| Item 1.01. |
Entry into a Material Definitive Agreement. |
Business Combination Agreement
On June 22, 2023,
Banyan Acquisition Corporation (the “Company”), Panther Merger Sub Inc., a Delaware corporation and a wholly owned
subsidiary of the Company (“Merger Sub”) and Pinstripes, Inc., a Delaware corporation (“Pinstripes”)
entered into a Business Combination Agreement (the “Agreement”). Pinstripes, Merger Sub and the Company are collectively
referred to as the “Parties.”
Pinstripes is a best-in-class
experiential dining and entertainment brand combining bistro, bowling, bocce and private event space. Pinstripes provides a “home
away from home” where guests can celebrate life while enjoying delicious food, entertainment and socializing. Despite the increase
in virtual connectivity over the last several years, people feel less connected than ever before and are seeking ways to bring back the
human-to-human connections that have been lost. Pinstripes addresses this problem by offering curated experiences to create meaningful
connections, and Pinstripes sits at the confluence of three dynamic markets with broad consumer appeal: casual dining, entertainment and
private events.
The Business Combination
Pursuant to the Agreement,
it is anticipated that (a) Merger Sub shall merge with an into Pinstripes (the “Merger”), with Pinstripes being
the surviving corporation of the Merger (Pinstripes, in its capacity as the surviving company of the Merger, the “Surviving Company”),
and as a result of which the Surviving Company will become a wholly owned subsidiary of the Company.
The Merger and the other
transactions contemplated by the Agreement are hereinafter referred to as the “Business Combination.” The Company
intends to file a Registration Statement on Form S-4 as promptly as reasonably practicable and it is currently anticipated that the
Business Combination will close in the fourth quarter of 2023, following the receipt of the required approval by the Company’s stockholders
and the fulfillment or waiver of other closing conditions.
Business Combination Consideration
In accordance with the
terms and subject to the conditions of the Agreement, at the effective time of the Merger, each outstanding share of common stock, par
value $0.01 of Pinstripes (the “Pinstripes Common Stock”) (including shares of Pinstripes Common Stock resulting from
the conversion of preferred stock of Pinstripes and excluding Dissenting Shares (as defined in the Agreement), treasury shares and Series I
Convertible Preferred Stock of Pinstripes) will be cancelled and extinguished and converted into the right to receive the number of shares
of common stock, par value $0.0001 per share of the Company (the “Company Common Stock”) determined in accordance with
the Agreement based on a pre-money equity value of Pinstripes of $429,000,000 and a price of $10 per share of Company Common Stock. The
Series I Convertible Preferred Stock of Pinstripes will be converted into Pinstripes Common Stock immediately prior to the Closing
(as defined below) and, at the effective time of the Merger, such resulting shares of Pinstripes Common Stock will be cancelled and extinguished
and converted into the right to receive the number of shares of Company Common Stock determined in accordance with the Agreement based
on an exchange ratio of 2.5 shares of Company Common Stock for each share of Pinstripes Common Stock resulting from the conversion of the Series I Preferred Stock of Pinstripes immediately prior to Closing.
Representations and Warranties; Covenants
The Agreement contains
customary representations and warranties and covenants from each of the Parties, including certain restrictive covenants applicable to
Pinstripes. The Parties have agreed to take all actions necessary or appropriate such that effective immediately after the effective time
of the Merger the Company’s board of directors will be divided into three classes and be composed of a total of seven (7) directors,
which directors shall include one (1) individuals designated by the Company and six (6) individuals designated by Pinstripes.
The Parties may also enter into additional equity or equity-linked financing commitments for up to $57 million of gross proceeds (the
“PIPE Investment”) at or prior to the closing of the Business Combination (the “Closing”).
Conditions to Each Party’s Obligations
The obligations of Parties
to consummate the transactions contemplated by the Agreement are subject to the satisfaction or waiver (where permissible) at or prior
to the Closing of the following conditions: (i) each applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, relating to the Business Combination shall have expired, been terminated or obtained (or be deemed, by applicable
law, to have been obtained), as applicable; (ii) there shall not be any applicable law in effect that makes the consummation of the
transactions contemplated by the Agreement illegal or any order in effect preventing the consummation of the Business Combination; (iii) the
required Company stockholder approval shall have been obtained; (iv) the Company’s common stock to be issued in connection
with the transactions contemplated by the Agreement shall be listed or have been approved for listing on NYSE or Nasdaq, subject only
to official notice of issuance thereof; (v) the certificate of merger shall have been accepted for filing by the Delaware Secretary
of State; and (vi) the Pinstripes required approval shall have been obtained.
The obligations of Pinstripes
to consummate the transactions contemplated by the Agreement are further subject to the satisfaction (or written waiver by Pinstripes)
at or prior to the Closing of the following conditions: (i) certain representations and warranties of the Company and Merger Sub
shall be true and correct as of the date of Closing as if made at and as of such time; (ii) each of the Company and Merger Sub shall
have performed in all material respects its obligations under the Agreement required to be performed by it at or prior to the Closing;
(iii) an authorized officer of the Company shall have executed and delivered to the Pinstripes a certificate as to compliance with
certain conditions; (iv) the receipt of certain closing deliverables; and (v) the aggregate
cash proceeds from the Company’s trust account (after deducting any amounts paid to the Company’s stockholders that exercise
their redemption rights in connection with the Business Combination), together with the gross proceeds from the PIPE Investment,
the gross proceeds from the Bridge Financing (as defined below) and 50% of the gross amount of any additional financing in connection
with the Business Combination shall be equal to or greater than $75,000,000.
The obligations of the
Company and the Merger Sub to consummate the transactions contemplated by the Agreement are further subject to the satisfaction (or written
waiver by the Company) at or prior to the Closing of the following conditions: (i) certain representations and warranties of Pinstripes
shall be true and correct as of the date of Closing as if made at and as of such time; (ii) Pinstripes shall have performed in all
material respects its obligations under the Agreement required to be performed by it at or prior to the date of Closing; (iii) the
Company shall have received certain closing deliveries; (iv) there shall not have occurred a Material Adverse Effect (as defined
in the Agreement) since the date of the Agreement; and (v) an authorized officer of Pinstripes shall have executed and delivered
a certificate as to its compliance with certain conditions.
Termination
The Agreement may be
terminated at any time at or prior to the Closing: (i) in writing, by mutual consent of the Company and Pinstripes; (ii) by
either the Company or Pinstripes by written notice to the other Party if any final, non-appealable, order is in effect prohibiting the
consummation of the transactions contemplated by the Agreement or any final, non-appealable, law has been adopted that makes consummation
of the transactions contemplated by the Agreement illegal; provided, that the right to terminate the Agreement as described in this clause
(ii) shall not be available to any Party whose breach of any representation, warranty, covenant or agreement of the Agreement results
in or causes such final, non-appealable order or law; (iii) by either the Company or Pinstripes if the Closing does not
occur on or prior to December 24, 2023; provided, that the right to terminate the Agreement as described in this clause (ii) shall
not be available to any Party whose breach of any representation, warranty, covenant or agreement of the Agreement results in or causes
the failure of the Closing to occur by such date; (iv) by the Company, by written notice to Pinstripes, if there has been a breach
of any representation, warranty, covenant or other agreement and such breach or inaccuracy would result in a failure of certain closing
conditions to be satisfied upon Closing, (v) by Pinstripes, by written notice to the Company, if there has been a material breach
of any representation, warranty, covenant or other agreement made by the Company or Merger Sub in the Agreement and such breach or inaccuracy
would result in a failure of certain closing conditions to be satisfied upon Closing; (vi) by the Company if the written consent
from Pinstripes’ stockholders is not delivered within three full business days after the Company provides Pinstripes with written
notice that the Registration Statement/Proxy Statement is declared effective; (vii) by Pinstripes if at any time prior to Closing
the board of directors of the Company changes its recommendation that Company stockholders vote in favor of the transactions contemplated
by the Agreement; or (viii) by Pinstripes if the Parties mutually determine in writing that the Merger is not expected to qualify
as a “reorganization” within the meaning of Section 368(a) of the U.S. Internal Revenue Code of 1986 and the Parties
are unable to mutually agree on an alternative transaction structure.
The Agreement also provides that, in case the Agreement is terminated (unless by Pinstripes due to a Willful and Material Breach (as defined
and further detailed in the Agreement)), the Company and Pinstripes will share any qualifying expenses relating to the
transaction in the following manner: (i) first, the Company will bear and pay up to $400,000, and (ii) second, Pinstripes will bear and
pay up to $1,500,000 of any remaining expenses that qualify for expense reimbursement. Qualifying expenses are any SPAC Expenses (as defined
in the Agreement) that are incurred on and following May 1, 2023, with the exception of fees and expenses of legal counsel to the Company.
A copy of the Agreement
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 Agreement is qualified in its entirety by reference thereto. The Agreement contains representations, warranties and
covenants that the respective Parties made to each other as of the date of the Agreement or other specific dates. The assertions embodied
in those representations, warranties and covenants were made for purposes of the contract among the respective Parties and are subject
to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The representations,
warranties and covenants in the Agreement 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 stockholders and were
used for the purpose of allocating risk among the Parties rather than establishing matters as facts. The Company believes that these schedules
do not contain information that is material to an investment or voting decision.
Sponsor Letter Agreement
Concurrently with the
execution of the Agreement, the Company, Banyan Acquisition Sponsor LLC, a Delaware Limited Liability Company (the “Sponsor”),
George Courtot, Bruce Lubin, Otis Carter, Kimberley Annette Rimsza, Matt Jaffee and Brett Biggs (collectively, the “Sponsor Parties”)
and Pinstripes, entered into a Letter Agreement (the “Sponsor Letter Agreement”), pursuant to which, among other things, the
Sponsor Parties have agreed to (i) vote in favor of all SPAC Stockholder Voting Matters (as such term is defined in the Agreement)
and the transactions contemplated thereby, (ii) waive the anti-dilution or similar protections with respect to the shares of Class B
common stock, par value $0.0001 per share of the Company (the “Class B Shares”) held by the Sponsor Parties, (iii) not
redeem any of their shares in connection with the vote to approve the Business Combination and (iv) not further amend or modify the
letter agreement, dated as of January 19, 2022, by and among the Company, the Sponsor and other parties thereto (the “Prior
Letter Agreement”). Additionally, each of the Sponsor Parties acknowledged that the Prior Letter Agreement would continue to
be in effect and would survive the consummation of the Business Combination; provided, however, that effective from the Closing, the lock-up
period contained in Section 7 of the Prior Letter Agreement would be shortened to six months from the Closing.
In addition, the Sponsor
Parties agreed that two-thirds of the Class B Shares (or Class A common stock of the Company if converted) held by the Sponsor
Parties (excluding up to 1,000,000 shares that will be transferred by the Sponsor to investors pursuant to certain non-redemption agreements
entered into by the Sponsor and up to 2,000,000 shares that may be transferred by the Sponsor to investors in the Bridge Financing and
the PIPE Investment, the “Vesting Shares”) shall be subject to vesting conditions and forfeiture as follows: 50% of
the Vesting Shares shall vest and no longer be subject to forfeiture if the volume weighted average
share price of the Company Common Stock equals or exceeds $12.00 per share for any 20 trading days within any consecutive 30-trading day period
commencing five months after the Closing; and (ii) 100% of the Vesting Shares shall vest and no longer be subject to forfeiture
if the volume weighted average share price of the Company Common Stock equals or exceeds $14.00
per share for any 20 trading days within any consecutive 30-trading day period commencing five months after the Closing.
Any Vesting Shares that remain unvested upon the five-year anniversary of the Closing will be forfeited by the Sponsor Parties.
The foregoing description
of the Sponsor Letter Agreement is subject to and qualified in its entirety by reference to the full text of the Sponsor Letter Agreement,
a copy of which is attached as Exhibit 10.1 hereto and the terms of which are incorporated herein by reference.
Registration Rights Agreement
At the closing of the
Business Combination, it is anticipated that the Company, the Sponsor Parties and certain equityholders of Pinstripes will enter into
an Amended and Restated Registration Rights Agreement, pursuant to which, among other things, the parties thereto will be granted customary
registration rights with respect to shares of the post-Business Combination company.
Security Holder Support Agreement
Concurrently with the
execution of the Agreement, the Company, Pinstripes and certain security holders of Pinstripes (collectively, the “Pinstripes
Holders”) entered into security holder support agreements (the “Support Agreements”), pursuant to which the
Pinstripes Holders have agreed to, among other things, (i) waive any appraisal rights or dissenter rights in connection with the
Business Combination, (ii) as soon as reasonably practicable following the Registration Statement (as defined below) being declared
effective by the Securities and Exchange Commission (the “SEC”), consent to and vote in favor of the Agreement and
the transactions contemplated thereby (including the Merger) and (iii) not transfer any Company Common Stock such Pinstripes Holders
will be issued in connection with the Business Combination for a period of six months following the Closing. The transfer restrictions
for the Pinstripes Holders will also lapse prior to their expiration upon the occurrence of certain events, including the closing price
of the Company Common Stock reaching or exceeding $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing.
The foregoing description
of the Support Agreement is subject to and qualified in its entirety by reference to the full text of the Support Agreement, a copy of
which is attached as Exhibit 10.2 hereto and the terms of which are incorporated herein by reference.
Lockup Agreement
Concurrently with the
execution of the Agreement, the Company, Pinstripes and certain security holders of Pinstripes (the “Security Holders”)
entered into a lockup agreement (the “Lockup Agreement”), pursuant to which each Security Holder agreed that it, he
or she will not transfer any Company Common Stock such Security Holder will be issued in connection with the Business Combination or any
warrants of the Company issued to such Security Holder at the time of the initial public offering of the Company for a period of six months
following the Closing. The transfer restrictions for the Security Holders will also lapse prior to their expiration upon the occurrence
of certain events, including the closing price of the Company Common Stock reaching or exceeding $12.00 per share (as adjusted for stock
splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing
at least 150 days after the Closing. Additionally, the transfer restrictions contain customary exceptions, including for estate planning
transfers, affiliates transfers, certain open market transfers and transfers upon death or by will.
The foregoing description
of the Lockup Agreement is subject to and qualified in its entirety by reference to the full text of the Lockup Agreement, a copy of which
is attached as Exhibit 10.3 hereto and the terms of which are incorporated herein by reference.
Director Designation
Agreement
At the closing of the
Business Combination, the Company’s board of directors will be composed of a total of seven (7) directors and the Company and
Mr. Dale Schwartz, the chief executive officer of Pinstripes, will enter into a director designation agreement (the “Director
Designation Agreement”), pursuant to which, among other things, Mr. Schwartz will have the right to designate: (i) four
directors for election to the board of the post-Business Combination company so long as he or any trusts or family partnerships he controls
(collectively, the “Schwartz Group”) beneficially own a number of shares equal to at least 70% of the number of shares of
Company Common Stock the members of the Schwartz Group are issued in connection with the Business Combination, (ii) three directors
for election to the board of the post-Business Combination company so long as the members of the Schwartz Group hold 50% of the shares
of Company Common Stock the members of the Schwartz Group are issued in connection with the Business Combination, (iii) two directors
for election to the board of the post-Business Combination company so long as the members of the Schwartz Group hold 25% of the shares
of Company Common Stock the members of the Schwartz Group are issued in connection with the Business Combination and (iv) one director
for election to the board of the post-Business Combination company so long as the members of the Schwartz Group hold 10% of the shares
of Company Common Stock the members of the Schwartz Group are issued in connection with the Business Combination. Pursuant to the Director
Designation Agreement, Mr. Schwartz will also have the right to designate a majority of the members of each committee of the board
for so long as Mr. Schwartz has the ability to designate at least four individuals for nomination to the board. At all other times
that Mr. Schwartz has the ability to designate at least one individual for nomination to the board, Mr. Schwartz will have the
ability to designate at least one-third, but in no event fewer than one, of the members of each committee. Pursuant to the Director Designation
Agreement, the post-Business Combination company will not increase or decrease the size of the board or take certain other actions that
might reasonably be deemed to adversely affect any of Mr. Schwartz’ rights thereunder without the consent of Mr. Schwartz
so long as Mr. Schwartz has the ability to designate at least one individual for nomination to the board. Each of Mr. Schwartz’s
designees (other than himself) must qualify as independent directors under the rules of the New York Stock Exchange (or, if not the
New York Stock Exchange, the principal U.S. national securities exchange upon which the Company Common Stock is then listed).
The foregoing description
of the Director Designation Agreement is subject to and qualified in its entirety by reference to the full text of the form of Director
Designation Agreement, of which is attached as Exhibit 10.4 hereto, and the terms of which are incorporated herein by reference.
Bridge Financing
Concurrently with the
execution of the Agreement, affiliates of the Sponsor entered into a securities purchase agreement with Pinstripes to provide $18.0 million
of bridge financing in the form of Series I Convertible Preferred Stock of Pinstripes (the “Bridge Financing”).
The shares of Series I Convertible Preferred Stock received by such affiliates will convert, pursuant to the terms of the Agreement,
into shares of Company Common Stock in connection with the consummation of the Business Combination.
