Merger Agreement

3 Months Ended

Feb. 28, 2018

Note 8 - Merger Agreement

Merger Agreement

On July 24, 2017, the Company entered into a Merger Agreement with HTH, which was later amended on September 27, 2017 (“Amended Merger Agreement”). Pursuant to the terms of the Amended Merger Agreement, the Merger Sub will merge with and into HTH, with HTH continuing as the surviving entity (the “Merger”) and all holders of HTH equity securities and warrants, options and rights to acquire or securities that convert into HTH equity securities (collectively, “HTH Securities”) will convert into Origo common shares and, with respect to options, options to acquire Origo common shares. More specifically at the effective time of the Merger (the “Effective Time”):

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All holders of HTH Securities (excluding HTH options, as described below) shall be entitled to receive in the Merger an aggregate of 23,474,178 common shares of Origo (the “Merger Consideration”), which is equal to $250 million divided by the agreed upon value of the Origo common shares to be issued as Merger Consideration of $10.65 per share. In the event HTH receives in excess of $5,000,001 in net proceeds from one or more separate sales of common or preferred stock prior to the Closing, then the amount in excess of $5,000,001 shall increase the HTH’s valuation on a dollar-for-dollar basis and increase the number of Origo common shares representing the Merger Consideration by dividing the increased HTH valuation by the agreed upon value of the Origo common shares to be issued as Merger Consideration.

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Each holder of capital stock of HTH shall receive for each share of capital stock of HTH its pro rata share of the Merger Consideration, treating any outstanding shares of HTH’s preferred stock on an as-converted to Class A common stock basis (and after deducting from the Merger Consideration payable to such holders of capital stock, the Origo common shares issuable to the holders of HTH’s 8% senior secured convertible promissory notes in an initial aggregate principal amount of $30 million (“HTH Purchase Notes”)).

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Any warrants and other rights to acquire equity securities of HTH, and all other securities that are convertible into or exchangeable for equity securities of HTH, (A) if exercised or converted prior to the Effective Time, shall have the resulting shares of capital stock of HTH issued upon such exercise treated as outstanding shares of capital stock of HTH, and (B) if not exercised or converted prior to the Effective Time will be terminated and extinguished at the Effective Time (except for the HTH Purchase Notes and ExWorks Convertible Not, which shall be converted as described below, and the outstanding HTH options, which shall be assumed by Origo as described below).

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HTH shall be permitted to increase the principal amount of HTH’s existing secured loan from ExWorks Capital Fund I, L.P (“ExWorks”) to up to $11.5 million from $7.5 million. Additionally, Origo acknowledged that any shares of HTH Class A common stock issued to ExWorks pursuant to the convertible note evidencing the ExWorks loan (the “ExWorks Convertible Note”) shall be converted into Origo common shares at a conversion price equal to 90% of the per share value of the Merger Consideration (i.e., $10.65, or an ExWorks conversion price of $9.585). Origo further agreed that all Origo common shares issued upon conversion of the ExWorks Convertible Note shall not be deemed to be part of the Merger Consideration and shall dilute all holders of Origo common shares on an equitable pro-rata basis. Origo also acknowledged that HTH and ExWorks entered into an amendment, pursuant to which ExWorks granted HTH an option, exercisable at any time on or before January 29, 2018, to extend the maturity date of the ExWorks loan to August 28, 2018. If HTH elects to exercise the option, it will be obligated to pay ExWorks an additional fee of $600,000 and issue an additional warrant to ExWorks to purchase shares of HTH Class A common stock. HTH agreed that prior to the Closing Date of the Merger, HTH shall either refinance its indebtedness to ExWorks or exercise the foregoing option to extend the terminate date of the ExWorks loan to August 28, 2018.

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The HTH Purchase Notes that are outstanding as of the Closing shall automatically be converted in a number of Origo common shares calculated by dividing the outstanding principal and interest of all such HTH Purchase Notes and dividing such amount by the closing price of Origo’s common shares on the date of the Closing.

●	All outstanding HTH options will be assumed by Origo and be converted into an option to purchase Origo common shares (each, an “Origo Assumed Option”). Origo Assumed Options shall be in addition to the Merger Consideration and will dilute all holders of Origo securities.

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If, prior to the Closing Date (i) Origo has less than $5,000,001 in net tangible assets (excluding the net tangible assets of HTH) and (ii) HTH shall consummate a HTH Public Offering, then (A) on the Closing Date, HTH will utilize up to ten percent (10%) of the gross proceeds of such HTH Public Offering (up to $20 million of such gross proceeds) to pay for all or a portion of Origo deferred expenses as directed by Origo and (B) if the gross proceeds of a HTH Public Offering exceeds $20 million, HTH will utilize up to $5.0 million of the gross proceeds of such HTH Public Offering to pay for all or a portion of Origo deferred expenses as directed by Origo.

The Merger Agreement also provides that, immediately prior to the Effective Time, Origo will reincorporate under the laws of the State of Nevada, whether by reincorporation, statutory conversion or otherwise.

The obligations of each party to consummate the Merger are subject to the satisfaction or waiver of customary conditions and Closing deliverables, including (1) the Registration Statement having been declared and remain effective, (2) Origo’s shareholders having approved the Merger Agreement and the related transactions at the extraordinary general meeting of Origo shareholders, (3) any required governmental and third party approvals having been obtained, (4) the consents required to be obtained or made from any third party (other than a governmental authority) in order to consummate the transactions contemplated by the Merger Agreement shall have been obtained or made; (5) no governmental authority having enacted any law which has the effect of making the transactions or agreements contemplated by the Merger Agreement illegal or which otherwise prevents or prohibits consummation of the transactions contemplated by the Merger Agreement, (6) there shall be no pending action brought by a third party non-affiliate to enjoin or otherwise restrict the consummation of the Closing, (7) upon the Closing, after giving effect to the completion of Origo’s redemption of its public stockholders in connection with the Merger and the payment of all accrued and unpaid expenses, Origo shall have net tangible assets of at least $5,000,001 (which shall include the consolidated net tangible assets of HTH and its subsidiaries), (8) HTH shall have received its required stockholder approval, (9) the parties’ respective representations and warranties shall be true and correct as of the Closing Date (subject to certain materiality qualifiers), (10) each of the parties shall have performed in all material respects all of its obligations and complied in all material respects with all of its agreements and covenants under the Merger Agreement to be performed or complied with by it on or prior to the Closing Date, and (11) no event having occurred since the date of the Merger Agreement resulting in a material adverse effect upon the business, assets, liabilities, results of operations, prospects or condition of the other party and its subsidiaries, taken as a whole, or the other party’s ability to consummate the transactions contemplated by the Merger Agreement and ancillary documents on a timely basis (subject in each case to customary exceptions) (a “Material Adverse Effect”), which is continuing and uncured. The obligation of Origo and Merger Sub to consummate the Merger is also subject to the satisfaction or waiver or certain additional conditions.

Consulting Services Agreement

At the Closing, the successor will enter into a consulting services agreement with Oreva Capital Corp., a Delaware corporation, pursuant to which the consultant is to perform certain services for the successor, including administrative services, dealing with investment bankers, investor relations consultants and other members of the investment community (as authorized from time to time by the Board of Directors), and assisting in connection with proposed acquisitions, dispositions and financings. In consideration for such services, the successor will pay the consultant a monthly consulting fee of $35,000. Commencing in 2018, the consultant may elect to have all or any portion of the consulting fee deferred and paid in shares of the successor’s common stock, at a per share price equal to 100% of the closing price of the stock of the successor. Adam Levin, the Chief Executive Officer and a director of HTH, is the Managing Director of Oreva Capital Corp.

Origo Acquisition Corp 10-Q