Item 1.01. Entry into a Material Definitive
Agreement.
Merger Agreement
On
January 5, 2023, iCoreConnect Inc., a Nevada corporation (“iCoreConnect”), entered into a Merger Agreement
and Plan of Reorganization (the “Merger Agreement”), by and among iCoreConnect, FG Merger Corp., a Delaware
corporation (“FGMC”), and FG Merger Sub Inc., a Nevada corporation and a direct, wholly-owned subsidiary of
FGMC (“Merger Sub”).
The
Merger Agreement and the transactions contemplated thereby were approved by the boards of directors of each of iCoreConnect, FGMC, and
Merger Sub.
The Business Combination
The
Merger Agreement provides that, among other things, at the closing (the “Closing”) of the transactions contemplated
by the Merger Agreement, Merger Sub will merge with and into iCoreConnect (the “Merger”), with iCoreConnect
surviving as a wholly-owned subsidiary of FGMC. In connection with the Merger, FGMC will change its name to “iCoreConnect Inc.”
The Merger and the other transactions contemplated by the Merger Agreement are hereinafter referred to as the “Business Combination.”
The
Business Combination is expected to close in the second quarter of 2023, subject to customary closing conditions, including the receipt
of certain governmental approvals and the required approval by the stockholders of FGMC and iCoreConnect.
Pre-Closing iCoreConnect
Conversions
Prior
to the Closing, (i) each vested issued and outstanding option to purchase iCoreConnect common stock par value $0.001 (“iCoreConnect
Common Stock”) shall be exercised into shares of iCoreConnect Common Stock (ii) each issued and outstanding warrant
to purchase iCoreConnect Common Stock shall be exercised into shares of iCoreConnect Common Stock and (iii) the outstanding principal
together with all accrued and unpaid interest under each iCoreConnect convertible promissory note shall be converted into shares of iCoreConnect
Common Stock.
Pre-Closing FGMC
Conversion
Prior
to the Closing, each share of FGMC common stock par value $0.0001 (“FGMC Common Stock”) shall be converted into
shares of newly issued FGMC preferred stock, par value $0.0001 (“FGMC Preferred Stock”). The FGMC Preferred
Stock shall have the rights, preferences, powers, privileges and restrictions, qualifications and limitations as set forth in Exhibit D
to the Merger Agreement, including but not limited to:
•
The holders of Preferred Stock shall not be entitled to vote on any matters submitted to the stockholders of FGMC.
•
From and after the date of the issuance of any shares of FGMC Preferred Stock, dividends shall accrue at the rate per annum of 12% of
the original issue price for each share of FGMC Preferred Stock, prior and in preference to any declaration or payment of any other dividend
(subject to appropriate adjustments).
•
Dividends shall accrue from day to day and shall be cumulative and shall be payable to each holder of FGMC Preferred Stock within fifteen
(15) business days after the anniversary of the date of the original issuance of the FGMC Preferred Stock as of such date.
•
From the closing of the Business Combination until the second anniversary of the date of the original issuance of the FGMC Preferred Stock,
FGMC may, at its option, pay all or part of the accruing dividends on the FGMC Preferred Stock by issuing and delivering additional shares
of FGMC Preferred Stock to the holders thereof.
•
FGMC shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of FGMC the holders of
the FGMC Preferred Stock then outstanding shall first receive dividends due and owing on each outstanding share of FGMC Preferred Stock.
•
In the event of any liquidation, dissolution or winding up of FGMC, the holders of shares of FGMC Preferred Stock then outstanding shall
be entitled to be paid out of the assets of FGMC available for distribution to its stockholders an amount per share equal to the greater
of (i) one times the applicable original issue price, plus any accrued and unpaid dividends, and (ii) such amount as would have
been payable had all shares of FGMC Preferred Stock been converted into FGMC Common Stock pursuant to the following paragraph immediately
prior to such liquidation, dissolution or winding up, before any payment shall be made to the holders of FGMC Common Stock.
•
After 24 months from the closing of the Business Combination, in the event the closing share price of the FGMC Common Stock shall exceed
140% of the Conversion Price (as defined in the Merger Agreement) then in effect, then (i) each outstanding share of FGMC Preferred
Stock shall automatically be converted into such number of shares of FGMC Common Stock as is determined by dividing the original issue
price by the Conversion Price in effect at the time of conversion and (ii) such shares may not be reissued by FGMC, subject to adjustment.
At the time of such conversion, FGMC shall declare and pay all of the dividends that are accrued and unpaid as of the time of the conversion
by either, at the option of FGMC, (i) issuing additional FGMC Preferred Stock or (ii) paying cash.
•
Each share of FGMC Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without
the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of FGMC Common
Stock as is determined by dividing the original issue price by the Conversion Price in effect at the time of conversion, subject to adjustment.
•
Immediately prior to any such optional conversion FGMC shall pay all dividends on the FGMC Preferred Stock being converted that are accrued
and unpaid as of such time by, either, at the option of FGMC: (i) issuing additional FGMC Preferred Stock or (ii) paying cash.
The
foregoing description of the terms of the FGMC Preferred Stock is subject to and qualified in its entirety by reference to the full text
of Exhibit D to the Merger Agreement, a copy of which is included as Exhibit 2.1 hereto, and the terms of which are incorporated herein
by reference.
Business Combination
Consideration
The
aggregate consideration to be received by the iCoreConnect stockholders is based on a pre-transaction equity value of $98,000,000 (subject
to usual and customary working capital adjustments and any adjustments to reflect the effect of any stock split, reverse stock split,
stock dividend, reorganization, recapitalization, reclassification, combination, merger, sale or exchange of shares or other like change
with respect to shares of FGMC Common Stock, occurring prior to the Closing date). In accordance with the terms and subject to the conditions
of the Merger Agreement, immediately prior to the effective time of the Closing each share of issued and outstanding iCoreConnect Common
Stock, shall be converted into a number of shares of FGMC Common Stock, based on the Exchange Ratio (as defined in the Merger Agreement).
Governance
The
parties have agreed that, effective immediately after the Closing of the Business Combination, the FGMC Board will be comprised of the
directors designated by iCoreConnect by written notice to FGMC and reasonably acceptable to FGMC.
Representations
and Warranties; Covenants
The
Merger Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions
of this type, including, among others, covenants providing for (i) certain limitations on the operation of the parties’ respective
businesses prior to consummation of the Business Combination, (ii) the parties’ efforts to satisfy conditions to consummation
of the Business Combination, including by obtaining necessary approvals from governmental agencies (including U.S. federal antitrust authorities
and under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”)), and (iii) the
parties preparing and filing a registration statement on Form S-4 and a joint proxy statement with the Securities and Exchange Commission
(the “SEC”) and taking certain other actions to obtain the requisite approval of each party’s stockholders
to vote in favor of certain matters, including the adoption of the Merger Agreement and approval of the Business Combination, at special
meetings to be called for the approval of such matters.
In
addition, FGMC has agreed to adopt an equity incentive plan, as described in the Merger Agreement.
Conditions to Each
Party’s Obligations
The
obligations of iCoreConnect and FGMC to consummate the Business Combination are subject to certain closing conditions, including, but
not limited to, (i) the approval of FGMC’s stockholders, (ii) the approval of iCoreConnect’s stockholders, (iii) the
expiration or termination of the applicable waiting period under the HSR Act, (iv) FGMC’s Form S-4 registration statement
becoming effective, and (v) FGMC having at least $5,000,001 of net tangible assets following the exercise of stockholder redemption
rights in accordance with FGMC’s charter.
In
addition, the obligations of FGMC and Merger Sub to consummate the Business Combination are also subject to the fulfillment (or waiver)
of other closing conditions, including, but not limited to, (i) the representations and warranties of iCoreConnect being true
and correct to the standards applicable to such representations and warranties and each of the covenants of iCoreConnect having been performed
or complied with in all material respects, (ii) delivery of certain ancillary agreements required to be executed and delivered in
connection with the Business Combination; (iii) no Company Material Adverse Effect (as defined in the Merger Agreement) having occurred,
(iv) iCoreConnect having effected the conversions of outstanding iCoreConnect option, warrants and convertible promissory notes described
above and (v) the $15 Exercise Price Warrants Purchase Agreement, dated as of February 25, 2022, by and between FGMC and FG
Merger Investors LLC shall have been amended to provide that each $15 Exercise Price Warrant (as defined therein) shall entitle the holder
thereof to purchase one share of FGMC preferred stock, par value $0.0001 per share at the exercise price of $15.00 per share.
The
obligation of iCoreConnect to consummate the Business Combination is also subject to the fulfillment (or waiver) of other closing conditions,
including, but not limited to, (i) the representations and warranties of FGMC and Merger Sub being true and correct to the standards
applicable to such representations and warranties and each of the covenants of FGMC and Merger Sub having been performed or complied with
in all material respects and (ii) the shares of FGMC Common Stock issuable in connection with the Business Combination being listed
on the Nasdaq Stock Market.
Termination
The
Merger Agreement may be terminated under certain customary and limited circumstances prior to the Closing, including, but not limited
to, (i) by mutual written consent of FGMC and iCoreConnect, (ii) by FGMC, on the one hand, or iCoreConnect, on the other hand,
if there is any breach of the representations, warranties, covenant or agreement of the other party as set forth in the Merger Agreement,
in each case, such that certain conditions to closing cannot be satisfied and the breach or breaches of such representations or warranties
or the failure to perform such covenant or agreement, as applicable, are not cured or cannot be cured within certain specified time periods,
(iii) by either FGMC or iCoreConnect if the Business Combination is not consummated 2023 prior to the later of (A) June 1,
2023 and (B) September 1, 2023 if FGMC extends the deadline by which it must complete its initial business combination in accordance
with its amended and restated certificate of incorporation, provided the failure to close by such date is not due to a breach by the terminating
party and (iv) by either FGMC or iCoreConnect if a meeting of FGMC’s stockholders is held to vote on proposals relating to
the Business Combination and the stockholders do not approve the proposals.
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. The Merger Agreement contains
representations, warranties and covenants that the respective parties made to each other as of the date of the Merger 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 Merger 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.
FGMC and iCoreConnect do not believe that these schedules contain information that is material to an investment decision.
Certain Related Agreements
iCoreConnect Support Agreement
In connection with the execution of the Merger
Agreement, certain stockholders of iCoreConnect have entered into a support agreement (the “iCoreConnect Support Agreement”)
pursuant to which the stockholders of iCoreConnect that are parties to the iCoreConnect Support Agreement have agreed to vote all shares
of common stock of iCoreConnect beneficially owned by them in favor of the Merger Agreement and related transactions.
The foregoing description of the iCoreConnect Support
Agreement is subject to and qualified in its entirety by reference to the full text of the Form of iCoreConnect Support Agreement, a copy of which
is included as Exhibit 10.1 hereto, and the terms of which are incorporated herein by reference.
Sponsor Support Agreement
In
connection with the execution of the Merger Agreement, FGMC, iCoreConnect, and FG Merger Investors LLC, a Delaware limited liability company
(the “Sponsor”) entered into a Sponsor Support Agreement (the “Sponsor Support Agreement”) pursuant
to which the Sponsor agreed to, among other things vote at any meeting of the stockholders of FGMC all of its shares of FGMC Common Stock
held of record or thereafter acquired in favor of the proposals relating to the Business Combination.
The foregoing description of the Sponsor Support
Agreement is subject to and qualified in its entirety by reference to the full text of the Sponsor Support Agreement, a copy of which
is included as Exhibit 10.2 hereto, and the terms of which are incorporated herein by reference.
Lock-Up Agreement
In connection with the Closing, the Sponsor, certain
existing stockholders of FGMC and certain existing equityholders of iCoreConnect (each, a “Lock-up Holder”)
will enter into an agreement (the “Lock-Up Agreement”), pursuant to which and subject to certain customary exceptions,
during the period commencing on the date of the Closing and ending on the date that is one hundred eighty (180) days after the consummation
of the Business Combination such Lock-up Holder will agree not to (i) offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, any of the Lock-up Shares (as defined in the Lock-Up Agreement, which shall include certain securities held
by the Lock-Up Holders), (ii) enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement
that transfers, in whole or in part, any of the economic consequences of ownership of such Lock-up Shares, whether any of these transactions
are to be settled by delivery of any such Lock-up Shares, in cash or otherwise, (iii) publicly disclose the intention to make any
offer, sale, pledge or disposition, or (iv) enter into any transaction, swap, hedge or other arrangement, or engage in any short
sales with respect to any security of FGMC.
The foregoing description of the Lock-Up Agreement
is subject to and qualified in its entirety by reference to the full text of the Form of Lock-Up Agreement, a copy of which is included
as Exhibit 10.3 hereto, and the terms of which are incorporated herein by reference.
Amended and Restated Registration Rights Agreement
In connection with the Closing, FGMC will enter
into an amended and restated registration rights agreement (the “Amended and Restated Registration Rights Agreement”),
pursuant to which, the Registration Rights Agreement, dated as of February 25, 2022, among FGMC and the other parties thereto is
terminated and whereby FGMC will agree to, among other things, file a resale shelf registration statement registering certain of the securities
held by the Holders (as defined in the Amended and Restated Registration Rights Agreement, which will include certain existing stockholders
of FGMC and certain existing equityholders of iCoreConnect) no later than 20 business days after the closing of the Business Combination.
The Amended and Restated Registration Rights Agreement will also provide certain registration rights, including customary demand registration
rights and piggyback registration rights to the Holders, subject to customary exceptions, terms and conditions. FGMC will agree to pay
certain fees and expenses relating to registrations under the Amended and Restated Registration Rights Agreement.
The foregoing description of the Amended and Restated
Registration Rights Agreement is subject to and qualified in its entirety by reference to the full text of the Form of Amended and
Restated Registration Rights Agreement, a copy of which is included as Exhibit 10.4 hereto, and the terms of which are incorporated
herein by reference.
Sponsor Forfeiture Agreement
In connection with the execution of the Merger
Agreement, the Sponsor, FGMC and iCoreConnect entered into a sponsor forfeiture agreement (the “Sponsor Forfeiture Agreement”)
pursuant to which the Sponsor has agreed that if at the closing of the Business Combination the SPAC Closing Cash (as defined in the Sponsor
Forfeiture Agreement) is less than $20,000,000 then upon and subject to such closing the Sponsor will forfeit any and all dividends accrued
on any shares of preferred stock, par value $0.0001 of FGMC (“Preferred Stock”) owned by the Sponsor, at the
time of payment, whether such dividend shall be paid in cash or by the issuance of additional shares of Preferred Stock.
The foregoing description of the Sponsor Forfeiture
Agreement is subject to and qualified in its entirety by reference to the full text of the Sponsor Forfeiture Agreement, a copy of which
is included as Exhibit 10.5 hereto, and the terms of which are incorporated herein by reference.