Sponsor Promote Adjustment. SponsorCo hereby agrees that, upon and subject to the Closing, SponsorCo shall irrevocably surrender to Parent, immediately prior to the First Effective Time, 1,000,000 shares of Parent Common Stock (as the same may be adjusted to give effect to any stock split, reverse stock split, stock dividend, reclassification, subdivision, combination or similar recapitalization of such securities or any similar reorganization after the date of this Sponsor Support Agreement) for no consideration and as a contribution to the capital of Parent whereupon such shares shall be cancelled.
Sponsor Promote Adjustment. In connection with the consummation of the Transactions, Sponsor agrees that, subject to the satisfaction or waiver of each of the conditions to Closing set forth in Sections 8.01, 8.02 and 8.03 of the BCA, immediately prior to the Effective Time, in the event the BCAC Related Funds Amount at Closing that are available to the Company are less than $20,000,000, that number of Sponsor Shares (the “Surrendered Shares”) equal to (x) one (1) minus the quotient of the BCAC Related Funds Amount divided by $20,000,000, multiplied by (y) one-third (1/3) of the total number of Sponsor Shares, shall be deemed automatically forfeited and cancelled without any further actions by the Sponsor or any other Person, and such Surrendered Shares will be recorded as cancelled by the Company.
Sponsor Promote Adjustment. In connection with the consummation of the Transactions, the Sponsor agrees that, upon and subject to the occurrence of the Closing, the Sponsor shall automatically forfeit and cancel, without any further action by the Sponsor or any other Person or any further consideration therefor, all of the Sponsor Shares, other than the Retained Sponsor Shares. For purposes of this Agreement:
Sponsor Promote Adjustment. In connection with the consummation of the Transactions, Sponsor agrees that it shall use commercially reasonable efforts to utilize up to an aggregate of 10% of the Subject Shares to (a) if the accrued and unpaid SPAC Transaction Expenses (as set forth on the written statement to be delivered to the Company pursuant to Section 3.02(b)(i) of the Merger Agreement) exceed the Expense Cap, then transfer, on behalf of the Company, such Subject Shares to the payee of the applicable SPAC Transaction Expense in satisfaction of some or all of such applicable SPAC Transaction Expense (the “SPAC Equity Payment”), and (b) secure waivers of SPAC Shareholder Redemption Rights in connection with the SPAC Transaction Proposals. For purposes of this Section 5.2, “Expense Cap” means $11,000,000; provided, however, that if the Closing has not occurred prior to September 30, 2024, such Expense Cap may be increased subject to consent from the Company (which shall not be unreasonably withheld, conditioned or delayed). For U.S. federal and applicable state and local income tax purposes, Sponsor and SPAC intend that any SPAC Equity Payment be treated as (i) a contribution of the applicable SPAC Class A Shares and/or SPAC Class B Shares to the capital of SPAC within the meaning of Section 118 of the Code and (ii) a payment by SPAC of SPAC Transaction Expenses with such contributed SPAC Class A Shares and/or SPAC Class B Shares, as the case may be, which transaction shall be governed by Section 1032 of the Code.
Sponsor Promote Adjustment. In connection with the consummation of the Transactions, the Sponsor agrees that, upon and subject to the occurrence of the Closing, the Sponsor shall automatically forfeit and cancel, without any further action by the Sponsor or any other Person or any further consideration therefor, all of the Sponsor Shares, other than the Retained Sponsor Shares (the “Forfeiture”). For purposes of this Agreement, “Retained Sponsor Shares” means an amount of SPAC Class B Common Stock equal to (a) 4,500,000 shares in the aggregate, minus (b) the Expense Excess Shares, if any; provided, however, that the Sponsor shall exchange 2,500,000 of the Retained Sponsor Shares for shares of SPAC Series A Preferred Stock in connection with the SPAC Exchange Offer (the “Exchange”). “Expense Excess Shares” means an amount of SPAC Class B Common Stock equal to the quotient obtained by dividing (x) the excess, if any, of (i) the Unpaid SPAC Transaction Expenses over (ii) the SPAC Transaction Expenses Cap, by (ii) ten dollars ($10). For U.S. federal and applicable state and local income tax purposes, Sponsor and SPAC intend that (1) the Forfeiture be treated as a contribution to the capital of SPAC within the meaning of Section 118 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), and (2) the Exchange qualify as a “reorganization” under Section 368(a)(1)(E) of the Code and this Agreement constitute, and hereby be adopted as, a “plan of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the U.S. Treasury Regulations.
