies’ role as financial advisor and capital markets advisor to the Company may give rise to potential conflicts of interest or the appearance thereof and that these conflicts may potentially conflict with, or be adverse to, Subscriber’s interests. Subscriber hereby waives, to the fullest extent permitted by law, any claims it may have based on any actual or potential conflict of interest or similar claim, whether known or unknown, contingent or otherwise and wherever and whenever arising in connection with, relating to or arising from Jefferies acting as financial advisor and capital markets advisor to the Company.
t. Except for the representations and warranties contained in this Section 4, Subscriber makes no express or implied representation or warranty, and Subscriber hereby disclaims any such representation or warrant with respect to this Subscription Agreement or any of the transactions contemplated herein.
5. Termination. Except as otherwise provided herein, this Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earlier to occur of (a) such date and time as the Business Combination Agreement is terminated in accordance with its terms, (b) the date and time on which the Company and the Lead Subscriber agree in writing to terminate this Subscription Agreement, (c) the date and time upon which written notice is delivered by the Company or the Lead Subscriber to the other (provided that the party delivering such notice is not in breach of the obligations under this Subscription Agreement) if, on the Closing Date of the Transactions, any of the conditions to Closing with respect to the Lead Subscriber set forth in Section 2 of this Subscription Agreement have not been satisfied as of the time required hereunder to be so satisfied or waived (to the extent a valid waiver is capable of being issued) by the party entitled to grant such waiver and, as a result thereof, the transactions contemplated by this Subscription Agreement are not consummated, or (d) the date and time upon which written notice is delivered by the Lead Subscriber to the Company of the termination of this Subscription Agreement as a result of (i) the termination of the Compass Combination Agreement in accordance with its terms, (ii) the termination of the Whizz Combination Agreement in accordance with its terms, (iii) the occurrence of the “Agreement End Date” (as defined in the Business Combination Agreement and as the same may be extended pursuant to Section 10.1(e) of the Business Combination Agreement as in effect on the date hereof), or (iv) the occurrence of the date that is six months after the date hereof, in each case if the Closing with respect to the Lead Subscriber shall not have occurred prior to such time; provided, that nothing herein will relieve any party from liability for any willful breach hereof (including, for the avoidance of doubt, a Subscriber’s willful breach of Section 2(c) of this Subscription Agreement with respect to its representations, warranties and covenants as of the date of the Closing) prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach. Notwithstanding the foregoing, each Subscriber other than the Lead Subscriber shall have the right to terminate this Subscription Agreement, solely with respect to itself, if the Closing with respect to the Lead Subscriber has occurred but the Closing with respect to such Subscriber has not occurred as a result of any of the conditions to Closing set forth in Section 2(c) or Section 2(e) of this Subscription Agreement having not been satisfied as of the time required hereunder to be so satisfied or waived (to the extent a valid waiver is capable of being issued) by the party entitled to grant such waiver. The Company shall notify the Subscribers of (A) the termination of any of the Transaction Agreements promptly after the termination thereof (and in any event within two (2) Business Days following any such termination) and (B) the existence of any breach or purported breach of any of the Transaction Agreements and any notice related thereto promptly after the occurrence of such breach or purported breach or the receipt of such notice (and in any even within two (2) Business Days following any such breach, purported breach, or notice relating thereto).
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6. Trust Account Waiver. Each Subscriber acknowledges that Company is a blank check company with the powers and privileges to effect a merger, asset acquisition, reorganization or similar business combination involving Company and one or more businesses or assets. Each Subscriber hereby acknowledges that the Company has established a trust account (the “Trust Account”) containing the proceeds of its initial public offering (the “IPO”) and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of Company, the Company’s public stockholders and certain other parties (including the underwriters of the IPO). For and in consideration of the Company entering into this Subscription Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Subscriber hereby (i) agrees that it does not now and shall not at any time hereafter have any right, title, interest or claim of any kind in or to any assets held in the Trust Account, and shall not make any claim against the Trust Account, regardless of whether such claim arises as a result of, in connection with or relating in any way to this Subscription Agreement or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (any and all such claims are collectively referred to hereafter as the “Released Claims”), (ii) irrevocably waives any Released Claims that it may have against the Trust Account now or in the future as a result of, or arising out of, any negotiations, contracts or agreements with the Company, and (iii) will not seek recourse against the Trust Account for any reason whatsoever; provided, however, that nothing in this Section 6 shall be deemed to limit any Subscriber’s right to distributions or redemptions from the Trust Account in accordance with the Company’s amended and restated certificate of incorporation in respect of any redemptions by Subscriber of its public Class A ordinary shares of the Company acquired by any means other than pursuant to this Subscription Agreement. Subscriber agrees not to seek recourse or make or bring any action, suit, claim or other proceeding against the Trust Account as a result of, or arising out of, this Subscription Agreement, the transactions contemplated hereby or the Subscribed Notes regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability. Each Subscriber acknowledges and agrees that it shall not have any redemption rights with respect to the Subscribed Notes pursuant to the Company’s organizational documents in connection with the Transactions or any other business combination, any subsequent liquidation of the Trust Account, the Company or otherwise, except as to be set forth in the Indenture. In the event a Subscriber has any claim against the Company as a result of, or arising out of, this Subscription Agreement, the transactions contemplated hereby or the Subscribed Notes, it shall pursue such claim solely against the Company and its assets outside the Trust Account and not against the Trust Account or any monies or other assets in the Trust Account.
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7. Miscellaneous.
a. All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient, (ii) when sent by electronic mail, on the date of transmission to such recipient; provided, that such notice, request, demand, claim or other communication is also sent to the recipient pursuant to clauses (i), (iii) or (iv) of this Section 7(a), (iii) one (1) Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid), or (iv) four (4) Business Days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and, in each case, addressed to the intended recipient at its address specified on the signature page hereof or to such electronic mail address or address as subsequently modified by written notice given in accordance with this Section 7(a).
b. Each Subscriber acknowledges that the Company and others (including the Placement Agents) will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement. Prior to the Closing, each Subscriber agrees to promptly notify the Company and the Placement Agents if it becomes aware that any of the acknowledgments, understandings, agreements, representations and warranties of such Subscriber set forth herein are no longer accurate in all material respects. The Company acknowledges that the Subscribers and others (including Placement Agents) will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement. Prior to the Closing, the Company agrees to promptly notify the Subscribers and the Placement Agents if it becomes aware that any of the acknowledgments, understandings, agreements, representations and warranties of the Company set forth herein are no longer accurate in all material respects.
c. Each of the Company and the Subscribers are irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
d. Each of the Company and the Subscribers agree that they each shall take commercially reasonable best efforts to cause the Notes to be eligible at DTC on the Closing Date (provided such actions shall not result in changes to the economic terms of the Notes).
e. Each party shall be responsible for and pay its own fees and expenses incurred in connection with this Subscription Agreement, the Indenture and the transactions contemplated hereby and thereby, including without limitation, all fees of its legal counsel, financial advisers and accountants; provided, that all reasonable fees and reasonable and documented out-of-pocket expenses of the Lead Subscriber, including, without limitation, the reasonable and documented fees and expenses of Stroock & Stroock & Lavan LLP, as counsel to the Lead Subscriber, shall be paid (i) by Tempo promptly following termination of the Subscription Agreement (other than as a result of the Lead Subscriber’s breach of its respective obligations thereunder), and/or (ii) by Tempo and/or the Company on the Closing Date to the extent invoiced at least one (1) Business Day prior to the Closing Date. This Section 7(e) shall survive the termination of this Subscription Agreement. In no event shall the Company be responsible for reimbursement of any fees or expenses of any party if the Transactions are not consummated.
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f. Neither this Subscription Agreement nor any rights that may accrue to the Subscribers hereunder (other than the Subscribed Notes acquired hereunder, if any) may be transferred or assigned. Neither this Subscription Agreement nor any rights that may accrue to the Company hereunder may be transferred or assigned (provided, that, for the avoidance of doubt, the Company may transfer the Subscription Agreement and its rights (but not obligations) hereunder solely in connection with the consummation of the Transactions and exclusively to another entity under the control of, or under common control with, the Company). Notwithstanding the foregoing, any Subscriber may delegate its rights as set forth in the Designation Notice, and may further assign its rights and obligations under this Subscription Agreement to one or more of its affiliates (including other investment funds or accounts managed or advised by the investment manager who acts on behalf of such Subscriber) or, with the Company’s prior written consent, to another person, provided that no such assignment shall relieve such Subscriber of its obligations hereunder if any such assignee fails to perform such obligations, unless the Company has given its prior written consent to such relief, and such assignee agrees in writing to be bound by the terms hereof.
g. Each of the agreements, representations and warranties made by each party hereto in this Subscription Agreement shall survive the Closing.
h. This Subscription Agreement may not be amended, modified or waived except by an instrument in writing, signed by the party against whom enforcement of such modification, waiver, or termination is sought; provided, that (i) Section 3, Section 4, this Section 7(h), Section 7(j) and Section 7(t) of this Subscription Agreement may not be amended, modified or waived in a manner that is material and adverse to the Placement Agents without the written consent of the Placement Agents, and (ii) the Lead Subscriber may amend, modify or waive this Subscription Agreement on behalf of, and as it relates to, all Subscribers unless such amendment, modification or waiver materially, adversely and disproportionately impacts a Subscriber, in which case such Subscriber’s written consent shall also be required.
i. This Subscription Agreement (including Annex A hereto) constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof, except that any confidentiality agreement with respect to the undersigned or its affiliates shall remain in full force and effect.
j. Benefit.
(i) Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.
(ii) The parties hereto agree that the Placement Agents are express third-party beneficiaries of this Subscription Agreement to the extent expressly provided in Section 3, Section 4, Section 7(h), this Section 7(j) and Section 7(t) of this Subscription Agreement. Prior to the Closing, Subscriber agrees to promptly notify the Company and the Placement Agents if any of the acknowledgments, understandings, agreements, representations and warranties of Subscriber set forth herein are no longer accurate. The Subscriber acknowledges and agrees that each purchase by Subscriber of Subscribed Notes from the Company will constitute a reaffirmation of the acknowledgments, understandings, agreements, representations and warranties herein (as modified by any such notification) by Subscriber as of the time of such purchase.
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k. If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
l. This Subscription Agreement may be executed and delivered in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
m. Remedies.
(i) The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise.
(ii) Each of the parties hereto shall be entitled to seek and obtain equitable relief, without proof of actual damages, including an injunction or injunctions or order for specific performance to prevent breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement to cause each the Subscriber to fund the respective portion of its Purchase Price and cause the Closing to occur if the conditions in Section 2 of this Subscription Agreement have been satisfied or, to the extent permitted by applicable law, waived. The parties hereto further agree (A) to waive any requirement for the security or posting of any bond in connection with any such equitable remedy, (B) not to assert that a remedy of specific enforcement pursuant to this paragraph (m) is unenforceable, invalid, contrary to applicable law or inequitable for any reason and (C) to waive any defense that a remedy at law would be adequate. In any dispute arising out of or related to this Subscription Agreement, or any other agreement, document, instrument or certificate contemplated hereby, or any transactions contemplated hereby or thereby, the applicable adjudicating body shall award to the prevailing party, if any, the documented costs and attorneys’ fees reasonably incurred by the prevailing party in connection with the dispute and the enforcement of its rights under this Subscription Agreement or any other agreement, document, instrument or certificate contemplated hereby and, if the adjudicating body determines a party to be the prevailing party under circumstances where the prevailing party won on some but not all of the claims and counterclaims, the adjudicating body may award the prevailing party an appropriate percentage of the documented costs and attorneys’ fees reasonably incurred by the prevailing party in connection with the adjudication and the enforcement of its rights under this Subscription Agreement or any other agreement, document, instrument or certificate contemplated hereby or thereby.
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(iii) If (A) the Company consummates its initial “Business Combination” (as defined in its amended and restated memorandum and articles of association, dated July 27, 2020), with or among Tempo, Compass, Whizz, or any of their respective affiliates or subsidiaries (any such initial Business Combination, the “Business Combination”) and (B) this Subscription Agreement is terminated for any reason other than (x) a termination by the Company as a result of the Lead Subscriber’s breach of its obligations thereunder or (y) a termination on account of the Closing occurring and the Company issuing the Notes to the Subscribers, the Lead Subscriber shall be entitled to a termination fee in an amount equal to 3.5% of the aggregate principal amount of the Subscribed Notes, to be paid by the Company or any other successor to the Company immediately following and as a condition subsequent to the closing of the Business Combination. In no event shall Tempo or the Company be responsible for payment of any termination fee if the Business Combination is not consummated. This Section 7(m)(iii) shall survive the termination of this Subscription Agreement.
n. This Subscription Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the principles of conflicts of laws that would otherwise require the application of the law of any other state.
o. EACH PARTY HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OR RELATED TO THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY OR ANY AFFILIATE OF ANY OTHER SUCH PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE PARTIES AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS SUBSCRIPTION AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS SUBSCRIPTION AGREEMENT.
p. The parties agree that all disputes, legal actions, suits and proceedings arising out of or relating to this Subscription Agreement must be brought exclusively in the state courts of New York or in the federal courts located in the state and county of New York (collectively the “Designated Courts”). Each party hereby consents and submits to the exclusive jurisdiction of the Designated Courts. No legal action, suit or proceeding with respect to this subscription agreement may be brought in any other forum. Each party hereby irrevocably waives all claims of immunity from jurisdiction and any objection which such party may now or hereafter have to the laying of venue of any suit, action or proceeding in any Designated Court, including any right to object on the basis that any dispute, action, suit or proceeding brought in the Designated Courts has been brought in an improper or inconvenient forum or venue. Each of the parties also agrees that delivery of any process, summons, notice or document to a party hereof in compliance with Section 7(a) of this Subscription Agreement shall be effective service of process for any action, suit or proceeding in a Designated Court with respect to any matters to which the parties have submitted to jurisdiction as set forth above.
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q. This Subscription Agreement may only be enforced against, and any claim, action, suit or other legal proceeding based upon, arising out of, or related to this Subscription Agreement, or the negotiation, execution or performance of this Subscription Agreement, may only be brought against the entities that are expressly named as parties hereto and their successors and permitted assigns and then only with respect to the specific obligations set forth herein with respect to such party. No past, present or future director, officer, employee, incorporator, manager, member, partner, stockholder, affiliate, agent, attorney or other representative of any party hereto or of any affiliate of any party hereto, or any of their successors or permitted assigns, shall have any liability for any obligations or liabilities of any party hereto under this Subscription Agreement or for any claim, action, suit or other legal proceeding based on, in respect of or by reason of the transactions contemplated hereby.
r. The Company shall, by 9:00 a.m., New York City time, on the second (2nd) Business Day immediately following the date of this Subscription Agreement, issue one or more press releases or file with the Commission a Current Report on Form 8-K (collectively, the “Disclosure Document”) disclosing, to the extent not previously publicly disclosed, all material terms of the transactions contemplated hereby and the Transactions. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Subscriber or any affiliate or investment advisor of any Subscriber, or include the name of any Subscriber or any affiliate or investment advisor of any Subscriber in any press release or in any filing with the Commission or any regulatory agency or trading market, without the prior written consent (including by e-mail) of such Subscriber, and shall omit or redact such Subscriber’s signature page to omit its name and any other identifying information in any such press release or filing, except (i) to the extent required by the federal securities laws, rules or regulations (subject to Commission request as provide in clause (ii) in the case of federal securities laws), (ii) to the extent such disclosure is required by other laws, rules or regulations, in each case, at the request of the staff of the Commission or regulatory agency or under NASDAQ regulations or (iii) to the extent such announcements or other communications contain only information previously disclosed in public statement, press release or other communication previously approved in accordance with this Section 7(r); provided, in the case of (i) and (ii), the Company shall provide the Subscribers with prior written notice (including by e-mail) of such permitted disclosure, and shall reasonably consult with the Subscribers regarding such disclosure.
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s. The obligations of the Subscribers under this Subscription Agreement are several and not joint with the obligations of any other Subscriber, and each Subscriber shall not be responsible in any way for the performance of the obligations of any other Subscriber under this Subscription Agreement. The decision of each Subscriber to purchase Subscribed Notes pursuant to this Subscription Agreement has been made by such Subscriber independently of any other Subscriber or any other investor and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or any of its subsidiaries which may have been made or given by any other Subscriber or investor or by any agent or employee of any other Subscriber or investor, and neither such Subscriber nor any of its agents or employees shall have any liability to any other Subscriber or investor (or any other person) relating to or arising from any such information, materials, statements or opinions. Nothing contained herein, and no action taken by the Subscriber or investor pursuant hereto or thereto, shall be deemed to constitute the Subscribers and other investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Subscribers and other investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Subscription Agreement. Each Subscriber acknowledges that no other Subscriber has acted as agent for the Subscriber in connection with making its investment hereunder and no other Subscriber will be acting as agent of the Subscriber in connection with monitoring its investment in the Subscribed Notes or enforcing its rights under this Subscription Agreement. Each Subscriber shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Subscription Agreement, and it shall not be necessary for any other Subscriber or investor to be joined as an additional party in any proceeding for such purpose.
t. Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, the Placement Agents, any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), other than the statements, representations and warranties of the Company expressly contained in Section 3 of this Subscription Agreement, in making its investment or decision to invest in Company. Subscriber acknowledges and agrees that none of (i) any other investor pursuant to this Subscription Agreement or any Other Subscription Agreement (including Subscriber’s affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing) or (ii) the Placement Agents, their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing, shall have any liability to Subscriber or to any other Subscriber pursuant to, arising out of or relating to this Subscription Agreement, the negotiation hereof or thereof or its subject matter, or the transactions contemplated hereby or thereby, including, without limitation, with respect to any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Subscribed Notes or with respect to any claim (whether in tort, contract or otherwise) for breach of this Subscription Agreement or in respect of any written or oral representations made or alleged to be made in connection herewith, as expressly provided herein, or for any actual or alleged inaccuracies, misstatements or omissions with respect to any information or materials of any kind furnished by the Company, Tempo, the Placement Agents or any Non-Party Affiliate (as defined below) concerning the Company, the Company, the Placement Agents, any of their respective controlled affiliates, this Subscription Agreement or the transactions contemplated hereby. For purposes of this Subscription Agreement, “Non-Party Affiliates” means each former, current or future officer, director, employee, partner, member, manager, direct or indirect equityholder or affiliate of the Company, Tempo, any Placement Agent or any of the Company’s, Tempo’s or the Placement Agents’ controlled affiliates or any family member of the foregoing. Subscriber agrees that none of the Placement Agents shall be liable to it (including in contract, tort, under federal or state securities laws or otherwise) for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the sale of Subscribed Notes pursuant to this Subscription Agreement. On behalf of Subscriber and its affiliates, Subscriber releases the Placement Agents in respect of any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements related to the sale of Subscribed Notes pursuant to this Subscription Agreement. Subscriber agrees not to commence any litigation or bring any claim against any of the Placement Agents in any court or any other forum which relates to, may arise out of, or is in connection with, the sale of Subscribed Notes pursuant to this Subscription Agreement. This undertaking is given freely and after obtaining independent legal advice. This Section 7(t) shall survive any termination of this Subscription Agreement. The Placement Agents have introduced the Subscribers to the Company in reliance on each Subscriber’s understanding and agreement to this Section 7(t).
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8. Subscriber Covenant. Each Subscriber hereby agrees that, from the date of this Subscription Agreement, none of such Subscriber, its controlled affiliates, or any person or entity acting on behalf of such Subscriber or any of its controlled affiliates or pursuant to any understanding with such Subscriber or any of its controlled affiliates will engage in any Short Sales with respect to securities of the Company prior to the Closing Date. For purposes of this Section 8, “Short Sales” shall include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, and all types of direct and indirect stock pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-U.S. broker dealers or foreign regulated brokers. Notwithstanding the foregoing, (i) nothing herein shall prohibit other entities under common management with such Subscriber that have no knowledge of this Subscription Agreement or of such Subscriber’s participation in the Transactions (including such Subscriber’s controlled affiliates and/or affiliates) from entering into any Short Sales and (ii) in the case of a Subscriber that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Subscriber’s assets and the portfolio managers have no knowledge of the investment decisions made by the portfolio managers managing other portions of such Subscriber’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Subscribed Notes covered by this Subscription Agreement. For the avoidance of doubt, neither Brookfield Asset Management Inc. nor any of its controlled affiliates shall be deemed to have any knowledge of this Subscription Agreement or of any Subscriber’s participation in the Transactions except to the extent such entities cross the ethical wall in place between Subscribers, on the one hand, and Brookfield and its controlled affiliates, on the other hand.
[Signature pages follow.]
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IN WITNESS WHEREOF, each of the Company, Tempo and each Subscriber has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first set forth above.
|
ACE CONVERGENCE ACQUISITION CORP. | ||
| By: | /s/ Denis Tse | |
| Name: Denis Tse | ||
| Title: Secretary and Director | ||
|
Address for Notices: | |
|
ACE Convergence Acquisition Corp. 1013 Centre Road, Suite 403S Wilmington, DE 19805 Attention: Denis Tse Email: denis@acev.io |
| TEMPO AUTOMATION, INC. | ||
|
By: |
/s/ Joy Weiss | |
| Name: Joy Weiss | ||
| Title: President & CEO | ||
|
Address for Notices: | |
|
Tempo Automation, Inc. 2460 Alameda St San Francisco, CA 94103 Attention: Ryan Benton Email: rbenton@tempoautomation.com |
SUBSCRIBER:
OCM Tempo Holdings, LLC
By: Oaktree Fund GP, LLC
Its: Manager
By: Oaktree Fund GP I, LLC
Its: Manager Member
| By: | /s/ Kaj Vazales |
| Name: | Kaj Vazales | |
| Title: Authorized Signatory | ||
| Date: 1/18/22 | ||
| By: | /s/ Jordan Mikes |
| Name: | Jordan Mikes | |
| Title: Authorized Signatory | ||
| Date: 1/18/22 | ||
Name of Subscriber: OCM Tempo Holding, LLC
| Kaj Vazales and Jordan Mikes, Authorized | |
| Signatories |
(Please print. Please indicate name and
capacity of person signing above)
Name in which shares are to be registered
(if different):
| Email Address: | kvazales@oaktreecapital.com | |
| jmikes@oaktreecapital.com | ||
| Subscriber’s EIN: |
Jurisdiction of residency: Delaware
|
Aggregate Principal Amount of Subscribed Notes subscribed for: |
$175,000,000.00 |
|
|
Aggregate Purchase Price: |
$173,250,000.00 |
You must pay the Purchase Price by wire transfer of United States dollars in immediately available funds to the account of the Company specified by the Company in the Closing Notice.
SUBSCRIBER:
TOR ASIA CREDIT OPPORTUNITY MASTER FUND II LP
By: TACOF II GP LLC
Its: General Partner
| By: | /s/ Crystal Au |
| Name: | Crystal Au | |
| Title: Authorized Signatory | ||
| Date: | ||
Name of Subscriber: TOR ASIA CREDIT OPPORTUNITY MASTER FUND II LP
| By: | Crystal Au, Authorized Signatory |
(Please print. Please indicate name and
capacity of person signing above)
Name in which shares are to be registered
(if different):
|
Email Address: |
toroperations@torinvestment.com |
| Subscriber’s EIN: | 98-1527313 |
| Jurisdiction of residency: | Cayman Islands |
| Aggregate Principal Amount of Subscribed Notes subscribed for: |
$25,000,000.00 |
|
| Aggregate Purchase Price: | $24,750,000.00 |
You must pay the Purchase Price by wire transfer of United States dollars in immediately available funds to the account of the Company specified by the Company in the Closing Notice.
Exhibit 10.2
STRICTLY CONFIDENTIAL
January 18, 2022
Behrooz Abdi
ACE Convergence Acquisition Corp.
1013 Centre Road, Suite 403S
Wilmington, DE 19805
Joy Weiss
Tempo Automation, Inc.
2460 Alameda Street
San Francisco, CA 94103
Re: Board Observer and Confidentiality Agreement
Dear Mr. Abdi and Ms. Weiss:
Reference is made to that certain Subscription Agreement, dated as of January 18, 2021, by and among (i) ACE Convergence Acquisition Corp., a Cayman Islands exempted company limited by shares, which entity shall migrate to and domesticate as Tempo Automation Holdings, Inc., a Delaware corporation, prior to the Closing (the “Company”), (ii) Tempo Automation, Inc., a Delaware corporation (“Tempo”) (solely for purposes of the agreements and obligations set forth in Section 7(e) of the Subscription Agreement), and (iii) each of the subscribers signatory thereto (the “Subscribers”) (as the same may be amended or modified from time to time, the “Subscription Agreement”), pursuant to which Oaktree Capital Management, L.P. and/or one or more of its affiliates or affiliated investment funds and/or managed or controlled accounts (collectively, “Oaktree”) has subscribed for, and agreed to purchase from the Company, at the Closing, $175 million in aggregate principal amount of 13% Convertible Senior Notes due 2025 (the “Notes”) having the terms set forth in that certain Indenture, to be dated as of Closing Date, by and between the Company, as issuer and U.S. Bank, National Association, as trustee (in substantially the form attached to the Subscription Agreement as Exhibit B thereto, the “Indenture”). Capitalized terms used herein, but not defined herein, shall have the meanings ascribed to such terms in the Subscription Agreement.
In connection with the execution of the Subscription Agreement by Oaktree (as Subscribers), and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the parties hereby acknowledges and agrees, on behalf of itself, as follows:
1. Agreements.
(a) Right to Appoint Board Observers.
(i) Commencing on the Closing Date and ending on the date Oaktree no longer holds or controls Notes in an aggregate principal amount that is at least 50% of the aggregate principal amount of Notes purchased by Oaktree on the Closing Date (but subject to Section 1(a)(vi) hereof), Oaktree shall have the right (but not the obligation) to appoint up to two (2) individuals to attend, as board observers and participants in a nonfiduciary and non-voting capacity, who may be investment professionals or any other person employed by or associated with Oaktree and/or a third party (each such individual, an “Observer”), each meeting of the board of directors of the Company and any duly authorized committee thereof (the “Board” and each such meeting, including a committee meeting, a “Meeting”). Neither Oaktree nor any such Observer (i) shall have any duties (fiduciary or otherwise) to the Company, any of its subsidiaries or any of its or their respective stockholders or other equityholders or owners or to any other holder of Notes, and (ii) except as described in Section 1 and Section 2 of this letter agreement, no obligations to the Company under this letter agreement.
(ii) Each Observer shall be entitled to participate in discussions of any matters presented at any Meeting, but shall not be entitled to vote on any such matters. The Company shall (x) provide each Observer with reasonable advance written notice of the time, place, telephonic (or other remote access) information and agenda for each Meeting (but in no event shall such notice be given to each Observer later than the time at which such notice is provided to the Board) and, in the case of any proposed action by written consent in lieu of a Meeting, shall provide each Observer with copies of all consent materials no later than the time that such materials are provided to the Board, (y) provide each Observer with copies of all minutes of each Meeting and all written consents in lieu of any Meeting promptly after such Meeting has been adjourned or such consent has been executed, as applicable, and (z) provide each Observer with copies of all documents, materials and other information given to any member of any Board no later than the time at which any member of such Board is provided with such documents, materials or other information. The failure to deliver notice, or materials, to each Observer in connection with such Observer’s right to attend and/or review materials with respect to, any meeting of the Board shall not, of itself, impair the validity of any action taken by the Board at such meeting. Each Observer shall be required to execute or otherwise become subject to any codes of conduct and policy with respect to compliance with securities laws as the Company may reasonably require (including with respect to prohibitions on “tipping” under the federal securities laws regardless of whether the Observer is determined to owe any fiduciary duty to the Company). Each Observer and Oaktree shall agree to maintain the confidentiality of all non-public information and proceedings of the Board and any committee of the Board and to comply with, and be bound by, in all respects, the terms and conditions of the confidentiality provisions of Section 4 of this letter agreement (the “Confidentiality Provisions”), which agreement shall, with respect to any Observer, be evidenced either in a joinder to this letter agreement or in a writing in such other form as is reasonably acceptable to the Company that is executed by the Observer. Notwithstanding the foregoing, an Observer shall not be entitled to receive portions of any materials relating to, or be in attendance for any portion of any Meetings or other discussions relating to, topics for which the Board makes a reasonable good faith determination that the disclosure of such materials to such Observer, or the attendance at such portions of such Meetings or other discussions by such Observer, as applicable, (1) will constitute a waiver of the attorney client privilege to which the Company is entitled, (2) will result in a violation of applicable law or regulation by the Company, or (3) would provide the Observer with access to information that directly relates to the Company’s strategy, negotiating position or obligations specifically related to Oaktree or that otherwise involves or is reasonably expected to involve a conflict of interest with the Observer or Oaktree or any of their respective affiliates.
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(iii) Oaktree may from time to time and at any time, in its sole discretion and by providing the Company with prior written notice thereof (including by e-mail), remove and replace either Observer with a new Observer. The Company shall have the right to approve any such new Observer that, at the time of appointment, is not an employee of Oaktree or any of its affiliates, provided that such approval shall not be unreasonably withheld, conditioned or delayed. In the event any Observer ceases to be an employee of Oaktree or any of its affiliates, unless otherwise agreed by the Company, Oaktree will remove and replace such Observer with another Observer pursuant to this Section 1(a)(iii).
(iv) The reasonable and documented costs and expenses incurred by each Observer (or any substitute individual) in connection with attendance at Meetings or otherwise, including, but not limited to, the reasonable travel and lodging costs, shall be paid by the Company after receipt of a written request by the Observer for such payment in accordance with the Company’s normal expense reimbursement policies and procedures.
(v) The initial Observers shall be the individuals specified in a written notice (including by e-mail) delivered on or after the Closing Date, which individuals shall be employees of Oaktree or any of its affiliates unless otherwise approved in writing by the Company (such approval not to be unreasonably withheld, conditioned or delayed).
(vi) Notwithstanding anything to the contrary herein, Oaktree shall be permitted to assign one (1) Observer seat to any transferee of its Notes that (together with its affiliates) acquires at least two-thirds of the total principal amount of Notes purchased by Oaktree on the Closing Date, in either a single transaction or a series of transactions, on the terms and subject to the conditions set forth in this Section 1(a), by executing a joinder to this letter agreement, certifying as to such transferee’s holdings of its Notes and delivering such joinder to the Company. Upon delivery of any such joinder to the Company, all references to “Oaktree” in this Agreement, solely with respect to any Observer appointed by such transferee, shall be deemed to refer to such transferee. Oaktree (or its transferee, as applicable), shall be responsible for any breach by its respective Observer(s) of the Confidentiality Providers but shall not, for the avoidance of doubt, be responsible for any such breach by an Observer that was not appointed by it. In the event that Oaktree assigns an Observer right to a transferee, Oaktree’s right to appoint the remaining Observer shall terminate once Oaktree no longer holds or controls at least 25% of the aggregate principal amount of Notes that Oaktree purchased on the Closing Date, and the right of Oaktree’s transferee to appoint an Observer shall terminate once such transferee no longer holds or controls at least 50% of the aggregate principal amount of Notes purchased by Oaktree on the Closing Date.
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(b) Liquidity Reporting. No later than five (5) Business Days (as defined in the Indenture) following the end of each calendar month, the Company shall certify in writing to Oaktree (or any of its transferees that own or control at least $25,000,000 in aggregate principal amount of the Notes) the Cash Amount (as defined in the Indenture) (and the component parts thereof) as of the end of each day of such calendar month and whether on each such calendar day the Cash Amount exceeded the Required Cash Amount (as defined in the Indenture).
(c) Access; Inspection Rights. For so long as Oaktree (or any of its transferees) holds or controls Notes in an aggregate principal amount that is at least 25% of the aggregate principal amount of Notes purchased by Oaktree on the Closing Date, Oaktree (and/or any transferee (together with its affiliates) that holds, or will hold following such transfer, at least $50 million in aggregate principal amount of the Notes):
(i) shall be entitled (i) to visit and inspect any of the Company’s or any of its subsidiaries’ respective properties, (ii) to examine any corporate, financial and operating records of the Company (or any of its subsidiaries), and make copies thereof or abstracts therefrom, and (iii) to discuss the Company’s business, operations, affairs, finances and accounts with its officers, directors and employees, in each case at the reasonable expense of the Company and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance written notice (which may be by e-mail) to the Company; provided that, Oaktree shall not exercise such rights more often than one time during any calendar quarter; and
(ii) the Company shall provide written notice and consult with Oaktree (or any such transferee) prior to making a determination that any amounts are treated as distributions with respect to the Notes under section 305 of the Code and prior to withholding any taxes with respect to such amounts; provided, that such right to consultation shall be deemed satisfied if, following the delivery of such notice, (i) the Company has made due and reasonable efforts to consult with Oaktree (or any such transferee), and (ii) Oaktree (or any such transferee) has not responded to the Company within thirty (30) days of such delivery.
2. Effectiveness. This letter agreement shall become effective automatically, and without any further action by any party hereto or any other person, upon the occurrence of the Closing under the Subscription Agreement.
3. Representations. Each of the Company, Tempo and Oaktree represents and warrants that it is duly authorized and has the corporate and legal power and authority to enter into this letter agreement and take the acts and actions described herein.
4. Confidentiality.
(a) As used in this letter agreement, subject to Section 4(c) below, “Confidential Information” means any and all non-public financial information or other non-public information concerning the Company, its subsidiaries and their affiliates that may hereafter be disclosed to the Observer by the Company, its subsidiaries, their affiliates or by any of the directors, officers, employees, agents, consultants, advisors or other representatives (including financial advisors, accountants or legal counsel) (the “Representatives”) of the Company or its subsidiaries, including all notices, minutes, consents, materials, ideas or other information (to the extent constituting information concerning the Company, its subsidiaries and their affiliates that is non-public financial information or other non-public information) provided to the Observer.
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(b) Except to the extent permitted by this Section 4(b) or by Section 4(c) or Section 4(d) below, Oaktree shall instruct its Observers and, solely to the extent the Observer is an employee of Oaktree, Oaktree shall cause such Observer, to keep such Confidential Information strictly confidential and not use the Confidential Information for any purpose other than in connection with his or her role as an Observer; provided, that each Observer may share Confidential Information with Oaktree and its affiliates and its and their respective directors, officers, employees, agents, consultants, advisors, legal counsel and other representatives, as well as with any Permitted Transferee that holds, or will hold following such transfer, at least $50 million in aggregate principal amount of the Notes (each such transferee, a “Permitted Recipient”) who (a) have a need to know such information and (b) are informed of the confidential nature of such information. Oaktree and the other Permitted Recipients shall keep such Confidential Information strictly confidential and shall not use the Confidential Information for any purpose other than monitoring Oaktree’s investment in the Company and exercising Oaktree’s rights as an investor in the Company and its rights under this letter agreement; provided, however, that, subject to Section 4(e) below, the foregoing shall not apply to the extent Oaktree, its affiliates, or any of the Permitted Recipients or the Observer is requested or compelled to disclose Confidential Information by statute, rule, regulation, arbitral or judicial or regulatory process or otherwise requested by any governmental authority. The Observer may not record the proceedings of any meeting of the Board by means of an electronic recording device.
(c) The term “Confidential Information” does not include information that (i) is or becomes generally available to the public other than (a) as a result of a disclosure by an Observer in violation of this letter agreement or (b) in violation of a confidentiality obligation to the Company or its subsidiaries known to any Observer or Oaktree, (ii) is or becomes available to any Observer or Oaktree or any of its affiliates or the Permitted Recipients on a non-confidential basis from a source not known by any Observer or Oaktree or any of its affiliates to have an obligation of confidentiality to the Company or its subsidiaries, (iii) was already known to any Observer or Oaktree or any of its affiliates or the Permitted Recipients at the time of disclosure, or (iv) is independently developed by any Observer or Oaktree or any of its affiliates or the Permitted Recipients without reference to any Confidential Information disclosed to any Observer.
(d) Oaktree acknowledges and will advise each Observer and the Permitted Recipients that United States securities laws prohibit any person who has received from an issuer any material, non-public information from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.
(e) In the event that Oaktree, any Observer, any Permitted Recipient or any of their respective affiliates is required or compelled by statute, rule, regulation, arbitral or judicial process or otherwise requested by any governmental or regulatory authority to disclose the Confidential Information, Oaktree (or, if applicable, such Observer or Permitted Recipient) shall use commercially reasonable efforts, to the extent permitted and practicable, to provide the Company with prompt prior written notice of such requirement so that the Company or its subsidiaries or their affiliates may seek, at such their sole expense and cost, an appropriate protective order. If in the absence of a protective order, Oaktree, any Observer, any Permitted Recipient or any of their respective affiliates is nonetheless legally required or compelled to disclose Confidential Information, such person may disclose only the portion of the Confidential Information or other information that it is so legally required or compelled or requested to be disclosed.
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(f) All Confidential Information disclosed by the Company, its subsidiaries or their Representatives to an Observer or Oaktree is and will remain the property of the Company, so long as such information remains Confidential Information.
(g) It is understood and acknowledged that neither the Company, its subsidiaries nor any Representative makes any representation or warranty as to the accuracy or completeness of the Confidential Information or any component thereof.
(h) Notwithstanding anything herein to the contrary, the obligations of this Section 4 will automatically expire one (1) year after the termination of this letter agreement.
5. Termination. This letter agreement will automatically terminate, and all provisions hereof and all related rights and obligations of the parties hereunder will terminate without any further liability on the part of any party in respect hereof, upon the earliest to occur (a) the termination of the Subscription Agreement in accordance with the terms thereunder (other than a termination in connection with the Closing), (b) the date and time on which all of the Notes held by Oaktree or any transferee of any of Oaktree’s rights hereunder are converted into Common Stock (as defined in the Indenture), and (c) with respect to Oaktree or any transferee of any of Oaktree’s rights hereunder, the date and time on which Oaktree or any such transferee, as applicable, no longer owns or controls at least $25,000,000 in aggregate principal amount of the Notes.
6. Miscellaneous.
(a) Entire Agreement; Amendments; Counterparts. This letter agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings among the parties with respect to such subject matter. This letter agreement may not be assigned by any of the parties hereto; provided, however, that Oaktree shall be permitted to assign its rights (i) under Sections 1(b) and (c) of this letter agreement to or with any transferee (together with its affiliates) that holds, or will hold following such transfer, at least $50 million in aggregate principal amount of the Notes, by providing written notice (including by e-mail) to the Company and upon delivery of a joinder agreement or other written undertaking, in a form reasonably acceptable to the Company, by such assignee agreeing to the provisions of Section 4 hereof as if such assignee were an Observer or Oaktree; and (ii) as set forth in Section 1(a)(vi) of this letter agreement. This letter agreement may not be amended, supplemented, modified or waived except by an instrument in writing signed by all of the parties. This letter agreement may be executed in counterparts, each of which, when executed, shall be deemed to be an original and all of which together will be deemed to be one and the same instrument binding upon all of the parties notwithstanding the fact that all parties are not signatory to the original or the same counterpart. For purposes of this letter agreement, facsimile and portable document format signatures shall be deemed originals.
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(b) Governing Law; Venue; No Jury Trial. This letter agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of New York, without giving effect to the conflicts of law principles thereof except sections 5-1401 and 5-1402 of the general obligations law of the State of New York. Each party hereby (i) consents to submit itself to the personal jurisdiction of the federal court of the Southern District of New York or any state court located in New York County, State of New York in the event any dispute arises out of or relates to this letter agreement or any of the transactions contemplated by this letter agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, including, without limitation, a motion to dismiss on the grounds of forum non conveniens, and (iii) agrees that it will not bring any action arising out of or relating to this letter agreement or any of the transactions contemplated by this letter agreement in any court other than the federal court of the Southern District of New York or any state court located in New York County, State of New York. EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS.
(c) Notices. All notices, requests, demands, claims and other communications required or permitted under this letter agreement shall be in writing and must be delivered by nationally recognized overnight courier, e-mail or personal delivery. Any such notice, request, demand, claim, or other communication to either party shall be deemed duly given, as applicable, (i) on the date of receipt by the addressee if sent by overnight delivery, (ii) when sent, if sent by e-mail (provided that (x) the sender’s computer provides confirmation of transmission or receipt evidencing that such communication was sent to the appropriate email address on a specified date and (y) a copy of the same notice or other communication sent by email is also sent by overnight delivery on the same day as such email is sent) or (iii) upon personal delivery, in each case, to the address or email address set forth for such party on its signature page hereto (or at such other address for a party as may be specified by like notice given to the other party).
[Signature Page Follows.]
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If the foregoing is acceptable, please execute the enclosed copy of this letter agreement and return it to the undersigned.
| OCM Tempo Holdings, LLC |
| By: Oaktree Fund GP, LLC |
| Its: Manager |
| By: Oaktree Fund GP I, LLC |
| Its: Manager Member |
| By: | /s/ Kaj Vazales |
| Name: | Kaj Vazales |
| Title: | Authorized Signatory |
| By: | /s/ Jordan Mikes |
| Name: | Jordan Mikes |
| Title: | Authorized Signatory |
[Signature Page to Letter Agreement]
ACCEPTED AND AGREED:
ACE CONVERGENCE ACQUISITION CORP.
| By: | /s/ Denis Tse |
| Name: | Denis Tse |
| Title: | Secretary and Director |
| Date: | January 18, 2022 |
Notice Address:
ACE Convergence Acquisition Corp.
1013 Centre Road, Suite 403S
Wilmington, DE 19805
Attention: Denis Tse
Email: denis@acev.io
Tempo Automation, Inc.
| By: | /s/ Joy Weiss |
| Name: | Joy Weiss |
| Title: | President & CEO |
| Date: | 1/18/2022 |
Notice Address:
Tempo Automation, Inc.
2460 Alameda St
San Francisco, CA 94103
Attention: Ryan Benton
Email: rbenton@tempoautomation.com
[Signature Page to Letter Agreement]
Exhibit 10.3
STRICTLY CONFIDENTIAL
January 18, 2022
Behrooz Abdi
ACE Convergence Acquisition Corp.
1013 Centre Road, Suite 403S
Wilmington, DE 19805
Joy Weiss
Tempo Automation, Inc.
2460 Alameda Street
San Francisco, CA 94103
Re: Information Rights and Confidentiality Agreement
Dear Mr. Abdi and Ms. Weiss:
Reference is made to that certain Subscription Agreement, dated as of January 18, 2022, by and among (i) ACE Convergence Acquisition Corp., a Cayman Islands exempted company limited by shares, which entity shall migrate to and domesticate as Tempo Automation Holdings, Inc., a Delaware corporation, prior to the Closing (the “Company”), (ii) Tempo Automation, Inc., a Delaware corporation (“Tempo”) (solely for purposes of the agreements and obligations set forth in Section 7(e) of the Subscription Agreement), and (iii) each of the subscribers signatory thereto (the “Subscribers”) (as the same may be amended or modified from time to time, the “Subscription Agreement”), pursuant to which Tor Asia Credit Opportunity Master Fund II LP and/or one or more of its affiliates or affiliated investment funds and/or managed or controlled accounts (collectively, “Tor”) has subscribed for, and agreed to purchase from the Company, at the Closing, $25 million in aggregate principal amount of 13% Convertible Senior Notes due 2025 (the “Notes”) having the terms set forth in that certain Indenture, to be dated as of Closing Date, by and between the Company, as issuer and U.S. Bank, National Association, as trustee (in substantially the form attached to the Subscription Agreement as Exhibit B thereto, the “Indenture”). Capitalized terms used herein, but not defined herein, shall have the meanings ascribed to such terms in the Subscription Agreement.
In connection with the execution of the Subscription Agreement by Tor (as Subscriber), and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the parties hereby acknowledges and agrees, on behalf of itself, as follows:
1. Agreements.
(a) Liquidity Reporting. No later than five (5) Business Days (as defined in the Indenture) following the end of each calendar quarter, the Company shall certify in writing to Tor the Cash Amount (as defined in the Indenture) (and the component parts thereof) as of the end of the last day of such calendar quarter.
(b) Access; Inspection Rights. For so long as Tor (or any of its transferees) holds or controls at least $25,000,000 in aggregate principal amount of the Notes, Tor (or such transferee) shall be entitled (i) to visit and inspect any of the Company’s or any of its subsidiaries’ respective properties, (ii) to examine any corporate, financial and operating records of the Company (or any of its subsidiaries), and make copies thereof or abstracts therefrom, and (iii) to discuss the Company’s business, operations, affairs, finances and accounts with its officers, directors and employees, in each case at the reasonable expense of the Company and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance written notice (which may be by e-mail) to the Company; provided that Tor (or such transferee) shall not exercise such rights more often than one time during any calendar quarter.
2. Effectiveness. This letter agreement shall become effective automatically, and without any further action by any party hereto or any other person, upon the occurrence of the Closing under the Subscription Agreement.
3. Representations. Each of the Company, Tempo and Tor represents and warrants that it is duly authorized and has the corporate and legal power and authority to enter into this letter agreement and take the acts and actions described herein.
4. Confidentiality.
(a) As used in this letter agreement, subject to Section 4(c) below, “Confidential Information” means any and all non-public financial information or other non-public information concerning the Company, its subsidiaries and their affiliates that may hereafter be disclosed to Tor by the Company, its subsidiaries, their affiliates or by any of the directors, officers, employees, agents, consultants, advisors or other representatives (including financial advisors, accountants or legal counsel) (the “Representatives”) of the Company or its subsidiaries, including all notices, minutes, consents, materials, ideas or other information (to the extent constituting information concerning the Company, its subsidiaries and their affiliates that is non-public financial information or other non-public information) provided to Tor.
(b) Except to the extent permitted by this Section 4(b) or by Section 4(c) or Section 4(d) below, Tor shall keep such Confidential Information strictly confidential and shall not use the Confidential Information for any purpose other than monitoring Tor’s investment in the Company and exercising Tor’s rights as an investor in the Company and its rights under this letter agreement; provided, that Tor may share Confidential Information with its affiliates and its and their respective directors, officers, employees, agents, consultants, advisors, legal counsel and other representatives (each, a “Permitted Recipient”) who (a) have a need to know such information and (b) are informed of the confidential nature of such information; provided, further, that, subject to Section 4(e) below, the foregoing shall not apply to the extent Tor or any of the Permitted Recipients is requested or compelled to disclose Confidential Information by statute, rule, regulation, arbitral or judicial or regulatory process or otherwise requested by any governmental authority.
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(c) The term “Confidential Information” does not include information that (i) is or becomes generally available to the public other than (a) as a result of a disclosure by Tor in violation of this letter agreement or (b) in violation of a confidentiality obligation to the Company or its subsidiaries known to Tor, (ii) is or becomes available to Tor or the Permitted Recipients on a non-confidential basis from a source not known by Tor or any of its affiliates to have an obligation of confidentiality to the Company or its subsidiaries, (iii) was already known to Tor or any of its affiliates or the Permitted Recipients at the time of disclosure, or (iv) is independently developed by Tor or any of its affiliates or the Permitted Recipients without reference to any Confidential Information disclosed to Tor.
(d) Tor acknowledges and will advise the Permitted Recipients that United States securities laws prohibit any person who has received from an issuer any material, non-public information from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.
(e) In the event that Tor or any of the Permitted Recipients is required or compelled by statute, rule, regulation, arbitral or judicial process or otherwise requested by any governmental or regulatory authority to disclose the Confidential Information, Tor (or, if applicable, such Permitted Recipient) shall use commercially reasonable efforts, to the extent permitted and practicable, to provide the Company with prompt prior written notice of such requirement so that the Company or its subsidiaries or their affiliates may seek, at such their sole expense and cost, an appropriate protective order. If in the absence of a protective order, Tor or any of its affiliates or any Permitted Recipient is nonetheless legally required or compelled to disclose Confidential Information, such person may disclose only the portion of the Confidential Information or other information that it is so legally required or compelled or requested to be disclosed.
(f) All Confidential Information disclosed by the Company, its subsidiaries or their Representatives to Tor is and will remain the property of the Company, so long as such information remains Confidential Information.
(g) It is understood and acknowledged that neither the Company, its subsidiaries nor any Representative makes any representation or warranty as to the accuracy or completeness of the Confidential Information or any component thereof.
(h) Notwithstanding anything herein to the contrary, the obligations of this Section 4 will automatically expire one (1) year after the termination of this letter agreement.
5. Termination. This letter agreement will automatically terminate, and all provisions hereof and all related rights and obligations of the parties hereunder will terminate without any further liability on the part of any party in respect hereof, upon the earliest to occur (a) the termination of the Subscription Agreement in accordance with the terms thereunder (other than a termination in connection with the Closing), (b) the date and time on which all of the Notes held by Tor are converted into Common Stock (as defined in the Indenture), and (c) with respect to Tor, the date and time on which Tor no longer owns or controls at least $25,000,000 in aggregate principal amount of the Notes.
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6. Miscellaneous.
(a) Entire Agreement; Amendments; Counterparts. This letter agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings among the parties with respect to such subject matter. This letter agreement may not be assigned by any of the parties hereto. This letter agreement may not be amended, supplemented, modified or waived except by an instrument in writing signed by all of the parties. This letter agreement may be executed in counterparts, each of which, when executed, shall be deemed to be an original and all of which together will be deemed to be one and the same instrument binding upon all of the parties notwithstanding the fact that all parties are not signatory to the original or the same counterpart. For purposes of this letter agreement, facsimile and portable document format signatures shall be deemed originals.
(b) Governing Law; Venue; No Jury Trial. This letter agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of New York, without giving effect to the conflicts of law principles thereof except sections 5-1401 and 5-1402 of the general obligations law of the State of New York. Each party hereby (i) consents to submit itself to the personal jurisdiction of the federal court of the Southern District of New York or any state court located in New York County, State of New York in the event any dispute arises out of or relates to this letter agreement or any of the transactions contemplated by this letter agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, including, without limitation, a motion to dismiss on the grounds of forum non conveniens, and (iii) agrees that it will not bring any action arising out of or relating to this letter agreement or any of the transactions contemplated by this letter agreement in any court other than the federal court of the Southern District of New York or any state court located in New York County, State of New York. EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS.
(c) Notices. All notices, requests, demands, claims and other communications required or permitted under this letter agreement shall be in writing and must be delivered by nationally recognized overnight courier, e-mail or personal delivery. Any such notice, request, demand, claim, or other communication to either party shall be deemed duly given, as applicable, (i) on the date of receipt by the addressee if sent by overnight delivery, (ii) when sent, if sent by e-mail (provided that (x) the sender’s computer provides confirmation of transmission or receipt evidencing that such communication was sent to the appropriate email address on a specified date and (y) a copy of the same notice or other communication sent by email is also sent by overnight delivery on the same day as such email is sent) or (iii) upon personal delivery, in each case, to the address or email address set forth for such party on its signature page hereto (or at such other address for a party as may be specified by like notice given to the other party).
[Signature Page Follows.]
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If the foregoing is acceptable, please execute the enclosed copy of this letter agreement and return it to the undersigned.
| TOR ASIA CREDIT OPPORTUNITY MASTER FUND II LP | |
| By: TACOF II GP LLC | |
| Its: General Partner |
| By: | /s/ James Sweeney |
| Name: | James Sweeney |
| Title: | Authorized Signatory |
[Signature Page to Letter Agreement]
ACCEPTED AND AGREED:
ACE CONVERGENCE ACQUISITION CORP.
| By: | /s/ Denis Tse |
| Name: | Denis Tse |
| Title: | Secretary and Director |
| Date: | January 18, 2022 |
Notice Address:
ACE Convergence Acquisition Corp.
1013 Centre Road, Suite 403S
Wilmington, DE 19805
Attention: Denis Tse
Email: denis@acev.io
Tempo Automation, Inc.
| By: | /s/ Joy Weiss |
| Name: | Joy Weiss |
| Title: | President & CEO |
| Date: | 1/18/2022 |
Notice Address:
Tempo Automation, Inc.
2460 Alameda St
San Francisco, CA 94103
Attention: Ryan Benton
Email: rbenton@tempoautomation.com
[Signature Page to Letter Agreement]
Exhibit 10.4
THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT OR THE APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD IN ACCORDANCE WITH RULE 144 UNDER THE ACT.
Tempo Automation, Inc.
CONVERTIBLE PROMISSORY NOTE
| Note No. | Issue Date | |
| $ | January 18, 2022 |
FOR VALUE RECEIVED, Tempo Automation, Inc., a Delaware corporation (“Tempo” or the “Company”), hereby promises to pay (“Lender”), the principal balance equal to $ , together with simple interest on the unpaid principal balance of this Note from time to time outstanding at the rate of 10% per year; provided that in no event shall the interest rate be less than the minimum rate of interest required in order to avoid the imputation of interest for federal income tax purposes. Interest shall commence with the date hereof and shall continue on the outstanding unpaid principal until paid in full or converted. Interest on this Note shall be computed on the basis of a year of 365 days for the actual number of days elapsed.
1. Maturity. Unless earlier converted pursuant to the conversion provisions set forth herein, all outstanding principal and accrued interest under this Note (the “Outstanding Amount”) shall be due and payable by the Company on demand by the Lender at any time after November 15, 2022 (the “Maturity Date”).
2. Priority. This Note will be subordinate in right of payment to all current and future Company indebtedness to banks, leasing or equipment financing institutions and other financial institutions engaged in the business of lending money, which is for money borrowed or purchase or leasing of equipment in the case of lease or other equipment financing, whether or not secured.
3. Conversion of the Note. The Outstanding Amount will convert into securities of ACE Convergence Acquisition Corp., a Cayman Islands exempted company that will domesticate as a Delaware corporation prior to the closing of the Transactions (as defined below) (the “Issuer”), upon the earlier to occur of the closing of the Transactions and the closing of the first Qualified Financing (as defined below) following any termination of the Business Combination Agreement (as defined below), as applicable, in accordance with the following:
(a) effective upon the closing of the Transactions, the Outstanding Amount shall automatically be converted into shares of common stock, par value $0.001 per share, of the Issuer at a conversion price of $10.00 per share, with any resulting fraction of a share rounded down to the nearest whole share. No payment will be made to Lender in lieu of any fractional shares to which Lender would otherwise have been entitled, and such amounts shall be extinguished without any further payment on the part of the Company. The “Transactions” means, collectively, the transactions contemplated by that certain Agreement and Plan of Merger, dated as of October 13, 2021 (as may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among the Issuer, Tempo and ACE Convergence Subsidiary Corp., a Delaware corporation and a direct wholly owned subsidiary of the Issuer (“Tempo Merger Sub”), pursuant to which, among other things, Tempo Merger Sub will merge with and into Tempo, with Tempo surviving such merger as a wholly owned subsidiary of the Issuer. Lender hereby agrees to execute and become party to all customary agreements that the Company reasonably requests in connection with the Transactions. As promptly as practicable after the conversion of this Note, the Company at its expense shall issue and deliver to the holder of this Note, upon surrender of this Note by Lender to the Company, a certificate or certificates for the number of full Conversion Shares issuable upon such conversion. Upon the conversion of this Note, Lender shall have no further rights under such Note, whether or not such Note is surrendered; and
(b) effective upon the closing of the first Qualified Financing (as defined below) following any termination of the Business Combination Agreement, the Outstanding Amount shall automatically be converted into shares of the same class and series of capital stock of the Company issued to other investors in the Qualified Financing (the “Conversion Shares”) at a conversion price equal to the price paid per share for the Equity Securities (as defined below) by the other investors in the Qualified Financing (the “Conversion Price”), with any resulting fraction of a share rounded down to the nearest whole share. No payment will be made to Lender in lieu of any fractional shares to which Lender would otherwise have been entitled, and such amounts shall be extinguished without any further payment on the part of the Company. The number of Conversion Shares to be issued upon such conversion shall be equal to the quotient obtained by dividing the Outstanding Amount on this Note, on the date of conversion, by the Conversion Price. “Qualified Financing” means the first issuance or series of related issuances by the Company of Equity Securities following the date of this Note from which the Company receives immediately available gross proceeds of at least $35,000,000 (excluding proceeds from this Note and any other indebtedness of the Company that convert into equity in such financing). The Company shall notify Lender in writing of the anticipated occurrence of a Qualified Financing at least five days prior to the closing date of the Qualified Financing, notifying Lender of the conversion to be effected and the terms under which the Equity Securities of the Company are anticipated to be sold in such Qualified Financing. The issuance of Conversion Shares pursuant to the conversion of this Note shall be upon and subject to the same terms and conditions applicable to the Equity Securities sold in the Qualified Financing. Lender hereby agrees to execute and become party to all customary agreements that the Company reasonably requests in connection with such Qualified Financing. As promptly as practicable after the conversion of this Note, the Company at its expense shall issue and deliver to the holder of this Note, upon surrender of this Note by Lender to the Company, a certificate or certificates for the number of full Conversion Shares issuable upon such conversion. Upon the conversion of this Note, Lender shall have no further rights under such Note, whether or not such Note is surrendered. “Equity Securities” means a series of the Company’s common stock or preferred stock issued by the Company for bona fide equity financing purposes.
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4. Payment Upon Change of Control. If there is a Change of Control (as defined below) of the Company prior to the conversion of this Note for any reason, the Company shall pay to Lender, upon the closing of the Change of Control and in full satisfaction of this Note, the Change of Control Multiple (as defined below). The “Change of Control Multiple” means 1.5x the outstanding principal balance of this Note. A “Change of Control” means (i) a merger or consolidation other than in which (x) the Company is a constituent party or (y) a subsidiary of the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the shares of capital stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation or (2) if the surviving or resulting corporation is a wholly-owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation, (ii) the sale by the stockholders of the Company, in a single transaction or series of related transactions, of capital stock representing at least 50% of the outstanding voting power of the Company, or (iii) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger, consolidation or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Company; provided, however, that a Change of Control shall not include (a) any transaction or series of related transactions principally for bona fide equity financing purposes (including, but not limited to, the Qualified Financing) in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof occurs or (b) any of the Transactions. The Company shall notify Lender in writing of the anticipated occurrence of a Change of Control at least five days prior to the closing date of the Change of Control.
5. Defaults and Remedies.
5.1 Events of Default. Upon the occurrence of an Event of Default (as defined below), at the option and upon the declaration of the Lender and upon written notice to the Company, the entire unpaid principal and accrued interest on such Note shall, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived, but subject to the conversion rights set forth herein, be immediately due and payable. The following events shall be considered events of default with respect to each Note (individually, an “Event of Default” and collectively, “Events of Default”):
(a) if the Company fails to pay any of the principal, interest or any other amounts payable under this Note when due and payable;
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(b) if the Company files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or seeks the appointment of a custodian, receiver, trustee (or other similar official) of the Company or all or any substantial portion of the Company’s assets, or makes any assignment for the benefit of creditors or takes any action in furtherance of any of the foregoing, or fails to generally pay its debts as they become due; or
(c) if an involuntary petition is filed, or any proceeding or case is commenced, against the Company (unless such proceeding or case is dismissed or discharged within 60 days of the filing or commencement thereof) under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, liquidation or moratorium statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is applied or appointed for the Company or to take possession, custody or control of any property of the Company, or an order for relief is entered against the Company in any of the foregoing.
5.2 Remedies. Upon the occurrence of an Event of Default, Lender shall have then, or at any time thereafter, all of the rights and remedies afforded creditors generally by the applicable federal laws or the laws of the State of California at law, in equity or otherwise.
6. Pre-payment. This Note may not be prepaid, in whole or in part, prior to the Maturity Date without the prior written consent of the Lender. If pre-payment is consented to by the Lender (a) it will be without any pre-payment penalties and (b) interest will no longer continue to accrue on any prepaid principal amounts after such pre-payments. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.
7. Payment. All payments by the Company under this Note shall be in immediately available funds at the principal office of the Company, or at such other place as Lender may from time to time designate in writing to the Company. All payments by the Company under this Note shall be made without set-off or counterclaim and be free and clear and without any deduction or withholding for any taxes or fees of any nature whatever, unless the obligation to make such deduction or withholding is imposed by law. All payments by the Company under this Note shall be applied first to the accrued interest due and payable hereunder and the remainder, if any, applied to the outstanding principal.
8. Directors, Officers and Stockholders Not Liable. Lender agrees that no stockholder, director or officer of the Company shall have any personal liability for any amounts due and payable pursuant to this Note.
9. No Litigation, Disputes or Actions Without Approval of a Majority in Interest of Note Holders. Notwithstanding any other provision of this Note, Lender agrees that Lender will exercise Lender’s rights and remedies under this Note only in concert with all other holders of outstanding Notes and will not take any action, including commencement or prosecution of litigation or any other proceeding to collect this Note except as agreed by the holders of a majority in interest of the aggregate amount of outstanding principal under the Notes.
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10. Interest Cutoff. If the Transactions, a Change of Control or Qualified Financing is consummated, all interest on this Note shall be deemed to have stopped accruing as of a date selected by the Company that is up to 10 days prior to the consummation of the Transactions, Change of Control or Qualified Financing.
11. Offset of Subscription Amount. The parties hereto agree that the principal balance of this Note shall reduce the “Subscription Amount” (as defined in that certain Subscription Agreement, dated as of October 13, 2021, by and between Lender and the Issuer (the “Subscription Agreement”)) of Lender on a dollar-for-dollar basis (the “Prefunded Amount”), and Lender shall be deemed to have satisfied in full its obligations under the Subscription Agreement with respect to such Prefunded Amount in the event the closing of the Transactions occurs.
12. Miscellaneous.
12.1 Series of Notes. This is one of a series of the Company’s Convertible Promissory Notes in substantially the same form (collectively, the “Notes”). As used herein, “Lenders” means, collectively, Lender together with the other lenders to which the Company from time to time issues and sells the Notes. If at any time there is more than one Lender of Notes, the Company shall maintain a register for the recordation of the names and addresses of the Lenders, and the principal amounts and stated interest of the Notes.
12.2 Accredited Investor Representation. By accepting this Note and countersigning below, Lender represents and warrants to the Company that such Lender is an “accredited investor” as defined in Rule 501(a) under the Act.
12.3 No “Bad Actor” Disqualification. Lender hereby represents that no “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Act (a “Disqualification Event”) is applicable to Lender or any of its Rule 506(d) Related Parties (as defined below), except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable. For purposes of this Note, “Rule 506(d) Related Party” means any individual, corporation, partnership, trust, limited liability company, association or other entity that is a beneficial owner of Lender’s securities for purposes of Rule 506(d) of the Act.
12.4 Tax Forms. The Lender and each beneficial owner of this Note agrees to provide, at the time it becomes a party hereto and thereinafter upon reasonable request or as required under applicable law, tax forms or other documentation (including any applicable Internal Revenue Service Form W-8/W-9 as well as certifications indicating eligibility for the portfolio interest exemption) reasonably satisfactory to the Company or other applicable withholding agent to establish an exemption from U.S. withholding tax on payments and deliveries hereunder as well as an exemption from, or a reduction in the rate of, U.S. withholding that may apply to any dividend or constructive dividend (e.g., under Section 305(c) of the Code).
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12.5 Governing Law; Jurisdiction and Venue; Waiver of Jury Trial. This Note shall be governed by and construed in accordance with the General Corporation Law of the State of Delaware as to matters within the scope thereof, and as to all other matters shall be governed by and construed in accordance with the internal laws of the State of California, without regard to conflict of law principles that would result in the application of any law other than the law of the State of California. Notwithstanding any provision of this Note to the contrary, this Note shall be (to the extent necessary to satisfy the requirements of Section 22062(b)(3)(D) of the California Financial Code) subject to the implied covenant of good faith and fair dealing arising under Section 1655 of the California Civil Code. Each of the parties irrevocably consents to the exclusive jurisdiction of, and venue in, the state courts in San Francisco County in the State of California (or in the event of exclusive federal jurisdiction, the courts of the State of California), in connection with any matter based upon or arising out of this Note or the matters contemplated herein, and agrees that process may be served upon them in any manner authorized by the laws of the State of California for such persons. Each of the parties hereto irrevocably waives, to the fullest extent permitted by law, any and all right to trial by jury in any legal proceeding (whether in contract, tort or otherwise) arising out of or related to this Note.
12.6 Successors and Assigns. This Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Note is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Note, except as expressly provided in this Note. Notwithstanding the forgoing, any transfer of this Note may be effected only in accordance with the provisions of this Note and the consent of the Company and by surrender of this Note to the Company and reissuance of a new note to the transferee. Lender and any subsequent holder of this Note receives this Note subject to the foregoing terms and conditions, as well as all other terms and conditions contained in this Note, and agrees to comply with all such terms and conditions for the benefit of the Company and any other Lenders.
12.7 Titles and Subtitles. The titles and subtitles used in this Note are used for convenience only and are not to be considered in construing or interpreting this Note.
12.8 Entire Agreement; Amendments and Waivers. This Note constitutes the full and entire understanding and agreement between the parties with regard to the subjects hereof. The terms and provisions of this Note may be modified or amended and the observance of any term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Lender.
12.9 Delay or Omission; Waiver of Presentment. No delay or omission on the part of Lender in exercising any right under this Note shall operate as a waiver of such right or of any other right of Lender, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or any other right on any future occasion. The Company and every endorser or guarantor of this Note, regardless of the time, order or place of signing, hereby waives presentment, demand, protest and notices of every kind and assents to any permitted extension of the time of payment and to the addition or release of any other party primarily or secondarily liable hereunder.
12.10 No Rights as Stockholder. Until the conversion of this Note, Lender shall not have or exercise any rights by virtue hereof as a stockholder of the Company.
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12.11 Severability. If any provision of this Note is held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of this Note shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
12.12 Expenses. The Company and Lender shall bear their own legal and other expenses with respect to this Note.
12.13 Counterparts. This Note may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.
12.14 Electronic and Facsimile Signatures. Any signature page delivered electronically or by facsimile (including, without limitation, transmission by .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) shall be binding to the same extent as an original signature page.
12.15 California Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
12.16 No Usury. This Note is hereby expressly limited so that in no event whatsoever, whether by reason of deferment or advancement of loan proceeds, acceleration of maturity of the loan evidenced hereby, or otherwise, shall the amount paid or agreed to be paid to Lender hereunder for the loan, use, forbearance or detention of money exceed the maximum interest rate permitted by the laws of the State of California. If at any time the performance of any provision hereof involves a payment exceeding the limit of the price that may be validly charged for the loan, use, forbearance or detention of money under applicable law, then automatically and retroactively, ipso facto, the obligation to be performed shall be reduced to such limit, it being the specific intent of the Company and Lender that all payments under this Note be credited first to interest as permitted by law, but not in excess of (a) the agreed rate of interest set forth herein or (b) that permitted by law, whichever is the lesser, and the balance toward the reduction of principal. The provisions of this Section 12.16 shall never be superseded or waived and shall control every other provision of this Note.
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12.17 Notice. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed electronic mail or confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (c) five business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications to the Company shall be sent to the address or other contact information as set forth beneath its signature, with a copy (which shall not constitute notice) to: Latham & Watkins LLP, 811 Main Street, Suite 3700, Houston, TX 77002, Attention: Ryan J. Maierson, Thomas G. Brandt, Email: ryan.maierson@lw.com, thomas.brandt@lw.com. All communications to Lender shall be sent to Lender’s address or such other contact information as set forth beneath its signature. Or at such other address or contact information as the relevant recipient may designate pursuant to the provisions of this Section 12.17.
12.18 Pari Passu Notes. Lender acknowledges and agrees that the payment of all or any portion of the outstanding principal amount of this Note and all interest hereon shall be pari passu in right of payment and in all other respects to the other Notes.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Convertible Promissory Note as of the date set forth above.
| Tempo Automation, Inc. | ||
| By: | ||
| Name: | Joy Weiss | |
| Title: | CEO | |
| Address: | Tempo Automation, Inc. | |
| 2460 Alameda St. | ||
| San Francisco, CA 94103 | ||
| Email: | joy@tempoautomation.com |
[LENDER]
| By: | ||
| Name: | ||
| Title: | ||
| Address: | ||
| Email: | ||
Solely for purposes of Section 3(a) and Section 11:
ACE CONVERGENCE ACQUISITION CORP.
| By: |
| Name: | ||
| Title: |
Address:
| Email: | ||
[Signature page to Convertible Promissory Note]
Exhibit 10.5
LETTER AGREEMENT
ACE Convergence Acquisition Corp.
1013 Centre Road, Suite 403S
Wilmington, DE 19805
January 18, 2022
ACE SO3 SPV Limited
8 Marina View, #43-01, Asia Square Tower 1
Singapore 018960
Tempo Automation, Inc.
2460 Alameda St.
San Francisco, CA 94103
To whom it may concern:
Reference is made to that certain Note Subscription Agreement (the “Note Subscription Agreement”), dated as of October 13, 2021, by and between ACE Convergence Acquisition Corp. (“ACE”) and ACE SO3 SPV Limited.
Conditioned upon and concurrently with the execution of (i) the Subscription Agreement, by and among ACE, Tempo Automation, Inc. (“Tempo”), OCM Tempo Holdings, LLC and TOR Asia Credit Opportunity Master Fund II LP, and (ii) the certain side letters to be entered into in connection therewith, in each case to be entered into on the date hereof, the parties to the Note Subscription Agreement agree that the Note Subscription Agreement is hereby terminated in its entirety in accordance with its terms.
This letter shall also function as Tempo’s consent pursuant to Section 7.10 of the Agreement and Plan of Merger, dated as of October 13, 2021, by and among ACE, ACE Convergence Subsidiary Corp. and Tempo, to the termination of the Note Subscription Agreement contemplated hereby.
[Signature Page Follows]
Please indicate your acceptance of this Letter by signing in the space provided below.
| Very truly yours, | ||
| ACE Convergence Acquisition Corp. | ||
| By: | /s/ Behrooz Abdi | |
| Name: Behrooz Abdi | ||
| Title: Chief Executive Officer | ||
Agreed and accepted as of the date first written above:
| ACE SO3 SPV Limited | |||
| By: | /s/ Denis Tse | ||
| Name: | Denis Tse | ||
| Title: | Director | ||
| Tempo Automation, Inc. | |||
| By: | /s/ Joy Weiss | ||
| Name: | Joy Weiss | ||
| Title: | Chief Executive Officer | ||
Cc:
Tempo Automation, Inc.
2460 Alameda St.
San Francisco, CA 94103
Attn: Ryan Benton
Email: rbenton@tempoautomation.com
Latham & Watkins LLP
811 Main Street, Suite 3700
Houston, TX 77002
Attn: Ryan J. Maierson
Thomas G. Brandt
Email: ryan.maierson@lw.com
Thomas.brandt@lw.com
[Signature Page to Letter Agreement]