QUINPARIO ACQUISITION CORP. 2 (NASDAQ:QPAC) Files An 8-K Entry into a Material Definitive Agreement

QUINPARIO ACQUISITION CORP. 2 (NASDAQ:QPAC) Files An 8-K Entry into a Material Definitive Agreement

Story continues below

Item 1.01

Entry Into A Material Definitive Agreement.

On February 21, 2017, Quinpario Acquisition Corp. 2 (the
Company or Quinpario), entered into a Business
Combination Agreement (the Agreement) by and among the
Company, Quinpario Merger Sub I, Inc., a Delaware corporation
(SourceHOV Merger Sub), Quinpario Merger Sub II, Inc., a
Delaware corporation (Novitex Merger Sub and, together
with SourceHOV Merger Sub, the Merger Subs), Novitex
Holdings, Inc., a Delaware corporation (Novitex),
SourceHOV Holdings, Inc., a Delaware corporation
(SourceHOV), Novitex Parent, L.P. (Novitex Parent),
HOVS LLC and HandsOn Fund 4 I, LLC (collectively, the HGM
Group
and, together with Novitex Parent, each a Seller
and collectively, the Sellers).

The Mergers

The Agreement provides for (i) the merger of SourceHOV Merger Sub
with and into SourceHOV, as a result of which the separate
corporate existence of SourceHOV Merger Sub will cease, with
SourceHOV continuing as the surviving company and a subsidiary of
the Company (the SourceHOV Surviving Company) (the
SourceHOV Merger), and (ii) the merger of Novitex Merger
Sub with and into Novitex, as a result of which the separate
corporate existence of Novitex Merger Sub will cease, with
Novitex as the surviving company and a subsidiary of the Company
(the Novitex Surviving Company) (the Novitex
Merger
, and together with the SourceHOV Merger, the
Mergers).

Consideration

to the Agreement, the shares of common stock, par value $0.01 per
share, in SourceHOV Merger Sub (the SourceHOV Merger Sub
Common Stock
) issued and outstanding immediately prior to the
effective time of the SourceHOV Merger shall be converted into
100% of the fully paid and nonassessable shares of common stock,
par value $0.01 per share of the SourceHOV Surviving Company. All
shares of common stock, par value $0.001 per share, in SourceHOV
(the SourceHOV Common Stock) that are owned by SourceHOV
as treasury stock and each share of SourceHOV Common Stock that
is owned by Company or SourceHOV Merger Sub immediately prior to
the effective time of the SourceHOV Merger shall no longer be
outstanding and shall automatically be canceled and shall cease
to exist, with no consideration in exchange therefor. Each share
of SourceHOV Common Stock issued and outstanding prior to the
effective time of the SourceHOV Merger (excluding dissenting
shares and shares to be cancelled) shall be converted into the
right to receive a number of shares of common stock, par value
$0.0001 per share, of the Company (the Company Common
Stock)
equal to the quotient obtained by dividing 80,600,000
by the number of shares of SourceHOV Common Stock outstanding
immediately prior to the effective time of the SourceHOV Merger
assuming the settlement (in shares of SourceHOV Common Stock) of
all the outstanding awards of restricted stock units
corresponding to the shares of SourceHOV (the SourceHOV RSU
Awards
) outstanding immediately prior to the effective time
of the SourceHOV Merger (the SourceHOV Merger
Consideration
).

In addition, under the terms of the Agreement, the shares of
common stock, par value $0.01 per share, in Novitex Merger Sub
(the Novitex Merger Sub Common Stock) issued and
outstanding immediately prior to the effective time of the
Novitex Merger shall be converted into 100% of the fully paid and
nonassessable shares of common stock, par value $0.01 per share
of the Novitex Surviving Company. All issued and outstanding
equity shares interest of Novitex, par value $0.01 per share,
(the Novitex Common Stock) that are owned by Novitex as
treasury stock and each share of Novitex Common Stock that is
owned by Company or Novitex Merger Sub immediately prior to the
effective time of the Novitex Merger shall no longer be
outstanding and were automatically canceled and ceased to exist,
and no consideration shall be delivered in exchange therefor.
Each share of Novitex Common Stock (excluding shares to be
cancelled) shall be converted into the right to receive a number
of shares of Company Common Stock equal to the quotient obtained
by dividing 30,600,000 by the number of shares of Novitex Common
Stock outstanding immediately prior to the effective time of the
Novitex Merger (the Novitex Merger Consideration).

At the effective time of the SourceHOV Merger, each outstanding
SourceHOV RSU Award, whether vested or unvested, immediately
prior to the effective time of the SourceHOV Merger shall be
automatically assumed by the Company and converted into an award
of restricted stock units covering the number of shares of the
Company Common Stock equal to the SourceHOV Merger Consideration
for each share of SourceHOV Common Stock that would have been
received if such SourceHOV RSU Award had been settled in shares
of SourceHOV Common Stock immediately prior to the effective time
of the SourceHOV Merger.

Representations and Warranties

Under the Agreement, each of the Sellers, Novitex and SourceHOV,
and Quinpario and the Merger Subs, made customary representations
and warranties for transactions of this nature. The
representations and warranties made under the Agreement do not
survive after the Closing.

Conditions to Consummation of the Mergers

Consummation of the transactions contemplated by the Agreement is
subject to customary conditions of the respective parties,
including the approval of the Companys stockholders in accordance
with the Companys amended and restated certificate of
incorporation. It is a condition to the Closing under the
Agreement that at the Closing Date, after giving effect to (i)
the redemptions each holder of Company Common Stock is entitled
to and (ii) the proceeds of any equity or debt issuances of the
Company in connection with one or more private placements prior
to the Closing (excluding, for the avoidance of doubt, the debt
financing to the commitment letters referenced in the paragraph
below), the total funds available to the Company shall be no less
than $275,000,000 in cash.

In addition, consummation of the transactions contemplated by the
Agreement is subject to other closing conditions, including,
among others: (i) that all applicable waiting periods and any
extensions thereof under applicable antitrust, competition or
similar laws have expired or been terminated; (ii) that there has
been no material adverse effect on the Novitex Groups or
SourceHOV Groups (each as defined in the Agreement) or their
respective business; (iii) the Company has at least $5,000,001 of
net tangible assets remaining after the Closing; and (iv)
Quinpario will have received the proceeds of the debt financing
to commitment letters entered into between Quinpario, Royal Bank
of Canada and Credit Suisse.

Termination

The Agreement may be terminated under certain customary and
limited circumstances at any time prior to the Closing, including
if the transactions contemplated by the Agreement have not been
completed by July 24, 2017 (the Outside Date), unless the
party seeking to terminate has breached the Agreement and such
breach is the primary cause of the failure of the Closing to
occur by the Outside Date. If the Agreement is validly
terminated, no party thereto will have any liability or any
further obligation to any other party under the Agreement with
certain limited exceptions, including liability for intentional
breach of any of the provisions contained in the Agreement.

Registration and Governance Rights

In connection with the Mergers (i) the Sellers and the founders
of the Company will be entitled to customary registration rights
with respect to their Company Common Stock; (ii) affiliates of
Novitex Parent will be entitled to nominate three individuals,
and affiliates of SourceHOV will be entitled to nominate two
individuals, for election to the Companys board of directors at
Closing (with such number of nominees subject to reduction
following the Closing depending on the amount of Company Common
Stock held by such affiliates of Novitex Parent or such
affiliates of SourceHOV, as applicable); and (iii) the Sellers
will be entitled to consent rights over certain corporate actions
of the Company.

A copy of the Agreement is filed with this Current Report on Form
8-K (the Current Report) as Exhibit 2.1 and is
incorporated herein by reference, and the foregoing description
of the Agreement is qualified in its entirety by reference
thereto. The Agreement contains representations, warranties and
covenants that the respective parties made to each other as of
the date of such agreement or other specific dates. The
assertions embodied in those representations, warranties and
covenants were made for purposes of the contract among the
respective parties and are subject to important qualifications
and limitations agreed to by the parties in connection with
negotiating such agreement. The representations, warranties and
covenants in the Agreement are also modified in important part by
the underlying disclosure schedules which are not filed publicly
and which are subject to a contractual standard of materiality
different from that generally applicable to stockholders and were
used for the purpose of allocating risk among the parties rather
than establishing matters as facts. We do not believe that these
schedules contain information that is material to an investment
decision.

Item 3.02 Unregistered Sales of Equity
Securities

The disclosure set forth above in Item 1.01 of this Current
Report is incorporated by reference herein. The shares of Company
Common Stock to be issued in connection with the Agreement and
the transactions contemplated thereby will not be registered
under the Securities Act of 1933, as amended (the Securities
Act
), in reliance on the exemption from registration provided
by Section4(a)(2) of the Securities Act and/or Regulation D
promulgated thereunder.

Item 7.01 Regulation FD Disclosure.

On February 21, 2017, the Company issued a press release
announcing the execution of the Agreement.The press release is
attached hereto as Exhibit99.1 and incorporated by reference
herein.

Attached as Exhibit 99.2 hereto and incorporated into this Item
7.01 by reference is the investor presentation that will be used
by the Company in making presentations to certain existing and
potential stockholders of the Company with respect to the
Mergers.

The foregoing (including Exhibits 99.1 and 99.2) is being
furnished to Item 7.01 and shall not be deemed to be filed for
purposes of Section 18 of the Securities and Exchange Act of
1934, as amended (the Exchange Act), or otherwise be
subject to the liabilities of that section, nor shall it be
deemed to be incorporated by reference in any filing under the
Securities Act or the Exchange Act.

Item 8.01 Other Events

In connection with the execution of the Agreement, the Company
has received commitments from Royal Bank of Canada and Credit
Suisse to provide debt financing at the Closing, and the Company
has entered into customary commitment letters in connection
therewith.

In connection with the execution of the Agreement, certain
founders of the Company have agreed to forfeit certain shares of
Company Common Stock issued to such founders at the time of the
Companys initial public offering. The number of shares of Company
Common Stock subject to such forfeiture at the Closing will be
determined by such founders and the Sellers at that time.

Additional Information

In connection with the proposed Mergers, Quinpario will file a
preliminary proxy statement with the SEC and will mail a
definitive proxy statement and other relevant documents to its
stockholders. Investors and security holders of Quinpario
are advised to read, when available, the preliminary proxy
statement, and amendments thereto, and the definitive proxy
statement in connection with Quinparios solicitation of proxies
for its stockholders meeting to be held to approve the Mergers
because the proxy statement will contain important information
about the Mergers and the parties to the Mergers. The definitive
proxy statement will be mailed to stockholders of Quinpario as of
a record date to be established for voting on the Mergers.
Stockholders will also be able to obtain copies of the proxy
statement, without charge, once available, at the SECs website at
www.sec.gov or by directing a request to: Quinpario Acquisition
Corp. 2, 12935 N. Forty Drive, Suite 201, St. Louis, MO 63141,
e-mail: [email protected].

Participants in the Solicitation

Quinpario and its directors, executive officers and other members
of its management and employees, under SEC rules, may be deemed
to be participants in the solicitation of proxies of Quinpario
stockholders in connection with the proposed Mergers.
Investors and security holders may obtain more detailed
information regarding the names, affiliations and interests in
Quinpario of directors and officers of Quinpario in Quinparios
Extension Proxy, which was filed with the SEC on December 30,
2016. Information regarding the persons who may, under SEC rules,
be deemed participants in the solicitation of proxies to
Quinparios stockholders in connection with the proposed Mergers
will be set forth in the proxy statement for the proposed Mergers
when available.
Information concerning the interests of
participants in the solicitation, which may, in some cases, be
different than those of Quinparios and the target companies
stockholders generally, will be set forth in the proxy statement
relating to the mergers when it becomes available.

Forward Looking Statements

Certain statements made herein are not historical facts but are
forward-looking statements for purposes of the safe harbor
provisions under The Private Securities Litigation Reform Act of
1995. Forward-looking statements generally are accompanied by
words such as may, should, would, plan, intend, anticipate,
believe, estimate, predict, potential, seem, seek, continue,
future, will, expect, outlook or other similar words, phrases or
expressions. These forward-looking statements include statements
regarding the Companys industry, future events, the proposed
transaction between Quinpario, SourceHOV and Novitex, the
estimated or anticipated future results and benefits of the
combined company following the transaction, including the
likelihood and ability of the parties to successfully consummate
the proposed transaction, future opportunities for the combined
company, and other statements that are not historical facts.
These statements are based on the current expectations of
Quinpario, SourceHOV and Novitex management and are not
predictions of actual performance. These statements are subject
to a number of risks and uncertainties regarding Quinpario.
SourceHOV and Novitexs respective businesses and the transaction,
and actual results may differ materially. These risks and
uncertainties include, but are not limited to, changes in the
business environment in which SourceHOV and Novitex operate,
including inflation and interest rates, and general financial,
economic, regulatory and political conditions affecting the
industry in which SourceHOV and Novitex operate; changes in
taxes, governmental laws, and regulations; competitive product
and pricing activity; difficulties of managing growth profitably;
the loss of one or more members of Quinpario, SourceHOV or
Novitex management teams; the inability of the parties to
successfully or timely consummate the proposed transaction,
including the risk that the required regulatory approvals are not
obtained, are delayed or are subject to unanticipated conditions
that could adversely affect the combined company or the expected
benefits of the transaction or that the approval of the
stockholders of Quinpario is not obtained; failure to realize the
anticipated benefits of the transaction, including as a result of
a delay in consummating the transaction or a delay or difficulty
in integrating the businesses of Quinpario, SourceHOV and
Novitex; uncertainty as to the long-term value of Quinpario
common stock; the inability to realize the expected amount and
timing of cost savings and operating synergies; those discussed
in Quinpario’s Annual Report on Form 10-K for the year ended
December 31, 2015 under the heading Risk Factors, as updated from
time to time by Quinparios Quarterly Reports on Form 10-Q and
other documents of Quinpario on file with the Securities and
Exchange Commission (SEC) or in the proxy statement that will be
filed with the SEC by Quinpario. There may be additional risks
that neither Quinpario, SourceHOV or Novitex presently know or
that Quinpario, SourceHOV or Novitex currently believe are
immaterial that could also cause actual results to differ from
those contained in the forward-looking statements. In addition,
forward-looking statements provide Quinparios SourceHOVs and
Novitexs expectations, plans or forecasts of future events and
views as of the date of this communication. Quinpario, SourceHOV
and Novitex anticipate that subsequent events and developments
will cause Quinparios SourceHOVs and Novitexs assessments to
change. However, while Quinpario, SourceHOV and Novitex may elect
to update these forward-looking statements at some point in the
future, Quinpario, SourceHOV and Novitex specifically disclaim
any obligation to do so. These forward-looking statements should
not be relied upon as representing Quinparios, SourceHOVs and
Novitexs assessments as of any date subsequent to the date of
this communication.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number

Description

2.1* Business Combination Agreement, dated as of February 21,
2017, by and among Quinpario Acquisition Corp. 2, Quinpario
Merger Sub I, Inc., Quinpario Merger Sub II, Inc., Novitex
Holdings, Inc., SourceHOV Holdings, Inc., Novitex Parent,
L.P, HOVS LLC and Handson Fund 4 I, LLC.
99.1* Press Release issued by the Company on February 21, 2017
99.2* Investor Presentation, dated February, 2017.
* Filed herewith.
Certain of 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 QUINPARIO ACQUISITION CORP. 2 (NASDAQ:QPAC)

Quinpario Acquisition Corp. 2 is a shell company. The Company was formed for the purpose of entering into a merger, stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities. The Company is focused on target businesses that operate in the specialty chemicals and performance materials industries. The Company is not engaged in any commercial business. The Company has not generated any revenues.

QUINPARIO ACQUISITION CORP. 2 (NASDAQ:QPAC) Recent Trading Information

QUINPARIO ACQUISITION CORP. 2 (NASDAQ:QPAC) closed its last trading session 00.00 at 10.05 with 2,014 shares trading hands.

An ad to help with our costs