Item 1.02 Termination of Material Definitive Agreement.
As previously announced, on May 17, 2022, Tuscan Holdings Corp. II ("Tuscan"),
Surf Air Global Limited ("Surf Air"), Surf Air Mobility Inc., a wholly-owned
subsidiary of Surf Air ("Parentco"), THCA Merger Sub Inc., a wholly-owned
subsidiary of Parentco ("Merger Sub I"), and SAGL Merger Sub Limited, a
wholly-owned subsidiary of Parentco ("Merger Sub II" and together with Surf Air,
Parentco and Merger Sub I, the "Surf Entities"), entered into a Business
Combination Agreement ("Merger Agreement"). The Merger Agreement had
contemplated that Merger Sub I would merge with and into Tuscan, with Tuscan
surviving, and, simultaneously therewith, Merger Sub II would merge with and
into Surf Air, with Surf Air surviving (collectively, the "Mergers"), as a
result of which Parentco would be the continuing public company with Tuscan and
Surf Air as its wholly owned subsidiaries.
Effective as of November 14, 2022, Tuscan and Surf Air mutually agreed to
terminate the Merger Agreement, pursuant to a Mutual Termination and Release
Agreement (the "Termination Agreement") by and among Tuscan, Tuscan Holdings
Acquisition II LLC ("Sponsor"), Surf Air and Parentco. As consideration for the
termination, if Parentco (or the surviving parent of Surf Air, if not Parentco,
the "Surf Parent") completes a Direct Listing, an IPO, a SPAC Transaction or a
Sale Transaction (each as defined in the Termination Agreement) on or prior to
November 14, 2025, Surf Parent will issue to Tuscan 600,000 shares of Parentco
common stock (or an equivalent number of shares of common equity of the Surf
Parent, if not Parentco, the "Common Stock"). In addition, as reimbursement of
Tuscan's expenses, at such time, Surf Parent will either (in Surf Air's sole
discretion) issue to Tuscan an additional 35,000 shares of Common Stock or pay
to Tuscan $700,000 in cash (such shares of Common Stock, collectively, the
"Shares"). The Termination Agreement obligates Surf Parent to file a
registration statement covering the sale of the Shares with the SEC. The
termination of the Merger Agreement became effective upon Parentco's
confidential submission on November 15, 2022 of a draft registration statement
with the Securities and Exchange Commission (the "SEC") in connection with the
Direct Listing of Parentco. The Shares were included in the draft registration
statement.
Under the Termination Agreement, the Tuscan parties released all claims against
the Surf Air parties and certain associated persons, and the Surf Air parties
released all claims against the Tuscan parties and certain associated person,
arising or resulting from or relating to, directly or indirectly, the Merger
Agreement, any other transaction documents, any of the transactions contemplated
by the Merger Agreement or any other transaction documents, or any loans issued
by Surf Air or any of its affiliates to Tuscan or any of its affiliates. The
Termination Agreement also includes certain mutual indemnification obligations.
The foregoing description of the Termination Agreement is qualified in its
entirety by reference to the full text of such agreement which is attached as an
exhibit hereto and incorporated herein by reference.
Because Tuscan will not be able to consummate a business combination within the
remaining time available to it under its amended and restated certificate of
incorporation, Tuscan will now commence the process of dissolving and
liquidating its assets. Additionally, the Sponsor has indicated that it does not
intend to deposit the necessary funds to the trust account to extend the time to
consummate a business combination for the final month of the previously obtained
extension of time to consummate such a business combination. Tuscan's warrants
will expire worthless.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit Description
10.1 Mutual Termination and Release Agreement.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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