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 Merger Agreement, which is filed as Exhibit
2.1.
The
Merger
On
October 27, 2020, Alberton Acquisition Corporation, a British Virgin Islands corporation (together with its successors, “Alberton”),
entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among Alberton, Alberton Merger
Subsidiary Inc., a Nevada corporation and a wholly-owned subsidiary of Alberton (“Merger Sub”), and SolarMax
Technology, Inc., a Nevada corporation (“SolarMax”).
SolarMax is an integrated
solar energy company. It was founded in 2008 to conduct business in the U.S. and subsequently commenced operation in China following
two acquisitions in 2015.Through its subsidiaries, it is primarily engaged selling and installing integrated photovoltaic systems
for residential and commercial customers in the United States, which is its original business; identifying and procuring solar
farm system projects for resale to third party developers and related services in the People’s Republic of China; providing
engineering, procuring and construction services, which are referred to in the industry as EPC services, for solar farms in China,
financing the sale of its photovoltaic systems and servicing installment sales by its customers in the United States and providing
exterior and interior light-emitting diodes, known as LED, lighting sales and retrofitting services for governmental and commercial
applications.
The
Merger Agreement provides for the merger of Merger Sub with and into SolarMax (the “Merger”), with SolarMax
continuing as the surviving corporation in the Merger. Subject to the terms and conditions
set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”): (i) all shares
of SolarMax common stock (the “SolarMax Stock”) issued and outstanding immediately prior to the Effective Time
will be converted into the right to receive the Stockholder Merger Consideration (as defined below); (ii) each outstanding
option to acquire SolarMax Stock (whether vested or unvested) shall be assumed by combined entity and automatically converted
into an option to acquire shares of combined entity’s common stock, with its price and number of shares equitably adjusted
based on the conversion ratio, which is the number of shares of Alberton Common Stock issuable in respect of one share of SolarMax
Stock (each, an “Assumed Option”) and (iii) each outstanding convertible notes of SolarMax shall become convertible
into shares of Alberton’s common stock determined by dividing the conversion price of such notes at the Effective Time by
the applicable conversion ratio.
The
Merger Agreement also provides that, immediately prior to the Closing, Alberton will re-domesticate from a British Virgin Islands
corporation into a Nevada corporation so as to continue as a Nevada corporation (the “Domestication”). At the
closing of the Merger (the “Closing”), Alberton will change its name to “SolarMax Technology Holdings,
Inc.” In connection with the Domestication, the provision in Alberton’s amended and restated memorandum and articles
of association which provides that Alberton have net tangible assets of at least US$5,000,001 upon such consummation of the business
combination is to be amended to require that the net tangible asset test be met “prior to or upon” consummation of
the business combination.
Merger
Consideration
As consideration for the
Merger, SolarMax shareholders as of immediately prior to the Effective Time (but excluding holders of SolarMax options) collectively
will receive from Alberton, in the aggregate, a number of Alberton common stock equal to: (i) $300,000,000, divided by (ii) the
Redemption Price (defined below) (such shares of Alberton common stock is referred as the “Stockholder Merger Consideration”).
The holders of SolarMax options shall receive Assumed Options to purchase the number of shares of Alberton Common Stock as described
above in accordance with the terms and conditions set forth in the Merger Agreement. For the purpose of the Merger Agreement, Redemption
Price means a price per share equal to the price at which each share of Alberton common stock is redeemed pursuant to the redemption
by Alberton of its public stockholders in connection with Alberton’s initial business combination, as required by its amended
and restated certificate of incorporation immediately prior to the Effective Time (the “Redemption”).
Representations
and Warranties
The
Merger Agreement contains customary representations and warranties by each of Alberton, SolarMax and Merger Sub. Many of the representations
and warranties are qualified by materiality or Material Adverse Effect. “Material Adverse Effect” as used in
the Merger Agreement means with respect to any specified person or entity, any fact, event, occurrence, change or effect that
has had or would reasonably be expected to have a material adverse effect on the business, assets, liabilities, results of operations
or condition (financial or otherwise) of such person or entity and its subsidiaries, taken as a whole, or the ability of such
person or entity or any of its subsidiaries on a timely basis to consummate the transactions contemplated by the Merger Agreement
or the ancillary documents to which it is a party or bound or to perform its obligations thereunder, in each case subject to certain
customary exceptions. Certain of the representations are subject to specified exceptions and qualifications contained in the Merger
Agreement or in information provided pursuant to certain disclosure schedules to the Merger Agreement. The representations and
warranties made by the parties do not survive the Closing and there are no indemnification rights for another party’s breach.
Covenants
of the Parties
Each
party agreed in the Merger Agreement to use its 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 (the “Interim
Period”).
On
October 26, 2020, upon shareholders’ approval, Alberton extended the deadline for it to consummate its initial business combination
to a date no earlier than April 26, 2021, or such an earlier date may be determined by the board of Alberton (the “Extension”).
SolarMax agreed to make multiple loans in the amount of $60,000 per month up to six months for cash contribution in connection
with the Extension (including loans of two months’ cash contributions totaling $120,000, previously provided) and the sponsor,
officers, directors, affiliates of Alberton or their designees shall make such additional loans as shall be necessary for the costs
and expenses of the Extension or any contribution exceeding the portion of loans provided by SolarMax.
The
Merger Agreement and the consummation of the transactions contemplated thereby requires the approval of both Alberton’s
shareholders and SolarMax’s stockholders. Alberton agreed, as promptly as practicable after the date of the Merger Agreement,
to prepare, with the reasonable assistance of SolarMax, and use its commercially reasonable efforts to file with the Securities
and Exchange Commission (the “SEC”), a registration statement on Form S-4 (as amended, the “Registration
Statement”) in connection with the registration under the Securities Act of 1933, as amended (the “Securities
Act”) of the issuance shares of Stockholder Merger Consideration to the SolarMax stockholders, and containing a joint
proxy statement/prospectus for the purpose of (i) Alberton soliciting proxies from the shareholders of Alberton to approve the
Merger Agreement, the transactions contemplated thereby and related matters (the “Alberton Shareholder Approval”)
at a special meeting of Alberton’s shareholders (the “Alberton Special Meeting”) and providing such stockholders
an opportunity of Redemption, and (ii) SolarMax soliciting proxies from the stockholders of SolarMax to approve the Merger Agreement,
the transactions contemplated thereby and related matters (the “SolarMax Stockholder Approval”) at a special
meeting of SolarMax’s stockholders (the “SolarMax Special Meeting”).
Certain SolarMax stockholders,
who are officers, directors and 5% stockholders of SolarMax and who beneficially own constituting approximately 41.6% of the issued
and outstanding common stock of SolarMax, executed Voting Agreements in favor of the Merger Agreement and transaction contemplated
thereby. Sponsor of Alberton together with one major insider shareholder, constituting approximately 56.7% of the issued and outstanding
capital of Alberton, executed Voting Agreement in favor of the Merger Agreement and transaction contemplated thereby.
The
parties also agreed to take all necessary action, so that effective at the Closing, the entire board of directors of Alberton
will consist of those individuals who are directors of SolarMax on the Effective Date plus one individual to be designated by
Alberton who shall meet the Nasdaq requirement for an independent director and shall be acceptable to SolarMax.
Conditions
to Consummation of the Merger
The obligations of the
parties to consummate the Merger is subject to various conditions, including the following mutual conditions of the parties unless
waived: (i) the approval of the Merger Agreement and the transactions contemplated thereby and related matters by the requisite
vote of Alberton’s shareholders and SolarMax’s stockholders; (ii) receipt of requisite regulatory approvals; (iii)
no law or order preventing or prohibiting the Merger or the other transactions contemplated by the Merger Agreement; (iv) no pending
litigation to enjoin or restrict the consummation of the Closing; (v) Alberton having at least $5,000,001 in net tangible assets
as of the Closing, after giving effect to the completion of the Redemption, consummation of the Merger and any private financings;
(vi) the Domestication, (vii) the election or appointment of members to the Alberton’s board of directors as described above;
(vii) the effectiveness of the Registration Statement, and (viii) being advised by Nasdaq that upon consummation of the Merger,
Alberton shall continue to be listed and all outstanding deficiencies have been addressed to the satisfaction of Nasdaq .
In
addition, unless waived by SolarMax, the obligations of SolarMax to consummate the Merger are subject to the satisfaction of the
following Closing conditions, in addition to customary certificates and other closing deliveries:
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The
representations and warranties of Alberton being true and correct as of the date of the
Merger Agreement and as of the Closing (subject to Material Adverse Effect);
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Alberton
having performed in all material respects its obligations and complied in all material
respects with its covenants and agreements under the Merger Agreement required to be
performed or complied with on or prior the date of the Closing;
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Absence
of any Material Adverse Effect with respect to Alberton since the date of the Merger
Agreement which is continuing and uncured;
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Alberton
having received net proceeds from the financings sufficient such that, after giving effect
to the Merger, the Redemption and the receipt of such net proceeds, Alberton will satisfy
the applicable listing requirements of Nasdaq (“Financing Requirement”);
and
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Alberton
having satisfied all deferred underwriting fees and expenses, including deferred fee
and other obligations arising from Alberton’s initial public offering and all notes
that re outstanding as of September 3, 2020 by delivery of outstanding sponsor shares.
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Unless
waived by Alberton, the obligations of Alberton and the Merger Sub to consummate the Merger are subject to the satisfaction of
the following Closing conditions, in addition to customary certificates and other closing deliveries:
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The
representations and warranties of SolarMax being true and correct as of the date of the
Merger Agreement and as of the Closing (subject to Material Adverse Effect);
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SolarMax
having performed in all material respects its obligations and complied in all material
respects with its covenants and agreements under the Merger Agreement required to be
performed or complied with on or prior to the Closing Date;
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Absence
of any Material Adverse Effect with respect to SolarMax since the date of the Merger
Agreement which is continuing and uncured;
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Alberton
having received a copy of duly executed Lock-Up agreements by certain significant SolarMax
stockholders (or such SolarMax stockholders otherwise being subject to substantially
similar transfer restrictions);
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Termination
The
Merger Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including:
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by
mutual written consent of Alberton and SolarMax;
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by
written notice by either Alberton or SolarMax if the Closing has not occurred on or prior
to April 26, 2021 (provided, that if the right to terminate under this clause shall not
be available to a Party if the breach or violation by such Party or its affiliates of
any representations, warranty, covenant or obligation under the Merger Agreement was
the principal cause of, or resulted in, the failure of the Closing to occur on or before
April 26, 2021);
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by
written notice by either Alberton or SolarMax if a governmental authority of competent
jurisdiction shall have issued an order or taken any other action permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by the Merger Agreement,
and such order or other action has become final and non-appealable;
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by
written notice by either party of the other party’s uncured breach (subject to
certain materiality qualifiers);
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by
written notice by either Party if there has been a Material Adverse Effect on the other
Party since the date of the Merger Agreement which is continuing and incapable of being
cured or, if capable of cure, is uncured after 20 days after the date that written notice
of such Material Adverse Effect is provided by the Party not having a Material Adverse
Effect;
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by
written notice by either Party if Alberton holds the Alberton Special Meeting and it
does not receive the Alberton Shareholder Approval;
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by
written notice by either Party if SolarMax holds the SolarMax Special Meeting and it
does not receive the SolarMax Stockholder Approval; or
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by
written notice by Alberton or SolarMax if twenty (20) business days elapsed after the
Alberton Special Meeting and the Financing Requirement is not satisfied or waived by
SolarMax.
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If
the Merger Agreement is terminated, all further obligations of the parties under the Merger Agreement will terminate and will
be of no further force and effect (except that certain obligations related to public announcements, confidentiality, termination
and termination fees, waiver of claims against the trust, and certain general provisions will continue in effect), and no party
will have any further liability to any other party thereto except for liability for any fraud claims or willful breach of the
Merger Agreement prior to such termination.
Sponsor
Support
During
the Interim Period, Alberton shall obtain the agreement of the underwriter in its initial public offering and the holders of its
promissory notes that were outstanding as of September 3, 2020 that all deferring underwriting and related fees due to such underwriter
and all of such outstanding promissory notes shall be settled by the delivery by the sponsor and its affiliate of shares of Alberton
securities owned by them.
During
the Interim Period, Alberton shall obtain agreement of its sponsor to transfer to Alberton for cancellation such number of Alberton
shares equal to the cash paid by the surviving corporation after the Merger to pay all of Alberton’s liabilities, including
contingent liabilities, on the closing date (other than Alberton Closing Expenses, defined below) divided by the Redemption Price
(such arrangement is referred as “Sponsor Expenses Support”).
Fees
and Expenses
SolarMax has agreed that
the surviving entity shall pay all expenses relating to the Merger Agreement and the transaction contemplated by the Merger Agreement
which are incurred by Alberton on or after the date that the Registration Statement in connection with the Merger is initially
filed with the SEC (“Alberton Closing Expenses”). In addition, SolarMax has agreed to provide multiple loans
in the amount of no more than $60,000 per month to support Alberton’s Extension up to six months (including the two months’
extension contribution previously provided), repayable upon the earlier of the closing of the Merger or liquidation.
Except Alberton Closing
Expenses, all expenses incurred in connection with the Merger Agreement and the transaction contemplated thereby shall be paid
the Party incurring such expenses, subject to Sponsor Expenses Support.
Trust Account Waiver
SolarMax
has agreed that it and its affiliates will not have any right, title, interest or claim of any kind in or to any monies in Alberton’s
trust account held for its public stockholders, and agreed not to, and waived any right to, make any claim against the trust account
(including any distributions therefrom).
Related
Agreements
Voting
Agreements
Simultaneously
with the execution of the Merger Agreement, certain SolarMax stockholders, who are officers, directors and 5% shareholders, entered
into voting agreements with Alberton and SolarMax (the “Voting Agreements”) and agree to vote all of their
shares of SolarMax Stock in favor of the Merger Agreement and related transactions and to otherwise take certain other actions
in support of the Merger Agreement and related transactions and refrain from taking actions that would adversely affect such SolarMax
Stockholder’s ability to perform its obligations under the Voting Agreement, and provide a proxy to SolarMax to vote such
SolarMax Stock accordingly. The Voting Agreements prevent transfers of the SolarMax Stock held by the SolarMax stockholder party
thereto between the date of the Voting Agreement and the date of the SolarMax Special Meeting, except for certain permitted transfers.
Simultaneously
with the execution of the Merger Agreement, Alberton’s sponsor and one major insider shareholder entered into voting agreements
with Alberton and SolarMax (the “Sponsor Voting Agreements”). Under the Sponsor Voting Agreements, the sponsor
and the insider shareholder agree to vote all of their shares of Alberton ordinary shares in favor of the Merger Agreement and
related transactions and to otherwise take certain other actions in support of the Merger Agreement and related transactions and
refrain from taking actions that would adversely affect such sponsor’s ability to perform its obligations under the Sponsor
Voting Agreement, and provide a proxy to Alberton to vote such Alberton ordinary shares accordingly. The Sponsor Voting Agreements
prevent transfers of the Alberton ordinary shares held by the sponsor party thereto between the date of the Voting Agreement and
the date of the Alberton Special Meeting, except for certain permitted transfers.
Lock-Up
Agreements
At
the Closing, the officers and directors of SolarMax and certain SolarMax stockholders owning more than 1% of the outstanding SolarMax
stock immediately prior to the Effective Time (each, a “Significant Stockholder”) will each either enter into
a Lock-Up Agreement with combined entity in substantially the form attached to the Merger Agreement (each, a “Lock-Up
Agreement”) or such Significant Stockholder shall otherwise be subject to substantially similar transfer restrictions
that are in favor of the combined entity. In such Lock-Up Agreement, each such holder will agree not to (1) offer, pledge, announce
the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly,
any Alberton Shares or any securities convertible into, exercisable or exchangeable for or that represent the right to receive
Alberton Shares (including Alberton Shares which may be deemed to be beneficially owned by the undersigned in accordance with the
rules and regulations of the Securities and Exchange Commission and securities which may be issued upon exercise of a stock option
or warrant) whether now owned or hereafter acquired (the “Undersigned’s Securities”); (2) enter into any
swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Undersigned’s
Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Alberton Shares or
such other securities, in cash or otherwise; (3) make any demand for or exercise any right with respect to, the registration of
any Alberton Shares or any security convertible into or exercisable or exchangeable for Alberton Shares; or (4) publicly disclose
the intention to do any of the foregoing during the lock-up period. For the purpose of Lock-Up Agreement, the “Lock-Up Period”
means (i) for 50% of each Significant Stockholder’s Securities, the period ending on the earlier of (x) six months after
the closing of the Merger, and (y) the date on which the closing price of the Alberton Shares equals or exceeds $12.50 per for
any 20 trading days within any 30-trading day period commencing after the closing of the Merger and (ii) for the remaining 50%
of such Significant Stockholder’s Securities, ending six months after the closing of the Merger.
The
foregoing descriptions of the Voting Agreements, the Sponsor Voting Agreements, the Form of Lock-up Agreement do not purport to
be complete and are qualified in their entirety by reference to the Voting Agreement, Sponsor Voting Agreement, Lock-up Agreement,
copies of which are filed as Exhibits 10.1, 10.2 and10.3, respectively.