Item 1.01 Entry
into a Material Definitive Agreement.
Business Combination
Agreement
On
June 9, 2022, Moringa Acquisition Corp (“Moringa” or the “SPAC”) (Nasdaq: MACA, MACAU
and MACAW), an exempted company organized under the laws of the Cayman Islands that is a special purpose acquisition company, entered
into a Business Combination Agreement (the “Business Combination Agreement”), by and among Moringa, Holisto
Ltd., a company organized under the laws of the State of Israel (“Holisto”), and Holisto MergerSub, Inc., a
Cayman Islands exempted company and wholly-owned subsidiary of Holisto (“Merger Sub”). The transactions set
forth in the Business Combination Agreement (the “Transactions”) will constitute a “Business Combination”
as contemplated by Moringa’s Amended and Restated Memorandum and Articles of Association.
Holisto
is an Israeli company and a tech-powered online travel agency, which aims to make hotel booking affordable and personalized for consumers.
The
Business Combination Agreement and the transactions contemplated thereby have been unanimously approved by the boards of directors of
Moringa and Holisto, and by the shareholders of Holisto.
The
following description of the Business Combination Agreement does not purport to be complete
and is qualified in its entirety by reference to the Business Combination Agreement, a copy
of which is included as Exhibit 2.1 to this Current Report on Form 8-K. Capitalized terms used in this Current Report on Form 8-K but
not otherwise defined herein have the meanings assigned to them in the Business Combination Agreement.
General Terms and Effects;
Merger Consideration
Pursuant to the Business Combination
Agreement, at the closing (the “Closing”) of the transactions contemplated thereunder (collectively, the “Transactions”),
and following the Capital Restructuring (as each such term is defined and described below), (i) Merger Sub will merge with and into the
SPAC, with the SPAC continuing as the surviving entity and a wholly-owned subsidiary of Holisto (the “Merger”);
(ii) Moringa Units, to the extent not previously separated, will be separated into the Moringa Class A ordinary shares and warrants; (iii)
the Class B Ordinary Shares of Moringa will be converted into Moringa Class A Ordinary Shares; (iv) the Class A ordinary shares of Moringa
will be converted into ordinary shares of Holisto (“Holisto Ordinary Shares”) in accordance with the ratio described
below; (v) each Moringa warrant will be converted into one Holisto warrant (on the same terms contained in the Moringa warrants, except
that each Holisto warrant will represent the right to acquire Holisto ordinary shares in lieu of Moringa Class A ordinary shares); (vi)
Moringa will become a wholly-owned subsidiary of Holisto; and (vii) Moringa, as a wholly-owned subsidiary of Holisto, will change its
corporate name to Holisto Inc. and will amend and restate its amended and restated memorandum and articles of association so as to be
appropriate for a private company.
The number of Holisto Ordinary
Shares to be received in exchange for each Moringa Class A ordinary share in the Merger will depend on whether the share was issued to
the public pursuant to the registration statement relating to Moringa’s initial public offering (a “Moringa Public Share”)
or whether the share was issued other than as part of Holisto’s initial public offering:
| (i) | each Moringa Class A ordinary share issued to Moringa’s sponsor, Moringa Sponsor, L.P. (the “Sponsor”),
and the underwriters for Moringa’s initial public offering (the “IPO”), including Class A ordinary shares
issued upon conversion of Moringa Class B ordinary shares, which represent all of Moringa’s ordinary shares that were not issued
to the public in the IPO, will automatically be exchanged for one Holisto Ordinary Share; and |
| (ii) | each Moringa Public Share that is not redeemed for cash pursuant to Moringa’s articles shall automatically
become and be converted into the right to receive a number of Holisto Ordinary Shares that is equal to the lower of: (A) 1.6 or (B) the
number yielded by the following calculations: (1) first, calculating the sum of (a) the Post-Redemption SPAC Share Number plus (b) 1,725,000
(which may be increased by mutual written consent of Moringa and Holisto), and (2) second, dividing the result of the immediately preceding
sub-clause (1) by the Post-Redemption SPAC Share Number (the “Bonus Plan Adjustment”). The Post-Redemption SPAC
Share Number is the aggregate number of Moringa Public Shares outstanding after giving effect to all redemptions of Moringa Public Shares.
Under this formula, the more Moringa shares that are redeemed, the greater the number of Holisto Ordinary Shares that will be issued in
respect of one Moringa Public Share. The maximum ratio will be 1.6 Holisto Ordinary Shares for each Moringa Public Share exchanged in
the Merger, which is the ratio if 75% or more of Moringa Public Shares are redeemed, and the minimum ratio will be 1.15 Holisto Ordinary
Shares for each Moringa Public Share exchanged in the Merger. |
Prior to the Closing, but subject
to the completion of the Closing, Holisto will effect a capital restructuring of its outstanding equity securities (the “Capital
Restructuring”) so that the only class of outstanding equity of Holisto will be Holisto Ordinary Shares (along with certain
options and warrants to be rolled over in connection with the Transactions). To effect the Capital Restructuring, (i) warrants to purchase
Holisto Ordinary Shares, Ordinary A Shares and Preferred Shares (with certain exceptions) will be automatically exercised in accordance
with their terms; (ii) each existing Simple Agreement for Future Equity (“SAFE”) that is outstanding for Holisto
securities as of the date of the Business Combination Agreement (excluding any New SAFE Agreement, for a total of $4.75 million) will
be converted automatically into Holisto Ordinary Shares in accordance with the terms of the SAFE agreements; (iii) the preferred shares
and ordinary A shares of Holisto (including preferred shares and ordinary A shares issuable upon exercise of warrants that are exercised
as part of the Capital Restructuring) will be converted into Holisto Ordinary Shares in accordance with their terms with the result that
only Holisto Ordinary Shares will be outstanding. Holisto will then effect a share split, to become effective immediately prior to the
Closing, and subject to the effectiveness of the Merger, pursuant to which each Holisto Ordinary Share outstanding as of immediately prior
to the effective time of the Merger (but after the exercises and conversions described above, and excluding and prior to the issuance
of any shares pursuant to a New SAFE Agreement) will be converted into the number of Holisto Ordinary Shares computed by (A) multiplying
each such Holisto Ordinary Share by (B) the conversion ratio described below (the “Conversion Ratio”); and (iv)
with respect to outstanding options and warrants to purchase Holisto Ordinary Shares that are not exercised as part of the Capital Restructuring,
the number of Holisto Ordinary Shares issuable upon exercise of those securities, as well as the exercise price of those securities, will
be adjusted in accordance with the Conversion Ratio. The Conversion Ratio is based on a Holisto valuation of $400 million plus the amount
actually invested pursuant to the New SAFE Agreements, and a share price of $10.00 per Holisto Ordinary Share. The Business Combination
Agreement does not provide for any purchase price adjustments to the Conversion Ratio as part of the pre-Closing Capital Restructuring.
Contemporaneously with
the execution of the Business Combination Agreement, Holisto, Moringa and an institutional investor (the “Investor”)
entered into a securities purchase agreement (the “Securities Purchase Agreement”) pursuant to which
Holisto agreed to issue to the Investor and the Investor agreed to purchase from Holisto contemporaneously with the closing under
the Business Combination Agreement, on and subject to the terms and conditions of the Securities Purchase Agreement, for a total
consideration of $30 million, Holisto’s secured senior convertible note in a principal amount of $30 million, which is due two
years from the date of issuance (the “Investor Note”), and a warrant to purchase an aggregate of 1,363,636
Holisto Ordinary Shares (the “Financing Warrant”) at an exercise price of $11.50. The Securities Purchase
Agreement, Investor Note, Financing Warrant and the related transaction documents, are described under “Terms of the
Financing.”
Representations and Warranties
The Business Combination
Agreement contains a number of representations and warranties made by each of Moringa and Holisto as of the date of the Business
Combination Agreement or other specified dates. Certain of the representations and warranties are qualified by materiality or
Material Adverse Effect (as defined below), as well as information provided in the disclosure schedules to the Business Combination
Agreement. As used in the Business Combination Agreement, “Material Adverse Effect” means, with respect to
any specified person or entity, an event or change that has a material adverse effect upon (a) the business, assets, liabilities,
results of operations, prospects or condition (financial or otherwise) of such entity and its subsidiaries, taken as a whole, or (b)
the ability of such entity or any of its subsidiaries to consummate the Transactions contemplated by the Business Combination
Agreement or the ancillary agreements to which it is a party or bound, or to perform its related obligations, on a timely basis, in
each case, subject to certain conditions and exceptions.
No Survival
The representations and warranties
of the parties contained in the Business Combination Agreement terminate as of, and do not survive, the Closing, and there are no indemnification
rights for another party’s breach, subject to any party’s right to claim fraud by another party. The covenants and agreements
of the parties contained in the Business Combination Agreement do not survive the Closing, except for (i) those covenants and agreements
to be performed after the Closing, which covenants and agreement will survive until fully performed, and (ii) the case of a claim of fraud
by another party.
Covenants of the Parties
Each party has agreed in the
Business Combination Agreement to use its commercially reasonable efforts to effect the Closing. The Business Combination Agreement also
contains certain customary covenants by each of the parties during the period between the signing of the Business Combination Agreement
and the earlier of the Closing or the termination of the Business Combination Agreement in accordance with its terms (the “Interim
Period”), including those relating to: (1) providing each other access to their properties, books and personnel; (ii) the
operation of their respective businesses in the ordinary course of business; (iii) Holisto providing financial statements to Moringa;
(iv) Moringa’s public filings; (v) no insider trading; (vi) notifications of certain breaches, consent requirements or other matters;
(vii) efforts to consummate the Closing; (viii) further assurances; (ix) public announcements; (x) the filing of registration statements
by Holisto; and (xi) confidentiality. Each party also agreed during the Interim Period not to solicit or enter into any inquiry, proposal
or offer, or any indication of interest in making an offer or proposal for an alternative competing transaction, to notify the other party
as promptly as practicable in writing of the receipt of any inquiries, proposals or offers, requests for information or requests relating
to an alternative competing transaction or any requests for non-public information relating to such transaction, and to keep the other
party informed of the status of any such inquiries, proposals, offers or requests for information. The Business Combination Agreement
also contains certain customary post-Closing covenants regarding, among other matters, (a) maintenance of books and records; (b) indemnification
of directors and officers and the purchase of tail directors’ and officers’ liability insurance; and (c) use of trust account
proceeds.
In addition, Holisto has agreed
to obtain, and, prior to its execution of the Business Combination Agreement, obtained its required shareholder approval for, among other
things: (i) the adoption and approval of the Business Combination Agreement and the Transactions (including, to the extent required, the
Capital Restructuring and the issuance of Holisto Ordinary Shares and warrants to the Moringa shareholders and warrant holders pursuant
to the Business Combination Agreement (including in connection with the Financing)); (ii) the approval of the restated Holisto organizational
documents, which had been approved by Holisto’s directors; (iii) the composition of Holisto’s post-Closing board of directors
as described below (the “Post-Closing Board”), and agreed to enforce the Voting Agreements (as defined and described
below) in connection therewith; (iv) the adoption and approval of certain incentive equity plan modifications, as well as a new equity
incentive plan for Holisto in a form to be mutually agreed by Moringa and Holisto prior to the filing of the Registration Statement, which
will provide for a new pool for awards; (v) the new employment agreements for post-Closing executives; (vi) the issuance of Holisto Ordinary
Shares upon conversion of the new SAFE Agreements in accordance with their terms; and (vii) indemnification of directors and officers
and the purchase of tail directors’ and officers’ liability insurance.
The parties made customary
covenants regarding the filing by Holisto of a registration statement on Form F-4 (the “Registration Statement”)
with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the
“Securities Act”), to register the issuance of (a) the Holisto Ordinary Shares and warrants to purchase Holisto
Ordinary Shares to be issued to the holders of Moringa ordinary shares and warrants pursuant to the Business Combination Agreement, and
(b) Holisto Ordinary Shares that are issuable upon exercise of those warrants. The Registration Statement also will contain Moringa’s
proxy statement to seek the approval of its shareholders to: (i) the adoption and approval of the Business Combination Agreement, the
ancillary documents related to the Transactions to which Moringa is a party, the Merger, the Plan of Merger, and the other related transactions;
(ii) the approval of the change of name of Moringa as the surviving company of the Merger to “Holisto Inc.”; (iii) the approval
and adoption of the restated articles of association of Moringa (as a subsidiary of Holisto) upon the Merger; (iv) such other matters
as Holisto and Moringa shall mutually determine to be necessary or appropriate in order to effect the Transactions; and (v) the adjournment
of the Moringa shareholders meeting, if necessary.
Holisto agreed to file with
the SEC, within 30 days of the Closing, an additional registration statement, on Form F-1 under the Securities Act (the “Form
F-1 Registration Statement”), covering the (i) sale of Holisto Ordinary Shares which are held by certain existing shareholders
of Holisto and that are issuable to certain shareholders of Moringa pursuant to the Transactions, who are parties to the Amended Shareholder
Rights Agreement (the “Amended SRA”) and the Restated Registration Rights Agreement, respectively, (ii) sale
of Holisto Ordinary Shares issuable upon exercise of Continuing Warrants held by certain current shareholders of Holisto who have registration
rights, and (iii) sale of Holisto warrants and Holisto Ordinary Shares issuable upon exercise of Holisto warrants which are to be held
by certain shareholders of Moringa who are parties to the Restated Registration Rights Agreement. The undertaking by Holisto to register
the sale of securities under the Form F-1 Registration Statement is in addition to its agreement to register, within five business days
following the Closing, the sale of Holisto Ordinary Shares issuable upon conversion of the Investor Notes and upon exercise of the Financing
Warrants. Holisto’s obligation to register Holisto Ordinary Shares pursuant to the Business Combination Agreement is subject to
the restrictions on filing registration statements pursuant to the Securities Purchase Agreement with the Investor, which prohibits Holisto
from filing any registration statements until the earlier of (x) the first date on which the resale by the Investor of all the Registrable
Securities required to be filed on the initial Registration Statement, which includes the maximum number of Holisto Ordinary Shares issuable
upon conversion of the Investor Note (including interest to the maturity date) and all Holisto Ordinary Shares issuable upon exercise
of the Warrants is declared effective by the SEC (and each prospectus contained therein is available for use on such date) or (y) the
first date on which all of the Registrable Securities are eligible to be resold by the Investor pursuant to Rule 144.
The agreement provides that the
Post-Closing Holisto Board of Directors will consist of seven directors, consisting of four directors designated prior to the Closing
by Holisto, at least two of whom will be considered independent under the requirements of The Nasdaq Capital Market (“Nasdaq”),
one director designated prior to the Closing by Moringa, and two independent directors (under Nasdaq requirements) to be designated by
Holisto, subject to Moringa’s consent (not to be unreasonably withheld, delayed or conditioned). Following the closing, Holisto’s
chief executive officer and chief financial officer will be the same individuals (in the same office) as that of Holisto immediately prior
to the Closing.
In connection with the execution
of the Business Combination Agreement, Holisto intends to enter into employment agreements with certain of its senior employees, which
will include non-competition and non-solicitation undertakings by those employees, in each case effective as of the Closing, each of which
will be in a form to be agreed upon by Holisto and Moringa. Pursuant to the employment agreements, Holisto intends to grant options to
its three founders.
Holisto has undertaken to
Moringa to use its commercially reasonable best efforts to consummate the Financing pursuant to the Securities Purchase Agreement with
the Investor.
Conditions to Closing
The Business Combination Agreement
contains customary conditions to Closing, including the following mutual conditions of the parties (unless waived): (i) approval of the
shareholders of Moringa and Holisto; (ii) approvals of any required governmental authorities; (iii) no law or order preventing the Transactions;
(iv) the Registration Statement having been declared effective by the SEC and no stop order having been issued by the SEC; (v) upon the
Closing, after giving effect to the Redemption and the Financing pursuant to the Securities Purchase Agreement with the Investor, Holisto
has, on a consolidated basis, net tangible assets of at least $5,000,001 immediately prior to, or upon completion of, the Merger (the
net tangible assets to be determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act); and (vi) approval of Holisto’s Nasdaq
listing application.
In addition, unless waived by
Holisto, the obligations of Holisto and Merger Sub to consummate the Transactions are subject to the satisfaction of the following additional
Closing conditions, in addition to the delivery by Moringa of customary certificates and other Closing deliverables: (i) the representations
and warranties of Moringa being true and correct as of the date of the Business Combination Agreement and as of the Closing (subject to
certain materiality qualifiers); (ii) Moringa having performed in all material respects its obligations and complied in all material respects
with its covenants and agreements under the Business Combination Agreement required to be performed or complied with by it on or prior
to the date of the Closing; and (iii) the execution of the Founder Lock-Up Agreement (as defined and described below) by the Sponsor.
Unless waived by Moringa, the
obligations of Moringa to consummate the Transactions are subject to, among other matters, the satisfaction of the following additional
Closing conditions, in addition to the delivery by Holisto and Merger Sub of customary certificates and other Closing deliverables: (i)
the representations and warranties of Holisto and Merger Sub being true and correct as of the date of the Business Combination Agreement
and as of the Closing (subject to certain materiality qualifiers); (ii) Holisto and Merger Sub having performed in all material respects
their respective obligations and complied in all material respects with their respective covenants and agreements under the Business Combination
Agreement required to be performed or complied with by them on or prior to the date of the Closing; (iii) absence of any Material Adverse
Effect with respect to Holisto and its subsidiaries on a consolidated basis since the date of the Business Combination Agreement which
is continuing and uncured; (iv) each of the Lock-Up Agreements, the New Employment Agreements, the Amended SRA, the Restated Registration
Rights Agreement, and the D&O Indemnification Agreements shall be in full force and effect in accordance with the terms thereof as
of the Closing and the existing investor rights agreements shall have been terminated; (v) the New SAFE Agreements shall have been converted
into Holisto Ordinary Shares in accordance with their terms; (vi) Holisto shall have consummated the Capital Restructuring; (vii) the
amended and restated articles of association of Moringa shall have been duly adopted effective as of the Effective Time; and (viii) the
members of the Post-Closing Board shall have been elected or appointed as of the Closing in accordance with the composition required by
the Business Combination Agreement.
Termination
The Business Combination Agreement
may be terminated under certain customary and limited circumstances at any time prior to the Closing, including: (i) by mutual written
consent of Moringa and Holisto; (ii) by either Moringa or Holisto if any of the conditions to Closing have not been satisfied or waived
by November 15, 2022; (iii) by either Moringa or Holisto if a governmental authority of competent jurisdiction has issued an order or
taken any other action permanently restraining, enjoining or otherwise prohibiting the Transactions, and such order or other action has
become final and non-appealable; (iv) by either Moringa or Holisto in the event of the other party’s uncured breach, if such breach
would result in the failure of a closing condition (and so long as the terminating party is not also in breach under the Business Combination
Agreement); (v) by Moringa if there has been a Material Adverse Effect on Holisto and its subsidiaries on a consolidated basis following
the date of the Business Combination Agreement that is uncured and continuing; (vi) by written notice by Moringa to Holisto, if the Registration
Statement has not been filed with the SEC within ten weeks from the date of the Business Combination Agreement; and (vii) by either Moringa
or Holisto if Moringa holds a special meeting of its shareholders to approve the Business Combination Agreement and the Transactions and
such approval is not obtained.
If the Business Combination Agreement
is terminated, all further obligations of the parties under the Business Combination Agreement (except for certain obligations related
to publicity, confidentiality, fees and expenses, trust fund waiver, no recourse, termination and general provisions) will terminate,
and no party to the Business Combination Agreement will have any further liability to any other party thereto except for liability for
fraud or for willful breach of the Business Combination Agreement prior to termination.
If the required Holisto shareholder
approval of the Transactions has not been obtained within 45 days of the date of the Business Combination Agreement, or if the Registration
Statement has not been filed by Holisto with the SEC within ten weeks from the date of the Business Combination Agreement (other than
as a result of the failure of Moringa to provide information concerning Moringa required to be included in the Registration Statement
reasonably satisfactory to counsel for Holisto), Holisto is required to pay a $3 million fee to Moringa (the “Special Fee”).
The required Holisto shareholder approval was obtained prior to the execution of the Business Combination Agreement. Notwithstanding the
foregoing, Moringa shall no longer be entitled to the Special Fee, and shall return any amount received on account of the Special Fee,
if following the payment of the Special Fee, the parties consummate the Transactions prior to February 15, 2023. If Holisto does not have
sufficient cash to pay the Special Fee when due, then the portion of the Special Fee that Holisto does not have sufficient cash to pay
shall instead be payable as follows: (x) of any amount advanced to, or invested in, Holisto or its subsidiaries until February 15, 2023,
12% shall be used to pay the outstanding balance of the Special Fee, and (y) any amount of the Special Fee that remains outstanding on
February 15, 2023, shall be immediately payable to Moringa in cash by irrevocable wire transfer in immediately available funds, to an
account designated by Moringa (or, alternatively, at Holisto’s election, by issuance of a SAFE agreement to Moringa, substantially
in the form of the New SAFE Agreements, with the substantive changes being that (1) such SAFE agreement shall be effective as of the issuance
thereof, (2) certain provisions of the SAFE agreement shall be deleted, (3) the “Final Date” shall be February 15, 2023, and
(4) the “Purchase Amount” shall be the outstanding balance of the Special Fee). Notwithstanding the foregoing, in the event
of a Liquidity Event (as defined in the New SAFE Agreements previously executed), Moringa shall have the right, at its discretion, to
convert the outstanding balance of the Special Fee into the consideration payable in respect of the New SAFE Agreements (treating the
outstanding balance of the Special Fee as the Purchase Amount thereunder). The Company shall immediately inform Moringa of any event triggering
repayment or conversion rights hereunder, and in any event at least seven (7) days prior to the occurrence thereof.
Trust Account Waiver
Holisto and Merger Sub each agreed
that they and their affiliates will not have any right, title, interest or claim of any kind in or to any monies in Moringa’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) other than in connection with the Closing.
Governing Law
The Business Combination Agreement
is governed by the laws of the State of New York and the parties are subject to exclusive jurisdiction of federal and state courts located
in the State of New York (and any appellate courts thereof).
A copy of the Business Combination
Agreement is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference, and the foregoing description
of the Business Combination Agreement is qualified in its entirety by reference thereto.
The Business Combination Agreement
and the Securities Purchase Agreement, the terms are which are described below under “Terms of the Financing,” contain representations,
warranties and covenants that the respective parties made to each other as of the date of such agreements or other specific dates. The
assertions embodied in those representations, warranties and covenants were made for purposes of the contracts among the respective parties
and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreements. The
Business Combination Agreement and the Securities Purchase Agreement have been filed as exhibits to this Current Report on Form 8-K in
order to provide investors with information regarding their respective terms. These agreements are not intended to provide any other factual
information about Moringa, Holisto, Merger Sub or any other party to the Business Combination Agreement or the Securities Purchase Agreement.
In particular, the representations, warranties, covenants and agreements contained in the Business Combination Agreement and the Securities
Purchase Agreement, which were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the
parties to the Business Combination Agreement and the Securities Purchase Agreement, may be subject to limitations agreed upon by the
contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between
the parties to the Business Combination Agreement and the Securities Purchase Agreement instead of establishing these matters as facts)
and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors and
reports and documents filed with the SEC. Investors should not rely on the representations, warranties, covenants and agreements, or any
descriptions thereof, as characterizations of the actual state of facts or conditions of any party to the Business Combination Agreement
or the Securities Purchase Agreement. The representations, warranties, covenants and agreements and other terms of the Business Combination
Agreement and the Securities Purchase Agreement may be subject to subsequent waiver or modification. Moreover, information concerning
the subject matter of the representations and warranties and other terms may change after the date of the Business Combination Agreement
and the Securities Purchase Agreement, which subsequent information may or may not be fully reflected in Moringa’s or Holisto’s
public disclosures.
Related Agreements
This section describes the
material provisions of certain additional agreements entered into or to be entered into pursuant to or in connection with the Business
Combination Agreement (the “Ancillary 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 Ancillary Agreements, copies of each of
which are filed as exhibits. Shareholders and other interested parties are urged to read such Ancillary Agreements in their entirety.
Shareholder Voting
and Support Agreement
Simultaneously
with the execution and delivery of the Business Combination Agreement, certain shareholders of Holisto (as listed in the agreement), Holisto,
and Moringa entered into a shareholder voting and support agreement (the “Shareholder Voting and Support Agreement”).
Pursuant to such agreement, each shareholder irrevocably and unconditionally agreed that, at any meeting of the shareholders of Holisto
(whether annual or special and whether or not an adjourned or postponed meeting), including any class meetings, class votes or class consents,
and in connection with any written consent of shareholders of Holisto, such shareholder shall, and shall cause any other holder of record
of any of the such shareholder's covered shares to: (a) if and when such meeting is held, appear at such meeting (in person or by proxy),
and if a quorum is not present, to vote (in person or by proxy) in favor of adjournment of such meeting of the shareholders to a later
date, as in accordance with Holisto’s Articles of Association as in effect at such time; (b) vote, in person or by proxy, or validly
execute and deliver any written consent with respect to all of the shareholder’s Covered Shares (as defined therein) in favor of
the resolutions in the form attached to the agreement and any other resolutions in favor of (i) the Merger and the adoption of the Business
Combination Agreement, (ii) the Conversion, (iii) the Capital Restructuring and (iv) any other matters necessary or reasonably requested
by Holisto for consummation of the Merger and the other transactions contemplated by the Business Combination Agreement; (c) vote, in
person or by proxy, or validly execute and deliver any written consent with respect to all of the shareholder’s Covered Shares against
(A) any transaction, action or agreement of any kind (other than the Merger pursuant to the Business Combination Agreement) concerning
the sale or transfer of (x) all or any material part of the business or assets of Holisto or (y) any of the shares or other equity interests
or profits of Holisto, that would reasonably be expected to (i) frustrate the purposes of, impede, interfere with, delay, postpone or
adversely affect the Merger with Moringa (including the consummation thereof), (ii) result in a breach of any covenant, representation
or warranty or other obligation or agreement of Holisto under the Business Combination Agreement, or cause any of the conditions to Closing
set forth in the Business Combination Agreement not to be fulfilled or satisfied, or (iii) result in a breach of any covenant, representation
or warranty or other obligation or agreement of the shareholder contained in this Agreement and (B) any merger agreement or merger (other
than the Business Combination Agreement and the Merger), consolidation, combination, sale of all or substantially all assets, scheme of
arrangement, reorganization, recapitalization, dissolution, liquidation or winding up of or by Holisto. Each shareholder of Holisto party
to the Shareholder Voting and Support Agreement granted a proxy in furtherance of its voting undertakings pursuant to the agreement.
A copy
of the Shareholder Voting and Support Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein
by reference, and the foregoing description of the Shareholder Voting and Support Agreement is qualified in its entirety by reference
thereto.
Holisto Lock-Up Agreements
Simultaneously with the execution
and delivery of the Business Combination Agreement, certain 1% holders and/or insider Holisto shareholders each entered into a Lock-Up
Agreement with Holisto (collectively, the “Lock-Up Agreements”). Pursuant to each of the Lock-Up Agreements,
each Holisto shareholder party thereto agreed not to, during the period commencing on the date of the agreement and ending on the date
which is six months following the Effective Time (subject to early release with respect to 50% of the Held Securities, on the date on
which the closing price of Holisto Ordinary Shares on the Nasdaq Capital Market equals or exceeds $12.00 per share for any 20 trading
days within any 30 consecutive trading days after the closing of the transactions contemplated by the Business Combination Agreement):
(i) lend, offer, pledge, sell, hypothecate, encumber, donate, assign, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer, directly or indirectly
any Holisto Ordinary Shares or any securities convertible into or exchangeable or exercisable for Holisto Ordinary Shares, whether now
owned or hereafter acquired, (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the restricted securities, whether any such swap or transaction is to be settled
by delivery of Holisto Ordinary Shares or other securities, in cash or otherwise, or (iii) publicly disclose the intention to do any of
the foregoing, whether any such transaction, described in clauses (i), or (ii) above, is to be settled by delivery of the restricted securities
or other securities, in cash or otherwise.
A copy of the form of Lock-Up
Agreement is filed as Exhibit 10.2.1 to this Current Report on Form 8-K and is incorporated herein by reference, and the foregoing description
of the form of Lock-Up Agreement is qualified in its entirety by reference thereto.
Sponsor Lock-Up Agreement
Simultaneously with the execution
and delivery of the Business Combination Agreement, the Sponsor and Holisto entered into a letter agreement (the “Sponsor
Lock-Up Agreement”). Pursuant to the Sponsor Lock-Up Agreement, the Sponsor agreed not to, during the period commencing
on the date of the agreement and ending on the date which is six (6) months following the Effective Time (subject to early release with
respect to 50% of the Held Securities, on the date on which the closing price of Holisto Ordinary Shares on the Nasdaq Capital Market
equals or exceeds $12.00 for any 20 trading days within any 30 consecutive trading days after the closing of the transactions contemplated
by the Business Combination Agreement) without the prior written consent of Holisto, directly or indirectly: (i) lend, offer, pledge,
sell, hypothecate, encumber, donate, assign, contract to sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer, directly or indirectly any of its Holisto
Ordinary Shares or any securities convertible into or exchangeable or exercisable for Holisto Ordinary Shares that are received in respect
of its Moringa founder shares, (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the foregoing securities, whether any such swap or transaction is to
be settled by delivery of Holisto Ordinary Shares or other securities, in cash or otherwise, or (iii) publicly disclose the intention
to do any of the foregoing, whether any such transaction, described in clauses (i), or (ii) above, is to be settled by delivery of the
foregoing securities or other securities, in cash or otherwise. The Sponsor Lock-Up Agreement relates to the Holisto Ordinary Shares issuable
to the Sponsor pursuant to the Business Combination Agreement in respect of the 2,875,000 Moringa Class B ordinary shares owned by the
Sponsor.
A copy of the Sponsor Lock-Up
Agreement is filed as Exhibit 10.2.2 to this Current Report on Form 8-K and is incorporated herein by reference, and the foregoing description
of the Sponsor Lock-Up Agreement is qualified in its entirety by reference thereto.
Private Placement Share/Warrant Lock-Up Agreement
Simultaneously with the execution
and delivery of the Business Combination Agreement, the Sponsor entered into a letter agreement (the “Private Placement Share/Warrant
Lock-Up Agreement”). Pursuant to the Private Placement Share/Warrant Lock-Up Agreement, the Sponsor agreed not to, during
the period commencing on the date of the agreement and ending thirty (30) days following the Effective Time, without the prior written
consent of Holisto, directly or indirectly, (i) lend, offer, pledge, sell, hypothecate, encumber, donate, assign, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer, directly or indirectly any Holisto Ordinary Shares or any securities convertible into or exchangeable or exercisable
for Holisto Ordinary Shares received in respect of its Moringa private shares and warrants, (ii) enter into any swap or any other agreement
or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the restricted
securities, whether any such swap or transaction is to be settled by delivery of Holisto Ordinary Shares or other securities, in cash
or otherwise, or (iii) publicly disclose the intention to do any of the foregoing, whether any such transaction, described in clauses
(i), or (ii) above, is to be settled by delivery of the restricted securities or other securities, in cash or otherwise. The Private Placement
Share/Warrant Lock-Up Agreement relates to the Holisto Ordinary Shares and Holisto warrants to be issued to the Sponsor pursuant to the
Business Combination Agreement in respect of the 352,857 Moringa Class A ordinary shares and 176,429 Moringa warrants owned by the Sponsor.
A copy
of the Private Placement Share/Warrant Lock-Up Agreement is filed as Exhibit 10.2.3 to this Current Report on Form 8-K and is incorporated
herein by reference, and the foregoing description of the Private Placement Share/Warrant Lock-Up Agreement is qualified in its entirety
by reference thereto.
Amended and Restated
Registration Rights Agreement
Prior to the filing of the Registration
Statement, Holisto, EarlyBirdCapital, Inc., the Sponsor, and with respect to a certain aspect of the agreement, Moringa, are to enter
into an amended and restated registration rights agreement (the “Amended and Restated Registration Rights Agreement”),
which will amend that certain Registration Rights Agreement, dated as of February 19, 2021, by and among Moringa, EarlyBirdCapital, Inc.
and the Sponsor. Pursuant to the Amended and Restated Registration Rights Agreement, which will become effective as of the Closing of
the Transactions, Holisto will assume the obligations of Moringa under the prior Moringa registration rights agreement, and, among other
things, Moringa will assign, and Holisto agreed to accept and assume, all of Moringa’s rights and obligations under the prior agreement
from and after the Closing, pursuant to which Holisto will grant the holders certain registration rights with respect to certain securities
of Holisto, as set forth in the Amended and Restated Registration Rights Agreement.
As
part of the agreement, at any time and from time to time on or after the date the Merger is consummated, the Sponsor (or its affiliates)
may make a written demand for registration of all or part of their Registrable Securities (as defined in the Amended and Restated Registration
Rights Agreement), which written demand shall describe the amount and type of securities to be included in such registration and the
intended method(s) of distribution thereof. Upon receipt by Holisto of any such written notification from a requesting holder(s) to Holisto,
such requesting holder(s) shall be entitled to have their Registrable Securities included in a registration pursuant to a demand registration
and Holisto shall (i) file a registration statement (i.e., a Form F-1 or any similar long-form registration statement that may
be available at such time) in respect of all Registrable Securities requested by the Sponsor and Requesting Holder(s) pursuant to such
demand registration, not more than forty five (45) days immediately after Holisto’s receipt of the demand registration request,
and (ii) shall effect the registration thereof as soon as practicable thereafter.
Additionally,
if, at any time on or after the date of the Merger, Holisto proposes to file a registration statement under the Securities Act with respect
to an offering 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 shareholders of Holisto, then it shall give written notice of such proposed filing 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, which notice shall, among other items, offer to all of the holders of Registrable Securities the opportunity to
register the sale of such number of Registrable Securities. Holisto shall, in good faith, cause such Registrable Securities to be included
in such piggyback registration and shall use its best efforts to cause the managing underwriter of a proposed underwritten offering to
permit the Registrable Securities requested by the Holders to be included in a piggyback registration on the same terms and conditions
as any similar securities of Holisto included in such registration and to permit the sale or other disposition of such Registrable Securities
in accordance with the intended method(s) of distribution thereof.
Holisto’s
obligation to file a registration statement or include Holisto Ordinary Shares in a registration statement pursuant to the Amended and
Restated Registration Rights Agreement is subject to the restriction on filing registration statements contained in the Securities Purchase
Agreement with the Investor.
A copy of the Amended and
Restated Registration Rights Agreement is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference,
and the foregoing description of the Amended and Restated Registration Rights Agreement is qualified in its entirety by reference thereto.
Terms of the Financing
Simultaneously with the execution
of the Business Combination Agreement, Moringa and Holisto entered into the Securities Purchase Agreement with the Investor pursuant to
which the Investor will purchase from Holisto, for $30 million: (i) the Investor Note, in a principal amount of $30 million; and (ii)
a Financing Warrant to purchase 1,363,636 Holisto Ordinary Shares at an initial exercise price of $11.50 per share. Additionally, on the
closing date of the transaction, Holisto and the Investor will execute and deliver a Registration Rights Agreement, pursuant to which
Holisto has agreed to provide certain registration rights with respect to the securities identified by such agreement, and two security
agreements pursuant to which Holisto and its subsidiaries grant the Investor a first priority security interest in all of Holisto’s
and its subsidiaries’ assets.
The Investor Note has a term
of two years and will (i) rank senior to all outstanding and future indebtedness of Holisto, and its subsidiaries and (ii) be secured
by a first priority perfected security interest in all of the existing and future assets of Holisto and its direct and indirect subsidiaries,
including a pledge of all of the share capital of each of the subsidiaries, as evidenced by security agreements.
The $30 million purchase price
payable by the Investor for the Investor Note and Financing Warrant will be placed in a controlled account, which is controlled by a person
designated by Investor and who takes instructions only from the Investor. Funds may be taken out of the Controlled Account and paid to
Investor if either money is due to the Investor, generally as a result of Holisto’s non-compliance with one or more of its obligations
under the various agreement with the Investor or if the Investor has exercised its right to require Holisto to redeem all or part of the
Investor Note or the Investor believes that money is likely to be due to the Investor.
Funds are released to Holisto
if (a) the Investor exercises its right to convert the Investor Note, in which case the principal amount of the Investor Note that is
converted is released to Holisto and the principal amount of the Investor Note is reduced by the principal amount converted, or (b) Holisto
meets all of a number of conditions for a quarterly payment based on a payment schedule to be provided. These conditions include the price
of the Holisto Ordinary Share not being below the floor price (the “Floor Price”), which initially is $2.00,
during any of the ten trading days before the date of determination, and the either the average volume of the Holisto Ordinary Shares
is less than $400,000 or the trading volume during any one of the five trading days before the date of the determination is less than
$400,000. If the Investor does not convert the Investor Note and the conditions for the quarterly payment are not met, the Investor may,
in its discretion, advance all or part of the quarterly payment.
The Investor Note bears interest
at the annual rate of 5% per annum, which increases to 18% after the occurrence of and until the cure of an Event of Default. Interest
accrues from on the Issuance Date and is computed on the basis of a 360-day year and twelve 30-day months and shall be payable in arrears
on each Interest Date and, if such Interest is not paid or converted into Ordinary Shares on an Interest Date, shall compound on such
Interest Date, and shall otherwise be payable in accordance with the terms of this Note.
The Investor Note is convertible
into Holisto Ordinary Shares at a conversion price equal to the lesser of (a) the fixed conversion price, which of $11.00 per share, subject
to adjustment, or (b) the greater of (x) the Floor Price, which is initially $2.00 per share, or (y) 90% of the market price, as defined
in the Investor Note. Any conversion of the Investor Note includes conversion of interest to the date of conversion plus such additional
interest as would be payable to the Investor if the Investor held to maturity the portion of the Investor Note being converted. Upon conversion
of the Note, the principal amount of the Investor Note which is converted is released to Holisto from the Controlled Account. If the Investor
Note is converted, Holisto is required to issue the Holisto Ordinary Shares issuable upon such conversion on or before the second trading
day following the date Holisto receives notice of conversion. If Holisto fails to issue the Holisto Ordinary Shares when required or if
Holisto fails to have a registration statement effective as required by the Investor Registration Rights Agreement (described below) and
the Holisto Ordinary Shares cannot be sold pursuant to Rule 144 without volume limitation, Holisto is required to pay damages to the Investor
in addition to any other rights available to the Investor.
The Investor Note provides for
full ratchet antidilution rights, which means that, with certain limited exceptions, if Holisto sells ordinary shares or issues warrants
or convertible securities at a price or with an exercise or conversion price lower than the then-current conversion price, the fixed conversion
price is reduced to the lowest price at which ordinary share are sold or are issuable or are deemed to be sold pursuant to warrants or
other convertible securities even if such price results in the fixed conversion price which is less than the Floor Price.
If at any time and from time
to time Holisto effects any share split, share dividend, share combination recapitalization or other similar transaction involving the
Holisto Ordinary Shares and following such event, the market price of the Holisto Ordinary Shares is less than the fixed conversion price
then in effect (after giving effect to the adjustment resulting from such event), then on the 16th trading day immediately following such
event, the conversion price then in effect on such 16th trading day shall be reduced (but in no event increased) to the market price on
such 16th trading day.
The Investor Note
provides for 21 events of default. Upon an event of default, the conversion price is the lesser of (a) the fixed conversion price or
(b) the greater of (x) the Floor Price or (y) 85% of market. Following an event of default the Investor can also require Holisto to
redeem the Investor Note at 115% of the principal amount.
If the market price of the Holisto
Ordinary Shares is less than the Floor Price, initially $2.00, the Investor can require Holisto to redeem the Investor Note at 105% of
amount being redeemed, which includes interest to the maturity date and any late charges. The Floor Price is subject to a downward adjustment
based on 20% of the market price, as defined, six and twelve months from the closing date.
In the event of a change of control,
as defined in the Investor Note, the Investor can require Holisto to redeem the Investor Note at 115% of the conversion amount or a greater
amount based on a formula set forth in the Investor Note.
If Holisto fails to comply with
certain covenants, including the timely delivery of Holisto Ordinary Shares upon conversion of the Investor Note or upon exercise of the
Financing Warrant, Holisto is required to pay liquidated damages for such breach, in addition to other remedies which may be available
to the Investor.
On the Maturity Date, Holisto
shall pay to the Investor an amount in cash representing all outstanding Principal, accrued and unpaid interest, including interest to
the maturity date and accrued and unpaid late charges. Other than as specifically permitted by the Investor Note, Holisto may not prepay
any portion of the outstanding principal, accrued and unpaid interest or accrued and unpaid late charges. The Investor has the right,
under certain conditions, to extend the Maturity Date.
Holisto has the right to redeem
all or any part of the Investor Note at 115% of the Conversion Amount being redeemed, which includes accrued interest and interest to
the maturity date of the amount being converted. If Holisto redeems the Investor Note in full, Holisto may also redeem the Financing Warrant
at the Black Sholes value computed as provided in the Financing Warrant.
The Financing Warrant has an
initial exercise price of $11.50 per share, which is reset to a price equal to 110% of the market price, as defined, one year from the
closing (if such reset price results in a lower price). The Financing Warrant provides for full ratchet antidilution rights, which means
that, with certain limited exceptions, if Holisto sells ordinary shares or issues warrants or convertible securities at a price or with
an exercise or conversion price lower than the then-current conversion price, the exercise price of the Financing Warrant is reduced to
the lowest price at which ordinary share are sold or are issuable or are deemed to be sold pursuant to warrants or other convertible securities,
even if such price results in an exercise price which is less than the Floor Price.
If at any time and from time
to time Holisto effects any share split, share dividend, share combination recapitalization or other similar transaction involving the
Holisto Ordinary Shares and following such event, the market price of the Holisto Ordinary Shares is less than the exercise price then
in effect (after giving effect to the adjustment resulting from such event), then on the 16th trading day immediately following such event,
the exercise price then in effect on such 16th trading day shall be reduced (but in no event increased) to the market price on such 16th
trading day.
Whenever the exercise price of
the Financing Warrant is reduced, the number of shares issuable upon exercise of the warrant is proportionately increased.
The Financing Warrant may be
exercised by the Investor on any day on or after the Issuance Date, in whole or in part either by paying the purchase price or by a cashless
exercise. If the Financing Warrant is exercised, Holisto is required to issue the Holisto Ordinary Shares issuable upon such exercise
on or before the second trading day following the date Holisto receives notice of exercise and the exercise price if the exercise is not
a cashless exercise. If Holisto fails to issue the Holisto Ordinary Shares when required or if Holisto fails to have a registration statement
effective as required by the registration rights agreement the Holisto Ordinary Shares cannot be sold pursuant to Rule 144 without volume
limitation, Holisto is required to pay damages to the Investor in addition to any other rights available to the Investor.
Holisto is required to use reasonable
best efforts to enter into an agreement for an Approved Financing pursuant to which investors invest at least $47 million. If Holisto
and Moringa are not able to obtain such financing by June 30, 2022, Holisto can terminate the Securities Purchase Agreement without liability,
other than reimbursement of an agreed amount of legal counsel fees of $305,000, of which $50,000 has been paid. An Approved Financing
consists of each of the following:
i. Subsequent
Placement of Holisto Ordinary Shares and/or warrants to purchase Holisto Ordinary Shares, with a fixed price per Holisto Ordinary Share
of no less than 90% of the Closing Bid Price of the Holisto Ordinary Shares on the Principal Market as of the Trading Day ended immediately
prior to the time of execution of definitive agreements with respect thereto and with such other terms and conditions reasonably satisfactory
to the Investor.
ii. In
addition to the $4.75 million under the New SAFE Agreements, up to an additional $5.0 million, in the aggregate, pursuant to one or more
SAFE agreements, in the same form as the New SAFE Agreements or such other form reasonably satisfactory to the Investor.
iii. Solely
to the extent outstanding prior to the Closing Date, any backstop or other non-redemption agreements pursuant to which the backstop investors
or other public investors purchase shares which would otherwise be redeemed and agree not to redeem the shares, and Holisto delivers (or
pays) to such investors such consideration (which may consist of cash, Holisto Ordinary Shares and/or warrants to acquire Holisto Ordinary
Shares, as applicable) as Holisto and the Investor shall mutually agree.
Upon the execution of the Securities
Purchase Agreement, and even before Closing, until no Investor Notes are outstanding, Holisto is prohibited from entering into or effecting
any “Variable Rate Transaction”, other than an equity line with the Investor. The prohibited Variable Rate Transaction means
(i) any agreement to sell securities at a future determined price (including prohibiting any equity line of credit, or any “at the
market” offering, but excluding and allowing standard “preemptive rights”) or (ii) any convertible securities whose
exercise or conversion price varies with the trading price of Holisto Ordinary Shares, or is reset at any future date (except standard
anti-dilution rights). The prohibition on any future priced security/Variable Rate Transaction between signing and closing purports to
also restrict Moringa. The Investor can use injunctive relief to stop such transactions, either against Holisto or Moringa. The SAFE financings
included in the Approved Financings are excluded from the definition of Variable Rate Transaction.
The Securities Purchase Agreement
has representations and warranties by Holisto and Moringa which are customary in a financing such as the Financing under Securities Purchase
Agreement, including representations relating its authorization of the Securities Purchase Agreement and related agreements and, with
respect to Holisto, the authorization for the issuance of the Investor Notes, Financing Warrant and the underlying Holisto Ordinary Shares,
their financial statements and the absence of undisclosed liabilities, the issuance of outstanding securities, the absence of certain
changes and undisclosed liabilities, developments and circumstances, transactions with affiliates, and, with respect to Moringa, its SEC
filings.
The closing of the Financing
is conditioned upon, among other things, the listing on Nasdaq of the Holisto Ordinary Shares, including the Holisto Ordinary Shares issuable
upon conversion of the Investor Note and exercise of the Financing Warrants. Under the Securities Purchase Agreement, Holisto is required
to apply for the listing of the Holisto Ordinary Shares and Holisto warrants on Nasdaq. In the event that the Holisto Ordinary Shares
and Holisto warrants are not listed on Nasdaq for failure of Holisto to meet the Nasdaq initial listing requirements, including the failure
to meet the Nasdaq requirements relating to (w) the market value of unrestricted publicly held shares, (x) unrestricted round lot holder
requirements, (y) unrestricted publicly held shares and (z) shareholders’ equity, Holisto may terminate the Securities Purchase
Agreement without payment of any fees other than reimbursement of legal fees as described above.
The Securities Purchase Agreement
prohibits Holisto from filing any registration statements until the earlier of (x) the first date on which the resale by the Investor
of all the Registrable Securities required to be filed on the initial Registration Statement, which includes the maximum number of Holisto
Ordinary Shares issuable upon conversion of the Investor Note (including interest to the maturity date) and all Holisto Ordinary Shares
issuable upon exercise of the Financing Warrant, is declared effective by the SEC (and each prospectus contained therein is available
for use on such date) or (y) the first date on which all of the Registrable Securities are eligible to be resold by the Investor pursuant
to Rule 144.
The Securities Purchase Agreement
also has limitations on the issuance of other securities that would cause a breach of the Investor Note or Financing Warrant.
The conditions precedent to Holisto’s
obligation to close the Financing are limited, but include that the Investor has paid the Purchase Price to the Controlled Account (less
specified fees which would otherwise be paid at closing).
The closing conditions for the
Investor are extensive (more than 30 closing conditions), and include, among other things:
| ● | The concurrent closing of the Business Combination Agreement; |
| ● | Holisto shall have not less than $50,000,000 of cash including
(a) the $30,000,000 proceeds from the sale of the Investor Note, which amount shall be transferred to a specified account at a specified
bank pursuant to a Controlled Account Agreement; (b) the net funds in Moringa’s Trust Account after paying the redemption price
of the Moringa Public Shares that have exercised their right of redemption; (c) any cash held in Holisto’s or Moringa’s bank
account; and (d) the net proceeds of any additional financing agreement, net of any expenses including brokers commissions and deferred
underwriting fees from Moringa’s initial public offering; |
| ● | As of the closing date, no indebtedness of Holisto or any
of its subsidiaries (after giving effect to the Merger) shall exist other than the Investor Note, except for such indebtedness that is
subordinated to the Investor Note pursuant to a subordination agreement in form and substance satisfactory to the Collateral Agent (as
defined in the Securities Purchase Agreement) in its sole discretion. |
| ● | The Holisto Ordinary Shares are approved for listing on Nasdaq; |
| ● | Holisto shall have paid of its secured debt and the secured
party releases its lien on Holisto’s assets; and |
| ● | No event or series of events have occurred that reasonably
would have or result in a material adverse effect. |
If the Investor satisfies or
waives all of its conditions, and the deal does not close in 5 days (or if it does not close by the Outside Date of December 1, 2022),
Holisto must pay the Investor’s counsel expenses plus all other transaction expenses, and the Investor can seek specific performance.
If Holisto terminates the agreement an does any alternative financing within one year, Holisto will be required to pay a break-up fee
of $1.5 million in addition to paying these expenses. The agreement provides that if the Securities Purchase Agreement is terminated because
of the listing failure, or the failure to raise the $47 million in Approved Financing, then there is no break-up fee.
A copy of the form of Securities
Purchase Agreement is filed as Exhibit 10.4.1 to this Current Report on Form 8-K and is incorporated herein by reference, and the foregoing
description of the form of Securities Purchase Agreement is qualified in its entirety by reference thereto.
A copy of the form of Investor
Note is filed as Exhibit 10.4.2 to this Current Report on Form 8-K and is incorporated herein by reference, and the foregoing description
of the Investor Note is qualified in its entirety by reference thereto.
A copy of the form of Financing
Warrant is filed as Exhibit 10.4.3 to this Current Report on Form 8-K and is incorporated herein by reference, and the foregoing description
of the form of Financing Warrant is qualified in its entirety by reference thereto.
Ancillary Agreements to the Securities Purchase
Agreement
Simultaneously with the execution
of the Securities Purchase Agreement, Holisto and the Investors also entered into a registration rights agreement (the “Investor
Registration Rights Agreement”), leak-out agreement (“Leak-Out Agreement”), security and pledge
agreement (“Security and Pledge Agreement”), security agreement (“Security Agreement”),
and guaranty agreement (“Guaranty Agreement”).
Investor Registration Rights Agreement
In connection with the execution
of the Securities Purchase Agreement, Holisto agreed upon the closing of the Securities Purchase Agreement to enter into an Investor Registration
Rights Agreement with the Investor and its permitted assignees pursuant to which Holisto will agree to register with the SEC the resale
of the Holisto Ordinary Shares issuable upon conversion of the Note and the exercise of the Financing Warrant. Under the Investor Registration
Rights Agreement, Holisto will agree to file a registration statement on Form F-3 (or Form F-1 if Form F-3 is unavailable) with the SEC
within 5 days of the Closing, and to have the registration statement declared effective within 90 calendar days from the date the registration
statement is filed. The Investor Registration Rights Agreement likewise contains piggyback registration rights. The Investor Registration
Rights Agreement also contains usual and customary liquidated damages provisions for failure to file and failure to have the registration
statement declared effective by the SEC within the time periods specified.
A copy of the form of Investor
Registration Rights Agreement is filed as Exhibit 10.4.4 to this Current Report on Form 8-K and is incorporated herein by reference, and
the foregoing description of the form of Investor Registration Rights Agreement is qualified in its entirety by reference thereto.
Leak-Out Agreement
Pursuant to the Leak-Out Agreement,
the Investor agreed that, during the period commencing on the date of issuance of the Investor Note (the “Execution Date”)
and ending on the earlier to occur of (i) such date as the Investor no longer holds any Investor Note, (ii) such date upon which any breach
by Holisto of any term of the Leak-Out Agreement occurs, regardless of whether such breach is subsequently cured and (iii) such date any
Event of Default (as defined in the Investor Note) occurs, regardless of whether such Event of Default is subsequently cured (such period,
the “Restricted Period”), on any Trading Day following the Trading Day on which the VWAP of Holisto Ordinary
Shares is less than $5.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or similar events) (any
such date, a “Date of Determination”), the Investor and any Affiliate of the Investor has or shares discretion
relating to the holder’s investments or trading or information concerning the Investor’s investments in any the Restricted
Securities (together, the “Investor’s Trading Affiliates”) shall not sell on the Trading Day following
such Date of Determination (the “Applicable Trading Day”), in the aggregate, any Conversion Shares or Warrant
Shares (the “Restricted Securities”) in an aggregate amount representing more than the greater of (x) $60,000
in sales of Holisto Ordinary Shares, and (y) 20% of the daily composite trading volume of Ordinary Shares as reported by Bloomberg, LP
on such Applicable Trading Day.
A copy of the form of Leak-Out
Agreement is filed as Exhibit 10.4.5 to this Current Report on Form 8-K and is incorporated herein by reference, and the foregoing description
of the form of Leak-Out Agreement is qualified in its entirety by reference thereto.
Security Agreements
Pursuant to the
Securities Purchase Agreement, the Investors Note will be guaranteed by each subsidiary of Holisto and secured by a first priority
perfected security interest in all of the existing and future assets of Holisto and its direct and indirect domestic subsidiaries,
including a pledge of all of the share capital of each of the subsidiaries. The Investor’s security interest is set forth in
two security agreements – the Security Agreement (Israel) and the Security and Pledge Agreement, which are described
below.
Pursuant to the Securities Purchase
Agreement, and in order to secure the prompt payment and performance in full when due of Holisto’s obligations relating to all loans,
advances, debts, liabilities, obligations, covenants and duties it owes to the Investor pursuant to the Investor Note (as well as the
Investor Registration Rights Agreement and other transaction documents), whether by lapse of time, acceleration, mandatory prepayment
or otherwise, Holisto and its subsidiaries will, at the closing, enter into an Israeli Security Agreement and a Security and Pledge Agreement
with the Investor pursuant to which Holisto and its subsidiaries shall grant, assign and pledge, effective as of the closing of the Securities
Purchase Agreement, to the Investor, as Collateral Agent on behalf of itself, security interests and pledges all its assets in favor of
the Investor in a first priority fixed pledge and a first priority floating pledge in all of the existing and future assets of Holisto
and its subsidiaries including a pledge of all of the share capital owned by Holisto in each of its subsidiaries and in all of Holisto’s
and its subsidiaries’ intellectual property. The Collateral under the Security and Pledge Agreement excludes from the general definition
of all of Holisto’s and its subsidiaries’ assets (i) such portion of the voting capital stock of any foreign subsidiary, as
defined, in excess of 65% of the issued and outstanding voting capital stock of such Foreign Subsidiary at any time the pledging of more
than 65% of the total outstanding voting capital stock of such Foreign Subsidiary would result in a material adverse tax consequence to
Holisto or a subsidiary, or (ii) any assets or rights included in the definition of “Collateral” in the Security Agreement
(Israel).
A copy of the form of Security
and Pledge Agreement is filed as Exhibit 10.4.6 to this Current Report on Form 8-K and is incorporated herein by reference, and the foregoing
description of the form of Security and Pledge Agreement is qualified in its entirety by reference thereto.
A copy of the form of Security
Agreement (Israel) is filed as Exhibit 10.4.7 to this Current Report on Form 8-K and is incorporated herein by reference, and the foregoing
description of the form of Security Agreement is qualified in its entirety by reference thereto.
Guaranty Agreement
Under the terms of the Securities
Purchase Agreement, each of Holiso’s subsidiaries will enter into a guaranty agreement in favor of Investor in its capacity as collateral
agent. Pursuant to the Guaranty Agreement, all of Holisto’s subsidiaries will jointly and severally guaranty to the Investor, the
punctual payment, as and when due and payable, by stated maturity or otherwise, of all Obligations, which is broadly defined to include
obligations of Holisto under all of the Transaction Documents.
A copy of the
form of Guaranty Agreement is filed as Exhibit 10.4.8 to this Current Report on Form 8-K and is incorporated herein by reference, and
the foregoing description of the form of Guaranty Agreement is qualified in its entirety by reference thereto.