Item 1.01 Entry Into A Material Definitive Agreement
Business Combination Agreement
On
The Business Combination
The BCA contemplates that the business combination among Prospector, LeddarTech and Newco will be completed through the following series of transactions:
? Prospector will continue as a corporation existing under the laws of
(the "Continuance" and Prospector as so continued, "Prospector Canada");
? Prospector
Prospector
? the preferred shares of LeddarTech will convert into common shares of
LeddarTech and, on the terms and subject to the conditions set forth in a plan
of arrangement (the "Plan of Arrangement"), Amalco will acquire all of the
issued and outstanding common shares of LeddarTech from LeddarTech's
shareholders in exchange for common shares of Amalco having an aggregate equity
value of
aggregate exercise price of LeddarTech's outstanding "in the money" options
immediately prior to the Prospector Amalgamation (the "Share Exchange") plus
additional Amalco "earnout" shares (with the terms set forth in the BCA);
? LeddarTech and Amalco will amalgamate (the "Company Amalgamation" and
LeddarTech and Amalco as so amalgamated, the "Surviving Company"); and
? in connection with the Company Amalgamation, the securities of Amalco will
convert into an equivalent number of corresponding securities in the Surviving
Company (other than as described below with respect to the Prospector Class B
Shares) and each of LeddarTech's equity awards (other than options to purchase
LeddarTech's class M shares) will be cancelled for no compensation or
consideration and LeddarTech's equity plans will be terminated (and the
options to purchase LeddarTech's class M shares will become options to
purchase Surviving Company Shares).
The Continuance, the Prospector Amalgamation, the Share Exchange, the Company Amalgamation and the other transactions contemplated by the BCA are hereinafter referred to as the "Business Combination".
In connection with the Business Combination, Prospector, LeddarTech and Newco
will prepare, and Newco (as predecessor to the
The Business Combination is expected to close by the fourth quarter of 2023, subject to the receipt of the required approvals by Prospector's shareholders and the satisfaction of certain customary closing conditions described below.
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Representations and Warranties; Covenants
The BCA contains representations and warranties of each of the parties thereto that are customary for transactions of this type, including with respect to the operations of Prospector, LeddarTech and Newco. In addition, the BCA contains customary pre-closing covenants, including the obligation of LeddarTech to conduct its business in the ordinary course consistent with past practice and to refrain from taking specified actions, subject to certain exceptions. LeddarTech has agreed to adopt an equity incentive plan effective upon closing of the Business Combination (the "Closing"), as described in the BCA.
Governance
The parties have agreed to take all action within their power as may be
necessary or appropriate such that, effective immediately after the Closing, the
Conditions to Closing
The obligation of Prospector, LeddarTech and Newco to consummate the Business
Combination is subject to certain closing conditions, including, but not limited
to, (i) the expiration or termination of the applicable waiting period under
certain non-
In addition, the obligation of Prospector to consummate the Business Combination is subject to the fulfillment of other closing conditions, including, but not limited to, (i) the representations and warranties of LeddarTech and Newco being true and correct to the standards applicable to such representations and warranties set forth in the BCA and each of the covenants and agreements of LeddarTech and Newco set forth in the BCA having been performed or complied with in all material respects and (ii) no Company Material Adverse Effect (as defined in the BCA) having occurred.
The obligation of LeddarTech to consummate the Business Combination is also
subject to the fulfillment of other closing conditions, including, but not
limited to, (i) the representations and warranties of Prospector being true and
correct to the standards applicable to such representations and warranties set
forth in the BCA and each of the covenants and agreements of Prospector set
forth in the BCA having been performed or complied with in all material
respects, (ii) no Prospector Material Adverse Effect (as defined in the BCA)
having occurred and (iii) immediately after the Closing, the aggregate cash
proceeds actually received (or deemed received) by LeddarTech, Amalco or the
Concurrently with the execution of the BCA, certain shareholders of LeddarTech representing more than the requisite votes necessary to approve the Business Combination entered into a consent and waiver of shareholders pursuant to which each such shareholder agreed to, among other things, vote to approve the Business Combination and the related transactions.
Redemption Offer
Pursuant to its governing documents, Prospector will be providing the holders of
its Class A ordinary shares, par value
Prospector will issue at the Closing, as a dividend, following the Prospector Shareholder Redemption and prior to the Continuance, to each holder of Prospector Class A Shares that elects not to participate in the redemption (a "Non- Redeeming Shareholder") one additional Prospector Class A Share for each non-redeemed Prospector Class A Share held by such Non- Redeeming Shareholder (the "Prospector Share Issuance").
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Following the Prospector Shareholder Redemption but prior to the Prospector Share Issuance, the Prospector Class A Shares and the warrants comprising each issued and outstanding unit of Prospector immediately prior to the Prospector Share Issuance shall be automatically separated.
Termination
The BCA may be terminated under certain customary and limited circumstances
prior to the Closing (i) by mutual written consent of Prospector and LeddarTech;
(ii) by Prospector if the representations and warranties of LeddarTech are not
true and correct or if LeddarTech fails to perform any covenant or agreement set
forth in the BCA such that certain conditions to Closing cannot be satisfied and
the breach or breaches of such representations or warranties or the failure to
perform such covenant or agreement, as applicable, are not cured or cannot be
cured within certain specified time periods; (iii) by LeddarTech if the
representations and warranties of Prospector are not true and correct or if
Prospector fails to perform any covenant or agreement set forth in the BCA such
that certain conditions to Closing cannot be satisfied and the breach or
breaches of such representations or warranties or the failure to perform such
covenant or agreement, as applicable, are not cured or cannot be cured within
certain specified time periods; (iv) subject to certain limited exceptions, by
either Prospector or LeddarTech if the Business Combination is not consummated
by
If the BCA is validly terminated, and except in the case of any willful or material breach of any covenant or agreement or fraud (involving scienter), none of the parties to the BCA will have any liability or any further obligation under the BCA other than customary confidentiality obligations.
A copy of the BCA is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference, and the foregoing description of the BCA is qualified in its entirety by reference thereto. The BCA contains representations, warranties, covenants and agreements that the respective parties made to each other as of the date of the BCA or other specific dates. The assertions embodied in those representations, warranties, covenants and agreements were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The representations, warranties, covenants and agreements in the BCA are also modified in important part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to shareholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. Prospector does not believe that these schedules contain information that is material to an investment decision.
Financing
Prior to the execution of the BCA, LeddarTech entered into a subscription
agreement (the "Subscription Agreement") with certain investors (the
"Investors"), pursuant to which the Investors agreed to purchase convertible
notes of LeddarTech (upon execution of the BCA) and Newco (upon closing of the
BCA) in an aggregate principal amount of at least
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The issuance of the first tranche ("Tranche A") of the Financing occurred on
The issuance of the second tranche ("Tranche B") of the Financing is contingent
upon, among other things, the substantially concurrent consummation of the
Business Combination. The Subscription Agreement provides that each Tranche B
Investor will receive a secured convertible note issued by LeddarTech in a
principal amount equal to such Investor's Tranche B investment and convertible
into common shares of the
Pursuant to the BCA, each of Prospector, LeddarTech and Newco agree that, if . . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits Exhibits 2.1† Business Combination Agreement, dated as ofJune 12, 2023 , by and amongProspector Capital Corp. ,LeddarTech Inc. andLeddarTech Holdings Inc. 10.1† Subscription Agreement, dated as ofJune 12, 2023 , by and amongLeddarTech Inc. and the investors party thereto. 10.2 Sponsor Letter Agreement, dated as ofJune 12, 2023 , by and amongProspector Sponsor LLC ,Prospector Capital Corp. ,LeddarTech Inc. andLeddarTech Holdings Inc. 10.3 Form of Registration Rights Agreement. 10.4 Form of Investor Rights Agreement. 104 Cover Page Interactive Data File-Embedded within the inline XBRL document
† Certain of the exhibits and schedules to this exhibit have been omitted in
accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to theSEC upon its request. 7
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