ATLANTIC ALLIANCE PARTNERSHIP CORP. (NASDAQ:AAPC) Files An 8-K Entry into a Material Definitive Agreement

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 complete text of the Merger
Agreement, a copy of which is attached hereto as Exhibit 2.1.
AAPCs shareholders and other interested parties are urged to read
such agreement in its entirety. Unless otherwise defined herein,
the capitalized terms used below are defined in the Merger
Agreement.

General Description of the Merger
Agreement

OnMay 8, 2017, Atlantic Alliance Partnership Corp., a British
Virgin Islands company (together with the successor entity
thereto, AAPC), entered into a Merger Agreement (the
Merger Agreement) with Kalyx Development Inc., a Maryland
corporation (Kalyx). to the Merger Agreement, subject to
the terms and conditions set forth therein, at the closing of the
transactions contemplated thereby (the Closing), Kalyx
will merge with and into AAPC (the Merger), with AAPC
continuing as the surviving entity (the Surviving
Corporation). As a result of the consummation of the Merger,
at the effective time of the Merger (the Effective Time),
Kalyx will cease to exist, the holders of Kalyx capital stock
will receive shares of AAPC capital stock and Kalyxs outstanding
warrants will be assumed by AAPC.

Immediately prior to the Closing, AAPC be converted into a
Maryland corporation, named Atlantic Alliance Partnership Corp.
(the Successor), to a statutory conversion (the
Conversion). As a result of the Conversion, each
outstanding no par ordinary share of AAPC will become one share
of common stock, par value $0.0001 per share of the successor
entity.

Merger Consideration

to Kalyxs Articles of Amendment and Restatement, dated July 14,
2016 (the Kalyx Charter), holders of outstanding shares of
Kalyxs Series A Preferred Stock (the Kalyx Series A Preferred
Stock) and Kalyxs Series B Preferred Stock (the Kalyx
Series B Preferred Stock) are entitled to a certain internal
rate of return under certain circumstances, which is taken into
account in the shares of common stock of the Surviving
Corporation to be issued to the Kalyx stockholders to the Merger
Agreement (the Merger Consideration). In particular, the
Merger Agreement provides that holders of Kalyx Series A
Preferred Stock and of Kalyx Series B Preferred Stock
(collectively, the Kalyx Preferred Stock) will receive an
IRR Value defined, with respect to a share of Kalyx
Preferred Stock, as the amount by which a ten percent (10%)
Internal Rate of Return (as defined in, and calculated in
accordance with, the Kalyx Charter, including giving effect to
prior dividends), with respect to the relevant share of Kalyx
Preferred Stock, exceeds $10.00.

As a result of the consummation of the Merger, at the Effective
Time and subject to the terms and conditions set forth in the
Merger Agreement:

At the Effective Time, each Kalyx Warrant that remains
outstanding, including the Amended Warrants discussed below, will
be assumed by the Surviving Corporation.

For purposes of the Merger Agreement, the shares of the Surviving
Corporation to be issued as Merger Consideration will be valued
at $10.00 per share. Prior to the Closing, AAPC will issue a
stock dividend to its shareholders who do not elect to redeem
their AAPC ordinary shares, with the number of shares based on
the difference between AAPCs Trust Account (as defined below)
liquidation value per share at the Closing and the $10.00 per
share price.

Representations and Warranties

The Merger Agreement contains customary representations and
warranties by AAPC relating to, (1) organization and
qualification, (2) capitalization, (3) corporate authorization,
enforceability and board action, (4) consents and approvals, no
violations, (5) SEC filings and financial statements, (6) absence
of certain changes, (7) undisclosed liabilities, (8) litigation,
(9) compliance with laws, (10) employee benefit plans, (11)
taxes, (12) contracts, (13) intellectual property, (14) finders
or advisors fees, (15) absence of sensitive matters and (16) bank
accounts. The Merger Agreement also contains customary
representations and warranties by Kalyx relating to, (1)
organization, authority, (2) corporate authorization,
enforceability, board action, (3) consents and approvals, no
violations, (4) capitalization, (5) financial statements, (6)
absence of certain changes, (7) undisclosed liabilities, (8) real
property, (9) environmental laws, (10) utilities and access, (11)
no condemnation, (12) possession of licenses and permits, (13)
business insurance, (14) title insurance, (15) real estate
investment trust and operating partnership, (16) transactions
with related parties, (17) absence of sensitive matters, (18)
litigation, (19) compliance with laws, (20) employee benefit
plans, (21) taxes, (22) intellectual property, (23) material
contracts and (24) finders or advisors fees. Certain of the
representations and warranties are qualified by the representing
partys knowledge and/or by materiality or material adverse
effect. The representations and warranties made by the parties to
the Merger Agreement do not survive the Closing.

Covenants of the Parties

The Merger Agreement contains certain customary covenants by each
of the parties to be performed 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, including covenants regarding (1) conduct of business, (2)
access to information, (3) no solicitation, (4) regulatory
filings, (5) announcements, (6) further assurances, (7)
notification of certain matters, (8) post-closing director and
officer liability, (9) reasonable efforts to consummate the
Merger, (10) annual and interim financial statements by Kalyx,
(11) no trading by Kalyx, (12) use of funds in AAPCs trust
account containing the proceeds from its initial public offering
(the Trust Account) and (13) Kalyx disclosure schedule
updates.

Both AAPC and Kalyx agreed to certain covenants related to the
preparation and filing of a preliminary registration statement on
Form S-4 in connection with the registration under the Securities
Act of 1933 of (i) the issuance of the Successors stock to AAPCs
pre-Conversion shareholders, and (ii) the issuance of the Merger
Consideration (the Registration Statement). AAPC also
agreed to certain covenants to hold a special meeting of its
shareholders as soon as practicable after the filing and
effectiveness of a definitive Registration Statement on Form S-4
to approve the Conversion, Merger and Merger Agreement.

In addition, Kalyx agreed that its board of directors will, prior
to the Closing, recommend that the shareholders of Kalyx (the
Kalyx Shareholders) consent to the Merger and adopt the
Merger Agreement in accordance with the Kalyx Charter, Kalyxs
bylaws and applicable law and to use Kalyxs reasonable best
efforts to obtain that consent (the Kalyx Shareholder
Approval), and that Kalyx will use its reasonable best
efforts to obtain the approval of the holders of at least 75% of
the outstanding Kalyx Warrants (the Warrantholder
Approval) to either (i) surrender and cancel their Kalyx
Warrants in exchange for a certain number of shares of Kalyx
Common Stock as provided below, or (ii) agree to amend their
Kalyx Warrants so that the number of shares for which such
Warrant was exercisable (the Warrant Shares) would be
reduced to an amount equal to seventy-five percent (75%) of the
current number of Warrant Shares and such reduced number of
Warrant Shares would only exercisable as provided below (the
Amended Warrants). The Kalyx Warrants that are exchanged
for shares of Kalyx Common Stock will be exchanged based on the
following ratios: (1) 0.0388 shares of Kalyx Common Stock for
each Warrant Share under Kalyx Warrants that were issued in
connection with the issuance of Kalyx Common Stock, (2) 0.02947
shares of Kalyx Common Stock for each Warrant Share under Kalyx
Warrants that were issued in connection with the issuance of
Kalyx Series A Preferred Stock and (3) 0.0368 shares of Kalyx
Common Stock for each Warrant Share under Kalyx Warrants that
were issued in connection with the issuance of Kalyx Series B
Preferred Stock. The Amended Warrants will provide that the
exercisability would be in nine different tranches with the first
tranche for 12.5% of the total Warrant Shares being exercisable
for the 12 months after the Effective Time at a price of $11.50
per share, with the second tranche for 13.25% of the total
Warrant Shares being exercisable for a period of 6 months
beginning on the 12 month anniversary of the Effective Time at a
price of $11.75 per share and each additional tranche being
exercisable for a period of 6 months beginning on the expiration
of the prior tranche (with the third tranche for 14.25% of the
total Warrant Shares at $12.00 per share, the fourth and fifth
tranches for 14.5% and 14.25%, respectively of the total Warrant
Shares at $12.25 per share, the sixth and seventh tranches for
13.5% and 11.00%, respectively of the total Warrant Shares at
$12.50 per share and the eighth and ninth tranches for 4.0% and
2.75%, respectively of the total Warrant Shares at $13.00 per
share).

Conditions to Closing of the Merger

The obligations of each party to consummate the Merger are
subject to the satisfaction or waiver of customary conditions and
closing deliverables, including, among other matters, (1) AAPC
having obtained the approval and adoption by its shareholders of
the Merger Agreement and related transactions (the AAPC
Shareholder Approval), (2) Kalyx having obtained the Kalyx
Shareholder Approval, (3) the consummation of the Conversion, (4)
AAPC having issued its ordinary shares in a private placement to
certain accredited investors at a price of $10.00 per share (the
PIPE Transaction), with AAPC having at least $15,000,000
in funds when combining (i) the funds left in the Trust Account
after giving effect to redemptions by its public shareholders,
plus (ii) the gross proceeds received by AAPC in the PIPE
Transaction, (5) AAPC having net tangible assets of at least
$5,000,001 upon the Closing, after giving effect to redemptions
from its public shareholders, (6) any material required third
party approvals having been obtained, (7) no applicable law,
judgment, injunction, order or decree makes illegal or otherwise
prohibits the consummation of the Merger or any transactions
contemplated by the Merger Agreement, (9) all material
authorizations, consents, orders, permits or approvals of or
declarations or filings with any governmental authority will have
been made or obtained and will be in full effect, (10) ordinary
shares of AAPC (or the shares of the Successor or the Surviving
Corporation), after giving effect to any redemptions by the
public shareholders of AAPC, being listed or quoted on any tier
of the Nasdaq stock market, the New York Stock Exchange, the NYSE
MKT or another recognized U.S. national stock exchange, (11) the
accuracy of the other partys respective representations and
warranties (subject to certain materiality qualifiers) and
compliance with its covenants under the Merger Agreement in all
material respects, and (12) 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 partys 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).

The obligation of Kalyx to consummate the Merger is subject to
satisfaction or waiver of certain additional conditions,
including among others, that the Forfeiture Agreement, as
described below, is in full force and effect.

The obligation of AAPC to consummate the Merger is subject to
satisfaction or waiver of certain additional conditions,
including among others: (1) receipt by AAPC of non-competition
and non-solicitation agreements and lock-up agreements from
certain key stockholders of Kalyx, as discussed below, (2)
receipt by AAPC of employment agreements from certain key
officers, directors and/or employees of Kalyx, (3) the
Warrantholder Approval, and (4) the termination of certain
management fee arrangements of Kalyx.

Termination

The Merger Agreement may be terminated under certain customary
and limited circumstances at any time prior to the Effective
Time, including among other reasons: (1) by the mutual written
consent of Kalyx and AAPC, (2) by either of AAPC or Kalyx if (i)
the shareholders of AAPC have voted on the Merger Agreement and
the AAPC Shareholder Approval has not been obtained, unless the
failure to obtain such approval was caused by the breach of the
party seeking termination, (ii) the shareholders of Kalyx have
voted on the Merger Agreement and the Kalyx Shareholder Approval
has not been obtained, unless the failure to obtain such approval
was caused by the breach of the party seeking termination, (iii)
if any final and non-appealable order is entered which enjoins
Kalyx or AAPC from consummating the Merger, or (iv) if the Merger
has not occurred on or before October 1, 2017 (the Termination
Date), unless the terminating partys breach was the cause of
the failure to occur by such date, (3) by either party if the
other party has breached any of its representations, warranties
or covenants in the Merger Agreement such that the related
closing conditions would not be met and such breach is incapable
of cure or has not been cured by the earlier of the Termination
Date or 30 days after the breaching party receives written notice
of the breach (unless, at the intended time of termination, the
terminating party has breached any of its representations or
warranties in any material respect and such breach is uncured),
or (4) by either party if there has been a Material Adverse
Effect with respect to the other party since the date of the
Merger agreement which is continuing and uncured.

If the Merger Agreement is terminated, all further obligations of
the parties under the Merger Agreement will terminate, and no
party to the Merger Agreement will have any further liability to
any other party thereto except for liability for fraud,
intentional misrepresentation, willful misconduct or for willful
breach of the Merger Agreement prior to termination, except that
sections of the Merger Agreement related to announcements, waiver
of claims against the Trust Account, the termination provisions
and certain general provisions will survive the termination of
the Merger Agreement. There are no termination fees in connection
with the termination of the Merger Agreement.

Trust Account Waiver

Kalyx agreed that it and its affiliates will not have any right,
title, interest or claim of any kind in or to any monies in the
Trust Account held for AAPCs public shareholders, and agreed not
to, and waived any right to, make any claim against the Trust
Account (including any distributions therefrom).

Certain Governance Matters

The Merger Agreement contemplates that the articles of
incorporation and bylaws of the Successor shall be the articles
of incorporation and bylaws of the Surviving Corporation. The
Merger Agreement further provides that after the Effective Time
and until successors are duly elected in accordance with the
bylaws of the Surviving Corporation and applicable law, the
directors and officers of Kalyx immediately prior to the
Effective Time will become the directors and officers of the
Surviving Corporation.

A copy of the Merger Agreement is filed with this Current
Report on Form 8-K as Exhibit 2.1 and is incorporated herein by
reference, and the foregoing description of the Merger Agreement
is qualified in its entirety by reference thereto.

Forfeiture Agreement

In connection with the execution of the Merger Agreement, AAP
Sponsor (PTC) Corp. (the Sponsor) and Fox Investments
Limited (Fox), an affiliate of Iain Abrahams, the Chief
Executive Officer and a director of AAPC and a director and
shareholder of the Sponsor, entered into a letter agreement (the
Forfeiture Agreement) with Kalyx, to which the Sponsor
agreed to forfeit at the Effective Time all but 321,492 of the
Sponsors 2,976,691 ordinary shares of AAPC (the Sponsor
Shares), provided that if Fox elects to have any of its
522,800 AAPC public shares redeemed by AAPC in connection with
the Merger, the Sponsor will forfeit all of its Sponsor Shares at
the Effective Time. Fox also agreed that within 10 business days
after receipt of notice from Kalyx (or as earlier required in
connection with AAPCs shareholder meeting) that AAPC has received
binding subscription agreements for the PIPE Transaction for an
aggregate purchase price of at least $9.5 million at $10.00 per
share, it must provide written notice to Kalyx that it is or, as
the case may be, is not, committing to waive its rights to have
its AAPC public shares redeemed by AAPC in connection with the
Merger.

Related Agreements

This section describes the material provisions of certain
additional agreements entered into or to be entered into to the
Merger Agreement (the Related 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 Related Agreements, copies of each of which
are attached hereto as exhibits. Shareholders and other
interested parties are urged to read such Related Agreements in
their entirety.

Voting Agreements

At the same time that the Merger Agreement was signed, AAPC and
Kalyx entered into voting agreements (each, a Voting
Agreement) with certain Kalyx Shareholders. Under the Voting
Agreement, the Kalyx Shareholders party thereto generally agreed
to vote all of their Kalyx 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 Kalyx Shareholders ability to perform its obligations
under the Voting Agreement or which Kalyx is prohibited from
taking under the Merger Agreement. Each Voting Agreement
prevents, with certain exceptions, transfers of the Kalyx shares
held by the Kalyx Shareholder party thereto between the date of
the Voting Agreement and the date of the meeting of Kalyx
shareholders.

The form of the Voting Agreements that were signed is filed
with this Current Report on Form 8-K as Exhibit 10.1 and is
incorporated herein by reference, and the foregoing description
of the Voting Agreements is qualified in its entirety by
reference thereto.

Non-Competition and Non-Solicitation
Agreement

At the Closing, certain specified Kalyx Shareholders actively
involved with Kalyxs management (each, an Owner) will
enter into Non-Competition and Non-Solicitation Agreements in
favor of AAPC (including the Surviving Corporation as its
successor) and its affiliates and subsidiaries (referred to as
the Covered Parties), in substantially the form attached
to the Merger Agreement (each, a Non-Competition
Agreement), relating to the business of acquiring, owning,
managing, upgrading and leasing commercial and industrial
properties to state-licensed operators for their regulated
cannabis businesses in states in which such activities are legal
under state laws (the Business). Under the Non-Competition
Agreement, for a period of three years after the Closing (such
period, the Restricted Period), the Owner will not and
will not permit its Affiliates to, without the Surviving
Corporations prior written consent, anywhere in the United
States, directly or indirectly engage in the Business (other than
through a Covered Party) or own, manage, finance or control, or
participate in the ownership, management, financing or control
of, or become engaged or serve as an officer, director, member,
partner, employee, agent, consultant, advisor or representative
of, a business or entity (other than a Covered Party) that
engages in the Business (a Competitor). However, the Owner
and its affiliates will be permitted under the Non-Competition
Agreement to own passive investments of no more than 2% of any
class of outstanding equity interests in a Competitor that is
publicly traded, so long as the Owner and its affiliates are not
involved in the management or control of such Competitor. Under
the Non-Competition Agreements, the Owner and its affiliates will
also be subject to certain non-solicitation and non-interference
obligations during the Restricted Period with respect to the
Covered Parties respective (i) employees, consultants and
independent contractors, (ii) customers and (iii) vendors,
suppliers, distributors, agents or other service providers. The
Owner will also be subject to non-disparagement provisions
regarding the Covered Parties and confidentiality obligations
with respect to the confidential information of the Covered
Parties.

The form of the Non-Competition Agreement is filed with this
Current Report on Form 8-K as Exhibit 10.2 and is incorporated
herein by reference, and the foregoing description of the
Non-Competition Agreement is qualified in its entirety by
reference thereto.

Lock-Up Agreement

At the Closing, certain Kalyx Shareholders will enter into a
Lock-Up Agreement with AAPC, in substantially the form attached
to the Merger Agreement (each, a Lock-Up Agreement), with
respect to their common shares of the Surviving Corporation
received as Merger Consideration, the shares issuable under their
Kalyx Warrants that are assumed by the Surviving Corporation, as
the successor to AAPC, and/or upon conversion of any Class A
units or LTIP profits interests of Kalyx OP LP into common shares
of the Surviving Corporation in accordance with the terms of such
units and profits interests (collectively, the Restricted
Securities). In such Lock-Up Agreement, each holder will
agree that, during the period commencing from the Closing and
continuing for the earliest of: (x) the one year anniversary date
of the Closing, (y) the date on which the closing sale price of
the shares of common stock of the Surviving Corporation equals or
exceeds $12.00 per share (as adjusted for stock splits, stock
dividends, reorganizations and recapitalizations) for any 20
trading days within any 30 trading day period commencing at least
150 days after the Closing, and (z) the date after the Closing on
which the Surviving Corporation consummates a transaction,
including a liquidation, merger, stock exchange or other similar
transaction, which results in all of the Surviving Corporations
stockholders having the right to exchange their shares of the
Surviving Corporations common stock for cash, securities or other
property, it will not (i) lend, offer, pledge, hypothecate,
encumber, donate, assign, 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, or otherwise
transfer or dispose of, directly or indirectly, any Restricted
Securities, (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of the Restricted Securities, or (iii)
publicly disclose the intention to do any of the foregoing,
whether any such transaction described in clauses (i), (ii), or
(iii) above is to be settled by delivery of Restricted Securities
or other securities, in cash or otherwise. However, each holder
is permitted to transfer its Restricted Securities (A) by gift,
will or intestate succession upon the death of such holder, (B)
to certain permitted transferees or (C) to a court order or
settlement agreement related to the distribution of assets in
connection with the dissolution of marriage or civil union.

The form of the Lock-Up Agreement is filed with this Current
Report on Form 8-K as Exhibit 10.3 and is incorporated herein by
reference, and the foregoing description of the Lock-Up Agreement
is qualified in its entirety by reference thereto.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

* The exhibits and schedules to this Exhibit have been omitted in
accordance with Regulation S-K Item 601(b)(2). The Registrant
agrees to furnish supplementally a copy of all omitted exhibits
and schedules to the Securities and Exchange Commission upon its
request.

About ATLANTIC ALLIANCE PARTNERSHIP CORP. (NASDAQ:AAPC)

Atlantic Alliance Partnership Corp. is a blank check company. The Company is formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation, contractual control arrangement with, purchasing all or substantially all of the assets of, or engaging in any other similar initial business combination with one or more businesses or entities. The Company is focused on companies in the media, Internet and consumer sector operating in the United Kingdom and Europe (which may include a business based in Europe, which has operations or opportunities outside of Europe). The Company may pursue an acquisition opportunity in any business industry or sector. The Company has not conducted any operations and has not generated any revenues.

ATLANTIC ALLIANCE PARTNERSHIP CORP. (NASDAQ:AAPC) Recent Trading Information

ATLANTIC ALLIANCE PARTNERSHIP CORP. (NASDAQ:AAPC) closed its last trading session down -0.28 at 10.50 with 590 shares trading hands.