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Form 8-K CENAQ Energy Corp. For: Aug 12

August 12, 2022 4:43 PM EDT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 12, 2022

 

CENAQ Energy Corp.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-40743

 

85-1863331

(State or other jurisdiction of
incorporation or organization)
  (Commission File Number)   (I.R.S. Employer
Identification Number)
 

 

4550 Post Oak Place Dr., Suite 300

Houston, TX

 

77027

(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (713) 820-6300

 

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 to the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Units, each consisting of one share of Class A common stock and three-quarters of one warrant   CENQU   The NASDAQ Stock Market LLC
         
Class A common stock, par value $0.0001 per share   CENQ   The NASDAQ Stock Market LLC
         
Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share   CENQW   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 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Business Combination Agreement

 

On August 12, 2022, CENAQ Energy Corp., a Delaware corporation (“CENAQ”), Verde Clean Fuels OpCo, LLC, a Delaware limited liability company and wholly-owned subsidiary of CENAQ (“OpCo”), and, for a limited purpose, CENAQ Sponsor LLC, a Delaware limited liability company (“Sponsor”), entered into a business combination agreement (as the same may be amended from time to time, the “Business Combination Agreement”) with Bluescape Clean Fuels Holdings, LLC, a Delaware limited liability company (“Holdings”), and Bluescape Clean Fuels Intermediate Holdings, LLC, a Delaware limited liability company (the “Company” and, together with Holdings, the “Bluescape Parties”). The transactions contemplated by the Business Combination Agreement are collectively referred to herein as the “business combination.”

 

Structure of the Business Combination

 

Pursuant to the Business Combination Agreement, at the closing of the business combination (the “Closing”) on the date the business combination is consummated (the “Closing Date”):

 

(a)(i) CENAQ will contribute to OpCo (A) all of its assets (excluding its interests in OpCo and the aggregate amount of cash proceeds required to satisfy any exercise by stockholders of CENAQ of their redemption rights (the “Redemption Rights”) provided for in CENAQ’s third amended and restated certificate of incorporation, dated August 5, 2021 (the “Charter”) (the “Redemption Amount”)), including, for the avoidance of doubt, an amount of funds equal to (x) funds held in the trust account (the “Trust Account”) (net of the Redemption Amount), plus (y) net cash proceeds from the PIPE (as defined below) or any amounts received from entering into additional subscription agreements pursuant to the Business Combination Agreement (the “Additional Financing”), plus (z) any cash held by CENAQ in any working capital or similar account; and (B) 22,500,000 newly issued shares of Class C common stock, par value $0.0001 per share (the “Class C Common Stock”), of CENAQ (such shares, the “Holdings Class C Shares”) and (ii) in exchange therefor, OpCo will issue to CENAQ a number of Class A common units of OpCo (the “Class A OpCo Units”) equal to the number of total shares of Class A common stock, par value $0.0001 per share (the “Class A Common Stock” and, together with the Class C Common Stock, the “Common Stock”), of CENAQ, issued and outstanding immediately after the Closing (taking into account the PIPE and following the exercise of the Redemption Rights) (such transactions, the “SPAC Contribution”); and

 

(b)immediately following the SPAC Contribution, (i) Holdings will contribute to OpCo 100% of the issued and outstanding limited liability company interests of the Company and (ii) in exchange therefor, OpCo will transfer to Holdings (A) 22,500,000 Class C common units of OpCo (the “Class C OpCo Units” and, together with the Class A OpCo Units, the “OpCo Units”) and (B) the Holdings Class C Shares (such transactions, the “Holdings Contribution”).

 

In connection with Closing, CENAQ will change its name to Verde Clean Fuels, Inc. (“Verde Inc.”). The combined company will be organized in an “Up-C” structure in which the combined company’s only direct assets will consist of equity interests in OpCo, and OpCo will own the business of the Company and its subsidiaries.

 

Each share of Class C Common Stock has no economic rights but entitles its holders to one vote on all matters to be voted on by stockholders generally. Holders of shares of Class A Common Stock and shares of Class C Common Stock will vote together as a single class on all matters presented to CENAQ’s stockholders for their vote or approval, except as otherwise required by applicable law or by CENAQ’s fourth amended and restated certificate of incorporation to be adopted in connection with the Closing. CENAQ does not intend to list any shares of Class C Common Stock on any exchange.

 

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Earn-Out

 

Following the Closing, and as additional consideration for the Holdings Contribution, CENAQ will cause OpCo to transfer to Holdings up to 3,500,000 Class C OpCo Units and a corresponding number of shares of Class C Common Stock (as adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or the like change or transaction with respect to the Class C OpCo Units or Class C Common Stock occurring on or after the Closing) (the “Earn Out Equity”), within five (5) business days after the occurrence of a triggering event. A triggering event occurs on the date on which the CENAQ volume-weighted average price for twenty (20) trading days within any period of thirty (30) consecutive trading days within the period beginning on the Closing Date and ending on the earlier of the five-year anniversary of such date or the date a Company Sale (as defined in the Business Combination Agreement) is consummated (the “Earn Out Period”) is greater than or equal to $15.00 or $18.00 (“Triggering Event I” and “Triggering Event II,” respectively). Upon the occurrence of Triggering Event I within the Earn Out Period, an aggregate of 1,750,000 Class C OpCo Units (and a corresponding number of shares of Class C Common Stock) (as adjusted as noted above) will be transferred to Holdings, and upon the occurrence of Triggering Event II within the Earn Out Period, an aggregate of 1,750,000 Class C OpCo Units (and a corresponding number of shares of Class C Common Stock) (as adjusted as noted above) will be transferred to Holdings.

 

If there is a Company Sale during the Earn Out Period pursuant to which CENAQ or its stockholders have the right to receive consideration implying a value per share of Class A Common Stock (as determined in good faith by the CENAQ Board) (as defined below) that is greater than or equal to the applicable price specified in Triggering Event I or Triggering Event II, any Earn Out Equity that has not previously transferred will be deemed to have been transferred immediately prior to the closing of such Company Sale, and Holdings will be eligible to participate in such Company Sale with respect to the Earn Out Equity deemed transferred on the same terms, and subject to the same conditions, as apply to the holders of Class A Common Stock generally. Upon consummation of a Company Sale, the Earn Out Period will terminate and Holdings will have no further right to receive or earn the Earn Out Equity other than in accordance with Triggering Event I or Triggering Event II, as applicable, with respect to such Company Sale.

 

Incentive Equity Plan

 

Prior to filing the definitive proxy statement, the board of directors of CENAQ (the “CENAQ Board”) will approve and adopt an equity incentive plan (the “Incentive Equity Plan”) in the form mutually agreed upon by the Company and CENAQ to be effective as of one day prior to the Closing Date. The Incentive Equity Plan will provide for an initial share reserve of 10% of the number of shares of Common Stock outstanding following the Closing.

 

Representations, Warranties and Covenants

 

The parties to the Business Combination Agreement have made representations, warranties and covenants that are customary for transactions of this nature.

 

Conditions to Closing

 

The obligations of the Bluescape Parties, CENAQ and OpCo to consummate the business combination are subject to the satisfaction or waiver (where permissible) at or prior to the Closing of each of the following mutual conditions:

 

the business combination and certain required proposals shall have been approved and adopted by the requisite affirmative vote of the stockholders of CENAQ in accordance with the proxy statement to be filed by CENAQ in connection with the business combination, the Delaware General Corporation Law (the “DGCL”), the Charter and CENAQ’s bylaws (the “Organizational Documents”) and the rules and regulations of the Nasdaq Stock Market LLC (“Nasdaq”) and, if applicable, the SPAC Extension Proposal (as defined in the Business Combination Agreement) shall have been approved and adopted by the requisite affirmative vote of the stockholders of CENAQ in accordance with the proxy statement filed in connection therewith, the DGCL and the Organizational Documents;

 

no governmental authority shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, judgment, decree, executive order or award which is then in effect and has the effect of making the business combination illegal or otherwise prohibiting consummation of the business combination;

 

all required filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) shall have been completed and any applicable waiting period (and any extension thereof) applicable to the consummation of the business combination under the HSR Act shall have expired or been terminated;

 

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the shares of Class A Common Stock (including shares issuable upon the exchange, as set forth in the A&R LLC Agreement, of one or more Class C OpCo Units for shares of Class A Common Stock on a one-for-one basis, together with the cancellation of the related shares of Class C Common Stock (each, an “OpCo Holder Exchange”)) shall be listed on Nasdaq, or another national securities exchange mutually agreed to by the parties, as of the Closing Date; and

 

CENAQ shall have at least $5,000,001 of net tangible assets after giving effect to the business combination and following the exercise of Redemption Rights in accordance with the Organizational Documents.

 

The obligations of CENAQ and OpCo to consummate the business combination are subject to the satisfaction or waiver (where permissible) at or prior to the Closing of the following additional conditions:

 

the representations and warranties of the Company and the subsidiaries of the Company contained in the sections titled (a) “Organization and Qualification; Subsidiaries,” (b) “Organizational Documents,” (c) “Capitalization,” (d) “Authority Relative to this Agreement,” (e) “No Conflict; Required Filings and Consents,” (f) “Absence of Certain Changes or Events,” and (g) “Brokers” in the Business Combination Agreement shall each have been true and correct in all respects as of the date of the Business Combination Agreement and as of the Closing Date, except to the extent that any such representation or warranty expressly was made as of an earlier date, in which case such representation and warranty shall have been true and correct as of such earlier specified date. The other representations and warranties of the Company contained in the Business Combination Agreement shall have been true and correct in all respects (without giving effect to any “materiality,” “Company Material Adverse Effect” (as defined in the Business Combination Agreement) or similar qualifiers contained in any such representations and warranties) as of the date of the Business Combination Agreement and as of the Closing Date as though made on and as of such date, except to the extent that any such representation or warranty expressly was made as of an earlier date, in which case such representation and warranty shall have been true and correct as of such earlier date, except where the failures of any such representations and warranties to be so true and correct would not have a Company Material Adverse Effect;

 

each Bluescape Party shall have performed or complied in all material respects with all agreements and covenants required by the Business Combination Agreement to be performed or complied with by such Bluescape Party on or prior to the Closing;

 

the Company shall have delivered to CENAQ an officer’s certificate, dated the date of the Closing, signed by the Chief Executive Officer of the Company, certifying as to the satisfaction of certain conditions;

 

no Company Material Adverse Effect shall have occurred after the date of the Business Combination Agreement; and

 

Holdings shall have delivered to CENAQ certain specified documents, duly executed by the Bluescape Parties as applicable.

 

The obligations of Holdings and the Company to consummate the business combination are subject to the satisfaction or waiver (where permissible) at or prior to the Closing of the following additional conditions:

 

the representations and warranties of CENAQ and OpCo contained in the sections titled (a) “Corporate Organization,” (b) “Organizational Documents,” (c) “Authority Relative to this Agreement,” (d) “No Conflict; Required Filings and Consents,” and (e) “SPAC Trust Fund” in the Business Combination Agreement shall each have been true and correct in all respects as of the date of the Business Combination Agreement and as of the Closing Date, except to the extent that any such representation or warranty expressly was or is made as of an earlier date, in which case such representation and warranty shall have been true and correct as of such earlier specified date. The other representations and warranties of CENAQ and OpCo contained in the Business Combination Agreement shall have been true and correct in all respects (without giving effect to any “materiality,” “SPAC Material Adverse Effect” (as defined in the Business Combination Agreement) or similar qualifiers contained in any such representations and warranties), as of the date of the Business Combination Agreement and as of the Closing Date as though made on and as of such date, except to the extent that any such representation or warranty expressly was made as of an earlier date, in which case such representation and warranty shall have been true and correct as of such earlier date, except where the failures of any such representations and warranties to be so true and correct would not have a SPAC Material Adverse Effect;

 

each of CENAQ and OpCo shall have performed or complied in all material respects with all agreements and covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Closing, and CENAQ’s expenses incurred in connection with its IPO (as defined below) and the business combination shall not exceed $9,375,000 plus additional fees related to the Subscription Agreements (as defined below);

 

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CENAQ shall have delivered to the Company an officer’s certificate, dated the date of the Closing, signed by the Chief Executive Officer of CENAQ, certifying as to the satisfaction of certain conditions;

 

the gross proceeds from the PIPE shall not be less than $80,000,000 (including any Additional Financing contemplated under the Business Combination Agreement, the “Aggregate Private Placements Amounts”), provided that to the extent funds contained in the Trust Account immediately prior to Closing (after giving effect to the exercise of the Redemption Rights) exceed $17,420,000, each $10.00 increment of such excess funds shall reduce the required Aggregate Private Placements Amount by $10.00 up to a maximum reduction of $20,000,000;

 

no SPAC Material Adverse Effect shall have occurred after the date of the Business Combination Agreement;

 

CENAQ shall have made all necessary and appropriate arrangements with Continental Stock Transfer & Trust Company, acting as trustee, to have all of the funds in the Trust Account disbursed to CENAQ immediately prior to the Closing, and all such funds released from the Trust Account shall be available for immediate use to CENAQ in respect of all or a portion of certain payment obligations set forth in the Business Combination Agreement and the payment of CENAQ’s fees and expenses incurred in connection with the Business Combination Agreement and the business combination; and

 

CENAQ and OpCo shall have delivered to Holdings certain specified documents, duly executed as applicable.

 

Termination

 

The Business Combination Agreement may be terminated and the business combination may be abandoned at any time prior to the Closing, notwithstanding any requisite approval and adoption of the Business Combination Agreement and the business combination by the stockholders of the Company or the stockholders of CENAQ, as follows:

 

by mutual written consent of CENAQ and the Company;

 

by CENAQ or the Company, if (i) the Closing has not occurred prior to the date that is 270 days from signing (the “Outside Date”); provided, however, that the Business Combination Agreement may not be terminated by or on behalf of any party that either directly or indirectly through its affiliates is in breach or violation of any representation, warranty, covenant, agreement or obligation contained therein and such breach or violation is the principal cause of the failure of a condition set forth in the Business Combination Agreement on or prior to the Outside Date; (ii) any governmental authority in the United States has enacted, issued, promulgated, enforced or entered any injunction, order, decree or ruling (whether temporary, preliminary or permanent) which has become final and nonappealable and has the effect of making consummation of the business combination illegal or otherwise preventing or prohibiting consummation of the business combination; or (iii) any of the proposals put to CENAQ’s stockholders at the stockholders’ meeting (subject to any adjournment, postponement or recess of such meeting) fail to receive the requisite vote for approval; provided, however, that the Business Combination Agreement may not be terminated pursuant to clause (iii) by or on behalf of CENAQ if, directly or indirectly, through its affiliates, CENAQ is in breach or violation of any representation, warranty, covenant, agreement or obligation contained in the Business Combination Agreement and such breach or violation is the principal cause of the failure by CENAQ to receive such requisite vote for approval;

 

by CENAQ if there is an occurrence of a material breach of any representation, warranty, covenant or agreement on the part of the Bluescape Parties set forth in the Business Combination Agreement, or if any representation or warranty of the Company has become untrue, in either case, such that certain conditions set forth in the Business Combination Agreement would not be satisfied (a “Terminating Bluescape Breach”); provided that CENAQ has not waived such Terminating Bluescape Breach and CENAQ and OpCo are not then in material breach of their representations, warranties, covenants or agreements in the Business Combination Agreement; provided further that, if such Terminating Bluescape Breach is curable by such Bluescape Party, CENAQ may not terminate the Business Combination Agreement under this proviso for so long as the applicable Bluescape Party continues to exercise its reasonable best efforts to cure such breach, unless such breach is not cured by the earlier of thirty (30) days after notice of such breach is provided by CENAQ to the Bluescape Parties and the Outside Date; or

 

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by the Company if there is an occurrence of a material breach of any representation, warranty, covenant or agreement on the part of CENAQ and OpCo set forth in the Business Combination Agreement, or if any representation or warranty of CENAQ and OpCo will have become untrue, in either case such that certain conditions set forth in the Business Combination Agreement would not be satisfied (a “Terminating SPAC Breach”); provided that Holdings has not waived such Terminating SPAC Breach and the Bluescape Parties are not then in material breach of their representations, warranties, covenants or agreements in the Business Combination Agreement; provided, however, that, if such Terminating SPAC Breach is curable by CENAQ or OpCo, Holdings may not terminate the Business Combination Agreement under this proviso for so long as CENAQ and OpCo continue to exercise their reasonable best efforts to cure such breach, unless such breach is not cured by the earlier of thirty (30) days after notice of such breach is provided by CENAQ to the Bluescape Parties and the Outside Date.

 

Effect of Termination

 

If the Business Combination Agreement is terminated pursuant to one of the events described above, such agreement will forthwith become void, and there will be no liability under the Business Combination Agreement on the part of any party to the Business Combination Agreement, except as set forth in the applicable provisions of the Business Combination Agreement or in the case of fraud or any willful and material breach of the Business Combination Agreement by a party thereto.

 

A copy of the Business Combination Agreement is filed as an exhibit to this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference. The foregoing description of the Business Combination Agreement is qualified in its entirety by reference to the full text of the Business Combination Agreement filed with this Current Report on Form 8-K. The Business Combination Agreement is included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about CENAQ, the Company or the other parties thereto. In particular, the assertions embodied in representations and warranties by CENAQ, Holdings, the Company and OpCo contained in the Business Combination Agreement are qualified by information in the disclosure schedules provided by the parties in connection with the signing of the Business Combination Agreement. These disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Business Combination Agreement. Moreover, certain representations and warranties in the Business Combination Agreement were used for the purpose of allocating risk between the parties, rather than establishing matters as facts. Accordingly, investors and security holders should not rely on the representations and warranties in the Business Combination Agreement as characterizations of the actual state of facts about CENAQ, Holdings, the Company or OpCo.

 

Sponsor Letter

 

In connection with the execution of the Business Combination Agreement, on August 12, 2022, Sponsor entered into a letter agreement with the Company, Holdings and CENAQ (the “Sponsor Letter”), pursuant to which, among other things, Sponsor agreed to (i) forfeit 2,475,000 of its private placement warrants, (ii) waive its anti-dilution rights with respect to any shares of Class B common stock, par value $0.0001 per share, of CENAQ (“Founder Shares”) owned by it in connection with the consummation of the business combination, (iii) comply with the lock-up provisions in the Letter Agreement, dated August 12, 2021, by and among CENAQ, Sponsor and CENAQ’s directors and officers (collectively, the “Insiders”), pursuant to which the Insiders agreed not to transfer any Founder Shares (or shares of Class A Common Stock issuable upon conversion of such Founder Shares in connection with the Closing) until the earlier of (A) six months after the completion of CENAQ’s initial business combination or (B) subsequent to the business combination, (x) if the last sale price of the Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any twenty (20) trading days within any thirty (30) consecutive trading day period commencing at least seventy-five (75) days after CENAQ’s initial business combination or (y) the date on which CENAQ completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of CENAQ’s stockholders having the right to exchange their shares of Class A Common Stock for cash, securities or other property (the “Lock-Up”), (iv) vote all of its shares of Class A Common Stock and Founder Shares in favor of the adoption and approval of the Business Combination Agreement and the business combination, and (v) not redeem any of its shares of Class A Common Stock in connection with such stockholder approval.

 

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Sponsor also agreed to subject 3,234,375 shares (the “Sponsor Subject Shares”) of the 3,487,500 shares of Class A Common Stock it will receive as a result of the conversion of its Founder Shares in connection with the Closing to potential forfeiture if Triggering Event I or Triggering Event II does not occur during the time period between the Closing Date and the earlier of the five-year anniversary of the Closing Date or the date a Company Sale is consummated (the “Forfeiture Period”). 50% of the Sponsor Subject Shares will no longer be subject to forfeiture if Triggering Event I occurs during the Forfeiture Period and 50% of the Sponsor Subject Shares will no longer be subject to forfeiture if Triggering Event II occurs during the Forfeiture Period. Prior to the occurrence of either Triggering Event I or Triggering Event II, Sponsor may not transfer any of its Sponsor Subject Shares. If during the Forfeiture Period there is a Company Sale pursuant to which CENAQ or the holders of Class A Common Stock have the right to receive consideration implying a value of Class A Common Stock (as determined in good faith by the CENAQ Board) of greater than or equal to $15.00 or $18.00, respectively, then Triggering Event I or Triggering Event II will be deemed to have occurred. If either Triggering Event does not occur during the Forfeiture Period, upon the expiration of the Forfeiture Period, the applicable Sponsor Subject Shares will immediately be forfeited to CENAQ for no consideration and immediately cancelled. The transactions contemplated by this paragraph are collectively referred to herein as the “Forfeiture Terms.”

 

The foregoing description of the Sponsor Agreement is qualified in its entirety by reference to the full text of the Sponsor Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and incorporated herein by reference.

 

Underwriters Letter

 

In connection with the execution of the Business Combination Agreement, on August 12, 2022, CENAQ, the Company and Holdings entered into a letter agreement with the underwriters (the “Underwriters Letter”), pursuant to which, among other things, (i) Imperial Capital, LLC agreed to forfeit all of its 1,423,125 private placement warrants and all of its 156,543 shares of Class A Common Stock, (ii) I-Bankers Securities, Inc. agreed to forfeit all of its 301,875 private placement warrants and all of its 33,207 shares of Class A Common Stock and (iii) the underwriters agreed to reduce their deferred underwriting fees related to CENAQ’s initial public offering (“IPO”) from $6,037,500 to $4,312,500.

 

The foregoing description of the Underwriters Letter is qualified in its entirety by reference to the full text of the Underwriters Letter, a copy of which is included as Exhibit 10.2 to this Current Report on Form 8-K, and incorporated herein by reference.

 

Subscription Agreements

 

In connection with the execution of the Business Combination Agreement, on August 12, 2022, CENAQ entered into separate subscription agreements (collectively, the “Subscription Agreements”) with a number of investors, including Holdings (the “PIPE Investors”), pursuant to which the PIPE Investors have agreed to purchase, and CENAQ agreed to sell to the PIPE Investors, an aggregate of 8,000,000 shares of Class A Common Stock (the “PIPE Shares”), for a purchase price of $10.00 per share, or an aggregate purchase price of $80,000,000, in a private placement (the “PIPE”). Of the 8,000,000 shares of Class A Common Stock, Holdings has agreed to purchase, and CENAQ has agreed to sell to Holdings, 800,000 shares for an aggregate purchase price of $8,000,000.

 

Additionally, Arb Clean Fuels Management LLC (“Arb Clean Fuels”), an entity affiliated with a member of Sponsor, has agreed to purchase, and CENAQ has agreed to sell to Arb Clean Fuels, 7,000,000 shares (the “Committed Amount”) for an aggregate purchase price of $70,000,000 (the “Committed Purchase Price”); provided, that, under its subscription agreement (the “Arb Subscription Agreement”), to the extent the funds in the Trust Account immediately prior to the Closing, after giving effect to the exercise of Redemption Rights, exceed $17,420,000, the Committed Amount shall be reduced by one share for every $10.00 in excess of $17,420,000 in the Trust Account; provided, further, that in no event shall the Committed Amount be reduced by more than 2,000,000 shares or the Committed Purchase Price be reduced by more than $20,000,000.

 

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The closing of the sale of the PIPE Shares pursuant to the Subscription Agreements is contingent upon, among other customary closing conditions, the concurrent consummation of the business combination. The purpose of the PIPE is to raise additional capital for use by the combined company following the Closing.

 

Pursuant to the Subscription Agreements, CENAQ agreed to use commercially reasonable efforts to submit to or file with the Securities and Exchange Commission (the “SEC”), within 30 calendar days after consummation of the business combination (at CENAQ’s sole cost and expense), a registration statement registering the resale of the PIPE Shares (the “PIPE Resale Registration Statement”), and CENAQ will use its commercially reasonable efforts to have the PIPE Resale Registration Statement declared effective as soon as practicable after the filing thereof but no later than the earlier of (i) ninety (90) calendar days (or one hundred twenty (120) calendar days if the SEC notifies CENAQ that it will review the PIPE Resale Registration Statement) following the Closing and (ii) the tenth (10th) business day after the SEC notifies CENAQ that the PIPE Resale Registration Statement will not be reviewed or will not be subject to further review.

 

The foregoing description of the Subscription Agreements is qualified in its entirety by reference to the full text of the form of Subscription Agreement, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K, and incorporated herein by reference. The foregoing description of the Arb Subscription Agreement is qualified in its entirety by reference to the full text of the Arb Subscription Agreement, a copy of which is filed as Exhibit 10.4 to this Current Report on Form 8-K, and incorporated herein by reference.

 

Lock-Up Agreement

 

In connection with the execution of the Business Combination Agreement, on August 12, 2022, Holdings entered into a Lock-Up Agreement (the “Lock-Up Agreement”), pursuant to which Holdings agreed to subject its shares of Common Stock received in connection with the Holdings Contribution and the Earn-Out Equity to the Lock-Up.

 

The foregoing description of the Lock-Up Agreement is qualified in its entirety by the terms of the Lock-Up Agreement, a copy of which is included as Exhibit 10.5 to this Current Report on Form 8-K, and incorporated herein by reference.

 

Agreements to be Executed at Closing

 

The Business Combination Agreement also contemplates the execution by the parties of various agreements at the Closing, including, among others, the below.

 

Tax Receivable Agreement

 

In connection with the business combination, CENAQ will enter into the tax receivable agreement (the “Tax Receivable Agreement”) with Holdings (together with its permitted transferees, the “TRA Holders,” and each a “TRA Holder”) and the Agent (as defined therein), which will generally provide for the payment by Verde Inc. to each TRA Holder of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax (computed using simplifying assumptions to address the impact of state and local taxes) that Verde Inc. realizes (or is deemed to realize in certain circumstances) in periods after the business combination as a result of (i) certain increases in tax basis that occur as a result of Verde Inc.’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s Class C OpCo Units pursuant to an OpCo Holder Exchange set forth in the A&R LLC Agreement, and (ii) imputed interest deemed to be paid by Verde Inc. as a result of, and additional tax basis arising from, any payments Verde Inc. makes under the Tax Receivable Agreement. Verde Inc. will retain the benefit of the remaining 15% of these net cash savings.

 

Payments generally will be made under the Tax Receivable Agreement as Verde Inc. realizes actual cash tax savings in periods after the consummation of the business combination from the tax benefits covered by the Tax Receivable Agreement. However, if the Tax Receivable Agreement terminates early (at Verde Inc.’s election or due to other circumstances, including Verde Inc.’s breach of a material obligation thereunder or upon certain changes of control described in the Tax Receivable Agreement), Verde Inc. would be required to make an immediate payment to each TRA Holder equal to the present value of the anticipated future payments to be made by it under the Tax Receivable Agreement (based upon certain valuation assumptions and deemed events set forth in the Tax Receivable Agreement), such payments not to exceed $50 million, in the aggregate, in the case of certain changes of control.

 

Verde Inc. will depend on OpCo to make distributions to Verde Inc. in an amount sufficient to cover Verde Inc.’s obligations under the Tax Receivable Agreement.

 

The foregoing description of the Tax Receivable Agreement is qualified in its entirety by reference to the full text of the form of Tax Receivable Agreement, a copy of which is included as Exhibit D to the Business Combination Agreement, filed as Exhibit 2.1 to this Current Report on Form 8-K, and incorporated herein by reference.

 

7

 

 

A&R LLC Agreement

 

Following the Closing, Verde Inc. will operate its business through OpCo. On the Closing Date, Verde Inc. and Holdings will enter into an amended and restated limited liability company agreement of OpCo (the “A&R LLC Agreement”). The A&R LLC Agreement will provide, among other things, that each Class C OpCo Unit will be exchangeable, subject to certain conditions, for one share of Class A Common Stock, and a corresponding share of Class C Common Stock will be cancelled in connection with such exchange, pursuant to and in accordance with the terms of the A&R LLC Agreement.

 

The foregoing description of the A&R LLC Agreement is qualified in its entirety by the terms of the form of A&R LLC Agreement, a copy of which is included as Exhibit G to the Business Combination Agreement, filed as Exhibit 2.1 to this Current Report on Form 8-K, and incorporated herein by reference.

 

A&R Registration Rights Agreement

 

In connection with the Closing, that certain Registration Rights Agreement dated August 17, 2021 (the “IPO Registration Rights Agreement”) will be amended and restated and Verde Inc., certain stockholders of CENAQ prior to the Closing (the “Initial Holders”) and certain stockholders receiving Class A Common Stock and Class C Common Stock pursuant to the business combination (the “New Holders” and together with the Initial Holders, the “Reg Rights Holders”) will enter into an amended and restated IPO Registration Rights Agreement (the “A&R Registration Rights Agreement”).

 

Pursuant to the A&R Registration Rights Agreement, Verde Inc. will agree that, within thirty (30) days after the Closing, it will use its commercially reasonable efforts to file with the SEC (at Verde Inc.’s sole cost and expense) a registration statement registering the resale of certain securities held by or issuable to the Reg Rights Holders (the “Resale Registration Statement”), and Verde Inc. will use its commercially reasonable efforts to have the Resale Registration Statement declared effective as soon as reasonably practicable after the filing thereof. In certain circumstances, the Reg Rights Holders can demand Verde Inc.’s assistance with underwritten offerings and block trades, and the Reg Rights Holders will be entitled to certain piggyback registration rights.

 

The foregoing description of the A&R Registration Rights Agreement is qualified in its entirety by the terms of the form of A&R Registration Rights Agreement, a copy of which is included as Exhibit A to the Business Combination Agreement, filed as Exhibit 2.1 to this Current Report on Form 8-K, and incorporated herein by reference.

 

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 with respect to the issuance of shares of Class C Common Stock is incorporated by reference herein. The shares of Class C Common Stock to be issued pursuant to the Business Combination Agreement will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.

 

The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K with respect to the issuance of shares of Class A Common Stock in the PIPE is incorporated by reference herein. The PIPE Shares that may be issued in connection with the Subscription Agreements will not be registered under the Securities Act in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.

 

8

 

 

Item 7.01 Regulation FD Disclosure.

 

On August 12, 2022, CENAQ and the Company issued a joint press release announcing the execution of the Business Combination Agreement. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Furnished as Exhibit 99.2 to this Current Report on Form 8-K is the investor presentation relating to the business combination.

 

The information in this Item 7.01, including Exhibits 99.1 and 99.2, is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities under that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filings.

 

Important Information About the Business Combination and Where to Find It

 

In connection with the proposed business combination, CENAQ will file with the SEC a preliminary proxy statement. CENAQ also plans to file other documents with the SEC regarding the proposed business combination. After the proxy statement has been cleared by the SEC, a definitive proxy statement will be mailed to the stockholders of CENAQ. STOCKHOLDERS OF CENAQ ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE PROPOSED BUSINESS COMBINATION THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED BUSINESS COMBINATION. Stockholders will be able to obtain free copies of the proxy statement and other documents containing important information about CENAQ and the Company once such documents are filed with the SEC, through the website maintained by the SEC at http://www.sec.gov.

 

Participants in the Solicitation

 

CENAQ and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of CENAQ in connection with the proposed business combination. The Company and its officers and directors may also be deemed participants in such solicitation. Information about the directors and executive officers of CENAQ is set forth in CENAQ’s Annual Report on Form 10-K filed with the SEC on March 30, 2022. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC when they become available.

 

Forward-Looking Statements

 

The information included herein and in any oral statements made in connection herewith include “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of present or historical fact included herein, regarding the proposed business combination, CENAQ’s and the Company’s ability to consummate the transaction, the benefits of the transaction, CENAQ’s and the Company’s future financial performance following the transaction, as well as CENAQ’s and the Company’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used herein, including any oral statements made in connection herewith, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on CENAQ’s and the Company’s management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise required by applicable law, CENAQ and the Company disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date hereof. CENAQ and the Company caution you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of CENAQ and the Company. These risks include, but are not limited to, general economic, financial, legal, political and business conditions and changes in domestic and foreign markets; the inability of the parties to successfully or timely consummate the proposed business combination or to satisfy the closing conditions, including the risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined company; the risk that the approval of the stockholders of CENAQ for the proposed business combination is not obtained; the failure to realize the anticipated benefits of the proposed business combination, including as a result of a delay in its consummation; the amount of redemption requests made by CENAQ’s stockholders; the occurrence of events that may give rise to a right of one or both of CENAQ and the Company to terminate the definitive agreements related to the proposed business combination; the risks related to the growth of the Company’s business and the timing of expected business milestones; and the effects of competition on the Company’s future business. Should one or more of the risks or uncertainties described herein and in any oral statements made in connection therewith occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. There may be additional risks that neither CENAQ nor the Company presently know or that CENAQ and the Company currently believe are immaterial that could cause actual results to differ from those contained in the forward-looking statements. Additional information concerning these and other factors that may impact CENAQ’s expectations and projections can be found in CENAQ’s periodic filings with the SEC, including CENAQ’s Annual Report on Form 10-K filed with the SEC on March 30, 2022 and any subsequently filed Quarterly Report on Form 10-Q. CENAQ’s SEC filings are available publicly on the SEC’s website at http://www.sec.gov.

 

9

 

 

No Offer or Solicitation

 

This Current Report on Form 8-K shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the business combination. This Current Report on Form 8-K shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of section 10 of the Securities Act, or an exemption therefrom.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.   Description
2.1*   Business Combination Agreement, dated as of August 12, 2022, by and among the Company, CENAQ, Holdings, OpCo and Sponsor.
10.1   Sponsor Agreement, dated as of August 12, 2022, by and among the Company, CENAQ, Holdings and Sponsor.
10.2   Underwriters Letter, dated as of August 12, 2022, by and among the Company, CENAQ, Holdings and the underwriters.
10.3   Form of Subscription Agreement.
10.4   Subscription Agreement, dated as of August 12, 2022, by and between CENAQ and Arb Clean Fuels Management LLC.
10.5   Lock-Up Agreement, dated as of August 12, 2022.
99.1   Press Release, dated August 12, 2022.
99.2   Investor Presentation.
104   Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

*Certain exhibits and schedules to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. CENAQ agrees to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon its request.

 

10

 

 

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.

 

  CENAQ ENERGY CORP.
   
  By: /s/ J. Russell Porter
  Name:  J. Russell Porter
  Title: Chief Executive Officer
     
Dated: August 12, 2022    

 

 

11

 

 

Exhibit 2.1

 

 

 

 

 

 

 

 

 

BUSINESS COMBINATION AGREEMENT

 

by and among

 

CENAQ ENERGY CORP.,

 

BLUESCAPE CLEAN FUELS HOLDINGS, LLC,

 

BLUESCAPE CLEAN FUELS INTERMEDIATE HOLDINGS, LLC,

 

VERDE CLEAN FUELS OPCO, LLC

and

CENAQ SPONSOR LLC (SOLELY WITH RESPECT TO Section 6.18)

 

Dated as of August 12, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table of Contents

 

    Page
ARTICLE I. DEFINITIONS 2
     
SECTION 1.01 Certain Definitions 2
SECTION 1.02 Construction. 18
     
ARTICLE II. COMBINATION TRANSACTIONS 19
     
SECTION 2.01 Combination Transactions 19
SECTION 2.02 Closing 19
SECTION 2.03 Earn-Out. 21
SECTION 2.04 Withholding 21
     
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 22
     
SECTION 3.01 Organization and Qualification; Subsidiaries 22
SECTION 3.02 Organizational Documents 22
SECTION 3.03 Capitalization 22
SECTION 3.04 Authority Relative to this Agreement 23
SECTION 3.05 No Conflict; Required Filings and Consents 24
SECTION 3.06 Permits; Compliance 25
SECTION 3.07 Financial Statements 25
SECTION 3.08 Absence of Certain Changes or Events 26
SECTION 3.09 Absence of Litigation 27
SECTION 3.10 Employee Benefit Plans 27
SECTION 3.11 Labor and Employment Matters 29
SECTION 3.12 Real Property; Title to Assets 31
SECTION 3.13 Intellectual Property 32
SECTION 3.14 Taxes 35
SECTION 3.15 Environmental Matters 37
SECTION 3.16 Material Contracts 38
SECTION 3.17 Insurance 41
SECTION 3.18 Certain Business Practices 42
SECTION 3.19 Interested Party Transactions 43
SECTION 3.20 Exchange Act 43
SECTION 3.21 Regulatory Status. 43
SECTION 3.22 Brokers 43
SECTION 3.23 Company Owner Contributions 43
SECTION 3.24 Exclusivity of Representations and Warranties 44
     
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SPAC AND OPCO 44
     
SECTION 4.01 Corporate Organization 44
SECTION 4.02 Organizational Documents 44

 

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SECTION 4.03 Capitalization 45
SECTION 4.04 Authority Relative to this Agreement 46
SECTION 4.05 No Conflict; Required Filings and Consents 46
SECTION 4.06 Compliance 47
SECTION 4.07 SEC Filings; Financial Statements; Sarbanes-Oxley 47
SECTION 4.08 Absence of Certain Changes or Events 48
SECTION 4.09 Absence of Litigation 48
SECTION 4.10 Board Approval; Vote Required 48
SECTION 4.11 No Prior Operations of OpCo 49
SECTION 4.12 Brokers 49
SECTION 4.13 SPAC Trust Fund 49
SECTION 4.14 Employees 50
SECTION 4.15 Taxes 50
SECTION 4.16 Registration and Listing 51
SECTION 4.17 SPAC’s and OpCo’s Investigation and Reliance 52
SECTION 4.18 Subscription Agreements 52
SECTION 4.19 Exclusivity of Representations and Warranties 53
     
ARTICLE V. CONDUCT OF BUSINESS 53
     
SECTION 5.01 Conduct of Business by the Company 53
SECTION 5.02 Conduct of Business by SPAC and OpCo 57
SECTION 5.03 Claims Against Trust Account 58
     
ARTICLE VI. ADDITIONAL AGREEMENTS 59
     
SECTION 6.01 Proxy Statement 59
SECTION 6.02 SPAC Stockholders’ Meeting 60
SECTION 6.03 Non-Transfer of Certain SPAC Intellectual Property 61
SECTION 6.04 Access to Information; Confidentiality 61
SECTION 6.05 Exclusivity 62
SECTION 6.06 Employee Benefits Matters 62
SECTION 6.07 Directors’ and Officers’ Indemnification 64
SECTION 6.08 Notification of Certain Matters 66
SECTION 6.09 ISRA Compliance 66
SECTION 6.10 Further Action; Reasonable Best Efforts 66
SECTION 6.11 Public Announcements 67
SECTION 6.12 Stock Exchange Listing 68
SECTION 6.13 Antitrust 68
SECTION 6.14 Trust Account 69
SECTION 6.15 Tax Matters 69
SECTION 6.16 Post-Closing Directors and Officers 71
SECTION 6.17 Intentionally Omitted 71
SECTION 6.18 SPAC Extensions 71

 

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ARTICLE VII. CLOSING CONDITIONS 72
     
SECTION 7.01 Conditions to the Obligations of Each Party 72
SECTION 7.02 Conditions to the Obligations of SPAC and OpCo 72
SECTION 7.03 Conditions to the Obligations of Holdings and the Company 73
     
ARTICLE VIII. TERMINATION, AMENDMENT AND WAIVER 74
     
SECTION 8.01 Termination 74
SECTION 8.02 Effect of Termination 75
SECTION 8.03 Expenses 75
SECTION 8.04 Amendment 76
SECTION 8.05 Waiver 76
     
ARTICLE IX. GENERAL PROVISIONS 76
     
SECTION 9.01 Notices 76
SECTION 9.02 Nonsurvival of Representations, Warranties and Covenants 77
SECTION 9.03 Severability 77
SECTION 9.04 Entire Agreement; Assignment 78
SECTION 9.05 Parties in Interest 78
SECTION 9.06 Governing Law 78
SECTION 9.07 Waiver of Jury Trial 78
SECTION 9.08 Headings 79
SECTION 9.09 Counterparts 79
SECTION 9.10 Specific Performance 79
SECTION 9.11 No Recourse 79

 

EXHIBIT A Form of Amended and Restated Registration Rights Agreement EX-A-1
EXHIBIT B Form of Sponsor Agreement EX-B-1
EXHIBIT C Form of Lockup Agreement EX-C-1
EXHIBIT D Form of Tax Receivable Agreement EX-D-1
EXHIBIT E Form of Fourth Amended and Restated Certificate of Incorporation of SPAC EX-E-1
EXHIBIT F Form of Amended and Restated Bylaws of SPAC EX-F-1
EXHIBIT G Form of Amended and Restated LLC Agreement of OpCo EX-G-1
EXHIBIT H Form of Company Assignment Agreement EX-H-1
EXHIBIT I Form of Underwriters Letter Agreement EX-I-1

 

iii

 

 

BUSINESS COMBINATION AGREEMENT dated as of August 12, 2022 (this “Agreement”), by and among CENAQ Energy Corp., a Delaware corporation (“SPAC”), Verde Clean Fuels OpCo, LLC, a Delaware limited liability company and wholly-owned subsidiary of SPAC (“OpCo”), Bluescape Clean Fuels Holdings, LLC, a Delaware limited liability company (“Holdings”), Bluescape Clean Fuels Intermediate Holdings, LLC, a Delaware limited liability company (the “Company” and, together with Holdings, the “Bluescape Parties”), and, solely with respect to Section 6.18, CENAQ Sponsor LLC, a Delaware limited liability company (“Sponsor”).

 

WHEREAS, SPAC, OpCo and the Bluescape Parties desire to enter into this Agreement and the Transactions;

 

WHEREAS, the Board of Directors of SPAC (the “SPAC Board”) has (a) approved and adopted this Agreement and declared its advisability and approved the Transactions pursuant to this Agreement and the other Transaction Documents, including on behalf of OpCo in SPAC’s capacity as the sole member of OpCo, and (b) recommended the approval and adoption of this Agreement and the Transactions by the stockholders of SPAC;

 

WHEREAS, all of the members of the board of managers of Holdings (the “Holdings Board”) have approved and adopted this Agreement and the Transactions;

 

WHEREAS, Holdings, as the sole member of the Company, has approved and adopted this Agreement and the Transactions;

 

WHEREAS, in connection with the Closing, Holdings, SPAC and Sponsor shall enter into an Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”) substantially in the form attached hereto as Exhibit A;

 

WHEREAS, SPAC, its officers and directors, and Sponsor are parties to that certain Letter Agreement, dated August 12, 2021 (the “Letter Agreement”), providing that, among other things, such parties will vote their shares of SPAC Class B Common Stock in favor of this Agreement and the Transactions;

 

WHEREAS, SPAC, concurrently with the execution and delivery of this Agreement, is entering into subscription agreements (the “Subscription Agreements”) with certain subscribers (the “Subscribers”) pursuant to which such Subscribers, upon the terms and subject to the conditions set forth therein, have agreed to purchase shares of SPAC Class A Common Stock at a purchase price of $10.00 in a private placement or placements (the “Private Placements”) to be consummated immediately prior to the consummation of the Transactions;

 

WHEREAS, Sponsor, certain of its affiliates and certain other persons, concurrently with the execution and delivery of this Agreement, are entering into a letter agreement (the “Sponsor Agreement”) in the form attached hereto as Exhibit B;

 

WHEREAS, concurrently with the execution and delivery of this Agreement, in connection with the Transactions, Holdings has entered into that certain lockup agreement (the “Lockup Agreement”), in the form set forth on Exhibit C, each to be effective upon the Closing;

 

1

 

 

WHEREAS, in connection with the Closing, Holdings and SPAC shall enter into the Tax Receivable Agreement (the “Tax Receivable Agreement”) along with any other holders named therein substantially in the form attached hereto as Exhibit D; and

 

WHEREAS, concurrently with the execution and delivery of this Agreement, in connection with the Transactions, SPAC, Holdings and the Company are entering into the letter agreement (the “Underwriters Letter Agreement”) in the form attached hereto as Exhibit I with the underwriters named therein.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

 

Article I.
 

DEFINITIONS

 

Section 1.01  Certain Definitions. For purposes of this Agreement:

 

1st Extension Date Funding Amount” means $1,725,000, which, pursuant to SPAC’s Organizational Documents and the prospectus from SPAC’s initial public offering, the Sponsor (or its designees) shall deposit, or cause to be deposited, into the Trust Account in the form of a non-interest bearing loan in order to extend the time period for SPAC to consummate a business combination from August 17, 2022 to November 16, 2022.

 

2nd Extension Date Funding Amount” means $1,725,000, which, pursuant to SPAC’s Organizational Documents and the prospectus from SPAC’s initial public offering, the Sponsor (or its designees) shall deposit, or cause to be deposited, into the Trust Account in the form of a non-interest bearing loan in order to extend the time period for SPAC to consummate a business combination from November 17, 2022 to February 16, 2023.

 

Action” is defined in Section 3.09.

 

Additional Financing” is defined in Section 6.10(c).

 

Additional Subscription Agreements” means subscription agreements entered into with certain subscribers after the date of this Agreement pursuant to which such subscribers, upon the terms and subject to the conditions set forth therein, have agreed to purchase shares of SPAC Class A Common Stock at a purchase price of at least $10.00 per share in the Private Placement to be consummated immediately prior to the consummation of the Transactions. Additional Subscription Agreements shall reflect the same economic terms in all material respects that are no more favorable to any such other subscribers thereunder than the economic terms of the Subscription Agreements unless the Company provides its prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed).

 

Additional Subscription Fees” means the aggregate amount of fees payable to Imperial Capital, LLC and I-Bankers Securities, Inc. in connection with the Additional Financing, provided that such fees shall not exceed 5% of the aggregate amount of the funds raised in connection with the Additional Financing.

 

2

 

 

affiliate” means, with respect to any specified person, any person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person.

 

Affiliate Loan” is defined in Section 4.03(f).

 

Aggregate Private Placements Amount” is defined in Section 7.03(d).

 

Agreement” is defined in Preamble.

 

Alternative Transaction” is defined in Section 6.05.

 

Ancillary Agreements” means the Registration Rights Agreement, the Sponsor Agreement, the Lockup Agreement, the Tax Receivable Agreement, the Fourth A&R SPAC Certificate of Incorporation, Amended and Restated Bylaws of SPAC, the OpCo A&R LLC Agreement, the Underwriters Letter Agreement, the Company Assignment Agreement, the Subscription Agreements, the Additional Subscription Agreements and all other agreements, certificates and instruments executed and delivered by any of SPAC, OpCo, Holdings or the Company in connection with the Transactions and specifically contemplated by this Agreement.

 

Anti-Corruption Laws” means (i) the U.S. Foreign Corrupt Practices Act of 1977, (ii) the UK Bribery Act 2010, (iii) anti-bribery legislation promulgated by the European Union and implemented by its member states, (iv) legislation adopted in furtherance of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and (v) similar legislation applicable to the Company or any Company Subsidiary from time to time.

 

Antitrust Laws” is defined in Section 6.13(a).

 

Available Cash” shall equal, as of the Closing, the amount of funds contained in the Trust Account (net of the SPAC Stockholder Redemption Amount), plus the amount of Available Financing Proceeds, plus any cash held by SPAC in any working capital or similar account.

 

Available Financing Proceeds” shall equal, as of the Closing, the net cash proceeds to SPAC resulting from the Subscription Agreements or any Additional Financing.

 

Blue Sky Laws” is defined in Section 3.05(b).

 

Bluescape Parties” is defined in Preamble.

 

Bluescape Transaction Expenses” means all reasonable and documented third-party, out-of-pocket fees and expenses incurred in connection with, or otherwise related to, the Transactions, the negotiation and preparation of this Agreement and the other documents contemplated hereby and the performance and compliance with all agreements and conditions contained herein to be performed or complied with at or before the Closing, including the fees, expenses and disbursements of counsel and accountants, due diligence expenses, advisory and consulting fees and expenses, and other third-party fees, in each case, of the Bluescape Parties and including any transaction, retention, change in control or similar bonuses, severance payments or other employee-related payments payable by Holdings, the Company or any Company Subsidiary as of or after the Closing Date (including the employer portion of any withholding, payroll, employment or similar Taxes, if any, associated therewith) as a result of, or in connection with, the consummation of the transactions contemplated hereby, and shall be deemed to include the fees and expenses set forth on Section 1.01(a) of the Company Disclosure Schedule.

 

3

 

 

Business Combination” has the meaning ascribed to such term in the SPAC Certificate of Incorporation.

 

Business Data” means all business information and data, including Personal Information (whether of employees, contractors, consultants, customers, consumers, or other persons and whether in electronic or any other form or medium), that is accessed, collected, used, stored, shared, distributed, transferred, disclosed, destroyed, disposed of or otherwise processed by any of the Business Systems or otherwise in the course of the conduct of the business of the Company or any Company Subsidiaries.

 

Business Day” means any day on which the principal offices of the SEC in Washington, D.C. are open to accept filings, or, in the case of determining a date when any payment is due, any day on which banks are not required or authorized to close in New York, New York or Houston, Texas; provided that banks shall not be deemed to be authorized or obligated to be closed due to a “shelter in place,” “non-essential employee” or similar closure of physical branch locations at the direction of any Governmental Authority if such banks’ electronic funds transfer systems (including for wire transfers) are open for use by customers on such day.

 

Business Systems” means all Software, computer hardware (whether general or special purpose), electronic data processors, databases, communications, telecommunications, networks, interfaces, platforms, servers, peripherals, and computer systems, including any outsourced systems and processes, and any Software and systems provided via the cloud or “as a service,” that are owned or used in the conduct of the business of the Company or any Company Subsidiaries.

 

CARES Act” is defined in Section 3.14(h).

 

Claims” is defined in Section 5.03.

 

Closing” is defined in Section 2.02(a).

 

Closing Date” is defined in Section 2.02(a).

 

Code” means the United States Internal Revenue Code of 1986, as amended.

 

Combination Transactions” is defined in Section 2.01(b).

 

Company” is defined in Preamble.

 

Company Assignment Agreement” means an assignment instrument evidencing the assignment and transfer to OpCo of the Company Interests, substantially in the form of Exhibit H.

 

4

 

 

Company Disclosure Schedule” is defined in Article III.

 

Company Interests” means 100% of the issued and outstanding limited liability company interests of the Company.

 

Company-Licensed IP” means all Intellectual Property rights owned or purported to be owned by a third party and licensed to the Company or any Company Subsidiary or to which the Company or any Company Subsidiary otherwise has a right to use.

 

Company Material Adverse Effect” means any result, occurrence, fact, event, circumstance, change or effect (collectively, “Effect”) that, individually or in the aggregate with all other Effects, is or could reasonably be expected to (i) be materially adverse to the business, properties, assets, condition (financial or otherwise), liabilities, or operations of the Company and the Company Subsidiaries taken as a whole or (ii) prevent, materially delay or materially impede the performance by any Bluescape Party of its obligations under this Agreement or the consummation of the Transactions; provided, however, that none of the following shall be deemed to constitute, alone or in combination, or be taken into account in the determination of whether, there has been or will be a Company Material Adverse Effect: (a) any change or proposed change in or change in the interpretation of any Law or GAAP; (b) events or conditions generally affecting the industries or geographic areas in which the Company and the Company Subsidiaries operate; (c) any downturn in general economic conditions, including changes in the credit, debt, securities, financial or capital markets (including changes in interest or exchange rates, prices of any security or market index or commodity or any disruption of such markets); (d) any geopolitical conditions, outbreak of hostilities, acts of war, sabotage, cyberterrorism, terrorism, military actions, earthquakes, volcanic activity, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions, epidemics, pandemics and other force majeure events (including any escalation or general worsening thereof); (e) any actions taken or not taken by the Company or the Company Subsidiaries, as required by this Agreement or any Ancillary Agreement; (f) any Effect attributable to the announcement or execution, pendency, negotiation or consummation of the Transactions (including the impact thereof on relationships with customers, suppliers, employees or Governmental Authorities) (provided that this clause (f) shall not apply to any representations or warranty to the extent the purpose of such representation or warranty is to address the consequences resulting from this Agreement or the consummation of the Transactions); (g) any failure to meet any projections, forecasts, guidance, estimates, milestones, budgets or financial or operating predictions of revenue, earnings, cash flow or cash position, provided that this clause (g) shall not prevent a determination that any Effect underlying such failure has resulted in a Company Material Adverse Effect; or (h) or any actions taken, or failures to take action, or such other changes or events, in each case, which SPAC has requested or to which it has consented in writing, except in the cases of clauses (a) through (d), to the extent that the Company and the Company Subsidiaries, taken as a whole, are materially disproportionately affected thereby as compared with other participants in the industries in which the Company and the Company Subsidiaries operate.

 

Company-Owned IP” means all Intellectual Property rights owned or purported to be owned by the Company or any of the Company Subsidiaries.

 

Company-Owned Registered IP” is defined in Section 3.13(a).

 

5

 

 

Company Owner Contributions” means the amounts contributed to the Company or a Company Subsidiary by Bluescape Energy Partners LLC or its affiliates after December 15, 2021 and prior to the Closing Date.

 

Company Permits” is defined in Section 3.06.

 

Company Sale” means any transaction or series of transactions (a) following which a person or “group” (within the meaning of Section 13(d) of the Exchange Act) of persons (other than Holdings, SPAC, OpCo or any of their respective subsidiaries), obtains direct or indirect beneficial ownership of securities (or rights convertible or exchangeable into securities) representing 50% or more of the voting power of or economic rights or interests in SPAC or OpCo, (b) constituting a merger, consolidation, reorganization or other business combination, however effected, following which either (1) the members of the SPAC Board immediately prior to such merger, consolidation, reorganization or other business combination do not constitute at least a majority of the board of directors of the company surviving the combination or, if the surviving company is a subsidiary, the ultimate parent thereof or (2) the voting securities of SPAC immediately prior to such merger, consolidation, reorganization or other business combination do not continue to represent or are not converted into 50% or more of the combined voting power of the then-outstanding voting securities of the person resulting from such combination or, if the surviving company is a subsidiary, the ultimate parent thereof, or (c) the result of which is a sale of all or substantially all of the assets of SPAC to any person.

 

Company Software” means Software owned or purported to be owned by the Company or any Company Subsidiary.

 

Company Subsidiary” means each subsidiary of the Company.

 

Confidential Information” means any information, knowledge or data concerning the businesses or affairs of the Company or the Company Subsidiaries that is not already generally available to the public, including information of third parties that the Company or the Company Subsidiaries are bound to keep confidential.

 

Continuing Employees” is defined in Section 6.06(a).

 

Contracting Parties” is defined in Section 9.11.

 

control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, or as trustee or executor, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.

 

COVID-19” means the COVID-19 or SARS-CoV-2 virus (or any mutation or variation thereof).

 

Cut-Off Date” is defined in Section 6.10(c).

 

D&O Insurance” is defined in Section 6.07(c).

 

6

 

 

Data Security Requirements” is defined in Section 3.13(h).

 

Deferred Underwriting Fees” shall mean the amount of deferred underwriting fees in connection with SPAC’s initial public offering payable to the underwriters upon consummation of a Business Combination.

 

Earn Out Equity” is defined in Section 2.03(a).

 

Earn Out Period” means the period beginning on the Closing Date and ending on the earlier of the five-year anniversary of such date or the date a Company Sale is consummated.

 

Effect” is defined in definition of “Company Material Adverse Effect.”

 

Employee Benefit Plan” means (i) any plan that is an “employee benefit plan” as defined in Section 3(3) of ERISA, (ii) any retirement or deferred compensation plan, incentive compensation plan, bonus, stock option, stock purchase, restricted stock, other equity-based compensation plan (including partnership interests), agreement, program or arrangement, performance award, incentive, retiree medical or life insurance, death or disability benefit, supplemental retirement, severance, retention, change in control, employment, bonus or benefit, unemployment compensation, consulting, fringe benefit, sick pay, insurance or hospitalization, flexible benefit, cafeteria, dependent care and vacation plans, agreements, programs or arrangements or any other employee benefit plans, agreements, programs or arrangements, whether written or unwritten, for any employee, former employee, director, consultant, or agent, whether pursuant to contract, arrangement, custom or informal understanding, which does not constitute an employee benefit plan (as defined in Section 3(3) of ERISA), and (iii) any employment agreement or consulting agreement, in each case, that Holdings, Company any of its subsidiaries or any of their respective ERISA Affiliates maintain, sponsor, is a party to, participate in, have a commitment to create, or have any liability or contingent liability with respect to.

 

Employee HoldCo” means Bluescape Clean Fuels Employee Holdings, LLC, a Delaware limited liability company.

 

Employee Holdings” means Bluescape Clean Fuels EmployeeCo, LLC, a Delaware limited liability company.

 

Employment Agreements” is defined in Section 6.06(b).

 

Environmental Attributes” means, as of the Closing Date, any of the following existing legal and beneficial rights or entitlements resulting from either the operations of the Company or the Company Subsidiaries, or the SPAC or OpCo, as appropriate, that are capable of being measured, verified, calculated or commoditized: (i) any Governmental Authority or private cash payment or grant relating to the production of renewable natural gasoline, (ii) renewable energy credits or renewable energy certificates, (iii) carbon reduction credits, offsets or allowances, (iv) renewable identification numbers, or (v) credits generated in connection with a low carbon fuel standard.

 

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Environmental Laws” means any United States federal, state or local or non-United States Laws relating to: (i) Releases or threatened Releases of, or exposure of any person to Hazardous Substances; (ii) the generation, manufacture, handling, transport, use, treatment, storage or disposal of Hazardous Substances; or (iii) pollution or protection of the environment, natural resources or human health and safety (to the extent related to exposure to Hazardous Substances).

 

ERISA” means the Employee Retirement Income Security Act of 1974.

 

ERISA Affiliate” is defined in Section 3.10(c).

 

Evaluation Material” is defined in Section 6.03.

 

Exchange Act” is defined in Section 3.05(b).

 

Ex-Im Laws” means all applicable Laws relating to export, re-export, transfer, and import controls, including the U.S. Export Administration Regulations, the customs and import Laws administered by U.S. Customs and Border Protection, and the EU Dual Use Regulation.

 

FERC” means the Federal Energy Regulatory Commission.

 

Financial Statements” is defined in Section 3.07(b).

 

Fourth A&R SPAC Certificate of Incorporation” is defined in Section 2.02(b)(i).

 

FPA” means the Federal Power Act of 1920.

 

Funding Amount” means, as applicable, either the 1st Extension Date Funding Amount or the 2nd Extension Date Funding Amount.

 

GAAP” is defined in Section 3.07(a).

 

Governmental Authority” is defined in Section 3.05(b).

 

Hazardous Substance(s)” means (i) those hazardous or toxic substances, chemicals or materials regulated under Environmental Laws, including the following United States federal statutes and their state counterparts, and all regulations promulgated thereunder: the Hazardous Materials Transportation Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water Act, the Federal Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act, (ii) petroleum and petroleum products, including crude oil and any fractions thereof, and (iii) polychlorinated biphenyls, per- and polyfluoroalkyl substances, asbestos, urea formaldehyde foam, polychlorinated biphenyls, and radioactive materials.

 

HCERA” is defined in Section 3.10(i).

 

Health Plan” is defined in Section 3.10(i).

 

Healthcare Reform Laws” is defined in Section 3.10(i).

 

Holdings” is defined in Preamble.

 

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Holdings Board” is defined in Recitals.

 

Holdings Class C Shares” is defined in Section 2.01(a).

 

Holdings Contribution” is defined in Section 2.01(b).

 

Holdings LLC Agreement” means that certain Limited Liability Company Agreement of Holdings, dated as of August 7, 2020.

 

Holdings OpCo Units” means 22,500,000 OpCo Units.

 

HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

 

HSR Clearance” means all filings, notifications, or other submissions required under the HSR Act for the consummation of the transactions contemplated hereby shall have been made, and all applicable waiting periods (including any extensions thereof) under the HSR Act shall have expired or been terminated.

 

HSR Fees” means all filing fees in connection with the HSR Act or other materials contemplated by Section 6.13.

 

ICA” means the Interstate Commerce Act.

 

Imperial Letter Agreement” means that certain Letter Agreement, dated August 17, 2021, by and between SPAC and Imperial Capital, LLC.

 

Inception Date” means July 31, 2020.

 

Insurance Policies” is defined in Section 3.17(a).

 

Intellectual Property” means (i) patents, patent applications and patent disclosures, together with all registrations, reissues, continuations, continuations-in-part, divisionals, revisions, extensions or reexaminations thereof, (ii) trademarks and service marks, trade dress, designs, logos, trade names, corporate names, brands, slogans, and other source identifiers together with all translations, adaptations, derivations, combinations and other variants of the foregoing, and all applications, registrations, and renewals in connection therewith, together with all of the goodwill associated with the foregoing, (iii) copyrights, and other works of authorship (whether or not copyrightable), and moral rights, and registrations and applications for registration, renewals and extensions thereof, (iv) trade secrets, know-how (including ideas, formulas, compositions, inventions (whether or not patentable or reduced to practice)), and rights in Software, databases, technology, proprietary processes, formulae, algorithms, models, and methodologies, (v) Internet domain names and social media accounts, and (vi) all other intellectual property or proprietary rights of any kind or description existing anywhere in the world.

 

Intended Tax Treatment” is defined in Section 6.15.

 

Interested Party Transaction” is defined in Section 3.19.

 

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Interim Financial Statements” is defined in Section 3.07(b).

 

Investment Agreements” means the contracts listed in Section 4.03(f)(i) of the SPAC Disclosure Schedule.

 

IRS” is defined in Section 3.10(b).

 

ISRA” means The Industrial Site Recovery Act, N.J.S.A. 13:1K, as amended, and the implementing regulations at N.J.A.C. 7:26B.

 

knowledge” or “to the knowledge” of a person shall mean in the case of the Company, the actual knowledge of Ernest Miller, John Doyle, Rohn Crabtree and Jonathan Siegler after reasonable inquiry, and in the case of SPAC, the actual knowledge of J. Russell Porter and Michael Mayell after reasonable inquiry.

 

Law” means any applicable federal, national, state, county, municipal, provincial, local, foreign or multinational, statute, constitution, common law, ordinance, code, decree, order, judgment, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.

 

Lease” is defined in Section 3.12(b).

 

Leased Real Property” means the real property leased by the Company or the Company Subsidiaries as tenant, together with, to the extent leased by the Company or the Company Subsidiaries, all buildings and other structures, facilities or improvements located thereon and all easements, licenses, rights and appurtenances of the Company or the Company Subsidiaries relating to the foregoing.

 

Letter Agreement” is defined in Recitals.

 

Lien” means any lien, security interest, mortgage, pledge, adverse claim or other encumbrance of any kind that secures the payment or performance of an obligation (other than those created (i) under applicable securities laws, (ii) at the request of SPAC and OpCo and (iii) under the Transaction Documents).

 

Lockup Agreement” is defined in Recitals.

 

Material Contracts” is defined in Section 3.16(a).

 

Material Suppliers” is defined in Section 3.16(c).

 

Maximum Annual Premium” is defined in Section 6.07(c).

 

Nasdaq” means The Nasdaq Stock Market LLC.

 

NGA” means the Natural Gas Act of 1938.

 

Nonparty Affiliates” is defined in Section 9.11.

 

10

 

 

OpCo” is defined in Preamble.

 

OpCo A&R LLC Agreement” is defined in Section 2.02(b)(iii).

 

OpCo Holder Redemption Right” means, following the Closing, the right of a holder of OpCo Units to cause OpCo to redeem one or more of such OpCo Units for shares of SPAC Class A Common Stock on a one-for-one basis (subject to adjustment in certain cases), together with the cancellation of the related shares of SPAC Class C Common Stock, as set forth in the OpCo A&R LLC Agreement and the Fourth A&R SPAC Certificate of Incorporation.

 

OpCo Interests” means 100% of the issued and outstanding limited liability company interests of OpCo as of immediately prior to Closing (before giving effect to the OpCo A&R LLC Agreement).

 

OpCo Units” means the common units of OpCo, on and after the Closing (after giving effect to the OpCo A&R LLC Agreement).

 

Open Source Software” means any Software in source code form that is licensed pursuant to (i) any license that is a license now or in the future approved by the open source initiative and listed at http://www.opensource.org/licenses, which licenses include all versions of the GNU General Public License (GPL), the GNU Lesser General Public License (LGPL), the GNU Affero GPL, the MIT license, the Eclipse Public License, the Common Public License, the CDDL, the Mozilla Public License (MPL), the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL), and the Sun Industry Standards License (SISL), (ii) any license to Software that is considered “free” or “open source software” by the open source foundation or the Free Software Foundation, or (iii) any Reciprocal License.

 

Organizational Documents” means the articles of incorporation, certificate of incorporation, charter, bylaws, articles or certificate of formation, regulations, operating agreement, certificate of limited partnership, partnership agreement, and all other similar documents, instruments or certificates executed, adopted, or filed in connection with the creation, formation, or organization of a person, including any amendments thereto.

 

Outside Date” is defined in Section 8.01(b).

 

party” or “parties” means, individually or collectively, SPAC, OpCo and each of the Bluescape Parties.

 

PCAOB” means the Public Company Accounting Oversight Board and any division or subdivision thereof.

 

11

 

 

Permitted Liens” means (i) such imperfections of title, easements, encumbrances, Liens or restrictions that do not materially impair the current use of the Company’s or any Company Subsidiary’s assets that are subject thereto, (ii) materialmen’s, mechanics’, carriers’, workmen’s, warehousemen’s, repairmen’s, landlord’s and other similar Liens arising in the ordinary course of business, or deposits to obtain the release of such Liens, (iii) Liens for Taxes not yet due and delinquent, or if delinquent, being contested in good faith through appropriate proceedings and, in each case for which appropriate reserves have been made in accordance with GAAP and which are listed in Section 1.01(c) of the Company Disclosure Schedule or SPAC Disclosure Schedule, as applicable, (iv) zoning, entitlement, conservation restriction and other land use and Environmental Laws promulgated by Governmental Authorities, (v) non-exclusive licenses (or sublicenses) of Company-Owned IP granted in the ordinary course of business, (vi) non-monetary Liens, encumbrances and restrictions on real property (including easements, covenants, rights of way and similar restrictions of record) that do not materially interfere with the present uses of such real property, (vii) Liens identified in the Year-End Financial Statements, and (viii) Liens on leases, subleases, easements, licenses, rights of use, rights to access and rights of way arising from the provisions of such agreements or benefiting or created by any superior estate, right or interest.

 

person” means an individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including, without limitation, a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government.

 

Personal Information” means (i) personal information that specifically identifies an individual and (ii) any other information that constitutes “personal information,” “personal data” or “personally identifiable information” under applicable privacy Laws.

 

PPACA” is defined in Section 3.10(i).

 

Privacy Policies” is defined in Section 3.13(h).

 

Privacy/Data Security Laws” means all Laws applicable to the Company that govern the receipt, collection, use, storage, processing, sharing, security, confidentiality, disclosure, or transfer of Personal Information or the security of the Company’s Business Systems or Business Data.

 

Private Placements” is defined in Recitals.

 

Products” mean any products or services, developed, manufactured, performed, out-licensed, sold, distributed or otherwise made available by or on behalf of the Company or any Company Subsidiary, from which the Company or any Company Subsidiary has derived previously or is currently deriving, revenue from the sale or provision thereof.

 

Proxy Statement” is defined in Section 6.01(a).

 

PUHCA” means the Public Utility Holding Company Act of 2005.

 

Reciprocal License” means a license of an item of Software that requires or that conditions any rights granted in such license upon (i) the disclosure, distribution or compulsory licensing of any Company Software, (ii) a requirement that any disclosure, distribution or licensing of any Company Software be at no charge, (iii) a requirement that any other licensee of the Software be permitted to access the source code of, modify, make derivative works of, or reverse-engineer any such Company Software, (iv) a requirement that Company Software be redistributable by other licensees of such Software, or (v) the grant of any patent rights owned by the Company or its subsidiaries (other than patent rights in such item of Software), including non-assertion or patent license obligations (other than patent obligations relating to the use of such item of Software).

 

12

 

 

Redemption Percentage” means a percentage equal to the SPAC Stockholder Redemption Amount divided by the total amount required if all holders of SPAC Class A Common Stock elected to exercise their Redemption Rights with respect to all shares of SPAC Class A Common Stock held by such holders.

 

Redemption Rights” means the redemption rights provided for in Section 9.2 of Article IX of the SPAC Certificate of Incorporation.

 

Registered Intellectual Property” means (i) utility models, supplementary protection certificates, patents and applications for any of the foregoing, (ii) registered trademarks, service marks, designs, trade names, logos, trade dress, and slogans and applications to register any of the foregoing, (iii) registered copyrights and applications for copyright registrations, and (iv) domain name registrations.

 

Registration Rights Agreement” is defined in Recitals.

 

Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, dumping or disposing of any Hazardous Substances into or through the environment.

 

Remedies Exceptions” is defined in Section 3.04(a).

 

Representatives” is defined in Section 6.04(a).

 

Sanctioned Person” means at any time any person (i) listed on any Sanctions-related list of designated or blocked persons, (ii) the government of, resident in, or organized under the Laws of a country or territory that is the subject of comprehensive restrictive Sanctions from time to time (which includes, as of the date of this Agreement, Cuba, Iran, North Korea, Russia, Syria, the Crimea, so-called Donetsk People’s Republic (DNR), and so-called Luhansk People’s Republic (LNR) regions of Ukraine), or (iii) majority-owned or controlled by any of the foregoing.

 

Sanctions” means those trade, economic and financial sanctions Laws, regulations, embargoes, and restrictive measures administered or enforced by (i) the United States (including without limitation the U.S. Treasury Office of Foreign Assets Control), or (ii) any other similar Governmental Authority with jurisdiction over the Company or any Company Subsidiary from time to time.

 

SEC” is defined in Section 4.07(a).

 

SEC Fees” means all fees in connection with filings with the SEC or other materials contemplated by Section 6.01(a).

 

Securities Act” is defined in Section 3.05(b).

 

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Security Breach” means any breach of security of the Company Business Systems resulting in unauthorized use, access, destruction, loss, alteration, acquisition or disclosure of any Business Data.

 

Security Program” is defined in Section 3.13(h).

 

Software” means all computer software (including smartphone or tablet applications, HTML code, and firmware and other software embedded in hardware devices), systems and databases, firmware, data files, object codes and source codes, development tools, user interfaces, websites, manuals and all versions thereof and other software specifications and all documentation related to any of the foregoing.

 

SPAC” is defined in Preamble.

 

SPAC Board” is defined in Recitals.

 

SPAC Bylaws” is defined in Section 2.02(b)(ii).

 

SPAC Certificate of Incorporation” means the Third Amended and Restated Certificate of Incorporation of SPAC, dated August 5, 2021, as such may have been amended, supplemented or modified from time to time.

 

SPAC Class A Common Stock” means SPAC’s Class A Common Stock, par value $0.0001 per share.

 

SPAC Class B Common Stock” means SPAC’s Class B Common Stock, par value $0.0001 per share.

 

SPAC Class C Common Stock” means SPAC’s Class C Common Stock, par value $0.0001 per share, as described in the Fourth A&R SPAC Certificate of Incorporation.

 

SPAC Common Stock” means SPAC Class A Common Stock, SPAC Class B Common Stock and SPAC Class C Common Stock.

 

SPAC Contribution” is defined in Section 2.01(a).

 

SPAC Disclosure Schedule” means SPAC’s disclosure schedule delivered by SPAC in connection with this Agreement.

 

SPAC Extension Proposal” means any proposal to be submitted to the SPAC stockholders in accordance with Section 6.18 for the purpose of amending the SPAC’s Organizational Documents to extend the time period for SPAC to consummate a business combination, including the preparation, with the assistance of the Company, filing with the SEC, and with all other regulatory bodies, and mailing to the SPAC stockholders materials in the form of a proxy statement to be used for the purpose of soliciting proxies from the SPAC stockholders to approve such proposal at a special meeting of SPAC stockholders (including any adjournments) and providing the SPAC stockholders with the opportunity to redeem their shares of SPAC Class A Common Stock in connection therewith in accordance with the applicable provisions of the SPAC Certificate of Incorporation.

 

14

 

 

SPAC Incentive Common Stock” means SPAC Class A Common Stock and SPAC Class C Common Stock.

 

SPAC Incentive Equity Plan” is defined in Section 6.06(c).

 

SPAC Material Adverse Effect” means any Effect that, individually or in the aggregate with all other Effects, is or could reasonably be expected to (i) be materially adverse to the business, properties, assets, condition (financial or otherwise), liabilities, or operations of SPAC, or (ii) prevent, materially delay or materially impede the performance by SPAC or OpCo of their respective obligations under this Agreement or the consummation of the Transactions; provided, however that none of the following shall be deemed to constitute, alone or in combination, or be taken into account in the determination of whether, there has been or will be a SPAC Material Adverse Effect: (a) any change or proposed change in or change in the interpretation of any Law or GAAP; (b) events or conditions generally affecting special purpose acquisition companies; (c) any downturn in general economic conditions, including changes in the credit, debt, securities, financial or capital markets (including changes in interest or exchange rates, prices of any security or market index or commodity or any disruption of such markets); (d) any geopolitical conditions, outbreak of hostilities, acts of war, sabotage, cyberterrorism, terrorism, military actions, earthquakes, volcanic activity, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions, epidemics, pandemics and other force majeure events (including any escalation or general worsening thereof); (e) any actions taken or not taken by SPAC, as required by this Agreement or any Ancillary Agreement; (f) any Effect attributable to the announcement or execution, pendency, negotiation or consummation of the Transactions (provided that this clause (f) shall not apply to any representation or warranty to the extent the purpose of such representation or warrant is to address the consequences resulting from this Agreement or the consummation of the transactions contemplated hereby); or (g) any actions taken, or failures to take action, or such other changes or events, in each case, which the Company has requested or to which it has consented in writing, except in the cases of clauses (a) through (f), to the extent that SPAC is materially disproportionately affected thereby as compared with other participants in the industries in which SPAC operates.

 

SPAC Preferred Stock” is defined in Section 4.03(a).

 

SPAC Proposals” means the following proposals, collectively, to be considered at the SPAC Stockholders’ Meeting: (i) approval and adoption of this Agreement and Transactions, (ii) approval of the issuance of SPAC Class A Common Stock and SPAC Class C Common Stock as contemplated by this Agreement and the Subscription Agreements, as applicable, (iii) approval of the Fourth A&R SPAC Certificate of Incorporation, (iv) approval of certain non-binding proposals relating to the approval of the Fourth A&R SPAC Certificate of Incorporation, (v) approval of the SPAC Incentive Equity Plan, and (vi) any other proposals as may be mutually agreed by SPAC and the Company as necessary to effectuate the Transactions; provided that clauses (iv), (v) and (vi) shall, unless otherwise agreed between SPAC and the Company, not be a SPAC Proposal for purposes of Section 7.01(a) and Section 8.01(d).

 

15

 

 

SPAC SEC Reports” is defined in Section 4.07(a).

 

SPAC Stockholder Redemption Amount” means the aggregate amount of cash proceeds required to satisfy any exercise by stockholders of SPAC of the Redemption Right pursuant to and in accordance with the SPAC Certificate of Incorporation.

 

SPAC Stockholders’ Meeting” means the meeting of SPAC’s stockholders (including any adjournment or postponement thereof) to be held to consider the SPAC Proposals.

 

SPAC Tail Policy” is defined in Section 6.07(d).

 

SPAC Transaction Expenses” means (i) all reasonable and documented accrued and unpaid out of pocket third-party fees and expenses (inclusive of any Deferred Underwriting Fees) incurred in connection with, or otherwise related to, SPAC’s initial public offering and the Transactions, the negotiation and preparation of this Agreement and the other documents contemplated hereby and the performance and compliance with all agreements and conditions contained herein to be performed or complied with at or before the Closing, including the fees, expenses and disbursements of counsel and accountants, due diligence expenses, advisory and consulting fees and expenses, and other third-party fees, in each case, of SPAC or any of its subsidiaries (including OpCo) as of the Closing, and (ii) all amounts outstanding under any Affiliate Loan or any other loan to SPAC; provided that SPAC Transaction Expenses shall not include any applicable 1st Extension Date Funding Amount or 2nd Extension Date Funding Amount.

 

SPAC Units” means one share of SPAC Class A Common Stock and three-quarters of one SPAC Warrant.

 

SPAC VWAP” means the volume-weighted average share price of SPAC Class A Common Stock as displayed on SPAC’s page on Bloomberg (or any successor service) in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time, on the applicable Trading Day.

 

SPAC Warrant Agreement” means the Warrant Agreement between Continental Stock Transfer & Trust Company and CENAQ Energy Corp. dated August 17, 2021.

 

SPAC Warrants” means those certain whole warrants to purchase shares of SPAC Class A Common Stock as contemplated under the SPAC Warrant Agreement, with each whole warrant exercisable for one share of SPAC Class A Common Stock at an exercise price of $11.50.

 

Sponsor” is defined in Preamble.

 

Sponsor Agreement” is defined in Recitals.

 

State Commission” has the meaning set forth in 18 C.F.R. § 1.101(k).

 

Stockholder Approval” is defined in Section 7.01(a).

 

Subscription Agreements” is defined in Recitals.

 

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subsidiary” or “subsidiaries” means, with respect to any person, any legal entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such person or one or more of the other subsidiaries of such person or a combination thereof, or (ii) if a legal entity (other than a corporation), (a) a majority of the securities or other similar ownership interests having the power to elect a majority of the board of directors or other persons performing similar functions, (b) a general partner interest or (c) a managing member interest, is at the time owned or controlled, directly or indirectly, by such person or one or more subsidiaries of such person or a combination thereof. The term “subsidiary” shall include all subsidiaries of such subsidiary.

 

Supplier” means any person that supplies inventory or other materials or personal property, components, or other goods or services (including, design, development and manufacturing services) that comprise or are utilized in, including in connection with the design, development, manufacture or sale of, the Products of the Company or any Company Subsidiary.

 

Tax” or “Taxes” means any and all taxes, duties, levies or other similar governmental assessments, charges and fees in the nature of taxes imposed by any Governmental Authority, including, but not limited to, income, estimated, business, occupation, corporate, capital, gross receipts, transfer, stamp, registration, employment, payroll, unemployment, withholding, occupancy, escheat, unclaimed property, municipal, alternative or add-on, license, severance, capital, production, ad valorem, excise, windfall profits, customs duties, real property, personal property, sales, use, turnover, value added and franchise taxes, in each case imposed by any Governmental Authority, whether disputed or not, together with all interest, penalties, fines, assessments and additions to tax imposed with respect thereto by a Governmental Authority.

 

Tax Receivable Agreement” is defined in Recitals.

 

Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes or the administration of Tax-related matters, including any schedule or attachment thereto and any amendment thereof, in each case provided or required to be provided to a Governmental Authority.

 

Terminating Bluescape Breach” is defined in Section 8.01(e).

 

Terminating SPAC Breach” is defined in Section 8.01(f).

 

Trading Day” means any day on which shares of SPAC Class A Common Stock are actually traded on the principal securities exchange or securities market on which shares of SPAC Class A Common Stock are then traded.

 

Transaction Documents” means this Agreement, including all exhibits hereto, the Company Disclosure Schedule, the SPAC Disclosure Schedule, the Ancillary Agreements and all other agreements, certificates and instruments executed and delivered by SPAC, OpCo, Holdings or the Company in connection with the Transactions.

 

Transactions” means the Combination Transactions and the other transactions contemplated by this Agreement and the Transaction Documents.

 

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Transfer Taxes” is defined in Section 6.15(b).

 

Treasury Regulations” means the United States Treasury regulations issued pursuant to the Code.

 

Triggering Event I” means the date on which the SPAC VWAP is greater than or equal to $15.00 for any 20 Trading Days within any period of 30 consecutive Trading Days within the Earn Out Period.

 

Triggering Event II” means the date on which the SPAC VWAP is greater than or equal to $18.00 for any 20 Trading Days within any period of 30 consecutive Trading Days within the Earn Out Period.

 

Triggering Events” means Triggering Event I and Triggering Event II, respectively.

 

Trust Account” is defined in Section 4.13.

 

Trust Agreement” is defined in Section 4.13.

 

Trust Fund” is defined in Section 4.13.

 

Trustee” is defined in Section 4.13.

 

Virtual Data Room” means the virtual data room established by the Bluescape Parties, access to which was given to SPAC in connection with its due diligence investigation of the Company relating to the Transactions.

 

Year-End Financial Statements” is defined in Section 3.07(a).

 

Section 1.02  Construction.

 

(a)  Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the definitions contained in this Agreement are applicable to the other grammatical forms of such terms, (iv) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this entire Agreement, (v) the terms “Article,” “Section,” “clause,” “Schedule,” and “Exhibit” refer to the specified Article, Section, clause, Schedule or Exhibit of or to this Agreement, (vi) the word “including” or “include” means “including without limitation,” or “include, without limitation,” respectively, (vii) the word “or” shall be disjunctive but not exclusive, (viii) references to any Law shall include any successor legislation and all rules and regulations promulgated thereunder as in effect from time to time in accordance with the terms thereof and references to any Law shall be construed as including all statutory, legal, and regulatory provisions consolidating, amending or replacing such Law as amended from time to time, and (ix) references to any contract or agreement, document or instrument shall mean such contract, agreement, document, or instrument as amended or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of this Agreement. All terms defined in this Agreement have the defined meanings when used in any certificate or document made or delivered pursuant to this Agreement, unless otherwise defined in such certificate or other document. The phrase “made available,” “provided” or other similar terms when used in this Agreement with respect to the Company mean that the information or materials referred to have been posted to the Virtual Data Room at least two Business Days prior to the date of this Agreement.

 

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(b)  The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent and no rule of strict construction shall be applied against any party.

 

(c)  Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified, and when counting days, the date of commencement will not be included as a full day for purposes of computing any applicable time periods (except as otherwise may be required under any applicable Law). If any action is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action may be deferred until the next Business Day.

 

(d)  All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP as consistently applied by the Company.

 

Article II.

 

COMBINATION TRANSACTIONS

 

Section 2.01  Combination Transactions. Upon the terms and subject to the satisfaction or written waiver of the conditions contained in this Agreement, at the Closing:

 

(a)  (i) SPAC shall contribute to OpCo (A) all of its assets (excluding its interests in OpCo and the SPAC Stockholder Redemption Amount), including, for the avoidance of doubt, the Available Cash, and (B) a number of newly issued SPAC Class C Common Stock equal to the number of Holdings OpCo Units (such shares, the “Holdings Class C Shares”) and (ii) in exchange therefor, OpCo shall issue to SPAC a number of OpCo Units, which shall equal the number of total shares of SPAC Class A Common Stock issued and outstanding immediately after the Closing of the Transactions (taking into account the Private Placements and following the exercise of Redemption Rights) (such transactions, the “SPAC Contribution”); and

 

(b)  immediately following the SPAC Contribution, (i) Holdings shall contribute to OpCo the Company Interests and (ii) in exchange therefor, OpCo shall transfer to Holdings (A) the Holdings OpCo Units and (B) the Holdings Class C Shares (such transactions, the “Holdings Contribution” and together with the SPAC Contribution, the “Combination Transactions”).

 

Section 2.02  Closing.

 

(a)  The closing (the “Closing”) shall take place at 9:00 a.m., Houston, Texas time, (i) on a date that is two Business Days after the satisfaction, or, if permissible, waiver of the conditions set forth in Article VII (other than those conditions that by their nature are to be satisfied at Closing, it being understood that the occurrence of the Closing shall remain subject to the satisfaction or, if permissible, waiver, of such conditions at Closing) or (ii) on such other date as the parties may agree in writing. For purposes of this Agreement, “Closing Date” shall mean the date on which the Closing occurs.

 

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(b)  At the Closing, SPAC and OpCo will deliver or cause to be delivered to Holdings the following:

 

(i)  evidence of the filing with, and acceptance by, the Office of the Secretary of State of the State of Delaware of a fourth amended and restated certificate of incorporation of SPAC, substantially in the form attached hereto as Exhibit E (the “Fourth A&R SPAC Certificate of Incorporation”), to reflect, among other things, the issuance of the SPAC Class C Common Stock, with such rights and powers as granted therein;

 

(ii)  amended and restated bylaws of SPAC as set forth on Exhibit F (“SPAC Bylaws”);

 

(iii)  the amended and restated limited liability company agreement of OpCo substantially in the form attached as Exhibit G hereto (the “OpCo A&R LLC Agreement”), duly executed by SPAC, which shall include the OpCo Holder Redemption Right;

 

(iv)  the Tax Receivable Agreement, duly executed by SPAC;

 

(v)  the Registration Rights Agreement, duly executed by SPAC and the stockholders of SPAC party thereto;

 

(vi)  the consideration outlined in Section 2.01(b); and

 

(vii)  any other agreements, instruments, and documents which are required by other terms of this Agreement (or reasonably requested by Holdings) to be executed or delivered at Closing.

 

(c)  At the Closing, Holdings will deliver or cause to be delivered to SPAC the following:

 

(i)  the OpCo A&R LLC Agreement, duly executed by Holdings;

 

(ii)  the Tax Receivable Agreement, duly executed by Holdings;

 

(iii)  the Company Assignment Agreement, duly executed by Holdings;

 

(iv)  a duly completed and executed Internal Revenue Service Form W-9 in respect of Holdings;

 

(v)  the Registration Rights Agreement, duly executed by Holdings; and

 

(vi)  any other agreements, instruments, and documents which are required by other terms of this Agreement (or reasonably requested by SPAC) to be executed or delivered at Closing.

 

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Section 2.03  Earn-Out.

 

(a)  Following the Closing, as additional consideration for the Holdings Contribution, within five Business Days after the occurrence of a Triggering Event, SPAC shall cause OpCo to transfer to Holdings, the following number of OpCo Units and shares of SPAC Class C Common Stock (which shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to the OpCo Units or SPAC Class C Common Stock occurring on or after the Closing) (the “Earn Out Equity”), upon the terms and subject to the conditions set forth in this Agreement and the Ancillary Agreements:

 

(i) Upon the occurrence of Triggering Event I, a one-time transfer of 1,750,000 units and shares, as applicable, of Earn Out Equity; and

 

(ii)  Upon the occurrence of Triggering Event II, a one-time transfer of 1,750,000 units and shares, as applicable, of Earn Out Equity.

 

(b)  In the event there is a Company Sale during the Earn Out Period pursuant to which SPAC or its stockholders have the right to receive consideration implying a value per share of SPAC Class A Common Stock (as agreed in good faith by the SPAC Board) that is greater than or equal to the applicable SPAC VWAP price specified in Triggering Event I or Triggering Event II, any Earn Out Equity that has not previously transferred in accordance with Section 2.03(a)(i) or Section 2.03(a)(ii), as applicable, shall be deemed to have been transferred immediately prior to the closing of such Company Sale, and Holdings shall be eligible to participate in such Company Sale with respect to the Earn Out Equity deemed transferred pursuant to this Section 2.03(b) on the same terms, and subject to the same conditions, as apply to the holders of SPAC Class A Common Stock generally. Upon the consummation of a Company Sale, the Earn Out Period shall terminate and Holdings shall have no further right to receive or earn the Earn Out Equity other than in accordance with this Section 2.03(b) with respect to such Company Sale.

 

Section 2.04  Withholding. Notwithstanding anything in this Agreement to the contrary, each of SPAC and OpCo and any other applicable withholding agent shall be entitled to deduct and withhold from any amount or property (including shares, units or warrants) otherwise payable, issuable or transferable pursuant to this Agreement such amounts as are required to be deducted and withheld from or with respect to such payment, issuance or transfer under the Code or other applicable Law relating to Taxes; provided, however, that any party that becomes aware that withholding may be required in connection with the Transactions shall use commercially reasonable efforts to provide prior notice to the other parties of such potential withholding, and, in such case, the parties shall cooperate in good faith with each other to determine whether any such deduction or withholding is required under applicable Law and use commercially reasonable efforts to obtain any available exemption or reduction of, or otherwise minimize to the extent permitted by applicable Law, such deduction and withholding. To the extent that amounts are properly deducted or withheld and paid over to the applicable Governmental Authority, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid, issued or transferred to the person in respect of which such deduction and withholding was made.

 

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Article III.

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as set forth in the Company’s disclosure schedule delivered by the Company in connection with this Agreement (the “Company Disclosure Schedule”), the Bluescape Parties jointly and severally represent and warrant to SPAC and OpCo as follows:

 

Section 3.01  Organization and Qualification; Subsidiaries.

 

(a)  Each Bluescape Party and each Company Subsidiary is a limited liability company or other organization duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization and has the requisite limited liability company or other organizational power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to have such power or authority would not have a Company Material Adverse Effect. Each Bluescape Party and Company Subsidiary is duly qualified or licensed as a foreign corporation or other organization to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing that would not individually or in the aggregate have a Company Material Adverse Effect. A complete and correct list of all of the jurisdictions in which the Company and each Company Subsidiary are so licensed and qualified to do business is set forth on Section 3.01 of the Company Disclosure Schedule.

 

Section 3.02  Organizational Documents. The Company has prior to the date of this Agreement made available to SPAC a complete and correct copy of the Organizational Documents, each as amended to date, of each Bluescape Party and Company Subsidiary. Such Organizational Documents are in full force and effect. None of the Bluescape Parties nor any Company Subsidiary is in violation of any of the provisions of its Organizational Documents.

 

Section 3.03  Capitalization.

 

(a)  Holdings owns the Company Interests. All of the Company Interests are validly issued, fully paid and non-assessable (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act). There are no equity interests issued or outstanding in the Company other than the Company Interests. All the Company Interests have been issued and granted in compliance in all material respects with (i) applicable securities Laws and (ii) all preemptive rights and other requirements set forth in the Organizational Documents of the Company.

 

(b)  A true, correct and complete list of all the Company Subsidiaries, together with the jurisdiction of formation of each Company Subsidiary and the percentage of the outstanding equity interests of each Company Subsidiary owned by the Company and each other Company Subsidiary, is set forth in Section 3.03(b) of the Company Disclosure Schedule. The Company and the Company Subsidiaries do not directly or indirectly own, and have never owned, any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any other corporation, partnership, joint venture or business association or other entity, other than the Company Subsidiaries. Neither the Company nor any Company Subsidiary directly or indirectly controls (as such term is defined in the definition of “affiliate”) any other person.

 

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(c)  All of the outstanding equity interests of the Company Subsidiaries (i) are duly authorized, validly issued, fully paid and non-assessable (except as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act), and (ii) have been issued and granted in compliance in all material respects with applicable securities Laws and all preemptive rights and other requirements set forth in the Organizational Documents of the Company Subsidiaries, as applicable.

 

(d)  The Company Interests and equity interests in each Company Subsidiary held by the Company or a Company Subsidiary are free and clear of all Liens, other than transfer restrictions under applicable securities Laws, the Transaction Documents, and the applicable Organizational Documents.

 

(e)  There are no options, warrants, preemptive rights, calls, convertible securities or other rights, agreements, arrangements or commitments of any character with respect to the issued or unissued equity interests of the Company or any Company Subsidiary or obligating the Company or any Company Subsidiary to issue or sell any equity or voting interests in, or any securities convertible into or exchangeable or exercisable for equity or other voting interests in, the Company or any Company Subsidiary. None of the Company or any Company Subsidiary is a party to, or otherwise bound by, and none of the Company or any Company Subsidiary has granted, any equity appreciation rights, participations, phantom equity or similar rights. There are no voting trusts, voting agreements, proxies, shareholder agreements or other agreements to which the Company or any Company Subsidiary is a party or other securities of the Company or any Company Subsidiary to which the Company or any Company Subsidiary is not a party, with respect to the voting or transfer of the Company Interests or any of the equity interests or other securities of the Company or any Company Subsidiary.

 

(f) There are no outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any equity interests of the Company or any Company Subsidiary or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any person other than a Company Subsidiary.

 

Section 3.04  Authority Relative to this Agreement.

 

(a)  Each Bluescape Party has all necessary organizational power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Transactions. The execution and delivery of this Agreement by the Bluescape Parties and the consummation by the Bluescape Parties of the Transactions have been duly and validly authorized by all necessary organizational action, and no other corporate proceedings on the part of the Bluescape Parties are necessary to authorize this Agreement or to consummate the Transactions. This Agreement has been duly and validly executed and delivered by the Bluescape Parties and, assuming the due authorization, execution and delivery by SPAC and OpCo, constitutes a legal, valid and binding obligation of the Bluescape Parties, enforceable against the Bluescape Parties in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally or by general equitable principles (the “Remedies Exceptions”). No federal, state or local takeover statute is applicable to the Holdings Contribution.

 

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(b)  The Holdings Board, by resolutions duly adopted by unanimous vote of those voting at a meeting duly called and held and not subsequently rescinded or modified in any way, or by unanimous written consent, has duly approved and adopted this Agreement and the Transactions. Holdings, as the sole member of the Company, approved and adopted this Agreement and the Transactions. No additional approval or vote from any holders of any equity interests of Holdings, the Company or any of their respective affiliates are necessary to adopt this Agreement and approve the Transactions.

 

Section 3.05  No Conflict; Required Filings and Consents.

 

(a)  The execution and delivery of this Agreement by the Bluescape Parties does not, and subject to receipt of the filing and recordation of the consents, approvals, authorizations or permits, filings and notifications, expiration or termination of waiting periods after filings and other actions contemplated by Section 3.05(b) and assuming all other required filings, waivers, approvals, consents, authorizations and notices disclosed in Section 3.05(a) of the Company Disclosure Schedule have been made, obtained or given, the performance of this Agreement by the Bluescape Parties will not (i) conflict with or violate the Organizational Documents of any Bluescape Party or any Company Subsidiary, (ii) conflict with or violate any Law applicable to the Bluescape Parties or any Company Subsidiary or by which any property or asset of the Company or any Company Subsidiary is bound or affected, or (iii) result in any breach of or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any right of notice, consent, termination, amendment, acceleration or cancellation of, or result in the creation of a Lien (other than any Permitted Lien) on any material property or asset of the Company or any Company Subsidiary pursuant to, any (A) Material Contract or (B) Company Permit held by the Company or any Company Subsidiary, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which would not have a Company Material Adverse Effect.

 

(b)  The execution and delivery of this Agreement by the Bluescape Parties does not, and the performance of this Agreement by the Bluescape Parties will not, require any consent, approval, authorization or permit of, or filing with or notification to, or expiration or termination of any waiting period by, any United States federal, state, county or local or non-United States government, governmental, regulatory or administrative authority, agency, instrumentality or commission or any court, tribunal, or judicial or arbitral body (a “Governmental Authority”), except (i) for applicable requirements, if any, of the Securities Exchange Act of 1934 (the “Exchange Act”), the Securities Act of 1933 (the “Securities Act”), state securities or “blue sky” laws (“Blue Sky Laws”) and state takeover laws, and HSR Clearance, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not have a Company Material Adverse Effect.

 

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Section 3.06  Permits; Compliance. Each of the Company and the Company Subsidiaries is in possession of all material franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority necessary for each of the Company or the Company Subsidiaries to own, lease and operate its properties or to carry on its business as it is now being conducted (the “Company Permits”). No suspension or cancellation of any of the Company Permits is pending or, to the knowledge of the Company, threatened in writing. Neither the Company nor any Company Subsidiary is in conflict with, or in default, breach or violation of, (a) any Law applicable to the Company or any Company Subsidiary or by which any property or asset of the Company or any Company Subsidiary is bound, or (b) any Company Permit or any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise, or other instrument or obligation to which the Company or any Company Subsidiary is a party or by which Company or any Company Subsidiary or any of their property or assets is bound, except, in each case of clauses (a) and (b), for any such conflicts, defaults, breaches or violations that would not reasonably be expected, individually or in the aggregate, to have a Company Material Adverse Effect.

 

Section 3.07  Financial Statements.

 

(a)  The Company has made available to SPAC true, correct and complete copies of the audited consolidated balance sheets of the Company and the Company Subsidiaries as of December 31, 2020 and as of December 31, 2021, and the related audited consolidated statements of operations and cash flows of the Company and the Company Subsidiaries for the period from the Inception Date through December 31, 2020 and for the year ended December 31, 2021, each audited in accordance with the auditing standards of PCAOB (the “Year-End Financial Statements”), which are attached as Section 3.07(a) of the Company Disclosure Schedule. The Year-End Financial Statements (including the notes thereto) (i) were prepared from and are consistent with the books and records of the Company and the Company Subsidiaries, (ii) were prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods indicated and (iii) fairly present, in all material respects, the financial position, results of operations and cash flows of the Company and the Company Subsidiaries as at the date thereof and for the period indicated therein.

 

(b)  The Company has made available to SPAC true, correct and complete copies of the unaudited consolidated balance sheet of the Company and the Company Subsidiaries as of March 31, 2022, and the related unaudited consolidated statements of operations and cash flows of the Company and the Company Subsidiaries for the three months then ended (the “Interim Financial Statements” and together with the Year-End Financial Statements, the “Financial Statements”), which are attached as Section 3.07(b) of the Company Disclosure Schedule. The Interim Financial Statements (i) were prepared from and are consistent with the books and records of the Company and the Company Subsidiaries, (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except for the absence of notes other textual disclosures required by GAAP and subject to year-end adjustments and accruals) and (iii) fairly present, in all material respects, the financial position, results of operations and cash flows of the Company and the Company Subsidiaries as at the date thereof and for the period indicated therein, except as otherwise noted therein and subject to normal and recurring year-end adjustments.

 

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(c)  Except as and to the extent set forth in the Year-End Financial Statements, neither the Company nor any of the Company Subsidiaries has any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), except for: (i) liabilities that were incurred in the ordinary course of business consistent with past practice since December 31, 2021, (ii) obligations for future performance under any contract to which the Company or any Company Subsidiary is a party, or (iii) such other liabilities and obligations which, individually or in the aggregate, are not material to the Company and the Company Subsidiaries, taken as a whole.

 

(d)  Since the Inception Date, (i) neither the Company nor any Company Subsidiary, nor, to the knowledge of the Company, any director, manager, officer, employee, auditor, accountant or Representative of the Company or any Company Subsidiary, has received or otherwise had or obtained knowledge of any complaint, allegation, assertion or claim, whether written or, to the knowledge of the Company, oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Company Subsidiary or their respective internal accounting controls, including any such complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in questionable accounting or auditing practices, and (ii) there have been no internal investigations regarding accounting or revenue recognition discussed with, reviewed by or initiated at the direction of the chief executive officer, chief financial officer, general counsel, the Holdings Board or any committee thereof.

 

(e)  To the knowledge of the Company, no employee of the Company or any Company Subsidiary has provided or is providing information to any law enforcement agency regarding the commission or possible commission of any crime or the violation or possible violation of any applicable Law. None of the Company, any Company Subsidiary or, to the knowledge of the Company, any officer, employee, contractor, subcontractor or agent of the Company or any Company Subsidiary has discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against an employee of the Company or any Company Subsidiary in the terms and conditions of employment because of any act of such employee described in 18 U.S.C. sec. 1514A(a).

 

Section 3.08  Absence of Certain Changes or Events. From December 31, 2021 until the date of this Agreement, except as expressly contemplated by this Agreement, (a) there has not been a Company Material Adverse Effect, (b) except (x) as expressly contemplated by this Agreement, any Ancillary Agreement or in connection with the transactions contemplated hereby and thereby or (y) for any action taken, or omitted to be taken, by the Company to the extent determined to be reasonable and advisable in response to COVID-19, the Company and the Company Subsidiaries have conducted their respective businesses in all material respects in the ordinary course consistent with past practice, (c) the Company and the Company Subsidiaries have not sold, assigned, transferred, permitted to lapse, abandoned, or otherwise disposed of any right, title, or interest in or to any of their respective material assets (including Company-Owned IP) and (d) none of the Company or any Company Subsidiary has taken any action that, if taken after the date of this Agreement, would constitute a material breach of any of the covenants set forth in Section 5.01(b)(ii), (iii), (v), (vii), (x), (xii), (xix), (xx) or (xxi) (solely as it relates to the foregoing subsections of Section 5.01(b)).

 

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Section 3.09  Absence of Litigation. Since the Inception Date, there has been no material litigation, suit, claim, charge, grievance, action, proceeding, audit or investigation by or before any Governmental Authority (an “Action”) pending or, to the knowledge of the Company, threatened, against the Company or any Company Subsidiary, or any property or asset of the Company or any Company Subsidiary. None of Company, the Company Subsidiaries, and any property and asset of the Company or any Company Subsidiary, is subject to any material continuing order of, consent decree, settlement agreement or any other similar agreement with, or, to the knowledge of the Company, continuing investigation by, any Governmental Authority, or any material order, writ, judgment, injunction, decree, determination or award of any Governmental Authority.

 

Section 3.10  Employee Benefit Plans.

 

(a)  Section 3.10(a) of the Company Disclosure Schedule lists all Employee Benefit Plans.

 

(b)  With respect to each Employee Benefit Plan, the Company has made available to SPAC, if applicable (i) a true, correct and complete copy of the current plan document and all material amendments thereto and each trust or other funding arrangement, (ii) copies of the most recent summary plan description and any summaries of material modifications, (iii) a copy of the last three filed Internal Revenue Service (“IRS”) Form 5500 annual reports and accompanying schedules (or, if not yet filed, the most recent draft thereof), (iv) copies of the most recently received IRS determination, opinion or advisory letter for each such Employee Benefit Plan, if applicable, and (v) any material non-routine correspondence from any Governmental Authority with respect to any Employee Benefit Plan since the Inception Date. Neither the Company nor any Company Subsidiary has any express commitment to modify, change or terminate any Employee Benefit Plan, other than with respect to a modification, change or termination required by ERISA or the Code, or other applicable Law.

 

(c)  None of the Employee Benefit Plans is, and none of the Company or any ERISA Affiliate has or ever has had, any liability or obligation under, (i) a multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA), (ii) a single employer pension plan subject to Section 412 of the Code and/or Title IV of ERISA, (iii) a multiple employer plan, or (iv) a multiple employer welfare arrangement under ERISA. For purposes of this Agreement, “ERISA Affiliate” shall mean any corporation, trade or business which, together with any of the Bluescape Parties, is a member of a controlled group of corporations or a group of trades or businesses under common control within the meaning of Sections 414(b) or (c) of the Code.

 

(d)  None of Holdings, the Company or any Company Subsidiary is or will be obligated, whether under any Employee Benefit Plan or otherwise, to pay separation, severance, termination or similar benefits to any person as a result of the consummation of the Transactions, nor will any such Transactions accelerate the time of payment or vesting, or increase the amount, of any benefit, loan forgiveness, or other compensation due to any individual. The Transactions shall not be the direct or indirect cause of any amount paid or payable by the Company or any Company Subsidiary being classified as an “excess parachute payment” under Section 280G of the Code, and none of the payments contemplated by the Employee Benefit Plans would, in the aggregate, constitute excess parachute payments (as defined in Section 280G of the Code (without regard to subsection (b)(4) thereof)).

 

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(e)  None of the Employee Benefit Plans provide, nor does the Company nor any Company Subsidiary have or reasonably expect to have any obligation to provide, retiree medical or life insurance benefits to any current or former employee, officer, director or consultant of the Company or any Company Subsidiary after termination of employment or service except as may be required under Section 4980B of the Code and Parts 6 and 7 of Title I of ERISA and the regulations thereunder or any analogous state law.

 

(f) Each Employee Benefit Plan is and has been since the Inception Date in compliance, in all material respects, in accordance with its terms and the requirements of all applicable Laws, including ERISA and the Code. The Company and the ERISA Affiliates have performed all material obligations required to be performed by them under, are not in any material respect in default under or in violation of any Employee Benefit Plan. No Action is pending or, to the knowledge of the Company, threatened with respect to any Employee Benefit Plan (other than claims for benefits in the ordinary course), and to the knowledge of the Company, no facts or circumstances exist that would reasonably be expected to give rise to any such Action.

 

(g)  Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code or Section 401(k) of the Code (i) has timely received a favorable determination letter from the IRS that the Employee Benefit Plan is so qualified, (ii) has been established under a standardized master and prototype or volume submitter plan for which a current favorable Internal Revenue Service advisory letter or opinion letter has been obtained by the plan sponsor and is valid as to the adopting employer, (iii) has time remaining under applicable Laws to apply for a determination or opinion letter or to make any amendments necessary to obtain a favorable determination or opinion letter, or (iv) is entitled to rely on a favorable opinion letter from the IRS, and to the knowledge of Company, no fact or event has occurred since the date of such determination or opinion letter or letters from the IRS that materially and adversely affects the qualified status of any such Employee Benefit Plan or unavailability of reliance on such opinion letter.

 

(h)  Each Employee Benefit Plan (i) has been administered in compliance with its terms and all applicable Laws, including ERISA and the Code, (ii) no event has occurred which will or could cause any such Employee Benefit Plan to fail to comply with such requirements and no notice has been issued by any Governmental Authority questioning or challenging such compliance; and (iii) all contributions, premiums or payments required to be made with respect to any Employee Benefit Plan have been timely made to the extent due or properly accrued on the consolidated financial statements of the Company and the Company Subsidiaries. All Employee Benefit Plans which are subject to section 409A of the Code comply, with section 409A of the Code in form and have been administered in accordance with their terms and section 409A of the Code.

 

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(i) The Company and each ERISA Affiliate have each complied in all material respects with the notice and continuation coverage requirements, and all other requirements, of Section 4980B of the Code and Parts 6 and 7 of Title I of ERISA, and the regulations thereunder, with respect to each Employee Benefit Plan that is a group health plan within the meaning of Section 5000(b)(1) of the Code. There have been no acts or omissions by the Company or any of its ERISA Affiliates which have given rise to or may give rise to interest, fines, penalties, taxes or related charges under section 502 of ERISA or Chapters 43, 47, 68 or 100 of the Code for which the Company or any of its ERISA Affiliates, or any participant in any Employee Benefit Plan that is a nonqualified deferred compensation plan (within the meaning of section 409A of the Code), may be liable. The Company and its ERISA Affiliates, and each Employee Benefit Plan that is a “group health plan” as defined in Section 733(a)(1) of ERISA (a “Health Plan”) (i) is currently in compliance in all material respects with the Patient Protection and Affordable Care Act, Pub. L. No. 111-148 (“PPACA”), the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152 (“HCERA”), and the regulations and guidance issued thereunder (collectively, with PPACA and HCERA, the “Healthcare Reform Laws”), and (ii) has been in compliance in all material respects with all applicable Healthcare Reform Laws since March 23, 2010. No event has occurred, and no conditions or circumstance exists, that would reasonably be expected to subject the Company or any of its ERISA Affiliates or any Health Plan, to material penalties or excise taxes under Sections 4980D, 4980H, or 4980I of the Code or any other provision of the Healthcare Reform Laws.

 

(j) No nonexempt “prohibited transactions” as such term is defined in Section 406 of ERISA or Section 4975 of the Code have occurred with respect to any Employee Benefit Plan, and neither the Company nor any of its ERISA Affiliates has liability under Section 4975 of the Code. No Employee Benefit Plan, nor any trust which serves as a funding medium for any such Employee Benefit Plan is currently under examination by the IRS, the United States Department of Labor, the Pension Benefit Guaranty Corporation or any court, other than applications for determinations pending with the IRS. None of the assets of any Employee Benefit Plan are invested in employer securities or employer real property.

 

(k)  Neither the Company nor any of its ERISA Affiliates is a nonqualified entity within the meaning of section 457A of the Code. No Employee Benefit Plan or any contract, agreement, plan, policy, or arrangement with any employee, officer, director, consultant or independent contractor of the Company or any of its ERISA Affiliates, including, but not limited to, the agreements disclosed on Section 3.10(k) of the Company Disclosure Schedule, provides for a “gross-up” or similar payment in respect of any Taxes that may become payable under Sections 409A or 4999 of the Code.

 

Section 3.11  Labor and Employment Matters.

 

(a)  Section 3.11(a)(i) of the Company Disclosure Schedule sets forth a true, correct and complete list of all employees of the Company or any Company Subsidiary as of the date hereof and sets forth for each such individual the following: (i) name; (ii) employing entity; (iii) hire date; (iv) job title and status as full- or part-time; (v) total compensation (including commission, bonus or other incentive-based compensation eligibility) in 2021 and for which he or she is eligible in 2022); (vi) current annualized base salary or (if paid on an hourly basis) hourly rate of pay; (vii) commission, bonus or other incentive-based compensation plan(s), program(s) or agreement(s) to which he or she is a party, in which he or she participates or for which he or she is eligible; (viii) principal location of employment; (ix) whether covered by the terms of a collective bargaining or similar agreement or an employment agreement; (x) details of any work permit, visa or other work authorization, as applicable; (xi) leave status (including type of leave and expected return to work date); and (xii) classification as exempt or non-exempt from the overtime regulations of the Fair Labor Standards Act and applicable state wage and hour laws. Section 3.11(a)(ii) of the Company Disclosure Schedule sets forth a true, correct and complete list of all individuals who provide material services to the Company or any Company Subsidiary in the capacity of an independent contractor, and sets forth for each such individual: (x) the entity to which the services are provided; (y) a description of the services provided; and (z) compensation terms. The individuals identified in Section 3.11(a)(i) and Section 3.11(a)(ii) of the Company Disclosure Schedule represent the entirety of the individuals necessary to manage and operate the business of the Company and the Company Subsidiaries as currently managed and operated.

 

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(b)  The Company and each Company Subsidiary are, and since the Inception Date, have been, in compliance in all material respects with all applicable Laws relating to employment and employment practices or terms and conditions of employment, including but not limited to, worker classification (including the proper classification of individuals as employees or independent contractors), wages, hours of work, mass layoffs and plant closings (including the Worker Adjustment and Retraining Notification Act of 1988 and any similar state or local Laws), recordkeeping, employee notices, background checks and drug testing, pay equity, family and medical leave and all other employee leave, hiring, anti-harassment and anti-retaliation, anti-discrimination, collective bargaining, immigration, meal and rest breaks, employee reimbursements, pay stub requirements, workers’ compensation, unemployment compensation, and occupational safety and health. Except as would not reasonably be expected to be material to the Company or any Company Subsidiary, each employee of the Company and each Company Subsidiary and any other individual who has provided services with respect to the Company or any Company Subsidiary since the Inception Date has been paid (and as of the Closing will have been paid) all wages, bonuses, compensation and other sums owed and due to such individual as of such date.

 

(c)  Since the Inception Date, neither the Company nor any Company Subsidiary has taken, and as of the date hereof has no plans to take, any action with respect to the Transactions that would constitute a “mass layoff” or “plant closing” within the meaning of the Worker Adjustment and Retraining Notification Act of 1988 or would otherwise trigger any notice requirement under any state or local plant closing notice Law.

 

(d)  To the knowledge of the Company, no executive officer or other key employee of the Company or any Company Subsidiary is subject to any noncompetition, nonsolicitation, employment, or consulting agreement in conflict with the present business activities of the Company and any Company Subsidiary and, to the knowledge of the Company as of the date hereof, no executive officer or other key employee of the Company or any Company Subsidiary is planning to terminate his or her employment with the Company or any Company Subsidiary for any reason (or no reason), including the consummation of the Transactions.

 

(e)  Since the Inception Date, none of the Company or the Company Subsidiaries has entered into a settlement agreement with a current or former officer, director, contractor or employee of the Company or any of the Company Subsidiaries resolving allegations of sexual harassment, or discrimination by any current or former executive officer or director of the Company or any of the Company Subsidiaries. There are no, and since the Inception Date there has not been any, material Actions pending or, to the knowledge of the Company, threatened against the Company or any Company Subsidiary, in each case, involving allegations of sexual harassment or discrimination by a current or former executive officer or director of the Company or any of the Company Subsidiaries. The Company and any Company Subsidiary have investigated or reviewed all sexual harassment or other harassment, discrimination or retaliation allegations of which such Company or Company Subsidiary had actual knowledge since the Inception Date. With respect to each such allegation with potential merit, the Company and any Company Subsidiary have taken corrective action that is reasonably calculated to prevent further improper action.

 

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(f) No employee of the Company or any Company Subsidiary is represented by a labor union, works council, trade union, or other representative of employees with respect to their employment with the Company or any Company Subsidiary. Neither the Company nor any Company Subsidiary is a party to, subject to, or bound by a collective bargaining agreement, collective agreement, works council or trade union obligation or any other contract or agreement with a labor union, works council, trade union, or other representative of employees concerning the representation of employees. There are no, and since the Inception Date there have not been, any strikes, lockouts, concerted work stoppages, unfair labor practice charges or other material labor disputes existing or, to the knowledge of the Company, threatened, with respect to any employees or the Company or any Company Subsidiary or any other individuals who have provided services with respect to the Company or any Company Subsidiary. Since the Inception Date there have been no union certification or representation petitions or demands made to the Company or any Company Subsidiary and, to the knowledge of the Company, no union organizing campaign or similar effort is pending or threatened with respect to the Company, any Company Subsidiary, or any of their employees.

 

(g)  There are, and since the Inception Date, there have been, no material Actions pending or, to the knowledge of the Company, threatened against the Company or any Company Subsidiary by or on behalf of any of their respective current or former employees or contractors.

 

Section 3.12  Real Property; Title to Assets.

 

(a)  The Company does not own any real property.

 

(b)  Each lease, sublease, and license pursuant to which the Company or any Company Subsidiary leases, subleases or licenses any real property is referred to herein as a “Lease”. (i) To the Company’s knowledge, there are no leases, assignments, subleases, sublicenses, concessions or other contracts granting, in whole or in part, to any person other than the Company or Company Subsidiaries the right to use or occupy any Leased Real Property, and (ii) all Leases are in full force and effect, are valid and enforceable in accordance with their respective terms, subject to the Remedies Exceptions, and there is not, under any of such Leases, any existing default or event of default (or event which, with notice or lapse of time, or both, would constitute a default) by the Company or any Company Subsidiary or, to the knowledge of the Company, by the other party to such Leases, except as is not, or would not reasonably expected to, individually or in the aggregate be material to the Company or any Company Subsidiary.

 

(c)  There are no contractual or legal restrictions that preclude or restrict the ability of the Company or any Company Subsidiary to use any Leased Real Property for the purposes for which it is currently being used, except as would not, individually or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole. The Leased Real Property is in good and working order, condition and repair, ordinary wear and tear excepted. There are no latent defects or adverse physical conditions affecting the Leased Real Property, and improvements thereon, other than those that have not had a Company Material Adverse Effect.

 

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(d)  Each of the Company and the Company Subsidiaries has legal and valid title to, or, in the case of Leased Real Property, valid leasehold or subleasehold interests in, all of its properties and assets, tangible and intangible, real, personal and mixed, used or held for use in its business, free and clear of all Liens other than Permitted Liens, except where the failure to do so would not, or would not be reasonably expected to, individually or in the aggregate be material to the Company or any Company Subsidiary.

 

Section 3.13  Intellectual Property.

 

(a)  Section 3.13(a) of the Company Disclosure Schedule contains a true, correct and complete list of all: (i) Registered Intellectual Property constituting Company-Owned IP (the “Company-Owned Registered IP”) showing in each, as applicable, the jurisdiction in which such item of Company-Owned Registered IP has been registered or filed, filing date, date of issuance, and registration or application number and registrar, and the record owner; and (ii) all contracts or agreements to use any Company-Licensed IP, including for the Software or Business Systems of any other person (other than (A) unmodified, commercially available, “off-the-shelf” Software with a replacement cost and aggregate annual license and maintenance fees of less than $75,000, (B) commercially available service agreements to Business Systems that have an individual service or subscription fee of less than $75,000 per annum, or (C) non-exclusive licenses granted by or to the Company by customers or distributors in the ordinary course of business or that are incidental to the primary purpose of the contract). The Company-Owned IP and the Company-Licensed IP collectively constitutes all Intellectual Property rights used in, or necessary for, the operation of the business of the Company and the Company Subsidiaries and is sufficient for the conduct of such business as currently conducted and contemplated to be conducted as of the date hereof. All Company-Owned Registered IP is subsisting, valid and enforceable. No loss or expiration of any of the Company-Owned Registered IP is or, to the knowledge of the Company, threatened or pending, other than ordinary course expiration at the end of the statutory term for Company-Owned Registered IP.

 

(b)  The Company or one of the Company Subsidiaries, as applicable, solely owns and possesses, free and clear of all Liens (other than Permitted Liens), all right, title and interest in and to the Company-Owned IP and has the right to use pursuant to a valid and enforceable contract or license, all Company-Licensed IP.

 

(c)  The Company and each of its applicable Company Subsidiaries have taken and take reasonable actions to maintain the secrecy, confidentiality and value of its trade secrets and other Confidential Information of the Company or any Company Subsidiary, except where the failure to do so would not reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole. Neither the Company nor any Company Subsidiary has disclosed any trade secrets or other Confidential Information that is material to the business of the Company and any applicable Company Subsidiaries to any other person that is not an employee, officer or director of the Company or a Company Subsidiary other than pursuant to a written confidentiality agreement under which such other person agrees to maintain the confidentiality and protect such Confidential Information.

 

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(d)  (i) There have been no claims filed and served or threatened in writing (including email), including invitations to take a license, against the Company or any Company Subsidiary in any forum, by any person (A) contesting the validity, use, ownership, enforceability, patentability or registrability of any of the Company-Owned Registered IP (other than correspondence and office actions issued by Governmental Authorities in connection with the prosecution or registration of such Company-Owned Registered IP), or (B) alleging any infringement or misappropriation of, or other violation of, any Intellectual Property rights of other persons; (ii) the operation of the business of the Company and the Company Subsidiaries (including the Products) has not, since the Inception Date, and does not, infringe, misappropriate or violate, any Intellectual Property rights of other persons; (iii) to the knowledge of the Company, no other person has infringed, misappropriated or violated any of the material Company-Owned IP; and (iv) neither the Company nor any of the Company Subsidiaries has received written notice of any of the foregoing or received any formal written opinion of counsel regarding the foregoing.

 

(e)  All past and current employees and independent contractors of the Company and the Company Subsidiaries who have contributed, developed or conceived any Company-Owned IP have executed valid and enforceable written agreements with the Company or one of the Company Subsidiaries, substantially in the form(s) made available to SPAC, and pursuant to which such persons assigned to the Company or the applicable Company Subsidiary all of their entire right, title, and interest in and to any Intellectual Property created, conceived or otherwise developed by such person in the course of and related to his, her or its relationship with the Company or the applicable Company Subsidiary, without further consideration or any restrictions or obligations whatsoever, including on the use or other disposition or ownership of such Intellectual Property.

 

(f) The Company and Company Subsidiaries do not use and have not used, modified, distributed, made available, or otherwise exploited any Open Source Software or any modification or derivative thereof (i) in a manner that would grant or purport to grant to any other person any rights to or immunities under any of the Company-Owned IP, (ii) in a manner that would or could result in the imposition of a requirement or condition that the Company refrain from asserting or enforcing any of its patent rights, or (iii) under any Reciprocal License, to license or disclose, distribute, or make available the source code to any of the Business Systems or Product components for the purpose of making derivative works, or to make available for redistribution to any person the source code to any of the Business Systems or Product components at no or minimal charge.

 

(g)  The Company and/or one of the Company Subsidiaries owns, leases, licenses, or otherwise has the legal right to use all Business Systems, and such Business Systems are sufficient for the immediate needs of the business of the Company or any of the Company Subsidiaries. Except as would not be material to the Company or any of the Company Subsidiaries, taken as a whole, the Company and the Company Subsidiaries maintain commercially reasonable disaster recovery, business continuity and risk assessment plans, procedures and facilities. To the knowledge of the Company, since the Inception Date, there has not been any material failure with respect to any of the Business Systems that has not been remedied or replaced in all material respects. The Company and each of the Company Subsidiaries have purchased a sufficient number and type of licenses for the operation of their Business Systems as currently conducted or as contemplated to be conducted as of the date hereof.

 

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(h)  The Company and each of the Company Subsidiaries currently comply in all material respects with, and since the Inception Date have complied in all material respects with (i) all Privacy/Data Security Laws applicable to the Company or a Company Subsidiary, (ii) any applicable privacy policy of the Company and/or the Company Subsidiary, respectively, concerning the collection, dissemination, storage or use of Personal Information, including any policies or disclosures posted to websites or other media maintained or published by the Company or a Company Subsidiary (the “Privacy Policies”), (iii) industry standards to which the Company or any Company Subsidiary is bound or purports to adhere, and (iv) all contractual commitments that the Company or any Company Subsidiary has entered into or is otherwise bound with respect to privacy and/or data security (collectively, the “Data Security Requirements”). The Company and the Company Subsidiaries have each implemented commercially reasonable data security safeguards designed to protect the security and integrity of the Business Systems and any Business Data. Since the Inception Date, neither the Company nor any of the Company Subsidiaries has (x) to the knowledge of the Company, experienced any Security Breaches; or (y) been subject to or received written notice of any audits, proceedings or investigations by any Governmental Authority or any customer, or received any material claims or complaints regarding the collection, dissemination, storage, use, or other processing of Personal Information, or the violation of any applicable Data Security Requirements. Neither the Company nor any of the Company Subsidiaries has provided or been legally required to provide any notice to data owners in connection with any unauthorized access, use, disclosure or other processing of Personal Information collected by or provided to the Company or any of the Company Subsidiaries.

 

(i) To the knowledge of the Company, the Company and/or one of the Company Subsidiaries (i) possesses the right to use the Business Data constituting Company-Owned IP free and clear of any restrictions other than those imposed by applicable Privacy/Data Security Laws, or (ii) has the right to use, exploit, publish, reproduce, distribute, license, sell and create derivative works of such Business Data, in whole or in part, in the manner in which the Company and the Company Subsidiaries receive and use such Business Data prior to the Closing Date. To the knowledge of the Company, neither the Company nor any Company Subsidiary is subject to any contractual requirements, privacy policies, or other legal obligations, including based on the Transactions, that would prohibit the continuing or surviving entity or such Company Subsidiary, as applicable, from receiving or using Personal Information or other Business Data after the Closing Date, in the same manner in which the Company or such Company Subsidiary receive and use such Personal Information and other Business Data prior to the Closing Date.

 

(j) All past and current employees and independent contractors of the Company and the Company Subsidiaries have agreed to written obligations to the Company and the Company Subsidiaries to maintain in confidence all Confidential Information acquired or contributed by them in the course of their employment or engagement.

 

(k)  Neither the Company nor any Company Subsidiary is, nor has ever been, a member or promoter of, or a contributor to, any industry standards body or similar standard setting organization that requires or obligates the Company or any Company Subsidiary to grant or offer to any other person any license or right to any Company-Owned IP.

 

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Section 3.14  Taxes.

 

(a)  Each of the Company and the Company Subsidiaries: (i) has duly and timely filed (taking into account any extension of time within which to file) all material Tax Returns required to be filed and all such filed Tax Returns are complete and accurate in all material respects; (ii) has timely paid or withheld all material Taxes that it is obligated to pay or withhold, except with respect to current Taxes that are not yet due and payable or Taxes that are being contested in good faith and for which adequate reserves in respect thereof have been established in the Year-End Financial Statements in accordance with GAAP; (iii) with respect to all material Tax Returns filed by or with respect to it, has not waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency which waiver or extension remains in effect; (iv) does not have any deficiency, assessment, claim, audit, examination, investigation, litigation or other proceeding in respect of a material amount of Taxes or material Tax matters pending, asserted or proposed or threatened in writing by a Governmental Authority; and (v) has provided adequate reserves in accordance with GAAP in the Year-End Financial Statements for any material Taxes of the Company or any of the Company Subsidiaries as of the date of the Year-End Financial Statements that have not been paid.

 

(b)  Neither the Company nor any Company Subsidiary (i) has any liability for the Taxes of another person (other than the Company and any Company Subsidiary) pursuant to Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or non-U.S. Laws), as a transferee or a successor or by contract or agreement (other than any customary Tax sharing or indemnification provisions contained in any agreement entered into in the ordinary course of business and the principal purpose of which is not related to Taxes (e.g., leases, credit agreements or other commercial agreements)), or (ii) is a party to, is bound by or has any obligation to any Governmental Authority or other person (other than the Company or any Company Subsidiary) under any Tax sharing agreement, Tax indemnification agreement, Tax allocation agreement or similar contract, agreement or arrangement (including any agreement, contract or arrangement providing for the sharing or ceding of credits or losses), other than an agreement, contract or arrangement the primary purpose of which does not relate to Taxes.

 

(c)  Neither the Company nor any Company Subsidiary has been a member of an affiliated group filing a consolidated, combined or unitary U.S. federal, state, local or non-U.S. income Tax Return (other than a group of which Holdings, the Company or any Company Subsidiary is or was the common parent).

 

(d)  Neither the Company nor any Company Subsidiary will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any Tax period (or portion thereof) ending after the Closing Date as a result of any: (i) adjustment under Section 481(a) or Section 482 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law) by reason of a change in method of accounting or otherwise prior to the Closing; (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law) executed prior to the Closing; (iii) installment sale or open transaction disposition made prior to the Closing; (iv) intercompany transaction or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or non-U.S. Tax Law) entered into or created prior to the Closing; or (v) prepaid amount received prior to the Closing outside the ordinary course of business.

 

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(e)  Neither the Company nor any Company Subsidiary has engaged in or entered into a “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2).

 

(f) There are no Tax Liens upon any assets of the Company or any of the Company Subsidiaries except for Permitted Liens.

 

(g)  Since the Inception Date, no written claim has been made by a Governmental Authority in a jurisdiction where Tax Returns with respect to the Company or any Company Subsidiary are not filed asserting that the Company or any Company Subsidiary is or may be subject to Tax in that jurisdiction.

 

(h)  Neither the Company nor any Company Subsidiary has deferred any payroll Taxes pursuant to the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. 116-136, H.R. 748 (Mar. 27, 2020) (“CARES Act”), the Families First Coronavirus Response Act, Pub. L. 116-127, H.R. 6201 (Mar. 14, 2020), or the presidential memorandum regarding Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster signed on August 8, 2020, in any case, which deferred payroll Taxes are still unpaid. Neither the Company nor any Company Subsidiary has outstanding a covered loan under paragraph (36) of Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by Section 1102 of the CARES Act.

 

(i) Bluescape Clean Fuels Employee Holdings, LLC is, and has been since its formation, classified as a corporation for U.S. federal income tax purposes. The only material asset that Bluescape Clean Fuels Employee Holdings, LLC has ever owned is the membership interest in Bluescape Clean Fuels EmployeeCo, LLC, and the only material income ever incurred by Bluescape Clean Fuels Employee Holdings, LLC was derived from such membership interest in Bluescape Clean Fuels EmployeeCo, LLC. The Company has provided SPAC with all income Tax Returns of Bluescape Clean Fuels Employee Holdings, LLC.

 

(j) Bluescape Clean Fuels EmployeeCo, LLC is, and has been since its formation, disregarded as separate from its regarded owner or classified as a partnership for U.S. federal income tax purposes.

 

(k)  The Company and each Company Subsidiary (other than Bluescape Clean Fuels Employee Holdings, LLC and Bluescape Clean Fuels EmployeeCo, LLC) is, and, at all times since its formation, has been, disregarded as separate from its regarded owner for U.S. federal income Tax purposes, and no such entity has ever been treated as a corporation for U.S. federal income Tax purposes.

 

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Section 3.15  Environmental Matters. Except as would not be, individually or in the aggregate, material to the Company:

 

(a)  neither the Company nor any Company Subsidiary, nor to the knowledge of the Company, any other person whose liability has been contractually assumed or undertaken by the Company, has released any Hazardous Substance at any of the properties currently or, to the knowledge of the Company, formerly owned, leased or operated by the Company or any Company Subsidiary (including, without limitation, releases resulting in contamination of any land surface or subsurface strata, air, surface water or ground waters) which currently requires reporting, investigation, removal, remediation, monitoring or other response action by the Company or any Company Subsidiary pursuant to applicable Environmental Laws, or which could reasonably be expected to give rise to any liability of the Company or any Company Subsidiary under Environmental Laws;

 

(b)  since the Inception Date, none of the Company or any of the Company Subsidiaries has received any written notice alleging that it is liable pursuant to applicable Environmental Laws for any contamination by Hazardous Substances at any property owned, leased or operated by a third-person;

 

(c)  the Company, each Company Subsidiary, and each of their Products is, and since the Inception Date has been, in compliance with all applicable Environmental Laws (including with respect to all permits, licenses, registrations, approvals, and other authorizations required under Environmental Laws for the operations of the Company and each Company Subsidiary), and, to the knowledge of the Company, no material capital or operating expenditures are required to maintain such compliance that have not otherwise been budgeted for or adequately reserved;

 

(d)  the Company and each Company Subsidiary has obtained all permits, licenses, registrations, approvals and other authorizations required of the Company under applicable Environmental Laws to carry out its business as is currently conducted or that otherwise are required for the manufacture or production of each of their Products, or, to the knowledge of the Company, third parties hold such permits, licenses, registrations, approvals and other authorizations for the benefit of the Company or Company Subsidiary;

 

(e)  there are no Actions pending or, to the knowledge of the Company, threatened against the Company or any Company Subsidiary that allege a violation of or liability arising under any Environmental Law;

 

(f) to the knowledge of the Company, any Environmental Attributes generated in connection with the operations of the Company or the Company Subsidiaries are valid, the Company and each Company Subsidiary, as may be applicable, hold legal title to such Environmental Attributes, and none of the Company or any Company Subsidiary has received written notice from any person alleging that any such Environmental Attribute is invalid, untradeable, or must be surrendered;

 

(g)  none of the Company or any of the Company Subsidiaries are subject to any consent agreement, order, judgement, or settlement arising under Environmental Laws, for which any obligations remain outstanding; and

 

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(h)  the Company has provided SPAC with copies of all environmental audits, assessments, investigations, reports and compliance evaluations and other similar environmental documents relating to the Company, any Company Subsidiary, or any of their current or former operations or facilities, that are in the reasonable possession, custody, or reasonable control of the Company or any of its Representatives.

 

Section 3.16  Material Contracts.

 

(a)  Section 3.16(a) of the Company Disclosure Schedule contains a true, correct and complete list, as of the date of this Agreement, of the following types of contracts and agreements (whether written or oral) to which the Company or any Company Subsidiary is a party or is bound (such contracts and agreements, excluding any Employee Benefit Plan listed on Section 3.10(a) of the Company Disclosure Schedule, being the “Material Contracts”):

 

(i) each contract and agreement with consideration paid by, or payable to, the Company or any of the Company Subsidiaries of more than $250,000 in a calendar year or more than $1,000,000 in the aggregate over the life of such contract or agreement;

 

(ii)  each contract and agreement with any Material Supplier;

 

(iii)  any operating agreement, voting or similar agreement relating to the equity securities of the Company and the Company Subsidiaries;

 

(iv)  each contract and agreement (A) governing the terms of the employment or engagement of any former (to the extent of any ongoing liability or obligation) or current directors, officers, employees or individual independent contractors providing for total annual compensation in excess of $250,000 (other than “at-will” contracts that may be terminated upon 30 days’ or less notice without the payment of severance), or (B) providing for retention, severance, transaction or change of control payments or benefits in excess of $250,000, or (C) providing for accelerated vesting or any other payment or benefit that may or will become due, in whole or in part, in connection with the consummation of the Transactions;

 

(v)  all management contracts and contracts with other consultants, in each case, excluding Employee Benefit Plans, that are not terminable without further monetary liability or penalty on 90 days’ or less prior notice;

 

(vi)  all broker, distributor, dealer, manufacturer’s representative, agency, sales promotion, market research, marketing consulting and advertising contracts and agreements pursuant to which the Company or any Company Subsidiary has granted any sponsorship rights, exclusive marketing, franchising consignment, distributor or any other similar right to any third party (including in any geographic area or with respect to any Product);

 

(vii)  (A) each contract and agreement under which the Company or any Company Subsidiary has created, incurred, assumed or borrowed any money or issued any note, indenture or other evidence of Company indebtedness or where the Company has guaranteed the indebtedness or others and (B) any pledge agreements, security agreements or other collateral agreements in which the Company or any Company Subsidiary granted to any person a Lien (other than any Permitted Liens) on any of the property or assets of the Company or any Company Subsidiary, and all agreements or instruments guarantying the debts or other obligations of any person in connection therewith;

 

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(viii)   each contract and agreement providing for the Company or any Company Subsidiary to make any loan, advance, capital contribution or assignment of payment to any person;

 

(ix)  each contract and agreement requiring any capital commitment or capital expenditure (or series of capital commitments or expenditures) by the Company or any Company Subsidiary in an amount in excess of $250,000 annually or $1,000,000 over the life of such contract or agreement;

 

(x)  each contract and agreement involving the payment of any earn-out or similar contingent payment on or after the date hereof;

 

(xi)  all partnership, strategic alliance, profit-sharing, joint venture or similar agreements;

 

(xii)  each contract and agreement with any Governmental Authority to which the Company or any Company Subsidiary is a party, other than any Company Permits;

 

(xiii)   each contract and agreement involving any resolution or settlement of any actual or threatened Action or other dispute which requires payment in excess of $100,000 or imposes material, continuing obligations on the Company or any Company Subsidiary, including injunctive or other non-monetary relief;

 

(xiv) each contract and agreement that limits, or purports to limit, the ability of the Company or any Company Subsidiary during any period of time to engage in any business, to solicit any potential customer, to operate in any geographical area or to compete with any person, to acquire any product or asset or to receive services from any person or sell any product or asset or perform services for any person;

 

(xv) each contract and agreement that results in any person or entity holding a power of attorney from the Company or any Company Subsidiary that relates to the Company, any Company Subsidiary or their respective business;

 

(xvi) all leases or master leases under which the Company or any Company Subsidiary is lessee of or holds or operates, in each case, any tangible property (other than real property), owned by any other person, except for any agreement under which the annual rental payments do not exceed $50,000;

 

(xvii) all leases or master leases under which the Company or any Company Subsidiary is lessor of or permits any third party to hold or operate, in each case, any tangible property (other than real property), owned or controlled by such Company or Company Subsidiary, except for any agreement under which the annual rental payments do not exceed $50,000;

 

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(xviii) each contract and agreement to use any Company-Licensed IP required to be set forth on Section 3.13(a)(ii) of the Company Disclosure Schedule;

 

(xix) contracts which involve the license or grant of rights to Company-Owned IP by the Company, other than non-exclusive licenses granted by the Company to customers or distributors in the ordinary course of business or that are incidental to the primary purpose of the contract;

 

(xx) each contract and agreement that has the following restrictions or terms: (a) a “most favored nation” or similar provision with respect to any person; (b) a provision providing for the sharing of any revenue or cost-savings with any other person; (c) a “minimum purchase” requirement; (d) rights of first refusal or first offer; (e) options to purchase or options to license; or (f) a “take or pay” provision;

 

(xxi) each contract and agreement that relates to any completed or future disposition or acquisition by the Company or any Company Subsidiary of (a) any business (whether by merger, consolidation or other business combination, sale of securities, sale of assets or otherwise) or (b) any material assets or properties, except any agreement for the purchase or sale of inventory in the ordinary course of business;

 

(xxii) each contract and agreement for the development of Company-Owned IP that is material to the Company and embodied in or distributed with a Product (other than employee invention assignment and confidentiality agreements);

 

(xxiii) all collective bargaining agreements or other contracts with any labor union, labor organization, works council or other representative of employees;

 

(xxiv)   each contract and agreement involving the payment of royalties or other amounts calculated based upon the revenues or income of the Company or any Company Subsidiary or income or revenues related to any Product of the Company or any Company Subsidiary to which the Company or any Company Subsidiary is a party;

 

(xxv) all contracts and agreements with any affiliate of the Company or family member thereof;

 

(xxvi)   each contract and agreement that is a currency or interest hedging arrangement; and

 

(xxvii)  any commitment to enter into an agreement of the type described in clauses (i) through (xxvi) of this Section 3.16.

 

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(b)  (i) Each Material Contract is a legal, valid and binding obligation of the Company or the Company Subsidiaries, as applicable, and, to the knowledge of the Company, the other parties thereto, and neither the Company nor any Company Subsidiary is in breach or violation of, or default under, any Material Contract nor has any Material Contract been canceled by the counterparty; (ii) to the knowledge of the Company, no other party is in breach or violation of, or default under, any Material Contract; (iii) the Company and the Company Subsidiaries have not received any written, or to the knowledge of the Company, oral claim of any breach, violation or default under any such Material Contract; and (iv) no event has occurred that (with or without due notice or lapse of time or both) would result in a breach of, or default under, any Material Contract by the Company or any Company Subsidiary or, to the Company’s knowledge, the counterparties thereto. The Company has made available to SPAC true, correct and complete copies of all Material Contracts, including any and all amendments, supplements or updates thereto.

 

(c)  Section 3.16(c) of the Company Disclosure Schedule sets forth a complete and accurate list of the names of the top 10 Suppliers of materials, products or services to the Company and the Company Subsidiaries, taken as a whole (measured by aggregate amount purchased by the Company and the Company Subsidiaries) during the 12 months ended December 31, 2021 (the “Material Suppliers”) and the amount paid by the Company and the Company Subsidiaries during such 12-month period then ended. Since the Inception Date, (x) no such Material Supplier has canceled, terminated or materially and adversely altered its relationship with the Company or any Company Subsidiary or, to the knowledge of the Company, threatened to cancel, terminate or materially and adversely alter its relationship with the Company or any Company Subsidiary and (y) there have been no material disputes between the Company or any Company Subsidiary and any Material Supplier.

 

Section 3.17  Insurance.

 

(a)  Section 3.17 of the Company Disclosure Schedule sets forth, with respect to each material insurance policy under which the Company or any Company Subsidiary is an insured, a named insured or otherwise the principal beneficiary of coverage as of the date of this Agreement (i) the names of the insurer, the principal insured and each named insured, (ii) the policy number, (iii) the period, scope and amount of coverage, and (iv) the premium most recently charged. To the knowledge of the Company, all such policies, binders and insurance contracts (collectively, the “Insurance Policies”), are in full force and effect.

 

(b)  With respect to each such Insurance Policy of the Company and the Company Subsidiaries, (i) neither the Company nor any Company Subsidiary is in material breach or default (including any such breach or default with respect to the payment of premiums or the giving of notice), and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default, or permit termination or modification, under the policy, (ii) all premiums due and payable with respect to each such Insurance Policy have been paid to date, and neither the Company nor any Company Subsidiary is in default with respect to its obligations under any such Insurance Policy, (iii) there is no material claim outstanding under any such Insurance Policy and neither the Company nor any Company Subsidiary has received any written notice from any insurer or reinsurer of any reservation rights with respect to pending or paid claims, and (iv) to the knowledge of the Company, no insurer on the policy has been declared insolvent or placed in receivership, conservatorship or liquidation.

 

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(c)  The Company and Company Subsidiaries maintain and have maintained at all times since the Inception Date, insurance against liabilities, claims and risks of a nature and in such amounts as are normal and customary for comparable entities in the industry, and the Company and Company Subsidiaries are, and have been, in compliance with all insurance requirements under applicable Laws and any contracts. Neither the Company nor any Company Subsidiary has received written, or to the knowledge of the Company, oral notice of cancellation, non-renewal, disallowance or reduction in coverage with respect to any Insurance Policy. There are currently no claims pending under any Insurance Policy issued to or for the benefit of the Company or any Company Subsidiary as to which coverage has been denied or disputed by the insurers of such policies and, to the knowledge of the Company, all claims and reportable incidents under any such Insurance Policy have been reported and asserted. Any material action pending against the Company or any Company Subsidiary that is covered by such Insurance Policy has been properly reported to the applicable insurer. With respect to the insurance maintained by or for the Company or Company Subsidiaries since the Inception Date, all deductible, or self-insured retention amounts, as applicable, are commercially reasonable.

 

Section 3.18  Certain Business Practices.

 

(a)  The Company, the Company Subsidiaries, their respective managers, officers and directors, and, to the knowledge of the Company, their employees, any agents or other third-party representatives to the extent they act on behalf of the Company or any Company Subsidiary, are currently, and since the Inception Date have been, in compliance in all material respects with all applicable Anti-Corruption Laws, and since the Inception Date, none of the Company, any Company Subsidiary, any of their respective managers, officers or directors or, to the knowledge of the Company, any of their respective employees or agents, has: (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity, including to any person running for federal or state office; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of any applicable Anti-Corruption Law; or (iii) made any payment in the nature of criminal bribery.

 

(b)  The Company, the Company Subsidiaries, their respective managers, officers and directors, and, to the knowledge of the Company, their respective employees, agents or other third-party representatives acting on behalf of the Company or any Company Subsidiary, are currently, and since the Inception Date have been, in compliance in all material respects with all applicable Sanctions and Ex-Im Laws. Since the Inception Date, none of the Company, any Company Subsidiary, their respective managers, officers and directors, or to the knowledge of the Company, any of their respective employees or agents (i) is or has been a Sanctioned Person; (ii) has transacted business with or for the benefit of any Sanctioned Person or has otherwise violated applicable Sanctions; or (iii) has violated any Ex-Im Laws.

 

(c)  There are no, and since the Inception Date, there have not been, any internal or external investigations, audits, actions or proceedings pending, or any voluntary or involuntary disclosures made to a Governmental Authority, with respect to any apparent or suspected violation by the Company, any Company Subsidiary, or any of their respective officers, directors, employees or agents with respect to any applicable Anti-Corruption Laws, Sanctions, or Ex-Im Laws.

 

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Section 3.19  Interested Party Transactions. Except for employment relationships and the payment of compensation, benefits and expense reimbursements and advances in the ordinary course of business, no director, officer or other affiliate of the Company or any Company Subsidiary, to knowledge of the Company, has or has had, directly or indirectly: (a) an economic interest in any person that has furnished or sold, or furnishes or sells, services or Products that the Company or any Company Subsidiary furnishes or sells, has furnished or sold or proposes to furnish or sell; (b) an economic interest in any person that purchases from or sells or furnishes to, the Company or any Company Subsidiary, any goods or services; (c) a beneficial interest in any Material Contract; or (d) any contractual or other arrangement with the Company or any Company Subsidiary, other than customary indemnity arrangements (each, an “Interested Party Transaction”). The Company and the Company Subsidiaries have not, since the Inception Date, (i) extended or maintained credit, arranged for the extension of credit or renewed an extension of credit in the form of a personal loan to or for any director or executive officer (or equivalent thereof) of the Company, or (ii)  modified any term of any such extension or maintenance of credit. There are no contracts or arrangements between the Company or any of the Company Subsidiaries and any family member of any director, officer or other affiliate of the Company or any of the Company Subsidiaries.

 

Section 3.20  Exchange Act. Neither the Company nor any Company Subsidiary is currently (nor has it previously been) subject to the requirements of Section 12 of the Exchange Act.

 

Section 3.21  Regulatory Status.

 

(a)  Neither the Company nor any Company Subsidiary is regulated pursuant to the FPA or is a “holding company,” “electric utility company,” or “gas utility company,” pursuant to PUHCA or FERC’s implementing regulations thereunder.

 

(b)  Neither the Company nor any Company Subsidiary is subject to regulation as a “natural gas company” as defined in the NGA or regulation under the ICA, including in each case with respect to rates, terms and conditions of service, accounting and recordkeeping, or other matters.

 

(c)  Neither the Company nor any Company Subsidiary is subject to, or not exempt from, financial, organizational or rate regulation by any State Commission.

 

(d)  No pre-Closing consent, approval or authorization, registration or filing is required by FERC or any State Commission in connection with the execution, delivery and performance of this Agreement or the consummation of the Transactions.

 

Section 3.22  Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of the Company.

 

Section 3.23  Company Owner Contributions. Section 3.23 of the Company Disclosure Schedule sets forth the Company Owner Contributions made as of the date of this Agreement.

 

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Section 3.24  Exclusivity of Representations and Warranties. Except as otherwise expressly provided in this Article III (as modified by the Company Disclosure Schedule), each of the Bluescape Parties and each Company Subsidiary hereby expressly disclaims and negates, any other express or implied representation or warranty whatsoever (whether at Law or in equity) with respect to the Bluescape Parties, the Company Subsidiaries, and any matter relating to any of them, including their affairs, the condition, value or quality of the assets, liabilities, prospects, financial condition or results of operations, or with respect to the accuracy or completeness of any other information made available to SPAC, its affiliates or any of their respective Representatives by, or on behalf of, the Bluescape Parties or any Company Subsidiary, and any such representations or warranties are expressly disclaimed. Without limiting the generality of the foregoing, except as expressly set forth in this Agreement (as modified by the Company Disclosure Schedule) or in any certificate delivered by any Bluescape Party pursuant to this Agreement, the Bluescape Parties and the Company Subsidiaries have not and do not, and no other person on behalf of the Bluescape Parties or the Company Subsidiaries has made or makes, any representation or warranty, whether express or implied, with respect to any projections, forecasts, estimates or budgets made available to SPAC, its affiliates or any of their respective Representatives of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of any Bluescape Party or any Company Subsidiary, whether or not included in any management presentation or in any other information made available to SPAC, its affiliates or any of their respective Representatives or any other person, and any such representations or warranties are expressly disclaimed. Nothing in this Section 3.24 shall limit any claim or cause of action (or recovery therewith) with respect to fraud.

 

Article IV.

 

REPRESENTATIONS AND WARRANTIES OF SPAC AND OPCO

 

Except as set forth in the SPAC SEC Reports (to the extent the qualifying nature of such disclosure is readily apparent from the content of such SPAC SEC Reports, but excluding disclosures referred to in “Forward-Looking Statements,” “Risk Factors” and any other disclosures therein to the extent they are of a predictive or cautionary nature or related to forward-looking statements), SPAC hereby represents and warrants to the Bluescape Parties as follows:

 

Section 4.01  Corporate Organization. Each of SPAC and OpCo is a corporation or limited liability company duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation and has the requisite corporate or limited liability company power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to have such power or authority would not reasonably be expected, individually or in the aggregate, to have a SPAC Material Adverse Effect.

 

Section 4.02  Organizational Documents. Each of SPAC and OpCo has heretofore furnished to the Company complete and correct copies of its Organizational Documents. SPAC’s Organizational Documents and OpCo’s Organizational Documents are in full force and effect. Neither SPAC nor OpCo is in violation of any of the provisions of SPAC’s Organizational Documents and OpCo’s Organizational Documents.

 

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Section 4.03  Capitalization.

 

(a)  As of the date hereof, the authorized capital stock of SPAC consists of (i) 200,000,000 shares of SPAC Class A Common Stock, (ii) 20,000,000 shares of SPAC Class B Common Stock, and (iii) 1,000,000 shares of preferred stock, par value $0.0001 per share (“SPAC Preferred Stock”). As of the date of this Agreement (A) 17,439,750 shares of SPAC Class A Common Stock are issued and outstanding, all of which are validly issued, fully paid and non-assessable and not subject to any preemptive rights, (B) 4,312,500 shares of SPAC Class B Common Stock are issued and outstanding, all of which are validly issued, fully paid and non-assessable and were issued in compliance in all material respects with applicable Law, (C) no shares of SPAC Class A Common Stock or SPAC Class B Common Stock are held in the treasury of SPAC, (D) 19,612,500 SPAC Warrants are issued and outstanding, and (E) 19,612,500 shares of SPAC Class A Common Stock are reserved for future issuance pursuant to the SPAC Warrants. As of the date of this Agreement, there are no shares of SPAC Preferred Stock issued and outstanding. Each SPAC Warrant is exercisable for one share of SPAC Class A Common Stock at an exercise price of $11.50, subject to the terms of such SPAC Warrant and the SPAC Warrant Agreement. The SPAC Class B Common Stock will convert into SPAC Class A Common Stock at the Closing pursuant to the terms of the SPAC Certificate of Incorporation.

 

(b)  Except for OpCo, SPAC does not directly or indirectly own any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any corporation, partnership, joint venture or business association or other person.

 

(c)  SPAC owns the OpCo Interests. The OpCo Interests have been duly authorized, validly issued, fully paid and are non-assessable and are not subject to preemptive rights, and are held by SPAC free and clear of all Liens, other than transfer restrictions under applicable securities Laws and OpCo’s Organizational Documents.

 

(d)  All outstanding SPAC Units, shares of SPAC Class A Common Stock, shares of SPAC Class B Common Stock and SPAC Warrants have been issued and granted in compliance with all applicable securities Laws and were issued free and clear of all Liens other than transfer restrictions under applicable securities laws and SPAC’s Organizational Documents.

 

(e)  The SPAC Class C Common Stock being delivered by SPAC hereunder shall be duly and validly issued, fully paid and nonassessable, and each such share or other security shall be issued free and clear of preemptive rights and all Liens, other than transfer restrictions under applicable securities Laws and SPAC’s Organizational Documents. The SPAC Class C Common Stock will be issued in compliance with all applicable securities Laws and without contravention of any other person’s rights therein or with respect thereto.

 

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(f) Except for the Subscription Agreements, Imperial Letter Agreement, the Additional Subscription Agreements, this Agreement, the SPAC Warrants and the SPAC Class B Common Stock, SPAC has not issued any options, warrants, preemptive rights, calls, convertible securities or other rights, agreements, arrangements or commitments of any character with respect to the issued or unissued capital stock of SPAC or obligating SPAC to issue or sell any shares of capital stock of, or other equity interests in, SPAC. All shares of SPAC Class A Common Stock and SPAC Class B Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and non-assessable. Neither SPAC nor any subsidiary of SPAC is a party to, or otherwise bound by; and neither SPAC nor any subsidiary of SPAC has granted, any equity appreciation rights, participations, phantom equity or similar rights. Except for the Investment Agreements, Imperial Letter Agreement, Letter Agreement and the Sponsor Agreement, SPAC is not a party to any voting trusts, voting agreements, proxies, shareholder agreements or other agreements with respect to the voting or transfer of SPAC Common Stock or any of the equity interests or other securities of SPAC or any of its subsidiaries. Except with respect to this Agreement, Redemption Rights and the SPAC Warrants, there are no outstanding contractual obligations of SPAC to repurchase, redeem or otherwise acquire any shares of SPAC Common Stock. Except for any loan from Sponsor or an affiliate or member thereof listed in Section 4.03(f)(ii) of the SPAC Disclosure Schedule (each, an “Affiliate Loan”), there are no outstanding contractual obligations of SPAC to make any investment (in the form of a loan, capital contribution or otherwise) in, any person.

 

Section 4.04  Authority Relative to this Agreement. Each of SPAC and OpCo has all necessary organizational power and authority to execute and deliver this Agreement and, subject to obtaining Stockholder Approval, to perform its respective obligations hereunder. The execution and delivery of this Agreement by each of SPAC and OpCo and the consummation by each of SPAC and OpCo of the Transactions have been duly and validly authorized by all necessary organizational action other than obtaining Stockholder Approval, and no other corporate or limited liability company proceedings on the part of SPAC or OpCo, as applicable, are necessary to authorize this Agreement or to consummate the Transactions. This Agreement has been duly and validly executed and delivered by SPAC and OpCo and, assuming obtaining Stockholder Approval and due authorization, execution and delivery by the Company, constitutes a legal, valid and binding obligation of SPAC or OpCo, enforceable against SPAC or OpCo in accordance with its terms, subject to the Remedies Exceptions.

 

Section 4.05  No Conflict; Required Filings and Consents.

 

(a)  The execution and delivery of this Agreement by each of SPAC and OpCo do not, and the performance of this Agreement by each of SPAC and OpCo will not, (i) conflict with or violate SPAC’s Organizational Documents or OpCo’s Organizational Documents, (ii) assuming that all consents, approvals, authorizations, expiration or termination of waiting periods and other actions described in Section 4.05(b) have been obtained and all filings and obligations described in Section 4.05(b) have been made, conflict with or violate any Law applicable to each of SPAC or OpCo or by which any of their property or assets is bound, or (iii) result in any breach of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any property or asset of each of SPAC or OpCo pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which each of SPAC or OpCo is a party or by which each of SPAC or OpCo or any of their property or assets is bound or affected, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which would not have a SPAC Material Adverse Effect.

 

(b)  The execution and delivery of this Agreement by each of SPAC and OpCo do not, and the performance of this Agreement by each of SPAC and OpCo will not, require any consent, approval, authorization or permit of, or filing with or notification to, or expiration or termination of any waiting period by, any Governmental Authority, except (i) for applicable requirements, if any, of the Exchange Act, the Securities Act, Blue Sky Laws and state takeover laws, and HSR Clearance and (ii)  where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not reasonably be expected, individually or in the aggregate, to have a SPAC Material Adverse Effect.

 

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Section 4.06  Compliance.

 

(a)  Neither SPAC nor OpCo is or has been in conflict with, or in default, breach or violation of, (i) any Law applicable to SPAC or OpCo or by which any property or asset of SPAC or OpCo is bound, or (ii) any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which SPAC or OpCo is a party or by which SPAC or OpCo or any property or asset of SPAC or OpCo is bound, except, in each case, for any such conflicts, defaults, breaches or violations that would not reasonably be expected to individually or in the aggregate result in a SPAC Material Adverse Effect. Each of SPAC and OpCo is in possession of all material franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority necessary for SPAC or OpCo to own, lease and operate its properties or to carry on its business as it is now being conducted.

 

(b)  SPAC is not a party to any contract with any other person other than (i) this Agreement and the agreements expressly contemplated hereby, (ii) engagement agreements with advisors and consultants in connection with activities directed toward the accomplishment of a Business Combination, (iii) contracts filed prior to the date hereof as exhibits to the SPAC SEC Reports, (iv) D&O Insurance contracts, (v) the contracts listed in Section 4.06(b) of the SPAC Disclosure Schedule, and (vi) any other contracts that, in the aggregate, require payment following the date hereof by SPAC of less than $250,000 for all such contracts in the aggregate. SPAC is not a party to any contract that, as of and following the Closing, will impose any limitations or restrictions on the business activities of SPAC, the Company or any Company Subsidiary.

 

Section 4.07  SEC Filings; Financial Statements; Sarbanes-Oxley.

 

(a)  SPAC has filed all forms, reports, schedules, statements and other documents, including any exhibits thereto, required to be filed by it with the Securities and Exchange Commission (the “SEC”) since August 12, 2021, together with any amendments, restatements or supplements thereto (collectively, the “SPAC SEC Reports”). As of their respective dates, the SPAC SEC Reports (i) complied in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act, and the rules and regulations promulgated thereunder, and (ii) did not, at the time they were filed, or, if amended, as of the date of such amendment, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, in the case of any SPAC SEC Report that is a registration statement, or include 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, in the case of any other SPAC SEC Report.

 

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(b)  Each of the financial statements (including, in each case, any notes thereto) contained in the SPAC SEC Reports was prepared in accordance with GAAP (applied on a consistent basis) and Regulation S-X and Regulation S-K, as applicable, throughout the periods indicated (except as may be indicated in the notes thereto or, in the case of unaudited financial statements, as permitted by Form 10-Q of the SEC) and each fairly presents, in all material respects, the financial position, results of operations, changes in stockholders equity and cash flows of SPAC as at the respective dates thereof and for the respective periods indicated therein (subject, in the case of unaudited statements, to normal and recurring year-end adjustments which have not had, and would not reasonably be expected to individually or in the aggregate be material to SPAC). SPAC has no off-balance sheet arrangements that are not disclosed in the SPAC SEC Reports.

 

(c)  Except for any Affiliate Loan and as and to the extent set forth in the SPAC SEC Reports, neither SPAC nor OpCo has any liability or obligation of a nature (whether accrued, absolute, contingent or otherwise), except for liabilities and obligations arising in the ordinary course of SPAC’s and OpCo’s business.

 

(d)  As of the date hereof, there are no outstanding SEC comments from the SEC with respect to the SPAC SEC Reports.

 

Section 4.08  Absence of Certain Changes or Events.

 

(a)  Since December 31, 2021 and prior to the date of this Agreement, except as expressly contemplated by this Agreement and in connection with any Affiliate Loan, (i) SPAC has conducted its business in all material respects in the ordinary course, (ii) SPAC has not sold, assigned, transferred, permitted to lapse, abandoned, or otherwise disposed of any right, title, or interest in or to any of its material assets, (iii) there has not been a SPAC Material Adverse Effect and (iv) SPAC has not taken any action that, if taken after the date of this Agreement, would constitute a material breach of any of the covenants set forth in Section 5.02.

 

(b)  Since its incorporation, except for any Affiliate Loan, SPAC has not conducted any business activities other than activities directed toward the accomplishment of a business combination in accordance with the SPAC’s Organizational Documents. Except for this Agreement and the Transactions, SPAC has no interests, rights, obligations or liabilities with respect to, and is not party to, bound by or has its assets or property subject to, in each case whether directly or indirectly, any contract or transaction which is, or could reasonably be interpreted as constituting, such a business combination.

 

Section 4.09  Absence of Litigation. There is no Action pending or, to the knowledge of SPAC, threatened against SPAC, or any property or asset of SPAC, before any Governmental Authority. SPAC is not subject to any continuing order of, consent decree or settlement agreement with, or, to the knowledge of SPAC, continuing investigation by, any Governmental Authority.

 

Section 4.10  Board Approval; Vote Required.

 

(a)  The SPAC Board, by resolutions duly adopted by unanimous vote of those voting at a meeting duly called and held and that has not been subsequently rescinded or modified in any way, has duly (i) determined that this Agreement and the transactions contemplated by this Agreement are fair to and in the best interests of SPAC and its stockholders, (ii) approved this Agreement and the Transactions and declared their advisability, and (iii) recommended that the stockholders of SPAC approve and adopt this Agreement and the Transactions and directed that this Agreement and the Transactions, be submitted for consideration by the stockholders of SPAC at the SPAC Stockholders’ Meeting.

 

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(b)  The only vote of the holders of any class or series of capital stock of SPAC necessary to approve the Transactions is the affirmative vote of the holders of a majority of the outstanding shares of SPAC Common Stock.

 

(c)  SPAC, in its capacity as the sole member of OpCo, by resolutions duly adopted by written consent and not subsequently rescinded or modified in any way, has duly (i) determined that this Agreement and the Transactions are fair to and in the best interests of OpCo and (ii) approved this Agreement and the Transactions.

 

(d)  The only vote of the holders of any class or series of equity interests of OpCo necessary to approve this Agreement and the Transactions is the consent of the sole member of OpCo.

 

Section 4.11  No Prior Operations of OpCo. OpCo was formed solely for the purpose of engaging in the Transactions and has not engaged in any business activities or conducted any operations or incurred any obligation or liability, other than as contemplated by this Agreement or in furtherance or anticipation of the Transactions.

 

Section 4.12  Brokers. Except for I-Bankers Securities, Inc. and Imperial Capital, LLC, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of SPAC or OpCo.

 

Section 4.13  SPAC Trust Fund. As of the date of this Agreement, SPAC has no less than $174,225,000 in the trust fund established by SPAC for the benefit of its public stockholders (the “Trust Fund”) (including any Deferred Underwriting Fees) maintained in a trust account at Bank of America (the “Trust Account”). The monies of such Trust Account are invested in United States Government securities or money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, and held in trust by Continental Stock Transfer & Trust Company (the “Trustee”) pursuant to the Investment Management Trust Agreement, dated as of August 17, 2021, between SPAC and the Trustee (the “Trust Agreement”). The Trust Agreement has not been amended or modified and is valid and in full force and effect and is enforceable in accordance with its terms, subject to the Remedies Exceptions. SPAC has complied in all material respects with the terms of the Trust Agreement and is not in breach thereof or default thereunder and there does not exist any fact, circumstance or event which, with the giving of notice or the lapse of time, would constitute a breach or default by SPAC or the Trustee. There are no separate contracts, agreements, side letters or other agreements or understandings (whether written or unwritten, express or implied): (a) between SPAC and the Trustee that would cause the description of the Trust Agreement in the SPAC SEC Reports to be inaccurate in any material respect; or (b) to the knowledge of SPAC that would entitle any person (other than stockholders of SPAC who shall have elected to redeem their shares of SPAC Class A Common Stock pursuant to SPAC’s Organizational Documents) to any portion of the proceeds in the Trust Account. Prior to the Closing, none of the funds held in the Trust Account may be released except: (i) to pay income and franchise Taxes from any interest income earned in the Trust Account; and (ii) upon the exercise of Redemption Rights in accordance with the provisions of SPAC’s Organizational Documents. Following the Closing, no stockholder of SPAC shall be entitled to receive any amount from the Trust Account except to the extent such stockholder is exercising its Redemption Rights. There are no Actions pending or, to the knowledge of SPAC, threatened in writing with respect to the Trust Account. As of the date hereof, SPAC has no knowledge that any of the conditions to the use of funds in the Trust Account will not be satisfied or funds available in the Trust Account will not be available to SPAC at the Closing.

 

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Section 4.14  Employees. Other than any officers as described in the SPAC SEC Reports, SPAC and OpCo do not have (and have never had) any employees on their payroll, and have not retained any contractors, other than consultants and advisors in the ordinary course of business that are independent contractors. Other than reimbursement of any out-of-pocket expenses incurred by SPAC’s officers and directors in connection with activities on SPAC’s behalf in an aggregate amount not in excess of the amount of cash held by SPAC outside of the Trust Account, SPAC has no unsatisfied material liability with respect to any officer or director. SPAC and OpCo have never and do not currently maintain, sponsor, or contribute to or have any liability (contingent or otherwise) with respect to any Employee Benefit Plan.

 

Section 4.15  Taxes.

 

(a)  Each of SPAC and OpCo (i) has duly and timely filed (taking into account any extension of time within which to file) all material Tax Returns required to be filed and all such filed Tax Returns are complete and accurate in all material respects; (ii) has timely paid or withheld all material Taxes that it is obligated to pay or withhold, except with respect to current Taxes that are not yet due and payable or Taxes that are being contested in good faith and for which adequate reserves in respect thereof have been established in the financial statements contained in the SPAC SEC Reports in accordance with GAAP; (iii) with respect to all material Tax Returns filed by or with respect to it, has not waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency which waiver or extension remains in effect; (iv) does not have any deficiency, assessment, claim, audit, examination, investigation, litigation or other proceeding in respect of a material amount of Taxes or material Tax matters pending, asserted or proposed or threatened in writing by a Governmental Authority; and (v) has provided adequate reserves in accordance with GAAP in the financial statements contained in the SPAC SEC Reports for any material Taxes of SPAC as of the date of such financial statements that have not been paid.

 

(b)  Neither SPAC nor OpCo (i) has any liability for the Taxes of another person (other than SPAC or OpCo) pursuant to Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or non-U.S. Laws), as a transferee or a successor or by contract or agreement (other than any customary Tax sharing or indemnification provisions contained in any agreement entered into in the ordinary course of business and the principal purpose of which is not related to Taxes (e.g., leases, credit agreements or other commercial agreements)), or (ii) is a party to, is bound by or has any obligation to any Governmental Authority or other person (other than SPAC or OpCo) under any Tax sharing agreement, Tax indemnification agreement, Tax allocation agreement or similar contract, agreement or arrangement (including any agreement, contract or arrangement providing for the sharing or ceding of credits or losses), other than an agreement, contract or arrangement the primary purpose of which does not relate to Taxes.

 

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(c)  Neither SPAC nor OpCo has been a member of an affiliated group filing a consolidated, combined or unitary U.S. federal, state, local or non-U.S. income Tax Return (other than a group of which SPAC is or was the common parent).

 

(d)  Neither SPAC nor OpCo will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any Tax period (or portion thereof) ending after the Closing Date as a result of any: (i) adjustment under Section 481(a) or Section 482 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law) by reason of a change in method of accounting or otherwise prior to the Closing; (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Law) executed prior to the Closing; (iii) installment sale or open transaction disposition made prior to the Closing; (iv) intercompany transaction or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or non-U.S. Tax Law) entered into or created prior to the Closing; or (v) prepaid amount received prior to the Closing outside the ordinary course of business.

 

(e)  Neither SPAC nor OpCo has engaged in or entered into a “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2).

 

(f) There are no Tax Liens upon any assets of SPAC or OpCo except for Permitted Liens.

 

(g)  In the last three years, no written claim has been made by a Governmental Authority in a jurisdiction where Tax Returns with respect to SPAC or OpCo are not filed asserting that SPAC or OpCo is or may be subject to Tax in that jurisdiction.

 

(h)  Neither SPAC nor OpCo has deferred any payroll Taxes pursuant to the CARES Act, the Families First Coronavirus Response Act, Pub. L. 116-127, H.R. 6201 (Mar. 14, 2020), or the presidential memorandum regarding Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster signed on August 8, 2020, in any case, which deferred payroll Taxes are still unpaid. Neither SPAC nor OpCo has outstanding a covered loan under paragraph (36) of Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by Section 1102 of the CARES Act.

 

(i) SPAC is, and has been since its formation, classified as a corporation for U.S. federal income Tax purposes.

 

(j) OpCo is, and has been since its formation, disregarded as separate from SPAC for U.S. federal income Tax purposes.

 

Section 4.16  Registration and Listing. The issued and outstanding SPAC Units are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol “CENQU”. The issued and outstanding shares of SPAC Class A Common Stock are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol “CENQ”. The issued and outstanding SPAC Warrants are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on Nasdaq under the symbol “CENQW”. As of the date of this Agreement, there is no Action pending or, to the knowledge of SPAC, threatened in writing against SPAC by Nasdaq or the SEC with respect to any intention by such entity to deregister the SPAC Units, shares of SPAC Class A Common Stock, or SPAC Warrants or terminate the listing of SPAC on Nasdaq. None of SPAC or any of its affiliates has taken any action in an attempt to terminate the registration of the SPAC Units, shares of SPAC Class A Common Stock, or the SPAC Warrants under the Exchange Act.

 

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Section 4.17  SPAC’s and OpCo’s Investigation and Reliance. Each of SPAC and OpCo is a sophisticated purchaser and has made its own independent investigation, review and analysis regarding the Company and any Company Subsidiary and the Transactions, which investigation, review and analysis were conducted by SPAC and OpCo together with expert advisors, including legal counsel, that they have engaged for such purpose. SPAC, OpCo and their Representatives acknowledge and agree they have been provided with access to the Representatives, properties, offices, plants and other facilities, books and records of the Company and any Company Subsidiary and other information that they have requested in connection with their investigation of the Company and the Company Subsidiaries and the Transactions. Neither SPAC nor OpCo is relying on any statement, representation or warranty, oral or written, express or implied, made by the Company or any Company Subsidiary or any of their respective Representatives, except as expressly set forth in Article III (as modified by the Company Disclosure Schedule) or in any certificate delivered by the Company pursuant to this Agreement. Neither the Company nor any of its respective stockholders, affiliates or Representatives shall have any liability to SPAC, OpCo or any of their respective stockholders, affiliates or Representatives resulting from the use of any information, documents or materials made available to SPAC or OpCo or any of their Representatives, whether orally or in writing, in any confidential information memoranda, “data rooms,” management presentations, due diligence discussions or in any other form in expectation of the Transactions. SPAC and OpCo acknowledge that neither the Company nor any of its stockholders, affiliates or Representatives is making, directly or indirectly, any representation or warranty with respect to any estimates, projections or forecasts involving the Company and/or any Company Subsidiary.

 

Section 4.18  Subscription Agreements. SPAC has delivered to the Company true, correct and complete copies of each of the fully executed Subscription Agreements pursuant to which the Subscribers have committed, subject to the terms and conditions therein, to purchase an aggregate of 8,000,000 shares of SPAC Class A Common Stock for an aggregate amount of cash equal to eighty million dollars ($80,000,000). Each of the Subscription Agreements are in full force and effect and are legal, valid, binding and enforceable upon SPAC and, to the knowledge of SPAC, upon the Subscribers (in each case, subject to the Remedies Exceptions). As of the date of this Agreement, none of the Subscription Agreements have been withdrawn, terminated, amended or modified, and, to the knowledge of SPAC, no such withdrawal, termination, amendment or modification is contemplated except as expressly permitted by this Agreement (it being understood that a change of or to one or more entities or individuals with respect to any such Subscriber shall not be deemed a violation of the foregoing). As of the date hereof, there are no side letters between SPAC and any Subscriber relating to any Subscription Agreement that would affect the applicable commitment obligation of such Subscriber being contributed to SPAC. As of the date of this Agreement, no fees, consideration or other discounts are payable or have been agreed to by SPAC in connection with the Subscription Agreements, except as set forth in the Subscription Agreements. To the knowledge of SPAC, as of the date hereof, no event has occurred which, with or without notice, lapse of time or both, would or would reasonably be expected to (i) constitute a default or breach under the Subscription Agreements on the part of SPAC or the Subscribers, (ii) assuming the conditions set forth in Section 7.01 and Section 7.02 will be satisfied, constitute a failure to satisfy a condition under the Subscription Agreements on the part of SPAC or the Subscribers or (iii) assuming the conditions set forth in Section 7.01 and Section 7.02 will be satisfied, result in any portion of the amounts to be paid by the Subscribers in accordance with the Subscription Agreements being unavailable on the Closing Date. As of the date hereof, assuming the conditions set forth in Section 7.01 and Section 7.02 will be satisfied, SPAC has no reason to believe that it or any Subscriber will be unable to satisfy in all material respects on a timely basis any term or condition of closing contained in any Subscription Agreement.

 

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Section 4.19  Exclusivity of Representations and Warranties. Except as otherwise expressly provided in this Article IV (as modified by the SPAC Disclosure Schedule), each of SPAC and OpCo hereby expressly disclaims and negates, any other express or implied representation or warranty whatsoever (whether at Law or in equity) with respect to SPAC and OpCo, and any matter relating to any of them, including their affairs, the condition, value or quality of the assets, liabilities, prospects, financial condition or results of operations, or with respect to the accuracy or completeness of any other information made available to the Bluescape Parties, their affiliates or any of their respective Representatives by, or on behalf of, SPAC or OpCo or any their respective subsidiaries, and any such representations or warranties are expressly disclaimed. Without limiting the generality of the foregoing, except as expressly set forth in this Agreement (as modified by the SPAC Disclosure Schedule) or in any certificate delivered by SPAC or OpCo pursuant to this Agreement, SPAC and OpCo have not and do not, and no other person on behalf of the SPAC or OpCo has made or makes, any representation or warranty, whether express or implied, with respect to any projections, forecasts, estimates or budgets made available to the Bluescape Parties, their affiliates or any of their respective Representatives of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of SPAC or OpCo, whether or not included in any management presentation or in any other information made available to the Bluescape Parties, their affiliates or any of their respective Representatives or any other person, and any such representations or warranties are expressly disclaimed. Nothing in this Section 4.19 shall limit any claim or cause of action (or recovery therewith) with respect to fraud.

 

Article V.

 

CONDUCT OF BUSINESS

 

Section 5.01  Conduct of Business by the Company.

 

(a)  The Bluescape Parties agree that, between the date of this Agreement and the Closing or the earlier termination of this Agreement, except as (1) contemplated or permitted by any other provision of this Agreement or any Ancillary Agreement, (2) set forth in Section 5.01 of the Company Disclosure Schedule, and (3) required by applicable Law, unless SPAC shall otherwise consent in writing (which consent shall not be unreasonably conditioned, withheld or delayed):

 

(i) the Company shall, and shall cause the Company Subsidiaries to, conduct their business in the ordinary course of business in a manner consistent with past practice; and

 

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(ii)  the Company shall, and shall cause the Company Subsidiaries to, preserve substantially intact the business organization of the Company and the Company Subsidiaries, use commercially reasonable efforts to keep available the services of the current officers, key employees and consultants of the Company and the Company Subsidiaries and to preserve the relationships of the Company and the Company Subsidiaries with customers, Suppliers, and distributors, with which the Company or any Company Subsidiary has significant business relations.

 

(b)  By way of amplification and not limitation, except as (i) expressly contemplated or permitted by any other provision of this Agreement or any Ancillary Agreement, (ii) as set forth in Section 5.01 of the Company Disclosure Schedule, and (iii) as required by applicable Law, the Company shall not, and shall cause each Company Subsidiary not to, between the date of this Agreement and the Closing or the earlier termination of this Agreement, directly or indirectly, do any of the following without the prior written consent of SPAC (which consent shall not be unreasonably conditioned, withheld or delayed);

 

(i) amend, supplement, restate or otherwise change the Organizational Documents of the Company or any Company Subsidiary;

 

(ii)  issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any equity interests of the Company or any Company Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any such equity interests, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Company Subsidiary;

 

(iii)  sell, lease, or otherwise dispose of any of its material assets, rights or properties other than in the ordinary course of business;

 

(iv)  form any subsidiary or acquire (whether by merging or consolidating with, purchasing any equity securities in or a substantial portion of the assets of, or by any other manner) any equity interest or other interest in any other entity or enter into a joint venture with any other entity;

 

(v)  declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its equity interests;

 

(vi)  reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its equity interests;

 

(vii)  (A) acquire (including, without limitation, by merger, consolidation, combination or acquisition of stock or any other business combination), directly or indirectly, any assets, securities, properties, interests or businesses of any corporation, partnership, other business organization or any division thereof; or (B) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, such obligations of any person, or make any loans, advances or capital contributions or intentionally grant any security interest in any of its assets;

 

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(viii)   except as required by any existing Employee Benefit Plan, this Agreement or applicable Law, adopt, amend and/or terminate any Employee Benefit Plan, including, but not limited to, by (A) granting any increase in compensation, incentives or benefits payable, or to become payable to, any current or former director or officer of the Company or any Company Subsidiary whose annual compensation exceeds, or would exceed after any increase, $250,000, (B) entering into any new, or materially amending, any existing, employment, retention, bonus, change in control, severance or termination agreement with any current or former director or officer of the Company or any Company Subsidiary whose annual compensation exceeds or would exceed upon entry into any such agreement, $250,000, (C) accelerating, or committing to accelerate, the funding, payment, or vesting of any compensation or benefits to any current or former director or officer of the Company or any Company Subsidiary whose annual compensation exceeds $250,000 or (D) establishing or entering into any collective bargaining agreement, collective agreement or other contract or agreement with a labor union, trade union, works council, or other representative of employees;

 

(ix)  enter into, renew or amend in any material respect any Interested Party Transaction (or any contractual or other arrangement, that if existing on the date of this Agreement, would have constituted an Interested Party Transaction);

 

(x)  materially amend (other than reasonable amendments in the ordinary course of business or amendments made in connection with any Transactions) any accounting or cash management policies or procedures, other than as required by GAAP;

 

(xi)  (A) amend any material Tax Return, (B) file any Tax Return in a manner materially inconsistent with past practices, (C) change any material method of Tax accounting, (D) make, change or rescind any material election relating to Taxes (including, for the avoidance of doubt, any election that results in the Company or any Company Subsidiary other than Bluescape Clean Fuels Employee Holdings, LLC being treated as other than a partnership or a disregarded entity for U.S. federal income tax purposes), (E) settle or compromise any material U.S. federal, state, local or non-U.S. Tax audit, assessment, Tax claim or other controversy relating to Taxes, (F) compromise, settle or surrender any right to claim a Tax refund, (G) enter into any Tax sharing, allocation, indemnity or similar agreement (other than an agreement, contract or arrangement the primary purpose of which does not relate to Taxes), or (H) make any request for a private letter ruling, administrative relief, technical advice, change of any method of accounting or other similar request with a Tax authority;

 

(xii)  materially amend, materially modify or consent to the termination (excluding any automatic termination in accordance with its terms) of any Material Contract or Lease or amend, waive, modify or consent to the termination (excluding any automatic termination in accordance with its terms) of the Company’s or any Company Subsidiary’s material rights thereunder, in each case except in the ordinary course of business consistent with past practice;

 

(xiii)   enter into any contract, agreement or arrangement that would have been a Material Contract or Lease had it been entered into prior to the date of this Agreement;

 

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(xiv) [Reserved];

 

(xv) fail to maintain in full force and effect any Insurance Policies or allow any coverage thereunder to be reduced, except as replaced by a substantially similar insurance policy;

 

(xvi) enter into any material new line of business outside of the business currently conducted by the Company or the Company Subsidiaries as of the date of this Agreement;

 

(xvii) disclose any trade secrets (other than pursuant to a written confidentiality and non-disclosure agreement entered into in the ordinary course of business);

 

(xviii) intentionally permit any material and useful item of Company-Owned IP to lapse or to be abandoned, invalidated, dedicated to the public, or disclaimed, or otherwise become unenforceable or fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees required or advisable to maintain and protect its interest in each and every material item of Company-Owned IP other than, in each case, in the ordinary course of business;

 

(xix) waive, release, assign, settle or compromise any material Action, other than waivers, releases, assignments, settlements or compromises that are solely monetary in nature and do not exceed $100,000 individually or $250,000 in the aggregate, in each case, in excess of any insurance proceeds paid with respect to any such amounts;

 

(xx) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any material Company Subsidiary; or

 

(xxi) enter into any binding agreement or otherwise make a binding commitment with respect to any of the foregoing.

 

Nothing herein shall require the Company to obtain consent from SPAC to do any of the foregoing if obtaining such consent might reasonably be expected to violate applicable Law. Any action taken, or omitted to be taken, by the Company to the extent that such act or omission is required to comply with any Law, order, directive, pronouncement or guideline issued by a Governmental Authority providing for business closures, “sheltering-in-place” or other restrictions that relates to, or arises out of, COVID-19 or any other pandemic or public health crisis shall in no event be deemed to constitute a breach of this Section 5.01 and any action taken, or omitted to be taken, to the extent reasonably determined by the Company to be necessary and advisable in response to COVID-19, after reasonably consulting with SPAC, shall not be deemed to constitute a breach of this Section 5.01.

 

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Section 5.02  Conduct of Business by SPAC and OpCo. Except as expressly contemplated or permitted by any other provision of this Agreement (including, for the avoidance of doubt, the payments of the 1st Extension Date Funding Amount or the 2nd Extension Date Funding Amount) or any Ancillary Agreement (including entering into various Subscription Agreements, Additional Subscription Agreements and consummating the Private Placements) and except as required by applicable Law or prevalent industry standard, SPAC agrees that, from the date of this Agreement until the earlier of the termination of this Agreement and the Closing, unless the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), the businesses of SPAC and OpCo shall be conducted in the ordinary course of business and in a manner consistent with past practice. By way of amplification and not limitation, except as expressly contemplated or permitted by any other provision of this Agreement or any Ancillary Agreement (including entering into various Subscription Agreements, Additional Subscription Agreements and consummating the Private Placements) and as required by applicable Law, neither SPAC nor OpCo shall, between the date of this Agreement and the Closing or the earlier termination of this Agreement, directly or indirectly, do any of the following without the prior written consent of the Company (which consent shall not be unreasonably conditioned, withheld or delayed):

 

(a)  amend or otherwise change SPAC’s Organizational Documents (other than in connection with a SPAC Extension Proposal) or OpCo’s Organizational Documents or form any subsidiary of SPAC other than OpCo;

 

(b)  declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its equity interests, other than redemptions from the Trust Fund that are required pursuant to SPAC’s Organizational Documents;

 

(c)  reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the SPAC Common Stock or SPAC Warrants or equity interests of OpCo, except for payments from the Trust Fund pursuant to the exercise of Redemption Rights and conversions of the SPAC Class B Common Stock that are required pursuant to SPAC’s Organizational Documents;

 

(d)  issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any shares of any class of capital stock or other securities of SPAC or OpCo, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of SPAC or OpCo, except in connection with (i) conversion of the SPAC Class B Common Stock pursuant to SPAC’s Organizational Documents, (ii) the 1st Extension Date Funding Amount or the 2nd Extension Date Funding Amount or (iii) the Additional Financing;

 

(e)  acquire (including by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or enter into any strategic joint ventures, partnerships or alliances with any other person;

 

(f) incur any indebtedness or guarantee any indebtedness or obligations of another person or persons, issue or sell any debt securities or warrants or other rights to acquire any debt securities of SPAC or its subsidiaries, as applicable, except in connection with the 1st Extension Date Funding Amount or the 2nd Extension Date Funding Amount;

 

(g)  make any change in any method of financial accounting or financial accounting principles, policies, procedures or practices, except as required by a concurrent amendment in GAAP or applicable Law made subsequent to the date hereof, as agreed to by its independent accountants;

 

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(h)  (i) amend any material Tax Return, (ii) file any Tax Return in a manner materially inconsistent with past practices (iii) change any material method of Tax accounting, (iv) make, change or rescind any material election relating to Taxes (including, for the avoidance of doubt, any election that results in OpCo being treated as other than a partnership or a disregarded entity for U.S. federal income tax purposes), (v) settle or compromise any material U.S. federal, state, local or non-U.S. Tax audit, assessment, Tax claim or other controversy relating to Taxes, (vi) compromise, settle or surrender any right to claim a Tax refund, (vii) enter into any Tax sharing, allocation, indemnity or similar agreement (other than an agreement, contract or arrangement the primary purpose of which does not relate to Taxes), or (viii) make any request for a private letter ruling, administrative relief, technical advice, change of any method of accounting or other similar request with a Tax authority;

 

(i) liquidate, dissolve, reorganize or otherwise wind up the business and operations of SPAC or OpCo;

 

(j) amend or modify the Trust Agreement or any other agreement related to the Trust Account (other than in connection with a SPAC Extension Proposal), the SPAC Warrant Agreement or SPAC’s Organizational Documents (other than in connection with a SPAC Extension Proposal), or seek any approval from SPAC stockholders with respect to any such change, modification or amendment in a manner that is materially adverse to the Company (other than in connection with a SPAC Extension Proposal);

 

(k)  waive, release, assign, settle or compromise any Action, other than waivers, releases, assignments, settlements or compromises that are solely monetary in nature and do not exceed $100,000 individually or $250,000 in the aggregate, in each case in excess of insurance proceeds paid with respect to any such amounts;

 

(l) adopt or enter into any Employee Benefit Plan; or

 

(m)  enter into any binding agreement or otherwise make a binding commitment with respect to any of the foregoing.

 

Section 5.03  Claims Against Trust Account. Each of the Bluescape Parties agrees that, notwithstanding any other provision contained in this Agreement, each of the Bluescape Parties does not now have, and shall not at any time prior to the Closing have, any claim to, or make any claim against, the Trust Fund, regardless of whether such claim arises as a result of, in connection with or relating in any way to, the business relationship between the Company on the one hand, and SPAC on the other hand, this Agreement, or any other 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 in this Section 5.03 as the “Claims”). Each of the Bluescape Parties acknowledges and agrees that SPAC has established the Trust Account for the benefit of the public stockholders of SPAC, which holds proceeds of its initial public offering. Notwithstanding any other provision contained in this Agreement, including the previous sentence, each of the Bluescape Parties hereby irrevocably waives any Claim it may have, now or in the future and will not seek recourse against the Trust Fund for any reason whatsoever in respect thereof; provided, however, that the foregoing waiver will not limit or prohibit the Company from pursuing a claim against SPAC, OpCo or any other person (a) for legal relief against monies or other assets of SPAC or OpCo held outside of the Trust Account (including any funds that have been released from the Trust Account and any assets that have been purchased or acquired with any such funds) or for specific performance or other equitable relief in connection with the Transactions (including a claim for SPAC to specifically perform its obligations under this Agreement and cause the disbursement of the balance of the cash remaining in the Trust Account (after giving effect to the Redemption Rights)) or for fraud or (b) for damages for breach of this Agreement against SPAC (or any successor entity) or OpCo in the event this Agreement is terminated for any reason and SPAC consummates a business combination transaction with another party. Each of the Bluescape Parties acknowledge and agree that such irrevocable waiver is material to this Agreement and specifically relied upon by SPAC, OpCo and the Sponsor to induce SPAC and OpCo to enter into this Agreement, and the Bluescape Parties further intend and understand such waiver to be enforceable against the Company and the Company Subsidiaries and persons that they have the authority to bind under applicable Law. In the event that the Company commences any action or proceeding against or involving the Trust Fund in violation of the foregoing, SPAC shall be entitled to recover from the Company the associated reasonable legal fees and costs in connection with any such action, to the extent SPAC prevails in such action or proceeding.

 

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Article VI.

 

ADDITIONAL AGREEMENTS

 

Section 6.01  Proxy Statement.

 

(a)  Subject to the terms of this Section 6.01, SPAC (with the assistance and cooperation of the Company as reasonably requested by SPAC) shall prepare and file with the SEC a proxy statement (as amended or supplemented, the “Proxy Statement”) to be sent to the stockholders of SPAC relating to the SPAC Stockholders’ Meeting to adopt and approve the SPAC Proposals and other matters reasonably related to the SPAC Proposals, all in accordance with and as required by SPAC’s Organizational Documents, any related agreements with Sponsor and its affiliates, applicable Law, and any applicable rules and regulations of the SEC and the Nasdaq. SPAC and the Company each shall use their reasonable best efforts to (x) cause the Proxy Statement, when filed with the SEC, to comply in all material respects with all legal requirements applicable thereto and (y) respond as promptly as reasonably practicable to and resolve all comments received from the SEC concerning the Proxy Statement. As promptly as practicable after the date on which the SEC confirms orally or in writing, that it has no further comments on the Proxy Statement or that it does not intend to review the Proxy Statement, SPAC shall mail the Proxy Statement to its stockholders. Each of SPAC and the Company shall furnish all information concerning it or any of its subsidiaries as may reasonably be requested by the other party in connection with such actions and the preparation of the Proxy Statement.

 

(b)  No filing of, or amendment or supplement to the Proxy Statement will be made by SPAC without the approval of the Company (such approval not to be unreasonably withheld, conditioned or delayed). SPAC will advise the Company, promptly after it receives notice thereof, of any request by the SEC for amendment of the Proxy Statement or comments thereon and responses thereto or requests by the SEC for additional information and shall, as promptly as practicable after receipt thereof, supply the Company with copies of all written correspondence between it or any of its Representatives, on the one hand, and the SEC or the staff of the SEC, on the other hand, or, if not in writing, a description of such communication, with respect to the Proxy Statement. No response to any comments from the SEC or the staff of the SEC relating to the Proxy Statement will be made by SPAC without the prior consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed) and without providing the Company a reasonable opportunity to review and comment thereon unless pursuant to a telephone call initiated by the SEC.

 

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(c)  SPAC represents that the information supplied by SPAC for inclusion in the Proxy Statement shall not, at (i) the time the definitive Proxy Statement is filed, (ii) the time the Proxy Statement is mailed to its stockholders and (iii) the time of the SPAC Stockholders’ Meeting, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If, at any time prior to the Closing, any event or circumstance relating to SPAC or OpCo, or their respective officers or directors, should be discovered by SPAC which should be set forth in an amendment or a supplement to the Proxy Statement, SPAC shall promptly inform the Company.

 

(d)  The Company represents that the information supplied by the Company for inclusion in the Proxy Statement shall not, at (i) the time the definitive Proxy Statement is filed, (ii) the time the Proxy Statement is mailed to SPAC’s respective stockholders and (iii) the time of the SPAC Stockholders’ Meeting, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If, at any time prior to the Closing, any event or circumstance relating to the Company or any Company Subsidiary or its officers or directors, should be discovered by the Company which should be set forth in an amendment or a supplement to the Proxy Statement, the Company shall promptly inform SPAC.

 

Section 6.02  SPAC Stockholders’ Meeting. SPAC shall call and hold the SPAC Stockholders’ Meeting as promptly as practicable following the clearance of the Proxy Statement by the SEC for the purpose of voting solely upon the SPAC Proposals; provided that SPAC may (or, upon the receipt of a reasonable request to do so from the Company, shall) postpone or adjourn the SPAC Stockholders’ Meeting on one or more occasions for up to 45 days in the aggregate to the extent that such postponement or adjournment is reasonably necessary to solicit additional proxies to obtain approval of the SPAC Proposals or otherwise take actions consistent with SPAC’s obligations pursuant to Section 6.10 of this Agreement. SPAC shall use its reasonable best efforts to obtain the approval of the SPAC Proposals at the SPAC Stockholders’ Meeting, including by soliciting from its stockholders proxies as promptly as possible in favor of the SPAC Proposals, and shall take all other action necessary or advisable to secure the required vote or consent of its stockholders. The SPAC Board shall recommend to its stockholders that they approve the SPAC Proposals and shall include such recommendation in the Proxy Statement. Notwithstanding the foregoing, if the SPAC Board, after consultation with its outside legal counsel, determines in good faith that failure to withdraw or modify its recommendation would be inconsistent with its fiduciary duties to SPAC’s stockholders under applicable Law, then the SPAC Board may withdraw or modify its recommendation in the Proxy Statement so long as SPAC (to the extent lawful and reasonably practicable) first provides the Company with at least 48 hours advance written notice of such withdrawal or modification and the reason for such withdrawal or modification. SPAC shall keep Holdings reasonably informed on all matters related to the SPAC Stockholders’ Meeting (including the exercise of any Redemption Rights in connection therewith).

 

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Section 6.03  Non-Transfer of Certain SPAC Intellectual Property. The Bluescape Parties acknowledge that SPAC is in possession of certain confidential and proprietary information of third parties received in connection with SPAC’s evaluation of alternative business combinations, including but not limited to, information concerning the business, financial condition, operations, assets and liabilities, trade secrets, know-how, technology, customers, business plans, Intellectual Property rights, promotional and marketing efforts, the existence and progress of financings, mergers, sales of assets, take-overs or tender offers of third parties, including SPAC’s, OpCo’s and their respective Representatives’ internal notes and analysis concerning such information (collectively, “Evaluation Material”), and that the Evaluation Material is or may be subject to confidentiality or non-disclosure agreement. Each Bluescape Party acknowledges it has no right or expectancy in or to the Evaluation Material. No Bluescape Party shall have any right or expectancy in or to the name “CENAQ Energy Corp.” or any derivation thereof, the trading symbols “CENQU,” “CENQ” or “CENQW,” SPAC’s internet domain name, or the Intellectual Property rights therein.

 

Section 6.04  Access to Information; Confidentiality.

 

(a)  Subject to applicable Law, from the date of this Agreement until the Closing, the Company and SPAC shall (and shall cause their respective subsidiaries to): (i) provide to the other party (and the other party’s officers, directors, employees, accountants, consultants, legal counsel, agents and other representatives, collectively, “Representatives”) reasonable access at reasonable times upon prior notice to the officers, key employees, agents, properties, offices and other facilities of such party and its subsidiaries and to the books and records thereof; and (ii) furnish promptly to the other party such information concerning the business, properties, contracts, assets, liabilities, personnel and other aspects of such party and its subsidiaries as the other party or its Representatives may reasonably request. Notwithstanding the foregoing, neither the Bluescape Parties nor SPAC shall be required to provide access to or disclose information where the access or disclosure would jeopardize the protection of attorney-client privilege, violate a contract to which such person is party, contravene applicable Law (it being agreed that the parties shall use their reasonable best efforts to cause such information to be provided in a manner that would not result in such jeopardy or contravention), or involve invasive environmental sampling, testing, or drilling.

 

(b)  Notwithstanding anything in this Agreement to the contrary, each party (and its respective Representatives) may consult any Tax advisor as is reasonably necessary regarding the Tax treatment and Tax structure of the Transactions and may disclose to such advisor as if reasonably necessary, the Intended Tax Treatment and Tax structure of the Transactions and all materials (including any Tax analysis) that are provided relating to such treatment or structure, in each case in accordance with applicable Law.

 

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Section 6.05  Exclusivity. From the date of this Agreement and ending on the earlier of (a) the Closing and (b) the termination of this Agreement in accordance with Article VIII, the parties hereto shall not, and shall cause their respective subsidiaries and its and their respective Representatives not to, directly or indirectly, (i) enter into, knowingly solicit, initiate or continue any discussions or negotiations with, or knowingly encourage or respond to any inquiries or proposals by, or participate in any negotiations with, or provide any information to, or otherwise cooperate in any way with, any person or other entity or “group” within the meaning of Section 13(d) of the Exchange Act, concerning any sale of any material assets of such party or any of the outstanding capital stock or equity interests or any conversion, consolidation, liquidation, dissolution or similar transaction involving such party or any of such party’s subsidiaries other than with the other parties to this Agreement and their respective Representatives (an “Alternative Transaction”), (ii) enter into any agreement regarding, continue or otherwise knowingly participate in any discussions regarding, or furnish to any person any information with respect to, or cooperate in any way that would otherwise reasonably be expected to lead to, any Alternative Transaction or (iii) commence, continue or renew any due diligence investigation regarding any Alternative Transaction; provided that the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the Transactions shall not be deemed a violation of this Section 6.05. Each party shall, and shall cause its affiliates and Representatives to, immediately cease any and all existing discussions or negotiations with any person conducted heretofore with respect to any Alternative Transaction. Each party also agrees that it will promptly request each person (other than the parties hereto and their respective Representatives) that has prior to the date hereof executed a confidentiality agreement in connection with its consideration of an Alternative Transaction to return or destroy all confidential information furnished to such person by or on behalf of it prior to the date hereof (to the extent so permitted under, and in accordance with the terms of, such confidentiality agreement). If a party or any of its subsidiaries or any of its or their respective Representatives receives any inquiry or proposal with respect to an Alternative Transaction at any time prior to the Closing, then such party shall promptly (and in no event later than 24 hours after such party becomes aware of such inquiry or proposal) notify such person in writing that such party is subject to an exclusivity agreement with respect to the Transactions that prohibits such party from considering such inquiry or proposal, but only, in the case of SPAC, to the extent not inconsistent with the fiduciary duties of the SPAC Board. Without limiting the foregoing, the parties agree that any violation of the restrictions set forth in this Section 6.05 by a party or any of its subsidiaries or its or their affiliates or Representatives shall be deemed to be a breach of this Section 6.05 by such party.

 

Section 6.06  Employee Benefits Matters.

 

(a)  SPAC shall, or shall cause OpCo or its applicable subsidiary (including, following Closing, the Company or any of the Company Subsidiaries) to provide the employees of the Company or any of the Company Subsidiaries who remain employed as of the Closing (the “Continuing Employees”) credit for purposes of eligibility to participate, vesting and determining the level of benefits, as applicable, under any employee benefit plan established or maintained by OpCo or any of its subsidiaries for service accrued or deemed accrued prior to the Closing with the Company or any Company Subsidiary; provided, however, that such crediting of service shall not operate to duplicate any benefit or the funding of any such benefit. In addition, subject to the terms of all governing documents, SPAC shall use reasonable best efforts to, for the year in which the Closing Date occurs: (i) cause to be waived any eligibility waiting periods, any evidence of insurability requirements and the application of any pre-existing condition limitations under each employee benefit plan that is a group health plan established or maintained by OpCo or any of its subsidiaries that cover the Continuing Employees or their dependents to the extent such eligibility waiting periods, any evidence of insurability requirements and the application of any pre-existing condition limitations would not have been applicable under the analogous Employee Benefit Plans that are group health plans, and (ii) cause any eligible expenses incurred by any Continuing Employee and his or her covered dependents, during the portion of the plan year in which the Closing occurs, under those Employee Benefit Plans that are group health plans in which such Continuing Employee currently participates to be taken into account under those health and welfare benefit plans in which such Continuing Employee participates immediately subsequent to the Closing Date for purposes of satisfying all deductible, coinsurance, and maximum out-of-pocket requirements applicable to such Continuing Employee and his or her covered dependents for the applicable plan year. Following the Closing, OpCo will honor all accrued but unused vacation and other paid time off of the Continuing Employees that existed immediately prior to the Closing with respect to the calendar year in which the Closing occurs.

 

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(b)  Prior to the filing of the definitive Proxy Statement, the Company may enter into employment agreements with each of the individuals set forth on Section 6.06(b) of the Company Disclosure Schedule (the “Employment Agreements”), which Employment Agreements shall: (i) be effective as of the Closing, and subject to prior approval by SPAC; and (ii) contain market terms for a public company of similar size and industry to the Company.

 

(c)  Prior to the filing of the definitive Proxy Statement, the SPAC Board shall approve and adopt an equity incentive plan in the form mutually agreed by the Company and the SPAC (the “SPAC Incentive Equity Plan”), in the manner prescribed under applicable Laws, effective as of one day prior to the Closing Date, reserving a number of shares of SPAC Incentive Common Stock for grant thereunder equal to 10% of the number of shares of SPAC Incentive Common Stock outstanding following the Closing. The SPAC Incentive Equity Plan will provide that the SPAC Incentive Common Stock reserved for issuance thereunder will automatically increase annually on the first day of each fiscal year beginning with the 2023 fiscal year in an amount equal to 4% of SPAC Incentive Common Stock outstanding on the last day of the immediately preceding fiscal year or such lesser amount as determined by the administrator of the SPAC Incentive Equity Plan.

 

(d)  The provisions of this Section 6.06 are solely for the benefit of the parties to the Agreement, and nothing contained in this Agreement, express or implied, shall confer upon any Continuing Employee or legal representative or beneficiary or dependent thereof, or any other person, any rights or remedies of any nature or kind whatsoever under or by reason of this Agreement, whether as a third-party beneficiary or otherwise, including, without limitation, any right to employment or continued employment for any specified period, or level of compensation or benefits. Nothing contained in this Agreement, express or implied, shall constitute the establishment, termination, amendment or modification of any Employee Benefit Plan or any other benefit or compensation plan, policy or arrangement, or shall require the Company, SPAC, OpCo and each of its subsidiaries to continue any Employee Benefit Plan or other benefit or compensation plan, policy or arrangements, or prevent their establishment, amendment, modification or termination.

 

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Section 6.07  Directors’ and Officers’ Indemnification.

 

(a)  To the fullest extent permitted by Law, the limited liability company agreement of the Company following the Transactions shall contain provisions no less favorable with respect to indemnification, exculpation, advancement or expense reimbursement than are set forth in the Holdings LLC Agreement, which provisions shall not be amended, repealed or otherwise modified for a period of six years from the Closing in any manner that would affect adversely the rights thereunder of individuals who, at or prior to the Closing, were directors, officers, employees, fiduciaries or agents of the Company, unless such modification shall be required by applicable Law. The parties further agree that with respect to the provisions of the Organizational Documents of the Company Subsidiaries relating to indemnification, exculpation, advancement or expense reimbursement, such provisions shall not be amended, repealed or otherwise modified for a period of six years from the Closing in any manner that would affect adversely the rights thereunder of individuals who, at or prior to the Closing, were directors, officers, employees, fiduciaries or agents of such Company Subsidiary, unless such modification shall be required by applicable Law. For a period of six years from the Closing, SPAC and the Company shall indemnify and hold harmless each present and former director and officer of the Company and the Company Subsidiaries against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or relating to matters existing or occurring at or prior to the Closing, whether asserted or claimed prior to, at or after the Closing, to the fullest extent that the Company would have been permitted under applicable Law and the Holdings LLC Agreement in effect on the date of this Agreement to indemnify such person (including the advancing of expenses as incurred to the fullest extent permitted under applicable Law).

 

(b)  To the fullest extent permitted by Law, the certificate of incorporation and bylaws of SPAC following the Transactions shall contain provisions no less favorable with respect to indemnification, exculpation, advancement or expense reimbursement than are set forth in the current certificate of incorporation and bylaws of SPAC, which provisions shall not be amended, repealed or otherwise modified for a period of six years from the Closing in any manner that would affect adversely the rights thereunder of individuals who, at or prior to the Closing, were directors, officers, employees, fiduciaries or agents of SPAC, unless such modification shall be required by applicable Law. For a period of six years from the Closing, SPAC shall indemnify and hold harmless each present and former director and officer of SPAC against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or relating to matters existing or occurring at or prior to the Closing, whether asserted or claimed prior to, at or after the Closing, to the fullest extent that SPAC would have been permitted under applicable Law, the SPAC Certificate of Incorporation or the bylaws of SPAC in effect on the date of this Agreement to indemnify such person (including the advancing of expenses as incurred to the fullest extent permitted under applicable Law).

 

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(c)  For a period of six years from the Closing, SPAC shall maintain in effect directors’ and officers’ liability insurance (“D&O Insurance”) covering those persons who are currently covered by the directors’ and officers’ liability insurance policy applicable to Holdings, the Company and the Company Subsidiaries and their respective directors and officers on terms not less favorable than the terms of such current insurance coverage, except that in no event shall SPAC be required to pay an annual premium for such insurance in excess of 200% of the aggregate annual premium payable by Holdings or the Company for such insurance policy for the year ended December 31, 2021 (the “Maximum Annual Premium”). If the annual premiums of such insurance coverage exceed the Maximum Annual Premium, then SPAC will be obligated to obtain a policy with the greatest coverage available for a cost not exceeding the Maximum Annual Premium from an insurance carrier with the same or better credit rating as Holdings’ or the Company’s current directors’ and officers’ liability insurance carrier. Prior to the Closing, the Company or Holdings may purchase a prepaid “tail” policy with respect to the D&O Insurance from an insurance carrier with the same or better credit rating as the current directors’ and officers’ liability insurance carrier so long as the aggregate cost for such “tail” policy does not exceed the Maximum Annual Premium (it being understood that if Holdings purchases such a policy, any expenses related thereto shall for all purposes hereof be deemed to be a Bluescape Transaction Expense that will be reimbursed by SPAC). If the Company elects to purchase such a “tail” policy prior to the Closing, SPAC will maintain such “tail” policy in full force and effect for a period of no less than six years after the Closing and continue to honor its obligations thereunder. If the Company is unable to obtain the “tail” policy and SPAC is unable to obtain the insurance described in this Section 6.07(c) for an amount less than or equal to the Maximum Annual Premium, SPAC will instead obtain as much comparable insurance as possible for an annual premium equal to the Maximum Annual Premium.

 

(d)  Prior to the Closing, SPAC may purchase a prepaid “tail” policy (“SPAC Tail Policy”) with respect to the D&O Insurance covering those persons who are currently covered by SPAC’s directors’ and officers’ liability insurance policies. If SPAC elects to purchase such a SPAC Tail Policy prior to the Closing, SPAC shall maintain such SPAC Tail Policy in full force and effect for a period of no less than six years after the Closing and continue to honor SPAC’s obligations thereunder.

 

(e)  On the Closing Date, SPAC shall enter into customary indemnification agreements reasonably satisfactory to each of the Company and SPAC with the post-Closing directors and officers of SPAC, which indemnification agreements shall continue to be effective following the Closing.

 

(f) In the event SPAC, the Company, OpCo or any of their respective successors or assigns (i) consolidates with or merges into any other person and is not the continuing or surviving entity in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any person, then, and in either such case, proper provision shall be made so that the successors and assigns of SPAC, the Company and OpCo, as the case may be, shall assume all of the obligations set forth in this Section 6.07.

 

(g)  For a period of six years from the Closing, each of the SPAC and OpCo agree that it shall indemnify and hold harmless Sponsor and each present and former director, officer, equity holder and affiliate of Sponsor, against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to matters existing or occurring at or prior to the Closing, whether asserted or claimed prior to, at or after the Closing, to the fullest extent permitted under applicable Law (including the advancing of expenses as incurred to the fullest extent permitted under applicable Law).

 

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Section 6.08  Notification of Certain Matters. The Company shall give prompt notice to SPAC, and SPAC shall give prompt notice to the Company, of any event which a party hereto becomes aware of between the date of this Agreement and the Closing (or the earlier termination of this Agreement in accordance with Article VIII), the occurrence, or non-occurrence of which causes or would reasonably be expected to cause any of the conditions set forth in Article VII to fail.

 

Section 6.09  ISRA Compliance. With respect to the Leased Real Property located at 219 Homestead Road, Building 2 in Hillsborough, the State of New Jersey, which is classified as an “industrial establishment” under ISRA, the Company shall (a) submit a General Information Notice (as defined under ISRA) within five (5) days after the date of this Agreement and (b) file a Remediation Certification (as defined under ISRA) prior to the Closing identifying Bluescape Clean Fuels, LLC as the “responsible party” and/or “person responsible” for compliance with ISRA. After the Closing, Bluescape Clean Fuels, LLC shall continue to be responsible for compliance with and shall take all such actions as are required by ISRA.

 

Section 6.10  Further Action; Reasonable Best Efforts.

 

(a)  Upon the terms and subject to the conditions of this Agreement, each of the parties hereto shall use its reasonable best efforts to take, or cause to be taken, appropriate action, and to do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise, and each shall cooperate with the other, to consummate and make effective the Transactions, including, without limitation, using its reasonable best efforts to obtain all permits, consents, approvals, authorizations, qualifications and orders of, and the expiration or termination of waiting periods by, Governmental Authorities and parties to contracts with the Company and the Company Subsidiaries as set forth in Section 3.05 necessary for the consummation of the Transactions and to fulfill the conditions to the Transactions. In case, at any time after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of each party shall use their reasonable best efforts to take all such action.

 

(b)  Each of the parties shall keep each other apprised of the status of matters relating to the Transactions, including promptly notifying the other parties of any communication it or any of its affiliates receives from any Governmental Authority relating to the matters that are the subject of this Agreement and permitting the other parties to review in advance, and to the extent practicable consult about, any proposed communication by such party to any Governmental Authority in connection with the Transactions. No party to this Agreement shall agree to participate in any meeting, or video or telephone conference, with any Governmental Authority in respect of any filings, investigation or other inquiry unless it consults with the other parties in advance and, to the extent permitted by such Governmental Authority, gives the other parties the opportunity to attend and participate at such meeting or conference. Except as required by applicable Law, the parties will coordinate and cooperate fully with each other in exchanging such information and providing such assistance as the other parties may reasonably request in connection with the foregoing. Except as required by applicable Law, the parties will provide each other with copies of all material correspondence, filings or communications, including any documents, information and data contained therewith, between them or any of their Representatives, on the one hand, and any Governmental Authority, on the other hand, with respect to this Agreement and the Transactions. No party shall take or cause to be taken any action before any Governmental Authority that is inconsistent with or intended to delay its action on requests for a consent or the consummation of the Transactions.

 

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(c)  Notwithstanding the generality of the foregoing but subject to the remainder of this Section 6.10(c), SPAC shall use its reasonable best efforts to consummate the Private Placements in accordance with the Subscription Agreements and Additional Subscription Agreements, and the Company shall reasonably cooperate with SPAC in such efforts. SPAC shall not, without the prior written consent of the Company (such consent not to be unreasonably withheld, delayed or conditioned), permit or consent to any material amendment, supplement or modification to any Subscription Agreement or Additional Subscription Agreement; provided, that SPAC may, without the prior written consent of the Company, enter into amendments, supplements or modifications to any Subscription Agreement or Additional Subscription Agreement to reduce the shares of SPAC Class A Common Stock being purchased (and a corresponding amount of cash proceeds to SPAC) by a Subscriber if the aggregate commitments under the Subscription Agreements and Additional Subscription Agreements constitute no less than an aggregate of 8,000,000 shares of SPAC Class A Common Stock for a purchase price of at least $10.00 per share. SPAC may enter into Additional Subscription Agreements following the date hereof without the prior written consent of the Company (the investments contemplated by any Additional Subscription Agreements, the “Additional Financing”); provided, that following October 11, 2022 (the “Cut-Off Date”) the Subscription Agreements and Additional Subscription Agreements shall provide for the issuance of no more shares of SPAC Class A Common Stock than were subscribed for in the Subscription Agreements and Additional Subscription Agreements as of the Cut-Off Date without the prior written consent of the Company. The Company shall reasonably cooperate with SPAC with respect to the arrangement of any such Additional Financing.

 

Section 6.11  Public Announcements. The initial press release relating to this Agreement shall be a joint press release the text of which has been agreed to by each of SPAC and the Company. Thereafter, between the date of this Agreement and the Closing Date (or the earlier termination of this Agreement in accordance with Article VIII) unless otherwise prohibited by applicable Law or the requirements of Nasdaq, each of SPAC and the Bluescape Parties shall each use its reasonable best efforts to consult with each other before issuing any press release or otherwise making any public statements (including through social media platforms) with respect to this Agreement and the Transactions, and shall not issue any such press release or make any such public statement (including through social media platforms) without the prior written consent of the other party. Furthermore, nothing contained in this Section 6.11 shall prevent (i) SPAC or the Bluescape Parties and/or its respective affiliates from publishing any press release or public announcement that is substantively consistent with public statements set forth in (x) the initial press release, (y) other press releases published by the Company and/or its respective affiliates prior to the date of this Agreement, or (z) previously consented to by the other party in accordance with this Section 6.11, (ii) SPAC or the Bluescape Parties and/or its respective affiliates from furnishing customary or other reasonable information concerning the Transactions to their investors and prospective investors that is substantively consistent with public statements set forth in (x) the initial press release, (y) other press releases published by the Company and/or its respective affiliates prior to the date of this Agreement, or (z) previously consented to by the other party in accordance with this Section 6.11, or (iii) the Bluescape Parties and its affiliates from furnishing customary or other reasonable information concerning the Transactions to their respective members, managers, limited partners, and advisory or similar committees.

 

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Section 6.12  Stock Exchange Listing. SPAC will use its reasonable best efforts to cause all shares of SPAC Class A Common Stock issuable upon the exercise of the OpCo Holder Redemption Right to be approved for listing on Nasdaq at Closing. During the period from the date hereof until the Closing, SPAC shall use its reasonable best efforts to keep the SPAC Units, SPAC Class A Common Stock and SPAC Warrants listed for trading on Nasdaq. The Company shall use reasonable best efforts, and shall use reasonable best efforts to cause its Representatives to, cooperate with SPAC and its Representatives in connection with the foregoing provisions of this Section 6.12, as reasonably requested by SPAC.

 

Section 6.13  Antitrust.

 

(a)  To the extent required under any Laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade, including the HSR Act (“Antitrust Laws”), each party hereto agrees to promptly make any required filing or application under Antitrust Laws, as applicable, and no later than 10 Business Days after the date of this Agreement, the Company and SPAC each shall file (or cause to be filed) with the Antitrust Division of the U.S. Department of Justice and the U.S. Federal Trade Commission a Notification and Report Form as required by the HSR Act. The parties hereto agree to supply as promptly as reasonably practicable any additional information and documentary material that may be requested pursuant to Antitrust Laws and to take all other actions necessary, proper or advisable to cause the expiration or termination of the applicable waiting periods or obtain required approvals, as applicable under Antitrust Laws as soon as practicable, including by requesting early termination of the waiting period provided for under the HSR Act.

 

(b)  SPAC and the Company each shall, in connection with its efforts to obtain all requisite approvals and expiration or termination of waiting periods for the Transactions under any Antitrust Law, use its reasonable best efforts to: (i) cooperate in all respects with each other party or its affiliates in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private person; (ii) keep the other reasonably informed of any communication received by such party from, or given by such party to, any Governmental Authority and of any communication received or given in connection with any proceeding by a private person, in each case regarding any of the Transactions, and promptly furnish the other with copies of all such written communications (with the exception of the filings, if any, submitted under the HSR Act); (iii) permit the other to review in advance any written communication to be given by it to, and consult with each other in advance of any meeting or video or telephonic conference with, any Governmental Authority or, in connection with any proceeding by a private person, with any other person, and to the extent permitted by such Governmental Authority or other person, give the other the opportunity to attend and participate in such in person, video or telephonic meetings and conferences; (iv) in the event a party is prohibited from participating in or attending any in person, video or telephonic meetings or conferences, the other shall keep such party promptly and reasonably apprised with respect thereto; and (v) use reasonable best efforts to cooperate in the filing of any memoranda, white papers, filings, correspondence or other written communications explaining or defending the Transactions, articulating any regulatory or competitive argument, and/or responding to requests or objections made by any Governmental Authority; provided that materials required to be provided pursuant to this Section 6.13(b) may (i) be restricted to outside counsel and may be redacted to remove references concerning the valuation of the Company, (ii) be restricted to outside counsel and redacted as necessary to comply with contractual arrangements, and (iii) to the extent constituting Item 4(c) information on the HSR Act filing form, be kept confidential by the applicable party and not disclosed to the other party hereunder.

 

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(c)  No party hereto shall take any action that could reasonably be expected to adversely affect or materially delay the approval of any Governmental Authority, or the expiration or termination of any waiting period under Antitrust Laws, including by agreeing to merge with or acquire any other person or acquire a substantial portion of the assets of or equity in any other person. The parties hereto further covenant and agree, with respect to a threatened or pending preliminary or permanent injunction or other order, decree or ruling or statute, rule, regulation or executive order that would adversely affect the ability of the parties to consummate the Transactions, to use reasonable best efforts to prevent or lift the entry, enactment or promulgation thereof, as the case may be.

 

Section 6.14  Trust Account. As of the Closing, the obligations of SPAC to dissolve or liquidate within a specified time period as contained in the SPAC Certificate of Incorporation will be terminated and SPAC shall have no obligation whatsoever to dissolve and liquidate the assets of SPAC by reason of the consummation of the Transactions or otherwise, and no stockholder of SPAC shall be entitled to receive any amount from the Trust Account. At least 48 hours prior to the Closing, SPAC shall provide notice to the Trustee in accordance with the Trust Agreement and shall deliver any other documents, opinions or notices required to be delivered to the Trustee pursuant to the Trust Agreement and cause the Trustee prior to the Closing to, and the Trustee shall thereupon be obligated to, transfer all funds held in the Trust Account to SPAC following the payment by the Trustee of the SPAC Stockholder Redemption Amount (to be held as available cash for immediate use on the balance sheet of SPAC, and to be used (a) to pay the Company’s and SPAC’s unpaid transaction expenses in connection with this Agreement and the Transactions, (b) if applicable, to pay the Sponsor or cause the Sponsor to be repaid in accordance with Section 8.03 the 1st Extension Date Funding Amount and the 2nd Extension Date Funding Amount, and (c) thereafter for working capital and other general corporate purposes of the business following the Closing), and thereafter shall cause the Trust Account and the Trust Agreement to terminate.

 

Section 6.15  Tax Matters.

 

(a)  For U.S. federal (and any applicable state or local) income Tax purposes, each of Holdings, SPAC and OpCo hereby agrees to treat (and, if applicable, to cause its affiliates to treat) certain portions of the Combination Transactions as follows:

 

(i) the SPAC Contribution and Holdings Contribution as a contribution of property to OpCo (a newly formed partnership that is not a continuation of Holdings) under Section 721(a) of the Code, and each liability of the Company and the Company Subsidiaries or to which their assets are subject that is assumed by OpCo in connection with the Holdings Contribution be treated as a “qualified liability” (as such term is defined in Treasury Regulations Section 1.707-5(a)(6)(i)) except to the extent SPAC or OpCo, after Closing, has received advice from a nationally recognized accounting or law firm that such liability would more likely than not be treated otherwise;

 

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(ii)  each of the Holdings Class C Shares and the right to request redemption of OpCo Units contemplated by the OpCo A&R LLC Agreement shall be treated as having a fair market value equal to zero dollars ($0) at the time of the Combination Transactions; provided, however, that, if any value were ascribed to such shares, the receipt of the Holdings Class C Shares by Holdings would be properly treated as a reimbursement of preformation capital expenditures within the meaning of Treasury Regulations Section 1.707-4(d), to the extent permitted by Law; and

 

(iii)  any rights under the Tax Receivable Agreement associated with subsequent redemptions of OpCo Units after the date hereof shall not be recognized as consideration received in exchange for the Combination Transactions and shall be taken into account as consideration only in connection with such subsequent redemptions.

 

To the extent applicable, the tax treatment described in Section 6.15(a) is referred to as the “Intended Tax Treatment.” Each of Holdings, SPAC and OpCo shall (and, if applicable, shall cause its affiliates to) use reasonable best efforts to (i) cause the Combination Transactions to qualify for the Intended Tax Treatment, (ii) take no action (whether or not otherwise permitted under this Agreement), which action would prevent or impede, or that would reasonably be expected to prevent or impede, the Combination Transactions from qualifying for the Intended Tax Treatment, (iii) prepare and file all Tax Returns in a manner consistent with the Intended Tax Treatment, and (iv) not take any action or position inconsistent with the Intended Tax Treatment in any Tax Return, Tax-related Proceeding or otherwise for Tax purposes, unless otherwise required pursuant to a determination within the meaning of Section 1313(a) of the Code. For the avoidance of doubt, if any opinion related to the Intended Tax Treatment is required in connection with the filing of the Proxy Statement or any other required disclosure in respect thereof, then (i) to the extent such opinion or disclosure relates to the Company or any of its direct or indirect owners, the Company shall cause such opinion to be provided by a nationally recognized tax advisor of the Company, and (ii) to the extent such opinion or disclosure relates to SPAC or any of its direct or indirect owners, SPAC shall cause such opinion to be provided by a nationally recognized tax advisor of SPAC. Each of the parties shall, and shall cause is respective affiliates to, cooperate in connection with the delivery of any such opinion, including by providing any customary representation letters that may be reasonably requested by any such tax advisor.

 

(b)  Any transfer, stamp, documentary, sales, use, registration, value-added and other similar Taxes (including any associated penalties and interest) incurred in connection with this Agreement and the Transactions (“Transfer Taxes”) will be borne and paid by OpCo.

 

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Section 6.16  Post-Closing Directors and Officers. Subject to the terms of SPAC’s Organizational Documents, the Fourth A&R SPAC Certificate of Incorporation and the SPAC Bylaws, SPAC shall take all such action within its power as may be necessary or appropriate such that immediately following the Closing:

 

(a)  The SPAC Board shall consist of 7 directors, which shall be divided into three classes, designated Classes I, II and III (with Classes I and II consisting of two directors each, and with Class III consisting of three directors), and such board shall initially include:

 

(i) two director nominees to be chosen by the Sponsor and designated as Class III; and

 

(ii)  five director nominees to be chosen by the Company (at least one of whom shall be designated as Class III, one of whom shall be the chairman of the SPAC Board, and at least three of whom shall also meet the requirements for service on the audit committee of the SPAC following Closing under the Exchange Act, Nasdaq rules and the Sarbanes-Oxley Act of 2002).

 

(b)  Ernest Miller shall be the Chief Executive Officer of SPAC.

 

Section 6.17  Intentionally Omitted.

 

Section 6.18  SPAC Extensions.

 

(a)  The Company and SPAC agree that, unless this Agreement shall have otherwise been terminated in accordance with its terms or the Proxy Statement will not be filed on or prior to August 16, 2022, then the Sponsor shall deposit, or cause to be deposited, into the Trust Account the 1st Extension Date Funding Amount and use its commercially reasonable efforts to take such other action as necessary to extend the period of time to consummate the business combination to November 16, 2022 (“1st Extension Date”). If this Agreement has not otherwise been terminated in accordance with its terms and the Transactions have not been consummated by the 1st Extension Date, then the Sponsor shall deposit, or cause to be deposited, into the Trust Account the 2nd Extension Date Funding Amount and use its commercially reasonable efforts to take such other action as necessary to extend the period of time to consummate the business combination to February 16, 2023 (“2nd Extension Date”).

 

(b)  If this Agreement has not otherwise been terminated in accordance with its terms and the Transactions will be consummated after the 2nd Extension Date, then SPAC shall call a special meeting of its stockholders regarding the SPAC Extension Proposal, and the parties shall cooperate with the preparation, filing and mailing of proxy materials to be sent to SPAC stockholders seeking approval of the SPAC Extension Proposal and providing the SPAC stockholders with the opportunity to redeem their shares of SPAC Common Stock in connection therewith, provided, such SPAC Extension Proposal shall not seek to amend SPAC’s Organizational Documents to extend the time period for SPAC to consummate a business combination beyond June 30, 2023.

 

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Article VII.

 

CLOSING CONDITIONS

 

Section 7.01  Conditions to the Obligations of Each Party. The obligations of the Bluescape Parties, SPAC and OpCo to consummate the Transactions are subject to the satisfaction or waiver in accordance with the terms of this Agreement (where permissible) at or prior to the Closing of the following conditions:

 

(a)  SPAC Stockholders’ Approval. The SPAC Proposals shall have been approved and adopted by the requisite affirmative vote of the stockholders of SPAC in accordance with the Proxy Statement, the Delaware General Corporation Law, SPAC’s Organizational Documents and the rules and regulations of Nasdaq and, if applicable, the SPAC Extension Proposal shall have been approved and adopted by the requisite affirmative vote of the stockholders of SPAC in accordance with the proxy statement filed in connection therewith, the Delaware General Corporation Law and SPAC’s Organizational Documents (“Stockholder Approval”).

 

(b)  No Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law, rule, regulation, judgment, decree, executive order or award which is then in effect and has the effect of making the Transactions illegal or otherwise prohibiting consummation of the Transactions.

 

(c)  HSR. All required filings under the HSR Act shall have been completed and any applicable waiting period (and any extension thereof) applicable to the consummation of the Transactions under the HSR Act shall have expired or been terminated.

 

(d)  Stock Exchange Listing. The shares of SPAC Class A Common Stock (including shares issuable upon the exercise of the OpCo Holder Redemption Right) shall be listed on Nasdaq, or another national securities exchange mutually agreed to by the parties, as of the Closing Date.

 

(e)  SPAC Net Tangible Assets. SPAC shall have at least $5,000,001 of net tangible assets after giving effect to the Transactions and following the exercise of Redemption Rights in accordance with SPAC’s Organizational Documents.

 

Section 7.02  Conditions to the Obligations of SPAC and OpCo. The obligations of SPAC and OpCo to consummate the Transactions are subject to the satisfaction or waiver in accordance with the terms of this Agreement (where permissible) at or prior to the Closing of the following additional conditions:

 

(a)  Representations and Warranties. The representations and warranties of the Company and Company Subsidiaries contained in (i) Section 3.01, Section 3.02, Section 3.03, Section 3.04, Section 3.05(a)(i), Section 3.08(a) and Section 3.22 shall each be true and correct in all respects as of the date hereof and the Closing Date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such specified date) and (ii) the other provisions of Article III shall be true and correct in all respects (without giving effect to any “materiality,” “Company Material Adverse Effect” or similar qualifiers contained in any such representations and warranties) as of the date hereof and as of the Closing Date as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failures of any such representations and warranties to be so true and correct would not have a Company Material Adverse Effect.

 

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(b)  Agreements and Covenants. Each Bluescape Party shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by such Bluescape Party on or prior to the Closing.

 

(c)  Officer Certificate. The Company shall have delivered to SPAC a certificate, dated the date of the Closing, signed by the Chief Executive Officer of the Company, certifying as to the satisfaction of the conditions specified in Section 7.02(a) and Section 7.02(b).

 

(d)  Material Adverse Effect. No Company Material Adverse Effect shall have occurred after the date of this Agreement.

 

(e)  Closing Deliveries. Holdings shall have delivered or caused to be delivered (or will deliver or cause to be delivered at Closing) to SPAC the documents and deliveries set forth in Section 2.02(c), in each case, duly executed by the Bluescape Parties as applicable.

 

Section 7.03  Conditions to the Obligations of Holdings and the Company. The obligations of Holdings and the Company to consummate the Transactions are subject to the satisfaction or waiver in accordance with the terms of this Agreement (where permissible) at or prior to the Closing of the following additional conditions:

 

(a)  Representations and Warranties. The representations and warranties of SPAC and OpCo contained in (i) Section 4.01, Section 4.02, Section 4.04, Section 4.05(a)(i), and Section 4.13 shall each be true and correct in all respects as of the date hereof and the Closing Date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such specified date), and (ii) the other provisions of Article IV shall be true and correct in all respects (without giving effect to any “materiality,” “SPAC Material Adverse Effect” or similar qualifiers contained in any such representations and warranties) as of the date hereof and as of the Closing Date as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failures of any such representations and warranties to be so true and correct would not have a SPAC Material Adverse Effect.

 

(b)  Agreements and Covenants. (i) SPAC and OpCo shall have performed or complied in all material respects with all other agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing and (ii) SPAC Transaction Expenses shall not exceed the amount set forth in Section 8.03(a)(ii).

 

(c)  Officer Certificate. SPAC shall have delivered to the Company a certificate, dated the date of the Closing, signed by the Chief Executive Officer of SPAC, certifying as to the satisfaction of the conditions specified in Section 7.03(a) and Section 7.03(b).

 

(d)  Private Placements. The gross proceeds from the Private Placements shall not be less than $80,000,000 (including any Additional Financing contemplated under Section 6.10(c), the “Aggregate Private Placements Amount”), provided that to the extent funds contained in the Trust Account immediately prior to the Closing (after giving effect to the exercise of Redemption Rights) exceed $17,420,000, each $10.00 increment of such excess funds shall reduce the required Aggregate Private Placements Amount by $10.00 up to a maximum reduction of $20,000,000.

 

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(e)  Material Adverse Effect. No SPAC Material Adverse Effect shall have occurred after the date of this Agreement.

 

(f) Trust Fund. SPAC shall have made all necessary and appropriate arrangements with the Trustee to have all of the Trust Funds disbursed to SPAC immediately prior to the Closing, and all such funds released from the Trust Account shall be available for immediate use to SPAC in respect of all or a portion of the payment obligations set forth in Section 6.14 and the payment of SPAC’s fees and expenses incurred in connection with this Agreement and the Transactions.

 

(g)  Closing Deliveries. SPAC and OpCo shall have delivered (or will deliver at Closing) to Holdings the documents and deliveries set forth in Section 2.02(b), in each case, duly executed as applicable.

 

Article VIII.

TERMINATION, AMENDMENT AND WAIVER

 

Section 8.01  Termination. This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Closing, notwithstanding any requisite approval and adoption of this Agreement and the Transactions by the stockholders of the Company or SPAC, as follows:

 

(a)  by mutual written consent of SPAC and the Company; or

 

(b)  by either SPAC or the Company if the Closing shall not have occurred prior to May 9, 2023 (the “Outside Date”); provided, however, that this Agreement may not be terminated under this Section 8.01(b) by or on behalf of any party that either directly or indirectly through its affiliates is in breach or violation of any representation, warranty, covenant, agreement or obligation contained herein and such breach or violation is the principal cause of the failure of a condition set forth in Article VII on or prior to the Outside Date; or

 

(c)  by either SPAC or the Company if any Governmental Authority in the United States shall have enacted, issued, promulgated, enforced or entered any injunction, order, decree or ruling (whether temporary, preliminary or permanent) which has become final and nonappealable and has the effect of making consummation of the Transactions, illegal or otherwise preventing or prohibiting consummation of the Transactions; or

 

(d)  by either SPAC or the Company if any of the SPAC Proposals shall fail to receive the requisite vote for approval at the SPAC Stockholders’ Meeting (subject to any adjournment, postponement or recess of such meeting in accordance with the terms of this Agreement); provided, however, that this Agreement may not be terminated under this Section 8.01(d) by or on behalf of SPAC if, directly or indirectly, through its affiliates, SPAC is in breach or violation of any representation, warranty, covenant, agreement or obligation contained herein and such breach or violation is the principal cause of the failure of the condition set forth in Section 7.01(a); or

 

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(e)  by SPAC upon a material breach of any representation, warranty, covenant or agreement on the part of the Bluescape Parties set forth in this Agreement, or if any representation or warranty of the Company shall have become untrue, in either case, such that the conditions set forth in Sections 7.02(a) and 7.02(b) would not be satisfied (“Terminating Bluescape Breach”); provided that SPAC has not waived such Terminating Bluescape Breach and SPAC and OpCo are not then in material breach of their representations, warranties, covenants or agreements in this Agreement; provided further that, if such Terminating Bluescape Breach is curable by such Bluescape Party, SPAC may not terminate this Agreement under this Section 8.01(e) for so long as the applicable Bluescape Party continues to exercise its reasonable best efforts to cure such breach, unless such breach is not cured by the earlier of 30 days after notice of such breach is provided by SPAC to the Bluescape Parties and the Outside Date; or

 

(f) by the Company upon a material breach of any representation, warranty, covenant or agreement on the part of SPAC and OpCo set forth in this Agreement, or if any representation or warranty of SPAC and OpCo shall have become untrue, in either case such that the conditions set forth in Sections 7.03(a) and 7.03(b) would not be satisfied (“Terminating SPAC Breach”); provided that Holdings has not waived such Terminating SPAC Breach and the Bluescape Parties are not then in material breach of their representations, warranties, covenants or agreements in this Agreement; provided, however, that, if such Terminating SPAC Breach is curable by SPAC or OpCo, Holdings may not terminate this Agreement under this Section 8.01(f) for so long as SPAC and OpCo continue to exercise their reasonable best efforts to cure such breach, unless such breach is not cured by the earlier of 30 days after notice of such breach is provided by SPAC to the Bluescape Parties and the Outside Date.

 

Section 8.02  Effect of Termination. In the event of the termination of this Agreement pursuant to Section 8.01, this Agreement shall forthwith become void, and there shall be no liability under this Agreement on the part of any party hereto, except (i) this Section 8.02, Section 8.03 and Article IX (and any corresponding definitions set forth in Article I) and (ii) in the case of fraud or any willful and material breach of this Agreement by a party hereto.

 

Section 8.03  Expenses. Except as set forth in this Section 8.03 or elsewhere in this Agreement, all expenses incurred in connection with this Agreement and the Transactions shall be paid by the party incurring such expenses; provided that if the Closing shall occur, SPAC shall, in the following order, (i) pay or cause to be paid the accrued but unpaid Bluescape Transaction Expenses in an amount up to $3,250,000, (ii) pay or cause to be paid the accrued and unpaid SPAC Transaction Expenses in an amount up to $9,375,000, plus any Additional Subscription Fees, (iii) repay or cause to be repaid the Company Owner Contributions in an amount up to $10,000,000, and (iv) if applicable, repay Sponsor or cause Sponsor to be repaid the applicable Funding Amount; provided, that such Funding Amount to be repaid shall be reduced by an amount equal to the Redemption Percentage multiplied by such Funding Amount (it being understood that any payments to be made (or to cause to be made) by SPAC under this Section 8.03 shall be paid as soon as reasonably practicable upon consummation of the Transactions and release of proceeds from the Trust Account). Notwithstanding anything in this Agreement to the contrary, the Bluescape Transaction Expenses may not exceed $3,250,000 and the Company Owner Contributions may not exceed $10,000,000, in each case, without the prior written consent of SPAC. For the avoidance of doubt and notwithstanding anything to the contrary herein, neither the $9,375,000 cap (plus any Additional Subscription Fees) described in clause (ii) of the first sentence of this Section 8.03 nor the $3,250,000 cap described in the foregoing sentence shall include the 1st Extension Date Funding Amount, the 2nd Extension Date Funding Amount, the HSR Fees or the SEC Fees.

 

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Section 8.04  Amendment. This Agreement may be amended in writing by the parties hereto at any time prior to the Closing. This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto.

 

Section 8.05  Waiver. At any time prior to the Closing, (a) SPAC may (i) extend the time for the performance of any obligation or other act of the Bluescape Parties, (ii) waive any inaccuracy in the representations and warranties of the Bluescape Parties contained herein or in any document delivered by the Bluescape Parties pursuant hereto, and (iii) waive compliance with any agreement of the Bluescape Parties or any condition to its own obligations contained herein and (b) Holdings may (i) extend the time for the performance of any obligation or other act of SPAC or OpCo, (ii) waive any inaccuracy in the representations and warranties of SPAC or OpCo contained herein or in any document delivered by SPAC pursuant hereto, and (iii) waive compliance with any agreement of SPAC or OpCo or any condition to its own obligations contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby.

 

Article IX.

 

GENERAL PROVISIONS

 

Section 9.01  Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by email or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.01):

 

if to SPAC or OpCo:

 

CENAQ Energy Corp.

4550 Post Oak Place Drive

Suite 300

Houston, Texas 77027

Attention: Mr. J. Russell Porter

Email: [email protected]

 

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

 

Vinson & Elkins L.L.P.
1001 Fannin Street
25th Floor, Ste. 2500
Houston, Texas 77002
Attention: Mark Kelly; Crosby Scofield

Email: [email protected]; [email protected]

 

if to any Bluescape Party:
Bluescape Clean Fuels Holdings, LLC

200 Crescent Court, Suite 1900

Dallas, TX 75201
Attention: Jonathan Siegler
Email: [email protected]

 

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

 

Kirkland & Ellis LLP

609 Main Street
Houston, Texas 77002
Attention: Sean Wheeler, P.C.; Debbie Yee, P.C.; Cephas Sekhar

Email: [email protected]; [email protected]; [email protected]

 

Section 9.02  Nonsurvival of Representations, Warranties and Covenants. None of the representations, warranties, covenants, obligations or other agreements in this Agreement or in any certificate, statement or instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations, warranties, covenants, obligations, agreements and other provisions, shall survive the Closing and all such representations, warranties, covenants, obligations or other agreements shall terminate and expire upon the occurrence of the Closing (and there shall be no liability in respect thereof or relating thereto), except for (a) those covenants and agreements contained herein that by their terms expressly apply in whole or in part after the Closing and then only with respect to any breaches occurring after the Closing and (b) this Article IX and any corresponding definitions set forth in Article I.

 

Section 9.03  Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the Transactions be consummated as originally contemplated to the fullest extent possible.

 

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Section 9.04  Entire Agreement; Assignment. This Agreement and the Transaction Documents constitute the entire agreement among the parties with respect to the subject matter hereof and supersede, except as set forth in Section 6.04(b), all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. This Agreement shall not be assigned (whether pursuant to a merger, by operation of Law or otherwise) by any party without the prior express written consent of the other parties hereto.

 

Section 9.05  Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, other than Section 6.07 and Section 9.11(which is intended to be for the benefit of the persons covered thereby and may be enforced by such persons) and Section 6.16(a)(i) (which is intended to be for the benefit of the Sponsor and may be enforced by the Sponsor).

 

Section 9.06  Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed in that State. All legal actions and proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in any Delaware Chancery Court in New Castle County; provided, that if jurisdiction is not then available in any such Delaware Chancery Court, then any such legal Action may be brought in any federal court located in the State of Delaware or any other Delaware state court. The parties hereto hereby (a) irrevocably submit to the exclusive jurisdiction of the aforesaid courts for themselves and with respect to their respective properties for the purpose of any Action arising out of or relating to this Agreement or the Transactions brought by any party hereto, and (b) agree not to commence any Action relating thereto except in the courts described above in Delaware, other than Actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any Action arising out of or relating to this Agreement or the Transactions, (a) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and (c) that (i) the Action in any such court is brought in an inconvenient forum, (ii) the venue of such Action is improper, or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

 

Section 9.07  Waiver of Jury Trial. Each of the parties hereto hereby waives to the fullest extent permitted by applicable Law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement or the Transactions. Each of the parties hereto (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement and the Transactions, as applicable, by, among other things, the mutual waivers and certifications in this Section 9.07.

 

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Section 9.08  Headings. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

 

Section 9.09  Counterparts. This Agreement may be executed and delivered (including by facsimile or portable document format (.pdf) transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

 

Section 9.10  Specific Performance.

 

(a)  The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof, and, accordingly, that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof (including the parties’ obligation to consummate the Transactions) in the Court of Chancery of the State of Delaware, County of New Castle, or, if that court does not have jurisdiction, any court of the United States located in the State of Delaware without proof of actual damages or otherwise, in addition to any other remedy to which they are entitled at Law or in equity as expressly permitted in this Agreement. Each of the parties hereby further waives (i) any defense in any action for specific performance that a remedy at Law would be adequate and (ii) any requirement under any Law to post security or a bond as a prerequisite to obtaining equitable relief.

 

(b)  Notwithstanding anything to the contrary in this Agreement, if prior to the Outside Date any party initiates an Action to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, then the Outside Date will be automatically extended by: (i) the amount of time during which such Action is pending plus 20 Business Days; or (ii) such other time period established by the court presiding over such Action.

 

Section 9.11  No Recourse. All claims, obligations, liabilities, or causes of action (whether in contract or in tort, in Law or in equity or otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any other theory or doctrine, including alter ego or otherwise) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to this Agreement or the other Transaction Documents or the Transactions, or the negotiation, execution, or performance or non-performance of this Agreement or the other Transaction Documents (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement or the other Transaction Documents), may be made only against (and such representations and warranties are those solely of) the persons that are expressly identified as parties to this Agreement or the applicable Transaction Document (the “Contracting Parties”) except as set forth in this Section 9.11. In no event shall any Contracting Party have any shared or vicarious liability for the actions or omissions of any other person. No person who is not a Contracting Party, including without limitation, any current, former or future director, officer, employee, incorporator, member, partner, manager, stockholder, affiliate, agent, financing source, attorney or Representative or assignee of any Contracting Party, or any current, former or future director, officer, employee, incorporator, member, partner, manager, stockholder, affiliate, agent, financing source, attorney or Representative or assignee of any of the foregoing (collectively, the “Nonparty Affiliates”), shall have any liability (whether in contract or in tort, in Law or in equity or otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any other theory or doctrine, including alter ego or otherwise) for any obligations or liabilities arising under, out of, in connection with, or related in any manner to this Agreement or the other Transaction Documents or for any claim based on, in respect of, or by reason of this Agreement or the other Transaction Documents or the Transactions or their negotiation, execution, performance, or breach, except with respect to willful misconduct or common law fraud against the person who committed such willful misconduct or common law fraud to the maximum extent permitted by applicable Law; and each party hereto waives and releases all such liabilities, claims, causes of action and obligations against any such Nonparty Affiliates. The parties acknowledge and agree that the Nonparty Affiliates are intended third-party beneficiaries of this Section 9.11.

 

[Signature Page Follows.]

 

79

 

 

IN WITNESS WHEREOF, SPAC, Sponsor, OpCo, Holdings and the Company have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

  CENAQ Energy Corp.
     
  By /s/ J. Russell Porter
  Name: J. Russell Porter
  Title: Chief Executive Officer
     
  CENAQ SPONSOR LLC, solely for purposes of
Section 6.18
     
  By /s/ J. Russell Porter
  Name: J. Russell Porter
  Title: Chief Executive Officer
     
  VERDE CLEAN FUELS OPCO, LLC
   
  By: CENAQ Energy Corp., its sole member
     
  By /s/ J. Russell Porter
  Name: J. Russell Porter
  Title: Chief Executive Officer
     
  Bluescape Clean Fuels Holdings, LLC
     
  By /s/ Ernest B. Miller
  Name:   Ernest B. Miller
  Title: Chief Executive Officer
     
  BLUESCAPE CLEAN FUELS INTERMEDIATE HOLDINGS, LLC
     
  By /s/ Ernest B. Miller
  Name: Ernest B. Miller
  Title: Chief Executive Officer

 

[Signature Page to Business Combination Agreement]

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT A

 

Form of Amended and Restated Registration Rights Agreement

 

[Attached]

 

 

 

 

 

 

 

 

 

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

 

THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of [_______], 202[●], is made and entered into by and among Verde Clean Fuels, Inc., a Delaware corporation (f/k/a CENAQ Energy Corp.) (the “Company”), CENAQ Sponsor LLC, a Delaware limited liability company (the “Sponsor”), Bluescape Clean Fuels Holdings, LLC, a Delaware limited liability company (“Bluescape Holdings”), and the undersigned parties listed under Holders on the signature pages hereto (each such party, together with the Sponsor, Bluescape Holdings and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 of this Agreement, a “Holder” and collectively the “Holders”). Except as otherwise stated, capitalized terms used but not otherwise defined herein shall have the meanings provided in the Business Combination Agreement (as defined below).

 

RECITALS

 

WHEREAS, on August 17, 2021, the Company, the Sponsor and certain other security holders named therein (the “Existing Holders”) entered into that certain Registration Rights Agreement (the “Existing Registration Rights Agreement”), pursuant to which the Company granted the Sponsor and such other Existing Holders certain registration rights with respect to certain securities of the Company;

 

WHEREAS, on August 12, 2022, the Company, Bluescape Holdings, Bluescape Clean Fuels Intermediate Holdings, LLC, a Delaware limited liability company, and Verde Clean Fuels OpCo, LLC, a Delaware limited liability company (“OpCo”), and, solely with respect to Section 6.18 therein, the Sponsor, entered into that certain Business Combination Agreement and Plan of Reorganization (as the same may be amended, supplemented or modified, the “Business Combination Agreement”), pursuant to which the parties to the Business Combination Agreement will undertake the transactions described therein (the “Business Combination”);

 

WHEREAS, after the closing of the Business Combination (the “Closing”), the Holders (other than Bluescape Holdings) will own shares of the Company’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), the Sponsor will own warrants to purchase 2,475,000 shares of Class A Common Stock (the “Private Placement Warrants”), and Bluescape Holdings will own common units of OpCo (“OpCo Units”) and shares of the Company’s Class C common stock, par value $0.0001 per share (“Class C Common Stock”), which together will be exchangeable for shares of Class A Common Stock pursuant to the terms of the amended and restated limited liability company agreement of OpCo;

 

WHEREAS, following the Closing, Bluescape Holdings may receive OpCo Units and shares of Class C Common Stock in accordance with the terms and conditions set forth in the Business Combination Agreement (the “Earn Out Equity”); and

 

WHEREAS, the Company and the Existing Holders desire to amend and restate the Existing Registration Rights Agreement, pursuant to which the Company shall grant the Holders certain registration rights with respect to certain securities of the Company, as set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

EX-A-1

 

 

Article I

DEFINITIONS

 

1.1 Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:

 

Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or principal financial officer of the Company, after consultation with counsel to the Company, (a) would be required to be made in (i) any Registration Statement in order for the applicable Registration Statement not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any Prospectus in order for the applicable Prospectus not to include 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, (b) would not be required to be made at such time if the Registration Statement were not being filed, and (c) the Company has a bona fide business purpose for not making such information public.

 

Additional Subscription Agreements” shall mean any subscription agreements entered into by the Company between the date of the Business Combination Agreement and the Closing, providing for the issuance to certain investors of Class A Common Stock in connection with the consummation of the transactions contemplated by the Business Combination Agreement.

 

Agreement” shall have the meaning given in the Preamble.

 

Block Trade” shall have the meaning given to it in subsection 2.3.1 of this Agreement.

 

Bluescape Holdings” shall have the meaning given in the Preamble.

 

Board” shall mean the board of directors of the Company.

 

Business Combination” shall have the meaning given in the Recitals hereto.

 

Business Combination Agreement” shall have the meaning given in the Recitals hereto.

 

Class A Common Stock” shall have the meaning given in the Recitals hereto.

 

Class C Common Stock” shall have the meaning given in the Recitals hereto.

 

Closing” shall have the meaning given in the Recitals hereto.

 

Commission” shall mean the Securities and Exchange Commission.

 

Company” shall have the meaning given in the Preamble.

 

EX-A-2

 

 

Demanding Holder” shall have the meaning given in subsection 2.1.5 of this Agreement.

 

Demand Notice” shall have the meaning given in subsection 2.1.5 of this Agreement.

 

Earn Out Equity” shall meaning given in the Recitals hereto.

 

Effectiveness Period” shall have the meaning given in subsection 3.1.1 of this Agreement.

 

Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.

 

Existing Holders” shall have the meaning given in the Recitals hereto.

 

Existing Registration Rights Agreement” shall have the meaning given in the Recitals hereto.

 

Financial Counterparty” shall have the meaning given in subsection 2.3.1 of this Agreement.

 

Holder Indemnified Persons” shall have the meaning given in subsection 4.1.1 of this Agreement.

 

Holder Information” shall have the meaning given in subsection 4.1.2.

 

Holders” shall have the meaning given in the Preamble.

 

Minimum Underwritten Offering Threshold” shall have the meaning given in subsection 2.1.5 of this Agreement.

 

Maximum Number of Securities” shall have the meaning given in subsection 2.1.6 of this Agreement.

 

Misstatement” shall mean, in the case of a Registration Statement, an untrue statement of a material fact or an omission to state a material fact required to be stated therein, or necessary to make the statements therein not misleading, and in the case of a Prospectus, an untrue statement of a material fact or an omission 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.

 

OpCo” shall have the meaning given in the Recitals hereto.

 

OpCo Units” shall have the meaning given in the Recitals hereto.

 

Opt-Out Notice” shall have the meaning given in Section 2.5.

 

Other Coordinated Offering” shall have the meaning given to it in subsection 2.3.1 of this Agreement.

 

EX-A-3

 

 

Permitted Transferees” shall mean (a) the members of a Holder’s immediate family (for purposes of this Agreement, “immediate family” shall mean with respect to any natural person, any of the following: such person’s spouse, the siblings of such person and his or her spouse, and the direct descendants and ascendants (including adopted and step children and parents) of such person and his or her spouses and siblings), (b) any trust for the direct or indirect benefit of a Holder or the immediate family of a Holder, (c) if a Holder is a trust, to the trustor or beneficiary of such trust or to the estate of a beneficiary of such trust, (d) any officer, director, general partner, limited partner, shareholder, member or owner of similar equity interests in a Holder or (e) any affiliate of a Holder or the immediate family of such affiliate.

 

Piggyback Notice” shall have the meaning given in subsection 2.2.1 of this Agreement.

 

Piggyback Registration” shall have the meaning given in subsection 2.2.1 of this Agreement.

 

Private Placement Warrants” shall have the meaning given in the Recitals hereto.

 

Pro Rata” shall have the meaning given in subsection 2.1.6 of this Agreement.

 

Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.

 

Registrable Security” shall mean (a) the Private Placement Warrants (including any shares of Class A Common Stock issued or issuable upon the exercise of any such Private Placement Warrants) held by the Sponsor immediately following the Closing, (b) any outstanding shares of Class A Common Stock (including the shares of Class A Common Stock issued or issuable upon the exercise of any other equity security) of the Company held by a Holder as of the date of this Agreement, (c) any shares of Class A Common Stock issued or issuable upon exchange of OpCo Units and Class C Common Stock issued to a Holder under the Business Combination Agreement, including any shares of Class A Common Stock issued or issuable upon exchange of any Earn Out Equity held or acquired by a Holder, (d) any shares of Class A Common Stock issued or to be issued to any Holders in connection with the Business Combination and (e) any other equity security of the Company issued or issuable with respect to any Registrable Security by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided, however, that, as to any particular Registrable Securities, such securities shall cease to be Registrable Securities when: (A) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (B) such securities shall have been otherwise transferred to a Person who is not entitled to the registration and other rights hereunder, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding; or (D) such securities may be sold without registration pursuant to Rule 144 and Rule 145 (as applicable) promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission) (but with no volume or other restrictions or limitations).

 

Registration” shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and any such registration statement having been declared effective by, or become effective pursuant to the rules promulgated by, the Commission.

 

Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:

 

(A) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc. and any national securities exchange on which the shares of Class A Common Stock is then listed);

 

EX-A-4

 

 

(B) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);

 

(C) printing, messenger, telephone and delivery expenses;

 

(D) reasonable fees and disbursements of counsel for the Company;

 

(E) reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration or Underwritten Offering;

 

(F) the fees and expenses incurred in connection with the listing of any Registrable Securities on each national securities exchange on which the shares of Class A Common Stock is then listed;

 

(G) the fees and expenses incurred by the Company in connection with any Underwritten Offerings or other offering involving an Underwriter; and

 

(H) reasonable fees and expenses of one (1) legal counsel selected jointly by the majority-in-interest of Registrable Securities held by the Demanding Holders initiating an Underwritten Demand, the Requesting Holders participating in an Underwritten Offering and the Holders participating in a Piggyback Registration, as applicable.

 

Registration Statement” shall mean any registration statement under the Securities Act that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement and all exhibits to and all material incorporated by reference in such registration statement.

 

Requesting Holder” shall have the meaning given in subsection 2.1.5 of this Agreement.

 

Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

 

Shelf Registration” shall have the meaning given in subsection 2.1.1 of this Agreement.

 

Sponsor” shall have the meaning given in the Preamble.

 

Subsequent Shelf Registration Statement” shall have the meaning given in subsection 2.1.3.

 

Subscription Agreements” shall mean the several subscription agreements entered into by the Company, each dated as of the date of the Business Combination Agreement, providing for the issuance to certain investors of Class A Common Stock in connection with the consummation of the transactions contemplated by the Business Combination Agreement.

 

Suspension Period” shall have the meaning given in Section 2.4.

 

Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal or as broker, placement agent or sales agent pursuant to a Registration and not as part of such dealer’s market-making activities.

 

Underwritten Demand” shall have the meaning given in subsection 2.1.5 of this Agreement.

 

Underwritten Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.

 

EX-A-5

 

 

Article II
REGISTRATIONS

 

2.1 Registration.

 

2.1.1 Shelf Registration. The Company agrees that, within thirty (30) calendar days after the consummation of the Business Combination, the Company will use its commercially reasonable efforts to file with the Commission (at the Company’s sole cost and expense) a Registration Statement registering the resale or other disposition of the Registrable Securities (a “Shelf Registration”), which Shelf Registration may include shares of Class A Common Stock that may be issuable upon exercise of outstanding warrants, or shares that may have been purchased in any private placement that was consummated at the same time as the Closing. The Shelf Registration shall provide for the resale of the Registrable Securities included therein pursuant to any method or combination of methods legally available to, and requested by, any Holder. The Company shall maintain the Shelf Registration in accordance with the terms of this Agreement, and shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements as may be necessary to keep such Shelf Registration continuously effective, available for use and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. In the event the Company files a Shelf Registration on Form S-1, the Company shall use its commercially reasonable efforts to convert the Shelf Registration on Form S-1 (and any Subsequent Shelf Registration) to a Shelf Registration on Form S-3 as soon as practicable after the Company is eligible to use Form S-3.

 

2.1.2 Effective Registration. The Company shall use its commercially reasonable efforts to cause such Registration Statement to become effective by the Commission as soon as reasonably practicable after the initial filing of the Registration Statement. Subject to the limitations contained in this Agreement, the Company shall effect any Shelf Registration on such appropriate registration form of the Commission (a) as shall be selected by the Company and (b) as shall permit the resale or other disposition of the Registrable Securities by the Holders. If at any time a Registration Statement filed with the Commission pursuant to subsection 2.1.1 is effective and a Holder provides written notice to the Company that it intends to effect an offering of all or part of the Registrable Securities included on such Registration Statement, the Company will use its commercially reasonable efforts to amend or supplement such Registration Statement as may be necessary in order to enable such offering to take place in accordance with the terms of this Agreement.

 

2.1.3 Subsequent Shelf Registration. If any Registration Statement ceases to be effective under the Securities Act for any reason at any time while Registrable Securities are still outstanding, the Company shall, subject to Section 3.4, use its commercially reasonable efforts to as promptly as is reasonably practicable cause such Registration Statement to again become effective under the Securities Act (including using its commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness of such Registration Statement), and shall use its commercially reasonable efforts to as promptly as is reasonably practicable amend such Registration Statement in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such Registration Statement or file an additional Registration Statement as a Shelf Registration (a “Subsequent Shelf Registration Statement”) registering the resale of all Registrable Securities from time to time (determined as of two (2) business days prior to such filing), and pursuant to any method or combination of methods legally available to, and requested by, any Holder named therein. If a Subsequent Shelf Registration Statement is filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration Statement to become effective under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that the Subsequent Shelf Registration Statement shall be an automatic shelf registration statement (as defined in Rule 405 promulgated under the Securities Act) if the Company is a well-known seasoned issuer (as defined in Rule 405 promulgated under the Securities Act) at the most recent applicable eligibility determination date) and (ii) keep such Subsequent Shelf Registration Statement continuously effective, available for use to permit the Holders named therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. Any such Subsequent Shelf Registration Statement shall be a Registration Statement on Form S-3 to the extent that the Company is eligible to use such form. Otherwise, such Subsequent Shelf Registration Statement shall be on another appropriate form. The Company’s obligation under this subsection 2.1.3, shall, for the avoidance of doubt, be subject to Section 3.4.

 

EX-A-6

 

 

2.1.4 Additional Registrable Securities. Subject to Section 3.4, in the event that any Holder holds Registrable Securities that are not registered for resale on a delayed or continuous basis, the Company, upon written request of the Sponsor or a Holder, shall promptly use its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered, at the Company’s option, by any then available Registration Statement (including by means of a post-effective amendment) or by filing a Subsequent Shelf Registration Statement and cause the same to become effective as soon as practicable after such filing and such Registration Statement or Subsequent Shelf Registration Statement shall be subject to the terms hereof; provided, however, that the Company shall only be required to cause such Registrable Securities to be so covered twice per calendar year for each of the Sponsor and the Holders.

 

2.1.5 Underwritten Offering. Subject to the provisions of subsection 2.1.6, Section 2.4 and Section 3.4 of this Agreement, the Sponsor, a Holder or group of Holders (any of the Sponsor, Holder or group of Holders being in such case, a “Demanding Holder”) may make a written demand for an Underwritten Offering pursuant to a Registration Statement filed with the Commission in accordance with subsection 2.1.1 of this Agreement (an “Underwritten Demand”); provided, that the Company shall only be obligated to effect an Underwritten Offering if such offering shall include Registrable Securities proposed to be sold by the Demanding Holder, either individually or together with other Demanding Holders, with a total offering price reasonably expected to exceed, in the aggregate, fifty million dollars ($50,000,000) (the “Minimum Underwritten Offering Threshold”). The Demanding Holder shall have the responsibility to engage an underwriter(s); provided that such selection shall be subject to the consent of the Company, which consent shall not be unreasonably withheld, and the Company shall have no responsibility for engaging any underwriter(s) for an Underwritten Offering. The Company shall, within five (5) business days of the Company’s receipt of the Underwritten Demand, notify, in writing (such notice, the “Demand Notice”), all other Holders of such demand, and each Holder who thereafter requests to include all or a portion of such Holder’s Registrable Securities in such Underwritten Offering pursuant to such Underwritten Demand (each such Holder, a “Requesting Holder”) shall so notify the Company, in writing, within two (2) days (one (1) day if such offering is an overnight or bought Underwritten Offering) after the receipt by such Holder of the notice from the Company. Upon receipt by the Company of any such written notification from a Requesting Holder(s), such Requesting Holder(s) shall be entitled to have their Registrable Securities included in such Underwritten Offering pursuant to such Underwritten Demand. In such event, the right of any Holder or Requesting Holder to register pursuant to this subsection 2.1.5 shall be conditioned upon such Holder’s or Requesting Holder’s participation in such underwriting and the inclusion of such Holder’s or Requesting Holder’s Registrable Securities in the underwriting to the extent provided herein. All such Holders or Requesting Holders proposing to distribute their Registrable Securities through such Underwritten Offering under this subsection 2.1.5 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Demanding Holders initiating such Underwritten Offering. Notwithstanding the foregoing, the Company is not obligated to effect more than one (1) Underwritten Offering demanded by the Sponsor and an aggregate of four (4) Underwritten Offerings demanded by Bluescape Holdings pursuant to this subsection 2.1.5 and is not obligated to effect an Underwritten Offering pursuant to this subsection 2.1.5 within ninety (90) days after the closing of an Underwritten Offering, Block Trade or Coordinated Sale.

 

2.1.6 Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Offering, pursuant to an Underwritten Demand, in good faith, advises or advise the Company, the Demanding Holders, the Requesting Holders and other persons or entities holding Registrable Securities or other equity securities of the Company that were requested to be included in such Underwritten Offering, taken together with all other shares of Class A Common Stock or other securities which the Company desires to sell and the shares of Class A Common Stock or other securities, if any, as to which registration has been requested pursuant to written contractual piggyback registration rights held by other equity holders of the Company who desire to sell (if any) that the dollar amount or number of Registrable Securities or other equity securities of the Company requested to be included in such Underwritten Offering exceeds the maximum dollar amount or maximum number of equity securities of the Company that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, as follows: (a) first, the Registrable Securities of the Demanding Holders (pro rata based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Offering, regardless of the number of shares held by each such person and the aggregate number of Registrable Securities that the Demanding Holders have requested be included in such Underwritten Offering (such proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Securities; (b) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (a), the Registrable Securities of the Requesting Holders, Pro Rata, which can be sold without exceeding the Maximum Number of Securities; (c) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (a) and (b), the shares of Class A Common Stock or other equity securities of the Company that the Company desires to sell and that can be sold without exceeding the Maximum Number of Securities; and (d) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (a), (b) and (c), the shares of Class A Common Stock or other equity securities of the Company held by other persons or entities that the Company is obligated to include pursuant to separate written contractual arrangements with such persons or entities and that can be sold without exceeding the Maximum Number of Securities.

 

EX-A-7

 

 

2.1.7 Withdrawal. Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing such Underwritten Offering, a majority-in-interest of the Demanding Holders initiating an Underwritten Offering pursuant to subsection 2.1.5 of this Agreement shall have the right to withdraw from such Underwritten Offering for any or no reason whatsoever upon written notification (a “Withdrawal Notice”) to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Underwritten Offering; provided that the Sponsor, Bluescape Holdings or a Holder may elect to have the Company continue an Underwritten Offering if the Minimum Underwritten Offering Threshold would still be satisfied by the Registrable Securities proposed to be sold in the Underwritten Offering by the Sponsor, Bluescape Holdings or the Holders, as applicable. If withdrawn, a demand for an Underwritten Offering shall constitute a demand for an Underwritten Offering by the withdrawing Demanding Holder for purposes of subsection 2.1.6, unless either (i) such Demanding Holder has not previously withdrawn any Underwritten Offering or (ii) such Demanding Holder reimburses the Company for all Registration Expenses with respect to such Underwritten Offer (or, if there is more than one Demanding Holder, a pro rata portion of such Registration Expenses based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Offering); provided that, if the Sponsor, Bluescape Holdings or a Holder elects to continue an Underwritten Offering pursuant to the proviso in the immediately preceding sentence, such Underwritten Offering shall instead count as an Underwritten Offering demanded by the Sponsor, Bluescape Holdings or such Holder, as applicable, for purposes of subsection 2.1.6. Following the receipt of any Withdrawal Notice, the Company shall promptly forward such Withdrawal Notice to any other Holders that had elected to participate in such Underwritten Offering. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with an Underwritten Demand prior to its withdrawal under this subsection 2.1.7, other than if a Demanding Holder elects to pay such Registration Expenses pursuant to clause (ii) of the second sentence of this subsection 2.1.7.

 

2.2 Piggyback Registration.

 

2.2.1 Piggyback Rights. Subject to the provisions of subsection 2.2.2 and Section 2.4 hereof, if, at any time on or after the date the Company consummates a Business Combination, the Company proposes to consummate an Underwritten Offering for its own account or for the account of stockholders of the Company, then the Company shall give written notice of such proposed action to all of the Holders as soon as practicable (the “Piggyback Notice”), which notice shall (a) describe the amount and type of securities to be included, the intended method(s) of distribution and the name of the proposed managing Underwriter or Underwriters, if any, and (b) offer to all of the Holders the opportunity to include such number of Registrable Securities as such Holders may request in writing within two (2) days (one (1) day if such offering is an overnight or bought Underwritten Offering), in each case after receipt of such written notice (such Registration, a “Piggyback Registration”). The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use its commercially reasonable efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included in such Piggyback Registration and to permit the resale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All such Holders proposing to include Registrable Securities in an Underwritten Offering under this subsection 2.2.1 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.

 

2.2.2 Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of shares of equity securities of the Company that the Company desires to sell, taken together with (i) the shares of equity securities of the Company, if any, as to which the Underwritten Offering has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which a Piggyback Registration has been requested pursuant to Section 2.2 of this Agreement and (iii) the shares of equity securities of the Company, if any, as to which inclusion in the Underwritten Offering has been requested pursuant to separate written contractual piggyback registration rights of other stockholders of the Company, exceeds the Maximum Number of Securities, then:

 

(a) If the Underwritten Offering is undertaken for the Company’s account, the Company shall include in any such Underwritten Offering (A) first, the shares of Class A Common Stock or other equity securities of the Company that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders requesting a Piggyback Registration pursuant to subsection 2.2.1 of this Agreement, Pro Rata, which can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Class A Common Stock or other equity securities of the Company, if any, as to which inclusion in the Underwritten Offering has been requested pursuant to written contractual piggyback registration rights of other stockholders of the Company, which can be sold without exceeding the Maximum Number of Securities;

 

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(b) If the Underwritten Offering is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company shall include in any such Underwritten Offering (A) first, the shares of Class A Common Stock or other equity securities of the Company, if any, of such requesting persons or entities, other than the Holders, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders requesting a Piggyback Registration pursuant to subsection 2.2.1 of this Agreement, Pro Rata, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Class A Common Stock or other equity securities of the Company that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the shares of Class A Common Stock or other equity securities of the Company for the account of other persons or entities that the Company is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities; or

 

(c) If the Underwritten Offering is pursuant to a request by Holder(s) of Registrable Securities pursuant to Section 2.1 hereof, then the Company shall include in any such Registration or registered offering securities in the priority set forth in subsection 2.1.6.

 

2.2.3 Piggyback Registration Withdrawal. Any Holder of Registrable Securities (other than a Demanding Holder, whose right to withdraw from an Underwritten Offering, and related obligations, shall be governed by subsection 2.1.7) shall have the right to withdraw from a Piggyback Registration upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback Registration prior to the commencement of the Underwritten Offering. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this subsection 2.2.3. The Company (whether on its own good faith determination or as a result of a withdrawal by persons making a demand pursuant to written contractual obligations) may withdraw an Underwritten Offering undertaken for the Company’s account at any time prior to the effectiveness of such Registration Statement. Each Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any Piggyback Registration at any time prior to the execution of an underwriting agreement with respect thereto by giving an Opt-Out Notice to the Company requesting that such Holder not receive notice from the Company of any proposed Piggyback Registration; provided, however, that such Holder may later revoke any such Opt-Out Notice in writing. Following receipt of an Opt-Out Notice from a Holder (unless subsequently revoked), the Company shall not, and shall not be required to, deliver any notice to such Holder pursuant to Section 2.2 and such Holder shall no longer be entitled to participate in any Piggyback Registration.

 

2.2.4 Unlimited Piggyback Registration Rights. For purposes of clarity, subject to subsection 2.1.7, any Piggyback Registration or Underwritten Offering effected pursuant to Section 2.2 of this Agreement shall not be counted as an Underwritten Offering pursuant to an Underwritten Demand effected under Section 2.1 of this Agreement.

 

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2.3 Block Trades; Other Coordinated Offerings.

 

2.3.1 Notwithstanding any other provision of this Article II, but subject to Section 3.4, at any time and from time to time when an effective Registration Statement is on file with the Commission, if a Demanding Holder wishes to engage in (a) an underwritten registered offering not involving a “roadshow,” an offer commonly known as a “block trade” (a “Block Trade”) or (b) an “at the market” or similar registered offering through a broker, sales agent or distribution agent, whether as agent or principal, (an “Other Coordinated Offering”), in each case, with a total offering price reasonably expected to exceed, in the aggregate, either (i) $25 million or (ii) all remaining Registrable Securities held by the Demanding Holder, then if such Demanding Holder requires any assistance from the Company pursuant to this Section 2.3, such Holder shall notify the Company of the Block Trade or Other Coordinated Offering at least five (5) business days prior to the day such offering is to commence and the Company shall as expeditiously as possible use its commercially reasonable efforts to facilitate such Block Trade or Other Coordinated Offering; provided that the Demanding Holders representing a majority of the Registrable Securities wishing to engage in the Block Trade or Other Coordinated Offering shall use commercially reasonable efforts to work with the Company and any Underwriters or brokers, sales agents or placement agents (each, a “Financial Counterparty”) prior to making such request in order to facilitate preparation of the registration statement, prospectus and other offering documentation related to the Block Trade or Other Coordinated Offering.

 

2.3.2 Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used in connection with a Block Trade or Other Coordinated Offering, a majority-in interest of the Demanding Holders initiating such Block Trade or Other Coordinated Offering shall have the right to submit a written notification to the Company, the Underwriter or Underwriters (if any) and Financial Counterparty (if any) of their intention to withdraw from such Block Trade or Other Coordinated Offering. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Block Trade or Other Coordinated Offering prior to its withdrawal under this subsection 2.3.2.

 

2.3.3 Notwithstanding anything to the contrary in this Agreement, Section 2.2 shall not apply to a Block Trade or Other Coordinated Offering initiated by a Demanding Holder pursuant to Section 2.3 of this Agreement.

 

2.3.4 The Demanding Holder in a Block Trade or Other Coordinated Offering shall have the right to select the Underwriters and Financial Counterparty (if any) for such Block Trade or Other Coordinated Offering (in each case, which shall consist of one or more reputable nationally recognized investment banks).

 

2.3.5 Notwithstanding the foregoing, the Company is not obligated to effect more than an aggregate of two (2) Block Trades or Other Coordinated Offerings demanded by the Sponsor and an aggregate of five (5) Block Trades or Other Coordinated Offerings demanded by Bluescape Holdings pursuant to this subsection 2.3.5 and is not obligated to effect a Block Trade or Other Coordinated Offerings pursuant to this subsection 2.3.5 within ninety (90) days after the closing of an Underwritten Offering, Block Trade or Other Coordinated Offering. For the avoidance of doubt, any Block Trade or Other Coordinated Offering effected pursuant to this Section 2.3 shall not be counted as a demand for an Underwritten Offering pursuant to subsection 2.1.5 hereof. Notwithstanding the foregoing, if a Demanding Holder has used the maximum amount of Block Trades and Other Coordinated Offerings such Holder is entitled to under this Section 2.3.5 at a time in which it is entitled to demand an Underwritten Offering under Section 2.1.5, such Demanding Holder shall be entitled to demand the Company effect a Block Trade or Other Coordinated Offering in accordance with Section 2.3 in lieu of an Underwritten Offering (which, for the avoidance of doubt, shall count towards the aggregate amount of Underwritten Offerings such Holder is entitled to demand pursuant to Section 2.1.5); provided that such Block Trade or Other Coordinated Offering shall not be within ninety (90) days of the closing of another Block Trade, Other Coordinated Offering or Underwritten Offering.

 

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2.4 Restrictions on Registration Rights. If the Holders have requested an Underwritten Offering pursuant to an Underwritten Demand and in the good faith judgment of the Board such Underwritten Offering would be seriously detrimental to the Company and the Board concludes as a result that it is essential to defer the undertaking of such Underwritten Offering at such time, then in each case the Company shall furnish to such Holders a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board it would be seriously detrimental to the Company to undertake such Underwritten Offering in the near future and that it is therefore essential to defer the undertaking of such Underwritten Offering (any such period, a “Suspension Period”). In such event, the Company shall have the right to defer such offering for a period of not more than thirty (30) days; provided, however, that the Company shall not defer its obligations in this manner more than once in any twelve (12) month period.

 

2.5 Opt-Out Notices. Any Holder may deliver written notice (an “Opt-Out Notice”) to the Company requesting that such Holder not receive notice from the Company of the proposed filing of any Underwritten Offering, Piggyback Registration, the withdrawal of any Shelf Registration or Piggyback Registration or any event that would lead to a Suspension Period as contemplated by Section 2.4provided, however, that such Holder may later revoke any such Opt-Out Notice in writing; provided, further, that if the Company has provided a Demand Notice or a Piggyback Notice at the time a Holder revokes its Opt-Out Notice, such revocation shall not extend the respective notice periods. Following receipt of an Opt-Out Notice from a Holder (unless subsequently revoked), the Company shall not deliver any notice to such Holder pursuant to Section 2.1, Section 2.2, Section 2.4 or Section 3.4, as applicable, and such Holder shall no longer be entitled to the rights associated with any such notice and each time prior to a Holder’s intended use of an effective Registration Statement, such Holder will notify the Company in writing at least two business days in advance of such intended use, and if a notice of a Suspension Period was previously delivered (or would have been delivered but for the provisions of this Section 2.5) and the Suspension Period remains in effect, the Company will so notify such Holder, within one business day of such Holder’s notification to the Company, by delivering to such Holder a copy of such previous notice of such Suspension Period, and thereafter will provide such Holder with the related notice of the conclusion of such Suspension Period immediately upon its availability.

 

Article III
COMPANY PROCEDURES

 

3.1 General Procedures. The Company shall use its commercially reasonable efforts to effect such Registration or Underwritten Offering to permit the resale or other disposition of such Registrable Securities in accordance with the intended plan of distribution thereof (and including all manners of distribution in such Registration Statement as Holders may reasonably request in connection with the filing of such Registration Statement and as permitted by law, including distribution of Registrable Securities to a Holder’s members, securityholders or partners), and pursuant thereto the Company shall, as expeditiously as possible and to the extent applicable:

 

3.1.1 prepare and file with the Commission after the consummation of the Business Combination a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become effective in accordance with Section 2.1, including filing a replacement Registration Statement, if necessary, and remain effective until all Registrable Securities covered by such Registration Statement have been sold or are no longer outstanding (such period, the “Effectiveness Period”);

 

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3.1.2 prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be reasonably requested by the Holders or any Underwriter or as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the plan of distribution provided by the Holders and as set forth in such Registration Statement or supplement to the Prospectus or are no longer outstanding;

 

3.1.3 prior to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters or Financial Counterparty, if any, and the Holders of Registrable Securities included in such Registration or Underwritten Offering or Block Trade, and such Holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus (including each preliminary Prospectus) and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or Underwritten Offering or the legal counsel for any such Holders may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Holders; provided that the Company will not have any obligation to provide any document pursuant to this subsection 3.1.3 that is available on the Commission’s EDGAR system;

 

3.1.4 prior to any Underwritten Offering of Registrable Securities, use its commercially reasonable efforts to (a) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request (or provide evidence satisfactory to such Holders that the Registrable Securities are exempt from such registration or qualification) and (b) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;

 

3.1.5 cause all such Registrable Securities to be listed on each national securities exchange or automated quotation system on which similar securities issued by the Company are then listed;

 

3.1.6 provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement or Underwritten Offering;

 

3.1.7 advise each seller of such Registrable Securities, promptly after it receives notice or obtains knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;

 

3.1.8 during the Effectiveness Period, furnish a conformed copy of each filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus or any document that is to be incorporated by reference into such Registration Statement or Prospectus, promptly after such filing of such documents with the Commission to each seller of such Registrable Securities or its counsel; provided that the Company will not have any obligation to provide any document pursuant to this subsection 3.1.8 that is available on the Commission’s EDGAR system;

 

3.1.9 notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 of this Agreement;

 

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3.1.10 in the event of an Underwritten Offering, a Block Trade, an Other Coordinated Offering, or sale by a Financial Counterparty pursuant to such Registration, permit a representative of the Holders (such representative to be selected by a majority of the Holders), the Underwriters or other Financial Counterparty facilitating such Underwritten Offering, Block Trade, Other Coordinated Offering or other sale pursuant to such Registration, if any, and any attorney, consultant or accountant retained by such Holders or Underwriter to participate, at each such person’s or entity’s own expense, in the preparation of the Registration Statement or the Prospectus, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, Financial Counterparty, attorney, consultant or accountant in connection with the Registration; provided, however, that such representatives or Underwriters or Financial Counterparty agree to confidentiality arrangements in form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;

 

3.1.11 obtain a comfort letter from the Company’s independent registered public accountants in the event of an Underwritten Offering, a Block Trade or sale by a Financial Counterparty pursuant to such Registration (subject to such Financial Counterparty providing such certification or representation reasonably requested by the Company’s independent registered public accountants and the Company’s counsel), in customary form and covering such matters of the type customarily covered by comfort letters as the managing Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating Holders;

 

3.1.12 in the event of an Underwritten Offering, a Block Trade, an Other Coordinated Offering or sale by a Financial Counterparty pursuant to such Registration, on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated such date, of counsel representing the Company for the purposes of such Registration, addressed to the participating Holders, the Financial Counterparty, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the participating Holders, Financial Counterparty or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably satisfactory to such participating Holders, Financial Counterparty or Underwriter;

 

3.1.13 in the event of an Underwritten Offering or a Block Trade, or an Other Coordinated Offering or sale by a Financial Counterparty pursuant to such Registration to which the Company has consented, to the extent reasonably requested by such Financial Counterparty in order to engage in such offering, allow the Financial Counterparty to conduct customary “underwriter’s due diligence” with respect to the Company;

 

3.1.14 in the event of any Underwritten Offering, a Block Trade, an Other Coordinated Offering or sale by a Financial Counterparty pursuant to such Registration, enter into and perform its obligations under an underwriting or other purchase or sales agreement, in usual and customary form, with the managing Underwriter or the Financial Counterparty of such offering or sale;

 

3.1.15 make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission);

 

3.1.16 with respect to an Underwritten Offering pursuant to subsection 2.1.5 use its commercially reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in any Underwritten Offering; and

 

3.1.17 otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the participating Holders, consistent with the terms of this Agreement, in connection with such Registration.

 

Notwithstanding the foregoing, the Company shall not be required to provide any documents or information to an Underwriter or Financial Counterparty if such Underwriter or Financial Counterparty has not then been named with respect to the applicable Underwritten Offering or other offering involving a registration as an Underwriter or Financial Counterparty, as applicable.

 

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3.2 Registration Expenses. The Registration Expenses in respect of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.

 

3.3 Requirements for Participation in Underwritten Offerings. Notwithstanding anything in this Agreement to the contrary, if any Holder does not provide the Company with its requested Holder Information, the Company may exclude such Holder’s Registrable Securities from the applicable Registration Statement or Prospectus if the Company determines, based on the advice of counsel, that such information is necessary to effect the registration and such Holder continues thereafter to withhold such information. No person or entity may participate in any Underwritten Offering for equity securities of the Company pursuant to a Registration initiated by the Company hereunder unless such person or entity (a) agrees to sell such person’s or entity’s securities on the basis provided in any underwriting arrangements approved by the Company and (b) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements.

 

3.4 Suspension of Sales; Adverse Disclosure.

 

3.4.1 Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains or includes a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until he, she or it has received copies of a supplemented or amended Registration Statement or Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until he, she or it is advised in writing by the Company that the use of the Registration Statement or Prospectus may be resumed. If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration or Underwritten Offering at any time would require the Company to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time, provided, however, that the Company may not delay or suspend a Registration Statement, Prospectus or Underwritten Offering on more than two (2) occasions, for more than sixty (60) consecutive calendar days, or more than one hundred-twenty (120) total calendar days, in each case during any twelve (12)-month period. In the event the Company exercises its rights under the preceding sentences in this Section 3.4, the Holders agree to suspend, immediately upon their receipt of the notices referred to in this Section 3.4, their use of the Registration Statement or Prospectus in connection with any resale or other disposition of Registrable Securities. In addition, the Company may delay or suspend continued use of a Registration Statement or Prospectus in respect of a Registration or Underwritten Offering in order to file and make effective a post-effective amendment to such Registration Statement in connection with the filing of the Company’s Annual Report on Form 10-K. The Company shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4.

 

3.5 Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act. The Company further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to resell or otherwise dispose of shares of Registrable Securities held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including providing any customary legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.

 

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Article IV

INDEMNIFICATION AND CONTRIBUTION

 

4.1 Indemnification.

 

4.1.1 The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers, directors, employees, advisors, agents, representatives, members and each person who controls such Holder (within the meaning of the Securities Act) (collectively, the “Holder Indemnified Persons”) against all losses, claims, damages, liabilities and expenses (including reasonable attorneys’ fees and inclusive of all reasonable attorneys’ fees arising out of the enforcement of each such persons’ rights under this Section 4.1) resulting from any Misstatement or alleged Misstatement, except insofar as the same are caused by or contained or included in any information furnished in writing to the Company by or on behalf of such Holder Indemnified Person specifically for use therein.

 

4.1.2 In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus (the “Holder Information”) and, to the extent permitted by law, shall, severally and not jointly, indemnify the Company, its officers, directors, employees, advisors, agents, representatives and each person who controls the Company (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including reasonable attorneys’ fees and inclusive of all reasonable attorneys’ fees arising out of the enforcement of each such persons’ rights under this Section 4.1) resulting from any Misstatement or alleged Misstatement, but only to the extent that the same are made in reliance on and in conformity with information relating to the Holder so furnished in writing to the Company by or on behalf of such Holder specifically for use therein. In no event shall the liability of any selling Holder hereunder be greater in amount than the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement giving rise to such indemnification obligation.

 

4.1.3 Any person or entity entitled to indemnification herein shall (a) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (b) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim or there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, not to be unreasonably withheld or delayed, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement includes a statement or admission of fault and culpability on the part of such indemnified party or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

4.1.4 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, employee, advisor, agent, representative, member or controlling person or entity of such indemnified party and shall survive the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s indemnification is unavailable for any reason.

 

EX-A-15

 

 

4.1.5 If the indemnification provided under Section 4.1 of this Agreement is held by a court of competent jurisdiction to be unavailable to an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall to the extent permitted by law contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by a court of law by reference to, among other things, whether the Misstatement or alleged Misstatement relates to information supplied by such indemnifying party or such indemnified party and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this subsection 4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3 of this Agreement, any reasonable legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection 4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of such fraudulent misrepresentation.

 

Article V
MISCELLANEOUS

 

5.1 Notices. Any notice or communication under this Agreement must be in writing and given by (a) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (b) delivery in person or by courier service or sent by overnight mail via a reputable overnight carrier, in each case providing evidence of delivery or (c) transmission by facsimile or email. Each notice or communication that is mailed, delivered or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received, in the case of mailed notices, on the third (3rd) business day following the date on which it is mailed, in the case of notices delivered by courier service, hand delivery, or overnight mail at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation, and in the case of notices delivered by facsimile or email, at such time as it is successfully transmitted to the addressee. Any notice or communication under this Agreement must be addressed, if to the Company, to 219 Homestead Rd., Hillsborough, NJ 08844, Attention: Ernest B. Miller, or by email at: [email protected], if to the Sponsor, to 4550 Post Oak Place Dr. Suite 300, Houston, TX 77027, Attention: Michael J. Mayell, or by email at: [email protected], or if to any Holder, to the address of such Holder as it appears in the applicable register for the Registrable Securities or such other address as may be designated in writing by such Holder (including on the signature pages hereto). Any party may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery of such notice as provided in this Section 5.1.

 

5.2 Assignment; No Third Party Beneficiaries.

 

5.2.1 This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.

 

EX-A-16

 

 

5.2.2 Subject to Section 5.2.4 and Section 5.2.5, this Agreement and the rights, duties and obligations of a Holder hereunder may be assigned in whole or in part to such Holder’s Permitted Transferees to which it transfers Registrable Securities; provided that with respect to the initial Holders, the rights hereunder that are personal to such Holders may not be assigned or delegated in whole or in part, except that (i) each of the initial Holders shall be permitted to transfer its rights hereunder as the initial Holders to one or more affiliates or any direct or indirect partners, members or equity holders of such Holder (it being understood that no such transfer shall reduce or multiply any rights of such Holder or such transferees), and (ii) the Sponsor shall be permitted to transfer its rights hereunder as the Sponsor to one or more affiliates or any direct or indirect partners, members or equity holders of the Sponsor, which, for the avoidance of doubt, shall include a transfer of its rights in connection with a distribution of any Registrable Securities held by Sponsor to its members (it being understood that no such transfer shall reduce or multiply any rights of the Sponsor or such transferees).

 

5.2.3 This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors, which shall include Permitted Transferees.

 

5.2.4 This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement and Section 5.2 of this Agreement.

 

5.2.5 No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (a) written notice of such assignment as provided in Section 5.1 of this Agreement and (b) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 5.2 shall be null and void.

 

5.3 Counterparts. This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.

 

5.4 Governing Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF TEXAS AS APPLIED TO AGREEMENTS AMONG TEXAS RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN TEXAS, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF SUCH JURISDICTION AND THE VENUE FOR ANY ACTION TAKEN WITH RESPECT TO THE AGREEMENT SHALL BE ANY STATE OR FEDERAL COURT IN HARRIS COUNTY IN THE STATE OF TEXAS.

 

5.5 Trial by Jury. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

EX-A-17

 

 

5.6 Amendments and Modifications. Upon the written consent of (a) the Company and (b) the Holders of at least a majority in interest of the Registrable Securities held by the Holders at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, (i) any amendment hereto or waiver hereof that adversely affects any Holder, solely in his, her or its capacity as a holder of the shares of capital stock of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of each such Holder so affected, (ii) any amendment or waiver hereof that adversely affects the rights expressly granted to the Sponsor shall require the consent of the Sponsor and (iii) any amendment or waiver hereof that adversely affects the rights expressly granted to Bluescape Holdings shall require the consent of Bluescape Holdings; provided, further, that notwithstanding the foregoing, any amendment hereto or waiver hereof shall also require the written consent of Bluescape Holdings so long as Bluescape Holdings and its affiliates hold, in the aggregate, at least twenty percent (20%) of the outstanding shares of Class A Common Stock and Class C Common Stock of the Company. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.

 

5.7 Other Registration Rights. The Company represents and warrants that no person, other than (a) a Holder, (b) the parties to the Subscription Agreements and the Additional Subscription Agreements and (c) holders of the Company’s warrants pursuant to that certain Warrant Agreement, dated as of August 17, 2021, by and between the Company and Continental Stock Transfer & Trust Company, has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration filed by the Company for the sale of securities for its own account or for the account of any other person. Further, the Company represents and warrants that this Agreement supersedes any other registration rights agreement, including the Existing Registration Rights Agreement, or agreement with similar terms and conditions and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail. Upon the Closing, the Existing Registration Rights Agreement shall no longer be of any force or effect.

 

5.8 Term. This Agreement shall terminate, with respect to any Holder, on the date as of which such Holder ceases to hold any Registrable Securities. The provisions of Article IV shall survive any termination.

 

5.9 Holder Information. Each Holder agrees, if requested in writing, to represent to the Company the total number of Registrable Securities held by such Holder in order for the Company to make determinations hereunder.

 

5.10 Severability. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

 

[Signature page follows.]

 

EX-A-18

 

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

 

  COMPANY:
   
  VERDE CLEAN FUELS, INC., a Delaware corporation
   
  By:
  Name:  
  Title:  

 

[Signature Page to Amended and Restated Registration Rights Agreement]

 

EX-A-19

 

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

 

  HOLDERS:
   
  CENAQ SPONSOR LLC, a Delaware limited liability company
   
  By:
  Name:  
  Title:  

 

[Signature Page to Amended and Restated Registration Rights Agreement]

 

EX-A-20

 

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

 

  HOLDERS:
   
  BLUESCAPE CLEAN FUELS HOLDINGS, LLC, a Delaware limited liability company
   
  By:
  Name:  
  Title:  

 

[Signature Page to Amended and Restated Registration Rights Agreement]

 

EX-A-21

 

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

 

  HOLDERS
   
   
  [Bluescape stockholder]
   
   
  [Bluescape stockholder]

 

[Signature Page to Amended and Restated Registration Rights Agreement]

 

EX-A-22

 

 

 

 

 

 

 

 

EXHIBIT B

 

Form of Sponsor Agreement

 

[Attached]

 

 

 

 

 

 

 

 

 

 

August 12, 2022

 

CENAQ Energy Corp.

4550 Post Oak Place Drive, Suite 300

Houston, Texas 77027

 

RE:Certain Transaction Matters

 

Reference is made to that certain Business Combination Agreement (as the same may be amended, supplemented or modified, the “BCA”), dated as of the date hereof, by and among, Bluescape Clean Fuels Intermediate Holdings, LLC, a Delaware limited liability company (the “Company”), Bluescape Clean Fuels Holdings, LLC, a Delaware limited liability company (“Holdings”), Verde Clean Fuels OpCo, LLC, a Delaware limited liability company (“OpCo”), CENAQ Energy Corp., a Delaware corporation (“PubCo”), and, solely with respect to Section 6.18 of the BCA, CENAQ Sponsor LLC, a Delaware limited liability company (“Sponsor”). This letter agreement (this “Letter Agreement”) is being entered into and delivered by PubCo, the Company, Holdings and Sponsor. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the BCA.

 

In consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the parties hereby agrees as follows:

 

1.Sponsor represents and warrants to Holdings and the Company that Sponsor holds 3,487,500 shares of Class B common stock, par value $0.0001 per share, of PubCo (the “PubCo Class B Common Stock”), as of the date hereof. Sponsor represents and warrants to Holdings that, as of the date hereof, it owns 4,950,000 private placement warrants (the “Private Placement Warrants”), each such warrant exercisable to purchase one share of Class A common stock, par value $0.0001 per share, of PubCo (the “PubCo Class A Common Stock” and, together with the PubCo Class B Common Stock, the “PubCo Common Stock”).

 

2.Upon and subject to the Closing, 50% of the Sponsor’s Private Placement Warrants shall be forfeited by Sponsor for no consideration as a contribution to the capital of PubCo and immediately cancelled.

 

EX-B-1

 

 

3.The PubCo Common Stock shall be subject to the provisions set forth in Section 7 of that certain letter agreement, dated August 12, 2021, by and among Sponsor, PubCo and certain other parties thereto (as amended, the “Prior Letter Agreement”); provided, that the word “year” in the first sentence of Section 7 of the Prior Letter Agreement is a typographical error and is hereby deleted in its entirety from the Prior Letter Agreement and shall be disregarded for purposes of this Letter Agreement. During the period commencing on the date hereof and ending on the earlier of the Closing and the valid termination of the BCA pursuant to Article VIII thereof, Sponsor agrees (a) to do, or cause to be done, all actions (and refrain from taking any actions) necessary or advisable to consummate and make effective the transactions contemplated by the BCA, including voting its shares of PubCo Common Stock in favor of the transactions contemplated by the BCA and all other proposals included in the proxy statement for the special meeting of stockholders of PubCo to approve the transactions contemplated by the BCA, and not electing to exercise any Redemption Rights, and (b) not to (i) Transfer any SPAC Units, shares of PubCo Common Stock or Private Placement Warrants or (ii) deposit any SPAC Units or shares of PubCo Common Stock held by Sponsor into a voting trust or enter into a voting agreement or any similar agreement, arrangement or understanding with respect to such SPAC Units or shares of PubCo Common Stock or grant any proxy (except as otherwise provided herein), consent or power of attorney with respect thereto (other than pursuant to this Letter Agreement); provided, that Sponsor may Transfer SPAC Units, shares of PubCo Common Stock or Private Placement Warrants, as contemplated by clauses (a), (e), (f), (g) or (h) of Section 7(c) of the Prior Letter Agreement, if and only if, the transferee of such SPAC Units, shares of PubCo Common Stock or Private Placement Warrants evidences in a writing reasonably satisfactory to PubCo such transferee’s agreement to be bound by and subject to the terms and provisions of this Letter Agreement to the same effect as Sponsor. For purposes of this Letter Agreement, “Transfer” shall mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b).

 

4.Section 4.3(b)(i) and (ii) of PubCo’s Third Amended and Restated Certificate of Incorporation (the “PubCo Charter”) provides that each share of PubCo Class B Common Stock will be converted into one or more shares of PubCo Class A Common Stock in the circumstances set forth therein. Subject to the satisfaction or waiver of each of the conditions to Closing set forth in Sections 7.01 and 7.02 of the BCA, effective immediately prior to the Closing, Sponsor hereby waives any and all rights it has or will have under Section 4.3(b)(ii) of the PubCo Charter in excess of the conversion ratio set forth in Section 4.3(b)(i) of the PubCo Charter. Without limitation of the foregoing, upon the consummation of the Transactions, Sponsor hereby acknowledges and agrees that pursuant to Section 4.3(b)(i) of the PubCo Charter, each share of PubCo Class B Common Stock held by Sponsor shall automatically convert into one share of PubCo Class A Common Stock.

 

EX-B-2

 

 

5.

 

(a)Upon and subject to the Closing, Sponsor shall receive 3,487,500 shares of PubCo Class A Common Stock as a result of the conversion of its shares of PubCo Class B Common Stock in connection with Closing (the “Sponsor Shares”), 3,234,375 shares of which (the “Sponsor Subject Shares”) shall become subject to potential forfeiture if the $15.00 Triggering Event (as defined below) or the $18.00 Triggering Event (as defined below) (each, a “Triggering Event”), as applicable, does not occur within the Forfeiture Period (as defined below), with the applicable portion of such Sponsor Subject Shares no longer being subject to forfeiture upon the occurrence of the applicable Triggering Event. Certificates or book entries representing the Sponsor Subject Shares shall bear a legend referencing that they are subject to forfeiture pursuant to the provisions of this Letter Agreement, and any transfer agent for PubCo Class A Common Stock will be given appropriate stop transfer orders with respect to the Sponsor Subject Shares until the occurrence of the applicable Triggering Event; provided, however, that upon a Triggering Event in accordance with the terms herein, PubCo shall immediately cause the removal of such legend and direct such transfer agent that such stop transfer orders are no longer applicable.

 

(b)The Sponsor Subject Shares shall no longer be subject to forfeiture as follows:

 

(i)50% of the Sponsor Subject Shares (the “$15.00 Threshold Shares”) shall no longer be subject to forfeiture if the $15.00 Triggering Event (as defined below) occurs during the time period between the Closing Date and the earlier of the five-year anniversary of the Closing Date or the date a Company Sale is consummated (such time period, the “Forfeiture Period”). Prior to the occurrence of a $15.00 Triggering Event, Sponsor shall not Transfer any of its $15.00 Threshold Shares. For purposes of this Letter Agreement, “$15.00 Triggering Event” means the date on which the PubCo VWAP (as defined below) is greater than or equal to $15.00 per share for any 20 Trading Days within any period of 30 consecutive Trading Days; provided that if, during the Forfeiture Period, there is a Company Sale (as defined below) pursuant to which PubCo or the holders of PubCo Class A Common Stock have the right to receive consideration implying a value of PubCo Class A Common Stock (as determined in good faith by the board of directors of PubCo (the “PubCo Board”)) of greater than or equal to $15.00, then the $15.00 Triggering Event shall be deemed to have occurred.

 

(ii)50% of the Sponsor Subject Shares (the “$18.00 Threshold Shares”) shall no longer be subject to forfeiture if the $18.00 Triggering Event (as defined below) occurs during the Forfeiture Period. Prior to the occurrence of a $18.00 Triggering Event, Sponsor shall not Transfer any of its $18.00 Threshold Shares. For purposes of this Letter Agreement, “$18.00 Triggering Event” means the date on which the PubCo VWAP is greater than or equal to $18.00 per share for any 20 Trading Days within any period of 30 consecutive Trading Days; provided that if, during the Forfeiture Period, there is a Company Sale pursuant to which PubCo or the holders of PubCo Class A Common Stock have the right to receive consideration implying a value of PubCo Class A Common Stock (as determined in good faith by the PubCo Board) of greater than or equal to $18.00, then the $18.00 Triggering Event shall be deemed to have occurred.

 

EX-B-3

 

 

(c)In the event any Triggering Event does not occur during the Forfeiture Period, upon the expiration of the Forfeiture Period, the applicable Sponsor Subject Shares shall immediately be forfeited to PubCo for no consideration as a contribution to the capital of PubCo and immediately cancelled.

 

6.For purposes of this Letter Agreement:

 

(a)Company Sale” shall mean any transaction or series of transactions (a) following which a person or “group” (within the meaning of Section 13(d) of the Exchange Act) of persons (other than Holdings, PubCo, OpCo or any of their respective subsidiaries), obtains direct or indirect beneficial ownership of securities (or rights convertible or exchangeable into securities) representing fifty percent (50%) or more of the voting power of or economic rights or interests in PubCo or OpCo, (b) constituting a merger, consolidation, reorganization or other business combination, however effected, following which either (1) the members of the PubCo Board immediately prior to such merger, consolidation, reorganization or other business combination do not constitute at least a majority of the board of directors of the company surviving the combination or, if the surviving company is a subsidiary, the ultimate parent thereof or (2) the voting securities of PubCo immediately prior to such merger, consolidation, reorganization or other business combination do not continue to represent or are not converted into fifty percent (50%) or more of the combined voting power of the then outstanding voting securities of the person resulting from such combination or, if the surviving company is a subsidiary, the ultimate parent thereof, or (c) the result of which is a sale of all or substantially all of the assets of PubCo to any person.

 

(b)PubCo VWAP” shall mean the volume-weighted average share price of PubCo Class A Common Stock as displayed on PubCo’s page on Bloomberg (or any successor service) in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time, on the applicable Trading Day.

 

7.The number of shares of PubCo Class A Common Stock (including the PubCo Common Stock subject to the lockup provisions set forth in Section 7 of the Prior Letter Agreement, the $15.00 Threshold Shares and the $18.00 Threshold Shares) and the PubCo VWAP targets set forth in this Letter Agreement shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to the PubCo Class A Common Stock occurring on or after the Closing (other than the conversion of the PubCo Class B Common Stock into PubCo Class A Common Stock at the Closing).

 

EX-B-4

 

 

8.Holders of the $15.00 Threshold Shares and the $18.00 Threshold Shares shall be entitled to vote such shares of PubCo Class A Common Stock and receive dividends and other distributions in respect thereof prior to the occurrence of a $15.00 Triggering Event or $18.00 Triggering Event, as applicable, unless forfeited in accordance with the terms hereof.

 

9.The parties hereto acknowledge and agree that the Prior Letter Agreement shall survive the consummation of the Transactions in accordance with its terms (including for the avoidance of doubt, Section 7 thereof).

 

10.Notwithstanding Section 10 of the Prior Letter Agreement or any other provision in this Letter Agreement or the Prior Letter Agreement to the contrary, subject to Section 8.03 of the BCA, upon the Closing, Sponsor may be reimbursed for amounts of any capital contributions made by Sponsor or affiliate thereof to PubCo.

 

11.Sponsor agrees that it shall not, and shall direct its Representatives not to, directly or indirectly, take any action that would violate Section 6.05 of the BCA if such Person were deemed a party to the BCA for purposes of Section 6.05 of the BCA.

 

12.The terms and provisions of this Letter Agreement may be modified or amended only with the written approval of the parties hereto.

 

13.Sponsor acknowledges that it has read the BCA and this Letter Agreement and has had the opportunity to consult with its tax and legal advisors.

 

14.Subject to the terms and conditions of this Letter Agreement, PubCo and Sponsor agree to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or advisable to consummate and make effective the transactions contemplated by this Letter Agreement.

 

15.Sponsor hereby represents and warrants to Holdings and the Company as follows:

 

(a)Sponsor has all necessary power and authority to execute and deliver this Letter Agreement and to perform its obligations hereunder. The execution and delivery of this Letter Agreement by Sponsor has been duly and validly authorized and no other action on the part Sponsor is necessary to authorize this Letter Agreement. This Letter Agreement has been duly and validly executed and delivered by Sponsor and, assuming due authorization, execution and delivery PubCo, constitutes a legal, valid and binding obligation of Sponsor, enforceable against Sponsor in accordance with its terms, subject to the Remedies Exceptions.

 

(b)As of the date hereof, Sponsor holds its SPAC Units, shares of PubCo Common Stock and Private Placement Warrants, as applicable, free and clear of any and all Liens, other than those (i) created by this Letter Agreement, the Prior Letter Agreement, the SPAC Warrant Agreement and PubCo’s Organizational Documents or (ii) arising under applicable securities Laws. Sponsor has and will have until the earlier of the Closing and the valid termination of the BCA pursuant to Article VIII thereof, sole voting power, power of disposition and power to issue instructions with respect to the SPAC Units, shares of PubCo Common Stock and Private Placement Warrants held by Sponsor in accordance with this Letter Agreement and power to agree to all of the matters applicable to Sponsor set forth in this Letter Agreement.

 

EX-B-5

 

 

(c)The execution and delivery of this Letter Agreement by Sponsor does not, and the performance of this Letter Agreement by Sponsor will not: (i) conflict with or violate any Law applicable to Sponsor, (ii) contravene or conflict with, or result in any violation or breach of, any provision of any Organizational Documents of Sponsor, as applicable, or (iii) result in any material breach of or constitute a material default (or an event which, with notice or lapse of time or both, would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any of the SPAC Units, shares of PubCo Common Stock or Private Placement Warrants owned by Sponsor, as applicable, pursuant to any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument (whether written or oral) to which Sponsor is a party or by which Sponsor is bound, except for any such conflicts, violations, breaches, defaults or other occurrences which, individually or in the aggregate, would not reasonably be expected to materially impair the ability of Sponsor to perform its obligations hereunder or to consummate the transactions contemplated hereby.

 

(d)The execution and delivery of this Letter Agreement by Sponsor does not, and the performance of this Letter Agreement by Sponsor will not, require any consent, approval, authorization or permit of, or filing with or notification to, or expiration or termination of any waiting period by, any Governmental Authority or any other person.

 

(e)As of the date hereof, there is no material Action pending or, to the knowledge of Sponsor, threatened against such Sponsor, which, individually or in the aggregate, would reasonably be expected to materially impair the ability of Sponsor to perform its obligations hereunder or to consummate the transactions contemplated hereby.

 

(f)Except for this Letter Agreement and the Prior Letter Agreement, Sponsor has not: (i) entered into any voting agreement, voting trust or any similar agreement, arrangement or understanding, with respect to the SPAC Units, shares of PubCo Common Stock or Private Placement Warrants owned by Sponsor, as applicable, (ii) granted any proxy, consent or power of attorney with respect to any SPAC Units, shares of PubCo Common Stock or Private Placement Warrants owned by Sponsor (other than as contemplated by this Letter Agreement) or (iii) entered into any agreement, arrangement or understanding that is otherwise inconsistent with, or would interfere with, or prohibit or prevent it from satisfying its obligations pursuant to this Letter Agreement.

 

EX-B-6

 

 

(g)Sponsor understands and acknowledges that Holdings and the Company are entering into the BCA in reliance upon the execution and delivery of this Letter Agreement by Sponsor.

 

16.This Letter Agreement, together with the BCA to the extent referenced herein, and the Prior Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersede all prior understandings, agreements, or representations by or among the parties hereto, written or oral, relating to the subject matter hereof.

 

17.No party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other parties hereto, and any purported assignment in violation of the foregoing shall be null and void ab initio. This Letter Agreement shall be binding on the parties hereto and their respective successors and assigns.

 

18.This Letter Agreement shall be construed and interpreted in a manner consistent with the provisions of the BCA. In the event of any conflict between the terms of this Letter Agreement and the BCA, the terms of the BCA shall govern. The provisions set forth in Sections 8.05 (Waiver), 9.03 (Severability), 9.05 (Parties in Interest), 9.06 (Governing Law), 9.07 (Waiver of Jury Trial), 9.09 (Counterparts), 9.10 (Specific Performance) and 9.11 (No Recourse) of the BCA, as in effect as of the date hereof, are hereby incorporated by reference into, and shall be deemed to apply to, this Letter Agreement, mutatis mutandis.

 

19.Any notice, consent or request to be given in connection with any of the terms or provisions of this Letter Agreement shall be in writing and shall be sent in the same manner as provided in Section 9.01 (Notices) of the BCA, with (a) notices to PubCo, Holdings and the Company being sent to the addresses set forth therein, in each case with all copies as required thereunder, and (b) notices to Sponsor being sent to the address set forth on the signature page for Sponsor to this Letter Agreement.

 

20.This Letter Agreement shall terminate, and have no further force and effect, if the BCA is terminated in accordance with its terms prior to the Closing.

 

[The remainder of this page left intentionally blank.]

 

EX-B-7

 

 

Please indicate your agreement to the terms of this Letter Agreement by signing where indicated below.

 

  Very truly yours,
   
  CENAQ SPONSOR LLC
   
  By:                  
  Name:  J. Russell Porter
  Title: Chief Executive Officer
   
  Address:
  4550 Post Oak Place Drive
  Suite 300
  Houston, Texas 77027

  

[Signature Page to Letter Agreement]

 

EX-B-8

 

 

Acknowledged and agreed

as of the date of this Letter Agreement:

 

CENAQ Energy Corp.  
   
By:  
Name: J. Russell Porter  
Title: Chief Executive Officer  

 

[Signature Page to Letter Agreement]

 

EX-B-9

 

 

 

Acknowledged and agreed

as of the date of this Letter Agreement:

 

Bluescape Clean Fuels Holdings, LLC  
   
By:  
Name: Ernest B. Miller  
Title: Chief Executive Officer  

 

[Signature Page to Letter Agreement]

 

EX-B-10

 

 

Acknowledged and agreed

as of the date of this Letter Agreement:

 

Bluescape Clean Fuels INTERMEDIATE HOLDINGS, LLC  
   
By:  
Name:  Ernest B. Miller  
Title Chief Executive Officer  

 

[Signature Page to Letter Agreement]

 

EX-B-11

 

 

 

 

 

 

 

 

EXHIBIT C

 

Form of Lockup Agreement

 

[Attached]

 

 

 

 

 

 

 

 

 

 

 

August 12, 2022

 

CENAQ Energy Corp.

4550 Post Oak Place Drive, Suite 300

Houston, Texas 77027

 

Re: Lock-Up Agreement

 

Ladies and Gentlemen:

 

This letter (this “Letter Agreement”) is being delivered to you in accordance with the Business Combination Agreement (as the same may be amended, supplemented or modified, the “BCA”) entered into by and among Bluescape Clean Fuels Intermediate Holdings, LLC, a Delaware limited liability company (the “Company”), Bluescape Clean Fuels Holdings, LLC, a Delaware limited liability company (“Holdings”), Verde Clean Fuels OpCo, LLC, a Delaware limited liability company (“OpCo”), CENAQ Energy Corp., a Delaware corporation (“PubCo”), and, solely with respect to Section 6.18 therein, CENAQ Sponsor LLC, a Delaware limited liability company (“Sponsor”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the BCA.

 

In order to induce the parties to proceed with the Transactions and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned (the “Securityholder”) hereby agrees with PubCo as follows:

 

1. Subject to the exceptions set forth herein, the Securityholder agrees not to Transfer any OpCo Units or corresponding shares of SPAC Class C Common Stock received in connection with the Transactions pursuant to the BCA, until the earlier of (i) six months after the Closing Date, and (ii) subsequent to the Closing Date, (x) if the last sale price of the SPAC Class A Common Stock quoted on Nasdaq is greater than or equal to $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations, and the like) for any 20 Trading Days within any period of 30 consecutive Trading Days commencing at least 75 days after the Closing Date or (y) the date on which PubCo completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction with a third party that results in all of PubCo’s stockholders having the right to exchange their shares of PubCo Class A Common Stock for cash, securities or other property (the “Lock-Up”). For purposes of this Letter Agreement, “Transfer” shall mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b).

 

2. The restrictions set forth in paragraph 1 shall not apply to:

 

(i)in the case of an entity, Transfers to a stockholder, partner, member or affiliate of such entity;

 

(ii)in the case of an individual, Transfers by gift to members of the individual’s immediate family (as defined below) or to a trust, the beneficiary of which is a member of one of the individual’s immediate family, an affiliate of such person or to a charitable organization;

 

(iii)in the case of an individual, Transfers by virtue of laws of descent and distribution upon death of the individual;

 

EX-C-1

 

 

(iv)in the case of an individual, Transfers pursuant to a qualified domestic relations order;

 

(v)in the case of an entity, Transfers by virtue of the laws of the state of the entity’s organization and the entity’s organizational documents upon dissolution of the entity;

 

(vi)transactions relating to SPAC Class A Common Stock or other securities convertible into or exercisable or exchangeable for SPAC Class A Common Stock acquired in open market transactions after the Closing; provided that no such transaction is required to be, or is, publicly announced (whether on Form 4, Form 5 or otherwise, other than a required filing on Schedule 13F, 13G or 13G/A) during the Lock-Up;

 

(vii)exchanges of SPAC Class C Common Stock or OpCo Units to SPAC Class A Common Stock; provided that, following such exchange, the issued SPAC Class A Common Stock shall be subject to the Lock-Up; or

 

(viii)Transfers to the Company associated with (a) net withholding to satisfy tax withholding obligations or (b) net exercise to satisfy exercise price obligations, in each case, for equity-based awards pursuant to the Company’s equity incentive plans or arrangements;

 

provided, however, that (A) in the case of clauses (i) through (v), these permitted transferees must enter into a written agreement, in substantially the form of this Letter Agreement (it being understood that any references to “immediate family” in the agreement executed by such transferee shall expressly refer only to the immediate family of the Securityholder and not to the immediate family of the transferee), agreeing to be bound by these Transfer restrictions. For purposes of this paragraph, “immediate family” shall mean a spouse, domestic partner, child, grandchild or other lineal descendant (including by adoption), father, mother, brother or sister of the undersigned; and “affiliate” shall have the meaning set forth in Rule 405 under the Securities Act of 1933, as amended.

 

3. This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by all parties hereto.

 

4. No party hereto may assign either this Letter Agreement or any of its rights, interests or obligations hereunder without the prior written consent of the other party. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding on the Securityholder and each of its respective successors, heirs and assigns and permitted transferees.

 

5. This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The parties hereto (i) all agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this Letter Agreement shall be brought and enforced in any Delaware Chancery Court, and irrevocably submit to such jurisdiction and venue, which jurisdiction and venue shall be exclusive and (ii) waive any objection to such exclusive jurisdiction and venue or that such courts represent an inconvenient forum.

 

6. This Letter Agreement shall terminate on the expiration of the Lock-Up.

 

[remainder of page intentionally left blank]

 

EX-C-2

 

 

  Very truly yours,
   
   
  (Name of Securityholder – Please Print)
   
   
  (Signature)
   
   
  (Name of Signatory if Securityholder is an entity – Please Print)
   
   
  (Title of Signatory if Securityholder is an entity – Please Print)
   
  Address:         
     
     
     
     

 

[Signature Page to Lock-Up Agreement]

 

EX-C-3

 

 

Acknowledged and agreed

as of the date of this Letter Agreement:

 

CENAQ ENERGY CORP.

 

By:    
Name:     
Title:    

 

[Signature Page to Lock-Up Agreement]

 

EX-C-4

 

 

 

 

 

 

 

 

 

 

EXHIBIT D

 

Form of Tax Receivable Agreement

 

[Attached]

 

 

 

 

 

 

 

 

 

 

TAX RECEIVABLE AGREEMENT

 

by and among

 

Verde Clean Fuels, Inc.,

 

CERTAIN OTHER PERSONS NAMED HEREIN,

 

and

 

Agent

 

 

 

 

 

DATED AS OF [    ]

 

EX-D-1

 

 

TAX RECEIVABLE AGREEMENT

 

This TAX RECEIVABLE AGREEMENT (this “Agreement”), dated as of [ ], 2022, is hereby entered into by and among Verde Clean Fuels, Inc. (f/k/a CENAQ Energy Corp.), a Delaware corporation (“PubCo”), the TRA Holders and the Agent.

 

RECITALS

 

WHEREAS, the Corporate Taxpayer is the managing member of Verde Clean Fuels OpCo, LLC, a Delaware limited liability company (together with any successor entity, “OpCo”), an entity classified as a partnership for U.S. federal income tax purposes, and currently holds membership interests in OpCo;

 

WHEREAS, OpCo and each of its direct and indirect Subsidiaries that is treated as a partnership for U.S. federal income tax purposes will have in effect an election under Section 754 of the Code for each Taxable Year in which a Redemption occurs;

 

WHEREAS, after the closing of the Business Combination, the TRA Holders will hold Units and may transfer all or a portion of such Units in one or more Redemptions, and, as a result of such Redemption(s), the Corporate Taxpayer is expected to obtain or be entitled to certain tax benefits as further described herein;

 

WHEREAS, this Agreement is intended to set forth the agreement among the parties hereto regarding the sharing of the tax benefits realized by the Corporate Taxpayer as a result of the Redemptions;

 

NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.1 Definitions. As used in this Agreement, the terms set forth in this Article I shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined).

 

Accrued Amount” has the meaning set forth in Section 3.1(b) of this Agreement.

 

Actual Tax Liability” means, with respect to any Taxable Year, the actual liability for U.S. federal income Taxes of (i) the Corporate Taxpayer, and (ii)