PROSPECTOR CAPITAL CORP. : Entry into a Material Definitive Agreement, Financial Statements and Exhibits (form 8-K)

Item 1.01 Entry Into A Material Definitive Agreement

Business Combination Agreement

On June 12, 2023, Prospector Capital Corp., a Cayman Islands exempted company ("Prospector"), entered into a Business Combination Agreement (as the same may be amended, supplemented or otherwise modified from time to time, the "BCA"), with LeddarTech Inc., a corporation existing under the laws of Canada ("LeddarTech"), and LeddarTech Holdings Inc., a company incorporated under the laws of Canada and a wholly owned subsidiary of LeddarTech ("Newco"). LeddarTech, founded in 2007 and headquartered in Québec, Canada, is an automotive advanced driver assistance and autonomous driving software company that offers low-level sensor fusion and perception solutions. In its first ten years, LeddarTech focused its business on software and signal processing for smart sensing solutions. Commencing in 2022, LeddarTech began to focus its business on pure-play automotive software for low-level fusion and perception. The BCA and the transactions contemplated thereby were unanimously approved by the boards of directors of each of Prospector and LeddarTech.

The Business Combination

The BCA contemplates that the business combination among Prospector, LeddarTech and Newco will be completed through the following series of transactions:

? Prospector will continue as a corporation existing under the laws of Canada

(the "Continuance" and Prospector as so continued, "Prospector Canada");

? Prospector Canada and Newco will amalgamate (the "Prospector Amalgamation" and

Prospector Canada and Newco as so amalgamated, "Amalco");

? the preferred shares of LeddarTech will convert into common shares of

LeddarTech and, on the terms and subject to the conditions set forth in a plan

of arrangement (the "Plan of Arrangement"), Amalco will acquire all of the

issued and outstanding common shares of LeddarTech from LeddarTech's

shareholders in exchange for common shares of Amalco having an aggregate equity

value of $200 million (valued at $10.00 per share) plus an amount equal to the

aggregate exercise price of LeddarTech's outstanding "in the money" options

immediately prior to the Prospector Amalgamation (the "Share Exchange") plus

additional Amalco "earnout" shares (with the terms set forth in the BCA);

? LeddarTech and Amalco will amalgamate (the "Company Amalgamation" and

LeddarTech and Amalco as so amalgamated, the "Surviving Company"); and

? in connection with the Company Amalgamation, the securities of Amalco will

convert into an equivalent number of corresponding securities in the Surviving

Company (other than as described below with respect to the Prospector Class B

Shares) and each of LeddarTech's equity awards (other than options to purchase

LeddarTech's class M shares) will be cancelled for no compensation or

consideration and LeddarTech's equity plans will be terminated (and the

options to purchase LeddarTech's class M shares will become options to

purchase Surviving Company Shares).

The Continuance, the Prospector Amalgamation, the Share Exchange, the Company Amalgamation and the other transactions contemplated by the BCA are hereinafter referred to as the "Business Combination".

In connection with the Business Combination, Prospector, LeddarTech and Newco will prepare, and Newco (as predecessor to the Surviving Company) will file with the U.S. Securities and Exchange Commission (the "SEC"), a registration statement on Form F-4 that will include a document that will serve as both a prospectus of Newco and a proxy statement of Prospector (the "Registration Statement"). Newco expects to file the Registration Statement by early July 2023.

The Business Combination is expected to close by the fourth quarter of 2023, subject to the receipt of the required approvals by Prospector's shareholders and the satisfaction of certain customary closing conditions described below.

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Representations and Warranties; Covenants

The BCA contains representations and warranties of each of the parties thereto that are customary for transactions of this type, including with respect to the operations of Prospector, LeddarTech and Newco. In addition, the BCA contains customary pre-closing covenants, including the obligation of LeddarTech to conduct its business in the ordinary course consistent with past practice and to refrain from taking specified actions, subject to certain exceptions. LeddarTech has agreed to adopt an equity incentive plan effective upon closing of the Business Combination (the "Closing"), as described in the BCA.

Governance

The parties have agreed to take all action within their power as may be necessary or appropriate such that, effective immediately after the Closing, the Surviving Company board of directors will consist of at least seven directors, including four current directors of LeddarTech (who include two Prospector nominees), one current officer of LeddarTech and one Investissement Québec ("IQ") nominee.

Conditions to Closing

The obligation of Prospector, LeddarTech and Newco to consummate the Business Combination is subject to certain closing conditions, including, but not limited to, (i) the expiration or termination of the applicable waiting period under certain non-U.S. antitrust laws, (ii) the approval of Prospector's shareholders, (iii) the approval of LeddarTech's shareholders, (iv) the final order of the Superior Court of Québec pursuant to Section 192(4) of the Canada Business Corporations Act (the "CBCA") having been granted and not set aside or modified in a manner unacceptable to the parties and (v) the Registration Statement becoming effective.

In addition, the obligation of Prospector to consummate the Business Combination is subject to the fulfillment of other closing conditions, including, but not limited to, (i) the representations and warranties of LeddarTech and Newco being true and correct to the standards applicable to such representations and warranties set forth in the BCA and each of the covenants and agreements of LeddarTech and Newco set forth in the BCA having been performed or complied with in all material respects and (ii) no Company Material Adverse Effect (as defined in the BCA) having occurred.

The obligation of LeddarTech to consummate the Business Combination is also subject to the fulfillment of other closing conditions, including, but not limited to, (i) the representations and warranties of Prospector being true and correct to the standards applicable to such representations and warranties set forth in the BCA and each of the covenants and agreements of Prospector set forth in the BCA having been performed or complied with in all material respects, (ii) no Prospector Material Adverse Effect (as defined in the BCA) having occurred and (iii) immediately after the Closing, the aggregate cash proceeds actually received (or deemed received) by LeddarTech, Amalco or the Surviving Company in respect of the Financing (as defined below), together with any funds in the Trust Account, shall be equal to or greater than $43,000,000.

Concurrently with the execution of the BCA, certain shareholders of LeddarTech representing more than the requisite votes necessary to approve the Business Combination entered into a consent and waiver of shareholders pursuant to which each such shareholder agreed to, among other things, vote to approve the Business Combination and the related transactions.

Redemption Offer

Pursuant to its governing documents, Prospector will be providing the holders of its Class A ordinary shares, par value $0.0001 per share (the "Prospector Class A Shares"), the right to redeem all or a portion of their Prospector Class A Shares in connection with the Business Combination (the "Prospector Shareholder Redemption").

Prospector will issue at the Closing, as a dividend, following the Prospector Shareholder Redemption and prior to the Continuance, to each holder of Prospector Class A Shares that elects not to participate in the redemption (a "Non- Redeeming Shareholder") one additional Prospector Class A Share for each non-redeemed Prospector Class A Share held by such Non- Redeeming Shareholder (the "Prospector Share Issuance").

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Following the Prospector Shareholder Redemption but prior to the Prospector Share Issuance, the Prospector Class A Shares and the warrants comprising each issued and outstanding unit of Prospector immediately prior to the Prospector Share Issuance shall be automatically separated.

Termination

The BCA may be terminated under certain customary and limited circumstances prior to the Closing (i) by mutual written consent of Prospector and LeddarTech; (ii) by Prospector if the representations and warranties of LeddarTech are not true and correct or if LeddarTech fails to perform any covenant or agreement set forth in the BCA 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 LeddarTech if the representations and warranties of Prospector are not true and correct or if Prospector fails to perform any covenant or agreement set forth in the BCA 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; (iv) subject to certain limited exceptions, by either Prospector or LeddarTech if the Business Combination is not consummated by December 31, 2023; (v) by either Prospector or LeddarTech if any governmental entity has issued an order prohibiting the transaction; (vi) by either Prospector or LeddarTech if Prospector's shareholders meeting has been held and has concluded and the approval by Prospector's shareholders of the Business Combination shall not have been obtained and (vii) by either Prospector or LeddarTech if the approval by LeddarTech's shareholders in respect of the special resolution relating to the arrangement under Section 192 of the CBCA on the terms and subject to the conditions set out in the Plan of Arrangement shall not have been obtained.

If the BCA is validly terminated, and except in the case of any willful or material breach of any covenant or agreement or fraud (involving scienter), none of the parties to the BCA will have any liability or any further obligation under the BCA other than customary confidentiality obligations.

A copy of the BCA 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 BCA is qualified in its entirety by reference thereto. The BCA contains representations, warranties, covenants and agreements that the respective parties made to each other as of the date of the BCA or other specific dates. The assertions embodied in those representations, warranties, covenants and agreements 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, covenants and agreements in the BCA 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 shareholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. Prospector does not believe that these schedules contain information that is material to an investment decision.

Financing

Prior to the execution of the BCA, LeddarTech entered into a subscription agreement (the "Subscription Agreement") with certain investors (the "Investors"), pursuant to which the Investors agreed to purchase convertible notes of LeddarTech (upon execution of the BCA) and Newco (upon closing of the BCA) in an aggregate principal amount of at least $43,000,000 (the "Financing"). FS LT Holdings LP ("FS Investors"), an affiliate of Prospector Sponsor LLC, Prospector's sponsor (the "Sponsor"), and the Sponsor are participants in the Financing and are investing $17,025,000 in the Financing. Derek Aberle, the Chief Executive Officer of Prospector, is investing $210,000 in the Financing. Existing shareholders of LeddarTech and their affiliates (including the Sponsor) have agreed to purchase all of the securities issued in the Financing.

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The issuance of the first tranche ("Tranche A") of the Financing occurred on June 13 (with one Investor funding on June 14) and was contingent upon, among other things, the execution of the BCA. The Subscription Agreement provides that each Tranche A Investor received (a) a secured convertible note issued by LeddarTech in a principal amount equal to such Investor's Tranche A investment and convertible into Class D-1 preferred shares of LeddarTech before the Closing or if the Closing does not occur (the "Class D-1 Preferred Shares") or into common shares of the Surviving Company after the Closing, as its successor, as provided in the Subscription Agreement, and (b) a warrant certificate entitling such Investor to purchase Class D-1 Preferred Shares at an exercise price of $0.01 per share at any time prior to the date that is fourteen calendar days after the conditions of LeddarTech and the Investors to consummate the Tranche A transaction have been met, representing 2.75 Class D-1 Preferred Shares for each $100.00 of the Tranche A investment paid by such Investor under the Subscription Agreement.

The issuance of the second tranche ("Tranche B") of the Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Subscription Agreement provides that each Tranche B Investor will receive a secured convertible note issued by LeddarTech in a principal amount equal to such Investor's Tranche B investment and convertible into common shares of the Surviving Company, at an initial conversion price of $10.00 per share as provided in the Subscription Agreement.

Pursuant to the BCA, each of Prospector, LeddarTech and Newco agree that, if . . .

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits



Exhibits

2.1†         Business Combination Agreement, dated as of June 12, 2023, by and
           among Prospector Capital Corp., LeddarTech Inc. and LeddarTech Holdings
           Inc.

10.1†        Subscription Agreement, dated as of June 12, 2023, by and among
           LeddarTech Inc. and the investors party thereto.

10.2         Sponsor Letter Agreement, dated as of June 12, 2023, by and among
           Prospector Sponsor LLC, Prospector Capital Corp., LeddarTech Inc. and
           LeddarTech Holdings Inc.

10.3         Form of Registration Rights Agreement.

10.4         Form of Investor Rights Agreement.

104        Cover Page Interactive Data File-Embedded within the inline XBRL
           document

† Certain of the exhibits and schedules to this exhibit have been omitted in

   accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish
   supplementally a copy of all omitted exhibits and schedules to the SEC upon its
   request.




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