As filed with the United States Securities and Exchange
Commission under the Securities Act of 1933, as amended, on April 16, 2021
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Fifth Wall Acquisition Corp. III
(Exact name of registrant as specified in its charter)
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Cayman Islands
(State or other jurisdiction of
incorporation or organization)
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6770
(Primary Standard Industrial
Classification Code Number)
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98-1583957
(I.R.S. Employer
Identification No.)
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6060 Center Drive
10th Floor
Los Angeles, California 90045
(310)-853-8878
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Brendan Wallace
6060 Center Drive
10th Floor
Los Angeles, California 90045
(310)-853-8878
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Steven J. Slutzky
Joshua M. Samit
Debevoise & Plimpton LLP
919 Third Avenue
New York, New York 10022
Tel: (212) 909-6000
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Joelle Khoury
6060 Center Drive
10th Floor
Los Angeles, California 90045
Tel: (310)-853-8878
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Gregg A. Noel
Michael Mies
Skadden, Arps, Slate,
Meagher & Flom LLP
525 University Ave
Palo Alto, CA 94301
Tel: (650)-470-4500
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Smaller reporting company ☒
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Emerging growth company ☒
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF SECURITIES
TO BE REGISTERED
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AMOUNT
BEING
REGISTERED
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PROPOSED
MAXIMUM
OFFERING
PRICE PER
SECURITY(1)
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PROPOSED
MAXIMUM
AGGREGATE
OFFERING
PRICE(1)
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AMOUNT OF
REGISTRATION
FEE
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Class A ordinary shares, $0.0001 par value(2)
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28,750,000(3)
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$ |
10.00 |
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$ |
287,500,000 |
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$ |
31,367 |
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Total
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$ |
287,500,000 |
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$ |
31,367 |
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(1)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act.
(2)
Pursuant to Rule 416(a), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from share sub-divisions, share capitalizations or similar transactions.
(3)
Includes 3,750,000 Class A ordinary shares, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. We and the selling shareholder may not sell these securities until the U.S. Securities and Exchange Commission declares our registration statement effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securities in any state or jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 16, 2021
PRELIMINARY PROSPECTUS
$250,000,000
Fifth Wall Acquisition Corp. III
25,000,000 Class A Ordinary Shares
Fifth Wall Acquisition Corp. III is a newly organized blank check company incorporated as a Cayman Islands exempted company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target.
This is the initial public offering of our Class A ordinary shares, par value $0.0001, which we refer to as our public shares, at an initial public offering price of $10.00 per ordinary share. The underwriters have a 45-day option from the date of this prospectus to purchase up to 3,750,000 additional public shares to cover over-allotments, if any. Unlike many other special purpose acquisition companies, we are not offering any warrants to prospective investors in this offering.
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per ordinary share price, payable in cash, equal to the aggregate amount then on deposit in the trust account described below as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding Class A ordinary shares that were sold in this offering, which we refer to collectively as our public shares, subject to the limitations and on the conditions described herein. If we are unable to consummate an initial business combination within 24 months from the closing of this offering, we will redeem 100% of the public shares at a per ordinary share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions as further described herein.
Our sponsor, Fifth Wall Acquisition Sponsor III, LLC, has agreed to purchase 857,000 Class A ordinary shares (or 932,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full), at a price of $10.00 per ordinary share in a private placement to occur concurrently with the closing of this offering for an aggregate purchase price of $8,570,000 (or $9,320,000 if the underwriters’ over-allotment option is exercised in full). The private placement shares are identical to the Class A ordinary shares sold in this offering, subject to certain limited exceptions as described in this prospectus. Our sponsor currently owns 7,187,500 Class B ordinary shares (up to 937,500 shares of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised), which will automatically convert into Class A ordinary shares at the time of our initial business combination on a one-for-one basis, subject to the adjustments as described herein.
Currently, there is no public market for our securities. We intend to apply to have our Class A ordinary shares listed on The Nasdaq Capital Market, or Nasdaq, under the symbol “FWAC.” We cannot guarantee that our Class A ordinary shares will be approved for listing on Nasdaq.
We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 31 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.
Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
No offer or invitations to subscribe for securities may be made to the public in the Cayman Islands.
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PER ORDINARY
SHARE
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TOTAL
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Public offering price
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$ |
10.00 |
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$ |
250,000,000 |
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Underwriting discounts and commissions(1)
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$ |
0.55 |
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$ |
13,750,000 |
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Proceeds, before expenses, to us
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$ |
9.45 |
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$ |
236,250,000 |
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(1)
Includes $0.35 per ordinary share, or $8,750,000 in the aggregate (or $10,062,500 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein and released to the underwriters only upon the consummation of an initial business combination. See also “Underwriting” beginning on page 130 for a description of compensation payable to the underwriters.
Of the proceeds we receive from this offering and the sale of the private placement ordinary shares described in this prospectus, $250,000,000, or $287,500,000 if the underwriters’ over-allotment option is exercised in full ($10.00 per ordinary share in either case), will be deposited into a trust account with Continental Stock Transfer & Trust Company acting as trustee.
The underwriters are offering the public shares for sale on a firm commitment basis. The underwriters expect to deliver the shares to the purchasers on or about , 2021.
Deutsche Bank SecuritiesGoldman Sachs & Co. LLC
BofA Securities
, 2021
TABLE OF CONTENTS
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F-1
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We are responsible for the information contained in this prospectus. We have not authorized anyone to provide you with different information, and we take no responsibility for any other information others may give to you. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
SUMMARY
This summary only highlights the more detailed information appearing elsewhere in this prospectus. Before investing, you should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus.
Unless otherwise stated in this prospectus or the context otherwise requires, references to:
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“Affiliate” of any person or entity means any other person or entity that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person or entity;
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“Affiliated Joint Acquisition” means an initial business combination opportunity we pursue jointly with our sponsor, Fifth Wall, or one or more of their respective affiliates, portfolio companies and/or investors;
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“amended and restated memorandum and articles of association” are to our amended and restated memorandum and articles of association that the company will adopt upon completion of this offering;
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“Companies Act” are to the Companies Act (As Revised) of the Cayman Islands as the same may be amended from time to time;
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“equity-linked securities” are to any debt or equity securities that are convertible, exercisable or exchangeable for our Class A ordinary shares issued in a financing transaction in connection with our initial business combination, including, but not limited to, a private placement of equity or debt;
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“Fifth Wall” are to Fifth Wall Asset Management, LLC, collectively with its Affiliates and any investment funds, investment vehicles or accounts managed or advised by any of the foregoing, which are Affiliates of our sponsor;
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“founders” are to Brendan Wallace, co-founder and Managing Partner at Fifth Wall, and Andriy Mykhaylovskyy, Managing Partner and Chief Operating Officer at Fifth Wall;
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“founder shares” are to our Class B ordinary shares initially issued to our sponsor in a private placement prior to this offering and our Class B ordinary shares transferred by our sponsor to certain of our directors, if any, as well as the Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares at the time of our initial business combination (for the avoidance of doubt, such Class B ordinary shares will not be “public shares”);
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“management” or “our management team” are to our executive officers and directors;
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“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares;
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“private placement shares” are to the Class A ordinary shares to be issued to our sponsor in a private placement simultaneously with the closing of this offering (which private placement shares are identical to the shares sold in this offering, subject to certain limited exceptions as described in the prospectus) and upon conversion of working capital loans, if any;
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“public shares” are to our Class A ordinary shares sold as part of this offering (whether they are purchased in this offering or thereafter in the open market);
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“shareholders” are to the holders of our public shares, including our sponsor and management team to the extent our sponsor and/or members of our management team purchase public shares, provided that our sponsor’s and each member of our management team’s status as a “shareholder” will only exist with respect to such public shares;
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“sponsor” are to Fifth Wall Acquisition Sponsor III, LLC, a Cayman Islands limited liability company, which is an Affiliate of Fifth Wall; and
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“we,” “us,” “company” or “our company” are to Fifth Wall Acquisition Corp. III, a Cayman Islands exempted company.
Any forfeiture of shares described in this prospectus will take effect as a surrender of shares for no consideration of such shares as a matter of Cayman Islands law. Any conversion of the Class B ordinary
shares described in this prospectus will take effect as a compulsory redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. Any share dividends described in this prospectus will take effect as share capitalizations as a matter of Cayman Islands law.
Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option.
General
We are a newly organized blank check company incorporated as a Cayman Islands exempted company on February 19, 2021 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target. We have generated no operating revenues to date and we do not expect that we will generate operating revenues until we consummate our initial business combination at the earliest.
While we may pursue an acquisition opportunity in any business, industry, sector or geographical location, we intend to focus on industries outside of the United States that complement our management team’s background, and to capitalize on the ability of our management team to identify and acquire a technology business focusing on verticals of the real estate industry, as well as the adjacent industries that collectively make up the human-made environment that provides the setting for human activity, ranging in scale from buildings to cities and beyond, which we call the “Built World.” Fifth Wall Acquisition Corp. II also intends to focus on these so-called “proptech” companies, focusing specifically on proptech companies serving the residential real estate industry. As such, if any officer or director serving Fifth Wall Acquisition Corp. II or Fifth Wall Acquisition Corp. III becomes aware of a business combination opportunity with a proptech company serving the residential real estate industry (and no other parties to which such officers or directors may owe any fiduciary, contractual or other obligations, including in the case of officers and directors associated or affiliated with Fifth Wall, Fifth Wall, wish to pursue such opportunity), such officers and directors will present the opportunity to Fifth Wall Acquisition Corp. II. In all other cases, the opportunity will be first presented to Fifth Wall Acquisition Corp. III.
Our Sponsor
Our sponsor is an affiliate of Fifth Wall. Fifth Wall is one of the largest venture capital firms focused exclusively on investing in “proptech”. Fifth Wall was founded in 2016 after identifying the growing market opportunity in proptech brought about by the real estate industry, the largest asset class as of the end of 2016, beginning to adopt technology at an increasingly rapid pace. Fifth Wall developed a differentiated model of venture capital predicated on raising capital from and partnering with leading real estate owners, who are among the largest users and customers for the technologies in which Fifth Wall invests. As of November 30, 2020, Fifth Wall manages $1.3 billion in committed capital on behalf of its investors across three core fund strategies, and has invested in more than 40 companies, including six that have gone on to become “unicorns”, or startups with a private market valuation in excess of $1 billion. On February 9, 2021, Fifth Wall Acquisition Corp. I, an affiliate of Fifth Wall, closed its $345 million IPO, becoming one of the earliest proptech-focused SPACs sponsored by an affiliate of a venture capital firm. While an affiliate of Fifth Wall has voting and investment discretion with respect to the common stock held of record by our sponsor, one or more limited partners or prospective limited partners of funds affiliated with Fifth Wall may own up to 25% of the economic interest in our sponsor.
We believe our management team will be able to execute on our business strategy by leveraging Fifth Wall’s experience and core competencies. Since its founding 5 years ago, Fifth Wall has become a leading venture capital investor in the proptech space, for several reasons:
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Fifth Wall was one of the first to recognize the growing market opportunity in real estate technology. With the close of its oversubscribed $212 million North American Real Estate Technology Fund in May 2017, Fifth Wall became one of the first institutional venture capital funds
exclusively focused on the intersection of real estate and technology, or “proptech”. Since then, Fifth Wall has raised $126 million for its retail strategy, which is focused on the disruption of traditional brick & mortar retail. Its second North American Real Estate Tech Fund was also oversubscribed and closed at $503 million in July 2019. More recently, Fifth Wall has launched and completed the first close of its European Real Estate Technology Fund and is currently raising a Climate Technology Fund focused on investing in North American startups with technologies that enable transitions towards a decarbonized real estate industry, reduce greenhouse gas emissions, or address the impacts of global warming. As of November 30, 2020, Fifth Wall is approximately five times larger than the next largest proptech-focused venture capital manager.
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Fifth Wall has pioneered a differentiated consortium-driven approach to venture capital. Fifth Wall’s model is predicated on raising a significant portion of its capital from leading real estate corporations, and advising its corporate limited partners on implementing emerging real estate technologies with the potential to transform their businesses. The firm’s initial North American Real Estate Technology Fund included 9 U.S.-based real estate corporations as limited partners. As of November 30, 2020, Fifth Wall’s global network of corporate partners has grown to include more than 60 real estate corporations from 14 countries, representing every major subsector in the real estate industry. In certain subsectors, like homebuilding, Fifth Wall’s corporate limited partners represent 4 of the 5 largest U.S.homebuilders, which collectively account for approximately 20% of all homes delivered in the United States annually. Alongside its corporate limited partners, Fifth Wall has attracted investment from some of the world’s largest and most prominent institutional investors, including leading university endowments, pensions, and sovereign wealth funds.
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Fifth Wall has distinct informational and distribution advantages. Fifth Wall’s dynamic working relationships with its global consortium of over 60 corporate real estate partners provide the firm with differentiated informational and distribution advantages when evaluating potential investments. Fifth Wall’s role as both a venture capital investor and a trusted advisor to real estate corporations provides significant visibility to the operational and technological challenges faced by its corporate partners. This enables its investment team to underwrite investments with knowledge of orchestrating large contracts and partnerships with Fifth Wall’s real estate investors, who are among the largest potential customers for these technologies. Similarly, success or failure for real estate technology companies often hinges on distribution to the real estate industry. Fifth Wall’s deep relationships with its 60 corporate limited partners, coupled with its expertise in real estate technology, enable Fifth Wall to flip “distribution risk” for its portfolio companies into a “distribution edge” by effectuating commercial partnerships to significantly accelerate their growth.
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Fifth Wall has superior access and deal flow. Fifth Wall’s domain expertise in real estate technology, its partnerships with some of the largest real estate owners and operators globally, its brand positioning as a leading partner to proptech entrepreneurs, and its differentiated platform have helped to solidify the firm as a highly-sought after investor for technology companies that depend on distribution to the real estate industry. Generalist venture capital funds typically select Fifth Wall as their preferred co-investment partner in proptech companies based on Fifth Wall’s category expertise and ability to facilitate distribution to its real estate investors. Additionally, Fifth Wall’s corporate partners proactively send Fifth Wall technologies that they are evaluating for their own businesses. Management teams of portfolio companies are also often eager to introduce to Fifth Wall new companies that fit Fifth Wall’s strategies. Across these three channels, Fifth Wall benefits from meaningful network effects that are borne out in its deal flow and its portfolio of emergent winners in the proptech category. As of November 30, 2020, Fifth Wall’s CRM tracks more than 8,300 real estate technology companies, including more than 600 growth and later stage companies.
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Fifth Wall is a highly visible, highly active investor and thought leader. Since its founding in 2016, Fifth Wall has carefully cultivated its brand and profile as a thought leader through the creation and dissemination of content related to the real estate technology ecosystem. Fifth Wall strives to be seen by other venture capital investors, proptech entrepreneurs, and the real estate industry as synonymous with proptech, as the thought leader in the space. This approach has enabled Fifth Wall to source investments in more than 40 companies, gaining access to highly competitive financing rounds for high-profile proptech businesses, sometimes with terms that enable Fifth Wall to reopen closed financing rounds at prior valuations, or to structure investments in such a way that ultimately
generates greater upside . Fifth Wall’s investments at the intersection of real estate and technology include Opendoor, VTS, States Title, Hippo, Industrious, Blend, and Clutter.
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Fifth Wall can influence outcomes to create outsized value. Beyond unlocking distribution to the real estate industry, Fifth Wall has played a leading role in the effectuation of major partnerships between its portfolio companies and some of the largest real estate corporations in the world, activating corporate innovation to create significant value. Fifth Wall partnered with what it believes to be the second largest homebuilder in the United States to launch large-scale partnerships with Opendoor, Hippo, Blend, and Notarize and, furthermore, helped to orchestrate the landmark sale of the homebuilder’s captive title insurance business to States Title, a Fifth Wall portfolio company. Similarly, Fifth Wall played a critical role in the execution of partnerships between Industrious and VTS and its corporate partners in the office vertical, catalyzing significant growth for both portfolio companies.
We believe that SPACs are important extensions of Fifth Wall management’s approach to partnering with leading real estate technology companies to create long-term value. While Fifth Wall’s existing fund strategies typically invest relatively early on in a company’s lifecycle, our management has also developed a track record at Fifth Wall of investing in proptech companies — including Fifth Wall’s own portfolio companies — as they mature, opportunistically deploying SPV capital to invest in later-stage funding rounds. With Fifth Wall Acquisition Corp. III, we intend to form a long-term partnership with a business that has the potential to become a category-defining market leader, guiding them in their transition from private to public markets while leveraging Fifth Wall’s global consortium of some of largest owners and operators of real estate in the world, creating value through distribution to the real estate industry and partnership with leading real estate corporations. We believe that our affiliation with Fifth Wall and its positioning and proptech category expertise will afford us substantial competitive advantages relative to other blank check companies, including those who are primarily focused on acquiring real estate technology businesses.
Market Opportunity
Our management founded Fifth Wall on the belief that the real estate industry is on the verge of massive change through technological innovation, and that emerging real estate technologies had the potential to create trillions of dollars of enterprise value over time. Today, technology is rapidly penetrating all verticals of the real estate industry, as well as the adjacent industries that collectively make up the human-made environment that provides the setting for human activity, ranging in scale from buildings to cities and beyond, which we call the “Built World”.
We believe the market for real estate technology businesses is attractive for a number of reasons:
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Large and growing addressable market. Real estate and technology investments both represent a significant segment of the global economy. According to Bureau of Economic Analysis, US Department of Commerce, real estate and technology accounted for 13% and 12%, respectively, of the U.S. gross domestic product in 2019. Real estate technology investment has grown significantly in the last few years, with total venture capital funding in this sector reaching $32 billion in 2019 compared to $4 billion in 2016 according to CRETech. Despite this strong growth, we believe that the bulk of digitalization is still to come as we are only beginning to see fully digital transactions, data-driven decision making, replacement of middle-men with market places and incumbents embracing technology.
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Accelerating pace of technological innovation. Technology has disrupted the real estate sector as owners and operators continuously seek to improve the efficiency of their assets, with emerging technologies often providing new solutions to longstanding business and operational challenges. We believe that increased rates of technology adoption will spur the creation of more new technologies and disruptive new entrants in order to create greater efficiencies in the real estate value chain. Real estate technology is penetrating the real estate asset class, driving innovation across transactions, work processes, tenant engagement and even the nature of buildings themselves, while also disrupting the middle-man heavy businesses that currently dominate the real estate industry. We further believe that the impacts of COVID-19 on the real estate industry have catalyzed and accelerated the adoption of technology, which we expect will have lasting, transformational effects on the real estate industry.
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Robust and growing pipeline. From 2014 to 2019, over $64 billion has been invested in proptech companies, while more than $250 billion in enterprise value has been created within the real estate technology sector across public and private companies. As of November 30, 2020, we estimate that more than 35 proptech companies are valued at $1 billion or more in the private markets. In 2019, 528 real estate technology transactions were executed according to CREtech. We believe that many later stage proptech companies, the number of which we expect to continue to grow in the years ahead, could benefit from a public listing. Similarly, we believe that Fifth Wall Acquisition Corp. III will be able to offer them, or companies like them, a compelling path to enter the public markets.
We currently intend to focus our investment effort broadly across businesses focusing on verticals of the real estate industry, as well as the adjacent industries that collectively make up the human-made environment that provides the setting for human activity, ranging in scale from buildings to cities and beyond, which we call the “Built World,” although we may pursue an acquisition opportunity in any industry or geographic region. We believe that our investment and operating expertise in both the real estate and technology industries will offer us a large, addressable universe of potential targets. Our management team will seek to leverage their access to proprietary deal flow, sourcing capabilities, and network of industry contacts to generate business combination opportunities.
Business Strategy
Our strategy is to identify and acquire businesses within the sectors in which Fifth Wall invests, with a focus on later-stage companies with high quality growth fundamentals and strong market dynamics, whose pace of growth can benefit from our operational expertise and differentiated distribution capabilities. Our management expects to benefit from Fifth Wall’s experience as one of the largest and most active venture investors at the intersection of real estate and technology and its proven track record with deep experience in investing, operations and technology as well as a global consortium of real estate partners representing almost every real estate sector and every major geography. We intend to leverage our sponsor’s expertise and extensive network of strategic LPs, portfolio companies, real estate relationships and reputation in the real estate technology sector to identify investment opportunities with meaningful near term growth potential that can generate attractive risk-adjusted returns for our shareholders.
Consistent with this strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective targets. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines.
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High quality fundamentals. We will focus our search on identifying transformative businesses with attractive margins and unit economics in line with best-in-class industry benchmarks, strong growth track record, and limited revenue concentration risks.
•
Strong market dynamics and growth potential. We will seek to acquire businesses that have a sizeable total addressable market with product offerings that are relevant across multiple asset classes, industries and geographies. We believe we can leverage our network to upsell and cross-sell additional product modules which will in turn further increase the addressable market and growth opportunities for the business and present readily available growth targets.
•
Competitive positioning. We will seek to acquire one or more businesses that demonstrate market leadership and / or strong advantages when compared to their competitors, including the potential to disrupt the market through technology driven transformation, defensible proprietary technology, strong adoption rates, and low or manageable risks of technological obsolescence.
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Attractive risk-adjusted return profile. We intend to focus our efforts on identifying later-stage businesses that we believe have meaningful near term growth opportunity and significant potential for attractive risk-adjusted returns for shareholders, weighing potential growth opportunities and operational improvements in the target business against any identified downside risks.
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Informational and structuring advantages. We intend to invest in one or more businesses where Fifth Wall’s global network of more than 60 real estate corporations in 14 countries can offer distinct informational advantages in underwriting a potential acquisition, and where Fifth Wall’s ability to
unlock distribution to the real estate industry can enable us to structure a potential transaction in such a way that it maximizes value for all parties involved.
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Value creation potential by Fifth Wall. We intend to acquire one or more businesses that we believe will benefit from Fifth Wall’s differentiated industry network, brand and proprietary value-creation capabilities in order to improve financial performance and business planning. For example, we intend to target companies that have strong traction regionally but lack national and international partners to support geographical expansion whose growth can be accelerated through Fifth Wall’s network of real estate partners, or companies with a sales cycle that is longer than best-in-class peers that could be shortened with strategic introductions to key management at real estate companies facilitated by Fifth Wall.
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Management Team. We will seek to invest in one or more businesses that have proven management teams with a compelling strategy of selling their product and recruiting talent.
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Benefit from Being a Public Company. We intend to invest in one or more businesses that will benefit from being publicly listed and can effectively utilize the broader access to capital and a public profile to grow and accelerate shareholders value creation.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholders communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
Team
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Brendan Wallace is our Chief Executive Officer and Chairman. Mr. Wallace serves as a co-founder and Managing Partner at Fifth Wall, where he guides the firm’s strategic vision and serves as the chairman of the investment committee. Mr. Wallace also serves as the Chairman of the Board and Chief Executive Officer of Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II. Prior to starting Fifth Wall, Mr. Wallace co-founded Identified Inc., a venture-backed data and analytics company that was acquired by Workday, Inc. Mr. Wallace also co-founded Cabify, the largest ridesharing service in Latin America, and has been an active investor, leading more than 60 angel investments including Coinbase, Dollar Shave Club, Lyft, SpaceX, Clutter, and Philz Coffee. Mr. Wallace started his career at Goldman Sachs in the real estate, hospitality, and gaming group before joining The Blackstone Group’s real estate private equity practice where he was involved with the buyout of Hilton Hotels and Equity Office Properties. Mr. Wallace is a graduate of Princeton University and received his M.B.A. from Stanford University.
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Andriy Mykhaylovskyy is our Chief Financial Officer and director. Mr. Mykhaylovskyy is a Managing Partner and Chief Operating Officer at Fifth Wall, where he oversees the firm’s day-to-day operations and investing activities. Mr. Mykhaylovskyy also serves as the Chief Financial Officer and a director of Fifth Wall Acquisition Corp. I and as Chief Financial Officer of Fifth Wall Acquisition Corp. II. Prior to joining Fifth Wall, Mr. Mykhaylovskyy was a Principal and founding team member at Evergreen Coast Capital, a technology-focused private equity affiliate of Elliott Management Corporation. Other previous leadership roles include serving as Vice President at The Gores Group and Chief Financial Officer of Identified, a data and analytics company. Mr. Mykhaylovskyy started his career in investment banking at Morgan Stanley, where he offered financial advisory and capital-raising services to global industrial corporations, before joining technology-focused private equity firm Francisco Partners as an Associate. Mr. Mykhaylovskyy is a graduate of Princeton University and received his M.B.A. from Stanford University.
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Adeyemi Ajao has been a member of our board of directors since April 2021. In this role, he will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Mr. Ajao has been a director of Fifth Wall Acquisition Corp. II since April 2021. Mr. Ajao is also Co-founder & Managing Partner at Base10 Partners which was founded in
January 2017. Mr. Ajao was the co-founder and CEO of Tuenti (The “Spanish Facebook”) from January 2005 to July 2010 which was acquired by Telefonica in 2010 for $100M. He also was the co-founder and CEO of Identified from June 2010 to February 2014 which was acquired by Workday in 2014. He was also a founding investor of Cabify in July 2011 (the largest ridesharing company in Latin America currently valued at over $1B). While at Workday from February 2014 to September 2016, Mr. Ajao led launch to Workday Ventures, the first fund focused on Applied AI for Enterprise Software and was VP of Technology Strategy. Mr. Ajao graduated from Icade University in Spain in 2005 with a Master of Science in Finance and a Juris Doctor. Mr. Ajao graduated from Stanford University in 2010 with a Master of Business Administration. Mr. Ajao also holds a certificate from Stanford University in Machine Learning.
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Alana Beard has been a member of our board of directors since April 2021. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Beard has been a director of Fifth Wall Acquisition Corp. I since February 2021 and a director of Fifth Wall Acquisition Corp. II since April 2021. She is also a Senior Associate at SVB Capital since February 2020 and President of the 318 Foundation, Inc., a non-profit organization, since January 2021. Prior to joining SVB, Alana was a member of the WNBA Los Angeles Sparks organization April 2012 to January 2020 and an ESPN/ACC women’s college basketball analyst from October 2019 to March 2020. During her career with the Sparks, Ms. Beard was a four-time WNBA All-Star, won the WNBA championship in 2016 and was named WNBA Defensive Player of the Year for the 2017 and 2018 seasons. Ms. Beard graduated from Duke University in 2004 with a bachelor’s degree in Sociology.
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Poonam Sharma Mathis has been a member of our board of directors since April 2021. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Mathis has been a director of Fifth Wall Acquisition Corp. II since April 2021. Ms. Mathis is also a serial entrepreneur, real estate industry veteran and public speaker with a passion for innovating around the built world. Most recently CEO of Raise, she aimed to revolutionize childcare for the future of work. Previously, she founded StealthForce, (the gig economy of real estate; a resource and project management platform for CRE), which was exited in early 2019. Prior to StealthForce, she was Deputy to the Head of Global Real Estate Asset Management at Partners Group AG ($40 billion AUM), and earlier employee 13 at The Gerson Lehrman Group, which was the world’s first institutional expert network. Ms. Mathis earned her Bachelor of Arts at Harvard and Master of Business Administration at Wharton, and spent over a decade in real estate development and investment. Twice named a top female CEO in CREtech, she has been featured in The New York Times, Inc. Magazine, Harvard Business Review, NBC News, and more. She is also an author and experienced public speaker (ULI, ICSC, CRETech, etc.) who has published four books in five languages which have been printed worldwide.
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Amanda Parness has been a member of our board of directors since April 2021. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition. Ms. Parness has been a director of Fifth Wall Acquisition Corp. II since April 2021. In January 2020, Ms. Parness became CEO and Founder of Spring Advisory Services. From May 2019 to December 2019, Ms. Parness was Managing Director, Head of U.S. Private Equity Funds at Caisse de Depot et Investment du Quebec (CDPQ). From September 1998 to May 2019, Ms. Parness was a Managing Principal at GoldPoint Partners, New York Life Insurance Company’s private equity subsidiary. Ms. Parness was a Financial Analyst in the Equity Research Group at Goldman Sachs & Co. from January 1994 to July 1996. Ms. Parness graduated from Barnard College at Columbia University in 1993 with a Bachelor of Arts in Economics and a Bachelor of Arts in English Literature, and in 1998 graduated with a Masters of Business Administration in Finance from Columbia Business School.
Our management team will be supported by Fifth Wall’s investment team and broader organization of more than 30 employees, based in Los Angeles, San Francisco, New York, and London. Fifth Wall’s team has experience in some of the largest and most established real estate firms, private equity firms, consulting firms, and technology companies, providing a deep bench of sourcing, investment, structuring, and operational talent.
Other key members of the Fifth Wall team that our management team expects to work with include:
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Jeremy Fox, who serves as a Partner at Fifth Wall, where he focuses on corporate partnerships and capital markets. Prior to joining Fifth Wall, Mr. Fox was Co-Head of Real Estate Gaming & Lodging Investment Banking at Credit Suisse. Previously, he was Head of US Equity Capital Markets at Deutsche Bank. Mr. Fox started his career at Ernst & Young, before joining Goldman Sachs, where he worked in Institutional Equity Sales. Mr. Fox graduated from Yeshiva University with a BS in Accounting.
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Brad Greiwe, who is a co-founder and Managing Partner at Fifth Wall. Prior to starting Fifth Wall, Mr. Greiwe co-founded Invitation Homes Inc. (NYSE: INVH). Mr. Greiwe started his career in investment banking at UBS Group AG in the real estate, lodging, and leisure group. He then worked in real estate private equity at Tishman Speyer Properties and Starwood Capital Group. Mr. Greiwe graduated from Harvard University, where he received his BA in economics.
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Vik Chawla, who serves as Partner on the Real Estate Technology Investment team at Fifth Wall, where he focuses on technology and innovations within the homebuilding, retail, and industrial asset classes. Previously, Mr. Chawla was an Investment Associate at Echelon Asset Management. He began his career at The Blackstone Group Inc., where he worked on advisory transactions spanning the energy, real estate, and financial services industries. Mr. Chawla graduated from the University of Pennsylvania’s Wharton School, where he received his BS in economics with concentrations in finance and statistics and a minor in mathematics.
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Dan Wenhold, who serves as Partner on the Real Estate Technology Investment team at Fifth Wall, where he focuses on emerging software and marketplace companies. Prior to joining Fifth Wall, he was the first employee and Director of Retail at The Black Tux, an omnichannel menswear brand. Prior to The Black Tux, he was a member of the investment team at Battery Ventures L.P. Mr. Wenhold started his career as a financial analyst at Robert W.Baird & Co. Incorporated. Mr. Wenhold graduated from the University of Illinois with a degree in finance.
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Kevin Campos, who serves as Partner on the Retail & Consumer Investment team at Fifth Wall, where he oversees the team’s operations and leads investments in omnichannel retail brands and technologies. Prior to joining Fifth Wall, Mr. Campos was the Chief Retail Officer for Combatant Gentlemen, Inc., a digitally native menswear brand. He also was a member of the retail team at Golden Gate Capital, a private equity firm. He started his career at Bain & Company as a strategy consultant advising technology, media, and investment fund clients. Mr. Campos graduated from Princeton University with a BA from the Princeton School of Public and International Affairs.
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Joelle Khoury, who serves as Partner and General Counsel at Fifth Wall. Prior to joining Fifth Wall, Ms. Khoury worked as Vice President, Business and Legal Affairs at Saban Capital Group. Prior to joining Saban Capital Group, Inc., she was an Associate at both Gibson Dunn & Crutcher LLP and Cooley LLP, where she specialized in corporate transactions in the media, entertainment and technology industries. Ms. Khoury received her BA in Political Science from University of California, San Diego and then received her JD and LLM from Duke Law School.
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G. M. Nicholas Vik, who serves as Vice President of Strategy & Operations at Fifth Wall, where he leads business operations and strategic initiatives across the firm. Prior to joining Fifth Wall, Mr. Vik was Director of Strategy & Finance and a member of the founding team at Renew Health, a healthcare startup founded in partnership with Venrock. Previously, he served as a member of the Revenue Strategy team at Snap Inc. (NYSE: SNAP). Mr. Vik started his career at Cambridge Associates, where he advised institutions on venture capital and private equity investment strategies, before joining ICONIQ Capital, a multifamily office and investment firm. Mr. Vik graduated from Tufts University where he received a BA in International Relations.
Initial Business Combination
Nasdaq rules and our amended and restated memorandum and articles of association require that we complete one or more business combinations having an aggregate fair market value of at least 80% of the assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of signing the agreement to enter into the
initial business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses, or we are considering an initial business combination with an affiliated entity, we will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority (FINRA), or an independent valuation or appraisal firm with respect to the satisfaction of such criteria.
We anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the prior owners of the target business, the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholders approval, as applicable.
Other Considerations
We are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with Fifth Wall or our sponsor, founders, officers, or directors, or a company in which any of the foregoing may have a direct or indirect interest. In the event we seek to complete our initial business combination with a company that is affiliated with Fifth Wall, our sponsor or any of our founders, officers or directors, we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or appraisal firm that such initial business combination or transaction is fair to our company from a financial point of view.
Affiliates of Fifth Wall and members of our board of directors will directly or indirectly own founder shares and private placement shares following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers or directors were to be included by a target business as a condition to any agreement with respect to our initial business combination.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected nor considered a target business for the Company nor have they had any substantive discussions regarding possible target businesses for the Company among themselves or with our underwriters or other advisors. Fifth Wall is continuously made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a business combination transaction with our company. We have not (nor have any of our agents or affiliates) been approached by any candidates (or representative of any
candidates) with respect to a possible acquisition transaction with our company and we will not consider a business combination with any company identified to Fifth Wall at any time as a suitable acquisition candidate for it, unless Fifth Wall, in its sole discretion, declines such potential business combination or makes available to our company a co-investment opportunity, in each case, in accordance with any legal obligations of Fifth Wall and Fifth Wall’s applicable existing and future policies and procedures. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to select or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to select or locate any such acquisition candidate.
Fifth Wall currently manages multiple investment vehicles and may raise additional funds successor funds or other investment vehicles or accounts in the future, which may be during the period in which we are seeking our initial business combination. Such Fifth Wall investment entities may be seeking investments or acquisition opportunities and related financing at any time. We may compete with any one or more of them on any given acquisition opportunity.
In addition, Fifth Wall and its Affiliates and our officers and directors have previously sponsored and formed and become officers or directors of, and in the future may sponsor or form or become officers or directors of, other special purpose acquisition companies similar to ours (including sponsors and special purpose acquisition companies that are not Affiliates of Fifth Wall), or may pursue other business or investment ventures, including without limitation forming investment funds or other vehicles, whose strategies may conflict with or otherwise be competitive with us during the period in which we are seeking an initial business combination. For example, Affiliates of Fifth Wall are currently sponsoring two special purpose acquisition companies, Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II. Although we intend to focus on industries outside of the United States, Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II are also pursuing an acquisition opportunity in any business, industry, sector or geographical location with a focus on “Built World”. Mr. Wallace, our Chairman of the Board and Chief Executive Officer, is the Chairman of the Board and Chief Executive Officer of Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II and Mr. Mykhaylovskyy, our Chief Financial Officer and director, is the Chief Financial Officer and director of Fifth Wall Acquisition Corp. I and the Chief Financial Officer of Fifth Wall Acquisition Corp. II. Our other directors, Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness are also directors of Fifth Wall Acquisition Corp. II. Alana Beard is also a director of Fifth Wall Acquisition Corp. I. As a result, while we currently do not have any specific business combination under consideration and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target, any such other special purpose acquisition companies, businesses or investments, including without limitation investment funds or other vehicles, with which Fifth Wall and its Affiliates, and our officers and directors are involved, may present additional conflicts of interest in pursuing an initial business combination.
Fifth Wall and each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations to other entities pursuant to which Fifth Wall or such persons is or will be required to present a business combination opportunity. Accordingly, if Fifth Wall or any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which Fifth Wall or such person has then-current fiduciary, contractual or other obligations to present such opportunity to such entity, Fifth Wall or such person will honor such fiduciary, contractual or other obligations to present such opportunity to such entity first, in which case such opportunity may not be made available to us, and Fifth Wall or such person will only present such opportunity to us if such other entity rejects the opportunity and consummating the transaction would not violate any restrictive covenants or other legal obligations to which such officers and directors are subject, including their fiduciary duties under Cayman Islands law. If any officer or director serving Fifth Wall Acquisition Corp. II or Fifth Wall Acquisition Corp. III becomes aware of a business combination opportunity with a proptech company serving the residential real estate industry (and no other parties to which such officers or directors may owe any fiduciary, contractual or other obligations, including in the case of officers and directors associated or affiliated with Fifth Wall, Fifth Wall, wish to pursue such opportunity), such officers and directors will present the opportunity to Fifth Wall Acquisition Corp. II. In all other cases, the opportunity will be first presented to Fifth Wall Acquisition Corp. III. Further, Fifth Wall and each of our officers and directors have duties and obligations with respect to confidentiality to other entities and may in the future agree to additional such duties or obligations, which may prevent Fifth Wall and such officers and directors from
disclosing such information to us. Fifth Wall and our officers and directors will comply with such duties and obligations of confidentiality to such other entities, in which case, we may not have access to such information. In addition, we may, at our option, pursue an Affiliated Joint Acquisition opportunity with an entity to which Fifth Wall or an officer or director currently has, or may in the future have, a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the business combination by making a specified future issuance to any such entity. Any such business combination may require additional consents from third parties outside the control of our directors, officers or Fifth Wall, including any such business combination that requires the consent of the limited partner advisory committee of one or more investment funds managed or advised by Fifth Wall. We may be prevented from pursuing an Affiliated Joint Acquisition or other similar business combination if such consents are not obtained. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
In addition, Fifth Wall, our founders, officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. Moreover, our founders, officers and directors have, and will have in the future, time and attention requirements for current and future businesses, including investment funds, accounts, co-investment vehicles and other entities managed by Fifth Wall. To the extent any conflict of interest arises between, on the one hand, us and, on the other hand, such businesses, investments funds, accounts, co-investment vehicles and other entities managed by Fifth Wall (including, without limitation, arising as a result of certain of our founders, officers and directors being required to offer investment or acquisition opportunities to such investment funds, accounts, co-investment vehicles and other entities), Fifth Wall, its affiliates and our founders, officers and directors may (i) resolve such conflicts of interest in their sole discretion in accordance with their then existing fiduciary, contractual, and other duties, and there can be no assurance that such conflict of interest will be resolved in our favor or (ii) delay or ultimately prevent the identification of a business combination candidate that has caused such conflict of interest.
Any past experience and performance of Fifth Wall or our management team is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our initial business combination; or (2) of any results with respect to any initial business combination we may consummate. You should not rely on the historical record of Fifth Wall or our management team’s performance as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An investment in us is not an investment in Fifth Wall. Our officers, directors and Fifth Wall have had limited experience with a blank check company or special purpose acquisition company in the past.
Unlike many other special purpose acquisition companies, we are not offering any warrants to prospective investors in this offering.
Corporate Information
Our executive offices are located at 6060 Center Drive, 10th Floor, Los Angeles, California 90045.
We are a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (As Revised) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in
whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30.
Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
THE OFFERING
In deciding whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors” of this prospectus.
25,000,000 Class A ordinary shares (or 28,750,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full)), at $10.00 per ordinary share.
Class A ordinary shares: “FWAC”
Number outstanding before this offering
6,250,000(2)(3)
Number outstanding after this offering
32,107,000(1)(2) (4) (5)
On February 24, 2021, we issued to our sponsor 4,312,500 founder shares in exchange for a payment or payment of expenses of $25,000, to cover for certain expenses and offering costs on behalf of us. In April 2021, the Company effected a share capitalization for Class B ordinary shares, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding and an aggregate purchase price of approximately $0.003 per ordinary share. All shares and associated amounts have been restated to reflect the share capitalization. Our sponsor will transfer 30,000 founder shares to each of Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness. Such transferred shares will not be subject to forfeiture in the event the underwriters’ over-allotment option is not exercised.
Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The per-share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the ownership of our
(1)
Founder shares are currently classified as Class B ordinary shares, which shares will automatically convert into Class A ordinary shares at the time of our initial business combination as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated memorandum and articles of association.
(2)
Excludes an aggregate of up to 937,500 Class B ordinary shares held by our sponsor that are subject to forfeiture if the underwriters’ over-allotment option is not exercised in full.
(3)
Assumes no exercise of the underwriters’ over-allotment option (excluding the private placement shares), and the corresponding forfeiture of 937,500 founder shares.
(4)
Assumes no exercise of the underwriters’ over-allotment option and includes 25,000,000 public shares, 857,000 private shares and 6,250,000 founder shares, assuming 937,500 founder shares have been forfeited.
(5)
Unlike other special purpose acquisition companies, we are not offering any warrants to prospective investors in this offering.
sponsor (and its permitted transferees), on an as-converted basis, at 20% of our issued and outstanding Class A ordinary shares upon the consummation of this offering. Up to 937,500 of the founder shares held by our sponsor (excluding the private placement shares) will be forfeited depending on the extent to which the underwriters’ over-allotment option is not exercised.
The founder shares are identical to the Class A ordinary shares being sold in this offering, except that:
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the founder shares are subject to certain transfer restrictions, as described in more detail below;
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our sponsor and our directors and executive officers have entered into an agreement with us, pursuant to which it has agreed to (i) waive their redemption rights with respect to their founder shares and (ii) waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. Our sponsor and our directors and executive officers have also agreed (A) that they will not propose any amendment to our amended and restated memorandum and articles of association that would modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their shares and (B) to waive their redemption rights with respect to their founder shares and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination. However, if our sponsor, directors or executive officers acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. If we submit our initial business combination to our public shareholders for a vote, our sponsor and our directors and executive officers have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our founder shares and private placement shares, we would need 8,946,501, or 35.8%, of the 25,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). The other members of our management team have entered into agreements similar to the one entered into by our sponsor with respect to any public shares acquired by them in or after this offering;
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the founder shares are entitled to registration rights; and
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the founder shares will be automatically convertible into our Class A ordinary shares at the time of our initial business
combination as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated memorandum and articles of association. .
Transfer restrictions on founder shares
Except as described herein, our sponsor and our directors and executive officers have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property or (y) if the closing price of our ordinary shares equals or exceeds $12.00 per ordinary share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination. Any permitted transferees would be subject to the same restrictions and other agreements of our sponsor with respect to any founder shares.
Founder shares conversion and anti-dilution rights
The founder shares are designated as Class B ordinary shares and will automatically convert into Class A ordinary shares at the time of our initial business combination on a one-for-one basis (subject to adjustment for share sub-division, share dividends, reorganizations, recapitalizations and the like), and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in this prospectus and related to the closing of the business combination, including pursuant to a specified future issuance, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless our sponsor agrees to waive such adjustment with respect to any such issuance or deemed issuance, including a specified future issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all ordinary shares outstanding upon completion of this offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the business combination (after giving effect to any redemptions of Class A ordinary shares by public shareholders) (excluding any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in the business combination, the private placement shares, and any private placement shares issued to our sponsor, officers or directors upon conversion of working capital loans).
With respect to all matters submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law or the applicable rules of Nasdaq then in effect, holders of our founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.
Our amended and restated memorandum and articles of association provides that our board of directors will be divided into three
classes with only one class of directors being appointed in each year and each class (except for those directors appointed prior to our first annual meeting of shareholders) serving a three-year term.
Our sponsor has committed, pursuant to a written agreement, to purchase 857,000 private placement shares (or 932,000 private placement shares if the underwriters’ over-allotment option is exercised in full), at a price of $10.00 per ordinary share in a private placement to occur concurrently with the closing of this offering for an aggregate purchase price of $8,570,000 (or $9,320,000 if the underwriters’ over-allotment option is exercised in full). The private placement shares are identical to the Class A ordinary shares sold in this offering, subject to certain limited exceptions as described in this prospectus.
Proceeds to be held in trust account
Nasdaq rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement shares be deposited in a trust account. Of the proceeds we will receive from this offering and the sale of the private placement shares described in this prospectus, $250,000,000, or $287,500,000 if the underwriters’ over-allotment option is exercised in full ($10.00 per ordinary share in either case), will be deposited into a segregated trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee and $2,570,000 will be used to pay expenses in connection with the closing of this offering and for working capital following this offering. The proceeds to be placed in the trust account include $8,750,000 (or $10,062,500 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions.
Except for the withdrawal of interest income to pay our income taxes, our amended and restated memorandum and articles of association, as discussed below and subject to the requirements of law and regulation, provides that none of the funds held in the trust account will be released from the trust account until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we are unable to consummate an initial business combination within 24 months from the closing of this offering, subject to applicable law, or (iii) the redemption of our public shares properly submitted in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders.
Anticipated expenses and funding sources
Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except the withdrawal of interest income to pay our income taxes and/or to redeem our public shares in connection with an amendment to our
amended and restated memorandum and articles of association, as described above. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Assuming an interest rate of 0.1% per year, we estimate the interest earned on the trust account will be approximately $250,000 per year; however, we can provide no assurances regarding this amount. Unless and until we complete our initial business combination, we may pay our expenses only from:
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the net proceeds of this offering not held in the trust account, which will be approximately $1,000,000 in working capital after the payment of approximately $2,570,000 in expenses relating to this offering; and
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any loans or additional investments from our sponsor or an affiliate of our sponsor or certain of our officers and directors, although they are under no obligation to advance funds or invest in us, and provided any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into private placement shares, at a price of $10.00 per ordinary share, at the option of the lender.
Conditions to completing our initial business combination
Nasdaq rules and our amended and restated memorandum and articles of association require that our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm. Our shareholders may not be provided with a copy of such opinion nor will they be able to rely on such opinion.
We will complete our initial business combination only if the post-transaction company in which our public shareholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in
the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test, provided that in the event that the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of seeking shareholder approval or conducting a tender offer, as applicable.
Permitted purchases and other transactions with respect to our securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial shareholders directors, executive officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares our initial shareholders, directors, executive officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, our sponsor, directors, executive officers, advisors or their affiliates have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds held in the trust account will be used to purchase shares in such transactions. If our sponsor, directors, executive officers, advisors or their affiliates engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Securities Exchange Act of 1934, as amended, or the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See “Proposed Business — Permitted Purchases of Our Securities” for a description of how our sponsor, directors, executive officers, advisors or any of their affiliates will select which shareholders to purchase securities from in any private transaction.
The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain
amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our Class A ordinary shares may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Redemption rights for public shareholders upon completion of our initial business combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest (net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public ordinary share. The per ordinary share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our private placement shares. Our sponsor and our directors and executive officers have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, private placement shares and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination.
Limitations on redemptions
Our amended and restated memorandum and articles of association provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). However, a greater net tangible asset or cash requirement may be contained in the agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof.
Manner of conducting redemptions
We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and share purchases would not typically require shareholder approval, while direct mergers with our company and any transactions where we issue more than 20% of our outstanding Class A ordinary shares or seek to amend our amended and restated memorandum and articles of association would require shareholder approval. We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange listing requirement and we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other legal reasons.
If we hold a shareholder vote to approve our initial business combination, we will:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
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file proxy materials with the SEC.
If we seek shareholder approval, we will complete our initial business combination only if we receive approval pursuant to an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our sponsor and our directors and executive officers have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our founder shares and private placement shares, we would need 8,946,501, or 35.8%, of the 25,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). The other members of our management team have entered into agreements similar to the one entered into by our sponsor with respect to any public shares acquired by them in or after this offering. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. Our amended and restated memorandum and articles of association requires that at least ten days’ notice be given of any such general meeting.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our Class A ordinary shares in the open market, in order to comply with Rule 14e-5 under the Exchange Act. In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of public shares we are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
Limitation on redemption rights of shareholders holding 15% or more of the shares sold in this offering if we hold a shareholder vote
Notwithstanding the foregoing redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, without our prior consent. We believe the restriction described above will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our public shareholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target
that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our shareholders’ ability to vote all of their shares (including all shares held by those shareholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.
Release of funds in trust account on closing of our initial business combination
On the completion of our initial business combination, the funds held in the trust account will be disbursed directly by the trustee to pay amounts due to any public shareholders who exercise their redemption rights as described above adjacent to the caption “Redemption rights for public shareholders upon completion of our initial business combination,” to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt securities or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
Redemption of public shares and distribution and liquidation if no initial business combination
Our amended and restated memorandum and articles of association provides that we will have only 24 months from the closing of this offering to consummate our initial business combination. If we are unable to consummate an initial business combination within 24 months from the closing of this offering, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case, to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
Our sponsor has entered into an agreement with us, pursuant to which it has agreed to (i) waive its redemption rights with respect to its founder shares and (ii) waive its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. Our sponsor and our directors and
executive officers have also agreed (A) that they will not propose any amendment to our amended and restated memorandum and articles of association that would modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their shares and (B) to waive their redemption rights with respect to their founder shares and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination. However, if our sponsor or members of our management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering.
The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not consummate an initial business combination within 24 months from the closing of this offering or any extended period of time that we may have to consummate an initial business combination as a result of an amendment to our amended and restated memorandum and articles of association and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.
Our sponsor, executive officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not consummate an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described above adjacent to the caption “Limitations on redemptions.” For example, our board of directors may propose such an amendment if it determines that additional time is necessary to complete our initial business combination. In such event, we will conduct a proxy solicitation and distribute proxy materials pursuant to Regulation 14A of the Exchange Act seeking shareholder approval of such proposal and, in connection therewith, provide our public shareholders with the redemption rights described above upon shareholder approval of such amendment. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, any executive officer and director, or any other person.
Our amended and restated memorandum and articles of association provides that, if we wind up for any other reason prior to the
consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Limited payments to insiders
There will be no finder’s fees, reimbursements or cash payments made by the company to our sponsor, officers or directors, or our or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering and the sale of the private placement shares held in the trust account prior to the completion of our initial business combination.
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repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
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payment of up to $17,500 per month, for up to 24 months, for office space and professional, secretarial, administrative and support services;
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reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial business combination; and
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repayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans may be convertible into shares of the post business combination entity at a price of $10.00 per ordinary share at the option of the lender. The shares would be identical to the private placement shares. Except for the foregoing, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans.
Any such payments will be made either (i) prior to our initial business combination using proceeds of this offering held outside the trust account or from loans made to us by our sponsor or (ii) in connection with or after the consummation of our initial business combination.
We have established and will maintain an audit committee, which is composed entirely of independent directors. Among its responsibilities, the audit committee will review on a quarterly basis all payments that were made to our sponsor, officers or directors, or our or their affiliates and monitor compliance with the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to promptly take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled “Management — Committees of the Board of Directors — Audit Committee.”
Fifth Wall engages in a range of business activities, including managing or advising several investment funds, investment vehicles or other accounts, and providing certain consulting services to
third-party client, including third-parties engaged in industries in which we may pursue an initial business acquisition. Further, Fifth Wall and each of our officers and directors currently engage in, and may in the future engage in, additional or other businesses from time to time, including managing additional investment vehicles, including vehicles that may compete with us for investment or acquisition opportunities or that may compete in industries or markets with potential targets for our initial business acquisition. Fifth Wall, our officers and directors and their respective Affiliates and portfolio companies, currently compete with us, and may compete with us, for investment or acquisition opportunities. If these entities or persons decide to pursue any such opportunity, we may be precluded from procuring such opportunities in Fifth Wall’s or such person’s sole discretion in accordance with any legal obligation of Fifth Wall or such other person and their respective existing and future policies and procedures. In addition, investment ideas generated within Fifth Wall may be suitable for both us and for current or future Fifth Wall investment funds, investment vehicles, accounts or clients and may be directed to such Fifth Wall funds, vehicles, accounts or clients rather than to us. None of Fifth Wall, nor members of our management team or directors who are also employed by, or otherwise provides services to, Fifth Wall or its current or future affiliates or portfolio companies have any obligation to present us with any opportunity for a potential business combination of which they become aware, unless presented to such person solely in his or her capacity as an officer or director of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. Fifth Wall, our management team and our directors, in their capacities as employees, managers or members of Fifth Wall or in their other endeavors, are required to present certain potential business combinations to other entities before they present such opportunities to us. Each such person presently has, and any of them in the future may have, additional, fiduciary, contractual or other obligations to another entity, including private funds under the management of Fifth Wall and their respective portfolio companies, pursuant to which such member of our management team is or will be required to present a business combination opportunity to such entity. In addition, existing and future Fifth Wall funds, investment vehicles, accounts or clients and their respective portfolio companies may compete with us for business combination opportunities and, if such opportunities are pursued by such entities, we may be precluded from pursuing such opportunities. Accordingly, if any such person becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary, contractual or other obligations, he or she will honor his or her fiduciary, contractual or other obligations to present such business combination opportunity to such entity first, in which case such opportunity may not be made available to us, and Fifth Wall or such person will only present such opportunity to us if such other entity rejects the opportunity and consummating the transaction would not violate any restrictive covenants or other legal obligations to which such
officers and directors are subject, including their fiduciary duties under Cayman Islands law. If any officer or director serving Fifth Wall Acquisition Corp. II or Fifth Wall Acquisition Corp. III becomes aware of a business combination opportunity with a proptech company serving the residential real estate industry (and no other parties to which such officers or directors may owe any fiduciary, contractual or other obligations, including in the case of officers and directors associated or affiliated with Fifth Wall, Fifth Wall, wish to pursue such opportunity), such officers and directors will present the opportunity to Fifth Wall Acquisition Corp. II. In all other cases, the opportunity will be first presented to Fifth Wall Acquisition Corp. III.
In addition, Fifth Wall and its Affiliates and our officers and directors have previously sponsored and formed and become officers or directors of, and in the future may sponsor or form or become officers or directors of, other special purpose acquisition companies similar to ours (including sponsors and special purpose acquisition companies that are not Affiliates of Fifth Wall), or may pursue other business or investment ventures, including without limitation forming investment funds or other vehicles, whose strategies may conflict with or otherwise be competitive with us during the period in which we are seeking an initial business combination. For example, Affiliates of Fifth Wall are currently sponsoring two special purpose acquisition companies, Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II. Although we intend to focus on industries outside of the United States, Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II are also pursuing an acquisition opportunity in any business, industry, sector or geographical location with a focus on “Built World”. Mr. Wallace, our Chairman of the Board and Chief Executive Officer, is the Chairman of the Board and Chief Executive Officer of Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II and Mr. Mykhaylovskyy, our Chief Financial Officer and director, is the Chief Financial Officer and director of Fifth Wall Acquisition Corp. I and Chief Financial Officer of Fifth Wall Acquisition Corp. II. Our other directors, Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness are also directors of Fifth Wall Acquisition Corp. II. Alana Beard is also a director of Fifth Wall Acquisition Corp. I. As a result, while we currently do not have any specific business combination under consideration and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target, any such other special purpose acquisition companies, businesses or investments, including without limitation investment funds or other vehicles, with which Fifth Wall and its Affiliates, and our officers and directors are involved, may present additional conflicts of interest in pursuing an initial business combination.
Notwithstanding the foregoing, we may pursue an Affiliated Joint Acquisition opportunity with one or more affiliates of Fifth Wall and/or investors. Such entities may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by issuing to such entities a class of equity or equity-linked securities. Any Affiliated Joint Acquisition alongside a Fifth Wall investment fund, investment vehicle, account or other client may also require the
consent of some or all investors in such fund, vehicle, account or client, and our ability to complete any Affiliated Joint Acquisition would be subject to any such consent. Any such business combination may require additional consents from third parties outside the control of our directors, officers or Fifth Wall, including any such business combination that requires the consent of the limited partner advisory committee of one or more investment funds managed or advised by Fifth Wall. We may be prevented from pursuing an Affiliated Joint Acquisition or other similar business combination if such consents are not obtained. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
RISKS
We are a newly incorporated company that has conducted no operations and has generated no revenues. Until we complete our initial business combination (at the earliest), we will have no operations and will generate no operating revenues. In making your decision whether to invest in our securities, you should take into account not only the background of our management team, but also the special risks we face as a blank check company. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ from this offering, please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.” You should carefully consider these and the other risks set forth in the section entitled “Risk Factors” of this prospectus.
You should read and carefully consider these risks, together with the risks set forth under the section entitled “Risk Factors” and all of the other information in this prospectus, including the financial statements and the related notes included elsewhere in this prospectus, before deciding whether to invest in our ordinary shares. If any of the risks discussed in this prospectus actually occur, our business, financial condition or operating results could be materially and adversely affected. In particular, our risks include, but are not limited to, the following:
•
We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
•
Past performance by Fifth Wall, including our management team, may not be indicative of future performance of an investment in us.
•
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent COVID 19 coronavirus pandemic and the status of debt and equity markets.
•
The requirement that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding any taxes payable) at the time of the execution of a definitive agreement for our initial business combination may limit the type and number of companies with which we may complete such a business combination.
•
Our public shareholders may not be afforded an opportunity to vote on our proposed business combination, which means we may consummate our initial business combination even though a majority of our public shareholders do not support such a combination.
•
Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
•
If we seek shareholders approval of our initial business combination, our sponsor has agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.
•
The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into our initial business combination with a target.
•
The ability of a large number of our shareholders to exercise redemption rights may not allow us to consummate the most desirable business combination or optimize our capital structure.
•
The requirement that we maintain a minimum net worth or retain a certain amount of cash could increase the probability that we cannot consummate our business combination and that you would have to wait for liquidation in order to redeem your shares.
•
The requirement that we complete our initial business combination within 24 months from the closing of this offering may give potential target businesses leverage over us in negotiating our initial business combination.
•
We may not be able to consummate our initial business combination within the required time period, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
•
If we seek shareholder approval of our business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares from shareholders, in which case they may influence a vote in favor of a proposed business combination that you do not support.
•
Purchases of ordinary shares in the open market or in privately negotiated transactions by our sponsor, directors, officers, advisors or their affiliates may make it difficult for us to maintain the listing of our shares on a national securities exchange following the consummation of an initial business combination.
•
If a shareholders fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
•
You will not be entitled to protections normally afforded to investors of many other blank check companies.
•
If we seek shareholder approval of our business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to hold in excess of 15% of our ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our ordinary shares.
•
If the net proceeds of this offering not being held in the trust account are insufficient to allow us to operate for at least the next 24 months, we may be unable to complete our initial business combination.
•
Unlike some other similarly structured special purpose acquisition companies, our sponsor will receive additional Class A ordinary shares if we issue certain shares to consummate an initial business combination.
•
Our executive officers and directors will allocate their time to other businesses, thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
•
Fifth Wall and each of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
•
Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
•
We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors or existing holders which may raise potential conflicts of interest.
SUMMARY FINANCIAL DATA
The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, so only balance sheet data is presented.
| |
|
|
February 24, 2021
|
|
|
Balance Sheet Data:
|
|
|
|
Working capital
|
|
|
|
$ |
(4,815) |
|
|
|
Total assets
|
|
|
|
$ |
35,237 |
|
|
|
Total liabilities
|
|
|
|
$ |
20,026 |
|
|
|
Shareholder’s equity
|
|
|
|
$ |
15,211 |
|
|
RISK FACTORS
An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this prospectus, before making a decision to invest in our shares. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
Risks Related to Our Business and Financial Position
We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a blank check company with no operating results, and we will not commence operations until obtaining funding through this offering and consummating our initial business combination. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning our initial business combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
We may be a passive foreign investment company for U.S. federal income tax purposes.
We currently expect that we or any of our direct or indirect investments may be treated as a “passive foreign investment company” for U.S. federal income tax purposes for our current taxable year and taxable years thereafter. If we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined in the section of this prospectus captioned “Taxation — U.S. Federal Income Tax Considerations for U.S. Holders”) of our Class A ordinary shares or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception and the timing of our initial business combination (see the section of this prospectus captioned “Taxation — U.S. Federal Income Tax Considerations for U.S. Holders —Passive Foreign Investment Company”). Depending on the particular circumstances, the application of the PFIC start-up exception is subject to uncertainty, and there can be no assurance that we will qualify for the PFIC start-up exception. In addition, our status as a PFIC for any taxable year will not be determinable until after the end of such taxable year. Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. The U.S. federal income tax rules applicable to investments in passive foreign investment companies are very complex, and a U.S. investor may suffer adverse U.S. federal income tax consequences as a result of these rules. See “U.S. Federal Income Tax Considerations for U.S. Holders.” Each prospective U.S. investor should consult its own tax advisor regarding the tax considerations relating to an investment in a passive foreign investment company.
Our initial business combination or reincorporation may result in taxes imposed on shareholders.
We may, subject to requisite shareholder approval under the Companies Act, effect a business combination with a target company in another jurisdiction, reincorporate in the jurisdiction in which the target company or business is located, or reincorporate in another jurisdiction. Such transaction(s) may require a shareholder to recognize taxable income in the jurisdiction in which the shareholder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders to pay such taxes. Shareholders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.
If we determine to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the Cayman Islands. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
After our initial business combination, it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located outside the United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
In particular, there is uncertainty as to whether the courts of the Cayman Islands or any other applicable jurisdictions would recognize and enforce judgments of U.S. courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or entertain original actions brought in the Cayman Islands or any other applicable jurisdiction’s courts against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.
For a more detailed discussion, see the section of this prospectus captioned “Description of Securities — Certain Differences in Corporate Law.”
Past performance by Fifth Wall, including our management team, may not be indicative of future performance of an investment in us.
Information regarding performance by, or businesses associated with, Fifth Wall is presented for informational purposes only. Any past experience and performance of Fifth Wall or our management team is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our initial business combination; or (2) of any results with respect to any initial business combination we may consummate. You should not rely on the historical record of Fifth Wall or our management team’s performance as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An investment in us is not an investment in Fifth Wall. Our officers, directors and Fifth Wall have had limited experience with a blank check company or special purpose acquisition company in the past.
We are dependent upon our executive officers and directors and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us. Further, Fifth Wall and each of our officers and directors have duties and obligations with respect to confidentiality to other entities and may in the future agree to additional such duties or obligations, which may prevent Fifth Wall and such officers and directors from disclosing such information to the company. Fifth Wall and our officers and directors will comply with such duties and obligations of confidentiality to such other entities, in which case, the company may not have access to such information.
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent COVID-19 coronavirus pandemic and the status of debt and equity markets.
In December 2019, a novel strain of coronavirus was reported to have surfaced, which has and is continuing to spread throughout the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the COVID-19 coronavirus disease a “Public Health Emergency
of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic.” The COVID-19 outbreak has resulted in, and a significant outbreak of other infectious diseases could result in, a widespread health crisis that could materially and adversely affect the economies and financial markets worldwide, and the operations and financial position of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors, if the target company’s personnel, vendors and service providers are unavailable to negotiate and consummate a transaction in a timely manner, or if COVID-19 causes a prolonged economic downturn. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
In addition, our ability to consummate a business combination may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
The requirement that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding any taxes payable) at the time of the execution of a definitive agreement for our initial business combination may limit the type and number of companies with which we may complete such a business combination.
Nasdaq rules and our amended and restated memorandum and articles of association require that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding any taxes payable) at the time of the execution of a definitive agreement for our initial business combination. This restriction may limit the type and number of companies that we may complete a business combination with. If we are unable to locate a target business or businesses that satisfy this fair market value test, we may be forced to liquidate and you will only be entitled to receive your pro rata portion of the funds in the trust account, which may be less than $10.00 per ordinary share.
As a result of the aggregate purchase price paid by our initial shareholders for the founder shares and private shares, our initial shareholders could make a substantial profit even if an initial business combination is unprofitable for our public shareholders or subsequently declines in value.
As a result of the aggregate purchase price paid by our initial shareholders for the founder shares and private shares, our initial shareholders could make a substantial profit even if we select and consummate an initial business combination with an acquisition target that is unprofitable for our public shareholders or subsequently declines in value. For example, the following table shows the public shareholders’ and initial shareholders’ investment per share and how that compares to the implied value of one of our shares upon our initial business combination assuming (1) we are valued at $241,250,000 upon our initial business combination, which is the amount of funds we will initially have available for our initial business combination, assuming no redemptions and after payment of $8,750,000 of deferred underwriting fees after estimated offering and working capital expenses, (2) none of our public shareholders redeem their shares and (3) no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of an aggregate of 937,500 Class B ordinary shares held by our initial shareholders. While the table below assumes no redemptions, we will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest (net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein.
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Public shares
|
|
|
|
|
25,000,000 |
|
|
| |
Founder shares
|
|
|
|
|
6,250,000 |
|
|
| |
Private shares
|
|
|
|
|
857,000 |
|
|
| |
Total shares
|
|
|
|
|
32,107,000 |
|
|
| |
Value of company at time of business combination
|
|
|
|
$ |
241,250,000 |
|
|
| |
Implied value per share
|
|
|
|
$ |
7.51 |
|
|
| |
Public shareholders’ investment per share
|
|
|
|
$ |
10.00 |
|
|
| |
Initial shareholders’ average investment per share(1)
|
|
|
|
$ |
1.21 |
|
|
(1)
Represents the average per share purchase price of the 6,250,000 founder shares and 857,000 private shares, which were purchased by the initial shareholders for $25,000 and $8,570,000, respectively.
As a result, our initial shareholders and their affiliates may have more of an economic incentive for us to enter into an initial business combination with a riskier, weaker-performing or an entity lacking an established record of revenues or earnings, than would be the case if such parties had paid the full offering price for their securities.
Risks Related to Our Proposed Initial Business Combination
Our public shareholders may not be afforded an opportunity to vote on our proposed business combination, which means we may consummate our initial business combination even though a majority of our public shareholders do not support such a combination.
If a shareholder vote is not required, we may conduct redemptions via a tender offer. Accordingly, we may consummate our initial business combination even if holders of a majority of our public shares do not approve the business combination.
Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Because our board of directors may consummate our initial business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the business combination. Accordingly, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our business combination.
If we seek shareholder approval of our initial business combination, our sponsor has agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.
Our sponsor will own, on an as-converted basis, 20% of our outstanding ordinary shares immediately following the completion of this offering, excluding the private placement shares. Our sponsor also may from time to time purchase Class A ordinary shares prior to our initial business combination.
Our amended and restated memorandum and articles of association provides that, if we seek shareholder approval of an initial business combination, we will complete our initial business combination only if we receive approval pursuant to an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. As a result, in addition to our sponsor’s founder shares, we would need 8,946,501, or 35.8%, of the 25,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). Accordingly, if we seek shareholder approval of our initial business combination, the agreement by our sponsor to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite shareholders approval for such initial business combination.
The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into our initial business combination with a target.
We may enter into a transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights, we may not be able to meet such closing condition, and as a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets would be aware of these risks and, thus, may be reluctant to enter into our initial business combination transaction with us.
The ability of a large number of our shareholders to exercise redemption rights may not allow us to consummate the most desirable business combination or optimize our capital structure.
In connection with the successful consummation of our business combination, we may redeem up to that number of ordinary shares that would permit us to maintain net tangible assets of $5,000,001. If our business combination requires us to use substantially all of our cash to pay the purchase price, the redemption threshold may be further limited. Alternatively, we may need to arrange third party financing to help fund our business combination in case a larger percentage of shareholders exercise their redemption rights than we expect. If the acquisition involves the issuance of our shares as consideration, we may be required to issue a higher percentage of our shares to the target or its shareholders to make up for the failure to satisfy a minimum cash requirement. Raising additional funds to cover any shortfall may involve dilutive equity financing or incurring indebtedness at higher than desirable levels. This may limit our ability to effectuate the most attractive business combination available to us.
The requirement that we maintain a minimum net worth or retain a certain amount of cash could increase the probability that we cannot consummate our business combination and that you would have to wait for liquidation in order to redeem your shares.
If, pursuant to the terms of our proposed business combination, we are required to maintain a minimum net worth or retain a certain amount of cash in trust in order to consummate the business combination and regardless of whether we proceed with redemptions under the tender offer or proxy rules, the probability that we cannot consummate our business combination is increased. If we do not consummate our business combination, you would not receive your pro rata portion of the trust account until we liquidate. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount in our trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
The requirement that we complete our initial business combination within 24 months from the closing of this offering may give potential target businesses leverage over us in negotiating our initial business combination.
Any potential target business with which we enter into negotiations concerning our initial business combination will be aware that we must consummate our initial business combination within 24 months from the closing of this offering. Consequently, such target businesses may obtain leverage over us in negotiating our initial business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to consummate our initial business combination within the required time period, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
We may not be able to find a suitable target business and consummate an initial business combination within 24 months after the closing of this offering. Our ability to complete our initial business combination
may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. If we have not consummated an initial business combination within such applicable time period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case, to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Our amended and restated memorandum and articles of association provides that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law. In either such case, our public shareholders may receive only $10.00 per public share, or less than $10.00 per public share, or possibly less, on the redemption of their public shares. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share” and other risk factors herein.
If we seek shareholder approval of our business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares from shareholders, in which case they may influence a vote in favor of a proposed business combination that you do not support.
If we seek shareholder approval of our business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares or equity-linked securities in privately negotiated transactions or in the open market either prior to or following the consummation of our initial business combination. Such purchases will not be made if our sponsor, directors, officers, advisors or their affiliates are in possession of any material non-public information that has not been disclosed to the selling shareholder, although they are under no obligation to do so. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. It is intended that, if Rule 10b-18 would apply to purchases by our sponsor, directors, officers, advisors or their affiliates, then such purchases will comply with Rule 10b-18 under the Exchange Act, to the extent it applies, which provides a safe harbor for purchases made under certain conditions, including with respect to timing, pricing and volume of purchases.
The purpose of such purchases would be to (1) increase the likelihood of obtaining shareholder approval of the business combination or (2) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of the business combination, where it appears that such requirement would otherwise not be met. This may result in the consummation of an initial business combination that may not otherwise have been possible.
Purchases of ordinary shares in the open market or in privately negotiated transactions by our sponsor, directors, officers, advisors or their affiliates may make it difficult for us to maintain the listing of our shares on a national securities exchange following the consummation of an initial business combination.
If our sponsor, directors, officers, advisors or their affiliates purchase ordinary shares in the open market or in privately negotiated transactions, the public “float” of our ordinary shares and the number of beneficial holders of our securities would both be reduced, possibly making it difficult to maintain the listing or trading of our securities on a national securities exchange following consummation of the business combination.
If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a shareholder fails to receive our proxy solicitation or tender offer materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly redeem or tender public shares. In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed. See “Proposed Business — Effecting Our Initial Business Combination — Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights.”
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares, potentially at a loss.
Our public shareholders shall be entitled to receive funds from the trust account only in the event of a redemption to public shareholders prior to any winding up in the event we do not consummate our initial business combination or our liquidation, if they redeem their shares in connection with an initial business combination that we consummate or if we seek to amend our amended and restated memorandum and articles of association to modify the substance or timing of our redemption obligation to redeem all public shares if we cannot complete an initial business combination within 24 months of the closing of this offering or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity. In no other circumstances will a shareholder have any right or interest of any kind to the funds in the trust account. Accordingly, to liquidate your investment, you may be forced to sell your public shares, potentially at a loss.
You will not be entitled to protections normally afforded to investors of many other blank check companies.
Because the net proceeds of this offering are intended to be used to complete our initial business combination with a target business that has not been identified, we may be deemed to be a “blank check” company under the United States securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the successful consummation of this offering and will expect to file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419.
Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our shares will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, offerings subject to Rule 419 would prohibit the release of any interest earned on funds held in the trust account to us. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
We or one of our Affiliates may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us or our Affiliates after this offering, which may include acting as financial advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction or as an underwriter in connection with an offering by another special purpose acquisition company that is competitive with ours. Our underwriters are entitled to receive deferred commissions that will be released from the trust only on a completion of an initial business combination. These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after this offering, including, for example, in connection with the sourcing and consummation of an initial business combination.
We or one of our Affiliates may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after this offering, including, for example, identifying potential targets, providing financial advisory services, acting as a placement agent in a private offering or arranging
debt financing or as an underwriter in connection with an offering by another special purpose acquisition company that is competitive with ours.
We may pay such underwriter or its affiliate fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with any of the underwriters or their respective affiliates and no fees or other compensation for such services will be paid to any of the underwriters or their respective affiliates prior to the date that is 60 days from the date of this prospectus, unless such payment would not be deemed underwriters’ compensation in connection with this offering. The underwriters are also entitled to receive deferred commissions that are conditioned on the completion of an initial business combination. The underwriters’ or their respective affiliates’ financial interests tied to the consummation of a business combination transaction or other transactions may give rise to potential conflicts of interest in providing any such additional services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.
If we seek shareholder approval of our business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to hold in excess of 15% of our ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our ordinary shares.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, individually or together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in this offering. Your inability to redeem more than an aggregate of 15% of the shares sold in this offering will reduce your influence over our ability to consummate our initial business combination and you could suffer a material loss on your investment in us if you sell such excess shares in open market transactions. As a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, you would be required to sell your shares in open market transaction, potentially at a loss.
As the number of special purpose acquisition companies increases, there may be more competition to find an attractive target for an initial business combination. This could increase the costs associated with completing our initial business combination and may result in our inability to find a suitable target for our initial business combination.
In recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many companies have entered into business combinations with special purpose acquisition companies, and there are still many special purpose acquisition companies seeking targets for their initial business combination, as well as many additional special purpose acquisition companies currently in registration. As a result, at times, fewer attractive targets may be available, and it may require more time, effort and resources to identify a suitable target for an initial business combination.
In addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find a suitable target for and/or complete our initial business combination.
If the net proceeds of this offering not being held in the trust account are insufficient to allow us to operate for at least the next 24 months, we may be unable to complete our initial business combination.
The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the next 24 months, assuming that our initial business combination is not consummated during that time. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants
to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we are unable to fund such down payments or “no shop” provisions, our ability to close a contemplated transaction could be impaired. Furthermore, if we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination, our public shareholders may only receive a pro rata portion of the amount then in the trust account (which may be less than $10.00 per ordinary share) (whether or not the underwriters’ over-allotment option is exercised in full) on our redemption.
Subsequent to our consummation of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges.
Even if we conduct thorough due diligence on a target business with which we combine, this diligence may not surface all material issues that may be present inside a particular target business. And, regardless of how comprehensive our diligence may be, factors outside of the target business and outside of our control may arise later. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing.
Our directors may decide not to enforce indemnification obligations against our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public shareholders.
In the event that the proceeds in the trust account are reduced below $10.00 per ordinary share (whether or not the underwriters’ overallotment option is exercised in full) and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine on our behalf whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations on our behalf, the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.00 per ordinary share.
Unlike some other similarly structured special purpose acquisition companies, our sponsor will receive additional Class A ordinary shares if we issue certain shares to consummate an initial business combination.
The founder shares will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment for share sub-divisions, share dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares or equity-linked securities are issued or deemed issued in connection with our initial business combination, the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as converted basis, 20% of the total number of Class A ordinary shares outstanding after such conversion (after giving effect to any redemptions of Class A ordinary shares by public shareholders). This amount will include the total number of Class A ordinary shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination, but will exclude any
Class A ordinary shares or equity-linked securities or rights exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial business combination, the private placement shares, and any private placement shares issued to our sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one-for-one basis. This is different than some other similarly structured special purpose acquisition companies in which the initial shareholders will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to our initial business combination.
Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our executive officers’ and directors’ other business affairs, please see “Management — Officers and Directors.”
Fifth Wall and each of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual or other obligations to other entities and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Fifth Wall and each of our officers and directors presently has, and any of them in the future may have, additional fiduciary, contractual or other obligations to other entities, including Fifth Wall investment funds, investment vehicles, accounts and clines and their respective portfolio companies, pursuant to which such officer or director is or will be required to present a business combination opportunity or other business opportunities to such entity first, in which case such opportunity may not be made available to us, and Fifth Wall or such person will only present such opportunity to us if such other entity rejects the opportunity and consummating the transaction would not violate any restrictive covenants or other legal obligations to which such officers and directors are subject, including their fiduciary duties under Cayman Islands law. In addition, existing and future Fifth Wall investment funds, investment vehicles, accounts, accounts and clients and their respective portfolio companies may compete with us for business combination opportunities and, if such opportunities are pursued by such entities, we may be precluded from pursuing such opportunities. If any officer or director serving Fifth Wall Acquisition Corp. II or Fifth Wall Acquisition Corp. III becomes aware of a business combination opportunity with a proptech company serving the residential real estate industry (and no other parties to which such officers or directors may owe any fiduciary, contractual or other obligations, including in the case of officers and directors associated or affiliated with Fifth Wall, Fifth Wall, wish to pursue such opportunity), such officers and directors will present the opportunity to Fifth Wall Acquisition Corp. II. In all other cases, the opportunity will be first presented to Fifth Wall Acquisition Corp. III. Further, any of the foregoing may engage in businesses that are competitive to a prospective or actual target for the company’s initial business acquisition. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in
being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer on the one hand, and us, on the other. If Fifth Wall or any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which Fifth Wall or such person has then-current fiduciary, contractual or other obligations to present such opportunity to such entity, Fifth Wall or such person will honor such fiduciary, contractual or other obligations to present such opportunity to such entity first, in which case such opportunity may not be made available to us, and Fifth Wall or such person will only present such opportunity to us if such other entity rejects the opportunity and consummating the transaction would not violate any restrictive covenants or other legal obligations to which such officers and directors are subject, including their fiduciary duties under Cayman Islands law. In addition, Fifth Wall and its Affiliates and our officers and directors have previously sponsored and formed and become officers or directors of, and in the future may sponsor or form or become officers or directors of, other special purpose acquisition companies similar to ours, or may pursue other business or investment ventures, including without limitation forming investment funds or other vehicles, whose strategies may conflict with or otherwise be competitive with us during the period in which we are seeking an initial business combination. For example, Affiliates of Fifth Wall are currently sponsoring two special purpose acquisition companies, Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II. Although we intend to focus on industries outside of the United States, Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II are also pursuing an acquisition opportunity in any business, industry, sector or geographical location with a focus on “Built World”. Mr. Wallace, our Chairman of the Board and Chief Executive Officer, is the Chairman of the Board and Chief Executive Officer of Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II and Mr. Mykhaylovskyy, our Chief Financial Officer and director, is the Chief Financial Officer and director of Fifth Wall Acquisition Corp. I and Chief Financial Officer of Fifth Wall Acquisition Corp. II. Our other directors, Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness are also directors of Fifth Wall Acquisition Corp. II. Alana Beard is also a director of Fifth Wall Acquisition Corp. I. As a result, while we currently do not have any specific business combination under consideration and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target any such other special purpose acquisition companies, businesses or investments, including without limitation investment funds or other vehicles, with which Fifth Wall and its Affiliates, and our officers and directors are involved, may present additional conflicts of interest in pursuing an initial business combination that you should be aware of, please see “Management — Officers and Directors,” “Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions.” If any officer or director serving Fifth Wall Acquisition Corp. II or Fifth Wall Acquisition Corp. III becomes aware of a business combination opportunity with a proptech company serving the residential real estate industry (and no other parties to which such officers or directors may owe any fiduciary, contractual or other obligations, including in the case of officers and directors associated or affiliated with Fifth Wall, Fifth Wall, wish to pursue such opportunity), such officers and directors will present the opportunity to Fifth Wall Acquisition Corp. II. In all other cases, the opportunity will be first presented to Fifth Wall Acquisition Corp. III.
Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact (subject to certain approvals and consents), we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive officers or a target business in which any of the foregoing have an interest, although we do not intend to do so, or we may acquire a target business through an Affiliated Joint Acquisition with one or more affiliates of Fifth Wall and/or one or more investors in any current or future Fifth Wall investment fund, investment vehicle, account or client. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours. In particular, certain of the Fifth Wall funds are focused on investments in the proptech industry. As a result, there may be substantial overlap between companies that would be a suitable business combination for us and companies that would make an attractive target for the Fifth Wall funds. In addition, our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law:
(i) no individual serving as a director or an officer shall have any duty, except to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination or in determining the outcome of any conflicts of interest that may arise as a result of such personal and financial interests. In addition, our directors and officers may have interests in other special purpose acquisition companies similar to ours (including sponsors and special purpose acquisition companies that are not Affiliates of Fifth Wall). Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our shareholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’ rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors or existing holders which may raise potential conflicts of interest.
In light of the involvement of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers, directors or existing holders. Our directors also serve as officers and board members for other entities, including, without limitation, those described under “Management — Conflicts of Interest.” Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in “Proposed Business — Effecting our initial business combination — Evaluation of a target business and structuring of our initial business combination” and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, executive officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
Moreover, we may pursue an Affiliated Joint Acquisition opportunity with one or more affiliates of Fifth Wall and/or one or more investors in Fifth Wall. Any such parties may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the business combination by issuing to such parties a class of equity or equity-linked securities. Accordingly, such persons or entities may have a conflict between their interests and ours. Any such business combination may require additional consents from third parties outside the control of our directors, officers or Fifth Wall, including any such business combination that requires the consent of the limited partner advisory committee of one or more investment funds managed or advised by Fifth Wall. We may be prevented from pursuing an Affiliated Joint Acquisition or other similar business combination if such consents are not obtained.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including restrictions on the nature of our investments and restrictions on the issuance of
securities, each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including registration as an investment company, adoption of a specific form of corporate structure and reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate our initial business combination.
In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-business combination business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations.
Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, and (iii) the redemption of our public shares if we have not consummated an initial business within 24 months from the closing of this offering, subject to applicable law and as further described herein. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we do not complete our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our shareholders do not agree.
Our amended and restated memorandum and articles of association does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. As a result, we may be able to complete our initial business combination even though a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial business combination and do not conduct
redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares in connection with such initial business combination, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments, in particular, the Securities and Exchange Commission, or the SEC. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application also may change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations.
If we are unable to consummate our initial business combination, our public shareholders may be forced to wait up to 24 months or longer before redemption from our trust account.
If we are unable to consummate our initial business combination within 24 months from the closing of this offering, we will, as promptly as reasonably possible but not more than ten business days thereafter (subject to our amended and restated memorandum and articles of association and applicable law), distribute the aggregate amount then on deposit in the trust account (net of taxes payable), pro rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs by way of a voluntary liquidation, as further described herein. Any redemption of public shareholders from the trust account shall be effected as required by our amended and restated memorandum and articles of association prior to our commencing any voluntary liquidation. Except as otherwise described herein, we have no obligation to return funds to investors prior to the date of any redemption required as a result of our failure to consummate our initial business combination within the period described above or our liquidation, unless we consummate our initial business combination prior thereto and only then in cases where investors have sought to redeem their ordinary shares. Only upon any such redemption of public shares as we are required to effect, or any liquidation, will public shareholders be entitled to distributions if we are unable to complete our initial business combination.
The grant of registration rights to our sponsor may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our ordinary shares.
Pursuant to an agreement to be entered into on the date of this prospectus, our sponsor (and/or our sponsor’s designees) and their permitted transferees can demand that we register the founder shares, the private shares, the underlying securities and any securities issued upon conversion of working capital loans. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our ordinary shares. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the shareholder of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our ordinary shares that is expected to occur when the securities owned by our sponsor, holders of our private shares or their respective permitted transferees are registered.
Because we have not selected a particular business or specific geographic location or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’ operations.
We may pursue an acquisition opportunity in any business industry or sector, but we intend to initially focus on those industries or sectors that complement our management team’s background. Except for the
limitations that a target business have a fair market value of at least 80% of the value of the trust account (excluding any taxes payable) and that we are not permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations, we will have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. Because we have not yet identified or approached any specific target business with respect to our initial business combination, there is no basis to evaluate the possible merits or risks of any particular target business’ operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we consummate our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and thus leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. In addition, investors will be relying on the business judgment of our board of directors, which will have significant discretion in choosing the standard used to establish the fair market value of a particular target business. An investment in our shares may not ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in an acquisition target.
We may seek investment opportunities outside our management’s area of expertise and our management may not be able to adequately ascertain or assess all significant risks associated with the target company.
There is no limitation on the industry or business sector we may consider when contemplating our initial business combination. We may therefore be presented with a business combination candidate in an industry unfamiliar to our management team, but determine that such candidate offers an attractive investment opportunity for our company. In the event we elect to pursue an investment outside of our management’s expertise, our management’s experience may not be directly applicable to the target business or their evaluation of its operations.
Although we identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified specific criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we consummate our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce our initial business combination with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by law or the Nasdaq, or we decide to obtain shareholder approval for business or other legal reasons, it may be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public shareholders may only receive $10.00 per ordinary share or even less (whether or not the underwriters’ over-allotment option is exercised in full) on our redemption.
Management’s flexibility in identifying and selecting a prospective acquisition candidate, along with our management’s financial interest in consummating our initial business combination, may lead management to enter into an acquisition agreement that is not in the best interest of our shareholders.
Subject to the requirements in Nasdaq rules and our amended and restated memorandum and articles of association that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the trust account (excluding any taxes payable) at the time of the
agreement to enter into such initial business combination, we will have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. Investors will be relying on management’s ability to identify business combinations, evaluate their merits, conduct or monitor diligence and conduct negotiations. Management’s flexibility in identifying and selecting a prospective acquisition candidate, along with management’s financial interest in consummating our initial business combination, may lead management to enter into an acquisition agreement that is not in the best interest of our shareholders, which would be the case if the trading price of our ordinary shares after giving effect to such business combination was less than the per-share trust liquidation value that our shareholders would have received if we had dissolved without consummating our initial business combination.
We are not required to obtain an opinion from an independent investment banking firm, and consequently, an independent source may not confirm that the price we are paying for the business is fair to our shareholders from a financial point of view.
Unless we consummate our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independant valuation or appraisal firm the price we are paying is fair to our shareholders from a financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.
Resources could be wasted in researching acquisitions that are not consummated.
We anticipate that the investigation of each specific target business and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to consummate our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public shareholders may only receive $10.00 per ordinary share or even less (whether or not the underwriters’ over-allotment option is exercised in full) on our redemption.
Our ability to successfully effect our initial business combination and to be successful thereafter will be largely dependent upon the efforts of our officers, directors and key personnel, some of whom may join us following our initial business combination.
Our operations are dependent upon a relatively small group of individuals and, in particular, our officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have consummated our initial business combination. In addition, our officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
The role of such persons in the target business, however, cannot presently be ascertained. Although some of such persons may remain with the target business in senior management or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, our assessment of these individuals may not prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Members of our management team may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Members of our management team may be able to remain with the company after the completion of our business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of our business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any members of our management team will remain with us after the completion of our business combination. We cannot assure you that any members of our management team will remain in senior management or advisory positions with us. The determination as to whether any members of our management team will remain with us will be made at the time of our initial business combination.
We may have a limited ability to assess the management of a prospective target business and, as a result, may effectuate our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’ management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted.
The officers and directors of an acquisition candidate may resign upon consummation of our initial business combination. The loss of an acquisition target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key personnel upon the consummation of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that some members of the management team of an acquisition candidate will not wish to remain in place.
Risks Related to Our Operations
Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our executive officers’ and directors’ other business affairs, please see “Management — Officers and Directors.”
Fifth Wall and certain of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business opportunity should be presented.
Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Fifth Wall and our sponsor and officers and directors are, and may in the future become, affiliated with entities (such as operating companies or investment vehicles) that are engaged in a similar business. Our sponsor and directors and officers are also not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to us completing our initial business combination. Moreover, certain of our directors and officers have time and attention requirements for investment funds of which affiliates of our sponsor are the investment managers.
Fifth Wall and our officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other entities in the future to which they owe certain fiduciary or contractual duties. For example, Affiliates of Fifth Wall are currently sponsoring two special purpose acquisition companies, Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II. Although we intend to focus on industries outside of the United States, Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II are also pursuing an acquisition opportunity in any business, industry, sector or geographical location with a focus on “Built World”. Mr. Wallace, our Chairman of the Board and Chief Executive Officer, is the Chairman of the Board and Chief Executive Officer of Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II and Mr. Mykhaylovskyy, our Chief Financial Officer and director, is the Chief Financial Officer and director of Fifth Wall Acquisition Corp. I and the Chief Financial Officer of Fifth Wall Acquisition Corp. II. Our other directors, Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness are also directors of Fifth Wall Acquisition Corp. II. Alana Beard is also a director of Fifth Wall Acquisition Corp. I. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us, subject to our officers’ and directors’ fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer on the one hand, and us, on the other.
For a complete discussion of our officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see the sections of this prospectus entitled “Management — Officers and Directors,” “Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”
Since our sponsor, officers and directors will lose their entire investment in us if our business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
On February 24, 2021, our sponsor paid $25,000 to cover for certain expenses and offering costs on behalf of the company in exchange for issuance of 4,312,500 founder shares. In April 2021, the Company effected a share capitalization for Class B ordinary shares, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding. All shares and associated amounts have been restated to reflect the share capitalization. Our sponsor will transfer 30,000 founder shares to each of Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness. Such transferred shares will not be subject to forfeiture in the event the underwriters’ over-allotment option is not exercised. Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the outstanding shares after this offering, excluding the private placement shares. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has
committed to purchase an aggregate of 857,000 Class A ordinary shares (or 932,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full), at a price of $10.00 per ordinary share in a private placement to occur concurrently with the closing of this offering for an aggregate purchase price of $8,570,000 (or $9,320,000 if the underwriters’ over-allotment option is exercised in full). The private placement shares are identical to the Class A ordinary shares sold in this offering, subject to certain limited exceptions as described in this prospectus. Our sponsor and our directors and executive officers have agreed (A) to vote any shares owned by them in favor of any proposed business combination and (B) not to redeem any founder shares in connection with a shareholder vote to approve a proposed initial business combination. In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director. The personal and financial interests of our officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination.
Certain shares beneficially owned by our officers and directors will not participate in liquidating distributions and, therefore, our officers and directors may have a conflict of interest in determining whether a particular target business is appropriate for our initial business combination.
Our sponsor has agreed to (i) waive its redemption rights with respect to its founder shares and (ii) waive its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. Our sponsor and our directors and executive officers have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination. However, if our sponsor, directors or executive officers acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. Accordingly, the founder shares will be worthless if we do not consummate our initial business combination. The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. In addition, our directors and officers may have interests in other special purpose acquisition companies similar to ours (including sponsors and special purpose acquisition companies that are not Affiliates of Fifth Wall). Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our shareholders’ best interest.
We may issue notes or other debt securities, or otherwise incur substantial debt, to complete our initial business combination, which may adversely affect our financial condition and thus negatively impact the value of our shareholders’ investment in us.
Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete our initial business combination. If we incur any indebtedness without a waiver from the lender of any right, title, interest or claim of any kind in or to any monies held in the trust account, the incurrence of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after our initial business combination are insufficient to repay our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
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our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
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our inability to pay dividends on our ordinary shares;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
We may only be able to complete one business combination with the proceeds of this offering, which will cause us to be solely dependent on a single business, which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.
The net proceeds from this offering together with the funds we will receive from the sale of the private shares (excluding $1,000,000 of net proceeds that will not be held in the trust account) will provide us with approximately $241,250,000 assuming no redemptions (or approximately $277,437,500 if the underwriters’ over-allotment option is exercised in full) that we may use to complete our initial business combination, after payment of the deferred underwriting discount and estimated offering expenses of $2,570,000.
We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By consummating our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities, which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be solely dependent upon the performance of a single business, property or asset, or dependent upon the development or market acceptance of a single or limited number of products or services. This lack of diversification may subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.00 per ordinary share.
The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our amended and restated memorandum and articles of association, our public shareholders are entitled to receive their pro rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.00 per ordinary share.
Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
In recent months, the market for directors and officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management team. Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable. These trends may continue into the future.
The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business combination entity might need to incur greater expense and/or accept less favorable terms. Furthermore, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain qualified officers and directors.
In addition, after completion of any initial business combination, our directors and officers could be subject to potential liability from claims arising from conduct alleged to have occurred prior to such initial business combination. As a result, in order to protect our directors and officers, the post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for run-off insurance would be an added expense for the post-business combination entity and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholder may be less than $10.00 per public share.
Our placing of funds in the trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers (excluding our independent registered public accounting firm), prospective partner businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our founders will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if our founding team believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by our founding team to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where our founding team is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not consummated an initial business combination within 24 months from the closing of this offering or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per ordinary share redemption amount received by public shareholder could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors. Pursuant to the letter agreement the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or
business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per ordinary share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
We may attempt to simultaneously consummate business combinations with multiple prospective targets, which may hinder our ability to consummate our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete the initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to consummate our initial business combination with a private company about which little information is available.
In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. By definition, very little public information exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in our initial business combination with a company that is not as profitable as we suspected, if at all.
We may not be able to maintain control of a target business after our initial business combination.
We may structure our initial business combination to acquire less than 100% of the equity interests or assets of a target business, but we will only consummate such business combination if we will become the majority shareholder of the target (or control the target through contractual arrangements in limited circumstances for regulatory compliance purposes) or are otherwise not required to register as an investment company under the Investment Company Act or to the extent permitted by law we may acquire interests in a variable interest entity, in which we may have less than a majority of the voting rights in such entity, but in which we are the primary beneficiary. Even though we may own a majority interest in the target, our shareholders prior to the business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to such transaction could own less than a majority of our outstanding shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock, shares or other equity interests than we initially acquired. Accordingly, this may make it more likely that we will not be able to maintain our control of the target business.
The ability of our public shareholders to exercise their redemption rights may not allow us to effectuate the most desirable business combination or optimize our capital structure.
If our initial business combination requires us to use substantially all of our cash to pay the purchase price, because we will not know how many public shareholders may exercise redemption rights, we may either need to reserve part of the trust account for possible payment upon such redemption, or we may need to arrange third party financing to help fund our initial business combination. In the event that the acquisition involves the issuance of our shares as consideration, we may be required to issue a higher percentage of our shares to make up for a shortfall in funds. Raising additional funds to cover any shortfall may involve dilutive equity financing or incurring indebtedness at higher than desirable levels. This may limit our ability to effectuate the most attractive business combination available to us.
In connection with any meeting held to approve an initial business combination, we will offer each public shareholder the option to vote in favor of the proposed business combination and still seek redemption of their shares.
In connection with any meeting held to approve an initial business combination, we will offer each public shareholder (but not our sponsor, officers or directors) the right to have their ordinary shares redeemed for cash (subject to the limitations described elsewhere in this prospectus) regardless of whether such shareholder votes for or against such proposed business combination; provided that a shareholder must in fact vote for or against a proposed business combination in order to have their ordinary shares redeemed for cash. If a shareholder fails to vote for or against a proposed business combination, that shareholder would not be able to have their ordinary shares so redeemed. We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding ordinary shares voted are voted in favor of the business combination. This is different than other similarly structured blank check companies where shareholders are offered the right to redeem their shares only when they vote against a proposed business combination. This threshold and the ability to seek redemption while voting in favor of a proposed business combination may make it more likely that we will consummate our initial business combination.
We will require public shareholders who wish to redeem their ordinary shares in connection with a proposed business combination, or an amendment to our amended and restated memorandum and articles of association to effect the substance or timing of their redemption obligation if we fail to timely complete a business combination, to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights.
We will require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either (i) tender their certificates to our transfer agent prior to the expiration date set forth in the tender offer documents mailed to such holders, or in the event we distribute proxy materials, up to two business days prior to the vote on the proposal to approve the business combination or amendment to our amended and restated memorandum and articles of association to modify the substance or timing of our redemption obligation to redeem all public shares if we cannot complete an initial business combination or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, or (ii) deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. In order to obtain a physical stock certificate, a shareholder’s broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. While we have been advised that it takes a short time to deliver shares through the DWAC System, this may not be the case. Under our amended and restated memorandum and articles of association, we are required to provide at least 10 days advance notice of any general meeting, which would be the minimum amount of time a shareholder would have to determine whether to exercise redemption rights. Accordingly, if it takes longer than we anticipate for shareholders to deliver their shares, shareholders who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their shares.
Redeeming shareholders may be unable to sell their securities when they wish to in the event that the proposed business combination is not approved.
We will require public shareholders who wish to redeem their ordinary shares in connection with any proposed business combination to comply with the delivery requirements discussed above for redemption. If such proposed business combination is not consummated, we will promptly return such certificates to the tendering public shareholders. Accordingly, investors who attempted to redeem their shares in such a circumstance will be unable to sell their securities after the failed acquisition until we have returned their securities to them. The market price for our ordinary shares may decline during this time and you may not be able to sell your securities when you wish, even while other shareholders that did not seek redemption may be able to sell their securities.
Because of our structure, other companies may have a competitive advantage and we may not be able to consummate an attractive business combination.
We expect to encounter intense competition from entities other than blank check companies having a business objective similar to ours, including proptech investment funds and operating businesses competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. Therefore, our ability to compete in acquiring certain sizable target businesses may be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, seeking shareholder approval of our initial business combination may delay the consummation of a transaction. Additionally, our rights, and the future dilution they represent (entitling the holders to receive ordinary shares on consummation of our initial business combination), may not be viewed favorably by certain target businesses. Any of the foregoing may place us at a competitive disadvantage in successfully negotiating our initial business combination.
We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination. If we are unable to complete our initial business combination, our public shareholders may only receive $10.00 per ordinary share or even less (whether or not the underwriters’ over-allotment option is exercised in full) on our redemption.
Although we believe that the net proceeds of this offering will be sufficient to allow us to consummate our initial business combination, because we have not yet identified any prospective target business we cannot ascertain the capital requirements for any particular transaction or our costs to identify and consummate a transaction and to operate the target business. If the net proceeds of this offering prove to be insufficient for one or more reasons including the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination, or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. Financing may not be available on acceptable terms, if at all. The current economic environment may make it especially difficult for companies to obtain acquisition financing. To the extent that additional financing proves to be unavailable when needed to consummate our initial business combination, we would be compelled to either restructure the transaction or abandon that particular initial business combination and seek an alternative target business candidate. If we are unable to complete our initial business combination, our public shareholders may only receive $10.00 per ordinary share or even less (whether or not the underwriters’ over-allotment option is exercised in full) on our redemption. In addition, even if we do not need additional financing to consummate our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or shareholders is required to provide any financing to us in connection with or after our initial business combination.
Our sponsor controls a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.
Upon closing of this offering, our sponsor (and its transferees/designees, if any) collectively will own 20% of our issued and outstanding ordinary shares (assuming they do not purchase any shares in this offering and excluding the private placement shares). Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association. If our sponsor purchases any shares in this offering, or if we or our sponsor purchase any additional ordinary shares in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our sponsor nor its members nor, to our knowledge, any of our officers or directors, has any current intention to purchase additional securities. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our ordinary shares.
Our sponsor paid an aggregate of $25,000, or approximately $0.003 per founder share and, accordingly, you will experience immediate and substantial dilution from the purchase of our ordinary shares.
The difference between the public offering price per ordinary share (allocating all of the share purchase price to the ordinary shares) and the pro forma net tangible book value per ordinary share after this offering constitutes the dilution to you and the other investors in this offering. Our sponsor acquired the founder shares at a nominal price, significantly contributing to this dilution. Upon closing of this offering, you and the other public shareholders will incur an immediate and substantial dilution of approximately 94.0% or $9.40 per ordinary share (the difference between the pro forma net tangible book value per ordinary share of $.60 and the initial offering price of $10.00 per ordinary share immediately upon the closing of this offering), or a dilution of approximately 94.8% dilution or $9.48 per ordinary share (the difference between the pro forma net tangible book value per ordinary share of $.52 and the initial offering price of $10.00 per ordinary share) if the over-allotment is fully exercised.
Because, unlike many other SPAC IPOs, investors in this offering will not receive warrants that would become exercisable following completion of our initial business combination, our offered securities may be worth less than the securities offered in other SPAC IPOs.
This is an initial public offering of our Class A ordinary shares. Unlike many other SPAC IPOs, investors in this offering will not receive warrants that would become exercisable following completion of our initial business combination. We are not offering warrants in order to remove the dilutive effect of warrants upon completion of a business combination, thus making us, we believe, a more attractive business combination partner for target businesses. Nevertheless, this offering structure may cause our offered securities to be worth less than if we were also offering a whole or fractional warrant to purchase shares.
The determination of the offering price of our Class A ordinary shares and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry.
Prior to this offering there has been no public market for any of our securities. The public offering price of the Class A ordinary shares was negotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with representatives of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of Class A ordinary shares includes:
•
the history and prospects of companies whose principal business is the acquisition of other companies;
•
prior offerings of those companies;
•
our prospects for acquiring an operating business at attractive values;
•
a review of debt to equity ratios in leveraged transactions;
•
our capital structure;
•
an assessment of our management and their experience in identifying operating companies;
•
general conditions of the securities markets at the time of this offering; and
•
other factors as were deemed relevant.
Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results.
There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
As of the date of this prospectus there is currently no market for our securities. Prospective shareholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions. Once listed on Nasdaq, an active trading market for our securities may never develop or, if developed, may not be sustained. Additionally, if our securities become delisted from Nasdaq for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities not listed on a national exchange, the liquidity and price of our securities may be more limited than if we were listed on Nasdaq or another national exchange. You may be unable to sell your securities unless a market can be established and sustained.
Once initially listed on Nasdaq, our securities may not continue to be listed on Nasdaq in the future, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We anticipate that our securities will be initially listed on Nasdaq upon consummation of this offering. However, we cannot assure you of this or that our securities will continue to be listed on Nasdaq in the future. Additionally, in connection with our business combination, Nasdaq may require us to file a new initial listing application and meet its initial listing requirements as opposed to its more lenient continued listing requirements. We cannot assure you that we will be able to meet those initial listing requirements at that time. If Nasdaq delists our securities from trading on its exchange, we could face significant material adverse consequences, including:
•
a limited availability of market quotations for our securities;
•
a reduced liquidity with respect to our securities;
•
a determination that our ordinary shares are a “penny stock” which will require brokers trading in our ordinary shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our ordinary shares;
•
a limited amount of news and analyst coverage for our company; and
•
a decreased ability to issue additional securities or obtain additional financing in the future.
Because we must furnish our shareholders with target business financial statements prepared in accordance with U.S. generally accepted accounting principles or international financial reporting standards, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.
The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards, or IFRS, as issued by the International Accounting Standards Board or the IASB, depending on the circumstances. Historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. We will include substantially the same financial statement disclosure in connection with any tender offer documents we use, whether or not they are required under the tender offer rules. These financial statement requirements may limit the pool of potential target businesses with which we consummate our initial business combination, because some targets may be unable to provide such statements in time
for us to disclose such statements in accordance with federal proxy rules, and hence we may be unable to complete our initial business combination within the prescribed time frame.
Compliance obligations under the Sarbanes-Oxley Act of 2002 may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2022. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to all public companies because a target company with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
We are an “emerging growth company”and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our securities less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act. We will remain an “emerging growth company” for up to five years. However, if either our non-convertible debt issued within a three-year period, or our revenues exceed $1.07 billion, or the market value of our ordinary shares that are held by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company as of the following fiscal year. As an emerging growth company, we (i) are not required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, (ii) have reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and (iii) are exempt from the requirements of holding a nonbinding advisory vote on executive compensation and obtaining shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, will not adopt the new or revised standard until the time private companies are required to adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.
We cannot predict if investors will find our shares less attractive because we may rely on these provisions. If some investors find our shares less attractive as a result, there may be a less active trading market for our shares and our share price may be more volatile.
Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.
We are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or executive officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs and the rights of shareholders will be governed by our amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to time) and the common law of the Cayman Islands. We will also be subject to the federal
securities laws of the United States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States. For a more detailed discussion of the principal differences between the provisions of the Companies Act applicable to us and, for example, the laws applicable to companies incorporated in the United States and their shareholders, see the section of this prospectus captioned “Description of Securities - Certain Differences in Corporate Law.”
Shareholders of Cayman Islands exempted companies like the company have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of the register of members of these companies. Our directors have discretion under our amended and restated memorandum and articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
We have been advised by Maples and Calder (Cayman) LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management team, members of the board of directors or controlling shareholders than they would as public shareholders of a United States company.
Our letter agreement with our sponsor, executive officers and directors may be amended without shareholder approval.
Our letter agreement with our sponsor, executive officers and directors contain provisions relating to transfer restrictions of our founder shares and private placement shares, indemnification of the trust account, waiver of redemption rights and participation in liquidating distributions from the trust account. The letter agreement may be amended without shareholder approval (although releasing the parties from the restriction not to transfer the founder shares for 185 days following the date of this prospectus will require the prior written consent of the underwriters). While we do not expect our board to approve any amendment to the letter agreement prior to our initial business combination, it may be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more
amendments to the letter agreement. Any such amendments to the letter agreement would not require approval from our shareholders and may have an adverse effect on the value of an investment in our securities.
Risks Associated with Acquiring and Operating a Business outside of the United States
We may effect our initial business combination with a company located outside of the United States.
If we effect our initial business combination with a company located outside of the United States, we would be subject to any special considerations or risks associated with companies operating in the target business’ home jurisdiction, including any of the following:
•
rules and regulations or currency redemption or corporate withholding taxes on individuals;
•
laws governing the manner in which future business combinations may be effected;
•
exchange listing and/or delisting requirements;
•
tariffs and trade barriers;
•
regulations related to customs and import/export matters;
•
longer payment cycles;
•
tax issues, such as tax law changes and variations in tax laws as compared to the United States;
•
currency fluctuations and exchange controls;
•
rates of inflation or deflation;
•
challenges in collecting accounts receivable;
•
cultural and language differences;
•
employment regulations;
•
crime, strikes, riots, civil disturbances, terrorist attacks, pandemics and wars; and
•
deterioration of political relations with the United States. We may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer.
Social unrest, acts of terrorism, regime changes, changes in laws and regulations, political upheaval, or policy changes or enactments may occur in a country in which we may operate after we effect our initial business combination.
Political events in another country may significantly affect our business, assets or operations. Social unrest, acts of terrorism, regime changes, changes in laws and regulations, political upheaval, pandemics and policy changes or enactments could negatively impact our business in a particular country.
Many countries have difficult and unpredictable legal systems and underdeveloped laws and regulations that are unclear and subject to corruption and inexperience.
Our ability to seek and enforce legal protections, including with respect to intellectual property and other property rights, or to defend ourselves with regard to legal actions taken against us in a given country, may be difficult or impossible, which could adversely impact our operations, assets or financial condition.
Rules and regulations in many countries are often ambiguous or open to differing interpretation by responsible individuals and agencies at the municipal, state, regional and federal levels. The attitudes and actions of such individuals and agencies are often difficult to predict and inconsistent.
Delay with respect to the enforcement of particular rules and regulations, including those relating to customs, tax, environmental and labor, could cause serious disruption to operations abroad and negatively impact our results.
If relations between the United States and foreign governments deteriorate, it could cause potential target businesses or their goods and services to become less attractive.
The relationship between the United States and foreign governments could be subject to sudden fluctuation and periodic tension. For instance, the United States may announce its intention to impose quotas on certain imports. Such import quotas may adversely affect political relations between the two countries and result in retaliatory countermeasures by the foreign government in industries that may affect our ultimate target business. Changes in political conditions in foreign countries and changes in the state of U.S. relations with such countries are difficult to predict and could adversely affect our operations or cause potential target businesses or their goods and services to become less attractive. Because we are not limited to any specific industry, there is no basis for investors in this offering to evaluate the possible extent of any impact on our ultimate operations if relations are strained between the United States and a foreign country in which we acquire a target business or move our principal manufacturing or service operations.
If our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws.
Following our initial business combination, our management may resign from their positions as officers or directors of the company and the management of the target business at the time of the business combination will remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar with our laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues, which may adversely affect our operations.
Currency policies may cause a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, the dollar equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.
Because foreign law could govern our material agreements, we may not be able to enforce our rights within such jurisdiction or elsewhere.
Foreign law could govern our material agreements. The target business may not be able to enforce any of its material agreements and remedies may not be available outside of such foreign jurisdiction’s legal system. The system of laws and the enforcement of existing laws and contracts in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The judiciaries in certain foreign countries may be relatively inexperienced in enforcing corporate and commercial law, leading to a higher than usual degree of uncertainty as to the outcome of any litigation. Any such jurisdictions may not favor outsiders or could be corrupt. As a result, the inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business and business opportunities.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:
•
our ability to complete our initial business combination;
•
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
•
our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;
•
our potential ability to obtain additional financing to complete our initial business combination;
•
our pool of prospective target businesses;
•
the ability of our officers and directors to generate a number of potential investment opportunities;
•
our public securities’ potential liquidity and trading;
•
the lack of a market for our securities;
•
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
•
the trust account not being subject to claims of third parties; or
•
our financial performance following this offering.
The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
USE OF PROCEEDS
We are offering 22,000,000 shares at an offering price of $10.00 per ordinary share. We estimate that the net proceeds of this offering, together with the funds we will receive from the sale of the private placement shares, will be used as set forth in the following table.
| |
|
|
WITHOUT
OVER-
ALLOTMENT
OPTION
|
|
|
OVER-
ALLOTMENT
OPTION
EXERCISED
|
|
|
Gross proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross proceeds from shares offered to public(1)
|
|
|
|
$ |
250,000,000 |
|
|
|
|
$ |
287,500,000 |
|
|
|
Gross proceeds from private placement shares offered in the private placement
|
|
|
|
|
8,570,000 |
|
|
|
|
|
9,320,000 |
|
|
|
Total gross proceeds
|
|
|
|
$ |
258,570,000 |
|
|
|
|
$ |
296,820,000 |
|
|
|
Offering expenses(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting commissions (2.0% of gross proceeds from shares offered to public, excluding deferred portion)(3)
|
|
|
|
$ |
5,000,000 |
|
|
|
|
$ |
5,750,000 |
|
|
|
Legal fees and expenses
|
|
|
|
|
300,000 |
|
|
|
|
|
300,000 |
|
|
|
Printing and engraving expenses
|
|
|
|
|
40,000 |
|
|
|
|
|
40,000 |
|
|
|
Accounting fees and expenses
|
|
|
|
|
60,000 |
|
|
|
|
|
60,000 |
|
|
|
SEC/FINRA Expenses
|
|
|
|
|
75,000 |
|
|
|
|
|
75,000 |
|
|
|
Travel and road show
|
|
|
|
|
20,000 |
|
|
|
|
|
20,000 |
|
|
|
Nasdaq listing and filing fees
|
|
|
|
|
75,000 |
|
|
|
|
|
75,000 |
|
|
|
Director & Officer liability insurance premiums
|
|
|
|
|
1,700,000 |
|
|
|
|
|
1,700,000 |
|
|
|
Miscellaneous
|
|
|
|
|
300,000 |
|
|
|
|
|
300,000 |
|
|
|
Total offering expenses (other than underwriting commissions)
|
|
|
|
$ |
2,570,000 |
|
|
|
|
$ |
2,570,000 |
|
|
|
Proceeds after offering expenses
|
|
|
|
$ |
251,000,000 |
|
|
|
|
$ |
288,500,000 |
|
|
|
Held in trust account(3)
|
|
|
|
$ |
250,000,000 |
|
|
|
|
$ |
287,500,000 |
|
|
|
% of public offering size
|
|
|
|
|
100% |
|
|
|
|
|
100% |
|
|
|
Not held in trust account
|
|
|
|
$ |
1,000,000 |
|
|
|
|
$ |
1,000,000 |
|
|
The following table shows the use of the $1,000,000 of net proceeds not held in the trust account.(4)(5)
| |
|
|
AMOUNT
|
|
|
% OF TOTAL
|
|
|
Legal, accounting, due diligence, travel, and other expenses in connection with any business combination(6)
|
|
|
|
$ |
350,000 |
|
|
|
|
|
35.0% |
|
|
|
Legal and accounting fees related to regulatory reporting obligations
|
|
|
|
|
150,000 |
|
|
|
|
|
15.0% |
|
|
|
Administrative and support services
|
|
|
|
|
420,000 |
|
|
|
|
|
42.0% |
|
|
|
Nasdaq continued listing fees
|
|
|
|
|
55,000 |
|
|
|
|
|
5.5% |
|
|
|
Working capital to cover miscellaneous expenses
|
|
|
|
|
25,000 |
|
|
|
|
|
2.5% |
|
|
|
Total
|
|
|
|
$ |
1,000,000 |
|
|
|
|
|
100.0% |
|
|
(1)
Includes amounts payable to shareholders who properly redeem their shares in connection with the successful completion of our initial business combination.
(2)
In addition, a portion of the offering expenses have been paid from the proceeds up to $300,000 in loans from our sponsor, as described in this prospectus. Upon completion of this offering these loans will be repaid out of the $2,570,000 of offering proceeds allocated for the payment of offering expenses other than underwriting commissions. In the event that offering expenses are less than set forth in this table, any such amounts will be used for post-closing working capital expenses.
(3)
The underwriters have agreed to defer underwriting commissions of 3.5% of the gross proceeds of this offering. Concurrently with the completion of our initial business combination, $8,750,000, which constitutes the underwriters’ deferred commissions (or $10,062,500 if the underwriters’ over-allotment option is exercised in full) will be paid to the underwriters from the funds held in the trust account. See “Underwriting.” The remaining funds, less amounts released to the trustee to pay redeeming shareholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.
(4)
These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring our initial business combination based upon the level of complexity of such business combination. In the event we identify a business combination target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Assuming an interest rate of 0.1% per year, and no exercise of the underwriters’ over-allotment, we estimate the interest earned on the trust account will be approximately $250,000 per year; however, we can provide no assurances regarding this amount.
(5)
Assumes no exercise of the underwriters’ over-allotment option.
(6)
Includes estimated amounts that may also be used in connection with our initial business combination to fund a “no shop” provision and commitment fees for financing.
The rules of Nasdaq provide that at least 90% of the gross proceeds from this offering and the private placement be deposited in a trust account. Of the $258,570,000 in proceeds we receive from this offering and the sale of the private placement shares described in this prospectus, or $296,820,000 if the underwriters’ over-allotment option is exercised in full, $250,000,000 ($10.00 per ordinary share), or $287,500,000 if the underwriters’ over-allotment option is exercised in full ($10.00 per ordinary share), will be deposited into a trust account with Continental Stock Transfer & Trust Company acting as trustee, and $3,570,000, will be used to pay expenses in connection with the closing of this offering and for working capital following this offering. We will not be permitted to withdraw any of the principal or interest held in the trust account, except for the withdrawal of interest income to pay our income taxes, until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we are unable to consummate an initial business combination within 24 months from the closing of this offering, subject to applicable law, or (iii) the redemption of our public shares properly submitted in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity. Based on current interest rates, we expect that interest income earned on the trust account (if any) will be sufficient to pay income taxes.
The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our initial business combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination, we may apply the balance of the cash released from the trust account for general corporate purposes, including for
maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination.
We believe that amounts not held in trust, together with funds available to us from loans from our sponsor, will be sufficient to pay the costs and expenses to which such proceeds are allocated. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor, members of our management team or any of their affiliates, but such persons are not under any obligation to advance funds to, or invest in, us.
Following the closing of this offering, we expect that we will enter into an administrative support agreement with an affiliate of our sponsor pursuant to which we will agree to pay the sponsor affiliate a total of up to $17,500 per month for office space and professional, secretarial, administrative and support services provided to us. Upon the completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
Our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and are due at the earlier of the closing of this offering or the date on which we determine not to consummate this offering. The loans will be repaid upon the closing of this offering out of the $2,570,000 of offering proceeds allocated to the payment of offering expenses.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans would be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into Class A ordinary shares of the post business combination entity at a price of $10.00 per ordinary share at the option of the lender. The shares would be identical to the private placement shares. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
DIVIDEND POLICY
We have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time and we will only pay such dividend out of our profits or share premium (subject to solvency requirements) as permitted under Cayman Islands law. If we incur any indebtedness in connection with a business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
DILUTION
The difference between the public offering price per ordinary share of Class A ordinary shares and the pro forma net tangible book value per ordinary share of our Class A ordinary shares after this offering constitutes the dilution to investors in this offering. Net tangible book value per ordinary share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of Class A ordinary shares which may be redeemed for cash), by the number of outstanding Class A ordinary shares.
At February 24, 2021, our net tangible book deficit was a deficit of $4,815, or approximately $(0.00) per ordinary share. After giving effect to the sale of 25,000,000 Class A ordinary shares we are offering by this prospectus (or 28,750,00 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full), the sale of the private placement shares and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at February 24, 2021 would have been $5,000,001, or $0.60 per ordinary share (or $5,000,001, or $0.52 per ordinary share, if the underwriters’ over-allotment option is exercised in full), representing an immediate increase in net tangible book value (as decreased by the value of 23,726,521 Class A ordinary shares that may be redeemed for cash, or 27,345,271 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full) of $0.60 per unit (or $0.52 if the underwriters’ over-allotment option is exercised in full) to our sponsor as of the date of this prospectus. Total dilution to shareholders from this offering will be $9.40 per ordinary share (or $9.48 if the underwriters’ over-allotment option is exercised in full).
The following table illustrates the dilution to the shareholders on a per-share basis:
| |
|
|
Without Over-allotment
|
|
|
With Over-allotment
|
|
|
Public offering price
|
|
|
|
|
|
|
|
|
|
$ |
10.00 |
|
|
|
|
|
|
|
|
|
|
$ |
10.00 |
|
|
|
Net tangible book deficit before this offering
|
|
|
|
|
(0.00) |
|
|
|
|
|
|
|
|
|
|
|
(0.00) |
|
|
|
|
|
|
|
|
|
Increase attributable to public shareholders
|
|
|
|
|
0.60 |
|
|
|
|
|
|
|
|
|
|
|
0.52 |
|
|
|
|
|
|
|
|
|
Pro forma net tangible book value after this offering and the sale of the private placement shares
|
|
|
|
|
|
|
|
|
|
|
0.60 |
|
|
|
|
|
|
|
|
|
|
|
0.52 |
|
|
|
Dilution to public shareholders
|
|
|
|
|
|
|
|
|
|
$ |
9.40 |
|
|
|
|
|
|
|
|
|
|
$ |
9.48 |
|
|
|
Percentage of dilution to public shareholders
|
|
|
|
|
|
|
|
|
|
|
94.0% |
|
|
|
|
|
|
|
|
|
|
|
94.8% |
|
|
For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriters’ over-allotment option) by $237,265,210 because holders of up to approximately 94.9% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per ordinary share redemption price equal to the amount in the trust account as set forth in our proxy or tender offer materials (initially anticipated to be the aggregate amount held in trust two days prior to the commencement of our shareholders meeting or tender offer, including interest and net of taxes payable), divided by the number of Class A ordinary shares sold in this offering.
The following table sets forth information with respect to our sponsor and the shareholders:
| |
|
|
Shares Purchased
|
|
|
Total Consideration
|
|
|
Average Price
Per Share
|
|
| |
Number
|
|
|
Percentage
|
|
|
Amount
|
|
|
Percentage
|
|
|
Class B ordinary shares(1)(2)
|
|
|
|
|
6,250,000 |
|
|
|
|
|
19.5% |
|
|
|
|
$ |
25,000 |
|
|
|
|
|
.01% |
|
|
|
|
$ |
.004 |
|
|
|
Private placement shares
|
|
|
|
|
857,000 |
|
|
|
|
|
2.7% |
|
|
|
|
$ |
8,570,000 |
|
|
|
|
|
3.31% |
|
|
|
|
$ |
10.00 |
|
|
|
Public shareholders
|
|
|
|
|
25,000,000 |
|
|
|
|
|
77.8% |
|
|
|
|
|
250,000,000 |
|
|
|
|
|
96.6% |
|
|
|
|
$ |
10.00 |
|
|
| |
|
|
|
|
32,107,000 |
|
|
|
|
|
100.0% |
|
|
|
|
$ |
258,595,000 |
|
|
|
|
|
100.00% |
|
|
|
|
|
|
|
|
(1)
Assumes no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of 937,500 Class B ordinary shares held by our sponsor.
(2)
Our sponsor will transfer 30,000 founder shares to each of Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness. Such transferred shares will not be subject to forfeiture in the event the underwriters’ over-allotment option is not exercised.
The pro forma net tangible book value per ordinary share after the offering is calculated as follows:
| |
|
|
Without Over-
allotment
|
|
|
With Over-
allotment
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tangible book deficit before this offering
|
|
|
|
$ |
(4,815) |
|
|
|
|
$ |
(4,815) |
|
|
|
Net proceeds from this offering and sale of the private placement
shares(1)
|
|
|
|
|
251,000,000 |
|
|
|
|
|
288,500,000 |
|
|
|
Plus: Offering costs paid in advance, excluded from tangible book value before this offering
|
|
|
|
|
20,026 |
|
|
|
|
|
20,026 |
|
|
|
Less: Deferred underwriting commissions
|
|
|
|
|
(8,750,000) |
|
|
|
|
|
(10,062,500) |
|
|
|
Less: Proceeds held in trust subject to redemption(2)
|
|
|
|
|
(237,265,210) |
|
|
|
|
|
(273,452,710) |
|
|
| |
|
|
|
$ |
5,000,001 |
|
|
|
|
$ |
5,000,001 |
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B ordinary shares outstanding prior to this offering
|
|
|
|
|
7,187,500 |
|
|
|
|
|
7,187,500 |
|
|
|
Class B ordinary shares forfeited if over-allotment is not exercised
|
|
|
|
|
937,500 |
|
|
|
|
|
— |
|
|
|
Class A ordinary shares sold in this offering
|
|
|
|
|
25,000,000 |
|
|
|
|
|
28,750,000 |
|
|
|
Class A ordinary shares sold to our sponsor in a private placement
|
|
|
|
|
857,000 |
|
|
|
|
|
932,000 |
|
|
|
Less: Ordinary shares subject to redemption
|
|
|
|
|
(23,726,521) |
|
|
|
|
|
(27,345,271) |
|
|
| |
|
|
|
|
8,380,479 |
|
|
|
|
|
9,524,229 |
|
|
(1)
Expenses applied against gross proceeds include offering expenses of $2,570,000 and underwriting commissions of $5,000,000 or $5,750,000 if the underwriters exercise their over-allotment option (excluding deferred underwriting fees). See “Use of Proceeds.”
(2)
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. In the event of any such purchases of our shares prior to the completion of our initial business combination, the number of Class A ordinary shares subject to redemption will be reduced by the amount of any such purchases, increasing the pro forma net tangible book value per ordinary share. See “Proposed Business — Effecting Our Initial Business Combination — Permitted Purchases of Our Securities.”
CAPITALIZATION
The following table sets forth our capitalization at February 24, 2021, and as adjusted to give effect to the filing of our amended and restated memorandum and articles of association, the sale of our public shares in this offering and the private placement shares and the application of the estimated net proceeds derived from the sale of such securities:
| |
|
|
February 24, 2021
|
|
| |
|
|
Actual
|
|
|
As Adjusted(1)
|
|
|
Note payable to related party(2)
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
Deferred underwriting commissions(3)
|
|
|
|
|
— |
|
|
|
|
|
8,750,000 |
|
|
|
Class A ordinary shares subject to possible redemption; -0- and 23,726,521 shares, actual and as adjusted, respectively(4)
|
|
|
|
|
— |
|
|
|
|
|
237,265,210 |
|
|
|
Preferred shares, $0.0001 par value, 1,000,000 shares authorized; none issued and outstanding, actual and as adjusted
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Class A ordinary shares, $0.0001 par value, 200,000,000 shares
authorized; -0- and 2,130,479 shares issued and outstanding
(excluding -0- and 23,726,521 shares subject to possible redemption),
actual and as adjusted, respectively
|
|
|
|
|
— |
|
|
|
|
|
213 |
|
|
|
Class B ordinary shares, $0.0001 par value, 20,000,000 shares authorized; 7,187,500 and 6,250,000 shares issued and outstanding, actual and as adjusted, respectively
|
|
|
|
|
719 |
|
|
|
|
|
625 |
|
|
|
Additional paid-in capital
|
|
|
|
|
24,281 |
|
|
|
|
|
5,008,952 |
|
|
|
Accumulated deficit
|
|
|
|
|
(9,789) |
|
|
|
|
|
(9,789) |
|
|
|
Total shareholders’ equity
|
|
|
|
$ |
15,211 |
|
|
|
|
$ |
5,000,001 |
|
|
|
Total capitalization
|
|
|
|
$ |
15,211 |
|
|
|
|
$ |
251,015,211 |
|
|
(1)
Assumes no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of 937,500 Class B ordinary shares held by our sponsor.
(2)
Our sponsor may loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. As of April 16, 2021, we have borrowed approximately $58,000 from our sponsor to cover expenses in connection with this offering.
(3)
$0.35 per ordinary share, or $8,750,000 in the aggregate, will be payable to the underwriters for deferred underwriting commissions. The deferred underwriting commissions will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the company completes a Business Combination, subject to the terms of the underwriting agreement. The company records deferred underwriting commissions upon the closing of the initial public offering as a reduction of additional paid-in capital. Since the actual additional paid-in capital was reduced by the recording of the accrued deferred underwriting commission, total capitalization, as adjusted, includes the amount of the deferred underwriting commission to reflect total capitalization.
(4)
Upon the completion of our initial business combination, we will provide our public shareholders with the opportunity to redeem their public shares for cash at a per ordinary share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest (net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein whereby redemptions cannot cause our net tangible assets to be less than $5,000,001 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
We are a blank check company incorporated on February 19, 2021 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the private placement of the private placement shares, our shares, debt or a combination of cash, equity and debt.
The issuance of additional shares in a business combination:
•
may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
•
may subordinate the rights of holders of Class A ordinary shares if shares of preference shares are issued with rights senior to those afforded our Class A ordinary shares;
•
could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
•
may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and
•
may adversely affect prevailing market prices for our Class A ordinary shares. Similarly, if we issue debt securities or otherwise incur significant debt, it could result in:
•
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
•
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves (in the absence of a waiver or renegotiation of that covenant);
•
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
•
our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
•
our inability to pay dividends on our Class A ordinary shares;
•
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
•
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
•
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
•
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
As indicated in the accompanying financial statements, as of February 24, 2021, we had no cash and deferred offering costs of approximately $20,000. Further, we expect to incur significant costs in the pursuit
of our initial business combination. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination at the earliest. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering.
Liquidity and Capital Resources
Our liquidity needs have been satisfied prior to the completion of this offering through a payment of $25,000 from our sponsor to cover for certain expenses and offering costs on behalf of us in exchange for the issuance of the founder shares and a commitment from our sponsor to loan us up to $300,000 to cover our expenses in connection with this offering. We estimate that the net proceeds from (i) the sale of the shares in this offering, after deducting offering expenses of $2,570,000, underwriting commissions of $5,000,000, or $5,750,000 if the underwriters’ over-allotment option is exercised in full (excluding deferred underwriting commissions of $8,750,000, or $10,062,500 if the underwriters’ over-allotment option is exercised in full), and (ii) the sale of the private placement shares for a purchase price of $8,570,000 (or $9,320,000 if the underwriters’ over-allotment option is exercised in full) will be $251,000,000 (or $288,500,000 if the underwriters’ over-allotment option is exercised in full). $250,000,000 (or $287,500,000 if the underwriters’ over-allotment option is exercised in full) will be held in the trust account, which includes the deferred underwriting commissions described above. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The remaining $1,000,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $2,570,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $2,570,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less taxes payable and deferred underwriting commissions), to complete our initial business combination. We may withdraw interest income to pay our income taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest income earned on the amount in the trust account (if any) will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination, we will have available to us the $1,000,000 of proceeds held outside the trust account, as well as certain funds from loans from our sponsor. We will use these funds to primarily identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.
We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business prior to our initial business combination, other than funds available from loans from our sponsor. However, if our estimates of the costs of identifying a target
business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into Class A ordinary shares of the post business combination entity at a price of $10.00 share at the option of the lender. The shares would be identical to the private placement shares. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We expect our primary liquidity requirements during that period to include approximately $350,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $150,000 for legal and accounting fees related to regulatory reporting requirements; $420,000 for administrative and support services incurred during the search for an initial business combination target; $55,000 for Nasdaq continued listing fees; and $25,000 for general working capital that will be used for miscellaneous expenses and reserves.
These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
Moreover, we may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account, or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account.
Controls and Procedures
We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2022. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer would we be required to comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.
Prior to the closing of this offering, we have not completed an assessment, nor has our independent public registered accounting firm tested our systems, of our internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary
in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as:
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staffing for financial, accounting and external reporting areas, including segregation of duties;
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reconciliation of accounts;
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proper recording of expenses and liabilities in the period to which they relate;
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evidence of internal review and approval of accounting transactions;
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documentation of processes, assumptions and conclusions underlying significant estimates; and
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documentation of accounting policies and procedures.
Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.
Once our management’s report on internal controls is complete, we will retain our independent registered public accounting firm to audit and render an opinion on such report when required by Section 404. The independent registered public accounting firm may identify additional issues concerning a target business’s internal controls while performing their audit of internal control over financial reporting.
Quantitative and Qualitative Disclosures about Market Risk
The net proceeds of this offering and the sale of the private placement shares held in the trust account will be invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of February 24, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have not conducted any operations to date.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act,
(iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
PROPOSED BUSINESS
Introduction
We are a newly organized blank check company domiciled in the Cayman Islands on February 19, 2021 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target. We have generated no operating revenues to date and we do not expect that we will generate operating revenues until we consummate our initial business combination at the earliest.
While we may pursue an acquisition opportunity in any business, industry, sector or geographical location, we intend to focus on industries that complement our management team’s background, and to capitalize on the ability of our management team to identify and acquire a business focusing on verticals of the real estate industry, as well as the adjacent industries that collectively make up the human-made environment that provides the setting for human activity, ranging in scale from buildings to cities and beyond, which we call the “Built World.” Fifth Wall Acquisition Corp. II also intends to focus on these so-called “proptech” companies, focusing specifically on proptech companies serving the residential real estate industry. As such, if any officer or director serving Fifth Wall Acquisition Corp. II or Fifth Wall Acquisition Corp. III becomes aware of a business combination opportunity with a proptech company serving the residential real estate industry (and no other parties to which such officers or directors may owe any fiduciary, contractual or other obligations, including in the case of officers and directors associated or affiliated with Fifth Wall, Fifth Wall, wish to pursue such opportunity), such officers and directors will present the opportunity to Fifth Wall Acquisition Corp. II. In all other cases, the opportunity will be first presented to Fifth Wall Acquisition Corp. III.
Our Sponsor
Our sponsor is an affiliate of Fifth Wall. Fifth Wall is one of the largest venture capital firms focused exclusively on investing in “proptech”. Fifth Wall was founded in 2016 after identifying the growing market opportunity in proptech brought about by the real estate industry, the largest asset class as of the end of 2016, beginning to adopt technology at an increasingly rapid pace. Fifth Wall developed a differentiated model of venture capital predicated on raising capital from and partnering with leading real estate owners, who are among the largest users and customers for the technologies in which Fifth Wall invests. As of November 30, 2020, Fifth Wall manages $1.3 billion in committed capital on behalf of its investors across three core fund strategies, and has invested in more than 40 companies, including six that have gone on to become “unicorns”, or startups with a private market valuation in excess of $1 billion. On February 9, 20201, Fifth Wall Acquisition Corp. I, an affiliate of Fifth Wall, closed its $345 million IPO, becoming one of the earliest proptech-focused SPACs sponsored by an affiliate of a venture capital firm. While an affiliate of Fifth Wall has voting and investment discretion with respect to the common stock held of record by our sponsor, one or more limited partners or prospective limited partners of funds affiliated with Fifth Wall may own up to 25% of the economic interest in our sponsor.
We believe our management team will be able to execute on our business strategy by leveraging Fifth Wall’s experience and core competencies. Since its founding 5 years ago, Fifth Wall has become a leading venture capital investor in the proptech space, for several reasons:
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Fifth Wall was one of the first to recognize the growing market opportunity in real estate technology. With the close of its oversubscribed $212 million North American Real Estate Technology Fund in May 2017, Fifth Wall became one of the first institutional venture capital funds exclusively focused on the intersection of real estate and technology, or “proptech”. Since then, Fifth Wall has raised $126 million for its retail strategy, which is focused on the disruption of traditional brick & mortar retail. Its second North American Real Estate Tech Fund was also oversubscribed and closed at $503 million in July 2019. More recently, Fifth Wall has launched and completed the first close of its European Real Estate Technology Fund and is currently raising a Climate Technology Fund focused on investing in North American startups with technologies that
enable transitions towards a decarbonized real estate industry, reduce greenhouse gas emissions, or address the impacts of global warming. As of November 30, 2020, Fifth Wall is approximately five times larger than the next largest proptech-focused venture capital manager.
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Fifth Wall has pioneered a differentiated consortium-driven approach to venture capital. Fifth Wall’s model is predicated on raising a significant portion of its capital from leading real estate corporations, and advising its corporate limited partners on implementing emerging real estate technologies with the potential to transform their businesses. The firm’s initial North American Real Estate Technology Fund included 9 U.S.-based real estate corporations as limited partners. As of November 30, 2020, Fifth Wall’s global network of corporate partners has grown to include more than 60 real estate corporations from 14 countries, representing every major subsector in the real estate industry. In certain subsectors, like homebuilding, Fifth Wall’s corporate limited partners represent 4 of the 5 largest U.S. homebuilders, which collectively account for approximately 20% of all homes delivered in the United States annually. Alongside its corporate limited partners, Fifth Wall has attracted investment from some of the world’s largest and most prominent institutional investors, including leading university endowments, pensions, and sovereign wealth funds.
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Fifth Wall has distinct informational and distribution advantages. Fifth Wall’s dynamic working relationships with its global consortium of over 60 corporate real estate partners provide the firm with differentiated informational and distribution advantages when evaluating potential investments. Fifth Wall’s role as both a venture capital investor and a trusted advisor to real estate corporations provides significant visibility to the operational and technological challenges faced by its corporate partners. This enables its investment team to underwrite investments with knowledge of orchestrating large contracts and partnerships with Fifth Wall’s real estate investors, who are among the largest potential customers for these technologies. Similarly, success or failure for real estate technology companies often hinges on distribution to the real estate industry. Fifth Wall’s deep relationships with its 60 corporate limited partners, coupled with its expertise in real estate technology, enable Fifth Wall to flip “distribution risk” for its portfolio companies into a “distribution edge” by effectuating commercial partnerships to significantly accelerate their growth.
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Fifth Wall has superior access and deal flow. Fifth Wall’s domain expertise in real estate technology, its partnerships with some of the largest real estate owners and operators globally, its brand positioning as a leading partner to proptech entrepreneurs, and its differentiated platform have helped to solidify the firm as a highly-sought after investor for technology companies that depend on distribution to the real estate industry. Generalist venture capital funds typically select Fifth Wall as their preferred co-investment partner in proptech companies based on Fifth Wall’s category expertise and ability to facilitate distribution to its real estate investors. Additionally, Fifth Wall’s corporate partners proactively send Fifth Wall technologies that they are evaluating for their own businesses. Management teams of portfolio companies are also often eager to introduce to Fifth Wall new companies that fit Fifth Wall’s strategies. Across these three channels, Fifth Wall benefits from meaningful network effects that are borne out in its deal flow and its portfolio of emergent winners in the proptech category. As of November 30, 2020, Fifth Wall’s CRM tracks more than 8,300 real estate technology companies, including more than 600 growth and later stage companies.
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Fifth Wall is a highly visible, highly active investor and thought leader. Since its founding in 2016, Fifth Wall has carefully cultivated its brand and profile as a thought leader through the creation and dissemination of content related to the real estate technology ecosystem. Fifth Wall strives to be seen by other venture capital investors, proptech entrepreneurs, and the real estate industry as synonymous with proptech, as the thought leader in the space. This approach has enabled Fifth Wall to source investments in more than 40 companies, gaining access to highly competitive financing rounds for high-profile proptech businesses, sometimes with terms that enable Fifth Wall to reopen closed financing rounds at prior valuations, or to structure investments in such a way that ultimately generates greater upside . Fifth Wall’s investments at the intersection of real estate and technology include Opendoor, VTS, States Title, Hippo, Industrious, Blend, and Clutter.
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Fifth Wall can influence outcomes to create outsized value. Beyond unlocking distribution to the real estate industry, Fifth Wall has played a leading role in the effectuation of major partnerships between its portfolio companies and some of the largest real estate corporations in the world,
activating corporate innovation to create significant value. Fifth Wall partnered with what it believes to be the second largest homebuilder in the United States to launch large-scale partnerships with Opendoor, Hippo, Blend, and Notarize and, furthermore, helped to orchestrate the landmark sale of the homebuilder’s captive title insurance business to States Title, a Fifth Wall portfolio company. Similarly, Fifth Wall played a critical role in the execution of partnerships between Industrious and VTS and its corporate partners in the office vertical, catalyzing significant growth for both portfolio companies.
We believe that SPACs are important extensions of Fifth Wall management’s approach to partnering with leading real estate technology companies to create long-term value. While Fifth Wall’s existing fund strategies typically invest relatively early on in a company’s lifecycle, our management has also developed a track record at Fifth Wall of investing in proptech companies — including Fifth Wall’s own portfolio companies — as they mature, opportunistically deploying SPV capital to invest in later-stage funding rounds. With Fifth Wall Acquisition Corp. III, we intend to form a long-term partnership with a business that has the potential to become a category-defining market leader, guiding them in their transition from private to public markets while leveraging Fifth Wall’s global consortium of some of largest owners and operators of real estate in the world, creating value through distribution to the real estate industry and partnership with leading real estate corporations. We believe that our affiliation with Fifth Wall and its positioning and proptech category expertise will afford us substantial competitive advantages relative to other blank check companies, including those who are primarily focused on acquiring real estate technology businesses..
Market Opportunity
Our management founded Fifth Wall on the belief that the real estate industry is on the verge of massive change through technological innovation, and that emerging real estate technologies had the potential to create trillions of dollars of enterprise value over time. Today, technology is rapidly penetrating all verticals of the real estate industry, as well as the adjacent industries that collectively make up the human-made environment that provides the setting for human activity, ranging in scale from buildings to cities and beyond, which we call the “Built World”.
We believe the market for real estate technology businesses is attractive for a number of reasons:
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Large and growing addressable market. Real estate and technology investments both represent a significant segment of the global economy. According to Bureau of Economic Analysis, US Department of Commerce, real estate and technology accounted for 13% and 12%, respectively, of the U.S. gross domestic product in 2019. Real estate technology investment has grown significantly in the last few years, with total venture capital funding in this sector reaching $32 billion in 2019 compared to $4 billion in 2016 according to CRETech. Despite this strong growth, we believe that the bulk of digitalization is still to come as we are only beginning to see fully digital transactions, data-driven decision making, replacement of middle-men with market places and incumbents embracing technology.
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Accelerating pace of technological innovation. Technology has disrupted the real estate sector as owners and operators continuously seek to improve the efficiency of their assets, with emerging technologies often providing new solutions to longstanding business and operational challenges. We believe that increased rates of technology adoption will spur the creation of more new technologies and disruptive new entrants in order to create greater efficiencies in the real estate value chain. Real estate technology is penetrating the real estate asset class, driving innovation across transactions, work processes, tenant engagement and even the nature of buildings themselves, while also disrupting the middle-man heavy businesses that currently dominate the real estate industry. We further believe that the impacts of COVID-19 on the real estate industry have catalyzed and accelerated the adoption of technology, which we expect will have lasting, transformational effects on the real estate industry.
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Robust and growing pipeline. From 2014 to 2019, over $64 billion has been invested in proptech companies, while more than $250 billion in enterprise value has been created within the real estate technology sector across public and private companies. As of November 30, 2020, we estimate that more than 35 proptech companies are valued at $1 billion or more in the private markets. In 2019,
528 real estate technology transactions were executed according to CREtech. We believe that many later stage proptech companies, the number of which we expect to continue to grow in the years ahead, could benefit from a public listing. Similarly, we believe that Fifth Wall Acquisition Corp. III will be able to offer them, or companies like them, a compelling path to enter the public markets.
We currently intend to focus our investment effort broadly across businesses focusing on verticals of the real estate industry, as well as the adjacent industries that collectively make up the human-made environment that provides the setting for human activity, ranging in scale from buildings to cities and beyond, which we call the “Built World,” although we may pursue an acquisition opportunity in any industry or geographic region. We believe that our investment and operating expertise in both the real estate and technology industries will offer us a large, addressable universe of potential targets. Our management team will seek to leverage their access to proprietary deal flow, sourcing capabilities, and network of industry contacts to generate business combination opportunities.
Business Strategy
Our strategy is to identify and acquire businesses within the sectors in which Fifth Wall invests, with a focus on later-stage companies with high quality growth fundamentals and strong market dynamics, whose pace of growth can benefit from our operational expertise and differentiated distribution capabilities. Our management expects to benefit from Fifth Wall’s experience as one of the largest and most active venture investors at the intersection of real estate and technology and its proven track record with deep experience in investing, operations and technology as well as a global consortium of real estate partners representing almost every real estate sector and every major geography. We intend to leverage our sponsor’s expertise and extensive network of strategic LPs, portfolio companies, real estate relationships and reputation in the real estate technology sector to identify investment opportunities with meaningful near term growth potential that can generate attractive risk-adjusted returns for our shareholders.
Consistent with this strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective targets. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines.
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High quality fundamentals. We will focus our search on identifying transformative businesses with attractive margins and unit economics in line with best-in-class industry benchmarks, strong growth track record, and limited revenue concentration risks.
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Strong market dynamics and growth potential. We will seek to acquire businesses that have a sizeable total addressable market with product offerings that are relevant across multiple asset classes, industries and geographies. We believe we can leverage our network to upsell and cross-sell additional product modules which will in turn further increase the addressable market and growth opportunities for the business and presents readily available growth targets.
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Competitive positioning. We will seek to acquire one or more businesses that demonstrate market leadership and / or strong advantages when compared to their competitors, including the potential to disrupt the market through technology driven transformation, defensible proprietary technology, strong adoption rates, and low or manageable risks of technological obsolescence.
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Attractive risk-adjusted return profile. We intend to focus our efforts on identifying later-stage businesses that we believe have meaningful near term growth opportunity and significant potential for attractive risk-adjusted returns for shareholders, weighing potential growth opportunities and operational improvements in the target business against any identified downside risks.
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Informational and structuring advantages. We intend to invest in one or more businesses where Fifth Wall’s global network of more than 60 real estate corporations in 14 countries can offer distinct informational advantages in underwriting a potential acquisition, and where Fifth Wall’s ability to unlock distribution to the real estate industry can enable us to structure a potential transaction in such a way that it maximizes value for all parties involved.
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Value creation potential by Fifth Wall. We intend to acquire one or more businesses that we believe will benefit from Fifth Wall’s differentiated industry network, brand and proprietary value-creation
capabilities in order to improve financial performance and business planning. For example, we intend to target companies that have strong traction regionally but lack national and international partners to support geographical expansion whose growth can be accelerated through Fifth Wall’s network of real estate partners, or companies with a sales cycle that is longer than best-in-class peers that could be shortened with strategic introductions to key management at real estate companies facilitated by Fifth Wall.
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Management Team. We will seek to invest in one or more businesses that have proven management teams with a compelling strategy of selling their product and recruiting talent.
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Benefit from Being a Public Company. We intend to invest in one or more businesses that will benefit from being publicly listed and can effectively utilize the broader access to capital and a public profile to grow and accelerate shareholder value creation.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
Team
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Brendan Wallace is our Chief Executive Officer and Chairman. Mr. Wallace serves as a co-founder and Managing Partner at Fifth Wall, where he guides the firm’s strategic vision and serves as the chairman of the investment committee. Mr. Wallace also serves as the Chairman of the Board and Chief Executive Officer of Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II. Prior to starting Fifth Wall, Mr. Wallace co-founded Identified Inc., a venture-backed data and analytics company that was acquired by Workday, Inc. Mr. Wallace also co-founded Cabify, the largest ridesharing service in Latin America, and has been an active investor, leading more than 60 angel investments including Coinbase, Dollar Shave Club, Lyft, SpaceX, Clutter, and Philz Coffee. Mr. Wallace started his career at Goldman Sachs in the real estate, hospitality, and gaming group before joining The Blackstone Group’s real estate private equity practice where he was involved with the buyout of Hilton Hotels and Equity Office Properties. Mr. Wallace is a graduate of Princeton University and received his M.B.A. from Stanford University.
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Andriy Mykhaylovskyy is our Chief Financial Officer and director. Mr. Mykhaylovskyy is a Managing Partner and Chief Operating Officer at Fifth Wall, where he oversees the firm’s day-to-day operations and investing activities. Mr. Mykhaylovskyy also serves as the Chief Financial Officer and a director of Fifth Wall Acquisition Corp. I and as Chief Financial Officer of Fifth Wall Acquisition Corp. II. Prior to joining Fifth Wall, Mr. Mykhaylovskyy was a Principal and founding team member at Evergreen Coast Capital, a technology-focused private equity affiliate of Elliott Management Corporation. Other previous leadership roles include serving as Vice President at The Gores Group and Chief Financial Officer of Identified, a data and analytics company. Mr. Mykhaylovskyy started his career in investment banking at Morgan Stanley, where he offered financial advisory and capital-raising services to global industrial corporations, before joining technology-focused private equity firm Francisco Partners as an Associate. Mr. Mykhaylovskyy is a graduate of Princeton University and received his M.B.A. from Stanford University.
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Adeyemi Ajao has been a member of our board of directors since April 2021. In this role, he will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Mr. Ajao has been a director of Fifth Wall Acquisition Corp. II since April 2021. Mr. Ajao is also Co-founder & Managing Partner at Base10 Partners which was founded in January 2017. Mr. Ajao was the co-founder and CEO of Tuenti (The “Spanish Facebook”) from January 2005 to July 2010 which was acquired by Telefonica in 2010 for $100M. He also was the co-founder and CEO of Identified from June 2010 to February 2014 which was acquired by Workday in 2014. He was also a founding investor of Cabify in July 2011 (the largest ridesharing company in Latin America currently valued at over $1B). While at Workday from February 2014 to
September 2016, Mr. Ajao led launch to Workday Ventures, the first fund focused on Applied AI for Enterprise Software and was VP of Technology Strategy. Mr. Ajao graduated from Icade University in Spain in 2005 with a Master of Science in Finance and a Juris Doctor. Mr. Ajao graduated from Stanford University in 2010 with a Master of Business Administration. Mr. Ajao also holds a certificate from Stanford University in Machine Learning.
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Alana Beard has been a member of our board of directors since April 2021. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Beard has been a director of Fifth Wall Acquisition Corp. I since February 2021 and a director of Fifth Wall Acquisition Corp. II since April 2021. She is also a Senior Associate at SVB Capital since February 2020 and President of the 318 Foundation, Inc., a non-profit organization, since January 2021. Prior to joining SVB, Alana was a member of the WNBA Los Angeles Sparks organization April 2012 to January 2020 and an ESPN/ACC women’s college basketball analyst from October 2019 to March 2020. During her career with the Sparks, Ms. Beard was a four-time WNBA All-Star, won the WNBA championship in 2016 and was named WNBA Defensive Player of the Year for the 2017 and 2018 seasons. Ms. Beard graduated from Duke University in 2004 with a bachelor’s degree in Sociology.
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Poonam Sharma Mathis has been a member of our board of directors since April 2021. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Mathis has been a director of Fifth Wall Acquisition Corp. II since April 2021. Ms. Mathis is also a serial entrepreneur, real estate industry veteran and public speaker with a passion for innovating around the built world. Most recently CEO of Raise, she aimed to revolutionize childcare for the future of work. Previously, she founded StealthForce, (the gig economy of real estate; a resource and project management platform for CRE), which was exited in early 2019. Prior to StealthForce, she was Deputy to the Head of Global Real Estate Asset Management at Partners Group AG ($40 billion AUM), and earlier employee 13 at The Gerson Lehrman Group, which was the world’s first institutional expert network. Ms. Mathis earned her Bachelor of Arts at Harvard and Master of Business Administration at Wharton, and spent over a decade in real estate development and investment. Twice named a top female CEO in CREtech, she has been featured in The New York Times, Inc. Magazine, Harvard Business Review, NBC News, and more. She is also an author and experienced public speaker (ULI, ICSC, CRETech, etc.) who has published four books in five languages which have been printed worldwide.
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Amanda Parness has been a member of our board of directors since April 2021. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition. Ms. Parness has been a director of Fifth Wall Acquisition Corp. II since April 2021. In January 2020, Ms. Parness became CEO and Founder of Spring Advisory Services. From May 2019 to December 2019, Ms. Parness was Managing Director, Head of U.S. Private Equity Funds at Caisse de Depot et Investment du Quebec (CDPQ). From September 1998 to May 2019, Ms. Parness was a Managing Principal at GoldPoint Partners, New York Life Insurance Company’s private equity subsidiary. Ms. Parness was a Financial Analyst in the Equity Research Group at Goldman Sachs & Co. from January 1994 to July 1996. Ms. Parness graduated from Barnard College at Columbia University in 1993 with a Bachelor of Arts in Economics and a Bachelor of Arts in English Literature, and in 1998 graduated with a Masters of Business Administration in Finance from Columbia Business School.
Our management team will be supported by Fifth Wall’s investment team and broader organization of more than 30 employees, based in Los Angeles, San Francisco, New York, and London. Fifth Wall’s team has experience in some of the largest and most established real estate firms, private equity firms, consulting firms, and technology companies, providing a deep bench of sourcing, investment, structuring, and operational talent.
Other key members of the Fifth Wall team that our management team expects to work with include:
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Jeremy Fox, who serves as a Partner at Fifth Wall, where he focuses on corporate partnerships and capital markets. Prior to joining Fifth Wall, Mr. Fox was Co-Head of Real Estate Gaming & Lodging Investment Banking at Credit Suisse. Previously, he was Head of US Equity Capital Markets at
Deutsche Bank. Mr. Fox started his career at Ernst & Young, before joining Goldman Sachs, where he worked in Institutional Equity Sales. Mr. Fox graduated from Yeshiva University with a BS in Accounting.
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Brad Greiwe, who is a co-founder and Managing Partner at Fifth Wall. Prior to starting Fifth Wall, Mr. Greiwe co-founded Invitation Homes Inc. (NYSE: INVH). Mr. Greiwe started his career in investment banking at UBS Group AG in the real estate, lodging, and leisure group. He then worked in real estate private equity at Tishman Speyer Properties and Starwood Capital Group. Mr. Greiwe graduated from Harvard University, where he received his BA in economics.
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Vik Chawla, who serves as Partner on the Real Estate Technology Investment team at Fifth Wall, where he focuses on technology and innovations within the homebuilding, retail, and industrial asset classes. Previously, Mr. Chawla was an Investment Associate at Echelon Asset Management. He began his career at The Blackstone Group Inc., where he worked on advisory transactions spanning the energy, real estate, and financial services industries. Mr. Chawla graduated from the University of Pennsylvania’s Wharton School, where he received his BS in economics with concentrations in finance and statistics and a minor in mathematics.
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Dan Wenhold, who serves as Partner on the Real Estate Technology Investment team at Fifth Wall, where he focuses on emerging software and marketplace companies. Prior to joining Fifth Wall, he was the first employee and Director of Retail at The Black Tux, an omnichannel menswear brand. Prior to The Black Tux, he was a member of the investment team at Battery Ventures L.P. Mr. Wenhold started his career as a financial analyst at Robert W. Baird & Co. Incorporated. Mr. Wenhold graduated from the University of Illinois with a degree in finance.
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Kevin Campos, who serves as Partner on the Retail & Consumer Investment team at Fifth Wall, where he oversees the team’s operations and leads investments in omnichannel retail brands and technologies. Prior to joining Fifth Wall, Mr. Campos was the Chief Retail Officer for Combatant Gentlemen, Inc., a digitally native menswear brand. He also was a member of the retail team at Golden Gate Capital, a private equity firm. He started his career at Bain & Company as a strategy consultant advising technology, media, and investment fund clients. Mr. Campos graduated from Princeton University with a BA from the Princeton School of Public and International Affairs.
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Joelle Khoury, who serves as Partner and General Counsel at Fifth Wall. Prior to joining Fifth Wall, Ms. Khoury worked as Vice President, Business and Legal Affairs at Saban Capital Group. Prior to joining Saban Capital Group, Inc., she was an Associate at both Gibson Dunn & Crutcher LLP and Cooley LLP, where she specialized in corporate transactions in the media, entertainment and technology industries. Ms. Khoury received her BA in Political Science from University of California, San Diego and then received her JD and LLM from Duke Law School.
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G. M. Nicholas Vik, who serves as Vice President of Strategy & Operations at Fifth Wall, where he leads business operations and strategic initiatives across the firm. Prior to joining Fifth Wall, Mr. Vik was Director of Strategy & Finance and a member of the founding team at Renew Health, a healthcare startup founded in partnership with Venrock. Previously, he served as a member of the Revenue Strategy team at Snap Inc. (NYSE: SNAP). Mr. Vik started his career at Cambridge Associates, where he advised institutions on venture capital and private equity investment strategies, before joining ICONIQ Capital, a multifamily office and investment firm. Mr. Vik graduated from Tufts University where he received a BA in International Relations.
Initial Business Combination
Nasdaq rules and our amended and restated memorandum and articles of association require that we complete one or more business combinations having an aggregate fair market value of at least 80% of the assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of signing the agreement to enter into the initial business combination and that a majority of our independent and disinterested directors approve such initial business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses, or we are considering an initial business combination with an affiliated entity, we will obtain an opinion from an independent investment banking firm that is a
member of the Financial Industry Regulatory Authority (FINRA), or an independent valuation or appraisal firm with respect to the satisfaction of such criteria.
We anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the prior owners of the target business, the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholder approval, as applicable.
Other Considerations
We are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with Fifth Wall or our sponsor, founders, officers, or directors, or a company in which any of the foregoing may have a direct or indirect interest. In the event we seek to complete our initial business combination with a company that is affiliated with Fifth Wall, our sponsor or any of our founders, officers or directors, we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or appraisal firm that such initial business combination or transaction is fair to our company from a financial point of view.
Affiliates of Fifth Wall and members of our board of directors will directly or indirectly own founder shares and private placement shares following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers or directors were to be included by a target business as a condition to any agreement with respect to our initial business combination.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected nor considered a target business for the Company nor have they had any substantive discussions regarding possible target businesses for the Company among themselves or with our underwriters or other advisors. Fifth Wall is continuously made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a business combination transaction with our company. We have not (nor have any of our agents or affiliates) been approached by any candidates (or representative of any candidates) with respect to a possible acquisition transaction with our company and we will not consider a business combination with any company identified to Fifth Wall at any time as a suitable acquisition candidate for it, unless Fifth Wall, in its sole discretion, declines such potential business combination or makes
available to our company a co-investment opportunity, in each case, in accordance with any legal obligations of Fifth Wall and Fifth Wall’s applicable existing and future policies and procedures. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to select or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to select or locate any such acquisition candidate.
Fifth Wall currently manages multiple investment vehicles and may raise additional funds successor funds or other investment vehicles or accounts in the future, which may be during the period in which we are seeking our initial business combination. Such Fifth Wall investment entities may be seeking investment or acquisition opportunities and related financing at any time. We may compete with any one or more of them on any given acquisition opportunity.
In addition, Fifth Wall and its Affiliates and our officers and directors have previously sponsored and formed and become officers or directors of, and in the future may sponsor or form or become officers or directors of, other special purpose acquisition companies similar to ours (including sponsors and special purpose acquisition companies that are not Affiliates of Fifth Wall), or may pursue other business or investment ventures, including without limitation forming investment funds or other vehicles, whose strategies may conflict with or otherwise be competitive with us during the period in which we are seeking an initial business combination. For example, Affiliates of Fifth Wall is currently sponsoring two special purpose acquisition companies, Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II. Although we intend to focus on industries outside of the United States, Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II are also pursuing an acquisition opportunity in any business, industry, sector or geographical location with a focus on “Built World”. Mr. Wallace, our Chairman of the Board and Chief Executive Officer, is the Chairman of the Board and Chief Executive Officer of Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II and Mr. Mykhaylovskyy, our Chief Financial Officer and director, is the Chief Financial Officer and director of Fifth Wall Acquisition Corp. I and the Chief Financial Officer of Fifth Wall Acquisition Corp. II. Our other directors, Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness are also directors of Fifth Wall Acquisition Corp. II. Alana Beard is also a director of Fifth Wall Acquisition Corp. I. As a result, while we currently do not have any specific business combination under consideration and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target, any such other special purpose acquisition companies, businesses or investments, including without limitation investment funds or other vehicles, with which Fifth Wall and its Affiliates, and our officers and directors are involved, may present additional conflicts of interest in pursuing an initial business combination.
Fifth Wall and each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations to other entities pursuant to which Fifth Wall or such persons is or will be required to present a business combination opportunity. Accordingly, if Fifth Wall or any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which Fifth Wall or such person has then-current fiduciary, contractual or other obligations to present such opportunity to such entity, subject to their fiduciary duties under Cayman Islands law, Fifth Wall or such person will honor such fiduciary, contractual or other obligations to present such opportunity to such entity first, in which case such opportunity may not be made available to us, and Fifth Wall or such person will only present such opportunity to us if such other entity rejects the opportunity and consummating the transaction would not violate any restrictive covenants or other legal obligations to which such officers and directors are subject, including their fiduciary duties under Cayman Islands law. If any officer or director serving Fifth Wall Acquisition Corp. II or Fifth Wall Acquisition Corp. III becomes aware of a business combination opportunity with a proptech company serving the residential real estate industry (and no other parties to which such officers or directors may owe any fiduciary, contractual or other obligations, including in the case of officers and directors associated or affiliated with Fifth Wall, Fifth Wall, wish to pursue such opportunity), such officers and directors will present the opportunity to Fifth Wall Acquisition Corp. II. In all other cases, the opportunity will be first presented to Fifth Wall Acquisition Corp. III. Further, Fifth Wall and each of our officers and directors have duties and obligations with respect to confidentiality to other entities and may in the future agree to additional such duties or obligations, which may prevent Fifth Wall and such officers and directors from disclosing such information to us. Fifth Wall and our officers and directors will comply with such duties and obligations of confidentiality to such other entities, in which case, we may not have access to such information. In addition, we may, at our
option, pursue an Affiliated Joint Acquisition opportunity with an entity to which Fifth Wall or an officer or director currently has, or may in the future have, a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the business combination by making a specified future issuance to any such entity. Any such business combination may require additional consents from third parties outside the control of our directors, officers or Fifth Wall, including any such business combination that requires the consent of the limited partner advisory committee of one or more investment funds managed or advised by Fifth Wall. We may be prevented from pursuing an Affiliated Joint Acquisition or other similar business combination if such consents are not obtained. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
In addition, Fifth Wall, our founders, officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. Moreover, Fifth Wall, our founders, officers and directors have, and will have in the future, time and attention requirements for current and future businesses, including investment funds, accounts, co-investment vehicles and other entities managed by Fifth Wall. To the extent any conflict of interest arises between, on the one hand, us and, on the other hand, such businesses, investments funds, accounts, co-investment vehicles and other entities managed by Fifth Wall (including, without limitation, arising as a result of certain of our founders, officers and directors being required to offer investment or acquisition opportunities to such investment funds, accounts, co-investment vehicles and other entities), Fifth Wall, its affiliates and our founders, officers and directors may (i) resolve such conflicts of interest in their sole discretion in accordance with their then existing fiduciary, contractual, and other duties, and there can be no assurance that such conflict of interest will be resolved in our favor or (ii) delay or ultimately prevent the identification of a business combination candidate that has caused such conflict of interest.
Any past experience and performance of Fifth Wall or our management team is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our initial business combination; or (2) of any results with respect to any initial business combination we may consummate. You should not rely on the historical record of Fifth Wall or our management team’s performance as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An investment in us is not an investment in Fifth Wall. Our officers, directors and Fifth Wall has had limited experience with a blank check company or special purpose acquisition company in the past.
Unlike other special purpose acquisition companies, we are not offering any warrants to prospective investors in this offering.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination with us. In a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock, shares or other equity interests in the target business for our Class A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses will find this method a more expeditious and cost effective method to become a public company than the typical initial public offering. The typical initial public offering process takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions, that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could prevent the offering from occurring. Once public, we believe the target business would then have greater access to capital, an additional means of providing management incentives consistent with shareholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek shareholder approval of any proposed initial business combination, negatively.
We are an “emerging growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Financial Position
With funds available for a business combination initially in the amount of $241,250,000, after payment of the estimated expenses of this offering and $8,750,000 of deferred underwriting fees (or $277,437,500 after payment of $10,062,500 of deferred underwriting fees if the underwriters’ over-allotment option is exercised in full), we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
General
We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination using cash from the proceeds of this offering, the private placements of the private placement shares, our equity, debt or a combination of these as the consideration to be paid in our initial business combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
We have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions with any business combination target. Additionally, we have not engaged or retained any agent or other representative to select or locate any suitable acquisition candidate, to conduct any research or take any measures, directly or indirectly, to locate or contact a target business,
other than our officers and directors. Accordingly, there is no current basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely affect a target business.
We may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account, or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. There are no prohibitions on our ability to issue securities or incur debt in connection with our initial business combination. We are not currently a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities, the incurrence of debt or otherwise.
Sources of Target Businesses
Certain members of our management team have spent significant portions of their careers working with businesses in the proptech industry and have developed a wide network of professional services contacts and business relationships in that industry. The members of our board of directors also have significant executive management and public company experience with proptech companies. Our process of identifying acquisition targets will leverage our management team’s industry experiences, demonstrated deal sourcing capabilities and broad and deep network of relationships, including executives and management teams, private equity groups and other institutional investors, large business enterprises, lenders, investment bankers and other investment market participants, restructuring advisers, consultants, attorneys and accountants, which we believe should provide us with a number of business combination opportunities. We expect that the collective experience, capability and network of our founders, directors and officers, combined with their individual and collective reputations in the investment community, will help to create prospective business combination opportunities.
In addition, we anticipate that target business candidates may be brought to our attention from various unaffiliated sources, including investment bankers and private investment funds. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read this prospectus and know what types of businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates of which they become aware through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions.
While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of a finder’s fee is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation by the company prior to, or for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is). None of our sponsor, executive officers or directors, or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective business combination target in connection with a contemplated acquisition of such target by us. Following the closing of this offering, we expect that we will enter into an administrative
support agreement with an affiliate of our sponsor pursuant to which we will agree to pay the sponsor affiliate a total of up to $17,500 per month for office space and professional, secretarial, administrative and support services provided to us.
We are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our sponsor, officers or directors, or from making the acquisition through a joint venture or other form of shared ownership with our sponsor, officers or directors. Although we will not be specifically focusing on, or targeting, any transactions with affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth below and such transaction was approved by a majority of our independent and disinterested directors. In the event we seek to complete our initial business combination with a business combination target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent investment banking which is a member of FINRA or an independent valuation or appraisal firm, that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
As more fully discussed in “Management — Conflicts of Interest,” if any of our executive officers becomes aware of a business combination opportunity that falls within the line of business of any entity, including private funds under the management of Fifth Wall and their respective portfolio companies, to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us, subject to their fiduciary duties under Cayman Islands law. In addition, existing and future funds managed by Fifth Wall and their respective portfolio companies may compete with us for business combination opportunities and if such opportunities are pursued by such entities, we may be precluded from pursuing such opportunities. All of our executive officers currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us. In addition, we may pursue an Affiliated Joint Acquisition opportunity with an entity to which an officer or director has a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by issuing to such entity a class of equity or equity-linked securities. Any such business combination may require additional consents from third parties outside the control of our directors, officers or Fifth Wall, including any such business combination that requires the consent of the limited partner advisory committee of one or more investment funds managed or advised by Fifth Wall. We may be prevented from pursuing an Affiliated Joint Acquisition or other similar business combination if such consents are not obtained. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
Evaluation of a Target Business and Structuring of Our Initial Business Combination
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial, operational, legal and other information which will be made available to us. If we determine to move forward with a particular target, we will proceed to structure and negotiate the terms of the business combination transaction.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation with, a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. The company will not pay any consulting fees to members of our management team, or any of their respective affiliates, for services rendered to or in connection with our initial business combination.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and
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cause us to depend on the marketing and sale of a single product or limited number of products or services.
Limited Ability to Evaluate the Target’s Management Team
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve Our Initial Business Combination
We may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum and articles of association. However, we will seek shareholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek shareholder approval for business or other legal reasons.
Under Nasdaq’s listing rules, shareholder approval would be required for our initial business combination if, for example:
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we issue (other than in a public offering for cash) ordinary shares that will either (a) be equal to or in excess of 20% of the number of Class A ordinary shares then outstanding or (b) have voting power equal to or in excess of 20% of the voting power then outstanding;
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any of our directors, officers or substantial shareholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of ordinary shares could result in an increase in outstanding ordinary shares or voting power of 5% or more; or
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the issuance or potential issuance of ordinary shares will result in our undergoing a change of control.
The Companies Act and Cayman Islands law do not currently require, and we are not aware of any other applicable law that will require, shareholder approval of our initial business combination.
The decision as to whether we will seek shareholder approval of a proposed business combination in those instances in which shareholder approval is not required by law will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a variety of factors, including, but not limited to:
•
the timing of the transaction, including in the event we determine shareholder approval would require additional time and there is either not enough time to seek shareholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;
•
the expected cost of holding a shareholder vote;
•
the risk that the shareholders would fail to approve the proposed business combination;
•
other time and budget constraints of the company; and
•
additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to shareholders.
Permitted Purchases of Our Securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public shares in such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.
In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
The purpose of any such purchases of shares could be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our Class A ordinary shares may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom our sponsor, officers, directors or their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of Class A ordinary shares) following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling shareholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against
our initial business combination, whether or not such shareholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the general meeting related to our initial business combination. Our sponsor, executive officers, directors, advisors or any of their affiliates will select which shareholders to purchase shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Our sponsor, officers, directors and/or their affiliates will not make purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
Redemption Rights for Shareholders upon Completion of Our Initial Business Combination
We will provide our shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest (net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per ordinary share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Our sponsor has entered into an agreement with us, pursuant to which it has agreed to (i) waive its redemption rights with respect to its founder shares and (ii) waive its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. Our sponsor and our directors and executive officers have also agreed (A) that they will not propose any amendment to our amended and restated memorandum and articles of association that would modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their shares and (B) to waive their redemption rights with respect to their founder shares and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination. However, if our sponsor or members of our management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering.
Limitations on Redemptions
Our amended and restated memorandum and articles of association provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). However, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof.
Manner of Conducting Redemptions
We will provide our shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision
as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with our company and any transactions where we issue more than 20% of our outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would require shareholder approval. We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange listing requirement and we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other legal reasons.
If we held a shareholder vote to approve our initial business combination, we will, pursuant to our amended and restated memorandum and articles of association:
•
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
•
file proxy materials with the SEC.
In the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our shareholders with the redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval, we will complete our initial business combination only if we receive approval pursuant to an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our sponsor has agreed to vote the founder shares and any public shares purchased by our sponsor during or after this offering in favor of our initial business combination. As a result, in addition to our sponsor’s founder shares and private placement shares, we would need 8,946,501, or 35.8%, of the 25,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). Each shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. In addition, our sponsor and our directors and executive officers have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of a business combination.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
•
conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our initial business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase Class A ordinary shares in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on shareholders not tendering more than the number of
public shares we are permitted to redeem. If shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
Limitation on Redemption upon Completion of Our Initial Business Combination If We Seek Shareholder Approval
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redeeming its shares with respect to more than an aggregate of 15% of the shares of common stock sold in this offering, which we refer to as the Excess Shares. We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the shares sold in this offering without our prior consent, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering Share Certificates in Connection with Redemption Rights or a Tender Offer
Public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” will be required to either tender their certificates (if any) to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials, as applicable, mailed to such holders, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/ Withdrawal At Custodian) System, at the holder’s option, in each case up to two business days prior to the initially scheduled vote to approve the business combination. The proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate the applicable delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a shareholder would have from the time we send out our tender offer materials up to two days prior to the vote on the business combination to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short period in which to exercise redemption rights, it is advisable for shareholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the shareholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise their redemption rights. After the business combination was approved, the company would contact such shareholder to arrange for them to deliver their certificate to verify ownership.
As a result, the shareholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s shares in the market. If the price rose above the redemption price, they could sell their shares in the open market before actually delivering their shares to the company for cancellation. As a result, the redemption rights, to which shareholders were aware they needed to commit before the general meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming shareholder’s election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to two business days prior to the vote on the proposal to approve the business combination, unless otherwise agreed to by us. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination is not approved or completed for any reason, then our shareholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until 24 months from the closing of this offering.
Redemption of Public Shares and Liquidation If No Initial Business Combination
Our amended and restated memorandum and articles of association provides that we will have only 24 months from the closing of this offering to consummate an initial business combination. If we are unable to consummate an initial business combination within 24 months from the closing of this offering, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Our amended and restated memorandum and articles of association provides that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Our sponsor has entered into an agreement with us, pursuant to which it has waived its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. However, if our sponsor or members of our management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering.
Our sponsor had agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not consummate an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust
account, including interest (net of taxes payable), divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement, we would not proceed with the amendment or the related redemption of our public shares at such time. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsors, any executive officer or director, or any other person.
We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the $1,000,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of this offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by shareholders upon our dissolution would be $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount received by shareholders will not be less than $10.00. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers (excluding our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. The underwriters will not execute agreements with us waiving such claims to the monies held in the trust account. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable, provided that such liability will not apply to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None
of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per share.
We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (excluding our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to $1,000,000 from the proceeds of this offering with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, shareholders who received funds from our trust account could be liable for claims made by creditors. In the event that our offering expenses exceed our estimate of $2,570,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $2,570,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
If we file a bankruptcy, winding-up or insolvency petition or an involuntary bankruptcy, winding-up or insolvency petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency laws, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public shareholders. Additionally, if we file a bankruptcy or insolvency petition or an involuntary bankruptcy, winding-up or insolvency petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/ creditor and/or bankruptcy and/or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.”
As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public shareholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not consummate an initial business combination within 24 months from the closing of this offering, (ii) in connection with a shareholder vote to amend our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not consummate an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity or (iii) if they redeem their respective shares for cash upon the completion of the initial business combination. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. In the event we seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection with the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of the trust
account. Such shareholder must have also exercised its redemption rights described above. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote.
Comparison of Redemption or Purchase Prices in Connection with Our Initial Business Combination and If We Fail to Complete Our Initial Business Combination
The following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we are unable to consummate an initial business combination within 24 months from the closing of this offering.
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REDEMPTIONS IN
CONNECTION WITH OUR
INITIAL BUSINESS
COMBINATION
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OTHER PERMITTED
PURCHASES OF PUBLIC
SHARES BY OUR
AFFILIATES
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REDEMPTIONS IF WE
FAIL TO COMPLETE AN
INITIAL BUSINESS
COMBINATION
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Calculation of redemption price
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Redemptions at the time of our initial business combination may be made in connection with a shareholder vote or pursuant to a tender offer. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a shareholder vote. In either case, our shareholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.00 per ordinary share), including interest (net of taxes payable), divided by the number of then outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination.
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If we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following completion of our initial business combination. There is no limit to the prices that our sponsor, directors, officers, advisors or their affiliates may pay in these transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Securities Exchange Act of 1934, as amended, or the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at
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If we are unable to consummate an initial business combination within 24 months from the closing of this offering, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount, then on deposit in the trust account (which is initially anticipated to be $10.00 per ordinary share), including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable) divided by the number of then outstanding public shares.
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REDEMPTIONS IN
CONNECTION WITH OUR
INITIAL BUSINESS
COMBINATION
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OTHER PERMITTED
PURCHASES OF PUBLIC
SHARES BY OUR
AFFILIATES
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REDEMPTIONS IF WE
FAIL TO COMPLETE AN
INITIAL BUSINESS
COMBINATION
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the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
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Impact to remaining shareholders
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The redemptions in connection with our initial business combination will reduce the book value per ordinary share for our remaining shareholders, who will bear the burden of the deferred underwriting commissions and taxes payable.
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If the permitted purchases described above are made, there would be no impact to our remaining shareholders because the purchase price would not be paid by us.
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The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per ordinary share for the shares held by our sponsor, who will be our only remaining shareholder after such redemptions.
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Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419
The following table compares the terms of this offering to the terms of an offering by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule 419, and that the underwriters will not exercise their over-allotment option. None of the provisions of Rule 419 apply to our offering.
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TERMS OF OUR OFFERING
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TERMS UNDER A RULE 419
OFFERING
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Escrow of offering proceeds
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$250,000,000 of the net proceeds of this offering and the sale of the private placement shares will be deposited into a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee.
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Approximately $212,625,000 of the offering proceeds, representing the gross proceeds of this offering, would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account.
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Investment of net proceeds
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$250,000,000 of the net proceeds of this offering and the sale of the private placement shares held in trust will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.
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Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States.
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Receipt of interest on escrowed funds
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Interest income on proceeds from the trust account to be paid to shareholders is reduced by (i) any taxes paid or payable
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Interest income on funds in escrow account would be held for the sole benefit of investors, unless and only after the
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TERMS OF OUR OFFERING
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TERMS UNDER A RULE 419
OFFERING
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and (ii) in the event of our liquidation for failure to complete our initial business combination within the allotted time, up to $100,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation.
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funds held in escrow were released to us in connection with our completion of a business combination.
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Limitation on fair value or net assets of target business
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Nasdaq rules and our amended and restated memorandum and articles of association require that we complete one or more business combinations having an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of the agreement to enter into the initial business combination.
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The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds.
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Trading of securities issued
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The public shares are expected to begin trading on or promptly after the date of this prospectus. If the over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the over-allotment option.
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No trading of the Class A ordinary shares would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.
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Election to remain an investor
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We will provide our shareholders with the opportunity to redeem their public shares for cash at a per ordinary share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest (net of taxes payable), divided by the number of then outstanding public shares, upon the completion of our initial business combination, subject to the limitations described herein. We may not be required by law to hold a shareholder vote. If we are not required by law and do not otherwise decide to hold a shareholder vote, we will, pursuant to our amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with
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A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of a post-effective amendment to the company’s registration statement, to decide if they elect to remain a shareholder of the company or require the return of their investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the shareholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all
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TERMS OF OUR OFFERING
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TERMS UNDER A RULE 419
OFFERING
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the SEC which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, we hold a shareholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek shareholder approval, we will complete our initial business combination only if we receive approval pursuant to an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. Additionally, each shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. Our amended and restated memorandum and articles of association requires that at least ten days’ notice be given of any such general meeting.
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of the investors and none of the securities are issued.
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TERMS OF OUR OFFERING
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TERMS UNDER A RULE 419
OFFERING
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Business combination deadline
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If we are unable to consummate an initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding public shares, which redemption will completely extinguish shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case, to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
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If an acquisition has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors.
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Release of funds
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Except for the withdrawal of interest income to pay our income taxes, none of the funds held in trust will be released from the trust account until the earliest of: (i) the completion of our initial business combination, (ii) the redemption of our public shares if we are unable to consummate an initial business combination within 24 months from the closing of this offering, subject to applicable law, or (iii) the redemption of our public shares properly submitted in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity.
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The proceeds held in the escrow account are not released until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time.
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Competition
In identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies, operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our shareholders who exercise their redemption rights may reduce the resources available to us for our initial business combination, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
We currently maintain our executive offices at 6060 Center Drive, 10th Floor, Los Angeles, CA 90045. Following the closing of this offering, we expect that we will enter into an administrative support agreement with an affiliate of our sponsor pursuant to which we will agree to pay the sponsor affiliate a total of up to $17,500 per month for office space and professional, secretarial, administrative and support services provided to us. We consider our current office space adequate for our current operations.
Employees
We currently have two executive officers. These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of the business combination process we are in. We do not intend to have any full time employees prior to the completion of our initial business combination.
Periodic Reporting and Financial Information
We will register our Class A ordinary shares under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public accountants.
We will provide shareholders with audited financial statements of the prospective target business as part of the proxy solicitation or tender offer materials, as applicable, sent to shareholders. These financial statements may be required to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial statements prepared in accordance with the requirements outlined above, or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal control procedures audited. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their
internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We are a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (As Revised) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Legal Proceedings
There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
MANAGEMENT
Officers and Directors
Our officers and directors are as follows:
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NAME
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AGE
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POSITION
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Brendan Wallace
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39
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Chairman of the Board and Chief Executive Officer
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Andriy Mykhaylovskyy
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35
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Director and Chief Financial Officer
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Adeyemi Ajao
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38
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Director
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Alana Beard
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38
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Director
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Poonam Sharma Mathis
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43
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Director
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Amanda Parness
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49
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Director
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Brendan Wallace serves as our Chief Executive Officer and Chairman. Mr. Wallace also serves as a co-founder and Managing Partner at Fifth Wall since May 2016, where he also serves as the chairman of the investment committee, Mr. Wallace is also the Chairman of the Board and Chief Executive Officer of Fifth Wall Acquisition Corp. I and Fifth Wall Acquisition Corp. II. Prior to starting Fifth Wall, Mr. Wallace co-founded Identified Inc., a venture-backed data and analytics company, in January 2009, that was subsequently acquired by Workday, Inc. in February 2014. Mr. Wallace also was involved in the founding of Maxi Mobility Spain, S.L. (d/b/a Cabify) in September 2012. Mr. Wallace has been an active investor, leading more than 65 angel investments including Dollar Shave Club, Bonobos, Carbon38, Clutter, Inc., Philz Coffee, Inc., Allbirds, Inc., MasterClass, Roofstock, Inc., Common Living, Inc. Mr. Wallace started his career at The Goldman Sachs Group, Inc. in the real estate, hospitality, and gaming investment banking before joining The Blackstone Group Inc.’s real estate private equity group where he was involved with the buyout of Hilton Hotels and Equity Office Properties. Mr. Wallace received his B.A. Summa Cum Laude in Political Science from Princeton University in 2004 and received his M.B.A. from Stanford University in 2010. We believe Mr. Wallace is well suited to be a member of our board of directors based on his extensive investment experience.
Andriy Mykhaylovskyy serves as our Chief Financial Officer and director. Mr. Mykhaylovskyy is a Managing Partner and Chief Operating Officer at Fifth Wall since April 2017, where he oversees the firm’s day-to-day operations and investing activities. Mr. Mykhaylovskyy also serves as the Chief Financial Officer and a director of Fifth Wall Acquisition Corp. I and as Chief Financial Officer of Fifth Wall Acquisition Corp. II. Prior to joining Fifth Wall, Mr. Mykhaylovskyy was a Principal and founding team member at Evergreen Coast Capital, a technology-focused private equity affiliate of Elliott Management Corporation, from January 2016 to March 2017. Mr. Mykhaylovskyy’s other previous leadership roles include serving as the Vice President at The Gores Group from May 2014 to January 2016 and Chief Financial Officer of Identified, Inc., a data and analytics company, from August 2013 to February 2014. Mr. Mykhaylovskyy started his career in investment banking at Morgan Stanley & Co. LLC, where he offered financial advisory and capital-raising services to global industrial corporations, before joining technology-focused private equity firm Francisco Partners as an associate. Mr. Mykhaylovskyy received his B.A. in Economics from Princeton University in 2007 and received his M.B.A. from Stanford University in 2013. We believe Mr. Mykhaylovsky’s financial expertise and experience in evaluating and investing in technology and data analytics companies makes him well qualified to serve on our board of directors.
Adeyemi Ajao has been a member of our board of directors since April 2021. In this role, he will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Mr. Ajao has been a director of Fifth Wall Acquisition Corp. II since April 2021. Mr. Ajao is also Co-founder & Managing Partner at Base10 Partners which was founded in January 2017. Mr. Ajao was the co-founder and CEO of Tuenti (The “Spanish Facebook”) from January 2005 to July 2010 which was acquired by Telefonica in 2010 for $100M. He also was the co-founder and CEO of Identified from June 2010 to February 2014 which was acquired by Workday in 2014. He was also a founding investor of Cabify in July 2011 (the largest ridesharing company in Latin America currently valued at over $1B). While at Workday from February 2014 to September 2016, Mr. Ajao led launch to Workday Ventures, the first fund focused on Applied AI for Enterprise Software and was VP of Technology Strategy. Mr. Ajao
graduated from Icade University in Spain in 2005 with a Master of Science in Finance and a Juris Doctor. Mr. Ajao graduated from Stanford University in 2010 with a Master of Business Administration. Mr. Ajao also holds a certificate from Stanford University in Machine Learning. We believe Mr. Ajao’s prior leadership experience makes him well qualified to serve on our board of directors.
Alana Beard has been a member of our board of directors since April 2021. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Beard has been a director of Fifth Wall Acquisition Corp. I since February 2021 and a director of Fifth Wall Acquisition Corp. II since April 2021. She is also a Senior Associate at SVB Capital since February 2020 and President of the 318 Foundation, Inc., a non-profit organization, since January 2021. Prior to joining SVB, Alana was a member of the WNBA Los Angeles Sparks organization April 2012 to January 2020 and an ESPN/ACC women’s college basketball analyst from October 2019 to March 2020. During her career with the Sparks, Ms. Beard was a four-time WNBA All-Star, won the WNBA championship in 2016 and was named WNBA Defensive Player of the Year for the 2017 and 2018 seasons. Ms. Beard graduated from Duke University in 2004 with a bachelor’s degree in Sociology. We believe Ms. Beard’s prior leadership experience makes her well qualified to serve on our board of directors.
Poonam Sharma Mathis has been a member of our board of directors since April 2021. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Mathis has been a director of Fifth Wall Acquisition Corp. II since April 2021. Ms. Mathis is also a serial entrepreneur, real estate industry veteran and public speaker with a passion for innovating around the built world. Most recently CEO of Raise, she aimed to revolutionize childcare for the future of work. Previously, she founded StealthForce, (the gig economy of real estate; a resource and project management platform for CRE), which was exited in early 2019. Prior to StealthForce, she was Deputy to the Head of Global Real Estate Asset Management at Partners Group AG ($40 billion AUM), and earlier employee 13 at The Gerson Lehrman Group, which was the world’s first institutional expert network. Ms. Mathis earned her Bachelor of Arts at Harvard and Master of Business Administration at Wharton, and spent over a decade in real estate development and investment. Twice named a top female CEO in CREtech, she has been featured in The New York Times, Inc. Magazine, Harvard Business Review, NBC News, and more. She is also an author and experienced public speaker (ULI, ICSC, CRETech, etc.) who has published four books in five languages which have been printed worldwide. We believe Ms. Mathis’s prior leadership experience makes her well qualified to serve on our board of directors.
Amanda Parness has been a member of our board of directors since April 2021. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition. Ms. Parness has been a director of Fifth Wall Acquisition Corp. II since April 2021. In January 2020, Ms. Parness became CEO and Founder of Spring Advisory Services. From May 2019 to December 2019, Ms. Parness was Managing Director, Head of U.S. Private Equity Funds at Caisse de Depot et Investment du Quebec (CDPQ). From September 1998 to May 2019, Ms. Parness was a Managing Principal at GoldPoint Partners, New York Life Insurance Company’s private equity subsidiary. Ms. Parness was a Financial Analyst in the Equity Research Group at Goldman Sachs & Co. from January 1994 to July 1996. Ms. Parness graduated from Barnard College at Columbia University in 1993 with a Bachelor of Arts in Economics and a Bachelor of Arts in English Literature, and in 1998 graduated with a Masters of Business Administration in Finance from Columbia Business School. We believe Ms. Parness’s prior leadership experience makes her well qualified to serve on our board of directors.
Number and Terms of Office of Officers and Directors
Our board of directors is divided into three classes, with only one class of directors being appointed in each year, and with each class (except for those directors appointed prior to our first annual meeting of shareholders) serving a three-year term. The term of office of the first class of directors, consisting of Alana Beard and Poonam Sharma Mathis, is expected to expire at our first annual meeting of shareholders. The term of office of the second class of directors, consisting of Amanda Parness and Adeyemi Ajao, is expected to expire at our second annual meeting of shareholders. The term of office of the third class of directors, consisting of Brendan Wallace and Andriy Mykhaylovskyy, will expire at our third annual meeting of shareholders.
Prior to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders of a majority of our founder shares. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
Pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, upon consummation of an initial business combination and for so long as our sponsor and its permitted transferees collectively hold at least 50% of the number of ordinary shares held by the sponsor upon consummation of this offering (after giving appropriate effect to any sub-divisions, reverse share sub-divisions or other similar corporate transactions, or any adjustment to the conversion rate of the founder shares in connection with an initial business combination) through our sponsor, Fifth Wall, will be entitled to nominate one person for appointment to our board of directors.
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our amended and restated memorandum and articles of association as it deems appropriate. Our amended and restated memorandum and articles of association provides that our officers may consist of one or more chairperson of the board, chief executive officer, president, chief financial officer, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.
Director Independence
Applicable rules of the Nasdaq require a majority of a listed company’s board of directors to be comprised of independent directors within one year of listing. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Upon the effectiveness of the registration statement of which this prospectus forms a part, we expect to have “independent directors” as defined in Nasdaq’s listing standards and applicable SEC rules. Our board of directors has determined that Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are, subject to the transition rules described above for newly listed companies present.
Executive Officer and Director Compensation
Our sponsor will transfer 30,000 founder shares to each of Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness. None of our executive officers or directors have received any cash compensation for services rendered to us. Our sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, executive officers or directors, or our or their affiliates. Any such payments prior to an initial business combination will be made from funds held outside the trust account. Other than quarterly audit committee review of such reimbursements, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, will be paid by the company to our sponsor, executive officers and directors, or any of their respective affiliates, prior to completion of our initial business combination.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the proxy solicitation materials or tender offer materials furnished to our shareholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business
will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment.
Committees of the Board of Directors
Upon the effectiveness of the registration statement of which this prospectus forms a part, our board of directors will have three standing committees: an audit committee, a nominating committee and a compensation committee. Subject to phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception, the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent directors. Each committee will operate under a charter that has been approved by our board and will have the composition and responsibilities described below.
Audit Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish an audit committee of the board of directors. Adeyemi Ajao, Poonam Sharma Mathis and Amanda Parness will serve as members of our audit committee. Our board of directors has determined that each of Adeyemi Ajao, Poonam Sharma Mathis and Amanda Parness are independent and Amanda Parness will serve as the Chairperson of the audit committee. Each member of the audit committee meets the financial literacy requirements of Nasdaq and our board of directors has determined that Amanda Parness qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.
The audit committee is responsible for:
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meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems;
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monitoring the independence of the independent registered public accounting firm;
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verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;
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inquiring and discussing with management our compliance with applicable laws and regulations;
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pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed;
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appointing or replacing the independent registered public accounting firm;
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determining the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent registered public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;
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establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies;
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monitoring compliance on a quarterly basis with the terms of this offering and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of this offering; and
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reviewing and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval.
Nominating Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a nominating committee of our board of directors. The members of our nominating committee will be Adeyemi Ajao, Alana Beard and Poonam Sharma Mathis and Adeyemi Ajao will serve as chairperson of the nominating committee. Our board of directors has determined that each of Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness are independent.
The nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. The nominating committee considers persons identified by its members, management, shareholders, investment bankers and others.
Guidelines for Selecting Director Nominees
The guidelines for selecting nominees, which will be specified in a charter to be adopted by us, generally provide that persons to be nominated:
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should have demonstrated notable or significant achievements in business, education or public service;
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should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and
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should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders.
The nominating committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The nominating committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating committee does not distinguish among nominees recommended by shareholders and other persons.
Compensation Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a compensation committee of our board of directors. The members of our compensation committee will be Alana Beard, Poonam Sharma Mathis and Amanda Parness and Poonam Sharma Mathis will serve as chairperson of the compensation committee.
Our board of directors has determined that each of Alana Beard, Poonam Sharma Mathis and Amanda Parness are independent. We will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, including:
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reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;
•
reviewing and approving the compensation of all of our other Section 16 executive officers;
•
reviewing our executive compensation policies and plans;
•
implementing and administering our incentive compensation equity-based remuneration plans;
•
assisting management in complying with our proxy statement and annual report disclosure requirements;
•
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;
•
producing a report on executive compensation to be included in our annual proxy statement; and
•
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our board of directors.
Code of Ethics
Upon to the effectiveness of the registration statement of which this prospectus forms a part, we will have adopted a Code of Ethics applicable to our directors, officers and employees. A copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Conflicts of Interest
Under Cayman Islands law, directors and officers owe the following fiduciary duties:
•
duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
•
duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
•
duty to not improperly fetter the exercise of future discretion;
•
duty to exercise powers fairly as between different sections of shareholders;
•
duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and
•
duty to exercise independent judgment.
In addition to the above, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge skill and experience of that director.
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission
granted in the amended and restated memorandum and articles of association or alternatively by shareholder approval at general meetings.
Fifth Wall and each of our officers and directors presently has, and any of them in the future may have, additional, fiduciary, contractual or other obligations to other entities pursuant to which such persons is or will be required to present a business combination opportunity. Accordingly, if Fifth Wall or any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which such person has then-current fiduciary, contractual or other obligations to present such opportunity to such entity first, such person will honor such fiduciary, contractual or other obligations to present such opportunity to such entity, in which case such opportunity may not be made available to us and Fifth Wall or such person will only present such opportunity to us if such other entity rejects the opportunity and consummating the transaction would not violate any restrictive covenants or other legal obligations to which such officers and directors are subject, including their fiduciary duties under Cayman Islands law. If any officer or director serving Fifth Wall Acquisition Corp. II or Fifth Wall Acquisition Corp. III becomes aware of a business combination opportunity with a proptech company serving the residential real estate industry (and no other parties to which such officers or directors may owe any fiduciary, contractual or other obligations, including in the case of officers and directors associated or affiliated with Fifth Wall, Fifth Wall, wish to pursue such opportunity), such officers and directors will present the opportunity to Fifth Wall Acquisition Corp. II. In all other cases, the opportunity will be first presented to Fifth Wall Acquisition Corp. III. Further, Fifth Wall and each of our officers and directors have duties and obligations with respect to confidentiality to other entities and may in the future agree to additional such duties or obligations, which may prevent Fifth Wall and such officers and directors from disclosing such information to us. Fifth Wall and our officers and directors will comply with such duties and obligations of confidentiality to such other entities, in which case, we may not have access to such information. In addition, we may, at our option, pursue an Affiliated Joint Acquisition opportunity with an entity to which Fifth Wall or an officer or director currently has, or may in the future have, a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the business combination by making a specified future issuance to any such entity. Any such business combination may require additional consents from third parties outside the control of our directors, officers or Fifth Wall, including any such business combination that requires the consent of the limited partner advisory committee of one or more investment funds managed or advised by Fifth Wall. We may be prevented from pursuing an Affiliated Joint Acquisition or other similar business combination if such consents are not obtained. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
Below is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties or similar contractual obligations:
|
Individual
|
|
|
Entity
|
|
|
Entity’s Business
|
|
|
Affiliation
|
|
|
Brendan Wallace
|
|
|
Fifth Wall
|
|
|
Investments and Advisory
|
|
|
Co-Founder and Managing Partner
|
|
| |
|
|
Global Uprising, PBC
|
|
|
Retail & wholesale products
|
|
|
Board Member of Portfolio Company
|
|
| |
|
|
Honest Networks, Inc.
|
|
|
Internet service provider
|
|
|
Board Member of Portfolio Company
|
|
| |
|
|
Loft Holdings Ltd
|
|
|
Real-estate platform to buy, sell, and rent residential and commercial properties.
|
|
|
Board Member of Portfolio Company
|
|
| |
|
|
Fifth Wall Acquisition
|
|
|
Special Purpose Acquisition
|
|
|
Chairman of the Board and
|
|
|
Individual
|
|
|
Entity
|
|
|
Entity’s Business
|
|
|
Affiliation
|
|
| |
|
|
Corp. I
|
|
|
Company
|
|
|
Chief Executive Officer
|
|
| |
|
|
Fifth Wall Acquisition Corp. II
|
|
|
Special Purpose Acquisition Company
|
|
|
Chairman of the Board and Chief Executive Officer
|
|
| |
|
|
Fifth Wall Acquisition Sponsor I, LLC
|
|
|
Special Purpose Acquisition Company Sponsor
|
|
|
Manager
|
|
| |
|
|
Fifth Wall Acquisition Sponsor II, LLC
|
|
|
Special Purpose Acquisition Company Sponsor
|
|
|
Manager
|
|
|
Andriy Mykhaylovskyy
|
|
|
Fifth Wall
|
|
|
Investments and Advisory
|
|
|
Managing Partner and Chief Operating Officer
|
|
| |
|
|
FHF Ventures, Ltd
|
|
|
Fund vehicle
|
|
|
Board Member of Portfolio Company
|
|
| |
|
|
Fifth Wall Acquisition Corp. I
|
|
|
Special Purpose Acquisition Company
|
|
|
Director and Chief Financial Officer
|
|
| |
|
|
Fifth Wall Acquisition Corp. II
|
|
|
Special Purpose Acquisition Company
|
|
|
Chief Financial Officer
|
|
| |
|
|
Fifth Wall Acquisition Sponsor I, LLC
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|
|
Special Purpose Acquisition Company Sponsor
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|
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Manager
|
|
| |
|
|
Fifth Wall Acquisition Sponsor II, LLC
|
|
|
Special Purpose Acquisition Company Sponsor
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|
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Manager
|
|
|
Adeyemi Ajao
|
|
|
Base10 Partners
|
|
|
Venture capital
|
|
|
Co-founder & Managing Partner
|
|
| |
|
|
Fifth Wall Acquisition Corp. II
|
|
|
Special Purpose Acquisition Company
|
|
|
Director
|
|
|
Alana Beard
|
|
|
Fifth Wall Acquisition Corp. I
|
|
|
Special Purpose Acquisition Company
|
|
|
Director
|
|
| |
|
|
Fifth Wall Acquisition Corp. II
|
|
|
Special Purpose Acquisition Company
|
|
|
Director
|
|
| |
|
|
SVB Capital
|
|
|
Venture capital
|
|
|
Senior Associate
|
|
| |
|
|
318 Foundation, Inc.
|
|
|
Non-Profit
|
|
|
President
|
|
|
Amanda Parness
|
|
|
Spring Advisory Services
|
|
|
Advisory
|
|
|
Chief Executive Officer
|
|
| |
|
|
Fifth Wall Acquisition Corp. II
|
|
|
Special Purpose Acquisition Company
|
|
|
Director
|
|
|
Poonam Sharma Mathis
|
|
|
Fifth Wall Acquisition Corp. II
|
|
|
Special Purpose Acquisition Company
|
|
|
Director
|
|
Potential investors should also be aware of the following other potential conflicts of interest:
•
In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
•
Our sponsor and its transferees, if any, have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the consummation of our initial business combination. Additionally, our sponsor has agreed to waive its redemption rights with respect to any founder shares held by it if we fail to consummate our initial business combination within 24 months after the closing of this offering. However, if our sponsor acquires public shares in or after this offering, it will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement shares held in the trust
account will be used to fund the redemption of our public shares, and the private placement shares will expire worthless.
With certain limited exceptions, the founder shares will not be transferable, assignable by our sponsor or certain of our directors that hold founder shares (or any other permitted assigns, if any) until the earlier of: (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) if the last sale price of our Class A ordinary shares equals or exceeds $12.00 per ordinary share (as adjusted for share sub-divisions, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property. With certain limited exceptions, the private placement shares and the Class A ordinary shares, will not be transferable, assignable or salable by our sponsor or its permitted transferees until 30 days after the completion of our initial business combination. Since our sponsor and officers and directors may directly or indirectly own ordinary shares following this offering, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to complete our initial business combination.
•
Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
•
Our sponsor, officers or directors may have a conflict of interest with respect to evaluating a business combination and financing arrangements as we may obtain loans from our sponsor or an affiliate of our sponsor or any of our officers or directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans may be convertible into Class A ordinary shares at a price of $10.00 per ordinary share at the option of the lender. Such shares would be identical to the private placement shares, including as to exercise price, exercisability and exercise period.
The conflicts described above may not be resolved in our favor.
We are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our sponsor, officers or directors or completing the business combination through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a business combination target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent investment banking which is a member of FINRA or a valuation or appraisal firm, that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context. Furthermore, in no event will our sponsor or any of our existing officers or directors, or any of their respective affiliates, be paid by the company any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination except that following the closing of this offering, we expect that we will enter into an administrative support agreement with an affiliate of our sponsor pursuant to which we will agree to pay the sponsor affiliate a total of up to $17,500 per month for office space and professional, secretarial, administrative and support services provided to us.
In the event that we submit our initial business combination to our public shareholders for a vote, our sponsor has agreed to vote any founder shares held by it and any public shares purchased during or after the offering in favor of our initial business combination and our officers and directors have also agreed to vote any public shares purchased during or after the offering in favor of our initial business combination.
If we seek shareholder approval, we will complete our initial business combination only if we receive approval pursuant to an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares, private placement shares and public shares purchased during or after this offering in favor of our initial business combination.
Limitation on Liability and Indemnification of Officers and Directors
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association provides for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We will enter into agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for in our amended and restated memorandum and articles of association. We will enter into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated memorandum and articles of association.
We will purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
Our indemnification obligations may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the directors’ and officers’ liability insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
PRINCIPAL SHAREHOLDERS
The following table sets forth information regarding the beneficial ownership of our ordinary shares as of the date of this prospectus, and as adjusted to reflect the sale of our Class A ordinary shares offered by this prospectus, and assuming no purchase of shares in this offering, by:
•
each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares;
•
each of our executive officers and directors that beneficially owns ordinary shares; and
•
all our executive officers and directors as a group.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all of our ordinary shares beneficially owned by them.
On February 24, 2021, we issued to our sponsor 4,312,500 founder shares in exchange for a payment of $25,000, from our sponsor to cover for certain expenses and offering costs on behalf of us. In April 2021, the Company effected a share capitalization for Class B ordinary shares, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding (of which 937,500 are subject to forfeiture if the underwriters do not exercise their over-allotment option) and an aggregate purchase price of approximately $0.003 per ordinary share. All shares and associated amounts have been restated to reflect the share capitalization. Our sponsor will transfer 30,000 founder shares to each of Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness. Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The per ordinary share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued. The number of shares beneficially owned and the post-offering percentages in the following table assume that the underwriters do not exercise their over-allotment option and that there are 32,107,000 ordinary shares issued and outstanding after this offering and that our sponsor forfeits 937,500 Class B ordinary shares.
|
NAME OF BENEFICIAL OWNER(1)
|
|
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED(2)
|
|
|
APPROXIMATE PERCENTAGE OF
OUTSTANDING ORDINARY SHARES
|
|
| |
BEFORE
OFFERING
|
|
|
AFTER
OFFERING
|
|
|
Fifth Wall Acquisition Sponsor III, LLC
(our sponsor)(3)(4)
|
|
|
|
|
7,107,000 |
|
|
|
|
|
100% |
|
|
|
|
|
22.135% |
|
|
|
Andriy Mykhaylovskyy(3)(4)(5)
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Brendan Wallace(3)(4)(5)
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Adeyemi Ajao
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Alana Beard
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Poonam Sharma Mathis
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Amanda Parness
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
All officers and directors as a group (6 individuals)
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
*
Represents less than 1% of the outstanding shares of the Company.
(1)
Unless otherwise noted, the business address of each of our shareholders is 6060 Center Drive, 10th Floor, Los Angeles, CA 90045.
(2)
Interests shown consist solely of founder shares, classified as Class B ordinary shares. Such shares will automatically convert into Class A ordinary shares at the time of our initial business combination as described in the section entitled “Description of Securities.”
(3)
Our sponsor is the record holder of such shares. Andriy Mykhaylovskyy and Brendan Wallace are the managing members of our sponsor and therefore, may be deemed to have beneficial ownership of the common stock held directly by our sponsor.
(4)
Interests shown consist solely of founder shares (assuming the underwriters do not exercise their over-allotment option), classified as Class B ordinary shares, and 857,000 private placement shares to be sold
in the private placement that will close simultaneously with the closing of this offering. The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of our initial business combination as described in the section entitled “Description of Securities.”
(5)
Does not include any shares indirectly owned as a result of interest held in our sponsor.
Immediately after this offering, our sponsor will beneficially own 20% of the then issued and outstanding ordinary shares (assuming they do not purchase any shares in this offering and excluding the private placement shares). Because of this ownership block, our sponsor may be able to effectively influence the outcome of all other matters requiring approval by our shareholders, including amendments to our amended and restated memorandum and articles of association and approval of significant corporate transactions including our initial business combination.
Our sponsor and our directors and executive officers have agreed (a) to vote any founder shares owned by them in favor of any proposed business combination and (b) not to redeem any founder shares in connection with a shareholder vote to approve a proposed initial business combination.
Our sponsor is deemed to be our “promoter” as such term is defined under the federal securities laws.
Transfers of Founder Shares and Private Placement Shares
The founder shares and private placement shares are each subject to transfer restrictions pursuant to lock-up provisions in the agreements entered into by our sponsor and management team. Our sponsor and our directors and executive officers have agreed not to transfer, assign or sell (i) any of their founder shares until the earliest of (a) one year after the completion of our initial business combination and (b) upon consummation of our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per ordinary share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property, and (ii) any of their private placement shares until 30 days after the completion of our initial business combination except in each case (a) to our officers or directors, any affiliates or family members of any of our officers or directors, to our sponsor, any members or partners of our sponsor or their affiliates, or any affiliates of our sponsor; (b) in the case of an individual, by gift to a member of one of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with any forward purchase agreement or similar arrangement made in connection with the consummation of an initial business combination at prices no greater than the price at which the founder shares, private placement shares or Class A ordinary shares were originally purchased; (f) by virtue of our sponsor’s organizational documents and the laws under which it is organized, upon liquidation or dissolution of our sponsor; (g) to the company for no value for cancellation in connection with the consummation of our initial business combination; (h) in the event of our liquidation prior to the completion of our initial business combination; or (i) in the event of our completion of a liquidation, merger, share exchange or other similar transaction which results in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreements.
Registration and Shareholder Rights
The holders of the (i) founder shares, which were issued in a private placement, or transferred by our sponsor, prior to the closing of this offering or any shares of common stock issued upon the conversion of the founder shares, (ii) private placement shares, which will be issued in a private placement simultaneously with the closing of this offering and (iii) private placement shares that may be issued upon conversion of working capital loans will have registration rights to require us to register a sale of any of our securities held
by them pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of this offering. Pursuant to the registration and shareholder rights agreement and assuming the underwriters exercise their over-allotment option in full and $1,500,000 of working capital loans are converted into private placement shares, we will be obligated to register up to 8,687,500 Class A ordinary shares. The number of Class A ordinary shares includes (i) up to 7,187,5000 Class A ordinary shares to be issued upon conversion of the founder shares, (ii) up to 932,000 Class A ordinary shares underlying the private placement shares and (iii) 150,000 Class A ordinary shares underlying the private placement shares issued upon conversion of working capital loans. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the founder shares, as described elsewhere in this prospectus, and (ii) in the case of the private placement shares, 30 days after the completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On February 24, 2021, we issued 4,312,500 founder shares to our sponsor in exchange for a payment of $25,000 to cover for certain expenses and offering costs on behalf of us. In April 2021, the Company effected a share capitalization for Class B ordinary shares, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding and an aggregate purchase price of approximately $0.003 per ordinary share. All shares and associated amounts have been restated to reflect the share capitalization. Our sponsor will transfer 30,000 founder shares to each of Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the outstanding shares upon completion of this offering, excluding the private placement shares.
Up to 937,500 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. The shares transferred to certain of our directors will not be subject to forfeiture in the event the underwriters’ over-allotment option is not exercised. The founder shares (including the Class A ordinary shares issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.
Our sponsor has committed, pursuant to a written agreement, to purchase 857,000 Class A ordinary shares (or 932,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full), at a price of $10.00 per ordinary share in a private placement to occur concurrently with the closing of this offering for an aggregate purchase price of $8,570,000 (or $9,320,000 if the underwriters’ over-allotment option is exercised in full). The private placement shares are identical to the Class A ordinary shares sold in this offering, subject to certain limited exceptions as described in this prospectus.
Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us. As more fully discussed in the section of this prospectus entitled “Management — Conflicts of Interest,” if any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity first, in which case such opportunity may not be made available to us, and Fifth Wall or such person will only present such opportunity to us if such other entity rejects the opportunity and consummating the transaction would not violate any restrictive covenants or other legal obligations to which such officers and directors are subject, including to their fiduciary duties under Cayman Islands law. If any officer or director serving Fifth Wall Acquisition Corp. II or Fifth Wall Acquisition Corp. III becomes aware of a business combination opportunity with a proptech company serving the residential real estate industry (and no other parties to which such officers or directors may owe any fiduciary, contractual or other obligations, including in the case of officers and directors associated or affiliated with Fifth Wall, Fifth Wall, wish to pursue such opportunity), such officers and directors will present the opportunity to Fifth Wall Acquisition Corp. II. In all other cases, the opportunity will be first presented to Fifth Wall Acquisition Corp. III.
No compensation of any kind, including finder’s and consulting fees, will be paid to our sponsor, officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Following the closing of this offering, we expect that we will enter into an administrative support agreement with an affiliate of our sponsor pursuant to which we will agree to pay the sponsor affiliate a total of up to $17,500 per month for office space and professional, secretarial, administrative and support services provided to us.
Our sponsor may loan us funds to be used for a portion of the expenses of this offering. These loans would be non-interest bearing, unsecured and are due at the earlier of the closing of this offering or the
date on which we determine not to consummate this offering. The loan would be repaid upon the closing of this offering out of the estimated $2,570,000 of offering proceeds that has been allocated to the payment of offering expenses.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete an initial business combination, we would repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into Class A ordinary shares at a price of $10.00 per ordinary share at the option of the lender. The shares would be identical to the private placement shares, including as to exercise price, exercisability and exercise period. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our shareholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a general meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
We will enter into a registration and shareholder rights agreement with respect to the founder shares (including shares issuable upon conversion of the founder shares) and private placement shares, which is described under the heading ‘‘Principal Shareholders — Registration and Shareholder Rights.’’ Upon consummation of our initial business combination and for so long as our sponsor and its permitted transferees collectively hold at least 50% of the number of ordinary shares held by the sponsor upon consummation of this offering (after giving appropriate effect to any share sub-divisions, reverse share sub-divisions or other similar corporate transactions, or any adjustment to the conversion rate of the founder shares in connection with an initial business combination), through our sponsor, Fifth Wall will be entitled to nominate one person for appointment to our board of directors, which is described under the section of this prospectus entitled “Description of Securities — Registration and Shareholder Rights.”
Policy for Approval of Related Party Transactions
The audit committee of our board of directors will adopt a charter, providing for the review, approval and/or ratification of “related party transactions,” which are those transactions required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated by the SEC, by the audit committee. At its meetings, the audit committee shall be provided with the details of each new, existing, or proposed related party transaction, including the terms of the transaction, any contractual restrictions that the company has already committed to, the business purpose of the transaction, and the benefits of the transaction to the company and to the relevant related party. Any member of the committee who has an interest in the related party transaction under review by the committee shall abstain from voting on the approval of the related party transaction, but may, if so requested by the chairperson of the committee, participate in some or all of the committee’s discussions of the related party transaction. Upon completion of its review of the related party transaction, the committee may determine to permit or to prohibit the related party transaction.
DESCRIPTION OF SECURITIES
We are a Cayman Islands exempted company and our affairs will be governed by our amended and restated memorandum and articles of association, the Companies Act and the common law of the Cayman Islands. Pursuant to our amended and restated memorandum and articles of association which will be adopted prior to the consummation of this offering, we are authorized to issue 200,000,000 Class A ordinary shares and 20,000,000 Class B ordinary shares, as well as 1,000,000 preference shares, $0.0001 par value each. The following description summarizes certain terms of our shares as set out more particularly in our amended and restated memorandum and articles of association. Because it is only a summary, it may not contain all the information that is important to you.
Ordinary Shares
Upon the closing of this offering, 32,107,000 ordinary shares will be outstanding (assuming no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of 937,500 founder shares by our sponsor), consisting of:
•
25,000,000 Class A ordinary shares being offered in this offering;
•
857,000 Class A ordinary shares, being offered in a private placement that will close simultaneously with the closing of this offering; and
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6,250,000 Class B ordinary shares held by our sponsor.
The number of founder shares outstanding was determined based on the expectation that such founder shares would represent 20% of the outstanding shares after this offering (excluding the private placement shares).
Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of our shareholders except as required by law, the applicable rules of Nasdaq then in effect or as otherwise specified in this prospectus. Unless specified in our amended and restated memorandum and articles of association, as required by applicable provisions of the Companies Act or applicable stock exchange rules or as otherwise specified in this prospectus, the affirmative vote of a majority of our ordinary shares that are voted is required to approve any such matter voted on by our shareholders. Approval of certain actions will require a special resolution under Cayman Islands law, being the affirmative vote of at least two-thirds of our ordinary shares that are voted, and pursuant to our amended and restated memorandum and articles of association; such actions include amending our amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company. There is no cumulative voting with respect to the appointment of directors, with the result that the holders of more than 50% of the shares voted for the appointment of directors can appoint all of the directors. Our shareholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.
Because our amended and restated memorandum and articles of association will authorize the issuance of up to 200,000,000 Class A ordinary shares, if we were to enter into a business combination, we may (depending on the terms of such a business combination) be required to increase the number of Class A ordinary shares which we are authorized to issue at the same time as our shareholders vote on the business combination to the extent we seek shareholder approval in connection with our initial business combination.
In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. As an exempted company, there is no requirement under the Companies Act for us to hold annual or extraordinary general meetings to appoint directors. We may not hold an annual or extraordinary general meeting to appoint new directors prior to the consummation of our initial business combination. Prior to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders of a majority of our founder shares. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
We will provide our shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our sponsor has entered into a letter agreement with us, pursuant to which it has agreed to waive its redemption rights with respect to any founder shares and any public shares held by it in connection with the completion of our business combination. However, if our sponsor acquires public shares in or after this offering, it will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. Unlike many blank check companies that hold shareholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is not required by law, if a shareholder vote is not required by law and we do not decide to hold a shareholder vote for business or other legal reasons, we will, pursuant to our amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated memorandum and articles of association requires these tender offer documents to contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, shareholder approval of the transaction is required by law, or we decide to obtain shareholder approval for business or other legal reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek shareholder approval, we will complete our initial business combination only if we receive approval pursuant to an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. A quorum for such meeting will consist of the holders present in person or by proxy of outstanding ordinary shares of the company representing a majority of the voting power of all outstanding ordinary shares of the company entitled to vote at such meeting. However, the participation of our sponsor or its advisors or affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our business combination even if a majority of our public shareholders vote, or indicate their intention to vote, against such business combination. For purposes of seeking approval of the majority of our outstanding ordinary shares voted, non-votes will have no effect on the approval of our business combination once a quorum is obtained. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our business combination. These quorum and voting thresholds, and the voting agreements of our sponsor, may make it more likely that we will consummate our initial business combination.
Our amended and restated memorandum and articles of association will require these tender offer documents to contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, a shareholder approval of the transaction is required by applicable law or stock exchange rule, or we decide to obtain shareholder approval for business or other reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek shareholder approval, we will complete our initial business combination only if we receive approval pursuant to an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. However, the participation of our sponsor, officers, directors, advisors or their affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our initial business combination even if a majority of our public shareholders vote, or indicate their intention to vote, against such initial business combination unless restricted by applicable the Nasdaq rules. For purposes of seeking approval of the majority of our issued and outstanding ordinary shares, non-votes will have no effect on the
approval of our initial business combination once a quorum is obtained. Our amended and restated memorandum and articles of association will require that at least ten days’ notice will be given of any general meeting.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its Excess Shares. However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our business combination. Our shareholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our business combination, and such shareholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such shareholders will not receive redemption distributions with respect to the Excess Shares if we complete the business combination. And, as a result, such shareholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their shares in open market transactions, potentially at a loss.
If we seek shareholder approval, we will complete our initial business combination only if we receive approval pursuant to an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our sponsor has agreed to vote its founder shares and any public shares purchased by it during or after this offering in favor of our initial business combination. As a result, in addition to our sponsor’s founder shares, we would need 8,946,501, or 35.8%, of the 25,000,000 public shares sold in this offering to be voted in favor of a transaction (assuming all outstanding shares are voted) in order to have our initial business combination approved (assuming the over-allotment option is not exercised). Additionally, each public shareholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction (subject to the limitation described in the preceding paragraph).
Pursuant to our amended and restated memorandum and articles of association, if we are unable to complete our business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter subject to lawfully available funds therefor, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise taxes, divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case, to our obligations under Cayman Islands law to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Our sponsor, directors and executive officers have entered into a letter agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our business combination within 24 months from the closing of this offering. However, if our sponsor, directors and executive officers acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our business combination within the prescribed time period.
In the event of a liquidation, dissolution or winding up of the company after a business combination, our shareholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of shares, if any, having preference over the ordinary shares. Our shareholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the ordinary shares, except that we will provide our shareholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, upon the completion of our initial business combination, subject to the limitations described herein.
Founder Shares
The founder shares are identical to the Class A ordinary shares being sold in this offering, and our sponsor, directors and executive officers have the same shareholder rights as public shareholders, except that (i) the founder shares are subject to certain transfer restrictions, as described in more detail below, (ii) our sponsor, directors and executive officers have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our business combination, (B) to waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our business combination within 24 months from the closing of this offering, although our sponsor, directors and executive officers will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our business combination within such time period, (C) not to propose any amendment to our amended and restated memorandum and articles of association that would modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their shares, (iii) the founder shares are our Class B ordinary shares that will automatically convert into our Class A ordinary shares at the time of our initial business combination, or at any time prior thereto at the option of our sponsor, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein and (iv) founder shares are subject to registration rights. If we submit our business combination to our public shareholders for a vote, our sponsor and our independent directors have agreed to vote any founder shares held by them and any public shares purchased during or after this offering in favor of our initial business combination.
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of our initial business combination on a one-for-one basis (subject to adjustment for share sub-divisions, share dividends, reorganizations, recapitalizations and the like), and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in this prospectus and related to the closing of the business combination, including pursuant to a specified future issuance, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless our Class B ordinary shareholders agree to waive such adjustment with respect to any such issuance or deemed issuance, including a specified future issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all ordinary shares outstanding upon completion of this offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the business combination (after giving effect to any redemptions of Class A ordinary shares by public shareholders) (excluding any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in the business combination, the private placement shares, and any private placement shares issued to our sponsor, officers or directors upon conversion of working capital loans).
With certain limited exceptions, the founder shares are not transferable, assignable or salable (except to our officers and directors and other persons or entities affiliated with our sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) if the last sale price of our Class A ordinary shares equals or exceeds $12.00 per ordinary share (as adjusted for share sub-divisions, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Register of Members
Under the Companies Act, we must keep a register of members and there should be entered therein:
(i)
the names and addresses of the members of the company, a statement of the shares held by each member, which:
(a)
distinguishes each share by its number (so long as the share has a number);
(b)
confirms the amount paid, or agreed to be considered as paid, on the shares of each member; confirms the number and category of shares held by each member; and
(c)
confirms whether each relevant category of shares held by a member carries voting rights under the amended and restated memorandum and articles of association, and if so, whether such voting rights are conditional;
(ii)
the date on which the name of any person was entered on the register as a member; and
(iii)
the date on which any person ceased to be a member.
For these purposes, “voting rights” means rights conferred on shareholders, including the right to appoint or remove directors, in respect of their shares to vote at general meetings of the company on all or substantially all matters. A voting right is conditional where the voting right arises only in certain circumstances.
Under Cayman Islands law, the register of members of our company is prima facie evidence of the matters set out therein (i.e. the register of members will raise a presumption of fact on the matters referred to above unless rebutted) and a member registered in the register of members will be deemed as a matter of Cayman Islands law to have legal title to the shares as set against its name in the register of members. Upon the closing of this public offering, the register of members will be immediately updated to reflect the issue of shares by us. Once our register of members has been updated, the shareholders recorded in the register of members will be deemed to have legal title to the shares set against their name. However, there are certain limited circumstances where an application may be made to a Cayman Islands court for a determination on whether the register of members reflects the correct legal position.
Further, the Cayman Islands court has the power to order that the register of members maintained by a company should be rectified where it considers that the register of members does not reflect the correct legal position. If an application for an order for rectification of the register of members were made in respect of our ordinary shares, then the validity of such shares may be subject to re-examination by a Cayman Islands court.
Preference Shares
Our amended and restated memorandum and articles of association will authorize 1,000,000 preference shares and will provide that preference shares may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares each series. Our board of directors will be able to, without shareholder approval, issue preference shares with voting and other rights that could adversely affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. The ability of our board of directors to issue preference shares without shareholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of our management team. We have no preference shares issued and outstanding at the date hereof. Although we do not currently intend to issue any preference shares, we cannot assure you that we will not do so in the future. No preference shares are being issued or registered in this offering.
Dividends
We have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of a business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any cash dividends subsequent to a
business combination will be within the discretion of our board of directors at such time, and we will only pay such dividend out of our profits or share premium (subject to solvency requirements) as permitted under Cayman Islands law
If we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Our Transfer Agent
The transfer agent for our ordinary shares is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent, its agents and each of its shareholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any claims and losses due to any gross negligence, bad faith or willful misconduct of the indemnified person or entity.
Certain Differences in Corporate Law
Cayman Islands companies are governed by the Companies Act. The Companies Act is modeled on English Law but does not follow recent English Law statutory enactments, and differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the material differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Mergers and Similar Arrangements. In certain circumstances, the Companies Act allows for mergers or consolidations between two Cayman Islands companies, or between a Cayman Islands exempted company and a company incorporated in another jurisdiction (provided that is facilitated by the laws of that other jurisdiction).
Where the merger or consolidation is between two Cayman Islands companies, the directors of each company must approve and enter into a written plan of merger or consolidation containing certain prescribed information. That plan or merger or consolidation must then be authorized by either (a) a special resolution (usually a majority of two-thirds in value of the voting shares voted at a general meeting) of the shareholders of each company; or (b) such other authorization, if any, as may be specified in such constituent company’s articles of association. No shareholder resolution is required for a merger between a parent company (i.e., a company that owns at least 90% of the issued ordinary shares of each class in a subsidiary company) and its subsidiary company. The consent of each holder of a fixed or floating security interest of a constituent company must be obtained, unless the court waives such requirement. If the Cayman Islands Registrar of Companies is satisfied that the requirements of the Companies Act (which includes certain other formalities) have been complied with, the Registrar of Companies will register the plan of merger or consolidation.
Where the merger or consolidation involves a foreign company, the procedure is similar, save that with respect to the foreign company, the directors of the Cayman Islands exempted company are required to make a declaration to the effect that, having made due enquiry, they are of the opinion that the requirements set out below have been met: (i) that the merger or consolidation is permitted or not prohibited by the constitutional documents of the foreign company and by the laws of the jurisdiction in which the foreign company is incorporated, and that those laws and any requirements of those constitutional documents have been or will be complied with; (ii) that no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the foreign company in any jurisdictions; (iii) that no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the foreign company, its affairs or its property or any part thereof; and (iv) that no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the foreign company are and continue to be suspended or restricted.
Where the surviving company is the Cayman Islands exempted company, the directors of the Cayman Islands exempted company are further required to make a declaration to the effect that, having made due enquiry, they are of the opinion that the requirements set out below have been met: (i) that the foreign
company is able to pay its debts as they fall due and that the merger or consolidated is bona fide and not intended to defraud unsecured creditors of the foreign company; (ii) that in respect of the transfer of any security interest granted by the foreign company to the surviving or consolidated company (a) consent or approval to the transfer has been obtained, released or waived; (b) the transfer is permitted by and has been approved in accordance with the constitutional documents of the foreign company; and (c) the laws of the jurisdiction of the foreign company with respect to the transfer have been or will be complied with; (iii) that the foreign company will, upon the merger or consolidation becoming effective, cease to be incorporated, registered or exist under the laws of the relevant foreign jurisdiction; and (iv) that there is no other reason why it would be against the public interest to permit the merger or consolidation.
Where the above procedures are adopted, the Companies Act provides certain limited appraisal rights for dissenting shareholders to be paid a payment of the fair value of his shares upon their dissenting to the merger or consolidation if they follow a prescribed procedure. In essence, that procedure is as follows: (a) the shareholder must give his written objection to the merger or consolidation to the constituent company before the vote on the merger or consolidation, including a statement that the shareholder proposes to demand payment for his shares if the merger or consolidation is authorized by the vote; (b) within 20 days following the date on which the merger or consolidation is approved by the shareholders, the constituent company must give written notice to each shareholder who made a written objection; (c) a shareholder must within 20 days following receipt of such notice from the constituent company, give the constituent company a written notice of his intention to dissent including, among other details, a demand for payment of the fair value of his shares; (d) within seven days following the date of the expiration of the period set out in paragraph (b) above or seven days following the date on which the plan of merger or consolidation is filed, whichever is later, the constituent company, the surviving company or the consolidated company must make a written offer to each dissenting shareholder to purchase his shares at a price that the company determines is the fair value and if the company and the shareholder agree the price within 30 days following the date on which the offer was made, the company must pay the shareholder such amount; and (e) if the company and the shareholder fail to agree a price within such 30 day period, within 20 days following the date on which such 30 day period expires, the company (and any dissenting shareholder) must file a petition with the Cayman Islands Grand Court to determine the fair value and such petition must be accompanied by a list of the names and addresses of the dissenting shareholders with whom agreements as to the fair value of their shares have not been reached by the company. At the hearing of that petition, the court has the power to determine the fair value of the shares together with a fair rate of interest, if any, to be paid by the company upon the amount determined to be the fair value. Any dissenting shareholder whose name appears on the list filed by the company may participate fully in all proceedings until the determination of fair value is reached. These rights of a dissenting shareholder are not available in certain circumstances, for example, to dissenters holding ordinary shares of any class in respect of which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the relevant date or where the consideration for such ordinary shares to be contributed are shares of any company listed on a national securities exchange or ordinary shares of the surviving or consolidated company.
Moreover, Cayman Islands law has separate statutory provisions that facilitate the reconstruction or amalgamation of companies in certain circumstances, schemes of arrangement will generally be more suited for complex mergers or other transactions involving widely held companies, commonly referred to in the Cayman Islands as a “scheme of arrangement” which may be tantamount to a merger.
In the event that a merger was sought pursuant to a scheme of arrangement (the procedures for which are more rigorous and take longer to complete than the procedures typically required to consummate a merger in the United States), the arrangement in question must be approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at an annual general meeting, or extraordinary general meeting summoned for that purpose. The convening of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:
•
we are not proposing to act illegally or beyond the scope of our corporate authority and the statutory provisions as to majority vote have been complied with;
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the shareholders have been fairly represented at the meeting in question;
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the arrangement is such as a businessman would reasonably approve; and
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the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would amount to a “fraud on the minority.”
If a scheme of arrangement or takeover offer (as described below) is approved, any dissenting shareholder would have no rights comparable to appraisal rights (providing rights to receive payment in cash for the judicially determined value of the shares), which would otherwise ordinarily be available to dissenting shareholders of United States corporations.
Squeeze-out Provisions. When a tender offer is made and accepted by holders of 90% of the shares to whom the offer relates within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands, but this is unlikely to succeed unless there is evidence of fraud, bad faith, collusion or inequitable treatment of the shareholders.
Further, transactions similar to a merger, reconstruction and/or an amalgamation may in some circumstances be achieved through means other than these statutory provisions, such as a share capital exchange, asset acquisition or control, or through contractual arrangements of an operating business.
Shareholders’ Suits. Maples and Calder (Cayman) LLP, our Cayman Islands legal counsel, is not aware of any reported class action having been brought in a Cayman Islands court. Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors usually may not be brought by a shareholder. However, based both on Cayman Islands authorities and on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:
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a company is acting, or proposing to act, illegally or ultra vires (beyond the scope of its authority);
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the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or
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those who control the company are perpetrating a “fraud on the minority.”
A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
Enforcement of Civil Liabilities. The Cayman Islands has a different body of securities laws as compared to the United States and provides less protection to investors. Additionally, Cayman Islands companies may not have standing to sue before the Federal courts of the United States.
We have been advised by Maples and Calder (Cayman) LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages
may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
Special Considerations for Exempted Companies. We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:
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an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies;
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an exempted company’s register of members is not open to inspection;
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an exempted company does not have to hold an annual general meeting;
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an exempted company may issue shares with no par value;
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an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);
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an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
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an exempted company may register as a limited duration company; and an exempted company may register as a segregated portfolio company.
“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the ordinary shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).
Amended and Restated Memorandum and Articles of Association
Our amended and restated memorandum and articles of association will contain provisions designed to provide certain rights and protections relating to this offering that will apply to us until the completion of our initial business combination. These provisions cannot be amended without a special resolution. As a matter of Cayman Islands law, a resolution is deemed to be a special resolution where it has been approved by either (i) the affirmative vote of at least two-thirds (or any higher threshold specified in a company’s articles of association) of a company’s shareholders entitled to vote and so voting at a general meeting for which notice specifying the intention to propose the resolution as a special resolution has been given; or (ii) if so authorized by a company’s articles of association, by a unanimous written resolution of all of the company’s shareholders. Our amended and restated memorandum and articles of association provides that special resolutions must be approved either by at least two-thirds of our shareholders who attend and vote at a general meeting of the company (i.e., the lowest threshold permissible under Cayman Islands law), or by a unanimous written resolution of all of our shareholders.
Further, our amended and restated memorandum and articles of association provides that a quorum at our general meetings will consist of the holders present in person or by proxy of outstanding ordinary shares of the company representing a majority of the voting power of all outstanding ordinary shares of the company entitled to vote at such meeting; provided that a quorum in connection with any meeting that is convened to vote on a business combination or any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares or pre-initial business combination activity shall be a majority of the ordinary shares entitled to vote at such meeting being individuals present in person or by proxy or if a corporation or other non-natural person by its duly authorized representative or proxy.
Our sponsor and its permitted transferees, if any, who will collectively beneficially own approximately 20% of our ordinary shares (excluding the private placement shares underlying the private placement) upon the closing of this offering, will participate in any vote to amend our amended and restated memorandum and articles of association and will have the discretion to vote in any manner they choose. Specifically, our amended and restated memorandum and articles of association provides, among other things, that:
•
If we do not complete our initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to fund our working capital requirements (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case, to our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the requirements of other applicable law;
•
Prior to our initial business combination, we may not issue additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on our initial business combination or (b) to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time we have to consummate a business combination beyond 24 months from the closing of this offering or (y) amend the foregoing provisions;
•
Although we do not intend to enter into a business combination with a target business that is affiliated with our sponsor, our directors or our executive officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm that such a business combination is fair to our company from a financial point of view;
•
If a shareholder vote on our initial business combination is not required by law and we do not decide to hold a shareholder vote for business or other legal reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act. Whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq, we will provide our public shareholders with the opportunity to redeem their public shares by one of the two methods listed above;
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We must complete one or more business combinations having an aggregate fair market value of at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination;
•
If our shareholders approve an amendment to our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering, or with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity, we will provide our public shareholders with the opportunity to redeem all or a portion of their Class A common share upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes and up to $100,000 of interest to pay dissolution expenses, divided by the number of then outstanding public shares, subject to the limitations described herein; and
•
We will not effectuate our initial business combination with another blank check company or a similar company with nominal operations.
In addition, our amended and restated memorandum and articles of association provides that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001.
The Companies Act permits a company incorporated in the Cayman Islands to amend its memorandum and articles of association with the approval of a special resolution, which requires the approval of the holders of at least two-thirds of such company’s issued and outstanding ordinary shares who attend and vote at a general meeting or by way of unanimous written resolution. A company’s articles of association may specify that the approval of a higher majority is required but, provided the approval of the required majority is obtained, any Cayman Islands exempted company may amend its memorandum and articles of association regardless of whether its memorandum and articles of association provides otherwise. Accordingly, although we could amend any of the provisions relating to our proposed offering, structure and business plan which are contained in our amended and restated memorandum and articles of association, we view all of these provisions as binding obligations to our shareholders and neither we, nor our officers or directors, will take any action to amend or waive any of these provisions unless we provide dissenting public shareholders with the opportunity to redeem their public shares.
Anti-Money Laundering - Cayman Islands
If any person in the Cayman Islands knows or suspects, or has reasonable grounds for knowing or suspecting, that another person is engaged in criminal conduct or money laundering or is involved with terrorism or terrorist financing and property and the information for that knowledge or suspicion came to their attention in the course of business in the regulated sector or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (As Revised) of the Cayman Islands if the disclosure relates to criminal conduct or money laundering or (ii) a police officer of the rank of constable or higher, or the Financial Reporting Authority, pursuant to the Terrorism Act (As Revised) of the Cayman Islands, if the disclosure relates to involvement with terrorism or terrorist financing and property. Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.
Data Protection in the Cayman Islands - Privacy Notice
We have certain duties under the Data Protection Act, 2017 of the Cayman Islands (the “DPA”) based on internationally accepted principles of data privacy.
Introduction
This privacy notice puts our shareholders on notice that through your investment in the company you will provide us with certain personal information which constitutes personal data within the meaning of the DPA (“personal data”).
In the following discussion, the “company” refers to us and our affiliates and/or delegates, except where the context requires otherwise.
Investor Data
We will collect, use, disclose, retain and secure personal data to the extent reasonably required only and within the parameters that could be reasonably expected during the normal course of business. We will only process, disclose, transfer or retain personal data to the extent legitimately required to conduct our activities of on an ongoing basis or to comply with legal and regulatory obligations to which we are subject. We will only transfer personal data in accordance with the requirements of the DPA, and will apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of the personal data and against the accidental loss, destruction or damage to the personal data.
In our use of this personal data, we will be characterized as a “data controller” for the purposes of the DPA, while our affiliates and service providers who may receive this personal data from us in the conduct of our activities may either act as our “data processors” for the purposes of the DPA or may process personal information for their own lawful purposes in connection with services provided to us.
We may also obtain personal data from other public sources. Personal data includes, without limitation, the following information relating to a shareholder and/or any individuals connected with a shareholder as an investor: name, residential address, email address, contact details, corporate contact information, signature, nationality, place of birth, date of birth, tax identification, credit history, correspondence records, passport number, bank account details, source of funds details and details relating to the shareholder’s investment activity.
Who this Affects
If you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal arrangements such as trusts or exempted limited partnerships) that provides us with personal data on individuals connected to you for any reason in relation your investment in the Company, this will be relevant for those individuals and you should transmit the content of this Privacy Notice to such individuals or otherwise advise them of its content.
How the Company May Use Your Personal Data
The company, as the data controller, may collect, store and use personal data for lawful purposes, including, in particular:
(i) where this is necessary for the performance of our rights and obligations under any purchase agreements;
(ii) where this is necessary for compliance with a legal and regulatory obligation to which we are subject (such as compliance with anti-money laundering and FATCA/CRS requirements); and/or
(iii) where this is necessary for the purposes of our legitimate interests and such interests are not overridden by your interests, fundamental rights or freedoms.
Should we wish to use personal data for other specific purposes (including, if applicable, any purpose that requires your consent), we will contact you.
Why We May Transfer Your Personal Data
In certain circumstances, we may be legally obliged to share personal data and other information with respect to your shareholding with the relevant regulatory authorities such as the Cayman Islands Monetary Authority or the Tax Information Authority. They, in turn, may exchange this information with foreign authorities, including tax authorities.
We anticipate disclosing personal data to persons who provide services to us and their respective affiliates (which may include certain entities located outside the US, the Cayman Islands or the European Economic Area), who will process your personal data on our behalf.
The Data Protection Measures We Take
Any transfer of personal data by us or our duly authorized affiliates and/or delegates outside of the Cayman Islands shall be in accordance with the requirements of the DPA.
We and our duly authorized affiliates and/or delegates shall apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of personal data, and against accidental loss or destruction of, or damage to, personal data.
We shall notify you of any personal data breach that is reasonably likely to result in a risk to your interests, fundamental rights or freedoms or those data subjects to whom the relevant personal data relates.
If you consider that your personal data has not been handled correctly, or you are not satisfied with the company’s responses to any requests you have made regarding the use of your personal data, you have the right to complain to the Cayman Islands’ Ombudsman. The Ombudsman can be contacted by calling +1 (345) 946-6283 or by email at info@ombudsman.ky.
Certain Anti-Takeover Provisions of our Amended and Restated Memorandum and Articles of Association
Our amended and restated memorandum and articles of association provides that our board of directors will be classified into three classes of directors. As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual general meetings.
Our authorized but unissued Class A ordinary shares and preference shares are available for future issuances without shareholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved Class A ordinary shares and preference shares could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Authorized but Unissued Ordinary Shares and Preference Shares
Our authorized but unissued ordinary shares and preference shares are available for future issuances without shareholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved ordinary shares and preference shares could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Securities Eligible for Future Sale
Immediately after this offering we will have 32,107,000 Class A ordinary shares (or 36,869,500 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full) issued and outstanding on an as-converted basis. Of these ordinary shares, the Class A ordinary shares sold in this offering (25,000,000 Class A ordinary shares if the underwriters’ over-allotment option is not exercised and 28,750,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full) will be freely tradable without restriction or further registration under the Securities Act, except for any Class A ordinary shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the outstanding founder shares (6,250,000 founder shares if the underwriters’ over-allotment option is not exercised and 7,187,500 founder shares if the underwriters’ over-allotment option is exercised in full) and all of the outstanding private placement shares (857,000 private placement shares if the underwriters’ over-allotment option is not exercised and 932,000 private placement shares if the underwriters’ over-allotment option is exercised in full) will be restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.
Persons who have beneficially owned restricted shares for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
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1% of the total number of ordinary shares then outstanding, which will equal 321,070 shares immediately after this offering (or 368,695 shares if the underwriters exercise their over-allotment option in full); or
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the average weekly reported trading volume of the Class A ordinary shares during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies
Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
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the issuer of the securities that was formerly a shell company has ceased to be a shell company;
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the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
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the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
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at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
As a result, our sponsor will be able to sell their founder shares and our sponsor will be able to sell its private placement shares pursuant to Rule 144 without registration one year after we have completed our initial business combination.
Registration and Shareholder Rights
The holders of the founder shares and private placement shares that may be issued upon conversion of working capital loans (including shares issuable upon conversion of the founder shares), private placement shares issued to our sponsor simultaneously with the closing of this offering will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of this offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the founder shares, as described in the following paragraph, and (ii) in the case of the private placement shares, 30 days after the completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Except as described herein, our sponsor and our directors and executive officers have agreed not to transfer, assign or sell any of their founder shares until (a) one year after the completion of our initial business combination, or (b) following the completion of the company’s initial business combination, the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of our sponsor with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up. Notwithstanding the foregoing, if the closing price of our Class A ordinary shares equals or exceeds $12.00 per ordinary share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the founder shares will be released from the lock-up.
In addition, pursuant to the registration and shareholder rights agreement, upon consummation of an initial business combination and for so long as our sponsor and its permitted transferees collectively hold at least 50% of the number of ordinary shares held by the sponsor upon consummation of this offering (after giving appropriate effect to any share sub-divisions, reverse share sub-divisions or other similar corporate transactions, or any adjustment to the conversion rate of the founder shares in connection with an initial business combination) through our sponsor, Fifth Wall, will be entitled to nominate one person for appointment n to our board of directors.
Listing of Securities
We have applied to have our Class A ordinary shares listed on Nasdaq under the symbol “FWAC.”
TAXATION
The following discussion of material Cayman Islands and U.S. federal income tax considerations of an investment in our Class A ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment in our Class A ordinary shares, such as the tax consequences under state, local and other tax laws.
Prospective investors should consult their advisors on the possible tax consequences of investing in our securities under the laws of their country of citizenship, residence or domicile.
Cayman Islands Tax Considerations
The following is a discussion of material Cayman Islands income tax consequences of an investment in the securities of the Company. The discussion is a general summary of present law, which is subject to prospective and retroactive change. It is not intended as tax advice, does not consider any investor’s particular circumstances, and does not consider tax consequences other than those arising under Cayman Islands law.
Under Existing Cayman Islands Laws
Payments of dividends and capital in respect of our securities will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the securities nor will gains derived from the disposal of the securities be subject to Cayman Islands income or corporate tax. The Cayman Islands currently has no income, corporation or capital gains tax and no estate duty, inheritance tax or gift tax.
No stamp duty is payable in respect of the issue of our Class A ordinary shares or on an instrument of transfer in respect of such shares.
The Company has been incorporated under the laws of the Cayman Islands as an exempted company with limited liability and, as such, has applied for and received an undertaking from the Financial Secretary of the Cayman Islands in the following form:
The Tax Concessions Act
(2018 Revision)
Undertaking as to Tax Concessions
In accordance with the provision of Section 6 of The Tax Concessions Act (2018 Revision), the Financial Secretary undertakes with Fifth Wall Acquisition Corp. III (the “Company”):
1.
That no law which is hereafter enacted in the Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to the Company or its operations; and
2.
In addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable:
2.1
On or in respect of the shares, debentures or other obligations of the Company; or
2.2
by way of the withholding in whole or part, of any relevant payment as defined in Section 6(3) of the Tax Concessions Act (2018 Revision).
These concessions shall be for a period of 20 years from the date hereof.
U.S. Federal Income Tax Considerations for U.S. Holders
The following is a discussion of material U.S. federal income tax considerations relating to the purchase, ownership and disposition of our Class A ordinary shares by U.S. Holders (as defined below) that purchase such shares pursuant to this offering and hold such shares as capital assets. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations
promulgated or proposed thereunder and administrative and judicial interpretations thereof, all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect, or to different interpretation. This discussion does not address all of the U.S. federal income tax considerations that may be relevant to specific U.S. Holders in light of their particular circumstances or to U.S. Holders subject to special treatment under U.S. federal income tax law (such as S-corporations, partnerships, or other entities or arrangements classified as partnerships for U.S. federal income tax purposes and any beneficial owners of such entities, banks, insurance companies, dealers in securities or other U.S. Holders that generally mark their securities to market for U.S. federal income tax purposes, tax-exempt entities, retirement plans, regulated investment companies, real estate investment trusts, certain former citizens or residents of the United States, U.S. Holders that hold our Class A ordinary shares as part of a straddle, hedge, conversion or other integrated transaction, U.S. Holders that have a “functional currency” other than the U.S. dollar, U.S. Holders that own (or are deemed to own) 10% or more (by vote or value) of our stock, or U.S. Holders that receive our Class A ordinary shares as compensation or pursuant to the conversion or exchange of another instrument). This discussion does not address any U.S. state or local or non-U.S. tax considerations or any U.S. federal estate, gift or alternative minimum tax considerations.
As used in this discussion, the term “U.S. Holder” means a beneficial owner of our Class A ordinary shares that, for U.S. federal income tax purposes, is (i) an individual who is a citizen or resident of the United States, (ii) a corporation created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof, or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income tax regardless of its source or (iv) a trust (x) with respect to which a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions or (y) that has in effect a valid election under applicable U.S. Treasury regulations to be treated as a U.S. person.
If an entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes invests in our Class A ordinary shares, the U.S. federal income tax considerations relating to such investment will depend in part upon the status and activities of such entity and its partners. Any such entity should consult its own tax advisor regarding the U.S. federal income tax considerations applicable to it and its partners relating to the purchase, ownership and disposition of our Class A ordinary shares.
No ruling has been or will be sought from the U.S. Internal Revenue Service (the “IRS”) with respect to any of the U.S. federal tax considerations discussed below, and no assurance can be given that the IRS will not take a position contrary to the discussion below.
THIS DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. EACH PERSON CONSIDERING AN INVESTMENT IN OUR CLASS A ORDINARY SHARES SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX CONSIDERATIONS RELATING TO THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR CLASS A ORDINARY SHARES IN LIGHT OF ITS PARTICULAR CIRCUMSTANCES. IN PARTICULAR, WE EXPECT THAT WE MAY BE TREATED AS A PFIC (AS DEFINED BELOW) FOR U.S. FEDERAL INCOME TAX PURPOSES AND, CONSEQUENTLY, EACH PERSON CONSIDERING AN INVESTMENT IN OUR CLASS A ORDINARY SHARES SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE TAX CONSIDERATIONS RELATING TO AN INVESTMENT IN A PFIC.
Passive Foreign Investment Company
In general, a corporation organized outside the United States is treated as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes in any taxable year in which either (i) at least 75% of its gross income is “passive income” or (ii) on average at least 50% of the value of its assets is attributable to assets that produce passive income or are held for the production of passive income. Passive income for this purpose generally includes, among other things, dividends, interest, royalties, rents, and net gains from commodities transactions and from the sale or exchange of property that gives rise to passive income. In determining whether a non-U.S. corporation is a PFIC, a pro rata portion of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) generally is taken into account.
We currently expect that we may be treated as a PFIC for the current taxable year and/or taxable years thereafter, as described below. Prospective U.S. investors should consult their own tax advisors regarding the U.S. federal income tax consequences of an investment in a PFIC.
Because we are a blank check company with no current active business, we believe that it is likely that we will qualify as a PFIC under the PFIC asset or income test for our current taxable year. However, pursuant to the so-called “start-up exception”, a corporation is generally not considered to be a PFIC for the first taxable year in which the corporation has gross income (the “start-up year”), if (1) no predecessor of the corporation was a PFIC; (2) it is established to the satisfaction of the IRS that the corporation will not be a PFIC for either of the first two taxable years following the start-up year; and (3) the corporation is not in fact a PFIC for either of the first two taxable years following the start-up year. The applicability of the start-up exception to us will not be known until after the close of our current taxable year and, perhaps, until after the end of our two taxable years following our start-up year. After the acquisition of a company or assets in a business combination, we may still meet one (or both) of the PFIC tests depending on the timing of the acquisition, the amount and value of our passive income and assets, respectively, as well as the passive income and assets of the acquired business. If the company that we acquire in a business combination is a PFIC, then we will not qualify for the start-up exception and will be a PFIC for our start-up year. Our actual PFIC status for our current taxable year or any subsequent taxable year will not be determinable until after the end of such taxable year (and, in the case of the application of the start-up exception to our current taxable year, perhaps until after the end of up to two taxable years following our start-up year). Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year or any future taxable year.
If we are a PFIC during any taxable year during which a U.S. Holder owns our Class A ordinary shares, we will generally continue to be treated as a PFIC with respect to such Class A ordinary shares unless (a) we cease to be a PFIC, and (b) you make a so-called “purging” election. Under one type of purging election, you will be deemed to have sold your shares at their fair market value, and any gain recognized on such deemed sale will be treated as an excess distribution, as described below. As a result of this election, you will have additional basis (to the extent of any gain recognized on the deemed sale) and, solely for purposes of the PFIC rules, a new basis and holding period in your Class A ordinary shares. You should consult your tax advisor as to the application of the rules governing purging elections to your particular circumstances (including the availability of a separate “deemed dividend” purging election that may be available if we are considered a controlled foreign corporation).
Except as specifically noted below, the remainder of this discussion assumes that we are, and will continue to be, a PFIC.
Distributions
A distribution (other than certain distributions of our stock or rights to acquire our stock) with respect to our Class A Ordinary shares to a U.S. Holder during a taxable year (without reduction for any non-U.S. tax withheld from such distribution) generally will be treated as an “excess distribution” to the extent such distribution does not exceed the ratable portion of the “total excess distribution” with respect to such share for such taxable year. The total excess distribution with respect to one of our Class A ordinary shares for a taxable year of a U.S. Holder is generally the excess of (i) all distributions to such U.S. Holder on such share during such taxable year over (ii) 125 percent of the average annual distributions to such U.S. Holder on such share during the preceding three taxable years (or shorter period during which such U.S. Holder held such share). The total excess distribution with respect to a share is deemed to be zero for the taxable year in which such U.S. Holder’s holding period for such share begins. The tax payable by a U.S. Holder on an excess distribution with respect to one of our Class A ordinary shares will be determined by allocating such excess distribution ratably to each day of such U.S. Holder’s holding period for such share. The amount of excess distribution allocated to the taxable year of such distribution will be included as ordinary income for the taxable year of such distribution. The amount of excess distribution allocated to any other period included in such U.S. Holder’s holding period cannot be offset by any net operating losses of such U.S. Holder and will be taxed at the highest marginal rates applicable to ordinary income for each such period and, in addition, an interest charge will be imposed on the amount of tax so derived for each such period.
Furthermore, only the portion of any excess distribution includable in income in the taxable year of such distribution will be taken into account in determining the amount of the total excess distribution for any subsequent taxable year.
To the extent a distribution (other than certain distributions of our stock or rights to acquire our stock) with respect to one of our Class A ordinary shares is not treated as an excess distribution to a U.S. Holder (for instance, because we are not treated as a PFIC), such U.S. Holder generally will be required to include the amount of such distribution in gross income as a dividend (without reduction for any non-U.S. tax withheld from such distribution) to the extent of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) that are not allocated to excess distributions. To the extent the amount of such distribution exceeds such current and accumulated earnings and profits, it generally will be treated first as a non-taxable return of capital to the extent of such U.S. Holder’s adjusted tax basis in such share and then as gain from the sale or exchange of such share, which will be treated in the manner described below under “Sale, Exchange, or Other Disposition of Shares”).
A distribution with respect to one of our Class A ordinary shares that is treated as a dividend generally will constitute income from sources outside the United States and generally will be categorized for U.S. foreign tax credit purposes as “passive category income” or, in the case of some U.S. Holders, as “general category income”. If, however, 50% or more (by vote or value) of our stock is treated as owned by U.S. persons, the amount of dividends constituting income from sources outside the United States for U.S. foreign tax credit purposes may be limited to the amount attributable to our income from sources outside the United States. Such dividend will not be eligible for the “dividends received” deduction generally allowed to corporate shareholders with respect to dividends received from U.S. corporations or for the preferential rates of tax applicable to “qualified dividend income” of certain non-corporate taxpayers.
If we are not treated as a PFIC, dividends we pay to a non-corporate U.S. Holder will generally constitute qualified dividend income if our shares are readily tradable on an established securities market in the United States and certain holding period and other requirements are met. It is unclear whether the redemption rights with respect to the Class A ordinary shares described in this prospectus may prevent a U.S. Holder from satisfying the applicable holding period requirements for these purposes.
Sale, Exchange or Other Disposition of Shares
A U.S. Holder generally will recognize gain or loss for U.S. federal income tax purposes upon the sale, exchange or other disposition (including, without limitation, gain with respect to certain transfers upon death, gifts and pledges) of one of our Class A ordinary shares (which, in general, would include a redemption of our Class A ordinary shares that is treated as a sale of such shares as described below) in an amount equal to the difference, if any, between the amount realized on the sale, exchange or other disposition and such U.S. Holder’s adjusted tax basis in such share. Any such gain generally will be treated as an excess distribution subject to the tax consequences relating to an excess distribution described above under “— Distributions.” Any such loss generally will be treated as a capital loss. If we are not treated as a PFIC, the gain or loss described above will generally be long-term capital gain or loss if the relevant holding period for the Class A ordinary shares so disposed of exceeds one year. The deductibility of capital losses is subject to limitations.
Redemption of Ordinary Shares
If a U.S. Holder’s ordinary shares are redeemed pursuant to the exercise of a shareholder redemption right or if we purchase a U.S. Holder’s Class A ordinary shares in an open market transaction (in either case referred to herein as a “redemption”), for U.S. federal income tax purposes, such redemption will be subject to the following rules. If the redemption qualifies as a sale of the ordinary shares under Section 302 of the Code, the tax treatment of such redemption will be as described under “— Sale, Exchange or Other Disposition of Shares” above. Whether a redemption of our shares qualifies for sale treatment will depend largely on the total number of our Class A ordinary shares treated as held by such U.S. Holder. The redemption of Class A ordinary shares generally will be treated as a sale or exchange of the Class A ordinary shares (rather than as a distribution) if the receipt of cash upon the redemption (1) is “substantially disproportionate”
with respect to a U.S. Holder, (2) results in a “complete termination” of such holder’s interest in us or (3) is “not essentially equivalent to a dividend” with respect to such holder. These tests are explained more fully below.
In determining whether any of the foregoing tests are satisfied, a U.S. Holder must take into account not only our Class A ordinary shares actually owned by such holder, but also our Class A ordinary shares that are constructively owned by such holder. A U.S. Holder may constructively own, in addition to our Class A ordinary shares owned directly, Class A ordinary shares owned by related individuals and entities in which such holder has an interest or that have an interest in such holder. In order to meet the substantially disproportionate test, the percentage of our outstanding voting shares actually and constructively owned by a U.S. Holder immediately following the redemption of our Class A ordinary shares must, among other requirements, be less than 80% of the percentage of our outstanding voting and Class A ordinary shares actually and constructively owned by such holder immediately before the redemption. There will be a complete termination of a U.S. Holder’s interest if either (1) all of our Class A ordinary shares actually and constructively owned by such U.S. Holder are redeemed or (2) all of our Class A ordinary shares actually owned by such U.S. Holder are redeemed and such holder is eligible to waive, and effectively waives, in accordance with specific rules, the attribution of shares owned by family members and such holder does not constructively own any other shares. The redemption of the Class A ordinary shares will not be essentially equivalent to a dividend if such redemption results in a “meaningful reduction” of a U.S. Holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority shareholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” U.S. Holders should consult with their own tax advisors as to the tax consequences of an exercise of the redemption right.
If none of the foregoing tests are satisfied, then the redemption may be treated as a distribution and the tax effects will be as described under “— Distributions,” above. After the application of those rules, any remaining tax basis a U.S. Holder has in the redeemed Class A ordinary shares will be added to the adjusted tax basis in such holder’s remaining Class A ordinary shares. If there are no remaining Class A ordinary shares, a U.S. Holder should consult its own tax advisors as to the allocation of any remaining basis.
Tax Basis Upon Death
A person who acquires one of our Class A ordinary shares from a deceased U.S. Holder generally will, for U.S. federal income tax purposes, be denied under the PFIC rules, a step-up of the tax basis in such share to fair market value of such share at the date of such U.S. Holder’s death. Instead, such person will have a tax basis in such share equal to the lower of such fair market value or such deceased U.S. Holder’s tax basis in such share.
Qualified Electing Fund Election
The following is subject to the further discussion below under “— Investments in Other PFICs”.
The tax consequences relating to excess distributions and tax basis described above under “— Distributions”, “— Sale, Exchange or Other Disposition of Shares” and “— Tax Basis Upon Death” generally will not apply to a U.S. Holder that validly has made a “qualified electing fund” (“QEF”) election with respect to us as of the first tax year of such U.S. Holder’s holding period for one of our Class A ordinary shares. A QEF election, once made, will be effective for all subsequent taxable years of such U.S. Holder unless revoked with the consent of the IRS. A QEF election is available to a U.S. Holder only if we provide such U.S. Holder with the annual information statement required under the U.S. Treasury regulations and with reasonable access to our books of account, records and other documents so as to enable such U.S. Holder to verify that its pro rata share of ordinary income and net capital gains has been calculated according to U.S. federal income tax principles. We currently intend to provide to a U.S. Holder who makes a QEF election, upon written request of such holder, the annual information statement required under the current U.S. Treasury regulations and with reasonable access to such books of account, records and other documents.
If a QEF election is made with respect to us by a U.S. Holder, such U.S. Holder generally will be required to include currently in gross income its pro rata share of our ordinary earnings and net capital gains, if any, for each taxable year in which we are a PFIC. Such income inclusion generally will be required whether or not such U.S. Holder owns Class A ordinary shares for an entire taxable year or at the end of our taxable year. The amount so included in income generally will be treated as ordinary income to the extent of such U.S. Holder’s allocable share of our ordinary earnings and as long-term capital gain to the extent of such U.S. Holder’s allocable share of our net capital gains. An amount previously included in income by such U.S. Holder under the QEF rules generally will not be subject to tax when it is distributed to such U.S. Holder. However, such U.S. Holder generally will recognize foreign currency gain or loss attributable to any movement in foreign currency exchange rates through the date when such amount is actually distributed. The U.S. Holder’s tax basis in its Class A ordinary shares generally will be increased by any amounts included in income under the QEF rules and be decreased by any amounts not included in income when distributed.
So long as a QEF election is in effect with respect to a U.S. Holder’s entire holding period for one of our Class A ordinary shares (or such holder made a QEF election after the first taxable year the holder was treated as holding PFIC stock, together with a purging election as described above), distributions with respect to such share, and gain on the sale, exchange or other disposition of such share, will not be treated as excess distributions to such U.S. Holder. Instead, any gain or loss recognized by such U.S. Holder on the sale, exchange or other disposition of such share generally will be long-term capital gain or loss if such U.S. Holder had held such share for more than one year at the time of such sale, exchange or other disposition. It is unclear, however, whether the redemption rights with respect to the shares of Class A ordinary shares described in this prospectus would suspend the running of the applicable holding period for this purpose. If the running of the holding period for the shares of Class A ordinary shares is suspended, then non-corporate U.S. holders may not be able to satisfy the one-year holding period requirement for long-term capital gain treatment, in which case any gain on a sale or taxable disposition of the shares would be subject to short-term capital gain treatment and would be taxed at regular ordinary income tax rates. Net long-term capital gain of certain non-corporate U.S. Holders generally is subject to a preferential tax rate. The deductibility of capital losses is subject to limitations. Such gain or loss generally will be sourced within the United States.
Mark-To-Market Election
The following is subject to the further discussion below under “— Investments in Other PFICs”.
The tax consequences relating to excess distributions described above under “— Distributions” and “— Sale, Exchange or Other Disposition of Shares” generally will not apply if a “mark-to-market” election is available and a U.S. Holder validly has made such an election as of the beginning of such U.S. Holder’s holding period for one of our Class A ordinary shares. If such election is made, distributions with respect to one of our Class A ordinary shares and gain on the sale, exchange or other disposition of such share will not be treated as excess distributions to such U.S. Holder. Instead, such U.S. Holder generally would be required to take into account the difference, if any, between the fair market value of, and its adjusted tax basis in, such share at the end of each taxable year in which we are a PFIC as ordinary income or, to the extent of any net mark-to-market gains previously included in income, ordinary loss, and to make corresponding adjustments to the tax basis in such share. In addition, any gain from a sale, exchange or other disposition of one of our Class A ordinary shares in a taxable year in which we are a PFIC would be treated as ordinary income, and any loss from such sale, exchange or other disposition would be treated first as ordinary loss to the extent of any net mark-to-market gains previously included in income and thereafter as capital loss. A mark-to-market election is available to a U.S. Holder only if our Class A ordinary shares are considered “marketable stock”. Generally, stock is be considered marketable stock if it is “regularly traded” on a “qualified exchange” within the meaning of applicable U.S. Treasury regulations. A class of stock is regularly traded during any calendar year during which such class of stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. A non-U.S. securities exchange constitutes a qualified exchange if it is regulated or supervised by a governmental authority of the country in which the securities exchange is located and meets certain trading, listing, financial disclosure and other requirements set forth in U.S. Treasury regulations. No assurance can be given that our Class A ordinary shares will
constitute marketable stock for this purpose. Each U.S. Holder should consult its own tax advisor with respect to the availability and tax consequences of a mark-to-market election with respect to our Class A ordinary shares.
Investment in other PFICs
We may hold, directly or indirectly, interests in entities that are PFICs. We intend to use commercially reasonable efforts to cause any such entity to provide information that is necessary under currently applicable U.S. Treasury regulations for U.S. Holders to make a separate QEF election with respect to such entity. However, if we do not control, directly or indirectly, such entity, we may not be able to cause such entity to provide such information, in which event a QEF election with respect to such entity generally will not be available. In such event, the rules relating to excess distributions described above under “— Sale, Exchange or Other Disposition of Shares” and “— Distributions” generally would apply to direct and indirect dispositions of our interest in such entity (including a disposition by a U.S. Holder of our Class A ordinary shares and a disposition by us of our interest in such entity) and distributions by such entity, even for a U.S. holder that has made a QEF election with respect to us. In addition, it is not entirely clear how the consequences described above under “— Tax Basis Upon Death” or a mark-to-market election made with respect to us would apply with respect to our interests in other PFICs. U.S. Holders should consult their own tax advisors regarding the tax consequences to them of our direct or indirect investment in other PFICs.
Medicare Taxes
In addition to regular U.S. federal income tax, certain U.S. Holders that are individuals, estates or trusts are subject to a 3.8% tax on all or a portion of their “net investment income,” which may include all or a portion of their income arising from a distribution with respect to our Class A ordinary shares and net gain from the sale, exchange or other disposition of our Class A ordinary shares. Each U.S. Holder should consult its own tax advisor regarding the application of this tax to income from an investment in a PFIC, including the special rules applicable to a U.S. Holder that has made a QEF election with respect to us.
Information Reporting and Backup Withholding
Under certain circumstances, information reporting and/or backup withholding may apply to U.S. Holders with respect to payments made on or proceeds from the sale, exchange or other disposition of our Class A ordinary shares, unless an applicable exemption is satisfied. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules generally will be allowed as a refund or a credit against a U.S. Holder’s U.S. federal income tax liability if the required information is furnished by the U.S. Holder on a timely basis to the IRS.
U.S. Holders generally will be required to file statements with respect to our Class A ordinary shares on IRS Form 8621 with their U.S. federal income tax returns. Failure to file such statements may result in the extension of the period of limitations on assessment and collection of U.S. federal income taxes.
Certain Reporting Requirements with Respect to Payments of Purchase Price
U.S. Holders may be required to file IRS Form 926 reporting the payment of the purchase price to us. Substantial penalties may be imposed, and the period of limitations on assessment and collection of U.S. federal income taxes may be extended, in the event of a failure to comply. Each U.S. Holder should consult its own tax advisor as to the possible obligation to file IRS Form 926 with respect to its payment of the purchase price to us.
Reportable Transactions
A U.S. Holder that participates in any “reportable transaction” (as defined in U.S. Treasury regulations) must attach to its U.S. federal income tax return a disclosure statement on IRS Form 8886. U.S. Holders should consult their own tax advisors as to the possible obligation to file IRS Form 8886 with respect to the sale, exchange or other disposition of any non-U.S. currency received as a distribution with respect to, or as proceeds from the sale, exchange or other disposition of, our Class A ordinary shares.
Disclosure Requirements for Specified Foreign Financial Assets
Individual U.S. Holders (and certain U.S. entities specified in U.S. Treasury regulations) who, during any taxable year, hold any interest in any “specified foreign financial asset” generally will be required to file
with their U.S. federal income tax returns certain information on IRS Form 8938 if the aggregate value of all such assets exceeds certain specified amounts. “Specified foreign financial asset” generally includes any financial account maintained with a non-U.S. financial institution and may also include our Class A ordinary shares if they are not held in an account maintained with a financial institution. Substantial penalties may be imposed, and the period of limitations on assessment and collection of U.S. federal income taxes may be extended, in the event of a failure to comply. U.S. Holders should consult their own tax advisors as to the possible application to them of this filing requirement.
Considerations for Non-U.S. Holders Under the U.S. Foreign Account Tax Compliance Act
Under the Foreign Account Tax Compliance Act provisions of the Code and related U.S. Treasury guidance (“FATCA”), a withholding tax of 30% will be imposed in certain circumstances on (i) payments of certain U.S. source income, including interest and dividends (“withholdable payments”) and (ii) payments that are “attributable” to withholdable payments (“foreign passthru payments”) made by “foreign financial institutions” (such as banks, brokers, investment funds or certain holding companies). It is uncertain at present when payments will be treated as “attributable” to withholdable payments.
It is possible that, in order to comply with FATCA, we (or if one of our Class A ordinary shares is held through a financial institution, such financial institution) may be required, pursuant to an “FFI Agreement” with the United States or under applicable law (including pursuant to the terms of any applicable intergovernmental agreement relating to FATCA entered into between the United States and another jurisdiction (an “IGA”)) to request certain information from the holders or beneficial owners of such share, which information may be provided to the IRS. In addition, it is possible that we or such other financial institution may be required to apply the FATCA withholding tax to any portion of any payment with respect to one of our Class A ordinary shares treated as a foreign passthru payment made on or after the date that is two years after the date on which the final U.S. Treasury regulations that define “foreign passthru payments” are published if such information is not provided or if payments are made to certain financial institutions that have not agreed to comply with an FFI Agreement with the United States (and are not otherwise required to comply with the FATCA regime under applicable law (including pursuant to the terms of any applicable IGA)). Each holder and beneficial owner of our Class A ordinary shares should consult its own tax advisor regarding the application of FATCA to our Class A ordinary shares.
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement, underwriters named below through their representatives Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and BofA Securities, Inc. have severally agreed to purchase from us the following respective number of shares at a public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus.
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Underwriters
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Number of Shares
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Deutsche Bank Securities Inc.
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9,375,000 |
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Goldman Sachs & Co. LLC
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9,375,000 |
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BofA Securities, Inc
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6,250,000 |
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Total
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25,000,000 |
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The underwriting agreement provides that the underwriters are obligated to purchase all the public shares in the offering if any are purchased, other than those shares covered by the option to purchase additional shares described below.
We have granted to the underwriters a 45-day option to purchase on a pro rata basis up to 3,750,000 additional shares at the initial public offering price, less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of shares.
The underwriters propose to offer the shares initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $ per ordinary share. After the initial public offering the underwriters may change the public offering price and concession and discount to broker/dealers. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.
The following table summarizes the compensation and estimated expenses we will pay:
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Per Unit(1)
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Total(1)
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Without
Over- allotment
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With
Over- allotment
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Without
Over- allotment
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With
Over- allotment
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Underwriting Discounts and Commissions paid by us
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$ |
0.55 |
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$ |
0.55 |
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$ |
13,750,000 |
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$ |
15,812,500 |
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(1)
Includes $0.35 per ordinary share, or $8,750,000 (or $10,062,500 if the underwriters’ option to purchase additional shares is exercised in full), payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein and released to the underwriters only upon the consummation of an initial business combination. The deferred commissions will be released to the underwriters only on completion of an initial business combination, in an amount equal to $0.35 multiplied by the number of ordinary shares sold as part of the shares in this offering, as described in this prospectus. Up to 30% of such amounts may be reallocated to members of FINRA who assist us in identifying or consummating our initial business combination.
We estimate that our out-of-pocket expenses for this offering will be approximately $2,570,000. We have agreed to pay for the FINRA-related fees and expenses of the underwriters’ legal counsel, not to exceed $25,000.
The representatives have informed us that the underwriters do not intend to make sales to discretionary accounts.
We, our sponsor and our officers and directors have agreed that we will not offer, sell, contract to sell, pledge or grant any option to purchase or otherwise dispose of, directly or indirectly, without the prior written consent of Deutsche Bank Securities Inc. for a period of 180 days after the date of this prospectus, any ordinary shares or any other securities convertible into, or exercisable, or exchangeable for, ordinary shares or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of any ordinary shares or any securities convertible into, or exercisable, or exchangeable for, ordinary shares owned, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise; provided, however, that we may (1) issue and sell the private placement shares; (2) issue and sell the additional shares to cover our underwriters’ option to purchase additional shares (if any); (3) register with the SEC pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, the resale of the private placement shares and the Class A ordinary shares issuable upon exercise of the founder shares; and (4) issue securities in connection with our initial business combination. However, the foregoing shall not apply to the forfeiture of any founder shares pursuant to their terms or any transfer of founder shares to any current or future independent director of the company (as long as such current or future independent director is subject to the terms of the letter agreement, filed herewith, at the time of such transfer; and as long as, to the extent any Section 16 reporting obligation is triggered as a result of such transfer, any related Section 16 filing includes a practical explanation as to the nature of the transfer). Deutsche Bank Securities Inc. in its sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.
Our sponsor has agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property or (y) if the closing price of our ordinary shares equals or exceeds $12.00 per ordinary share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period commencing at least 150 days after our initial business combination. Any permitted transferees would be subject to the same restrictions and other agreements of our initial shareholders with respect to any founder shares.
The private placement shares will not be transferable, assignable or salable until 30 days after the completion of our initial business combination, except as described herein under “Principal Shareholders — Transfers of Founder Shares and Private Placement Shares.”
We have agreed to indemnify the several underwriters against certain liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.
We expect our Class A ordinary shares to be listed on Nasdaq, under the symbol “FWAC”. Prior to this offering, there has been no public market for our securities.
The determination of our per-share offering price was more arbitrary than would typically be the case if we were an operating company. Among the factors considered in determining the initial public offering price were the history and prospects of companies whose principal business is the acquisition of other companies, prior offerings of those companies, our management, our capital structure, and currently prevailing general conditions in equity securities markets, including current market valuations of publicly traded companies considered comparable to our company. We cannot assure you, however, that the price at which the Class A ordinary shares will sell in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our Class A ordinary shares will develop and continue after this offering.
If we do not complete our initial business combination, the underwriters have agreed that: (1) the underwriters will forfeit any rights or claims to their deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account; and (2) that the deferred underwriters’ discounts and commissions will be distributed on a pro rata basis, together with any accrued interest thereon (which interest shall be net of taxes payable) to the public shareholders.
In connection with this offering the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Exchange Act.
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Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.
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Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position
may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the option to purchase additional shares. In a naked short position, the number of shares involved is greater than the number of shares in the option to purchase additional shares. The underwriters may close out any covered short position by either exercising their option to purchase additional shares and/or purchasing shares in the open market.
•
Syndicate covering transactions involve purchases of the shares in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the option to purchase additional shares. If the underwriters sell more shares than could be covered by the option to purchase additional shares, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in this offering.
•
Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the shares originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our shares or preventing or retarding a decline in the market price of the shares. As a result the price of our shares may be higher than the price that might otherwise exist in the open market. These transactions may be effected on Nasdaq or otherwise and, if commenced, may be discontinued at any time.
We are not under any contractual obligation to engage the underwriters to provide any services for us after this offering, and have no present intent to do so. However, the underwriters may introduce us to potential target businesses or assist us in raising additional capital in the future. If any of the underwriters provide services to us after this offering, we may pay such underwriter fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with the underwriters and no fees for such services will be paid to the underwriters prior to the date that is 60 days from the date of this prospectus, unless such payment would not be deemed underwriters’ compensation in connection with this offering. We may pay the underwriters of this offering or any entity with which they are affiliated a finder’s fee or other compensation for services rendered to us in connection with the completion of a business combination.
The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
In addition, in the ordinary course of their business activities, the underwriters and their respective affiliates, officers, directors and employees may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Notice to Prospective Investors in Canada
The shares may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 — Prospectus Exemptions
or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 — Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 of National Instrument 33-105 — Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
Notice to Residents of the Cayman Islands
No invitation, whether directly or indirectly, may be made to the public in the Cayman Islands to subscribe for our securities.
European Economic Area
In relation to each Member State of the European Economic Area (each, a “Member State”) no shares have been offered or will be offered pursuant to the offering to the public in that Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Member State or, where appropriate, approved in another Member State and notified to the competent authority in that Member State, all in accordance with the Prospectus Regulation, except that offers of shares may be made to the public in that Member State at any time under the following exemptions under the Prospectus Regulation:
(a)
to any legal entity which is a qualified investor as defined in the Prospectus Regulation;
(b)
to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation), subject to obtaining the prior consent of the representatives for any such offer; or
(c)
in any other circumstances falling within Article 1(4) of the Prospectus Regulation. provided that no such offer of shares shall require the issuer or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to any shares in any Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase or subscribe for any shares, and the expression “Prospectus Regulation” means Regulation (EU) 2017/ 1129.
This European Economic Area selling restriction is in addition to any other selling restrictions set out below.
Notice to Residents of Hong Kong
The shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each
case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.
Notice to Residents of Japan
The shares have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and, accordingly, will not be offered or sold, directly or indirectly, in Japan, or for the benefit of any Japanese Person or to others for re-offering or resale, directly or indirectly, in Japan or to any Japanese Person, except in compliance with all applicable laws, regulations and ministerial guidelines promulgated by relevant Japanese governmental or regulatory authorities in effect at the relevant time. For the purposes of this paragraph, “Japanese Person” shall mean any person resident in Japan, including any corporation or other entity organized under the laws of Japan.
Notice to Residents of Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.
Where the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
•
shares, debentures and shares of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:
•
to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;
•
where no consideration is or will be given for the transfer; or
•
where the transfer is by operation of law.
Notice to Investors in the United Kingdom
In relation to the United Kingdom, no shares have been offered or will be offered pursuant to this offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the shares that either (i) has been approved by the Financial Conduct Authority, or (ii) is to be treated as if it had been approved by the Financial Conduct Authority in accordance with the transitional provision in Regulation 74 of the Prospectus (Amendment etc.) (EU Exit) Regulations 2019, except that offers of shares may be made to the public in the United Kingdom at any time under the following exemptions under the UK Prospectus Regulation:
(a)
to any legal entity which is a qualified investor as defined in Article 2 of the UK Prospectus Regulation;
(b)
to fewer than 150 natural or legal persons (other than qualified investors as defined in Article 2 of the UK Prospectus Regulation), subject to obtaining the prior consent of the Representative for any such offer; or
(c)
in any other circumstances falling within section 86 of the Financial Services and Markets Act 2000, as amended (the “FSMA”), provided that no such offer of shares shall require the issuer or any underwriter to publish a prospectus pursuant to section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to any shares in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase or subscribe for any shares, and the expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.
The underwriters have represented and agreed that:
(a)
they have only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (FSMA)) received by it in connection with the issue or sale of the shares in circumstances in which Section 21(1) of the FSMA does not apply to the company; and
(b)
they have complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.
Notice to Prospective Investors in Switzerland
This prospectus is not intended to constitute an offer or solicitation to purchase or invest in the shares described herein. The shares may not be publicly offered, sold or advertised, directly or indirectly, in or into Switzerland within the meaning of the Swiss Financial Services Act (“FinSA”), except (i) to any investor that qualifies as a professional or institutional client within the meaning of Article 4(3) and Article 4(4) of the FinSA, (ii) to any investor that acquires the shares in the context of a portfolio management agreement with a licensed Swiss financial institution, or (iii) under any other applicable exemption under the FinSA, and further provided that no such offer of shares shall require the publication of a prospectus and/or the publication of a key information document (“KID”) (or an equivalent document) pursuant to the FinSA, and/or a registration or authorization of the Company and the shares in Switzerland. The shares have not and will not be listed or admitted to trading on any trading venue in Switzerland.
Neither this prospectus nor any other offering or marketing material relating to the shares or the Company constitutes a prospectus or a KID (or an equivalent document) as such terms are understood pursuant to the FinSA, and neither this prospectus nor any other offering or marketing material relating to the shares or the Company may be distributed or otherwise made available in Switzerland in a manner which would require the publication of a prospectus or a KID (or an equivalent document) in Switzerland pursuant to the FinSA, and/or a registration or authorization of the Company and the shares in Switzerland.
Neither this prospectus nor any other offering or marketing material relating to the shares or the Company have been or will be filed with or approved by any Swiss regulatory authority.
Notice to Prospective Investors in the Dubai International Financial Centre
This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The shares to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should
conduct their own due diligence on the shares. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.
Notice to Prospective Investors in Australia
No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission (“ASIC”), in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.
Any offer in Australia of the shares may only be made to persons (the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.
The shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale restrictions.
This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.
LEGAL MATTERS
Debevoise & Plimpton LLP, New York, New York will pass upon the validity of the securities offered in this prospectus with respect to Class A ordinary shares. Maples and Calder (Cayman) LLP will pass upon the validity of the securities offered in this prospectus with respect to the ordinary shares and matters of Cayman Islands law. In connection with this offering, Skadden, Arps, Slate, Meagher & Flom LLP advised the underwriters in connection with the offering of the securities.
EXPERTS
The financial statements of Fifth Wall Acquisition Corp. III as of February 24, 2021, and for the period from February 19, 2021 (inception) through February 24, 2021, appearing in this prospectus have been audited by WithumSmith+Brown, PC, independent registered public accounting firm, as set forth in their report thereon, appearing elsewhere in this prospectus, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securities we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information about us and our securities, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.
Upon completion of this offering, we will be subject to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov.
INDEX TO FINANCIAL STATEMENTS
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Page
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Audited Financial Statements of Fifth Wall Acquisition Corp. III:
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F-2 |
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F-3 |
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F-4 |
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F-5 |
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F-6 |
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F-7
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Report of Independent Registered Public Accounting Firm
To the Shareholder and the Board of Directors of
Fifth Wall Acquisition Corp. III
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Fifth Wall Acquisition Corp. III (the “Company”) as of February 24, 2021, the related statements of operations, changes in shareholder’s equity and cash flows for the period from February 19, 2021 (inception) through February 24, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February 24, 2021, and the results of its operations and its cash flows for the period from February 19, 2021 (inception) through February 24, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as the Company’s auditor since 2021.
New York, New York
April 16, 2021
FIFTH WALL ACQUISITION CORP. III
BALANCE SHEET
February 24, 2021
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Assets:
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Current assets:
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Prepaid expenses
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$ |
15,211 |
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Total current assets
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15,211 |
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Deferred offering costs associated with proposed public offering
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20,026 |
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Total Assets
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$ |
35,237 |
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Liabilities and Shareholder’s Equity:
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Current liabilities:
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Accrued expenses
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$ |
20,026 |
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Total current liabilities
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20,026 |
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Commitments and Contingencies (Note 5)
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Shareholder’s Equity:
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Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
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— |
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Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; none issued and outstanding
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— |
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Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 7,187,500 shares issued
and outstanding(1)
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719 |
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Additional paid-in capital
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24,281 |
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Accumulated deficit
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(9,789) |
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Total shareholder’s equity
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15,211 |
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Total Liabilities and Shareholder’s Equity
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$ |
35,237 |
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(1)
This number includes up to 937,500 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.
(2)
In April 2021, the Company effected a share capitalization for Class B ordinary shares, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding. All shares and associated amounts have been restated to reflect the share capitalization (see Note 4).
The accompanying notes are an integral part of these financial statements.
FIFTH WALL ACQUISITION CORP. III
STATEMENT OF OPERATIONS
For the period from February 19, 2021 (inception) through February 24, 2021
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Formation costs paid in exchange for issuance of Class B ordinary shares to Sponsor
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$ |
9,789 |
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Net loss
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$ |
(9,789) |
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Weighted average Class B ordinary shares outstanding, basic and diluted(1)(2)
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6,250,000 |
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Basic and diluted net loss per ordinary share
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$ |
(0.00) |
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(1)
This number excludes an aggregate of up to 937,500 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.
(2)
In April 2021, the Company effected a share capitalization for Class B ordinary shares, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding. All shares and associated amounts have been restated to reflect the share capitalization (see Note 4).
The accompanying notes are an integral part of these financial statements.
FIFTH WALL ACQUISITION CORP. III
STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY
For the period from February 19, 2021 (inception) through February 24, 2021
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Ordinary shares
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Additional
Paid-In
Capital
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Accumulated
Deficit
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Total
Stockholder’s
Equity
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Class A
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Class B
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Shares
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Amount
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Shares
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Amount
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Balance – February 19, 2021 (inception)
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— |
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$ |
— |
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— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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Issuance of Class B ordinary shares to Sponsor(1)(2)
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— |
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— |
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7,187,500 |
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719 |
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24,281 |
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— |
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25,000 |
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Net loss
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— |
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— |
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— |
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— |
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— |
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(9,789) |
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(9,789) |
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Balance – February 24, 2021
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— |
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$ |
— |
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7,187,500 |
|
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$ |
719 |
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|
$ |
24,281 |
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|
$ |
(9,789) |
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|
|
$ |
15,211 |
|
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(1)
This number includes up to 937,500 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.
(2)
In April 2021, the Company effected a share capitalization for Class B ordinary shares, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding. All shares and associated amounts have been restated to reflect the share capitalization (see Note 4).
The accompanying notes are an integral part of these financial statements.
FIFTH WALL ACQUISITION CORP. III
STATEMENT OF CASH FLOWS
For the period from February 19, 2021 (inception) through February 24, 2021
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Cash Flows from Operating Activities:
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| |
Net loss
|
|
|
|
$ |
(9,789) |
|
|
| |
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
| |
Formation costs paid in exchange for issuance of Class B ordinary shares to Sponsor
|
|
|
|
|
9,789 |
|
|
| |
Net cash used in operating activities
|
|
|
|
|
— |
|
|
| |
Net change in cash
|
|
|
|
|
— |
|
|
| |
Cash – beginning of the period
|
|
|
|
|
—
|
|
|
| |
Cash – end of the period
|
|
|
|
$ |
— |
|
|
| |
Supplemental schedule of noncash financing activities:
|
|
|
|
|
|
|
|
| |
Prepaid expenses paid in exchange for issuance of Class B ordinary shares to Sponsor
|
|
|
|
$ |
15,211 |
|
|
| |
Deferred offering costs included in accrued expenses
|
|
|
|
$ |
20,026 |
|
|
The accompanying notes are an integral part of these financial statements.
NOTES TO FINANCIAL STATEMENTS
Note 1 — Description of Organization, Business Operations and Basis of Presentation
Fifth Wall Acquisition Corp. III (the “Company”) was incorporated as a Cayman Islands exempted company on February 19, 2021. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As of February 24, 2021, the Company had not commenced any operations. All activity for the period from February 19, 2021 (inception) through February 24, 2021 relates to the Company’s formation and the proposed initial public offering described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Proposed Public Offering (as defined below). The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is Fifth Wall Acquisition Sponsor III, LLC, a Cayman Islands exempted limited company (the “Sponsor”). The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a proposed public offering (the “Proposed Public Offering”) of 25,000,000 Class A ordinary shares (each, a “Public Share” and collectively, the “Public Shares”) at $10.00 per Public Share (or 28,750,000 Public Shares if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3, and the sale of 857,000 Class A ordinary shares (or 932,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full) (each, a “Private Placement Share” and collectively, the “Private Placement Shares”), at a price of $10.00 per Private Placement Share in a private placement to the Sponsor that will close simultaneously with the Proposed Public Offering.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Public Offering and the sale of Private Placement Shares, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined below) (excluding the amount of deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the signing of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Upon the closing of the Proposed Public Offering, management has agreed that an amount equal to at least $10.00 per Public Share sold in the Proposed Public Offering, including the proceeds from the sale of the Private Placement Shares, will be held in a trust account (“Trust Account”), located in the United States, with Continental Stock Transfer & Trust Company acting as trustee, and will be invested only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The Company will provide the holders (the “Public Shareholders”) of Public Shares, with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the
NOTES TO FINANCIAL STATEMENTS (Continued)
funds held in the Trust Account and not previously released to the Company to pay income taxes). The per-share amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5).
These Public Shares will be classified as temporary equity upon the completion of the Proposed Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a shareholder meeting are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to the amended and restated memorandum and articles of association which the Company will adopt upon the consummation of the Proposed Public Offering (the “Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transactions is required by law, or the Company decides to obtain shareholder approval for business or reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or vote at all. If the Company seeks shareholder approval in connection with a Business Combination, the initial shareholders (as defined below) have agreed to vote their Founder Shares (as defined below in Note 4) and any Public Shares purchased during or after the Proposed Public Offering in favor of a Business Combination. Subsequent to the consummation of the Proposed Public Offering, the Company will adopt an insider trading policy which will require insiders to: (i) refrain from purchasing shares during certain blackout periods and when they are in possession of any material non-public information and (ii) to clear all trades with the Company’s legal counsel prior to execution. In addition, the initial shareholders have agreed to waive their redemption rights with respect to their Founder Shares, Private Placement Shares and Public Shares in connection with the completion of a Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of its Business Combination and does not conduct redemptions in connection with its Business Combination pursuant to the tender offer rules, the Amended and Restated Memorandum and Articles of Association will provide that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Class A ordinary shares sold in the Proposed Public Offering, without the prior consent of the Company.
The Company’s Sponsor, officers and directors (the “initial shareholders”) have agreed not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (a) that would modify the substance or timing of the Company’s obligation to provide holders of its Public Shares the right to have their shares redeemed in connection with a Business Combination or to redeem 100% of the Company’s Public Shares if the Company does not complete its Business Combination within 24 months from the closing of the Proposed Public Offering (the “Combination Period”) or with respect to any other provision relating to the rights of Public Shareholders, unless the Company provides the Public Shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.
If the Company has not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes that were paid by the Company or are payable by the Company, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding Public Shares, which redemption will completely
NOTES TO FINANCIAL STATEMENTS (Continued)
extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
The initial shareholders have agreed to waive their liquidation rights with respect to the Founder Shares and Private Placement Shares held by them if the Company fails to complete a Business Combination within the Combination Period. However, if the initial shareholders acquire Public Shares in or after the Proposed Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution (including Trust Account assets) will be only $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per Public Share due to reductions in the value of the trust assets. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Proposed Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (excluding the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Basis of Presentation
The accompanying financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC.
The Company does not have sufficient liquidity to meet its anticipated obligations over the next year from the date of issuance of these financial statements. In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of Financial Statements — Going Concern,” management has determined that the Company has access to funds from the Sponsor, and the Sponsor has the financial wherewithal to fund the Company, that are sufficient to fund the working capital needs of the Company until the earlier of the consummation of the Proposed Public Offering, at which time the Company will have sufficient working capital, or one year from the issuance of these financial statements.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
NOTES TO FINANCIAL STATEMENTS (Continued)
that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Note 2 — Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements,” approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature.
Deferred Offering Costs Associated with the Proposed Public Offering
Deferred offering costs consist of legal, accounting, and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to shareholder’s equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations.
Net Loss Per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period. Weighted average shares at February 24, 2021 were reduced for the effect of an aggregate of 937,500 Class B ordinary shares that are subject to forfeiture by the Sponsor if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). At February 24, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.
Income Taxes
FASB ASC Topic 740, “Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a
NOTES TO FINANCIAL STATEMENTS (Continued)
tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of February 24, 2021. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties for the period from February 19, 2021 (inception) through February 24, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
Note 3 — Proposed Public Offering
Pursuant to the Proposed Public Offering, the Company intends to offer for sale 25,000,000 Public Shares (or 28,750,000 Public Shares if the underwriter’s over-allotment option is exercised in full) at a price of $10.00 per Public Share.
Note 4 — Related Party Transactions
Founder Shares
On February 24, 2021, the Sponsor paid $25,000 of certain of the Company’s expenses as consideration for 4,312,500 Class B ordinary shares, par value $0.0001, (the “Founder Shares”). In April 2021, the Company effected a share capitalization for Class B ordinary shares, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding. All shares and associated amounts have been restated to reflect the share capitalization. The Sponsor has agreed to forfeit up to 937,500 Founder Shares to the extent that the over-allotment option is not exercised in full by the underwriters. The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the underwriters so that the Founder Shares will represent 20.0% of the Company’s issued and outstanding ordinary shares (excluding the Private Placement Shares and assuming the initial shareholders do not purchase any Public Shares in the Proposed Public Offering) after the Proposed Public Offering.
The initial shareholders will agree, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination and (B) subsequent to the initial Business Combination, (x) if the closing price of Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Private Placement Shares
The Sponsor will agree to purchase an aggregate of 857,000 Private Placement Shares (or 932,000 Private Placement Shares if the underwriters’ over-allotment option is exercised in full), at a price of $10.00 per Private Placement Share (approximately $8.6 million in the aggregate, or approximately $9.3 million if
NOTES TO FINANCIAL STATEMENTS (Continued)
the underwriters’ over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of the Proposed Public Offering. The Private Placement Shares will not be transferable or salable until 30 days after the completion of the initial Business Combination. Certain proceeds from the Private Placement Shares will be added to the proceeds from the Proposed Public Offering to be held in the Trust Account.
The Sponsor and the Company’s officers and directors will agree, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Shares until 30 days after the completion of the initial Business Combination.
Related Party Loans
On February 24, 2021, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover the Company’s expenses related to the Proposed Public Offering pursuant to a promissory note (the “Note”). This loan is non-interest bearing and payable on the earlier of February 28, 2022 and the completion of the Proposed Public Offering. As of February 24, 2021, the Company had not borrowed any amounts under the Note. Subsequent to February 24, 2021, the Company borrowed $58,000 under the Note.
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into shares of the post Business Combination entity at a price of $10.00 per share. The shares would be identical to the Private Placement Shares. As of February 24, 2021, the Company had no outstanding borrowings under the Working Capital Loans.
Administrative Support Agreement
Following the closing of the Proposed Public Offering, the Company expects that it with enter into an Administrative Support Agreement with Fifth Wall Ventures Management, LLC (“Management Company”) pursuant to which it will agree to pay Management Company a total of up to $17,500 per month for office space and professional, secretarial, administrative and support services provided to the Company. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees.
Note 5 — Commitments & Contingencies
Registration Rights
The holders of Founder Shares, Private Placement Shares and Private Placement Shares that may be issued upon conversion of Working Capital Loans, will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed upon consummation of the Proposed Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of its Business Combination. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the Founder Shares, in accordance with the letter agreement the Company’s initial shareholders entered into and (ii) in the case of the Private
NOTES TO FINANCIAL STATEMENTS (Continued)
Placement Shares, 30 days after the completion of the Company’ s Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company will grant the underwriters a 45-day option from the final prospectus relating to the Proposed Public Offering to purchase up to 2,250,000 additional Public Shares to cover over-allotments, if any, at the Proposed Public Offering price less the underwriting discounts and commissions.
The underwriters will be entitled to an underwriting discount of $0.20 per Public Share, or $3.0 million in the aggregate (or $3.45 million in the aggregate if the underwriters’ over-allotment option is exercised in full), payable upon the closing of the Proposed Public Offering. In addition, $0.35 per Public Share, or approximately $5.25 million in the aggregate (or approximately $6.1 million in the aggregate if the underwriters’ over-allotment option is exercised in full) will be payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, the close of the Proposed Public Offering and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 6 — Shareholder’s Equity
Class A Ordinary Shares — The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of February 24, 2021, there were no Class A ordinary shares issued or outstanding.
Class B Ordinary Shares — The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. On February 24, 2021, the Company issued 4,312,500 Class B ordinary shares. In April 2021, the Company effected a share capitalization for Class B ordinary shares, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding. All shares and associated amounts have been restated to reflect the share capitalization. Of the 7,187,500 Class B ordinary shares outstanding, up to 937,500 shares are subject to forfeiture to the Company by the Sponsor for no consideration to the extent that the underwriter’s over-allotment option is not exercised in full or in part, so that the initial shareholders will collectively own 20% of the Company’s issued and outstanding ordinary shares (excluding the Private Placement Shares and assuming the initial shareholders do not purchase any shares in the Proposed Public Offering) (See Note 4).
Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the shareholders except as required by law.
The Class B ordinary shares will automatically convert into Class A ordinary shares on the first business day following the consummation of the initial Business Combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding (excluding the Private Placement Shares) upon the consummation of the Proposed Public Offering, plus (ii) the sum of the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination,
NOTES TO FINANCIAL STATEMENTS (Continued)
excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any private placement shares issued to the Sponsor, members of the management team or any of their affiliates upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
Preference Shares — The Company is authorized to issue 1,000,000 preference shares with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of February 24, 2021, there were no preference shares issued or outstanding.
Note 7 — Subsequent Events
The Company has evaluated subsequent events and transactions that occurred after the balance sheet date up to April 16, 2021, the date that the financial statements were available to be issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
Subsequent to February 24, 2021, the Company borrowed $58,000 under the Note.
In April 2021, the Company effected a share capitalization for Class B ordinary shares, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding. All shares and associated amounts have been restated to reflect the share capitalization.
25,000,000 Class A Ordinary Shares
FIFTH WALL ACQUISITION CORP. III
PRELIMINARY PROSPECTUS
, 2021
Book-Running Managers
Deutsche Bank Securities
Goldman Sachs & Co. LLC
BofA Securities
Until , 2021 (25 days after the date of this prospectus), all dealers that buy, sell or trade our ordinary shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
We have not, and the underwriters have not, authorized anyone to provide you with any information or to make any representations other than contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may provide you. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
No dealer, salesperson or any other person is authorized to give any information or make any representations in connection with this offering other than those contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any jurisdiction in which the offer or solicitation is not authorized or is unlawful.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:
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SEC expenses
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$ |
31,375 |
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FINRA expenses
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43,625 |
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Accounting fees and expenses
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60,000 |
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Printing and engraving expenses
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40,000 |
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Travel and road show expenses
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20,000 |
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Legal fees and expenses
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300,000 |
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Nasdaq listing and filing fees
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75,000 |
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Director & Officers liability insurance premiums(1)
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1,700,000 |
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Miscellaneous
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300,000 |
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Total
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2,570,000 |
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(1)
This amount represents the approximate amount of annual director and officer liability insurance premiums the registrant anticipates paying following the completion of its initial public offering and until it completes a business combination.
Item 14. Indemnification of Directors and Officers.
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime. Our Amended and Restated Memorandum and Articles of Association provides for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We may purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 15. Recent Sales of Unregistered Securities.
On February 24, 2021, we issued to Fifth Wall Acquisition Sponsor III, LLC, our sponsor, 4,312,500 Class B ordinary shares, in exchange for a payment of $25,000 to cover for certain expenses and offering costs on behalf of us. In April 2021, the Company effected a share capitalization for Class B ordinary shares, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding and an aggregate purchase
price of approximately $0.003 per ordinary share. All shares and associated amounts have been restated to reflect the share capitalization. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D. Each of the equity holders in our sponsor is an accredited investor under Rule 501 of Regulation D. The sole business of our sponsor is to act as the company’s sponsor in connection with this offering.
Our sponsor has committed, pursuant to a written agreement, to purchase 857,000 private placement shares (or 932,000 private placement shares if the underwriters’ over-allotment option is exercised in full), at a price of $10.00 per ordinary share ($8,570,000 in the aggregate or $9,320,000 if the underwriters’ over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. These issuances will be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
No underwriting discounts or commissions were paid with respect to such sales.
Item 16. Exhibits and Financial Statement Schedules.
(a) The Exhibit Index is incorporated herein by reference.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) That for the purpose of determining any liability under the Securities Act of 1933 in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(2) That for the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(b) The undersigned hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 16th day of April, 2021.
FIFTH WALL ACQUISITION CORP. III
By:
/s/ Brendan Wallace
Name: Brendan Wallace
Title: Chief Executive Officer
FIFTH WALL ACQUISITION CORP. III
By:
/s/ Andriy Mykhaylovskyy
Name: Andriy Mykhaylovskyy
Title: Chief Financial Officer
Power of Attorney
KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature appears below hereby constitutes and appoints Brendan Wallace and Andriy Mykhaylovskyy, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power to act separately and full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorney-in-fact and agent full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or either of them or his or her or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement on Form S-1 has been signed below by the following person in the capacities and on the dates indicated.
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NAME
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POSITION
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DATE
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/s/ Brendan Wallace
Brendan Wallace
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Chairman of the Board and Chief Executive Officer (Principal Executive Officer)
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April 16, 2021
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/s/ Andriy Mykhaylovskyy
Andriy Mykhaylovskyy
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Director and Chief Financial Officer (Principal Financial and Accounting Officer)
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April 16, 2021
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/s/ Alana Beard
Alana Beard
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Director
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April 16, 2021
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/s/ Adeyemi Ajao
Adeyemi Ajao
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Director
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April 16, 2021
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/s/ Poonam Sharma Mathis
Poonam Sharma Mathis
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Director
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April 16, 2021
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/s/ Amanda Parness
Amanda Parness
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Director
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April 16, 2021
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Exhibit 1.1
Fifth Wall Acquisition Corp. III
25,000,000 Class A Ordinary Shares
Underwriting Agreement
[•], 2021
Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
Goldman Sachs & Co. LLC
200 West Street,
New York, New York 10282-2198
BofA Securities, Inc.
One Bryant Park
New York, New York 10036
As representatives (the "Representatives")
of the several Underwriters named in Schedule I hereto,
Ladies and Gentlemen:
Fifth Wall Acquisition Corp.
III, a Cayman Islands exempted company (the "Company"), proposes, subject to the terms and conditions stated in this agreement
(this "Agreement"), to issue and sell to the Underwriters named in Schedule I hereto (collectively, the "Underwriters")
an aggregate of 25,000,000 shares (the "Firm Shares") of the Company's Class A ordinary shares, par value U.S. $0.0001
per share (the "Class A Ordinary Shares"), and, at the election of the Underwriters, up to 3,750,000 additional Class A
Ordinary Shares, if any (the "Optional Shares," the Optional Shares, together with the Firm Shares, that the Underwriters elect
to purchase pursuant to Section 2 hereof being collectively called the "Shares").
The Company has entered into
an Investment Management Trust Agreement, effective as of [•], 2021, with Continental Stock Transfer & Trust Company ("CST"),
as trustee (the "Trustee"), in substantially the form filed as Exhibit 10.1 to the Registration Statement (the "Trust
Agreement"), pursuant to which the proceeds from the sale of the Private Placement Shares (as defined below) and certain proceeds
of the Offering will be deposited and held in a U.S. based trust account (the "Trust Account") for the benefit of the Company,
the Underwriters and the holders of the Firm Shares and the Optional Shares, if and when issued, in each case as described more fully
in the Prospectus.
The Company has entered
into a Subscription Agreement, dated as of February 24, 2021, with Fifth Wall Acquisition Sponsor III LLC, a Cayman Islands limited
liability company (the "Sponsor"), in substantially the form filed as Exhibit 10.5 (the "Founder's Subscription
Agreement"), pursuant to which the Sponsor then held an aggregate of 7,187,500 Class B ordinary shares, par value U.S.
$0.0001 per share, of the Company (including the Class A Ordinary Shares issuable upon conversion thereof, the "Founder
Shares"), which it received for an aggregate purchase price of U.S. $25,000. The Founder Shares are substantially similar to
the Shares, except as described in the Prospectus.
The Company has entered into
a private placement shares purchase agreement, as of [•], 2021, with the Sponsor (the "Private Placement Shares Purchase Agreement")
in substantially the form filed as Exhibit 10.7, pursuant to which, the Sponsor agreed to purchase an aggregate of 857,000 Class A
Ordinary Shares (or up to 932,000 Class A Ordinary Shares if the Underwriters elect to purchase the Optional Shares) of the Company
at price of $10.00 per share (the "Private Placement Shares"). The Private Placement Shares are identical to the Shares sold
in the Offering, except as described in the Prospectus.
The Company has entered into
a Registration and Shareholder Rights Agreement, as of [•], 2021, with the Sponsor and the other security holders of the Company
party thereto, in substantially the form filed as Exhibit 10.2 to the Registration Statement (the "Registration Rights Agreement"),
pursuant to which the Company has granted certain registration rights in respect of the Founder Shares, the Private Placement Shares,
and Shares that may be issued upon conversion of working capital loans.
The Company has caused to
be duly executed and delivered letters by the Sponsor, the initial shareholders and each of the Company's officers and directors, each
dated as of [•], 2021 and in substantially the form filed as Exhibit 10.4 to the Registration Statement (collectively, the "Insider
Letters").
1. The
Company represents and warrants to, and agrees with, each of the Underwriters that:
(a) A
registration statement on Form S-1 (File No. 333-[•]) (the "Initial Registration Statement") in respect of the
Shares has been filed with the Securities and Exchange Commission (the "Commission"); the Initial Registration Statement and
any post-effective amendment thereto, each in the form heretofore delivered to you, have been declared effective by the Commission in
such form; other than a registration statement, if any, increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial Registration Statement has been filed with the Commission; and no
stop order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has been initiated or, to the Company's knowledge, threatened by
the Commission (any preliminary prospectus included in the Initial Registration Statement or filed with the Commission pursuant to Rule 424(a) of
the rules and regulations of the Commission under the Act is hereinafter called a "Preliminary Prospectus"; the various
parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto
and including the information contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under
the Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective, each as amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statement"; the Preliminary Prospectus relating to the Shares that was included
in the Registration Statement immediately prior to the Applicable Time (as defined in Section 1(d) hereof) is hereinafter called
the "Pricing Prospectus"; and such final prospectus, in the form first filed pursuant to Rule 424(b) under the Act,
is hereinafter called the "Prospectus"; any oral or written communication with potential investors undertaken in reliance on
Section 5(d) of the Act or Rule 163B under the Act is hereinafter called a "Testing-the-Waters Communication";
and any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Act is hereinafter
called a "Written Testing-the-Waters Communication"; and any "issuer free writing prospectus" as defined in Rule 433
under the Act relating to the Shares is hereinafter called an "Issuer Free Writing Prospectus");
(b) (A) No
order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission,
and (B) each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with the Underwriter Information (as defined in Section 9(b) of
this Agreement);
(c) The
Company has filed with the Commission a Form 8-A (file number 001-[•]) providing for the registration under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), of the Shares, which registration is currently effective on the date hereof. The
Shares have been authorized for listing, subject to official notice of issuance and evidence of satisfactory distribution, on The Nasdaq
Capital Market, and the Company knows of no reason or set of facts that is likely to adversely affect such authorization;
(d) For
the purposes of this Agreement, the "Applicable Time" is [•] p.m (Eastern time) on the date of this Agreement. The Pricing
Prospectus, as supplemented by the information listed on Schedule II(c) hereto, taken together (collectively, the "Pricing Disclosure
Package"), as of the Applicable Time, did not, and as of each Time of Delivery (as defined in Section 4(a) of this Agreement)
will not, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus and each
Written Testing-the-Waters Communication does not conflict with the information contained in the Registration Statement, the Pricing Prospectus
or the Prospectus and each Issuer Free Writing Prospectus and each Written Testing-the-Waters Communication, as supplemented by and taken
together with the Pricing Disclosure Package, as of the Applicable Time, did not, and as of each Time of Delivery will not, include any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall
not apply to statements or omissions made in reliance upon and in conformity with the Underwriter Information;
(e) The
Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement and the Prospectus
will conform, in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to each part of the Registration Statement, as of the applicable filing
date as to the Prospectus and any amendment or supplement thereto, and as of each Time of Delivery, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity
with the Underwriter Information;
(f) The
Company has not, since the date of the latest audited financial statements included in the Pricing Prospectus, (i) sustained any
material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree or (ii) entered into any transaction or agreement (whether
or not in the ordinary course of business) that is material to the Company or incurred any liability or obligation, direct or contingent,
that is material to the Company, in each case otherwise than as set forth or contemplated in the Pricing Prospectus; and, since the respective
dates as of which information is given in the Registration Statement and the Pricing Prospectus, there has not been (x) any change
in the shares of the Company (other than as a result of (i) the exercise, if any, of share options or the award, if any, of share
options or restricted shares in the ordinary course of business pursuant to the Company's equity plans that are described in the Pricing
Prospectus and the Prospectus or (ii) the issuance, if any, of shares upon conversion of Company securities as described in the Pricing
Prospectus and the Prospectus) or long-term debt of the Company or (y) any Material Adverse Effect (as defined below); as used in
this Agreement, "Material Adverse Effect" shall mean any material adverse change or effect, or any development involving a prospective
material adverse change or effect, in or affecting (i) the business, properties, management, financial position, shareholders' equity
or results of operations of the Company, taken as a whole, except as set forth or contemplated in the Pricing Prospectus, or (ii) the
ability of the Company to perform its obligations under this Agreement, including the issuance and sale of the Shares, or to consummate
the transactions contemplated in the Pricing Prospectus and the Prospectus;
(g) The
Company does not own any real property, and the Company has good and marketable title to all personal property owned by it, in each case
free and clear of all liens, encumbrances and defects except such as are described in the Pricing Prospectus or such as do not materially
affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company;
(h) The
Company has been (i) duly incorporated and is validly existing and in good standing under the laws of its jurisdiction of organization,
with power and authority (corporate and other) to own its properties and conduct its business as described in the Pricing Prospectus,
and (ii) duly qualified as a foreign corporation and is in good standing (to the extent the concept of good standing exists in such
jurisdiction) under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require
such qualification, except, in the case of this clause (ii), where the failure to be so qualified or in good standing would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(i) The
Company has an authorized capitalization as set forth in the Pricing Prospectus and all of the issued shares of the Company have been
duly and validly authorized and issued and are fully paid and non-assessable and conform in all material respects to the description thereof
contained in the Pricing Disclosure Package and Prospectus;
(j) All
issued and outstanding shares of the Company have been duly and validly authorized and issued and are fully paid and nonassessable;
and none of such shares were issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual
rights granted by the Company. The offers and sales of the outstanding Class A Ordinary Shares were at all relevant times either
registered under the Act, the applicable state securities and blue sky laws or, based in part on the representations and warranties of
the purchasers of such Class A Ordinary Shares, exempt from such registration requirements. The holders of outstanding shares of
the Company are not entitled to preemptive or other rights to subscribe for the Shares arising by operation of law or under the Amended
and Restated Memorandum and Articles of Association; and, except as set forth in the Pricing Prospectus and the Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange
any securities for, shares or other ownership interests in the Company are outstanding.
(k) The
Shares have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company against
payment therefor as provided herein, will be validly issued, fully paid and non-assessable and will confirm in all material respects to
the description of the Shares contained in the Pricing Disclosure Package and the Prospectus; and the issuance of the Shares is not subject
to any preemptive or similar rights.
(l) Intentionally
omitted.
(m) Intentionally
omitted.
(n) The
Private Placement Shares have been duly authorized for issuance and sale pursuant to the Private Placement Shares Purchase Agreement and,
when issued and delivered by the Company in the manner set forth in the Private Placement Shares Purchase Agreement against payment therefor,
will be validly issued, fully paid and non-assessable.
(o) Except
as set forth in the Pricing Prospectus and the Prospectus, no holders of any securities of the Company or any rights exercisable for or
convertible or exchangeable into securities of the Company have the right to require the Company to register any such securities of the
Company under the Act or to include any such securities in a registration statement to be filed by the Company.
(p) No
securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of, any person or persons controlling,
controlled by, or under common control with the Company from its inception through and including the date hereof, except as disclosed
in the Registration Statement, the Pricing Prospectus and the Prospectus.
(q) Neither
the Company nor any of its affiliates has, prior to the date hereof, made any offer or sale of any securities that are required to be
"integrated" pursuant to the Act with the offer and sale of the Shares pursuant to the Registration Statement.
(r) The
Founder Shares are duly authorized, validly issued, fully paid and nonassessable.
(s) The
issue and sale of the Shares and the compliance by the Company with this Agreement, the Trust Agreement, the Founder's Subscription Agreement,
the Private Placement Shares Purchase Agreement, the Registration Rights Agreement or the Insider Letters and the consummation by the
Company of the transactions contemplated in this Agreement, the Trust Agreement, the Founder's Subscription Agreement, the Private Placement
Shares Purchase Agreement, the Registration Rights Agreement or the Insider Letters will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, (A) any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets
of the Company is subject, except, in the case of this clause (A) for such conflicts, defaults, breaches, or violations that would
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (B) the Amended and Restated Memorandum
and Articles of Association (or other applicable organizational document) of the Company, or (C) any statute or any judgment, order,
rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its properties, except,
in the case of this clause (C), for such conflicts, defaults, breaches, or violations that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for the issue and sale of the Shares or the consummation by the Company
of the transactions contemplated by this Agreement, except (i) such as have been obtained or may be obtained under the Act, (ii) the
approval by the Financial Industry Regulatory Authority, Inc. ("FINRA") of the underwriting terms and arrangements and
(iii) consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by the Underwriters or (iv) the absence of which would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(t) The
historical financial statements, including the notes thereto and the supporting schedules, if any, of the Company included in the Pricing
Prospectus, the Prospectus and the Registration Statement present fairly the financial condition, results of operations and cash flows
of the Company as of the dates and for the periods indicated. The summary financial data set forth under the caption "Summary Financial
Data" in the Pricing Prospectus, Prospectus and Registration Statement fairly present, on the basis stated in the Pricing Prospectus,
Prospectus and Registration Statement, the information included therein. The Company is not party to any off-balance sheet transactions,
arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that
may have a material current or material future effect on the Company's financial condition, changes in financial condition, results of
operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. The statistical,
industry-related and market-related data included in the Registration Statement, the Pricing Prospectus and the Prospectus are based on
or derived from sources that the Company reasonably and in good faith believes are reliable and accurate, and such data agree with the
sources from which they are derived.
(u) The
Company is not (i) in violation of its Amended and Restated Memorandum and Articles of Association (or other applicable organizational
document), (ii) in violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its properties, or (iii) in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be bound, except, in the case of the foregoing clauses (ii) and
this (iii), for such defaults as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(v) The
statements set forth in the Pricing Prospectus and Prospectus under the caption "Taxation", and under the caption "Underwriting",
insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair in all
material respects;
(w) Other
than as set forth in the Pricing Prospectus, there are no legal or governmental proceedings pending to which the Company or, to the Company's
knowledge, any officer or director of the Company, is a party or of which any property of the Company or, to the Company's knowledge,
any officer or director of the Company, is the subject which, if determined adversely to the Company (or such officer or director), would,
individually or in the aggregate, be expected to have a Material Adverse Effect; and, to the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or others;
(x) The
Company is not and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof, will not be
an "investment company", as such term is defined in the Investment Company Act of 1940, as amended (the "Investment Company
Act");
(y) At
the time of filing the Initial Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the
Company or any offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Shares,
and at the date hereof, the Company was and is an "ineligible issuer," as defined under Rule 405 under the Act;
(z) The
Company has not prepared or used any Issuer Free Writing Prospectus.
(aa) WithumSmith+Brown,
PC ("Withum"), who have certified certain financial statements of the Company and delivered their report with respect to the
audited financial statements and schedules included in the Registration Statement, are independent public accountants as required by the
Act and the rules and regulations of the Commission thereunder;
(bb) To
the extent required by Rule 13a-15 under the Exchange Act, the Company maintains a system of internal control over financial reporting
(as such term is defined in Rule 13a-15(f) under the Exchange Act) that (i) complies with the requirements of the Exchange
Act, (ii) has been designed by the Company's principal executive officer and principal financial officer, or under their supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and (iii) is sufficient to provide reasonable assurance that
(A) transactions are executed in accordance with management's general or specific authorization, (B) transactions are recorded
as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain
accountability for assets, (C) access to assets is permitted only in accordance with management's general or specific authorization
and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences; and except as disclosed in the Pricing Prospectus, the Company's internal control over financial
reporting is effective and the Company is not aware of any material weaknesses in its internal control over financial reporting;
(cc) Except
as disclosed in the Pricing Prospectus, since the date of the latest audited financial statements included in the Pricing Prospectus,
there has been no change in the Company's internal control over financial reporting that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over financial reporting;
(dd) To
the extent required by Rule 13a-15 under the Exchange Act, the Company maintains disclosure controls and procedures (as such term
is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure
controls and procedures have been designed to ensure that material information relating to the Company is made known to the Company's
principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures
are effective;
(ee) There
is no franchise, contract or other document of a character required to be described in the Registration Statement or Prospectus, or to
be filed as an exhibit thereto, which is not described or filed as required (and the Pricing Prospectus contains in all material respects
the same description of the foregoing matters contained in the Prospectus); and the statements in the Pricing Prospectus and the Prospectus
under the headings "Principal Shareholders," "Certain Relationships and Related Party Transactions," and "Description
of Securities" insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate
and fair summaries of such legal matters, agreements, documents or proceedings in all material respects. There are no business relationships
or related party transactions involving the Company or any other person required by the Act to be described in the Registration Statement
or Prospectus that have not been described as required.
(ff) This
Agreement has been duly authorized, executed and delivered by the Company;
(gg) Intentionally
omitted.
(hh) The
Trust Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding agreement of the Company,
enforceable against the Company, in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency,
or similar laws affecting creditors' rights generally from time to time in effect and by equitable principles of general applicability.
(ii) Intentionally
omitted.
(jj) The
Founder's Subscription Agreement has been duly authorized, executed and delivered by the Company and the Sponsor, and is a valid and binding
agreement of the Company and the Sponsor, enforceable against the Company and the Sponsor in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors' rights generally from time to time in effect and
by equitable principles of general applicability.
(kk) The
Private Placement Shares Purchase Agreement has been duly authorized, executed and delivered by the Company and the Sponsor, and is a
valid and binding agreement of the Company and the Sponsor, enforceable against the Company and the Sponsor in accordance with its terms
except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors' rights generally from
time to time in effect and by equitable principles of general applicability.
(ll) The
Registration Rights Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally from time to time in effect and by equitable principles of general applicability.
(mm) Each
of the Insider Letters executed by the Company, the Sponsor and, to the Company's knowledge, each executive officer, director and director
nominee of the Company, have been duly authorized, executed and delivered by the Company, the Sponsor and, to the Company's knowledge,
and each such executive officer, director and director nominee, respectively, and is a valid and binding agreement of the Company, the
Sponsor and, to the Company's knowledge, and each such executive officer, director and director nominee, respectively, enforceable against
the Company, the Sponsor and, to the Company's knowledge, each such executive officer, director and director nominee, respectively, in
accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally from time to time in effect and by equitable principles of general applicability.
(nn) Intentionally
omitted.
(oo) The
Company, the Sponsor, and their directors and officers have not and, to the Company's knowledge, no agent, employee, affiliate or other
person associated with or acting on behalf of the Company has (i) made, offered, promised or authorized any unlawful contribution,
gift, entertainment or other unlawful expense or taken any act in furtherance thereof; (ii) made, offered, promised or authorized
any direct or indirect unlawful payment or taken any act in furtherance thereof; or (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977, the Bribery Act 2010 of the United Kingdom or any other applicable antibribery
or anti-corruption law (collectively, "Anti-Bribery Laws"). The Company has instituted and maintained policies and procedures
reasonably designed to promote and ensure continued compliance with all Anti-Bribery Laws and with the representation and warranty contained
herein.
(pp) The
operations of the Company and the Sponsor are and have been conducted at all times in compliance with the requirements of applicable anti-money
laundering laws, including, but not limited to, the Bank Secrecy Act of 1970, as amended by the USA PATRIOT ACT of 2001, and the rules and
regulations promulgated thereunder, and the anti-money laundering laws of the various jurisdictions in which the Company conducts business
(collectively, the "Money Laundering Laws") and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of
the Company, threatened;
(qq) The
Company, the Sponsor, and their directors and officers are not and, to the Company's knowledge, no agent, employee, affiliate or other
person associated with or acting on behalf of the Company is currently the subject or the target of any sanctions administered or enforced
by the U.S. Government, including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or
the U.S. Department of State and including, without limitation, the designation as a "specially designated national" or "blocked
person," the European Union, Her Majesty's Treasury, the United Nations Security Council, or other relevant sanctions authority (collectively,
"Sanctions"), nor is the Company located, organized or resident in a country or territory that is the subject or target of Sanctions,
and the Company will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities
of or business with any person, or in any country or territory, that, at the time of such funding, is the subject or the target of Sanctions
or (ii) in any other manner that will result in a violation by any person (including any person participating in the transaction,
whether as underwriter, advisor, investor or otherwise) of Sanctions;
(rr) The
financial statements included in the Registration Statement, the Pricing Prospectus and the Prospectus, together with the related schedules
and notes, present fairly the financial position of the Company at the dates indicated and the statement of operations, shareholders'
equity and cash flows of the Company for the periods specified; said financial statements have been prepared in conformity with U.S. generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules,
if any, present fairly in accordance with GAAP the information required to be stated therein. The selected financial data and the summary
financial information included in the Registration Statement, the Pricing Prospectus and the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of the audited financial statements included therein. Except as included
therein, no historical or pro forma financial statements or supporting schedules are required to be included in the Registration Statement,
the Pricing Prospectus or the Prospectus under the Act or the rules and regulations promulgated thereunder. All disclosures contained
in the Registration Statement, the Pricing Prospectus and the Prospectus regarding "non-GAAP financial measures" (as such term
is defined by the rules and regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation
S-K of the Act, to the extent applicable;
(ss) There
is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company's officers or directors,
in their capacities as such, to comply with (as and when applicable), and immediately following the effective date of the Registration
Statement, the Company will be in compliance with the applicable listing rules of Nasdaq (subject to applicable phase-in Rules).
Further, there is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company's officers
or directors, in their capacities as such, to comply with (as and when applicable), and immediately following the effective date of the
Registration Statement, the Company will be in compliance with, the phase-in requirements and all other applicable provisions of the Nasdaq
corporate governance requirements set forth in the Nasdaq Marketplace Rules.
(tt) There
are no transfer, stamp, issue, registration, documentary or other similar taxes, duties, fees or charges under U.S. federal law or the
laws of any state, or under the laws of any non-U.S. jurisdiction, required to be paid in connection with the execution and delivery of
this Agreement or the issuance or sale by the Company of the Shares.
(uu) The
Company has filed all tax returns (including U.S. federal, state and non-U.S.) that are required to be filed by it or has requested extensions
thereof (except in any case in which the failure so to file would not have a Material Adverse Effect) through the date hereof and has
paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing
is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith and for which adequate
reserves required by generally accepted accounting principles have been created with respect thereto or as would not have a Material Adverse
Effect, except as set forth in or contemplated in the Registration Statement, Pricing Prospectus and the Prospectus (exclusive of any
supplement thereto).
(vv) The
Company possesses all licenses, certificates, permits and other authorizations issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct its business, and the Company has not received any notice of proceedings relating to the revocation or
modification of any such license, certificate, authorization or permit that, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect, except as set forth in or contemplated in the Pricing Prospectus and
the Prospectus (exclusive of any supplement thereto).
(ww) The
Company (i) does not have any material lending or other relationship with any bank or lending affiliate of any of the Underwriters
and (ii) does not intend to use any of the proceeds from the sale of the Shares hereunder to repay any outstanding debt owed to any
affiliate of any of the Underwriters.
(xx) All
information contained in the questionnaires (the "Questionnaires") completed by the Sponsor and, to the knowledge of the Company,
the Company's officers, directors and director nominees and provided to the Underwriters, is true and correct in all material respects
and the Company has not become aware of any information that would cause the information disclosed in the Questionnaires completed by
the Sponsor or the Company's officers, directors and director nominees to become inaccurate and incorrect.
(yy) Prior
to the date hereof, the Company has not selected any specific acquisition target and has not, nor has anyone on its behalf, engaged in
any substantive discussions, directly or indirectly, with any business combination target with respect to an initial Business Combination.
As used in this Agreement, the term “Business Combination” (as described more fully in the Registration Statement) shall mean
a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses
involving the Company.
(zz) Except
as described in the Registration Statement, the Pricing Prospectus and the Prospectus, there are no claims, payments, arrangements, contracts,
agreements or understandings relating to the payment of a brokerage commission or finder's, consulting, origination or similar fee by
the Company or the Sponsor with respect to the sale of the Shares hereunder or any other arrangements, agreements or understandings of
the Company, the Sponsor or any officer or director of the Company, or their respective affiliates, that may affect the Underwriters'
compensation, as determined by FINRA.
(aaa) Except
as described in the Registration Statement, the Pricing Prospectus and the Prospectus, the Company has not made any direct or indirect
payments (in cash, securities or any other form that would be "underwriting compensation" as defined in Rule 5110 of the
FINRA Manual): (i) to any person, as a finder's fee, consulting fee or otherwise, in consideration of such person raising capital
for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) to any person that,
to the Company's knowledge, has been accepted by FINRA as a member of FINRA (a "Member"); or (iii) to any person or
entity that, to the Company's knowledge, has any direct or indirect affiliation or association with any Member, within the FINRA Review
Period, as defined in Rule 5110(j)(20) of the FINRA Manual, other than payments to the Underwriters pursuant to this Agreement.
(bbb) Except
as described in the Registration Statement, the Pricing Prospectus and the Prospectus, during the period beginning 180 days prior to the
initial filing of the Registration Statement and ending on the effective date of the Registration Statement, no Member and/or any person
associated or affiliated with a Member has provided any investment banking, financial advisory and/or consulting services to the Company.
(ccc) Except
as disclosed in the FINRA Questionnaires provided to the Representatives, to the Company's knowledge no officer, director, or beneficial
owner of any class of the Company's securities (whether debt or equity, registered or unregistered, regardless of the time acquired or
the source from which derived) (any such individual or entity, a "Company Affiliate") is a Member or a person associated or
affiliated with a Member.
(ddd) Except
as disclosed in the FINRA Questionnaires provided to the Representatives, to the Company's knowledge, no Company Affiliate is an owner
of shares or other securities of any Member (other than securities purchased on the open market).
(eee) Except
as described in the Registration Statement, the Pricing Prospectus and the Prospectus, no proceeds from the sale of the Firm Shares (excluding
underwriting compensation as disclosed in the Registration Statement, Pricing Prospectus and the Prospectus) will be paid by the Company
to any Member, or any persons associated or affiliated with a Member.
(fff) The
Company has not issued any warrants or other securities, or granted any options, directly or indirectly to anyone who is a Participating
Member (as defined in Rule 5110(j)(15) of the FINRA Manual) within the 180-day period prior to the initial confidential submission
of the Registration Statement.
(ggg) No
person to whom securities of the Company have been privately issued within the 180-day period prior to the initial filing date of the
Registration Statement has, to the Company's knowledge, any relationship or affiliation or association with any Member intending to participate
in the Offering.
(hhh) To
the Company's knowledge, no Member intending to participate in the Offering has a conflict of interest with the Company. For this purpose,
a "conflict of interest" means, if at the time of the Member's participation in the Offering, any of the following applies:
(A) the securities are to be issued by the Member; (B) the Company controls, is controlled by or is under common control
with the Member or the Member's associated persons; (C) at least 5% of the net offering proceeds, not including underwriting
compensation, are intended to be: (i) used to reduce or retire the balance of a loan or credit facility extended by the Member, its
affiliates and its associated persons, in the aggregate; or (ii) otherwise directed to the Member, its affiliates and associated
persons, in the aggregate; or (D) as a result of the Offering and any transactions contemplated at the time of the Offering:
(i) the Member will be an affiliate of the Company; (ii) the Member will become publicly owned; or (iii) the
Company will become a Member or form a broker-dealer subsidiary.
(iii) The
Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(jjj) The
Company does not own an interest in any corporation, partnership, limited liability company, joint venture, trust or other entity.
(kkk) No
relationship, direct or indirect, exists between or among any of the Company or any affiliate of the Company, on the one hand, and any
director, director nominee, officer, shareholder, special advisor, customer or supplier of the Company or any affiliate of the Company,
on the other hand, which is required by the Act or the Exchange Act to be described in the Registration Statement, Pricing Prospectus
or the Prospectus that is not described as required. There are no outstanding loans, advances (except normal advances for business expenses
in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers, directors
or director nominees of the Company or any of their respective family members, except as disclosed in the Registration Statement, Pricing
Prospectus and the Prospectus. The Company has not extended or maintained credit, arranged for the extension of credit, or renewed an
extension of credit, in the form of a personal loan to or for any director or officer of the Company.
(lll) The
Company has not offered, or caused the Underwriters to offer, the Shares to any person or entity with the intention of unlawfully influencing:
(a) a customer or supplier of the Company or any affiliate of the Company to alter the customer's or supplier's level or type of
business with the Company or such affiliate or (b) a journalist or publication to write or publish favorable information about the
Company or any such affiliate.
(mmm) Upon
delivery and payment for the Shares on the closing date and the filing of the Form 8-K, the Company will not be subject to Rule 419
under the Act and none of the Company's outstanding securities will be deemed to be a "penny stock" as defined in Rule 3a51-1
under the Exchange Act.
(nnn) From
the time of the initial confidential submission of the Registration Statement to the Commission (or, if earlier, the first date on which
the Company engaged, directly or through any person authorized to act on its behalf, in any Testing-the-Waters Communication) through
the date hereof, the Company has been and is an Emerging Growth Company. "Testing-the-Waters Communication" means any oral or
written communication with potential investors undertaken in reliance on Section 5(d) of the Act.
(ooo) The
Company does not have any subsidiaries.
(ppp) As
of the time of filing of the Registration Statement, the Company was a "smaller reporting company," as defined in Rule 12b-2
of the Exchange Act Regulations.
(qqq) No
governmental approvals are currently required in order for the Company to pay dividends, interest attributable to shareholders’
equity or other distributions declared by the Company to the holders of Shares, and, under current laws and regulations, any amounts payable
with respect to the Shares (i) upon liquidation of the Company or upon redemption thereof and (ii) in the form of dividends
or interest attributable to shareholders’ equity declared and payable on the Shares shall be paid by the Company in U.S. dollars
and may be freely transferred out of the Cayman Islands; no such payments made to holders thereof or therein who are non-residents of
the Cayman Islands are subject to income, withholding or other taxes under laws and regulations of the Cayman Islands or any political
subdivision or taxing authority thereof or therein, and such payments will otherwise be free and clear of any other tax, duty, withholding
or deduction in the Cayman Islands or any political subdivision or taxing authority thereof or therein and without the necessity of obtaining
any governmental authorization in the Cayman Islands or any political subdivision or taxing authority thereof or therein.
(rrr) Neither
the Company nor any of its properties or assets has any immunity from the jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of execution or otherwise) under the laws of the Cayman Islands.
(sss) It
is not necessary under the laws of the Cayman Islands (i) to enable the Underwriters to enforce their rights under this Agreement
provided that they are not otherwise engaged in business in the Cayman Islands, or (ii) solely by reason of the execution, delivery
or consummation of this Agreement, for any of the Underwriters to be qualified or entitled to carry out business in the Cayman Islands.
(ttt) Although
there is no statutory enforcement in the Cayman Islands of judgments obtained in the courts of the State of New York, such judgments will
be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying
dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment is given
by a foreign court of competent jurisdiction, imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment
has been given, is final, is not in respect of taxes, a fine or a penalty, and was not obtained in a manner and is not of a kind the enforcement
of which is contrary to natural justice or the public policy of the Cayman Islands.
(uuu) Except
as described in the Registration Statement, the Pricing Prospectus and the Prospectus, under current laws and regulations of the Cayman
Islands and any political subdivision thereof, all dividends and other distributions declared and payable on the Shares may be paid by
the Company to the holder thereof in U.S. dollars and all such payments made to holders thereof or therein who are non-residents of the
Cayman Islands will not be subject to income, withholding or other taxes under laws and regulations of the Cayman Islands or any political
subdivision or taxing authority thereof or therein and will otherwise be free and clear of any other tax, duty, withholding or deduction
in the Cayman Islands or any political subdivision or taxing authority thereof or therein and without the necessity of obtaining any governmental
authorization in the Cayman Islands or any political subdivision or taxing authority thereof or therein.
2. Subject
to the terms and conditions herein set forth, (a) the Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price per Class A Ordinary Share of $10.00,
the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto and (b) in the event and to the extent
that the Underwriters shall exercise the election to purchase Optional Shares as provided below, the Company agrees to issue and sell
to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at the purchase
price per share set forth in clause (a) of this Section 2 (provided that the purchase price per Optional Share shall be reduced
by an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable
on the Optional Shares), that portion of the number of Optional Shares as to which such election shall have been exercised (to be adjusted
by you so as to eliminate fractional shares) determined by multiplying such number of Optional Shares by a fraction, the numerator of
which is the maximum number of Optional Shares which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter
in Schedule I hereto and the denominator of which is the maximum number of Optional Shares that all of the Underwriters are entitled to
purchase hereunder.
The Company hereby grants
to the Underwriters the right to purchase at their election up to 3,750,000 Optional Shares, at the purchase price per share set forth
in the paragraph above, for the sole purpose of covering sales of shares in excess of the number of Firm Shares, provided that the purchase
price per Optional Share shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable
on the Firm Shares but not payable on the Optional Shares. Any such election to purchase Optional Shares may be exercised only by written
notice from you to the Company, given within a period of 45 calendar days after the date of this Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional Shares are to be delivered, as determined by you but in
no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless you and the Company otherwise agree
in writing, earlier than two or later than ten business days after the date of such notice.
In addition to the discount
from the public offering price represented by the purchase price set forth in the first sentence of Section 2 of this Agreement,
the Company hereby agrees to pay to the Underwriters a deferred discount of $0.35 per Share (including both Firm Shares and Optional
Shares) purchased hereunder (the "Deferred Discount"). The Company and the Representatives agree that up to thirty percent
(30%) of the Deferred Discount (the “Jumpball Amount”) may be transferred by the Trustee, from amounts on deposit in the
Trust Account (without accrued interest) by wire transfer payable in same-day funds if and when the Company consummates an initial Business
Combination, at the Company’s sole discretion to members of FINRA that assist the the Company in identifying or consummating its
initial business combination. The Company and the Representatives hereby agree that the remaining amount of the Deferred Discount after
subtracting out the Jumpball Amount (such amount, if any, the “Remaining Discount”) shall be paid directly to each of the
Representatives, on behalf of the Underwriters, by the Trustee from amounts on deposit in the Trust Account (without accrued interest)
by wire transfer payable in same-day funds if and when the Company consummates an initial Business Combination, in such amounts as described
in the following sentence. Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and BofA Securities, Inc. shall receive such portion
of the Remaining Discount that is 37.5%, 37.5% and 25% of the Remaining Discount, respectively.
The Underwriters hereby agree that if no Business Combination is consummated
within the time period provided in the Trust Agreement and the funds held under the Trust Agreement are distributed to the holders of
the Shares sold pursuant to this Agreement (the "Public Shareholders," which term shall include any officers or directors of
the Company solely to the extent they hold any Public Shares (as defined below)), (i) the Underwriters will forfeit any rights or
claims to the Deferred Discount and (ii) the trustee under the Trust Agreement is authorized to distribute the Deferred Discount
to the Public Shareholders on a pro rata basis.
3. Upon
the authorization by you of the release of the Firm Shares, the several Underwriters propose to offer the Firm Shares for sale upon the
terms and conditions set forth in the Pricing Prospectus and the Prospectus (the "Offering").
4. (a) The
Shares to be purchased by each Underwriter hereunder, in definitive or book-entry form, and in such authorized denominations and registered
in such names as the Representatives may request upon at least forty-eight hours' prior notice to the Company shall be delivered by or
on behalf of the Company to the Representatives, through the facilities of the Depository Trust Company ("DTC"), for the account
of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day)
funds to the account specified by the Company to the Representatives at least forty-eight hours in advance. The Company will cause the
certificates, if any, representing the Shares to be made available for checking and packaging at least twenty-four hours prior to the
Time of Delivery (as defined below) with respect thereto at the office of DTC or its designated custodian (the "Designated Office").
The time and date of such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m., New York City time, on [•],
2021 or such other time and date as the Representatives and the Company may agree upon in writing, and, with respect to the Optional Shares,
9:30 a.m., New York time, on the date specified by the Representatives in the written notice given by the Representatives of the Underwriters'
election to purchase such Optional Shares, or such other time and date as the Representatives and the Company may agree upon in writing.
Such time and date for delivery of the Firm Shares is herein called the "First Time of Delivery", such time and date for delivery
of the Optional Shares, if not the First Time of Delivery, is herein called the "Second Time of Delivery", and each such time
and date for delivery is herein called a "Time of Delivery".
(b) The
documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 8 hereof, including
the cross receipt for the Shares and any additional documents requested by the Underwriters pursuant to Section 8(m) hereof,
will be delivered at the offices of Skadden, Arps, Slate, Meagher & Flom LLP at 525 University Ave., Palo Alto, CA 94301 (the
"Closing Location"), and the Shares will be delivered at the Designated Office, all at such Time of Delivery. A meeting will
be held at the Closing Location at 4 p.m., New York City time, on the New York Business Day next preceding such Time of Delivery, at which
meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive
order to close.
5. The
Company agrees with each of the Underwriters:
(a) To
prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day following the execution and delivery of this Agreement, or, if applicable,
such earlier time as may be required by Rule 430A(a)(3) under the Act; to make no further amendment or any supplement to the
Registration Statement or the Prospectus prior to the last Time of Delivery which shall be disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement
has been filed or becomes effective or any amendment or supplement to the Prospectus has been filed and to furnish you with copies thereof;
to file promptly all material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act;
to advise you, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or other prospectus in respect of the Shares, of the suspension of the qualification
of the Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or
other prospectus or suspending any such qualification, to promptly use its best efforts to obtain the withdrawal of such order;
(b) Promptly
from time to time to take such action as you may reasonably request to qualify the Shares for offering and sale under the securities laws
of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the distribution of the Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation (where not otherwise required) or to file a general consent to service
of process in any jurisdiction (where not otherwise required);
(c) Prior
to 10:00 a.m., New York City time, on the New York Business Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with written and electronic copies of the Prospectus in New York City in such quantities as you may reasonably request,
and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required at
any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the
Shares and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under
the Act) is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement
the Prospectus in order to comply with the Act, to notify you and upon your request to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request of an amended Prospectus
or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; and in case any Underwriter
is required to deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in connection
with sales of any of the Shares at any time nine months or more after the time of issue of the Prospectus, upon your request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as many written and electronic copies as you may request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To
make generally available to its securityholders as soon as practicable, but in any event not later than sixteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158); provided that any documents filed with the Commission pursuant to Electronic
Data Gathering, Analysis and Retrieval System shall be deemed to have been furnished or delivered to you pursuant to this paragraph;
(e) (1) The
Company will not, without the prior written consent of the Representatives, (x) offer, sell, contract to sell, pledge, hedge or otherwise
dispose of (or enter into any transaction that is designed to, or might reasonably be expected to, result in the disposition (whether
by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any affiliate of the Company
or any person in privity with the Company or any affiliate of the Company), directly or indirectly, including the filing (or participation
in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any other Class A
Ordinary Shares or any securities convertible into, or exercisable, or exchangeable for, Class A Ordinary Shares or publicly announce
an intention to effect any such transaction during the period commencing on the date hereof and ending 180 days after the date of this
Agreement; provided, however, that the Company may (1) issue and sell the Private Placement Shares, (2) register with the
Commission pursuant to the Registration Rights Agreement, in accordance with the terms of the Registration Rights Agreement, the resale
of the Founder Shares, the Private Placement Shares, and Class A Ordinary Shares that may be issued upon conversion of working capital
loans, and (3) issue securities in connection with a Business Combination, or (y) release the Sponsor or any officer, director
or director nominee from the 180-day lock-up contained in the Insider Letters.
(2) Intentionally
Omitted.
(f) The
Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(g) For
a period commencing on the effective date of the Registration Statement and until the Termination Date (as defined below), to furnish
to its shareholders as soon as practicable after the end of each fiscal year an annual report (including a balance sheet and statements
of income, shareholders' equity and cash flows of the Company and its consolidated subsidiaries certified by independent public accountants)
and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), to make available to its shareholders consolidated summary financial information
of the Company and its subsidiaries for such quarter in reasonable detail; provided that any documents filed with the Commission pursuant
to shall be deemed to have been furnished or delivered to you pursuant to this paragraph;
(h) During
a period of five years from the effective date of the Registration Statement or until such earlier time as the Liquidation (as defined
below) occurs or the Company is acquired or completes a going private transaction in a transaction where the Shares are no longer outstanding
(the "Termination Date"), to furnish to you copies of all reports or other communications (financial or other) furnished to
shareholders, and to deliver to you (i) as soon as they are available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; and (ii) such
additional information concerning the business and financial condition of the Company as you may from time to time reasonably request
(such financial statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated
in reports furnished to its shareholders generally or to the Commission); provided that any documents filed with the Commission pursuant
to EDGAR shall be deemed to have been furnished or delivered to you pursuant to this paragraph;
(i) For
a period commencing on the effective date of the Registration Statement and ending five (5) years from the date of the consummation
of the Business Combination or until such earlier time at which the Liquidation occurs, the Company will use its best efforts to maintain
the registration of the Shares under the provisions of the Exchange Act, except after giving effect to a going private transaction after
the completion of a Business Combination. The Company will not deregister the Shares under the Exchange Act (except in connection with
a going private transaction after the completion of a Business Combination) without the prior written consent of the Representative.
(j) To
use the net proceeds received by it from the sale of the Shares pursuant to this Agreement in the manner specified in the Pricing Prospectus
under the caption "Use of Proceeds";
(k) To
use its best efforts to list for quotation the Shares on The Nasdaq Capital Market;
(l) On
the date hereof, to retain its independent registered public accounting firm to audit the balance sheet of the Company as of the closing
date (the "Audited Balance Sheet") reflecting the receipt by the Company of the proceeds of the Offering on the closing date.
As soon as the Audited Balance Sheet becomes available, the Company shall promptly, but not later than four business days after the closing
date, file a Current Report on Form 8-K with the Commission, which Report shall contain the Audited Balance Sheet. Additionally,
upon the Company's receipt of the proceeds from the exercise of all or any portion of the option provided for in Section 2 hereof,
the Company shall promptly, but not later than four business days after the receipt of such proceeds, file a Current Report on Form 8-K
with the Commission, which report shall disclose the Company's sale of the Optional Shares and its receipt of the proceeds therefrom;
(m) For
a period commencing on the effective date of the Registration Statement and ending on the Termination Date, the Company, at its expense,
shall cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company's financial statements
for each of the first three fiscal quarters prior to the announcement of quarterly financial information, the filing of the Company's
Form 10-Q quarterly report and the mailing, if any, of quarterly financial information to shareholders.
(n) To
file with the Commission such information on Form 10-Q or Form 10-K as may be required by Rule 463 under the Act;
(o) If
the Company elects to rely upon Rule 462(b) under the Act, the Company shall file a Rule 462(b) Registration Statement
with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement
or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act;
(p) For
a period commencing on the effective date of the Registration Statement and ending on the Termination Date, the Company shall retain a
transfer agent;
(q) Upon
request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter an electronic version of the Company's trademarks,
servicemarks and corporate logo, if any, for use on the website, if any, operated by such Underwriter for the purpose of facilitating
the on-line offering of the Shares (the "License"); provided, however, that the License shall be used solely for the
purpose described above, is granted without any fee and may not be assigned or transferred;
(r) The
Company will not consummate an initial Business Combination with any entity that is affiliated with the Sponsor, a member of the Sponsor
or any of the Company's officers or directors unless it or a committee of independent members of the Company's Board of Directors obtains
an opinion from an independent investment banking firm which is a member of FINRA, or from an independent accounting firm, that such initial
Business Combination is fair to the Company from a financial point of view. The Company shall not pay the Sponsor or its affiliates or
any of the Company's officers, directors or any of their respective affiliates any fees or compensation for services rendered to the Company
prior to, or in connection with, the consummation of an initial Business Combination except as disclosed in the Registration Statement.
(s) For
a period of 60 days' following the effective date of the Registration Statement, in the event any person or entity (regardless of any
FINRA affiliation or association) is engaged to assist the Company in its search for a merger candidate or to provide any other merger
and acquisition services, or has provided or will provide any investment banking, financial, advisory and/or consulting services to the
Company, the Company agrees that it shall promptly provide to the Representatives and their counsel a notification prior to entering into
the agreement or transaction relating to a potential Business Combination: (i) the identity of the person or entity providing any
such services; (ii) complete details of all such services and copies of all agreements governing such services prior to entering
into the agreement or transaction; and (iii) justification as to why the value received by any person or entity for such services
is not underwriting compensation for the Offering.
(t) The
Company agrees that proper disclosure of any arrangement or potential arrangement that the Company has with any person or entity to assist
the Company in its search for a merger candidate or to provide any other merger and acquisition services or investment banking, financial,
advisory and/or consulting services will be made in the tender offer materials or proxy statement, as applicable, which the Company may
file in connection with the Business Combination for purposes of offering redemption of shares held by its shareholders or for soliciting
shareholder approval, as applicable. To the extent that the Company discloses arrangements with respect to any of the Representatives,
the Company will provide the applicable Representative with an opportunity to review and comment on any such tender offer materials or
proxy statement.
(u) The
Company shall advise FINRA, the Representatives and their counsel if it is aware that any 10% or greater shareholder of the Company becomes
an affiliate or associated person of a Member participating in the distribution of the Shares.
(v) The
Company shall cause the proceeds of the Offering and the sale of the Private Placement Shares held in the Trust Account to be invested
only in United States government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions
under Rule 2a-7 under the Investment Company Act as set forth in the Trust Agreement and disclosed in the Pricing Prospectus and
the Prospectus. The Company will otherwise conduct its business in a manner so that it will not become subject to the Investment Company
Act. Furthermore, once the Company consummates an initial Business Combination, it will not be required to register as an investment company
under the Investment Company Act.
(w) During
the period prior to the Company's initial Business Combination or Liquidation, the Company may instruct the trustee under the Trust
Agreement to release from the Trust Account, (i) solely with respect to interest from the Trust Account, the amounts necessary to
pay franchise and income tax obligations and (ii) to pay Public Shareholders who properly redeem their Public Shares in connection
with a vote to approve an amendment to the Amended and Restated Memorandum and Articles of Association (x) to modify the substance
or timing of the Company's obligation to redeem 100% of our public shares if the Company has not consummated an initial Business Combination
within twenty-four (24) months from the closing of this offering or (y) with respect to any other provisions relating to shareholders'
rights or pre-initial Business Combination activity. Otherwise, all funds held in the Trust Account (including any interest income earned
on the amounts held in the Trust Account (net of taxes payable thereon in accordance with the preceding sentence)) will remain in the
Trust Account until the earlier of the consummation of the Company's initial Business Combination or the Liquidation; provided,
however, that in the event of the Liquidation, up to $100,000 of interest income may be released to the Company if the proceeds of
the Offering held outside of the Trust Account are not sufficient to cover the costs and expenses associated with implementing the Company's
plan of dissolution. "Liquidation" means the distributions of the Trust Account to the Public Shareholders in connection with
the redemption of Class A Ordinary Shares held by such Public Shareholders pursuant to the terms of the Company's Amended and Restated
Memorandum and Articles of Association, if the Company fails to consummate a Business Combination.
(x) The
Company will reserve and keep available that maximum number of its authorized but unissued securities that are issuable upon the conversion
of the Founder Shares.
(y) Prior
to the consummation of an initial Business Combination or the Liquidation, the Company shall not issue any Class A Ordinary Shares,
warrants or any options or other securities convertible into Class A Ordinary Shares, or any preference shares, in each case, that
participate in any manner in the Trust Account or that vote as a class with the Class A Ordinary Shares on a Business Combination.
(z) Prior
to the consummation of an initial Business Combination or the Liquidation, the Company's audit committee will review on a quarterly basis
all payments made to the Sponsor, to the Company's officers or directors, or to the Company's or any of such other persons' respective
affiliates.
(aa) The
Company agrees that it will use commercially reasonable efforts to prevent the Company from becoming subject to Rule 419 prior to
the consummation of any Business Combination, including, but not limited to, using its best efforts to prevent any of the Company's outstanding
securities from being deemed to be a "penny stock" as defined in Rule 3a51-1 under the Exchange Act during such period.
(bb) To
the extent required by Rule 13a-15(e) under the Exchange Act, the Company will maintain "disclosure controls and procedures"
(as defined under Rule 13a-15(e) under the Exchange Act) and, to the extent required by Rule 13a-15(f) under the Exchange
Act, a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance
with management's general or specific authorization, (ii) transactions are recorded as necessary in order to permit preparation of
financial statements in accordance with GAAP and to maintain accountability for assets, (iii) access to assets is permitted only
in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(cc) The
Company shall not take any action or omit to take any action that would cause the Company to be in breach or violation of its Amended
and Restated Memorandum and Articles of Association.
(dd) The
Company will seek to have all vendors, service providers (other than independent accountants), prospective target businesses, lenders
or other entities with which it does business enter into agreements waiving any right, title, interest or claim of any kind in or to any
monies held in the Trust Account for the benefit of the Public Shareholders. The Company may forego obtaining such waivers only if the
Company shall have received the approval of any of its Chief Executive Officers.
(ee) The
Company may consummate the initial Business Combination and conduct redemptions of Class A Ordinary Shares for cash upon consummation
of such Business Combination without a shareholder vote pursuant to Rule 13e-4 and Regulation 14E under the Exchange Act, including
the filing of tender offer documents with the Commission. Such tender offer documents will contain substantially the same financial and
other information about the initial Business Combination and the redemption rights as is required under the Commission's proxy rules and
will provide each shareholder of the Company with the opportunity prior to the consummation of the initial Business Combination to redeem
the Class A Ordinary Shares held by such shareholder for an amount of cash equal to (A) the aggregate amount then on deposit
in the Trust Account as of two business days prior to the consummation of the initial Business Combination, representing (x) the
proceeds held in the Trust Account from the Offering and the sale of the Private Placement Shares and (y) any interest income earned
on the funds held in the Trust Account not previously released to pay franchise and income taxes, divided by (B) the total number
of Shares sold in the Offering (the "Public Shares") then outstanding, subject to the limitation that no redemptions will take
place if all of the redemptions would cause our net tangible assets to be less than $5,000,001. If, however, a shareholder vote is required
by law or stock exchange listing requirement in connection with the initial Business Combination or the Company decides to hold a shareholder
vote for business or other legal reasons, the Company will submit such Business Combination to the Company's shareholders for their approval
("Business Combination Vote"). With respect to the initial Business Combination Vote, if any, the Sponsor, officers and directors
have agreed to vote all of their Founder Shares, the Private Placement Shares, and any other Class A Ordinary Shares purchased during
or after the Offering in favor of the Company's initial Business Combination. If the Company seeks shareholder approval of the initial
Business Combination, the Company will offer to each Public Shareholder holding Class A Ordinary Shares the right to have its shares
redeemed in conjunction with a proxy solicitation pursuant to the proxy rules of the Commission at a per share redemption price (the
"Redemption Price") equal to (I) the aggregate amount then on deposit in the Trust Account as of two business days prior
to the consummation of the initial Business Combination, representing (1) the proceeds held in the Trust Account from the Offering
and the sale of the Private Placement Shares and (2) any interest income earned on the funds held in the Trust Account not previously
released to pay franchise and income taxes, divided by (II) the total number of Public Shares then outstanding, subject to the limitation
that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001. If the Company
seeks shareholder approval of the initial Business Combination, the Company may proceed with such Business Combination only if a majority
of the outstanding shares voted by the shareholders at a duly held shareholders meeting are voted to approve such Business Combination.
If, after seeking and receiving such shareholder approval, the Company elects to so proceed, it will redeem shares, at the Redemption
Price, from those Public Shareholders who affirmatively requested such redemption. Only Public Shareholders holding Class A Ordinary
Shares who properly exercise their redemption rights, in accordance with the applicable tender offer or proxy materials related to such
Business Combination and the Amended and Restated Memorandum and Articles of Association of the Company, shall be entitled to receive
distributions from the Trust Account in connection with an initial Business Combination, and the Company shall pay no distributions with
respect to any other holders of shares of the Company in connection therewith. In the event that the Company does not effect a Business
Combination by twenty-four (24) months from the closing of the Offering, the Company will (i) cease all operations except for the
purpose of winding up, (ii) as promptly as reasonably possible but not more than ten (10) business days thereafter, redeem 100%
of the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account (including
interest not previously released to the Company to pay franchise and income taxes, and less up to $100,000 of interest to pay dissolution
expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Shareholders' rights
as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as
promptly as reasonably possible following such redemption, subject to the approval of the Company's remaining shareholders and the Company's
board of directors, dissolve and liquidate, subject in each case to the Company's obligations under Cayman law to provide for claims of
creditors and the requirements of other applicable law. Only Public Shareholders holding Class A Ordinary Shares shall be entitled
to receive such redemption amounts and the Company shall pay no such redemption amounts or any distributions in liquidation with respect
to any other shares of the Company. The Sponsor and the Company's officers and directors have agreed that they will not propose any amendment
to the Amended and Restated Memorandum and Articles of Association that would affect the substance or timing of the Company's obligation
to redeem 100% of the outstanding Public Shares if the Company has not consummated a Business Combination within twenty-four months from
the closing of the Offering or with respect to any other material provisions relating to shareholders' rights or pre-initial Business
Combination activity, unless the Company offers to redeem the Public Shares in connection with such amendment, as described in the Pricing
Prospectus and Prospectus.
(ff) In
the event that the Company desires or is required by an applicable law or regulation to cause an announcement (a "Business Combination
Announcement") to be placed in The Wall Street Journal, The New York Times or any other news or media publication or outlet or to
be made via a public filing with the Commission announcing the consummation of an initial Business Combination that indicates that the
Underwriters were the underwriters in the Offering, the Company shall supply the Representatives with a draft of the Business Combination
Announcement and provide the Representatives with a reasonable advance opportunity to comment thereon, subject to the agreement of the
Underwriters to keep confidential such draft announcement in accordance with the Representatives' standard policies regarding confidential
information.
(gg) Upon
the consummation of the initial Business Combination, the Company will direct the Trustee to pay the Underwriters the Deferred Discount
out of the proceeds of the Offering held in the Trust Account. The Underwriters shall have no claim to payment of any interest earned
on the portion of the proceeds held in the Trust Account representing the Deferred Discount. If the Company fails to consummate its initial
Business Combination within twenty-four months from the closing of the Offering (or later if the Public Shareholders approve an amendment
to the Amended and Restated Memorandum and Articles of Association extending such deadline), the Deferred Discount will not be paid to
the Underwriters and will, instead, be included in the distribution of the proceeds held in the Trust Account made to the Public Shareholders
upon Liquidation. In connection with any such Liquidation, the Underwriters forfeit any rights or claims to the Deferred Discount.
(hh) If
at any time following the distribution of any Written Testing-the-Waters Communication, there occurred or occurs an event or development
as a result of which such Written Testing-the-Waters Communication included or would include any untrue statement of a material fact or
omitted or would omit to state any material fact necessary to make the statements therein in light of the circumstances under which they
were made at such time, not misleading, the Company will promptly (i) notify the Representatives so that use of the Written Testing-the-Waters
Communication may cease until it is amended or supplemented; (ii) amend or supplement, at its own expense, such Written Testing-the-Waters
Communication to eliminate or correct such untrue statement or omission; and (iii) supply any amendment or supplement to the
Representatives in such quantities as may be reasonably requested.
(ii) The
Company will promptly notify the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the later
of (i) completion of the distribution of the Shares within the meaning of the Act and (ii) completion of the 180-day restricted
period referred to in Section 5(e) hereof.
(jj) Upon
the earlier to occur of the expiration or termination of the Underwriters' option to purchase Optional Shares, the Company shall cancel
or otherwise effect the forfeiture of Founder Shares from the Sponsor in an aggregate amount equal to the number of Founder Shares determined
by multiplying (a) 937,500 by (b) a fraction, (i) the numerator of which is 3,750,000 minus the number of Optional Shares
purchased by the Underwriters upon the exercise of their option to purchase Optional Shares, and (ii) the denominator of which is
3,750,000. For the avoidance of doubt, if the Underwriters exercise their option to purchase Optional Shares in full, the Company shall
not cancel or otherwise affect the forfeiture of the Founder Shares pursuant to this subsection.
6. (a) The
Company represents and agrees that it has not made or used and will not make or use any offer relating to the Shares that would constitute
an Issuer Free Writing Prospectus;
(b) The
Company represents that it has satisfied and agrees that it will satisfy the conditions under Rule 433 under the Act to avoid a requirement
to file with the Commission any electronic road show;
(c) The
Company will endeavor in good faith, in cooperation with the Representatives to qualify the Shares for offering and sale under the securities
laws of such jurisdictions as the Representatives may reasonably designate, provided that no such qualification shall be required in any
jurisdiction where, as a result thereof, the Company would be subject to service of general process or to taxation as a foreign corporation
doing business in such jurisdiction. Until the earliest of (i) the date on which all Underwriters shall have ceased to engage in
market-making activities in respect of the Shares, (ii) the date on which the Shares are listed on The Nasdaq Capital Market (or
any successor thereto), (iii) a going private transaction after the completion of a Business Combination, and (iv) the date
of the liquidation of the Company, in each jurisdiction where such qualification shall be effected, the Company will, unless the Representatives
agree that such action is not at the time necessary or advisable, use all reasonable efforts to file and make such statements or reports
at such times as are or may be required to qualify the Shares for offering and sale under the securities laws of such jurisdiction.
(d) The
Company agrees that if at any time following issuance of a Written Testing-the-Waters Communication any event occurred or occurs as a
result of which such Written Testing-the-Waters Communication would conflict with the information in the Registration Statement, the Pricing
Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice
thereof to the Representatives and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter a
Written Testing-the-Waters Communication or other document which will correct such conflict, statement or omission;
(e) The
Company represents and agrees that (i) it has not engaged in, or authorized any other person to engage in, any Testing-the-Waters
Communications, other than Testing-the-Waters Communications with the prior consent of the Representatives with entities that the Company
reasonably believes are qualified institutional buyers as defined in Rule 144A under the Act or institutions that are accredited
investors as defined in Rule 501(a) under the Act; and (ii) it has not distributed, or authorized any other person to distribute,
any Written Testing-the-Waters Communications, other than those distributed with the prior consent of the Representatives that are listed
on Schedule II(d) hereto; and the Company reconfirms that the Underwriters have been authorized to act on its behalf in engaging
in Written Testing-the-Waters Communications;
(f) Each
Underwriter represents and agrees that any Testing-the-Waters Communications undertaken by it were with entities that such Underwriter
reasonably believes are qualified institutional buyers as defined in Rule 144A under the Act or institutions that are accredited
investors as defined in Rule 501(a) under the Act.
7. The
Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in connection with the registration of the Shares under the Act and
all other expenses in connection with the preparation, printing, reproduction and filing of the Registration Statement, any Preliminary
Prospectus, any Written Testing-the-Waters Communication and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters,
this Agreement, the Blue Sky Memorandum, closing documents (including any compilations thereof) and any other documents in connection
with the offering, purchase, sale and delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky survey; (iv) all fees and
expenses in connection with listing the Shares on The Nasdaq Capital Market; (v) the filing fees incident to, and the fees and disbursements
of counsel for the Underwriters in connection with, any required review by FINRA of the terms of the sale of the Shares (such fees and
disbursements of counsel to the Underwriters not to exceed $25,000); (vi) the cost of preparing share certificates; (vii) the
cost and charges of any trustee, warrant agent, transfer agent or registrar; and (viii) all other costs and expenses incident
to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section 7. It is understood,
however, that, except as provided in this Section 7, and Sections 9 and 12 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel.
8. The
obligations of the Underwriters hereunder, as to the Shares to be delivered at each Time of Delivery, shall be subject, in their discretion,
to the condition that all representations and warranties and other statements of the Company herein are, at and as of the Applicable Time
and such Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore
to be performed, and the following additional conditions:
(a) The
Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period
prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; all material
required to be filed by the Company pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the
applicable time period prescribed for such filing by Rule 433; if the Company has elected to rely upon Rule 462(b) under
the Act, the Rule 462(b) Registration Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on the date
of this Agreement; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or, to the Company's knowledge, threatened by the Commission; no stop order
suspending or preventing the use of the Pricing Prospectus or Prospectus shall have been initiated or, to the Company's knowledge, threatened
by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, shall have furnished to you such written opinion or opinions,
in form and substance reasonably satisfactory to the Representatives, dated such Time of Delivery, and such counsel shall have received
such papers and information as they may reasonably request to enable them to pass upon such matters;
(c) Debevoise &
Plimpton LLP, counsel for the Company, shall have furnished to the Representatives their written opinion, dated such Time of Delivery,
in form and substance reasonably satisfactory to the Representatives;
(d) Maples
and Calder (Cayman) LLP shall have furnished to the Representatives their written opinion, dated such Time of Delivery, in form and substance
reasonably satisfactory to the Representatives;
(e) On
the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time, on the effective date
of any post-effective amendment to the Registration Statement filed subsequent to the date of this Agreement and also at each Time of
Delivery, Withum shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form and substance
reasonably satisfactory to you;
(f) On
the effective date of the Registration Statement, the Company shall have delivered to the Representatives executed copies of the Trust
Agreement, the Founder's Subscription Agreement, the Private Placement Shares Purchase Agreement, the Insider Letters and the Registration
Rights Agreement;
(g) (i) The
Company shall not have sustained since the date of the latest audited financial statements included in the Pricing Prospectus any loss
or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus, and (ii) since
the respective dates as of which information is given in the Pricing Prospectus, there shall not have been any change in the shares or
long-term debt of the Company or any change or effect, or any development involving a prospective change or effect, in or affecting (x) the
business, properties, management, financial position, shareholders' equity or results of operations of the Company, taken as a whole,
except as set forth or contemplated in the Pricing Prospectus and the Prospectus, or (y) the ability of the Company to perform its
obligations under this Agreement, including the issuance and sale of the Shares, or to consummate the transactions contemplated in the
Pricing Prospectus and the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in your judgment
so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being
delivered at such Time of Delivery on the terms and in the manner contemplated in the Pricing Prospectus and the Prospectus;
(h) On
or after the Applicable Time (i) no downgrading shall have occurred in the rating accorded the Company's debt securities or preference
shares by any "nationally recognized statistical rating organization", as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act, and (ii) no such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the Company's debt securities or preference shares;
(i) Since
the date of the most recent financial statements included in the Prospectus, there has been no Material Adverse Effect, except as set
forth in the Prospectus;
(j) On
or after the Applicable Time there shall not have occurred any of the following: (i) a suspension or material limitation in trading
in securities generally on The Nasdaq Capital Market; (ii) a suspension or material limitation in trading in the Company's securities
on The Nasdaq Capital Market; (iii) a general moratorium on commercial banking activities declared by either Federal or New York
State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States;
(iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national
emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions
in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in your judgment makes it
impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Pricing Prospectus and the Prospectus;
(k) The
Shares to be sold at such Time of Delivery shall have been duly listed, subject to notice of issuance, on The Nasdaq Capital Market;
(l) The
Company shall have obtained and delivered to the Underwriters executed copies of the Insider Letters from Brendan Wallace, Andriy Mykhaylovskyy,
Adeyemi Ajao, Alana Beard, Poonam Sharma Mathis and Amanda Parness substantially to the effect set forth in Section 5(e) hereof
in form and substance reasonably satisfactory to you;
(m) The
Company shall have complied with the provisions of Section 5(c) hereof with respect to the furnishing of prospectuses on the
New York Business Day next succeeding the date of this Agreement; and
(n) The
Company shall have furnished or caused to be furnished to you at such Time of Delivery certificates of officers of the Company reasonably
satisfactory to you as to the accuracy of the representations and warranties of the Company herein at and as of such Time of Delivery,
as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the
matters set forth in subsections (a) and (e) of this Section and as to such other matters as you may reasonably request.
9. (a)The
Company will indemnify and hold harmless each Underwriter, the directors, officers, employees, affiliates and agents of each Underwriter,
each person who controls any Underwriter within the meaning of either the Act or otherwise and each affiliate of each Underwriter, against
any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus
or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus, any "roadshow" as defined in
Rule 433(h) under the Act (a "roadshow"), any "issuer information" filed or required to be filed pursuant
to Rule 433(d) under the Act or any Testing-the-Waters Communication, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any documented out-of-pocket legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus or any Written
Testing-the-Waters Communication, in reliance upon and in conformity with the Underwriter Information.
(b) Each
Underwriter, severally and not jointly, will indemnify and hold harmless the Company, each of its directors and director nominees, each
of its officers who signs the Registration Statement, and each persons who controls the Company within the meaning of either the Act or
otherwise, against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the
Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or any roadshow or any Written Testing-the-Waters
Communication, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, any Preliminary Prospectus,
the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or any roadshow
or any Written Testing-the-Waters Communication, in reliance upon and in conformity with the Underwriter Information; and will reimburse
the Company for any documented out-of-pocket legal or other expenses reasonably incurred by the Company in connection with investigating
or defending any such action or claim as such expenses are incurred. As used in this Agreement with respect to an Underwriter and an applicable
document, "Underwriter Information" shall mean the written information furnished to the Company by or on behalf of such Underwriter
through the Representatives expressly for use therein; it being understood and agreed upon that the only such information furnished by
any Underwriter consists of the following information in the Prospectus furnished on behalf of each Underwriter: the information contained
in the first, second, seventh and eleventh paragraphs under the caption "Underwriting".
(c) Promptly
after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; provided that the failure to notify the indemnifying party shall not relieve it from any
liability that it may have under the preceding paragraphs of this Section 9 except to the extent that it has been materially prejudiced
(through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying
party shall not relieve it from any liability that it may have to an indemnified party otherwise than under the preceding paragraphs of
this Section 9. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise
or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim
and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(d) If
the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the
one hand or the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above
in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.
(e) The
obligations of the Company under this Section 9 shall be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each employee, officer and director of each Underwriter and each person, if any, who controls
any Underwriter within the meaning of the Act and each broker-dealer or other affiliate of any Underwriter; and the obligations of the
Underwriters under this Section 9 shall be in addition to any liability which the respective Underwriters may otherwise have and
shall extend, upon the same terms and conditions, to each officer and director of the Company including any person who, with his or her
consent, is named in the Registration Statement as about to become a director of the Company and to each person, if any, who controls
the Company within the meaning of the Act.
10. (a) If
any Underwriter shall default in its obligation to purchase the Shares which it has agreed to purchase hereunder at a Time of Delivery,
you may in your discretion arrange for you or another party or other parties to purchase such Shares on the terms contained herein. If
within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Shares, then the Company shall
be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase
such Shares on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Shares, or the Company notifies you that it has so arranged for the purchase of such Shares, you or the Company
shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in your opinion may thereby
be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to this Agreement with respect to such Shares.
(b) If,
after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of Delivery, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the number of Shares which such Underwriter agreed to purchase hereunder at such Time of Delivery
and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have
not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
(c) If,
after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased exceeds one-eleventh of the aggregate
number of all the Shares to be purchased at such Time of Delivery, or if the Company shall not exercise the right described in subsection
(b) above to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the Underwriters to purchase and of the Company to sell the Optional
Shares) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses
to be borne by the Company and the Underwriters as provided in Section 7 hereof and the indemnity and contribution agreements in
Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
11. The
respective indemnities, agreements, representations, warranties and other statements of the Company and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery
of and payment for the Shares.
12. If
this Agreement shall be terminated pursuant to Section 10 hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 7 and 9 hereof; but, if for any other reason, any Shares are not delivered by or on behalf of the
Company as provided herein or the Underwriters decline to purchase the Shares for any reason permitted under this Agreement, the Company
will reimburse the Underwriters through you for all documented out-of-pocket expenses approved in writing by you, including the documented
fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery
of the Shares not so delivered, but the Company shall then be under no further liability to any Underwriter except as provided in Sections
7 and 9 hereof.
13. In
all dealings hereunder, the Representatives shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled
to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you jointly or by Deutsche
Bank Securities Inc. on behalf of you as the Representative.
All statements, requests,
notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile
transmission to you as the representatives in care of Deutsche Bank Securities Inc., 60 Wall Street, New York, New York 10005, Attention:
Equity Capital Markets – Syndicate Desk with a copy to Deutsche Bank Securities Inc., 60 Wall Street, 36th Floor, New York,
New York 10005, Attention: General Counsel, Fax: +1 (646) 374-1071; Goldman Sachs & Co. LLC, 200 West Street, New York, New
York 10282-2198, Attention: Registration Department; in care of Olympia McNerney; and BofA Securities, Inc. One Bryant Park, New York,
NY 10036, Facsimile: (646) 855 3073, Attention: Syndicate Department, with a copy to Facsimile: (212) 230-8730, Attention: ECM Legal;
and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in
the Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 9(c) hereof
shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by you upon request; provided,
however, that notices under subsection 5(e) shall be in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you as the representatives at Deutsche Bank Securities Inc., 60 Wall Street, New York, New York 10005,
Attention: Equity Capital Markets – Syndicate Desk; and if to the other parties to a lock-up letter to the address provided therein.
Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
In accordance with the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the underwriters are required to obtain,
verify and record information that identifies their respective clients, including the Company, which information may include the name
and address of their respective clients, as well as other information that will allow the underwriters to properly identify their respective
clients.
14. This
Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided in Sections
9 and 11 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.
15. Time
shall be of the essence of this Agreement. As used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
16. The
Company acknowledges and agrees that (i) the purchase and sale of the Shares pursuant to this Agreement is an arm's-length commercial
transaction between the Company, on the one hand, and the several Underwriters, on the other, (ii) in connection therewith and with
the process leading to such transaction each Underwriter is acting solely as a principal and not the agent or fiduciary of the Company,
(iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other
matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement and (iv) the Company
has consulted its own legal and financial advisors to the extent it deemed appropriate. The Company agrees that it will not claim that
the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the
Company, in connection with such transaction or the process leading thereto. None of the activities of the Underwriters in connection
with the transactions contemplated herein constitutes a recommendation, investment advice, or solicitation of any action by the Underwriters
with respect to any entity or natural person.
17. This
Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any
of them, with respect to the subject matter hereof.
18. This
Agreement and any transaction contemplated by this Agreement and any claim, controversy or dispute arising under or related thereto shall
be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflict of laws that
would results in the application of any other law than the laws of the State of New York. The Company agrees that any suit or proceeding
arising in respect of this Agreement or any transaction contemplated by this Agreement will be tried exclusively in the U.S. District
Court for the Southern District of New York or, if that court does not have subject matter jurisdiction, in any state court located in
The City and County of New York and the Company agrees to submit to the jurisdiction of, and to venue in, such courts.
19. The
Company and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
20. This
Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be
an original, but all such counterparts shall together constitute one and the same instrument. Delivery of this Agreement by one party
to the other may be made by facsimile, electronic mail (including any electronic signature complying with the New York Electronic Signatures
and Records Act (N.Y. State Tech. §§ 301-309), as amended from time to time, or other applicable law) or other transmission
method, and the parties hereto agree that any counterpart so delivered shall be deemed to have been duly and validly delivered and be
valid and effective for all purposes.
21. Notwithstanding
anything herein to the contrary, the Company is authorized to disclose to any persons the U.S. federal and state income tax treatment
and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided
to the Company relating to that treatment and structure, without the Underwriters imposing any limitation of any kind. However, any information
relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary
to enable any person to comply with securities laws. For this purpose, "tax structure" is limited to any facts that may be relevant
to that treatment.
22. Recognition
of the U.S. Special Resolution Regimes.
(a) In
the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer
from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent
as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were
governed by the laws of the United States or a state of the United States.
(b) In
the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under
a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to
be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement
were governed by the laws of the United States or a state of the United States.
(c) As
used in this section:
"BHC Act Affiliate"
has the meaning assigned to the term "affiliate" in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
"Covered Entity"
means any of the following:
(i) a "covered entity"
as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a "covered
bank" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a "covered
FSI" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
"Default Right"
has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.
"U.S. Special Resolution
Regime" means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II
of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
If the foregoing is in accordance
with your understanding, please sign and return to us one for the Company and the Representatives plus one for each counsel counterparts
hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute
a binding agreement between each of the Underwriters and the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company for examination upon request, but without warranty on your part as to the authority of the signers thereof.
[Signature Page Follows]
| |
Very truly yours, |
| |
|
| |
Fifth Wall Acquisition Corp. III |
| |
|
Accepted as of the date hereof:
Deutsche Bank Securities Inc.
Goldman Sachs & Co. LLC
BofA Securities, Inc.
On behalf of each
of the Underwriters
SCHEDULE I
| |
| | | |
| | |
| | |
| | | |
| Number of
Optional | |
| | |
| | | |
| Shares to be | |
| | |
| | | |
| Purchased if | |
| | |
| Total Number of | | |
| Maximum | |
| | |
| Firm Shares | | |
| Option | |
| Underwriter | |
| to
be Purchased | | |
| Exercised | |
| Deutsche Bank Securities Inc. | |
| | | |
| | |
| Goldman Sachs & Co. LLC | |
| | | |
| | |
| BofA Securities, Inc. | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| Total | |
| 25,000,000 | | |
| 3,750,000 | |
SCHEDULE II
(a) Issuer Free Writing Prospectuses not included in the Pricing
Disclosure Package:
None
(b) Additional Documents Incorporated by Reference:
None
(c) Information other than the Pricing Prospectus that comprise
the Pricing Disclosure Package:
The initial public offering price per Share is
$10.00.
The number of Shares purchased by the Underwriters
is 25,000,000.
(d) Written
Testing-the-Waters Communication:
None.
| THE COMPANIES ACT (AS REVISED)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
MEMORANDUM AND ARTICLES OF ASSOCIATION
OF
Fifth Wall Acquisition Corp. III
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: A32439966477
www.verify.gov.ky |
| BVC/784229-000001/65594541v1
THE COMPANIES ACT (AS REVISED)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
OF
Fifth Wall Acquisition Corp. III
1 The name of the Company is Fifth Wall Acquisition Corp. III.
2 The Registered Office of the Company shall be at the offices of Maples Corporate Services
Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such
other place within the Cayman Islands as the Directors may decide.
3 The objects for which the Company is established are unrestricted and the Company shall have
full power and authority to carry out any object not prohibited by the laws of the Cayman Islands.
4 The liability of each Member is limited to the amount unpaid on such Member's shares.
5 The share capital of the Company is US$22,100 divided into 200,000,000 Class A ordinary
shares of a par value of US$0.0001 each, 20,000,000 Class B ordinary shares of a par value of
US$0.0001 each and 1,000,000 preference shares of a par value of US$0.0001 each.
6 The Company has power to register by way of continuation as a body corporate limited by shares
under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the
Cayman Islands.
7 Capitalised terms that are not defined in this Memorandum of Association bear the respective
meanings given to them in the Articles of Association of the Company.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: A32439966477
www.verify.gov.ky |
| BVC/784229-000001/65594541v1
2
We, the subscriber to this Memorandum of Association, wish to form a company pursuant to this
Memorandum of Association, and we agree to take the number of shares shown opposite our name.
Dated this 19th day of February 2021.
Signature and Address of Subscriber Number of Shares Taken
Maples Corporate Services Limited
of PO Box 309, Ugland House
Grand Cayman
KY1-1104
Cayman Islands
acting by:
_______________________________
Allema Ramoon
_______________________________
Kameal Seymour
Witness to the above signature
One Class B ordinary share
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: A32439966477
www.verify.gov.ky |
| BVC/784229-000001/65594541v1
THE COMPANIES ACT (AS REVISED)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
Fifth Wall Acquisition Corp. III
1 Interpretation
1.1 In the Articles Table A in the First Schedule to the Statute does not apply and, unless there is
something in the subject or context inconsistent therewith:
"Articles" means these articles of association of the Company.
"Auditor" means the person for the time being performing the duties of auditor
of the Company (if any).
"Business Combination" means a merger, amalgamation, share exchange, asset acquisition,
share purchase, reorganisation or similar business combination
involving the Company, with one or more businesses or entities (the
"target business"), which Business Combination: (a) must occur
with one or more target businesses that together have an aggregate
fair market value of at least 80 per cent of the assets held in the
Trust Account (excluding the deferred underwriting commissions and
taxes payable on the income earned on the Trust Account) at the
time of the agreement to enter into such Business Combination; and
(b) must not be effectuated with another blank cheque company or a
similar company with nominal operations.
"Class A Share" means a Class A ordinary share of a par value of US$0.0001 in the
share capital of the Company.
"Class B Share" means a Class B ordinary share of a par value of US$0.0001 in the
share capital of the Company.
"Company" means the above named company.
"Directors" means the directors for the time being of the Company.
"Dividend" means any dividend (whether interim or final) resolved to be paid on
Shares pursuant to the Articles.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
www.verify.gov.ky
CI$50.00
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"E lectronic Record" has the same meaning as in the Electronic Transactions Act.
"Electronic
Transactions Act"
means the Electronic Transactions Act (As Revised) of the Cayman
Islands.
"Equity-linked
Securities"
means any debt or equity securities that are convertible, exercisable
or exchangeable for Class A Shares issued in a financing transaction
in connection with a Business Combination, including but not limited
to a private placement of equity or debt.
"IPO" means the Company's initial public offering of securities.
"Member" has the same meaning as in the Statute.
"Memorandum" means the memorandum of association of the Company.
"Ordinary Resolution" means a resolution passed by a simple majority of the Members as,
being entitled to do so, vote in person or, where proxies are allowed,
by proxy at a general meeting, and includes a unanimous written
resolution. In computing the majority when a poll is demanded regard
shall be had to the number of votes to which each Member is entitled
by the Articles.
"Preference Share" means a preference share of a par value of US$0.0001 in the share
capital of the Company.
"Register of Members" means the register of Members maintained in accordance with the
Statute and includes (except where otherwise stated) any branch or
duplicate register of Members.
"Registered Office" means the registered office for the time being of the Company.
"Seal" means the common seal of the Company and includes every
duplicate seal.
"Share" means a Class A Share, a Class B Share or a Preference Share and
includes a fraction of a share in the Company.
"Special Resolution" has the same meaning as in the Statute, and includes a unanimous
written resolution.
"Statute" means the Companies Act (As Revised) of the Cayman Islands.
"Subscriber" means the subscriber to the Memorandum.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
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"Treasury Share" means a Share held in the name of the Company as a treasury share
in accordance with the Statute.
"Trust Account" means the trust account established by the Company upon the
consummation of its IPO and into which a certain amount of the net
proceeds of the IPO, together with a certain amount of the proceeds
of a private placement of warrants simultaneously with the closing
date of the IPO, will be deposited.
1.2 In the Articles:
(a) words importing the singular number include the plural number and vice versa;
(b) words importing the masculine gender include the feminine gender;
(c) words importing persons include corporations as well as any other legal or natural person;
(d) "written" and "in writing" include all modes of representing or reproducing words in visible
form, including in the form of an Electronic Record;
(e) "shall" shall be construed as imperative and "may" shall be construed as permissive;
(f) references to provisions of any law or regulation shall be construed as references to
those provisions as amended, modified, re-enacted or replaced;
(g) any phrase introduced by the terms "including", "include", "in particular" or any similar
expression shall be construed as illustrative and shall not limit the sense of the words
preceding those terms;
(h) the term "and/or" is used herein to mean both "and" as well as "or." The use of "and/or" in
certain contexts in no respects qualifies or modifies the use of the terms "and" or "or" in
others. The term "or" shall not be interpreted to be exclusive and the term "and" shall not
be interpreted to require the conjunctive (in each case, unless the context otherwise
requires);
(i) headings are inserted for reference only and shall be ignored in construing the Articles;
(j) any requirements as to delivery under the Articles include delivery in the form of an
Electronic Record;
(k) any requirements as to execution or signature under the Articles including the execution
of the Articles themselves can be satisfied in the form of an electronic signature as
defined in the Electronic Transactions Act;
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
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(l) sections 8 and 19(3) of the Electronic Transactions Act shall not apply;
(m) the term "clear days" in relation to the period of a notice means that period excluding the
day when the notice is received or deemed to be received and the day for which it is
given or on which it is to take effect; and
(n) the term "holder" in relation to a Share means a person whose name is entered in the
Register of Members as the holder of such Share.
2 Commencement of Business
2.1 The business of the Company may be commenced as soon after incorporation of the Company
as the Directors shall see fit.
2.2 The Directors may pay, out of the capital or any other monies of the Company, all expenses
incurred in or about the formation and establishment of the Company, including the expenses of
registration.
3 Issue of Shares and other Securities
3.1 Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by
the Company in general meeting) and without prejudice to any rights attached to any existing
Shares, the Directors may allot, issue, grant options over or otherwise dispose of Shares
(including fractions of a Share) with or without preferred, deferred or other rights or restrictions,
whether in regard to Dividend or other distribution, voting, return of capital or otherwise and to
such persons, at such times and on such other terms as they think proper, and may also (subject
to the Statute and the Articles) vary such rights, save that the Directors shall not allot, issue, grant
options over or otherwise dispose of Shares (including fractions of a Share) to the extent that it
may affect the ability of the Company to carry out a Class B Share Conversion set out in the
Articles.
3.2 The Company may issue rights, options, warrants or convertible securities or securities of similar
nature conferring the right upon the holders thereof to subscribe for, purchase or receive any
class of Shares or other securities in the Company on such terms as the Directors may from time
to time determine.
3.3 The Company may issue units of securities in the Company, which may be comprised of whole or
fractional Shares, rights, options, warrants or convertible securities or securities of similar nature
conferring the right upon the holders thereof to subscribe for, purchase or receive any class of
Shares or other securities in the Company, upon such terms as the Directors may from time to
time determine.
3.4 The Company shall not issue Shares to bearer.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
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4 Register of Members
4.1 The Company shall maintain or cause to be maintained the Register of Members in accordance
with the Statute.
4.2 The Directors may determine that the Company shall maintain one or more branch registers of
Members in accordance with the Statute. The Directors may also determine which register of
Members shall constitute the principal register and which shall constitute the branch register or
registers, and to vary such determination from time to time.
5 Closing Register of Members or Fixing Record Date
5.1 For the purpose of determining Members entitled to notice of, or to vote at any meeting of
Members or any adjournment thereof, or Members entitled to receive payment of any Dividend or
other distribution, or in order to make a determination of Members for any other purpose, the
Directors may provide that the Register of Members shall be closed for transfers for a stated
period which shall not in any case exceed forty days.
5.2 In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or
arrears a date as the record date for any such determination of Members entitled to notice of, or
to vote at any meeting of the Members or any adjournment thereof, or for the purpose of
determining the Members entitled to receive payment of any Dividend or other distribution, or in
order to make a determination of Members for any other purpose.
5.3 If the Register of Members is not so closed and no record date is fixed for the determination of
Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive
payment of a Dividend or other distribution, the date on which notice of the meeting is sent or the
date on which the resolution of the Directors resolving to pay such Dividend or other distribution is
passed, as the case may be, shall be the record date for such determination of Members. When
a determination of Members entitled to vote at any meeting of Members has been made as
provided in this Article, such determination shall apply to any adjournment thereof.
6 Certificates for Shares
6.1 A Member shall only be entitled to a share certificate if the Directors resolve that share
certificates shall be issued. Share certificates representing Shares, if any, shall be in such form
as the Directors may determine. Share certificates shall be signed by one or more Directors or
other person authorised by the Directors. The Directors may authorise certificates to be issued
with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall
be consecutively numbered or otherwise identified and shall specify the Shares to which they
relate. All certificates surrendered to the Company for transfer shall be cancelled and subject to
the Articles no new certificate shall be issued until the former certificate representing a like
number of relevant Shares shall have been surrendered and cancelled.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
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6.2 The Company shall not be bound to issue more than one certificate for Shares held jointly by
more than one person and delivery of a certificate to one joint holder shall be a sufficient delivery
to all of them.
6.3 If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if
any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by
the Company in investigating evidence, as the Directors may prescribe, and (in the case of
defacement or wearing out) upon delivery of the old certificate.
6.4 Every share certificate sent in accordance with the Articles will be sent at the risk of the Member
or other person entitled to the certificate. The Company will not be responsible for any share
certificate lost or delayed in the course of delivery.
7 Transfer of Shares
7.1 Subject to Article 3.1, Shares are transferable subject to the approval of the Directors by
resolution who may, in their absolute discretion, decline to register any transfer of Shares without
giving any reason. If the Directors refuse to register a transfer they shall notify the transferee
within two months of such refusal.
7.2 The instrument of transfer of any Share shall be in writing and shall be executed by or on behalf
of the transferor (and if the Directors so require, signed by or on behalf of the transferee). The
transferor shall be deemed to remain the holder of a Share until the name of the transferee is
entered in the Register of Members.
8 Redemption, Repurchase and Surrender of Shares
8.1 Subject to the provisions of the Statute the Company may issue Shares that are to be redeemed
or are liable to be redeemed at the option of the Member or the Company. The redemption of
such Shares shall be effected in such manner and upon such other terms as the Company may,
by Special Resolution, determine before the issue of the Shares.
8.2 Subject to the provisions of the Statute, the Company may purchase its own Shares (including
any redeemable Shares) in such manner and on such other terms as the Directors may agree
with the relevant Member.
8.3 The Company may make a payment in respect of the redemption or purchase of its own Shares
in any manner permitted by the Statute, including out of capital.
8.4 The Directors may accept the surrender for no consideration of any fully paid Share.
9 Treasury Shares
9.1 The Directors may, prior to the purchase, redemption or surrender of any Share, determine that
such Share shall be held as a Treasury Share.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
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9.2 The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such
terms as they think proper (including, without limitation, for nil consideration).
10 Variation of Rights of Shares
10.1 If at any time the share capital of the Company is divided into different classes of Shares, all or
any of the rights attached to any class (unless otherwise provided by the terms of issue of the
Shares of that class) may, whether or not the Company is being wound up, be varied without the
consent of the holders of the issued Shares of that class where such variation is considered by
the Directors not to have a material adverse effect upon such rights; otherwise, any such variation
shall be made only with the consent in writing of the holders of not less than two thirds of the
issued Shares of that class, or with the approval of a resolution passed by a majority of not less
than two thirds of the votes cast at a separate meeting of the holders of the Shares of that class.
For the avoidance of doubt, the Directors reserve the right, notwithstanding that any such
variation may not have a material adverse effect, to obtain consent from the holders of Shares of
the relevant class. To any such meeting all the provisions of the Articles relating to general
meetings shall apply mutatis mutandis, except that the necessary quorum shall be one person
holding or representing by proxy at least one third of the issued Shares of the class and that any
holder of Shares of the class present in person or by proxy may demand a poll.
10.2 For the purposes of a separate class meeting, the Directors may treat two or more or all the
classes of Shares as forming one class of Shares if the Directors consider that such class of
Shares would be affected in the same way by the proposals under consideration, but in any other
case shall treat them as separate classes of Shares.
10.3 The rights conferred upon the holders of the Shares of any class issued with preferred or other
rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that
class, be deemed to be varied by the creation or issue of further Shares ranking pari passu
therewith.
11 Commission on Sale of Shares
The Company may, in so far as the Statute permits, pay a commission to any person in
consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally) or
procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any
Shares. Such commissions may be satisfied by the payment of cash and/or the issue of fully or
partly paid-up Shares. The Company may also on any issue of Shares pay such brokerage as
may be lawful.
12 Non Recognition of Trusts
The Company shall not be bound by or compelled to recognise in any way (even when notified)
any equitable, contingent, future or partial interest in any Share, or (except only as is otherwise
provided by the Articles or the Statute) any other rights in respect of any Share other than an
absolute right to the entirety thereof in the holder.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
www.verify.gov.ky |
| BVC/784229-000001/65594541v1
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13 Lien on Shares
13.1 The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not)
registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities
or engagements to or with the Company (whether presently payable or not) by such Member or
his estate, either alone or jointly with any other person, whether a Member or not, but the
Directors may at any time declare any Share to be wholly or in part exempt from the provisions of
this Article. The registration of a transfer of any such Share shall operate as a waiver of the
Company's lien thereon. The Company's lien on a Share shall also extend to any amount
payable in respect of that Share.
13.2 The Company may sell, in such manner as the Directors think fit, any Shares on which the
Company has a lien, if a sum in respect of which the lien exists is presently payable, and is not
paid within fourteen clear days after notice has been received or deemed to have been received
by the holder of the Shares, or to the person entitled to it in consequence of the death or
bankruptcy of the holder, demanding payment and stating that if the notice is not complied with
the Shares may be sold.
13.3 To give effect to any such sale the Directors may authorise any person to execute an instrument
of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The
purchaser or his nominee shall be registered as the holder of the Shares comprised in any such
transfer, and he shall not be bound to see to the application of the purchase money, nor shall his
title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of the
Company's power of sale under the Articles.
13.4 The net proceeds of such sale after payment of costs, shall be applied in payment of such part of
the amount in respect of which the lien exists as is presently payable and any balance shall
(subject to a like lien for sums not presently payable as existed upon the Shares before the sale)
be paid to the person entitled to the Shares at the date of the sale.
14 Call on Shares
14.1 Subject to the terms of the allotment and issue of any Shares, the Directors may make calls upon
the Members in respect of any monies unpaid on their Shares (whether in respect of par value or
premium), and each Member shall (subject to receiving at least fourteen clear days' notice
specifying the time or times of payment) pay to the Company at the time or times so specified the
amount called on the Shares. A call may be revoked or postponed, in whole or in part, as the
Directors may determine. A call may be required to be paid by instalments. A person upon
whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent
transfer of the Shares in respect of which the call was made.
14.2 A call shall be deemed to have been made at the time when the resolution of the Directors
authorising such call was passed.
14.3 The joint holders of a Share shall be jointly and severally liable to pay all calls in respect thereof.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
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14.4 If a call remains unpaid after it has become due and payable, the person from whom it is due
shall pay interest on the amount unpaid from the day it became due and payable until it is paid at
such rate as the Directors may determine (and in addition all expenses that have been incurred
by the Company by reason of such non-payment), but the Directors may waive payment of the
interest or expenses wholly or in part.
14.5 An amount payable in respect of a Share on issue or allotment or at any fixed date, whether on
account of the par value of the Share or premium or otherwise, shall be deemed to be a call and
if it is not paid all the provisions of the Articles shall apply as if that amount had become due and
payable by virtue of a call.
14.6 The Directors may issue Shares with different terms as to the amount and times of payment of
calls, or the interest to be paid.
14.7 The Directors may, if they think fit, receive an amount from any Member willing to advance all or
any part of the monies uncalled and unpaid upon any Shares held by him, and may (until the
amount would otherwise become payable) pay interest at such rate as may be agreed upon
between the Directors and the Member paying such amount in advance.
14.8 No such amount paid in advance of calls shall entitle the Member paying such amount to any
portion of a Dividend or other distribution payable in respect of any period prior to the date upon
which such amount would, but for such payment, become payable.
15 Forfeiture of Shares
15.1 If a call or instalment of a call remains unpaid after it has become due and payable the Directors
may give to the person from whom it is due not less than fourteen clear days' notice requiring
payment of the amount unpaid together with any interest which may have accrued and any
expenses incurred by the Company by reason of such non-payment. The notice shall specify
where payment is to be made and shall state that if the notice is not complied with the Shares in
respect of which the call was made will be liable to be forfeited.
15.2 If the notice is not complied with, any Share in respect of which it was given may, before the
payment required by the notice has been made, be forfeited by a resolution of the Directors.
Such forfeiture shall include all Dividends, other distributions or other monies payable in respect
of the forfeited Share and not paid before the forfeiture.
15.3 A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such
manner as the Directors think fit and at any time before a sale, re-allotment or disposition the
forfeiture may be cancelled on such terms as the Directors think fit. Where for the purposes of its
disposal a forfeited Share is to be transferred to any person the Directors may authorise some
person to execute an instrument of transfer of the Share in favour of that person.
15.4 A person any of whose Shares have been forfeited shall cease to be a Member in respect of
them and shall surrender to the Company for cancellation the certificate for the Shares forfeited
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
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and shall remain liable to pay to the Company all monies which at the date of forfeiture were
payable by him to the Company in respect of those Shares together with interest at such rate as
the Directors may determine, but his liability shall cease if and when the Company shall have
received payment in full of all monies due and payable by him in respect of those Shares.
15.5 A certificate in writing under the hand of one Director or officer of the Company that a Share has
been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against
all persons claiming to be entitled to the Share. The certificate shall (subject to the execution of
an instrument of transfer) constitute a good title to the Share and the person to whom the Share
is sold or otherwise disposed of shall not be bound to see to the application of the purchase
money, if any, nor shall his title to the Share be affected by any irregularity or invalidity in the
proceedings in reference to the forfeiture, sale or disposal of the Share.
15.6 The provisions of the Articles as to forfeiture shall apply in the case of non payment of any sum
which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of
the par value of the Share or by way of premium as if it had been payable by virtue of a call duly
made and notified.
16 Transmission of Shares
16.1 If a Member dies the survivor or survivors (where he was a joint holder) or his legal personal
representatives (where he was a sole holder), shall be the only persons recognised by the
Company as having any title to his Shares. The estate of a deceased Member is not thereby
released from any liability in respect of any Share, for which he was a joint or sole holder.
16.2 Any person becoming entitled to a Share in consequence of the death or bankruptcy or
liquidation or dissolution of a Member (or in any other way than by transfer) may, upon such
evidence being produced as may be required by the Directors, elect, by a notice in writing sent by
him to the Company, either to become the holder of such Share or to have some person
nominated by him registered as the holder of such Share. If he elects to have another person
registered as the holder of such Share he shall sign an instrument of transfer of that Share to that
person. The Directors shall, in either case, have the same right to decline or suspend registration
as they would have had in the case of a transfer of the Share by the relevant Member before his
death or bankruptcy or liquidation or dissolution, as the case may be.
16.3 A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or
dissolution of a Member (or in any other case than by transfer) shall be entitled to the same
Dividends, other distributions and other advantages to which he would be entitled if he were the
holder of such Share. However, he shall not, before becoming a Member in respect of a Share,
be entitled in respect of it to exercise any right conferred by membership in relation to general
meetings of the Company and the Directors may at any time give notice requiring any such
person to elect either to be registered himself or to have some person nominated by him be
registered as the holder of the Share (but the Directors shall, in either case, have the same right
to decline or suspend registration as they would have had in the case of a transfer of the Share
by the relevant Member before his death or bankruptcy or liquidation or dissolution or any other
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
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case than by transfer, as the case may be). If the notice is not complied with within ninety days of
being received or deemed to be received (as determined pursuant to the Articles) the Directors
may thereafter withhold payment of all Dividends, other distributions, bonuses or other monies
payable in respect of the Share until the requirements of the notice have been complied with.
17 Class B Ordinary Share Conversion
17.1 The rights attaching to the Class A Shares and Class B Shares shall rank pari passu in all
respects, and the Class A Shares and Class B Shares shall vote together as a single class on all
matters (subject to the Variation of Rights of Shares Article) with the exception that the holder of a
Class B Share shall have the conversion rights referred to in this Article.
17.2 Class B Shares shall automatically convert into Class A Shares on a one-for-one basis (the
"Initial Conversion Ratio"): (a) at any time and from time to time at the option of the holders
thereof; and (b) automatically on the day of the closing of a Business Combination.
17.3 Notwithstanding the Initial Conversion Ratio, in the case that additional Class A Shares or any
other Equity-linked Securities, are issued, or deemed issued, by the Company in excess of the
amounts offered in the IPO and related to the closing of a Business Combination, all Class B
Shares in issue shall automatically convert into Class A Shares at the time of the closing of a
Business Combination at a ratio for which the Class B Shares shall convert into Class A Shares
will be adjusted (unless the holders of a majority of the Class B Shares in issue agree to waive
such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the
number of Class A Shares issuable upon conversion of all Class B Shares will equal, on an as-
converted basis, in the aggregate, 20 per cent of the sum of all Class A Shares and Class B
Shares in issue upon completion of the IPO plus all Class A Shares and Equity-linked Securities
issued or deemed issued in connection with a Business Combination, excluding any Shares or
Equity-linked Securities issued, or to be issued, to any seller in a Business Combination and any
private placement warrants issued to the Sponsor or its Affiliates upon conversion of working
capital loans made to the Company.
17.4 Notwithstanding anything to the contrary contained herein, the foregoing adjustment to the Initial
Conversion Ratio may be waived as to any particular issuance or deemed issuance of additional
Class A Shares or Equity-linked Securities by the written consent or agreement of holders of a
majority of the Class B Shares then in issue consenting or agreeing separately as a separate
class in the manner provided in the Variation of Rights of Shares Article hereof.
17.5 The foregoing conversion ratio shall also be adjusted to account for any subdivision (by share
subdivision, exchange, capitalisation, rights issue, reclassification, recapitalisation or otherwise)
or combination (by share consolidation, exchange, reclassification, recapitalisation or otherwise)
or similar reclassification or recapitalisation of the Class A Shares in issue into a greater or lesser
number of shares occurring after the original filing of the Articles without a proportionate and
corresponding subdivision, combination or similar reclassification or recapitalisation of the Class
B Shares in issue.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
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17.6 Each Class B Share shall convert into its pro rata number of Class A Shares pursuant to this
Article. The pro rata share for each holder of Class B Shares will be determined as follows: each
Class B Share shall convert into such number of Class A Shares as is equal to the product of 1
multiplied by a fraction, the numerator of which shall be the total number of Class A Shares into
which all of the Class B Shares in issue shall be converted pursuant to this Article and the
denominator of which shall be the total number of Class B Shares in issue at the time of
conversion.
17.7 References in this Article to "converted", "conversion" or "exchange" shall mean the
compulsory redemption without notice of Class B Shares of any Member and, on behalf of such
Members, automatic application of such redemption proceeds in paying for such new Class A
Shares into which the Class B Shares have been converted or exchanged at a price per Class B
Share necessary to give effect to a conversion or exchange calculated on the basis that the Class
A Shares to be issued as part of the conversion or exchange will be issued at par. The Class A
Shares to be issued on an exchange or conversion shall be registered in the name of such
Member or in such name as the Member may direct.
17.8 Notwithstanding anything to the contrary in this Article, in no event may any Class B Share
convert into Class A Shares at a ratio that is less than one-for-one.
18 Amendments of Memorandum and Articles of Association and Alteration of Capital
18.1 The Company may by Ordinary Resolution:
(a) increase its share capital by such sum as the Ordinary Resolution shall prescribe and with
such rights, priorities and privileges annexed thereto, as the Company in general meeting
may determine;
(b) consolidate and divide all or any of its share capital into Shares of larger amount than its
existing Shares;
(c) convert all or any of its paid-up Shares into stock, and reconvert that stock into paid-up
Shares of any denomination;
(d) by subdivision of its existing Shares or any of them divide the whole or any part of its
share capital into Shares of smaller amount than is fixed by the Memorandum or into
Shares without par value; and
(e) cancel any Shares that at the date of the passing of the Ordinary Resolution have not
been taken or agreed to be taken by any person and diminish the amount of its share
capital by the amount of the Shares so cancelled.
18.2 All new Shares created in accordance with the provisions of the preceding Article shall be subject
to the same provisions of the Articles with reference to the payment of calls, liens, transfer,
transmission, forfeiture and otherwise as the Shares in the original share capital.
EXEMPTED Company Registered and
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18.3 Subject to the provisions of the Statute and the provisions of the Articles as regards the matters
to be dealt with by Ordinary Resolution, the Company may by Special Resolution:
(a) change its name;
(b) alter or add to the Articles;
(c) alter or add to the Memorandum with respect to any objects, powers or other matters
specified therein; and
(d) reduce its share capital or any capital redemption reserve fund.
19 Offices and Places of Business
Subject to the provisions of the Statute, the Company may by resolution of the Directors change
the location of its Registered Office. The Company may, in addition to its Registered Office,
maintain such other offices or places of business as the Directors determine.
20 General Meetings
20.1 All general meetings other than annual general meetings shall be called extraordinary general
meetings.
20.2 The Company may, but shall not (unless required by the Statute) be obliged to, in each year hold
a general meeting as its annual general meeting, and shall specify the meeting as such in the
notices calling it. Any annual general meeting shall be held at such time and place as the
Directors shall appoint and if no other time and place is prescribed by them, it shall be held at the
Registered Office on the second Wednesday in December of each year at ten o'clock in the
morning. At these meetings the report of the Directors (if any) shall be presented.
20.3 The Directors may call general meetings, and they shall on a Members' requisition forthwith
proceed to convene an extraordinary general meeting of the Company.
20.4 A Members' requisition is a requisition of Members holding at the date of deposit of the requisition
not less than ten per cent. in par value of the issued Shares which as at that date carry the right
to vote at general meetings of the Company.
20.5 The Members' requisition must state the objects of the meeting and must be signed by the
requisitionists and deposited at the Registered Office, and may consist of several documents in
like form each signed by one or more requisitionists.
20.6 If there are no Directors as at the date of the deposit of the Members' requisition or if the
Directors do not within twenty-one days from the date of the deposit of the Members' requisition
duly proceed to convene a general meeting to be held within a further twenty-one days, the
requisitionists, or any of them representing more than one-half of the total voting rights of all of
the requisitionists, may themselves convene a general meeting, but any meeting so convened
EXEMPTED Company Registered and
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shall be held no later than the day which falls three months after the expiration of the said twenty-
one day period.
20.7 A general meeting convened as aforesaid by requisitionists shall be convened in the same
manner as nearly as possible as that in which general meetings are to be convened by Directors.
21 Notice of General Meetings
21.1 At least five clear days' notice shall be given of any general meeting. Every notice shall specify
the place, the day and the hour of the meeting and the general nature of the business to be
conducted at the general meeting and shall be given in the manner hereinafter mentioned or in
such other manner if any as may be prescribed by the Company, provided that a general meeting
of the Company shall, whether or not the notice specified in this Article has been given and
whether or not the provisions of the Articles regarding general meetings have been complied
with, be deemed to have been duly convened if it is so agreed:
(a) in the case of an annual general meeting, by all of the Members entitled to attend and
vote thereat; and
(b) in the case of an extraordinary general meeting, by a majority in number of the Members
having a right to attend and vote at the meeting, together holding not less than ninety five
per cent. in par value of the Shares giving that right.
21.2 The accidental omission to give notice of a general meeting to, or the non receipt of notice of a
general meeting by, any person entitled to receive such notice shall not invalidate the
proceedings of that general meeting.
22 Proceedings at General Meetings
22.1 No business shall be transacted at any general meeting unless a quorum is present. Two
Members being individuals present in person or by proxy or if a corporation or other non-natural
person by its duly authorised representative or proxy shall be a quorum unless the Company has
only one Member entitled to vote at such general meeting in which case the quorum shall be that
one Member present in person or by proxy or (in the case of a corporation or other non-natural
person) by its duly authorised representative or proxy.
22.2 A person may participate at a general meeting by conference telephone or other communications
equipment by means of which all the persons participating in the meeting can communicate with
each other. Participation by a person in a general meeting in this manner is treated as presence
in person at that meeting.
22.3 A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by or
on behalf of all of the Members for the time being entitled to receive notice of and to attend and
vote at general meetings (or, being corporations or other non-natural persons, signed by their
EXEMPTED Company Registered and
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duly authorised representatives) shall be as valid and effective as if the resolution had been
passed at a general meeting of the Company duly convened and held.
22.4 If a quorum is not present within half an hour from the time appointed for the meeting to
commence or if during such a meeting a quorum ceases to be present, the meeting, if convened
upon a Members' requisition, shall be dissolved and in any other case it shall stand adjourned to
the same day in the next week at the same time and/or place or to such other day, time and/or
place as the Directors may determine, and if at the adjourned meeting a quorum is not present
within half an hour from the time appointed for the meeting to commence, the Members present
shall be a quorum.
22.5 The Directors may, at any time prior to the time appointed for the meeting to commence, appoint
any person to act as chairman of a general meeting of the Company or, if the Directors do not
make any such appointment, the chairman, if any, of the board of Directors shall preside as
chairman at such general meeting. If there is no such chairman, or if he shall not be present
within fifteen minutes after the time appointed for the meeting to commence, or is unwilling to act,
the Directors present shall elect one of their number to be chairman of the meeting.
22.6 If no Director is willing to act as chairman or if no Director is present within fifteen minutes after
the time appointed for the meeting to commence, the Members present shall choose one of their
number to be chairman of the meeting.
22.7 The chairman may, with the consent of a meeting at which a quorum is present (and shall if so
directed by the meeting) adjourn the meeting from time to time and from place to place, but no
business shall be transacted at any adjourned meeting other than the business left unfinished at
the meeting from which the adjournment took place.
22.8 When a general meeting is adjourned for thirty days or more, notice of the adjourned meeting
shall be given as in the case of an original meeting. Otherwise it shall not be necessary to give
any such notice of an adjourned meeting.
22.9 A resolution put to the vote of the meeting shall be decided on a show of hands unless before, or
on the declaration of the result of, the show of hands, the chairman demands a poll, or any other
Member or Members collectively present in person or by proxy (or in the case of a corporation or
other non-natural person, by its duly authorised representative or proxy) and holding at least ten
per cent. in par value of the Shares giving a right to attend and vote at the meeting demand a
poll.
22.10 Unless a poll is duly demanded and the demand is not withdrawn a declaration by the chairman
that a resolution has been carried or carried unanimously, or by a particular majority, or lost or not
carried by a particular majority, an entry to that effect in the minutes of the proceedings of the
meeting shall be conclusive evidence of that fact without proof of the number or proportion of the
votes recorded in favour of or against such resolution.
22.11 The demand for a poll may be withdrawn.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
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22.12 Except on a poll demanded on the election of a chairman or on a question of adjournment, a poll
shall be taken as the chairman directs, and the result of the poll shall be deemed to be the
resolution of the general meeting at which the poll was demanded.
22.13 A poll demanded on the election of a chairman or on a question of adjournment shall be taken
forthwith. A poll demanded on any other question shall be taken at such date, time and place as
the chairman of the general meeting directs, and any business other than that upon which a poll
has been demanded or is contingent thereon may proceed pending the taking of the poll.
22.14 In the case of an equality of votes, whether on a show of hands or on a poll, the chairman shall
be entitled to a second or casting vote.
23 Votes of Members
23.1 Subject to any rights or restrictions attached to any Shares, on a show of hands every Member
who (being an individual) is present in person or by proxy or, if a corporation or other non-natural
person is present by its duly authorised representative or by proxy, shall have one vote and on a
poll every Member present in any such manner shall have one vote for every Share of which he is
the holder.
23.2 In the case of joint holders the vote of the senior holder who tenders a vote, whether in person or
by proxy (or, in the case of a corporation or other non-natural person, by its duly authorised
representative or proxy), shall be accepted to the exclusion of the votes of the other joint holders,
and seniority shall be determined by the order in which the names of the holders stand in the
Register of Members.
23.3 A Member of unsound mind, or in respect of whom an order has been made by any court, having
jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee,
receiver, curator bonis, or other person on such Member's behalf appointed by that court, and
any such committee, receiver, curator bonis or other person may vote by proxy.
23.4 No person shall be entitled to vote at any general meeting unless he is registered as a Member
on the record date for such meeting nor unless all calls or other monies then payable by him in
respect of Shares have been paid.
23.5 No objection shall be raised as to the qualification of any voter except at the general meeting or
adjourned general meeting at which the vote objected to is given or tendered and every vote not
disallowed at the meeting shall be valid. Any objection made in due time in accordance with this
Article shall be referred to the chairman whose decision shall be final and conclusive.
23.6 On a poll or on a show of hands votes may be cast either personally or by proxy (or in the case of
a corporation or other non-natural person by its duly authorised representative or proxy). A
Member may appoint more than one proxy or the same proxy under one or more instruments to
attend and vote at a meeting. Where a Member appoints more than one proxy the instrument of
EXEMPTED Company Registered and
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proxy shall state which proxy is entitled to vote on a show of hands and shall specify the number
of Shares in respect of which each proxy is entitled to exercise the related votes.
23.7 On a poll, a Member holding more than one Share need not cast the votes in respect of his
Shares in the same way on any resolution and therefore may vote a Share or some or all such
Shares either for or against a resolution and/or abstain from voting a Share or some or all of the
Shares and, subject to the terms of the instrument appointing him, a proxy appointed under one
or more instruments may vote a Share or some or all of the Shares in respect of which he is
appointed either for or against a resolution and/or abstain from voting a Share or some or all of
the Shares in respect of which he is appointed.
24 Proxies
24.1 The instrument appointing a proxy shall be in writing and shall be executed under the hand of the
appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation or other
non natural person, under the hand of its duly authorised representative. A proxy need not be a
Member.
24.2 The Directors may, in the notice convening any meeting or adjourned meeting, or in an
instrument of proxy sent out by the Company, specify the manner by which the instrument
appointing a proxy shall be deposited and the place and the time (being not later than the time
appointed for the commencement of the meeting or adjourned meeting to which the proxy
relates) at which the instrument appointing a proxy shall be deposited. In the absence of any
such direction from the Directors in the notice convening any meeting or adjourned meeting or in
an instrument of proxy sent out by the Company, the instrument appointing a proxy shall be
deposited physically at the Registered Office not less than 48 hours before the time appointed for
the meeting or adjourned meeting to commence at which the person named in the instrument
proposes to vote.
24.3 The chairman may in any event at his discretion declare that an instrument of proxy shall be
deemed to have been duly deposited. An instrument of proxy that is not deposited in the manner
permitted, or which has not been declared to have been duly deposited by the chairman, shall be
invalid.
24.4 The instrument appointing a proxy may be in any usual or common form (or such other form as
the Directors may approve) and may be expressed to be for a particular meeting or any
adjournment thereof or generally until revoked. An instrument appointing a proxy shall be
deemed to include the power to demand or join or concur in demanding a poll.
24.5 Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding
the previous death or insanity of the principal or revocation of the proxy or of the authority under
which the proxy was executed, or the transfer of the Share in respect of which the proxy is given
unless notice in writing of such death, insanity, revocation or transfer was received by the
Company at the Registered Office before the commencement of the general meeting, or
adjourned meeting at which it is sought to use the proxy.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
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25 Corporate Members
Any corporation or other non-natural person which is a Member may in accordance with its
constitutional documents, or in the absence of such provision by resolution of its directors or other
governing body, authorise such person as it thinks fit to act as its representative at any meeting of
the Company or of any class of Members, and the person so authorised shall be entitled to
exercise the same powers on behalf of the corporation which he represents as the corporation
could exercise if it were an individual Member.
26 Shares that May Not be Voted
Shares in the Company that are beneficially owned by the Company shall not be voted, directly or
indirectly, at any meeting and shall not be counted in determining the total number of outstanding
Shares at any given time.
27 Directors
There shall be a board of Directors consisting of not less than one person (exclusive of alternate
Directors) provided however that the Company may by Ordinary Resolution increase or reduce
the limits in the number of Directors. The first Directors of the Company shall be determined in
writing by, or appointed by a resolution of, the Subscriber.
28 Powers of Directors
28.1 Subject to the provisions of the Statute, the Memorandum and the Articles and to any directions
given by Special Resolution, the business of the Company shall be managed by the Directors
who may exercise all the powers of the Company. No alteration of the Memorandum or Articles
and no such direction shall invalidate any prior act of the Directors which would have been valid if
that alteration had not been made or that direction had not been given. A duly convened meeting
of Directors at which a quorum is present may exercise all powers exercisable by the Directors.
28.2 All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable
instruments and all receipts for monies paid to the Company shall be signed, drawn, accepted,
endorsed or otherwise executed as the case may be in such manner as the Directors shall
determine by resolution.
28.3 The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement
to any Director who has held any other salaried office or place of profit with the Company or to his
widow or dependants and may make contributions to any fund and pay premiums for the
purchase or provision of any such gratuity, pension or allowance.
28.4 The Directors may exercise all the powers of the Company to borrow money and to mortgage or
charge its undertaking, property and assets (present and future) and uncalled capital or any part
thereof and to issue debentures, debenture stock, mortgages, bonds and other such securities
whether outright or as security for any debt, liability or obligation of the Company or of any third
party.
EXEMPTED Company Registered and
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Assistant Registrar
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29 Appointment and Removal of Directors
29.1 The Company may by Ordinary Resolution appoint any person to be a Director or may by
Ordinary Resolution remove any Director.
29.2 The Directors may appoint any person to be a Director, either to fill a vacancy or as an additional
Director provided that the appointment does not cause the number of Directors to exceed any
number fixed by or in accordance with the Articles as the maximum number of Directors.
30 Vacation of Office of Director
The office of a Director shall be vacated if:
(a) the Director gives notice in writing to the Company that he resigns the office of Director;
or
(b) the Director absents himself (for the avoidance of doubt, without being represented by
proxy or an alternate Director appointed by him) from three consecutive meetings of the
board of Directors without special leave of absence from the Directors, and the Directors
pass a resolution that he has by reason of such absence vacated office; or
(c) the Director dies, becomes bankrupt or makes any arrangement or composition with his
creditors generally; or
(d) the Director is found to be or becomes of unsound mind; or
(e) all of the other Directors (being not less than two in number) determine that he should be
removed as a Director, either by a resolution passed by all of the other Directors at a
meeting of the Directors duly convened and held in accordance with the Articles or by a
resolution in writing signed by all of the other Directors.
31 Proceedings of Directors
31.1 The quorum for the transaction of the business of the Directors may be fixed by the Directors, and
unless so fixed shall be two if there are two or more Directors, and shall be one if there is only
one Director. A person who holds office as an alternate Director shall, if his appointor is not
present, be counted in the quorum. A Director who also acts as an alternate Director shall, if his
appointor is not present, count twice towards the quorum.
31.2 Subject to the provisions of the Articles, the Directors may regulate their proceedings as they
think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of
an equality of votes, the chairman shall have a second or casting vote. A Director who is also an
alternate Director shall be entitled in the absence of his appointor to a separate vote on behalf of
his appointor in addition to his own vote.
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31.3 A person may participate in a meeting of the Directors or any committee of Directors by
conference telephone or other communications equipment by means of which all the persons
participating in the meeting can communicate with each other at the same time. Participation by a
person in a meeting in this manner is treated as presence in person at that meeting. Unless
otherwise determined by the Directors the meeting shall be deemed to be held at the place where
the chairman is located at the start of the meeting.
31.4 A resolution in writing (in one or more counterparts) signed by all the Directors or all the members
of a committee of the Directors or, in the case of a resolution in writing relating to the removal of
any Director or the vacation of office by any Director, all of the Directors other than the Director
who is the subject of such resolution (an alternate Director being entitled to sign such a resolution
on behalf of his appointor and if such alternate Director is also a Director, being entitled to sign
such resolution both on behalf of his appointer and in his capacity as a Director) shall be as valid
and effectual as if it had been passed at a meeting of the Directors, or committee of Directors as
the case may be, duly convened and held.
31.5 A Director or alternate Director may, or other officer of the Company on the direction of a Director
or alternate Director shall, call a meeting of the Directors by at least two days' notice in writing to
every Director and alternate Director which notice shall set forth the general nature of the
business to be considered unless notice is waived by all the Directors (or their alternates) either
at, before or after the meeting is held. To any such notice of a meeting of the Directors all the
provisions of the Articles relating to the giving of notices by the Company to the Members shall
apply mutatis mutandis.
31.6 The continuing Directors (or a sole continuing Director, as the case may be) may act
notwithstanding any vacancy in their body, but if and so long as their number is reduced below
the number fixed by or pursuant to the Articles as the necessary quorum of Directors the
continuing Directors or Director may act for the purpose of increasing the number of Directors to
be equal to such fixed number, or of summoning a general meeting of the Company, but for no
other purpose.
31.7 The Directors may elect a chairman of their board and determine the period for which he is to
hold office; but if no such chairman is elected, or if at any meeting the chairman is not present
within five minutes after the time appointed for the meeting to commence, the Directors present
may choose one of their number to be chairman of the meeting.
31.8 All acts done by any meeting of the Directors or of a committee of the Directors (including any
person acting as an alternate Director) shall, notwithstanding that it is afterwards discovered that
there was some defect in the appointment of any Director or alternate Director, and/or that they or
any of them were disqualified, and/or had vacated their office and/or were not entitled to vote, be
as valid as if every such person had been duly appointed and/or not disqualified to be a Director
or alternate Director and/or had not vacated their office and/or had been entitled to vote, as the
case may be.
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31.9 A Director but not an alternate Director may be represented at any meetings of the board of
Directors by a proxy appointed in writing by him. The proxy shall count towards the quorum and
the vote of the proxy shall for all purposes be deemed to be that of the appointing Director.
32 Presumption of Assent
A Director or alternate Director who is present at a meeting of the board of Directors at which
action on any Company matter is taken shall be presumed to have assented to the action taken
unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written
dissent from such action with the person acting as the chairman or secretary of the meeting
before the adjournment thereof or shall forward such dissent by registered post to such person
immediately after the adjournment of the meeting. Such right to dissent shall not apply to a
Director or alternate Director who voted in favour of such action.
33 Directors' Interests
33.1 A Director or alternate Director may hold any other office or place of profit under the Company
(other than the office of Auditor) in conjunction with his office of Director for such period and on
such terms as to remuneration and otherwise as the Directors may determine.
33.2 A Director or alternate Director may act by himself or by, through or on behalf of his firm in a
professional capacity for the Company and he or his firm shall be entitled to remuneration for
professional services as if he were not a Director or alternate Director.
33.3 A Director or alternate Director may be or become a director or other officer of or otherwise
interested in any company promoted by the Company or in which the Company may be
interested as a shareholder, a contracting party or otherwise, and no such Director or alternate
Director shall be accountable to the Company for any remuneration or other benefits received by
him as a director or officer of, or from his interest in, such other company.
33.4 No person shall be disqualified from the office of Director or alternate Director or prevented by
such office from contracting with the Company, either as vendor, purchaser or otherwise, nor
shall any such contract or any contract or transaction entered into by or on behalf of the
Company in which any Director or alternate Director shall be in any way interested be or be liable
to be avoided, nor shall any Director or alternate Director so contracting or being so interested be
liable to account to the Company for any profit realised by or arising in connection with any such
contract or transaction by reason of such Director or alternate Director holding office or of the
fiduciary relationship thereby established. A Director (or his alternate Director in his absence)
shall be at liberty to vote in respect of any contract or transaction in which he is interested
provided that the nature of the interest of any Director or alternate Director in any such contract or
transaction shall be disclosed by him at or prior to its consideration and any vote thereon.
33.5 A general notice that a Director or alternate Director is a shareholder, director, officer or
employee of any specified firm or company and is to be regarded as interested in any transaction
with such firm or company shall be sufficient disclosure for the purposes of voting on a resolution
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in respect of a contract or transaction in which he has an interest, and after such general notice it
shall not be necessary to give special notice relating to any particular transaction.
34 Minutes
The Directors shall cause minutes to be made in books kept for the purpose of recording all
appointments of officers made by the Directors, all proceedings at meetings of the Company or
the holders of any class of Shares and of the Directors, and of committees of the Directors,
including the names of the Directors or alternate Directors present at each meeting.
35 Delegation of Directors' Powers
35.1 The Directors may delegate any of their powers, authorities and discretions, including the power
to sub-delegate, to any committee consisting of one or more Directors. They may also delegate to
any managing director or any Director holding any other executive office such of their powers,
authorities and discretions as they consider desirable to be exercised by him provided that an
alternate Director may not act as managing director and the appointment of a managing director
shall be revoked forthwith if he ceases to be a Director. Any such delegation may be made
subject to any conditions the Directors may impose and either collaterally with or to the exclusion
of their own powers and any such delegation may be revoked or altered by the Directors. Subject
to any such conditions, the proceedings of a committee of Directors shall be governed by the
Articles regulating the proceedings of Directors, so far as they are capable of applying.
35.2 The Directors may establish any committees, local boards or agencies or appoint any person to
be a manager or agent for managing the affairs of the Company and may appoint any person to
be a member of such committees, local boards or agencies. Any such appointment may be
made subject to any conditions the Directors may impose, and either collaterally with or to the
exclusion of their own powers and any such appointment may be revoked or altered by the
Directors. Subject to any such conditions, the proceedings of any such committee, local board or
agency shall be governed by the Articles regulating the proceedings of Directors, so far as they
are capable of applying.
35.3 The Directors may by power of attorney or otherwise appoint any person to be the agent of the
Company on such conditions as the Directors may determine, provided that the delegation is not
to the exclusion of their own powers and may be revoked by the Directors at any time.
35.4 The Directors may by power of attorney or otherwise appoint any company, firm, person or body
of persons, whether nominated directly or indirectly by the Directors, to be the attorney or
authorised signatory of the Company for such purpose and with such powers, authorities and
discretions (not exceeding those vested in or exercisable by the Directors under the Articles) and
for such period and subject to such conditions as they may think fit, and any such powers of
attorney or other appointment may contain such provisions for the protection and convenience of
persons dealing with any such attorneys or authorised signatories as the Directors may think fit
and may also authorise any such attorney or authorised signatory to delegate all or any of the
powers, authorities and discretions vested in him.
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35.5 The Directors may appoint such officers of the Company (including, for the avoidance of doubt
and without limitation, any secretary) as they consider necessary on such terms, at such
remuneration and to perform such duties, and subject to such provisions as to disqualification
and removal as the Directors may think fit. Unless otherwise specified in the terms of his
appointment an officer of the Company may be removed by resolution of the Directors or
Members. An officer of the Company may vacate his office at any time if he gives notice in writing
to the Company that he resigns his office.
36 Alternate Directors
36.1 Any Director (but not an alternate Director) may by writing appoint any other Director, or any other
person willing to act, to be an alternate Director and by writing may remove from office an
alternate Director so appointed by him.
36.2 An alternate Director shall be entitled to receive notice of all meetings of Directors and of all
meetings of committees of Directors of which his appointor is a member, to attend and vote at
every such meeting at which the Director appointing him is not personally present, to sign any
written resolution of the Directors, and generally to perform all the functions of his appointor as a
Director in his absence.
36.3 An alternate Director shall cease to be an alternate Director if his appointor ceases to be a
Director.
36.4 Any appointment or removal of an alternate Director shall be by notice to the Company signed by
the Director making or revoking the appointment or in any other manner approved by the
Directors.
36.5 Subject to the provisions of the Articles, an alternate Director shall be deemed for all purposes to
be a Director and shall alone be responsible for his own acts and defaults and shall not be
deemed to be the agent of the Director appointing him.
37 No Minimum Shareholding
The Company in general meeting may fix a minimum shareholding required to be held by a
Director, but unless and until such a shareholding qualification is fixed a Director is not required to
hold Shares.
38 Remuneration of Directors
38.1 The remuneration to be paid to the Directors, if any, shall be such remuneration as the Directors
shall determine. The Directors shall also be entitled to be paid all travelling, hotel and other
expenses properly incurred by them in connection with their attendance at meetings of Directors
or committees of Directors, or general meetings of the Company, or separate meetings of the
holders of any class of Shares or debentures of the Company, or otherwise in connection with the
business of the Company or the discharge of their duties as a Director, or to receive a fixed
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
www.verify.gov.ky |
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BVC/784229-000001/65594541v1
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allowance in respect thereof as may be determined by the Directors, or a combination partly of
one such method and partly the other.
38.2 The Directors may by resolution approve additional remuneration to any Director for any services
which in the opinion of the Directors go beyond his ordinary routine work as a Director. Any fees
paid to a Director who is also counsel, attorney or solicitor to the Company, or otherwise serves it
in a professional capacity shall be in addition to his remuneration as a Director.
39 Seal
39.1 The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the
authority of the Directors or of a committee of the Directors authorised by the Directors. Every
instrument to which the Seal has been affixed shall be signed by at least one person who shall be
either a Director or some officer of the Company or other person appointed by the Directors for
the purpose.
39.2 The Company may have for use in any place or places outside the Cayman Islands a duplicate
Seal or Seals each of which shall be a facsimile of the common Seal of the Company and, if the
Directors so determine, with the addition on its face of the name of every place where it is to be
used.
39.3 A Director or officer, representative or attorney of the Company may without further authority of
the Directors affix the Seal over his signature alone to any document of the Company required to
be authenticated by him under seal or to be filed with the Registrar of Companies in the Cayman
Islands or elsewhere wheresoever.
40 Dividends, Distributions and Reserve
40.1 Subject to the Statute and this Article and except as otherwise provided by the rights attached to
any Shares, the Directors may resolve to pay Dividends and other distributions on Shares in
issue and authorise payment of the Dividends or other distributions out of the funds of the
Company lawfully available therefor. A Dividend shall be deemed to be an interim Dividend
unless the terms of the resolution pursuant to which the Directors resolve to pay such Dividend
specifically state that such Dividend shall be a final Dividend. No Dividend or other distribution
shall be paid except out of the realised or unrealised profits of the Company, out of the share
premium account or as otherwise permitted by law.
40.2 Except as otherwise provided by the rights attached to any Shares, all Dividends and other
distributions shall be paid according to the par value of the Shares that a Member holds. If any
Share is issued on terms providing that it shall rank for Dividend as from a particular date, that
Share shall rank for Dividend accordingly.
40.3 The Directors may deduct from any Dividend or other distribution payable to any Member all
sums of money (if any) then payable by him to the Company on account of calls or otherwise.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
www.verify.gov.ky |
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40.4 The Directors may resolve that any Dividend or other distribution be paid wholly or partly by the
distribution of specific assets and in particular (but without limitation) by the distribution of shares,
debentures, or securities of any other company or in any one or more of such ways and where
any difficulty arises in regard to such distribution, the Directors may settle the same as they think
expedient and in particular may issue fractional Shares and may fix the value for distribution of
such specific assets or any part thereof and may determine that cash payments shall be made to
any Members upon the basis of the value so fixed in order to adjust the rights of all Members and
may vest any such specific assets in trustees in such manner as may seem expedient to the
Directors.
40.5 Except as otherwise provided by the rights attached to any Shares, Dividends and other
distributions may be paid in any currency. The Directors may determine the basis of conversion
for any currency conversions that may be required and how any costs involved are to be met.
40.6 The Directors may, before resolving to pay any Dividend or other distribution, set aside such
sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors,
be applicable for any purpose of the Company and pending such application may, at the
discretion of the Directors, be employed in the business of the Company.
40.7 Any Dividend, other distribution, interest or other monies payable in cash in respect of Shares
may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed
to the registered address of the holder or, in the case of joint holders, to the registered address of
the holder who is first named on the Register of Members or to such person and to such address
as such holder or joint holders may in writing direct. Every such cheque or warrant shall be made
payable to the order of the person to whom it is sent. Any one of two or more joint holders may
give effectual receipts for any Dividends, other distributions, bonuses, or other monies payable in
respect of the Share held by them as joint holders.
40.8 No Dividend or other distribution shall bear interest against the Company.
40.9 Any Dividend or other distribution which cannot be paid to a Member and/or which remains
unclaimed after six months from the date on which such Dividend or other distribution becomes
payable may, in the discretion of the Directors, be paid into a separate account in the Company's
name, provided that the Company shall not be constituted as a trustee in respect of that account
and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend or
other distribution which remains unclaimed after a period of six years from the date on which such
Dividend or other distribution becomes payable shall be forfeited and shall revert to the
Company.
41 Capitalisation
The Directors may at any time capitalise any sum standing to the credit of any of the Company's
reserve accounts or funds (including the share premium account and capital redemption reserve
fund) or any sum standing to the credit of the profit and loss account or otherwise available for
distribution; appropriate such sum to Members in the proportions in which such sum would have
been divisible amongst such Members had the same been a distribution of profits by way of
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
www.verify.gov.ky |
| BVC/784229-000001/65594541v1
26
Dividend or other distribution; and apply such sum on their behalf in paying up in full unissued
Shares for allotment and distribution credited as fully paid-up to and amongst them in the
proportion aforesaid. In such event the Directors shall do all acts and things required to give
effect to such capitalisation, with full power given to the Directors to make such provisions as they
think fit in the case of Shares becoming distributable in fractions (including provisions whereby
the benefit of fractional entitlements accrue to the Company rather than to the Members
concerned). The Directors may authorise any person to enter on behalf of all of the Members
interested into an agreement with the Company providing for such capitalisation and matters
incidental or relating thereto and any agreement made under such authority shall be effective and
binding on all such Members and the Company.
42 Books of Account
42.1 The Directors shall cause proper books of account (including, where applicable,
material underlying documentation including contracts and invoices) to be kept with respect to all
sums of money received and expended by the Company and the matters in respect of which the
receipt or expenditure takes place, all sales and purchases of goods by the Company and the
assets and liabilities of the Company. Such books of account must be retained for a minimum
period of five years from the date on which they are prepared. Proper books shall not be deemed
to be kept if there are not kept such books of account as are necessary to give a true and fair
view of the state of the Company's affairs and to explain its transactions.
42.2 The Directors shall determine whether and to what extent and at what times and places and
under what conditions or regulations the accounts and books of the Company or any of them
shall be open to the inspection of Members not being Directors and no Member (not being a
Director) shall have any right of inspecting any account or book or document of the Company
except as conferred by Statute or authorised by the Directors or by the Company in general
meeting.
42.3 The Directors may cause to be prepared and to be laid before the Company in general meeting
profit and loss accounts, balance sheets, group accounts (if any) and such other reports and
accounts as may be required by law.
43 Audit
43.1 The Directors may appoint an Auditor of the Company who shall hold office on such terms as the
Directors determine.
43.2 Every Auditor of the Company shall have a right of access at all times to the books and accounts
and vouchers of the Company and shall be entitled to require from the Directors and officers of
the Company such information and explanation as may be necessary for the performance of the
duties of the Auditor.
43.3 Auditors shall, if so required by the Directors, make a report on the accounts of the Company
during their tenure of office at the next annual general meeting following their appointment in the
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
www.verify.gov.ky |
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BVC/784229-000001/65594541v1
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case of a company which is registered with the Registrar of Companies as an ordinary company,
and at the next extraordinary general meeting following their appointment in the case of a
company which is registered with the Registrar of Companies as an exempted company, and at
any other time during their term of office, upon request of the Directors or any general meeting of
the Members.
44 Notices
44.1 Notices shall be in writing and may be given by the Company to any Member either personally or
by sending it by courier, post, cable, telex, fax or e-mail to him or to his address as shown in the
Register of Members (or where the notice is given by e-mail by sending it to the e-mail address
provided by such Member). Any notice, if posted from one country to another, is to be sent by
airmail.
44.2 Where a notice is sent by courier, service of the notice shall be deemed to be effected by delivery
of the notice to a courier company, and shall be deemed to have been received on the third day
(not including Saturdays or Sundays or public holidays) following the day on which the notice was
delivered to the courier. Where a notice is sent by post, service of the notice shall be deemed to
be effected by properly addressing, pre paying and posting a letter containing the notice, and
shall be deemed to have been received on the fifth day (not including Saturdays or Sundays or
public holidays in the Cayman Islands) following the day on which the notice was posted. Where
a notice is sent by cable, telex or fax, service of the notice shall be deemed to be effected by
properly addressing and sending such notice and shall be deemed to have been received on the
same day that it was transmitted. Where a notice is given by e-mail service shall be deemed to
be effected by transmitting the e-mail to the e-mail address provided by the intended recipient
and shall be deemed to have been received on the same day that it was sent, and it shall not be
necessary for the receipt of the e-mail to be acknowledged by the recipient.
44.3 A notice may be given by the Company to the person or persons which the Company has been
advised are entitled to a Share or Shares in consequence of the death or bankruptcy of a
Member in the same manner as other notices which are required to be given under the Articles
and shall be addressed to them by name, or by the title of representatives of the deceased, or
trustee of the bankrupt, or by any like description at the address supplied for that purpose by the
persons claiming to be so entitled, or at the option of the Company by giving the notice in any
manner in which the same might have been given if the death or bankruptcy had not occurred.
44.4 Notice of every general meeting shall be given in any manner authorised by the Articles to every
holder of Shares carrying an entitlement to receive such notice on the record date for such
meeting except that in the case of joint holders the notice shall be sufficient if given to the joint
holder first named in the Register of Members and every person upon whom the ownership of a
Share devolves by reason of his being a legal personal representative or a trustee in bankruptcy
of a Member where the Member but for his death or bankruptcy would be entitled to receive
notice of the meeting, and no other person shall be entitled to receive notices of general
meetings.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
www.verify.gov.ky |
| BVC/784229-000001/65594541v1
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45 Winding Up
45.1 If the Company shall be wound up the liquidator shall apply the assets of the Company in
satisfaction of creditors' claims in such manner and order as such liquidator thinks fit. Subject to
the rights attaching to any Shares, in a winding up:
(a) if the assets available for distribution amongst the Members shall be insufficient to repay
the whole of the Company's issued share capital, such assets shall be distributed so that,
as nearly as may be, the losses shall be borne by the Members in proportion to the par
value of the Shares held by them; or
(b) if the assets available for distribution amongst the Members shall be more than sufficient
to repay the whole of the Company's issued share capital at the commencement of the
winding up, the surplus shall be distributed amongst the Members in proportion to the par
value of the Shares held by them at the commencement of the winding up subject to a
deduction from those Shares in respect of which there are monies due, of all monies
payable to the Company for unpaid calls or otherwise.
45.2 If the Company shall be wound up the liquidator may, subject to the rights attaching to any
Shares and with the approval of a Special Resolution of the Company and any other approval
required by the Statute, divide amongst the Members in kind the whole or any part of the assets
of the Company (whether such assets shall consist of property of the same kind or not) and may
for that purpose value any assets and determine how the division shall be carried out as between
the Members or different classes of Members. The liquidator may, with the like approval, vest the
whole or any part of such assets in trustees upon such trusts for the benefit of the Members as
the liquidator, with the like approval, shall think fit, but so that no Member shall be compelled to
accept any asset upon which there is a liability.
46 Indemnity and Insurance
46.1 Every Director and officer of the Company (which for the avoidance of doubt, shall not include
auditors of the Company), together with every former Director and former officer of the Company
(each an "Indemnified Person") shall be indemnified out of the assets of the Company against
any liability, action, proceeding, claim, demand, costs, damages or expenses, including legal
expenses, whatsoever which they or any of them may incur as a result of any act or failure to act
in carrying out their functions other than such liability (if any) that they may incur by reason of
their own actual fraud or wilful default. No Indemnified Person shall be liable to the Company for
any loss or damage incurred by the Company as a result (whether direct or indirect) of the
carrying out of their functions unless that liability arises through the actual fraud or wilful default of
such Indemnified Person. No person shall be found to have committed actual fraud or wilful
default under this Article unless or until a court of competent jurisdiction shall have made a finding
to that effect.
46.2 The Company shall advance to each Indemnified Person reasonable attorneys' fees and other
costs and expenses incurred in connection with the defence of any action, suit, proceeding or
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
www.verify.gov.ky |
| BVC/784229-000001/65594541v1
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investigation involving such Indemnified Person for which indemnity will or could be sought. In
connection with any advance of any expenses hereunder, the Indemnified Person shall execute
an undertaking to repay the advanced amount to the Company if it shall be determined by final
judgment or other final adjudication that such Indemnified Person was not entitled to
indemnification pursuant to this Article. If it shall be determined by a final judgment or other final
adjudication that such Indemnified Person was not entitled to indemnification with respect to such
judgment, costs or expenses, then such party shall not be indemnified with respect to such
judgment, costs or expenses and any advancement shall be returned to the Company (without
interest) by the Indemnified Person.
46.3 The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of
any Director or other officer of the Company against any liability which, by virtue of any rule of
law, would otherwise attach to such person in respect of any negligence, default, breach of duty
or breach of trust of which such person may be guilty in relation to the Company.
47 Financial Year
Unless the Directors otherwise prescribe, the financial year of the Company shall end on 31st
December in each year and, following the year of incorporation, shall begin on 1st January in
each year.
48 Transfer by Way of Continuation
If the Company is exempted as defined in the Statute, it shall, subject to the provisions of the
Statute and with the approval of a Special Resolution, have the power to register by way of
continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands
and to be deregistered in the Cayman Islands.
49 Mergers and Consolidations
The Company shall have the power to merge or consolidate with one or more other constituent
companies (as defined in the Statute) upon such terms as the Directors may determine and (to
the extent required by the Statute) with the approval of a Special Resolution.
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
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| BVC/784229-000001/65594541v1
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Dated this 19th day of February 2021.
Signature and Address of Subscriber
Maples Corporate Services Limited
of PO Box 309, Ugland House
Grand Cayman
KY1-1104
Cayman Islands
acting by:
_______________________________
Allema Ramoon
_______________________________
Kameal Seymour
Witness to the above signature
EXEMPTED Company Registered and
filed as No. 371865 On 19-Feb-2021
Assistant Registrar
Auth Code: C08882560021
www.verify.gov.ky |
Exhibit 3.2
THE COMPANIES ACT (As
Revised)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM AND ARTICLES OF ASSOCIATION
OF
FIFTH WALL ACQUISITION CORP. III
(adopted
by Special Resolution dated [·]
2021 and effective on [·]
2021)
THE
COMPANIES ACT (As Revised)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM OF ASSOCIATION
OF
FIFTH WALL ACQUISITION CORP. III
(adopted
by Special Resolution dated [·]
2021 and effective on [·]
2021)
| 1 | The name of the Company is Fifth Wall Acquisition Corp. III. |
| 2 | The Registered Office of the Company shall be at the offices of Maples Corporate Services Limited, PO
Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place within the Cayman Islands as the Directors may decide. |
| 3 | The objects for which the Company is established are unrestricted and the Company shall have full power
and authority to carry out any object not prohibited by the laws of the Cayman Islands. |
| 4 | The liability of each Member is limited to the amount unpaid on such Member's shares. |
| 5 | The share capital of the Company is US$22,100 divided into 200,000,000 Class A ordinary shares of a par
value of US$0.0001 each, 20,000,000 Class B ordinary shares of a par value of US$0.0001 each and 1,000,000 preference shares of a par
value of US$0.0001 each. |
| 6 | The Company has power to register by way of continuation as a body corporate limited by shares under the
laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands. |
| 7 | Capitalised terms that are not defined in this Amended and Restated Memorandum of Association bear the
respective meanings given to them in the Amended and Restated Articles of Association of the Company. |
THE
COMPANIES ACT (As Revised)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
FIFTH WALL ACQUISITION CORP. III
(adopted
by Special Resolution dated [·]
2021 and effective on [·] 2021)
| 1.1 | In the Articles Table A in the First Schedule to the Statute does not apply and, unless there is something
in the subject or context inconsistent therewith: |
| |
"Affiliate" |
in respect of a person, means any other person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such person, and (a) in the case of a natural person, shall include, without limitation, such person’s spouse, parents, children, siblings, mother-in-law and father-in-law and brothers and sisters-in-law, whether by blood, marriage or adoption or anyone residing in such person’s home, a trust for the benefit of any of the foregoing, a company, partnership or any natural person or entity wholly or jointly owned by any of the foregoing and (b) in the case of an entity, shall include a partnership, a corporation or any natural person or entity which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such entity. |
| |
"Applicable Law" |
means, with respect to any person, all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees or orders of any governmental authority applicable to such person. |
| |
"Articles" |
means these amended and restated articles of association of the Company. |
| |
"Audit Committee" |
means the audit committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. |
| |
"Auditor" |
means the person for the time being performing the duties of auditor of the Company (if any). |
| |
"Business
Combination" |
means a merger, share exchange, asset acquisition, share purchase, reorganisation or similar business combination involving the Company, with one or more businesses or entities (the "target business"), which Business Combination: (a) as long as the securities of the Company are listed on the Nasdaq Capital Market, must occur with one or more target businesses that together have an aggregate fair market value of at least 80 per cent of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the signing of the definitive agreement to enter into such Business Combination; and (b) must not be solely effectuated with another blank cheque company or a similar company with nominal operations. |
| |
"business day" |
means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorised or obligated by law to close in New York City. |
| |
"Clearing House" |
means a clearing house recognised by the laws of the jurisdiction in which the Shares (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction. |
| |
"Class A Share" |
means a Class A ordinary share of a par value of US$0.0001 in the share capital of the Company. |
| |
"Class B Share" |
means a Class B ordinary share of a par value of US$0.0001 in the share capital of the Company. |
| |
"Company" |
means the above named company. |
| |
"Company’s Website" |
means the website of the Company and/or its web-address or domain name (if any). |
| |
"Compensation Committee" |
means the compensation committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. |
| |
"Designated Stock Exchange" |
means any United States national securities exchange on which the securities of the Company are listed for trading, including the Nasdaq Capital Market. |
| |
"Directors" |
means the directors for the time being of the Company. |
| |
"Dividend" |
means any dividend (whether interim or final) resolved to be paid on Shares pursuant to the Articles. |
| |
"Electronic Communication" |
means a communication sent by electronic means, including electronic posting to the Company’s Website, transmission to any number, address or internet website (including the website of the Securities and Exchange Commission) or other electronic delivery methods as otherwise decided and approved by the Directors. |
| |
"Electronic Record" |
has the same meaning as in the Electronic Transactions Act. |
| |
"Electronic
Transactions Act" |
means the Electronic Transactions Act (As Revised) of the Cayman Islands. |
| |
"Equity-linked Securities" |
means any debt or equity securities that are convertible, exercisable or exchangeable for Class A Shares issued in a financing transaction in connection with a Business Combination, including but not limited to a private placement of equity or debt. |
| |
"Exchange Act" |
means the United States Securities Exchange Act of 1934, as amended, or any similar U.S. federal statute and the rules and regulations of the Securities and Exchange Commission thereunder, all as the same shall be in effect at the time. |
| |
"Founders" |
means all Members immediately prior to the consummation of the IPO. |
| |
"Independent Director" |
has the same meaning as in the rules and regulations of the Designated Stock Exchange or in Rule 10A-3 under the Exchange Act, as the case may be. |
| |
"IPO" |
means the Company's initial public offering of securities. |
| |
"Member" |
has the same meaning as in the Statute. |
| |
"Memorandum" |
means the amended and restated memorandum of association of the Company. |
| |
"Nominating Committee" |
means the nominating committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. |
| |
"Officer" |
means a person appointed to hold an office in the Company. |
| |
"Ordinary Resolution" |
means a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles. |
| |
"Over-Allotment Option" |
means the option of the Underwriters to purchase up to an additional 15 per cent of the firm shares issued in the IPO at a price equal to US$10 per share, less underwriting discounts and commissions. |
| |
"Preference Share" |
means a preference share of a par value of US$0.0001 in the share capital of the Company. |
| |
"Public Share" |
means a Class A Share issued in the IPO. |
| |
"Redemption Notice" |
means a notice in a form approved by the Company by which a holder of Public Shares is entitled to require the Company to redeem its Public Shares, subject to any conditions contained therein. |
| |
"Register of Members" |
means the register of Members maintained in accordance with the Statute and includes (except where otherwise stated) any branch or duplicate register of Members. |
| |
"Registered Office" |
means the registered office for the time being of the Company. |
| |
"Representative" |
means a representative of the Underwriters. |
| |
"Seal" |
means the common seal of the Company and includes every duplicate seal. |
| |
"Securities and Exchange
Commission" |
means the United States Securities and Exchange Commission. |
| |
"Share" |
means a Class A Share, a Class B Share, or a Preference Share and includes a fraction of a share in the Company. |
| |
"Special Resolution" |
subject to Article 29.4, has the same meaning as in the Statute, and includes a unanimous written resolution. |
| |
"Sponsor" |
means Fifth Wall Acquisition Sponsor III LLC, a Cayman Islands limited liability company, and its successors or assigns. |
| |
"Statute" |
means the Companies Act (As Revised) of the Cayman Islands. |
| |
"Tax Filing Authorised Person" |
means such person as any Director shall designate from time to time, acting severally. |
| |
"Treasury Share" |
means a Share held in the name of the Company as a treasury share in accordance with the Statute. |
| |
"Trust Account" |
means the trust account established by the Company upon the consummation of the IPO and into which a certain amount of the net proceeds of the IPO, together with a certain amount of the proceeds of a private placement of shares simultaneously with the closing date of the IPO, will be deposited. |
| |
"Underwriter" |
means an underwriter of the IPO from time to time and any successor underwriter. |
| (a) | words importing the singular number include the plural number and vice versa; |
| (b) | words importing the masculine gender include the feminine gender; |
| (c) | words importing persons include corporations as well as any other legal or natural person; |
| (d) | "written" and "in writing" include all modes of representing or reproducing words
in visible form, including in the form of an Electronic Record; |
| (e) | "shall" shall be construed as imperative and "may" shall be construed as permissive; |
| (f) | references to provisions of any law or regulation shall be construed as references to those provisions
as amended, modified, re-enacted or replaced; |
| (g) | any phrase introduced by the terms "including", "include", "in particular"
or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms; |
| (h) | the term "and/or" is used herein to mean both "and" as well as "or." The
use of "and/or" in certain contexts in no respects qualifies or modifies the use of the terms "and" or "or"
in others. The term "or" shall not be interpreted to be exclusive and the term "and" shall not be interpreted to require
the conjunctive (in each case, unless the context otherwise requires); |
| (i) | headings are inserted for reference only and shall be ignored in construing the Articles; |
| (j) | any requirements as to delivery under the Articles include delivery in the form of an Electronic Record; |
| (k) | any requirements as to execution or signature under the Articles including the execution of the Articles
themselves can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Act; |
| (l) | sections 8 and 19(3) of the Electronic Transactions Act shall not apply; |
| (m) | the term "clear days" in relation to the period of a notice means that period excluding the
day when the notice is received or deemed to be received and the day for which it is given or on which it is to take effect; and |
| (n) | the term "holder" in relation to a Share means a person whose name is entered in the Register
of Members as the holder of such Share. |
| 2 | Commencement of Business |
| 2.1 | The business of the Company may be commenced as soon after incorporation of the Company as the Directors
shall see fit. |
| 2.2 | The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred in
or about the formation and establishment of the Company, including the expenses of registration. |
| 3 | Issue of Shares and other Securities |
| 3.1 | Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by the Company
in general meeting) and, where applicable, the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission
and/or any other competent regulatory authority or otherwise under Applicable Law, and without prejudice to any rights attached to any
existing Shares, the Directors may allot, issue, grant options over or otherwise dispose of Shares (including fractions of a Share) with
or without preferred, deferred or other rights or restrictions, whether in regard to Dividends or other distributions, voting, return
of capital or otherwise and to such persons, at such times and on such other terms as they think proper, and may also (subject to the
Statute and the Articles) vary such rights, save that the Directors shall not allot, issue, grant options over or otherwise dispose of
Shares (including fractions of a Share) to the extent that it may affect the ability of the Company to carry out a Class B Ordinary Share
Conversion set out in the Articles. |
| 3.2 | The Company may issue rights, options, warrants or convertible securities or securities of similar nature
conferring the right upon the holders thereof to subscribe for, purchase or receive any class of Shares or other securities in the Company
on such terms as the Directors may from time to time determine. |
| 3.3 | The Company shall not issue Shares to bearer. |
| 4.1 | The Company shall maintain or cause to be maintained the Register of Members in accordance with the Statute. |
| 4.2 | The Directors may determine that the Company shall maintain one or more branch registers of Members in
accordance with the Statute. The Directors may also determine which register of Members shall constitute the principal register and which
shall constitute the branch register or registers, and to vary such determination from time to time. |
| 5 | Closing Register of Members or Fixing Record Date |
| 5.1 | For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members or
any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution, or in order to make a determination
of Members for any other purpose, the Directors may, after notice has been given by advertisement in an appointed newspaper or any other
newspaper or by any other means in accordance with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange
Commission and/or any other competent regulatory authority or otherwise under Applicable Law, provide that the Register of Members shall
be closed for transfers for a stated period which shall not in any case exceed forty days. |
| 5.2 | In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or arrears
a date as the record date for any such determination of Members entitled to notice of, or to vote at any meeting of the Members or any
adjournment thereof, or for the purpose of determining the Members entitled to receive payment of any Dividend or other distribution,
or in order to make a determination of Members for any other purpose. |
| 5.3 | If the Register of Members is not so closed and no record date is fixed for the determination of Members
entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a Dividend or other distribution,
the date on which notice of the meeting is sent or the date on which the resolution of the Directors resolving to pay such Dividend or
other distribution is passed, as the case may be, shall be the record date for such determination of Members. When a determination of
Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination shall apply to any adjournment
thereof. |
| 6.1 | A Member shall only be entitled to a share certificate if the Directors resolve that share certificates
shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors may determine. Share certificates
shall be signed by one or more Directors or other person authorised by the Directors. The Directors may authorise certificates to be issued
with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively numbered or otherwise
identified and shall specify the Shares to which they relate. All certificates surrendered to the Company for transfer shall be cancelled
and, subject to the Articles, no new certificate shall be issued until the former certificate representing a like number of relevant Shares
shall have been surrendered and cancelled. |
| 6.2 | The Company shall not be bound to issue more than one certificate for Shares held jointly by more than
one person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them. |
| 6.3 | If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any)
as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating evidence, as the
Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the old certificate. |
| 6.4 | Every share certificate sent in accordance with the Articles will be sent at the risk of the Member or
other person entitled to the certificate. The Company will not be responsible for any share certificate lost or delayed in the course
of delivery. |
| 6.5 | Share certificates shall be issued within the relevant time limit as prescribed by the Statute, if applicable,
or as the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory
authority or otherwise under Applicable Law may from time to time determine, whichever is shorter, after the allotment or, except in the
case of a Share transfer which the Company is for the time being entitled to refuse to register and does not register, after lodgement
of a Share transfer with the Company. |
| 7.1 | Subject to the terms of the Articles, any Member may transfer all or any of his Shares by an instrument
of transfer provided that such transfer complies with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange
Commission and/or any other competent regulatory authority or otherwise under Applicable Law. |
| 7.2 | The instrument of transfer of any Share shall be in writing in the usual or common form or in a form prescribed
by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory
authority or otherwise under Applicable Law or in any other form approved by the Directors and shall be executed by or on behalf of the
transferor (and if the Directors so require, signed by or on behalf of the transferee) and may be under hand or, if the transferor or
transferee is a Clearing House or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the
Directors may approve from time to time. The transferor shall be deemed to remain the holder of a Share until the name of the transferee
is entered in the Register of Members. |
| 8 | Redemption, Repurchase and Surrender of Shares |
| 8.1 | Subject to the provisions of the Statute, and, where applicable, the rules and regulations of the Designated
Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law,
the Company may issue Shares that are to be redeemed or are liable to be redeemed at the option of the Member or the Company. The redemption
of such Shares, except Public Shares, shall be effected in such manner and upon such other terms as the Company may, by Special Resolution,
determine before the issue of such Shares. With respect to redeeming or repurchasing the Shares: |
| (a) | Members who hold Public Shares are entitled to request the redemption of such Shares in the circumstances
described in the Business Combination Article hereof; |
| (b) | Class B Shares held by the Founders shall be surrendered by the Founders for no consideration to the extent
that the Over-Allotment Option is not exercised in full so that the Founders will own 20 per cent of the Company's issued Shares after
the IPO (exclusive of any securities purchased in a private placement simultaneously with the IPO); and |
| (c) | Public Shares shall be repurchased by way of tender offer in the circumstances set out in the Business
Combination Article hereof. |
| 8.2 | Subject to the provisions of the Statute, and, where applicable, the rules and regulations of the Designated
Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law,
the Company may purchase its own Shares (including any redeemable Shares) in such manner and on such other terms as the Directors may
agree with the relevant Member. For the avoidance of doubt, redemptions, repurchases and surrenders of Shares in the circumstances described
in the Article above shall not require further approval of the Members. |
| 8.3 | The Company may make a payment in respect of the redemption or purchase of its own Shares in any manner
permitted by the Statute, including out of capital. |
| 8.4 | The Directors may accept the surrender for no consideration of any fully paid Share. |
| 9.1 | The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share
shall be held as a Treasury Share. |
| 9.2 | The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they
think proper (including, without limitation, for nil consideration). |
| 10 | Variation of Rights of Shares |
| 10.1 | Subject to Article 3.1, if at any time the share capital of the Company is divided into different classes
of Shares, all or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class)
may, whether or not the Company is being wound up, be varied without the consent of the holders of the issued Shares of that class where
such variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise, any such variation shall
be made only with the consent in writing of the holders of not less than two thirds of the issued Shares of that class (other than with
respect to a waiver of the provisions of the Class B Ordinary Share Conversion Article hereof, which as stated therein shall only require
the consent in writing of the holders of a majority of the issued Shares of that class), or with the approval of a resolution passed by
a majority of not less than two thirds of the votes cast at a separate meeting of the holders of the Shares of that class. For the avoidance
of doubt, the Directors reserve the right, notwithstanding that any such variation may not have a material adverse effect, to obtain consent
from the holders of Shares of the relevant class. To any such meeting all the provisions of the Articles relating to general meetings
shall apply mutatis mutandis, except that the necessary quorum shall be one person holding or representing by proxy at least one
third of the issued Shares of the class and that any holder of Shares of the class present in person or by proxy may demand a poll. |
| 10.2 | For the purposes of a separate class meeting, the Directors may treat two or more or all the classes of
Shares as forming one class of Shares if the Directors consider that such class of Shares would be affected in the same way by the proposals
under consideration, but in any other case shall treat them as separate classes of Shares. |
| 10.3 | The rights conferred upon the holders of the Shares of any class issued with preferred or other rights
shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied by the creation
or issue of further Shares ranking pari passu therewith or Shares issued with preferred or other rights. |
| 11 | Commission on Sale of Shares |
The Company may, in so far as the Statute
permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally)
or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Such commissions may be satisfied
by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on any issue of Shares pay such brokerage
as may be lawful.
| 12 | Non Recognition of Trusts |
The Company shall not be bound by or
compelled to recognise in any way (even when notified) any equitable, contingent, future or partial interest in any Share, or (except
only as is otherwise provided by the Articles or the Statute) any other rights in respect of any Share other than an absolute right to
the entirety thereof in the holder.
| 13.1 | The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not) registered
in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with the Company (whether
presently payable or not) by such Member or his estate, either alone or jointly with any other person, whether a Member or not, but the
Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this Article. The registration of a
transfer of any such Share shall operate as a waiver of the Company's lien thereon. The Company's lien on a Share shall also extend to
any amount payable in respect of that Share. |
| 13.2 | The Company may sell, in such manner as the Directors think fit, any Shares on which the Company has a
lien, if a sum in respect of which the lien exists is presently payable, and is not paid within fourteen clear days after notice has been
received or deemed to have been received by the holder of the Shares, or to the person entitled to it in consequence of the death or bankruptcy
of the holder, demanding payment and stating that if the notice is not complied with the Shares may be sold. |
| 13.3 | To give effect to any such sale the Directors may authorise any person to execute an instrument of transfer
of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or his nominee shall be registered as the
holder of the Shares comprised in any such transfer, and he shall not be bound to see to the application of the purchase money, nor shall
his title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of the Company's power of sale under
the Articles. |
| 13.4 | The net proceeds of such sale after payment of costs, shall be applied in payment of such part of the
amount in respect of which the lien exists as is presently payable and any balance shall (subject to a like lien for sums not presently
payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the sale. |
| 14.1 | Subject to the terms of the allotment and issue of any Shares, the Directors may make calls upon the Members
in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and each Member shall (subject to receiving
at least fourteen clear days' notice specifying the time or times of payment) pay to the Company at the time or times so specified the
amount called on the Shares. A call may be revoked or postponed, in whole or in part, as the Directors may determine. A call may be required
to be paid by instalments. A person upon whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent
transfer of the Shares in respect of which the call was made. |
| 14.2 | A call shall be deemed to have been made at the time when the resolution of the Directors authorising
such call was passed. |
| 14.3 | The joint holders of a Share shall be jointly and severally liable to pay all calls in respect thereof. |
| 14.4 | If a call remains unpaid after it has become due and payable, the person from whom it is due shall pay
interest on the amount unpaid from the day it became due and payable until it is paid at such rate as the Directors may determine (and
in addition all expenses that have been incurred by the Company by reason of such non-payment), but the Directors may waive payment of
the interest or expenses wholly or in part. |
| 14.5 | An amount payable in respect of a Share on issue or allotment or at any fixed date, whether on account
of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid all the provisions of the Articles
shall apply as if that amount had become due and payable by virtue of a call. |
| 14.6 | The Directors may issue Shares with different terms as to the amount and times of payment of calls, or
the interest to be paid. |
| 14.7 | The Directors may, if they think fit, receive an amount from any Member willing to advance all or any
part of the monies uncalled and unpaid upon any Shares held by him, and may (until the amount would otherwise become payable) pay interest
at such rate as may be agreed upon between the Directors and the Member paying such amount in advance. |
| 14.8 | No such amount paid in advance of calls shall entitle the Member paying such amount to any portion of
a Dividend or other distribution payable in respect of any period prior to the date upon which such amount would, but for such payment,
become payable. |
| 15.1 | If a call or instalment of a call remains unpaid after it has become due and payable the Directors may
give to the person from whom it is due not less than fourteen clear days' notice requiring payment of the amount unpaid together with
any interest which may have accrued and any expenses incurred by the Company by reason of such non-payment. The notice shall specify where
payment is to be made and shall state that if the notice is not complied with the Shares in respect of which the call was made will be
liable to be forfeited. |
| 15.2 | If the notice is not complied with, any Share in respect of which it was given may, before the payment
required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall include all Dividends, other
distributions or other monies payable in respect of the forfeited Share and not paid before the forfeiture. |
| 15.3 | A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as
the Directors think fit and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the
Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred to any person the Directors may authorise
some person to execute an instrument of transfer of the Share in favour of that person. |
| 15.4 | A person any of whose Shares have been forfeited shall cease to be a Member in respect of them and shall
surrender to the Company for cancellation the certificate for the Shares forfeited and shall remain liable to pay to the
Company all monies which at the date of forfeiture were payable by him to the Company in respect of those Shares together with interest
at such rate as the Directors may determine, but his liability shall cease if and when the Company shall have received payment in full
of all monies due and payable by him in respect of those Shares. |
| 15.5 | A certificate in writing under the hand of one Director or Officer that a Share has been forfeited on
a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the Share. The
certificate shall (subject to the execution of an instrument of transfer) constitute a good title to the Share and the person to whom
the Share is sold or otherwise disposed of shall not be bound to see to the application of the purchase money, if any, nor shall his title
to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the
Share. |
| 15.6 | The provisions of the Articles as to forfeiture shall apply in the case of non payment of any sum which,
by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par value of the Share or by way of premium
as if it had been payable by virtue of a call duly made and notified. |
| 16.1 | If a Member dies, the survivor or survivors (where he was a joint holder), or his legal personal representatives
(where he was a sole holder), shall be the only persons recognised by the Company as having any title to his Shares. The estate of a deceased
Member is not thereby released from any liability in respect of any Share, for which he was a joint or sole holder. |
| 16.2 | Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation or dissolution
of a Member (or in any other way than by transfer) may, upon such evidence being produced as may be required by the Directors, elect,
by a notice in writing sent by him to the Company, either to become the holder of such Share or to have some person nominated by him registered
as the holder of such Share. If he elects to have another person registered as the holder of such Share he shall sign an instrument of
transfer of that Share to that person. The Directors shall, in either case, have the same right to decline or suspend registration as
they would have had in the case of a transfer of the Share by the relevant Member before his death or bankruptcy or liquidation or dissolution,
as the case may be. |
| 16.3 | A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution
of a Member (or in any other case than by transfer) shall be entitled to the same Dividends, other distributions and other advantages
to which he would be entitled if he were the holder of such Share. However, he shall not, before becoming a Member in respect of a Share,
be entitled in respect of it to exercise any right conferred by membership in relation to general meetings of the Company and the Directors
may at any time give notice requiring any such person to elect either to be registered himself or to have some person nominated by him
be registered as the holder of the Share (but the Directors shall, in either case, have the same right to decline or suspend registration
as they would have had in the case of a transfer of the Share by the relevant Member before his death or bankruptcy or liquidation or
dissolution or any other case than by transfer, as the case may
be). If the notice is not complied with within ninety days of being received or deemed to be received (as determined pursuant to the Articles),
the Directors may thereafter withhold payment of all Dividends, other distributions, bonuses or other monies payable in respect of the
Share until the requirements of the notice have been complied with. |
| 17 | Class B Ordinary Share Conversion |
| 17.1 | The rights attaching to the Class A Shares and Class B Shares shall rank pari passu in all respects,
and the Class A Shares and Class B Shares shall vote together as a single class on all matters (subject to the Variation of Rights of
Shares Article and the Appointment and Removal of Directors Article hereof) with the exception that the holder of a Class B Share shall
have the conversion rights referred to in this Article. |
| 17.2 | Class B Shares shall automatically convert into Class A Shares on a one-for-one basis (the "Initial
Conversion Ratio"): (a) at any time and from time to time at the option of the Sponsor; or (b) automatically on the day of the
consummation of a Business Combination. |
| 17.3 | Notwithstanding the Initial Conversion Ratio, in the case that additional Class A Shares or any other
Equity-linked Securities, are issued, or deemed issued, by the Company in excess of the amounts offered in the IPO and related to the
consummation of a Business Combination, including pursuant to a specified future issuance, the ratio at which Class B Shares shall convert
into Class A Shares will be adjusted (unless the Sponsor agrees to waive such adjustment with respect to any such issuance or deemed issuance)
so that the number of Class A Shares issuable upon conversion of all Class B Shares will equal, in the aggregate, on an as-converted basis,
20 per cent of the sum of all Class B Shares in issue upon completion of the IPO plus all Class A Shares and Equity-linked Securities
issued or deemed issued in connection with a Business Combination (after giving effect to any redemptions of Class A Shares by public
shareholders), excluding any Class A Shares or Equity-linked Securities issued, or to be issued, to any seller in a Business Combination
and any private placement shares issued to the Sponsor, officers or directors upon conversion of working capital loans. |
| 17.4 | Notwithstanding anything to the contrary contained herein, the foregoing adjustment to the Initial Conversion
Ratio may be waived as to any particular issuance or deemed issuance of additional Class A Shares or Equity-linked Securities by
the written consent or agreement of the Sponsor consenting or agreeing separately as a separate class in the manner provided in the Variation
of Rights of Shares Article hereof. |
| 17.5 | The foregoing conversion ratio shall also be adjusted to account for any subdivision (by share subdivision,
exchange, capitalisation, rights issue, reclassification, recapitalisation or otherwise) or combination (by share consolidation, exchange,
reclassification, recapitalisation or otherwise) or similar reclassification or recapitalisation of the Class A Shares in issue into a
greater or lesser number of Shares occurring after the original filing of the Articles without a proportionate and corresponding subdivision,
combination or similar reclassification or recapitalisation of the Class B Shares in issue. |
| 17.6 | Each Class B Share shall convert into its pro rata number of Class A Shares pursuant to this Article.
The pro rata share for each holder of Class B Shares will be determined as follows: each Class B Share shall convert into such number
of Class A Shares as is equal to the product of 1 multiplied by a fraction, the numerator of which shall be the total number of Class
A Shares into which all of the Class B Shares in issue shall be converted pursuant to this Article and the denominator of which shall
be the total number of Class B Shares in issue at the time of conversion. |
| 17.7 | References in this Article to "converted", "conversion" or "exchange"
shall mean the compulsory redemption without notice of Class B Shares of any Member and, on behalf of such Members, automatic application
of such redemption proceeds in paying for such new Class A Shares into which the Class B Shares have been converted or exchanged at a
price per Class B Share necessary to give effect to a conversion or exchange calculated on the basis that the Class A Shares to be issued
as part of the conversion or exchange will be issued at par. The Class A Shares to be issued on an exchange or conversion shall be registered
in the name of such Member or in such name as the Member may direct. |
| 17.8 | Notwithstanding anything to the contrary in this Article, in no event may any Class B Share convert into
Class A Shares at a ratio that is less than one-for-one. |
| 18 | Amendments of Memorandum and Articles of Association and Alteration of Capital |
| 18.1 | The Company may by Ordinary Resolution: |
| (a) | increase its share capital by such sum as the Ordinary Resolution shall prescribe and with such rights,
priorities and privileges annexed thereto, as the Company in general meeting may determine; |
| (b) | consolidate and divide all or any of its share capital into Shares of larger amount than its existing
Shares; |
| (c) | convert all or any of its paid-up Shares into stock, and reconvert that stock into paid-up Shares of any
denomination; |
| (d) | by subdivision of its existing Shares or any of them divide the whole or any part of its share capital
into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and |
| (e) | cancel any Shares that at the date of the passing of the Ordinary Resolution have not been taken or agreed
to be taken by any person and diminish the amount of its share capital by the amount of the Shares so cancelled. |
| 18.2 | All new Shares created in accordance with the provisions of the preceding Article shall be subject to
the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as
the Shares in the original share capital. |
| 18.3 | Subject to the provisions of the Statute, the provisions of the Articles as regards the matters to be
dealt with by Ordinary Resolution and Article 29.4, the Company may by Special Resolution: |
| (b) | alter or add to the Articles; |
| (c) | alter or add to the Memorandum with respect to any objects, powers or other matters specified therein;
and |
| (d) | reduce its share capital or any capital redemption reserve fund. |
| 19 | Offices and Places of Business |
Subject to the provisions of the Statute,
the Company may by resolution of the Directors change the location of its Registered Office. The Company may, in addition to its Registered
Office, maintain such other offices or places of business as the Directors determine.
| 20.1 | All general meetings other than annual general meetings shall be called extraordinary general meetings. |
| 20.2 | The Company may, but shall not (unless required by the Statute) be obliged to, in each year hold a general
meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it. Any annual general meeting shall
be held at such time and place as the Directors shall appoint. At these meetings the report of the Directors (if any) shall be presented. |
| 20.3 | The Directors, the chief executive officer or the chairman of the board of Directors may call general
meetings, and, for the avoidance of doubt, Members shall not have the ability to call general meetings. |
| 21 | Notice of General Meetings |
| 21.1 | At least ten clear days' notice shall be given of any general meeting. Every notice shall specify the
place, the day and the hour of the meeting and the general nature of the business to be conducted at the general meeting and shall be
given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general
meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of
the Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed: |
| (a) | in the case of an annual general meeting, by all of the Members entitled to attend and vote thereat; and |
| (b) | in the case of an extraordinary general meeting, by a majority in number of the Members having a right
to attend and vote at the meeting, together holding not less than ninety-five per cent in par value of the Shares giving that right. |
| 21.2 | The accidental omission to give notice of a general meeting to, or the non receipt of notice of a general
meeting by, any person entitled to receive such notice shall not invalidate the proceedings of that general meeting. |
| 22 | Proceedings at General Meetings |
| 22.1 | No business shall be transacted at any general meeting unless a quorum is present. The holders of a majority
of the Shares being individuals present in person or by proxy or if a corporation or other non-natural person by its duly authorised representative
or proxy shall be a quorum. |
| 22.2 | A person may participate at a general meeting by conference telephone or other communications equipment
by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a general
meeting in this manner is treated as presence in person at that meeting. |
| 22.3 | A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by or on
behalf of all of the Members for the time being entitled to receive notice of and to attend and vote at general meetings (or, being corporations
or other non-natural persons, signed by their duly authorised representatives) shall be as valid and effective as if the resolution had
been passed at a general meeting of the Company duly convened and held. |
| 22.4 | If a quorum is not present within half an hour from the time appointed for the meeting to commence, the
meeting shall stand adjourned to the same day in the next week at the same time and/or place or to such other day, time and/or place as
the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the
meeting to commence, the Members present shall be a quorum. |
| 22.5 | The Directors may, at any time prior to the time appointed for the meeting to commence, appoint any person
to act as chairman of a general meeting of the Company or, if the Directors do not make any such appointment, the chairman, if any, of
the board of Directors shall preside as chairman at such general meeting. If there is no such chairman, or if he shall not be present
within fifteen minutes after the time appointed for the meeting to commence, or is unwilling to act, the Directors present shall elect
one of their number to be chairman of the meeting. |
| 22.6 | If no Director is willing to act as chairman or if no Director is present within fifteen minutes after
the time appointed for the meeting to commence, the Members present shall choose one of their number to be chairman of the meeting. |
| 22.7 | The chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed
by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any
adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. |
| 22.8 | When a general meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be
given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of an adjourned meeting. |
| 22.9 | If, prior to a Business Combination, a notice is issued in respect of a general meeting and the Directors,
in their absolute discretion, consider that it is impractical or undesirable for any reason to hold that general meeting at the place,
the day and the hour specified in the notice calling such general meeting, the Directors may postpone the general meeting to another place,
day and/or hour provided that notice of the place, the day and the hour of the rearranged general meeting is promptly given to all Members.
No business shall be transacted at any postponed meeting other than the business specified in the notice of the original meeting. |
| 22.10 | When a general meeting is postponed for thirty days or more, notice of the postponed meeting shall be
given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of a postponed meeting. All
proxy forms submitted for the original general meeting shall remain valid for the postponed meeting. The Directors may postpone a
general meeting which has already been postponed. |
| 22.11 | A resolution put to the vote of the meeting shall be decided on a poll. |
| 22.12 | A poll shall be taken as the chairman directs, and the result of the poll shall be deemed to be the resolution
of the general meeting at which the poll was demanded. |
| 22.13 | A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith.
A poll demanded on any other question shall be taken at such date, time and place as the chairman of the general meeting directs, and
any business other than that upon which a poll has been demanded or is contingent thereon may proceed pending the taking of the poll. |
| 22.14 | In the case of an equality of votes the chairman shall be entitled to a second or casting vote. |
| 23.1 | Subject to any rights or restrictions attached to any Shares, including as set out at Article 29.4, every
Member present in any such manner shall have one vote for every Share of which he is the holder. |
| 23.2 | In the case of joint holders the vote of the senior holder who tenders a vote, whether in person or by
proxy (or, in the case of a corporation or other non-natural person, by its duly authorised representative or proxy), shall be accepted
to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the names of the holders
stand in the Register of Members. |
| 23.3 | A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction
in lunacy, may vote by his committee, receiver, curator bonis, or other person on such Member's behalf appointed by that court, and any
such committee, receiver, curator bonis or other person may vote by proxy. |
| 23.4 | No person shall be entitled to vote at any general meeting unless he is registered as a Member on the
record date for such meeting nor unless all calls or other monies then payable by him in respect of Shares have been paid. |
| 23.5 | No objection shall be raised as to the qualification of any voter except at the general meeting or adjourned
general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall be valid. Any objection
made in due time in accordance with this Article shall be referred to the chairman whose decision shall be final and conclusive. |
| 23.6 | Votes may be cast either personally or by proxy (or in the case of a corporation or other non-natural
person by its duly authorised representative or proxy). A Member may appoint more than one proxy or the same proxy under one or more instruments
to attend and vote at a meeting. Where a Member appoints more than one proxy the instrument of proxy shall specify the number of Shares
in respect of which each proxy is entitled to exercise the related votes. |
| 23.7 | A Member holding more than one Share need not cast the votes in respect of his Shares in the same way
on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain from voting
a Share or some or all of the Shares and, subject to the terms of the instrument appointing him, a proxy appointed under one or more instruments
may vote a Share or some or all of the Shares in respect of which he is appointed either for or against a resolution and/or abstain from
voting a Share or some or all of the Shares in respect of which he is appointed. |
| 24.1 | The instrument appointing a proxy shall be in writing and shall be executed under the hand of the appointor
or of his attorney duly authorised in writing, or, if the appointor is a corporation or other non natural person, under the hand of its
duly authorised representative. A proxy need not be a Member. |
| 24.2 | The Directors may, in the notice convening any meeting or adjourned meeting, or in an instrument of proxy
sent out by the Company, specify the manner by which the instrument appointing a proxy shall be deposited and the place and the time (being
not later than the time appointed for the commencement of the meeting or adjourned meeting to which the proxy relates) at which the instrument
appointing a proxy shall be deposited. In the absence of any such direction from the Directors in the notice convening any meeting or
adjourned meeting or in an instrument of proxy sent out by the Company, the instrument appointing a proxy shall be deposited physically
at the Registered Office not less than 48 hours before the time appointed for the meeting or adjourned meeting to commence at which the
person named in the instrument proposes to vote. |
| 24.3 | The chairman may in any event at his discretion declare that an instrument of proxy shall be deemed to
have been duly deposited. An instrument of proxy that is not deposited in the manner permitted, or which has not been declared to have
been duly deposited by the chairman, shall be invalid. |
| 24.4 | The instrument appointing a proxy may be in any usual or common form (or such other form as the Directors
may approve) and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked. An instrument
appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll. |
| 24.5 | Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the
previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the
transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation or transfer
was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting at which it
is sought to use the proxy. |
| 25.1 | Any corporation or other non-natural person which is a Member may in accordance with its constitutional
documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such person as it thinks
fit to act as its representative at any meeting of the Company or of any class of Members, and the person so authorised shall be entitled
to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise if it were an individual
Member. |
| 25.2 | If a Clearing House (or its nominee(s)), being a corporation, is a Member, it may authorise such persons
as it sees fit to act as its representative at any meeting of the Company or at any meeting of any class of Members provided that the
authorisation shall specify the number and class of Shares in respect of which each such representative is so authorised. Each person
so authorised under the provisions of this Article shall be deemed to have been duly authorised without further evidence of the facts
and be entitled to exercise the same rights and powers on behalf of the Clearing House (or its nominee(s)) as if such person was the registered
holder of such Shares held by the Clearing House (or its nominee(s)). |
| 26 | Shares that May Not be Voted |
Shares in the Company that are beneficially
owned by the Company shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number
of outstanding Shares at any given time.
| 27.1 | There shall be a board of Directors consisting of not less than one person provided however that the Company
may by Ordinary Resolution increase or reduce the limits in the number of Directors. |
| 27.2 | The Directors shall be divided into three classes: Class I, Class II and Class III. The number of Directors
in each class shall be as nearly equal as possible. Upon the adoption of the Articles, the existing Directors shall by resolution classify
themselves as Class I, Class II or Class III Directors. The Class I Directors shall stand appointed for a term expiring at the Company’s
first annual general meeting, the Class II Directors shall stand appointed for a term expiring at the Company’s second annual general
meeting and the Class III Directors shall stand appointed for a term expiring at the Company’s third annual general meeting. Commencing
at the Company’s first annual general meeting, and at each annual general meeting thereafter, Directors appointed to succeed those
Directors whose terms expire shall be appointed for a term of office to expire at the third succeeding annual general meeting after their
appointment. Except as the Statute or other Applicable Law may otherwise require, in the interim between annual general meetings or extraordinary
general meetings called for the appointment of Directors and/or the removal of one or more Directors and the filling of any vacancy in
that connection, additional Directors and any vacancies in the board of Directors, including unfilled vacancies resulting from the removal
of Directors for cause, may be filled by the vote of a majority of the remaining Directors then in office, although less than a quorum
(as defined in the Articles), or by the sole remaining Director. All Directors shall hold office until the expiration of their respective
terms of office and until their successors shall have been appointed and qualified. A Director appointed to fill a vacancy resulting from
the death, resignation or removal of a Director shall serve for the remainder of the full term of the Director whose death, resignation
or removal shall have created such vacancy and until his successor shall have been appointed and qualified.] |
| 28.1 | Subject to the provisions of the Statute, the Memorandum and the Articles and to any directions given
by Special Resolution, the business of the Company shall be managed by the Directors who may exercise all the powers of the Company. No
alteration of the Memorandum or Articles and no such direction shall invalidate any prior act of the Directors which would have been valid
if that alteration had not been made or that direction had not been given. A duly convened meeting of Directors at which a quorum is present
may exercise all powers exercisable by the Directors. |
| 28.2 | All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable instruments
and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may be in
such manner as the Directors shall determine by resolution. |
| 28.3 | The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any
Director who has held any other salaried office or place of profit with the Company or to his widow or dependants and may make contributions
to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance. |
| 28.4 | The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its
undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture stock,
mortgages, bonds and other such securities whether outright or as security for
any debt, liability or obligation of the Company or of any third party. |
| 29 | Appointment and Removal of Directors |
| 29.1 | Prior to the consummation of a Business Combination, the Company may by Ordinary Resolution of the holders
of the Class B Shares appoint any person to be a Director or may by Ordinary Resolution of the holders of the Class B Shares remove any
Director. For the avoidance of doubt, prior to the consummation of a Business Combination, holders of Class A Shares shall have no right
to vote on the appointment or removal of any Director. |
| 29.2 | The Directors may appoint any person to be a Director, either to fill a vacancy or as an additional Director
provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with the Articles
as the maximum number of Directors. |
| 29.3 | After the consummation of a Business Combination, the Company may by Ordinary Resolution appoint any person
to be a Director or may by Ordinary Resolution remove any Director. |
| 29.4 | Prior to the consummation of a Business Combination, Article 29.1 may only be amended by a Special Resolution
passed by at least two-thirds of such Members (which shall include a simple majority of the holders of Class B Shares) as, being entitled
to do so, vote in person or, where proxies are allowed, by proxy at a general meeting of which notice specifying the intention to propose
the resolution as a Special Resolution has been given, or by way of unanimous written resolution. |
| 30 | Vacation of Office of Director |
The office of a Director shall be vacated
if:
| (a) | the Director gives notice in writing to the Company that he resigns the office of Director; or |
| (b) | the Director absents himself (for the avoidance of doubt, without being represented by proxy) from three
consecutive meetings of the board of Directors without special leave of absence from the Directors, and the Directors pass a resolution
that he has by reason of such absence vacated office; or |
| (c) | the Director dies, becomes bankrupt or makes any arrangement or composition with his creditors generally;
or |
| (d) | the Director is found to be or becomes of unsound mind; or |
| (e) | all of the other Directors (being not less than two in number) determine that he should be removed as
a Director, either by a resolution passed by all of the other Directors at a meeting of the Directors duly convened and held in accordance
with the Articles or by a resolution in writing signed by all of the other Directors. |
| 31 | Proceedings of Directors |
| 31.1 | The quorum for the transaction of the business of the Directors may be fixed by the Directors, and unless
so fixed shall be a majority of the Directors then in office. |
| 31.2 | Subject to the provisions of the Articles, the Directors may regulate their proceedings as they think
fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman shall
have a second or casting vote. |
| 31.3 | A person may participate in a meeting of the Directors or any committee of Directors by conference telephone
or other communications equipment by means of which all the persons participating in the meeting can communicate with each other at the
same time. Participation by a person in a meeting in this manner is treated as presence in person at that meeting. Unless otherwise determined
by the Directors, the meeting shall be deemed to be held at the place where the chairman is located at the start of the meeting. |
| 31.4 | A resolution in writing (in one or more counterparts) signed by all the Directors or all the members of
a committee of the Directors or, in the case of a resolution in writing relating to the removal of any Director or the vacation of office
by any Director, all of the Directors other than the Director who is the subject of such resolution shall be as valid and effectual as
if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened and held. |
| 31.5 | A Director may, or other Officer on the direction of a Director shall, call a meeting of the Directors
by at least two days' notice in writing to every Director which notice shall set forth the general nature of the business to be considered
unless notice is waived by all the Directors either at, before or after the meeting is held. To any such notice of a meeting of the Directors
all the provisions of the Articles relating to the giving of notices by the Company to the Members shall apply mutatis mutandis. |
| 31.6 | The continuing Directors (or a sole continuing Director, as the case may be) may act notwithstanding any
vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to the Articles as the necessary
quorum of Directors the continuing Directors or Director may act for the purpose of increasing the number of Directors to be equal to
such fixed number, or of summoning a general meeting of the Company, but for no other purpose. |
| 31.7 | The Directors may elect a chairman of their board and determine the period for which he is to hold office;
but if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time appointed for
the meeting to commence, the Directors present may choose one of their number to be chairman of the meeting. |
| 31.8 | All acts done by any meeting of the Directors or of a committee of the Directors shall,
notwithstanding that it is afterwards discovered that there was some defect in the appointment of any Director, and/or that they or
any of them were disqualified, and/or had vacated their office and/or were not entitled to vote, be as valid as if every such person
had been duly appointed and/or not disqualified to be a Director and/or had not vacated their office and/or had been entitled to
vote, as the case may be. |
| 31.9 | A Director may be represented at any meetings of the board of Directors by a proxy appointed in writing
by him. The proxy shall count towards the quorum and the vote of the proxy shall for all purposes be deemed to be that of the appointing
Director. |
A Director who is present at a meeting
of the board of Directors at which action on any Company matter is taken shall be presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action with the person
acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent by registered post to
such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favour
of such action.
| 33.1 | A Director may hold any other office or place of profit under the Company (other than the office of Auditor)
in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine. |
| 33.2 | A Director may act by himself or by, through or on behalf of his firm in a professional capacity for the
Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director. |
| 33.3 | A Director may be or become a director or other officer of or otherwise interested in any company promoted
by the Company or in which the Company may be interested as a shareholder, a contracting party or otherwise, and no such Director shall
be accountable to the Company for any remuneration or other benefits received by him as a director or officer of, or from his interest
in, such other company. |
| 33.4 | No person shall be disqualified from the office of Director or prevented by such office from contracting
with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by
or on behalf of the Company in which any Director shall be in any way interested be or be liable to be avoided, nor shall any Director
so contracting or being so interested be liable to account to the Company for any profit realised by or arising in connection with any
such contract or transaction by reason of such Director holding office or of the fiduciary relationship thereby established. A Director
shall be at liberty to vote in respect of any contract or transaction in which he is interested provided that the nature of the interest
of any Director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any vote thereon. |
| 33.5 | A general notice that a Director is a shareholder, director, officer or employee of any specified firm
or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure for the
purposes of voting on a resolution in respect of a contract or transaction in which he has an interest, and after such general notice
it shall not be necessary to give special notice relating to any particular transaction. |
The Directors shall cause minutes to
be made in books kept for the purpose of recording all appointments of Officers made by the Directors, all proceedings at meetings of
the Company or the holders of any class of Shares and of the Directors, and of committees of the Directors, including the names of the
Directors present at each meeting.
| 35 | Delegation of Directors' Powers |
| 35.1 | The Directors may delegate any of their powers, authorities and discretions, including the power to sub-delegate,
to any committee consisting of one or more Directors (including, without limitation, the Audit Committee, the Compensation Committee and
the Nominating Committee). Any such delegation may be made subject to any conditions the Directors may impose and either collaterally
with or to the exclusion of their own powers and any such delegation may be revoked or altered by the Directors. Subject to any such conditions,
the proceedings of a committee of Directors shall be governed by the Articles regulating the proceedings of Directors, so far as they
are capable of applying. |
| 35.2 | The Directors may establish any committees, local boards or agencies or appoint any person to be a manager
or agent for managing the affairs of the Company and may appoint any person to be a member of such committees, local boards or agencies.
Any such appointment may be made subject to any conditions the Directors may impose, and either collaterally with or to the exclusion
of their own powers and any such appointment may be revoked or altered by the Directors. Subject to any such conditions, the proceedings
of any such committee, local board or agency shall be governed by the Articles regulating the proceedings of Directors, so far as they
are capable of applying. |
| 35.3 | The Directors may adopt formal written charters for committees and, if so adopted, shall review and assess
the adequacy of such formal written charters on an annual basis. Each of these committees shall be empowered to do all things necessary
to exercise the rights of such committee set forth in the Articles and shall have such powers as the Directors may delegate pursuant to
the Articles and as required by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or
any other competent regulatory authority or otherwise under Applicable Law. Each of the Audit Committee, the Compensation Committee and
the Nominating Committee, if established, shall consist of such number of Directors as the Directors shall from time to time determine
(or such minimum number as may be required from time to time by the rules and regulations of the Designated Stock Exchange, the Securities
and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law). For so long as any class of
Shares is listed on the Designated Stock Exchange, the Audit Committee, the Compensation Committee and the Nominating Committee shall
be made up of such number of Independent Directors as is required from time to time by the rules and regulations of the Designated Stock
Exchange, the Securities and Exchange Commission and/or any other
competent regulatory authority or otherwise under Applicable Law. |
| 35.4 | The Directors may by power of attorney or otherwise appoint any person to be the agent of the Company
on such conditions as the Directors may determine, provided that the delegation is not to the exclusion of their own powers and may be
revoked by the Directors at any time. |
| 35.5 | The Directors may by power of attorney or otherwise appoint any company, firm, person or body of persons,
whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory of the Company for such purpose
and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under the Articles) and
for such period and subject to such conditions as they may think fit, and any such powers of attorney or other appointment may contain
such provisions for the protection and convenience of persons dealing with any such attorneys or authorised signatories as the Directors
may think fit and may also authorise any such attorney or authorised signatory to delegate all or any of the powers, authorities and discretions
vested in him. |
| 35.6 | The Directors may appoint such Officers as they consider necessary on such terms, at such remuneration
and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors may think fit. Unless otherwise
specified in the terms of his appointment an Officer may be removed by resolution of the Directors or Members. An Officer may vacate his
office at any time if he gives notice in writing to the Company that he resigns his office. |
| 36 | No Minimum Shareholding |
The Company in general meeting may fix
a minimum shareholding required to be held by a Director, but unless and until such a shareholding qualification is fixed a Director is
not required to hold Shares.
| 37 | Remuneration of Directors |
| 37.1 | The remuneration to be paid to the Directors, if any, shall be such remuneration as the Directors shall
determine, provided that no cash remuneration shall be paid to any Director by the Company prior to the consummation of a Business Combination.
The Directors shall also, whether prior to or after the consummation of a Business Combination, be entitled to be paid all travelling,
hotel and other expenses properly incurred by them in connection with their attendance at meetings of Directors or committees of Directors,
or general meetings of the Company, or separate meetings of the holders of any class of Shares or debentures of the Company, or otherwise
in connection with the business of the Company or the discharge of their duties as a Director, or to receive a fixed allowance in respect
thereof as may be determined by the Directors, or a combination partly of one such method and partly the other. |
| 37.2 | The Directors may by resolution approve additional remuneration to any Director for any services which
in the opinion of the Directors go beyond his ordinary routine work as a Director. Any fees paid to a Director who is also counsel,
attorney or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his remuneration as a
Director. |
| 38.1 | The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the authority
of the Directors or of a committee of the Directors authorised by the Directors. Every instrument to which the Seal has been affixed shall
be signed by at least one person who shall be either a Director or some Officer or other person appointed by the Directors for the purpose. |
| 38.2 | The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal or Seals
each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine, with the addition on its face
of the name of every place where it is to be used. |
| 38.3 | A Director or Officer, representative or attorney of the Company may without further authority of the
Directors affix the Seal over his signature alone to any document of the Company required to be authenticated by him under seal or to
be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever. |
| 39 | Dividends, Distributions and Reserve |
| 39.1 | Subject to the Statute and this Article and except as otherwise provided by the rights attached to any
Shares, the Directors may resolve to pay Dividends and other distributions on Shares in issue and authorise payment of the Dividends or
other distributions out of the funds of the Company lawfully available therefor. A Dividend shall be deemed to be an interim Dividend
unless the terms of the resolution pursuant to which the Directors resolve to pay such Dividend specifically state that such Dividend
shall be a final Dividend. No Dividend or other distribution shall be paid except out of the realised or unrealised profits of the Company,
out of the share premium account or as otherwise permitted by law. |
| 39.2 | Except as otherwise provided by the rights attached to any Shares, all Dividends and other distributions
shall be paid according to the par value of the Shares that a Member holds. If any Share is issued on terms providing that it shall rank
for Dividend as from a particular date, that Share shall rank for Dividend accordingly. |
| 39.3 | The Directors may deduct from any Dividend or other distribution payable to any Member all sums of money
(if any) then payable by him to the Company on account of calls or otherwise. |
| 39.4 | The Directors may resolve that any Dividend or other distribution be paid wholly or partly by the distribution
of specific assets and in particular (but without limitation) by the distribution of shares, debentures, or securities of any other company
or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors may settle the same as
they think expedient and in particular may issue fractional Shares and may fix the value for distribution of such specific assets or any
part thereof and may determine that cash payments shall be made to any Members upon the basis of the value
so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees in such manner as may seem expedient
to the Directors. |
| 39.5 | Except as otherwise provided by the rights attached to any Shares, Dividends and other distributions may
be paid in any currency. The Directors may determine the basis of conversion for any currency conversions that may be required and how
any costs involved are to be met. |
| 39.6 | The Directors may, before resolving to pay any Dividend or other distribution, set aside such sums as
they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose of the Company
and pending such application may, at the discretion of the Directors, be employed in the business of the Company. |
| 39.7 | Any Dividend, other distribution, interest or other monies payable in cash in respect of Shares may be
paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of the holder or,
in the case of joint holders, to the registered address of the holder who is first named on the Register of Members or to such person
and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order
of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts for any Dividends, other distributions,
bonuses, or other monies payable in respect of the Share held by them as joint holders. |
| 39.8 | No Dividend or other distribution shall bear interest against the Company. |
| 39.9 | Any Dividend or other distribution which cannot be paid to a Member and/or which remains unclaimed after
six months from the date on which such Dividend or other distribution becomes payable may, in the discretion of the Directors, be paid
into a separate account in the Company's name, provided that the Company shall not be constituted as a trustee in respect of that account
and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend or other distribution which remains unclaimed
after a period of six years from the date on which such Dividend or other distribution becomes payable shall be forfeited and shall revert
to the Company. |
The Directors may at any time
capitalise any sum standing to the credit of any of the Company's reserve accounts or funds (including the share premium account and
capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for
distribution; appropriate such sum to Members in the proportions in which such sum would have been divisible amongst such Members
had the same been a distribution of profits by way of Dividend or other distribution; and apply such sum on their behalf in paying
up in full unissued Shares for allotment and distribution credited as fully paid-up to and amongst them in the proportion aforesaid.
In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power given to
the Directors to make such provisions as they think fit in the case of Shares becoming distributable in fractions (including
provisions whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors
may authorise any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such
capitalisation and matters incidental or relating thereto and any agreement made under such authority shall be effective and binding
on all such Members and the Company.
| 41.1 | The Directors shall cause proper books of account (including, where applicable, material underlying
documentation including contracts and invoices) to be kept with respect to all sums of money received and expended by the Company and
the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and the assets
and liabilities of the Company. Such books of account must be retained for a minimum period of five years from the date on which they
are prepared. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true
and fair view of the state of the Company's affairs and to explain its transactions. |
| 41.2 | The Directors shall determine whether and to what extent and at what times and places and under what conditions
or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members not being Directors and
no Member (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred
by Statute or authorised by the Directors or by the Company in general meeting. |
| 41.3 | The Directors may cause to be prepared and to be laid before the Company in general meeting profit and
loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law. |
| 42.1 | The Directors may appoint an Auditor of the Company who shall hold office on such terms as the Directors
determine. |
| 42.2 | Without prejudice to the freedom of the Directors to establish any other committee, if the Shares (or
depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, and if required by the rules and regulations of the
Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable
Law, the Directors shall establish and maintain an Audit Committee as a committee of the Directors and shall adopt a formal written Audit
Committee charter and review and assess the adequacy of the formal written charter on an annual basis. The composition and responsibilities
of the Audit Committee shall comply with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission
and/or any other competent regulatory authority or otherwise under Applicable Law. The Audit Committee shall meet at least once every
financial quarter, or more frequently as circumstances dictate. |
| 42.3 | If the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange,
the Company shall conduct an appropriate review of all related party transactions on an ongoing basis and shall utilise the Audit Committee
for the review and approval of potential conflicts of interest. |
| 42.4 | The remuneration of the Auditor shall be fixed by the Audit Committee (if one exists). |
| 42.5 | If the office of Auditor becomes vacant by resignation or death of the Auditor, or by his becoming incapable
of acting by reason of illness or other disability at a time when his services are required, the Directors shall fill the vacancy and
determine the remuneration of such Auditor. |
| 42.6 | Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers
of the Company and shall be entitled to require from the Directors and Officers such information and explanation as may be necessary for
the performance of the duties of the Auditor. |
| 42.7 | Auditors shall, if so required by the Directors, make a report on the accounts of the Company during their
tenure of office at the next annual general meeting following their appointment in the case of a company which is registered with the
Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following their appointment in the case of
a company which is registered with the Registrar of Companies as an exempted company, and at any other time during their term of office,
upon request of the Directors or any general meeting of the Members. |
| 43.1 | Notices shall be in writing and may be given by the Company to any Member either personally or by sending
it by courier, post, cable, telex, fax or e-mail to him or to his address as shown in the Register of Members (or where the notice is
given by e-mail by sending it to the e-mail address provided by such Member). Notice may also be served by Electronic Communication in
accordance with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent
regulatory authority or by placing it on the Company’s Website. |
| 43.2 | Where a notice is sent by: |
| (a) | courier; service of the notice shall be deemed to be effected by delivery of the notice to a courier company,
and shall be deemed to have been received on the third day (not including Saturdays or Sundays or public holidays) following the day on
which the notice was delivered to the courier; |
| (b) | post; service of the notice shall be deemed to be effected by properly addressing, pre paying and posting
a letter containing the notice, and shall be deemed to have been received on the fifth day (not including Saturdays or Sundays or public
holidays in the Cayman Islands) following the day on which the notice was posted; |
| (c) | cable, telex or fax; service of the notice shall be deemed to be effected by properly addressing and sending
such notice and shall be deemed to have been received on the same day that it was transmitted; |
| (d) | e-mail or other Electronic Communication; service of the notice shall be deemed to be effected by transmitting
the e-mail to the e-mail address provided by the intended recipient and shall be deemed to have been received on the same day that it
was sent, and it shall not be necessary for the receipt of the e-mail to be acknowledged by the recipient; and |
| (e) | placing it on the Company’s Website; service of the notice shall be deemed to have been effected
one hour after the notice or document was placed on the Company’s Website. |
| 43.3 | A notice may be given by the Company to the person or persons which the Company has been advised are entitled
to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices which are required to be
given under the Articles and shall be addressed to them by name, or by the title of representatives of the deceased, or trustee of the
bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so entitled, or at the option
of the Company by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred. |
| 43.4 | Notice of every general meeting shall be given in any manner authorised by the Articles to every holder
of Shares carrying an entitlement to receive such notice on the record date for such meeting except that in the case of joint holders
the notice shall be sufficient if given to the joint holder first named in the Register of Members and every person upon whom the ownership
of a Share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of a Member where the Member but
for his death or bankruptcy would be entitled to receive notice of the meeting, and no other person shall be entitled to receive notices
of general meetings. |
| 44.1 | If the Company shall be wound up, the liquidator shall apply the assets of the Company in satisfaction
of creditors' claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in a winding
up: |
| (a) | if the assets available for distribution amongst the Members shall be insufficient to repay the whole
of the Company's issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the
Members in proportion to the par value of the Shares held by them; or |
| (b) | if the assets available for distribution amongst the Members shall be more than sufficient to repay the
whole of the Company's issued share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members
in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect
of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise. |
| 44.2 | If the Company shall be wound up the liquidator may, subject to the rights attaching to any Shares and
with the approval of a Special Resolution of the Company and any other approval required by the Statute, divide amongst the Members in
kind the whole or any part of the assets of the Company (whether such assets shall consist of property of the same kind or not) and may
for that purpose value any assets and determine how the division shall be carried out as between the Members or different classes of Members.
The liquidator may, with the like approval, vest the whole or any part of such assets in trustees upon such trusts for the benefit of
the Members as the liquidator, with the like approval, shall think fit, but so that no Member shall be compelled to accept any asset upon
which there is a liability. |
| 45 | Indemnity and Insurance |
| 45.1 | Every Director and Officer (which for the avoidance of doubt, shall not include auditors of the Company),
together with every former Director and former Officer (each an "Indemnified Person") shall be indemnified out of the
assets of the Company against any liability, action, proceeding, claim, demand, costs, damages or expenses, including legal expenses,
whatsoever which they or any of them may incur as a result of any act or failure to act in carrying out their functions other than such
liability (if any) that they may incur by reason of their own actual fraud, wilful neglect or wilful default. No Indemnified Person shall
be liable to the Company for any loss or damage incurred by the Company as a result (whether direct or indirect) of the carrying out of
their functions unless that liability arises through the actual fraud, wilful neglect or wilful default of such Indemnified Person. No
person shall be found to have committed actual fraud, wilful neglect or wilful default under this Article unless or until a court of competent
jurisdiction shall have made a finding to that effect. |
| 45.2 | The Company shall advance to each Indemnified Person reasonable attorneys' fees and other costs and expenses
incurred in connection with the defence of any action, suit, proceeding or investigation involving such Indemnified Person for which indemnity
will or could be sought. In connection with any advance of any expenses hereunder, the Indemnified Person shall execute an undertaking
to repay the advanced amount to the Company if it shall be determined by final judgment or other final adjudication that such Indemnified
Person was not entitled to indemnification pursuant to this Article. If it shall be determined by a final judgment or other final adjudication
that such Indemnified Person was not entitled to indemnification with respect to such judgment, costs or expenses, then such party shall
not be indemnified with respect to such judgment, costs or expenses and any advancement shall be returned to the Company (without interest)
by the Indemnified Person. |
| 45.3 | The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of any Director
or Officer against any liability which, by virtue of any rule of law, would otherwise attach to such person in respect of any negligence,
default, breach of duty or breach of trust of which such person may be guilty in relation to the Company. |
Unless the Directors otherwise prescribe,
the financial year of the Company shall end on 31st December in each year and, following the year of incorporation, shall begin on 1st
January in each year.
| 47 | Transfer by Way of Continuation |
If the Company is exempted as defined
in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have the power to register
by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the
Cayman Islands.
| 48 | Mergers and Consolidations |
The Company shall
have the power to merge or consolidate with one or more other constituent companies (as defined in the Statute) upon such terms as the
Directors may determine and (to the extent required by the Statute) with the approval of a Special Resolution.
| 49.1 | Notwithstanding any other provision of the Articles, this Article shall apply during the period commencing
upon the adoption of the Articles and terminating upon the first to occur of the consummation of a Business Combination and the full distribution
of the Trust Account pursuant to this Article. In the event of a conflict between this Article and any other Articles, the provisions
of this Article shall prevail. |
| 49.2 | Prior to the consummation of a Business Combination, the Company shall either: |
| (a) | submit such Business Combination to its Members for approval; or |
| (b) | provide Members with the opportunity to have their Shares repurchased by means of a tender offer for a
per-Share repurchase price payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business
days prior to the consummation of such Business Combination, including interest earned on the Trust Account (net of taxes paid or payable,
if any), divided by the number of then issued Public Shares, provided that the Company shall not repurchase Public Shares in an amount
that would cause the Company's net tangible assets to be less than US$5,000,001 upon consummation of such Business Combination. Such obligation
to repurchase Shares is subject to the completion of the proposed Business Combination to which it relates. |
| 49.3 | If the Company initiates any tender offer in accordance with Rule 13e-4 and Regulation 14E of the Exchange
Act in connection with a proposed Business Combination, it shall file tender offer documents with the Securities and Exchange Commission
prior to completing such Business Combination which contain substantially the same financial and other information about such Business
Combination and the redemption rights as is required under Regulation 14A of the Exchange Act. If, alternatively, the
Company holds a general meeting to approve a proposed Business Combination, the Company will conduct any redemptions in conjunction with
a proxy solicitation pursuant to Regulation 14A of the Exchange Act, and not pursuant to the tender offer rules, and file proxy materials
with the Securities and Exchange Commission. |
| 49.4 | At a general meeting called for the purposes of approving a Business Combination pursuant to this Article,
in the event that such Business Combination is approved by Ordinary Resolution, the Company shall be authorised to consummate such Business
Combination, provided that the Company shall not consummate such Business Combination unless the Company has net tangible assets of at
least US$5,000,001 immediately prior to, or upon such consummation of, or any greater net tangible asset or cash requirement that may
be contained in the agreement relating to, such Business Combination. |
| 49.5 | Any Member holding Public Shares who is not the Sponsor, a Founder, Officer or Director may, in connection
with any vote on a Business Combination, elect to have their Public Shares redeemed for cash, in accordance with any applicable requirements
provided for in the related proxy materials (the "IPO Redemption"), provided that no such Member acting together with
any Affiliate of his or any other person with whom he is acting in concert or as a partnership, limited partnership, syndicate, or other
group for the purposes of acquiring, holding, or disposing of Shares may exercise this redemption right with respect to more than 15 per
cent of the Public Shares in the aggregate without the prior consent of the Company and provided further that any beneficial holder of
Public Shares on whose behalf a redemption right is being exercised must identify itself to the Company in connection with any redemption
election in order to validly redeem such Public Shares. If so demanded, the Company shall pay any such redeeming Member, regardless of
whether he is voting for or against such proposed Business Combination, a per-Share redemption price payable in cash, equal to the aggregate
amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the Business Combination,
including interest earned on the Trust Account (such interest shall be net of taxes payable) and not previously released to the Company
to pay its taxes, divided by the number of then issued Public Shares (such redemption price being referred to herein as the "Redemption
Price"), but only in the event that the applicable proposed Business Combination is approved and consummated. The Company shall
not redeem Public Shares that would cause the Company’s net tangible assets to be less than US$5,000,001 following such redemptions
(the "Redemption Limitation"). |
| 49.6 | A Member may not withdraw a Redemption Notice once submitted to the Company unless the Directors determine
(in their sole discretion) to permit the withdrawal of such redemption request (which they may do in whole or in part). |
| 49.7 | In the event that the Company does not consummate a Business Combination within 24 months from the consummation
of the IPO, or such later time as the Members may approve in accordance with the Articles, the Company shall: |
| (a) | cease all operations except for the purpose of winding up; |
| (b) | as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares,
at a per-Share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on
the funds held in the Trust Account and not previously released to the Company (less taxes payable and up to US$100,000 of interest to
pay dissolution expenses), divided by the number of then Public Shares in issue, which redemption will completely extinguish public Members'
rights as Members (including the right to receive further liquidation distributions, if any); and |
| (c) | as promptly as reasonably possible following such redemption, subject to the approval of the Company's
remaining Members and the Directors, liquidate and dissolve, |
subject in each case
to its obligations under Cayman Islands law to provide for claims of creditors and other requirements of Applicable Law.
| 49.8 | In the event that any amendment is made to the Articles: |
| (a) | to modify the substance or timing of the Company's obligation to allow redemption in connection with a
Business Combination or redeem 100 per cent of the Public Shares if the Company does not consummate a Business Combination within 24 months
from the consummation of the IPO, or such later time as the Members may approve in accordance with the Articles; or |
| (b) | with respect to any other provision relating to Members’ rights or pre-Business Combination activity, |
each holder of Public
Shares who is not the Sponsor, a Founder, Officer or Director shall be provided with the opportunity to redeem their Public Shares upon
the approval or effectiveness of any such amendment at a per-Share price, payable in cash, equal to the aggregate amount then on deposit
in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay
its taxes, divided by the number of then outstanding Public Shares. The Company’s ability to provide such redemption in this Article
is subject to the Redemption Limitation.
| 49.9 | A holder of Public Shares shall be entitled to receive distributions from the Trust Account only in the
event of an IPO Redemption, a repurchase of Shares by means of a tender offer pursuant to this Article, or a distribution of the Trust
Account pursuant to this Article. In no other circumstance shall a holder of Public Shares have any right or interest of any kind in the
Trust Account. |
| 49.10 | After the issue of Public Shares, and prior to the consummation of a Business Combination, the Company
shall not issue additional Shares or any other securities that would entitle the holders thereof to: |
| (a) | receive funds from the Trust Account; or |
| (b) | vote as a class with Public Shares on a Business Combination. |
| 49.11 | A Director may vote in respect of a Business Combination in which such Director has a conflict of interest
with respect to the evaluation of such Business Combination. Such Director must disclose such interest or conflict to the other Directors. |
| 49.12 | As long as the securities of the Company are listed on the Nasdaq Capital Market, the Company must complete
one or more Business Combinations having an aggregate fair market value of at least 80 per cent of the assets held in the Trust Account
(excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the Company's
signing a definitive agreement in connection with a Business Combination. A Business Combination must not be solely effectuated with another
blank cheque company or a similar company with nominal operations. |
| 49.13 | The Company may enter into a Business Combination with a target business that is Affiliated with the Sponsor,
a Founder, a Director or an Officer. In the event the Company seeks to consummate a Business Combination with a target that is Affiliated
with the Sponsor, a Founder, a Director or an Officer, the Company, or a committee of Independent and disinterested Directors, will obtain
an opinion from an independent investment banking firm that is a member of the United States Financial Industry Regulatory Authority or
an independent valuation or appraisal firm that such a Business Combination is fair to the Company from a financial point of view. |
Each Tax Filing Authorised Person and
any such other person, acting alone, as any Director shall designate from time to time, are authorised to file IRS forms SS-4, W-8 BEN,
W-8 IMY, W-9, 8832 and 2553 and such other similar tax forms as are customary to file with any US state or federal governmental authorities
or foreign governmental authorities in connection with the formation, activities and/or elections of the Company and such other tax forms
as may be approved from time to time by any Director or Officer. The Company further ratifies and approves any such filing made by any
Tax Filing Authorised Person or such other person prior to the date of the Articles.
| 51.1 | To the fullest extent permitted by Applicable Law, no individual serving as a Director or an Officer ("Management")
shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same
or similar business activities or lines of business as the Company. To the fullest extent permitted by Applicable Law, the Company renounces
any interest or expectancy of the Company in, or in being offered an opportunity to participate in, any potential transaction or matter
which may be a corporate opportunity for Management, on the one hand, and the Company, on the other. Except to the extent expressly assumed
by contract, to the fullest extent permitted by Applicable Law, Management shall have no duty to communicate or offer any such corporate
opportunity to the Company and shall not be liable to the Company or its Members for breach of any fiduciary duty as a Member, Director
and/or Officer solely by reason of the fact that such party pursues or acquires such corporate opportunity for itself, himself or herself,
directs such corporate opportunity to another person, or does not communicate information regarding such corporate opportunity to the
Company. |
| 51.2 | Except as provided elsewhere in this Article, the Company hereby renounces any interest or expectancy
of the Company in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate
opportunity for both the Company and Management, about which a Director and/or Officer who is also a member of Management acquires knowledge. |
| 51.3 | To the extent a court might hold that the conduct of any activity related to a corporate opportunity that
is renounced in this Article to be a breach of duty to the Company or its Members, the Company hereby waives, to the fullest extent permitted
by Applicable Law, any and all claims and causes of action that the Company may have for such activities. To the fullest extent permitted
by Applicable Law, the provisions of this Article apply equally to activities conducted in the future and that have been conducted in
the past. |
Exhibit 4.1
C-
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP [ ]
FIFTH WALL ACQUISITION CORP. III
CLASS A ORDINARY SHARES
THIS CERTIFIES THAT is the owner of
fully paid and non-assessable Class A ordinary shares, par value $0.0001 per share (the “Ordinary Shares”),
of Fifth Wall Acquisition Corp. III, a Cayman Islands exempted company (the “Company”), transferable on the
books of the Company in person or by duly authorized attorney upon surrender of this certificate properly endorsed.
This certificate is not valid unless countersigned
by the Transfer Agent and registered by the Registrar of the Company.
Witness the facsimile signature of a duly authorized
signatory of the Company.
| |
|
|
| Authorized Signatory |
|
Transfer Agent |
FIFTH WALL ACQUISITION CORP. III
The Company will furnish without charge to each
shareholder who so requests, a statement of the powers, designations, preferences and relative, participating, optional or other special
rights of each class of equity or series thereof of the Company and the qualifications, limitations, or restrictions of such preferences
and/or rights. This certificate and the shares represented thereby are issued and shall be held subject to all the provisions of the Company’s
Amended and Restated Memorandum and Articles of Association and all amendments thereto and resolutions of the Board of Directors providing
for the issue of securities (copies of which may be obtained from the secretary of the Company), to all of which the holder of this certificate
by acceptance hereof assents.
The following abbreviations, when used in the inscription
on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
| TEN COM |
— |
as tenants in common UNIF GIFT MIN ACT — |
Custodian
|
| TEN ENT |
— |
as tenants by the entireties |
(Cust) (Minor) |
| |
|
|
|
| JT TEN |
— |
as joint tenants with right of survivorship and not as tenants in common |
under Uniform Gifts to Minors Act |
| |
|
|
(State) |
Additional abbreviations may also be used though
not in the above list.
For value received, hereby
sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER(S) OF ASSIGNEE(S))
(PLEASE PRINT OR TYPEWRITE NAME(S) AND ADDRESS(ES),
INCLUDING ZIP CODE, OF ASSIGNEE(S))
Ordinary Shares represented by the within
Certificate, and hereby irrevocably constitutes and appoints
Attorney to transfer the said Ordinary Shares on
the books of the within named Company with full power of substitution in the premises.
| |
|
| |
Notice: The signature(s) to this assignment must correspond with the name as written
upon the face of the certificate in every particular, without alteration or enlargement or any change whatever. |
| Signature(s) Guaranteed: |
|
| |
|
| |
|
| THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 UNDER THE SECURITIES) |
|
| |
|
| EXCHANGE ACT OF 1934, AS AMENDED (OR ANY SUCCESSOR RULE). |
|
As more fully described in, and subject to the terms and conditions
described in, the Company’s final prospectus for its initial public offering dated , 2021, the holder(s) of this certificate
shall be entitled to receive a pro rata portion of certain funds held in the trust account established in connection with the Company’s
initial public offering only in the event that (i) the Company redeems the Ordinary Shares sold in the Company’s initial public
offering and liquidates because it does not consummate an initial business combination by the date set forth (the “Last Date”)
in the Company’s Amended and Restated Memorandum and Articles of Association, as the same may be amended from time to time (the
“Charter”), (ii) the Company redeems the Ordinary Shares sold in its initial public offering properly submitted in connection
with a shareholder vote to amend the Charter to modify the substance or timing of the Company’s obligation to redeem 100% of the
Ordinary Shares if it does not consummate an initial business combination by the Last Date or with respect to any other material provisions
relating to shareholders’ rights or pre-initial business combination activity, or (iii) if the holder(s) seek(s) to redeem for cash
his, her or its respective Ordinary Shares in connection with a tender offer (or proxy solicitation, solely in the event the Company seeks
shareholder approval of the proposed initial business combination) setting forth the details of a proposed initial business combination.
In no other circumstances shall the holder(s) have any right or interest of any kind in or to the trust account.
Exhibit 5.1
Our ref PJD/784229-000001/66238744v1
Fifth Wall Acquisition Corp. III
PO Box 309, Ugland House
Grand Cayman
KY1-1104
Cayman Islands
16 April 2021
Fifth Wall Acquisition Corp. III
We have acted as counsel as to Cayman Islands
law to Fifth Wall Acquisition Corp. III (the "Company") in connection with the Company's registration statement on Form
S-1, including all amendments or supplements thereto, filed with the United States Securities and Exchange Commission (the "Commission")
under the United States Securities Act of 1933, as amended (the "Act") (including its exhibits, the "Registration
Statement") for the purposes of, registering with the Commission under the Act, the offering and sale to the public of up to
28,750,000 Class A ordinary shares (including 3,750,000 Class A ordinary shares, which the several underwriters (the "Underwriters"),
for whom Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and BofA Securities, Inc. are acting as representatives ("Representatives"),
will have a 45-day option to purchase from the Company to cover over-allotments, if any) ("Ordinary Shares").
This opinion letter is given
in accordance with the terms of the Legal Matters section of the Registration Statement.
We have reviewed originals, copies, drafts or
conformed copies of the following documents:
| 1.1 | The certificate of incorporation dated 19 February 2021 and the memorandum and articles of association
of the Company as registered or adopted on 19 February 2021 (the "Memorandum and Articles"). |
| 1.2 | The written resolutions of the board of directors of the Company dated 24 February 2021 and 16 April
2021 (together, the "Resolutions") and the corporate records of the Company maintained at its registered office in
the Cayman Islands. |
| 1.3 | A certificate of good standing with respect to the Company issued by the Registrar of Companies
dated 15 April 2021 (the "Certificate of Good Standing"). |
| 1.4 | A certificate from a director of the Company a copy of which is attached to this opinion letter (the "Director's
Certificate"). |
| 1.5 | The Registration Statement. |
| 1.6 | A draft of the underwriting agreement between the Company and the Representatives (the "Document"). |
The following opinions are given only as to, and
based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions only relate to
the laws of the Cayman Islands which are in force on the date of this opinion letter. In giving the following opinions, we have relied
(without further verification) upon the completeness and accuracy, as at the date of this opinion letter, of the Director's Certificate
and the Certificate of Good Standing. We have also relied upon the following assumptions, which we have not independently verified:
| 2.1 | The Document has been or will be authorised and duly executed and unconditionally delivered by or on behalf
of all relevant parties in accordance with all relevant laws (other than, with respect to the Company, the laws of the Cayman Islands). |
| 2.2 | The Document is, or will be, legal, valid, binding and enforceable against all relevant parties in accordance
with its terms under the laws of the State of New York (the "Relevant Law") and all other relevant laws (other than,
with respect to the Company, the laws of the Cayman Islands). |
| 2.3 | The choice of the Relevant Law as the governing law of the Document has been made in good faith and would
be regarded as a valid and binding selection which will be upheld by the courts of the State of New York and any other relevant jurisdiction
(other than the Cayman Islands) as a matter of the Relevant Law and all other relevant laws (other than the laws of the Cayman Islands). |
| 2.4 | Copies of documents, conformed copies or drafts of documents provided to us are true and complete copies
of, or in the final forms of, the originals. |
| 2.5 | All signatures, initials and seals are genuine. |
| 2.6 | The capacity, power, authority and legal right of all parties under all relevant laws and regulations
(other than, with respect to the Company, the laws and regulations of the Cayman Islands) to enter into, execute, unconditionally deliver
and perform their respective obligations under the Document. |
| 2.7 | No invitation has been or will be made by or on behalf of the Company to the public in the Cayman Islands
to subscribe for any of the Ordinary Shares. |
| 2.8 | There is no contractual or other prohibition or restriction (other than as arising under Cayman Islands
law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the Document. |
| 2.9 | No monies paid to or for the account of any party under the Document or any property received or disposed
of by any party to the Document in each case in connection with the Document or the consummation of the transactions contemplated thereby
represent or will represent proceeds of criminal conduct or criminal property or terrorist property (as defined in the Proceeds of Crime
Act (As Revised) and the Terrorism Act (As Revised), respectively). |
| 2.10 | There is nothing under any law (other than the laws of the Cayman Islands) which would or might affect
the opinions set out below. Specifically, we have made no independent investigation of the Relevant Law. |
| 2.11 | The Company will receive money or money's worth in consideration for the issue of the Ordinary Shares
and none of the Ordinary Shares were or will be issued for less than par value. |
Save as aforesaid we have not
been instructed to undertake and have not undertaken any further enquiry or due diligence in relation to the transaction the subject of
this opinion letter.
Based upon, and subject to, the foregoing assumptions
and the qualifications set out below, and having regard to such legal considerations as we deem relevant, we are of the opinion that:
| 3.1 | The Company has been duly incorporated as an exempted company with limited liability and is validly existing
and in good standing with the Registrar of Companies under the laws of the Cayman Islands. |
| 3.2 | The Ordinary Shares to be offered and issued by the Company as contemplated by the Registration Statement
have been duly authorised for issue, and when issued by the Company against payment in full of the consideration as set out in the Registration
Statement and in accordance with the terms set out in the Registration Statement, such Ordinary Shares will be validly issued, fully paid
and non-assessable. As a matter of Cayman Islands law, a share is only issued when it has been entered in the register of members (shareholders). |
The opinions expressed above are subject to the
following qualifications:
| 4.1 | The term "enforceable" as used above means that the obligations assumed by the Company
under the Document are of a type which the courts of the Cayman Islands will enforce. It does not mean that those obligations will necessarily
be enforced in all circumstances in accordance with their terms. In particular: |
| (a) | enforcement may be limited by bankruptcy, insolvency, liquidation, reorganisation, readjustment of debts
or moratorium or other laws of general application relating to or affecting the rights of creditors; |
| (b) | enforcement may be limited by general principles of equity. For example, equitable remedies such as specific
performance may not be available, inter alia, where damages are considered to be an adequate remedy; |
| (c) | where obligations are to be performed in a jurisdiction outside the Cayman Islands, they may not be enforceable
in the Cayman Islands to the extent that performance would be illegal under the laws of that jurisdiction; and |
| (d) | some claims may become barred under relevant statutes of limitation or may be or become subject to defences
of set off, counterclaim, estoppel and similar defences. |
| 4.2 | To maintain the Company in good standing with the Registrar of Companies under the laws of the Cayman
Islands, annual filing fees must be paid and returns made to the Registrar of Companies within the time frame prescribed by law. |
| 4.3 | Under Cayman Islands law, the register of members (shareholders) is prima facie evidence of title
to shares and this register would not record a third party interest in such shares. However, there are certain limited circumstances where
an application may be made to a Cayman Islands court for a determination on whether the register of members reflects the correct legal
position. Further, the Cayman Islands court has the power to order that the register of members maintained by a company should be rectified
where it considers that the register of members does not reflect the correct legal position. As far as we are aware, such applications
are rarely made in the Cayman Islands and for the purposes of the opinion given in paragraph 3.2, there are no circumstances or matters
of fact known to us on the date of this opinion letter which would properly form the basis for an application for an order for rectification
of the register of members of the Company, but if such an application were made in respect of the Ordinary Shares, then the validity of
such shares may be subject to re-examination by a Cayman Islands court. |
| 4.4 | Except as specifically stated herein, we make no comment with respect to any representations and warranties
which may be made by or with respect to the Company in any of the documents or instruments cited in this opinion letter or otherwise with
respect to the commercial terms of the transactions the subject of this opinion letter. |
| 4.5 | In this opinion letter, the phrase "non-assessable" means, with respect to shares in the Company,
that a shareholder shall not, solely by virtue of its status as a shareholder, be liable for additional assessments or calls on the shares
by the Company or its creditors (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship
or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil). |
We hereby consent to the filing of this opinion
letter as an exhibit to the Registration Statement and to the references to our firm under the headings "Risks Related to our Operations",
"Legal Matters", "Shareholders' Suits" and "Enforcement of Civil Liabilities" in the prospectus included
in the Registration Statement. In providing our consent, we do not thereby admit that we are in the category of persons whose consent
is required under Section 7 of the Act or the Rules and Regulations of the Commission thereunder.
This opinion letter is addressed to you and may
be relied upon by you, your counsel and purchasers of Shares pursuant to the Registration Statement. This opinion letter is limited to
the matters detailed herein and is not to be read as an opinion with respect to any other matter.
Yours faithfully
/s/ Maples and Calder
Maples and Calder (Cayman) LLP
Exhibit 10.1
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Investment Management Trust Agreement (this
“Agreement”) is made effective as of [•],
2021 by and between Fifth Wall Acquisition Corp. III, a Cayman Islands exempted company (the “Company”), and
Continental Stock Transfer & Trust Company, a New York limited purpose trust company (the “Trustee”).
WHEREAS, the Company’s registration statement
on Form S-1, File No. 333-[●] (the “Registration Statement”) and prospectus (the “Prospectus”)
for the initial public offering (the “Offering”) of the Company’s shares (“Shares”)
of the Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary Shares”), has been
declared effective as of the date hereof by the U.S. Securities and Exchange Commission;
WHEREAS, the Company has entered into an Underwriting
Agreement (the “Underwriting Agreement”) with Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and
BofA Securities, Inc., as representatives (the “Representatives”) of the several underwriters
(the “Underwriters”) named therein;
WHEREAS, as described in the Prospectus, $250,000,000
of the gross proceeds of the Offering and sale of the Private Placement Shares (as defined in the Underwriting Agreement) (or $287,500,000
if the Underwriters’ over-allotment option is exercised in full) will be delivered to the Trustee to be deposited and held in a
segregated trust account located at all times in the United States (the “Trust Account”) for the benefit of
the Company and the holders of the Ordinary Shares issued in the Offering as hereinafter provided (the amount to be delivered to the Trustee
(and any interest subsequently earned thereon) is referred to herein as the “Property,” the shareholders for whose benefit
the Trustee shall hold the Property will be referred to as the “Public Shareholders,” and the Public Shareholders
and the Company will be referred to together as the “Beneficiaries”);
WHEREAS, pursuant to the Underwriting Agreement,
a portion of the Property up to $8,750,000, or up to $10,062,500 if the Underwriters’ over-allotment option is exercised in full,
is attributable to deferred underwriting discounts and commissions that will be payable by the Company to the Underwriters only upon and
concurrently with the consummation of a Business Combination (as defined below) (the “Deferred Discount”); and
WHEREAS, the Company and the Trustee desire to
enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property.
NOW THEREFORE, IT IS AGREED:
1. Agreements and Covenants of Trustee. The Trustee hereby agrees and covenants to:
(a)
Hold the Property in trust for the Beneficiaries in accordance with the terms of this Agreement in the Trust Account established
by the Trustee in the United States at JPMorgan Chase Bank, N.A. (or at another U.S. chartered commercial bank with consolidated assets
of $100 billion or more) in the United States, maintained by the Trustee and at a brokerage institution selected by the Trustee that is
reasonably satisfactory to the Company;
(b)
Manage, supervise and administer the Trust Account subject to the terms and conditions set forth herein;
(c)
In a timely manner, upon the written instruction of the Company, invest and reinvest the Property solely in United States government
securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 185 days or
less, or in money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 promulgated under the
Investment Company Act of 1940, as amended (or any successor rule), which invest only in direct U.S. government treasury obligations,
as determined by the Company; it being understood that the Trust Account will earn no interest while account funds are uninvested awaiting
the Company’s instructions hereunder and the Trustee may earn bank credits or other consideration;
(d)
Collect and receive, when due, all interest or other income arising from the Property, which shall become part of the “Property,”
as such term is used herein;
(e)
Promptly notify the Company and the Representatives of all communications received by the Trustee with respect to any Property
requiring action by the Company;
(f)
Supply any necessary information or documents as may be requested by the Company (or its authorized agents) in connection with
the Company’s preparation of the tax returns relating to assets held in the Trust Account;
(g)
Participate in any plan or proceeding for protecting or enforcing any right or interest arising from the Property if, as and when
instructed by the Company to do so;
(h)
Render to the Company monthly written statements of the activities of, and amounts in, the Trust Account reflecting all receipts
and disbursements of the Trust Account;
(i) Commence
liquidation of the Trust Account only after and promptly after (x) receipt of, and only in accordance with, the terms of a letter
from the Company (“Termination Letter”) in a form substantially similar to that attached hereto as either Exhibit
A or Exhibit B, as applicable, signed on behalf of the Company by its Chief Executive Officer, Chief Financial Officer,
President, Executive Vice President, Vice President, Secretary or Chairman of the board of directors of the Company (the
“Board”) or other authorized officer of the Company, and, in the case of Exhibit A, acknowledged
and agreed to by the Representatives, and complete the liquidation of the Trust Account and distribute the Property in the Trust
Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its
taxes (less taxes payable and up to $100,000 of such net interest to pay dissolution expenses), only as directed in the Termination
Letter and the other documents referred to therein, or (y) upon the date which is, the later of (1) 24 months after the closing of
the Offering and (2) such later date as may be approved by the Company’s shareholders in accordance with the Company’s
amended and restated memorandum and articles of association if a Termination Letter has not been received by the Trustee prior to
such date, in which case the Trust Account shall be liquidated in accordance with the procedures set forth in the Termination Letter
attached as Exhibit B and the Property in the Trust Account, including interest earned on the funds held in the Trust Account
and not previously released to the Company to pay its taxes (less taxes payable and up to $100,000 of such net interest to pay
dissolution expenses), shall be distributed to the Public Shareholders of record as of such date;
(j)
Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto
as Exhibit C (a “Tax Payment Withdrawal Instruction”), withdraw from the Trust Account and distribute
to the Company the amount of interest earned on the Property requested by the Company to cover any tax obligation owed by the Company
as a result of assets of the Company or interest or other income earned on the Property, which amount shall be delivered directly to the
Company by electronic funds transfer or other method of prompt payment, and the Company shall forward such payment to the relevant taxing
authority so long as there is no reduction in the principal amount per share initially deposited in the Trust Account; provided,
however, that to the extent there is not sufficient cash in the Trust Account to pay such tax obligation, the Trustee shall liquidate
such assets held in the Trust Account as shall be designated by the Company in writing to make such distribution (it being acknowledged
and agreed that any such amount in excess of interest income earned on the Property shall not be payable from the Trust Account). The
written request of the Company referenced above shall constitute presumptive evidence that the Company is entitled to said funds, and
the Trustee shall have no responsibility to look beyond said request;
(k)
Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto
as Exhibit D (a “Shareholder Redemption Withdrawal Instruction”), the Trustee shall distribute on behalf
of the Company the amount requested by the Company to be used to redeem Ordinary Shares from Public Shareholders properly submitted
in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association
to modify the substance or timing of the Company’s obligation to redeem 100% of Ordinary Shares sold in the Offering (the
“public shares”) if the Company has not consummated an initial Business Combination within such time as is described
in the Company’s amended and restated memorandum and articles of association or with respect to any other material provisions relating
to shareholders’ rights or pre-initial Business Combination activity. The written request of the Company referenced above shall
constitute presumptive evidence that the Company is entitled to distribute said funds, and the Trustee shall have no responsibility to
look beyond said request; and
(l)
Not make any withdrawals or distributions from the Trust Account other than pursuant to Section 1(i), (j) or (k)
above.
2. Agreements and Covenants of the Company. The Company hereby agrees and covenants to:
(a)
Give all instructions to the Trustee hereunder in writing, signed by the Company’s Chairman of the Board, Chief Executive
Officer, Chief Financial Officer, President, Executive Vice President, Vice President or Secretary. In addition, except with respect to
its duties under Sections 1(i), 1(j) and 1(k) hereof, the Trustee shall be entitled to rely on, and shall be protected
in relying on, any verbal or telephonic advice or instruction which it, in good faith and with reasonable care, believes to be given by
any one of the persons authorized above to give written instructions, provided that the Company shall promptly confirm such instructions
in writing;
(b)
Subject to Section 4 hereof, hold the Trustee harmless and indemnify the Trustee from and against any and all expenses,
including reasonable counsel fees and disbursements, or losses suffered by the Trustee in connection with any action taken by it hereunder
and in connection with any action, suit or other proceeding brought against the Trustee involving any claim, or in connection with any
claim or demand, which in any way arises out of or relates to this Agreement, the services of the Trustee hereunder, or the Property or
any interest earned on the Property, except for expenses and losses resulting from the Trustee’s gross negligence, fraud or willful
misconduct. Promptly after the receipt by the Trustee of notice of demand or claim or the commencement of any action, suit or proceeding,
pursuant to which the Trustee intends to seek indemnification under this Section 2(b), it shall notify the Company in writing of
such claim (hereinafter referred to as the “Indemnified Claim”). The Trustee shall have the right to conduct
and manage the defense against such Indemnified Claim; provided that the Trustee shall obtain the consent of the Company with respect
to the selection of counsel, which consent shall not be unreasonably withheld. The Trustee may not agree to settle any Indemnified Claim
without the prior written consent of the Company, which such consent shall not be unreasonably withheld. The Company may participate in
such action with its own counsel;
(c)
Pay the Trustee the fees set forth on Schedule A hereto, including an initial acceptance fee, annual administration fee,
and transaction processing fee which fees shall be subject to modification by the parties from time to time. It is expressly understood
that the Property shall not be used to pay such fees unless and until it is distributed to the Company pursuant to Sections 1(i)
through 1(j) hereof. The Company shall pay the Trustee the initial acceptance fee and the first annual administration fee at the
consummation of the Offering. The Company shall not be responsible for any other fees or charges of the Trustee except as set forth in
this Section 2(c), Schedule A and as may be provided in Section 2(b) hereof;
(d) In
connection with any vote of the Company’s shareholders regarding a merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination involving the Company and one or more businesses (the “Business
Combination”), provide to the Trustee an affidavit or certificate of the inspector of elections for the shareholder
meeting verifying the vote of such shareholders regarding such Business Combination;
(e)
Provide the Representatives with a copy of any Termination Letter(s) and/or any other correspondence that is sent to the Trustee
with respect to any proposed withdrawal from the Trust Account promptly after it issues the same;
(f)
Unless otherwise agreed between the Company and the Representatives, ensure that any Instruction Letter (as defined in Exhibit
A) delivered in connection with a Termination Letter in the form of Exhibit A expressly provides that the Deferred Discount
is paid directly to the account or accounts directed by the Representative on behalf of the Underwriters prior to any transfer of the
funds held in the Trust Account to the Company or any other person;
(g)
Instruct the Trustee to make only those distributions that are permitted under this Agreement, and refrain from instructing the
Trustee to make any distributions that are not permitted under this Agreement; and
(h)
Within four (4) business days after the Underwriters exercise the over-allotment option (or any unexercised portion thereof) or
such over-allotment option expires, provide the Trustee with a notice in writing of the total amount of the Deferred Discount.
3. Limitations of Liability. The Trustee shall have no responsibility or liability to:
(a)
Imply obligations, perform duties, inquire or otherwise be subject to the provisions of any agreement or document other than this
Agreement and that which is expressly set forth herein;
(b)
Take any action with respect to the Property, other than as directed in Section 1 hereof, and the Trustee shall have no
liability to any third party except for liability arising out of the Trustee’s gross negligence, fraud or willful misconduct;
(c)
Institute any proceeding for the collection of any principal and income arising from, or institute, appear in or defend any proceeding
of any kind with respect to, any of the Property unless and until it shall have received instructions from the Company given as provided
herein to do so and the Company shall have advanced or guaranteed to it funds sufficient to pay any expenses incident thereto;
(d)
Refund any depreciation in principal of any Property;
(e)
Assume that the authority of any person designated by the Company to give instructions hereunder shall not be continuing unless
provided otherwise in such designation, or unless the Company shall have delivered a written revocation of such authority to the Trustee;
(f)
The other parties hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or
omitted, in good faith and in the Trustee’s best judgment, except for the Trustee’s gross negligence, fraud or willful misconduct.
The Trustee may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel
(including counsel chosen by the Trustee, which counsel may be the Company’s counsel), statement, instrument, report or other paper
or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability
of any information therein contained) which the Trustee believes, in good faith and with reasonable care, to be genuine and to be signed
or presented by the proper person or persons. The Trustee shall not be bound by any notice or demand, or any waiver, modification, termination
or rescission of this Agreement or any of the terms hereof, unless evidenced by a written instrument delivered to the Trustee, signed
by the proper party or parties and, if the duties or rights of the Trustee are affected, unless it shall give its prior written consent
thereto;
(g)
Verify the accuracy of the information contained in the Registration Statement;
(h)
Provide any assurance that any Business Combination entered into by the Company or any other action taken by the Company is as
contemplated by the Registration Statement;
(i)
File information returns with respect to the Trust Account with any local, state or federal taxing authority or provide periodic
written statements to the Company documenting the taxes payable by the Company, if any, relating to any interest income earned on the
Property;
(j)
Prepare, execute and file tax reports, income or other tax returns and pay any taxes with respect to any income generated by, and
activities relating to, the Trust Account, regardless of whether such tax is payable by the Trust Account or the Company, including, but
not limited to, tax obligations, except pursuant to Section 1(j) hereof; or
(k)
Verify calculations, qualify or otherwise approve the Company’s written requests for distributions pursuant to Sections
1(i), 1(j) or 1(k) hereof.
4. Trust
Account Waiver. The Trustee has no right of set-off or any right, title, interest or claim of any kind (“Claim”)
to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account that it
may have now or in the future. In the event the Trustee has any Claim against the Company under this Agreement, including, without limitation,
under Section 2(b) or Section 2(c) hereof, the Trustee shall pursue such Claim solely against the Company and its assets
outside the Trust Account and not against the Property or any monies in the Trust Account.
5. Termination.
This Agreement shall terminate as follows:
(a)
If the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company shall use its reasonable
efforts to locate a successor trustee, pending which the Trustee shall continue to act in accordance with this Agreement. At such time
that the Company notifies the Trustee that a successor trustee has been appointed and has agreed to become subject to the terms of this
Agreement, the Trustee shall transfer the management of the Trust Account to the successor trustee, including but not limited to the transfer
of copies of the reports and statements relating to the Trust Account, whereupon this Agreement shall terminate; provided, however,
that in the event that the Company does not locate a successor trustee within ninety (90) days of receipt of the resignation notice from
the Trustee, the Trustee may submit an application to have the Property deposited with any court in the State of New York or with the
United States District Court for the Southern District of New York and upon such deposit, the Trustee shall be immune from any liability
whatsoever; or
(b)
At such time that the Trustee has completed the liquidation of the Trust Account and its obligations in accordance with the provisions
of Section 1(i) hereof and distributed the Property in accordance with the provisions of the Termination Letter, this Agreement
shall terminate except with respect to Section 2(b).
6. Miscellaneous.
(a)
The Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth below with respect
to funds transferred from the Trust Account. The Company and the Trustee will each restrict access to confidential information relating
to such security procedures to authorized persons. Each party must notify the other party immediately if it has reason to believe unauthorized
persons may have obtained access to such confidential information, or of any change in its authorized personnel. In executing funds transfers,
the Trustee shall rely upon all information supplied to it by the Company, including, account names, account numbers, and all other identifying
information relating to a Beneficiary, Beneficiary’s bank or intermediary bank. Except for any liability arising out of the Trustee’s
gross negligence, fraud or willful misconduct, the Trustee shall not be liable for any loss, liability or expense resulting from any error
in the information or transmission of the funds.
(b)
This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York. This Agreement
may be executed in several original or facsimile counterparts, each one of which shall constitute an original, and together shall constitute
but one instrument.
(c)
This Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereof.
Subject to Section 6(d) hereof, this Agreement or any provision hereof may only be changed, amended or modified (other than to
correct a typographical error) by a writing signed by each of the parties hereto.
(d) This
Agreement or any provision hereof may only be changed, amended or modified pursuant to Section 6(c) hereof with the Consent
of the Shareholders. For purposes of this Section 6(d), the “Consent of the Shareholders” means receipt by the
Trustee of a certificate from the inspector of elections of the shareholder meeting certifying that the Company’s shareholders
of record as of a record date established in accordance with Section 213(a) of the Delaware General Corporation Law, as amended
(“DGCL”) (or any successor rule), who hold sixty-five percent (65%) or more of all then outstanding Ordinary Shares and Class B ordinary shares, par value $0.0001 per share, of the Company voting together as a single class,
have voted in favor of such change, amendment or modification. No such amendment will affect any Public Shareholder who has
otherwise indicated his election to redeem his Ordinary Shares in connection with a shareholder vote sought to amend this
Agreement to modify the substance or timing of the Company’s obligation to redeem 100% of the Ordinary Shares if the Company
does not complete its initial Business Combination within the time frame specified in the Company’s amended and restated
memorandum and articles of association. Except for any liability arising out of the Trustee’s gross negligence, fraud or
willful misconduct, the Trustee may rely conclusively on the certification from the inspector or elections referenced above and
shall be relieved of all liability to any party for executing the proposed amendment in reliance thereon.
(e)
The parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York or the State
of New York, for purposes of resolving any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING TO THIS
AGREEMENT, EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.
(f)
Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing
and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or
by electronic mail:
if to the Trustee, to:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf & Celeste Gonzalez
Email: fwolf@continentalstock.com
Email: cgonzalez@continentalstock.com
if to the Company, to:
Fifth Wall Acquisition Corp. III
6060 Center Drive 10th Floor
Los Angeles, California 90045
Attn: Brendan Wallace
Email: brendan@fifthwall.com
in each case, with copies to:
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue
Palo Alto, CA 94301
Attn: Gregg A. Noel
Email: Gregg.Noel@skadden.com
and
Debevoise & Plimpton LLP
919 Third Avenue
New York, New York 10022
Attn.: Steven J. Slutzky
Email: sjslutzky@debevoise.com
(g)
Each of the Company and the Trustee hereby represents that it has the full right and power and has been duly authorized to enter
into this Agreement and to perform its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees that it shall
not make any claims or proceed against the Trust Account, including by way of set-off, and shall not be entitled to any funds in the Trust
Account under any circumstance.
(h)
This Agreement is the joint product of the Trustee and the Company and each provision hereof has been subject to the mutual consultation,
negotiation and agreement of such parties and shall not be construed for or against any party hereto.
(i)
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or electronic transmission
shall constitute valid and sufficient delivery thereof.
(j)
Each of the Company and the Trustee hereby acknowledges and agrees that the Representatives on behalf of the Underwriters is a
third-party beneficiary of this Agreement.
(k)
Except as specified herein, no party to this Agreement may assign its rights or delegate its obligations hereunder to any other
person or entity.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have duly
executed this Investment Management Trust Agreement as of the date first written above.
| |
CONTINENTAL
STOCK TRANSFER & TRUST COMPANY, as Trustee |
| |
|
| |
By: |
|
| |
|
Name: |
Francis
Wolf |
| |
|
Title: |
Vice
President |
| |
|
| |
FIFTH
WALL ACQUISITION CORP. III |
| |
|
| |
By: |
|
| |
|
Name: |
Brendan
Wallace |
| |
|
Title: |
Chief
Executive Officer |
[Signature Page to Investment
Management Trust Agreement]
SCHEDULE A
| Fee Item | |
Time and method of payment | |
Amount | |
| Initial set-up fee | |
Initial closing of Offering by wire transfer. | |
$ | 3,500 | |
| Trustee administration fee | |
Payable annually. First year fee payable, at initial closing of Offering by wire transfer, thereafter by wire transfer or check. | |
$ | 10,000 | |
| Transaction processing fee for disbursements to Company under Sections 1 | |
Billed to the Company following disbursement made to Company under Section 1 | |
$ | 250 | |
| Paying Agent services as required pursuant to Section 1(i) and 1(k) | |
Billed to Company upon delivery of service pursuant to Section 1(i) and 1(k) | |
| Prevailing rates | |
EXHIBIT A
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
Re: Trust Account No. - Termination Letter
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(i) of the Investment Management
Trust Agreement between Fifth Wall Acquisition Corp. III (the “Company”) and Continental Stock Transfer &
Trust Company (“Trustee”), dated as of [•], 2021 (the “Trust Agreement”), this
is to advise you that the Company has entered into an agreement with ___________________ (the “Target Business”)
to consummate a business combination with Target Business (the “Business Combination”) on or about [insert date].
The Company shall notify you at least seventy-two (72) hours in advance of the actual date (or such shorter period as you may agree) of
the consummation of the Business Combination (the “Consummation Date”). Capitalized terms used but not defined
herein shall have the meanings set forth in the Trust Agreement.
In accordance with the terms of the Trust Agreement,
we hereby authorize you to commence to liquidate all of the assets of the Trust Account and to transfer the proceeds to a segregated account
held by you on behalf of the Beneficiaries to the effect that, on the Consummation Date, all of the funds held in the Trust Account will
be immediately available for transfer to the account or accounts that the Company shall direct on the Consummation Date (including as
directed to it by the Representatives on behalf of the Underwriters (with respect to the Deferred Discount)).
On the Consummation Date (i) counsel for the
Company shall deliver to you written notification that the Business Combination has been consummated, or will be consummated
concurrently with your transfer of funds to the accounts as directed by the Company (the “Notification”),
and (ii) the Company shall deliver to you (a) a certificate by the Chief Executive Officer, Chief Financial Officer, Co-Executive
Chairman or Vice Chairman, which verifies that the Business Combination has been approved by a vote of the Company’s
shareholders, if a vote is held and (b) a joint written instruction signed by the Company and the Representatives with respect to
the transfer of the funds held in the Trust Account, including payment of amounts owed to public shareholders who have properly
exercised their redemption rights and payment of the Deferred Discount directly to the account or accounts directed by the
Representatives from the Trust Account (the “Instruction Letter”). You are hereby directed and authorized
to transfer the funds held in the Trust Account immediately upon your receipt of the Notification and the Instruction Letter, in
accordance with the terms of the Instruction Letter. In the event that certain deposits held in the Trust Account may not be
liquidated by the Consummation Date without penalty, you will notify the Company in writing of the same and the Company shall direct
you as to whether such funds should remain in the Trust Account and be distributed after the Consummation Date to the Company. Upon
the distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the
Trust Account, your obligations under the Trust Agreement shall be terminated.
In the event that the Business Combination is not
consummated on the Consummation Date described in the notice thereof and we have not notified you on or before the original Consummation
Date of a new Consummation Date, then upon receipt by the Trustee of written instructions from the Company, the funds held in the Trust
Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business day immediately following the Consummation
Date as set forth in such notice as soon thereafter as possible.
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Very truly yours, |
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Fifth Wall Acquisition Corp. III |
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By: |
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Name: |
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Title: |
| Agreed and acknowledged by: |
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| Deutsche Bank Securities Inc. |
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Name: |
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Title: |
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| Goldman Sachs & Co. LLC |
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Name: |
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Title: |
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| BofA Securities, Inc. |
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| By: |
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Name: |
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Title: |
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EXHIBIT B
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
Re: Trust
Account No. - Termination Letter
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section
1(i) of the Investment Management Trust Agreement between Fifth Wall Acquisition Corp. III (the “Company”)
and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of [•],
2021 (the “Trust Agreement”), this is to advise you that the Company has been unable to effect a business combination
with a Target Business (the “Business Combination”) within the time frame specified in the Company’s Amended
and Restated Memorandum and Articles of Association, as described in the Company’s Prospectus relating to the Offering. Capitalized
terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
In accordance with the terms of the Trust Agreement,
we hereby authorize you to liquidate all of the assets in the Trust Operating Account and to transfer the total proceeds into a segregated
account held by you on behalf of the Beneficiaries to await distribution to the Public Shareholders. The Company has selected 24 months
from the closing of the Offering or such later date as may be approved by the Company’s shareholders in accordance with the Company’s
amended and restated memorandum and articles of association as the effective date for the purpose of determining when the Public Shareholders
will be entitled to receive their share of the liquidation proceeds. You agree to be the Paying Agent of record and, in your separate
capacity as Paying Agent, agree to distribute said funds directly to the Company’s Public Shareholders in accordance with the terms
of the Trust Agreement and the Amended and Restated Memorandum and Articles of Association of the Company. Upon the distribution of all
the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations
under the Trust Agreement shall be terminated, except to the extent otherwise provided in Section 1(i) of the Trust Agreement.
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Very truly yours, |
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Fifth Wall Acquisition Corp. III |
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By: |
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Name: |
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Title: |
cc: Deutsche Bank Securities
Inc.
| By: |
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Name: |
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Title: |
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| Goldman
Sachs & Co. LLC |
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| By: |
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Name: |
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Title: |
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| BofA
Securities, Inc. |
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| By: |
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Name: |
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Title: |
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EXHIBIT C
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
Re: Trust
Account No. - Tax Payment Withdrawal Instruction
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(j) of the Investment
Management Trust Agreement between Fifth Wall Acquisition Corp. III (the “Company”) and Continental Stock Transfer
& Trust Company (the “Trustee”), dated as of [•], 2021 (the “Trust Agreement”),
the Company hereby requests that you deliver to the Company $_______________ of the interest income earned on the Property as of the date
hereof. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
The Company needs such funds to pay for the tax
obligations as set forth on the attached tax return or tax statement. In accordance with the terms of the Trust Agreement, you are hereby
directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the Company’s operating
account at:
[WIRE INSTRUCTION INFORMATION]
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Very truly yours, |
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Fifth Wall Acquisition Corp. III |
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By: |
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Name: |
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Title: |
cc: Deutsche Bank Securities
Inc.
| Goldman
Sachs & Co. LLC |
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| By: |
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Name: |
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Title: |
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| BofA
Securities, Inc. |
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Name: |
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EXHIBIT D
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
Re: Trust
Account No. - Shareholder Redemption Withdrawal Instruction
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(k) of the Investment
Management Trust Agreement between Fifth Wall Acquisition Corp. III (the “Company”) and Continental Stock Transfer
& Trust Company (the “Trustee”), dated as of [•], 2021 (the “Trust Agreement”),
the Company hereby requests that you deliver to the redeeming Public Shareholders of the Company $____________ of the principal and interest
income earned on the Property as of the date hereof to a segregated account held by you on behalf of the Beneficiaries. Capitalized terms
used but not defined herein shall have the meanings set forth in the Trust Agreement.
The Company needs such funds to pay its Public
Shareholders who have properly elected to have their Ordinary Shares redeemed by the Company in connection with a shareholder
vote to approve an amendment to the Company’s amended and restated memorandum and articles of association to modify the substance
or timing of the Company’s obligation to redeem 100% of public Ordinary Shares if the Company has not consummated an initial
Business Combination within such time as is described in the Company’s amended and restated memorandum and articles of association
or with respect to any other material provisions relating to shareholders’ rights or pre-initial Business Combination activity.
As such, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to
a segregated account held by you on behalf of the Beneficiaries.
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Very truly yours, |
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Fifth Wall Acquisition Corp. III |
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By: |
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Name: |
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Title: |
cc: Deutsche Bank Securities
Inc.
| By: |
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Name: |
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Title: |
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| Goldman
Sachs & Co. LLC |
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| By: |
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Name: |
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Title: |
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| BofA
Securities, Inc. |
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Name: |
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Title: |
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Exhibit 10.2
REGISTRATION AND SHAREHOLDER RIGHTS AGREEMENT
THIS REGISTRATION AND SHAREHOLDER RIGHTS AGREEMENT
(this “Agreement”), dated as of [●], 2021, is made and entered into by and among Fifth Wall Acquisition
Corp. III, a Cayman Islands exempted company (the “Company”), Fifth Wall Acquisition Sponsor III LLC, a Cayman
Islands limited liability company (the “Sponsor”) and the undersigned parties listed on the signature page hereto
under “Holders” (each such party, together with the Sponsor and any person or entity who hereafter becomes a party to this
Agreement pursuant to Section 6.2 of this Agreement, a “Holder” and collectively the “Holders”).
RECITALS
WHEREAS, the Company has 7,187,500 Class
B ordinary shares, par value $0.0001 per share (the “Founder Shares”), issued and outstanding, up to 937,500
of which will be forfeited to the Company for no consideration depending on the extent to which the underwriters of the Company’s
initial public offering exercise their over-allotment option;
WHEREAS, the Founder Shares are convertible
into the Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary Shares”), on the
terms and conditions provided in the Company’s amended and restated memorandum and articles of association;
WHEREAS, on [●],
2021, the Company and the Sponsor entered into that certain Private Placement Share Purchase Agreement (the “Private Placement
Share Purchase Agreement”), pursuant to which the Sponsor agreed to purchase up to 857,000 private placement shares (or
up to 932,000 shares to the extent that the over-allotment option in connection with the Company’s initial public offering is exercised)
(the “Private Placement Shares”) in a private placement transaction occurring simultaneously with the closing
of the Company’s initial public offering;
WHEREAS, in order to finance the Company’s
transaction costs in connection with its search for and consummation of an initial Business Combination (as defined below), the Sponsor
or an affiliate of the Sponsor or certain of the Company’s officers and directors may loan to the Company funds as the Company may
require, of which up to $1,500,000 of such loans may be convertible into private placement-equivalent shares (“Working Capital
Shares”) at a price of $10.00 per share at the option of the lender; and
WHEREAS, the Company and the Holders desire
to enter into this Agreement, pursuant to which the Company shall grant the Holders certain registration rights with respect to certain
securities of the Company, as set forth in this Agreement.
NOW, THEREFORE, in consideration of the
representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1
Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective
meanings set forth below:
“Adverse Disclosure”
shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive
Officer or principal financial officer of the Company, after consultation with counsel to the Company, (i) would be required to be
made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus
and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not be required
to be made at such time if the Registration Statement were not being filed, and (iii) the Company has a bona fide business purpose for
not making such information public.
“Agreement’ shall have
the meaning given in the Preamble.
“Board” shall mean the
Board of Directors of the Company.
“Business Combination”
shall mean any merger, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one
or more businesses, involving the Company.
“Commission” shall mean
the U.S. Securities and Exchange Commission.
“Company” shall have
the meaning given in the Preamble.
“Demand Registration”
shall have the meaning given in subsection 2.1.1.
“Demanding Holder” shall
have the meaning given in subsection 2.1.1.
“Exchange Act” shall
mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Form S-1” shall have
the meaning given in subsection 2.1.1.
“Form S-3” shall have
the meaning given in subsection 2.3.
“Founder Shares” shall
have the meaning given in the Recitals hereto and shall be deemed to include the Ordinary Shares issuable upon conversion thereof.
“Founder Shares Lock-up
Period” shall mean, with respect to the Founder Shares, the period ending on the earliest of (A) one year after the
completion of the Company’s initial Business Combination and (B) subsequent to the Company’s initial Business
Combination, (x) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar
transaction that results in all of the Company’s shareholders having the right to exchange their Ordinary Shares for cash,
securities or other property or (y) if the closing price of the Ordinary Shares equals or exceeds $12.00 per share (as adjusted for
share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any
30-trading day period commencing at least 150 days after the Company’s initial Business Combination.
“Holders” shall have
the meaning given in the Preamble.
“Insider Letter” shall
mean that certain letter agreement, dated as of [●], 2021, by and among the Company, the Sponsor and each of the Company’s
directors and executive officers.
“Maximum Number of Securities”
shall have the meaning given in subsection 2.1.4.
“Misstatement” shall
mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement
or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the light of the circumstances under
which they were made) not misleading.
“Ordinary Shares” shall
have the meaning given in the Recitals hereto.
“Permitted Transferees”
shall mean any person or entity to whom a Holder of Registrable Securities is permitted to transfer such Registrable Securities prior
to the expiration of the Founder Shares Lock-up Period, Private Placement Lock-up Period or any other lock-up period, as the case may
be, under the Insider Letter, the Private Placement Share Purchase Agreement, this Agreement and any other applicable agreement between
such Holder and the Company, and to any transferee thereafter.
“Piggyback Registration”
shall have the meaning given in subsection 2.2.1.
“Private Placement Lock-up Period”
shall mean, with respect to Private Placement Shares that are held by the initial purchasers of such Private Placement Shares or their
Permitted Transferees, the period ending 30 days after the completion of the Company’s initial Business Combination.
“Private Placement Shares”
shall have the meaning given in the Recitals hereto.
“Private Placement Share Purchase Agreement”
shall have the meaning given in the Recitals hereto.
“Pro Rata” shall have
the meaning given in subsection 2.1.4.
“Prospectus” shall mean
the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and
all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable
Security” shall mean (a) the Founder Shares and the Ordinary Shares issued or issuable upon the conversion of the
Founder Shares, (b) the Private Placement Shares, (c) any outstanding Ordinary Shares or any other equity security (including the
Ordinary Shares issued or issuable upon the exercise of any other equity security) of the Company held by a Holder as of the date of
this Agreement, (d) any equity securities (including the Ordinary Shares issued or issuable upon the exercise of any such equity
security) of the Company issuable upon conversion of any working capital loans in an amount up to $1,500,000 made to the Company by
a Holder (including the Working Capital Shares) and (e) any other equity security of the Company issued or issuable with respect to
any such Ordinary Shares by way of a share dividend or share sub-division or in connection with a combination of shares,
recapitalization, merger, consolidation or reorganization; provided, however, that, as to any particular Registrable
Security, such securities shall cease to be Registrable Securities when: (A) a Registration Statement with respect to the sale of
such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed
of or exchanged in accordance with such Registration Statement; (B) such securities shall have been otherwise transferred, new
certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and
subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities shall
have ceased to be outstanding; (D) such securities may be sold without registration pursuant to Rule 144 promulgated under the
Securities Act (or any successor rule promulgated thereafter by the Commission) (but with no volume or other restrictions or
limitations); or (E) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or
other public securities transaction.
“Registration” shall
mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements
of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
“Registration Expenses”
shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
(A)
all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory
Authority, Inc.) and any securities exchange on which the Ordinary Shares is then listed;
(B)
fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the
Underwriters in connection with blue sky qualifications of Registrable Securities);
(C)
printing, messenger, telephone and delivery expenses;
(D)
reasonable fees and disbursements of counsel for the Company;
(E)
reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection
with such Registration; and
(F)
reasonable fees and expenses of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders initiating
a Demand Registration to be registered for offer and sale in the applicable Registration.
“Registration Statement”
shall mean any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including the
Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration
statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Requesting Holder” shall
have the meaning given in subsection 2.1.1.
“Securities Act” shall
mean the Securities Act of 1933, as amended from time to time.
“Sponsor” shall have
the meaning given in the Recitals hereto.
“Sponsor Director” means
an individual elected to the Board that has been nominated by the Sponsor pursuant to this Agreement.
“Underwriter” shall mean
a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s
market-making activities.
“Underwritten Registration”
or “Underwritten Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter
in a firm commitment underwriting for distribution to the public.
“Working Capital Shares”
shall have the meaning given in the Recitals hereto.
ARTICLE II.
REGISTRATIONS
2.1
Demand Registration.
2.1.1 Request
for Registration. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, at any time and from time
to time on or after the date the Company consummates the Business Combination, the Holders of at least fifteen percent (15%) of the
then-outstanding number of Registrable Securities (the “Demanding Holders”) may make a written demand for
Registration of all or part of their Registrable Securities, which written demand shall describe the amount and type of securities
to be included in such Registration and the intended method(s) of distribution thereof (such written demand a “Demand
Registration”). The Company shall, within ten (10) days of the Company’s receipt of the Demand Registration,
notify, in writing, all other Holders of Registrable Securities of such demand, and each Holder of Registrable Securities who
thereafter wishes to include all or a portion of such Holder’s Registrable Securities in a Registration pursuant to a Demand
Registration (each such Holder that includes all or a portion of such Holder’s Registrable Securities in such Registration, a
“Requesting Holder”) shall so notify the Company, in writing, within five (5) days after the receipt by
the Holder of the notice from the Company. Upon receipt by the Company of any such written notification from a Requesting Holder(s)
to the Company, such Requesting Holder(s) shall be entitled to have their Registrable Securities included in a Registration pursuant
to a Demand Registration and the Company shall effect, as soon thereafter as practicable, but not more than forty five (45) days
immediately after the Company’s receipt of the Demand Registration, the Registration of all Registrable Securities requested
by the Demanding Holders and Requesting Holders pursuant to such Demand Registration. Under no circumstances shall the Company be
obligated to effect more than an aggregate of three (3) Registrations pursuant to a Demand Registration under this subsection
2.1.1 with respect to any or all Registrable Securities; provided, however, that a Registration shall not be
counted for such purposes unless a Form S-1 or any similar long-form registration statement that may be available at such time
(“Form S-1”) has become effective and all of the Registrable Securities requested by the Requesting
Holders to be registered on behalf of the Requesting Holders in such Form S-1 Registration have been sold, in accordance with Section
3.1 of this Agreement.
2.1.2
Effective Registration. Notwithstanding the provisions of subsection 2.1.1 above or any other part of this Agreement,
a Registration pursuant to a Demand Registration shall not count as a Registration unless and until (i) the Registration Statement filed
with the Commission with respect to a Registration pursuant to a Demand Registration has been declared effective by the Commission and
(ii) the Company has complied with all of its obligations under this Agreement with respect thereto; provided, further,
that if, after such Registration Statement has been declared effective, an offering of Registrable Securities in a Registration pursuant
to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission, federal or state court or
any other governmental agency the Registration Statement with respect to such Registration shall be deemed not to have been declared effective,
unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of
the Demanding Holders initiating such Demand Registration thereafter affirmatively elect to continue with such Registration and accordingly
notify the Company in writing, but in no event later than five (5) days, of such election; and provided, further, that the
Company shall not be obligated or required to file another Registration Statement until the Registration Statement that has been previously
filed with respect to a Registration pursuant to a Demand Registration becomes effective or is subsequently terminated.
2.1.3
Underwritten Offering. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, if a majority-in-interest
of the Demanding Holders so advise the Company as part of their Demand Registration that the offering of the Registrable Securities pursuant
to such Demand Registration shall be in the form of an Underwritten Offering, then the right of such Demanding Holder or Requesting Holder
(if any) to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s participation in such
Underwritten Offering and the inclusion of such Holder’s Registrable Securities in such Underwritten Offering to the extent provided
herein. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection
2.1.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering
by the majority-in-interest of the Demanding Holders initiating the Demand Registration.
2.1.4 Reduction
of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand
Registration, in good faith, advises the Company, the Demanding Holders and the Requesting Holders (if any) in writing that the
dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell,
taken together with all other Ordinary Shares or other equity securities that the Company desires to sell and the Ordinary Shares,
if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held
by any other shareholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be
sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or
the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the
“Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, as follows:
(i) first, the Registrable Securities of the Demanding Holders and the Requesting Holders (if any) (pro rata based on the respective
number of Registrable Securities that each Demanding Holder and Requesting Holder (if any) has requested be included in such
Underwritten Registration and the aggregate number of Registrable Securities that the Demanding Holders and Requesting Holders have
requested be included in such Underwritten Registration (such proportion is referred to herein as “Pro
Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the
Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Holders (Pro Rata,
based on the respective number of Registrable Securities that each Holder has so requested) exercising their rights to register
their Registrable Securities pursuant to subsection 2.2.1 hereof, without exceeding the Maximum Number of Securities; and
(iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the
Ordinary Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number
of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses
(i), (ii) and (iii), the Ordinary Shares or other equity securities of other persons or entities that the Company is obligated to
register in a Registration pursuant to separate written contractual arrangements with such persons and that can be sold without
exceeding the Maximum Number of Securities.
2.1.5
Demand Registration Withdrawal. A majority-in-interest of the Demanding Holders initiating a Demand Registration or a majority-in-interest
of the Requesting Holders (if any), pursuant to a Registration under subsection 2.1.1 shall have the right to withdraw from a Registration
pursuant to such Demand Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters
(if any) of their intention to withdraw from such Registration prior to the effectiveness of the Registration Statement filed with the
Commission with respect to the Registration of their Registrable Securities pursuant to such Demand Registration. Notwithstanding anything
to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Registration
pursuant to a Demand Registration prior to its withdrawal under this subsection 2.1.5.
2.2
Piggyback Registration.
2.2.1 Piggyback
Rights. If, at any time on or after the date the Company consummates a Business Combination, the Company proposes to file a
Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of shareholders of
the Company (or by the Company and by the shareholders of the Company including, without limitation, pursuant to Section 2.1
hereof), other than a Registration Statement (i) filed in connection with any employee share option or other benefit plan, (ii) for
an exchange offer or offering of securities solely to the Company’s existing shareholders, (iii) for an offering of debt that
is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan, then the Company shall give written
notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10)
days before the anticipated filing date of such Registration Statement, which notice shall (A) describe the amount and type of
securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing
Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity
to register the sale of such number of Registrable Securities as such Holders may request in writing within five (5) days after
receipt of such written notice (such Registration a “Piggyback Registration”). The Company shall, in good
faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use its best efforts to cause the
managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the
Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on the same terms and conditions as any
similar securities of the Company included in such Registration and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method(s) of distribution thereof. All such Holders proposing to distribute their
Registrable Securities through an Underwritten Offering under this subsection 2.2.1 shall enter into an underwriting
agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.
2.2.2
Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Registration that is
to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback
Registration in writing that the dollar amount or number of Ordinary Shares that the Company desires to sell, taken together with (i)
the Ordinary Shares, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons
or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which registration has been
requested pursuant to Section 2.2 hereof, and (iii) the Ordinary Shares, if any, as to which Registration has been requested pursuant
to separate written contractual piggy-back registration rights of other shareholders of the Company, exceeds the Maximum Number of Securities,
then:
(a)
If the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (A) first,
the Ordinary Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number
of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the
Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1
hereof (pro rata based on the respective number of Registrable Securities that such Holder has requested be included in such Registration),
which can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities
has not been reached under the foregoing clauses (A) and (B), the Ordinary Shares, if any, as to which Registration has been requested
pursuant to written contractual piggy-back registration rights of other shareholders of the Company, which can be sold without exceeding
the Maximum Number of Securities;
(b) If
the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company
shall include in any such Registration (A) first, the Ordinary Shares or other equity securities, if any, of such requesting persons
or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities;
(B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable
Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1, pro rata
based on the number of Registrable Securities that each Holder has requested be included in such Registration and the aggregate
number of Registrable Securities that the Holders have requested to be included in such Registration, which can be sold without
exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached
under the foregoing clauses (A) and (B), the Ordinary Shares or other equity securities that the Company desires to sell, which can
be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has
not been reached under the foregoing clauses (A), (B) and (C), the Ordinary Shares or other equity securities for the account of
other persons or entities that the Company is obligated to register pursuant to separate written contractual arrangements with such
persons or entities, which can be sold without exceeding the Maximum Number of Securities.
2.2.3
Piggyback Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback
Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of
his, her or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed
with the Commission with respect to such Piggyback Registration. The Company (whether on its own good faith determination or as the result
of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed
with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement.
Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in
connection with the Piggyback Registration prior to its withdrawal under this subsection 2.2.3.
2.2.4
Unlimited Piggyback Registration Rights. For purposes of clarity, any Registration effected pursuant to Section 2.2
hereof shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1 hereof.
2.3 Registrations
on Form S-3. The Holders of Registrable Securities may at any time, and from time to time, request in writing that the Company,
pursuant to Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale
of any or all of their Registrable Securities on Form S-3 or any similar short form registration statement that may be available at
such time (“Form S-3”); provided, however, that the Company shall not be obligated to effect
such request through an Underwritten Offering. Within five (5) days of the Company’s receipt of a written request from a
Holder or Holders of Registrable Securities for a Registration on Form S-3, the Company shall promptly give written notice of the
proposed Registration on Form S-3 to all other Holders of Registrable Securities, and each Holder of Registrable Securities who
thereafter wishes to include all or a portion of such Holder’s Registrable Securities in such Registration on Form S-3 shall
so notify the Company, in writing, within ten (10) days after the receipt by the Holder of the notice from the Company. As soon as
practicable thereafter, but not more than twelve (12) days after the Company’s initial receipt of such written request for a
Registration on Form S-3, the Company shall register all or such portion of such Holder’s Registrable Securities as are
specified in such written request, together with all or such portion of Registrable Securities of any other Holder or Holders
joining in such request as are specified in the written notification given by such Holder or Holders; provided, however,
that the Company shall not be obligated to effect any such Registration pursuant to Section 2.3 hereof if (i) a Form S-3 is
not available for such offering; or (ii) the Holders of Registrable Securities, together with the Holders of any other equity
securities of the Company entitled to inclusion in such Registration, propose to sell the Registrable Securities and such other
equity securities (if any) at any aggregate price to the public of less than $10,000,000.
2.4
Restrictions on Registration Rights. If (A) during the period starting with the date sixty (60) days prior to the Company’s
good faith estimate of the date of the filing of, and ending on a date one hundred and twenty (120) days after the effective date of,
a Company initiated Registration and provided that the Company has delivered written notice to the Holders prior to receipt of a Demand
Registration pursuant to subsection 2.1.1 and it continues to actively employ, in good faith, all reasonable efforts to cause the
applicable Registration Statement to become effective; (B) the Holders have requested an Underwritten Registration and the Company and
the Holders are unable to obtain the commitment of underwriters to firmly underwrite the offer; or (C) in the good faith judgment of the
Board such Registration would be seriously detrimental to the Company and the Board concludes as a result that it is essential to defer
the filing of such Registration Statement at such time, then in each case the Company shall furnish to such Holders a certificate signed
by the Chairman of the Board stating that in the good faith judgment of the Board it would be seriously detrimental to the Company for
such Registration Statement to be filed in the near future and that it is therefore essential to defer the filing of such Registration
Statement. In such event, the Company shall have the right to defer such filing for a period of not more than thirty (30) days; provided,
however, that the Company shall not defer its obligation in this manner more than once in any 12-month period.
ARTICLE III.
COMPANY PROCEDURES
3.1
General Procedures. If at any time on or after the date the Company consummates a Business Combination the Company is required
to effect the Registration of Registrable Securities, the Company shall use its best efforts to effect such Registration to permit the
sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall,
as expeditiously as possible:
3.1.1
prepare and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities
and use its reasonable best efforts to cause such Registration Statement to become effective and remain effective until all Registrable
Securities covered by such Registration Statement have been sold;
3.1.2 prepare
and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to
the Prospectus, as may be requested by the Holders or any Underwriter of Registrable Securities or as may be required by the rules,
regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and
regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration
Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to
the Prospectus;
3.1.3
prior to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters,
if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies of such
Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all
exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each
preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration
or the legal counsel for any such Holders may request in order to facilitate the disposition of the Registrable Securities owned by such
Holders;
3.1.4
prior to any public offering of Registrable Securities, use its best efforts to (i) register or qualify the Registrable Securities
covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States
as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may
request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered
with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and
do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such
Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however,
that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required
to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it
is not then otherwise so subject;
3.1.5
cause all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities
issued by the Company are then listed;
3.1.6
provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective
date of such Registration Statement;
3.1.7
advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance
of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any
proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal
if such stop order should be issued;
3.1.8 at
least five (5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such
Registration Statement furnish a copy thereof to each seller of such Registrable Securities and its counsel, including, without
limitation, providing copies promptly upon receipt of any comment letters received with respect to any such Registration Statement
or Prospectus;
3.1.9
notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the
Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in
effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;
3.1.10
permit a representative of the Holders (such representative to be selected by a majority of the participating Holders), the Underwriters,
if any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own expense,
in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information
reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided,
however, that such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory
to the Company, prior to the release or disclosure of any such information; and provided further, the Company may not include the
name of any Holder or Underwriter or any information regarding any Holder or Underwriter in any Registration Statement or Prospectus,
any amendment or supplement to such Registration Statement or Prospectus, any document that is to be incorporated by reference into such
Registration Statement or Prospectus, or any response to any comment letter, without the prior written consent of such Holder or Underwriter
and providing each such Holder or Underwriter a reasonable amount of time to review and comment on such applicable document, which comments
the Company shall include unless contrary to applicable law;
3.1.11
obtain a “cold comfort” letter from the Company’s independent registered public accountants in the event of an
Underwritten Registration which the participating Holders may rely on, in customary form and covering such matters of the type customarily
covered by “cold comfort” letters as the managing Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest
of the participating Holders;
3.1.12
on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated such date,
of counsel representing the Company for the purposes of such Registration, addressed to the Holders, the placement agent or sales agent,
if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is
being given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such
opinions and negative assurance letters, and reasonably satisfactory to a majority in interest of the participating Holders;
3.1.13
in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing Underwriter of such offering;
3.1.14 make
available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve
(12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the
Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any
successor rule promulgated thereafter by the Commission);
3.1.15
if the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $25,000,000, use
its reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations
that may be reasonably requested by the Underwriter in any Underwritten Offering; and
3.1.16
otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders,
in connection with such Registration.
3.2
Registration Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged
by the Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’
commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration
Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
3.3 Requirements for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity
securities of the Company pursuant to a Registration initiated by the Company hereunder unless such person (i) agrees to sell such person’s
securities on the basis provided in any underwriting arrangements approved by the Company and (ii) completes and executes all customary
questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably
required under the terms of such underwriting arrangements.
3.4 Suspension of Sales; Adverse Disclosure. Upon receipt of written notice from the Company that a Registration Statement or
Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until he, she
or it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company hereby
covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until he, she or
it is advised in writing by the Company that the use of the Prospectus may be resumed. If the filing, initial effectiveness or continued
use of a Registration Statement in respect of any Registration at any time would require the Company to make an Adverse Disclosure or
would require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond
the Company’s control, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial
effectiveness of, or suspend use of, such Registration Statement for the shortest period of time, but in no event more than thirty (30)
days, determined in good faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under the
preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus
relating to any Registration in connection with any sale or offer to sell Registrable Securities. The Company shall immediately notify
the Holders of the expiration of any period during which it exercised its rights under this Section 3.4.
3.5
Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall
be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d)
of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. The Company further covenants
that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such
Holder to sell Ordinary Shares held by such Holder without registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including
providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly
authorized officer as to whether it has complied with such requirements.
ARTICLE IV.
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1
The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers and directors
and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and
expenses (including attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration
Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are
caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein. The Company shall
indemnify the Underwriters, their officers and directors and each person who controls such Underwriters (within the meaning of the Securities
Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.
4.1.2 In
connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish
to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such
Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify the Company, its directors and officers
and agents and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses (including without limitation reasonable attorneys’ fees) resulting from any untrue statement of
material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement
thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading,
but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing
by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several, not
joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities
shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant
to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors
and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the
foregoing with respect to indemnification of the Company.
4.1.3
Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to
indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified
party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such
claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party.
If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (plus local counsel) for
all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party
a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim.
No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement
which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms
of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or litigation.
4.1.4
The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made
by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the
transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions
as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s
indemnification is unavailable for any reason.
4.1.5 If
the indemnification provided under Section 4.1 hereof from the indemnifying party is unavailable or insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the
indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified
party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a
material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the
indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to
correct or prevent such action; provided, however, that the liability of any Holder under this subsection 4.1.5
shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The
amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include,
subject to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees,
charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree
that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro rata
allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection
4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of such fraudulent
misrepresentation.
ARTICLE V.
SHAREHOLDER RIGHTS
5.1
Subject to the terms and conditions of this Agreement, at any time and from time to time on or after the date that the Company
consummates a Business Combination and for so long as the Sponsor and its Permitted Transferees hold at least 50% of the number of Ordinary
Shares held by the Sponsor at the time of the closing of the Company’s initial public offering:
5.1.1
The Sponsor shall have the right, but not the obligation, to designate one individual to be appointed or nominated, as the case
may be, for election to the Board (including any successor, each, a “Nominee”) by giving written notice to the Company on
or before the time such information is reasonably requested by the Board or the Nominating Committee of the Board, as applicable, for
inclusion in a proxy statement for a meeting of shareholders provided to the Sponsor.
5.1.2
The Company will, as promptly as practicable, use its best efforts to take all necessary and desirable actions (including, without
limitation, calling special meetings of the Board and the shareholders and recommending, supporting and soliciting proxies) so that there
is a Sponsor Director serving on the Board at all times.
5.1.3
The Company shall, to the fullest extent permitted by applicable law, use its best efforts to take all actions necessary to ensure
that: (i) each Nominee is included in the Board’s slate of nominees to the shareholders of the Company for each election of Directors;
and (ii) each Nominee is included in the proxy statement prepared by management of the Company in connection with soliciting proxies for
every meeting of the shareholders of the Company called with respect to the election of members of the Board, and at every adjournment
or postponement thereof, and on every action or approval by written consent of the shareholders of the Company or the Board with respect
to the election of members of the Board.
5.1.4
If a vacancy occurs because of the death, disability, disqualification, resignation, or removal of a Sponsor Director or for any
other reason, the Sponsor shall be entitled to designate such person’s successor, and the Company will, as promptly as practicable
following such designation, use its best efforts to take all necessary and desirable actions, to the fullest extent permitted by law,
within its control such that such vacancy shall be filled with such successor Nominee.
5.1.5
If a Nominee is not elected because of such Nominee’s death, disability, disqualification, withdrawal as a nominee or for
any other reason, the Sponsor shall be entitled to designate promptly another Nominee and the Company will take all necessary and desirable
actions within its control such that the director position for which such Nominee was nominated shall not be filled pending such designation
or the size of the Board shall be increased by one and such vacancy shall be filled with such successor Nominee as promptly as practicable
following such designation.
5.1.6
As promptly as reasonably practicable following the request of any Sponsor Director, the Company shall enter into an indemnification
agreement with such Sponsor Director, in the form entered into with the other members of the Board. The Company shall pay the reasonable,
documented out-of-pocket expenses incurred by the Sponsor Director in connection with his or her services provided to or on behalf of
the Company, including attending meetings or events attended explicitly on behalf of the Company at the Company’s request.
5.1.7
The Company shall (i) purchase directors’ and officers’ liability insurance in an amount determined by the Board to
be reasonable and customary and (ii) for so long as a Sponsor Director serves as a Director of the Company, maintain such coverage with
respect to such Sponsor Director; provided that upon removal or resignation of such Sponsor Director for any reason, the Company shall
take all actions reasonably necessary to extend such directors’ and officers’ liability insurance coverage for a period of
not less than six years from any such event in respect of any act or omission occurring at or prior to such event.
5.1.8
For so long as a Sponsor Director serves as a Director of the Company, the Company shall not amend, alter or repeal any right to
indemnification or exculpation covering or benefiting any Director nominated pursuant to this Agreement as and to the extent consistent
with applicable law, whether such right is contained in the Company’s amended and restated memorandum and articles of association,
as amended, or another document (except to the extent such amendment or alteration permits the Company to provide broader indemnification
or exculpation rights on a retroactive basis than permitted prior thereto).
5.1.9
Each Nominee may, but does not need to qualify as “independent” pursuant to listing standards of the New York Stock
Exchange (or such other national securities exchange upon which the Company’s securities are then listed).
5.1.10 Any
Nominee will be subject to the Company’s customary due diligence process, including its review of a completed questionnaire and
a background check. Based on the foregoing, the Company may object to any Nominee provided (a) it does so in good faith, and (b) such
objection is based upon any of the following: (i) such Nominee was convicted in a criminal proceeding or is a named subject of a pending
criminal proceeding (excluding traffic violations and other minor offenses), (ii) such Nominee was the subject of any order, judgment,
or decree not subsequently reversed, suspended or vacated of any court of competent jurisdiction, permanently or temporarily enjoining
such proposed director from, or otherwise limiting, the following activities: (A) engaging in any type of business practice, or (B) engaging
in any activity in connection with the purchase or sale of any security or in connection with any violation of federal or state securities
laws, (iii) such Nominee was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal
or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity
described in clause (ii)(B), or to be associated with persons engaged in such activity, (iv) such proposed director was found by a court
of competent jurisdiction in a civil action or by the Commission to have violated any federal or state securities law, and the judgment
in such civil action or finding by the Commission has not been subsequently reversed, suspended or vacated, or (v) such proposed director
was the subject of, or a party to any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated, relating to a violation of any federal or state securities laws or regulations. In the event the Board
reasonably finds the Nominee to be unsuitable based upon one or more of the foregoing clauses (i) through (v) and reasonably objects
to the identified director, Sponsor shall be entitled to propose a different nominee to the Board within 30 calendar days of the Company’s
notice to Sponsor of its objection to the Nominee and such replacement Nominee shall be subject to the review process outlined above.
5.1.11 The
Company shall take all necessary action to cause a Nominee chosen by the Sponsor, at the request of such Nominee to be elected to the
board of directors (or similar governing body) of each material operating subsidiary of the Company. The Nominee, as applicable, shall
have the right to attend (in person or remotely) any meetings of the board of directors (or similar governing body or committee thereof)
of each subsidiary of the Company.
ARTICLE VI.
MISCELLANEOUS
6.1
Notices. Any notice or communication under this Agreement must be in writing and given by (i) deposit in the United States
mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery
in person or by courier service providing evidence of delivery, or (iii) transmission by hand delivery, electronic mail, telecopy, telegram
or facsimile. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently
given, served, sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed and,
in the case of notices delivered by courier service, hand delivery, electronic mail, telecopy, telegram or facsimile, at such time as
it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the
addressee upon presentation. Any notice or communication under this Agreement must be addressed, if to the Company, to: 6060 Center Drive
10th Floor Los Angeles, California 90045, and, if to any Holder, at such Holder’s address or contact information as set forth in
the Company’s books and records. Any party may change its address for notice at any time and from time to time by written notice
to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery of such notice as provided
in this Section 6.1.
6.2
Assignment; No Third Party Beneficiaries.
6.2.1
This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company
in whole or in part.
6.2.2 Prior
to the expiration of the Founder Shares Lock-up Period or the Private Placement Lock-up Period, as the case may be, no Holder may
assign or delegate such Holder’s rights, duties or obligations under this Agreement, in whole or in part, except in connection
with a transfer of Registrable Securities by such Holder to a Permitted Transferee but only if such Permitted Transferee agrees to
become bound by the transfer restrictions set forth in this Agreement.
6.2.3
This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors
and the permitted assigns of the Holders, which shall include Permitted Transferees.
6.2.4
This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set
forth in this Agreement and Section 6.2 hereof.
6.2.5
No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate
the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 6.1 hereof
and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions
of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made
other than as provided in this Section 6.2 shall be null and void.
6.3
Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision
hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu
of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement
a provision as similar in terms to such invalid or unenforceable provision as may be possible that is valid and enforceable.
6.4
Counterparts. This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of
which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.
6.5
Entire Agreement. This Agreement (including all agreements entered into pursuant hereto and all certificates and instruments
delivered pursuant hereto and thereto) constitute the entire agreement of the parties with respect to the subject matter hereof and supersede
all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties, whether oral
or written.
6.6
Governing Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES
EXPRESSLY AGREE THAT (I) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS
AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF
SUCH JURISDICTION AND (II) THE VENUE FOR ANY ACTION TAKEN WITH RESPECT TO THIS AGREEMENT SHALL BE ANY STATE OR FEDERAL COURT IN THE STATE
OF NEW YORK.
6.7 Waiver
of Trial by Jury. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT,
COUNTERCLAIM OR OTHER PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH OR RELATING TO THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE ACTIONS OF THE SPONSOR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT HEREOF.
6.8
Amendments and Modifications. Upon the written consent of the Company and the Holders of at least a majority in interest
of the Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this
Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however,
that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in his, her or its
capacity as a holder of shares of the Company, in a manner that is materially different from the other Holders (in such capacity) shall
require the consent of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto or any
failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver
of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by
a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
6.9
Titles and Headings. Titles and headings of sections of this Agreement are for convenience only and shall not affect the
construction of any provision of this Agreement.
6.10
Waivers and Extensions. Any party to this Agreement may waive any right, breach or default which such party has the right
to waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party,
and specifically refers to this Agreement. Waivers may be made in advance or after the right waived has arisen or the breach or default
waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained shall be deemed
a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained. No waiver or extension
of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations
or acts.
6.11
Remedies Cumulative. In the event that the Company fails to observe or perform any covenant or agreement to be observed
or performed under this Agreement, the Holders may proceed to protect and enforce its rights by suit in equity or action at law, whether
for specific performance of any term contained in this Agreement or for an injunction against the breach of any such term or in aid of
the exercise of any power granted in this Agreement or to enforce any other legal or equitable right, or to take any one or more of such
actions, without being required to post a bond. None of the rights, powers or remedies conferred under this Agreement shall be mutually
exclusive, and each such right, power or remedy shall be cumulative and in addition to any other right, power or remedy, whether conferred
by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.
6.12 Other
Registration Rights. The Company represents and warrants that no person, other than a Holder of Registrable Securities, has any
right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any
Registration filed by the Company for the sale of securities for its own account or for the account of any other person. Further,
the Company represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar
terms and conditions and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this
Agreement shall prevail.
6.13
Term. This Agreement shall terminate upon the earlier of (i) the tenth anniversary of the date of this Agreement or (ii)
the date as of which (A) all of the Registrable Securities have been sold pursuant to a Registration Statement (but in no event prior
to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder (or any successor rule promulgated
thereafter by the Commission)) or (B) the Holders of all Registrable Securities are permitted to sell the Registrable Securities without
registration pursuant to Rule 144 (or any similar provision) under the Securities Act with no volume or other restrictions or limitations.
The provisions of Section 3.5 and Article IV shall survive any termination.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned have
caused this Agreement to be executed as of the date first written above.
| | COMPANY: |
| | |
| | FIFTH WALL ACQUISITION CORP. III, a Cayman Islands exempted
company |
| | |
| | By: |
|
| | |
Name: |
Brendan Wallace |
| | |
Title: |
Chief Executive Officer |
| | HOLDERS: |
| | |
| | FIFTH
WALL ACQUISITION SPONSOR III LLC, a Cayman Islands limited liability company |
| | |
| | By: |
|
| | |
Name: |
Brendan
Wallace |
| | |
Title: |
Manager |
| | |
| | |
| | Adeyemi
Ajao |
| | |
| | |
| | Alana
Beard |
| | |
| | |
| | Poonam
Sharma Mathis |
| | |
| | |
| | Amanda
Parness |
[Signature Page to Registration and Shareholder Rights
Agreement]
Exhibit 10.3
FORM OF INDEMNIFICATION AGREEMENT
This Indemnification Agreement (“Agreement”)
is made and entered into as of [•], 2021 by and between Fifth Wall Acquisition Corp. III, a Cayman Islands exempted company (the
“Company”), and [•] (“Indemnitee”).
RECITALS
WHEREAS, the Company desires to attract and retain
the services of highly qualified individuals, such as Indemnitee, to serve the Company;
WHEREAS, in order to induce Indemnitee to provide
services to the Company, the Company wishes to provide for the indemnification of, and advancement of expenses to, Indemnitee to the maximum
extent permitted by law;
WHEREAS, the Amended and Restated Memorandum and
Articles of Association of the Company (the “Articles”) require indemnification of the officers and directors of the
Company;
WHEREAS, the Articles expressly provide that the
indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the
Company and members of the board of directors, officers and other persons with respect to indemnification;
WHEREAS, the Board of Directors of the Company
(the “Board”) has determined that the increased difficulty in attracting and retaining highly qualified persons such
as Indemnitee is detrimental to the best interests of the Company’s shareholders;
WHEREAS, it is reasonable and prudent for the Company
contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable
law, regardless of any amendment or revocation of the Articles, so that they will serve the Company free from undue concern that they
will not be so indemnified; and
WHEREAS, this Agreement is a supplement to and
in furtherance of the indemnification provided in the Articles and any resolutions adopted pursuant thereto, and shall not be deemed a
substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
NOW, THEREFORE, in consideration of the premises
and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services
to the Company. Indemnitee agrees to serve as a director of the Company. Indemnitee may at any time and for any reason resign from
such position (subject to any other contractual obligation or any obligation imposed by law), in which event the Company shall have no
obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between
the Company (or any of its subsidiaries or any Enterprise) and Indemnitee.
Section 2. Definitions.
As used in this Agreement:
(a) “Change
in Control” shall mean (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an
unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s
outstanding voting power and outstanding shares immediately prior to such transaction do not own a majority of the outstanding
voting power and outstanding shares or other equity interests of the resulting or successor entity (or its ultimate parent, if
applicable) immediately upon completion of such transaction, (iii) the sale of all of the shares of the Company to an unrelated
person, entity or group thereof acting in concert, or (iv) any other transaction in which the owners of the Company’s
outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the
Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of
securities directly from the Company.
(b) “Corporate Status” describes the status of a person as a current or former director of the Company or current
or former director, manager, partner, officer, employee, agent or trustee of any other Enterprise which such person is or was serving
at the request of the Company.
(c) “Enforcement Expenses” shall include all reasonable attorneys’ fees, court costs, transcript costs, fees
of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all
other out-of-pocket disbursements or expenses of the types customarily incurred in connection with an action to enforce indemnification
or advancement rights, or an appeal from such action. Expenses, however, shall not include fees, salaries, wages or benefits owed to Indemnitee.
(d) “Enterprise” shall mean any corporation (other than the Company), partnership, joint venture, trust, employee
benefit plan, limited liability company, or other legal entity of which Indemnitee is or was serving at the request of the Company as
a director, manager, partner, officer, employee, agent or trustee.
(e) “Expenses” shall include all reasonable attorneys’ fees, court costs, transcript costs, fees of experts,
travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other out-of-pocket
disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding or an appeal resulting from a Proceeding.
Expenses, however, shall not include amounts paid in settlement by Indemnitee, the amount of judgments or fines against Indemnitee or
fees, salaries, wages or benefits owed to Indemnitee.
(f) “Independent
Counsel” means a law firm, or a partner (or, if applicable, member or shareholder) of such a law firm, that is experienced
in matters of company or corporation law and neither presently is, nor in the past five (5) years has been, retained to represent:
(i) the Company, any subsidiary of the Company, any Enterprise or Indemnitee in any matter material to any such party; or (ii) any
other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent
Counsel referred to above and to fully indemnify such counsel against any and all expenses, claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant hereto.
(g) The
term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, alternate dispute
resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether
brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, regulatory or investigative nature,
and whether formal or informal, in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that Indemnitee
is or was a director of the Company or is or was serving at the request of the Company as a director, manager, partner, officer, employee,
agent or trustee of any Enterprise or by reason of any action taken by Indemnitee or of any action taken on his or her part while acting
as a director of the Company or while serving at the request of the Company as a director, manager, partner, officer, employee, agent
or trustee of any Enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for
which indemnification, reimbursement or advancement of expenses can be provided under this Agreement; provided, however,
that the term “Proceeding” shall not include any action, suit or arbitration, or part thereof, initiated by Indemnitee to
enforce Indemnitee’s rights under this Agreement as provided for in Section 12(a) of this Agreement.
Section 3. Indemnity
in Third-Party Proceedings. The Company shall indemnify Indemnitee to the extent set forth in this Section 3 if Indemnitee is, or
is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified against all Expenses, judgments, fines,
penalties, excise taxes, and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his or her behalf in connection
with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding, had no reasonable cause to believe
that his or her conduct was unlawful.
Section 4. Indemnity
in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee to the extent set forth in this Section
4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or any claim, issue or matter therein,
if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the
Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which
Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that a state or
federal court in the Borough of Manhattan in the State of New York (the “NY Court”) shall determine upon
application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnification for such expenses as the NY Court shall deem proper.
Section 5. Indemnification
for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement and except as
provided in Section 7, to the extent that Indemnitee is a party to or a participant in any Proceeding and is successful in such Proceeding
or in defense of any claim, issue or matter therein, the Company shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or her in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful as to one
or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually
and reasonably incurred by Indemnitee or on his or her behalf in connection with each successfully resolved claim, issue or matter. For
purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with
or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Reimbursement
for Expenses of a Witness or in Response to a Subpoena. Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee, by reason of his or her Corporate Status, (i) is a witness in any Proceeding to which Indemnitee is not a party and is not
threatened to be made a party or (ii) receives a subpoena with respect to any Proceeding to which Indemnitee is not a party and is not
threatened to be made a party, the Company shall reimburse Indemnitee for all Expenses actually and reasonably incurred by him or her
or on his or her behalf in connection therewith.
Section 7. Exclusions.
Notwithstanding any provision in this Agreement to the contrary, the Company shall not be obligated under this Agreement:
(a) to
indemnify for amounts otherwise indemnifiable hereunder (or for which advancement is provided hereunder) if and to the extent that Indemnitee
has otherwise actually received such amounts under any insurance policy, contract, agreement or otherwise;
(b) to
indemnify for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company
within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law
or common law;
(c) to
indemnify with respect to any Proceeding, or part thereof, brought by Indemnitee against the Company, any legal entity which it controls,
any director or officer thereof or any third party, unless (i) the Board has consented to the initiation of such Proceeding or part thereof
and (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable
law; provided, however, that this Section 7(d) shall not apply to (A) counterclaims or affirmative defenses asserted by
Indemnitee in an action brought against Indemnitee or (B) any action brought by Indemnitee for indemnification or advancement from the
Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company
in the suit for which indemnification or advancement is being sought as described in Section 12; or
(d) to provide any indemnification or advancement of expenses that is prohibited by applicable law (as such law exists at the time
payment would otherwise be required pursuant to this Agreement).
Section 8. Advancement
of Expenses. Subject to Section 9(b), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee
in connection with any Proceeding, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement
or statements requesting such advances (including any invoices received by Indemnitee, which such invoices may be redacted as necessary
to avoid the waiver of any privilege accorded by applicable law) from time to time, whether prior to or after final disposition of any
Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s (i) ability to
repay the expenses, (ii) ultimate entitlement to indemnification under the other provisions of this Agreement, and (iii) entitlement
to and availability of insurance coverage, including advancement, payment or reimbursement of defense costs, expenses or covered loss
under the provisions of any applicable insurance policy (including, without limitation, whether such advancement, payment or reimbursement
is withheld, conditioned or delayed by the insurer(s)). Indemnitee shall qualify for advances upon the execution and delivery to the
Company of this Agreement which shall constitute an undertaking providing that Indemnitee undertakes to the fullest extent required by
law to repay the advance if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment,
not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company. The right to advances under this paragraph shall
in all events continue until final disposition of any Proceeding, including any appeal therein. Nothing in this Section 8 shall limit
Indemnitee’s right to advancement pursuant to Section 12(e) of this Agreement.
Section 9. Procedure
for Notification and Defense of Claim.
(a) To
obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request therefor specifying the basis for
the claim, the amounts for which Indemnitee is seeking payment under this Agreement, and all documentation related thereto as reasonably
requested by the Company.
(b) In
the event that the Company shall be obligated hereunder to provide indemnification for or make any advancement of Expenses with
respect to any Proceeding, the Company shall be entitled to assume the defense of such Proceeding, or any claim, issue or matter
therein, with counsel approved by Indemnitee (which approval shall not be unreasonably withheld or delayed) upon the delivery to
Indemnitee of written notice of the Company’s election to do so. After delivery of such notice, approval of such counsel by
Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for
any fees or expenses of separate counsel subsequently employed by or on behalf of Indemnitee with respect to the same Proceeding; provided
that (i) Indemnitee shall have the right to employ separate counsel in any such Proceeding at Indemnitee’s expense and (ii) if
(A) the employment of separate counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of such defense, or
(C) the Company shall not continue to retain such counsel to defend such Proceeding, then the fees and expenses actually and
reasonably incurred by Indemnitee with respect to his or her separate counsel shall be Expenses hereunder.
(c) In
the event that the Company does not assume the defense in a Proceeding pursuant to paragraph (b) above, then the Company will be entitled
to participate in the Proceeding at its own expense.
(d) The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding
effected without its prior written consent (which consent shall not be unreasonably withheld or delayed). Without limiting the generality
of the foregoing, the fact that an insurer under an applicable insurance policy delays or is unwilling to consent to such settlement or
is or may be in breach of its obligations under such policy, or the fact that directors’ and officers’ liability insurance
is otherwise unavailable or not maintained by the Company, may not be taken into account by the Company in determining whether to provide
its consent. The Company shall not, without the prior written consent of Indemnitee (which consent shall not be unreasonably withheld
or delayed), enter into any settlement which (i) includes an admission of fault of Indemnitee, any non-monetary remedy imposed on Indemnitee
or any monetary damages for which Indemnitee is not wholly and actually indemnified hereunder or (ii) with respect to any Proceeding with
respect to which Indemnitee may be or is made a party or may be otherwise entitled to seek indemnification hereunder, does not include
the full release of Indemnitee from all liability in respect of such Proceeding.
Section 10. Procedure
Upon Application for Indemnification.
(a) Upon
written request by Indemnitee for indemnification pursuant to Section 9(a), a determination, if such determination is required by
applicable law, with respect to Indemnitee’s entitlement to indemnification hereunder shall be made in the specific case by
one of the following methods: (x) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the
Board; or (y) if a Change in Control shall not have occurred: (i) by a majority vote of the disinterested directors, even though
less than a quorum; (ii) by a committee of disinterested directors designated by a majority vote of the disinterested directors,
even though less than a quorum; or (iii) if there are no disinterested directors or if the disinterested directors so direct, by
Independent Counsel in a written opinion to the Board. For purposes hereof, disinterested directors are those members of the Board
who are not parties to the action, suit or proceeding in respect of which indemnification is sought. In the case that such
determination is made by Independent Counsel, a copy of Independent Counsel’s written opinion shall be delivered to Indemnitee
and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within forty-five
(45) days after such determination. Indemnitee shall cooperate with the Independent Counsel or the Company, as applicable, in making
such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such counsel or the
Company, upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from
disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any out-of-pocket costs
or expenses (including reasonable attorneys’ fees and disbursements) actually and reasonably incurred by Indemnitee in so
cooperating with the Independent Counsel or the Company shall be borne by the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(b) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 10(a), the Independent
Counsel shall be selected by the Board if a Change in Control shall not have occurred or, if a Change in Control shall have occurred,
by Indemnitee. Indemnitee or the Company, as the case may be, may, within ten (10) days after written notice of such selection, deliver
to the Company or Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection
may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel”
as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent
a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated,
the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the NY Court
has determined that such objection is without merit. If, within twenty (20) days after the later of (i) submission by Indemnitee
of a written request for indemnification pursuant to Section 9(a), and (ii) the final disposition of the Proceeding, including any appeal
therein, no Independent Counsel shall have been selected without objection, either Indemnitee or the Company may petition the NY Court
for resolution of any objection which shall have been made by Indemnitee or the Company to the selection of Independent Counsel and/or
for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate. The
person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 10(a)
hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 12(a) of this Agreement, Independent Counsel
shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct
then prevailing).
(c) Notwithstanding
anything to the contrary contained in this Agreement, the determination of entitlement to indemnification under this Agreement shall
be made without regard to the Indemnitee’s entitlement to and availability of insurance coverage, including advancement, payment
or reimbursement of defense costs, expenses or covered loss under the provisions of any applicable insurance policy (including, without
limitation, whether such advancement, payment or reimbursement is withheld, conditioned or delayed by the insurer(s)).
Section 11. Presumptions
and Effect of Certain Proceedings.
(a) To
the extent permitted by applicable law, in making a determination with respect to entitlement to indemnification hereunder, it shall
be presumed that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection
with the making of any determination contrary to that presumption.
(b) The
termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea
of guilty, nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in
a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any
criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.
(c) The
knowledge and/or actions, or failure to act, of any director, manager, partner, officer, employee, agent or trustee of the Company, any
subsidiary of the Company, or any Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.
Section 12. Remedies
of Indemnitee.
(a) Subject
to Section 12(f), in the event that (i) a determination is made pursuant to Section 10 of this Agreement that Indemnitee is not entitled
to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii)
no determination of entitlement to indemnification shall have been made pursuant to Section 10(a) of this Agreement within sixty (60)
days after receipt by the Company of the request for indemnification for which a determination is to be made other than by Independent
Counsel, (iv) payment of indemnification or reimbursement of expenses is not made pursuant to Section 5 or 6 or the last sentence of
Section 10(a) of this Agreement within forty-five (45) days after receipt by the Company of a written request therefor (including any
invoices received by Indemnitee, which such invoices may be redacted as necessary to avoid the waiver of any privilege accorded by applicable
law) or (v) payment of indemnification pursuant to Section 3 or 4 of this Agreement is not made within forty-five (45) days after a determination
has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication by the NY Court of his
or her entitlement to such indemnification or advancement. Alternatively, Indemnitee, at his or her option, may seek an award in arbitration
to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee
shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing time
limitation shall not apply in respect of a proceeding brought by Indemnitee to enforce his or her rights under Section 5 of this Agreement.
The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
(b) In
the event that a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is not entitled to indemnification,
any judicial proceeding or arbitration commenced pursuant to this Section 12 shall be conducted in all respects as a de novo trial, or
arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding
or arbitration commenced pursuant to this Section 12, the Company shall have the burden of proving Indemnitee is not entitled to indemnification
or advancement, as the case may be.
(c) If
a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such
indemnification under applicable law.
(d) The
Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures
and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(e) The
Company shall indemnify Indemnitee to the fullest extent permitted by law against any and all Enforcement Expenses and, if requested
by Indemnitee, shall (within forty-five (45) days after receipt by the Company of a written request therefor) advance, to the extent
not prohibited by law, such Enforcement Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought
by Indemnitee for indemnification or advancement from the Company under this Agreement or under any directors’ and officers’
liability insurance policies maintained by the Company in the suit for which indemnification or advancement is being sought. Such written
request for advancement shall include invoices received by Indemnitee in connection with such Enforcement Expenses but, in the case of
invoices in connection with legal services, any references to legal work performed or to expenditures made that would cause Indemnitee
to waive any privilege accorded by applicable law need not be included with the invoice.
(f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement
shall be required to be made prior to the final disposition of the Proceeding, including any appeal therein.
Section 13. Non-exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The
rights of indemnification and to receive advancement as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under applicable law, the Articles, any agreement, a vote of shareholders or a resolution
of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any
right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status
prior to such amendment, alteration or repeal. To the extent that a change in Cayman Islands law, whether by statute or judicial decision,
permits greater indemnification or advancement than would be afforded currently under the Articles and this Agreement, it is the intent
of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy
herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion
or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right
or remedy.
(b) To
the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, managers,
partners, officers, employees, agents or trustees of the Company or of any other Enterprise, Indemnitee shall be covered by such
policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director,
manager, partner, officer, employee, agent or trustee under such policy or policies. If, at the time of the receipt of a notice of a
claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give
prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective
policies.
(c) In
the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution
of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company’s obligation to provide indemnification or advancement hereunder to Indemnitee who is or was serving at the request
of the Company as a director, manager, partner, officer, employee, agent or trustee of any other Enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement from such other Enterprise.
Section 14. Duration
of Agreement. This Agreement shall continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee
shall have ceased to serve as a director of the Company or (b) one (1) year after the final termination of any Proceeding, including
any appeal, then pending in respect of which Indemnitee is granted rights of indemnification or advancement hereunder and of any proceeding
commenced by Indemnitee pursuant to Section 12 of this Agreement relating thereto. This Agreement shall be binding upon the Company and
its successors and assigns and shall inure to the benefit of Indemnitee and his or her heirs, executors and administrators. The Company
shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially
all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee,
expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required
to perform if no such succession had taken place.
Section 15. Waiver
of Claims Against Trust Account. Notwithstanding anything to the contrary in this Agreement, the Indemnitee and the Company, on behalf
of itself, its affiliates, its and their equityholders and any of its or their respective representatives (i) acknowledges and agrees
that (A) the Company has established a trust account for the benefit of the Company and certain of its existing equityholders, and (B)
none of the Indemnitee, the Company, its or their affiliates, its or their respective equityholders or any of its or their respective
representatives has any right, title, interest or claim of any kind arising from this Agreement or otherwise in or to any monies in such
trust account or any distributions or payments therefrom (each, a “Claim”) and (ii) hereby waives any Claim arising
from this Agreement or otherwise and agrees not to seek recourse against such trust account for any reason whatsoever.
Section 16. Severability.
If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each
portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not
itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so
as to give effect to the intent manifested thereby.
Section 17. Enforcement.
(a) The
Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order
to induce Indemnitee to serve as a director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement
in serving as a director of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes
all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof;
provided, however, that this Agreement is a supplement to and in furtherance of the Articles and applicable law, and shall
not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
(c) The Company shall not seek from a court, or agree to, a “bar order” which would have the effect of prohibiting or limiting
the Indemnitee’s rights to receive advancement of expenses under this Agreement.
Section 18. Modification and Waiver. No supplement, modification or amendment, or waiver of any provision, of this Agreement shall be
binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver. No supplement, modification
or amendment of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee prior to such supplement, modification or amendment.
Section 19. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification,
reimbursement or advancement as provided hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of
any obligation which it may have to Indemnitee under this Agreement or otherwise.
Section 20. Notices.
All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been
directed, (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is
so mailed, (iii) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication
shall have been directed or (iv) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been
received:
(a) If to Indemnitee, at such address as Indemnitee shall provide to the Company.
(b) If to the Company to:
Fifth Wall Acquisition Corp. III
6060 Center Drive 10th Floor
Los Angeles, California 90045
Attention: Brendan Wallace
or to any other address as may have been furnished to Indemnitee by
the Company.
Section 21. Contribution.
To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee
for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether
for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any Proceeding
in such proportion as is deemed fair and reasonable in light of all of the circumstances in order to reflect (i) the relative benefits
received by the Company and Indemnitee in connection with the event(s) and/or transaction(s) giving rise to such Proceeding; and/or (ii)
the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transactions.
Section 22. Internal
Revenue Code Section 409A. The Company intends for this Agreement to comply with the Indemnification exception under Section 1.409A-1(b)(10)
of the regulations promulgated under the Internal Revenue Code of 1986, as amended (the “Code”), which provides that
indemnification of, or the purchase of an insurance policy providing for payments of, all or part of the expenses incurred or damages
paid or payable by Indemnitee with respect to a bona fide claim against Indemnitee or the Company do not provide for a deferral of compensation,
subject to Section 409A of the Code, where such claim is based on actions or failures to act by Indemnitee in his or her capacity as
a service provider of the Company. The parties intend that this Agreement be interpreted and construed with such intent.
Section 23. Applicable
Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by Indemnitee pursuant to Section 12(a) of this Agreement, the Company and Indemnitee hereby
irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be
brought only in the NY Court, and not in any other state or federal court in the United States of America or any court in any other
country, (ii) consent to submit to the exclusive jurisdiction of the NY Court for purposes of any action or proceeding arising out
of or in connection with this Agreement, (iii) consent to service of process at the address set forth in Section 19 of this
Agreement with the same legal force and validity as if served upon such party personally within the State of New York, (iv) waive
any objection to the laying of venue of any such action or proceeding in the NY Court, and (v) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the NY Court has been brought in an improper or inconvenient
forum.
Section 24. Headings.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
Section 25. Identical
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against
whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on and as of the day and year first above written.
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FIFTH WALL ACQUISITION CORP. III |
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By: |
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Name: |
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Title: |
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[Name of Indemnitee] |
Exhibit 10.4
[•],
2021
Fifth Wall Acquisition Corp. III
6060 Center Drive 10th Floor
Los Angeles, California 90045
Re: Initial Public Offering
Ladies and Gentlemen:
This letter (this “Letter Agreement”)
is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”) entered
into by and among Fifth Wall Acquisition Corp. III, a Cayman Islands exempted company (the “Company”), Deutsche
Bank Securities Inc., Goldman Sachs & Co. LLC and BofA Securities, Inc. as representatives (the “Representatives”)
of the several underwriters (each, an “Underwriter” and collectively, the “Underwriters”),
relating to an underwritten initial public offering (the “Public Offering”), of up to 28,750,000 of the Company’s
shares (the “Shares”) of Class A ordinary shares, par value $0.0001 per share (the “Class A Ordinary
Shares”), including up to 3,750,000 Shares that may be purchased to cover over-allotments, if any. The Shares will be sold
in the Public Offering pursuant to a registration statement on Form S-1 and prospectus (the “Prospectus”) filed
by the Company with the U.S. Securities and Exchange Commission (the “Commission”) and the Company has applied
to have the Shares listed on the Nasdaq Capital Market. Certain capitalized terms used herein are defined in paragraph 11 hereof.
In order to induce the Company and the Underwriters
to enter into the Underwriting Agreement and to proceed with the Public Offering and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, each of Fifth Wall Acquisition Sponsor III LLC (the “Sponsor”)
and the undersigned individuals, each of whom is a member of the Company’s board of directors and/or management team (each of the
undersigned individuals, an “Insider” and collectively, the “Insiders”), hereby agrees
with the Company as follows:
| 1. | The Sponsor and each Insider agrees that if the Company seeks shareholder approval of a proposed Business Combination, then in connection
with such proposed Business Combination, it, he or she shall (i) vote any Ordinary Shares (as defined below) owned by it, him or her in
favor of any proposed Business Combination and (ii) not redeem any Ordinary Shares owned by it, him or her in connection with such shareholder
approval. If the Company seeks to consummate a proposed Business Combination by engaging in a tender offer, the Sponsor and each Insider
agrees that it, he or she will not sell or tender any Ordinary Shares owned by it, him or her in connection therewith. |
| 2. | The Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a
Business Combination within 24 months from the closing of the Public Offering, or such later period approved by the Company’s
shareholders in accordance with the Company’s amended and restated memorandum and articles of association (as it may be
amended from time to time, the “Articles”), the Sponsor and
each Insider shall take all reasonable steps to cause the Company to (i) cease all operations except for the purpose of winding up, (ii)
as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the Class A Ordinary Shares sold in
the Public Offering (the “Offering Shares”), at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the Trust Account (as defined below), including interest earned on the funds held in the Trust Account and not previously
released to the Company to pay its taxes (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the
number of then outstanding Offering Shares, which redemption will completely extinguish all Public Shareholders’ (as defined below)
rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board
of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for
claims of creditors and other requirements of applicable law. The Sponsor and each Insider agrees to not propose any amendment to the
Articles to modify the substance or timing of the Company’s obligation to redeem 100% of the Offering Shares if the Company does
not complete a Business Combination within the required time period set forth in the Articles or with respect to any other material provisions
relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides its Public Shareholders
with the opportunity to redeem their Offering Shares upon approval of any such amendment at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not
previously released to the Company to pay its taxes, divided by the number of then outstanding Offering Shares. |
The Sponsor and each Insider
acknowledges that it, he or she has no right, title, interest or claim of any kind in or to any monies held in the Trust Account or
any other asset of the Company as a result of any liquidation of the Company with respect to the Founder Shares (as defined below)
held by it, him or her. The Sponsor and each Insider hereby further waives, with respect to any Ordinary Shares held by it, him or
her, if any, any redemption rights it, he or she may have in connection with (A) the consummation of a Business Combination,
including, without limitation, any such rights available in the context of a shareholder vote to approve such Business Combination,
or (B) a shareholder vote to approve an amendment to the Articles to modify the substance or timing of the Company’s
obligation to redeem 100% of the Offering Shares if the Company has not consummated a Business Combination within the time period
set forth in the Articles or with respect to any other material provisions relating to shareholders’ rights or pre-initial
business combination activity or in the context of a tender offer made by the Company to purchase Offering Shares (although the
Sponsor, the Insiders and their respective affiliates shall be entitled to redemption and liquidation rights with respect to any
Offering Shares it or they hold if the Company fails to consummate a Business Combination within the time period set forth in the
Articles).
| 3. | During the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the Sponsor
and each Insider shall not, without the prior written consent of the Representatives, (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish
or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission promulgated
thereunder, with respect to, any Ordinary Shares (including, but not limited to, Founder Shares) or any securities convertible into, or
exercisable, or exchangeable for, Ordinary Shares owned by it, him or her, (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 any Ordinary Shares (including, but not limited to,
Founder Shares) or any securities convertible into, or exercisable, or exchangeable for, Ordinary Shares owned by it, him or her, whether
any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly announce any intention to
effect any transaction specified in clause (i) or (ii); provided, however, that the foregoing does not apply to the forfeiture of any
Founder Shares pursuant to their terms or any transfer of Founder Shares to any current or future independent director of the company
(as long as such current or future independent director transferee is subject to this Letter Agreement or executes an agreement substantially
identical to the terms of this Letter Agreement, as applicable to directors and officers at the time of such transfer; and as long as,
to the extent any Section 16 reporting obligation is triggered as a result of such transfer, any related Section 16 filing includes a
practical explanation as to the nature of the transfer). Each of the Insiders and the Sponsor acknowledges and agrees that, prior to the
effective date of any release or waiver, of the restrictions set forth in this paragraph 3 or paragraph 7 below, the Company shall announce
the impending release or waiver by press release through a major news service at least two business days before the effective date of
the release or waiver. Any release or waiver granted shall only be effective two business days after the publication date of such press
release. The provisions of this paragraph will not apply if the release or waiver is effected solely to permit a transfer not for consideration
and the transferee has agreed in writing to be bound by the same terms described in this Letter Agreement to the extent and for the duration
that such terms remain in effect at the time of the transfer. Notwithstanding the foregoing, nothing in this Section 3 will prohibit (1)
the issuance and sale of Private Placement Shares (as defined below), (2) the issuance and sale of any Shares in the Public Offering,
including any Shares issued and sold to cover over-allotments, if any, (3) the registration with the SEC pursuant to an agreement to be
entered into concurrently with the execution of this Agreement, the resale of the Private Placement Shares and the Founder Shares and
(4) issuance of securities in connection with a Business Combination. |
| 4. | In the event of the liquidation of the Trust Account upon the failure of the Company to consummate its initial Business Combination
within the time period set forth in the Articles, the Sponsor (the “Indemnitor”) agrees to indemnify and hold
harmless the Company against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and
all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, whether pending or threatened)
to which the Company may become subject as a result of any claim by (i) any third party for services rendered or products sold to the
Company or (ii) any prospective target business with which the Company has entered into a written letter of intent, confidentiality or
other similar agreement or Business Combination agreement (a “Target”); provided, however, that
such indemnification of the Company by the Indemnitor (x) shall apply only to the extent necessary to ensure that such claims by a third
party or a Target do not reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Offering Share and (ii)
the actual amount per Offering Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00
per Offering Share is then held in the Trust Account due to reductions in the value of the trust assets, less taxes payable, (y) shall
not apply to any claims by a third party or a Target which executed a waiver of any and all rights to the monies held in the Trust Account
(whether or not such waiver is enforceable) and (z) shall not apply to any claims under the Company’s indemnity of the Underwriters
against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The Indemnitor shall have the right to
defend against any such claim with counsel of its choice reasonably satisfactory to the Company if, within 15 days following written receipt
of notice of the claim to the Indemnitor, the Indemnitor notifies the Company in writing that it shall undertake such defense. |
| 5. | To the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 3,750,000 Shares within
45 days from the date of the Prospectus (and as further described in the Prospectus), the Sponsor agrees to forfeit, at no cost, a number
of Founder Shares in the aggregate equal to 937,500 multiplied by a fraction, (i) the numerator of which is 3,750,000 minus the number
of Shares purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 3,750,000.
The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the Underwriters so that the
Founder Shares will represent an aggregate of 20.0% of the Company’s issued and outstanding Class A Ordinary Shares after the Public
Offering (not including the Private Placement Shares (as defined below)). The Sponsor further agrees that to the extent that the size
of the Public Offering is increased or decreased, the Company will purchase or sell Shares or effect a share repurchase or share capitalization,
as applicable, immediately prior to the consummation of the Public Offering in such amount as to maintain the ownership of the Initial
Shareholders prior to the Public Offering at 20.0% of its issued and outstanding Capital Shares upon the consummation of the Public Offering.
In connection with such increase or decrease in the size of the Public Offering, then (A) the references to 3,750,000 in the numerator
and denominator of the formula in the first sentence of this paragraph shall
be changed to a number equal to 15% of the number of Public Shares issued in the Public Offering and (B) the reference to 937,500 in the
formula set forth in the first sentence of this paragraph shall be adjusted to such number of Founder Shares that the Sponsor would have
to surrender to the Company in order for the Initial Shareholders to hold an aggregate of 20.0% of the Company’s issued and outstanding
Class A Ordinary Shares after the Public Offering (not including Private Placement Shares). |
| 6. | The Sponsor and each Insider hereby agrees and acknowledges that: (i) the Underwriters and the Company would be irreparably injured
in the event of a breach by such Sponsor or an Insider of its, his or her obligations under paragraphs 1, 2, 3, 4, 5, 7(a), and 7(b),
as applicable, of this Letter Agreement (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching
party shall be entitled to injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event
of such breach. |
| 7. | (a) The Sponsor and each Insider agrees that it, he or she shall not Transfer any Founder Shares (or any Class A Ordinary Shares
issuable upon conversion thereof) until the earliest of (A) one year after the completion of the Company’s initial Business Combination
or (B) subsequent to the Company’s initial Business Combination, (x) the date on which the Company completes a liquidation, merger,
share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to
exchange their Class A Ordinary Shares for cash, securities or other property or (y) if the closing price of the Company’s Class
A Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial
Business Combination (the “Founder Shares Lock-up Period”). |
| | (b) The Sponsor and each Insider agrees that it, he or she shall
not Transfer any Private Placement Shares, until 30 days after the completion of a Business Combination (the “Private Placement
Shares Lock-up Period”, together with the Founder Shares Lock-up Period, the “Lock-up Periods”). |
| | (c) Notwithstanding the provisions set forth in paragraphs 7(a)
and (b), Transfers of the Founder Shares, Private Placement Shares or the Founder Shares that are held by the Sponsor, any Insider or
any of their permitted transferees (that have complied with this paragraph 7(c)), are permitted (a) to the Company’s officers or
directors, any affiliates or family members of any of the Company’s officers or directors, to the Sponsor, any members or partners
of the Sponsor or their affiliates, or any affiliates of the Sponsor; (b) in the case of an individual, by gift to a member of such individual’s
immediate family or to a trust, the beneficiary of which is a member of such individual’s immediate family, an affiliate of such
individual or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death
of such individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers
made in connection with any forward purchase agreement or similar arrangement or in connection with the consummation of an initial Business
Combination at prices no greater than the price at which the securities were originally purchased; (f) by virtue of the laws of the Cayman
Islands or the Sponsor’s limited liability company agreement upon dissolution of the Sponsor; (g) to the Company for no value for
cancellation in connection with the consummation of a Business Combination; (h) in the event of the Company’s liquidation prior
to the consummation of a Business Combination; or (i) in the event of the Company’s liquidation, merger, share exchange or other
similar transaction which results in all of the Company’s shareholders having the right to exchange their Class A Ordinary Shares
for cash, securities or other property subsequent to the Company’s completion of an initial Business Combination; provided,
however, that in the case of clauses (a) through (f), these permitted transferees must enter into a written agreement with the
Company agreeing to be bound by the transfer restrictions herein and the other restrictions contained in this Agreement (including provisions
relating to voting, the Trust Account and liquidating distributions). |
| 8. | The Sponsor and each Insider represents and warrants that it, he or she has never been suspended or expelled from membership in any
securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
Each Insider’s biographical information furnished to the Company (including any such information included in the Prospectus) is
true and accurate in all respects and does not omit any material information with respect to the Insider’s background. The Sponsor
and each Insider’s questionnaire furnished to the Company is true and accurate in all respects. The Sponsor and each Insider represents
and warrants that: it, he or she is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or
order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction; it, he
or she has never been convicted of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or
handling of funds of another person, or (iii) pertaining to any dealings in any securities and it, he or she is not currently a defendant
in any such criminal proceeding. |
| 9. | Except as disclosed in the Prospectus, neither the Sponsor nor any officer, nor any affiliate of the Sponsor or any officer, nor any
director of the Company, shall receive from the Company any finder’s fee, reimbursement, consulting fee, non-cash payments, monies
in respect of any repayment of a loan or other compensation prior to, or in connection with any services rendered in order to effectuate,
the consummation of the Company’s initial Business Combination (regardless of the type of transaction that it is), other than the
following, none of which will be made from the proceeds held in the Trust Account prior to the completion of the initial Business Combination:
repayment of a loan and advances up to an aggregate of $300,000 made to the Company by the Sponsor; payment of up to $17,500 per month, for up to 24 months, for
office space and professional, secretarial, administrative and support services; reimbursement for any reasonable out-of-pocket expenses
related to identifying, investigating, negotiating and completing an initial Business Combination, and repayment of loans, if any, and
on such terms as to be determined by the Company from time to time, made by the Sponsor or an affiliate of the Sponsor or any of the Company’s
officers or directors to finance transaction costs in connection with an intended initial Business Combination, provided, that, if the
Company does not consummate an initial Business Combination, a portion of the working capital held outside the Trust Account may be used
by the Company to repay such loaned amounts so long as no proceeds from the Trust Account are used for such repayment. Up to $1,500,000
of such loans may be convertible into shares at a price of $10.00 per share at the option of the lender. Such shares would be identical
to the Private Placement Shares. |
| 10. | The Sponsor and each Insider has full right and power, without violating any agreement to which it is bound (including, without limitation,
any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement and, as applicable,
to serve as an officer and/or director on the board of directors of the Company and hereby consents to being named in the Prospectus as
an officer and/or director of the Company. |
| 11. | As used herein, (i) “Business Combination” shall mean a merger, share exchange, asset acquisition, share
purchase, reorganization or similar business combination, involving the Company and one or more businesses; (ii) “Ordinary
Shares” shall mean the Class A ordinary shares and Class B ordinary shares; (iii) “Founder Shares”
shall mean the 7,187,500 Class B ordinary shares issued and outstanding (up to 937,500 Shares of which are subject to complete or partial
forfeiture if the over-allotment option is not exercised by the Underwriters); (iv) “Initial Shareholders” shall
mean the Sponsor and any Insider that holds Founder Shares; (v) “Private Placement Shares” shall mean the up
to 857,000 shares (or up to 932,000 shares if the over-allotment option is exercised in full) that the Sponsor has agreed to purchase
for an aggregate purchase price of $8,570,000 (or $9,320,000 if the over-allotment option is exercised in full), or $10.00 per Share,
in a private placement that shall occur simultaneously with the consummation of the Public Offering; (vi) “Public Shareholders”
shall mean the holders of securities issued in the Public Offering; (vii) “Trust Account” shall mean the trust
fund into which a portion of the net proceeds of the Public Offering and the sale of the Private Placement Shares shall be deposited;
(viii) “Transfer” shall mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge,
grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase
of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16
of the Exchange Act, and the rules and regulations of the Commission promulgated thereunder with respect to, any security, (b) entry into
any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security,
whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any
intention to effect any transaction specified in clause (a) or (b); and (ix) “Shares” shall mean the Private
Placement Shares and public shares. |
| 12. | The Company will maintain an insurance policy or policies providing directors’ and officers’ liability insurance, and
each Director shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage
available for any of the Company’s directors or officers. |
| 13. | This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof
and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent
they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may not be changed,
amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument
executed by all parties hereto. |
| 14. | No party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the prior
written consent of the other parties. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall
not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding on the Sponsor
and each Insider and their respective successors, heirs and assigns and permitted transferees. |
| 15. | Nothing in this Letter Agreement shall be construed to confer upon, or give to, any person or corporation other than the parties hereto
any right, remedy or claim under or by reason of this Letter Agreement or of any covenant, condition, stipulation, promise or agreement
hereof. All covenants, conditions, stipulations, promises and agreements contained in this Letter Agreement shall be for the sole and
exclusive benefit of the parties hereto and their successors, heirs, personal representatives and assigns and permitted transferees. |
| 16. | This Letter Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. |
| 17. | This Letter Agreement shall be deemed severable, and the invalidity or unenforceability of any term or
provision hereof shall not affect the validity or enforceability of this Letter Agreement or of any other term or provision hereof.
Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as
a part of this Letter Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable. |
| 18. | This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York. The parties
hereto (i) all agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this Letter Agreement shall
be brought and enforced in the courts of New York City or in the State of New York, and irrevocably submit to such jurisdiction and venue,
which jurisdiction and venue shall be exclusive and (ii) waive any objection to such exclusive jurisdiction and venue or that such courts
represent an inconvenient forum. |
| 19. | Any notice, consent or request to be given in connection with any of the terms or provisions of this Letter Agreement shall be in
writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery
or facsimile transmission. |
| 20. | Each party hereto shall not be liable for any breaches or misrepresentations contained in this Letter Agreement by any other party
to this Letter Agreement, and no party shall be liable or responsible for the obligations of another party, including, without limitation,
indemnification obligations and notice obligations. |
| 21. | This Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods or (ii) the liquidation of the Company;
provided, however, that this Letter Agreement shall earlier terminate in the event that the Public Offering is not consummated and closed
by December 31, 2021; provided further that paragraph 4 of this Letter Agreement shall survive such liquidation. |
[Signature Page Follows]
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Sincerely, |
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FIFTH WALL ACQUISITION SPONSOR
III LLC |
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By: |
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Name: Brendan Wallace |
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Title: Manager |
| Acknowledged and Agreed: |
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| FIFTH WALL ACQUISITION CORP.
III |
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| By: |
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Name: Brendan Wallace |
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Title: Chief Executive Officer |
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| Brendan Wallace |
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| Andriy Mykhaylovskyy |
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| Adeyemi Ajao |
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| Alana Beard |
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| Poonam Sharma Mathis |
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| Amanda Parness |
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[Signature Page to Letter
Agreement]
Exhibit 10.5
Fifth Wall Acquisition Corp. III
February 24, 2021
Fifth Wall Acquisition Sponsor III, LLC
RE: Securities Subscription Agreement
Gentlemen:
This agreement
(this “Agreement”) is entered into on February 24, 2021 by and between Fifth Wall Acquisition Sponsor III, LLC, a
Cayman Islands limited liability company (the “Subscriber” or “you”), and Fifth Wall
Acquisition Corp. III, a Cayman Islands exempted company (the “Company”). Pursuant to the terms hereof, the
Company hereby accepts the offer the Subscriber has made to subscribe for and purchase 4,312,500 Class B ordinary shares, $0.0001
par value per share (the “Shares”), up to 562,500 of which are subject to forfeiture by you if the underwriters
of the initial public offering (“IPO”) of the Company do not fully exercise their over-allotment option (the
“Over-allotment Option”). The Company and the Subscriber’s agreements regarding such Shares are as
follows:
1. Subscription and Purchase of Securities. For the sum of $25,000 (the “Purchase Price”), which the Company acknowledges receiving in cash, the Company hereby issues the Shares to the Subscriber, and the Subscriber hereby subscribes for and purchases the Shares from the Company, 562,500 of which are subject to forfeiture, on the terms and subject to the conditions set forth in this Agreement. All references in this Agreement to shares of the Company being forfeited shall take effect as surrenders for no consideration of such shares as a matter of Cayman Islands law. Upon the issuance of the Shares, the Subscriber hereby surrenders for no consideration the one Class B ordinary share of the Company held by it following the incorporation of the Company.
| 2. | Representations, Warranties and Agreements. |
2.1 Subscriber’s
Representations, Warranties and Agreements. To induce the Company to issue the Shares to the Subscriber, the Subscriber hereby represents
and warrants to the Company and agrees with the Company as follows:
2.1.1 No Government
Recommendation or Approval. The Subscriber understands that no federal or state agency has passed upon or made any recommendation
or endorsement of the offering of the Shares.
2.1.2 No Conflicts.
The execution, delivery and performance of this Agreement and the consummation by the Subscriber of the transactions contemplated hereby
do not violate, conflict with or constitute a default under (i) the limited liability company agreement of the Subscriber, (ii) any agreement,
indenture or instrument to which the Subscriber is a party or (iii) any law, statute, rule or regulation to which the Subscriber is subject,
or any agreement, order, judgment or decree to which the Subscriber is subject.
2.1.3 Registration
and Authority. The Subscriber is a Cayman Islands limited liability company, formed and registered, validly existing and possessing
all requisite power and authority necessary to carry out the transactions contemplated by this Agreement. Upon execution and delivery
by you, this Agreement will be a legal, valid and binding agreement of Subscriber, enforceable against Subscriber in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).
2.1.4 Experience,
Financial Capability and Suitability. Subscriber is: (i) sophisticated in financial matters and is able to evaluate the risks and
benefits of the investment in the Shares and (ii) able to bear the economic risk of its investment in the Shares for an indefinite period
of time because the Shares have not been registered under the Securities Act (as defined below) and therefore cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is available. Subscriber is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its own interests. Subscriber must bear the economic risk
of this investment until the Shares are sold pursuant to: (i) an effective registration statement under the Securities Act or (ii) an
exemption from registration available with respect to such sale. Subscriber is able to bear the economic risks of an investment in the
Shares and to afford a complete loss of Subscriber’s investment in the Shares.
2.1.5 Access to
Information; Independent Investigation. Prior to the execution of this Agreement, the Subscriber has had the opportunity to ask
questions of and receive answers from representatives of the Company concerning an investment in the Company, as well as the
finances, operations, business and prospects of the Company, and the opportunity to obtain additional information to verify the
accuracy of all information so obtained. In determining whether to make this investment, Subscriber has relied solely on
Subscriber’s own knowledge and understanding of the Company and its business based upon Subscriber’s own due diligence
investigation and the information furnished pursuant to this paragraph. Subscriber understands that no person has been authorized to
give any information or to make any representations which were not furnished pursuant to this Section 2 and Subscriber has not
relied on any other representations or information in making its investment decision, whether written or oral, relating to the
Company, its operations and/or its prospects.
2.1.6 Regulation D
Offering. Subscriber represents that it is an “accredited investor” as such term is defined in Rule 501(a) of
Regulation D under the Securities Act of 1933, as amended (the “Securities Act”) and acknowledges the sale
contemplated hereby is being made in reliance on a private placement exemption to “accredited investors” within the
meaning of Section 501(a) of Regulation D under the Securities Act or similar exemptions under federal and state law.
2.1.7 Investment Purposes.
The Subscriber is purchasing the Shares solely for investment purposes, for the Subscriber’s own account and not for the account
or benefit of any other person, and not with a view towards the distribution or dissemination thereof. The Subscriber did not decide to
enter into this Agreement as a result of any general solicitation or general advertising within the meaning of Rule 502 under the Securities
Act.
2.1.8 Restrictions on
Transfer; Shell Company. Subscriber understands the Shares are being offered in a transaction not involving a public offering
within the meaning of the Securities Act. Subscriber understands the Shares will be “restricted securities” within the
meaning of Rule 144(a)(3) under the Securities Act, and Subscriber understands that the certificates representing the Shares will
contain a legend in respect of such restrictions. If in the future the Subscriber decides to offer, resell, pledge or otherwise
transfer the Shares, such Shares may be offered, resold, pledged or otherwise transferred only pursuant to: (i) registration under
the Securities Act, or (ii) an available exemption from registration. Subscriber agrees that if any transfer of its Shares or any
interest therein is proposed to be made, as a condition precedent to any such transfer, Subscriber may be required to deliver to the
Company an opinion of counsel satisfactory to the Company. Absent registration or an exemption, the Subscriber agrees not to resell
the Shares. Subscriber further acknowledges that because the Company is a shell company, Rule 144 may not be available to the
Subscriber for the resale of the Shares until one year following consummation of the initial business combination of the Company,
despite technical compliance with the requirements of Rule 144 and the release or waiver of any contractual transfer
restrictions.
2.1.9 No Governmental Consents.
No governmental, administrative or other third party consents or approvals are required or necessary on the part of Subscriber in connection
with the transactions contemplated by this Agreement.
2.2 Company’s Representations,
Warranties and Agreements. To induce the Subscriber to subscribe for and purchase the Shares, the Company hereby represents and warrants
to the Subscriber and agrees with the Subscriber as follows:
2.2.1 Incorporation and Corporate
Power. The Company is a Cayman Islands exempted company incorporated, validly existing and is qualified to do business in every jurisdiction
in which the failure to so qualify would reasonably be expected to have a material adverse effect on the financial condition, operating
results or assets of the Company. The Company possesses all requisite corporate power and authority necessary to carry out the transactions
contemplated by this Agreement. Upon execution and delivery by the Company, this Agreement will be a legal, valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the enforcement of creditors’ rights generally and subject
to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
2.2.2 No Conflicts.
The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated hereby
do not violate, conflict with or constitute a default under (i) the memorandum and articles of association of the Company, (ii) any agreement,
indenture or instrument to which the Company is a party or (iii) any law, statute, rule or regulation to which the Company is subject,
or any agreement, order, judgment or decree to which the Company is subject.
2.2.3 Title to
Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof, and registration in the Company’s register
of members, the Shares will be duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant
to, the terms hereof, and registration in the Company’s register of members, the Subscriber will have or receive good title to the
Shares, free and clear of all liens, claims and encumbrances of any kind, other than (a) transfer restrictions hereunder and other agreements
to which the Shares may be subject, (b) transfer restrictions under federal and state securities laws, and (c) liens, claims or encumbrances
imposed due to the actions of the Subscriber.
2.2.4 No Adverse
Actions. There are no actions, suits, investigations or proceedings pending, threatened against or affecting the Company which: (i)
seek to restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated by this Agreement or (ii) question
the validity or legality of any transactions or seeks to recover damages or to obtain other relief in connection with any transactions.
3.1 Partial
or No Exercise of the Over-allotment Option. In the event the Over-allotment Option granted to the representative(s) of the underwriters
of the Company’s IPO is not exercised in full, the Subscriber acknowledges and agrees that it shall forfeit any and all rights to
such number of Shares (up to an aggregate of 562,500 Shares and pro rata based upon the percentage of the Over-allotment Option exercised)
such that immediately following such forfeiture, the Subscriber (and all other initial shareholders prior to the IPO, if any) will own
an aggregate number of Shares (not including ordinary shares issuable upon exercise of any warrants or any ordinary shares purchased by
Subscriber in the Company’s IPO or in the aftermarket) equal to 20% of the issued and outstanding ordinary shares of the Company
immediately following the IPO.
3.2 Termination
of Rights as Shareholder. If any of the Shares are forfeited in accordance with this Section 3, then after such time the Subscriber
(or successor in interest), shall no longer have any rights as a holder of such Shares, and the Company shall take such action as is appropriate
to cancel such Shares.
4. Waiver of Liquidation Distributions; Redemption Rights. In connection with the Shares purchased pursuant to this Agreement, the Subscriber hereby waives any and all right, title, interest or claim of any kind in or to any distributions by the Company from the trust account which will be established for the benefit of the Company’s public shareholders and into which substantially all of the proceeds of the IPO will be deposited (the “Trust Account”), in the event of a liquidation of the Company upon the Company’s failure to timely complete an initial business combination. For purposes of clarity, in the event the Subscriber purchases ordinary shares in the IPO or in the aftermarket, any additional Shares so purchased shall be eligible to receive any liquidating distributions by the Company. However, in no event will the Subscriber have the right to redeem any ordinary shares into funds held in the Trust Account upon the successful completion of an initial business combination.
| 5. | Restrictions on Transfer. |
5.1 Securities
Law Restrictions. In addition to any restrictions to be contained in that certain letter agreement (commonly known as an
“Insider Letter”) to be dated as of the closing of the IPO by and between Subscriber and the Company, Subscriber
agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Shares unless, prior thereto (a) a
registration statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the
Shares proposed to be transferred shall then be effective or (b) the Company has received an opinion from counsel reasonably
satisfactory to the Company, that such registration is not required because such transaction is exempt from registration under the
Securities Act and the rules promulgated by the Securities and Exchange Commission thereunder and with all applicable state
securities laws.
5.2 Restrictive
Legends. Any certificates representing the Shares shall have endorsed thereon legends substantially as follows:
“THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER
THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH,
IN THE OPINION OF COUNSEL, IS AVAILABLE.”
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO A LOCKUP AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF THE
LOCKUP.”
5.3 Additional
Shares or Substituted Securities. In the event of the declaration of a share capitalization, the declaration of an extraordinary dividend
payable in a form other than Shares, a spin-off, a share sub-division, an adjustment in conversion ratio, a recapitalization or a similar
transaction affecting the Company’s outstanding Shares without receipt of consideration, any new, substituted or additional securities
or other property which are by reason of such transaction distributed with respect to any Shares subject to this Section 5 or into which
such Shares thereby become convertible shall immediately be subject to this Section 5 and Section 3. Appropriate adjustments to reflect
the distribution of such securities or property shall be made to the number and/or class of Shares subject to this Section 5 and Section
3.
5.4
Registration Rights. Subscriber acknowledges that the Shares are being purchased pursuant to an exemption from the registration
requirements of the Securities Act and will become freely tradable only after certain conditions are met or they are registered pursuant
to a Registration Rights Agreement to be entered into with the Company prior to the closing of the IPO.
6.1
Further Assurances. Subscriber agrees to execute such further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
6.2
Notices. All notices, statements or other documents which are required or contemplated by this Agreement shall be: (i) in writing
and delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission
to the address designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address or fax
number as may be designated in writing by such party and (iii) by electronic mail, to the electronic mail address most recently provided
to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so
transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following receipt
of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier
service or five (5) days after mailing if sent by mail.
6.3
Entire Agreement. This Agreement, together with that certain Insider Letter to be entered into between Subscriber and the Company,
substantially in the form to be filed as an exhibit to the Registration Statement on Form S-1 associated with the Company’s IPO,
embodies the entire agreement and understanding between the Subscriber and the Company with respect to the subject matter hereof and
supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation,
warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or
restrict, the express terms and provisions of this Agreement.
6.4
Modifications and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed
by all parties hereto.
6.5 Waivers
and Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by
a written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be
deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not
similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given,
and shall not constitute a continuing waiver or consent.
6.6 Assignment.
The rights and obligations under this Agreement may not be assigned by either party hereto without the prior written consent of the
other party.
6.7 Benefit. All
statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure
to the benefit of the respective successors and permitted assigns of each party hereto. Nothing in this Agreement shall be construed to
create any rights or obligations except among the parties hereto, and no person or entity shall be regarded as a third-party beneficiary
of this Agreement.
6.8 Governing
Law. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by
the laws of New York applicable to contracts wholly performed within the borders of such state, without giving effect to the conflict
of law principles thereof.
6.9 Severability.
In the event that any court of competent jurisdiction shall determine that any provision, or any portion thereof, contained in this
Agreement shall be unreasonable or unenforceable in any respect, then such provision shall be deemed limited to the extent that such court
deems it reasonable and enforceable, and as so limited shall remain in full force and effect. In the event that such court shall deem
any such provision, or portion thereof, wholly unenforceable, the remaining provisions of this Agreement shall nevertheless remain in
full force and effect.
6.10 No Waiver
of Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement,
and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of such party. No single
or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment or discontinuance of steps
to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder. The election of any remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not expressly required under this Agreement shall entitle
the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver
of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand.
6.11 Survival
of Representations and Warranties. All representations and warranties made by the parties hereto in this Agreement or in any other
agreement, certificate or instrument provided for or contemplated hereby, shall survive the execution and delivery hereof and any investigations
made by or on behalf of the parties.
6.12 No Broker
or Finder. Each of the parties hereto represents and warrants to the other that no broker, finder or other financial consultant has
acted on its behalf in connection with this Agreement or the transactions contemplated hereby in such a way as to create any liability
on the other. Each of the parties hereto agrees to indemnify and save the other harmless from any claim or demand for commission or other
compensation by any broker, finder, financial consultant or similar agent claiming to have been employed by or on behalf of such party
and to bear the cost of legal expenses incurred in defending against any such claim.
6.13 Headings
and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall
in no way modify or affect the meaning or construction of any of the terms or provisions hereof.
6.14 Counterparts.
This Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or any other
form of electronic delivery, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such signature page were an original thereof.
6.15 Construction. The
parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of
proof will arise favoring or disfavoring any party hereto because of the authorship of any provision of this Agreement. The words
“include,” “includes,” and “including” will be deemed to be followed by
“without limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include any other
gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise
requires. The words “this Agreement,” “herein,” “hereof,”
“hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and not
to any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty, and
covenant contained herein will have independent significance. If any party hereto has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which such party hereto has not breached will not detract
from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant.
6.16 Mutual Drafting.
This Agreement is the joint product of the Subscriber and the Company and each provision hereof has been subject to the mutual consultation,
negotiation and agreement of such parties and shall not be construed for or against any party hereto.
7. Voting and Tender of
Shares. Subscriber agrees to vote the Shares in favor of an initial business combination that the Company negotiates and submits for
approval to the Company’s shareholders and shall not seek redemption or repurchase with respect to such Shares. Additionally, the
Subscriber agrees not to tender any Shares in connection with a tender offer presented to the Company’s shareholders in connection
with an initial business combination negotiated by the Company.
[Signature Page Follows]
If the foregoing accurately sets forth
our understanding and agreement, please sign the enclosed copy of this Agreement and return it to us.
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Very truly yours, |
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Fifth Wall Acquisition Corp. III |
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By: |
/s/ Andriy Mykhaylovskyy |
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Name: Andriy Mykhaylovskyy |
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Title: Director |
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| Accepted and agreed as of the date first written above. |
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| Fifth Wall Acquisition Sponsor III, LLC |
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| |
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| By: |
/s/ Andriy Mykhaylovskyy |
|
| |
Name: Andriy Mykhaylovskyy |
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| |
Title: Manager |
|
[Signature Page to Subscription Agreement]
EXHIBIT
10.6
THIS PROMISSORY NOTE
(“NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS
NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE
THEREOF UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED.
PROMISSORY NOTE
| Principal Amount: up to $300,000 |
Dated as of February 24, 2021 |
(as set forth on the Schedule of Borrowings attached hereto)
Fifth Wall Acquisition Corp.
III, a Cayman Islands exempted company and blank check company (the “Maker”), promises to pay to the order of Fifth
Wall Acquisition Sponsor III, LLC, a Cayman Islands limited liability company, or its registered assigns or successors in interest (the
“Payee”), or order, the principal sum of up to three hundred thousand U.S. dollars ($300,000) (as set forth on the
Schedule of Borrowings attached hereto) in lawful money of the United States of America, on the terms and conditions described below.
All payments on this Note shall be made by check or wire transfer of immediately available funds or as otherwise determined by the Maker
to such account as the Payee may from time to time designate by written notice in accordance with the provisions of this Note.
1.
Principal. The principal balance of this Note shall be payable on the earlier of: (i) February 28, 2022 or (ii) the date on
which Maker consummates an initial public offering of its securities (the “IPO”). The principal balance may be prepaid
at any time.
| 2. | Interest. No interest shall accrue on the unpaid principal balance of this Note. |
3.
Application of Payments. All payments shall be applied first to payment in full of any costs incurred in the collection
of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of any late
charges and finally to the reduction of the unpaid principal balance of this Note.
| 4. | Events of Default. The following shall constitute an event of default (“Event of Default”):
|
(a)
Failure to Make Required Payments. Failure by Maker to pay the principal amount due pursuant to this Note within five
(5) business days of the date specified above.
(b)
Voluntary Bankruptcy, Etc. The commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency,
reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of Maker or for any substantial part of its property, or the making
by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or
the taking of corporate action by Maker in furtherance of any of the foregoing.
(c)
Involuntary Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises
in respect of Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or
ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days.
(a) Upon the occurrence
of an Event of Default specified in Section 4(a) hereof, Payee may, by written notice to Maker, declare this Note to be due immediately
and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable thereunder, shall become immediately due
and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained
herein or in the documents evidencing the same to the contrary notwithstanding.
(b) Upon the occurrence
of an Event of Default specified in Sections 4(b) and 4(c), the unpaid principal balance of this Note, and all other sums payable with
regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part of Payee.
6. Waivers.
Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor,
protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee
under the terms of this Note, and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property,
real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution,
or providing for any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any real
estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may be sold
upon any such writ in whole or in part in any order desired by Payee.
7.
Unconditional Liability. Maker hereby waives all notices in connection with the delivery, acceptance, performance, default,
or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of
any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted
or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by
Payee with respect to the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties
may become parties hereto without notice to Maker or affecting Maker’s liability hereunder.
8.
Notices. All notices, statements or other documents which
are required or contemplated by this Agreement shall be: (i) in writing and delivered personally or sent by first class registered or
certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing, (ii)
by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing
by such party and (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic
mail address as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have
been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by
facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing
if sent by mail.
9.
Construction. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NEW YORK, WITHOUT REGARD TO CONFLICT
OF LAW PROVISIONS THEREOF.
10. Severability.
Any provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
11.
Trust Waiver. Notwithstanding anything herein to the contrary, the Payee hereby waives any and all right, title, interest or
claim of any kind (“Claim”) in or to any distribution of or from the trust account to be established in which the
proceeds of the IPO conducted by the Maker (including the deferred underwriters discounts and commissions) and the proceeds of the
sale of the warrants issued in a private placement to occur prior to the consummation of the IPO are to be deposited, as described
in greater detail in the registration statement and prospectus to be filed with the Securities and Exchange Commission in connection
with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the trust account
for any reason whatsoever.
12.
Amendment; Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent
of the Maker and the Payee.
13.
Assignment. No assignment or transfer of this Note or any rights or obligations
hereunder may be made by any party hereto (by operation of law or otherwise) without the prior written consent of the other party
hereto and any attempted assignment without the required consent shall be void.
[Signature page follows]
IN WITNESS WHEREOF,
Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned as of the day and year first
above written.
|
Fifth Wall Acquisition Corp. III, |
|
a Cayman Islands exempted company |
| By: | /s/ Andriy
Mykhaylovskyy |
| | Name: Andriy Mykhaylovskyy |
| | Title: Director |
[Signature Page to Promissory Note - Fifth Wall Acquisition
Corp. III]
SCHEDULE OF BORROWINGS
The following increases or decreases in this Promissory Note have been
made:
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Principal Amount of this |
| Amount of decrease in |
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Amount of increase in |
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Promissory Note |
| Principal Amount of this |
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Principal Amount of this |
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following such decrease |
| Promissory Note |
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Promissory Note |
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or increase |
| Date of Increase or | | |
| Decrease | | |
Exhibit 10.7
PRIVATE PLACEMENT SHARES PURCHASE AGREEMENT
THIS PRIVATE PLACEMENT SHARES PURCHASE AGREEMENT
(as it may from time to time be amended and including all exhibits referenced herein, this “Agreement”), dated
as of [•], 2021, is entered into by and between among Fifth Wall Acquisition Corp. III, a Cayman Islands exempted company (the “Company”),
and Fifth Wall Acquisition Sponsor III, LLC, a Cayman Islands limited liability company (the “Purchaser”).
WHEREAS, the Company intends to consummate an initial
public offering (the “Public Offering”) of the Company’s Class A ordinary shares, par value $0.0001 per
share (each, a “Share”), as set forth in the Company’s Registration Statement on Form S-1, filed with
the U.S. Securities and Exchange Commission (the “SEC”), File Number 333-[●] (the “Registration
Statement”), under the Securities Act of 1933, as amended (the “Securities Act”).
WHEREAS, the Purchaser has agreed to purchase an
aggregate of 857,000 Shares (and up to 932,000 Shares if the underwriters in the Public Offering exercise their option to purchase additional
Shares in full) (the “Private Placement Shares”).
NOW THEREFORE, in consideration of the mutual promises
contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties to this Agreement hereby, intending legally to be bound, agree as follows:
AGREEMENT
Section 1.
Authorization, Purchase and Sale; Terms of the Private Placement Shares.
A.
Authorization of the Private Placement Shares. The Company has duly authorized the issuance and sale of the Private Placement
Shares to the Purchaser.
B.
Purchase and Sale of the Private Placement Shares.
(i)
On the date of the consummation of the Public Offering (the “IPO Closing Date”), the Company shall issue
and sell to the Purchaser, and the Purchaser shall purchase from the Company, 857,000 Private Placement Shares at a price of $10.00 per
Private Placement Share for an aggregate purchase price of $8,570,000 (the “Purchase Price”). The Purchaser
shall pay the Purchase Price by wire transfer of immediately available funds to the Company at in accordance with the Company’s
wiring instructions, at least one (1) business day prior to the date of effectiveness of the Registration Statement filed in connection
with the Public Offering. On the IPO Closing Date, subject to the receipt of funds pursuant to the immediately prior sentence, the Company,
at its option, shall deliver a certificate evidencing the Private Placement Shares purchased by the Purchaser on such date duly registered
in the Purchaser’s name to the Purchaser or effect such delivery in book-entry form.
(ii)
On the date of any closing of the option to purchase additional Shares, if any, in connection with the Public Offering or on such
earlier time and date as may be mutually agreed by the Purchaser and the Company (each such date, an “Option Closing Date”,
and each Option Closing Date (if any) and the IPO Closing Date, a “Closing Date”), the Company shall issue and
sell to the Purchaser, and the Purchaser shall purchase from the Company, up to 75,000 Private Placement Shares (or, to the extent the
option to purchase additional Shares is not exercised in full, a lesser number of Private Placement Shares in proportion to portion of
the option that is exercised) at a price of $10.00 per Private Placement Share for an aggregate purchase price of up to $750,000 (the
“Option Purchase Price”). The Purchaser shall pay the Option Purchase Price in accordance with the Company’s
wire instruction by wire transfer of immediately available funds to the Company. On each Option Closing Date (if any), subject to the
receipt of funds pursuant to the immediately prior sentence, the Company shall, at its option, deliver a certificate evidencing the Private
Placement Shares purchased on such date duly registered in the Purchaser’s name to the Purchaser or effect such delivery in book-entry
form.
C.
Terms of the Private Placement Shares.
(i)
The Private Placement Shares are substantially identical to the Shares to be offered in the Public Offering except: (a) as provided
in that letter agreement, dated as of the date hereof (the “Letter Agreement”), by and among the Company, the
Purchaser and each of the Company’s officers, directors and director nominees, and (b) the Private Placement Shares are being purchased
pursuant to an exemption from the registration requirements of the Securities Act and will become freely tradable only after the expiration
of the lockup described above in the Letter Agreement and they are registered pursuant to the Registration and Shareholder Rights Agreement
(as defined below) or an exemption from registration is available, and the restrictions described above in clause (a) have expired.
(ii)
On the IPO Closing Date, the Company and the Purchaser shall enter into a registration and shareholder rights agreement (the “Registration
and Shareholder Rights Agreement”) pursuant to which the Company will grant certain registration rights to the Purchaser
relating to the Private Placement Shares.
Section 2.
Representations and Warranties of the Company. As a material inducement to the Purchaser to enter into this Agreement and purchase
the Private Placement Shares, the Company hereby represents and warrants to the Purchaser (which representations and warranties shall
survive each Closing Date) that:
A. Incorporation
and Corporate Power. The Company is an exempted company duly incorporated, validly existing and in good standing under the laws
of the Cayman Islands and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably be
expected to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company
possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement.
B.
Authorization; No Breach.
(i)
The execution, delivery and performance of this Agreement and the Private Placement Shares have been duly authorized by the Company
as of the Closing Date. This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with its
terms. Upon issuance in accordance with, and payment pursuant to, the terms of this Agreement, the Private Placement Shares will constitute
valid and binding obligations of the Company, enforceable in accordance with their terms as of the Closing Date.
(ii)
The execution and delivery by the Company of this Agreement and the Private Placement Shares, the issuance and sale of the Private
Placement Shares and the fulfillment of and compliance with the respective terms hereof and thereof by the Company, do not and will not
as of each Closing Date (a) conflict with or result in a breach of the terms, conditions or provisions of, (b) constitute a default under,
(c) result in the creation of any lien, security interest, charge or encumbrance upon the Company’s share capital or assets under,
(d) result in a violation of, or (e) require any authorization, consent, approval, exemption or other action by or notice or declaration
to, or filing with, any court or administrative or governmental body or agency pursuant to the amended and restated memorandum and articles
of association of the Company (in effect on the date hereof or as may be amended prior to completion of the contemplated Public Offering)
or any material law, statute, rule or regulation to which the Company is subject, or any agreement, order, judgment or decree to which
the Company is subject, except for any filings required after the date hereof under federal or state securities laws.
C.
Title to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof, the Private Placement
Shares will be duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms
hereof, the Purchaser will have good title to the Private Placement Shares purchased by it, free and clear of all liens, claims and encumbrances
of any kind, other than (i) transfer restrictions hereunder and under the other agreements contemplated hereby, (ii) transfer restrictions
under federal and state securities laws, and (iii) liens, claims or encumbrances imposed due to the actions of the Purchaser.
D.
Governmental Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental
authority is required in connection with the execution, delivery and performance by the Company of this Agreement or the consummation
by the Company of any other transactions contemplated hereby.
E. Regulation D Qualification. Neither the Company nor, to its actual knowledge, any of its affiliates, members, officers,
directors or beneficial shareholders of 20% or more of its outstanding securities, has experienced a disqualifying event as enumerated
pursuant to Rule 506(d) of Regulation D under the Securities Act.
Section 3.
Representations and Warranties of the Purchaser. As a material inducement to the Company to enter into this Agreement and issue
and sell the Private Placement Shares to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations
and warranties shall survive each Closing Date) that:
A.
Organization and Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out
the transactions contemplated by this Agreement.
B.
Authorization; No Breach.
(i)
This Agreement constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting
creditors’ rights and to general equitable principles (whether considered in a proceeding in equity or law).
(ii)
The execution and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the
Purchaser does not and shall not as of each Closing Date conflict with or result in a breach by the Purchaser of the terms, conditions
or provisions of any agreement, instrument, order, judgment or decree to which the Purchaser is subject that would materially impact its
ability to perform its obligations hereunder.
C.
Investment Representations.
(i)
The Purchaser is acquiring the Private Placement Shares for its own account, for investment purposes only and not with a view towards,
or for resale in connection with, any public sale or distribution thereof.
(ii)
The Purchaser is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D under
the Securities Act, and the Purchaser has not experienced a disqualifying event as enumerated pursuant to Rule 506(d) of Regulation D
under the Securities Act.
(iii)
The Purchaser understands that the Private Placement Shares are being offered and will be sold to it in reliance on specific exemptions
from the registration requirements of the United States federal and state securities laws and that the Company is relying upon the truth
and accuracy of, and the Purchaser’s compliance with, the representations and warranties of the Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of the Purchaser to acquire such Private Placement Shares.
(iv)
The Purchaser did not decide to enter into this Agreement as a result of any general solicitation or general advertising within
the meaning of Rule 502(c) of Regulation D under the Securities Act.
(v)
The Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Private Placement Shares which have been requested by the Purchaser. The Purchaser has been afforded
the opportunity to ask questions of the executive officers and directors of the Company. The Purchaser understands that its investment
in the Private Placement Shares involves a high degree of risk and it has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to the acquisition of the Private Placement Shares.
(vi)
The Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed
on or made any recommendation or endorsement of the Private Placement Shares or the fairness or suitability of the investment in the Private
Placement Shares by the Purchaser nor have such authorities passed upon or endorsed the merits of the offering of the Private Placement
Shares.
(vii)
The Purchaser understands that: (a) the Private Placement Shares have not been and are not being registered under the Securities
Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder
or (2) sold in reliance on an exemption therefrom; and (b) except as specifically set forth in the Registration and Shareholder Rights
Agreement, neither the Company nor any other person is under any obligation to register the Private Placement Shares under the Securities
Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. While the Purchaser understands
that Rule 144 under the Securities Act is not available for the resale of securities initially issued by shell companies (other than business
combination related shell companies) or issuers that have been at any time previously a shell company, the Purchaser understands that
Rule 144 includes an exception to this prohibition if the following conditions are met: (i) the issuer of the securities that was formerly
a shell company has ceased to be a shell company; (ii) the issuer of the securities is subject to the reporting requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); (iii) the issuer of the securities has
filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period
that the issuer was required to file such reports and materials), other than Form 8-K reports; and (iv) at least one year has elapsed
from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell
company.
(viii)
The Purchaser has such knowledge and experience in financial and business matters, knowledge of the high degree of risk associated
with investments in the securities of companies in the development stage such as the Company, is capable of evaluating the merits and
risks of an investment in the Private Placement Shares and is able to bear the economic risk of an investment in the Private Placement
Shares in the amount contemplated hereunder for an indefinite period of time. The Purchaser has adequate means of providing for its current
financial needs and contingencies and will have no current or anticipated future needs for liquidity which would be jeopardized by the
investment in the Private Placement Shares. The Purchaser can afford a complete loss of its investments in the Private Placement Shares.
(ix)
The Purchaser understands that the Private Placement Shares shall bear the following legend and appropriate “stop transfer
restrictions”:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND NEITHER THE SECURITIES NOR
ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL,
IS AVAILABLE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO LOCKUP PROVISIONS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF DURING THE TERM OF THE LOCKUP.”
Section 4.
Conditions of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and pay for the Private Placement
Shares are subject to the fulfillment, on or before each Closing Date, of each of the following conditions:
A.
Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall be
true and correct at and as of such Closing Date as though then made.
B.
Performance. The Company shall have performed and complied with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or before such Closing Date.
C.
No Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization
having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this
Agreement.
D.
Registration and Shareholder Rights Agreement. The Company shall have entered into the Registration and Shareholder Rights
Agreement on terms satisfactory to the Purchaser.
Section 5.
Conditions of the Company’s Obligations. The obligations of the Company to the Purchaser under this Agreement are subject
to the fulfillment, on or before each Closing Date, of each of the following conditions:
A.
Representations and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall
be true and correct at and as of such Closing Date as though then made.
B.
Performance. The Purchaser shall have performed and complied with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by the Purchaser on or before such Closing Date.
C.
Corporate Consents. The Company shall have obtained the consent of its board of directors authorizing the execution, delivery
and performance of this Agreement and the issuance and sale of the Private Placement Shares hereunder.
D.
No Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization
having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this
Agreement.
Section 6.
Termination. This Agreement may be terminated at any time after [•] upon the election by either the Company or the Purchaser
upon written notice to the other party if the closing of the IPO does not occur prior to such date.
Section 7.
Survival of Representations and Warranties. All of the representations and warranties contained herein shall survive each Closing
Date.
Section 8.
Definitions. Terms used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the registration
statement on Form S-1 the Company plans to file under the Securities Act.
Section 9.
Miscellaneous.
A.
Successors and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement
by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether
so expressed or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement without
the prior written consent of the other party hereto, other than assignments by the Purchaser to its affiliates thereof (including, without
limitation one or more of its members).
B.
Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
C.
Counterparts. This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the
signatures of more than one party, but all such counterparts taken together shall constitute one and the same agreement. In the event
that any signature is delivered by via facsimile transmission or by e-mail delivery of a “pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature page were an original thereof.
D.
Descriptive Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do
not constitute a substantive part of this Agreement. The use of the word “including” in this Agreement shall be by way of
example rather than by limitation.
E.
Governing Law. This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all
purposes shall be construed in accordance with the internal laws of the State of New York, without giving effect to conflicts of law principles
that would result in the application of the laws of another jurisdiction.
F.
Amendments. This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument
executed by the parties hereto.
[Signature page follows]
IN WITNESS WHEREOF, the undersigned have duly executed
this Agreement as of the date first written above.
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COMPANY: |
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FIFTH WALL ACQUISITION CORP. III, |
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a Cayman Islands exempted company |
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By: |
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Name: |
Brendan Wallace |
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Title: |
Chief Executive Officer |
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PURCHASER: |
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FIFTH WALL ACQUISITION SPONSOR III, LLC, |
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a Cayman Islands limited liability company |
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By: |
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Name: |
Brendan Wallace |
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Title: |
Manager |
[Signature Page to Private Placement Shares Purchase
Agreement]
Exhibit 10.8
Fifth Wall Ventures Management, LLC
[•], 2021
Fifth Wall Acquisition Corp. III
6060 Center Drive 10th Floor
Los Angeles, California 90045
Ladies and Gentlemen:
This letter will confirm our agreement that, commencing on the effective
date (the “Effective Date”) of the registration statement (the “Registration Statement”)
for the initial public offering (the “IPO”) of the securities of Fifth Wall Acquisition Corp. III (the “Company”)
and continuing until the earlier of (i) the consummation by the Company of an initial business combination and (ii) the Company’s
liquidation (in each case as described in the Registration Statement) (such earlier date hereinafter referred to as the “Termination
Date”), Fifth Wall Ventures Management, LLC (the “Management Company”) shall take steps directly
or indirectly to make available to the Company certain office space and professional, secretarial, administrative and support services
as may be required by the Company from time to time, situated at 6060 Center Drive 10th Floor Los Angeles, California 90045
(or any successor location) and such intellectual property rights, if any, as may be reasonably agreed by the parties, including any associated
additional compensation with respect thereto, if any, therefore. In exchange therefor, the Company shall reimburse Management Company
up to a sum of $17,500 per month commencing on the Effective Date and continuing monthly thereafter until the Termination Date. Management
Company hereby agrees that it does not have any right, title, interest or claim of any kind (a “Claim”) in or
to any monies that may be set aside in a trust account (the “Trust Account”) that may be established in connection
with and upon the consummation of the IPO and hereby irrevocably waives any Claim it presently has or may have in the future as a result
of, or arising out of, any negotiations, contracts or agreements with the Company and will not seek recourse, reimbursement, payment or
satisfaction of any Claim against the Trust Account or any monies or other assets in the Trust Account for any reason whatsoever. The
Company acknowledges that Management Company is being deemed an “investment adviser” of the Company under the Investment Advisers
Act of 1940, as amended.
This letter agreement constitutes
the entire agreement and understanding of the parties hereto in respect of its subject matter and supersedes all prior understandings,
agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter
hereof or the transactions contemplated hereby.
This letter agreement may
not be amended, modified or waived as to any particular provision, except by a written instrument executed by the parties hereto.
The parties may not assign
this letter agreement and any of their rights, interests, or obligations hereunder without the consent of the other party. Any purported
assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title
to the purported assignee.
This letter agreement shall
be governed by, construed in accordance with, and interpreted pursuant to the laws of the State of Delaware, without giving effect to
its choice of laws principles that will apply the laws of another jurisdiction.
This letter agreement may
be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall
constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be
produced to evidence the existence of this letter agreement.
[Signature Page Follows]
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Very truly yours, |
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FIFTH WALL VENTURES MANAGEMENT, LLC |
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By: |
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Name: |
Andriy Mykhaylovskyy |
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Title: |
Manager |
| AGREED TO AND ACCEPTED BY: |
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FIFTH WALL ACQUISITION CORP. III |
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| By: |
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| Name: |
Andriy Mykhaylovskyy |
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| Title: |
Chief Financial Officer |
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We hereby consent to the use in the Prospectus
constituting a part of this Registration Statement on Form S-1 of our report dated April 16, 2021, relating to the financial statements
of Fifth Wall Acquisition Corp. III, which is contained in that Prospectus. We also consent to the reference to us under the caption “Experts”
in the Prospectus.
| /s/ WithumSmith+Brown, PC |
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| New York, New York |
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| April 16, 2021 |
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