Sponsor Side Letter

This letter agreement (this “Side Letter”) is dated as of September 12, 2023, by and among Focus Impact Sponsor, LLC, a Delaware limited liability company (the “Sponsor”) and Focus Impact Acquisition Corp., a Delaware corporation (“SPAC”). Capitalized terms used but not defined in this Side Letter shall have the respective meanings ascribed to such terms in the Business Combination Agreement (as defined below), except as otherwise provided in this Side Letter.

WHEREAS, as of the date hereof, the Sponsor is the holder of record of 5,750,000 SPAC Class B Shares (the “Sponsor Shares”) and 11,200,000 Private Placement Warrants (the “Sponsor Warrants” and, together with the Sponsor Shares, the “Sponsor Equity”);

WHEREAS, contemporaneously with the execution and delivery of this Side Letter, SPAC has entered into a Business Combination Agreement with DevvStream Holdings Inc., a company existing under the Laws of the Province of British Columbia (the “Company”), Focus Impact Amalco Sub Ltd., a company existing under the Laws of the Province of British Columbia (“Amalco Sub”), dated as of the date hereof (as amended or modified from time to time in accordance with the terms of such agreement, the “Business Combination Agreement”), pursuant to which, among other things, (i) immediately prior to the Closing, SPAC shall continue as an Alberta corporation (the “SPAC Continuance”, and following such SPAC Continuance the SPAC is referred to herein for the periods following the effectiveness of the SPAC Continuance as the “New PubCo”) and, at the Closing in accordance with the Plan of Arrangement, Amalco Sub and the Company will amalgamate (the “Amalgamation”) to form one corporate entity which is a wholly owned subsidiary of the New PubCo (“Amalco”);

WHEREAS, in connection with the SPAC Continuance and the occurrence of the Closing, each Sponsor Share will automatically be converted into one share of common stock of New PubCo (“New Pubco Common Shares”) pursuant to the Governing Documents of SPAC and each Sponsor Warrant will be assumed by New PubCo and be converted into the right to exercise such warrants for New PubCo Common Shares (collectively, the “Automatic Conversion”);

WHEREAS, in accordance with the terms of this Side Letter, in lieu of the Automatic Conversion:  (i) 575,000 Sponsor Shares (the “Automatic Forfeiture Sponsor Shares”) which shares will automatically be canceled upon the occurrence of the Closing for no consideration therefor and (ii) to the extent agreed by the Sponsor in accordance with Section 1.2 of this Side Letter (a) up to 1,725,000 Sponsor Shares (the “Financing Sponsor Share Cap”) and (b) up to 3,360,000 Sponsor Warrants (the “Financing Sponsor Warrant Cap”) will automatically be canceled upon the occurrence of the Closing for no consideration therefor;

WHEREAS, the Sponsor Shares and Sponsor Warrants not forfeited hereunder shall continue to be subject to the Automatic Conversion; and

WHEREAS, as an inducement to the Company to enter into the Business Combination Agreement and to consummate the transactions contemplated therein, the parties hereto desire to agree to certain matters as set forth herein, including making the Company an express third party beneficiary of this Side Letter to the extent set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

Section 1.2        Financing Forfeiture. In the event the Company and the SPAC agree to issue Financing Incentive Shares pursuant to the Business Combination Agreement, and the Sponsor has provided its written consent thereto, effective as of the consummation of the SPAC Continuance at the Closing, in accordance with the Business Combination Agreement, the Sponsor hereby consents to the automatic forfeiture of a number of Sponsor Shares equal to the number of Financing Incentive Shares, in no event to exceed a number equal to the Financing Sponsor Share Cap (the “Financing Forfeiture Sponsor Shares”) in lieu of the Automatic Conversion, in accordance with the terms and conditions of this Side Letter (such automatic forfeiture, the “Financing Sponsor Share Forfeiture”). The Sponsor shall receive no consideration in respect of the Financing Forfeiture Sponsor Shares. In the event the Company and the SPAC agree to issue Financing Incentive Warrants pursuant to the Business Combination Agreement, and the Sponsor has provided its written consent thereto, effective as of the consummation of the SPAC Continuance at the Closing, in accordance with the Business Combination Agreement, the Sponsor hereby consents to the automatic forfeiture of a number of Sponsor Warrants equal to the number of Financing Incentive Warrants, in no event to exceed a number equal to the Financing Sponsor Warrant Cap (the “Financing Forfeiture Sponsor Warrants”) in lieu of the Automatic Conversion, in accordance with the terms and conditions of this Side Letter (such automatic forfeiture, the “Financing Sponsor Warrant Forfeiture”). The Sponsor shall receive no consideration in respect of the Financing Forfeiture Sponsor Warrants. Alternatively (and for the avoidance of doubt, without limiting the Automatic Sponsor Share Forfeiture contemplated by Section 1.1), the Sponsor may agree to transfer (in lieu of forfeiting) all of its right, title and interest in, to and under certain Sponsor Shares and/or Sponsor Warrants to Financing Investors in and as a part of the Financing, in which case (i) such transferred Sponsor Shares and/or transferred Sponsor Warrants shall not be forfeited, (ii) upon such transfer, such Sponsor Shares and Sponsor Warrants shall be deemed to have been elected to be converted in Class A Shares per SPAC’s certificate of incorporation and cease to be considered Sponsor Shares and Sponsor Warrants, and shall instead be treated for all purposes as Class A Shares and Public Warrants of the SPAC and (iii) any shares or warrants so transferred shall reduce, on a share for share or warrant for warrant basis, the Financing Sponsor Share Cap or the Financing Sponsor Warrant Cap, respectively, as appropriate. The Sponsor shall receive no consideration in respect of such transferred Sponsor Shares or Sponsor Warrants. At the Closing in connection with the SPAC Continuance, (i) all of the Sponsor Shares, other than the Automatic Forfeiture Sponsor Shares and the Financing Forfeiture Sponsor Shares, shall be converted into New PubCo Common Shares and (ii) all of the Sponsor Warrants, other than the Financing Forfeiture Sponsor Warrants, shall continue to be obligations of New PubCo and exercisable for New PubCo Common Shares. Notwithstanding anything to the contrary in that certain Warrant Agreement, dated as of November 1, 2021, by and between the SPAC and Continental Stock Transfer & Trust Company, the Sponsor agrees that it will not elect its right to exercise the Private Placement Warrants on a “cashless basis” pursuant to Section 3.1 or Section 3.3.1(c) thereof. Notwithstanding anything to the contrary herein, this sentence and the immediately preceding sentence shall survive any termination of the Sponsor Lock-Up Period and the termination of this Agreement pursuant to Section 3.1(i) or 3.1(ii) (and the Company shall have the right to enforce the immediately preceding sentence notwithstanding termination of this Agreement pursuant to Section 3.1(i) or 3.1(ii)).

Section 1.4           Transfer Restrictions.

(a)          The Sponsor hereby acknowledges and agrees that, during the period between the execution of this Side Letter and the Closing (and without limitation of the provisions set forth in Section 1.4(b)), the Sponsor Shares and Sponsor Warrants shall remain subject to and bound by the provisions of, and may only be Transferred (as defined in the Lock-Up Agreement) in accordance with, Section 5 of that certain letter agreement (the “Lock-Up Agreement”), dated as of November 1, 2021, by and among SPAC, the Sponsor and certain members of SPAC’s board of directors and/or management signatory thereto, a copy of which is attached hereto as Exhibit A. Sponsor also agrees not to (i) enter into any agreement, arrangement or understanding with any Person, or take any other action, that violates or would reasonably be expected to violate or conflict, or result in or give rise to a violation of, the Sponsor’s representations, warranties, covenants and obligations under this Side Letter; or (ii) take any action that would restrict or otherwise adversely affect the Sponsor’s legal power, authority and right to comply with and perform its covenants and obligations under this Side Letter. Any Transfer in violation of this provision shall be void ab initio. Any transferee of Sponsor Shares or Sponsor Warrants (a “Sponsor Party”) must enter into a written agreement reasonably acceptable to the Company with the parties hereto agreeing to be bound by the terms of this Side Letter as if a party hereto and if such written agreement is not executed and delivered to the Company and the SPAC, such Transfer shall not be permitted hereunder or under the Lock-Up Agreement.

(b)        Until the earlier of (i) 360 days after the Closing and (ii) the date following the Closing on which New PubCo completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of New PubCo’s stockholders having the right to exchange their equity for cash, securities or other property (the “Sponsor Lock-Up Period”), without the consent of New PubCo following the Closing, the Sponsor shall not be entitled to make any voluntary or involuntary, direct or indirect (whether through a change of control of the Transferor or any Person that controls the Transferor, the issuance or transfer of Equity Securities of the Transferor, by operation of law or otherwise), transfer, sale, pledge or hypothecation or other disposition (each, a “Transfer”), or to permit any Transfer, of any (1) New PubCo Common Shares received as a result of the Automatic Conversion or (2) New PubCo Common Shares received as a result of the exercise of the Sponsor Warrants (collectively, the “Restricted Sponsor Shares”); provided, that the Sponsor shall be permitted to distribute the Restricted Sponsor Shares to its members or otherwise to an Affiliate of Sponsor, so long as any member or Affiliate of Sponsor in receipt of Restricted Sponsor Shares prior to or simultaneously with the Transfer enters into a written agreement reasonably acceptable to the Company with the parties hereto agreeing to be bound by the terms of this Side Letter as if a party hereto; and provided, further, that if such written agreement is not executed and delivered to the Company and the SPAC, such distribution of the Restricted Sponsor Shares shall not be permitted hereunder or under the Lock-Up Agreement. Any reduction in the Lock-Up Period defined in the Company Support & Lock-Up Agreement shall be simultaneously and automatically applied to the Sponsor Lock-Up Period. Notwithstanding the foregoing, if, subsequent to the Closing, the closing price of the New Pubco Common Shares equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing at least 150 days after the Closing, the Sponsor Shares shall be released from the transfer restrictions provided by this Section 1.4(b).

Section 1.5          Further Assurances. SPAC and Sponsor shall take, or cause to be taken, all actions and do, or cause to be done, all things reasonably necessary under applicable Laws to consummate the transactions contemplated by this Side Letter on the terms and subject to the conditions set forth herein.

Section 1.6          No Inconsistent Agreement. The Sponsor hereby represents and covenants that the Sponsor has not entered into, and shall not enter into, any agreement that does or would restrict, limit or interfere with the performance of the Sponsor’s obligations under this Side Letter with respect to the Restricted Sponsor Shares.

Section 1.7          Tax Treatment. The parties to this Side Letter intend that, for U.S. federal and all applicable state and local income tax purposes, (a) the Automatic Conversion qualifies as a “reorganization” within the meaning of Section 368(a)(1)(E) of the Code, and (b) this Side Letter be, and hereby adopt this Side Letter as, a “plan of reorganization” within the meaning of Section 368 of the Code. The parties to this Side Letter shall not take any position inconsistent with the intent set forth in this Section 1.7 except to the extent otherwise required by a “determination” as defined in Section 1313 of the Code. References in this Section 1.7 to the Code shall include references to any similar or analogous provisions of state or local law.

Section 1.9         Sponsor Support. At any meeting of the stockholders of SPAC, however called, or at any adjournment thereof, and in any action by written consent of the stockholders of SPAC distributed by the board of directors of SPAC, or otherwise undertaken as contemplated by the Business Combination Agreement or the transactions contemplated thereby, or in any other circumstance in which the vote, consent or other approval of the stockholders of SPAC is sought, Sponsor hereby unconditionally and irrevocably agrees that it shall (i) appear at each such meeting or otherwise cause all of its Sponsor Shares to be counted as present thereat for purposes of calculating a quorum and (ii) vote (or cause to be voted), or execute and deliver a written consent (or cause a written consent to be executed and delivered) covering, all of its Sponsor Shares: (a) in favor of the SPAC Shareholder Approval Matters and any other matters necessary or reasonably requested by the Company or the SPAC in connection therewith; (b) in favor of any proposal to adjourn or postpone any meeting of the shareholders of the SPAC at which any of the foregoing matters are submitted for consideration and vote of the shareholders of the SPAC to a later date if there are not a quorum or sufficient votes for approval of such matters on the date on which the meeting is held to vote upon any of the foregoing matters; (c) against any proposal relating to an alternative Business Combination (as defined in SPAC’s certificate of incorporation as in effect as of the date hereof); (d) against any proposal, action or agreement that would (1) compete with the transaction contemplated by the Business Combination Agreement, (2) result in a breach of any covenant, representation or warranty or any other obligation or agreement of the SPAC contained in the Business Combination Agreement, or of the Sponsor contained in this Side Letter, (3) reasonably be expected to impede, frustrate, prevent or nullify any provision of this Side Letter, the Business Combination Agreement or the Amalgamation and/or the related plan of arrangement or this Side Letter or the performance by the SPAC of its obligations under the Business Combination Agreement or by the Sponsor of its obligations under this Side Letter or (4) change in any manner the dividend policy or capitalization of, including the voting rights of, any class of capital stock or other securities of SPAC (other than, in the case of this clause (4), pursuant to the Business Combination Agreement or the Ancillary Documents and the transactions contemplated thereby).  The obligations of the Sponsor specified in this Section 1.9 shall apply whether or not (i) the Business Combination, the Business Combination Agreement, the related plan of arrangement or any action described above is recommended by the Board of Directors of the SPAC or (ii) the Board of Directors of the SPAC has previously recommended the Business Combination, the Business Combination Agreement, the related plan of arrangement or any action described above and subsequently withdrawn or otherwise changed such recommendation. Sponsor Party agrees that it shall not commit, agree, or publicly propose any intention to take any action inconsistent with the foregoing. Sponsor hereby irrevocably waives, and agrees not to exercise, assert or perfect (and agrees to cause not to be exercised, asserted or perfected), any dissenters’ or appraisal rights under Section 262 of the Delaware General Corporation Law and any other similar statute in connection with the Amalgamation or the Business Combination Agreement. Sponsor hereby agrees to take all actions necessary to opt out of, any class action with respect to, any claim, derivative or otherwise, against the SPAC or any of its Affiliates relating to the negotiation, execution or delivery of this Side Letter, the Business Combination Agreement or the consummation of the Business Combination and/or the related plan of arrangement, including any claim (1) challenging the validity of, or seeking to enjoin the operation of, any provision of this Side Letter or (2) alleging a breach of any fiduciary duty of the Board of Directors of the SPAC in connection with this Side Letter, the Business Combination Agreement or the Business Combination and/or the related plan of arrangement.

Section 1.10         Stock Transactions. During the period between the execution of this Side Letter and the Closing, the Sponsor acknowledges and agrees that if it acquires any shares or securities convertible into shares of the SPAC (including, without limitation, any warrants issued to Sponsor in connection with the conversion of that certain unsecured promissory note, dated as of May 9, 2023, issued by the SPAC to the Sponsor), the Sponsor agrees that he, she or it will (a) make such acquisition in material compliance with applicable Laws regarding the sale and purchase of securities and material non-public information and (b) not elect to make a Redemption with respect to any such purchased shares or shares issuable upon conversion of securities convertible into shares. All such additional shares or securities acquired shall be subject to the terms of Section 1.9.

Section 1.11       Waiver of Adjustment Provisions. Notwithstanding anything to the contrary in any other document, agreement or contract to which Sponsor is bound, Sponsor (for itself, himself or herself and for its, his or her successors, heirs, assigns and permitted transferees) hereby (but subject to the consummation of the Amalgamation) irrevocably and unconditionally waives and agrees not to exercise or assert, any rights to adjustment or other anti-dilution protections with respect to the rate at which shares of SPAC Class B Shares convert into other shares of SPAC or New PubCo Common Shares in connection with the Automatic Conversion and, in furtherance of the foregoing, Sponsor hereby irrevocably and unconditionally agrees and acknowledges that (a) each SPAC Class B Share (other than those subject to the Automatic Sponsor Share Forfeiture or the Financing Sponsor Share Forfeiture) shall convert only into New PubCo Common Shares (and not any other SPAC shares prior to the Automatic Conversion) on a one-for-one basis automatically at the Effective Time in connection with the Automatic Conversion and (b) that each Sponsor Warrant shall only convert into the right to exercise such warrants for New PubCo Common Shares, such waiver, agreement and acknowledgement constituting sufficient and necessary waiver under the terms of SPAC’s certificate of incorporation as currently in effect for such purpose, in each case subject to equitable adjustments for any Pre-Closing Splits to provide the same economic effect as contemplated by this Side Letter prior to such Pre-Closing Split.

The Sponsor represents and warrants to SPAC as follows:

Section 2.1         Organization; Due Authorization. The Sponsor is duly organized, validly existing and in good standing under the Laws of the jurisdiction in which it is incorporated, formed, organized or constituted, and the execution, delivery and performance of this Side Letter and the consummation of the transactions contemplated hereby are within the Sponsor’s corporate, limited liability company or organizational powers and have been duly authorized by all necessary corporate, limited liability company or organizational actions on the part of such Sponsor Party. The Sponsor has full legal capacity, right and authority to execute and deliver this Sponsor Agreement and to perform his or her obligations hereunder. This Side Letter has been duly executed and delivered by the Sponsor and, assuming due authorization, execution and delivery by the other parties to this Side Letter, this Side Letter constitutes a legally valid and binding obligation of the Sponsor, enforceable against the Sponsor in accordance with the terms hereof (except as enforceability may be limited by bankruptcy Laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies). If this Side Letter is being executed in a representative or fiduciary capacity, the Person signing this Side Letter has full power and authority to enter into this Side Letter on behalf of the Sponsor.

Section 2.2          Ownership. The Sponsor is the holder of record of all of the Sponsor Equity as set forth in this Side Letter, and there exist no Liens or any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such Sponsor Equity, other than transfer restrictions under the Securities Act) affecting any such Sponsor Shares, other than any Permitted Liens or pursuant to (i) this Side Letter, (ii) the Sponsor’s organizational documents or the organizational documents of SPAC, (iii) the Registration Rights Agreement to be executed by the Company, SPAC, the Sponsor and other parties thereto following the signing of the Business Combination Agreement or (iv) the Lock-Up Agreement.

Section 2.3          No Conflicts. The execution and delivery of this Side Letter by the Sponsor does not, and the performance by the Sponsor of his, her or its obligations hereunder will not, (i) if such Sponsor Party is not an individual, conflict with or result in a violation of the organizational documents of the Sponsor or (ii) require any consent or approval that has not been given or other action that has not been taken by any Person (including under any Contract binding upon the Sponsor), in each case to the extent such consent, approval or other action would prevent, enjoin or delay the performance by the Sponsor of its, his or her obligations under this Side Letter.

Section 2.4         Litigation. There are no Proceedings pending against the Sponsor, or to the knowledge of the Sponsor threatened against the Sponsor, which in any manner challenges or seeks to prevent, enjoin or delay the performance by the Sponsor of its obligations under this Side Letter.

Section 3.1          Termination. This Side Letter and all of its provisions shall terminate and be of no further force or effect upon the earliest to occur of (i) the first day on which the Lock-Up Agreement expires, (ii) the first day on which the Lock-Up Period defined in the Company Support & Lock-Up Agreement expires and (iii) the termination of the Business Combination Agreement in accordance with Article IX thereof. Except as expressly set forth herein, upon such termination of this Side Letter, all obligations of the parties under this Side Letter will terminate, without any liability or other obligation on the part of any party hereto to any Person in respect hereof or the transactions contemplated hereby, and no party hereto shall have any claim against another (and no Person shall have any rights against such party), whether under contract, tort or otherwise, with respect to the subject matter hereof. This Article III shall survive the termination of this Side Letter. Neither the provisions of this Section 3.1 nor the termination of this Side Letter shall (a) relieve any party hereto from any liability of such party to any other party incurred prior to such termination or expiration, (b) relieve any party hereto from any liability to any other party arising out of or in connection with any breach of this Side Letter prior to such termination or expiration or fraud or (c) terminate the obligations under the last sentence of Section 1.10.

Section 3.2          Amendment and Waiver. No amendment of any provision of this Side Letter shall be valid unless (a) the same shall be in writing and signed by SPAC and the Sponsor and (b) in compliance with Section 3.3.  No waiver of any provision or condition of this Side Letter shall be valid unless (i) the same shall be in writing and signed by the party against which such waiver is to be enforced and (ii) in compliance with Section 3.3.  No waiver by any party of any default, breach of representation or warranty or breach of covenant hereunder, whether intentional or not, shall be deemed to extend to any other, prior or subsequent default or breach or affect in any way any rights arising by virtue of any other, prior or subsequent such occurrence.

Section 3.3          Assignment; Third Party Beneficiaries. This Side Letter and all of the provisions hereof will be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns. Neither this Side Letter nor any of the rights, interests or obligations hereunder will be assigned (including by operation of law) without the prior written consent of the parties hereto, other than in respect of the dissolution of the Sponsor to the members of the Sponsor in receipt of Restricted Sponsor Shares as a result thereof. This Side Letter is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give any Person, other than the parties and such permitted assigns, any legal or equitable rights hereunder. Notwithstanding anything to the contrary contained in this Side Letter, the parties hereto hereby acknowledge and agree that from the execution of this Side Letter until the occurrence of the Closing or the termination of this Side Letter in accordance with Section 3.1 of this Side Letter (provided that, solely with respect to Section 1.2, Section 1.2 will survive as set forth in the final sentence of Section 1.2): (a) the Company is an express third-party beneficiary of this Side Letter, including, for the avoidance of doubt, with respect to (i)  the covenants of Sponsor and SPAC set forth in Article I (as well as any Sponsor Party or other transferee that becomes bound by this Side Letter) as if the Company were a party hereto and (ii) the representations and warranties of Sponsor given to SPAC (as well as any Sponsor Party or other transferee that becomes bound by this Side Letter) and set forth in Article II as if the Company were the SPAC with respect thereto, (b) no amendment of this Side Letter, waiver of any provision or condition of this Side Letter, assignment of this Side Letter or termination of this Side Letter (except as expressly contemplated in Section 3.1 of this Side Letter) shall be made without the prior written consent of the Company, and (c) the Company shall be entitled to enforce the terms of this Side Letter as if they were a party hereto, and the Company shall be entitled to exercise any remedies for breaches by any party of, or failure of any party to perform, this Side Letter, including without limitation injunctive or other equitable relief or an Order of specific performance (or any other equitable remedy) to enforce the terms hereof and to prevent breaches of this Side Letter, in addition to any other remedy at law or in equity, and shall not be required to provide any bond or other security in connection with any such Order or injunctive relief.

Section 3.4          Notices. All notices, demands and other communications to be given or delivered under this Side Letter shall be in writing and shall be deemed to have been given (a) when personally delivered (or, if delivery is refused, upon presentment) or received by email (with confirmation of transmission) prior to 5:00 p.m. eastern time on a Business Day and, if otherwise, on the next Business Day, (b) one (1) Business Day following delivery by reputable overnight express courier (charges prepaid) or (c) three (3) days following mailing by certified or registered mail, postage prepaid and return receipt requested. Any notice, demand and other communications to be given or delivered under this Side Letter to either party shall be simultaneously provided to the Company in accordance with Section 11.1 (Notices) of the Business Combination Agreement. Unless another address is specified in writing pursuant to the provisions of this Section 3.4, notices, demands and other communications to the parties hereto shall be sent to the addresses indicated below:

Section 3.5          Entire Agreement. This Side Letter and the exhibits and schedule hereto constitute the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersede all prior understandings, agreements or representations by or among the parties hereto to the extent they relate in any way to the subject matter hereof.

Section 3.6          Miscellaneous. The provisions of Sections 11.4 (Governing Law; Jurisdiction), 11.5 (Waiver of Jury Trial), 11.7 (Severability), 11.9 (No Recourse), 11.11 (Interpretation) and 11.12 (Counterparts) of the Business Combination Agreement shall apply mutatis mutandis.

IN WITNESS WHEREOF, the SPAC and Sponsor have duly executed this Side Letter as of the date first written above.