Transaction Financing
Gesher has obtained commitments (i) for up to $70,000,0000 of equity financing in connection with the Transaction as described below and (ii) from the Forward Purchaser (as defined below) that the Forward Purchaser will not exercise its redemption rights in connection with the Transaction with respect to its 990,000 outstanding Gesher Ordinary Shares that the Forward Purchaser acquired in Gesher’s initial public offering, with a redemption value of approximately $10,000,000.
Forward Purchase Agreement and Backstop Commitments
As previously announced, Gesher entered into a Forward Purchase Agreement dated March 23, 2022 (the “Forward Purchase Agreement”) with M&G (ACS) Japan Equity Fund, as managed by M&G Investment Management Limited (the “Forward Purchaser”), pursuant to which the Forward Purchaser agreed to purchase 4,000,000 Gesher Units for an aggregate purchase price of $40,000,000 in connection with the acquisition of Freightos. The Forward Purchase Agreement also provides for the Forward Purchaser to provide up to an additional $10,000,000 of committed capital (the “Backstop Commitment”) to Gesher in the event that, as of immediately prior to the Closing, certain minimum cash conditions are not met after taking into account redemptions by Gesher shareholders in connection with the Transaction and certain other investments. In exchange for providing the Backstop Commitment, the Forward Purchaser will receive (a) an additional amount of Gesher Ordinary Shares equal to the amount of the Backstop Commitment drawn, divided by $10.00, and (b) 500,000 Gesher Warrants. Other than the Forward Purchaser, the parties to the forward purchase agreements executed in connection with Gesher’s initial public offering have elected not to exercise their forward purchase rights in connection with the Transaction.
The Forward Purchaser has unconditionally agreed not to exercise its redemption rights in connection with the Transaction with respect to its 990,000 outstanding Gesher Ordinary Shares that the Forward Purchaser acquired in Gesher’s initial public offering. Pursuant to the Forward Purchase Agreement, the Forward Purchaser will be entitled to registration rights for the Freightos securities it receives at Closing. Consummation of the forward purchase and the backstop subscription will be on the same date and immediately prior to, or simultaneously with, the Closing.
The Forward Purchase Agreement is attached hereto as Exhibit 10.1, and is incorporated herein by reference, and the foregoing description of the Forward Purchase Agreement is qualified in its entirety by reference thereto.
As previously announced, Gesher entered into a Backstop Subscription Agreement (the “Backstop Subscription Agreement”) dated April 14, 2022 with Composite Analysis Group, Inc. (“Composite”), pursuant to which Composite agreed to provide $10,000,000 of committed capital (the “Additional Backstop Commitment”) to Gesher in the event that, as of immediately prior to the Closing, certain minimum cash conditions are not met after taking into account redemptions by Gesher’s shareholders in connection with the Transaction and certain other investments. In exchange for providing the Additional Backstop Commitment, Gesher will issue and sell to the additional backstop investor (a) 1,000,000 Gesher Ordinary Shares at a purchase price of $10.00 per share, and (b) 100,000 Gesher Warrants. Pursuant to the Agreement, Composite will be entitled to registration rights with respect to the Freightos Securities it receives at Closing. The closing of the Additional Backstop Commitment, to the extent that it is drawn upon, will be on the same date and immediately prior to, or simultaneously with, the Closing.
The Backstop Subscription Agreement is attached hereto as Exhibit 10.2, and is incorporated herein by reference, and the foregoing description of the Forward Purchase Agreement is qualified in its entirety by reference thereto.
Prior to the consummation of the Mergers, Freightos and Gesher will enter into an assignment and assumption agreement, which will provide for the assignment and assumption by Freightos of Gesher’s rights and obligations under the forward purchase and backstop agreements described above.
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