Item 1.01 Entry Into A Material
Definitive Agreement.
Merger Agreement
This section describes the material provisions
of the Merger Agreement (as defined below) but does not purport to describe all of the terms thereof. The following summary
is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached hereto as Exhibit
2.1. Origo’s shareholders, warrant holders and other interested parties are urged to read such agreement in its entirety.
Unless otherwise defined herein, the capitalized terms used below are defined in the Merger Agreement.
General Description of the Merger Agreement and Merger
Consideration
On December
19, 2016, Origo Acquisition Corporation, a Cayman Islands company (“
Origo
”), entered into a Merger Agreement
(the “
Merger Agreement
”) with Aina Le’a Inc., a Delaware corporation (“
Aina Le’a
”),
Aina Le’a Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Aina Le’a (“
Merger Sub
”),
and Jose Aldeanueva, in the capacity as the representative for the stockholders of Origo as of the Effective Time (as defined below)
and their successors and assign (the “
OAC Representative
”).
Pursuant to the
Merger Agreement, subject to the terms and conditions set forth therein, at the closing of the transactions contemplated by the
Merger Agreement (the “
Closing
”), Origo will merge with and into Merger Sub, with Merger Sub continuing as the
surviving entity (the “
Merger
”). As a result of the consummation of the Merger, Origo will cease to exist and
the holders of Origo equity securities and warrants, options and rights to acquire or convert into Origo equity securities will
convert into Aina Le’a equity securities and warrants, options and rights to acquire or convert into Aina Le’a equity
securities. More specifically, at the effective time of the Merger (the “
Effective Time
”):
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all the issued and outstanding Origo ordinary
shares, par value $0.0001 per share (each, an “
Origo Ordinary Share
”), will no longer be outstanding and will
automatically be cancelled in exchange for the right of the holder thereof to receive for each Origo Ordinary Share held 0.600
shares (the “
Per Share Merger Consideration
”) of Aina Le’a common stock, par value $0.001 per share (“
AL
Common Stock
”);
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each outstanding right to receive 1/10
th
of an Origo Ordinary Share upon the closing of Origo’s initial business combination (an “
Origo Right
”)
that was included as part of Origo’s units (an “
Origo Unit
”) sold in its initial public offering (the
“
IPO
”) and private placement will be converted into 1/10
th
of an Origo Ordinary Share at the Effective
Time and be converted into AL Common Stock on the basis of the Per Share Merger Consideration with the other outstanding Origo
Ordinary Shares;
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all outstanding warrants to acquire Origo
Ordinary Shares (“
Origo Warrants
”) will be automatically cancelled and replaced with warrants to acquire AL
Common Stock (“
Replacement Warrants
”), with the number of shares and exercise price thereunder equitably adjusted
based on the Per Share Merger Consideration;
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each outstanding unseparated Origo Unit
will automatically separate immediately prior to the Effective Time into an Origo Ordinary Share, an Origo Warrant and an Origo
Right, and convert into the applicable Merger consideration;
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the unit purchase options granted to Early
Bird Capital, Inc. in connection with the IPO will convert into a replacement option from Aina Le’a to acquire AL Common
Stock and Replacement Warrants, with the number of shares and exercise price thereunder equitably adjusted based on the Per Share
Merger Consideration; and
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holders
of Origo’s outstanding convertible promissory notes, if converted in connection
with the Closing, will receive AL Common Stock and Replacement Warrants for such conversion
in lieu of Origo Units based on the Per Share Merger Consideration.
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Representations and Warranties
The Merger Agreement
contains customary representations and warranties by each of Origo, Aina Le’a and Merger Sub relating to, among other matters,
(1) organization, (2) authorization and binding effect, (3) governmental approvals, (4) no conflicts, (5) capitalization, (6) subsidiaries,
(7) SEC filings and financial statements, (8) absence of certain changes, (9) compliance with laws, (10) permits, (11) litigation
and orders, (12) taxes, (13) employees and employee benefit plans, (14) intellectual property, (15) real and personal property,
(16) material contracts, (17) related party transactions, (18) the Investment Company Act, (19) finders and brokers and (20), with
respect to Origo only, the trust account. Aina Le’a and Merger Sub also made representations and warranties regarding (1)
development, land use and development property sales, (2) environmental matters, (3) title to and sufficiency of assets, (4) insurance,
(5) top customers and suppliers, (6) Merger Sub obligations, (7) EB-5 program compliance, (8) information supplied and (9) full
disclosure. Certain of the representations and warranties are qualified by the representing party’s knowledge and/or by materiality
or material adverse effect. The representations and warranties made by the parties do not survive the Closing.
Covenants of the Parties
Each
party
agreed in the Merger Agreement to use their commercially reasonable efforts to effect the Closing.
The
Merger Agreement also contains certain customary covenants by each of the parties during the period between the signing of the
Merger Agreement and the earlier of the Closing or the termination of the Merger Agreement in accordance with its terms, including
covenants regarding (1) the provision of access to their properties, books and personnel, (2) confidentiality, (3) the operation
of their respective businesses in the ordinary course of business, (3) filing their reports required by the Securities and Exchange
Act of 1934, as amended, provision of interim financial statements, and efforts regarding Nasdaq listing requirements, (4) no solicitation
of other competing transactions, (5) notifications of certain breaches, consent requirements or other matters, (6) efforts to consummate
the Closing and obtain third party and regulatory approvals, (7) further assurances, (8) public announcements and (9) use of funds
in the trust account.
Origo also
agreed to certain covenants with respect to its obligations to file a proxy statement for an extraordinary general meeting of
its shareholders to approve the Merger Agreement and the related transactions (the “
Proxy Statement
”) and
Aina Le’a agreed to certain covenants with respect to its obligations to file a registration statement on Form S-4 (the
“
Registration Statement
”) to register the issuance of the AL Common Stock, and to the extent applicable,
the Replacement Warrants (and the shares of AL Common Stock issuable upon the exercise of such Replacement Warrants).
Pursuant to the Merger Agreement, if Origo
believes that the Closing will most likely not occur prior to March 12, 2017, but that the parties are reasonably capable of
causing the Closing to occur after March 12, 2017 but prior to June 12, 2017 (or such earlier date as agreed by the parties,
the “
Extension Date
”), Origo may at its sole election with the reasonable consent of Aina Le’a, call an extraordinary general meeting of Origo’s shareholders to extend the
deadline for Origo to consummate its initial business combination from March 12, 2017 to the Extension Date (the
“
Extension
”), offer to redeem its public shareholders in connection with such Extension and file any proxy
statement or other filings in connection therewith.
The
parties agreed to take all necessary actions so that the board of directors of Aina Le’a as of the Closing will consist of
seven directors, a majority of which shall be independent directors in accordance with Nasdaq requirements, and two of which independent
directors will be designated by Origo prior to the Effective Time. The two independent directors designated by Origo will also
have the right to select two persons as observers to Aina Le’a’s board of directors.
Aina Le’a
also agreed to have its board of directors adopt on behalf of Aina Le’a prior to the Closing a new equity incentive plan
reasonably acceptable to Origo, and to submit such new plan to its stockholders for their ratification and approval at the first
meeting of Aina Le’a’s stockholders to occur after the Closing.
Conditions to Closing of the Merger
The
obligations of each party to consummate the Merger are subject to the satisfaction or waiver of customary conditions and
closing deliverables, including (1) the Registration Statement having been declared and remaining effective, (2)
Origo’s shareholders having approved the Merger Agreement and the related transactions at the extraordinary general
meeting of Origo shareholders, (3) any required governmental and third party approvals having been obtained, (4) Origo having
net tangible assets of at least $5,000,001 after giving effect to any redemptions of public shareholders required by
Origo’s organizational documents and its IPO prospectus (the “
Closing Redemption Offer
”), (5) Origo,
after giving effect to the Closing Redemption Offer and deducting any unpaid transaction expenses, extension costs and
deferred IPO offering costs, having cash and cash equivalents of at least $15,000,000, (6) Origo amending its share escrow
agreement entered into in connection with the IPO so that the lock-ups therein apply to the AL Common Stock received as
Merger consideration, with the related share prices equitably adjusted for the Per Share Merger Consideration, (7) the
accuracy of the other set of parties’ respective representations and warranties (subject to certain materiality
qualifiers) and compliance with its covenants under the Merger Agreement in all material respects, (8) no event having
occurred since the date of the Merger Agreement resulting in a material adverse effect upon the business, assets,
liabilities, results of operations, prospects or condition of the other party and its subsidiaries, taken as a whole, or the
other party’s ability to consummate the transactions contemplated by the Merger Agreement and ancillary documents on a
timely basis (subject in each case to customary exceptions) (a “
Material Adverse Effect
”).
The obligation of
Origo to consummate the Merger is subject to satisfaction or waiver of the following conditions: (1) stockholders (or group of
stockholders) of Aina Le’a that immediately prior to the Effective Time beneficially own at least 5% of the issued and outstanding
shares of Aina Le’a or that are executive officers of Aina Le’a will enter into lock-up agreements subjecting them
to transfer restrictions substantially identical to those imposed under Origo’s share escrow agreement (as amended in connection
with the Closing), (2) evidence of the termination of a certain outstanding Aina Le’a material contract, and (3) certain
other agreements, insurance policies, tax filings and deliverables in connection with Aina Le’a’s real estate development
and sale operations.
Termination
The Merger Agreement
may be terminated under certain customary and limited circumstances at any time prior the Closing, including among other reasons,
(1) by either Origo or Aina Le’a if the Closing has not occurred on or prior to March 12, 2017 (or, if Origo seeks and receives
the approval of its shareholders for the Extension, the Extension Date), (2) by either party for the other party’s uncured
breach (subject to certain materiality qualifiers), (3) by Origo if there has been a Material Adverse Effect on Aina Le’a
or its subsidiaries since the date of the Merger Agreement after the date of the Merger Agreement which is uncured and continuing,
or (4) by Origo if it holds (A) its extraordinary meeting of shareholders and it does not receive the requisite vote of its shareholders
to approve the Merger Agreement and related transactions or (B) a meeting for the Extension and it does not receive the requisite
vote of its shareholders to approve the Extension.
If the Merger Agreement
is terminated, all further obligations of the parties under the Merger Agreement (except for certain obligations related to confidentiality,
public announcements and general provisions) will terminate, and no party to the Merger Agreement will have any further liability
to any other party thereto except for liability for fraud or for willful breach of the Merger Agreement prior to termination. There
are no termination fees in connection with the termination of the Merger Agreement.
OAC Representative
Jose Aldeanueva, is serving
as the OAC Representative under the Merger Agreement, and in such capacity will represent holders of Origo securities immediately
prior to the Effective Time with respect to certain matters under the Merger Agreement and the ancillary documents to which he
is a party in such capacity.
Trust Account Waiver
Aina Le’a
and Merger Sub agreed that they and their affiliates will not have any right, title, interest or claim of any kind in or to any
monies in Origo’s trust account held for its public shareholders, and agreed not to, and waived any right to, make any claim
against the trust account (including any distributions therefrom).
A copy of the Merger Agreement is filed with
this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference, and the foregoing description of the Merger
Agreement is qualified in its entirety by reference thereto.
Related Agreements
This section describes the material
provisions of certain additional agreements entered into or to be entered into pursuant to the Merger Agreement (the “
Related
Agreements
”) but does not purport to describe all of the terms thereof. The following summary is qualified in its
entirety by reference to the complete text of each of the Related Agreements, copies of each of which are attached hereto as exhibits.
Shareholders and other interested parties are urged to read such Related Agreements in their entirety.
Origo Sponsor Group Letter
In connection with
the execution of the Merger Agreement, certain members of Origo management (collectively, the “
Sponsor Group
”)
entered into a letter agreement (the “
Sponsor Group Letter
”) with Aina Le’a and Origo, pursuant to which
the Sponsor Group agreed to, immediately prior to the Effective Time, forfeit in the aggregate between 625,000 and 850,000 Origo
Ordinary Shares that are part of the 1,050,000 “initial shares” as defined in the IPO prospectus, with the actual amount
forfeited based on the amount of cash or cash equivalents available after the Closing Redemption Offer.
A copy of the Sponsor Group Letter is filed
with this Current Report on Form 8-K as Exhibit 2.2 and is incorporated herein by reference, and the foregoing description of the
Sponsor Group Letter is qualified in its entirety by reference thereto.