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UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): October 19, 2023
Spectaire
Holdings Inc.
(Exact
name of registrant as specified in its charter)
Delaware |
|
001-40976 |
|
98-1578608 |
(State or other jurisdiction |
|
(Commission File Number) |
|
(I.R.S. Employer |
of incorporation) |
|
|
|
Identification No.) |
155 Arlington St., |
|
|
Watertown, MA |
|
02472 |
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s
telephone number, including area code: (508) 213-8991
3109
W 50th St., #207, Minneapolis, MN 55410
(Former name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ | 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 |
Common stock, par value $0.0001 per share |
|
SPEC |
|
The Nasdaq Stock Market LLC |
Redeemable warrants, each whole warrant exercisable
for one share of common stock at an exercise price of $11.50 |
|
SPECW |
|
The Nasdaq Stock Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
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.
Introductory
Note
Domestication
and Transactions
As
previously announced, Spectaire Holdings Inc., a Delaware corporation (formerly known as Perception Capital Corp. II) (the “Company”),
previously entered into that certain Agreement and Plan of Merger, dated as of January 16, 2023 (the “Merger Agreement”),
with Perception Spectaire Merger Sub Corp., a Delaware corporation and a direct wholly owned subsidiary of PCCT (“Merger Sub”),
and Spectaire Inc., a Delaware corporation (“Legacy Spectaire”), pursuant to which, on October 19, 2023, Merger Sub merged
with and into Legacy Spectaire, with Legacy Spectaire surviving the merger as a wholly owned subsidiary of New Spectaire (the “Business
Combination” and, together with the other transactions contemplated by the Merger Agreement, the “Transactions”).
On
October 16, 2023, the Company effected a deregistration under the Companies Act (As Revised) of the Cayman Islands and a domestication
under the General Corporation Law of the State of Delaware (the “DGCL”), as amended, pursuant to which the Company’s
jurisdiction of incorporation changed from the Cayman Islands to the State of Delaware (the “Domestication”). In connection
with the Domestication, (i) each issued and outstanding Class A ordinary share, par value $0.0001 per share, of the Company (the “Class
A Ordinary Shares”) and each then issued and outstanding Class B ordinary share, par value $0.0001 per share, of the Company (the
“Class B Ordinary Shares” and together with the Class A Ordinary Shares, the “Ordinary Shares”), converted automatically,
on a one-for-one basis, into a share of common stock, par value $0.0001 per share, of the Company (“Common Stock”), (ii)
each issued and outstanding warrant to purchase one Class A Ordinary Share (“Cayman Warrant”) converted automatically into
a warrant to acquire one share of Common Stock (“Warrant”) pursuant to the Warrant Agreement, dated as of October 27, 2021,
by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent, and (iii) each issued and outstanding
unit of the Company, consisting of one Class A Ordinary Share and one-half of one Cayman Warrant, was cancelled and entitled the holder
thereof to one share of Company Common Stock and one-half of one Warrant.
Upon
effectiveness of the Domestication, the Company changed its name from “Perception Capital Corp. II” to “Spectaire Holdings
Inc.”, filed a certificate of incorporation (the “Company Charter”) with the Secretary of State of Delaware and adopted
bylaws (the “Company Bylaws” and, together with the Company Charter, the “Company Organizational Documents”)
under the DGCL. The material terms of each of the Company Organizational Documents and the general effect upon the rights of holders
of the Company Common Stock and Company Warrants are included in the definitive proxy statement/prospectus, dated September 29, 2023
and filed with the United States Securities and Exchange Commission (the “Proxy Statement/Prospectus”), under the sections
entitled “Proposal No. 3—The Organizational Documents Proposal” beginning on page 109, “Comparison of Corporate
Governance and Shareholder Rights” beginning on page 249 and “Description of Securities of NewCo” beginning on page
251, which are incorporated herein by reference.
As
previously announced, on October 4, 2023, the Company entered into a subscription agreement with Polar Multi-Strategy Master Fund (“Polar”)
to cover working capital requirements of the Company prior to the consummation of the Business Combination (the “Polar Subscription
Agreement”). Pursuant to the terms and subject to the conditions of the Polar Subscription Agreement, Polar agreed to contribute
up to $650,000 to the Company (the “Capital Contribution”). In consideration of the Capital Contribution, the Company agreed
to issue 0.9 shares of Common Stock for each dollar of the Capital Contribution. Accordingly, at closing of the Business Combination,
the Company issued 585,000 shares of Common Stock to Polar. Upon certain events of default under the Subscription Agreement, PCCT shall
issue to Polar 0.1 shares of Common Stock (“Default Shares”) for each dollar of the Capital Contribution funded as of the
date of such default, and for each month thereafter until such default is cured, subject to certain limitations provided for therein.
In
connection with the Company’s entry into the Polar Subscription Agreement, Perception Capital Partners II LLC (the “Sponsor”)
delivered to the Company a letter agreement to facilitate the Company’s fundraising efforts (the “Sponsor Letter Agreement”).
Pursuant to the Sponsor Letter Agreement, the Sponsor agreed to forfeit for cancellation (i) 585,000 Class B Ordinary Shares concurrently
with the closing of the Business Combination and (ii) following the closing of the Business Combination, the number of shares of Common
Stock equal to the number of Default Shares, if any, issued by the Surviving Entity to Polar in accordance with the Subscription Agreement.
As
previously announced, on October 11, 2023, the Company entered into a private placement subscription agreement (the “PIPE Subscription
Agreement”) with Dr. Jörg Mosolf (the “PIPE Investor”), pursuant to which the PIPE Investor agreed to subscribe
for newly-issued shares of Common Stock (the “PIPE Shares”), with an aggregate purchase price of $3,500,000. On October 19,
2023, concurrently with the closing of the Business Combination, the PIPE Investor closed on the purchase of 50,000 PIPE Shares at a
price of $10.00 per share, for an aggregate purchase price of $500,000 (the “PIPE Investment”). Pursuant to the PIPE Subscription
Agreement, within two years following the Closing, the PIPE Investor will purchase additional PIPE Shares in one or multiple subsequent
closings for a purchase price per share of $10.00 (subject to as described in the PIPE Subscription Agreement) for an aggregate purchase
price of $3,000,000 (the “Additional Investments”). The purchase and sale of the PIPE Shares in the Additional Investments
is conditioned upon typical conditions for transactions of this type. The PIPE Shares issued and sold in the PIPE Investment and to be
issued and sold in the Additional Investments pursuant to the PIPE Subscription Agreement have not been and will not be registered under
the Securities Act of 1933 (the “Securities Act”) and have been and will be issued in reliance on the availability of an
exemption from such registration.
As
previously announced, on March 31, 2023, Legacy Spectaire, as borrower, entered into a Loan Agreement with Arosa Multi-Strategy Fund
LP (“Arosa”), as lender, providing for a term loan in a principal amount not to exceed $6.5 million (the “Loan Agreement”),
comprised of $5.0 million in cash of which (a) $2.0 million was funded to a deposit account of Legacy Spectaire and (b) $3.0 million
(the “Arosa Escrow Funds”) was funded into an escrow account (the “Arosa Escrow Account”) pursuant to an escrow
agreement, dated as of March 31, 2023, by and between Legacy Spectaire and Wilmington Savings Fund Society, FSB. Release of the Arosa
Escrow Funds from the Arosa Escrow Account is subject to the satisfaction or waiver of customary conditions, including certification
that all representations and warranties contained in the Loan Agreement and related documents are true and correct in all material respects.
In
accordance with the terms of the Loan Agreement, on March 31, 2023, Legacy Spectaire issued to Arosa a warrant to purchase a number of
shares of common stock of Legacy Spectaire representing 10.0% of the outstanding number of shares of common stock of Legacy Spectaire
on a fully diluted basis as of March 31, 2023 at an exercise price of $0.01 per share, subject to adjustment as described in the Loan
Agreement (the “Closing Date Warrant”). Pursuant to the Loan Agreement, on October 19, 2023, in connection with the closing
of the Business Combination, the Company issued an additional warrant to Arosa to purchase 2,194,453 shares of Common Stock, subject
to adjustment as described therein (the “Additional Warrant”). Upon the issuance of the Additional Warrant, Arosa and the
Company agreed to terminate and cancel the Closing Date Warrant. The shares of Common Stock underlying the Additional Warrant represented
approximately 10.3% of the outstanding number of shares of Common Stock outstanding as of immediately following the consummation of the
Business Combination on a fully diluted basis.
The
foregoing description of the Transactions and the PIPE Investment does not purport to be complete and is qualified in its entirety by
the full text of the Merger Agreement, each amendment thereto, the PIPE Subscription Agreement and the Additional Warrant, which are
attached as Exhibits 2.1, 10.1 and 10.2 to this Current Report on Form 8-K (this “Report”), each of which is incorporated
herein by reference.
Unless
the context otherwise requires, “we,” “us,” “our,” and the “Company” refer to Spectaire
Holdings Inc. and its consolidated subsidiaries following the closing of the Business Combination (the “Closing”). Unless
the context otherwise requires, references to “PCCT” refer to the Company prior to the Domestication. All references herein
to the “Board” refer to the board of directors of the Company.
Terms
used in this Report but not defined herein, or for which definitions are not otherwise incorporated by reference herein, shall have the
meaning given to such terms in the Proxy Statement/Prospectus in the section entitled “Basis of Presentation and Glossary”
beginning on page iii thereof, and such definitions are incorporated herein by reference.
Item
1.01 Entry into a Material Definitive Agreement
Registration
Rights Agreement
On
October 19, 2023, in connection with the consummation of the Business Combination and as contemplated by the Merger Agreement, the Company
entered into that certain Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”) with the
Sponsor, certain of PCCT’s directors and officers, certain stockholders of Legacy Spectaire and certain other parties. The material
terms of the Registration Rights Agreement are described in the section of the Proxy Statement/Prospectus beginning on page 230 titled
“Other Agreements—Registration Rights Agreement.”
The
foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference
to the full text of the Registration Rights Agreement, which is filed as Exhibit 10.3 to this Report and is incorporated herein by reference.
Lock-Up
Agreement
On
October 19, 2023, in connection with the consummation of the Business Combination and as contemplated by the Merger Agreement, the Company
entered into lock-up agreements (collectively, the “Lock-Up Agreements”) with (i) the Sponsor, (ii) certain of PCCT’s
directors and officers and (iii) certain stockholders of Legacy Spectaire restricting the transfer of Common Stock, Private Placement
Warrants and any shares of Common Stock underlying the Private Placement Warrants from and after the Closing. The restrictions under
the Lock-Up Agreements (1) with respect to the Common Stock, begin at the Closing, and end on (a) in the case of the Sponsor and certain
of PCCT’s directors and officers, the date that is 365 days after the Closing, or upon the price of Common Stock reaching $12.00
for any 20 trading days within a 30-trading day period commencing at least 150 days after the Closing, and (b) in the case of the stockholders
of Legacy Spectaire, the date that is 180 days after the Closing, and (2) with respect to the Private Placement Warrants and any shares
of Common Stock underlying the Private Placement Warrants, the date that is 30 days after the Closing. See the section entitled “Other
Agreements—Lock-Up Agreement” for more information. The material terms of the Lock-Up Agreements are described in the section
of the Proxy Statement/Prospectus beginning on page 230 titled “Other Agreements—Lock-Up Agreement.”
The
foregoing description of the Lock-Up Agreements does not purport to be complete and is qualified in its entirety by reference to the
full text of the Lock-Up Agreements, which are filed as Exhibit 10.4 and 10.5 to this Report and are incorporated herein by reference.
Additional
Warrant
On
October 19, 2023, in connection with the consummation of the Business Combination and as contemplated by the Loan Agreement, the Company
issued the Additional Warrant to Arosa. The information relating to the Additional Warrant set forth in the “Introductory Note—Domestication
and Transactions” above is incorporated into this Item 1.01 by reference. The Additional Warrant is exercisable at any time and
from time to time from the date of its issuance until October 19, 2028 at an exercise price of $0.01 per share.
The
foregoing description of the Additional Warrant does not purport to be complete and is qualified in its entirety by reference to the
full text of the Additional Warrant, which is filed as Exhibit 10.2 to this Report and is incorporated herein by reference.
Item
2.01 Completion of Acquisition or Disposition of Assets
The
information set forth in the “Introductory Note—Domestication and Transactions” above is incorporated into this Item
2.01 by reference.
Holders
of 952,924 Class A Ordinary Shares sold in PCCT’s initial public offering properly exercised their right to have such shares redeemed
for a full pro rata portion of the trust account holding the proceeds from PCCT’s initial public offering, which was approximately
$11.19 per share, or approximately $10.7 million in the aggregate.
As
a result of the Business Combination, each share of Legacy Spectaire preferred stock and common stock was converted into the right to
receive approximately 0.43 shares of Common Stock.
After
giving effect to the Transactions, the redemption of Class A Ordinary Shares as described above, and the consummation of the PIPE Investment,
there are currently 15,344,864 shares of Common Stock issued and outstanding.
The
Common Stock and Warrants commenced trading on the Nasdaq Stock Market (“Nasdaq”) under the symbols “SPEC” and
“SPECW,” respectively, on October 20, 2022, subject to ongoing review of the Company’s satisfaction of all listing
criteria following the Business Combination.
As
noted above, at closing of the Business Combination, an aggregate of approximately $10.7 million was paid from the Company’s trust
account to holders that properly exercised their right to have Class A Ordinary Shares redeemed, and the remaining balance immediately
prior to the closing of the Business Combination of approximately $12.6 million was used to, among other things, pay transaction expenses
in connection with the Business Combination.
Form
10 Information
Item
2.01(f) of Form 8-K states that if the registrant was a shell company, as the Company was immediately before the Business Combination,
then the registrant must disclose the information that would be required if the registrant were filing a general form for registration
of securities on Form 10. As a result of the consummation of the Business Combination, and as discussed below in Item 5.06 of this Report,
the Company has ceased to be a shell company. Accordingly, the Company is providing below the information that would be included in a
Form 10 if it were to file a Form 10. Please note that the information provided below relates to the combined company after the consummation
of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.
Cautionary
Note Regarding Forward-Looking Statements
This
Report contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and
forward-looking information within the meaning of applicable Canadian securities laws. In addition, any statements that refer to projections
(including EBITDA and cash flow), forecasts or other characterizations of future events or circumstances, including any underlying assumptions,
are forward-looking statements. When used in this proxy statement/prospectus, words such as “plan,” “believe,”
“expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,”
“project,” “continue,” “could,” “may,” “might,” “possible,” “potential,”
“predict,” “should,” “would” and other similar words and expressions, but the absence of these words
does not mean that a statement is not forward-looking. When the Company discuss strategies or plans, including as they relate to the
Business Combination, the Company is making projections, forecasts or forward-looking statements. Such statements are based on the beliefs
of, as well as assumptions made by and information currently available to, the Company’s management.
Forward-looking
statements may include, but are not limited to:
| ● | the
anticipated benefits of the Business Combination; |
| ● | the
financial and business performance of the Company; |
| ● | the
Company’s anticipated results from operations in future periods; |
| ● | the
products and services offered by the Company and the markets in which it operates; |
| ● | the
impact of health epidemics on the Company’s business and the actions the Company may
take in response thereto; |
| ● | the
future price of metals; |
| ● | the
stability of the financial and capital markets; |
| ● | other
current estimates and assumptions regarding the Business Combination and its benefits; such
expectations and assumptions are inherently subject to uncertainties and contingencies regarding
future events and, as such, are subject to change; |
| ● | the
risk that the consummation of the Business Combination disrupts the Company’s current
plans; |
| ● | the
Company’s ability to operate as a going concern; |
| ● | the
Company’s requirement of significant additional capital; |
| ● | the
Company’s limited operating history; |
| ● | the
Company’s history of losses; |
| ● | the
Company’s ability to attract qualified management; |
| ● | the
Company’s ability to adapt to rapid and significant technological change and respond
to introductions of new products in order to remain competitive; |
| ● | the
Company receives a significant portion of its revenues from a small number of customers and
the loss of, or nonperformance by, one or more significant customers could adversely affect
the Company’s business; |
| ● | the
Company relies heavily on manufacturing operations, including contract manufacturing, to
produce products, and the business could be adversely affected by disruptions of the manufacturing
operation; |
| ● | the
Company’s future growth depends on a single product line and its associated services; |
| ● | changes
in governmental regulations may reduce demand for the Company’s products or increase
the Company’s expenses; |
| ● | changes
in customers’ sustainability pledges may reduce demand for the Company’s products
or increase the Company’s expenses; |
| ● | evolution
in carbon markets, including both commercial dynamics and governmental regulation, may have
an adverse impact on the Company’s revenue model; |
| ● | changes
or disruptions in the securities markets; |
| ● | legislative,
political or economic developments; |
| ● | the
need to obtain permits and comply with laws and regulations and other regulatory requirements; |
| ● | risks
of accidents, equipment breakdowns, and labor disputes or other unanticipated difficulties
or interruptions; |
| ● | the
possibility of cost overruns or unanticipated expenses in development programs; |
| ● | potential
future litigation, including with respect to the Business Combination; |
| ● | the
Company’s lack of insurance covering all of the Company’s operations; and |
| ● | other
factors detailed in the section titled “Risk Factors.” |
The
forward-looking statements are based on the current expectations of the Company’s management and are inherently subject to uncertainties
and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that
future developments will be those that have been anticipated.
Should
one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of the Company prove
incorrect, actual results may vary in material respects from those projected in these forward-looking statements.
All
subsequent written and oral forward-looking statements concerning the Business Combination or other matters addressed herein and attributable
to the Company or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained
or referred to herein. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to update
these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated
events.
Business
The
business of the Company is described in the Proxy Statement/Prospectus in the section entitled “Information About NewCo Following
the Business Combination” beginning on page 149 thereof and that information is incorporated herein by reference.
Risk
Factors
The
risks associated with the Company’s business are described in the Proxy Statement/Prospectus in the section entitled “Risk
Factors” beginning on page 36 thereof and are incorporated herein by reference. A summary of the risks associated with the Company’s
business are also described beginning on page 21 of the Proxy Statement/Prospectus under the heading “Summary Risk Factors”
and are incorporated herein by reference.
Unaudited
Condensed Consolidated Financial Statements
The
unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2023 and 2022 of Legacy Spectaire are
included in the Proxy Statement/Prospectus beginning on page F-70 of the Proxy Statement/Prospectus, which are incorporated herein by
reference, have been prepared in accordance with U.S. generally accepted accounting principles and pursuant to the regulations of the
SEC. The unaudited financial information reflects, in the opinion of management, all adjustments, consisting of normal recurring adjustments,
considered necessary for a fair statement of Legacy Spectaire’s financial position, results of operations and cash flows for the
period indicated. The results reported for the interim period presented are not necessarily indicative of results that may be expected
for the full year.
These
unaudited condensed consolidated financial statements should be read in conjunction with the historical audited consolidated financial
statements of Legacy Spectaire as of and for the years ended December 31, 2022 and 2021 and the related notes included in the Proxy Statement/Prospectus,
the section entitled “Spectaire Management’s Discussion and Analysis of Financial Condition and Results of Operations”
beginning on page 163 of the Proxy Statement/Prospectus and the section entitled “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” included herein.
Unaudited
Pro Forma Condensed Combined Financial Information
The
unaudited pro forma condensed combined financial information of the Company as of and for the six months ended June 30, 2023 and for
the year ended December 31, 2022 is set forth in Exhibit 99.1 hereto and is incorporated herein by reference.
Management’s
Discussion and Analysis of Financial Condition and Results of Operations
Management’s
discussion and analysis of the financial condition and results of operation of Legacy Spectaire as of and for the six months ended June
30, 2023 and 2022 and as of and for the years ended December 31, 2022 and 2021 is included in the Proxy Statement/Prospectus in the section
titled “Spectaire Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning
on page 163 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
Properties
The
properties of the Company are described in the Proxy Statement/Prospectus in the section entitled “Information About NewCo Following
the Business Combination” beginning on page 149 thereof and that information is incorporated herein by reference.
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth information known to us regarding the beneficial ownership of our Common Stock immediately following consummation
of the Transactions by:
| ● | each
person who is the beneficial owner of more than 5% of the outstanding shares of our Common
Stock; |
| ● | each
of our named executive officers and directors; and |
| ● | all
of our executive officers and directors as a group. |
Beneficial
ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security
if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently
exercisable or exercisable within 60 days. Except as described in the footnotes below and subject to applicable community property laws
and similar laws, we believe that each person listed above has sole voting and investment power with respect to such shares. Unless otherwise
noted, the address of each beneficial owner is c/o Spectaire Holdings, Inc., 155 Arlington St., Watertown, MA 02472.
The
beneficial ownership of our Common Stock is based on 15,344,864 shares of Common Stock issued and outstanding immediately following consummation
of the Transactions, including the redemption of Class A Ordinary Shares as described above and the consummation of the PIPE Investment.
Beneficial Ownership Table
Name of Beneficial Owners | |
Number of Shares of Common Stock Beneficially Owned | | |
Percentage of Outstanding Common Stock | |
5% Stockholders: | |
| | |
| |
Perception Capital Partners II LLC(1) | |
| 5,075,000 | | |
| 33.1 | % |
| |
| | | |
| | |
Directors and Named Executive Officers: | |
| | | |
| | |
James Sheridan | |
| – | | |
| – | |
Tao Tan | |
| – | | |
| – | |
Brian Semkiw | |
| 775,337 | | |
| 5.1 | % |
Brian Hemond | |
| 1,469,344 | | |
| 9.6 | % |
Dr. Jörg Mosolf(2) | |
| 1,865,676 | | |
| 12.2 | % |
Frank Baldesarra | |
| – | | |
| – | |
Leonardo Fernandes | |
| 9,037 | * | |
| | |
Chris Grossman | |
| 12,651 | * | |
| | |
Rui Mendes | |
| 594,606 | | |
| 3.9 | % |
Directors and executive officers as a group (9 individuals) | |
| 4,726,651 | | |
| 30.8 | % |
| (1) | Perception Capital Partners II
LLC, the Sponsor, is the record holder of the shares of Common Stock reported herein. Sponsor is managed by Perception Capital Partners
LLC, which is controlled by Northern Pacific Group, L.P. Scott Honour and Marcy Haymaker control Northern Pacific Group, L.P. As a result,
Scott Honour and Marcy Haymaker may be deemed to beneficially own shares held by Sponsor by virtue of their indirect shared control over
Sponsor. |
| (2) | 1,812,062 of the shares of Common
Stock beneficially owned by Dr. Jörg Mosolf are held indirectly through MLabCapital GmbH. |
Management of the Company
Management and Board of Directors
The following sets forth certain information concerning the persons
who are expected to serve as executive officers and members of the board of directors of the Company following the consummation of the
Business Combination.
| |
| | |
|
Name | |
Age | | |
Title |
Dr. Jörg Mosolf | |
| 66 | | |
Independent Director |
Frank Baldesarra | |
| 68 | | |
Independent Director |
James Sheridan | |
| 56 | | |
Independent Director |
Tao Tan | |
| 38 | | |
Independent Director |
Brian Semkiw | |
| 68 | | |
Chairman of the Board of Directors and Chief Executive Officer |
Brian Hemond | |
| 41 | | |
Chief Scientific Officer and Director |
Leonardo Fernandes | |
| 38 | | |
Chief Financial Officer |
Chris Grossman | |
| 47 | | |
Chief Commercial Officer |
Rui Mendes | |
| 67 | | |
Chief Information Officer |
Dr. Jörg Mosolf has served as a member
of the board of directors of the Company since the consummation of the Business Combination. Dr. Mosolf has served as Chairman of the
Board of Directors and Chief Executive Officer of Mosolf SE & Co. KG since 2002. Dr. Mosolf holds an MBA from the University of St.
Gallen and a Doctorate degree from the University of Prague. Dr. Mosolf is also the President and a member of the executive board of the
German Transport Forum. We believe that Dr. Mosolf is qualified to serve on the board of directors of the Company due to, among other
things, his extensive leadership and director experience.
Frank Baldesarra has served as a member
of the board of directors of the Company since the consummation of the Business Combination. Mr. Baldesarra has served as the Chief Executive
Officer at ENGINEERING.com Incorporated, which he co-founded, since 2001. Prior to co-founding ENGINEERING.com Incorporated, Mr. Baldesarra
served in multiple roles at other organizations, including Executive Chairman of Cadsoft Corporation, President and Chief Operating Officer
at Rand Worldwide, Inc., which he co-founded with Mr. Semkiw, and President at Rand Investments, which he co-founded. Mr. Baldesarra has
served as a member of the board of directors of ENGINEERING.com Incorporated since 2001 and Eberspaecher Venture Inc. since May 2010.
Mr. Baldesarra holds a B.A.Sc. in civil engineering from the University of Toronto. We believe that Mr. Baldesarra is qualified to serve
on the board of directors of the Company due to, among other things, his extensive leadership, engineering and technology industry experience.
James Sheridan has served as a member of
the board of directors of the Company since the consummation of the Business Combination. Prior to the Business Combination, Mr. Sheridan
served as PCCT’s Co-President. Mr. Sheridan is currently the Chief Executive Officer of Perception Capital. He has experience as
both an operating executive (Chief Procurement Officer) and as a leader of the Purchasing Practice at McKinsey & Co. Mr. Sheridan
also has over 25 years of corporate and private equity leadership experience delivering bottom line impact and organizational capability
improvement. Mr. Sheridan has served on the board of directors of Innoviz (Nasdaq: INVZ) since April 2021. Prior to joining Perception
in 2020, Mr. Sheridan served as an Operating Partner for Sustainable Opportunities Acquisition Corp. (NYSE:SOAC), the first ESG focused
SPAC, led by Scott Honour (Chairman). Before joining SOAC, he served as a Senior Vice President of Purchasing and Logistics at Forterra
Building Products from 2017-2019. Prior to Forterra, Mr. Sheridan spent 12 years (2005-2017) at McKinsey & Co. as a Senior Expert
in Purchasing & Supply Chain. During his tenure at McKinsey & Co., he led operational transformations across industries from petrochemicals
and metals to aerospace. From 2003 through 2005, Mr. Sheridan was Champion Enterprises’ Chief Procurement Officer. Mr. Sheridan
started his professional career at Ford Motor Company in Corporate Purchasing, where he spent over 8 years in a number of positions, including
serving as the Strategy Manager for Manufacturing Procurement Operations (Powertrain and Raw Materials). Mr. Sheridan earned a B.A. from
the College of the Holy Cross and M.B.A from Carnegie Mellon. We believe that Mr. Sheridan is qualified to serve on the board of directors
of NewCo due to, among other things, his experience in purchasing and supply chain management across a number of industries and his investment
experience.
Tao Tan has served as a member of the board
of directors of the Company since the consummation of the Business Combination. Prior to the Business Combination, Mr. Tan served as PCCT’s
Co-President. Mr. Tan has nearly 15 years of experience across finance, strategy and business transformation. Prior to joining Perception,
Mr. Tan was an officer and a senior advisor to multiple investing and operating entities. Until 2020, Mr. Tan was an Associate Partner
at McKinsey & Company’s New York office. At McKinsey, Mr. Tan led teams across the firm’s transformation and private equity
& principal investor practices, where he drove comprehensive performance transformation and turnaround programs for companies with
revenues ranging from $200 million to $25 billion across multiple industries and continents. Most recently, Mr. Tan helped found, launch
and lead McKinsey’s SPAC service line, and served in a leadership role in McKinsey’s COVID-19 client response team. Prior
to McKinsey, Mr. Tan was a Senior Associate at Rose Tech Ventures, where he led the firm’s first-round investment in JUMP Bikes,
which was subsequently sold to Uber in 2018. Prior to Rose Tech Ventures, Mr. Tan served in investment banking and capital markets roles
at Bank of America Merrill Lynch and Lehman Brothers. Mr. Tan is a member of the Council on Foreign Relations and of the Economic Club
of New York. Mr. Tan received his B.A. and his M.B.A, both with honors, from Columbia University in the City of New York, where he was
an Erwin Wolfson Scholar and a Toigo Foundation Fellow. We believe that Mr. Tan is qualified to serve on the board of directors of NewCo
and as audit committee chair due to, among other things, his financial expertise and his leadership and investing experience.
Brian Semkiw has served as Chairman of
the Board of Directors and Chief Executive Officer of the Company since the consummation of the Business Combination. Mr. Semkiw has served
as Chairman of the board of directors and Chief Executive Officer of Spectaire since its formation in September 2022 and as the Chief
Executive Officer of 3rdGP Financial LLC, which he founded with Mr. Mendes, since July 2018. Prior to founding 3rdGP Financial LLC, Mr.
Semkiw served as Chief Executive Officer of Carta Solutions Holding Corp., which he co-founded, from 2007 through July 2018. Mr. Semkiw
also previously served as Chief Executive Officer of Rand Worldwide, Inc., which he co-founded with Mr. Baldesarra. Mr. Semkiw earned
a B.A.Sc. in engineering from the University of Toronto. We believe that Mr. Semkiw is qualified to serve on the board of directors of
the Company due to, among other things, his deep knowledge of Spectaire and his extensive leadership, engineering and financial experience.
Dr. Brian Hemond has served as a member
of the board of directors and Chief Scientific Officer of the Company the consummation of the Business Combination. Dr. Hemond has served
as Chief Scientific Officer of Spectaire since its formation in September 2022. Prior to joining Spectaire, Dr. Hemond served as Chief
Executive Officer of microMS, which he co-founded, from 2011 until the consummation of Spectaire’s acquisition of microMS in December
2022. Dr. Hemond also served in multiple roles, including Chief Executive Officer and Chief Operating Officer, of Indigo Technologies,
Inc., an original equipment manufacturer focused on the electric vehicle industry, from 2011 to 2020. Dr. Hemond holds a B.S. in electrical
engineering, a Masters of Engineering in electrical engineering and a Ph.D. in mechanical engineering from the Massachusetts Institute
of Technology. We believe that Dr. Hemond is qualified to serve on the board of directors of the Company due to, among other things, his
invention of the core technology underlying Spectaire’s business, deep knowledge of Spectaire and his extensive engineering, financial
and leadership experience.
Leonardo Fernandes has served as Chief
Financial Officer of the Company since the consummation of the Business Combination. Mr. Fernandes has served as Chief Financial Officer
of Spectaire since January 2023. Prior to joining Spectaire, Mr. Fernandes served as Chief Operating Officer of Lorem LLC, which he co-founded,
from March 2021 through January 2023. From September 2020 to March 2021, Mr. Fernandes served as Chief Operating Officer of Pronto Housing,
Inc., which he co-founded. Mr. Fernandes served as Chief of Staff at Megalith Capital Management LLC from January 2018 through August
2019. Prior to joining Megalith Capital Management LLC, Mr. Fernandes served as Partner – Head of Cross-Border Investments at RBR
Asset Management from 2016 through January 2018. Prior to 2016, Mr. Fernandes served as an associate at Equity International LLC and worked
at BR Properties S.A., one of Brazil’s largest commercial real estate investment companies, as a financial analyst and an investor
relations manager. Mr. Fernandes has a B.A. in economics and a B.A. in business administration and management from Michigan State University
and an MBA from Northwestern University – Kellogg School of Management.
Chris Grossman has served as Chief Commercial
Officer of the Company since the consummation of the Business Combination. Mr. Grossman has served as Chief Commercial Officer of Spectaire
since its formation in September 2022. Prior to joining Spectaire, Mr. Grossman served as President of Quantum Fleet Technology America’s
Ltd. From November 2018 through August 2022. From 2013 through October 2018, Mr. Grossman served as Chief Executive Officer of Zovy LLC.
Prior to joining Zovy, Mr. Grossman served in multiple roles, including Vice President of Engineering, at Rand Worldwide, Inc. Mr. Grossman
holds a Bachelor of Science in mechanical engineering from Rensselaer Polytechnic Institute.
Rui Mendes has served as Chief Information
Officer of the Company since the consummation of the Business Combination. Mr. Mendes has served as Chief Information Officer of Spectaire
since July 2022, as Chief Technology Officer of 3rdGP Financial LLC, which he co-founded with Mr. Semkiw, since July 2018 and as Chief
Executive Officer of LVI Holdings LTD since 2008. Mr. Mendes previously served as Chief Technology Officer of Carta Solutions Holding
Corp from 2006 through June 2018. Mr. Mendes also previously served as Chief Executive Officer of NOVAData Information Systems Inc. and
as Chief Technology Officer of Geodata. Mr. Mendes earned a BSC Computer Science in information systems and operations research from the
University of South Africa.
Corporate Governance
Composition of the NewCo Board of Directors After the Business Combination
The Company’s business and affairs are organized
under the direction of its board of directors. Brian Semkiw serves as Chairman of the board of directors of the Company. The primary responsibilities
of the board of directors of the Company are to provide oversight, strategic guidance, counseling, and direction to the Company’s
management. The board of directors of the Company will meet on a regular basis and additionally as required. In accordance with the terms
of the Company’s bylaws, the board of directors of the Company may establish the authorized number of directors from time to time
by resolution. The board of directors of the Company consists of six members. In accordance with the Company’s certificate of incorporation,
the board of directors of the Company is divided into three classes with staggered three-year terms. At each annual meeting of stockholders,
the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third
annual meeting following election. The Company’s directors are divided among the three classes as follows:
| ● | the Class I directors are James Sheridan, Tao Tan and Brian
Hemond and their terms will expire at the annual meeting of stockholders to be held in 2023. |
| ● | the Class II director is Brian Semkiw and his term will expire
at the annual meeting of stockholders to be held in 2024; and |
| ● | the Class III directors are Jörg Mosolf and Frank Baldesarra
and their terms will expire at the annual meeting of stockholders to be held in 2025. |
Any additional directorships resulting from an
increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist
of one-third of the directors. The division of the board of directors of the Company into three classes with staggered three-year terms
may delay or prevent a change of the Company’s management or a change in control.
Director Independence
As a result of the Common Stock being listed on
Nasdaq following the consummation of the Business Combination, the Company is required to comply with the applicable rules of such exchange
in determining whether a director is independent. The board of directors of the Company undertook a review of the independence of the
individuals named above and has determined that each of Dr. Jörg Mosolf, Frank Baldesarra, James Sheridan and Tao Tan qualifies as
“independent” as defined under the applicable Nasdaq rules. Mr. Sheridan will serve as lead independent director of the Company.
Board Committees
The board of directors of the Company has an audit
committee, a compensation committee, and a nominating and corporate governance committee. The composition and responsibilities of each
of the committees of the board of directors of the Company are described below. Members will serve on these committees until their resignation
or until otherwise determined by the board of directors of the Company. The board of directors of the Company may establish other committees
as it deems necessary or appropriate from time to time.
Audit Committee
The Company’s audit committee consists of
James Sheridan, Tao Tan and Frank Baldesarra, with Mr. Tan serving as chairperson. The board of directors of the Company has determined
that each of Mr. Sheridan, Mr. Tan and Mr. Baldesarra satisfy the independence requirements under Nasdaq listing standards and Rule 10A-3(b)(1)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and that Mr. Baldesarra is an “audit committee
financial expert” within the meaning of SEC regulations. Each member of the audit committee of the board of directors of the Company
is able to read and understand fundamental financial statements in accordance with applicable requirements. To make these determinations,
the board of directors of the Company examined each audit committee member’s scope of experience and the nature of their employment.
The primary purpose of the audit committee is
to discharge the responsibilities of the board of directors of the Company with respect to the Company’s corporate accounting and
financial reporting processes, systems of internal control and financial statement audits, and to oversee the Company’s independent
registered public accounting firm. Specific responsibilities of the audit committee of the board of directors of the Company include:
| ● | helping the board of directors of the Company oversee corporate
accounting and financial reporting processes; |
| ● | managing the selection, engagement, qualifications, independence
and performance of a qualified firm to serve as the independent registered public accounting firm to audit the Company’s consolidated
financial statements; |
| ● | discussing the scope and results of the audit with the independent
registered public accounting firm and reviewing, with management and the independent accountants, the Company’s interim and year-end
operating results; |
| ● | developing procedures for employees to submit concerns anonymously
about questionable accounting or audit matters; |
| ● | reviewing related person transactions; |
| ● | obtaining and reviewing a report by the independent registered
public accounting firm at least annually that describes the Company’s internal quality control procedures, any material issues
with such procedures and any steps taken to deal with such issues when required by applicable law; and |
| ● | approving or, as permitted, pre-approving, audit and permissible
non-audit services to be performed by the independent registered public accounting firm. |
Compensation Committee
The Company’s compensation committee consists
of Frank Baldesarra and James Sheridan, with Mr. Baldesarra serving as chairperson. The board of directors of the Company has determined
that each member of the compensation committee is independent under the Nasdaq listing standards and a “non-employee director”
as defined in Rule 16b-3 promulgated under the Exchange Act. The primary purpose of the compensation committee is to discharge the responsibilities
of the board of directors of the Company in overseeing the compensation policies, plans and programs and to review and determine the compensation
to be paid to executive officers, directors, and other senior management, as appropriate. Specific responsibilities of the compensation
committee include:
| ● | reviewing and approving the compensation of the chief executive officer, other executive officers and senior management; |
| ● | reviewing and recommending to the board of directors of the Company the compensation of directors; |
| ● | administering the incentive award plans and other benefit programs; |
| ● | reviewing, adopting, amending, and terminating incentive compensation and equity plans, severance agreements, profit sharing plans,
bonus plans, change-of-control protections and any other compensatory arrangements for the executive officers and other senior management;
and |
| ● | reviewing and establishing general policies relating to compensation and benefits of the employees, including the overall compensation
philosophy. |
Nominating and Corporate Governance Committee
The Company’s nominating and corporate governance
committee consists of Dr. Jörg Mosolf and James Sheridan, with Dr. Mosolf serving as chairperson. The board of directors of the Company
has determined that each member of the nominating and corporate governance committee is independent under the Nasdaq listing standards.
Specific responsibilities of the nominating and corporate governance committee include:
| ● | identifying and evaluating candidates, including the nomination
of incumbent directors for re-election and nominees recommended by stockholders, to serve on the board of directors of the Company; |
| ● | considering and making recommendations to the board of directors
of the Company regarding the composition and chairmanship of the committees of the board of directors of the Company; |
| ● | developing and making recommendations to the board of directors
of the Company regarding corporate governance guidelines and matters, including in relation to corporate social responsibility; and |
| ● | overseeing periodic evaluations of the performance of the
board of directors of the Company, including its individual directors and committees. |
Risk Oversight
One of the key functions of the board of directors
of the Company is informed oversight of the Company’s risk management process. The board of directors of the Company does not anticipate
having a standing risk management committee, but rather administers this oversight function directly through the board of directors of
the Company as a whole, as well as through various standing committees of the board of directors of the Company that address risks inherent
in their respective areas of oversight. In particular, the board of directors of the Company is responsible for monitoring and assessing
strategic risk exposure, and the Company’s audit committee has the responsibility to consider and discuss the Company’s major
financial risk exposures and the steps its management will take to monitor and control such exposures, including guidelines and policies
to govern the process by which risk assessment and management is undertaken. The audit committee also monitors compliance with legal and
regulatory requirements. The Company’s compensation committee also assesses and monitors whether the Company’s compensation
plans, policies and programs comply with applicable legal and regulatory requirements.
Compensation Committee Interlocks and Insider Participation
Prior to the Business Combination, Mr. Sheridan
served as PCCT’s Co-President. Other than Mr. Sheridan, none of the members of the Company’s compensation committee have ever
been an executive officer or employee of the Company. None of the Company’s executive officers currently serve, or have served during
the last completed fiscal year, on the compensation committee or board of directors of any other entity that has one or more executive
officers that will serve as a member of the board of directors of the Company or the Company’s compensation committee.
Code of Business Conduct and Ethics
The Company has a code of ethics that applies
to all of its executive officers, directors and employees, including its principal executive officer, principal financial officer, principal
accounting officer and controller and persons performing similar functions. The code of ethics is available on the Company’s website,
www.spectaire.com. In addition, the Company intends to post on its website all disclosures that are required by law or the listing
standards of Nasdaq concerning any amendments to, or waivers from, any provision of the code of ethics. The reference to the Company’s
website address does not constitute incorporation by reference of the information contained at or available through the Company’s
website, and you should not consider it to be a part of this Report.
Compensation of Directors and Officers
The board of directors of the Company expects
to review director compensation periodically to ensure that director compensation remains competitive such that the Company is able to
recruit and retain qualified directors.
Executive Compensation
The executive compensation of the Company’s
named executive officers and directors is described in the Proxy Statement/Prospectus in the section entitled “Executive and Director
Compensation” beginning on page 185 thereof and that information is incorporated herein by reference.
Certain Relationships and Related Transactions
Certain relationships and related person transactions
are described in the Proxy Statement/Prospectus in the section entitled “Certain Relationships and Related Person Transactions”
beginning on page 266 thereof and are incorporated herein by reference.
Legal Proceedings
Reference is made to the disclosure regarding
legal proceedings in the section of the Proxy Statement/Prospectus entitled “Information About NewCo Following the Business Combination”
beginning on page 149 thereof, which is incorporated herein by reference.
Market Price of and Dividends on the Registrant’s Common Equity
and Related Stockholder Matters
Market Price and Dividend Information
The market price of and dividends on PCCT’s
common equity, warrants and units and related stockholder matters is described in the Proxy Statement/Prospectus in the Section entitled
“Market Price and Dividend Information” beginning on page 32 thereof and that information is incorporated herein by reference.
The Common Stock and Warrants commenced trading
on Nasdaq under the symbols “SPEC” and “SPECW,” respectively, on October 20, 2023, subject to ongoing review of
the Company’s satisfaction of all listing criteria following the Business Combination, in lieu of the Class A Ordinary Shares and
Cayman Warrants. PCCT’s units ceased trading separately on Nasdaq on October 20, 2023.
Holders of Record
As of the Closing and following the completion
of the Transactions, including the redemption of Class A Ordinary Shares as described above and the consummation of the PIPE Investment,
the Company had 15,344,864 shares of Common Stock outstanding held of record by approximately 33 holders, no shares of preferred stock
outstanding, and Warrants to purchase 21,549,986 shares of Common Stock outstanding held of record by two holders. Such amounts do not
include DTC participants or beneficial owners holding shares through nominee names.
Securities Authorized for Issuance Under Equity Compensation
Plans
Reference is made to the disclosure described
in the Proxy Statement/Prospectus in the section entitled “Proposal No. 6 – The Equity Incentive Plan Proposal” beginning
on page 120 thereof, which is incorporated herein by reference. As described below, the Spectaire Holdings Inc. 2023 Incentive Award Plan
(the “2023 Plan”) and the material terms thereunder, including the authorization of the initial share reserve thereunder,
were approved by PCCT’s shareholders at the extraordinary general meeting of PCCT relating to the Transactions.
Recent Sales of Unregistered Securities
Reference is made to the disclosure set forth
under Item 3.02 of this Report relating to the issuance of shares of Common Stock pursuant to the PIPE Investment and the issuance of
the Additional Warrant, which is incorporated herein by reference.
Description of Registrant’s Securities to be Registered
The Company’s securities are described in
the Proxy Statement/Prospectus in the section entitled “Description of Securities of NewCo” beginning on page 251 thereof
and that information is incorporated herein by reference. As previously announced, the Company’s certificate of incorporation was
approved by PCCT’s shareholders at the Extraordinary General Meeting and became effective as of the Domestication.
Indemnification of Directors and Officers
The indemnification of our directors and officers
is described in the Proxy Statement/Prospectus in the section entitled “Certain Relationships and Related Party Transactions”
beginning on page 266 thereof and that information is incorporated herein by reference.
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Reference is made to the disclosure set forth
under Item 4.01 of this Report relating to the change in the Company’s certifying accountant, which is incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity
The information set forth
in the “Introductory Note—Domestication and Transactions” above is incorporated into this Item 3.02 by reference.
Item 4.01. Changes in Registrant’s Certified Accountant
On October 19, 2023,
the audit committee of the board of directors of the Company approved the engagement of UHY LLP (“UHY”) as the Company’s
independent registered public accounting firm effective immediately following the filing of the Company’s quarterly report on Form
10-Q for the quarter ended September 30, 2023 (the “Effective Time”), to audit the Company’s consolidated financial
statements for the year ended December 31, 2023. UHY served as the independent registered public accounting firm of Legacy Spectaire prior
to the Business Combination. Accordingly, Marcum LLP (“Marcum”), the Company’s independent registered public accounting
firm prior to the Business Combination, was informed that it would be replaced by UHY as the Company’s independent registered public
accounting firm effective immediately following the Effective Time.
Marcum’s report
on the Company’s financial statements as of December 31, 2022 and 2021 and for the year ended December 31, 2022, and for the period
from January 21, 2021 (inception) through December 31, 2021 did not contain any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope or accounting principles except for an explanatory paragraph in such report regarding
substantial doubt about PCCT’s ability to continue as a going concern.
During the period from
January 21, 2021 (inception) through December 31, 2021, the year ended December 31, 2022 and the subsequent period through October 20,
2023, there were no: (i) disagreements with Marcum on any matter of accounting principles or practices, financial statement disclosures
or audited scope or procedures, which disagreements if not resolved to Marcum’s satisfaction would have caused Marcum to make reference
to the subject matter of the disagreement in connection with its report or (ii) reportable events as defined in Item 304(a)(1)(v) of Regulation
S-K.
During the period from
January 21, 2021 (inception) to December 31, 2021, the year ended December 31, 2022 and the interim period through October 20, 2023, the
Company did not consult UHY with respect to either (i) the application of accounting principles to a specified transaction, either completed
or proposed; or the type of audit opinion that might be rendered on the Company’s financial statements, and no written report or
oral advice was provided to the Company by UHY that UHY concluded was an important factor considered by the Company in reaching a decision
as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement, as that
term is described in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act, and the related instructions to Item 304 of Regulation
S-K under the Exchange Act, or a reportable event, as that term is defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act.
The Company has provided
Marcum with a copy of the disclosures made by the Company in response to this Item 4.01 and has requested that Marcum furnish the Company
with a letter addressed to the SEC stating whether it agrees with the statements made by the registrant in response to this Item 304(a)
and, if not, stating the respects in which it does not agree. A letter from Marcum is attached as Exhibit 16.1 to this Report.
Item 5.01. Changes in Control of the Registrant.
The information set forth under the Introductory
Note and Item 2.01 of this Report is incorporated herein by reference.
Item 5.02. Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information set forth above in the sections
titled “Directors and Officers,” “Executive Compensation,” “Certain Relationships and Related Transactions”
and “Indemnification of Directors and Officers” in Item 2.01 to this Report is incorporated herein by reference.
As previously disclosed, at the Extraordinary
General Meeting, the shareholders of PCCT considered and approved the 2023 Plan, which became effective immediately upon the closing of
the Business Combination. A description of the 2023 Plan is included in the Proxy Statement/Prospectus in the section entitled “Proposal
No. 6 – The Equity Incentive Plan Proposal” beginning on page 120 thereof, which is incorporated herein by reference.
The foregoing description of the 2023 Plan does
not purport to be complete and is qualified in its entirety by reference to the full text of the 2023 Plan, which is filed as Exhibit
10.5 to this Report and is incorporated herein by reference.
Item 5.05. Amendments to the Registrant’s Code of Ethics,
or Waiver of a Provision of the Code of Ethics.
In connection with the closing Business Combination,
on October 19, 2023, the board of directors of the Company approved and adopted a new Code of Ethics and Conduct applicable to all employees,
officers and directors of the Company. A copy of the Code of Ethics and Conduct can be found on the Company’s website, www.spectaire.com.
The reference to the Company’s website address does not constitute incorporation by reference of the information contained at or
available through the Company’s website, and you should not consider it to be a part of this Report.
The foregoing description of the Code of Ethics
and Conduct Policy does not purport to be complete and is qualified in its entirety by reference to the full text of the Code of Ethics
and Conduct Policy, which is filed as Exhibit 14.1 to this Report and is incorporated herein by reference.
Item 5.06. Change in Shell Company Status.
As a result of the Business Combination, the Company
ceased to be a shell company. Reference is made to the disclosure in the Proxy Statement/Prospectus in the sections entitled “Proposal
No. 1 – The Business Combination Proposal” beginning on page 105 thereof, which is incorporated herein by reference.
Forward-Looking Statements
This Report contains forward-looking
statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within
the meaning of applicable Canadian securities laws. Forward-looking statements may include, but are not limited to, the anticipated benefits
of the Business Combination, the financial and business performance of the Company, the Company’s anticipated results from operations
in future periods and the products and services offered by the Company and the markets in which it operates. In addition, any statements
that refer to projections (including EBITDA and cash flow), forecasts or other characterizations of future events or circumstances, including
any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,”
“believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,”
“forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,”
“potential,” “predict,” “should,” “would” and other similar words and expressions, but
the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements
are based on the current expectations of the management of the Company and are inherently subject to uncertainties and changes in circumstances
and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be
those that have been anticipated. Forward-looking statements reflect material expectations and assumptions, including, without limitation,
expectations, and assumptions relating to: the future price of metals; the stability of the financial and capital markets. Such expectations
and assumptions are inherently subject to uncertainties and contingencies regarding future events and, as such, are subject to change.
Forward-looking statements involve a number of risks, uncertainties or other factors that may cause actual results or performance to be
materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are
not limited to, those discussed and identified in public filings made by the Company with the SEC and the following: the outcome of any
legal proceedings that may be instituted against the Company following announcement of the Business Combination; the Company’s ability
to operate as a going concern; the Company’s requirement of significant additional capital; the Company’s limited operating
history; the Company’s history of losses; the Company’s ability to attract qualified management; the Company’s ability
to adapt to rapid and significant technological change and respond to introductions of new products in order to remain competitive; the
Company receives a significant portion of its revenues from a small number of customers and the loss of, or nonperformance by, one or
more significant customers could adversely affect the Company’s business; the Company relies heavily on manufacturing operations
to produce the products and the business could be adversely affected by disruptions of the manufacturing operation; the Company’s
future growth depends on a single product; changes in governmental regulations may reduce demand for the Company’s products or increase
the Company’s expenses; the effects of global health crises on the Company’s business plans, financial condition and liquidity;
changes or disruptions in the securities markets; legislative, political or economic developments; the need to obtain permits and comply
with laws and regulations and other regulatory requirements; risks of accidents, equipment breakdowns, and labor disputes or other unanticipated
difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in development programs; potential future litigation;
and the Company’s lack of insurance covering all of the Company’s operations.
Should one or more of these
risks or uncertainties materialize or should any of the assumptions made by the management of the Company prove incorrect, actual results
may vary in material respects from those projected in these forward-looking statements.
All subsequent written and
oral forward-looking statements concerning the Business Combination or other matters addressed herein and attributable to the Company
or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein.
Except to the extent required by applicable law or regulation, the Company undertakes no obligation to update these forward-looking statements
to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.
Item 9.01. Financial Statement and Exhibits.
| (a) | Financial Statements of Businesses
Acquired. |
The audited consolidated financial statements
of Legacy Spectaire as of and for the years ended December 31, 2022 and 2021 and the related notes are included in the Proxy Statement/Prospectus
beginning on page F-51 of the Proxy Statement/Prospectus, and are incorporated herein by reference.
The unaudited condensed consolidated financial
statements of Legacy Spectaire as of and for the six months ended June 30, 2023 and 2022 and the related notes are included in the Proxy
Statement/Prospectus beginning on page F-72 of the Proxy Statement/Prospectus, and are incorporated herein by reference.
| (b) | Pro forma financial information. |
The unaudited pro forma condensed combined financial information of
the Company as of and for the six months ended June 30, 2023 and for the year ended December 31, 2022 are set forth in Exhibit 99.1 hereto
and are incorporated herein by reference.
Exhibit
Number |
|
Description |
1.1 |
|
Underwriting Agreement, dated as of October 27, 2021, by and among the Company and Jefferies LLC (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 1, 2021). |
|
|
|
1.2 |
|
Second Underwriting Agreement Amendment, dated October 16, 2023, by and between the Company and Jefferies LLC (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 19, 2023). |
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1.3 |
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Third Underwriting Agreement Amendment, dated October 18, 2023, by and between the Company and Jefferies LLC (incorporated by reference to Exhibit 1.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 19, 2023). |
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|
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2.1* |
|
Agreement and Plan of Merger, dated as of January 16, 2023, by and among PCCT, Merger Sub and Spectaire Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-4 filed with the SEC on September 27, 2023). |
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3.1 |
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Certificate of Incorporation of Spectaire Holdings Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 19, 2023). |
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3.2 |
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Bylaws of Spectaire Holdings Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 19, 2023). |
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4.1 |
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Specimen Common Stock Certificate. (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-4 filed with the SEC on September 27, 2023). |
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4.2 |
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Warrant Agreement, dated October 27, 2021, between PCCT and Continental Stock Transfer & Trust Company, as warrant agent.(incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-4 filed with the SEC on September 27, 2023). |
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10.1 |
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PIPE Subscription Agreement, dated October 11, 2023, by and between PCCT and the PIPE Investor. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 12, 2023). |
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10.2 |
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Warrant to Purchase Common Stock, dated as of October 19, 2023, issued by the Company to Arosa. |
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10.3 |
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Amended and Restated Registration Rights Agreement, dated as of October 19, 2023, by and among the Company, the Sponsor, certain affiliates of the Sponsor and certain equityholders of Legacy Spectaire named therein. |
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10.4 |
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Lock-Up Agreement, dated as of October 19, 2023, by and among the Company, the Sponsor and the other parties thereto. |
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10.5 |
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Lock-Up Agreement, dated as of October 19, 2023, by and among the Company and certain equityholders of Legacy Spectaire named therein. |
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10.6 |
|
Forward Purchase Agreement Amendment, dated October 18, 2023, by and between Meteora Special Opportunity Fund I, LP, Meteora Capital Partners, LP, Meteora Select Trading Opportunities Master, LP and Meteora Strategic Capital, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 19, 2023). |
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10.7 |
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Forward Purchase Agreement, dated October 16, 2023, by and between the Company and Polar (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 19, 2023). |
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10.8 |
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Amended and Restated Working Capital Note, dated October 17, 2023, by and between the Company and the Sponsor (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on October 19, 2023). |
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10.9 |
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Second Amended and Restated Extension Note, dated October 17, 2023, by and between the Company and the Sponsor (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on October 19, 2023). |
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10.10 |
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Subscription Agreement, dated October 4, 2023, by and between the Company and Polar (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 10, 2023). |
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10.11 |
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Sponsor Letter Agreement, dated October 4, 2023, between the Company and the Sponsor (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 10, 2023). |
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10.12 |
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Form of Spectaire Holdings Inc. 2023 Incentive Award Plan (included as Annex H to the proxy statement/prospectus). |
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10.13 |
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Form of Indemnification Agreement. |
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14.1 |
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Code of Business Conduct and Ethics of the Company. |
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16.1 |
|
Letter from Marcum LLP to the Securities and Exchange Commission. |
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21.1 |
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Subsidiaries of the Company. |
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99.1 |
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Unaudited pro forma condensed combined financial information of the Company for the six months ended June 30, 2023 and the year ended December 31, 2022. |
| * | Certain of the exhibits and schedules
to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish a copy of all omitted
exhibits and schedules to the SEC upon its request. |
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.
|
Spectaire Holdings Inc. |
Date: October 27, 2023 |
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By: |
/s/ Brian Semkiw |
|
Name: |
Brian Semkiw |
|
Title: |
Chief Executive Officer |
17
Exhibit 10.2
Execution Version
SPECTAIRE HOLDINGS
INC.
WARRANT TO PURCHASE COMMON STOCK
Warrant No.: 001
Number of Shares of Common Stock: 2,194,453
Date of Issuance: October 19, 2023 (“Issuance Date”)
Spectaire Holdings
Inc., a Delaware corporation (which for the avoidance of doubt includes any Successor Entity, the “Company”),
hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Arosa
Multi-Strategy Fund LP, a Cayman exempted limited partnership (“Arosa”), the registered holder hereof or its
permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the
Company, at the Exercise Price (as defined below) then in effect, at any time or times on or after the Issuance Date (the
“Initial Exercisability Date”), but not after 11:59 p.m., New York time, on the Expiration Date, (as defined
below), TWO MILLION ONE HUNDRED NINETY-FOUR THOUSAND FOUR HUNDRED AND FIFTY-THREE (2,194,453) fully paid non-assessable shares of
Common Stock (as defined below), subject to adjustment as provided herein (the “Warrant Shares”). Except as
otherwise defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, this “Warrant”), shall have the meanings set forth in
Section 16. This Warrant is one of the Warrants to purchase Common Stock (the “Warrants”) issued in connection
with that certain Loan Agreement, dated as of March 31, 2023, by and among Spectaire Inc., a Delaware corporation and a wholly owned
subsidiary of the Company, as Borrower, and Arosa, as Lender, and certain other parties thereto.
1. EXERCISE OF WARRANT.
(a)
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in
Section 1(e)), this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability Date, in whole
or in part, by delivery (whether via facsimile, electronic mail or otherwise) of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading Day
following delivery of the Exercise Notice, the Holder shall make payment to the Company of an amount equal to the Exercise Price in effect
on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate
Exercise Price”) in cash by wire transfer of immediately available funds. The Holder shall not be required to deliver the original
Warrant in order to effect an exercise hereunder, nor shall any ink-original signature or medallion guarantee (or other type of guarantee
or notarization) with respect to any Exercise Notice be required. Execution and delivery of the Exercise Notice with respect to less
than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares. On or before the first (1st)
Trading Day following the date on which the Company has received the applicable Exercise Notice, the Company shall transmit by facsimile
or electronic mail an acknowledgment of confirmation of receipt of the Exercise Notice, in the form attached to the Exercise Notice,
to the Holder and the Company’s transfer agent (the “Transfer Agent”). So long as the Holder delivers the Aggregate
Exercise Price on or prior to the first (1st) Trading Day following the date on which
the Exercise Notice has been delivered to the Company, then on or prior to the earlier of (i) the second (2nd)
Trading Day and (ii) the Standard Settlement Period (as defined below), in each case following the date on which the Exercise Notice
has been delivered to the Company, or, if the Holder does not deliver the Aggregate Exercise Price on or prior to the first (1st)
Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior to the first (1st)
Trading Day following the date on which the Aggregate Exercise Price is delivered (the “Share Delivery Date”), the
Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise
to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if
the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier
to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the
Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall
be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares
via DTC, if any, including without limitation, for same day processing. Upon delivery of the Exercise Notice, the Holder shall be deemed
for all corporate purposes to have become the holder of record and beneficial owner of the Warrant Shares with respect to which this
Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of
delivery of the certificates evidencing such Warrant Shares, as the case may be. If this Warrant is physically delivered to the Company
in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted
for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable
and in no event later than three (3) Trading Days after any exercise and at its own expense, issue and deliver to the Holder (or its
designee) a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares issuable immediately
prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional
Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded
to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including,
without limitation, fees and expenses of the Transfer Agent) which may be payable with respect to the issuance and delivery of Warrant
Shares upon exercise of this Warrant. The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms
and subject to the conditions hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to
enforce the same, or any setoff, counterclaim, recoupment, limitation or termination; provided, however, that the Company
shall not be required to deliver Warrant Shares with respect to an exercise prior to the Holder’s delivery of the Aggregate Exercise
Price with respect to such exercise.
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $0.01, subject to adjustment as provided herein.
(c) Company’s
Failure to Timely Deliver Securities. If either (I) the Company shall fail for any reason or for no reason to issue to the
Holder on or prior to the applicable Share Delivery Date, if (x) the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, a certificate for the number of shares of Common Stock to which the Holder is entitled and register
such Common Stock on the Company’s share register or (y) if the Transfer Agent is participating in the DTC Fast Automated
Securities Transfer Program, to credit the Holder’s balance account with DTC, for such number of shares of Common Stock to
which the Holder is entitled upon the Holder’s exercise of this Warrant, (II) the Company shall not within thirty (30) days
after the Issuance Date file with the SEC a registration statement for the resale by the Holder or any transferee therefrom of the
Warrant Shares (which registration statement shall be declared effective by the SEC no later than seventy five (75) days after the
Issuance Date, the “Registration Statement”), or (III) a registration statement (which may be the Registration
Statement) covering the issuance or resale of the Warrant Shares that are the subject of the Exercise Notice (the “Exercise
Notice Warrant Shares”) is not available for the issuance or resale, as applicable, of such Exercise Notice Warrant Shares
and (x) the Company fails to promptly, but in no event later than one (1) Business Day after such registration statement becomes
unavailable, to so notify the Holder and (y) the Company is unable to deliver the Exercise Notice Warrant Shares electronically
without any restrictive legend by crediting such aggregate number of Exercise Notice Warrant Shares to the Holder’s or its
designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system (the event described in the
immediately foregoing clause (III) is hereinafter referred as a “Notice Failure”) (provided, that, the
events described in clauses (II), (III) and (III) above shall only apply to the extent the Company (or, for the avoidance of doubt,
any Successor Entity) is a Registered Company), then, in addition to all other remedies available to the Holder, if on or prior to
the applicable Share Delivery Date either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, the Company shall fail to issue and deliver a certificate to the Holder and register such shares of Common Stock
on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer
Program, credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below or (II) a
Notice Failure occurs, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) Common
Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder
anticipated receiving from the Company, then the Company shall, within three (3) Trading Days after the Holder’s request and
in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price
(including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the
“Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such
shares of Common Stock) or credit such Holder’s balance account with DTC for such shares of Common Stock shall terminate, or
(ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such shares of Common Stock
or credit such Holder’s balance account with DTC, as applicable, and pay cash to the Holder in an amount equal to the excess
(if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) any trading price of the
Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise Date
and ending on the applicable Share Delivery Date. Nothing shall limit the Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver certificates representing Warrant Shares (or to electronically
deliver such Warrant Shares) upon the exercise of this Warrant as required pursuant to the terms hereof. While this Warrant is
outstanding, the Company shall cause its transfer agent to participate in the DTC Fast Automated Securities Transfer Program. In
addition to the foregoing rights, (i) if the Company fails to deliver the applicable number of Warrant Shares upon an exercise
pursuant to Section 1 by the applicable Share Delivery Date, then the Holder shall have the right to rescind such exercise in whole
or in part and retain and/or have the Company return, as the case may be, any portion of this Warrant that has not been exercised
pursuant to such Exercise Notice; provided that the rescission of an exercise shall not affect the Company’s obligation to
make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and (ii) if a
registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares that are
subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Exercise Notice Warrant Shares and
the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such registration statement and
the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive
legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the
Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder
shall have the option, by delivery of notice to the Company, to rescind such Exercise Notice in whole or in part and retain or have
returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided
that the rescission of an Exercise Notice shall not affect the Company’s obligation to make any payments that have accrued
prior to the date of such notice pursuant to this Section 1(c) or otherwise.
(d) Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company
shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section
11.
(e) Limitation
on Exercise. The Company and Holder acknowledge and agree that, to the extent the shares of Common Stock are listed on an Eligible
Market, (a) the total number of shares of Common Stock resulting from the exercise of this Warrant by the Holder or its assigns cannot
exceed 19.99% of the total number of shares of Common Stock outstanding immediately prior to the date hereof (as adjusted for any stock
dividend, stock split, stock combination, reclassification or similar transaction), and (b) the holders of the shares of Common Stock
resulting from the exercise of this Warrant cannot be entitled to more than 19.99% of the total voting power of the Company’s equity
securities outstanding immediately prior to the date hereof (as adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction).
(f) Required
Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this
Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as shall be necessary
to satisfy the Company’s obligation to issue shares of Common Stock under the Warrants then outstanding (without regard to any limitations
on exercise) (the “Required Reserve Amount”); provided that at no time shall the number of shares of Common
Stock reserved pursuant to this Section 1(f) be reduced other than in connection with any exercise of Warrants or such other event covered
by Section 2(c) below. The Required Reserve Amount (including, without limitation, each increase in the number of shares so reserved)
shall be allocated pro rata among the holders of the Warrants based on the number of shares of Common Stock issuable upon exercise of
Warrants held by each holder thereof on the Issuance Date (without regard to any limitations on exercise) (the “Authorized Share
Allocation”). In the event that a holder shall sell or otherwise transfer any of such holder’s Warrants, each transferee
shall be allocated a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated
to any Person which ceases to hold any Warrants shall be allocated to the remaining holders of Warrants, pro rata based on the number
of shares of Common Stock issuable upon exercise of the Warrants then held by such holders thereof (without regard to any limitations
on exercise).
(g) Insufficient
Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of
authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance the Required Reserve Amount (an
“Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the
Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve
Amount for this Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after
the date of the occurrence of an Authorized Share Failure, but in no event later than seventy-five (75) days after the occurrence of
such Authorized Share Failure, the Company shall hold a meeting of its shareholders for the approval of an increase in the number of
authorized shares of Common Stock. In connection with such meeting, the Company shall provide each shareholder with a proxy
statement and shall use its best efforts to solicit its shareholders’ approval of such increase in authorized shares of Common
Stock and to cause its board of directors to recommend to the shareholders that they approve such proposal. Notwithstanding the
foregoing, if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the
shares of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common
Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information
Statement on Schedule 14C.
(h)
Beneficial Ownership. Notwithstanding anything to the contrary contained herein, the Company, to the extent it is a Registered
Company, shall not effect the exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion
of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be null and void and treated as if
never made, to the extent that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively
would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the number of shares of Common Stock of the
Registered Company outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares
of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder
or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities
of the Registered Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including
the other Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise
analogous to the limitation contained in this Section 1(h), and notwithstanding anything to the contrary contained herein, any such unexercised
portion of such Warrant and/or unexercised or unconverted portion of any other securities referred to in clauses (A) and (B) above, shall
be deemed not to be exercisable or convertible, as the case may be, for sixty-one (61) days after the related date of determination.
For purposes of this Section 1(h), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For
purposes of this Warrant, in determining the number of outstanding shares of Common Stock of the Registered Company the Holder may acquire
upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the Registered Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q
and Current Reports on Form 8-K or other public filing with the Securities and Exchange Commission (the “SEC”), as
the case may be, (y) a more recent public announcement by the Registered Company or (z) any other written notice by the Registered Company
or the Transfer Agent setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”).
If the Registered Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common
Stock is less than the Reported Outstanding Share Number, the Registered Company shall (i) notify the Holder in writing of the number
of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial
ownership, as determined pursuant to this Section 1(h), to exceed the Maximum Percentage, the Holder must notify the Registered Company
of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is
reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the Registered Company shall return to
the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request
of the Holder, the Registered Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder
the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Registered Company, including this Warrant, by the Holder and
any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance
of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially
own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section
13(d) of the Exchange Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate
beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall
be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable
after the issuance of the Excess Shares has been deemed null and void, the Registered Company shall return to the Holder the exercise
price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Registered Company, the Holder may from time
to time increase or decrease the Maximum Percentage to any other percentage as specified in such notice; provided that (i) any
such increase in the Maximum Percentage will not be effective until the sixty-first (61st)
day after such notice is delivered to the Registered Company and (ii) any such increase or decrease will apply only to the Holder and
the other Attribution Parties and not to any other holder of Warrants that is not an Attribution Party of the Holder. For purposes of
clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed
to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act.
No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of
this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of this Section 1(h) to the extent necessary to correct this
paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained
in this Section 1(h) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation
contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.
2. ADJUSTMENT OF
EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time
as follows:
(a) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares
of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of the shares
of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may be.
(b) Voluntary
Adjustment By Company. Subject to the prior consent of such Eligible Market, if applicable, the Company may at any time during the
term of this Warrant reduce the then current Exercise Price and/or Adjusted Exercise Price, as applicable, to any amount and for any period
of time deemed appropriate by the Board of Directors of the Company.
(c) Adjustment
Upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Issuance Date subdivides (by any
stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price and/or Adjusted Exercise Price, as applicable, in effect immediately prior to such
subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at
any time on or after the Issuance Date combines (by combination, reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the Exercise Price and/or Adjusted Exercise Price, as
applicable, in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will
be proportionately decreased. Any adjustment under this Section 2(e) shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(d) Other
Events. If, prior to the Expiration Date, any event occurs of the type contemplated by the provisions of this Section 2 but not expressly
provided for by such provisions, then the Company’s Board of Directors will, in good faith, make an appropriate adjustment in the
Exercise Price and/or Adjusted Exercise Price, as applicable, and the number of Warrant Shares as mutually determined by the Company’s
Board of Directors and the Required Holders, each acting in good faith, so as to protect the rights of the Holder; provided that
no such adjustment pursuant to this Section 2(d) will increase the Exercise Price and/or Adjusted Exercise Price, as applicable, or decrease
the number of Warrant Shares as otherwise determined pursuant to this Section 2.
3. RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if, on or after the Issuance Date and on
or prior to the Expiration Date, the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire
its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution
of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum
Percentage) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that to the extent that the Holder’s right to participate in any such Distribution would result in the Holder and
the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution
to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and
beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until
such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage,
at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution
or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTION.
(a) Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time on or after the Issuance Date and on or prior
to the Expiration Date the Company (i) grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without
limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such
Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for
the grant, issuance or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to
beneficial ownership of such Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such
Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto
would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder
shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent
Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation), or (ii) conducts any
Pro Rata Repurchase Offer, the Holder shall be permitted to (but shall not be obligated to) participate, in whole or in part, on an
as-converted basis, provided that, notwithstanding any other provision hereof, such participation may at the election of the Holder
be conditioned upon the consummation of such transaction, in which case such participation shall not be deemed to be effective until
immediately prior to the consummation of such transaction.
(b) Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in
writing, pursuant to written agreements in form and substance satisfactory to the Required Holders, all of the obligations of the
Company under this Warrant and all other Transaction Documents in accordance with the provisions of this Section 4(b), including
agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant, but which is exercisable for a corresponding number of
shares of capital stock equivalent to the shares of Common Stock issuable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the
exercise price hereunder to such shares of capital stock (taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of
capital stock and such exercise price being for the purpose of appropriately reflecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction, the
Successor Entity shall succeed to, and be substituted for the Company (so that from and after the date of such Fundamental
Transaction, each and every provision of this Warrant referring to the “Company” shall instead refer to the Successor
Entity), and the Successor Entity may exercise every prior right and power of the Company and shall assume all prior obligations of
the Company under this Warrant with the same effect as if the Successor Entity had been named as the Company in this Warrant. On or
prior to the consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there
shall be issued upon exercise of this Warrant at any time after the consummation of the Fundamental Transaction, in lieu of the
shares of Common Stock (or other securities, cash, assets or other property purchasable upon the exercise of this Warrant prior to
such Fundamental Transaction), such shares of stock, securities, cash, assets or any other property whatsoever (including warrants
or other purchase or subscription rights), which for purposes of clarification may continue to be shares of Common Stock, if any,
that the Holder would have been entitled to receive upon the happening of such Fundamental Transaction or the record, eligibility or
other determination date for the event resulting in such Fundamental Transaction, had this Warrant been exercised immediately prior
to such Fundamental Transaction or the record, eligibility or other determination date for the event resulting in such Fundamental
Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of
this Warrant. Notwithstanding the foregoing, and without limiting the provisions of Section 1(f) hereof, the Holder may elect, at
its sole discretion, by delivery of a written notice to the Company, to permit a Fundamental Transaction without the required
assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any
Fundamental Transaction pursuant to which holders of Common Stock are entitled to receive securities, cash, assets or other property
with respect to or in exchange for Common Stock (a “Corporate Event”), the Company shall make appropriate
provision to ensure that, and any applicable Successor Entity shall ensure that, the Holder will thereafter have the right to
receive upon exercise of this Warrant at any time after the consummation of the Corporate Event, shares of Common Stock or capital
stock of the Successor Entity or, if so elected by the Holder, in lieu of the shares of Common Stock (or other securities, cash,
assets or other property) (except such items still issuable under Sections 3 and 4(a), which shall continue to be receivable
thereafter) issuable upon exercise of this Warrant prior to such Corporate Event, such shares of stock, securities, cash, assets or
any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been
entitled to receive upon the consummation of such Corporate Event or the record, eligibility or other determination date for the
event resulting in such Corporate Event, had this Warrant been exercised immediately prior to such Corporate Event or the record,
eligibility or other determination date for the event resulting in such Corporate Event (without regard to any limitations on
exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably
satisfactory to the Holder. The provisions of this Section 4(b) shall apply similarly and equally to successive Fundamental
Transactions and Corporate Events.
(c)
Notwithstanding the foregoing, in the event of Fundamental Transaction in which the aggregate consideration to the Holders as a result
of its Warrant Shares would be less than $15,000,000, at the request of the Holder delivered before the ninetieth (90th)
day after the consummation of such Fundamental Transaction, the Company (or the Successor Entity) shall purchase this Warrant from the
Holder by paying to the Holder, within five (5) Business Days after such request (or, if later, on the effective date of the Fundamental
Transaction), cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of
such Fundamental Transaction.
5. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws, or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all
times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect the rights of the
Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary
or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise
of this Warrant, and (iii) shall, so long as any of the Warrants are outstanding, take all action necessary to reserve and keep available
out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of the Warrants, the number
of shares of Common Stock as shall from time to time be necessary to effect the exercise of the Warrants then outstanding (without regard
to any limitations on exercise).
6. WARRANT
HOLDER NOT DEEMED A SHAREHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or be deemed the holder of capital stock of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity
as the Holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to
any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder
of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing
contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of
this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company or by creditors
of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other
information given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders.
7. REISSUANCE OF WARRANTS.
(a) Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may
request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number
of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing
the right to purchase the number of Warrant Shares not being transferred.
(b) Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the
Company in customary form (but without the obligation to post a bond) and, in the case of mutilation, upon surrender and cancellation
of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the
right to purchase the Warrant Shares then underlying this Warrant.
(c) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company,
for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant
Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares
as is designated by the Holder at the time of such surrender.
(d) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or
Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the
other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.
8. NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in writing,
(i) if delivered (a) from within the domestic United States, by first-class registered or certified airmail, or nationally
recognized overnight express courier, postage prepaid, electronic mail or by facsimile or (b) from outside the United States, by
International Federal Express, electronic mail or facsimile, and (ii) will be deemed given (A) if delivered by first-class
registered or certified mail domestic, three (3) Business Days after so mailed, (B) if delivered by nationally recognized overnight
carrier, one (1) Business Day after so mailed, (C) if delivered by International Federal Express, two (2) Business Days after so
mailed and (D) if delivered by electronic mail, when sent (provided that such sent email is kept on file (whether electronically or
otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient’s
email server that such e-mail could not be delivered to such recipient) and (E) if delivered by facsimile, upon electronic
confirmation of receipt of such facsimile, and will be delivered and addressed as follows:
| (i) | if to the Company, to: |
Spectaire Holdings Inc.
155 Arlington St.
Watertown, MA 02472
Attention: Leonardo Fernandes
E-Mail: lfernandes@spectaire.com
(ii) if
to the Holder, at such address or other contact information delivered by the Holder to Company or as is on the books and records of the
Company.
The Company shall provide the Holder
with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action
and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately
upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and
(ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend
or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities
or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights
to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided in each case that such information shall
be made known to the public prior to or in conjunction with such notice being provided to the Holder. It is expressly understood and agreed
that the time of exercise specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by
the Company.
9. AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may take
any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written
consent of the Holder.
10. GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all
questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of
New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City
of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to
the Company at the address set forth in Section 8(i) above or such other address as the Company subsequently delivers to the Holder
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be
deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other
jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for
such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
11. DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within two
(2) Business Days of receipt of the Exercise Notice or other event giving rise to such dispute, as the case may be, to the Holder.
If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares
within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the
Company shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of the Exercise
Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic
calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense the
investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the
Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations.
Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.
12. REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and any other Transaction Documents, at law or in equity (including a decree of specific performance
and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the
Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in
the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies,
to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
13. TRANSFER;
DTC. This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the
Company. Promptly, but in no event later than thirty (30) days after the Issuance Date, the Company shall undertake to provide for this
Warrant to be eligible and subject to the DTC system.
14. SEVERABILITY;
CONSTRUCTION; HEADINGS. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or
unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of
such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified
continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred
upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s). This Warrant shall be deemed to be jointly drafted by the Company and all the Buyers and shall not be
construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form
part of, or affect the interpretation of, this Warrant.
15. DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in good faith
determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company or its subsidiaries,
to the extent the Company is a Registered Company, the Company shall contemporaneously with any such receipt or delivery publicly disclose
such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice
contains material, nonpublic information relating to the Company or its subsidiaries, the Company so shall indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating
to such notice do not constitute material, nonpublic information relating to the Company or its subsidiaries.
16. CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “Adjusted
Exercise Price” means, with respect to any issuance or sale of Common Stock or Common Stock Equivalents, as contemplated by
Section 2(a), the product of (A) the Exercise Price in effect immediately prior to such issuance or sale of Common Stock or Common Stock
Equivalents and (B) a fraction, (x) the numerator of which shall be the sum of (I) the product of (1) the number of shares of Common Stock
outstanding (on a fully diluted basis) immediately prior to such issuance or sale and (2) the consideration per share (or its equivalent)
to be received in such transaction plus (II) the aggregate consideration, if any, received by the Company upon such issuance or sale,
and (y) the denominator of which shall be the Initial Valuation; provided, that in no event shall such adjustment result in an
Exercise Price per share which is less than the par value per Warrant Share.
(b) “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control
with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly
or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct
or cause the direction of the management and policies of such Person whether by contract or otherwise.
(c) “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds
or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the Holder’s
investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing,
(iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other
Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated with the Holder’s and the other
Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the purpose of the foregoing is to subject collectively
the Holder and all other Attribution Parties to the Maximum Percentage.
(d)
“Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg determined as of the day immediately following the first public announcement of the
applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental
Transaction is consummated, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury
rate for a period equal to the remaining term of this Warrant as of such date of request, (ii) an expected volatility equal to the
greater of 75% and the 100 day volatility obtained from the HVT function on Bloomberg as of the day immediately following the public
announcement of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the
Fundamental Transaction is consummated, (iii) the underlying price per share used in such calculation shall be the greater of (A)
the sum of the price per share being offered in cash, if any, plus the per share value of any non-cash consideration, if any, being
offered in the Fundamental Transaction and (B) the one (1) day Weighted Average Price the date immediately following the public
announcement of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the
Fundamental Transaction is consummated, (iv) a zero cost of borrow and (v) a 360 day annualization factor.
(e) “Bloomberg” means Bloomberg Financial Markets.
(f) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.
(g) “Common
Stock” means (i) the Company’s Common Stock, par value $0.0001 per share, and (ii) any capital stock into which such Common
Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.
(h) “Common
Stock Equivalents” means either preferred stock or subordinated convertible debt, that is in each case (x)is convertible into
Common Stock and (y) that has either a maturity of at least three (3) years (with no redemption at the option of the holder prior to such
maturity) or in the case of preferred stock, is perpetual.
(i) “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable
for shares of Common Stock.
(j) “Eligible
Market” means The NASDAQ Capital Market, the NYSE American LLC, The NASDAQ Global Select Market, The NASDAQ Global Market or
The New York Stock Exchange, Inc.
(k) “Expiration
Date” means the date sixty (60) months after the Initial Exercisability Date or, if such date falls on a day other than a Business
Day or, to the extent the shares of Common Stock are listed on an Eligible Market, on which trading does not take place on such Eligible
Market (a “Holiday”), the next day that is not a Holiday.
(l)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not
the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in
Rule 1-02 of Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow
the Company to be subject to or have its shares of Common Stock be subject to or party to one or more Subject Entities making, a
purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common
Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities
making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not
outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any
Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in
Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of
arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either
(x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as
if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or
party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common
Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of
at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its shares of Common Stock,
(B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related
transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition, purchase,
assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation,
business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or
reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power
represented by issued and outstanding shares of Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by
issued and outstanding shares of Common Stock not held by all such Subject Entities as of the Issuance Date calculated as if any
shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting
power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow
such Subject Entities to effect a statutory short form merger or other transaction requiring other shareholders of the Company to
surrender their Common Stock without approval of the shareholders of the Company or (C) directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other
instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case
this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition
to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the
intended treatment of such instrument or transaction.
(m) “Group”
means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.
(n) “Initial Valuation” means $50,000,000.
(o) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(p) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity whose
common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder, any other market,
exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity designated by the Holder
or in the absence of such designation, such Person or entity with the largest public market capitalization as of the date of consummation
of the Fundamental Transaction.
(q) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.
(r)
“Pro Rata Repurchase Offer” means any offer to purchase shares of Common Stock by the Company or any Affiliate
thereof pursuant to (i) any tender offer or exchange offer subject to Section 13(e) or 14(e) of the Exchange Act or Regulation 14E
promulgated thereunder or (ii) any other offer available to substantially all holders of Common Stock (subject to satisfaction of
any conditions to participation therein such as those relating to minimum holding percentages or accredited status) to purchase or
exchange their shares of Common Stock, in the case of both clauses (i) and (ii), whether for cash, shares of capital stock of the
Company, other securities of the Company, evidences of indebtedness of the Company or any other Person, or any other property
(including, without limitation, shares of capital stock, other securities or evidences of indebtedness of a Subsidiary of the
Company), or any combination thereof, effected while the Warrants are outstanding. The “effective date” of a Pro Rata
Repurchase Offer shall mean the date of acceptance of shares for purchase or exchange by the Company under any tender or exchange
offer which is a Pro Rata Repurchase Offer or the date of purchase with respect to any Pro Rata Repurchase Offer that is not a
tender or exchange offer.
(s) “Registered
Company” means the Company at such time it is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act.
(t) “Required
Holders” means the holders of the Warrants representing at least a majority of the shares of Common Stock underlying the Warrants
then outstanding.
(u) “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary
Trading Market with respect to the Common Stock as in effect on the date of delivery of the Exercise Notice.
(v) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(w) “Successor
Entity” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the Company or the Parent
Entity) with which such Fundamental Transaction shall have been entered into.
(x) “Trading
Day” means, (x) to the extent the shares of Common Stock are listed on an Eligible Market, any day on which the Common Stock
is traded on such Eligible Market, or, if such Eligible Market is not the principal trading market for the Common Stock, then on the principal
securities exchange or securities market on which the Common Stock is then traded and (y) otherwise, any day on which banking institutions
are required by law to be open in The City of New York.
(y) “Transaction
Documents” means any agreement entered into by and between the Company and the Holder, as applicable.
(z)
“Weighted Average Price” means, to the extent the shares of Common Stock are listed on an Eligible Market, for
any security as of any date, the dollar volume-weighted average price for such security on such Eligible Market during the period
beginning at 9:30:01 a.m., New York time (or such other time as such Eligible Market publicly announces is the official open of
trading), and ending at 4:00:00 p.m., New York time (or such other time as such Eligible Market publicly announces is the official
close of trading), as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not apply,
the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such
security during the period beginning at 9:30:01 a.m., New York time (or such other time as such market publicly announces is the
official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as such market publicly announces is the
official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security
by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest closing ask price of any of the market
makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC
Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing bases,
the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and
the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall
be resolved pursuant to Section 11 with the term “Weighted Average Price” being substituted for the term “Exercise
Price.” All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination,
reclassification or other similar transaction during the applicable calculation period.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned
has executed this Warrant to Purchase Common Stock as of the date first set forth above.
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SPECTAIRE HOLDINGS INC. |
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By: |
/s/ Leonardo Fernandes |
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Name: |
Leonardo Fernandes |
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Title: |
Chief Financial Officer |
[Signature Page to Warrant to Purchase
Common Stock]
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED
HOLDER TO EXERCISE THIS WARRANT TO PURCHASE COMMON STOCK
SPECTAIRE HOLDINGS INC.
The
undersigned holder hereby exercises the right to purchase
of the shares of Common Stock (“Warrant Shares”) of Spectaire Holdings Inc., a Delaware corporation (the
“Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.
1. Form of Exercise Price.
The Holder intends that payment of the Exercise Price shall be made as a “Cash Exercise” with respect to
Warrant Shares.
2. Payment of Exercise
Price. The holder shall pay the Aggregate Exercise Price in the sum of $
to the Company in accordance with the terms of the Warrant.
3.
Delivery of Warrant Shares. The Company shall deliver to the holder
Warrant Shares in accordance with the terms of the Warrant.
Date:
Name of Registered Holder
ACKNOWLEDGMENT
The Company hereby
acknowledges this Exercise Notice and hereby directs [TRANSFER AGENT] to issue the above indicated number of shares of Common Stock on
or prior to the applicable Share Delivery Date.
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SPECTAIRE HOLDINGS INC. |
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By: |
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Name: |
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Title: |
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A-1
Exhibit 10.3
Execution Version
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of October 19, 2023, is made and entered into by and among
Spectaire Holdings Inc., a Delaware corporation (the “Company”) (formerly known as Perception Capital Corp. II, a
Cayman Islands exempted company prior to its domestication as a Delaware corporation), Perception Capital Partners II LLC, a Delaware
limited liability company (“Sponsor Holdco”), the Persons set forth on Schedule I hereto (together with the
Sponsor Holdco, the “Sponsors” and each, a “Sponsor”) and certain former stockholders of Spectaire
Inc., a Delaware corporation (“Spectaire”), set forth on Schedule II hereto (such stockholders, the “Spectaire
Holders” and, collectively with the Sponsors and any person or entity who hereafter becomes a party to this Agreement pursuant
to Section 5.2 or Section 5.10 of this Agreement, the “Holders” and each, a “Holder”).
WHEREAS , the Company
and certain of the Sponsors are party to that certain Registration Rights Agreement, dated as of October 27, 2021 (the “Original
RRA”);
WHEREAS , the Company
has entered into that certain Agreement and Plan of Merger, dated as of January 16, 2023, (as it may be amended or supplemented from time
to time, the “Merger Agreement”), by and among the Company, Perception Spectaire Merger Sub Corp., a Delaware corporation
and a direct wholly owned subsidiary of the Company (“Merger Sub”), and Spectaire, pursuant to which, among other things,
on the date hereof, Merger Sub will merge with and into Spectaire, with Spectaire continuing on as the surviving entity and a wholly owned
subsidiary of the Company, on the terms and conditions set forth therein;
WHEREAS, prior to the
date hereof and subject to the conditions of the Merger Agreement, the Company migrated to and domesticated as a Delaware corporation
in accordance with Section 388 of the Delaware General Corporation Law, as amended, and the Cayman Islands Companies Act (as amended);
WHEREAS, on the date
hereof, the Spectaire Holders received shares of common stock, par value $0.0001 per share (the “Common Stock”), of
the Company;
WHEREAS , the Company
has entered into that certain Amended and Restated Forward Purchase Agreement, dated as of October 16, 2023 (as it may be amended or supplemented
from time to time, the “Meteora FPA”), by and among the Company and Meteora Strategic Capital, LLC, Meteora Capital
Partners, LP, and Meteora Select Trading Opportunities Master, LP (collectively, the “Meteora Entities”), pursuant
to which the Meteora Entities have agreed to purchase shares of Common Stock;
WHEREAS, pursuant
to that certain Agreement, dated as of March 31, 2023, by and between Spectaire and Arosa Multi-Strategy Fund LP (“Arosa”),
the Company has issued to Arosa a warrant to purchase up to 2,194,453 shares of Common Stock on the terms and subject to adjustment as
described therein (the “Warrant”);
WHEREAS, pursuant to
Section 5.5 of the Original RRA, the provisions, covenants and conditions set forth therein may be amended or modified upon the written
consent of the Company and the Holders (as defined in the Original RRA) of at least a majority in interest of the Registrable Securities
(as defined in the Original RRA) at the time in question, and the Sponsors are Holders in the aggregate of at least a majority in interest
of the Registrable Securities as of the date hereof; and
WHEREAS, the Company
and the Sponsors desire to amend and restate the Original RRA in its entirety and enter into this 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:
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:
“Additional Holder” shall have the meaning
given in Section 5.10.
“Additional Holder Common Stock” shall
have the meaning given in Section 5.10.
“Adverse Disclosure”
shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive
Officer of the Company, the Chief Financial Officer of the Company or the Board, after consultation with counsel to the Company, (i) would
be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not
to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein
(in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading,
(ii) would not be required to be made at such time if the Registration Statement were not being filed, declared effective or used, as
the case may be, and (iii) the Company has a bona fide business purpose for not making such information public.
“Agreement” shall have the meaning given
in the Preamble hereto.
“Board” shall mean the Board of Directors
of the Company.
“Closing” shall have the meaning given
in the Merger Agreement.
“Closing Date” shall have the meaning
given in the Merger Agreement.
“Commission” shall mean the United States
Securities and Exchange Commission.
“Common Stock” shall have the meaning
given in the Recitals hereto.
“Company”
shall have the meaning given in the Preamble hereto and includes the Company’s successors by recapitalization, merger, consolidation,
spin-off, reorganization or similar transaction.
“Competing Registration Rights” shall
have the meaning given in Section 5.7.
“Demanding Holder” shall have the meaning
given in Section 2.1.4.
“Earnout Shares” shall have the meaning given
in the Merger Agreement.
“Exchange Act” shall mean the Securities
Exchange Act of 1934, as it may be amended from time to time.
“Form S-1 Shelf” shall have the meaning
given in Section 2.1.1.
“Form S-3 Shelf” shall have the meaning
given in Section 2.1.1.
“Holder Information” shall have the meaning
given in Section 4.1.2.
“Holders”
shall have the meaning given in the Preamble hereto, for so long as such person or entity holds any Registrable Securities.
“Joinder” shall have the meaning given
in Section 5.10.
“Maximum Number of Securities” shall have
the meaning given in Section 2.1.5.
“Merger Agreement” shall have the meaning
given in the Recitals hereto.
“Meteora Entities” shall have the meaning
given in the Recitals hereto.
“Meteora FPA” shall have the meaning given
in the Recitals hereto.
“Minimum Takedown Threshold” shall have
the meaning given in Section 2.1.4.
“Misstatement”
shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement
or Prospectus or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus, in the light
of the circumstances under which they were made) not misleading.
“Original RRA” shall have the meaning
given in the Recitals hereto.
“Permitted Transferees”
shall mean any person or entity to whom such Holder is permitted to transfer such Registrable Securities, subject to and in accordance
with any applicable agreement between such Holder and/or their respective Permitted Transferees and the Company and any transferee thereafter,
including Section 5.2 of this Agreement.
“Piggyback Registration” shall have the
meaning given in Section 2.2.1.
“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) any outstanding shares of Common Stock or any other equity security (including warrants to
purchase shares of Common Stock (other than the Warrant) and shares of Common Stock issued or issuable upon the exercise of any
other equity security (including the Warrant)) of the Company held by a Holder immediately following the Closing (including any
securities distributable pursuant to the Merger Agreement); (b) (b) the Earnout Shares (in each case, upon issuance thereof), (c)
any Additional Holder Common Stock; and (d) any other equity security of the Company issued or issuable with respect to any
securities referenced in clauses (a), (b) and (c) above by way of a stock dividend or stock split or in connection with a
recapitalization, merger, consolidation, spin-off, reorganization or similar transaction; provided, however, that, as to any
particular Registrable Security, such securities shall cease to be Registrable Securities upon the earliest to occur of: (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 by the
applicable Holder; (B)(i) such securities shall have been otherwise transferred, (ii) new certificates for such securities not
bearing (or book-entry positions not subject to) a legend restricting further transfer shall have been delivered by the Company and
(iii) subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities
shall have ceased to be outstanding; (D) such securities may be sold without registration pursuant to Rule 144 or any successor rule
promulgated under the Securities Act (but with no limitation as to volume or manner of sale); and (E) such securities have been sold
to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
“Registration”
shall mean a registration, including any related Shelf Takedown, effected by preparing and filing a registration statement, Prospectus
or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder,
and such registration statement becoming effective.
“Registration Expenses”
shall mean the documented, 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 Common Stock is then listed;
(B)
fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of outside 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; and
(F) in an Underwritten Offering, reasonable fees and expenses of one (1) legal counsel selected by the majority in interest of the Demanding
Holders with the approval of the Company (which approval shall not be unreasonably withheld, conditioned or delayed) not to exceed $60,000
in the aggregate for each Registration.
“Registration Statement”
shall mean any registration statement that covers 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 Holders” shall have the meaning
given in Section 2.1.5.
“Securities Act” shall mean the Securities
Act of 1933, as amended from time to time.
“Shelf”
shall mean the Form S-1 Shelf, the Form S-3 Shelf or any Subsequent Shelf Registration Statement, as the case may be.
“Shelf Registration”
shall mean a registration of securities pursuant to a registration statement filed with the Commission in accordance with and pursuant
to Rule 415 promulgated under the Securities Act (or any successor rule then in effect).
“Shelf Takedown”
shall mean an Underwritten Shelf Takedown or any proposed transfer or sale using a Registration Statement, including a Piggyback Registration.
“Spectaire” shall have the meaning given
in the Preamble hereto.
“Spectaire Holders” shall have the meaning
given in the Preamble hereto.
“Sponsor” or “Sponsors”
shall have the meanings given in the Preamble hereto.
“Sponsor Holdco” shall have the meaning
given in the Preamble hereto.
“Subsequent Shelf Registration Statement”
shall have the meaning given in Section 2.1.2.
“Subscription Agreement”
shall mean that certain Subscription Agreement, dated as of October 11, 2023, by and between the Company and Dr. Jörg Mosolf relating
to the sale of Common Stock in a transaction exempt from registration under the Securities Act.
“Transfer”
shall mean the (a) sale or assignment 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 Exchange Act 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).
“Underwriter”
shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such
dealer’s market-making activities.
“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.
“Underwritten Shelf Takedown” shall have
the meaning given in Section 2.1.4.
“Withdrawal Notice” shall have the meaning
given in Section 2.1.6.
ARTICLE II
REGISTRATIONS AND OFFERINGS
2.1 Shelf
Registration.
2.1.1 Filing.
Within thirty (30) days following the Closing Date, the Company shall submit to or file with the Commission a Registration Statement
for a Shelf Registration on Form S-1 (the “Form S-1 Shelf”) or a Registration Statement for a Shelf Registration
on Form S-3 (the “Form S -3 Shelf”), if the Company is then eligible to use a Form S-3 Shelf, in each case,
covering the resale of all the Registrable Securities (determined as of two (2) business days prior to such submission or filing) on
a delayed or continuous basis and shall use its commercially reasonable efforts to have such Shelf declared effective as soon as
practicable after the filing thereof, but no later than the earlier of (a) the one hundred twentieth (120th) calendar day following
the filing date thereof if the Commission notifies the Company that it will “review” the Registration Statement and (b)
the tenth (10th) business day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission
that the Registration Statement will not be “reviewed” or will not be subject to further review. Such Shelf 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 named therein. The Company shall maintain a Shelf in accordance with the terms hereof,
and shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements as may be
necessary to keep a Shelf 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. In the event the Company files a Form S -1 Shelf, the Company shall use its commercially reasonable efforts
to convert the Form S-1 Shelf (and any Subsequent Shelf Registration Statement) to a Form S-3 Shelf as soon as practicable after the
Company is eligible to use Form S-3. The Company’s obligation under this Section 2.1.1, shall, for the avoidance of
doubt, be subject to Section 3.4.
2.1.2 Subsequent Shelf Registration.
If any Shelf 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 Shelf 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 Shelf), and shall use its commercially reasonable efforts to as promptly
as is reasonably practicable amend such Shelf in a manner reasonably expected to result in the withdrawal of any order suspending the
effectiveness of such Shelf or file an additional registration statement as a Shelf Registration (a “Subsequent Shelf Registration
Statement”) registering the resale of all Registrable Securities (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 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 Section 2.1.2, shall, for
the avoidance of doubt, be subject to Section 3.4.
2.1.3 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 Sponsor Holdco or a Spectaire Holder, shall promptly use its commercially
reasonable efforts to cause the resale of such Registrable Securities to be covered by either, at the Company’s option, any then
available Shelf (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 Shelf 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 Holdco and the Spectaire Holders, respectively.
2.1.4 Requests for Underwritten
Shelf Takedowns. Subject to Section 3.4, at any time and from time to time when an effective Shelf is on file with the Commission,
the Sponsor Holdco or a Spectaire Holder (the Sponsor Holdco or a Spectaire Holder being in such case, a “Demanding Holder”)
may request to sell all or any portion of its Registrable Securities in an Underwritten Offering that is registered pursuant to the Shelf
(each, an “Underwritten Shelf Takedown”); provided that the Company shall only be obligated to effect an Underwritten
Shelf Takedown 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, $20 million (the
“Minimum Takedown Threshold”). All requests for Underwritten Shelf Takedowns shall be made by giving written notice
to the Company, which shall specify the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown.
The Company shall have the right to select the Underwriters for such offering (which shall consist of one or more reputable nationally
recognized investment banks), subject to the initial Demanding Holder’s prior approval (which shall not be unreasonably withheld,
conditioned or delayed). The Sponsor Holdco, on the one hand, and the Spectaire Holders, on the other hand, may each demand not more than
two (2) Underwritten Shelf Takedowns pursuant to this Section 2.1.4 in any twelve (12) month period. Notwithstanding anything to
the contrary in this Agreement, the Company may effect any Underwritten Offering pursuant to any then effective Registration Statement,
including a Form S-3, that is then available for such offering.
2.1.5 Reduction of Underwritten
Offering. If the managing Underwriter or Underwriters in an Underwritten Shelf Takedown, in good faith, advises the Company, the Demanding
Holders and the Holders requesting piggy back rights pursuant to this Agreement with respect to such Underwritten Shelf Takedown (the
“Requesting Holders”) (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding
Holders and the Requesting Holders (if any) desire to sell, taken together with all other shares of Common Stock or other equity securities
that the Company desires to sell and all other shares of Common Stock or other equity securities, if any, that have been requested to
be sold in such Underwritten Offering pursuant to separate written contractual piggy-back registration rights held by any other stockholders,
exceeds the maximum dollar amount or maximum number of equity securities 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, before including any shares of Common Stock or other equity securities proposed to be sold
by Company or by other holders of Common Stock or other equity securities, the Registrable Securities of the Demanding Holders and the
Requesting Holders (if any) (pro rata (as nearly as practicable) based on the respective number of Registrable Securities that each Demanding
Holder and Requesting Holder (if any) has requested be included in such Underwritten Shelf Takedown and the aggregate number of Registrable
Securities that the Demanding Holders and Requesting Holders have requested be included in such Underwritten Shelf Takedown) that can
be sold without exceeding the Maximum Number of Securities. To facilitate the allocation of Registrable Securities in accordance with
the above provisions, the Company or the Underwriters may round the number of shares allocated to any Holder to the nearest 100 Registrable
Securities. The Company shall not be required to include any Registrable Securities in such Underwritten Shelf Takedown unless the Holders
accept the terms of the underwriting as agreed upon between the Company and its Underwriters.
2.1.6 Withdrawal.
Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing such
Underwritten Shelf Takedown, a majority in interest of the Demanding Holders initiating an Underwritten Shelf Takedown shall have
the right to withdraw from such Underwritten Shelf Takedown 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 Shelf Takedown; provided that the Sponsor Holdco or a Spectaire Holder may elect to have the Company
continue an Underwritten Shelf Takedown if the Minimum Takedown Threshold would still be satisfied by the Registrable Securities
proposed to be sold in the Underwritten Shelf Takedown by the Sponsor Holdco, the Spectaire Holders or any of their respective
Permitted Transferees, as applicable. If withdrawn, a demand for an Underwritten Shelf Takedown shall constitute a demand for an
Underwritten Shelf Takedown by the withdrawing Demanding Holder for purposes of Section 2.1.4, unless such Demanding Holder
reimburses the Company for all Registration Expenses with respect to such Underwritten Shelf Takedown (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 Shelf Takedown); provided that, if the Sponsor Holdco or
a Spectaire Holder elects to continue an Underwritten Shelf Takedown pursuant to the proviso in the immediately preceding sentence,
such Underwritten Shelf Takedown shall instead count as an Underwritten Shelf Takedown demanded by the Sponsor Holdco or such
Spectaire Holder, as applicable, for purposes of Section 2.1.4. 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 Shelf Takedown.
Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred
in connection with a Shelf Takedown prior to its withdrawal under this Section 2.1.6, other than if a withdrawing Demanding
Holder elects to pay such Registration Expenses pursuant to the second sentence of this Section 2.1.6.
2.2 Piggyback
Registration.
2.2.1 Piggyback
Rights. If the Company or any Holder proposes to conduct a registered offering of, or if the Company proposes to file a
Registration Statement under the Securities Act with respect to the Registration of, equity securities, or securities or other
obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of
stockholders of the Company (or by the Company and by the stockholders of the Company, including, without limitation, an
Underwritten Shelf Takedown pursuant to Section 2.1), other than a Registration Statement (or any registered offering with
respect thereto) (i) filed in connection with any employee stock option or other benefit plan, (ii) pursuant to a Registration
Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor
rule thereto), (iii) for an offering of debt that is convertible into equity securities of the Company, (iv) filed in connection
with the Meteora FPA, or (v) for a dividend reinvestment plan, then the Company shall give written notice of such proposed offering
to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the anticipated filing
date of such Registration Statement or, in the case of an Underwritten Offering pursuant to a Shelf Registration, the applicable
“red herring” prospectus or prospectus supplement used for marketing such offering, which notice shall (A) describe the
amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed
managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the
opportunity to include in such registered offering such number of Registrable Securities as such Holders may request in writing
within five (5) days after receipt of such written notice (such registered offering, a “Piggyback Registration”).
Subject to Section 2.2.2, the Company shall, in good faith, cause such Registrable Securities to be included in such
Piggyback Registration and, if applicable, shall use its commercially reasonable efforts to cause the managing Underwriter or
Underwriters of such Piggyback Registration to permit the Registrable Securities requested by the Holders pursuant to this Section
2.2.1 to be included therein on the same terms and conditions as any similar securities of the Company included in such
registered offering and to permit the sale or other disposition of such Registrable Securities in accordance with the intended
method(s) of distribution thereof. The inclusion of any Holder’s Registrable Securities in a Piggyback Registration shall be
subject to such Holder agreement to enter into an underwriting agreement in customary form with the Underwriter(s) selected for such
Underwritten Offering. Notwithstanding anything to the contrary in this Agreement, the Holders shall have no rights under this Section
2.2.1 if the registration statement the Company proposes to file is solely for purposes of a delayed or continuous offering
pursuant to Rule 415 under the Securities Act and, at the time of the filing of such registration statement, the Company is in
compliance with its obligations under Section 2.1.
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 Common Stock or other equity securities that the Company desires to sell, taken together with (i) the shares
of Common Stock or other equity securities, if any, as to which Registration or a registered 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 registration has been requested pursuant to Section 2.2 hereof, and (iii) the shares of Common Stock or
other equity securities, if any, as to which Registration or a registered offering has been requested pursuant to separate written contractual
piggy-back registration rights of persons or entities other than the Holders of Registrable Securities hereunder, exceeds the Maximum
Number of Securities, then:
(a)
if the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (A) first, the
shares of Common Stock or other equity securities 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 exercising their rights to register their Registrable Securities pursuant to Section 2.2.1, pro
rata (as nearly as practicable), based on the respective number of Registrable Securities that each Holder has requested be included in
such Underwritten Offering and the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten
Offering, 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 Common Stock or other equity securities, if any,
as to which Registration or a registered offering has been requested pursuant to separate written contractual piggy-back registration
rights of persons or entities other than the Holders of Registrable Securities hereunder, which can be sold without exceeding the Maximum
Number of Securities;
(b) if the Registration is pursuant to a demand by persons or entities other than the Holders of Registrable Securities, then the Company
shall include in any such Registration (A) first, the shares of Common Stock or other equity securities, if any, of such requesting persons
or entities, other than the Holders of Registrable Securities, 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 exercising their rights to register their Registrable Securities pursuant to Section 2.2.1, pro rata (as nearly as practicable),
based on the respective number of Registrable Securities that each Holder has requested be included in such Underwritten Offering and
the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten Offering, 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 Common Stock or other equity securities 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 Common Stock or other equity securities, if any, as to
which Registration or a registered offering has been requested pursuant to separate written contractual piggy-back registration rights
of persons or entities other than the Holders of Registrable Securities hereunder, which can be sold without exceeding the Maximum Number
of Securities; and
(c) if the Registration
and Underwritten Shelf Takedown 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 securities in the priority set forth in Section 2.1.5.
2.2.3 Piggyback Registration
Withdrawal. Any Holder of Registrable Securities (other than a Demanding Holder, whose right to withdraw from an Underwritten Shelf
Takedown, and related obligations, shall be governed by Section 2.1.6) shall have the right to withdraw from a Piggyback Registration
for any or no reason whatsoever 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 effectiveness of the Registration Statement filed with the Commission
with respect to such Piggyback Registration or, in the case of a Piggyback Registration pursuant to a Shelf Registration, the filing of
the applicable “red herring” prospectus or prospectus supplement with respect to such Piggyback Registration used for marketing
such transaction. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons or
entities pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection
with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary
in this Agreement (other than Section 2.1.6), the Company shall be responsible for the Registration Expenses incurred in connection
with the Piggyback Registration prior to its withdrawal under this Section 2.2.3.
2.2.4 Unlimited Piggyback
Registration Rights. For purposes of clarity, subject to Section 2.1.6, any Piggyback Registration effected pursuant to Section
2.2 hereof shall not be counted as a demand for an Underwritten Shelf Takedown under Section 2.1.4 hereof.
2.3 Market Stand -off
.. In connection with any Underwritten Offering of equity securities of the Company, if requested by the managing Underwriters, each Holder
that is an executive officer or director of the Company or a Holder of more than five percent (5%) of the outstanding Common Stock (and
for which it is customary for such a Holder to agree to a lock-up) agrees that it shall not Transfer any shares of Common Stock or other
equity securities of the Company (other than those included in such offering pursuant to this Agreement), without the prior written consent
of the Company, during the ninety (90)-day period (or such shorter time agreed to by the managing Underwriters) beginning on the date
of pricing of such offering, except as expressly permitted by such lock -up agreement or in the event the managing Underwriters otherwise
agree by written consent. Each such Holder agrees to execute a customary lock-up agreement in favor of the Underwriters to such effect
(in each case on substantially the same terms and conditions as all such Holders).
ARTICLE III
COMPANY PROCEDURES
3.1 General Procedures.
In connection with any Shelf and/or Shelf Takedown, the Company shall use its commercially reasonable efforts to effect such Registration
to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the
Company shall, as expeditiously as possible:
3.1.1 prepare and file
with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its commercially
reasonable efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities have
ceased to be Registrable Securities;
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 any Holder that holds at least five percent (5%) of the Registrable Securities registered on such Registration
Statement or any Underwriter of Registrable Securities 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 intended plan of distribution
set forth in such Registration Statement or supplement to the Prospectus;
3.1.3 prior to filing
a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and
the Holders of Registrable Securities included in such Registration, 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 included in such Registration Statement (including each preliminary Prospectus),
and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the legal counsel
for any such Holders may request in order to facilitate the disposition of the Registrable Securities owned by such Holders;
3.1.4 prior to any public
offering of Registrable Securities, use its commercially reasonable efforts to (i) 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 (ii) 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 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;
3.1.7 advise each seller
of such Registrable Securities, promptly after it shall receive notice or obtain 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 prior to the
filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus (or
such shorter period of time as may be (a) necessary in order to comply with the Securities Act, the Exchange Act, and the rules and
regulations promulgated under the Securities Act or Exchange Act, as applicable or (b) advisable in order to reduce the number of
days that sales are suspended pursuant to Section 3.4), furnish a copy thereof to each seller of such Registrable Securities
or its counsel (excluding any exhibits thereto and any filing made under the Exchange Act that is to be incorporated by reference
therein);
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;
3.1.10 in the event of
an Underwritten Offering or sale by a broker, placement agent or sales agent pursuant to such Registration, permit a representative of
the Holders, the Underwriters or other financial institutions facilitating such Underwritten 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, and cause the Company’s officers, directors and
employees to supply all information reasonably requested by any such representative, Underwriter, financial institution, attorney, consultant
or accountant in connection with the Registration; provided, however, that such representatives, Underwriters or financial institutions
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 use commercially
reasonable efforts to obtain a “comfort” letter (including a bring-down letter dated as of the date the Registrable Securities
are delivered for sale pursuant to such Registration) from the Company’s independent registered public accountants in the event
of an Underwritten Offering or sale by a broker, placement agent or sales agent pursuant to such Registration (subject to such broker,
placement agent or sales agent 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 or sale by a broker, placement agent or sales agent 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 broker, placement agents or sales agent, 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, broker, placement agent, sales agent or Underwriter may reasonably request and as are customarily included
in such opinions, provided such participating Holders provide such information to such counsel as is customarily required for purpose
of such opinions;
3.1.13 in the event of
any Underwritten Offering or sale by a broker, placement agent or sales agent 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 broker, placement agent or sales agent of such offering or sale;
3.1.14 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 then in effect);
3.1.15 if the Registration
involves the Registration of Registrable Securities involving gross proceeds in excess of $20 million with respect to an Underwritten
Offering pursuant to Section 2.1.4, 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 such Underwritten
Offering; and
3.1.16 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 broker, sales agent or placement agent
if such Underwriter or broker, sales agent or placement agent has not then been named with respect to the applicable Underwritten Offering
or other offering involving a registration as an Underwriter or broker, sales agent or placement agent, as applicable.
3.2 Registration Expenses.
The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders selling
Registrable Securities in any offering shall bear all incremental selling expenses relating to the sale of such 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 fees and expenses of any legal counsel representing the Holders.
3.3 Requirements for Participation
in Registration Statement in Offerings. The Holders of Registrable Securities shall provide such information as may reasonably be
requested by the Company, or the managing Underwriter or placement agent or sales agent, if any, in connection with the preparation of
any Registration Statement or Prospectus, including amendments and supplements thereto, in order to effect the registration of any Registrable
Securities under the Securities Act pursuant to ARTICLE II and in connection with the Company’s obligation to comply with
federal and applicable state securities laws. 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 or other offering for equity securities of the Company pursuant to a Registration initiated by the Company hereunder
unless such person or entity (i) agrees to sell such person’s or entity’s securities on the basis provided in any underwriting,
sales, distribution or placement arrangements approved by the Company and (ii) completes and executes all customary questionnaires, powers
of attorney, indemnities, lock-up agreements, underwriting or other agreements and other customary documents as may be reasonably required
under the terms of such underwriting, sales, distribution or placement arrangements. The exclusion of a Holder’s Registrable Securities
as a result of this Section 3.3 shall not affect the registration of the other Registrable Securities to be included in such Registration.
3.4 Suspension
of Sales; Adverse Disclosure; Restrictions on Registration Rights.
3.4.1 Upon receipt of
written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith
discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended 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 it is advised in writing by the Company that the use of the Prospectus may be resumed.
3.4.2 Subject to Section
3.4.4, if the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time
would (a) require the Company to make an Adverse Disclosure, (b) require the inclusion in such Registration Statement of financial statements
that are unavailable to the Company for reasons beyond the Company’s control, or (c) in the good faith judgment of the majority
of the Board such Registration, be seriously detrimental to the Company and the majority of the Board concludes as a result that it is
essential to defer such filing, initial effectiveness or continued use at such time, the Company may, upon giving prompt written notice
of such action to the Holders (which notice shall not specify the nature of the event giving rise to such delay or suspension), delay
the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time determined in good
faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under this Section 3.4.2,
the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to
any Registration in connection with any sale or offer to sell Registrable Securities until such Holder receives written notice from the
Company that such sales or offers of Registrable Securities may be resumed, and in each case maintain the confidentiality of such notice
and its contents.
3.4.3 Subject to Section
3.4.4, (a) during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of
the filing of, and ending on a date one hundred and eighty (180) days after the effective date of, a Company-initiated Registration, and
provided that the Company continues to actively employ, in good faith, all reasonable efforts to maintain the effectiveness of the applicable
Shelf Registration Statement, or (b) if, pursuant to Section 2.1.4, Holders have requested an Underwritten Shelf Takedown and the
Company and Holders are unable to obtain the commitment of underwriters to firmly underwrite such offering, the Company may, upon giving
prompt written notice of such action to the Holders, delay any other registered offering pursuant to Section 2.1.4.
3.4.4 The right to delay
or suspend any filing, initial effectiveness or continued use of a Registration Statement pursuant to Section 3.4.2 or a registered
offering pursuant to Section 3.4.3 shall be exercised by the Company, in the aggregate, for not more than ninety (90) consecutive
calendar days or more than one hundred and twenty (120) total calendar days in each case, during any twelve (12)-month period.
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 and to promptly furnish the Holders
upon written request with true and complete copies of all such filings; provided that any documents publicly filed or furnished
with the Commission pursuant to the Electronic Data Gathering, Analysis and Retrieval System shall be deemed to have been furnished or
delivered to the Holders pursuant to this Section 3.5. The Company further covenants that it shall use commercially reasonable
efforts to take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such
Holder to sell 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 then in effect). 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.
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 and agents and each person
or entity who controls such Holder (within the meaning of the Securities Act), against all losses, claims, damages, liabilities and reasonable
and documented out-of-pocket expenses (including, without limitation, reasonable and documented outside attorneys’ fees) resulting
from any untrue or alleged untrue statement of material fact contained in or incorporated by reference in any Registration Statement,
Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto filed pursuant to this Agreement or any omission or
alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in the case of a Prospectus
or preliminary Prospectus in the light of the circumstances under which they were made, not misleading, except insofar as the same are
caused by or contained in any information or affidavit so furnished in writing to the Company by such Holder expressly for use therein.
4.1.2 In connection
with any Registration Statement filed pursuant to this Agreement in which a Holder of Registrable Securities is participating, such Holder
shall furnish (or cause to be furnished) 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 indemnify the Company, its directors, officers and agents and each person or entity who controls the Company (within
the meaning of the Securities Act) against all losses, claims, damages, liabilities and reasonable and documented out-of-pocket expenses
(including, without limitation, reasonable and documented outside attorneys’ fees) resulting from any untrue or alleged untrue statement
of material fact contained or incorporated by reference in any Registration Statement, Prospectus or preliminary Prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make
the statements therein, in the case of a Prospectus or preliminary Prospectus in the light of the circumstances under which they were
made, not misleading, but only to the extent that such untrue or alleged untrue statement is contained in (or not contained in, in the
case of an omission or alleged omission) any information or affidavit so furnished in writing by or on behalf of such Holder expressly
for use therein; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders
of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the
net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable
Securities shall indemnify the Underwriters, their officers, directors and each person or entity who controls such Underwriters (within
the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.
4.1.3 Any person or
entity entitled to indemnification herein shall (i) 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 or
entity’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party)
and (ii) 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, 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, 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 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.
4.1.5 If the indemnification
provided under Section 4.1 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities and out-of-pocket expenses referred to herein, then the indemnifying party, in lieu
of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses,
claims, damages, liabilities and out-of-pocket 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 reference to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by (or not made by, in
the case of an omission), or relates to information supplied by (or not supplied by in the case of an omission), such indemnifying party
or 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 Section 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 Sections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges or out-of-pocket
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 Section 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 Section 4.1.5. No person
or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution
pursuant to this Section 4.1.5 from any person or entity 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 (i) deposit in the United States mail, addressed to the party to
be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery in person or by courier service
providing evidence of delivery, or (iii) transmission by hand delivery, electronic mail or facsimile. 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 business day following the date on which it is mailed and, in the case of notices delivered
by courier service, hand delivery, electronic mail or facsimile, 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. Any notice or communication
under this Agreement must be addressed, if to the Company, to: Spectaire Holdings Inc., 5285 Solar Drive, Mississauga, Ontario L4W 5B8,
Canada, Attention: Brian Semkiw Email: bsemkiw@spectaire.com, and, if to any Holder, at such Holder’s address, electronic mail
address or facsimile number as set forth in the Company’s books and records. 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.
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; provided that, with respect to the Spectaire Holders and the
Sponsors, the rights hereunder that are personal to such Holders may not be assigned or delegated in whole or in part, except that
(x) each of the Spectaire Holders shall be permitted to transfer its rights hereunder as the Spectaire Holders to (i) one or more
affiliates or any direct or indirect partners, members or equity holders of such Spectaire Holder (it being understood that no such
transfer shall reduce any rights of such Spectaire Holder or such transferees), (ii) any third-party pledgee in a bona fide
transaction as collateral to secure obligations pursuant to lending or other arrangements between such Spectaire Holder (or its
affiliates), on the one hand, and such third party (or its affiliates), on the other hand, or any similar arrangement relating to a
financing arrangement for the benefit of such Spectaire Holder and/or its affiliates, and (iii) pursuant to a bona fide loan or
pledge or as a grant or maintenance of a bona fide lien, security interests, pledge or other similar encumbrance of any such
securities owned by such Spectaire Holder and/or its affiliates to a nationally or internationally recognized financial institution
in connection with a loan to, or similar financing arrangement with, such Spectaire Holder and/or its affiliates, and (y) the
Sponsor Holdco shall be permitted to transfer its rights hereunder as the Sponsor Holdco to one or more affiliates or any direct or
indirect partners, members or equity holders of the Sponsor Holdco (it being understood that no such transfer shall reduce any
rights of the Sponsor Holdco 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 and the permitted
assigns of the Holders, which shall include Permitted Transferees.
5.2.4 This Agreement
shall not confer any rights or benefits on any persons or entities that are not parties hereto, other than as expressly set forth in this
Agreement and Section 5.2.
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 it
is permitted under Section 5.2.2 and until the Company shall have received (i) written notice of such assignment as provided in
Section 5.1 hereof and (ii) 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, ab initio.
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 (1) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AND (2) THE VENUE FOR ANY ACTION
TAKEN WITH RESPECT TO THIS AGREEMENT SHALL BE ANY STATE OR FEDERAL COURT IN NEW YORK COUNTY IN THE STATE OF NEW YORK.
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.
5.6 Amendments and Modifications.
Upon the written consent of (a) the Company and (b) the Holders of a majority of the total Registrable Securities, 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, any amendment hereto or waiver hereof shall
also require the written consent of each Holder so long as such Holder and its affiliates hold, in the aggregate, at least five percent
(5%) of the outstanding shares of Common Stock of the Company; and provided, further, that any amendment hereto or waiver hereof
that adversely affects one Holder, solely in 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 the Holder so affected. 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. Other than as provided in (i) the Meteora FPA, (ii) pursuant to the Subscription Agreement, (iii) the Underwriting Agreement,
dated as of October 27, 2021, by and between the Company and Jefferies LLC, as amended on March 23, 2023 and October 17, 2023, and (iv)
the Warrant Agreement, dated as of October 27, 2021, between the Company and Continental Stock Transfer & Trust Company, the Company
represents and warrants that no person or entity, other than a Holder of Registrable Securities, 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 Statement filed by
the Company for the sale of securities for its own account or for the account of any other person or entity. For so long as the Sponsor
Holdco and its affiliates hold, in the aggregate, at least five percent (5%) of the outstanding shares of Common Stock of the Company,
the Company hereby agrees and covenants that it will not grant rights to register any Common Stock (or securities convertible into or
exchangeable for Common Stock) pursuant to the Securities Act that are more favorable or senior to those granted to the Holders hereunder
(such rights “Competing Registration Rights”) without the prior written consent of the Sponsor Holdco. Further, the
Company represents and warrants that this Agreement supersedes any other 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.
5.8 Term. This Agreement
shall terminate on the earlier of (a) the seventh anniversary of the date of this Agreement and (b) with respect to any Holder, on the
date that such Holder no longer holds any Registrable Securities. The provisions of Section 3.5 and 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 Additional Holders;
Joinder. In addition to persons or entities who may become Holders pursuant to Section 5.2 hereof, subject to the prior written
consent of the Sponsor Holdco and each Spectaire Holder (in each case, so long as such Holder and its affiliates hold, in the aggregate,
at least five percent (5%) of the outstanding shares of Common Stock of the Company), the Company may make any person or entity who has
or acquires Common Stock or rights to acquire Common Stock after the date hereof a party to this Agreement (each such person or entity,
an “Additional Holder”) by obtaining an executed joinder to this Agreement from such Additional Holder in the form
of Exhibit A attached hereto (a “Joinder”). Such Joinder shall specify the rights and obligations of the applicable
Additional Holder under this Agreement. Upon the execution and delivery and subject to the terms of a Joinder by such Additional Holder,
the Common Stock of the Company then owned, or underlying any rights then owned, by such Additional Holder (the “Additional Holder
Common Stock”) shall be Registrable Securities to the extent provided herein and therein and such Additional Holder shall be
a Holder under this Agreement with respect to such Additional Holder Common Stock.
5.11 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.
5.12 Entire Agreement;
Restatement. This Agreement constitutes the full and entire agreement and understanding between the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings relating to such subject matter. Upon the Closing, the Original RRA
shall no longer be of any force or effect.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
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COMPANY:
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SPECTAIRE HOLDINGS INC.,
a Delaware corporation
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By: |
/s/ Brian
Semkiw |
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Name: |
Brian Semkiw |
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Title: |
Chief Executive Officer |
[Signature Page to Amended and Restated Registration
Rights Agreement]
IN WITNESS WHEREOF, the undersigned have caused
this Agreement to be executed as of the date first written above.
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HOLDERS:
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PERCEPTION
CAPITAL PARTNERS II LLC,
a Delaware limited liability company
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By: |
/s/ Scott
Honour |
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Name: |
Scott Honour |
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Title: |
Authorized Signatory |
[Signature Page to Amended and Restated Registration
Rights Agreement]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
|
/s/ Scott
Honour |
|
Name: |
Scott Honour |
[Signature Page to Amended and Restated Registration
Rights Agreement]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
|
/s/ Marcy Haymaker |
|
Name: |
Marcy Haymaker |
[Signature Page to Amended and Restated Registration
Rights Agreement]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
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/s/ Thomas J. Abood |
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Name: |
Thomas J. Abood |
[Signature Page to Amended and Restated Registration
Rights Agreement]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
|
/s/ Omer Keilaf |
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Name: |
Omer Keilaf |
[Signature Page to Amended and Restated Registration
Rights Agreement]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
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/s/ R. Rudolph Reinfrank |
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Name: |
R. Rudolph Reinfrank |
[Signature Page to Amended and Restated Registration
Rights Agreement]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
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/s / Karrie Willis |
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Name: |
Karrie Willis |
[Signature Page to Amended and Restated Registration
Rights Agreement]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
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POLAR
MULTI-STRATEGY MASTER FUND
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By
its investment advisor
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Polar Asset Management Partners Inc. |
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By: |
/s/ Michelle
Li |
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Name: |
Michelle Li |
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Title: |
Director, OCOO |
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By: |
/s/ Kirstie Moore |
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Name: |
Kirstie Moore |
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Title: |
Legal Counsel |
[Signature Page to Amended and Restated Registration
Rights Agreement]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
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AROSA
MULTI-STRATEGY FUND LP
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By: Arosa Capital Management Multi-Strategy
GP LLC,
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its general partner |
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By: |
/s/ Till Bechtolsheimer |
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Name: |
Till Bechtolsheimer |
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Title: |
Managing Member |
[Signature Page to Amended and Restated Registration
Rights Agreement]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
|
/s/ Brian Hemond |
|
Name: |
Brian Hemond |
[Signature Page to Amended and Restated Registration
Rights Agreement]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
|
/s/ Ian Hunter |
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Name: |
Ian Hunter |
[Signature Page to Amended and Restated Registration
Rights Agreement]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
|
/s/ Brian Semkiw |
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Name: |
Brian Semkiw |
[Signature Page to Amended and Restated Registration
Rights Agreement]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
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MLAB
CAPITAL GMBH
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By: |
/s/ Dr.
Jörg Mosolf |
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Name: |
Dr. Jörg Mosolf |
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Title: |
Authorized Signatory |
[Signature Page to Amended and Restated Registration
Rights Agreement]
Exhibit A
REGISTRATION RIGHTS AGREEMENT JOINDER
The undersigned is executing
and delivering this joinder (this “Joinder”) pursuant to the Amended and Restated Registration Rights Agreement, dated
as of October 17, 2023 (as the same may hereafter be amended, the “Registration Rights Agreement”), by and among Spectaire
Holdings Inc., a Delaware corporation (the “Company”), and the other persons or entities named as parties therein.
Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Registration Rights Agreement.
By executing and delivering
this Joinder to the Company, and upon acceptance hereof by the Company upon the execution of a counterpart hereof, the undersigned hereby
agrees to become a party to, to be bound by, and to comply with the Registration Rights Agreement as a Holder of Registrable Securities
in the same manner as if the undersigned were an original signatory to the Registration Rights Agreement, and the undersigned’s
shares of Common Stock shall be included as Registrable Securities under the Registration Rights Agreement to the extent provided therein;
provided, however, that the undersigned and its permitted assigns (if any) shall not have any rights as Holders, and the undersigned’s
(and its transferees’) shares of Common Stock shall not be included as Registrable Securities, for purposes of the Excluded Sections.
For purposes of this Joinder, “Excluded Sections”
shall mean [_____________].
Accordingly, the undersigned has executed and delivered
this Joinder as of the ___ day of ________________, 20_________.
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Signature of Stockholder |
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Print Name of Stockholder |
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Its: |
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Address: |
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Agreed and Accepted as of
_____________________, 20___
Spectaire Holdings Inc. |
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By: |
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Name: |
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Its: |
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Schedule I
Sponsors |
Perception Capital Partners II LLC |
Scott Honour |
Marcy Haymaker |
Thomas J. Abood |
Omer Keilaf |
R. Rudolph Reinfrank |
Karrie Willis |
[Schedule I to Amended and Restated Registration
Rights Agreement]
Schedule II
Spectaire Holders |
Brian Hemond |
Brian Semkiw |
Ian Hunter |
MLab Capital GmbH |
Arosa Multi-Strategy Fund LP |
Polar Multi-Strategy Master Fund |
[Schedule II to Amended and Restated Registration
Rights Agreement]
Exhibit 10.4
Execution Version
LOCK-UP AGREEMENT
THIS LOCK-UP
AGREEMENT (this “Agreement”), dated as of October 19, 2023, is made and entered into by and among Spectaire Holdings
Inc., a Delaware corporation (the “Company”) (formerly known as Perception Capital Corp. II, a Cayman Islands exempted
company limited by shares prior to its domestication as a Delaware corporation), and the Persons (as defined in the Merger Agreement (as
defined below)) set forth on Schedule I hereto (such Persons, together with any other Person who hereafter becomes a party to this
Agreement pursuant to Section 2 or Section 8 of this Agreement, the “Securityholders” and each, a “Securityholder”).
WHEREAS,
the Company, Perception Spectaire Merger Sub Corp., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger
Sub”), and Spectaire Inc., a Delaware corporation (“Legacy Spectaire”), entered into that certain Agreement
and Plan of Merger (as amended or modified from time to time, the “Merger Agreement”; capitalized terms used but not
defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement), dated as of January 16, 2023, pursuant
to which, among other things, on the date hereof Merger Sub will merge with and into Legacy Spectaire, with Legacy Spectaire continuing
on as the surviving entity and a wholly owned subsidiary of the Company, on the terms and conditions set forth therein (the “Merger”);
WHEREAS,
upon the Closing, each of the Securityholders will own equity interests in the Company; and
WHEREAS,
in connection with the Merger, the parties hereto wish to set forth herein certain understandings between such parties with respect to
restrictions on transfer of equity interests in the Company.
NOW, THEREFORE, the parties agree as follows:
1.
Subject to the exceptions set forth herein, each Securityholder agrees not to, without the prior written consent of the board of
directors of the Company, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option, right or
warrant to purchase or otherwise transfer, dispose of or agree to transfer or dispose of, directly or indirectly, or establish or
increase a put equivalent position or liquidate or decrease 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 (the “SEC”) promulgated thereunder, any shares of Domesticated Acquiror Common Stock held
by it immediately after the Effective Time, any shares of Domesticated Acquiror Common Stock issuable upon the exercise or
settlement, as applicable, of Acquiror Options or Acquiror RSUs held by it immediately after the Effective Time (other than shares
of Domesticated Acquiror Common Stock issued or issuable upon the exercise of Acquiror Private Placement Warrants), or any other
securities convertible into or exercisable or exchangeable for Domesticated Acquiror Common Stock held by it immediately after the
Effective Time (other than Acquiror Private Placement Warrants) (collectively, the “Lock-Up Shares”), (ii) enter
into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of
any of the Lock-Up Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise or
(iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii) (the actions specified in clauses
(i)-(iii), collectively, “Transfer”) until the date that is 365 days after the Closing Date (the “Share
Lock-Up Period”), subject to the early release provisions set forth in Section 4 below. Each Securityholder further
agrees not to Transfer any Acquiror Private Placement Warrants, or any shares of Domesticated Acquiror Common Stock issued or
issuable upon the exercise of Acquiror Private Placement Warrants, until the date that is 30 days after the Closing Date (the
“Warrant Lock-Up Period” and, together with the Share Lock-Up Period, the “Lock-Up
Period”).
2.
The restrictions set forth in Section 1 shall not apply to:
| (i) | in the case of an entity, Transfers (A) to another entity that is an affiliate
(as defined in Rule 405 promulgated under the Securities Act of 1933, as amended (the “Securities Act”)) of the undersigned,
or to any investment fund or other entity controlling, controlled by, managing or managed by or under common control with the undersigned
or affiliates of the undersigned or who shares a common investment advisor with the undersigned or (B) as part of a distribution to members,
partners, shareholders or equity holders of the undersigned; |
| (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; |
| (iv) | in the case of an individual, Transfers by operation of law or pursuant to a court
order, such as a qualified domestic relations order, divorce decree or separation agreement; |
| (v) | in the case of an individual, Transfers to a partnership, limited liability company
or other entity of which the undersigned and/or the immediate family (as defined below) of the undersigned are the legal and beneficial
owner of all of the outstanding equity securities or similar interests; |
| (vi) | in the case of an entity that is a trust, Transfers to a trustor or beneficiary
of the trust or to the estate of a beneficiary of such trust; |
| (vii) | 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; |
| (viii) | Transfers of any shares of Domesticated Acquiror Common Stock or other securities
(other than Acquiror Private Placement Warrants or shares of Domesticated Acquiror Common Stock underlying the Acquiror Private Placement
Warrants) acquired in connection with the financing of the Merger or issued in exchange for, or on conversion or exercise of, any securities
issued in connection with the financing of the Merger; |
| (ix) | Transfers relating to Domesticated Acquiror Common Stock or other securities convertible
into or exercisable or exchangeable for Domesticated Acquiror 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 applicable Lock-Up Period; |
| (x) | the exercise of stock options or warrants to purchase
shares of Domesticated Acquiror Common Stock or the vesting of stock awards of Domesticated Acquiror Common Stock and any related
transfer of shares of Domesticated Acquiror Common Stock in connection therewith
(x) deemed to occur upon the “cashless” or “net” exercise of such options or warrants or (y) for the purpose of
paying the exercise price of such options or warrants or for paying taxes due as a result of the exercise of such options or warrants,
the vesting of such options, warrants or stock awards, or as a result of the vesting of such shares of Domesticated Acquiror Common Stock,
it being understood that all shares of Domesticated Acquiror Common Stock received upon such exercise, vesting or transfer will remain
subject to the restrictions of this Agreement during the applicable Lock-Up Period; |
| (xi) | Transfers to the Company pursuant to any contractual arrangement in effect at the Effective Time that
provides for the repurchase by the Company or forfeiture of Domesticated Acquiror Common Stock or other securities convertible into or
exercisable or exchangeable for Domesticated Acquiror Common Stock in connection with the termination of the Securityholder’s service
to the Company; |
| (xii) | the entry, by a Securityholder, at any time after the Effective Time, of any trading plan providing for
the sale of shares of Domesticated Acquiror Common Stock by a Securityholder, which trading plan meets the requirements of Rule 10b5-1(c)
under the Exchange Act; provided, however, that such plan does not provide for, or permit, the sale of any shares of Domesticated
Acquiror Common Stock during the applicable Lock-Up Period and no public announcement or filing is voluntarily made or required regarding
such plan during the applicable Lock-Up Period; |
| (xiii) | Transfers in the event of completion of a liquidation, merger, stock exchange,
reorganization or other similar transaction that results in all of the Company’s securityholders having the right to exchange their
shares of Domesticated Acquiror Common Stock for cash, securities or other property; and |
| (xiv) | Transfers to satisfy any U.S. federal, state, or local income tax obligations of
a Securityholder (or its direct or indirect owners) arising from a change in the U.S. Internal Revenue Code of 1986, as amended (the “Code”),
or the U.S. Treasury Regulations promulgated thereunder (the “Regulations”) after the date on which the Merger Agreement
was executed by the parties, and such change prevents the Merger from qualifying as a “reorganization” pursuant to Section
368 of the Code (and the Merger does not qualify for similar tax-free treatment pursuant to any successor or other provision of the Code
or Regulations taking into account such changes), in each case solely and to the extent necessary to cover any tax liability as a direct
result of the transaction. |
provided, however, that (A)
in the case of clauses (i) through (vii), such permitted transferees must enter into a written agreement, in substantially the form of
this Agreement (it being understood that any references to “immediate family” in the agreement executed by such permitted
transferee shall expressly refer only to the immediate family of the applicable Securityholder and not to the immediate family of the
permitted transferee), agreeing to be bound by these Transfer restrictions. For purposes of this paragraph, “immediate family”
shall mean a spouse, domestic partner, child (including by adoption), father, mother, brother or sister of the undersigned, and lineal
descendant (including by adoption) of the undersigned or of any of the foregoing Persons; and “affiliate” shall have the meaning
set forth in Rule 405 under the Securities Act.
3. In the event that
the Company releases or waives, in full or in part, any party from a lock-up agreement entered into in connection with the Closing,
then the same number of Lock-Up Shares held by the undersigned as held by such released party shall be immediately and fully
released on the same terms from the applicable prohibition(s) set forth herein. The foregoing provisions of this paragraph will not
apply if (i) the release or waiver is granted to a holder of Domesticated Acquiror Common Stock in connection with a follow-on
public offering of Domesticated Acquiror Common Stock pursuant to a registration statement filed with the SEC, whether or not such
offering or sale is wholly or partially a secondary offering of the Domesticated Acquiror Common Stock, and the undersigned, only to
the extent the undersigned has a contractual right to demand or require the registration of the undersigned’s Domesticated
Acquiror Common Stock or “piggyback” on a registration statement filed by the Company for the offer and sale of its
Domesticated Acquiror Common Stock, has been given an opportunity to participate on a basis consistent with such contractual rights
in such follow-on offering, (ii)(a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the
transferee has agreed in writing to be bound by the same terms described in this letter to the extent and for the duration that such
terms remain in effect at the time of the transfer, (iii) the aggregate number of Lock-Up Shares affected by such releases or
waivers (whether in one or multiple releases or waivers) with respect to any particular beneficial or record holder of Lock-Up
Shares is less than or equal to 1% of the total number of outstanding shares of Domesticated Acquiror Common Stock then outstanding
(on a fully-diluted basis, calculated as of the date of such release or waiver), or (iv) the Company determines in its sole
discretion that a release or waiver should be granted to a record or beneficial holder of Lock-Up Shares due to circumstances of
emergency or hardship. In the event that the Company changes, amends, modifies or waives (other than to correct a typographical
error) any particular provision of any other lock-up agreement entered into in connection with the Closing, then the undersigned
shall be offered the option (but not the requirement) to make a corresponding change, amendment, modification or waiver to this
Agreement, which option may be exercised by a written consent executed by the Securityholders holding a majority of the shares of
Domesticated Acquiror Common Stock then held by the Securityholders in the aggregate as to which this Agreement has not been
terminated, executed in the same manner as this Agreement and which makes reference to this Agreement, and which changes,
amendments, modifications or waivers, if approved in accordance with the terms hereof, will thereafter be binding on all of the
undersigned.
4.
This Agreement shall terminate upon the earlier of (i) the expiration of the Lock Up Period, (ii) the closing of a liquidation,
merger, stock exchange, reorganization or other similar transaction after the Closing Date that results in all of the public
stockholders of the Company having the right to exchange their shares of Domesticated Acquiror Common Stock for cash securities or
other property, (iii) the day after the date on which the closing price of the Domesticated Acquiror Common Stock equals or exceeds
$12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20
trading days within any 30 trading day period commencing at least 150 days after the Closing Date or (iv) the liquidation of the
Company.
5. In
furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described
therein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of
this Agreement.
6. This
Agreement replaces Section 7(a) of that certain Letter Agreement, dated October 27, 2021, among the Company, Perception Capital Partners
II LLC, and the Company’s officers and directors, which Section 7(a) shall be terminated and, to the extent previously applicable
to a Securityholder, of no further effect with respect to such Securityholder upon the Closing, and 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.
7.
This Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing, executed by the
Company and the Securityholders holding a majority of the shares of Domesticated Acquiror Common Stock then held by the
Securityholders in the aggregate as to which this Agreement has not been terminated, executed in the same manner as this Agreement
and which makes reference to this Agreement. This Agreement may not be modified or amended except as provided in the immediately
preceding sentence and any purported amendment by any party or parties hereto effected in a manner which does not comply with this Section
7 shall be null and void, ab initio.
8. Except
as set forth herein, no party hereto may assign either this Agreement or any of its rights, interests or obligations hereunder without
the prior written consent of (i) with respect to any Securityholder, the Company, and (ii) with respect to the Company, the Securityholders
holding a majority of the shares of Domesticated Acquiror Common Stock then held by the Securityholders in the aggregate as to which this
Agreement has not been terminated. 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 Agreement shall be binding on each Securityholder
and each of its respective successors, heirs and assigns and permitted transferees.
9. This
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 Agreement shall be brought
and enforced in the 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.
10. This
Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement or any joinder to this Agreement
by electronic means, including DocuSign, e-mail, or scanned pages shall be effective as delivery of a manually executed counterpart to
this Agreement.
11. Whenever
possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law, but
if any term or other provision of this Agreement is held to be invalid, illegal or unenforceable under applicable law, all other provisions
of this Agreement shall remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby
are not affected in any manner materially adverse to any party hereto. Upon such determination that any term or other provision of this
Agreement is invalid, illegal or unenforceable under applicable law, 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 an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent possible
12. The
liability of any Securityholder hereunder is several (and not joint). Notwithstanding any other provision of this Agreement, in no event
will any Securityholder be liable for any other Securityholder’s breach of such other Securityholder’s obligations under this
Agreement.
[remainder of page intentionally
left blank]
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement on the day and year first above written.
|
SPECTAIRE HOLDINGS INC. |
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|
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By: |
/s/ Brian
Semkiw |
|
Name: |
Brian Semkiw |
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Title: |
Chief Executive Officer |
[Signature Page to Lock-up
Agreement]
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SECURITYHOLDERS: |
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PERCEPTION CAPITAL PARTNERS II LLC |
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By: |
/s/ Scott Honour |
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Name: |
Scott Honour |
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Title: |
Authorized Signatory |
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|
|
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/s/ Omer
Keilaf |
|
Omer Keilaf |
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/s/ Thomas J.
Abood |
|
Thomas J. Abood |
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/s/ R. Rudolph
Reinfrank |
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R. Rudolph Reinfrank |
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/s/ Karrie
Willis |
|
Karrie Willis |
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/s/ Scott
Honour |
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Scott Honour |
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|
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/s/ Marcy
Haymaker |
|
Marcy Haymaker |
[Signature Page to Lock-Up Agreement]
SCHEDULE I
SECURITYHOLDERS
Perception Capital Partners II LLC
Omer Keilaf
Thomas J. Abood
R. Rudolph Reinfrank
Karrie Willis
Scott Honour
Marcy Haymaker
Exhibit 10.5
Execution Version
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (this
“Agreement”), dated as of October 19, 2023, is made and entered into by and among Spectaire Holdings Inc., a Delaware
corporation (the “Company”) (formerly known as Perception Capital Corp. II, a Cayman Islands exempted company limited
by shares prior to its domestication as a Delaware corporation), and the Persons (as defined in the Merger Agreement (as defined below))
set forth on Schedule I hereto (such Persons, together with any other Person who hereafter becomes a party to this Agreement pursuant
to Section 2 or Section 7 of this Agreement, the “Securityholders” and each, a “Securityholder”).
WHEREAS, the
Company, Perception Spectaire Merger Sub Corp., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger
Sub”), and Spectaire Inc., a Delaware corporation (“Legacy Spectaire”), entered into that certain Agreement
and Plan of Merger (as amended or modified from time to time, the “Merger Agreement”; capitalized terms used but not
defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement), dated as of January 16, 2023, pursuant
to which, among other things, on the date hereof Merger Sub will merge with and into Legacy Spectaire, with Legacy Spectaire continuing
on as the surviving entity and a wholly owned subsidiary of the Company, on the terms and conditions set forth therein (the “Merger”);
WHEREAS, upon
the Closing, each of the Securityholders will own equity interests in the Company; and
WHEREAS, in
connection with the Merger, the parties hereto wish to set forth herein certain understandings between such parties with respect to restrictions
on transfer of equity interests in the Company.
NOW, THEREFORE, the parties agree as follows:
1.
Subject to the exceptions set forth herein, each Securityholder agrees not to, without the prior written consent of the board of
directors of the Company, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option, right or
warrant to purchase or otherwise transfer, dispose of or agree to transfer or dispose of, directly or indirectly, or establish or
increase a put equivalent position or liquidate or decrease 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 (the “SEC”) promulgated thereunder, any shares of Domesticated Acquiror Common Stock held
by it immediately after the Effective Time, any shares of Domesticated Acquiror Common Stock issuable upon the exercise or
settlement, as applicable, of Acquiror Options or Acquiror RSUs held by it immediately after the Effective Time (other than shares
of Domesticated Acquiror Common Stock issued or issuable upon the exercise of Acquiror Private Placement Warrants), or any other
securities convertible into or exercisable or exchangeable for Domesticated Acquiror Common Stock held by it immediately after the
Effective Time (other than Acquiror Private Placement Warrants) (collectively, the “Lock-Up Shares”), (ii) enter
into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of
any of the Lock-Up Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise or
(iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii) (the actions specified in clauses
(i)-(iii), collectively, “Transfer”) until the date that is 180 days after the Closing Date (the
“Lock-Up Period”), subject to the early release provisions set forth in Section 4 below.
2. The restrictions set forth in Section 1 shall not apply to:
| (i) | in the case of an entity, Transfers (A) to another entity that is an affiliate (as defined in Rule 405
promulgated under the Securities Act of 1933, as amended (the “Securities Act”)) of the undersigned, or to any investment
fund or other entity controlling, controlled by, managing or managed by or under common control with the undersigned or affiliates of
the undersigned or who shares a common investment advisor with the undersigned or (B) as part of a distribution to members, partners,
shareholders or equity holders of the undersigned; |
| (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; |
| (iv) | in the case of an individual, Transfers by operation of law or pursuant to a court order, such as a qualified
domestic relations order, divorce decree or separation agreement; |
| (v) | in the case of an individual, Transfers to a partnership, limited liability company or other entity of
which the undersigned and/or the immediate family (as defined below) of the undersigned are the legal and beneficial owner of all of the
outstanding equity securities or similar interests; |
| (vi) | in the case of an entity that is a trust, Transfers to a trustor or beneficiary of the trust or to the estate of a beneficiary of
such trust; |
| (vii) | 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; |
| (viii) | Transfers of any shares of Domesticated Acquiror Common Stock or other securities (other than Acquiror
Private Placement Warrants or shares of Domesticated Acquiror Common Stock underlying the Acquiror Private Placement Warrants) acquired
in connection with the financing of the Merger or issued in exchange for, or on conversion or exercise of, any securities issued in connection
with the financing of the Merger; |
| (ix) | Transfers relating to Domesticated Acquiror Common Stock or other securities convertible into or exercisable
or exchangeable for Domesticated Acquiror 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 Period; |
| (x) | the exercise of stock options or warrants to purchase shares
of Domesticated Acquiror Common Stock or the vesting of stock awards of Domesticated Acquiror Common Stock and any related transfer of
shares of Domesticated Acquiror Common Stock in connection therewith (x) deemed to occur upon the “cashless” or “net”
exercise of such options or warrants or (y) for the purpose of paying the exercise price of such options or warrants or for paying taxes
due as a result of the exercise of such options or warrants, the vesting of such options, warrants or stock awards, or as a result of
the vesting of such shares of Domesticated Acquiror Common Stock, it being understood that all shares of Domesticated Acquiror Common
Stock received upon such exercise, vesting or transfer will remain subject to the restrictions of this Agreement during the Lock-Up Period; |
| (xi) | Transfers to the Company pursuant to any contractual arrangement in effect at the Effective Time that
provides for the repurchase by the Company or forfeiture of Domesticated Acquiror Common Stock or other securities convertible into or
exercisable or exchangeable for Domesticated Acquiror Common Stock in connection with the termination of the Securityholder’s service
to the Company; |
| (xii) | the entry, by a Securityholder, at any time after the Effective Time, of any trading plan providing for
the sale of shares of Domesticated Acquiror Common Stock by a Securityholder, which trading plan meets the requirements of Rule 10b5-1(c)
under the Exchange Act; provided, however, that such plan does not provide for, or permit, the sale of any shares of Domesticated
Acquiror Common Stock during the applicable Lock-Up Period and no public announcement or filing is voluntarily made or required regarding
such plan during the Lock-Up Period; |
| (xiii) | Transfers in the event of completion of a liquidation, merger, stock exchange, reorganization or other
similar transaction that results in all of the Company’s securityholders having the right to exchange their shares of Domesticated
Acquiror Common Stock for cash, securities or other property; and |
| (xiv) | Transfers to satisfy any U.S. federal, state, or local income tax obligations of a Securityholder (or
its direct or indirect owners) arising from a change in the U.S. Internal Revenue Code of 1986, as amended
(the “Code”), or the U.S. Treasury Regulations promulgated thereunder (the “Regulations”) after
the date on which the Merger Agreement was executed by the parties, and such change prevents the Merger from qualifying as a “reorganization”
pursuant to Section 368 of the Code (and the Merger does not qualify for
similar tax-free treatment pursuant to any successor or other provision of the Code or Regulations taking into account such changes),
in each case solely and to the extent necessary to cover any tax liability as a direct result of the transaction; and |
| (xv) | pledges of Domesticated Acquiror Common Stock or other securities convertible into or exercisable or exchangeable
for Domesticated Acquiror Common Stock in a bona fide transaction as collateral to secure obligations pursuant to lending or other financing
arrangements between a Securityholder (or its affiliates), on the one hand, and a third party, on the other hand, for the benefit of such
Securityholder and/or its affiliates. |
provided, however, that (A) in the case
of clauses (i) through (vii), such permitted transferees must enter into a written agreement, in substantially the form of this Agreement
(it being understood that any references to “immediate family” in the agreement executed by such permitted transferee shall
expressly refer only to the immediate family of the applicable Securityholder and not to the immediate family of the permitted transferee),
agreeing to be bound by these Transfer restrictions. For purposes of this paragraph, “immediate family” shall mean a spouse,
domestic partner, child (including by adoption), father, mother, brother or sister of the undersigned, and lineal descendant (including
by adoption) of the undersigned or of any of the foregoing Persons; and “affiliate” shall have the meaning set forth in Rule
405 under the Securities Act.
3. In
the event that the Company releases or waives, in full or in part, any party from a lock-up agreement entered into in connection with
the Closing, then the same number of Lock-Up Shares held by the undersigned as held by such released party shall be immediately and fully
released on the same terms from the applicable prohibition(s) set forth herein. The foregoing provisions of this paragraph will not apply
if (i) the release or waiver is granted to a holder of Domesticated Acquiror Common Stock in connection with a follow-on public offering
of Domesticated Acquiror Common Stock pursuant to a registration statement filed with the SEC, whether or not such offering or sale is
wholly or partially a secondary offering of the Domesticated Acquiror Common Stock, and the undersigned, only to the extent the undersigned
has a contractual right to demand or require the registration of the undersigned’s Domesticated Acquiror Common Stock or “piggyback”
on a registration statement filed by the Company for the offer and sale of its Domesticated Acquiror Common Stock, has been given an opportunity
to participate on a basis consistent with such contractual rights in such follow-on offering, (ii)(a) the release or waiver is effected
solely to permit a transfer not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described
in this letter to the extent and for the duration that such terms remain in effect at the time of the transfer, (iii) the aggregate number
of Lock-Up Shares affected by such releases or waivers (whether in one or multiple releases or waivers) with respect to any particular
beneficial or record holder of Lock-Up Shares is less than or equal to 1% of the total number of outstanding shares of Domesticated Acquiror
Common Stock then outstanding (on a fully-diluted basis, calculated as of the date of such release or waiver), or (iv) the Company determines
in its sole discretion that a release or waiver should be granted to a record or beneficial holder of Lock-Up Shares due to circumstances
of emergency or hardship. In the event that the Company changes, amends, modifies or waives (other than to correct a typographical error)
any particular provision of any other lock-up agreement entered into in connection with the Closing, then the undersigned shall be offered
the option (but not the requirement) to make a corresponding change, amendment, modification or waiver to this Agreement, which option
may be exercised by a written consent executed by the Securityholders holding a majority of the shares of Domesticated Acquiror Common
Stock then held by the Securityholders in the aggregate as to which this Agreement has not been terminated, executed in the same manner
as this Agreement and which makes reference to this Agreement, and which changes, amendments, modifications or waivers, if approved in
accordance with the terms hereof, will thereafter be binding on all of the undersigned.
4.
This Agreement shall terminate upon the earlier of (i) the expiration of the Lock Up Period, (ii) the closing of a liquidation,
merger, stock exchange, reorganization or other similar transaction after the Closing Date that results in all of the public
stockholders of the Company having the right to exchange their shares of Domesticated Acquiror Common Stock for cash securities or
other property, or (iii) the liquidation of the Company.
5. In
furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described
therein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of
this Agreement.
6. This
Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing, executed by the Company and
the Securityholders holding a majority of the shares of Domesticated Acquiror Common Stock then held by the Securityholders in the aggregate
as to which this Agreement has not been terminated, executed in the same manner as this Agreement and which makes reference to this Agreement.
This Agreement may not be modified or amended except as provided in the immediately preceding sentence and any purported amendment by
any party or parties hereto effected in a manner which does not comply with this Section 6 shall be null and void, ab initio.
7. Except
as set forth herein, no party hereto may assign either this Agreement or any of its rights, interests or obligations hereunder without
the prior written consent of (i) with respect to any Securityholder, the Company, and (ii) with respect to the Company, the Securityholders
holding a majority of the shares of Domesticated Acquiror Common Stock then held by the Securityholders in the aggregate as to which this
Agreement has not been terminated. 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 Agreement shall be binding on each Securityholder
and each of its respective successors, heirs and assigns and permitted transferees.
8. This
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 Agreement shall be brought
and enforced in the 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.
9. This
Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement or any joinder to this Agreement
by electronic means, including DocuSign, e-mail, or scanned pages shall be effective as delivery of a manually executed counterpart to
this Agreement.
10. Whenever
possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law, but
if any term or other provision of this Agreement is held to be invalid, illegal or unenforceable under applicable law, all other provisions
of this Agreement shall remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby
are not affected in any manner materially adverse to any party hereto. Upon such determination that any term or other provision of this
Agreement is invalid, illegal or unenforceable under applicable law, 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 an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent possible
11. The
liability of any Securityholder hereunder is several (and not joint). Notwithstanding any other provision of this Agreement, in no event
will any Securityholder be liable for any other Securityholder’s breach of such other Securityholder’s obligations under this
Agreement.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement on the day and year first above written.
|
SPECTAIRE HOLDINGS INC. |
|
|
|
|
By: |
/s/ Brian
Semkiw |
|
Name: |
Brian Semkiw |
|
Title: |
Chief Executive Officer |
[Signature Page to Lock-up Agreement]
|
SECURITYHOLDERS: |
|
|
|
/s/ Brian
Hemond |
|
Brian Hemond |
|
|
|
/s/ Brian
Semkiw |
|
Brian Semkiw |
|
|
|
/s/ Ian
Hunter |
|
Ian Hunter |
|
MLAB CAPITAL GMBH |
|
| |
|
By: |
/s/
Dr. Jörg Mosolf |
|
Name: |
Dr. Jörg Mosolf |
|
Title: |
Authorized Signatory |
SCHEDULE I
SECURITYHOLDERS
Brian Hemond
Brian Semkiw
Ian Hunter
MLab Capital GmbH
Exhibit
10.13
INDEMNIFICATION
And Advancement AGREEMENT
This Indemnification and Advancement
Agreement (“Agreement”) is made as of October 19, 2023 by and between Spectaire Holdings Inc., a Delaware corporation (the
“Company”), and _____________, a [member of the Board of Directors/an officer] of the Company (“Indemnitee”).
This Agreement supersedes and replaces any and all previous agreements between the Company and Indemnitee covering indemnification and
advancement of expenses.
RECITALS
WHEREAS, the Board of Directors
of the Company (the “Board”) believes that highly competent persons have become more reluctant to serve publicly-held corporations
as directors, officers, or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification
and advancement of expenses against inordinate risks of claims and actions against them arising out of their service to and activities
on behalf of the corporation;
WHEREAS, the Board has determined
that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense,
liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such
insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company
believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums
and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally
would have been brought only against the Company or business enterprise itself. The Company’s Bylaws and Certificate of Incorporation
require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the
General Corporation Law of the State of Delaware (the “DGCL”). The Bylaws, the Certificate of Incorporation, and the DGCL
expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may
be entered into between the Company and its directors, officers and other persons with respect to indemnification and advancement of expenses;
WHEREAS, the uncertainties
relating to such insurance, to indemnification, and to advancement of expenses may increase the difficulty of attracting and retaining
such persons;
WHEREAS, the Board has determined
that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders
and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable,
prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons
to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that
they will not be so indemnified;
WHEREAS, this Agreement is
a supplement to and in furtherance of the Bylaws, the Certificate of Incorporation and any resolutions adopted pursuant thereto, as well
as any rights of Indemnitee under any directors’ and officers’ liability insurance policy, and is not a substitute therefor,
and does not diminish or abrogate any rights of Indemnitee thereunder; and
WHEREAS, Indemnitee does not
regard the protection available under the Bylaws, the Certificate of Incorporation, and available insurance as adequate in the present
circumstances, and may not be willing to serve or continue to serve as [a/an] [officer/director] without adequate additional protection,
and the Company desires Indemnitee to serve or continue to serve in such capacity. Indemnitee is willing to serve, continue to serve and
to take on additional service for or on behalf of the Company on the condition that Indemnitee be so indemnified and be advanced expenses.
NOW, THEREFORE, in consideration
of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services
to the Company. Indemnitee agrees to serve as [a/an] [director/officer] of the Company. Indemnitee may, at any time and for any reason,
resign from such position (subject to any other contractual obligation or any obligation, including any fiduciary duty, imposed by operation
of law). This Agreement does not create any obligation on the Company to continue Indemnitee in such position and is not an employment
contract between the Company (or any of its subsidiaries or any Enterprise (as defined below)) and Indemnitee.
Section 2. Definitions.
As used in this Agreement:
(a) “Agent”
means any person who is authorized by the Company or an Enterprise to act for or represent the interests of the Company or an Enterprise,
respectively.
(b) A
“Change in Control” occurs upon the earliest to occur after the date of this Agreement of any of the following events:
i. Acquisition
of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly,
of securities of the Company representing fifteen percent (15%) or more of the combined voting power of the Company’s then outstanding
securities unless the change in relative beneficial ownership of the Company’s securities by any Person results solely from a reduction
in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors;
ii. Change
in Board of Directors. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect a transaction described in Sections 2(b)(i), 2(b)(iii) or 2(b)(iv) of this
Agreement) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;
iii. Corporate
Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation
which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and
with the power to elect at least a majority of the Board or other governing body of such surviving entity;
iv. Liquidation.
The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company’s assets; and
v. Other
Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether
or not the Company is then subject to such reporting requirement.
vi. For
purposes of this Section 2(b), the following terms have the following meanings:
| 1 | “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time. |
| 2 | “Person” has the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided,
however, that Person excludes (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of
the Company, and (iii) any entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company. |
| 3 | “Beneficial Owner” has the meaning given to such term in Rule 13d-3 under the Exchange Act;
provided, however, that Beneficial Owner excludes any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the
Company approving a merger of the Company with another entity. |
(c) “Corporate
Status” describes the status of a person who is or was acting as a director, officer, employee, fiduciary, or Agent of the Company
or an Enterprise.
(d) “Disinterested
Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.
(e) “Enterprise”
means any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other entity for which
Indemnitee is or was serving at the request of the Company as a director, officer, employee, or Agent.
(f) “Expenses”
includes all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees and other costs of experts and other professionals,
witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal,
state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement,
ERISA excise taxes and penalties, and all other disbursements, obligations, or expenses of the types customarily incurred in connection
with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating
in, a Proceeding. Expenses also include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without
limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent,
and (ii) for purposes of Section 14(d) of this Agreement only, Expenses incurred by Indemnitee in connection with the interpretation,
enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise. Expenses, however, do not include
amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(g) “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is,
nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party
(other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification
agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing,
the term “Independent Counsel” does not include any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s
rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel.
(h) The
term “Proceeding” includes any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration,
mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed
proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, regulatory,
or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party,
potential party, non-party witness or otherwise arising out of (i) Indemnitee’s Corporate Status, (ii) any action taken by Indemnitee
(or a failure to take action by Indemnitee) or (iii) any action (or failure to act) on Indemnitee’s part while acting pursuant to
Indemnitee’s Corporate Status, in each case whether or not serving in such capacity at the time any liability or Expense is incurred
for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement. A Proceeding also includes
a situation the Indemnitee believes in good faith may lead to or culminate in the institution of a Proceeding.
Section 3. Indemnity
in Third-Party Proceedings. The Company will indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee
is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company
to procure a judgment in its favor. Pursuant to this Section 3, the Company will indemnify Indemnitee to the fullest extent permitted
by applicable law against all Expenses, judgments, fines and amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses, judgments, fines and amounts paid in settlement) actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein,
if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the
Company and, in the case of a criminal Proceeding, had no reasonable cause to believe that Indemnitee’s conduct was unlawful.
Section 4. Indemnity
in Proceedings by or in the Right of the Company. The Company will indemnify Indemnitee in accordance with the provisions of this
Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company
to procure a judgment in its favor. Pursuant to this Section 4, the Company will indemnify Indemnitee to the fullest extent permitted
by applicable law against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with
such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in, or not opposed to, the best interests of the Company. The Company will not indemnify Indemnitee for Expenses under this Section
4 related to any claim, issue, or matter in a Proceeding for which Indemnitee has been finally adjudged by a court to be liable to the
Company, unless, and only to the extent that, the Court of Chancery of the state of Delaware (the “Delaware Court”) or any
court in which the Proceeding was brought determines upon application by Indemnitee that, despite the adjudication of liability but in
view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.
Section 5. Indemnification
for Expenses of a Party Who is Wholly or Partly Successful. To the fullest extent permitted by applicable law, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection with any Proceeding to the extent that Indemnitee
is successful, on the merits or otherwise. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits
or otherwise, as to one or more but less than all claims, issues, or matters in such Proceeding, the Company will indemnify Indemnitee
against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with or related to each
successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section 5 and without limitation,
the termination of any claim, issue, or matter in such a Proceeding by dismissal, with or without prejudice, will be deemed to be a successful
result as to such claim, issue, or matter.
Section 6. Indemnification
for Expenses of a Witness. To the fullest extent permitted by applicable law, the Company will indemnify Indemnitee against all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding to which Indemnitee is
not a party but to which Indemnitee is a witness, deponent, interviewee, or otherwise asked to participate or provide information.
Section 7. Partial Indemnification.
If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but
not, however, for the total amount thereof, the Company will indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Section 8. Additional
Indemnification. Notwithstanding any limitation in Sections 3, 4, or 5 of this Agreement, the Company will indemnify Indemnitee to
the fullest extent permitted by applicable law (including but not limited to, the DGCL and any amendments to or replacements of the DGCL
adopted after the date of this Agreement that expand the Company’s ability to indemnify its officers, directors, employees or agents)
if Indemnitee is a party to, or threatened to be made a party to, any Proceeding (including a Proceeding by or in the right of the Company
to procure a judgment in its favor).
Section 9. Exclusions.
Notwithstanding any provision in this Agreement, the Company is not obligated under this Agreement to indemnify Indemnitee in connection
with any Proceeding:
(a) for
which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except to
the extent provided in Section 16(b) of this Agreement and except with respect to any excess beyond the amount paid under any insurance
policy or other indemnity provision;
(b) for
(i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within
the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b)) or similar provisions of state statutory law or common law,
(ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits
realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any
such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002
(the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities
in violation of Section 306 of the Sarbanes-Oxley Act) or (iii) any reimbursement of the Company by Indemnitee of any compensation pursuant
to any compensation recoupment or clawback policy adopted by the Board or the compensation committee of the Board, including but not limited
to any such policy adopted to comply with stock exchange listing requirements implementing Section 10D of the Exchange Act; or
(c) initiated
by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Proceeding or part of any Proceeding is to enforce Indemnitee’s rights
to indemnification or advancement, of Expenses, including a Proceeding (or any part of any Proceeding) initiated pursuant to Section 14
of this Agreement, (ii) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (iii) the Company
provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
Section 10. Advances
of Expenses.
(a) The
Company will advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with:
i. any
Proceeding (or any part of any Proceeding) not initiated by Indemnitee; or
ii. any
Proceeding (or any part of any Proceeding) initiated by Indemnitee if (A) the Proceeding or part of any Proceeding is to enforce Indemnitee’s
rights to obtain indemnification or advancement of Expenses from the Company or Enterprise, including a proceeding initiated pursuant
to Section 14, or (B) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation.
(b) The
Company will advance the Expenses within thirty (30) days after the receipt by the Company of a statement or statements requesting such
advances from time to time, whether prior to or after final disposition of any Proceeding eligible for advancement of expenses.
(c) Advances
will be unsecured and interest free. Indemnitee hereby undertakes to repay any amounts so advanced (without interest) to the extent that
it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company, thus Indemnitee qualifies for advances upon
the execution of this Agreement and delivery to the Company. No other form of undertaking is required other than the execution of this
Agreement. The Company will make advances without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s
ultimate entitlement to indemnification under the other provisions of this Agreement.
Section 11. Procedure
for Notification of Claim for Indemnification or Advancement.
(a) Indemnitee
will notify the Company in writing of any Proceeding with respect to which Indemnitee intends to seek indemnification or advancement of
Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of notice thereof. Indemnitee will include in
the written notification to the Company a description of the nature of the Proceeding and the facts underlying the Proceeding and provide
such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what
extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. Indemnitee’s failure to notify
the Company will not relieve the Company from any obligation it may have to Indemnitee under this Agreement, and any delay in so notifying
the Company will not constitute a waiver by Indemnitee of any rights under this Agreement to the extent such delay does not adversely
impact the Company. The Secretary of the Company will, promptly upon receipt of such a request for indemnification or advancement, advise
the Board in writing that Indemnitee has requested indemnification or advancement.
(b) The
Company will be entitled to participate in the Proceeding at its own expense.
Section 12. Procedure
Upon Application for Indemnification.
(a) Unless
a Change of Control has occurred, the determination of Indemnitee’s entitlement to indemnification will be made:
i. by
a majority vote of the Disinterested Directors, even though less than a quorum of the Board;
ii. by
a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of
the Board;
iii. if
there are no such Disinterested Directors or, if such Disinterested Directors so direct, by written opinion provided by Independent Counsel
selected by the Board; or
iv. if
so directed by the Board, by the stockholders of the Company.
(b) If
a Change in Control has occurred, the determination of Indemnitee’s entitlement to indemnification will be made by written opinion
provided by Independent Counsel selected by Indemnitee (unless Indemnitee requests such selection be made by the Board)
(c) The
party selecting Independent Counsel pursuant to subsection (a)(iii) or (b) of this Section 12 will provide written notice of the selection
to the other party. The notified party may, within ten (10) days after receiving written notice of the selection of Independent Counsel,
deliver to the selecting party a written objection to such selection; provided, however, that such objection may be asserted
only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined
in Section 2 of this Agreement, and the objection will set forth with particularity the factual basis of such assertion. Absent a
proper and timely objection, the person so selected will act as Independent Counsel. If such written objection is so made and substantiated,
the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware
Court has determined that such objection is without merit. If, within thirty (30) days after the later of submission by Indemnitee of
a written request for indemnification pursuant to Section 11(a) and the final disposition of the Proceeding, Independent Counsel
has not been selected or, if selected, any objection to such selection has not been resolved, either the Company or Indemnitee may petition
the Delaware Court for resolution of any objection made by the Company or Indemnitee to the other’s selection of Independent Counsel
and/or for the appointment as Independent Counsel of a person selected by such court or by such other person as such court designates.
Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent Counsel will
be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct
then prevailing).
(d) Indemnitee
will cooperate with the person, persons or entity making the determination with respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance request any documentation or information that is not privileged
or otherwise protected from disclosure and that is reasonably available to Indemnitee and reasonably necessary to such determination.
The Company will, subject to applicable law, advance and pay any Expenses incurred by Indemnitee in so cooperating with the person, persons
or entity making the indemnification determination irrespective of the determination as to Indemnitee’s entitlement to indemnification
and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The Company promptly will advise Indemnitee in writing
of the determination that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which
indemnification has been denied and providing a copy of any written opinion provided to the Board by Independent Counsel.
(e) If,
subject to applicable law, it is determined that Indemnitee is entitled to indemnification, the Company will make payment to Indemnitee
within thirty (30) days after such determination.
Section 13. Presumptions
and Effect of Certain Proceedings.
(a) In
making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination
will, to the fullest extent not prohibited by law, presume Indemnitee is entitled to indemnification under this Agreement if Indemnitee
has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company will, to the fullest extent
not prohibited by law, have the burden of proof to overcome that presumption. Neither the failure of the Company (including by its directors
or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification
is proper under the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company
(including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, will be a defense
to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) If
the determination of the Indemnitee’s entitlement to indemnification has not been made pursuant to Section 12 of this Agreement
within sixty (60) days after the later of (i) receipt by the Company of Indemnitee’s request for indemnification pursuant to Section
11(a) of this Agreement and (ii) the final disposition of the Proceeding for which Indemnitee requested Indemnification (the “Determination
Period”), the requisite determination of entitlement to indemnification will, to the fullest extent not prohibited by law, be deemed
to have been made and Indemnitee will be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact,
or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request
for indemnification, or (ii) a prohibition of such indemnification under applicable law. The Determination Period may be extended for
a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect
to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or
information relating thereto; and provided, further, the Determination Period will not apply (i) if the determination of entitlement to
indemnification is to be made by the stockholders pursuant to Section 12(a)(iv) of this Agreement and if (A) within fifteen (15) days
after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders
for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination
is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making
such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is
made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel.
(c) The
termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, will not (except as otherwise expressly provided in this Agreement) of itself adversely affect
the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee
had reasonable cause to believe that Indemnitee’s conduct was unlawful.
(d) For
purposes of any determination of good faith, Indemnitee will be deemed to have acted in good faith if Indemnitee acted based on (i) the
records or books of account of the Company, its subsidiaries, or an Enterprise, including financial statements, (ii) information supplied
to Indemnitee by the directors or officers of the Company, its subsidiaries, or an Enterprise in the course of their duties, (iii) the
advice of legal counsel for the Company, its subsidiaries, or an Enterprise, or (iv) information or records given or reports made to the
Company or an Enterprise by an independent certified public accountant or by an appraiser, financial advisor or other expert selected
with reasonable care by or on behalf of the Company, its subsidiaries, or an Enterprise. Further, Indemnitee will be deemed to have acted
in a manner “not opposed to the best interests of the Company,” as referred to in this Agreement if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in the best interests of the participants and beneficiaries of an employee
benefit plan. The provisions of this Section 13(d) are not exclusive and do not limit in any way the other circumstances in which the
Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(e) The
knowledge and/or actions, or failure to act, of any other person affiliated with the Company or an Enterprise (including, but not limited
to, a director, officer, trustee, partner, managing member, fiduciary, agent or employee) may not be imputed to Indemnitee for purposes
of determining Indemnitee’s right to indemnification under this Agreement.
Section 14. Remedies
of Indemnitee.
(a) Indemnitee
may commence litigation against the Company in the Delaware Court to obtain indemnification or advancement of Expenses provided by this
Agreement in the event that (i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) the Company does not advance Expenses pursuant to Section 10 of this Agreement, (iii) the determination
of entitlement to indemnification is not made pursuant to Section 12 of this Agreement within the Determination Period, (iv) the Company
does not indemnify Indemnitee pursuant to Section 5 or 6 or the second to last sentence of Section 12(d) of this Agreement within
thirty (30) days after receipt by the Company of a written request therefor, (v) the Company does not indemnify Indemnitee pursuant to
Section 3, 4, 7, or 8 of this Agreement within thirty (30) days after a determination has been made that Indemnitee is entitled to indemnification,
or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable,
or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided
or intended to be provided to the Indemnitee hereunder. Alternatively, Indemnitee or the Company, at each such party’s respective
option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee or the Company, as applicable, must commence such Proceeding seeking an adjudication or an award in
arbitration within one hundred and eighty (180) days following the date on which Indemnitee first has the right to commence such Proceeding
pursuant to this Section 14(a); provided, however, that the foregoing clause does not apply in respect of a Proceeding brought
by Indemnitee to enforce Indemnitee’s rights under Section 5 of this Agreement. The Company will not oppose, and Indemnitee
will not oppose the Company’s right, Indemnitee’s right to seek any such adjudication or award in arbitration.
(b) If
a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding
or arbitration commenced pursuant to this Section 14 will be conducted in all respects as a de novo trial or arbitration on
the merits and Indemnitee may not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced
pursuant to this Section 14 the Company will have the burden of proving Indemnitee is not entitled to indemnification or advancement of
Expenses, as the case may be, and will not introduce evidence of the determination made pursuant to Section 12 of this Agreement.
(c) If
a determination is made pursuant to Section 12 of this Agreement that Indemnitee is entitled to indemnification, the Company will
be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading,
in connection with Indemnitee’s request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The
Company is, to the fullest extent not prohibited by law, precluded from asserting in any judicial proceeding or arbitration commenced
pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and will stipulate
in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.
(e) It
is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other
Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or
otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee
hereunder. The Company, to the fullest extent permitted by law, will (within thirty (30) days after receipt by the Company of a written
request therefor) advance to Indemnitee such Expenses which are incurred by Indemnitee in connection with a Proceeding concerning this
Agreement, Indemnitee’s right to indemnification or advancement of Expenses from the Company, or concerning any directors’
and officers’ liability insurance policies maintained by the Company, and will indemnify Indemnitee against any and all such Expenses
unless the court determines that each of Indemnitee’s claims in such action were made in bad faith or were frivolous or are prohibited
by law.
Section 15. Non-exclusivity;
Survival of Rights; Insurance; Subrogation.
(a) The
indemnification and advancement of Expenses provided by this Agreement are not mutually exclusive, and together or separately are not
exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation,
the Bylaws, any agreement, a vote of stockholders or a resolution of the Board, or otherwise. The indemnification and advancement of Expenses
provided by this Agreement may not be limited or restricted by any amendment, alteration or repeal of this Agreement in any way with respect
to any action taken or omitted by Indemnitee in Indemnitee’s Corporate Status occurring prior to any amendment, alteration or repeal
of this Agreement. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification
or advancement of Expenses than would be afforded currently under the Bylaws, the Certificate of Incorporation, or this Agreement, it
is the intent of the parties hereto that Indemnitee enjoy by this Agreement the greater benefits so afforded by such change. No right
or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy is cumulative and
in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion
or employment of any right or remedy hereunder, or otherwise, will not prevent the concurrent assertion or employment of any other right
or remedy.
(b) The
Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement of Expenses and/or insurance provided
by one or more other Persons with whom or which Indemnitee may be associated. The relationship between the Company and such other Persons,
other than an Enterprise, with respect to the Indemnitee’s rights to indemnification, advancement of Expenses, and insurance is
described by this subsection, subject to the provisions of subsection (d) of this Section 15 with respect to a Proceeding concerning Indemnitee’s
Corporate Status with an Enterprise.
i. The
Company hereby acknowledges and agrees:
1) the
Company’s obligations to Indemnitee are primary and any obligation of any other Persons, other than an Enterprise, are secondary
(i.e., the Company is the indemnitor of first resort) with respect to any request for indemnification or advancement of Expenses made
pursuant to this Agreement concerning any Proceeding;
2)
the Company is primarily liable for all indemnification or advancement of Expenses obligations for any Proceeding, whether created by
law, the Bylaws, the Certificate of Incorporation, contract (including this Agreement) or otherwise;
3) any
obligation of any other Persons with whom or which Indemnitee may be associated to indemnify Indemnitee and/or advance Expenses to Indemnitee
in respect of any proceeding are secondary to the Company’s obligations;
4) the
Company will indemnify Indemnitee and advance Expenses to Indemnitee hereunder to the fullest extent provided herein without regard to
any rights Indemnitee may have against any other Person with whom or which Indemnitee may be associated, or an insurer of any such Person;
and
ii. the
Company irrevocably waives, relinquishes and releases (A) any other Person with whom or which Indemnitee may be associated from any claim
of contribution, subrogation, reimbursement, exoneration or indemnification, or any other recovery of any kind in respect of amounts paid
by the Company to Indemnitee pursuant to this Agreement and (B) any right to participate in any claim or remedy of Indemnitee against
any Person, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation,
the right to take or receive from any Person, directly or indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right.
iii. In
the event any other Person with whom or which Indemnitee may be associated or their insurers advances or extinguishes any liability or
loss for Indemnitee, the payor has a right of subrogation against the Company or its insurers for all amounts so paid which would otherwise
be payable by the Company or its insurers under this Agreement. In no event will payment by any other Person with whom or which Indemnitee
may be associated or their insurers affect the obligations of the Company hereunder or shift primary liability for the Company’s
obligation to indemnify or advance Expenses to any other Person with whom or which Indemnitee may be associated.
iv. Any
indemnification or advancement of Expenses provided by any other Person with whom or which Indemnitee may be associated is specifically
in excess over the Company’s obligation to indemnify and advance Expenses or any valid and collectible insurance (including but
not limited to any malpractice insurance or professional errors and omissions insurance) provided by the Company.
(c) To
the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees
or agents of the Company, the Company will obtain a policy or policies covering Indemnitee to the maximum extent of the coverage available
for any such director, officer, employee or agent under such policy or policies, including coverage in the event the Company does not
or cannot, for any reason, indemnify or advance Expenses to Indemnitee as required by this Agreement. If, at the time of the receipt of
a notice of a claim pursuant to this Agreement, the Company has director and officer liability insurance in effect, the Company will give
prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures
set forth in the respective policies. The Company will thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies. Indemnitee
agrees to assist the Company’s efforts to cause the insurers to pay such amounts and will comply with the terms of such policies,
including selection of approved panel counsel, if required.
(d) The
Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee for any Proceeding concerning Indemnitee’s Corporate
Status with an Enterprise will be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses
from such Enterprise. The Company and Indemnitee intend that any such Enterprise (and its insurers) be the indemnitor of first resort
with respect to indemnification and advancement of Expenses for any Proceeding related to or arising from Indemnitee’s Corporate
Status with such Enterprise. The Company’s obligation to indemnify and advance Expenses to Indemnitee is secondary to the obligations
the Enterprise or its insurers owe to Indemnitee. Indemnitee agrees to take all reasonably necessary and desirable action to obtain from
an Enterprise indemnification and advancement of Expenses for any Proceeding related to or arising from Indemnitee’s Corporate Status
with such Enterprise.
(e) In
the event of any payment made by the Company under this Agreement, the Company will be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee from any Enterprise or its insurance carrier. Indemnitee will execute all papers required and
take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.
Section 16. Duration
of Agreement. This Agreement continues until and terminates upon the later of: (a) ten (10) years after the date that Indemnitee ceases
to have a Corporate Status or (b) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee
is granted rights of indemnification or advancement of Expenses hereunder and of any Proceeding commenced by Indemnitee pursuant to Section 14
relating thereto. The indemnification and advancement of Expenses rights provided by or granted pursuant to this Agreement (i) are binding
upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor
by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), (ii) continue as
to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or of any other Enterprise, and (iii) inure
to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.
Section 17. Severability.
If any provision or provisions of this Agreement is held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity,
legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of
this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
will not in any way be affected or impaired thereby and will remain enforceable to the fullest extent permitted by law; (b) such provision
or provisions will be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent
of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion
of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) will be construed so as to give effect to the intent manifested thereby.
Section 18. Interpretation.
Any ambiguity in the terms of this Agreement will be resolved in favor of Indemnitee and in a manner to provide the maximum indemnification
and advancement of Expenses permitted by law. The Company and Indemnitee intend that this Agreement provide to the fullest extent permitted
by law for indemnification and advancement of Expenses in excess of that expressly provided, without limitation, by the Certificate of
Incorporation, the Bylaws, vote of the Company stockholders or disinterested directors, or applicable law.
Section 19. Enforcement.
(a) The
Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order
to induce Indemnitee to serve as a director, officer, employee or agent of the Company, and the Company acknowledges that Indemnitee is
relying upon this Agreement in serving or continuing to serve as a director, officer, employee or agent of the Company.
(b) This
Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided,
however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws, any directors’
and officers’ insurance maintained by the Company and applicable law, and is not a substitute therefor, and does not diminish or
abrogate any rights of Indemnitee thereunder.
Section 20. Modification
and Waiver. No supplement, modification or amendment of this Agreement is binding unless executed in writing by the parties hereto.
No waiver of any of the provisions of this Agreement will be deemed to constitute a waiver of any other provisions of this Agreement nor
will any waiver constitute a continuing waiver.
Section 21. Notice by
Indemnitee. Indemnitee agrees to promptly notify the Company in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement
of Expenses covered hereunder. The failure of Indemnitee to so notify the Company does not relieve the Company of any obligation which
it may have to the Indemnitee under this Agreement or otherwise.
Section 22. Notices.
All notices, requests, demands and other communications under this Agreement will be in writing and will be deemed to have been duly given
if (a) delivered by hand to the other party, (b) sent by reputable overnight courier to the other party or (c) sent by facsimile transmission
or electronic mail, with receipt of oral confirmation that such communication has been received:
(a) If
to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee provides to the Company.
(b) If
to the Company to:
Spectaire Holdings Inc.
155 Arlington St.
Watertown, MA 02472
Attention: Leonardo Fernandes, Chief Financial Officer
Email: lfernandes@spectaire.com
or to any other address as may have been furnished to Indemnitee by
the Company.
Section 23. Contribution.
To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee
for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, will contribute to the amount incurred by Indemnitee, whether
for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim
relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances
of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or
transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees
and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 24. Applicable
Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties are governed by, and construed and enforced
in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration
commenced pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that
any action, claim, or proceeding between the parties arising out of or in connection with this Agreement may be brought only in the Delaware
Court and not in any other state or federal court in the United States of America or any court in any other country, provided that if,
and only if, the Delaware Court lacks jurisdiction, the parties agree that any such action or Proceeding may be brought in any state or
federal court in the State of Delaware, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court (or, if applicable,
any other state or federal court in the State of Delaware) for purposes of any action, claim, or proceeding arising out of or in connection
with this Agreement, (iii) waive any objection to the laying of venue of any such action, claim, or proceeding in the Delaware Court (or,
if applicable, any other state or federal court in the State of Delaware), and (iv) waive, and agree not to plead or to make, any claim
that any such action, claim, or proceeding brought in the Delaware Court (or, if applicable, any other state or federal court in the State
of Delaware) has been brought in an improper or inconvenient forum.
Section 25. Identical
Counterparts. This Agreement may be executed in one or more counterparts, each of which will for all purposes be deemed to be an original
but all of which together constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability
is sought needs to be produced to evidence the existence of this Agreement.
Section 26. Headings.
The headings of this Agreement are inserted for convenience only and do not constitute part of this Agreement or affect the construction
thereof.
[Signature page follows.]
IN WITNESS WHEREOF, the parties
have caused this Agreement to be signed as of the day and year first above written.
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Exhibit 14.1
SPECTAIRE
HOLDINGS INC.
CODE OF ETHICS AND CONDUCT
Adopted October 18, 2023
In accordance with the requirements
of the Securities and Exchange Commission (the “SEC”) and the Nasdaq Stock Market LLC (“Nasdaq”), the Board of
Directors (the “Board”) of Spectaire Holdings Inc., a Delaware corporation (the “Company”), has adopted this Code
of Ethics and Conduct (the “Code”) to encourage:
| ● | honest and ethical conduct, including fair dealing and the ethical handling of actual or apparent conflicts
of interest; |
| | |
| ● | full, fair, accurate, timely and understandable disclosures in reports and documents that the Company
files with, or submits to, the SEC, as well as in other public communications made by or on behalf of the Company; |
| | |
| ● | compliance with applicable governmental laws, rules and regulations; |
| | |
| ● | prompt internal reporting of any violations of law or the Code; |
| | |
| ● | accountability for adherence to the Code, including fair process by which to determine violations; |
| | |
| ● | consistent enforcement of the Code, including clear and objective standards for compliance; and |
| | |
| ● | protection for persons reporting any such questionable behavior. |
All directors, officers and employees
(each a “Covered Party” and, collectively, the “Covered Parties”) of the Company and all of its subsidiaries and
controlled affiliates are expected to be familiar with the Code and to adhere to the principles and procedures set forth below.
I.
Conflicts of Interest
A conflict of interest occurs when
the private interests of a Covered Party interfere, or appear to interfere, with the interests of the Company as a whole.
For example, a conflict of interest
can arise when a Covered Party takes actions or has personal interests that make it difficult to perform his or her Company duties objectively
and effectively. A conflict of interest may also arise when a Covered Party, or a member of his or her immediate family,1 receives
improper personal benefits as a result of his or her position at the Company.
Conflicts of interest can also occur
indirectly. For example, a conflict of interest may arise when a Covered Party is also an executive officer, a major shareholder or has
a material interest in a company or organization doing business
with which the Company has current or prospective business dealings.
| 1 | Item 404(a) of SEC Regulation S-K defines “immediate family
member” as a person’s child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, or any person (other than a tenant or employee) sharing the person’s household. |
Each Covered Party has an obligation
to conduct the Company’s business in an honest and ethical manner, including the ethical handling of actual or apparent conflicts
of interest between personal and professional relationships. Any situation that involves, or may reasonably be expected to involve, a
conflict of interest with the Company, should be disclosed promptly to the Company’s Audit Committee of the Board.
This Code does not attempt to describe
all possible conflicts of interest that could develop. Other common conflicts from which Covered Parties must refrain are set out below:
| ● | Covered Parties may not engage in any conduct or activities that are inconsistent with the Company’s
best interests or that disrupt or impair the Company’s relationship with any person or entity with which the Company has or proposes
to enter into a business or contractual relationship. |
| ● | Covered Parties may not accept compensation, in any form, for services performed for the Company from
any source other than the Company. |
| ● | No Covered Party may take up any management or other employment position with, or have any material
interest in, any firm or company that is in direct or indirect competition with the Company. |
II.
Disclosures
The information in the Company’s
public communications, including all reports and documents filed with or submitted to the SEC, must be full, fair, accurate, timely and
understandable.
To ensure the Company meets this
standard, all Covered Parties (to the extent they are involved in the Company’s disclosure process) are required to maintain familiarity
with the disclosure requirements, processes and procedures applicable to the Company commensurate with their duties. Covered Parties are
prohibited from knowingly misrepresenting, omitting or causing others to misrepresent or omit, material facts about the Company to others,
including the Company’s independent auditors, governmental regulators and self-regulatory organizations.
III.
Compliance with Laws, Rules and Regulations
The Company is obligated to comply with
all applicable laws, rules and regulations. It is the personal responsibility of each Covered Party to adhere to the standards and restrictions
imposed by these laws, rules and regulations in the performance of his or her duties for the Company.
The Chief Executive Officer, Chief
Financial Officer and Chief Accounting Officer or Controller (or persons performing similar functions) of the Company are also required
to promote compliance by all employees with the Code and
to abide by Company standards, policies and procedures.
Covered Parties located outside
of the United States must comply with laws, regulations, rules and regulatory orders of the United States, including the Foreign Corrupt
Practices Act (“FCPA”) and U.S. export control laws, in addition to applicable local laws.
IV.
Reporting, Accountability and Enforcement
The Company promotes ethical behavior
at all times and encourages Covered Parties to talk to supervisors, managers and other appropriate personnel, including officers of the
Company, outside counsel for the Company and the Board or the relevant committee thereof, when in doubt about the best course of action
in a particular situation.
Covered
Parties should promptly report suspected violations of laws, rules, regulations or the Code or any other unethical behavior by any
director, officer, employee or anyone purporting to be acting on the Company’s behalf to appropriate personnel, including
officers of the Company, outside counsel for the Company and the Board or the relevant committee thereof. Reports may be made
anonymously. If requested, confidentiality will be maintained, subject to applicable law, regulations and legal proceedings.
The Audit Committee of the Board
or other appropriate officer or body shall investigate and determine, or shall designate appropriate persons to investigate and determine,
the legitimacy of such reports. The Audit Committee or other appropriate officer or body will then determine the appropriate disciplinary
action. Such disciplinary action includes, but is not limited to, reprimand, termination with cause, and possible civil and criminal prosecution.
To encourage employees to report
any and all violations, the Company will not tolerate retaliation for reports made in good faith. Retaliation or retribution against any
Covered Party for a report made in good faith of any suspected violation of laws, rules, regulations or this Code is cause for appropriate
disciplinary action.
V.
Waivers
Before an
employee, or an immediate family member of any such employee, engages in any activity that would be otherwise prohibited by the Code,
he or she is strongly encouraged to obtain a written waiver from the Board or other appropriate officer or body.
Before a director or executive officer,
or an immediate family member of a director or executive officer, engages in any activity that would be otherwise prohibited by the Code,
he or she must obtain a written waiver from the disinterested directors of the Board. Such waiver must then be disclosed to the Company’s
independent auditors and shareholders, as appropriate, along with the reasons for granting the waiver.
VI.
No Rights Created
This Code
is a statement of certain fundamental principles, policies and procedures that govern the Company’s Covered Parties in the
conduct of the Company’s business. It is not intended to and does not create any rights in any employee, customer, client,
visitor, supplier, competitor, shareholder or any other person or entity. It is the Company’s belief that the policy is robust
and covers most conceivable situations.
3
Exhibit 16.1
October 25, 2023
Office of the Chief Accountant
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Ladies and Gentlemen:
We have read the statements made by Spectaire
Holdings Inc. (formerly known as Perception Capital Corp. II) under Item 4.01 of its Form 8-K dated October 25, 2023. We agree with the
statements concerning our Firm in such Form 8-K; we are not in a position to agree or disagree with other statements of Spectaire Holdings
Inc. (formerly known as Perception Capital Corp. II) contained therein.
Very truly yours,
/s/ Marcum llp
Marcum llp
Exhibit 21.1
LIST OF SUBSIDIARIES OF SPECTAIRE
HOLDINGS INC.
Entity Name |
|
Jurisdiction of Incorporation |
Spectaire Inc. |
|
Delaware |
microMS, Inc. |
|
Delaware |
Exhibit 99.1
UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL INFORMATION
Defined terms included
below shall have the same meaning as terms defined and included elsewhere in this Current Report on Form 8-K (the “Form 8-K”)
filed with the Securities and Exchange Commission (the “SEC”.)
Introduction
The
following unaudited pro forma condensed combined financial information presents the combination of financial information of PCCT and Spectaire,
adjusted to give effect to the Business Combination and related transactions. The following unaudited pro forma condensed combined financial
information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to
Financial Disclosures about Acquired and Disposed Businesses” to depict the accounting for the transaction (“Transaction
Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or
are reasonably expected to occur (“Management’s Adjustments”). Spectaire has elected not to present Management’s
Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information.
The
following unaudited pro forma condensed combined balance sheet as of June 30, 2023 assumes that the Business Combination occurred on June
30, 2023. The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2023 and for the year
ended December 31, 2022 present the pro forma effect to the Business Combination as if it had been completed on January 1, 2022.
The
unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and do not necessarily
reflect what NewCo’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated.
Further, the pro forma condensed combined financial information also may not be useful in predicting the future financial condition and
results of operations of NewCo. The actual financial position and results of operations may differ significantly from the pro forma amounts
reflected herein due to a variety of factors.
The
historical financial information of PCCT was derived from the unaudited financial statements of PCCT as of and for the six months ended
June 30, 2023, and audited financial statements of PCCT for the year ended December 31, 2022, which are incorporated by reference. The
historical financial information of Spectaire was derived from the unaudited condensed consolidated financial statements of Spectaire
as of and for the six months ended June 30, 2023 and audited consolidated financial statements of Spectaire for the year ended December
31, 2022, which are incorporated by reference. This information should be read together with PCCT’s and Spectaire’s unaudited
and audited consolidated financial statements, and related notes, the sections titled “PCCT Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and “Spectaire Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and other financial information incorporated by reference.
Description of the Business
Combination
On January 16, 2023,
PCCT, Spectaire and Merger Sub, entered into the Merger Agreement.
The Domestication
Prior
to the Effective Time of the Business Combination, PCCT effected a deregistration under the Cayman Islands Companies Act and a domestication
under the DGCL, pursuant to which PCCT’s jurisdiction of incorporation was changed from the Cayman Islands to the State of Delaware.
In
connection with the Domestication, (i) each then issued and outstanding PCCT Class A Ordinary Share and each then issued and
outstanding PCCT Class B Ordinary Share, converted automatically, on a one-for-one basis, into a share of NewCo Common
Stock, (ii) each then issued and outstanding PCCT Warrant converted automatically into a warrant to acquire one share of NewCo Common
Stock, pursuant to the Warrant Agreement, dated as of October 27, 2021, between PCCT and Continental, as warrant agent, and (iii) each
then issued and outstanding PCCT Unit were cancelled and entitled the holder thereof to one share of NewCo Common Stock and one-half of
one NewCo Warrant. Upon effectiveness of the Domestication, PCCT changed its name to “Spectaire Holdings Inc.”
The Business Combination
The Merger Agreement
provides that, among other things and upon the terms and subject to the conditions thereof, and following the Domestication, the following
transactions occurred (together with the other agreements and transactions contemplated by the Merger Agreement, the “Business
Combination”):
| (i) | prior
to the Effective Time, the aggregate amount of each outstanding convertible promissory note of Spectaire, including all outstanding principal
and interest accrued but unpaid thereon, converted into shares of common stock, par value $0.0001 per share, of Spectaire (“Spectaire
Common Stock”), and each share of the Series Seed Preferred Stock, par value $0.0001 per share, of Spectaire converted into
one share of Spectaire Common Stock (such conversions, the “Spectaire Security Conversion”); |
| (ii) | at
the Effective Time (after giving effect to the Spectaire Security Conversion): |
| (a) | each
share of Spectaire Common Stock (other than shares of Spectaire Common Stock subject to Spectaire Options and Spectaire RSUs, Spectaire
Restricted Shares, treasury stock and dissenting shares) converted into the right to receive its pro rata portion (on a fully diluted
basis) of the Aggregate Merger Consideration and the Spectaire Earnout Shares; |
| (b) | each
outstanding option to purchase Spectaire Common Stock converted into (x) an option to purchase, upon substantially the same
terms and conditions, a whole number of shares of NewCo Common Stock (rounded down to the nearest whole share) equal to (1) the
number of shares of Spectaire Common Stock subject to such Spectaire Option as of immediately prior to the Effective Time multiplied
by (2) the Exchange Ratio (“Converted Stock Options”) and (y) the right to receive its pro rata portion of the
Spectaire Earnout Shares; |
| (c) | each
outstanding restricted stock unit relating to Spectaire Common Stock converted into (x) a restricted stock unit, upon substantially
the same terms and conditions, relating to a whole number of shares of NewCo Common Stock (rounded down to the nearest whole share) equal
to (1) the number of shares of Spectaire Common Stock subject to such Spectaire RSU as of immediately prior to the Effective Time
multiplied by (2) the Exchange Ratio (“Converted RSUs”) and (y) the right to receive its pro rata portion of
the Spectaire Earnout Shares; and |
| (d) | each
outstanding award of restricted shares of Spectaire Common Stock subject to vesting conditions and/or a risk of forfeiture converted
into (x) an award, upon substantially the same terms and conditions, of a whole number of restricted shares of NewCo Common Stock equal
to (1) the number of shares of Spectaire Common Stock subject to such Spectaire Restricted Share as of immediately prior to the
Effective Time multiplied by (2) the Exchange Ratio (“Converted Restricted Shares”) and (y) the right to receive
its pro rata portion of the Spectaire Earnout Shares. |
| (iii) | upon
the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the DGCL, following the Domestication,
Merger Sub merged with and into Spectaire with Spectaire as the surviving corporation and a wholly owned subsidiary of NewCo, and by
virtue of the Merger, each share of capital stock of Merger Sub automatically converted into a share of common stock, par value $0.0001
per share, of Spectaire. |
Other Related Events in
connection with the Business Combination
Polar Subscription Agreement
On
October 4, 2023, the Company entered into a subscription agreement with Polar Multi-Strategy Master Fund (“Polar”)
to cover working capital requirements of the Company prior to the consummation of the Business Combination (the “Polar Subscription
Agreement”). Pursuant to the terms and subject to the conditions of the Polar Subscription Agreement, Polar agreed to contribute
up to $650,000 to the Company (the “Capital Contribution”). In consideration of the Capital Contribution, the Company
agreed to issue 0.9 shares of Common Stock for each dollar of the Capital Contribution. Accordingly, at closing of the Business Combination,
the Company issued 585,000 shares of Common Stock to Polar. Upon certain events of default under the Subscription Agreement, PCCT shall
issue to Polar 0.1 shares of Common Stock (“Default Shares”) for each dollar of the Capital Contribution funded as
of the date of such default, and for each month thereafter until such default is cured, subject to certain limitations provided for therein.
In
connection with the Company’s entry into the Polar Subscription Agreement, Perception Capital Partners II LLC (the “Sponsor”)
delivered to the Company a letter agreement to facilitate the Company’s fundraising efforts (the “Sponsor Letter Agreement”).
Pursuant to the Sponsor Letter Agreement, the Sponsor agreed to forfeit for cancellation (i) 585,000 Class B Ordinary Shares concurrently
with the closing of the Business Combination and (ii) following the closing of the Business Combination, the number of shares of Common
Stock equal to the number of Default Shares, if any, issued by the Surviving Entity to Polar in accordance with the Subscription Agreement.
Polar Forward Purchase
Agreement
On
October 16, 2023, PCCT and Polar entered into the Polar Forward Purchase Agreement for an OTC Equity Prepaid Forward Transaction.
Pursuant to the terms of the Polar Forward Purchase Agreement, Polar purchased 206,000 class A ordinary shares, par value $0.0001 per
share, of PCCT from holders (other than PCCT or its affiliates) who elected to redeem such shares in connection with the Business Combination.
Purchases by Polar were made through brokers in the open market after the redemption deadline in connection with the Business Combination
at the Initial Price.
The
Polar Forward Purchase Agreement provides that not later than one local business day following the Closing, PCCT transferred to an account
designated in writing by Polar, out of funds held in the Trust Account the Prepayment Amount equal to the product of the number of Recycled
Shares and the Initial Price, less an amount equal to 1% of the product of the number of Recycled Shares and the Initial Price. In addition
to the Prepayment Amount, PCCT paid directly from the Trust Account on the Prepayment Date, an amount equal to the product of 37,500 PCCT
Class A Ordinary Shares and the Initial Price. Polar has agreed to waive any redemption rights in connection with the Business Combination
with respect to the Recycled Shares.
Forward Purchase Agreement
Pursuant
to the terms of the Forward Purchase Agreement executed on January 14, 2023, Meteora purchased 885,574 shares of PCCT Class A Ordinary
Shares from Public Shareholders who elected to redeem such shares in connection with the Business Combination. PCCT also transferred to
an account designated in writing by Meteora, out of funds held in the Trust Account the Prepayment Amount equal to the product of the
number of Recycled Shares and the Initial Price, less an amount equal to 1% of the product of the number of Recycled Shares and the Initial
Price. In addition to the Prepayment Amount, PCCT paid directly from the Trust Account on the Prepayment Date, an amount equal to the
product of 150,000 PCCT Class A Ordinary Shares and the Initial Price. Meteora waived any redemption rights in connection with the
Business Combination with respect to the Recycled Shares. Purchases of Recycled Shares by Meteora were made after the redemption deadline
in connection with the Business Combination at the Initial Price.
On
October 18, 2023, PCCT and Meteora entered into the Meteora Forward Purchase Agreement Amendment. Pursuant to the Meteora Forward
Purchase Agreement Amendment, PCCT and the Seller agreed to require PCCT to transfer the Prepayment Amount directly to an account designated
in writing by the Seller in place of an escrow account with Continental Stock Transfer & Trust Company to be held in escrow and
distributed in accordance with a written escrow agreement.
From
time to time following the Closing and prior to the Maturity Date, being the earliest to occur of (a) the first anniversary of the
Closing (or, upon the mutual written agreement of PCCT and Meteora, 18 months following the Closing) and (b) the date specified by
Meteora in a written notice to be delivered to PCCT at Meteora’s discretion after the occurrence of a Seller Price Trigger Event
or a Delisting Event (each as defined in the Forward Purchase Agreement), Meteora may, in its sole discretion, sell some or all of the
Recycled Shares. On the last trading day of each calendar month following the Business Combination, in the event that Meteora has sold
any Recycled Shares (other than sales to recover the Shortfall Amount), an amount will be paid to PCCT equal to the product of the number
of Recycled Shares sold multiplied by the Reset Price and to Meteora equal to the excess of the Initial Price over the Reset Price for
each sold Recycled Share. The “Reset Price” shall be set on the first scheduled trading day of each month, commencing with
the first calendar month following the Closing, to be the lowest of the (b) Initial Price and (c) volume weighted average price
of the NewCo Common Stock during the last 10 trading days during the prior calendar month, but not lower than $7.50; provided that to
the extent that PCCT offers and sells any NewCo Common Stock or securities convertible into NewCo Common Stock at a price lower than the
existing Reset Price, the Reset Price shall be modified to equal such reduced price.
At
the Maturity Date, an amount equal to the Initial Price for each Matured Share shall be transferred to Meteora, and Meteora shall transfer
the Matured Shares to PCCT. Additionally, at the Maturity Date, PCCT shall pay to Meteora an amount equal to $1.25 (or $1.75, if the Maturity
Date has been extended by the mutual written agreement of PCCT and Meteora) for each Matured Share, which may be paid in cash or in shares
of NewCo Common Stock at the 10-day volume weighted average price of the NewCo Common Stock.
Based
on above, PCCT has a conditional obligation to repurchase the outlined shares. As such, the Forward Purchase Agreement is within the scope
of ASC 480 and should be accounted for as liability.
Earnout Shares
During
the Earnout Period, NewCo shall issue up to 7,500,000 shares of NewCo Common Stock in three equal tranches to Eligible Spectaire Equityholders
upon the occurrence of the Earnout Triggering Events:
| ● | Upon
the occurrence of the volume-weighted average closing sale price of one share of NewCo Common Stock quoted on market is greater than
or equal to $15.00, a one-time issuance of 2,500,000 Spectaire Earnout Shares; and |
| ● | Upon
the occurrence of the volume-weighted average closing sale price of one share of NewCo Common Stock quoted on market is greater than
or equal to $20.00, a one-time issuance of 2,500,000 Spectaire Earnout Shares; and |
| ● | Upon
the occurrence of the volume-weighted average closing sale price of one share of NewCo Common Stock quoted on market is greater than
or equal to $25.00, a one-time issuance of 2,500,000 Spectaire Earnout Shares. |
The
Eligible Spectaire Equityholders shall be entitled to receive Spectaire Earnout Shares upon the occurrence of each Triggering Event; provided,
however, that each Triggering Event shall only occur once, if at all, and in no event shall the Eligible Spectaire Equityholders be entitled
to receive more than an aggregate of 7,500,000 Spectaire Earnout Shares.
The
per-share price calculation in a change-in-control transaction would exclude the shares that would be issued under the Earnout arrangement.
Management determined that the arrangement would not be considered indexed to the entity’s own stock as a result of this, and the
Spectaire Earnout Shares should therefore be classified as a liability and recognized at fair value at each reporting period with changes
in fair value included in earnings.
Amended and Restated
Promissory Notes
On
October 17, 2023, PCCT and the Sponsor amended and restated the A&R Working Capital Note to, among other things, extend the date
by which the unpaid principal balance thereunder becomes due and payable by PCCT to the Sponsor to the later of (i) the date by which
PCCT must complete an initial business combination and (ii) a date that is one hundred eighty (180) days following the consummation
of an initial business combination.
On
October 17, 2023, PCCT and the Sponsor amended and restated the Second A&R Extension Note to (A) extend the date by which
the unpaid principal balance thereunder becomes due and payable by the Company to the Sponsor to the later of (i) the date by which
PCCT must complete an initial business combination and (ii) a date that is one year following the consummation of an initial business
combination, and (B) allow the Company to convert up to $1,200,000 of the unpaid principal amount outstanding under the Second A&R
Extension Note into a number of shares of Company Common Stock calculated based on a 10-day volume weighted average price of
the Company Common Stock over a period ending on the day the Company provides the Sponsor notice of such conversion.
Arosa Bridge Loan Agreement
and Warrant Agreement
On
March 31, 2023, Spectaire, as borrower, entered into a Loan Agreement with Arosa Multi-Strategy Fund LP (“Arosa”), as
lender, providing for a term loan (the “Arosa Loan”) in a principal amount not to exceed $6.5 million (the “Loan
Agreement”), comprised of (i) $5.0 million in cash, of which (a) $2.0 million was funded to a deposit account of Spectaire
and (b) $3.0 million (the “Arosa Escrow Funds”) was funded into an escrow account (the “Arosa Escrow
Account”) pursuant to an escrow agreement, dated as of March 31, 2023, by and between Spectaire and Wilmington Savings
Fund Society, FSB, and (ii) Arosa caused its affiliate to transfer founder units valued by the parties at $1.5 million (the “Arosa
Founder Units”) to Spectaire. Upon receipt of the Arosa Founder Units, Spectaire will distribute the Arosa Founder Units to
Spectaire’s employees, service advisors, and other institutional investors (other than Arosa and its affiliates) on a pro rata basis.
Release of the Arosa Escrow Funds from the Arosa Escrow Account occurred on April 17, 2023.
The
Arosa Loan will mature on March 27, 2024 (the “Arosa Maturity Date”). In the event that the outstanding principal
amount and the final payment amount of $1.3 million (the “Final Payment Amount”) are not paid in full on the Arosa
Maturity Date, the unpaid balance will accrue interest thereafter at a rate of 20.0% per annum. Upon the occurrence and during the
continuance of an event of default under the Loan Agreement, all outstanding obligations under the Loan Agreement will bear interest at
a rate per annum that is 5.0% greater than the rate that would otherwise be applicable under the Loan Agreement. All interest under the
Loan Agreement will be computed on the basis of a 360-day year for the actual number of days elapsed.
Spectaire,
its subsidiaries and Arosa also entered into a Guarantee and Collateral Agreement providing that Spectaire’s obligations to Arosa
are secured by substantially all of Spectaire’s assets and all of Spectaire’s shareholders entered into a pledge agreement
with Arosa pursuant to which such shareholders pledged all of their equity interests in Spectaire to Arosa as collateral under the Arosa
Loan.
Within
90 days after PCCT share redemption, Spectaire shall cause all proceeds to Spectaire from the Trust Account, net of taxes and expenses
(the “Net Trust Proceeds”), to be applied to prepay the loan in an amount of cash equal to the sum of (a) the Net Trust Proceeds,
plus, (b) in the event that the payment in (a) results in the payment in full of the entire outstanding principal amount of the loan,
the Final Payment Amount and (c) all other sums, that shall have become due and payable hereunder in connection with the loan.
The
debt instrument does not have any features that require bifurcation as embedded derivatives. All of the proceeds received from the issuance
of the debt instrument are recorded as a liability on the unaudited condensed combined pro forma balance sheet.
The
transfer of Arosa Founder Units to Spectaire employees and service advisors is subject to ASC 718. Under ASC 718, compensation
associated with equity-classified awards is measured at fair value upon the grant date. The Arosa Founder Units were granted subject to
a performance condition (i.e., the occurrence of a Business Combination). Stock-based compensation would be recognized at the date a Business
Combination is considered probable (i.e., upon consummation of a Business Combination). For purpose of the presentation of the following
unaudited condensed pro forma financial statements, an amount equal to the number of Arosa Founder Units that ultimately vest multiplied
by the grant date fair value per share of $3.84 (or a total of $1.9 million) was recognized as stock-based compensation.
The
transfer of Arosa Founder Units to other institutional investors represents the offering of shares and no expense was recorded in the
unaudited condensed pro forma financial statements.
On
March 31, 2023, in accordance with the terms of the Loan Agreement, Spectaire agreed to issue to Arosa a warrant to purchase a number
of shares of Spectaire Common Stock representing 10.0% of the outstanding number of shares of Spectaire Common Stock on a fully diluted
basis as of March 31, 2023 at an exercise price of $0.01 per share, subject to adjustment as described in the Loan Agreement (the
“Closing Date Warrant”). Pursuant to the Loan Agreement, Spectaire will, upon the closing of the Business Combination,
issue an additional warrant to Arosa to purchase a number of shares of NewCo Common Stock equal to 5.0% of the outstanding number of shares
of NewCo Common Stock on a fully diluted basis at an exercise price of $0.01 per share, subject to adjustment as described in the
Loan Agreement (the “Additional Warrant”). Taken together after giving effect to the closing of the Business Combination,
the shares of NewCo common stock underlying the Closing Date Warrant and the Additional Warrant will represent 10.3% of the outstanding
number of shares of NewCo Common Stock on a fully diluted basis. Spectaire intends to account for these warrants in accordance with the
guidance contained in ASC 815. Such guidance provides that the warrants described above are not precluded from equity classification.
Equity-classified warrants are initially measured at fair value. Subsequent changes in fair value are not recognized as long as they continue
to be classified in equity.
The
following table summarizes the pro forma number of shares of NewCo Common Stock outstanding following the consummation of the Business
Combination and the Forward Purchase Transaction, discussed further in the sections below, excluding the potential dilutive effect of
the exercise or vesting of the NewCo Options, NewCo RSUs, NewCo Restricted Shares, PCCT Warrants, and Arosa Warrants.
Equity Capitalization Summary | |
Shares | | |
% | |
Spectaire Stockholders | |
| 8,466,873 | | |
| 55.2 | % |
PCCT Public Shareholders | |
| 36,417 | | |
| 0.2 | % |
Sponsor(1) | |
| 5,165,000 | | |
| 33.6 | % |
Polar | |
| 791,000 | | |
| 5.2 | % |
Meteora | |
| 885,574 | | |
| 5.8 | % |
Total NewCo Common Stock | |
| 15,344,864 | | |
| 100.0 | % |
(1) |
Includes the 90,000 PCCT Class B Ordinary Shares held by PCCT’s independent directors. |
Accounting Treatment
The
Business Combination was accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, although
PCCT acquired all of the outstanding equity interests of Spectaire in the Business Combination, PCCT was treated as the “acquired”
company and Spectaire was treated as the accounting acquirer for financial statement reporting purposes. Accordingly, the Business Combination
was treated as the equivalent of Spectaire issuing stock for the net assets of PCCT, accompanied by a recapitalization. The net assets
of PCCT were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination
were those of Spectaire.
Spectaire
was determined to be the accounting acquirer based on evaluation of the following facts and circumstances:
| ● | Spectaire’s
existing stockholders have the greatest voting interest in NewCo; |
| ● | Spectaire’s
existing stockholders have the ability to control decisions regarding election and removal of directors and officers of NewCo; |
| ● | Spectaire
comprises the ongoing operations of NewCo; and |
| ● | Spectaire’s
existing senior management is the senior management of NewCo. |
The
following unaudited pro forma condensed combined balance sheet as of June 30, 2023 and the unaudited pro forma condensed combined statements
of operations for the six months ended June 30, 2023 and for the year ended December 31, 2022 are based on the unaudited and audited historical
financial statements of PCCT and Spectaire. The unaudited pro forma adjustments are based on information currently available, and assumptions
and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may differ materially
from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information and include immaterial
rounding differences.
UNAUDITED PRO FORMA
CONDENSED COMBINED BALANCE SHEET
JUNE 30, 2023
(in thousands, except
share and per share data)
| |
(1) Spectaire (Historical) | | |
(2) PCCT (Historical) | | |
Transaction Accounting Adjustments | | |
| |
Pro Forma Combined | |
ASSETS | |
| | | |
| | | |
| | | |
| |
| | |
Current assets: | |
| | | |
| | | |
| | | |
| |
| | |
Cash | |
$ | 213 | | |
$ | 84 | | |
$ | 650 | | |
(E) | |
$ | 1,250 | |
| |
| | | |
| | | |
| 195 | | |
(G) | |
| | |
| |
| | | |
| | | |
| (392 | ) | |
(H) | |
| | |
| |
| | | |
| | | |
| 500 | | |
(I) | |
| | |
Prepaid expense and other current assets | |
| 10 | | |
| 145 | | |
| 690 | | |
(H) | |
| 845 | |
Note receivable – related party | |
| 694 | | |
| — | | |
| (694 | ) | |
(L) | |
| — | |
Investment in marketable securities | |
| 1,968 | | |
| — | | |
| — | | |
| |
| 1,968 | |
| |
| | | |
| | | |
| | | |
| |
| | |
Total current assets | |
| 2,885 | | |
| 229 | | |
| 949 | | |
| |
| 4,063 | |
| |
| | | |
| | | |
| | | |
| |
| | |
Property and equipment, net | |
| 31 | | |
| — | | |
| — | | |
| |
| 31 | |
Deposits | |
| 12 | | |
| — | | |
| — | | |
| |
| 12 | |
Investments held in Trust Account | |
| — | | |
| 22,585 | | |
| 703 | | |
(B) | |
| — | |
| |
| | | |
| | | |
| (10,664 | ) | |
(C) | |
| | |
| |
| | | |
| | | |
| (12,204 | ) | |
(D) | |
| | |
| |
| | | |
| | | |
| (420 | ) | |
(G) | |
| | |
| |
| | | |
| | | |
| | | |
| |
| | |
TOTAL ASSETS | |
$ | 2,928 | | |
$ | 22,814 | | |
$ | (21,636 | ) | |
| |
$ | 4,106 | |
| |
| | | |
| | | |
| | | |
| |
| | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
| | | |
| | | |
| | | |
| |
| | |
Current liabilities: | |
| | | |
| | | |
| | | |
| |
| | |
Accounts payable and accrued expenses | |
$ | 1,231 | | |
$ | 5,441 | | |
$ | 3,369 | | |
(H) | |
$ | 11,003 | |
| |
| | | |
| | | |
| 962 | | |
(O) | |
| | |
Accounts payable – related party | |
| — | | |
| 15 | | |
| — | | |
| |
| 15 | |
Accrued expenses – related party | |
| — | | |
| 12 | | |
| — | | |
| |
| 12 | |
Accrued offering costs | |
| — | | |
| 224 | | |
| — | | |
| |
| 224 | |
Polar payable | |
| — | | |
| — | | |
| 650 | | |
(E) | |
| 425 | |
Deferred revenue | |
| 149 | | |
| — | | |
| (225 | ) | |
(G) | |
| 149 | |
Loan payable | |
| 1,625 | | |
| — | | |
| — | | |
| |
| 1,625 | |
Convertible promissory notes – related party | |
| — | | |
| 1,743 | | |
| 285 | | |
(B) | |
| 1,334 | |
| |
| | | |
| | | |
| (694 | ) | |
(L) | |
| | |
FPA liability | |
| — | | |
| 4,290 | | |
| (2,040 | ) | |
(D) | |
| 2,250 | |
| |
| | | |
| | | |
| | | |
| |
| | |
Total current liabilities | |
| 3,005 | | |
| 11,725 | | |
| 2,307 | | |
| |
| 17,037 | |
| |
| | | |
| | | |
| | | |
| |
| | |
Convertible notes payable, net – related party | |
| 2,257 | | |
| — | | |
| (2,257 | ) | |
(I) | |
| — | |
Deferred underwriting fee payable | |
| — | | |
| 5,635 | | |
| — | | |
| |
| 5,635 | |
Earnout Shares liability | |
| — | | |
| — | | |
| 61,072 | | |
(M) | |
| 61,072 | |
| |
| | | |
| | | |
| | | |
| |
| | |
Total liabilities | |
| 5,262 | | |
| 17,360 | | |
| 61,122 | | |
| |
| 83,744 | |
UNAUDITED PRO FORMA
CONDENSED COMBINED BALANCE SHEET
JUNE 30, 2023
(in thousands, except
share and per share data)
| |
(1) Spectaire (Historical) | | |
(2) PCCT (Historical) | | |
Transaction Accounting Adjustments | | |
| |
Pro Forma Combined | |
PCCT Class A ordinary shares subject to possible redemption, 2,080,915 shares at redemption value | |
| — | | |
| 22,485 | | |
| (22,485 | ) | |
(A) | |
| — | |
PCCT common stock subject to possible redemption | |
| — | | |
| — | | |
| 22,485 | | |
(A) | |
| — | |
| |
| | | |
| | | |
| 703 | | |
(B) | |
| | |
| |
| | | |
| | | |
| (10,664 | ) | |
(C) | |
| | |
| |
| | | |
| | | |
| (12,524 | ) | |
(J) | |
| | |
Stockholders’ deficit: | |
| | | |
| | | |
| | | |
| |
| | |
PCCT preference shares, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding | |
| — | | |
| — | | |
| — | | |
| |
| — | |
PCCT Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; no shares issued and outstanding (excluding 2,080,915 shares subject to possible redemption) | |
| — | | |
| — | | |
| — | | |
| |
| — | |
PCCT Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,750,000 shares issued and outstanding | |
| — | | |
| 1 | | |
| (1 | ) | |
(A) | |
| — | |
PCCT common stock | |
| — | | |
| — | | |
| 1 | | |
(A) | |
| 2 | |
| |
| | | |
| | | |
| — | | |
(D) | |
| | |
| |
| | | |
| | | |
| — | | |
(E) | |
| | |
| |
| | | |
| | | |
| — | | |
(F) | |
| | |
| |
| | | |
| | | |
| 1 | | |
(I) | |
| | |
| |
| | | |
| | | |
| — | | |
(J) | |
| | |
Spectaire preferred stock, $0.0001 par value; 7,500,000 shares authorized; 5,100,000 shares issued and outstanding | |
| 1 | | |
| — | | |
| (1 | ) | |
(I) | |
| — | |
Spectaire common stock, $0.0001 par value; 25,000,000 shares authorized; 10,322,932 shares issued and outstanding | |
| 1 | | |
| — | | |
| (1 | ) | |
(I) | |
| — | |
Additional paid-in capital | |
| 15,368 | | |
| — | | |
| (7,964 | ) | |
(D) | |
| — | |
| |
| | | |
| | | |
| 3,662 | | |
(E) | |
| | |
| |
| | | |
| | | |
| — | | |
(F) | |
| | |
| |
| | | |
| | | |
| (492 | ) | |
(H) | |
| | |
| |
| | | |
| | | |
| 2,758 | | |
(I) | |
| | |
| |
| | | |
| | | |
| 12,524 | | |
(J) | |
| | |
| |
| | | |
| | | |
| 187 | | |
(K) | |
| | |
| |
| | | |
| | | |
| (61,072 | ) | |
(M) | |
| | |
| |
| | | |
| | | |
| 1,914 | | |
(N) | |
| | |
| |
| | | |
| | | |
| (25,945 | ) | |
(P) | |
| | |
| |
| | | |
| | | |
| 59,060 | | |
(Q) | |
| | |
Accumulated deficit | |
| (17,704 | ) | |
| (17,032 | ) | |
| (285 | ) | |
(B) | |
| (79,640 | ) |
| |
| | | |
| | | |
| (2,200 | ) | |
(D) | |
| | |
| |
| | | |
| | | |
| (3,662 | ) | |
(E) | |
| | |
| |
| | | |
| | | |
| (2,579 | ) | |
(H) | |
| | |
| |
| | | |
| | | |
| (187 | ) | |
(K) | |
| | |
| |
| | | |
| | | |
| (1,914 | ) | |
(N) | |
| | |
| |
| | | |
| | | |
| (962 | ) | |
(O) | |
| | |
| |
| | | |
| | | |
| 25,945 | | |
(P) | |
| | |
| |
| | | |
| | | |
| (59,060 | ) | |
(Q) | |
| | |
Total stockholders’ deficit | |
| (2,334 | ) | |
| (17,031 | ) | |
| (60,273 | ) | |
| |
| (79,638 | ) |
| |
| | | |
| | | |
| | | |
| |
| | |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
$ | 2,928 | | |
$ | 22,814 | | |
$ | (21,636 | ) | |
| |
$ | 4,106 | |
UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS
ENDED JUNE 30, 2023
(in thousands, except
share and per share data)
| |
(1)
Spectaire (Historical) | | |
(2)
PCCT (Historical) | | |
Transaction Accounting Adjustments | | |
| |
Pro Forma Combined | |
General and administrative | |
$ | 5,785 | | |
$ | 3,506 | | |
$ | (60 | ) | |
(BB) | |
$ | 9,231 | |
Depreciation expense | |
| 7 | | |
| — | | |
| — | | |
| |
| 7 | |
Research and development | |
| 1,246 | | |
| — | | |
| — | | |
| |
| 1,246 | |
Sales and marketing | |
| 226 | | |
| — | | |
| — | | |
| |
| 226 | |
Total operating expenses | |
| 7,264 | | |
| 3,506 | | |
| (60 | ) | |
| |
| 10,710 | |
| |
| | | |
| | | |
| | | |
| |
| | |
Loss from operations | |
| (7,264 | ) | |
| (3,506 | ) | |
| 60 | | |
| |
| (10,710 | ) |
| |
| | | |
| | | |
| | | |
| |
| | |
Other income (expense) | |
| | | |
| | | |
| | | |
| |
| | |
Interest and dividend income on investment held in Trust Account | |
| — | | |
| 549 | | |
| (549 | ) | |
(AA) | |
| — | |
Change in fair value of forward purchase units | |
| — | | |
| (460 | ) | |
| — | | |
| |
| (460 | ) |
Interest income on marketable securities | |
| 28 | | |
| — | | |
| — | | |
| |
| 28 | |
Loss on initial issuance of warrants | |
| (7,310 | ) | |
| — | | |
| — | | |
| |
| (7,310 | ) |
Interest expense | |
| (2,020 | ) | |
| — | | |
| 57 | | |
(II ) | |
| — | |
| |
| | | |
| | | |
| 1,963 | | |
(JJ) | |
| | |
| |
| | | |
| | | |
| | | |
| |
| | |
Total other (expense) income, net | |
| (9,302 | ) | |
| 89 | | |
| 1,471 | | |
| |
| (7,742 | ) |
| |
| | | |
| | | |
| | | |
| |
| | |
Loss before income tax | |
| (16,566 | ) | |
| (3,417 | ) | |
| 1,531 | | |
| |
| (18,452 | ) |
Income tax expense | |
| — | | |
| — | | |
| — | | |
| |
| — | |
| |
| | | |
| | | |
| | | |
| |
| | |
Net loss | |
$ | (16,566 | ) | |
$ | (3,417 | ) | |
$ | 1,531 | | |
| |
$ | (18,452 | ) |
| |
| | | |
| | | |
| | | |
| |
| | |
Net loss per common share, basic and diluted | |
$ | (1.73 | ) | |
| | | |
| | | |
| |
| | |
| |
| | | |
| | | |
| | | |
| |
| | |
Basic and diluted net loss per share attributable to common stock subject to redemption | |
| | | |
$ | (0.42 | ) | |
| | | |
| |
| | |
| |
| | | |
| | | |
| | | |
| |
| | |
Basic and diluted net loss per share attributable to common stock | |
| | | |
$ | (0.42 | ) | |
| | | |
| |
| | |
| |
| | | |
| | | |
| | | |
| |
| | |
Weighted average number of common shares outstanding, basic and diluted | |
| | | |
| | | |
| | | |
| |
| 15,344,864 | |
| |
| | | |
| | | |
| | | |
| |
| | |
Net loss per common share, basic and diluted | |
| | | |
| | | |
| | | |
| |
$ | (1.20 | ) |
UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2022
(in thousands, except
share and per share data)
| |
(1)
Spectaire (Historical) | | |
(2)
PCCT (Historical) | | |
Transaction Accounting Adjustments | | |
| |
Pro Forma Combined | |
General and administrative | |
$ | 138 | | |
$ | 3,794 | | |
$ | (120 | ) | |
(BB) | |
$ | 10,692 | |
| |
| | | |
| | | |
| 2,579 | | |
(CC) | |
| | |
| |
| | | |
| | | |
| 187 | | |
(DD) | |
| | |
| |
| | | |
| | | |
| 1,914 | | |
(FF) | |
| | |
| |
| | | |
| | | |
| 2,200 | | |
(GG) | |
| | |
Depreciation expense | |
| 10 | | |
| — | | |
| — | | |
| |
| 10 | |
Research and development | |
| 968 | | |
| — | | |
| — | | |
| |
| 968 | |
Total operating expenses | |
| 1,116 | | |
$ | 3,794 | | |
| 6,760 | | |
| |
| 11,670 | |
| |
| | | |
| | | |
| | | |
| |
| | |
Loss from operations | |
| (1,116 | ) | |
| (3,794 | ) | |
| (6,760 | ) | |
| |
| (11,670 | ) |
| |
| | | |
| | | |
| | | |
| |
| | |
Other income (expense) | |
| | | |
| | | |
| | | |
| |
| | |
Interest and dividend income on investment held in Trust Account | |
| — | | |
| 2,030 | | |
| (2,030 | ) | |
(AA) | |
| — | |
Gain on extinguishment of debt | |
| 700 | | |
| — | | |
| — | | |
| |
| 700 | |
Interest expense | |
| — | | |
| — | | |
| (7,800 | ) | |
(EE) | |
| (11,462 | ) |
| |
| | | |
| | | |
| (3,662 | ) | |
(HH) | |
| | |
| |
| | | |
| | | |
| | | |
| |
| | |
Total other (expense) income, net | |
| 700 | | |
| 2,030 | | |
| (13,492 | ) | |
| |
| (10,762 | ) |
| |
| | | |
| | | |
| | | |
| |
| | |
Loss before income tax | |
| (416 | ) | |
| (1,764 | ) | |
| (20,252 | ) | |
| |
| (22,432 | ) |
Income tax expense | |
| — | | |
| — | | |
| — | | |
| |
| — | |
| |
| | | |
| | | |
| | | |
| |
| | |
Net loss | |
$ | (416 | ) | |
$ | (1,764 | ) | |
$ | (20,252 | ) | |
| |
$ | (22,432 | ) |
| |
| | | |
| | | |
| | | |
| |
| | |
Net loss per common share, basic and diluted | |
$ | (0.06 | ) | |
| | | |
| | | |
| |
| | |
| |
| | | |
| | | |
| | | |
| |
| | |
Basic and diluted net loss per share attributable to common stock subject to redemption | |
| | | |
$ | (0.07 | ) | |
| | | |
| |
| | |
| |
| | | |
| | | |
| | | |
| |
| | |
Basic and diluted net loss per share attributable to common stock | |
| | | |
$ | (0.07 | ) | |
| | | |
| |
| | |
| |
| | | |
| | | |
| | | |
| |
| | |
Weighted average number of common shares outstanding, basic and diluted | |
| | | |
| | | |
| | | |
| |
| 15,344,864 | |
| |
| | | |
| | | |
| | | |
| |
| | |
Net loss per common share, basic and diluted | |
| | | |
| | | |
| | | |
| |
$ | (1.46 | ) |
NOTES TO UNAUDITED
PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
1. Basis of Presentation
The
Business Combination was accounted for as a reverse recapitalization in accordance with GAAP as Spectaire was determined to be the accounting
acquirer, primarily due to the fact that Spectaire stockholders continues to control NewCo. Under this method of accounting, although
PCCT acquired all of the outstanding equity interests of Spectaire in the Business Combination, PCCT was treated as the “acquired”
company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of Spectaire issuing stock
for the net assets of PCCT, accompanied by a recapitalization. The net assets of PCCT were stated at historical cost, with no goodwill
or other intangible assets recorded. Operations prior to the Business Combination were those of Spectaire.
The
unaudited pro forma condensed combined balance sheet as of June 30, 2023 assumes that the Business Combination and related transactions
occurred on June 30, 2023. The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2023
and for the year ended December 31, 2022 presents pro forma effect to the Business Combination as if it had been completed on January 1,
2022.
The
unaudited pro forma condensed combined balance sheet as of June 30, 2023 has been prepared using, and should be read in conjunction with,
the following:
|
i. |
PCCT’s unaudited balance sheet as of June 30, 2023 and the related notes for the six months ended June 30, 2023, incorporated by reference; and |
|
ii. |
Spectaire’s unaudited condensed consolidated balance sheet as of June 30, 2023 and the related notes for the six months ended June 30, 2023, incorporated by reference. |
The unaudited pro forma
condensed combined statement of operations for the six months ended June 30, 2023 has been prepared using, and should be read in conjunction
with, the following:
|
i. |
PCCT’s unaudited statement of operations for the six months ended June 30, 2023 and the related notes, incorporated by reference; and |
|
ii. |
Spectaire’s unaudited condensed consolidated statement of operations for the six months ended June 30, 2023 and the related notes, incorporated by reference. |
The unaudited pro forma
condensed combined statement of operations for the year ended December 31, 2022 has been prepared using, and should be read in conjunction
with, the following:
|
i. |
PCCT’s audited statement of operations for the year ended December 31, 2022 and the related notes, incorporated by reference; and |
|
ii. |
Spectaire’s audited consolidated statement of operations for the year ended December 31, 2022 and the related notes, incorporated by reference. |
As
the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts
recorded may differ materially from the information presented.
The
unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies,
tax savings or cost savings that may be associated with the Business Combination.
The
pro forma adjustments reflecting the consummation of the Business Combination are based on certain currently available information
and certain assumptions and methodologies that PCCT believes are reasonable under the circumstances. The unaudited condensed pro
forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is
evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments and it is possible the
difference may be material. Management believes that its assumptions and methodologies provide a reasonable basis for presenting all
of the significant effects of the Business Combination based on information available to management at this time and that the pro
forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed
combined financial information.
The
unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and
financial position would have been had the Business Combination taken place on the dates indicated, nor are they indicative of the future
consolidated results of operations or financial position of NewCo. They should be read in conjunction with the historical financial statements
and notes thereto of PCCT and Spectaire.
2. Accounting Policies
Upon
consummation of the Business Combination, management has performed a comprehensive review of the two entities’ accounting
policies. As a result of the review, management has not identified differences between the accounting policies of the two entities
which have a material impact on the consolidated financial statements of NewCo. Based on its analysis, management did not identify
any differences that would have a material impact on the unaudited pro forma condensed combined financial information. As a result,
the unaudited pro forma condensed combined financial information does not assume any differences in accounting policies.
3. Adjustments to Unaudited
Pro Forma Condensed Combined Financial Information
The
unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and
has been prepared for informational purposes only. The historical financial statements have been adjusted in the unaudited pro forma condensed
combined financial information to give pro forma effect to events that are expected to have a continuing impact on the results of NewCo.
The
following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11
of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to
Financial Disclosures about Acquired and Disposed Businesses” to depict the accounting for the transaction
(“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction
effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). Spectaire has
elected not to present Management’s Adjustments and is only presenting Transaction Accounting Adjustments in the unaudited pro
forma condensed combined financial information.
The
audited historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give
pro forma effect to transaction accounting adjustments that reflect the accounting for the transaction under GAAP. Spectaire and
PCCT have not had any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to
eliminate activities between the companies.
The
pro forma combined provision for income taxes does not necessarily reflect the amounts that would have resulted had NewCo filed consolidated
income tax returns during the periods presented. The pro forma condensed combined balance sheet does not necessarily reflect the deferred
taxes of NewCo as a result of the Business Combination. Upon Closing of the Business Combination, it is likely that NewCo will record
a valuation allowance against the total U.S. and state deferred tax assets given the history of net operating losses and valuation
allowance of Spectaire as the recoverability of the tax assets is uncertain.
The
pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statement of operations
are based upon the number of shares of NewCo Common Stock outstanding, assuming the Business Combination occurred on January 1, 2022.
Transaction Accounting Adjustments to Unaudited
Pro Forma Condensed Combined Balance Sheet
The Transaction Accounting
Adjustments included in the unaudited pro forma condensed combined balance sheet as of June 30, 2023 are as follows:
| (1) | Derived from the unaudited condensed consolidated financial
statements of Spectaire as of and for the six months ended June 30, 2023 and the audited statement of operations for the year ended December 31, 2022. |
| (2) | Derived from the unaudited condensed financial statements
of PCCT as of and for the six months ended June 30, 2023 and the audited statement of operations for the year ended December 31, 2022. |
| (A) | Reflects
the conversion of PCCT Class A Ordinary Shares and PCCT Class B Ordinary Shares into NewCo Common Stock in connection with
the Domestication. |
|
(B) |
Reflects the Extension payment into the Trust Account to extend the Combination Period, the interest income earned in the Trust Account, and the accretion of PCCT common stock subject to possible redemption subsequent to June 30, 2023. |
|
|
|
|
(C) |
Represents the redemption of 2,044,498 shares of PCCT common stock at a redemption price of $11.19 per share upon the Business Combination, net of the proceeds from Meteora and Polar’s purchase of 1,091,574 Recyced Shares at an Initial Price of $11.19 per share, resulting in a redemption payment of $10.7 million from the Trust Account to PCCT Public Stockholders. |
|
|
|
|
(D) |
Reflects the issuance of 1,091,574 Recycled Shares to Meteora and Polar upon the Business Combination and transfer of the Prepayment Amount and the Share Consideration Amount from the Trust Account. The Prepayment Amount equals to the product of the number of Recycled Shares and the Initial Price, less an amount equal to 1% of the product of the number of Recycled Shares and the Initial Price (the “Shortfall Amount”). |
|
|
|
|
(E) |
Reflects the capital contribution of $0.7 million from Polar prior to PCCT consummating the Business Combination that is contractually required
to be repaid by Spectaire. As additional consideration, PCCT issued 585,000 shares of PCCT common stock to Polar upon the Business Combination,
resulting in a recognition of financing charge of $3.7 million. |
|
|
|
|
(F) |
Reflects the cancellation of 585,000 Founder Shares for no consideration upon the Business Combination. |
|
|
|
|
(G) |
Reflects the transfer of
investments held in the Trust Account to cash after the repayment of $225,000 to Polar. |
|
(H) |
Reflects the accrual of $3.4 million of Business Combination related fees and expenses and the payment of $0.4 million of Business Combination related fees and expenses upon the Business Combination, including offering costs of $3.1 million, and the director and officer liability insurance of $0.7 million, which is recognized as a prepaid expense in the unaudited pro forma condensed combined balance sheet. |
|
(I) |
Reflects the conversion of the Spectaire Convertible Notes and the
Spectaire Preferred Stock into the Spectaire Common Stock and the issuance of 8,466,873 shares of NewCo Common Stock to existing Spectaire
stockholders, including the issuance of 50,000 PIPE Shares to the PIPE Investor. |
|
(J) |
Reflects the reclassification of 36,417 shares of PCCT common stock subject to possible redemption to permanent equity. |
|
|
|
|
(K) |
Reflects the recognition of stock-based compensation upon the Business Combination for the Founder Shares transferred from the Sponsor to directors on April 7, 2021. |
|
|
|
|
(L) |
Reflects the elimination of intercompany loan between PCCT and Spectaire. |
|
|
|
|
(M) |
Reflects the obligation to issue Spectaire Earnout Shares upon the occurrence of Earnout Triggering Events. PCCT has preliminarily determined that the Contingent Consideration for PCCT participating shareholders is not indexed to PCCT’s own stock and is therefore accounted for as a liability which will be remeasured to fair value at subsequent reporting dates with the change in fair value recognized as a gain or loss in the statement of operations. |
The following
table shows the pro forma earnings per share data upon NewCo meeting different Triggering Events for the six months ended June 30, 2023:
| |
Triggering
Event I | | |
Triggering
Event II | | |
Triggering
Event III | |
Number of Spectaire Earnout Shares outstanding | |
| 2,500,000 | | |
| 5,000,000 | | |
| 7,500,000 | |
Weighted average shares outstanding of common stock | |
| 17,844,864 | | |
| 20,344,864 | | |
| 22,844,864 | |
Net loss per common share, basic and diluted | |
$ | (1.03 | ) | |
$ | (0.91 | ) | |
$ | (0.81 | ) |
The following
table shows the pro forma earnings per share data upon NewCo meeting different Triggering Events for the year ended December 31, 2022:
| |
Triggering
Event I | | |
Triggering
Event II | | |
Triggering
Event III | |
Number of Spectaire Earnout Shares outstanding | |
| 2,500,000 | | |
| 5,000,000 | | |
| 7,500,000 | |
Weighted average shares outstanding of common stock | |
| 17,844,864 | | |
| 20,344,864 | | |
| 22,844,864 | |
Net loss per common share, basic and diluted | |
$ | (1.26 | ) | |
$ | (1.10 | ) | |
$ | (0.98 | ) |
| (N) | Reflects
the recognition of stock-based compensation upon the Business Combination for the Arosa Founder Units transferred to Spectaire employees
and service advisors. |
|
(O) |
Reflects the additional accrual of Final Payment of the Arosa Bridge Loan upon the Business Combination. |
|
|
|
|
(P) |
Reflects the elimination of PCCT’s historical accumulated deficit
after recording (1) the accretion as described under adjustment (B) above, (2) the payments of Shortfall Amount and Share Consideration
Amount as described under adjustment (D) above, (3) the interest expense as described under adjustment (E) above, (4)
the adjustment to PCCT accumulated deficit due to the Business Combination
related fees and expenses as described under adjustment (H) above, and (5) the recognition of stock-based compensation as described
under adjustment (K) above. |
|
(Q) |
Reflects the reclassification of negative additional paid-in capital to accumulated deficit. |
Transaction Accounting Adjustments to Unaudited
Pro Forma Condensed Combined Statements of Operations
The Transaction Accounting Adjustments included
in the unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2023 and the year ended December 31,
2022 are as follows:
| (AA) | Represents
an adjustment to eliminate interest and dividend income on investments held in the Trust Account after giving effect to the Business
Combination as of it had occurred on January 1, 2022. |
| (BB) | Represents
an adjustment to eliminate administrative service fees that will be ceased paying upon Closing of the Business Combination after giving
effect to the Business Combination as of it had occurred on January 1, 2022. |
|
(CC) |
Represents an adjustment to eliminate the effect of the pro forma balance sheet adjustment presented in Entry (H) above in the aggregate amount of $2.6 million for the direct, incremental costs of the Business Combination, assuming those adjustments were made as of the beginning of the fiscal year presented. As these costs are directly related to the Business Combination, they are not expected to recur in the income of the combined company beyond 12 months after the Business Combination. |
|
|
|
|
(DD) |
Represents the recognition of stock-based compensation upon the Business Combination for the Founder Shares transferred from Sponsor to directors on April 7, 2021. |
|
|
|
|
(EE) |
Represents the recognition of the 20% on the Initial Principal as interest expense and the amortization of the debt discount as interest expense. |
|
|
|
|
(FF) |
Reflects the recognition of stock-based compensation upon the Business Combination for the Arosa Founder Units transferred to Spectaire employees and service advisors. |
|
|
|
|
(GG) |
Represents payment of the
Shortfall Amount and the Share Consideration Amount in connection with Meteora and Polar’s purchase of Recycled Shares
as noted in tickmark (D). |
|
|
|
|
(HH) |
Represents the recognition of interest expense in connection with the issuance of 585,000 shares to Polar as additional consideration for capital contribution. |
|
|
|
|
(II) |
Represents an adjustment to eliminate interest expense after giving effect to the conversion of Spectaire convertible notes at the Business Combination as of it had occurred on January 1, 2022. |
| (JJ) | Represents
an adjustment to eliminate interest expense on Arosa Bridge Loan after giving effect to the Closing of the Business Combination as if
they had already been recorded during the year ended December 31, 2022. |
4. Net Loss per Share
Represents the net loss per
share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the
Business Combination, assuming the shares were outstanding since January 1, 2022. As the Business Combination and related transactions
are being reflected as if they had occurred at the beginning of January 1, 2022, the calculation of weighted average shares outstanding
for basic and diluted net loss per share assumes that the shares issuable relating to the Business Combination have been outstanding for
the entire periods presented.
The
unaudited pro forma condensed combined financial information has been prepared with the actual redemptions by PCCT’s public stockholders
of shares of PCCT Class A common stock for the six months ended June 30, 2023 and for the year ended December 31, 2022:
(in thousands, except share and per share data) | |
Six Months
Ended June 30,
2023 | | |
Year Ended
December 31,
2022 | |
Net loss | |
$ | (18,452 | ) | |
$ | (22,432 | ) |
Weighted average shares outstanding of common stock(1) | |
| 15,344,864 | | |
| 15,344,864 | |
Net loss per common share, basic and diluted | |
$ | (1.20 | ) | |
$ | (1.46 | ) |
(1) |
For the purposes of calculating diluted earnings per share, all outstanding 260,000 NewCo RSUs, 7,240,000 NewCo Restricted Shares, 21,500,000 PCCT Warrants, 221,631 Working Capital Loan Warrants and Extension Warrants, and 2,000,000 Arosa Warrants should have been assumed to have been exercised. However, since this results in anti-dilution, the effect of such exercise was not included in calculation of diluted loss per share |
15
v3.23.3
Cover
|
Oct. 19, 2023 |
Document Type |
8-K
|
Amendment Flag |
false
|
Document Period End Date |
Oct. 19, 2023
|
Entity File Number |
001-40976
|
Entity Registrant Name |
Spectaire
Holdings Inc.
|
Entity Central Index Key |
0001844149
|
Entity Tax Identification Number |
98-1578608
|
Entity Incorporation, State or Country Code |
DE
|
Entity Address, Address Line One |
155 Arlington St.
|
Entity Address, City or Town |
Watertown
|
Entity Address, State or Province |
MA
|
Entity Address, Postal Zip Code |
02472
|
City Area Code |
508
|
Local Phone Number |
213-8991
|
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|
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|
Common stock, par value $0.0001 per share |
|
Title of 12(b) Security |
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|
Trading Symbol |
SPEC
|
Security Exchange Name |
NASDAQ
|
Redeemable warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 |
|
Title of 12(b) Security |
Redeemable warrants, each whole warrant exercisable
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|
Trading Symbol |
SPECW
|
Security Exchange Name |
NASDAQ
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