Item 1.01. |
Entry into
a Material Definitive Agreement |
Agreement
and Plan of Merger
On
September 16, 2022, FoxWayne Enterprises Acquisition Corp., a Delaware corporation (“FoxWayne”), Gotham Merger Sub,
Inc., a Delaware corporation and a wholly owned subsidiary of FoxWayne (“Merger Sub”), Clover Inc., a corporation
organized under the laws of Ontario (“Clover”) and Isaac Raichyk as the stockholders’ representative (the “Stockholders’
Representative”), entered into an Agreement and Plan of Merger (“Merger Agreement”) pursuant to which, among
other things, Clover will be continued from Ontario into Delaware (the “Continued Company”) immediately prior to the
effective time of the Merger (as defined herein) (the “Effective Time”) and Merger Sub will be merged with and into
the Continued Company (the “Merger,” and together with the other transactions related thereto, the “Proposed
Transactions”), with the Continued Company surviving the Merger as a wholly owned subsidiary of FoxWayne (the “Surviving
Corporation”).
The
Merger Agreement and the transactions contemplated thereby were approved by the board of directors of FoxWayne, Merger Sub and Clover.
The transactions set forth in the Merger Agreement, including the Merger, will constitute a “Business Combination.” Unless
expressly stated otherwise herein, capitalized terms used but not defined herein have the meanings ascribed to them in the Merger Agreement.
Treatment
of Continued Company Securities
At
the Effective Time, by virtue of the Merger and without any action on the part of FoxWayne, Merger Sub, the Continued Company or the
holders of any of Continued Company’s securities:
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(i) |
each share of Class A Common
Stock of the Continued Company, no par value per share (the “Continued Company Class A Common Stock”), each share
of Class B Common Stock of Continued Company, no par value per share (the “Continued Company Class B Common Stock”),
each share of Class AAA Preferred Stock of Continued Company, no par value per share (the “Continued Company Class AAA Preferred
Stock”) and each share of the Continued Company’s convertible non-voting preferred stock, no par value per share
(the “Continued Company Convertible Preferred Stock” and together with the Continued Company Class A Common Stock,
Continued Company Class B Common Stock and Continued Company Class AAA Preferred Stock, the “Continued Company Capital Stock”)
issued and outstanding immediately prior to the Effective Time will be canceled and converted into the right to receive the number
of shares of FoxWayne’s common stock, par value $0.0001 per share (the “FoxWayne Common Stock”) allocable
from the Aggregate Consideration as set forth in the Consideration Schedule of the Merger Agreement (collectively, the “Per
Share Consideration”). “Aggregate Consideration” means 15,747,500 shares of FoxWayne Common Stock; |
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(ii) |
all shares
of Continued Company Capital Stock held in treasury by FoxWayne, the Continued Company or any wholly owned subsidiary of FoxWayne
or the Continued Company will be canceled without any conversion thereof and no payment or distribution will be made with respect
thereto; |
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(iii) |
each share of Merger Sub
issued and outstanding immediately prior to the Effective Time will be converted into one share of the Surviving Corporation; |
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(iv) |
certain warrants to acquire
Continued Company Capital Stock (each, a “Continued Company Warrant”) that are identified in the Merger Agreement,
will be assumed by FoxWayne (each, an “Assumed Warrant”). All other warrants of the Continued Company shall be
cancelled or terminated prior to the Effective Time. Each Assumed Warrant will be exercisable for such number of whole shares of
FoxWayne Common Stock (rounded up to the nearest whole share) at the per share exercise price (rounded up to the nearest whole cent)
as set forth in the Consideration Schedule. The number of shares of FoxWayne Common Stock into which an Assumed Warrant is exercisable
shall be based on the Per Share Consideration for the relevant Continued Company Capital Stock into which such Assumed Warrant is
exercisable, and the per share exercise price shall be ratably adjusted; |
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(v) |
no fractional shares of
FoxWayne Common Stock will be issued by virtue of the Merger and any fractional shares otherwise issuable to a holder of the Continued
Company’s securities (after aggregating all fractional shares of FoxWayne Common Stock that otherwise would be received by
such holder) will be rounded down to the nearest whole share of FoxWayne Common Stock. |
Representations
and Warranties
The
parties to the Merger Agreement have agreed to customary representations and warranties for transactions of this type. The representations
and warranties of Clover, or the Continued Company, as applicable, FoxWayne and Merger Sub will not survive the Closing.
Covenants
The
Merger Agreement includes covenants of FoxWayne relating to, among other things, (i) operating its business in the ordinary course, (ii)
disbursement of Trust Account funds, (iii) providing access and information to Clover or the Continued Company, as applicable, and its
Representatives, (iv) restrictions on soliciting, initiating or discussing alternative transaction proposals with third parties and ceasing
discussions regarding alternative transaction proposals, (v) indemnification and insurance; (vi) using reasonable best efforts to cause
FoxWayne Common Stock being issued pursuant to the Merger Agreement to be approved for listing on Nasdaq; and (vii) obtaining an opinion
from a financial advisor that the total consideration to FoxWayne’s stockholders is fair such stockholders from a financial point
of view.
The
Merger Agreement includes covenants of Clover and the Continued Company, as applicable, relating to, among other things, (i) the continuation
of Clover from Ontario to Delaware; (ii) conducting its business in the ordinary course; (iii) providing access and information to FoxWayne
and its Representatives; (iv) not making claims against the Trust Account; (v) restrictions on soliciting, initiating or discussing alternative
transaction proposals with third parties; (vi) delivering audited and unaudited financial statements, as applicable; and (vii) soliciting
written consents from the Continued Company’s stockholders in favor of the adoption and approval of the Merger Agreement and the
transactions contemplated thereby.
The
Merger Agreement also contains additional, customary joint covenants of the parties to, among other things, prepare a Registration Statement
on Form S-4 with respect to the FoxWayne Common Stock issuable under the Merger Agreement, which Form S-4 will contain a proxy statement
of FoxWayne (the “Registration Statement / Proxy Statement”) that includes provisions for approval and/or adoption
of (i) the Business Combination, including the Merger and Merger Agreement, (ii) amendments and restatements of FoxWayne’s charter
and bylaws, (iii) issuance of the Aggregate Consideration pursuant to the Merger Agreement, (iv) FoxWayne’s equity incentive plan,
and (v) certain other proposals at a special meeting of the holders of FoxWayne Common Stock (collectively, the “Proposals”).
Conditions
to Closing
Mutual
The
respective obligations of each of Clover, the Continued Company, FoxWayne and Merger Sub to consummate the Merger are subject to the
satisfaction or waiver, at or prior to the Closing of each of the following conditions:
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(i) |
approval by
FoxWayne stockholders of the Proposals set forth in the Registration Statement / Proxy Statement; and receipt of the requisite written
consent of the Continued Company’s stockholders adopting the Merger Agreement and approving the Merger and other transactions
contemplated by the Merger Agreement; |
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(iii) |
no Governmental Authority
of competent jurisdiction having enacted, issued, promulgated, enforced or entered any Law or Order that is in effect and restrains,
enjoins, makes illegal or otherwise prohibits the consummation of the Merger Agreement and other transactions contemplated thereby; |
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(iv) |
specified consents, registrations,
approvals, clearances, Permits and authorizations from Governmental Entities shall have been obtained; and |
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(v) |
the Registration Statement
/ Proxy Statement having been declared effective by the Securities and Exchange Commission (“SEC”) and no stop
order suspending the effectiveness of the Registration Statement / Proxy Statement being in effect, and no Proceedings for purposes
of suspending the effectiveness of the Registration Statement / Proxy Statement having been initiated or threatened by the SEC. |
FoxWayne
and Merger Sub
The
obligations of FoxWayne and Merger Sub to consummate the Merger are subject to the satisfaction or waiver, at or prior to the Closing
of additional conditions, including, but not limited to, the following:
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(i) |
Clover’s
or the Continued Company’s, as applicable representations and warranties being true and correct to the extent set forth in
the Merger Agreement; |
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(ii) |
Clover or the Continued
Company, as applicable, having complied with or performed in all material respects with all covenants and obligations required by
the Merger Agreement to be complied with or performed by it on or prior to the Closing; |
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(iii) |
no Material Adverse Effect
having occurred on the Continued Company between the date of the Merger Agreement and the Closing; |
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(iv) |
there not being more than
25.0% of dissenting shares of Clover capital stock; |
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(v) |
payment
of all consulting fees (not to exceed, in the aggregate, $500,000) incurred by FoxWayne in connection with the consummation of the
transactions contemplated by the Merger Agreement; and |
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(vi) |
FoxWayne’s board of directors having received
a fairness opinion acceptable to the board. |
Continued
Company
The
obligation of the Continued Company to consummate the Merger is subject to the satisfaction or waiver, at or prior to the Closing of
additional conditions, including, but not limited to, the following:
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(i) |
the representations
and warranties of FoxWayne and Merger Sub being true and correct to the extent set forth in the Merger Agreement; |
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(ii) |
each of FoxWayne and Merger
Sub having complied with or performed in all material respects with all covenants and obligations required by the Merger Agreement
to be complied with or performed by it on or prior to the Closing; |
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(iii) |
no Material
Adverse Effect having occurred on FoxWayne between the date of the Merger Agreement and the Closing; |
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(iv) |
FoxWayne having made all
necessary arrangements with the Trustee to have the funds in the Trust Account disbursed or available to FoxWayne in accordance with
the Trust Agreement and the Merger Agreement, contemporaneously with the Closing; |
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(v) |
FoxWayne having at least
$5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”); |
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(vi) |
The FoxWayne Common Stock
to be issued pursuant to the Merger Agreement being listed or approved for listing on Nasdaq; and |
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(vii) |
receipt by the Continued
Company of the effective resignations of certain directors and executive officers of FoxWayne
as set forth in the Merger Agreement. |
Closing
The
closing of the Merger will occur as promptly as practicable, but in no event later than three Business Days following the satisfaction
or waiver of all of the conditions to Closing.
Termination
The
Merger Agreement may be terminated at any time prior to the consummation of the Merger by mutual written consent of Clover or the Continued
Company, as applicable, and FoxWayne and in certain other limited circumstances, including if the Merger has not been consummated by
January 22, 2023 (the “Outside Date”) (as such date may be extended pursuant to the Merger Agreement).
Either
FoxWayne or the Continued Company may also terminate the Merger Agreement if (i) [certain/the] Proposals fail to receive the requisite
vote for approval at a special meeting of the holders of FoxWayne Common Stock; (ii) a Governmental Authority issues an Order or takes
any other action which restrains, enjoins or otherwise prohibits the Merger or (iii) if (A) any representation or warranty of FoxWayne,
Merger Sub or Clover contained in the Merger Agreement shall be inaccurate or (B) the covenants or obligations of FoxWayne, Merger Sub
or Clover or the Continued Company, as applicable, contained in the Merger Agreement shall have been breached in any material respect;
provided, however, that if an inaccuracy or breach is curable by the breaching party during the 30 calendar day period after the non-breaching
party notifies the breaching party in writing of the existence of such inaccuracy or breach (the “Cure Period”), then
the non-breaching party may not terminate the Merger Agreement as a result of such inaccuracy or breach prior to the expiration of the
Cure Period unless the breaching party is no longer continuing to exercise reasonable best efforts to cure such inaccuracy or breach.
FoxWayne may also terminate the Merger Agreement if (i) a Material Adverse Effect shall have occurred with respect to Clover; (ii) if
Clover fails to obtain, within 30 days from the date of the Merger Agreement (A) payoff letters from any creditors (the “Company
Creditors”), or (B) consent from the Company Creditors to the transactions contemplated by the Merger Agreement, in form and
substance reasonably acceptable to the FoxWayne in its sole and absolute discretion, which consent shall include an agreement to extend
the respective maturity dates of any obligations by Clover to such Company Creditors to a date that is no less than 30 days following
the Outside Date; and (iii) if either (A) the FoxWayne board of directors shall not have received a fairness opinion issued by the financial
advisor acceptable to the board, or (B) the fairness opinion has been withdrawn. In addition, Clover may terminate the Merger Agreement
if a Material Adverse Effect shall have occurred with respect to FoxWayne and its Subsidiaries, taken as a whole.
Effect
of Termination
If
the Merger Agreement is terminated, the Merger Agreement will become void, and there will be no liability under the Merger Agreement
on the part of any party thereto, except as set forth in the Merger Agreement.
A
copy of the Merger Agreement is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference.
The foregoing description of the Merger Agreement and the Proposed Transactions is incomplete and is subject to, and qualified in its
entirety by, reference to the actual Merger Agreement. The Merger Agreement and other agreements described below have been included as
exhibits to this Current Report on Form 8-K to provide security holders with information regarding their terms. They are not intended
to provide any other factual information about FoxWayne, Merger Sub, Clover or the Continued Company, as applicable. In particular, the
assertions embodied in representations and warranties by FoxWayne, Merger Sub and Clover or the Continued Company, as applicable, contained
in the Merger Agreement were made as of a specified date, are subject to important qualifications and limitations agreed to by the parties
in connection with negotiating such agreement, including being qualified by confidential information in the disclosure letters provided
by the parties in connection with the execution of the Merger Agreement, and are subject to standards of materiality applicable to the
contractive parties that may differ from those applicable to security holders. The confidential disclosures contain information that
modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger Agreement. Moreover, certain
representations and warranties in the Merger Agreement were used for the purpose of allocating risk between the parties, rather than
establishing matters as facts. Accordingly, security holders should not rely on the representations and warranties in the Merger Agreement
as characterizations of the actual state of facts about FoxWayne, Merger Sub or Clover or the Continued Company, as applicable. Moreover,
information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which
subsequent information may or may not be fully reflected in FoxWayne’s public disclosures.
Support
Agreements
Clover
Stockholder Support Agreement
Contemporaneously
with the execution of the Merger Agreement, certain officers and directors of Clover delivered Stockholder Support Agreements to FoxWayne.
Under the Stockholder Support Agreement terms, such Clover stockholders agreed to vote in favor of the Merger and the transactions contemplated
by the Merger Agreement. In addition, Clover or the Continued Company, as applicable, agreed to use its best efforts to obtain additional
Stockholder Support Agreements from certain of its larger stockholders. A copy of the form of Stockholder Support Agreement is filed
with this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference. The foregoing description of the
form of Stockholder Support Agreement is incomplete and is subject to, and qualified in its entirety by, reference to the actual agreement.
Sponsor
Support Agreement
Contemporaneously
with the execution of the Merger Agreement, FoxWayne Enterprises Acquisition Sponsor LLC, a Delaware limited liability company (“Sponsor”),
delivered the Sponsor Support Agreement, pursuant to which, among other things, Sponsor agreed to vote in favor of the Merger and the
transactions contemplated by the Merger Agreement. A copy of the form of Sponsor Support Agreement is filed with this Current Report
on Form 8-K as Exhibit 10.2 and is incorporated herein by reference. The foregoing description of the form of Sponsor Support
Agreement is incomplete and is subject to, and qualified in its entirety by, reference to the actual agreement.
FoxWayne
Stockholder Support Agreement
Contemporaneously
with the execution of the Merger Agreement, certain officers and directors of FoxWayne delivered Parent Support Agreements, pursuant
to which, among other things, such FoxWayne stockholders agreed to vote in favor of the Merger and the transactions contemplated by the
Merger Agreement. In addition, FoxWayne agreed to use its best efforts to obtain additional Parent Support Agreements from certain of
its stockholders. A copy of the form of Parent Support Agreement is filed with this Current Report on Form 8-K as Exhibit 10.3 and
is incorporated herein by reference. The foregoing description of the form of Parent Support Agreement is incomplete and is subject to,
and qualified in its entirety by, reference to the actual agreement.
Registration
Rights Agreement
In
connection with the Closing, Clover, FoxWayne, and certain of their respective stockholders will enter into a registration rights agreement
(the “Registration Rights Agreement”). Following the Business Combination of FoxWayne and the Continued Company (together
with their subsidiaries, the “Combined Company”), pursuant to the Registration Rights Agreement, the Combined Company
will be required to file a registration statement covering the resale of registrable securities held by the stockholders party thereto.
A copy of the form of Registration Rights Agreement is filed with this Current Report on Form 8-K as Exhibit 10.4 and is incorporated
herein by reference. The foregoing description of the Registration Rights Agreement is incomplete and is subject to, and qualified in
its entirety by, reference to the form of the Registration Rights Agreement.