ClimateRock 10-Q for FY2022 Q3
ClimateRock (CLRCF)
About this 10-Q
ClimateRock filed this 10-Q on November 9, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).
Headline figures
Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $79.8K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from _____ to _____
Commission File No.
| (Exact name of registrant as specified in its charter) |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices, including zip code)
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Units, each consisting of one Class A Ordinary Share, one-half of one Redeemable Warrant and one Right | CLRCU | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one Class A Ordinary Share at an exercise price of $11.50 | CLRCW | The Nasdaq Stock Market LLC | ||
| Rights, each entitling the holder to receive one-tenth (1/10) of one Class A Ordinary Share upon the consummation of an initial business combination | CLRCR | The Nasdaq Stock Market LLC |
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Indicate by check mark whether
the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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.
| ☐ | Large accelerated filer | ☐ | Accelerated filer |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
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 13(a) of the Exchange Act.
Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes
As of November 9, 2022, there
were
CLIMATEROCK
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2022
TABLE OF CONTENTS
i
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CLIMATEROCK
BALANCE SHEET (UNAUDITED)
| September 30, 2022 | December 31, 2021 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Deferred offering costs | ||||||||
| Investment held in trust account | ||||||||
| Total current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accrued liabilities | $ | $ | ||||||
| Loan payable - related party | ||||||||
| Deferred underwriting commission payable | ||||||||
| Total current liabilities | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| Class A common stock, $ | $ | $ | ||||||
| Total commitments and contingencies | ||||||||
| SHAREHOLDERS’ (DEFICIT) EQUITY | ||||||||
| Class A ordinary shares, $ | $ | $ | ||||||
| Class B ordinary shares, $ | ||||||||
| Preference shares, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total shareholders’ (deficit) equity | $ | ( | ) | $ | ||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY | $ | $ | ||||||
| (1) |
The accompanying notes are an integral part of these financial statements
1
CLIMATEROCK
STATEMENT OF OPERATIONS (UNAUDITED)
| Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | |||||||
| Operating expenses | ||||||||
| Formation and operating costs | $ | $ | ||||||
| Net loss from operations | $ | ( | ) | $ | ( | ) | ||
| Other income | ||||||||
| Unrealized investment income on trust account | ||||||||
| Total other income | $ | $ | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted weighted average shares outstanding | ||||||||
| $ | $ | |||||||
| $ | ( | ) | $ | ( | ) | |||
The accompanying notes are an integral part of these financial statements
2
CLIMATEROCK
STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY (UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022
| CLASS A ORDINARY SHARES | CLASS B ORDINARY SHARES | PREFERENCE SHARES | ADDITIONAL PAID-IN | ACCUMULATED | TOTAL SHAREHOLDERS’ (DEFICIT) | |||||||||||||||||||||||||||||||
| SHARES | AMOUNT | SHARES | AMOUNT | SHARES | AMOUNT | CAPITAL | DEFICIT | EQUITY | ||||||||||||||||||||||||||||
| Balances - December 31, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balances - March 31, 2022 | ( | ) | ||||||||||||||||||||||||||||||||||
| Forfeiture of | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Sale of | ||||||||||||||||||||||||||||||||||||
| Issuance of | ||||||||||||||||||||||||||||||||||||
| Sale of | — | — | — | |||||||||||||||||||||||||||||||||
| Adjustment to increase Class A ordinary shares subject to possible redemption to maximum redemption value | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balances - June 30, 2022 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Adjustment to increase Class A ordinary shares subject to possible redemption to maximum redemption value | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balances - September 30, 2022 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| (1) |
The accompanying notes are an integral part of these financial statements
3
CLIMATEROCK
STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022
| Cash flows from operating activities: | ||||
| Net loss | $ | ( | ) | |
| Adjustment to reconcile net loss to net cash in operating activities: | ||||
| Unrealized investment income received in trust account | ( | ) | ||
| Changes in operating assets and liabilities: | ||||
| Accrued liabilities | ||||
| Prepaid expenses | ( | ) | ||
| Net cash used in operating activities | $ | ( | ) | |
| Cash flows from investing activities: | ||||
| Cash deposited in trust account | ( | ) | ||
| Net cash used in investing activities | $ | ( | ) | |
| Cash flows from financing activities: | ||||
| Proceed from related party loan | ||||
| Repayment of related party loans | ( | ) | ||
| Proceeds from sale of units in the initial public offering, including over-allotment | ||||
| Payment of underwriting fee and other offering costs | ( | ) | ||
| Proceeds from sale of warrants in private placement | ||||
| Net cash provided by financing activities | $ | |||
| Net increase in cash | $ | |||
| Cash at beginning of period | ||||
| Cash at end of period | $ | |||
| Non-cash investing and financial activities: | ||||
| Deferred offering costs paid by related party | $ | |||
| Deferred underwriting commission charged to additional paid in capital | ||||
| Allocation of offering costs to Class A ordinary shares subject to redemption | ||||
| Issuance of representative shares | ||||
| Initial value of public shares subject to possible redemption | ||||
| Reclassification of offering costs related to public shares | ( | ) | ||
| Remeasurement adjustment on public shares subject to possible redemption | ||||
The accompanying notes are an integral part of these financial statements
4
CLIMATEROCK
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
ClimateRock (the “Company”) is a Cayman Islands exempted company incorporated as a blank check company on December 6, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses that the Company has not yet identified (“Business Combination”). Although the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company focuses on opportunities in climate change, environment, renewable energy and emerging, clean technologies.
At September 30, 2022, the Company had not yet commenced operations. All activity through September 30, 2022 relates to the Company’s formation and the initial public offering (the “Initial Public Offering”), which is described below, and post-offering activities in search for a target to consummate a Business Combination. The Company has selected December 31 as its fiscal year end.
The registration statement
for the Company’s Initial Public Offering was declared effective on April 27, 2022.
On May 2, 2022, the Company consummated its Initial Public Offering of
Simultaneously with the closing
of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of
Offering costs amounted to
$
Upon the closing of the Initial
Public Offering and Private Placement, $
At September 30, 2022,
the Company had $
The Company will provide
holders of its Public Shares (the “Public Shareholders”) 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 approximately $
5
CLIMATEROCK
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
The Company will have until
12 months from the closing of the Initial Public Offering to consummate an initial Business Combination. However, if the Company anticipates
that it may not be able to consummate the initial Business Combination within 12 months, it may extend the period of time to consummate
a Business Combination by two additional 3-month periods (for a total of up to 18 months) without submitting proposed extensions to its
shareholders for approval or offering its public shareholders redemption rights in connection therewith. The Company’s sponsor or
its affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account $
Going concern and management’s plan
As of September 30,
2022, the Company has a cash balance of $
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”).
The accompanying unaudited financial statements as of September 30, 2022, and for the three and nine months ended September 30, 2022 have been prepared in accordance with U.S. GAAP for interim financial information and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the period ending December 31, 2022, or any future period.
The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 8-K and the final prospectus filed by the Company with the SEC on May 6, 2022 and April 29, 2022, respectively.
Cash and cash equivalents
The Company considers all
short-term investments with a maturity of three months or less when purchased to be cash equivalents. As of September 30, 2022 and
December 31, 2021, the Company had a cash balance of $
Investment in Trust Account
Upon the closing of the Initial
Public Offering and Private Placement, $
The funds held in the trust
account can be invested in United States government treasury bills, notes or bonds having a maturity of
6
CLIMATEROCK
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in investment income on trust account in the accompanying statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information. (see Note 8).
At September 30, 2022,
the Company had $
Emerging growth company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (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 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, 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 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 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 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.
Use of estimates
The preparation of financial statements in conformity with GAAP requires 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 revenues and expenses during the reporting period. Accordingly, the actual results could differ significantly from those estimates.
Deferred offering costs
The Company complies with
the requirements of the Financial Accounting Standard Board (the “FASB”) Accounting Standards Codification (“ASC”)
340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A – “Expenses of Offerings.” Offering costs, consist of legal,
accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public
Offering, were charged to shareholders’ equity upon the completion of the Initial Public Offering. As of December 31, 2021, deferred
offering costs amounted to $
7
CLIMATEROCK
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
Ordinary shares subject to possible redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s public shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital or accumulated deficit if additional paid in capital equals to zero. Accordingly, ordinary shares subject to possible redemption are presented at redemption value (plus any interest earned and/or dividends on the Trust Account) as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheets.
Income taxes
The Company complies with the accounting and reporting requirements of Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 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 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.
The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. 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.
Net loss per share
The Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable shares and non-redeemable shares and the undistributed income (loss) is calculated using the total net loss less interest income in trust account less any dividends paid. We then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable shares. Any remeasurement of the accretion to redemption value of the ordinary shares subject to possible redemption was considered to be dividends paid to the public shareholders. At September 30, 2022, 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 periods presented.
8
CLIMATEROCK
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
The net income (loss) per share presented in the condensed statement of operations is based on the following:
| Three months ended September 30, 2022 | Nine months ended September 30, 2022 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Accretion of temporary equity to redemption value | ( | ) | ||||||
| Net loss including accretion of temporary equity to redemption value | $ | ( | ) | $ | ( | ) | ||
| Less: Investment income on trust account to be allocated to redeemable shares | ||||||||
| Net loss excluding investment income on trust account | $ | ( | ) | $ | ( | ) | ||
| Three months ended September 30, 2022 | ||||||||
| Redeemable shares | Non-redeemable shares | |||||||
| Basic and diluted net income/(loss) per share: | ||||||||
| Numerators: | ||||||||
| Allocation of net loss including accretion of temporary equity and excluding investment income on trust account | $ | ( | ) | $ | ( | ) | ||
| Investment income on trust account | ||||||||
| Allocation of net income/(loss) | $ | $ | ( | ) | ||||
| Denominators: | ||||||||
| Weighted-average shares outstanding | ||||||||
| $ | $ | ( | ) | |||||
| Nine months ended September 30, 2022 | ||||||||
| Redeemable shares | Non-redeemable shares | |||||||
| Basic and diluted net income/(loss) per share: | ||||||||
| Numerators: | ||||||||
| Allocation of net loss including accretion of temporary equity and excluding investment income on trust account | $ | ( | ) | $ | ( | ) | ||
| Investment income on trust account | ||||||||
| Accretion of temporary equity to redemption value | ||||||||
| Allocation of net income/(loss) | $ | $ | ( | ) | ||||
| Denominators: | ||||||||
| Weighted-average shares outstanding | ||||||||
| $ | $ | ( | ) | |||||
Fair value of financial instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 825, “Financial Instruments” approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature.
9
CLIMATEROCK
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| ● | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| ● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| ● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Recent accounting pronouncements
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect on the Company’s financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
On May 2, 2022, the Company
consummated its Initial Public Offering of
Each unit consists of one
Class A ordinary share, one-half of one redeemable warrant and one right. Each whole warrant entitles the holder thereof to purchase one
ordinary share for $
All of the
As of September 30, 2022, the ordinary shares reflected on the balance sheet are reconciled in the following table.
| As of September 30, 2022 | ||||
| Gross proceeds | $ | |||
| Less: | ||||
| Proceeds allocated to public warrants and public rights | ( | ) | ||
| Offering costs of public shares | ( | ) | ||
| Plus: | ||||
| Accretion of carrying value to redemption value | ||||
| Ordinary shares subject to possible redemption | $ | |||
10
CLIMATEROCK
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
NOTE 4. PRIVATE PLACEMENT
On May 2, 2022, the Company
sold
NOTE 5. RELATED PARTY TRANSACTIONS
Founder shares
On December 30, 2021, the
Company issued
Since the underwriters partially
exercised the over-allotment option in respect of
Promissory note
The member of the Sponsor
has agreed to loan the Company up to $
Loan with related party
The Company has agreed to
borrow up to $
On September 21, 2022, the Company entered into
a loan agreement with Eternal B.V. (the “Lender”) in the principal amount of up to $
Administrative Service Fee
The Company entered into an administrative services
agreement (the “Administrative Services Agreement”) with the Sponsor on April 27, 2022 whereby the Sponsor will perform certain
services for the Company for a monthly fee of $
11
CLIMATEROCK
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
Advisory Services
On September 21, 2022,
On October 5, 2022, the Company
and Gluon agreed to lower the Transaction Success Fee to a total payment of $
In
addition, the Letter Agreement was amended to entitle Gluon, with respect to any financing undertaken by the Company introduced by Gluon
during the term of the Letter Agreement, to the following fees: (i) for a financing involving an issuance of the Company’s senior,
subordinated and/or mezzanine debt securities, a cash fee payable at any closing equal to two percent (
In addition to the Transaction Success Fee, the Company agreed to pay Gluon Group for any reasonable and documented out-of-pocket expenses incurred in connection with providing the services for the transactions.
NOTE 6. COMMITMENTS AND CONTINGENCIES
Registration rights
The holders of the Founder Shares and warrants are entitled to registration rights pursuant to a registration rights agreement signed on April 27, 2022. 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 consummation of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting agreement
On October 21, 2021, the
Company engaged Maxim Group LLC (“Maxim”) as its underwriter. The Company granted the underwriters a 45-day option until June
11, 2022 to purchase up to
12
CLIMATEROCK
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
In addition to the underwriting
discount, the Company has agreed to pay or reimburse the underwriters for travel, lodging and other “road show” expenses,
expenses of the underwriters’ legal counsel and certain diligence and other fees, including the preparation, binding and delivery
of bound volumes in form and style reasonably satisfactory to the representative, transaction Lucite cubes or similar commemorative items
in a style as reasonably requested by the representative, and reimbursement for background checks on our directors, director nominees
and executive officers, which such fees and expenses are capped at an aggregate of $
Representative shares
The Company has issued to
Maxim and/or its designees,
The shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the date of the effectiveness of the registration statement of which this prospectus forms a part pursuant to Rule 5110(e)(1) of FINRA’s NASD Conduct Rules. Pursuant to FINRA Rule 5110(e)(1), these securities will not be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following April 27, 2022, nor may they be sold, transferred, assigned, pledged, or hypothecated for a period of 180 days immediately following April 27, 2022 except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners.
Subject to certain conditions, the Company granted Maxim, for a period beginning on May 2, 2022 and ending 12 months after the date of the consummation of the Business Combination, a right of first refusal to act as book-running managing underwriter or placement agent for any and all future public and private equity, equity-linked, convertible and debt offerings for the Company or any of its successors or subsidiaries. In accordance with FINRA Rule 5110(g)(6), such right of first refusal shall not have a duration of more than three years from April 27, 2022.
NOTE 7. SHAREHOLDER’S EQUITY
Class A Ordinary Shares
— The Company is authorized to issue
13
CLIMATEROCK
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
Class B Ordinary Shares
— The Company is authorized to issue
Preference Shares
— The Company is authorized to issue
Warrants — The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering (together, the “Warrants”), except that the Private Placement Warrants will be subject to certain restrictions on transfer and entitled to registration rights.
The Warrants may only be exercised for a whole number of shares. The Private Placement Warrants (including ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable, or salable until 30 days after the completion of our initial Business Combination. Following such period, the Private Placement Warrants (including the ordinary shares issuable upon exercise of the Private Placement Warrants) will be transferable, assignable, or salable, except that the Private Placement Warrants will not trade. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade.
The Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the ordinary shares issuable upon exercise of the Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the ordinary shares issuable upon exercise of the Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the ordinary shares issuable upon exercise of the warrants is not effective by the ninetieth (90th) day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. The Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The Company may call the Warrants for redemption, once they become exercisable :
| ● | at a price of $0.01 per warrant; |
| ● | upon a minimum of 30 days’ prior written notice of redemption; and |
| ● | if, and only if, the last reported last sale price of the ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
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CLIMATEROCK
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
If the Company calls the Warrants for redemption, management will have the option to require all holders that wish to exercise the Warrants to do so on a “cashless basis,” as described in the warrant agreement.
The exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share capitalization, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants shares. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
If: (i) the Company issues additional ordinary shares or securities convertible into or exercisable or exchangeable for shares of ordinary shares for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary shares, with such issue price or effective issue price to be determined in good faith by the Board (and in the case of any such issuance to the Sponsor or its affiliates, without taking into account any founder shares held by such holder or affiliates, as applicable, prior to such issuance) (the “New Issuance Price”); (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation thereof (net of redemptions); and (iii) the volume weighted average trading price of the ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates the initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the Warrant Price shall be adjusted (to the nearest cent) to be equal to 115% of the greater of the Market Value and the New Issuance Price and the Redemption Trigger Price ($18.00) shall be adjusted to equal to 180% of the greater of the Market Value and the Newly Issued Price.
The Company accounts for the Public Warrants and the Private Placement Warrants as equity instruments, so long as the Company continues to meet the accounting requirements for equity instruments.
Rights — Each holder of a right included in the unit (the “Right”) will automatically receive one-tenth (1/10) of one share of ordinary shares upon consummation of a Business Combination, except in cases where we are not the surviving company in a business combination, and even if the holder of such Right redeemed all shares of ordinary shares held by it in connection with a Business Combination. No additional consideration will be required to be paid by a holder of a Right in order to receive its additional shares upon consummation of a Business Combination, as the consideration related thereto has been included in the unit purchase price paid for by investors in the Initial Public Offering. If the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the definitive agreement will provide for the holders of Rights to receive the same per share consideration the holders of shares of ordinary shares will receive in the transaction on an as-exchanged for ordinary shares basis, and each holder of a Right will be required to affirmatively exchange its Rights in order to receive the 1/10 share underlying each Right (without paying any additional consideration) upon consummation of a Business Combination. More specifically, the Rights holder will be required to indicate its election to exchange the Right for the underlying shares within a fixed period of time after which period the Rights will expire worthless.
Pursuant to the Rights agreement, a Rights holder may exchange Rights only for a whole number of shares of ordinary shares. This means that the Company will not issue fractional shares in connection with an exchange of Rights and Rights may be exchanged only in multiples of 10 Rights (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like). Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of the Delaware General Corporation Law.
If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of rights will not receive any such funds with respect to their Rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Rights, and the Rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to holders of the rights upon consummation of a Business Combination. Additionally, in no event will the Company be required to net cash settle the Rights. Accordingly, the Rights may expire worthless.
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CLIMATEROCK
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
NOTE 8. FAIR VALUE MEASUREMENTS
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at September 30, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| Description | Level | September 30, 2022 | ||||||
| Assets: | ||||||||
| Investments held in Trust Account | 1 | $ | ||||||
Except for the foregoing, the Company does not have any assets measured at fair value on a recurring basis at September 30, 2022.
NOTE 9. SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, 2022, up through the date the Company issued the financial statements.
On October 6, 2022, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) with ClimateRock Holdings Limited, a Cayman Islands exempted company (“Pubco”), ClimateRock Merger Sub Limited, a Cayman Islands exempted company and a wholly-owned subsidiary of Pubco (“Merger Sub”), and E.E.W. Eco Energy World PLC, a company formed under the laws of England and Wales (the “EEW”).
The total consideration to be offered by Pubco
to the holders of EEW securities (each, a “Seller”) shall be a number of ordinary shares of Pubco (the “Pubco Ordinary
Shares”) with an aggregate value equal to Six Hundred Fifty Million U.S. Dollars ($
On October 5, 2022, the Company
amended its Letter Agreement with Gluon for certain consulting services previously disclosed in the 8-K filed September 27, 2022. The
Company and Gluon entered into that certain First Amendment to the Letter Agreement (“First Amendment”), pursuant to which,
the Letter Agreement was amended to decrease the Transaction Success Fee from up to $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to ClimateRock. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to U.N. SDG Support LLC The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. Such forward-looking statements are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes thereto included in this Quarterly Report under “Item 1 Financial Statements”. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Overview
The Company is a Cayman Islands exempted company incorporated as a blank check company on December 6, 2021. The Company was formed for the purpose of a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar Business Combination.
Although the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on opportunities in environmental protection, renewable energy, fighting climate change, and any other related industries. ClimateRock will target companies with established operating models that have strong management teams, realigned capital structures, positive cash flows prospects, and a clear and well-defined pathway for growing profitably over the long-term. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of September 30, 2022, the Company had not yet commenced any operations. All activity through September 30, 2022 relates to the Company’s formation and the Initial Public Offering, which is described below, and post-offering activities in search for a target to consummate a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate nonoperating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.
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The registration statement for the Company’s Initial Public Offering was declared effective on April 27, 2022. On May 2, 2022, the Company consummated its Initial Public Offering of 7,875,000 units (“Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”) at $10.00 per Unit, including 375,000 Units that were issued pursuant to the underwriters’ partial exercise of their over-allotment option, generating gross proceeds of $78,750,000.
The Company commenced operations after obtaining adequate financial resources through (i) the Initial Public Offering of 7,875,000 Units at $10.00 per Unit (which includes 375,000 units in connection with the underwriter’s partial exercise of the over-allotment option) and (ii) the sale of 3,762,500 Private Placement Warrants with an exercise price of $11.50 per warrant at a price of $1.00 per Private Placement Warrant to the Company’s Sponsor.
The Units were listed on the Nasdaq Global Market (“Nasdaq”). The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. Nasdaq rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the net assets held in the Trust Account (as defined below) (net of amounts disbursed to management for working capital purposes). The Company will only complete a Business Combination if the post-Business Combination 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”). There is no assurance that the Company will be able to successfully effect a Business Combination.
Upon the closing of the Initial Public Offering, $10.15 per Unit sold in the Initial Public Offering was placed in the Trust Account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.
The Sponsor, officers, directors and advisors (the “Initial Shareholders”) have agreed (a) to vote their Founder Shares (as defined below) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination, (b) not to propose an amendment to the Company’s amended and restated memorandum and articles of association with respect to the Company’s pre-Business Combination activities prior to the consummation of a Business Combination unless the Company provides dissenting public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment; (c) not to redeem any shares (including the Founder Shares) into the right to receive cash from the Trust Account in connection with a shareholder vote to approve a Business Combination (or to sell any shares in a tender offer in connection with a Business Combination if the Company does not seek shareholder approval in connection therewith) or a vote to amend the provisions of the amended and restated certificate of incorporation relating to shareholders’ rights of pre-Business Combination activity and (d) that the Founder Shares and the Private Placement Warrants (including underlying securities) shall not participate in any liquidating distributions upon winding up if a Business Combination is not consummated. However, the Initial Shareholders will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased during or after the Initial Public Offering if the Company fails to complete its Business Combination.
Recent Developments
On October 6, 2022, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) with ClimateRock Holdings Limited, a Cayman Islands exempted company (“Pubco”), ClimateRock Merger Sub Limited, a Cayman Islands exempted company and a wholly-owned subsidiary of Pubco (“Merger Sub”), and E.E.W. Eco Energy World PLC, a company formed under the laws of England and Wales (the “EEW”).
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The total consideration to be offered by Pubco to the holders of EEW securities (each, a “Seller”) shall be a number of Pubco Ordinary Shares with an aggregate value equal to Six Hundred Fifty Million U.S. Dollars ($650,000,000), with each Pubco Ordinary Share valued at an amount equal to the price at which each ClimateRock ordinary share is redeemed or converted pursuant to the redemption of ClimateRock’s ordinary shares pursuant to ClimateRock’s organizational documents (the “Redemption Price”).
For a more detailed description of the Business Combination Agreement and the transactions contemplated therein, see the Company’s Current Report on Form 8-K filed with the SEC on October 13, 2022 (the “Form 8-K”).
Results of Operations
Our entire activity since inception up to September 30, 2022 is related to our formation, the Initial Public Offering, and we will not be generating any operating revenues until the closing and completion of our initial Business Combination, at the earliest. We will generate nonoperating income in the form of interest income from the proceeds derived from the Initial Public Offering. Following the closing of our Initial Public Offering on May 2, 2022, we expect to incur increased expenses as a result of becoming a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended September 30, 2022, the Company reported a net loss of $79,795, which consists of general and administrative expenses, offset by $353,596 of investment income earned in the Trust Account.
For the nine months ended September 30, 2022, the Company reported a net loss of $265,934, which consists of general and administrative expenses, offset by $440,326 of investment income earned in the Trust Account.
Liquidity and Capital Reserves
On May 2, 2022, we consummated our Initial Public Offering of 7,875,000 Units, including 375,000 Units that were issued pursuant to the underwriters’ partial exercise of their over-allotment option. Simultaneously, the Company sold 3,762,500 Private Placement Warrants, including 112,500 Private Placement Warrants that were issued pursuant to the underwriters’ partial exercise of the over-allotment option. From the proceeds of the Initial Public Offering and Private Placement Warrants, the Company retained approximately $1,100,000 for working capital needs after transfer of proceeds to the Trust Account and payment of expenses related to the Initial Public Offering and directors and officers insurance.
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, loan us funds as may be required (“Working Capital Loans”). As of September 30, 2022, there were no Working Capital Loans under this arrangement.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a 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. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon completion of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2022.
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Contractual Obligations
Registration Rights
Pursuant to a registration rights agreement entered into on April 27, 2022, the holders of the Founder Shares (as defined below) and the Private Placement Warrants (and their underlying securities) are entitled to registration rights. The Company will bear the expenses incurred in connection with the filing of any registration statements pursuant to such registration rights.
Underwriting Agreement
Pursuant to the underwriting agreement, the underwriters received a cash underwriting discount of $1,181,250 following the consummation of the Initial Public Offering. The underwriters are also entitled to a deferred commission of $2,362,500, which will be payable solely in the event that the Company completes a Business Combination. In addition, the underwriters also received 118,125 Units in the Initial Public Offering, with such Units restricted from sale until the closing of the Business Combination and with no redemption rights from the Trust Account.
Additionally, the Company granted the underwriters for a period beginning on the closing of the Initial Public Offering and ending on the earlier of the 12 month anniversary of the closing of a Business Combination or April 27, 2025, a right of first refusal to act as (i) exclusive financial advisor in connection with all of the Company’s proposed business combinations for a fee of up to 6.0% of the proceeds of the Initial Public Offering (subject to the Company’s right to allocate up to 50% of such fee to another financial institution or extinguish such amount in Company’s sole discretion), and (ii) sole investment banker, sole book-runner and/or sole placement agent, at underwriters’ sole discretion, for each and every future public and private equity and debt Initial Public Offering, including all equity linked financings, during such period for the Company or any successor to it or any of its subsidiaries, on terms agreed to by both the Company and underwriters in good faith.
Related Party Transactions
Founder Shares
During the period ended December 31, 2021, we issued an aggregate of 2,156,250 Class B ordinary shares (the “Founder Shares”) to the Sponsor for an aggregate purchase price of $25,000 in cash. The Founder Shares included an aggregate of up to 281,250 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the Initial Shareholders will collectively own 20% of our issued and outstanding shares after the Initial Public Offering (assuming the Initial Shareholders do not purchase any Public Shares in the Initial Public Offering and excluding the securities underlying the Private Placement Warrants).
On May 2, 2022, the underwriters partially exercised the over-allotment option in respect of 375,000 Units and, as agreed with the Company, the underwriters waived their right to further exercise the option on May 5, 2022. Accordingly, a total of 93,750 of the Founder Shares are no longer subject to forfeiture on May 2, 2022, and 187,500 of the Founder Shares were forfeited, resulting in an aggregate of 1,968,750 Founder Shares issued and outstanding.
The Initial Shareholders have agreed not to transfer, assign or sell any of the Founder Shares (except to certain permitted transferees) until the earlier of (i) six months after the date of the consummation of the Company’s initial Business Combination or (ii) the date on which we consummate a liquidation, merger, share exchange or other similar transaction which results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of our initial shareholders with respect to any Founder Shares.
Promissory Note
The member of the Sponsor has agreed to loan the Company up to $300,000 to be used for the payment of costs related to the Initial Public Offering (the “Note”). The Note is non-interest bearing, unsecured and was due on the closing of the Initial Public Offering. As of September 30, 2022 and December 31, 2021, the Company has not borrowed any funds under the Note. The Note expired on May 2, 2022 and will not be extended or renewed.
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Loan with Related Party
The Company has agreed to borrow up to $500,000 from Eternal B.V., an affiliate of the Company through common ownership, to be used for the payment of costs related to the Initial Public Offering (the “Loan”). Pursuant to the loan agreement and its subsequent amendments, the Note is non-interest bearing, unsecured and was due on the closing of the Initial Public Offering. As of December 31, 2021, the outstanding balance of loan payable to the affiliate was $63,073, and no interest was accrued. The Loan expired on May 2, 2022 and was fully repaid to the affiliate on June 2, 2022.
On September 21, 2022, the Company entered into a loan agreement with Eternal B.V. (the “Lender”) in the principal amount of up to $180,000, on an unsecured basis and bearing no interest (the “Eternal B.V. Loan”). The Eternal BV Loan is available to be drawn down from September 21, 2022 to March 31, 2023 and its maturity date is March 31, 2024. The Lender is controlled by Charles Ratelband V, the Company’s Executive Chairman of the board of directors (the “Board”).As of September 30, 2022, the outstanding balance of the loan payable to affiliate was $180,000 and no interest was accrued.
Administrative Service Fee
The Company entered into an administrative services agreement (the “Administrative Services Agreement”) with the Sponsor on April 27, 2022 whereby the Sponsor will perform certain services for the Company for a monthly fee of $10,000. On May 2, 2022, the Sponsor entered into an assignment agreement with Gluon Group, an affiliate of the Company, to provide the services detailed in the Administrative Service Agreement. An officer of the Company owns 505 shares of Gluon Group and serves as managing partner. As of September 30, 2022, $23,386 has been paid to Gluon Group for such services and an additional $25,394 has been accrued.
Advisory Services
On September 21, 2022, the Company entered into the Letter Agreement with Gluon to pay a the Transaction Success Fee upon completion of one or more successful transactions. The Company will pay Gluon $500,000 upon completion of one or more transactions with an aggregate purchase price of less than $400,000,000; and, an additional $500,000 upon completion of one or more transactions with an aggregate purchase price of more than $400,000,000. This means the total remuneration for transactions with a purchase price more than $400,000,001 would be $1,000,000. The transactions purchase price will correspond to the price paid to the sellers of the applicable target, including cash, debt, and equity funded payments. Each Transaction Success Fee will be payable upon consummation of the applicable transaction, regardless of (i) the calendar for the payment of the purchase price, (ii) how the purchase price is funded, (iii) any deferred payment subsequent to consummation of the transaction, or (iv) any adjustments to the price of the transaction subsequent to consummation. Following payment of Transaction Success Fee, any accrued fees payable to the Gluon Group by the Company will be waived.
On October 5, 2022, the Company and Gluon agreed to lower the Transaction Success Fee to a total payment of $250,000 upon successful consummation of a transaction independent of aggregate transaction price.
In addition, the Letter Agreement was amended to entitle Gluon, with respect to any financing undertaken by the Company introduced by Gluon during the term of the Letter Agreement, to the following fees: (i) for a financing involving an issuance of the Company’s senior, subordinated and/or mezzanine debt securities, a cash fee payable at any closing equal to two percent (2.0%) of the gross proceeds received by the Company at such closing; (ii) for a financing involving equity, equity-linked or convertible securities, a cash fee payable at each closing equal to five percent (5.0%) of the gross proceeds received by the Company at such closing.
In addition to the Transaction Success Fee, the Company agreed to pay Gluon Group for any reasonable and documented out-of-pocket expenses incurred in connection with providing the services for the transactions.
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Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We had identified the following as its critical accounting policies:
Deferred offering costs
The Company complies with the requirements of the Financial Accounting Standard Board (the “FASB”) Accounting Standards Codification (“ASC”) 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A – “Expenses of Offerings.” Offering costs, consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering, were charged to shareholders’ equity upon the completion of the Initial Public Offering. As of December 31, 2021, deferred offering costs amounted to $83,343 and consisted of legal, accounting, and underwriting fees. Upon consummation of the Initial Public Offering on May 2, 2022, total offering costs related to the Initial Public Offering were $5,093,930, and was allocated between the Public Shares, public warrants and public rights based on their relative fair values at the date of issuance. Accordingly, $4,647,702 was allocated to the Public Shares and charged to temporary equity (see Note 3).
Net loss per share
The Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable shares and non-redeemable shares and the undistributed income (loss) is calculated using the total net loss less interest income in trust account less any dividends paid. We then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable shares. Any remeasurement of the accretion to redemption value of the ordinary shares subject to possible redemption was considered to be dividends paid to the public shareholders. At September 30, 2022, 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 periods presented.
Ordinary shares subject to possible redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s public shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital or accumulated deficit if additional paid in capital equals to zero. Accordingly, ordinary shares subject to possible redemption are presented at redemption value (plus any interest earned and/or dividends on the Trust Account) as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheets.
Recent accounting pronouncements
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect on the Company’s financial statements.
Factors that may adversely affect our results of operations
Our results of operations and our ability to complete a Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19 pandemic, including resurgences and the emergence of new variants, and geopolitical instability, such as the military conflict in the Ukraine. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete a Business Combination.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2022. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were effective.
Changes in Internal Control Over Financial Reporting
During the quarter ended September 30, 2022, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
23
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
To the knowledge of our management team, there is no litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property.
ITEM 1A. RISK FACTORS
As of the date of this Quarterly Report, other than as set forth below, there have been no material changes with respect to those risk factors previously disclosed in the registration statement for our Initial Public Offering and our Quarterly Report on Form 10-Q for the period ended June 30, 2022, as filed with the SEC on August 11, 2022. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise that may also affect our business or ability to consummate an initial Business Combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, we may, at any time, instruct the trustee to liquidate the securities held in the Trust Account and instead to hold the funds in the Trust Account in cash items until the earlier of the consummation of our initial Business Combination or our liquidation. As a result, following the liquidation of securities in the Trust Account, we would likely receive minimal interest, if any, on the funds held in the Trust Account, which would reduce the dollar amount our public shareholders would receive upon any redemption or liquidation of the Company.
The funds in the Trust Account have, since our Initial Public Offering, been held only in U.S. government treasury obligations with a maturity of 180 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. However, to mitigate the risk of us being deemed to be an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act) and thus subject to regulation under the Investment Company Act, we may, at any time, instruct Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account as cash items until the earlier of the consummation of our initial Business Combination or the liquidation of the Company. Following such liquidation, we would likely receive minimal interest, if any, on the funds held in the Trust Account. However, interest previously earned on the funds held in the Trust Account still may be released to us to pay our taxes, if any, and certain other expenses as permitted. As a result, any decision to liquidate the securities held in the Trust Account and thereafter to hold all funds in the Trust Account in cash items would reduce the dollar amount our public shareholders would receive upon any redemption or liquidation of the Company.
In the event that we may be deemed to be an investment company, we may be required to liquidate the Company.
We may not be able to complete an initial Business Combination with certain potential target companies if a proposed transaction with the target company may be subject to review or approval by regulatory authorities pursuant to certain U.S. or foreign laws or regulations.
Certain acquisitions or Business Combinations may be subject to review or approval by regulatory authorities pursuant to certain U.S. or foreign laws or regulations. In the event that such regulatory approval or clearance is not obtained, or the review process is extended beyond the period of time that would permit an initial Business Combination to be consummated with us, we may not be able to consummate a Business Combination with such target.
24
Among other things, the U.S. Federal Communications Act prohibits foreign individuals, governments, and corporations from owning more than a specified percentage of the capital stock of a broadcast, common carrier, or aeronautical radio station licensee. In addition, U.S. law currently restricts foreign ownership of U.S. airlines. In the United States, certain mergers that may affect competition may require certain filings and review by the Department of Justice and the Federal Trade Commission, and investments or acquisitions that may affect national security are subject to review by the Committee on Foreign Investment in the United States (“CFIUS”). CFIUS is an interagency committee authorized to review certain transactions involving foreign investment in the United States by foreign persons in order to determine the effect of such transactions on the national security of the United States. Our Chairman, Charles Ratelband, a Dutch citizen, is sole managing member of our Sponsor and holds an approximate 90% interest in the Sponsor, and therefore we or our Sponsor may constitute a “foreign person” under CFIUS rules and regulations.
Outside the United States, laws or regulations may affect our ability to consummate a Business Combination with potential target companies incorporated or having business operations in jurisdiction where national security considerations, involvement in regulated industries (including telecommunications), or in businesses relating to a country’s culture or heritage may be implicated.
U.S. and foreign regulators generally have the power to deny the ability of the parties to consummate a transaction or to condition approval of a transaction on specified terms and conditions, which may not be acceptable to us or a target. In such event, we may not be able to consummate a transaction with that potential target.
As a result of these various restrictions, the pool of potential targets with which we could complete an initial Business Combination may be limited and we may be adversely affected in terms of competing with other SPACs that do not have similar ownership issues. Moreover, the process of government review could be lengthy. Because we have only a limited time to complete our initial Business Combination, our failure to obtain any required approvals within the requisite time period may require us to liquidate. If we liquidate, our public shareholders may only receive $10.15 per share, and our warrants will expire worthless. This will also cause you to lose any potential investment opportunity in a target company and the chance of realizing future gains on your investment through any price appreciation in the combined company.
There is substantial doubt about our ability to continue as a “going concern.”
In connection with our assessment of going concern considerations under applicable accounting standards, management has determined that our possible need for additional financing to enable us to negotiate and complete our initial Business Combination raises substantial doubt about our ability to continue as a going concern through approximately one year from the date the financial statements were issued.
Changes to laws or regulations or in how such laws or regulations are interpreted or applied, or a failure to comply with any laws, regulations, interpretations or applications, may adversely affect our business, including our ability to negotiate and complete our initial Business Combination.
We are subject to the laws and regulations, and interpretations and applications of such laws and regulations, of national, regional, state and local governments and applicable non-U.S. jurisdictions. In particular, we are required to comply with certain SEC and potentially other legal and regulatory requirements, and our consummation of an initial Business Combination may be contingent upon our ability to comply with certain laws, regulations, interpretations and applications and any post-Business Combination company may be subject to additional laws, regulations, interpretations and applications. Compliance with, and monitoring of, the foregoing may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time, and those changes could have a material adverse effect on our business, including our ability to negotiate and complete an initial Business Combination. A failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete an initial Business Combination.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
For a description of the use of proceeds generated in our Initial Public Offering and Private Placement, see Part II, Item 2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, as filed with the SEC on June 10, 2022. There has been no material change in the planned use of proceeds from the Company’s Initial Public Offering and Private Placement as described in the registration statement for the Initial Public Offering.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURE
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: November 9, 2022 | CLIMATEROCK | |
| By: | /s/ Per Regnarsson | |
| Per Regnarsson | ||
| Chief Executive Officer | ||
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Exhibit 2.1
Certain
identified information has been excluded from this exhibit because it is both
(i) not material and (ii) private or confidential. [***] indicates that information has been redacted.
BUSINESS COMBINATION AGREEMENT
by and among
CLIMATEROCK
as Purchaser,
CLIMATEROCK HOLDINGS LIMITED,
as Pubco,
CLIMATEROCK MERGER SUB LIMITED,
as Merger Sub,
and
E.E.W. ECO ENERGY WORLD PLC,
as the Company
Dated as of October 6, 2022
CONFIDENTIAL
TABLE OF CONTENTS
| ARTICLE I THE MERGER | 3 | |
| 1.1 | The Merger | 3 |
| 1.2 | Effective Time | 3 |
| 1.3 | Effect of the Merger | 3 |
| 1.4 | Organizational Documents of Surviving Purchaser Subsidiary | 3 |
| 1.5 | Directors and Officers of the Surviving Purchaser Subsidiary | 3 |
| 1.6 | Effect of Merger on Issued and Outstanding Securities of Purchaser and Merger Sub | 4 |
| 1.7 | Effect of Merger on Issued and Outstanding Securities of Pubco | 5 |
| 1.8 | Surrender of Purchaser Securities | 5 |
| ARTICLE II THE PUBCO OFFER AND SHARE EXCHANGE | 5 | |
| 2.1 | The Pubco Offer | 5 |
| 2.2 | The Company Share Transfer | 6 |
| 2.3 | Pubco Offer for Company Options | 7 |
| 2.4 | Other Company Convertible Securities | 7 |
| 2.5 | Surrender of Company Securities and Disbursement of Exchange Consideration | 7 |
| 2.6 | Termination of Certain Agreements | 8 |
| ARTICLE III CLOSING | 8 | |
| 3.1 | Closing | 8 |
| 3.2 | Closing Deliverables | 9 |
| 3.3 | Withholding Rights | 9 |
| 3.4 | Tax Consequences | 9 |
| 3.5 | Taking of Necessary Action; Further Action | 9 |
| ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER | 10 | |
| 4.1 | Organization and Standing | 10 |
| 4.2 | Authorization; Binding Agreement | 10 |
| 4.3 | Governmental Approvals | 10 |
| 4.4 | Non-Contravention | 11 |
| 4.5 | Capitalization | 11 |
| 4.6 | SEC Filings and Purchaser Financials | 12 |
| 4.7 | Reporting Company; Listing | 14 |
| 4.8 | Absence of Certain Changes | 14 |
| 4.9 | Compliance with Laws | 14 |
| 4.10 | Actions; Orders; Permits | 14 |
| 4.11 | Taxes and Returns | 15 |
| 4.12 | Employees and Employee Benefit Plans | 16 |
| 4.13 | Properties | 16 |
| 4.14 | Material Contracts | 16 |
| 4.15 | Transactions with Affiliates | 16 |
| 4.16 | Business Activities | 17 |
| 4.17 | Investment Company Act | 17 |
| 4.18 | Finders and Brokers | 17 |
| 4.19 | Certain Business Practices | 17 |
| 4.20 | Insurance | 17 |
| 4.21 | Trust Account | 17 |
| 4.22 | Information Supplied | 18 |
| 4.23 | Independent Investigation | 18 |
| 4.24 | No Other Representations or Warranties | 18 |
| 4.25 | Lock-Up Agreements | 19 |
i
| ARTICLE V REPRESENTATIONS AND WARRANTIES OF PUBCO AND MERGER SUB | 19 | |
| 5.1 | Organization and Standing | 19 |
| 5.2 | Authorization; Binding Agreement | 19 |
| 5.3 | Governmental Approvals | 19 |
| 5.4 | Non-Contravention | 20 |
| 5.5 | Ownership | 20 |
| 5.6 | Ownership of Exchange Shares | 20 |
| 5.7 | Activities of Pubco and Merger Sub | 20 |
| 5.8 | Foreign Private Issuer | 21 |
| 5.9 | Finders and Brokers | 21 |
| 5.10 | Investment Company Act | 21 |
| 5.11 | Information Supplied | 21 |
| 5.12 | Exclusivity of Representations and Warranties | 21 |
| ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 22 | |
| 6.1 | Organization and Standing | 22 |
| 6.2 | Authorization; Binding Agreement | 22 |
| 6.3 | Capitalization | 23 |
| 6.4 | Subsidiaries | 23 |
| 6.5 | Governmental Approvals | 23 |
| 6.6 | Non-Contravention | 24 |
| 6.7 | Financial Statements | 24 |
| 6.8 | Absence of Certain Changes | 25 |
| 6.9 | Compliance with Laws | 25 |
| 6.10 | Company Permits | 25 |
| 6.11 | Litigation | 25 |
| 6.12 | Material Contracts | 26 |
| 6.13 | Intellectual Property | 27 |
| 6.14 | Taxes and Returns | 29 |
| 6.15 | Real Property | 29 |
| 6.16 | Personal Property | 30 |
| 6.17 | Title to Assets | 30 |
| 6.18 | Employee Matters | 30 |
| 6.19 | Benefit Plans | 31 |
| 6.20 | Environmental Matters | 32 |
| 6.21 | Transactions with Related Persons | 32 |
| 6.22 | Insurance | 33 |
| 6.23 | Certain Business Practices | 33 |
| 6.24 | Renewable Energy Matters | 33 |
| 6.25 | Investment Company Act | 34 |
| 6.26 | Finders and Brokers | 34 |
| 6.27 | Independent Investigation | 34 |
| 6.28 | Information Supplied | 34 |
| 6.29 | No Other Representations | 35 |
| ARTICLE VII COVENANTS | 35 | |
| 7.1 | Access and Information | 35 |
| 7.2 | Conduct of Business of the Company | 36 |
| 7.3 | Conduct of Business of Purchaser, Pubco, and Merger Sub | 39 |
ii
| 7.4 | Annual and Interim Financial Statements | 41 |
| 7.5 | Purchaser Public Filings | 41 |
| 7.6 | No Solicitation | 41 |
| 7.7 | No Trading | 42 |
| 7.8 | Notification of Certain Matters | 42 |
| 7.9 | Efforts | 43 |
| 7.10 | Further Assurances | 44 |
| 7.11 | The Registration Statement | 44 |
| 7.12 | Public Announcements. | 46 |
| 7.13 | Confidential Information | 46 |
| 7.14 | Post-Closing Board of Directors and Executive Officers | 48 |
| 7.15 | Indemnification of Directors and Officers; Tail Insurance | 48 |
| 7.16 | Use of Trust Account Proceeds | 49 |
| 7.17 | Nasdaq Capital Market Listing | 49 |
| 7.18 | PIPE Financing | 49 |
| 7.19 | Company Re-registration | 49 |
| 7.20 | Pubco Name Change | 49 |
| ARTICLE VIII CLOSING CONDITIONS | 49 | |
| 8.1 | Conditions to Each Party’s Obligations | 49 |
| 8.2 | Conditions to Obligations of the Company | 50 |
| 8.3 | Conditions to Obligations of Purchaser | 51 |
| 8.4 | Frustration of Conditions | 53 |
| ARTICLE IX TERMINATION AND EXPENSES | 53 | |
| 9.1 | Termination | 53 |
| 9.2 | Effect of Termination | 54 |
| 9.3 | Fees and Transaction Expenses | 54 |
| ARTICLE X WAIVER | 54 | |
| 10.1 | Waiver of Claims Against Trust | 54 |
| ARTICLE XI MISCELLANEOUS | 55 | |
| 11.1 | Survival | 55 |
| 11.2 | Notices | 55 |
| 11.3 | Binding Effect; Assignment | 56 |
| 11.4 | Third Parties | 56 |
| 11.5 | Governing Law; Jurisdiction | 57 |
| 11.6 | WAIVER OF JURY TRIAL | 57 |
| 11.7 | Specific Performance | 58 |
| 11.8 | Severability | 58 |
| 11.9 | Amendment | 58 |
| 11.10 | Waiver | 58 |
| 11.11 | Entire Agreement | 58 |
| 11.12 | Interpretation | 59 |
| 11.13 | Counterparts | 59 |
| 11.14 | Legal Representation | 59 |
| ARTICLE XII DEFINITIONS | 60 | |
| 12.1 | Certain Definitions | 60 |
| 12.2 | Section References | 71 |
iii
INDEX OF ANNEXES AND EXHIBITS
| Exhibit | Description |
| Exhibit A | Form of Holder Support Agreement |
| Exhibit B | Form of Shareholder Commitment |
| Exhibit C | Form of New Registration Rights Agreement |
iv
BUSINESS COMBINATION AGREEMENT
This Business Combination Agreement (this “Agreement”) is made and entered into as of October 6, 2022 by and among (i) ClimateRock, a Cayman Islands exempted company (together with its successors, the “Purchaser”), (ii) ClimateRock Holdings Limited, a Cayman Islands exempted company (“Pubco”), (iii) ClimateRock Merger Sub Limited, a Cayman Islands exempted company and a wholly-owned subsidiary of Pubco (“Merger Sub”), and (iv) E.E.W. ECO ENERGY WORLD PLC, a company formed under the laws of England and Wales (the “Company”). Purchaser, Pubco, Merger Sub, and the Company, are sometimes referred to herein individually as a “Party” and, collectively, as the “Parties.”
RECITALS:
A. Purchaser is a blank check company incorporated in the Cayman Islands for the purpose of effecting a business combination or similar transaction with one or more businesses;
B. The Company, directly and indirectly through its subsidiaries, engages in the business of developing solar photovoltaic, electricity storage and green hydrogen projects around the world from greenfield to ready-to-build status;
C. Pubco is a newly incorporated Cayman Islands company limited by shares that is wholly-owned by a certain Purchaser shareholder and was incorporated for the purpose of making acquisitions and investments, with the objective of acting as the publicly traded holding company for its investees.
D. Merger Sub is a newly incorporated Cayman Islands exempted company limited by shares, wholly-owned by Pubco, incorporated for the sole purpose of effecting the Merger (as defined herein);
E. Upon the terms and subject to the conditions set forth herein, the Parties desire and intend to effect a business combination transaction whereby (a) Merger Sub will merge with and into Purchaser, with Purchaser continuing as the surviving entity (the “Merger”), as a result of which (i) Purchaser shall become a wholly owned subsidiary of Pubco, and (ii) each issued and outstanding security of Purchaser immediately prior to the Effective Time (as defined below) shall no longer be outstanding and shall automatically be cancelled, in exchange for the issuance to the holder thereof of a substantially equivalent Pubco security and this Agreement is intended to be a “plan of reorganization” within the meaning of Sections 354, 361 and 368 of the Code and Treasury Regulations Sections 1.368-2(g) and 1.368-3(a) and (b)(i) Pubco will make an offer to acquire each Company Ordinary Share on the basis set out in Section 2.1 and 2.2 hereof and as will be set out in the Registration Statement (the “Pubco Offer,” and the exchange of securities, the “Company Share Transfer”) and (ii) Pubco shall offer to each holder of the Company’s outstanding options replacement options over Pubco Ordinary Shares with each such option holder then surrendering his or her existing options over Company Ordinary Shares, all upon the terms and subject to the conditions set forth in this Agreement and in accordance with the applicable provisions of the Cayman Act (as defined below) and the laws of England and Wales;
F. The boards of directors of the Company, Purchaser, and the Merger Sub have each (i) determined that the Merger and Company Share Transfer, as applicable, are fair, advisable and in the best interests of their respective companies and shareholders, (ii) approved this Agreement and the Transactions, upon the terms and subject to the conditions set forth herein, and (iii) determined to recommend to their respective shareholders the approval and adoption of this Agreement and the Transactions;
G. Contemporaneously with the execution of, and as a condition and an inducement to Purchaser, Merger Sub, and Pubco entering into this Agreement, Sponsor is entering into and delivering a support agreement, substantially in the form attached hereto as Exhibit A (the “Holder Support Agreement”), pursuant to which, among other things, Sponsor has agreed to vote in favor of the adoption of this Agreement and the Transactions and certain other covenants;
1
H. Purchaser and the Company will use their reasonable best efforts to enter into subscription agreements (as amended or modified from time to time, collectively, the “Subscription Agreements”) with certain investors (the “PIPE Investors”), pursuant to which, among other things, each PIPE Investor would agree to subscribe for and purchase from Purchaser or the Pubco and Purchaser or the Pubco, as applicable, agree to issue and sell to each such PIPE Investor on the Closing Date concurrent with the Closing, the number of Purchaser or Pubco Ordinary Shares set forth in the applicable Subscription Agreement in exchange for the purchase price set forth therein, on the terms and subject to the conditions set forth in the applicable Subscription Agreement (the equity financing under all Subscription Agreements, non-redemption agreements, or backstop arrangements with potential investors, or any other equity or debt investment, equity line of credit or any other financing agreements, in each case on terms mutually agreeable to the Company, Purchaser and Pubco, acting reasonably, for aggregate proceeds to Purchaser or Pubco of at least forty million dollars ($40,000,000) collectively, hereinafter referred to as the “PIPE Financing” and the Pubco Ordinary Shares to be issued pursuant to the PIPE Financing, the “PIPE Shares”);
I. Simultaneously with the execution and delivery of this Agreement, and as a condition and an inducement to Purchaser, Merger Sub, and Pubco entering into this Agreement, certain applicable Company Shareholders (the “Major Shareholders”) and Pubco are entering into an agreement substantially in the form attached hereto as Exhibit B (the “Shareholder Commitment”) pursuant to which the Major Shareholders have irrevocably undertaken, amongst other things:
| (i) | To vote in favor of the Company’s shareholder resolutions required to implement the Company Re-registration and to adopt new Articles of Association including a new article pursuant to which, subject to the Pubco Offer becoming or becoming declared wholly unconditional (the “Unconditional Date”), any Company Ordinary Shares issued following the Unconditional Date will be automatically sold and transferred to Pubco for consideration that is equivalent to the consideration offered for Company Ordinary Shares acquired pursuant to the Pubco Offer (save that if there is any reorganization of, or material alteration to, the Company share capital after the Unconditional Date, the value of any such consideration may be adjusted in an appropriate manner to reflect such reorganization or alteration); and |
| (ii) | To accept the Pubco Offer; |
J. Simultaneously with the Closing, the Company and Pubco shall have received a duly executed copy of the New Registration Rights Agreement (the “New Registration Rights Agreement”), substantially in the form attached as Exhibit C hereto, duly executed by Purchaser and certain holders of the “Registrable Securities” thereunder, to, among other matters, have Pubco assume the registration obligations of Purchaser under the Founder Registration Rights Agreement and have such rights apply to the Pubco Securities, and to provide certain Company Shareholders with registration rights to the extent applicable;
K. At or prior to the Closing, the shareholders of Pubco shall have amended and restated the memorandum and articles of association of Pubco in a form approved by the Company (the “Pubco A&R Memorandum and Articles”); and
L. Certain capitalized terms used herein are defined in ARTICLE XII hereof.
2
NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the Parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. On the Closing Date, and subject to and upon the terms and conditions of this Agreement, and in accordance with the applicable provisions of the Cayman Act, Merger Sub and Purchaser shall consummate the Merger, pursuant to which Merger Sub shall be merged with and into Purchaser, following which the separate corporate existence of Merger Sub shall cease and Purchaser shall continue as the surviving company of the Merger. Purchaser, as the surviving company after the Merger, is hereinafter sometimes referred to as the “Surviving Purchaser Subsidiary” (provided that references to Purchaser for periods after the Effective Time shall include the Surviving Purchaser Subsidiary).
1.2 Effective Time. Subject to the conditions of this Agreement, on the Closing Date, Merger Sub and Purchaser shall cause the Merger to be consummated by (a) executing a plan of merger in form and substance reasonably acceptable to the Company, Merger Sub, Pubco, and Purchaser (the “Plan of Merger”) and (b) filing the Plan of Merger and such other documents as required by the Cayman Act with the Registrar of Companies of the Cayman Islands as provided in Section 233 of the Cayman Act and Purchaser’s and Merger Sub’s Organizational Documents. The Merger shall become effective at the time the Plan of Merger is registered by the Registrar of Companies of the Cayman Islands or at such other date as may be agreed in writing by the Company and Purchaser and specified in the Plan of Merger, provided that such date shall not be a date later than the 90th day following the date of such registration (the “Effective Time”).
1.3 Effect of the Merger. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, the effect of the Merger shall be as provided in this Agreement and the applicable provisions of the Cayman Act and other applicable Law. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, agreements, privileges, powers and franchises of Merger Sub shall vest in the Surviving Purchaser Subsidiary and all Liabilities, obligations and duties of Merger Sub shall become the Liabilities, obligations and duties of the Surviving Purchaser Subsidiary (including all rights and obligations with respect to the Trust Account), including in each case the rights and obligations of the Surviving Purchaser Subsidiary under this Agreement and the Ancillary Documents from and after the Effective Time, and the Surviving Purchaser Subsidiary shall continue its existence as a wholly owned Subsidiary of Pubco.
1.4 Organizational Documents of Surviving Purchaser Subsidiary. At the Effective Time, the Surviving Purchaser Subsidiary shall adopt the form of the amended and restated memorandum and articles of association of Merger Sub as in effect immediately prior to the Effective Time (the “Surviving Purchaser Subsidiary A&R Memorandum and Articles”), as the amended and restated memorandum of association and articles of association of the Surviving Purchaser Subsidiary; provided that, at the Effective Time, (a) references therein to the name of the Surviving Purchaser Subsidiary shall be amended to be such name as reasonably determined by the Company and (b) references therein to the authorized share capital of the Surviving Purchaser Subsidiary shall be amended to refer to the authorized share capital of the Surviving Purchaser Subsidiary as approved in the Plan of Merger, if necessary. The Company acknowledges and agrees that after the Closing it shall not use the name “ClimateRock” without the prior written consent of the Sponsor and that the rights to use the ClimateRock name shall remain with Sponsor.
1.5 Directors and Officers of the Surviving Purchaser Subsidiary. The Parties shall take all action necessary so that at the Effective Time, the board of directors and executive officers of the Surviving Purchaser Subsidiary shall be the same as the board of directors and executive officers of the Merger Sub, each to hold office in accordance with the Surviving Purchaser Subsidiary A&R Memorandum and Articles until their respective successors are duly elected or appointed and qualified.
3
1.6 Effect of Merger on Issued and Outstanding Securities of Purchaser and Merger Sub. At the Effective Time, by virtue of the Merger and without any action on the part of any Party or the holders of securities of Purchaser or the Company:
(a) Purchaser Public Units. At the Effective Time, every issued and outstanding Purchaser Public Unit shall be automatically separated and the holder thereof shall be deemed to hold one (1) Purchaser Class A Ordinary Share, one-half of one Purchaser Warrant, and one Purchaser Right in accordance with the terms of the applicable Purchaser Public Unit, which underlying Purchaser Securities shall be converted in accordance with the applicable terms of this Section 1.6.
(b) Purchaser Ordinary Shares. At the Effective Time, (i) each Purchaser Class A Ordinary Share issued and outstanding prior to the Effective Time that is not redeemed or converted in the Redemption (other than those described in Section 1.6(e) below) shall be converted automatically into one (1) Pubco Ordinary Share and (ii) each Purchaser Class B Ordinary Share issued and outstanding prior to the Effective Time shall be converted automatically into one (1) Pubco Ordinary Share, following which, all Purchaser Ordinary Shares shall cease to be outstanding and shall automatically be canceled and shall cease to exist. The holders of Purchaser Ordinary Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares except as provided herein or required under applicable Law. Each certificate previously evidencing Purchaser Ordinary Shares shall be exchanged for a certificate (if requested) representing the same number of Pubco Ordinary Shares upon the surrender of such certificate in accordance with Section 1.8(a). Each certificate formerly representing Purchaser Ordinary Shares shall thereafter represent the same number of Pubco Ordinary Shares.
(c) Purchaser Warrants. At the Effective Time, each issued and outstanding Purchaser Public Warrant shall be converted into one (1) Pubco Public Warrant and each issued and outstanding Purchaser Private Warrant shall be converted into one (1) Pubco Private Warrant. At the Effective Time, Purchaser Warrants shall cease to be outstanding and shall automatically be canceled and retired and shall cease to exist. Each of the Pubco Public Warrants shall have, and be subject to, substantially the same terms and conditions set forth in the Purchaser Public Warrants, and each of the Pubco Private Warrants shall have, and be subject to, substantially the same terms and conditions set forth in Purchaser Private Warrants, except that in each case they shall represent the right to acquire Pubco Ordinary Shares in lieu of Purchaser Class A Ordinary Shares. At or prior to the Effective Time, Pubco shall take all corporate action necessary to reserve for future issuance, and shall maintain such reservation for so long as any of the Pubco Warrants remain outstanding, a sufficient number of Pubco Ordinary Shares for delivery upon the exercise of such Pubco Warrants.
(d) Purchaser Rights. At the Effective Time, each issued and outstanding Purchaser Right shall be automatically converted into the number of Pubco Ordinary Shares that would have been received by the holder thereof if the Purchaser Right had been converted upon the consummation of a Business Combination in accordance with Purchaser’s Organizational Documents, the IPO Prospectus, and the Founder Registration Rights Agreement into Purchaser Ordinary Shares, but for such purposes treating it as if such Business Combination had occurred immediately prior to the Effective Time and Purchaser Ordinary Shares issued upon conversion of Purchaser Rights had then automatically been converted into Pubco Ordinary Shares in accordance with Section 1.6(b) above. At the Effective Time, Purchaser Rights shall cease to be outstanding and shall automatically be canceled and retired and shall cease to exist. The holders of certificates previously evidencing Purchaser Rights outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Purchaser Rights, except as provided herein or by Law. Each certificate formerly representing Purchaser Rights shall thereafter represent only the right to receive Pubco Ordinary Shares as set forth herein.
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(e) Treasury Shares. At the Effective Time, if there are any shares of the Purchaser that are owned by Purchaser as treasury shares, such shares shall be canceled and extinguished without any conversion thereof or payment therefor.
(f) Merger Sub Shares. At the Effective Time, each ordinary share of Merger Sub outstanding immediately prior to the Effective Time shall be converted into an equal number of ordinary shares of the Surviving Purchaser Subsidiary, with the same rights, powers and privileges as the shares so converted and shall constitute the only issued and outstanding shares of the Surviving Purchaser Subsidiary.
(i) No Liability. Notwithstanding anything to the contrary in this Section 1.6, none of the Surviving Purchaser Subsidiary, Pubco or any other Party hereto shall be liable to any Person for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.
1.7 Effect of Merger on Issued and Outstanding Securities of Pubco. . Immediately following the issuance of any Pubco Ordinary Shares pursuant to this Agreement, without any action on the part of the holders of securities of Purchaser, all of the shares of Pubco issued and outstanding immediately prior to the Effective Time shall be redeemed in payment of the par value thereof and canceled without any conversion thereof.
1.8 Surrender of Purchaser Securities.
(a) All securities issued upon the surrender of Purchaser Securities in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to such securities, provided that any restrictions on the sale and transfer of Purchaser Securities shall also apply to the Pubco Securities so issued in exchange.
(b) Notwithstanding anything to the contrary contained herein, no fraction of a Pubco Ordinary Share will be issued by virtue of the Company Share Transfer or the Transactions, and each Person who would otherwise be entitled to a fraction of a Pubco Ordinary Share (after aggregating all fractional Pubco Ordinary Shares that otherwise would be received by such holder) shall instead have the number of Pubco Ordinary Shares issued to such Person rounded down in the aggregate to the nearest whole Pubco Ordinary Share.
ARTICLE II
THE PUBCO OFFER AND SHARE EXCHANGE
2.1 The Pubco Offer. Pubco shall, and the Purchaser shall procure that Pubco shall, promptly following the Exchange Offer Prospectus becoming effective, make an offer to acquire all the issued and to be issued Company Ordinary Shares by promptly distributing to all Company Shareholders the Registration Statement (as contemplated in Section 7.11(d) below) together with the Company Shareholder Acceptance, and the Company shall provide promptly any assistance reasonably requested by the Purchaser and Pubco in order to make and administer such offer and ensure that it is conducted in compliance with sections 974 to 982 (inclusive) of the UK Act. The Pubco Offer Documents shall set out the terms and conditions of the Pubco Offer which terms and conditions shall be customary for a takeover offer made for a company incorporated in England and Wales (recognizing that, subject to the Company Re-registration being a condition to this Agreement and the Pubco Offer, there being no need to comply with the provisions of the UK’s City Code on Takeovers and Mergers) and which shall comply with, and fall within the scope of, section 974 of the UK Act, and which shall include:
(a) Only two conditions (subject to any additional conditions that Pubco and the Company may agree in writing) being:
(i) the acceptance condition: that Pubco has received valid acceptances of the Pubco Offer in respect of not less than 90% (or such lower percentage as Pubco, with the consent of the Company, may decide) in value of the total Company Ordinary Shares to which the Pubco Offer relates; and
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(ii) the BCA condition: that all of the conditions under this Agreement have been satisfied, or where capable of waiver, waived, other than the condition set forth in Section 8.1(h);
(b) details of the consideration to which each accepting Company Shareholder shall be due pursuant to the terms of the Pubco Offer, as set out in Section 2.2 below;
(c) a requirement that each Company Shareholder, by accepting the Pubco Offer, provides customary representations and warranties, which shall include those as to their unencumbered title to the Company Ordinary Shares being assented to the offer, their unfettered authority to accept the Pubco Offer, and, to the extent required, as to matters necessary to comply with US or UK securities laws; provided that each Company Shareholder, save in any Lost Certificate Indemnity, shall not be required to otherwise provide representations or warranties as regards the Target Companies and/or each of their businesses nor provide any other covenants, undertakings or indemnities save as may be agreed between the Parties;
(d) a requirement that an accepting Company Shareholder, by executing the Company Shareholder Acceptance (as a deed), and delivering it to the Registrar, irrevocably appoints the Company, Pubco, the Registrar and each director of, or person authorized by, each of them as his or her attorney, subject to the Pubco Offer becoming or being declared wholly unconditional:
(i) to complete and execute all or any form(s) of transfer and/or other document(s) at the discretion of the attorney in relation to his or her Company Ordinary Shares in favor of Pubco;
(ii) to deliver to the Registrar such form(s) of transfer and/or other document(s) at the discretion of the attorney with the certificate(s) and/or other document(s) of title and/or Lost Certificate Indemnity relating to his or her Company Ordinary Shares for registration within six months of the Pubco Offer becoming or being declared wholly unconditional; and
(iii) to execute all such other documents and do all such other acts and things as may in the opinion of the attorney be necessary or expedient for the purposes of, or in connection with, the acceptance and implementation of the Pubco Offer.
2.2 The Company Share Transfer. On the Closing Date, immediately prior to the Effective Time and subject to and upon the terms and conditions of the Pubco Offer and in accordance with the applicable provisions of the laws of England and Wales, where it is entitled to do so and where the conditions to the Pubco Offer have been satisfied or waived, Pubco shall declare the Pubco Offer wholly unconditional. As a result of declaring the Pubco Offer wholly unconditional, this Agreement shall become unconditional, Pubco shall be contractually obligated to acquire each Company Ordinary Share validly assented to the Pubco Offer in accordance with its terms (which shall require the holder thereof to have delivered the applicable Transmittal Documents in accordance with Section 2.5), in consideration for the issuance and allotment of a number of Pubco Ordinary Shares equal to the Per Share Price divided by the Redemption Price (the “Conversion Ratio”) (the “Exchange Shares”). Pubco shall, promptly following the Unconditional Date and in accordance with the UK Act (including, without limitation, sections 979 and 980), serve squeeze out notices on all holders of Company Ordinary Shares that have not, at the date of such notice, assented their Company Ordinary Shares to the Pubco Offer and Pubco shall, at the same time, send a copy of such notice to the Company together with the required statutory declaration pursuant to section 980(4)(b) of the UK Act. The Company as the surviving limited liability company after the Company Share Transfer is hereinafter sometimes referred to as “Surviving Company Subsidiary” (provided that references to the Company for periods after the Effective Time shall include Surviving Company Subsidiary).
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2.3 Pubco Offer for Company Options. Pubco shall make an offer to the holder of each outstanding Company Option (whether vested or unvested) to replace such options with options over Pubco Ordinary Shares (each a “Pubco Option”) with each such option holder then surrendering his or her existing Company Options. Subject to the subsequent sentence, each Pubco Option will be subject to the terms and conditions set forth in the Company Equity Plan (except any references therein to the Company or Company Ordinary Shares will instead mean Pubco and Pubco Ordinary Shares, respectively). Each Pubco Option shall: (i) confer on the holder the right to acquire a number of Pubco Ordinary Shares equal to (as rounded down to the nearest whole number) (A) the number of Company Ordinary Shares which the Company Option had the right to acquire immediately prior to the Effective Time (had such Company Options been fully vested at the Effective Time), multiplied by (B) the Conversion Ratio; (ii) have an exercise price equal to (as rounded up to the nearest whole cent) the quotient of (A) the exercise price of the Company Option (expressed in US Dollars ($), converted from Euros (€) at the European Central Bank published rate on the date of this Agreement), divided by the Conversion Ratio and (iii) be subject to the same vesting schedule as the applicable Company Option. Pubco shall take all corporate action necessary to issue the relevant Pubco Options and reserve for future issuance, and shall maintain such reservation for so long as any of the Pubco Options remain outstanding, a sufficient number of Pubco Ordinary Shares for delivery upon the exercise of such Pubco Option.
2.4 Other Company Convertible Securities. Any other Company Convertible Security other than a Company Option or a Company Convertible Loan, if not exercised or converted prior to the Effective Time, shall be exchangeable or convertible to Pubco Securities upon the terms thereof.
2.5 Surrender of Company Securities and Disbursement of Exchange Consideration.
(a) Prior to the Effective Time, Purchaser shall, or shall cause Pubco to, appoint a registrar, reasonably acceptable to the Company and Purchaser (in such capacity, the “Registrar”), for the purpose of receiving and recording the Company Shareholder Acceptances and exchanging Company Ordinary Shares validly assented to the Pubco Offer or acquired compulsorily pursuant to the valid service of a squeeze out notice for a number of Pubco Ordinary Shares, in accordance with the provisions of the Pubco Offer. Prior to the Effective Time, Pubco shall send, or shall cause the Registrar to send, to each Company Shareholder, a Company Shareholder Acceptance for use in such exchange (which shall specify the number of Company Ordinary Shares and the number of Pubco Ordinary Shares to be issued and allotted to the holders of Company Ordinary Shares based on the Conversion Ratio, and that risk of loss and title shall pass, only upon proper delivery of a properly completed and duly executed Company Shareholder Acceptance and the certificates representing Company Ordinary Shares (the “Company Certificates”), if any (or a Lost Certificate Indemnity)), to the Registrar for use in such exchange.
(b) Each Company Shareholder shall be entitled to receive a number of Pubco Ordinary Shares equal to the Conversion Ratio multiplied by the number of Company Ordinary Shares such Company Shareholder assented to in the Pubco Offer, as soon as reasonably practicable after the Effective Time, but subject to the delivery to the Registrar of the following items prior thereto (collectively, the “Transmittal Documents”): (i) the Company Certificate(s), if any, for its Company Ordinary Shares (or a Lost Certificate Indemnity), and/or a properly completed and duly executed Company Shareholder Acceptance and (ii) such other documents as may be reasonably requested by the Registrar, Pubco or the Purchaser. Pubco shall take all corporate action necessary to enable the issuance and allotment to the Company Shareholders of the relevant Exchange Shares on receipt by the Registrar of the Transmittal Documents in accordance with this Agreement and the Pubco Offer.
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(c) Notwithstanding anything to the contrary contained herein, in the event that any Company Certificate shall have been lost, stolen or destroyed, in lieu of delivery of a Company Certificate to the Registrar, the Company Shareholder may instead deliver to the Registrar a Lost Certificate Indemnity. Any Lost Certificate Indemnity properly delivered in accordance with this Section 2.5(c) shall be treated as a Company Certificate for all purposes of this Agreement.
(d) After the Effective Time, no dividends or other distributions declared or made after the date of this Agreement with respect to Pubco Ordinary Shares with a record date after the Effective Time will be paid to any holder of any Company Ordinary Share that has not yet validly assented his or her Company Ordinary Shares to the Pubco Offer and received his or her Exchange Shares.
(e) All securities issued upon the surrender of Company Securities in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to such Company Securities.
(f) Notwithstanding anything to the contrary contained herein, no fraction of a Pubco Ordinary Share will be issued by virtue of the Company Share Transfer or other Transactions, and each Person who would otherwise be entitled to a fraction of a Pubco Ordinary Share (after aggregating all fractional Pubco Ordinary Shares that otherwise would be received by such holder) shall instead have the number of Pubco Ordinary Shares issued to such Person rounded down in the aggregate to the nearest whole Pubco Ordinary Share.
2.6 Termination of Certain Agreements. The Company hereby agrees that, effective at the Closing, (a) any shareholders, voting or similar agreement among the Company and any of the Company Shareholders or among the Company Shareholders with respect to the Company’s capital shares, and (b) any registration rights agreement between the Company and the Company Shareholders, in each case of clauses (a) and (b), shall automatically, and without any further action by any Person terminate in full and become null and void and of no further force and effect. Further, the Company hereby waives, and shall use commercially reasonable efforts to cause the Company Shareholders to waive where applicable, any obligations of the Company or the Company Shareholders under the Company’s Organizational Documents or any agreement described in clause (a) above with respect to the Transactions and the Ancillary Documents, and any failure of the Company or the Company Shareholders to comply with the terms thereof in connection with the Transactions and the Ancillary Documents.
ARTICLE III
CLOSING
3.1 Closing. Subject to the satisfaction or waiver of the conditions set forth in ARTICLE VIII, the consummation of the Transactions (the “Closing”) shall take place either remotely or at the offices of Ellenoff Grossman & Schole LLP (“EGS”), counsel to Purchaser, 1345 Avenue of the Americas, New York, NY 10105, United States of America, on a date and at a time to be agreed upon by Purchaser and the Company, which date shall be no later than the second (2nd) Business Day after all the conditions set forth in ARTICLE VIII have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions at the Closing), or at such other date, time or place as Purchaser and the Company may agree (the date and time at which the Closing is actually held being the “Closing Date”).
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3.2 Closing Deliverables.
(a) At the Closing, the Company will deliver or cause to be delivered:
(i) to Purchaser and Pubco, the New Registration Rights Agreement, duly executed by the applicable Company Shareholders.
(b) At the Closing, Pubco will deliver or cause to be delivered:
(i) to the Company and the Purchaser, the New Registration Rights Agreement, duly executed by Pubco.
(c) At the Closing, Purchaser will deliver or cause to be delivered:
(i) to Pubco and the Company, the New Registration Rights Agreement, duly executed by duly authorized representatives of Sponsor;
(ii) to Pubco and the Company, the written resignations of all of the directors and officers of Purchaser effective as of the Effective Time; and
(iii) to Pubco and the Company, the Pubco A&R Memorandum and Articles.
3.3 Withholding Rights. Each of Purchaser, the Company, Pubco, and Merger Sub (and their Affiliates and Representatives) shall be entitled to deduct and withhold from the amounts payable pursuant to this Agreement such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code or other applicable Tax Law. Other than in respect of amounts subject to compensatory withholding, Purchaser, Pubco, and Merger Sub (or their Affiliates or Representatives) shall use commercially reasonable efforts to notify the Person in respect of whom such deduction or withholding is expected to be made as soon as reasonably practicable. Purchaser, Pubco, or Merger Sub (or their Affiliates or Representatives), as applicable, shall use commercially reasonable efforts to cooperate with such Person to reduce or eliminate any such requirement to deduct or withhold to the extent permitted by Law. To the extent that amounts are so deducted or withheld by Purchaser, the Company, Pubco, or Merger Sub (or their Affiliates or Representatives), as the case may be, and paid over to the appropriate Taxing Authority, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction or withholding was made.
3.4 Tax Consequences. It is intended by the Parties that, for U.S. federal, state and local income Tax purposes, (a) the Merger, the Company Share Transfer, and the PIPE Financing, if any, collectively, constitute an integrated transaction described in Section 351 of the Code, (b) the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code and this Agreement is and is hereby adopted as a “plan of reorganization” within the meaning of Sections 354, 361 and 368 of the Code and Treasury Regulations Sections 1.368-2(g) and 1.368-3(a), (c) the transfer of Purchaser Securities by holders thereof pursuant to the Merger, other than by any such holders who are U.S. persons with respect to which the applicable requirements of Treasury Regulations Section 1.367(a)-3(b) are not met, qualifies for an exception to Section 367(a)(1) of the Code, and (d) the transfer of Company Ordinary Shares by Company Shareholders pursuant to the Company Share Transfer, other than by any Company Shareholders who are U.S. persons with respect to which the applicable requirements of Treasury Regulations Section 1.367(a)-3(b) are not met, qualifies for an exception to Section 367(a)(1) of the Code (clauses (a) to (d), collectively, the “Intended Tax Treatment”).
3.5 Taking of Necessary Action; Further Action. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Purchaser Subsidiary with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Merger Sub, the then current officers and directors of the Surviving Purchaser Subsidiary and Pubco shall take all such lawful and necessary action, so long as such action is not inconsistent with this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as set forth in (i) the disclosure schedules delivered by Purchaser to the Company and Pubco on the date hereof (the “Purchaser Disclosure Schedules”), the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer, or (ii) the SEC Reports that are available on the SEC’s website through EDGAR, Purchaser represents and warrants to the Company, and Pubco, as of the date of this Agreement and as of the Closing Date, as follows:
4.1 Organization and Standing. Purchaser is an exempted company duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands. Purchaser has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on its business as now being conducted. Purchaser is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary. Purchaser has heretofore made available to the Company accurate and complete copies of its Organizational Documents, as currently in effect. Purchaser is not in violation of any provision of its Organizational Documents in any material respect.
4.2 Authorization; Binding Agreement. Purchaser has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby, subject to obtaining the Required Purchaser Shareholder Approval. The execution and delivery of this Agreement and each Ancillary Document to which it is a party and the consummation of the transactions contemplated hereby and thereby (a) have been duly and validly authorized by the board of directors of Purchaser, and (b) other than the Required Purchaser Shareholder Approval, no other corporate proceedings, other than as set forth elsewhere in the Agreement, on the part of Purchaser are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which Purchaser is a party shall be when delivered, duly and validly executed and delivered by Purchaser and, assuming the due authorization, execution and delivery of this Agreement and such Ancillary Documents by the other parties hereto and thereto, constitutes, or when delivered shall constitute, the valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except to the extent that enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization and moratorium laws and other laws of general application affecting the enforcement of creditors’ rights generally or by any applicable statute of limitation or by any valid defense of set-off or counterclaim, and the fact that equitable remedies or relief (including the remedy of specific performance) are subject to the discretion of the court from which such relief may be sought (collectively, the “Enforceability Exceptions”). Purchaser’s board of directors, by written resolutions duly signed by all of Purchaser’s directors (a) determined that this Agreement, the Merger, and the other transactions contemplated hereby are advisable, fair to, and in the best interests of, Purchaser and its shareholders, (b) approved this Agreement, the Merger and the other transactions contemplated by this Agreement in accordance with the Laws of the Cayman Islands, (c) directed that this Agreement be submitted to Purchaser’s shareholders for adoption and (d) resolved to recommend that Purchaser’s shareholders adopt this Agreement.
4.3 Governmental Approvals. Except as otherwise described in Schedule 4.3, no Consent of or notice to any Governmental Authority, on the part of Purchaser, is required to be obtained or made in connection with the execution, delivery or performance by Purchaser of this Agreement and each Ancillary Document to which Purchaser is a party or the consummation by Purchaser of the transactions contemplated hereby and thereby, other than (a) pursuant to Antitrust Laws, (b) such filings as contemplated by this Agreement, (c) any filings required with Nasdaq or the SEC with respect to the Transactions, (d) applicable requirements, if any, of the Securities Act, the Exchange Act, and/ or any state “blue sky” securities Laws, and the rules and regulations thereunder, and (e) where the failure to obtain or make such Consents or to make such filings or notifications, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Purchaser.
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4.4 Non-Contravention. Except as otherwise described in Schedule 4.4, the execution and delivery by Purchaser of this Agreement and each Ancillary Document to which it is a party, the consummation by Purchaser of the transactions contemplated hereby and thereby, and compliance by Purchaser with any of the provisions hereof and thereof, will not (a) contravene or conflict with or violate any provision of Purchaser’s Organizational Documents, (b) contravene or conflict with or constitute a violation of any Law or Order binding upon or applicable to Purchaser, (c) subject to obtaining the Consents from Governmental Authorities referred to in Section 4.3 hereof, and the waiting periods referred to therein having expired, and any condition precedent to such Consent or waiver having been satisfied, conflict with or violate any Law, Order or Consent applicable to Purchaser or any of its properties or assets, or (d) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by Purchaser under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien (other than a Permitted Lien) upon any of the properties or assets of Purchaser under, (viii) give rise to any obligation to obtain any third party Consent or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any Contract of Purchaser, including the Trust Account, except for any deviations from any of the foregoing clauses (a), (b), (c) or (d) that have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Purchaser.
4.5 Capitalization.
(a) Purchaser is authorized to issue 479,000,000 Purchaser Class A Ordinary Shares, 20,000,000 Purchaser Class B Ordinary Shares, and 1,000,000 Purchaser Preference Shares. The issued and outstanding Purchaser Securities are set forth on Schedule 4.5(a). There are no issued or outstanding Purchaser Preference Shares or Purchaser Securities that are convertible or exchangeable into Purchaser Preference Shares. All outstanding Purchaser Ordinary Shares are duly authorized, validly issued, fully paid and non-assessable and are not subject to or issued in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Cayman Act, Purchaser’s Organizational Documents or any Contract to which Purchaser is a party. None of the outstanding Purchaser Securities has been issued in violation of any applicable securities Laws. Prior to giving effect to the Transactions,
(b) Purchaser does not have any Subsidiaries or own any equity interests in any other Person.
(c) Except as set forth in Schedule 4.5(a) or Schedule 4.5(c) there are no (i) outstanding options, warrants, puts, calls, convertible or exchangeable securities, “phantom” share rights, share appreciation rights, share based units, preemptive or similar rights, (ii) bonds, debentures, notes or other Indebtedness having general voting rights or that are convertible or exchangeable into securities having such rights or (iii) subscriptions or other rights, agreements, arrangements, Contracts or commitments of any character (other than this Agreement and the Ancillary Documents), (A) relating to the issued or unissued Purchaser Ordinary Shares or (B) obligating Purchaser to issue, transfer, deliver or sell or cause to be issued, transferred, delivered, sold or repurchased any options or shares or securities convertible into or exchangeable for such shares, or (C) obligating Purchaser to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment for such shares. Other than the Redemption or as expressly set forth in this Agreement, there are no outstanding obligations of Purchaser to repurchase, redeem or otherwise acquire any Purchaser Securities or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any Person. Except as set forth in Schedule 4.5(c), there are no shareholders agreements, voting trusts or other agreements or understandings to which Purchaser is a party with respect to the voting of Purchaser Ordinary Shares.
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(d) All Indebtedness or unpaid Liabilities of Purchaser, Pubco or Merger Sub are set forth on Schedule 4.5(d). The Indebtedness and other Liabilities of Purchaser (including in respect of deferred underwriting commissions and costs and expenses incurred in respect with other prospective Business Combinations and of Purchaser’s initial public offering) do not exceed, in the aggregate, the amount set forth in Schedule 4.5(d). No Indebtedness of Purchaser contains any restriction upon (i) the prepayment of any of such Indebtedness, (ii) the incurrence of Indebtedness by Purchaser or (iii) the ability of Purchaser to grant any Lien on its properties or assets.
(e) Since the date of formation of Purchaser, and except as contemplated by this Agreement, Purchaser has not declared or paid any distribution or dividend in respect of its shares and has not repurchased, redeemed or otherwise acquired any of its shares, and Purchaser’s board of directors has not authorized any of the foregoing.
4.6 SEC Filings and Purchaser Financials.
(a) Purchaser, since the IPO, has filed all forms, reports, schedules, statements, registration statements, prospectuses, proxies and other documents required to be filed or furnished by Purchaser with the SEC under the Securities Act, the Exchange Act and the Sarbanes-Oxley Act, together with any amendments, restatements or supplements thereto, and shall file all such forms, reports, schedules, statements, proxy materials and other documents required to be filed subsequent to the date of this Agreement. Except to the extent available on the SEC’s website through EDGAR, Purchaser has delivered to the Company copies in the form filed with the SEC of all of the following: (i) Purchaser’s annual reports on Form 10-K for each fiscal year of Purchaser beginning with the first year Purchaser was required to file such a form, (ii) Purchaser’s quarterly reports on Form 10-Q for each fiscal quarter that Purchaser filed such reports to disclose its quarterly financial results in each of the fiscal years of Purchaser referred to in clause (i) above, (iii) all other forms, reports, registration statements, prospectuses, proxy materials and other documents (other than preliminary materials) filed by Purchaser with the SEC since the beginning of the first fiscal year referred to in clause (i) above (the forms, reports, registration statements, prospectuses, proxies and other documents referred to in clauses (i), (ii) and (iii) above, whether or not available through EDGAR, are, collectively, the “SEC Reports”) and (iv) all certifications and statements required by (A) Rules 13a-14 or 15d-14 under the Exchange Act, and (B) 18 U.S.C. §1350 (Section 906 of SOX) with respect to any report referred to in clause (i) above (collectively, the “Public Certifications”). Except for any changes (including any required revisions to or restatements of the Purchaser Financials (defined below) or the SEC Reports) to (A) Purchaser’s accounting or classification of Purchaser’s outstanding redeemable shares as temporary, as opposed to permanent, equity that was or may be required as a result of related statements by the SEC staff or recommendations or requirements of Purchaser’s auditors, or (B) Purchaser’s historical or future accounting relating to any other guidance from the SEC staff after the date hereof relating to non-cash accounting matters applicable to special purpose acquisition companies generally (clauses (A) through (B), collectively, “SEC SPAC Accounting Changes”). The SEC Reports (x) were prepared in all material respects in accordance with the requirements of the Securities Act and the Exchange Act, as the case may be, and the rules and regulations thereunder and (y) did not, as of their respective effective dates (in the case of SEC Reports that are registration statements filed pursuant to the requirements of the Securities Act) and at the time they were filed with the SEC (in the case of all other SEC Reports) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the SEC with respect to any SEC Reports. None of the SEC Reports filed on or prior to the date of this Agreement is subject to ongoing SEC review or investigation as of the date of this Agreement. The Public Certifications are each true as of their respective dates of filing. The Parties acknowledge and agree that any restatement, revision or other modification of Purchaser Financials or the SEC Reports as a result of any SEC SPAC Accounting Changes shall be deemed not material for purposes of this Agreement. As used in this Section 4.6(a), the term “file” shall be broadly construed to include any manner permitted by SEC rules and regulations in which a document or information is furnished, supplied or otherwise made available to the SEC. As of the date of this Agreement, (A) Purchaser Public Units, Purchaser Ordinary Shares, the Purchaser Rights and the Purchaser Public Warrants are listed on Nasdaq, (B) Purchaser has not received any written deficiency notice from Nasdaq relating to the continued listing requirements of such Purchaser Securities, (C) there are no Actions pending or, to the Knowledge of Purchaser, threatened against Purchaser by the Financial Industry Regulatory Authority, Nasdaq or the SEC with respect to any intention by such entity to suspend, prohibit or terminate the quoting of such Purchaser Securities on Nasdaq and (D) Purchaser and such Purchaser Securities are in compliance with all of the applicable listing corporate governance rules of Nasdaq.
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(b) Purchaser has established and maintains disclosure controls and procedures required by Rules 13a-15 or Rule 15d-15 under the Exchange Act; except as set forth in the SEC Reports such disclosure controls and procedures are reasonably designed to ensure that all material information concerning Purchaser and other material information required to be disclosed by Purchaser in the reports and other documents that it files or furnishes under the Exchange Act is made known on a timely basis to the individuals responsible for the preparation of Purchaser’s SEC filings and other public disclosure documents. Such disclosure controls and procedures are effective in timely alerting Purchaser’s principal executive officer and principal financial officer to material information required to be included in Purchaser’s periodic reports required under the Exchange Act.
(c) Except for any SEC SPAC Accounting Changes, the financial statements and notes of Purchaser contained or incorporated by reference in the SEC Reports (the “Purchaser Financials”), fairly present in all material respects the financial position and the results of operations, changes in shareholders’ equity, and cash flows of Purchaser at the respective dates of and for the periods referred to in such financial statements and accurately reflect the books and records of Purchaser as of the times and for the periods referred to therein, all in accordance with (i) GAAP methodologies applied on a consistent basis throughout the periods involved and (ii) Regulation S-X or Regulation S-K, as applicable (except as may be indicated in the notes thereto and for the omission of notes and audit adjustments in the case of unaudited quarterly financial statements to the extent permitted by Regulation S-X or Regulation S-K, as applicable).
(d) Purchaser maintains accurate books and records reflecting its assets and Liabilities and maintains proper and adequate internal accounting controls that provide reasonable assurance that (i) Purchaser does not maintain any off-the-book accounts and that Purchaser’s assets are used only in accordance with Purchaser’s management directives, (ii) transactions are executed with management’s authorization and (iii) transactions are recorded as necessary to permit preparation of the financial statements of Purchaser and to account for Purchaser’s assets. Purchaser has not been subject to or involved in any material fraud that involves management or other employees who have a significant role in the internal controls over financial reporting of Purchaser. Purchaser or its Representatives has not received any written complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of Purchaser or its internal accounting controls, including any material written complaint, allegation, assertion or claim that Purchaser has engaged in questionable accounting or auditing practices.
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(e) Except for any SEC SPAC Accounting Changes and except to the extent reflected or reserved against in Purchaser Financials, Purchaser has not incurred any Liabilities or obligations of the type required to be reflected on a balance sheet in accordance with GAAP that are not adequately reflected or reserved on or provided for in Purchaser Financials, other than Liabilities of the type required to be reflected on a balance sheet in accordance with GAAP that have been incurred since Purchaser’s formation in the ordinary course of business. All material debts and Liabilities, fixed or contingent, which should be included under GAAP on a balance sheet are included in Purchaser Financials as of the date of such Purchaser Financial. Purchaser has no off-balance sheet arrangements.
4.7 Reporting Company; Listing. Purchaser is a publicly held company subject to reporting obligations pursuant to Section 13 of the Exchange Act, and Purchaser Public Units, Purchaser Class A Ordinary Shares and Purchaser Public Warrants are registered pursuant to Section 12(b) of the Exchange Act. There is no Action pending or, to the Knowledge of Purchaser threatened against Purchaser by Nasdaq or the SEC with respect to any intention by such entity to prohibit or terminate the listing of Purchaser Public Units, Purchaser Class A Ordinary Shares or Purchaser Public Warrants.
4.8 Absence of Certain Changes. As of the date of this Agreement, except as set forth in Schedule 4.8, Purchaser has, (a) since its incorporation, conducted no business other than its incorporation, the public offering of its securities (and the related private offerings), public reporting and its search for an initial Business Combination as described in the IPO Prospectus (including the investigation of the Target Companies and the negotiation and execution of this Agreement) and related activities and (b) since December 31, 2021, not been subject to a Material Adverse Effect on Purchaser.
4.9 Compliance with Laws. Purchaser is, and has since its incorporation been, in compliance in all material respects with all Laws applicable to it and the conduct of its business and Purchaser has not received written notice alleging any violation of applicable Law in any material respect by Purchaser.
4.10 Actions; Orders; Permits. There is no pending or, to the Knowledge of Purchaser, threatened material Action, and, to the Knowledge of Purchaser, no pending or threatened investigations, in each case, to which Purchaser is subject or otherwise affecting its assets that have had or would reasonably be expected to have a Material Adverse Effect on Purchaser, nor, to the Knowledge of Purchaser, is there any reasonable basis for such Action or investigation to be made. There is no material Action that Purchaser has pending against any other Person. Purchaser is not subject to any material Orders of any Governmental Authority, nor are any such Orders pending. Purchaser holds all material Permits necessary to lawfully conduct its business as presently conducted, and to own, lease and operate its assets and properties, all of which are in full force and effect, except where the failure to hold such Permit or for such Permit to be in full force and effect have not had and would not reasonably be expected to have a Material Adverse Effect on Purchaser. None of Purchaser, its directors or officers, nor, any of it employees, agents, or any other Persons acting for or on behalf of Purchaser has, directly or knowingly indirectly (i) made, offered, promised, authorized, paid or received any unlawful bribes, kickbacks or other similar payments to or from any Person, (ii) made, offered, promised, authorized or paid any unlawful contributions to a domestic or foreign political party or candidate or (iii) otherwise took any actions, directly or indirectly, that would result in a violation of the U.S. Foreign Corrupt Practices Act of 1977 or any other local or foreign anti-corruption or bribery Law. None of Purchaser, its directors or officers, nor, any of its employees, agents, or any other Persons acting for or on behalf of Purchaser is or has been a Person named on any economic sanctions administered, enacted or enforced by any Governmental Authority.
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4.11 Taxes and Returns.
(a) The Purchaser has timely filed, or caused to be timely filed, all applicable material U.S. federal, state, local, and non-U.S. Tax Returns required to be filed by it (taking into account all available extensions), which such Tax Returns are true, accurate and complete in all material respects, and has paid, collected or withheld, or caused to be paid, collected or withheld, all material Taxes required to be paid, collected or withheld, other than such Taxes being contested in good faith for which adequate reserves in Purchaser Financials have been established in accordance with GAAP. Schedule 4.11(a) sets forth each jurisdiction where Purchaser files or is required to file a Tax Return.
(b) There is no Action currently pending or, to the Knowledge of Purchaser, threatened in writing against Purchaser by a Governmental Authority in a jurisdiction where Purchaser does not file Tax Returns that it is or may be subject to material taxation by that jurisdiction.
(c) Purchaser is not currently being audited by any Taxing Authority and has not been notified in writing by any Taxing Authority that any such audit is currently contemplated or currently pending. There are no claims, assessments, audits, examinations, investigations or other Actions currently pending against Purchaser in respect of any material Tax, and Purchaser has not been notified in writing of any proposed material Tax claims or assessments against it that remains unpaid (other than, in each case, claims or assessments for which adequate reserves in Purchaser Financials have been established in accordance with GAAP).
(d) There are no Liens with respect to any Taxes upon any of the property or assets of Purchaser, other than Permitted Liens.
(e) Purchaser has no outstanding waivers or extensions of any applicable statute of limitations to assess any material amount of Taxes. There are no outstanding requests by Purchaser for any extension of time within which to file any material Tax Return or within which to pay any Taxes shown to be due on any material Tax Return; in each case, except for any extensions not requiring the consent of a Taxing Authority.
(f) Since the date of its incorporation, Purchaser has not (i) changed any Tax accounting methods, policies or procedures except as required by a change in Law, (ii) made, revoked, or amended any material Tax election, (iii) filed any amended Tax Returns or claim for refund or (iv) entered into any closing agreement affecting or otherwise settled or compromised any material Tax liability or refund.
(g) Purchaser has not requested, or is the subject of or bound by any private letter ruling, technical advice memorandum, closing agreement or similar ruling, memorandum or agreement with any Governmental Authority with respect to any material amount of Taxes, nor is any such request outstanding.
(h) Notwithstanding anything to the contrary in this Agreement, this Section 4.11 contains the sole representations and warranties of Purchaser concerning Taxes. Notwithstanding any representation or warranty in this Agreement (including the representations and warranties set forth in this Section 4.11), no representation or warranty is being made as to the use or availability of any Tax attribute or credit of Purchaser in any taxable period (or portion thereof) beginning on the day immediately after the Closing Date.
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4.12 Employees and Employee Benefit Plans. Since its date of incorporation, Purchaser does not (a) have any paid employees or (b) maintain, sponsor, contribute to or otherwise have any Liability under, any Benefit Plans.
4.13 Properties. Purchaser does not own, license or otherwise have any right, title or interest in any material Intellectual Property. Purchaser does not own or lease any material real property or Personal Property.
4.14 Material Contracts.
(a) Except as set forth on Schedule 4.14(a), other than this Agreement and the Ancillary Documents, there are no Contracts to which Purchaser is a party or by which any of its properties or assets may be bound, subject or affected, which (i) creates or imposes a Liability greater than $250,000, (ii) may not be cancelled by Purchaser on less than sixty (60) days’ prior notice without payment of a material penalty or termination fee or (iii) prohibits, prevents, restricts or impairs in any material respect any business practice of Purchaser as its business is currently conducted, any acquisition of material property by Purchaser, or restricts in any material respect the ability of Purchaser to engage in business as currently conducted by it or compete with any other Person (each, a “Purchaser Material Contract”). All Purchaser Material Contracts have been made available to the Company other than those that are exhibits to the SEC Reports.
(b) With respect to each Purchaser Material Contract: (i) Purchaser Material Contract was entered into at arms’ length and in the ordinary course of business; (ii) Purchaser Material Contract is legal, valid, binding and enforceable in all material respects against Purchaser and, to the Knowledge of Purchaser, the other parties thereto, and is in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability Exceptions); (iii) Purchaser is not in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default in any material respect by Purchaser, or permit termination or acceleration by the other party, under such Purchaser Material Contract; and (iv) to the Knowledge of Purchaser, no other party to any Purchaser Material Contract is in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute such a breach or default by such other party, or permit termination or acceleration by Purchaser under any Purchaser Material Contract.
4.15 Transactions with Affiliates. Schedule 4.15 sets forth a true, correct and complete list of the Contracts and arrangements that are in existence as of the date of this Agreement under which there are any existing or future material Liabilities, Indebtedness owed or obligations between Purchaser or any of its Subsidiaries and any (a) present or former director, sponsor, officer or employee or Affiliate of Purchaser, or any of their respective “associates” or “immediate family” member (as such terms are defined in Rule 12b-2 and Rule 16a-1 of the Exchange Act) of any of the foregoing, or (b) record or beneficial owner of more than five percent (5%) of Purchaser’s issued and outstanding shares as of the date hereof, other than (x) for payment of salary or (y) reimbursement for reasonable expenses less than $500,000 incurred on behalf of Purchaser in the ordinary course of business consistent with past practice. Purchaser acknowledges that none of their respective “immediate family” members owns directly or indirectly in whole or in part, or has any other material interest in, any material tangible or real property that Purchaser uses, owns or leases (other than through any equity interest in Purchaser). To the extent not filed with the SEC prior to the date of this Agreement, true and complete copies of such Contracts have been provided to the Company.
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4.16 Business Activities. Since its incorporation, Purchaser has not conducted any business activities other than activities directed toward completing a Business Combination.
4.17 Investment Company Act. Purchaser is not an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company,” or required to register as an “investment company,” in each case within the meaning of the Investment Company Act.
4.18 Finders and Brokers. Except as set forth on Schedule 4.18, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission from Purchaser, Pubco, Merger Sub, the Target Companies or any of their respective Affiliates in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of Purchaser.
4.19 Certain Business Practices.
(a) Since its incorporation, neither Purchaser, nor any of its Representatives acting on its behalf, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political parties or campaigns or violated any provision of the U.S. Foreign Corrupt Practices Act of 1977 or any other local or foreign anti-corruption or bribery Law, (iii) made any other unlawful payment or (iv) directly or indirectly, given or agreed to give any unlawful gift or similar benefit in any material amount to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder Purchaser or assist it in connection with any actual or proposed transaction.
(b) The operations of Purchaser are and have been conducted at all times in material compliance with money laundering statutes in all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any Governmental Authority, and no Action involving Purchaser with respect to any of the foregoing is pending or, to the Knowledge of Purchaser, threatened.
(c) None of Purchaser or any of its directors or officers, or, to the Knowledge of Purchaser, any other Representative acting on behalf of Purchaser, is currently identified on the specially designated nationals or other blocked person list or otherwise currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”), and Purchaser has not, in the last five (5) fiscal years, directly or indirectly, used any funds, or loaned, contributed or otherwise made available such funds to any Subsidiary, joint venture partner or other Person, in connection with any sales or operations in any country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to, or otherwise in violation of, any U.S. sanctions administered by OFAC.
4.20 Insurance. Schedule 4.20 lists all insurance policies (by policy number, insurer, coverage period, coverage amount, annual premium and type of policy) held by Purchaser relating to Purchaser or its business, properties, assets, directors, officers and employees, copies of which have been provided to the Company. All premiums due and payable under all such insurance policies have been timely paid and Purchaser is otherwise in material compliance with the terms of such insurance policies. All such insurance policies are in full force and effect, and to the Knowledge of Purchaser, there is no threatened termination of, or material premium increase with respect to, any of such insurance policies. There have been no insurance claims made by Purchaser. Purchaser has reported to its insurers all claims and pending circumstances that would reasonably be expected to result in a claim, except where such failure to report such a claim would not be reasonably likely to have a Material Adverse Effect on Purchaser.
4.21 Trust Account. The Trust Account has a balance of no less than $80,017,000. The Trust Agreement is valid and in full force and effect and enforceable in accordance with its terms (subject to the Enforceability Exceptions) and has not been amended or modified. Purchaser has complied in all respects with the terms of the Trust Agreement and is not in breach thereof or default thereunder and there does not exist under the Trust Agreement any event which, with the giving of notice or the lapse of time, would constitute such a breach or default by Purchaser or, to the Knowledge of Purchaser, by the Trustee. There are no separate agreements, side letters or other agreements (whether written or unwritten, express or implied) that would cause the description of the Trust Agreement in the SEC Reports to be inaccurate or that would entitle any Person (other than the underwriters of the IPO, Public Shareholders who shall have elected to redeem their Purchaser Ordinary Shares pursuant to Purchaser’s Memorandum and Articles or in connection with an extension of Purchaser’s deadline to consummate a Business Combination) (or Purchaser with respect to the income earned on the proceeds of the Trust Account to cover any tax obligations) to any portion of the proceeds in the Trust Account. Prior to the Closing, none of the funds held in the Trust Account may be released except as described in the Trust Agreement. There are no claims or proceedings pending or, to the Knowledge of Purchaser, threatened in writing with respect to the Trust Account. Since its incorporation, Purchaser has not released any money from the Trust Account (other than interest income earned on the principal held in the Trust Account as permitted by the Trust Agreement). Following the Effective Time, no Public Shareholder shall be entitled to receive any amount from the Trust Account.
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4.22 Information Supplied. None of the information supplied or to be supplied by Purchaser expressly for inclusion in the Registration Statement will, at the date on which the Registration Statement is first mailed to the Public Shareholders or at the time of Purchaser Extraordinary General Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.
4.23 Independent Investigation. Notwithstanding anything contained in this Agreement, Purchaser and its respective directors, managers, officers, employees, equityholders, partners, members and representatives, acknowledge and agree that Purchaser has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) and assets of the Target Companies, Pubco, and Merger Sub and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Target Companies, Pubco, and Merger Sub for such purpose. Purchaser acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, it has relied solely upon its own investigation and the express representations and warranties of the Company, Pubco, or Merger Sub set forth in this Agreement (including the related portions of the Company Disclosure Schedules) and in any certificate delivered to Purchaser pursuant hereto, and the information provided by or on behalf of the Company for the Registration Statement; and (b) none of the Company, Pubco, or Merger Sub nor its respective Representatives have made any representation or warranty as to the Target Companies, Pubco, or Merger Sub or this Agreement, except as expressly set forth in this Agreement (including the related portions of the Company Disclosure Schedules) or in any certificate delivered to Purchaser pursuant hereto.
4.24 No Other Representations or Warranties. Except for the representations and warranties expressly made by Purchaser in this ARTICLE IV (as modified by Purchaser Disclosure Schedules) or as expressly set forth in an Ancillary Document, none of Purchaser nor any other Person on its behalf makes any express representation or warranty with respect to Purchaser, Purchaser Securities, the business of Purchaser, or the Transactions or any of the other Ancillary Documents, and Purchaser hereby expressly disclaims any other representations or warranties, whether made by Purchaser or any of its Representatives. Except for the representations and warranties expressly made by Purchaser in this ARTICLE IV (as modified by Purchaser Disclosure Schedules) or in an Ancillary Document, Purchaser hereby expressly disclaims all liability and responsibility for any representation, warranty, projection, forecast, statement or information made, communicated or furnished (orally or in writing) to the Company or any of its Representatives (including any opinion, information, projection or advice that may have been or may be provided to the Company or any of its Representatives by any Representative of Purchaser), including any representations or warranties regarding the probable success or profitability of the businesses of Purchaser.
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4.25 Lock-Up Agreements. All existing lock-up agreements between Purchaser and any of its shareholders or holders of any Purchaser Securities entered into in connection with the initial public offering of Purchaser provide for a lock-up period that is in full force and effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PUBCO AND MERGER SUB
Each of Pubco and Merger Sub represents and warrants to Purchaser and the Company, as of the date hereof and as of the Closing, as follows:
5.1 Organization and Standing. Each of Pubco and Merger Sub is an exempted company duly incorporated, validly existing as an exempted company and in good standing under the Laws of the Cayman Islands. Each of Pubco and Merger Sub has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Each of Pubco and Merger Sub is duly qualified or licensed and in good standing as a foreign or extra-provincial corporation (or other entity, if applicable) to do business in each jurisdiction in which its ownership of property or the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary. Pubco and Merger Sub have heretofore made available to Purchaser and the Company true, accurate and complete copies of the Organizational Documents of Pubco and Merger Sub, each as currently in effect. None of Pubco or Merger Sub is in violation of any provision of its Organizational Documents in any material respect.
5.2 Authorization; Binding Agreement. Each of Pubco and Merger Sub has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is, or is contemplated to be, a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each Ancillary Document to which each of Pubco and Merger Sub is, or is contemplated to be, a party and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by all necessary corporate actions and no other corporate proceedings, other than as expressly set forth elsewhere in the Agreement (including, without limitation, the filing of the Pubco A&R Memorandum and Articles), the approval and execution of the Plan of Merger, and the making of related filings of resolutions and other documents with the Cayman Registrar), on the part of Pubco or Merger Sub are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which each of Pubco and Merger Sub is, or is contemplated to be, a party or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and each Ancillary Document to which Pubco or Merger Sub is, or is contemplated to be, a party has been or shall be when delivered, duly and validly executed and delivered by such Party and, assuming the due authorization, execution and delivery of this Agreement and such Ancillary Documents by the other parties hereto and thereto, constitutes, or when delivered shall constitute, the valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to the Enforceability Exceptions.
5.3 Governmental Approvals. No Consent of or with any Governmental Authority, on the part of Pubco or Merger Sub, is required to be obtained or made in connection with the execution, delivery or performance by such Party of this Agreement and each Ancillary Document to which it is a party or the consummation by such Party of the transactions contemplated hereby and thereby, other than (a) pursuant to Antitrust Laws, (b) such filings as are expressly contemplated by this Agreement (including, without limitation, the Pubco A&R Memorandum and Articles, the Plan of Merger, and the resolutions and other documents related thereto), (c) any filings required with Nasdaq or the SEC with respect to the Transactions, (d) applicable requirements, if any, of the Securities Act, the Exchange Act, and/ or any state “blue sky” securities Laws, and the rules and regulations thereunder, and (e) where the failure to obtain or make such Consents or to make such filings or notifications, would not reasonably be expected to have a Material Adverse Effect on Pubco.
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5.4 Non-Contravention. The execution and delivery by Pubco and Merger Sub of this Agreement and each Ancillary Document to which it is, or is contemplated to be, a party, the consummation by such Party of the transactions contemplated hereby and thereby, and compliance by such Party with any of the provisions hereof and thereof, will not (a) conflict with or violate any provision of such Party’s Organizational Documents (assuming, for the avoidance of doubt, in the case of Pubco, the due adoption of the Pubco A&R Memorandum and Articles as contemplated by this Agreement), (b) subject to obtaining the Consents from Governmental Authorities referred to in Section 5.3 hereof, and the waiting periods referred to therein having expired, including waiting periods, approvals, clearances, required antitrust filings or orders required under Antitrust Laws, and any condition precedent to such Consent or waiver having been satisfied, conflict with or violate any Law, Order or Consent applicable to such Party or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by such Party under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien (other than a Permitted Lien) upon any of the properties or assets of such Party under, (viii) give rise to any obligation to obtain any third party Consent or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any Contract of such Party, except for any deviations from any of the foregoing clauses (a), (b) or (c) that has not been and would not reasonably be expected to be, individually or in the aggregate, material to Pubco or Merger Sub or prevent Pubco or Merger Sub from consummating the Transactions.
5.5 Ownership. As of the date hereof, (i) Pubco is authorized to issue 500,000,000 Pubco Ordinary Shares, of which one (1) Pubco Ordinary Share is issued and outstanding, and which is owned by ClimateRock Holdings Topco Limited, a Cayman Islands exempted company, and (ii) Merger Sub is authorized to issue 5,000,000 Merger Sub Ordinary Shares, of which one (1) share is issued and outstanding, and which is owned by Pubco. Immediately prior to the Effective Time, pursuant to the Pubco A&R Memorandum and Articles, Pubco shall be authorized to issue 469,000,001 Pubco Ordinary Shares and 30,999,999 Pubco preference shares, of which one (1) Pubco Ordinary Share shall at such time be issued and outstanding. Prior to giving effect to the Transactions, other than Merger Sub, Pubco does not have any Subsidiaries or own any equity interests in any other Person.
5.6 Ownership of Exchange Shares. All Exchange Shares to be issued and delivered in accordance with ARTICLE II to the Company Shareholders shall be, upon issuance and delivery of such Exchange Shares, duly authorized and validly issued and fully paid and non-assessable, free and clear of all Liens, other than restrictions arising from applicable securities Laws, the Shareholder Commitment, the New Registration Rights Agreement, the provisions of this Agreement and any Liens incurred by the Company Shareholders, and the issuance and sale of such Exchange Shares pursuant hereto will not be subject to or give rise to any preemptive rights or rights of first refusal.
5.7 Activities of Pubco and Merger Sub. Since their incorporation, Pubco and Merger Sub have not engaged in any business activities other than as contemplated by this Agreement, do not own, directly or indirectly, any ownership equity, profits or voting interest in any Person (other than Pubco’s 100% ownership of Merger Sub) and have no assets or Liabilities except those incurred in connection with this Agreement and the Ancillary Documents to which they are a party and the transactions contemplated hereby and thereby, and, other than their respective Organizational Documents, this Agreement and the Ancillary Documents to which they are a party, Pubco and Merger Sub are not party to or bound by any Contract.
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5.8 Foreign Private Issuer. Pubco is and shall be at all times commencing from the date thirty (30) days prior to the first filing of the Registration Statement with the SEC through the Closing, a “foreign private issuer” as defined in Rule 405 under the Securities Act.
5.9 Finders and Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission from Purchaser, Pubco, Merger Sub, or the Company or any of their respective Subsidiaries in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of Pubco or Merger Sub.
5.10 Investment Company Act. Pubco is not an “investment company” or, a Person directly or indirectly controlled by or acting on behalf of a person subject to registration and regulation as an “investment company”, in each case within the meanings of the Investment Company Act.
5.11 Information Supplied. None of the information supplied or to be supplied by Pubco or Merger Sub expressly for inclusion or incorporation by reference: (a) in any Current Report on Form 8-K or 6-K, and any exhibits thereto or any other report, form, registration or other filing made with any Governmental Authority (including the SEC) with respect to the Transactions or any Ancillary Documents; (b) in the Registration Statement; or (c) in the mailings or other distributions to Purchaser’s or Pubco’s shareholders and/or prospective investors with respect to the consummation of the Transactions or in any amendment to any of documents identified in (a) through (c), will, when filed, made available, mailed or distributed, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. None of the information supplied or to be supplied by Pubco or Merger Sub expressly for inclusion or incorporation by reference in any of the Signing Press Release, the Signing Filing, the Closing Filing and the Closing Press Release will, when filed or distributed, as applicable, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, neither Pubco nor Merger Sub makes any representation, warranty or covenant with respect to any information supplied by or on behalf of Purchaser, the Target Companies, or any of their respective Affiliates. All documents that Pubco is responsible for filing with the SEC in connection with the Transactions will comply as to form and substance in all material respects with the applicable requirements of the Securities Act and the Exchange Act.
5.12 Exclusivity of Representations and Warranties. Except as otherwise expressly provided in this ARTICLE V, Pubco, and Merger Sub hereby expressly disclaim and negate any other express representation or warranty whatsoever (whether at Law or in equity) with respect to Pubco, and Merger Sub, and any matter relating to any of them, including their affairs, the condition, value or quality of the assets, liabilities, financial condition or results of operations, or with respect to the accuracy or completeness of any other information made available to Purchaser, its Affiliates or any of their respective Representatives by, or on behalf of, Pubco, or Merger Sub, and any such representations or warranties are expressly disclaimed. Without limiting the generality of the foregoing, except as expressly set forth in this Agreement, none of Pubco or Merger Sub nor any other person on behalf of Pubco or Merger Sub has made or makes, any representation or warranty with respect to any projections, forecasts, estimates or budgets made available to Purchaser, its Affiliates or any of their respective Representatives of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of Pubco or Merger Sub (including the reasonableness of the assumptions underlying any of the foregoing), whether or not included in any management presentation or in any other information made available to Purchaser, its Affiliates or any of their respective Representatives or any other Person, and any such representations or warranties are expressly disclaimed.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
With respect to the Fundamental Representations, except as set forth in the disclosure schedules delivered by the Company to Purchaser on the date hereof (the “Company Disclosure Schedule”), the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer, or with respect to the representations and warranties of the Company that are not Fundamental Representations, except as disclosed in the Company Disclosure Schedule or the Company VDR, the Company hereby represents and warrants to Purchaser, as of the date hereof and as of the Closing, as follows:
6.1 Organization and Standing. The Company is an exempted company duly organized, validly existing and in good standing under the Laws of England and Wales. The Target Companies have all requisite corporate or other entity power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Each of the Target Companies is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization and has all requisite corporate or other entity power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Each Target Company is duly qualified or licensed and in good standing in the jurisdiction in which it is incorporated or registered and in each other jurisdiction where it does business or operates to the extent that the character of the property owned, or leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so licensed or qualified would not reasonably be expected to be, individually or in the aggregate, material to the Target Companies, taken as a whole. The Company has provided to Purchaser accurate and complete copies of the Organizational Documents of the Target Companies, each as amended to date and as currently in effect. No Target Company is in violation of any provision of its Organizational Documents in any material respect. No order has been made, petition presented or resolution passed for the winding up of any Target Company. No administrator has been appointed in respect of any Target Company and no receiver has been appointed over the whole or any part of the property, assets or undertaking of any Target Company. No voluntary arrangement has been proposed or approved under Part I of the Insolvency Act 1986. No compromise, composition, scheme of arrangement or reconstruction under Part 26 or Part 26A of the UK Act or any other compromise or arrangement with creditors generally (or any class of them) has been made, proposed, agreed to or sanctioned in respect of any Target Company.
6.2 Authorization; Binding Agreement. The Company has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Document to which it is a party, to perform the Company’s obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each Ancillary Document to which the Company is a party and the consummation of the transactions contemplated hereby and thereby, (a) have been (or, in the case of Ancillary Documents to be entered into at or prior to Closing, will be) duly and validly authorized by the board of directors and/or shareholders of the Company in accordance with the Company’s Organizational Documents, the UK Act and any other applicable Law, and (b) other than any Company Shareholder approval required to consummate the Transactions, no other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the transactions contemplated hereby and thereby (other than the filing and recordation of appropriate merger documents as required by the Cayman Act). This Agreement has been, and each Ancillary Document to which the Company is a party shall be when delivered, duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement and any such Ancillary Document by the other parties hereto and thereto, constitutes, or when delivered shall constitute, the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.
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6.3 Capitalization.
(a) As of the date of this Agreement, (i) the Company has 108,436,242 Company Ordinary Shares issued and outstanding, and comprises the whole of the Company’s allotted and issued share capital. The Exchange Shares to be delivered by the Company Shareholders to Pubco at the Closing constitute all of the issued and outstanding shares and other equity interests of the Company. All of the outstanding Company Ordinary Shares have been duly authorized, are fully paid and non-assessable and not in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the UK Act, any other applicable Law, the Company’s Organizational Documents or any Contract to which the Company is a party or by which the Company or its securities are bound. The Company does not directly or indirectly hold any of its shares or other equity interests in treasury. There is no dispute concerning the Company Shareholders’ title to the Exchange Shares or their ability to sell the same and no other Person has claimed, or to the knowledge of the Company is reasonably likely to claim, to have title to, or to be entitled to, any interest in the Exchange Shares. Save as contemplated in this Agreement, no Person has any right to be issued and allotted shares in the Company.
(b) There are no Company Convertible Securities, or preemptive rights or rights of first refusal or first offer, nor are there any Contracts, commitments, arrangements or restrictions to which the Company or, to the Knowledge of the Company, any of its shareholders are a party or bound relating to any equity securities of the Company, whether or not outstanding. There are no outstanding or authorized equity appreciation, phantom equity or similar rights with respect to the Company. There are no voting trusts, proxies, shareholder agreements or any other agreements or understandings with respect to the voting of the Company’s equity interests. Except as set forth in the Company’s Organizational Documents, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any of its equity interests or securities, nor has the Company granted any registration rights to any Person with respect to its equity securities. All of the Company’s securities have been granted, offered, sold and issued in compliance with all applicable securities Laws in all material respects. As a result of the consummation of the Transactions, no equity interests of the Company are issuable and no rights in connection with any interests, warrants, rights, options or other securities of the Company accelerate or otherwise become triggered (whether as to vesting, exercisability, convertibility or otherwise).
(c) Except as disclosed in the Company Financials, since January 1, 2022, the Company has not declared or paid any distribution or dividend in respect of its equity interests and has not repurchased, redeemed or otherwise acquired any equity interests of the Company, and the board of directors of the Company has not authorized any of the foregoing.
6.4 Subsidiaries. Schedule 6.4(a) sets forth the legal name and jurisdiction of organization of each Subsidiary of the Company. All of the outstanding equity securities of each Subsidiary of the Company are owned by the Company or another Subsidiary of the Company and have been validly and duly authorized, fully paid, non-assessable and free of any Liens, other than those imposed by such Subsidiary’s Organizational Documents or as would not be material to the Target Companies, taken as a whole. There are no outstanding or authorized options, warrants, rights, agreements, subscriptions, convertible securities or commitments to which any Subsidiary of the Company is a party or which are binding upon any Subsidiary of the Company providing for the issuance or redemption of any equity interests of any Subsidiary of the Company. No Target Company is a participant in any joint venture, partnership or similar arrangement.
6.5 Governmental Approvals. Except as otherwise described in Schedule 6.5, no Consent of or notice to any Governmental Authority on the part of any Target Company is required to be obtained or made in connection with the execution, delivery or performance by the Company of this Agreement or any Ancillary Documents or the consummation by the Company of the transactions contemplated hereby or thereby other than (a) such filings as are expressly contemplated by this Agreement, (b) pursuant to Antitrust Laws or (c) where the failure to obtain or much such Consents or to make such notices would not reasonably be expected to be, individually or in the aggregate, material to the Target Companies, taken as a whole, or the ability of the Company to perform its obligations under this Agreement or the Ancillary Documents to which it is or required to be a party or otherwise bound.
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6.6 Non-Contravention. Except as otherwise described in Schedule 6.6, the execution and delivery by the Company (or any other Target Company, as applicable) of this Agreement and each Ancillary Document to which any Target Company is party, the consummation by any Target Company of the transactions contemplated hereby and thereby and compliance by any Target Company with any of the provisions hereof and thereof, will not (a) conflict with or violate any provision of any Target Company’s Organizational Documents, (b) subject to obtaining the Consents from Governmental Authorities referred to in Section 6.5, the waiting periods referred to therein having expired, and any condition precedent to such Consent or waiver having been satisfied, conflict with or violate any Law, Order or Consent applicable to any Target Company or any of its material properties or assets, (c) violate, conflict with any provision of, or result in the breach of, result in the loss of any right or benefit, or cause acceleration, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, modification, or acceleration) under, give rise to any obligation to make payments or provide compensation under, give rise to any obligation to obtain any third party Consent or provide any notice to any Person or (d) result in the creation of any Lien upon any of the properties or assets of any Target Company under (other than Permitted Liens), any of the terms, conditions or provisions of any Company Material Contract, except in the cases of clauses (b), (c) and (d), as would not reasonably be expected to be, individually or in the aggregate, material to the Target Companies, taken as a whole, or the ability of the Company to perform its obligations under this Agreement or the Ancillary Documents to which it is or required to be a party or otherwise bound.
6.7 Financial Statements.
(a) As used herein, the term “Company Financials” means (i) the audited consolidated financial statements of the Target Companies (including, in each case, any related notes thereto), consisting of the consolidated statements of financial position of the Target Companies as of December 31, 2021 and December 31, 2020, and the related audited consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the fiscal years then ended, each audited by a PCAOB qualified auditor in accordance with PCAOB standards (the “Audited Company Financials”) and (ii) the unaudited financial statements, consisting of the consolidated statement of financial position of the Target Companies as of September 30, 2022 (the “Interim Balance Sheet Date”) and the related consolidated statement of profit or loss and other comprehensive income, changes in equity and cash flows for the nine (9) months then ended. The Audited Company Financials, when delivered by the Company, (i) will have been prepared from, and will be in accordance in all material respects, with, the books and records of the Target Companies as of the times and for the periods referred to therein, (ii) were prepared in accordance with IFRS, consistently applied throughout and among the periods involved (except that the unaudited statements exclude the footnote disclosures and other presentation items required for IFRS and exclude year-end adjustments which will not be material in amount), (iii) when included in the Registration Statement for filing with the SEC following the date of this Agreement, will comply in all material respects with all applicable accounting requirements under the Securities Act and the rules and regulations of the SEC, in each case, as in effect as of the respective dates thereof and (iv) fairly present in all material respects the consolidated financial position of the Target Companies as of the respective dates thereof and the consolidated results of the operations and cash flows of the Target Companies for the periods indicated. No Target Company has ever been subject to the reporting requirements of Sections 13(a) and 15(d) of the Exchange Act.
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(b) Each Target Company maintains accurate books and records reflecting its assets and Liabilities in all material respects and maintains proper and adequate internal accounting controls that, to the Knowledge of the Company, provide reasonable assurance that (i) such Target Company does not maintain any off-the-book accounts and that such Target Company’s assets are used only in accordance with such Target Company’s management directives, (ii) transactions are executed with management’s authorization and (iii) transactions are recorded as necessary to permit preparation of the financial statements of such Target Company and to account for such Target Company’s assets. No Target Company has been subject to or involved in any material fraud that involves management or other employees who have a significant role in the internal controls over financial reporting of any Target Company. In the past three (3) years, no Target Company or its Representatives has received any written complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of any Target Company or its internal accounting controls, including any material written complaint, allegation, assertion or claim that any Target Company has engaged in questionable accounting or auditing practices.
(c) All financial projections with respect to the Target Companies that were delivered by or on behalf of the Company to Purchaser or Pubco or their respective Representatives were prepared in good faith using assumptions that the Company believes to be reasonable.
6.8 Absence of Certain Changes. Except as set forth on Schedule 6.8, since December 31, 2021 through the date of this Agreement, each Target Company has (a) conducted its business only in the ordinary course of business consistent with past practice and (b) not been subject to a Material Adverse Effect.
6.9 Compliance with Laws. Except for (a) compliance with Environmental Laws (as to which certain representations and warranties are made pursuant to Section 6.20), (b) compliance with Tax Laws (as to which certain representations and warranties are made pursuant to Section 6.14), and (c) compliance with Laws relating to Intellectual Property (as to which certain representations and warranties are made pursuant to Section 6.13(b)), for the three (3) year period immediately preceding the date of this Agreement, and as would not be material to the Target Companies, taken as a whole, no Target Company is or has been in material non-compliance with, or in material default or violation of, nor has any Target Company received, since January 1, 2019, any written notice from a Governmental Authority of any non-compliance with any applicable Laws by which it or any of its properties, assets, employees, business, products or operations are or were bound or affected. For purposes of this Section 6.9, “material” shall mean having or being reasonably expected to have a Material Adverse Effect on the Target Companies taken as a whole.
6.10 Company Permits. Each Target Company holds all material Permits necessary to lawfully conduct its business as presently conducted and to own, lease and operate its assets and properties (collectively, the “Company Permits”), except in each case as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Target Companies, taken as a whole. The Company has made available to Purchaser true, correct and complete copies of all material Company Permits, all of which are listed in the Company VDR. Except as would not reasonably be expected to be, individually or in the aggregate, material to the Target Companies, taken as a whole, all of the Company Permits are in full force and effect and no suspension or cancellation of any of the Company Permits is pending or, to the Knowledge of the Company, threatened. No Target Company is in violation in any material respect of the terms of any Company Permit, and no Target Company has received any written notice of any Actions relating to the revocation or modification of any Company Permit, except in each case as would not reasonably be expected to be, individually or in the aggregate, material to the Target Companies, taken as a whole.
6.11 Litigation. Except as described on Schedule 6.11(a), except with respect to Intellectual Property (as to which certain representations and warranties are made pursuant to Section 6.13(b)) and except as would reasonably be expected not to have, either individually or in the aggregate, a Material Adverse Effect on the Target Companies, taken as a whole, there is no (a) material Action of any nature currently pending or, to the Knowledge of the Company, threatened, and no such material Action has been brought in the past three (3) years or (b) Order now pending or outstanding or that was rendered by a Governmental Authority in the past three (3) years, in either case of (a) or (b) by or against any Target Company, its current or former directors or officers (provided that any litigation involving the directors or officers of a Target Company must be related to such Target Company’s business or assets), its business, equity securities or assets. None of the current or former officers of any Target Company have been charged with, indicted for, arrested for, or convicted of any felony or any crime involving fraud during the past five (5) years.
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6.12 Material Contracts.
(a) The Company VDR sets forth a true, correct and complete list of all Contracts described in clauses (i) through (xii) below to which any Target Company is a party or by which any Target Company, or any of its properties or assets are bound (each such Contract, other than a Company Benefit Plan, a “Company Material Contract”) and the Company has made available to Purchaser, true, correct and complete copies of, each:
(i) contains covenants that materially limit the ability of any Target Company (A) (1) to compete in any line of business, with any Person or in any geographic area, (2) to sell or provide any service or product or (3) to solicit any Person, other than in respect of customary non-disclosure agreements entered into by any Target Company in the ordinary course of business or (B) to purchase or acquire an interest in any other Person;
(ii) providing for the formation of any joint venture or profit-sharing agreement or arrangement;
(iii) evidences Indebtedness (whether incurred, assumed, guaranteed or secured by any asset) of any Target Company having an outstanding principal amount in excess of $250,000 between the Company and any Subsidiary;
(iv) was entered into during the past three (3) years involving the acquisition or disposition, directly or indirectly (by merger or otherwise), of assets with an aggregate value in excess of $5,000,000 (other than Contracts (A) in which the applicable acquisition or disposition has been consummated and there are no material obligations ongoing, (B) in the ordinary course of business consistent with past practice or (C) between the Company and any Subsidiaries);
(v) relates to any merger, consolidation or other business combination with any other Person or the acquisition or disposition of any other entity or its business or material assets or the sale of any Target Company, its business or material assets;
(vi) by its terms, individually or with all related Contracts, calls for aggregate payments or receipts by the Target Companies under such Contract or Contracts of at least $250,000 per year or $500,000 in the aggregate;
(vii) obligates the Target Companies to provide continuing indemnification or a guarantee of obligations of a third party after the date hereof in excess of $500,000;
(viii) is between any Target Company and any directors, officers or employees of a Target Company (other than at-will employment arrangements, employee confidentiality and invention assignment agreements or equity or incentive equity agreements with employees entered into in the ordinary course of business consistent with past practice) or any Related Person;
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(ix) obligates the Target Companies to make any capital commitment or expenditure in excess of $500,000 (including pursuant to any joint venture);
(x) relates to a material settlement entered into within two (2) years prior to the date of this Agreement or under which any Target Company has outstanding obligations (other than customary confidentiality obligations) that would be reasonably likely to involve payments in excess of $500,000 after the date of this Agreement;
(xi) provides another Person (other than another Target Company or any shareholder, manager, director or officer of any Target Company) with a power of attorney; or
(xii) the termination of which, would be otherwise material to the Target Companies, taken as a whole and not covered by clauses (i) through (x) above.
(b) Except as set forth in Schedule 6.12(b), with respect to each Company Material Contract: (i) such Company Material Contract is valid and binding and enforceable in all respects against such Target Company party thereto and, to the Knowledge of the Company, each other party thereto, and is in full force and effect (except, in each case, as such enforcement may be limited by the Enforceability Exceptions), in each case, except as would not be reasonably expected to be, individually or in the aggregate, material to the Target Companies, taken as a whole; (ii) the consummation of the Transactions will not affect the validity or enforceability of any Company Material Contract; (iii) the Target Companies are not in breach of or default under the terms of any Company Material Contract and, to the Knowledge of the Company, no other party to any Company Material Contract is in breach of or default under the terms of any Company Material Contract, and no event has occurred or not occurred through any of the Target Companies’ action or inaction or, to the Knowledge of the Company, through the action or inaction of any third party, that with notice or the lapse of time or both would constitute a breach of or default under the terms of any Company Material Contract, in each case, except as would not reasonably expected to be, individually or in the aggregate, material to the Target Companies, taken as a whole.
6.13 Intellectual Property.
(a) The Company VDR sets forth all U.S. and foreign granted or issued Patents, registered Trademarks, registered Copyrights, domain name registration and filed and pending applications for the grant, issuance or registration of any Patent, Trademark, Copyright or domain name in each case for which a Target Company is the owner, applicant or assignee of record as of the date hereof (“Company Registered IP”), specifying as to each item, as applicable: (A) the title, (B) the owner of the item, (C) the jurisdictions in which the item is granted, issued or registered or in which an application for grant, issuance or registration has been filed and (D) the grant, issuance, registration or application numbers and dates. Each Target Company (i) owns, free and clear of all Liens (other than Permitted Liens) any and all Intellectual Property owned, in whole or in party by such Target Company (“Company IP”) or (ii) has valid and enforceable licenses to all other Intellectual Property that is used in and material to the conduct of such Target Company’s business as currently conducted. Except as set forth in the Company VDR, all Company Registered IP is owned exclusively by the applicable Target Company without obligation to pay royalties, licensing fees or other fees (except for registration, maintenance, renewal and other official fees with respect to the Company Registered IP that become due after the date hereof), or otherwise account to any third party with respect to such Company Registered IP.
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(b) To the Company’s Knowledge, no Action is pending or threatened in writing against a Target Company that challenges the validity, enforceability or ownership of, or, to the extent that any Target Company does any of the following in its business as currently conducted, such Target Company’s right to use, sell, license or sublicense, or that otherwise relates to, any material Company IP, nor, to the Knowledge of the Company, is there any reasonable basis for any such Action. In the past three (3) years, no Target Company has received any written notice or written claim asserting any material infringement, misappropriation, violation, dilution or unauthorized use of the Intellectual Property of any other Person as a consequence of the business activities of any Target Company as currently conducted. There are no Orders to which any Target Company is a party or is otherwise bound that restrict the rights of a Target Company to use, transfer, license or enforce any Intellectual Property owned by a Target Company. No Target Company is currently infringing any Intellectual Property of any other Person in any material respect in connection with the use of any Company IP or, to the Knowledge of the Company, otherwise in connection with the conduct of the respective businesses of the Target Companies as currently conducted. To the Company’s Knowledge, no third party is currently, or in the past three (3) years has been, infringing upon, misappropriating or otherwise violating any Company IP in any material respect.
(c) All officers, directors, employees and independent contractors (to the extent any such independent contractor had access to any Company IP) of a Target Company (and each of their respective Affiliates) have assigned to the Target Companies ownership of all Intellectual Property arising from the services performed for a Target Company by such Person (or such ownership vested in such Target Company by operation of Law). In the past three (3) years, no Target Company has received any written claim by any current or former officers, employees or independent contractors of a Target Company alleging any ownership interest of any such Person in any Company IP. To the Knowledge of the Company, in the past three (3) years, there has been no material violation of a Target Company’s policies or practices related to the protection of any Company IP or any confidentiality or nondisclosure Contract relating to any Company IP. Each Target Company has taken reasonable security measures designed to protect the secrecy and confidentiality of all material trade secrets, know-how and confidential information comprised in the Company IP.
(d) Except as would not, individually or in the aggregate, have a Material Adverse Effect on the Target Companies taken as a whole, to the Knowledge of the Company, in the past three (3) years, (i) no Person has obtained unauthorized access to third party information and data (including Personal Data) in the possession of a Target Company, nor (ii) has there been any other material compromise of the security or integrity of such information or data. Except as would not, individually or in the aggregate, have a Material Adverse Effect on the Target Companies taken as a whole, to the Knowledge of the Company, each Target Company has complied in all material respects with its own Privacy Policies, if any, each with respect to the Target Companies’ collection, processing and use of Personal Data.
(e) The consummation of any of the Transactions will not result in any acceleration of any payments by any Target Company with respect to any material Intellectual Property licensed to a Target Company under a Company IP License, except as would not reasonably expected to be, individually or in the aggregate, material to the Target Companies, taken as a whole. Following the Closing, the Company shall be permitted to exercise, directly or indirectly through its Subsidiaries, all of the Target Companies’ rights, except as would not reasonably expected to be, individually or in the aggregate, material to the Target Companies, taken as a whole, under Company IP Licenses to the same extent that the Target Companies would have been able to exercise had the Transactions not occurred, without the payment of any additional amounts or consideration other than ongoing fees, royalties or payments which the Target Companies would otherwise be required to pay in the absence of such transactions.
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6.14 Taxes and Returns.
(a) Each Target Company has or will have timely filed, or caused to be timely filed, all applicable material U.S. federal, state, local and non-U.S. Tax Returns required to be filed by it (taking into account all available extensions), and all such Tax Returns are true, accurate and complete in all material respects, and has paid, collected or withheld, or caused to be paid, collected or withheld, all material Taxes required to be paid, collected or withheld, other than such Taxes being contested in good faith for which adequate reserves in the Company Financials have been established.
(b) There is no Action currently pending or, to the Knowledge of the Company, threatened in writing against a Target Company by a Governmental Authority in a jurisdiction where a Target Company does not file Tax Returns that it is or may be subject to material taxation by that jurisdiction.
(c) No Target Company is currently being audited by any Taxing Authority or has been notified in writing by any Taxing Authority that any such audit is currently contemplated or currently pending. There are no claims, assessments, audits, examinations, investigations or other Actions currently pending against a Target Company in respect of any material Tax, and no Target Company has been notified in writing of any proposed material Tax claims or assessments against it that remains unpaid (other than, in each case, claims or assessments for which adequate reserves in the Company Financials have been established).
(d) There are no Liens with respect to any Taxes upon any Target Company’s assets, other than Permitted Liens.
(e) No Target Company has any outstanding waivers or extensions of any applicable statute of limitations to assess any material amount of Taxes. There are no outstanding requests by a Target Company for any extension of time within which to file any material Tax Return or within which to pay any material amount of Taxes shown to be due on any material Tax Return, in each case, except for any extensions not requiring the consent of a Taxing Authority.
(f) No Target Company has made any change in a material Tax accounting method (except as required by a change in Law).
(g) No Target Company has requested, or is the subject of or bound by any private letter ruling, technical advice memorandum, closing agreement or similar ruling, memorandum or agreement with any Governmental Authority with respect to any material amount of Taxes, nor is any such request outstanding.
(h) Notwithstanding anything to the contrary in this Agreement, this Section 6.14 contains the sole representations and warranties of the Company concerning Taxes. Notwithstanding any representation or warranty in this Agreement (including the representations and warranties set forth in this Section 6.14), no representation or warranty is being made as to the use or availability of any Tax attribute or credit of any Target Company in any taxable period (or portion thereof) beginning on the day immediately after the Closing Date.
6.15 Real Property. The Company VDR contains an accurate list of all material leases, material subleases and material occupancy agreements (collectively, the “Company Real Property Leases”). The Company has made available to Purchaser an accurate copy of each Company Real Property Lease. The Company Real Property Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect, subject to Enforceability Exceptions. To the Knowledge of the Company, the Company Real Property Leases are not subject to any financial charge, security interest, agreement for sale, option to acquire, right of pre-emption or right of first refusal.
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6.16 Personal Property. Except as (a) set forth on Schedule 6.16 or (b) as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Target Companies, taken as a whole, each item of Personal Property which is currently owned, used or leased by a Target Company with a book value or fair market value of greater than $100,000 (“Company Personal Property Leases”) are in good operating condition and repair (reasonable wear and tear excepted consistent with the age of such items) and are suitable for their intended use in the business of the Target Companies. The operation of a Target Company’s business as it is now conducted or presently proposed to be conducted is not in any material respect dependent upon the right to use the Personal Property of Persons other than a Target Company, except for such Personal Property that is owned, leased or licensed by or otherwise contracted to a Target Company. The Company has provided to Purchaser a true and complete copy of each of the Company Personal Property Leases, and in the case of any oral Company Personal Property Lease, a written summary of the material terms of such Company Personal Property Lease. The Company Personal Property Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect. To the Knowledge of the Company, no event has occurred which (whether with or without notice, lapse of time or both or the happening or occurrence of any other event) would constitute a default on the part of a Target Company or any other party under any of the Company Personal Property Leases, and no Target Company has received notice of any such condition.
6.17 Title to Assets. Except with respect to Intellectual Property (as to which certain representations and warranties are made pursuant to Section 6.13(a) and Section 6.13(b)), each Target Company has good and marketable title to, or a valid leasehold interest in or right to use, all of its material tangible assets and properties, free and clear of all Liens other than (a) Permitted Liens, (b) the rights of lessors under leasehold interests and (c) Liens specifically identified on the consolidated balance sheet of the Target Companies as of the Interim Balance Sheet Date. The material tangible assets (excluding Intellectual Property) of the Target Companies constitute all of the material tangible assets that are used in the operation of the businesses of the Target Companies as it is now conducted or that are used or held by the Target Companies for use in the operation of the businesses of the Target Companies.
6.18 Employee Matters.
(a) Except as set forth in Schedule 6.18(a), no Target Company is a party to any collective bargaining agreement or other Contract covering any group of employees, labor organization or other representative of any of the employees of any Target Company, and the Company has no Knowledge of any activities or proceedings of any labor union or other party to organize or represent such employees. There has not occurred or, to the Knowledge of the Company, been threatened any strike, slow-down, picketing, work-stoppage, or other similar labor activity with respect to any such employees. No current officer of a Target Company has provided any Target Company written or, to the Knowledge of the Company, oral notice of his or her plan to terminate his or her employment with any Target Company.
(b) Except as set forth in Schedule 6.18(b), each Target Company (i) is and has been in compliance in all material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment, employee classification, health and safety and wages and hours, and other Laws relating to discrimination, disability, labor relations, hours of work, payment of wages and overtime wages, pay equity, immigration, workers compensation, working conditions, employee scheduling, occupational safety and health, family and medical leave, and employee terminations, and has not received written or, to the Knowledge of the Company, oral notice that there is any pending Action involving unfair labor practices against a Target Company, (ii) is not liable for any material past due arrears of wages or any material penalty for failure to comply with any of the foregoing, and (iii) is not liable for any material payment to any Governmental Authority with respect to unemployment compensation benefits, social security or other benefits or obligations for employees, independent contractors or consultants (other than routine payments to be made in the ordinary course of business and consistent with past practice). Except as set forth in Schedule 6.18(b), there are no Actions pending or, to the Knowledge of any Target Company, threatened against a Target Company brought by or on behalf of any applicant for employment, any current or former employee, any Person alleging to be a current or former employee, or any Governmental Authority, relating to any such Law or regulation, or alleging breach of any express or implied contract of employment, wrongful termination of employment, or alleging any other discriminatory, wrongful or tortious conduct in connection with the employment relationship.
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6.19 Benefit Plans.
(a) Set forth on Schedule 6.19(a) is a true and complete list of each material Benefit Plan of a Target Company (each, a “Company Benefit Plan”) and denotes with an asterisk each material Non-U.S. Plan. No Target Company has ever maintained or contributed to (or had an obligation to contribute to) any Benefit Plan, which is not a Foreign Plan.
(b) With respect to each material Company Benefit Plan listed on Schedule 6.19(a), the Company has provided to Purchaser accurate and complete copies, if applicable, of: (i) all Company Benefit Plan documents and agreements and related trust agreements or annuity Contracts (including any amendments, modifications or supplements thereto); (ii) the most recent summary plan descriptions and summary of material modifications thereto; (iii) the most recent annual and periodic accounting of plan assets; (iv) the most recent actuarial valuation; and (v) all material communications with any Governmental Authority within the last three (3) years.
(c) With respect to each Company Benefit Plan: (i) such Company Benefit Plan has been administered and enforced in all material respects in accordance with its terms and the requirements of all applicable Laws, and has been maintained, where required, in good standing with applicable regulatory authorities and Governmental Authorities; (ii) no breach of fiduciary duty has occurred; (iii) no Action is pending, or to the Company’s Knowledge, threatened (other than routine claims for benefits arising in the ordinary course of administration); (iv) all contributions, premiums and other payments (including any special contribution, interest or penalty) required to be made with respect to a Company Benefit Plan have been timely made; (v) all benefits accrued under any unfunded Company Benefit Plan has been paid, accrued, or otherwise adequately reserved in accordance with IFRS and are reflected on the Company Financials; and (vi) no Company Benefit Plan provides for retroactive increases in contributions, premiums or other payments in relation thereto. No Target Company has incurred any obligation in connection with the termination of, or withdrawal from, any Company Benefit Plan.
(d) Except to the extent required by applicable Law, no Target Company provides health or welfare benefits to any former or retired employee or is obligated to provide such benefits to any active employee following such employee’s retirement or other termination of employment or service.
(e) All Company Benefit Plans can be terminated at any time as of or after the Closing Date without resulting in any material Liability to the Surviving Company Subsidiary or the Purchaser or their respective Affiliates for any additional contributions, penalties, premiums, fees, fines, excise taxes or any other charges or liabilities; provided that the foregoing shall not include arrangements entered into by the Target Companies in connection with the Transactions.
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6.20 Environmental Matters. Except as set forth in Schedule 6.20:
(a) Each Target Company is, and in the three (3) year period immediately preceding the date of this Agreement has been, in compliance in all material respects with all applicable Environmental Laws, including obtaining, maintaining in good standing and complying in all material respects with all Permits required for its business and operations by Environmental Laws (“Environmental Permits”), except where such non-compliance would not reasonably be expected to be material to the Target Companies, taken as a whole. In the three (3) year period immediately preceding the date of this Agreement, no Action is pending or, to the Knowledge of the Company, threatened in writing to revoke, modify or terminate any such Environmental Permit, and, to the Knowledge of the Company, no facts, circumstances or conditions currently exist that could adversely affect such continued compliance with Environmental Laws and Environmental Permits or require capital expenditures to achieve or maintain such continued compliance with Environmental Laws and Environmental Permits, except where such non-compliance would not reasonably be expected to be material to the Target Companies, taken as a whole.
(b) In the three (3) year period immediately preceding the date of this Agreement, no Target Company is the subject of any outstanding Order or Contract with any Governmental Authority or other Person in respect of any (i) Environmental Laws, (ii) Remedial Action or (iii) Release of a Hazardous Material, except, in each case, as would not, individually or in the aggregate, be reasonably expected to be material to the Target Companies, taken as a whole.
(c) In the three (3) year period immediately preceding the date of this Agreement, no Action has been made or is pending, or to the Knowledge of the Company, threatened in writing against any Target Company or any assets of a Target Company alleging either or both that a Target Company may be in material violation of any Environmental Law or Environmental Permit or may have any material Liability under any applicable Environmental Law, except, in each case, as would not, individually or in the aggregate, be reasonably expected to be material to the Target Companies, taken as a whole. To the Knowledge of the Company, no fact, circumstance, or condition exists in respect of any Target Company or any property currently or formerly owned, operated, or leased by any Target Company or any property to which a Target Company arranged for the disposal or treatment of Hazardous Materials that could reasonably be expected to result in a Target Company incurring any material environmental Liabilities.
(d) In the three (3) year period immediately preceding the date of this Agreement, no Target Company has manufactured, treated, stored, disposed of, arranged for or permitted the disposal of, generated, handled or released any Hazardous Material, or owned or operated any property or facility, in a manner that has given or would reasonably be expected to give rise to any material Liability or obligation under applicable Environmental Laws, except, in each case, as would not, individually or in the aggregate, be reasonably expected to be material to the Target Companies, taken as a whole.
6.21 Transactions with Related Persons. Except as set forth on Schedule 6.21, there are no material contracts or Contracts between any Target Company, on the one hand, and any Affiliate of any Target Company, present officer or director of any Target Company, beneficial owner (within the meaning of Section 13(d) of the Exchange Act) of Company Ordinary Shares constituting, as of the date of this Agreement, more than 5% of the total number of Company Ordinary Shares on a fully diluted basis, calculated on the date of this Agreement (each of the foregoing, a “Related Person”), on the other hand, other than for (a) Contracts and arrangements related or incidental to any Related Person’s employment or retention as a director or other service provider by a Target Company (including compensation, benefits and advancement or reimbursement of expenses), (b) loans to employees or other service providers of a Target Company in the ordinary course of business consistent with applicable Target Company policies and arrangements related or incidental thereto and (c) Contracts relating to a Related Person’s status as a holder of Company Ordinary Shares.
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6.22 Insurance. As of the date of this Agreement, the Target Companies are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged. All premiums due and payable under all such insurance policies have been timely paid and the Target Companies are otherwise in material compliance with the terms of such insurance policies, except for such non-compliance as would not, individually or in the aggregate, reasonably be expected to be material to the Target Companies or the ability of the Company to perform its obligations under this Agreement or the Ancillary Documents to which it is or required to be a party or otherwise bound. No Target Company has any self-insurance or co-insurance programs. Each such insurance policy is legal, valid, binding, enforceable and in full force and effect. In the past three (3) years, no Target Company has received any notice from, or on behalf of, any insurance carrier relating to or involving any adverse change or any change other than in the ordinary course of business, in the conditions of insurance, any refusal to issue an insurance policy or non-renewal of a policy. No Target Company has been refused any insurance coverage sought or applied for, and no Target Company has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers at a cost that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect with respect to the Target Companies.
6.23 Certain Business Practices.
(a) During the past three (3) years, no Target Company, nor to the Knowledge of the Company, any of their respective Representatives acting on their behalf, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political parties or campaigns or violated any provision of the U.S. Foreign Corrupt Practices Act of 1977 or any other applicable local or foreign anti-corruption or bribery Law or (iii) made any other unlawful payment.
(b) To the Knowledge of the Company, the Target Companies are currently and have been, in the past three (3) years, in material compliance with anti-money laundering laws, regulations, rules and guidelines by any Governmental Authority in any applicable jurisdiction, and no Action involving a Target Company with respect to any of the foregoing is pending or, to the Knowledge of the Company, threatened.
(c) No Target Company or any of their respective directors or officers, or, to the Knowledge of the Company, any other Representative acting on behalf of a Target Company is currently identified on the specially designated nationals or other blocked person list or otherwise currently subject to any U.S. sanctions administered by OFAC, and no Target Company has in the past three (3) years, directly or indirectly, used any funds, or loaned, contributed or otherwise made available such funds to any Subsidiary, joint venture partner or other Person, in connection with any sales or operations in any country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to, or otherwise in violation of, any U.S. sanctions administered by OFAC.
6.24 Renewable Energy Matters.
(a) To the Knowledge of the Company, there are no provisions in any development plan materially adversely affecting the use or development of Projects in respect of which any Target Project SPV has entered into Project Documents.
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(b) No Target Project SPV has received written notice from any planning authority that the current use of any property is in material breach of planning laws, and to the knowledge of the Company, there are no circumstances outstanding which constitute a material breach of planning laws.
(c) No Target Project SPV has received written notice of any breach of any Project Document and to the Knowledge of the Company, there (i) is no material breach of any Project Document; (ii) are no grounds for termination of any Project Document; (iii) are no events which have occurred that will constitute or result in a material default of any obligation under a Project Document.
(d) To the Knowledge of the Company, no Target Project SPV has received from any counterparty to any Project Document written notice of its intention to terminate such Project Document.
(e) To the Knowledge of the Company, no Target Project SPV is in material breach of any of the Project Documents.
(f) Except for the Project Documents, there are no contracts, arrangements or licenses placing obligations or liabilities on any Target Project SPV in respect of a Project which exceeds $250,000 or equivalent.
(g) No Power Purchase Agreement has been entered into in respect of any Project.
6.25 Investment Company Act. No Target Company is an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company,” or required to register as an “investment company,” in each case within the meaning of the Investment Company Act.
6.26 Finders and Brokers. Except as set forth in the Company VDR, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission from any Target Company or any of their respective Subsidiaries in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of any Target Company.
6.27 Independent Investigation. Notwithstanding anything contained in this Agreement, the Company and its respective directors, managers, officers, employees, equityholders, partners, members and representatives, acknowledge and agree that the Company has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of Purchaser, and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of Purchaser for such purpose. The Company acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, it has relied solely upon its own investigation and the express representations and warranties of Purchaser set forth in this Agreement (including the related portions of Purchaser Disclosure Schedules) and in any certificate delivered to the Company pursuant hereto; and (b) neither Purchaser nor any of its Representatives have made any representation or warranty as to Purchaser or this Agreement, except as expressly set forth in this Agreement.
6.28 Information Supplied. None of the information supplied or to be supplied by the Company expressly for inclusion in the Registration Statement will, at the date on which the Registration Statement is first mailed to the Public Shareholders or at the time of Purchaser Extraordinary General Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.
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6.29 No Other Representations. Except for the representations and warranties expressly made by the Company in this ARTICLE VI (as modified by the Company Disclosure Schedules) or as expressly set forth in an Ancillary Document, no Target Company nor any other Person on its behalf makes any express representation or warranty with respect to any of the Target Companies, the Company Security Holders, the Company Ordinary Shares, the business of the Target Companies, or the Transactions or any of the other Ancillary Documents, and the Company hereby expressly disclaims any other representations or warranties, whether made by any Target Company or any of its Representatives. Except for the representations and warranties expressly made by the Company in this Article ARTICLE VI (as modified by the Company Disclosure Schedules) or in an Ancillary Document, the Company hereby expressly disclaims all liability and responsibility for any representation, warranty, projection, forecast, statement or information made, communicated or furnished (orally or in writing) to Purchaser or any of its Representatives (including any opinion, information, projection or advice that may have been or may be provided to Purchaser or any of its Representatives by any Representative of the Company), including any representations or warranties regarding the probable success or profitability of the businesses of the Target Companies.
ARTICLE VII
COVENANTS
7.1 Access and Information.
(a) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with Section 9.1 or the Closing (the “Interim Period”), subject to Section 7.13, the Company shall give, and shall cause its Representatives to give, Purchaser and its Representatives, at reasonable times during normal business hours and upon reasonable notice, reasonable access to all offices and other facilities and to all employees, properties, Contracts, agreements, books and records, financial and operating data and other existing information, of or pertaining to the Target Companies, as Purchaser or its Representatives may reasonably request regarding the Target Companies and their respective businesses, assets, Liabilities, financial condition, prospects, operations, management, employees and other aspects and cause each of the Company’s Representatives to reasonably cooperate with Purchaser and its Representatives in their investigation; provided, however, that Purchaser and its Representatives shall conduct any such activities in such a manner as not to unreasonably interfere with the business or operations of the Target Companies, including conducting any invasive or intrusive investigations; provided, further, that Purchaser and its Representatives shall not, without the prior written consent of the Company, make inquiries of Persons having business relationships with the Company (including suppliers, customers and vendors) regarding the Company or such business relationships. Notwithstanding anything to the contrary in this Agreement, no Target Company shall be required to disclose any information to Purchaser or its Representatives to the extent such disclosure would, in their reasonable determination (i) result in a loss of any attorney-client or other similar legal privilege (ii) contravene any applicable Law, (iii) contravene the confidentiality restrictions in any Contract to which the disclosing Person is a party; provided that the Target Companies shall use good faith efforts to provide access that complies with such confidentiality restriction or (iv) violate applicable Laws. Nothing in this Section 7.1 shall require any Target Company to disclose or provide access to any information which primarily relates to the negotiation of this Agreement or the transactions contemplated hereby. All information obtained pursuant to this Section 7.1 shall be subject to the Confidentiality Agreement.
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(b) During the Interim Period, subject to Section 7.13, Purchaser shall give, and shall cause its Representatives to give, the Company, Pubco, Merger Sub and their respective Representatives, at reasonable times during normal business hours and upon reasonable intervals and notice, access to all offices and other facilities and to all employees, properties, Contracts, agreements, commitments, books and records, financial and operating data and other information (including Tax Returns, internal working papers, client files, client Contracts and director service agreements), of or pertaining to Purchaser or its Subsidiaries, as the Company, Pubco, Merger Sub or their respective Representatives may reasonably request regarding Purchaser, its Subsidiaries and their respective businesses, assets, Liabilities, financial condition, prospects, operations, management, employees and other aspects (including unaudited quarterly financial statements, including a consolidated quarterly balance sheet and income statement, a copy of each material report, schedule and other document filed with or received by a Governmental Authority pursuant to the requirements of applicable securities Laws, and independent public accountants’ work papers (subject to the consent or any other conditions required by such accountants, if any)) and cause each of their respective Representatives to reasonably cooperate with the Company, Pubco, Merger Sub and their respective Representatives in their investigation; provided, however, that the Company, Pubco, Merger Sub and their respective Representatives shall conduct any such activities in such a manner as not to unreasonably interfere with the business or operations of Purchaser or any of its Subsidiaries. Notwithstanding the foregoing, Purchaser shall not be required to provide access to any information (i) the disclosure of which would violate any Law or (ii) the disclosure of which would constitute a waiver of attorney-client, attorney work product or other legal privilege.
7.2 Conduct of Business of the Company.
(a) During the Interim Period, except (i) as set forth on Schedule 7.2, (ii) to the extent necessary to comply with the Company’s obligations under this Agreement or any Ancillary Document, (iii) as necessary to ensure that the Company complies with all applicable Laws, including Antitrust Laws and mandatory measures enacted by any Governmental Authority in response to the COVID-19 pandemic or (iv) with Purchaser’s consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (A) conduct their respective businesses, in all material respects, in the ordinary course of business consistent with past practice, (B) materially comply with all material applicable Laws and (C) preserve intact, in all material respects, their respective business organizations, to keep available the services of their respective managers, directors, officers, employees and consultants and to preserve the possession, control and condition of their respective material assets, all as consistent with past practice; provided that failure to take any action which is prohibited by the provisions of Section 7.2(b) shall not constitute a breach of this Section 7.2(a); provided that no action by the Company or its Subsidiaries specifically permitted as an exception to the actions which are otherwise prohibited by the provisions of Section 7.2(b) shall be deemed a breach of this Section 7.2(a).
(b) Without limiting the generality of Section 7.2(a) and except as contemplated by the terms of this Agreement or the Ancillary Documents or as required by applicable Law, during the Interim Period, except (i) as set forth on Schedule 7.2, (ii) to the extent necessary to comply with the Company’s obligations under the Agreement or any Ancillary Document, (iii) as necessary to ensure that the Company or its Subsidiaries complies with applicable Law, including Antitrust Laws and mandatory measures enacted by any Governmental Authority in response to the COVID-19 pandemic or (iv) with the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall not, and shall cause its Subsidiaries not to:
(i) amend or otherwise change, in any material respect, its Organizational Documents, except as required by applicable Law, it being understood that routine administrative amendments (such as changes in directors or officers, changes in share capital that is otherwise permitted hereunder, and other similar amendments) are not material;
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(ii) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for any of its shares or other equity securities or securities of any class and any other equity-based awards; provided that none of (w) any issuance of equity securities so long as the relevant shares are automatically included in the calculation of the Fully-Diluted Company Ordinary Shares, (x) the exercise or settlement of any Company Options or grants of Company Options under the Company Equity Plan, (y) the conversion of any Company Convertible Securities, and (z) the sale of equity securities, or other securities, of a Target Project SPV in connection with the sale of a Project shall require the consent of Purchaser;
(iii) recapitalize or reclassify any of its shares or other equity interests or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities (except for the forfeiture of Company Options held by or repurchase of Company Ordinary Shares from former employees, non-employee directors and consultants in accordance with agreements as in effect on the date of this Agreement providing for the repurchase of shares in connection with any termination of service);
(iv) incur, create, assume or otherwise become liable for any Indebtedness, other than Indebtedness arising from a refinancing of the Company Convertible Loans, a Company Material Contract, or the Company Benefit Plan, in excess of $50,000,000 (individually or in the aggregate);
(v) materially increase the wages, salaries or compensation of its employees other than in the ordinary course of business consistent with past practice, or make or commit to make any significant bonus payment (whether in cash, property or securities) other than in the ordinary course of business consistent with past practice, to any employee, or materially increase other benefits of employees generally other than in the ordinary course of business consistent with past practice, or enter into, establish, materially amend or terminate any Company Benefit Plan with, for or in respect of any current consultant, officer, manager director or employee, in each case other than as required by applicable Law or in the case of the renewal of group health or welfare plans, pursuant to the terms of any Company Benefit Plans or in the ordinary course of business consistent with past practice;
(vi) make or rescind any material election relating to Taxes, settle any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to material Taxes, file any amended material Tax Return or claim for a material Tax refund, or make any material change in its accounting or Tax policies or procedures, in each case except as required by applicable Law or in compliance with IFRS or local GAAP;
(vii) transfer or license to any Person, permit to lapse, or fail to preserve, any material Company IP (other than in the ordinary course of business consistent with past practice);
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(viii) terminate, or waive or assign any material right under, any Company Material Contract (except for assignment to a Target Company) or enter into any Contract that would be a Company Material Contract, in any case outside of the ordinary course of business consistent with past practice;
(ix) fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;
(x) enter into any new line of business;
(xi) fail to use commercially reasonable efforts to keep in force material insurance policies, or replacement or revised policies providing insurance coverage with respect to its material assets, operations and activities in such amount and scope of coverage substantially similar to that which is currently in effect;
(xii) waive, release, assign, settle or compromise any claim, action or proceeding (including any Action relating to this Agreement or the Transactions), other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on a Target Company) not in excess of $250,000 (individually or in the aggregate), or otherwise pay, discharge or satisfy any Actions, unless such amount has been reserved in the Company Financials or is within the ordinary course of business consistent with past practice;
(xiii) effect any layoff of more than fifteen (15) employees at once at any of its facilities, except within the ordinary course of business consistent with past practice;
(xiv) acquire, including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any corporation, partnership, limited liability company, other business organization or any division thereof except within the ordinary course of business consistent with past practice;
(xv) make capital expenditures in excess of $500,000 (individually for any project (or set of related projects) or $2,000,000 in the aggregate), except within the ordinary course of business consistent with past practice;
(xvi) adopt a plan of complete or partial liquidation, dissolution, winding up or other reorganization (other than with respect to any dormant entities);
(xvii) sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;
(xviii) enter into any agreement, understanding or arrangement with respect to the voting of equity securities of such Party;
(xix) take any action that would reasonably be expected to significantly delay or impair the obtaining of any Consents of any Governmental Authority to be obtained in connection with this Agreement; or
(xx) commit in a binding manner to do any of the foregoing actions.
For the avoidance of doubt, with respect to this Section 7.2, the Company’s “ordinary course of business” shall include the investigation, diligence, acquisition (including by way of acquisition of assets, contracts or companies), administration, development, financing and disposal of solar photovoltaic electricity projects and storage facilities, and all other activities related thereto.
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7.3 Conduct of Business of Purchaser, Pubco, and Merger Sub.
(a) Unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the Interim Period, except (i) as expressly contemplated by this Agreement or the Ancillary Documents or (ii) as required by Law, Purchaser, Pubco, and Merger Sub shall, and shall cause their respective Subsidiaries to, (i) conduct their respective businesses, in all material respects, in the ordinary course of business consistent with past practice, (ii) comply with all Laws applicable to each of Purchaser, Pubco, and Merger Sub and each of their Subsidiaries and their respective businesses, assets and employees and (iii) take all commercially reasonable measures necessary or appropriate to preserve intact, in all material respects, their respective business organizations, to keep available the services of their respective managers, directors, officers, employees and consultants, and to preserve the possession, control and condition of their respective material assets, all as consistent with past practice. Notwithstanding anything to the contrary in this Section 7.3, nothing in this Agreement shall prohibit or restrict Purchaser from extending, in accordance with the Purchaser Memorandum and Articles and IPO Prospectus, the deadline by which it much complete its Business Combination, and no consent of any other Party shall be required in connection therewith.
(b) Without limiting the generality of Section 7.3(a) and except as contemplated by this Agreement or the Ancillary Documents, during the Interim Period, without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed), none of Purchaser, Pubco, and Merger Sub shall, and shall cause their respective Subsidiaries not to:
(i) amend, waive or otherwise change, in any material respect, its Organizational Documents;
(ii) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable for any of its equity securities or other security interests of any class and any other equity-based awards, other than the issuance of Purchaser securities issuable upon conversion or exchange of their corresponding outstanding Purchaser securities in accordance with their terms;
(iii) split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof) in respect of its shares or other equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of its securities;
(iv) incur, create, assume, prepay or otherwise become liable for any Indebtedness other than any working capital loan from the Sponsor to the Purchaser that is reasonably necessary to pay for Transaction Expenses incurred by Purchaser in accordance with this Agreement, provided that the aggregate amount of all such working capital loans shall not exceed $750,000;
(v) make or rescind any material election relating to Taxes, settle any Action relating to material Taxes, file any amended material Tax Return or claim for a material Tax refund, or make any material change in its accounting or Tax policies or procedures, in each case except as required by applicable Law or in compliance with GAAP;
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(vi) directly or indirectly increase the compensation or benefits payable, whether conditionally or otherwise, to any director or officer or adopt a new compensation or benefit arrangement;
(vii) amend, waive or otherwise change the Trust Agreement in any manner adverse to Purchaser;
(viii) terminate, waive or assign any material right under any Purchaser Material Contract;
(ix) fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past practice;
(x) establish any Subsidiary or enter into any new line of business;
(xi) fail to use commercially reasonable efforts to keep in force insurance policies or replacement or revised policies providing insurance coverage with respect to its assets, operations and activities in such amount and scope of coverage substantially similar to that which is currently in effect;
(xii) revalue any of its material assets or make any material change in accounting methods, principles or practices, except to the extent required to comply with GAAP or IFRS, as applicable, and after consulting Purchaser’s, Pubco’s, or Merger Sub’s outside auditors, as applicable;
(xiii) waive, release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby), or otherwise pay, discharge or satisfy any Actions, Liabilities or obligations, unless, with respect to Purchaser, such amount has been reserved in Purchaser Financials;
(xiv) acquire, including by merger, consolidation, acquisition of equity interests or assets, or any other form of business combination, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets outside the ordinary course of business;
(xv) make capital expenditures;
(xvi) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than with respect to the Merger);
(xvii) voluntarily incur any Liability or obligation, including Transaction Expenses (whether absolute, accrued, contingent or otherwise) other than the Transaction Expenses set forth in Schedule 7.3(b)(xvii);
(xviii) sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;
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(xix) take any action that would reasonably be expected to significantly delay or impair the obtaining of any Consents of any Governmental Authority to be obtained in connection with this Agreement; or
(xx) authorize or agree to do any of the foregoing actions.
7.4 Annual and Interim Financial Statements.
(a) During the Interim Period, within forty-five (45) calendar days following the end of each of the fiscal quarters ending March 31, June 30 and September 30 and within sixty (60) calendar days following the end of the fiscal year ending December 31, the Company will use its reasonable best efforts to deliver to Purchaser an unaudited consolidated income statement and an unaudited consolidated balance sheet of the Target Companies for the period from the Interim Balance Sheet Date through the end of such quarterly period or fiscal year and the applicable comparative period in the preceding fiscal year (the “Interim Period Financials”). From the date hereof through the Closing Date, the Company will also promptly deliver to Purchaser copies of any audited consolidated financial statements of the Target Companies that the Target Companies’ certified public accountants may issue.
(b) The Company will use its reasonable best efforts to provide to the Purchaser the Audited Company Financials as promptly as practicable after the date of this Agreement.
7.5 Purchaser Public Filings. During the Interim Period, Purchaser will keep current and timely file all of its public filings with the SEC and otherwise comply in all material respects with applicable securities Laws and shall use its reasonable best efforts prior to the Closing to maintain the listing of Purchaser Public Units, Purchaser Ordinary Shares and Purchaser Public Warrants on Nasdaq; provided that the Parties acknowledge and agree that from and after the Closing, the Parties intend to list on Nasdaq only the Pubco Ordinary Shares and the Pubco Public Warrants.
7.6 No Solicitation.
(a) For purposes of this Agreement, (i) an “Acquisition Proposal” means any inquiry, proposal or offer, or any indication of interest in making an offer or proposal, from any Person or group at any time relating to an Alternative Transaction, and (ii) an “Alternative Transaction” means (A) with respect to the Company, Pubco, Merger Sub, and their respective Affiliates, a transaction (other than the Transactions) concerning the sale of (x) all or any material part of the business or assets of the Target Companies (other than in the ordinary course of business consistent with past practice) or (y) any of the shares or other equity interests or profits of the Target Companies, in any case, whether such transaction takes the form of a sale of shares or other equity interests, assets, merger, consolidation, issuance of debt securities, management Contract, joint venture or partnership, or otherwise and (B) with respect to Purchaser and its Affiliates, a transaction (other than the Transactions) concerning a Business Combination for Purchaser.
(b) During the Interim Period, in order to induce the other Parties to continue to commit to expend management time and financial resources in furtherance of the transactions contemplated hereby, each Party shall not, and shall cause its Representatives to not, without the prior written consent of the Company and Purchaser, directly or indirectly, (i) solicit, assist, initiate or facilitate the making, submission or announcement of, or intentionally encourage, any Acquisition Proposal, (ii) furnish any non-public information regarding such Party or its Affiliates or their respective businesses, operations, assets, Liabilities, financial condition, prospects or employees to any Person or group (other than a Party to this Agreement or their respective Representatives) in connection with or in response to an Acquisition Proposal, (iii) engage or participate in discussions or negotiations with any Person or group with respect to, or that could reasonably be expected to lead to, an Acquisition Proposal, (iv) approve, endorse or recommend, or publicly propose to approve, endorse or recommend, any Acquisition Proposal, (v) negotiate or enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Acquisition Proposal, or (vi) release any third Person from, or waive any provision of, any confidentiality agreement to which such Party is a party.
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(c) Each Party shall notify the others as promptly as practicable (and in any event within 48 hours) in writing (including by email) of the receipt by such Party or any of its Representatives of (i) any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations regarding or constituting any Acquisition Proposal or any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations that could be expected to result in an Acquisition Proposal, and (ii) any request for non-public information relating to such Party or its Affiliates, specifying in each case, the material terms and conditions thereof and the identity of the party making such inquiry, proposal, offer or request for information. Each Party shall keep the others promptly informed of the status of any such inquiries, proposals, offers or requests for information. During the Interim Period, each Party shall, and shall cause its Representatives to, immediately cease and cause to be terminated any solicitations, discussions or negotiations with any Person with respect to any Acquisition Proposal and shall, and shall direct its Representatives to, cease and terminate any such solicitations, discussions or negotiations.
7.7 No Trading. The Company acknowledges and agrees that it is aware, and that the Company’s Affiliates are aware (and each of their respective Representatives is aware or, upon receipt of any material non-public information of Purchaser, will be advised) of the restrictions imposed by U.S. federal securities laws and the rules and regulations of the SEC and Nasdaq promulgated thereunder or otherwise (the “Federal Securities Laws”) and other applicable foreign and domestic Laws on a Person possessing material non-public information about a publicly traded company. The Company hereby agrees that, while it is in possession of such material non-public information, it shall not purchase or sell any securities of Purchaser (other than to engage in the Merger in accordance with ARTICLE I), communicate such information to any third party, take any other action with respect to Purchaser in violation of such Laws, or cause or knowingly encourage any third party to do any of the foregoing.
7.8 Notification of Certain Matters. During the Interim Period, each Party shall give prompt notice to the other Parties if such Party or its Affiliates: (a) fails to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it or its Affiliates hereunder in any material respect; (b) receives any notice or other communication in writing from any third party (including any Governmental Authority) alleging (i) that the Consent of such third party is or may be required in connection with the Transactions or (ii) any non-compliance with any Law by such Party or its Affiliates; (c) receives any notice or other communication from any Governmental Authority in connection with the Transactions; (d) discovers any fact or circumstance that would reasonably be expected to cause or result in any of the conditions to set forth in ARTICLE VIII not being satisfied or the satisfaction of those conditions being materially delayed; or (e) becomes aware of the commencement or threat, in writing, of any Action against such Party or any of its Affiliates, or any of their respective properties or assets, or, to the Knowledge of such Party, any officer, director, partner, member or manager, in his, her or its capacity as such, of such Party or of its Affiliates with respect to the consummation of the Transactions. No such notice shall constitute an acknowledgement or admission by the Party providing the notice regarding whether or not any of the conditions to the Closing have been satisfied or in determining whether or not any of the representations, warranties or covenants contained in this Agreement have been breached.
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7.9 Efforts.
(a) Subject to the terms and conditions of this Agreement, each Party shall use its commercially reasonable efforts, and shall cooperate fully with the other Parties, to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable Laws and regulations to consummate the Transactions (including the receipt of all applicable Consents of Governmental Authorities) and to comply as promptly as practicable with all requirements of Governmental Authorities applicable to the Transactions.
(b) In furtherance and not in limitation of Section 7.9(a), to the extent required under any Laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade (“Antitrust Laws”), each Party agrees to make any required filing, notification, notice, submission or application under Antitrust Laws, as applicable, with respect to the transactions contemplated hereby. Each Party will supply as promptly as reasonably practicable any additional information and documentary material that may be reasonably requested pursuant to Antitrust Laws and to take all other actions reasonably necessary, proper or advisable to cause the expiration or termination of the applicable waiting periods under Antitrust Laws as soon as practicable, including by requesting early termination of the waiting period provided for under the Antitrust Laws. Each Party shall, in connection with its efforts to obtain all requisite approvals and authorizations for the Transactions under any Antitrust Law, use its commercially reasonable efforts to: (i) cooperate in all respects with each other Party or its Affiliates in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private Person; (ii) keep the other Parties reasonably informed of any communication received by such Party or its Representatives from, or given by such Party or its Representatives to, any Governmental Authority and of any communication received or given in connection with any proceeding by a private Person, in each case regarding any of the Transactions; (iii) permit a Representative of the other Parties and their respective outside counsel to review any communication given by it to, and consult with each other in advance of any meeting or conference with, any Governmental Authority or, in connection with any proceeding by a private Person, with any other Person, and to the extent permitted by such Governmental Authority or other Person, give a Representative or Representatives of the other Parties the opportunity to attend and participate in such meetings and conferences; (iv) in the event a Party’s Representative is prohibited from participating in or attending any meetings or conferences, the other Parties shall keep such Party promptly and reasonably apprised with respect thereto; and (v) use commercially reasonable efforts to cooperate in the filing of any memoranda, white papers, filings, correspondence or other written communications explaining or defending the transactions contemplated hereby, articulating any regulatory or competitive argument, and/or responding to requests or objections made by any Governmental Authority; provided that materials required to be provided pursuant to this Section 7.9(b) may be redacted as necessary to comply with contractual arrangements or as necessary to address attorney-client or other privilege concerns. Any disclosures or provision of copies by one party to the other pursuant to this Section 7.9(b) may be restricted to outside counsel. Any fees and expenses related to the foregoing provisions of this Section 7.9(b) shall be borne equally by the Parties.
(c) As soon as reasonably practicable following the date of this Agreement, the Parties shall reasonably cooperate with each other and use (and shall cause their respective Affiliates to use) their respective commercially reasonable efforts to prepare and file with Governmental Authorities requests for approval of the Transactions and shall use all commercially reasonable efforts to have such Governmental Authorities approve the Transactions. Each Party shall give prompt written notice to the other Parties if such Party or any of its Representatives receives any notice from such Governmental Authorities in connection with the Transactions, and shall promptly furnish the other Parties with a copy of such Governmental Authority notice. If any Governmental Authority requires that a hearing or meeting be held in connection with its approval of the transactions contemplated hereby, whether prior to the Closing or after the Closing, each Party shall arrange for Representatives of such Party to be present for such hearing or meeting. If any objections are asserted with respect to the Transactions under any applicable Law or if any Action is instituted (or threatened to be instituted) by any applicable Governmental Authority or any private Person challenging any of the Transactions or any Ancillary Document as violative of any applicable Law or which would otherwise prevent, materially impede or materially delay the consummation of the transactions contemplated hereby or thereby, the Parties shall use their commercially reasonable efforts to resolve any such objections or Actions so as to timely permit consummation of the Transactions and the Ancillary Documents, including in order to resolve such objections or Actions which, in any case if not resolved, could reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated hereby or thereby. In the event any Action is instituted (or threatened to be instituted) by a Governmental Authority or private Person challenging the Transactions, the Parties shall, and shall cause their respective Representatives to, reasonably cooperate with one another and use their respective commercially reasonable efforts to contest and resist any such Action and to have vacated, lifted, reversed or overturned any Order, whether temporary, preliminary, or permanent, that is in effect and that prohibits, prevents, or restricts consummation of the Transactions.
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(d) Prior to the Closing, each Party shall use its commercially reasonable efforts to obtain any Consents of Governmental Authorities or other third Persons as may be necessary for the consummation by such Party or its Affiliates of the Transactions or required as a result of the execution or performance of, or consummation of the transactions contemplated by, this Agreement by such Party or its Affiliates, and the other Parties shall provide reasonable cooperation in connection with such efforts.
7.10 Further Assurances. The Parties hereto shall further cooperate with each other and use their respective commercially reasonable efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on their part under this Agreement and applicable Laws to consummate the Transactions as soon as reasonably practicable, including preparing and filing as soon as practicable all documentation to effect all necessary notices, reports and other filings.
7.11 The Registration Statement.
(a) As promptly as practicable after the date hereof, Purchaser and Pubco shall prepare with the reasonable assistance of the Company, and file with the SEC a registration statement on Form F-4 (as amended or supplemented from time to time, and including the Proxy Statement and Exchange Offer Prospectus contained therein, the “Registration Statement”) in connection with the registration under the Securities Act of the Pubco Securities to be issued under this Agreement to the holders of Purchaser Securities and the Company Security Holders pursuant to the Merger and Company Share Transfer, which Registration Statement will also contain (a) a proxy statement of Purchaser (as amended, the “Proxy Statement”) for the purpose of soliciting proxies from Purchaser shareholders for the matters to be acted upon at Purchaser Extraordinary General Meeting and providing Purchaser shareholders an opportunity in accordance with Purchaser’s Organizational Documents and the IPO Prospectus to have their Purchaser Class A Ordinary Shares redeemed (the “Redemption”) in conjunction with the shareholder vote on Purchaser Shareholder Approval Matters, and (b) an exchange offer prospectus of Pubco (the “Exchange Offer Prospectus” for use in connection with the Pubco Offer. Any SEC filing fee or printer expenses related to the Registration Statement shall be borne by Purchaser. The Proxy Statement shall include proxy materials for the purpose of soliciting proxies from Purchaser shareholders to vote, at an extraordinary general meeting of Purchaser shareholders to be called and held, thirty (30) days after Registration Statement has become effective or as the Purchaser and the Company may mutually determine (the “Purchaser Extraordinary General Meeting”), in favor of resolutions approving (i) the adoption and approval of this Agreement and the Transactions, by the holders of Purchaser Ordinary Shares, as ordinary resolutions and special resolutions, as required by and in accordance with Purchaser’s Organizational Documents and IPO Prospectus, the Securities Act, The Cayman Act, the UK Act and the rules and regulations of the SEC and Nasdaq (the approvals described in the foregoing clause, the “Purchaser Shareholder Approval Matters”) and (ii) as ordinary resolutions and special resolutions, as applicable, any other proposals that are required for the consummation of the Transactions that are submitted to, and require the vote of, the Public Shareholders in the Registration Statement and agreed to by Purchaser and the Company. The board of directors of Purchaser shall not withdraw, amend, qualify or modify its unanimous recommendation to the Company Shareholders that they vote in favor of Purchaser Shareholder Approval Matters (together with any withdrawal, amendment, qualification or modification of its recommendation to the Company Shareholders described in the Recitals hereto, a “Modification in Recommendation”). Purchaser’s obligations to establish a record date for, duly call, give notice of, convene and hold the Purchaser Extraordinary General Meeting shall not be affected by any Modification in Recommendation. If, and only if, on the date for which Purchaser Extraordinary General Meeting is scheduled, Purchaser has not received proxies representing a sufficient number of shares to obtain the Required Purchaser Shareholder Approval, whether or not a quorum is present, Purchaser may make one or more successive postponements or adjournments of the Purchaser Extraordinary General Meeting; provided the Purchaser Extraordinary General Meeting is held no later than three (3) Business Days prior to the Outside Date. In connection with the Registration Statement, Purchaser and Pubco will file with the SEC financial and other information about the Transactions in accordance with applicable Law and applicable proxy solicitation and registration statement rules set forth in Purchaser’s Organizational Documents, the Securities Act, the Cayman Act, the UK Act and the rules and regulations of the SEC and Nasdaq. Purchaser and Pubco shall cooperate and provide the Company (and its counsel) with a reasonable opportunity to review and comment on the Registration Statement and any exhibit, amendment or supplement thereto prior to filing the same with the SEC. Purchaser shall consider any such comments in good faith and shall use commercially reasonable efforts to accept all reasonable additions, deletions or changes suggested by the Company and its counsel in connection therewith. Purchaser shall not file the Registration Statement or any exhibit, amendment or supplement thereto without the prior written consent of the Company, not to be unreasonably withheld, conditioned or delayed. The Company shall provide Purchaser and Pubco with such information concerning the Target Companies and their shareholders, officers, directors, employees, assets, Liabilities, condition (financial or otherwise), business and operations that may be required or appropriate for inclusion in the Registration Statement, or in any amendments or supplements thereto, which information provided by the Company shall be true and correct and not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not materially misleading.
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(b) Purchaser and Pubco shall take any and all reasonable and necessary actions required to satisfy the requirements of the Securities Act, the Exchange Act and other applicable Laws in connection with the Registration Statement, Purchaser Extraordinary General Meeting and the Redemption. Each of Purchaser, Pubco and the Company shall, and shall cause each of its Subsidiaries to, make their respective directors, officers and employees, upon reasonable advance notice, available to the Company, Purchaser and Pubco and their respective Representatives in connection with the drafting of the public filings with respect to the Transactions, including the Registration Statement, and responding in a timely manner to comments from the SEC. Each Party shall promptly correct any information provided by it for use in the Registration Statement (and other related materials) if and to the extent that such information is determined to have become false or misleading in any material respect or as otherwise required by applicable Laws. Purchaser and Pubco shall amend or supplement the Registration Statement and cause the Registration Statement, as so amended or supplemented, to be filed with the SEC and to be disseminated to Purchaser shareholders, in each case as and to the extent required by applicable Laws and subject to the terms and conditions of this Agreement and Purchaser’s Organizational Documents; provided, however, that Purchaser shall not amend or supplement the Registration Statement without the prior written consent of the Company, not to be unreasonably withheld, conditioned or delayed.
(c) Each of Purchaser and Pubco, with the assistance of the other Parties, shall promptly respond to any SEC comments on the Registration Statement and shall otherwise use its commercially reasonable efforts to cause the Registration Statement to respond to comments from the SEC and become effective. Purchaser and Pubco shall provide the Company with copies of any written comments, and shall inform the Company of any material oral comments, that Purchaser, Pubco or their respective Representatives receive from the SEC or its staff with respect to the Registration Statement, the Purchaser Extraordinary General Meeting and the Redemption promptly after the receipt of such comments and shall give the Company and its counsel a reasonable opportunity under the circumstances to review and comment on any proposed written or material oral responses to such comments, and Purchaser shall consider any such comments in good faith and shall use commercially reasonable efforts to accept all reasonable additions, deletions or changes suggested by the Company and its counsel in connection therewith.
(d) As soon as practicable following the Registration Statement becoming effective, (i) Purchaser shall distribute the Proxy Statement to Purchaser’s shareholders and, pursuant thereto, shall call the Purchaser Extraordinary General Meeting in accordance with the Cayman Act and the Securities Act for a date no later than thirty (30) days following the effectiveness of the Registration Statement, and (ii) Pubco shall distribute the Exchange Offer Prospectus to the Company Shareholders in order to commence the Pubco Offer.
(e) Purchaser and Pubco shall comply with all applicable Laws, any applicable rules and regulations of Nasdaq, Purchaser’s Organizational Documents and this Agreement in the preparation and filing of the Registration Statement, and the distribution of the Proxy Statement, any solicitation of proxies thereunder, the calling and holding of Purchaser Extraordinary General Meeting the Redemption, the distribution of the Exchange Offer Prospectus and the Pubco Offer.
(f) If, in connection with the preparation and filing of the Registration Statement or the SEC’s review thereof, the SEC requests or requires that an opinion with respect to the U.S. federal income tax consequences of the Transactions be prepared and submitted, the Parties shall deliver to counsel customary Tax representation letters reasonably satisfactory to such counsel and to the Parties, dated and executed as of the date such relevant filing shall have been declared effective by the SEC and such other date(s) as determined to be reasonably necessary by such counsel in connection with the preparation and filing of such opinion. Notwithstanding anything to the contrary in this Agreement, in the event there is any Tax opinion, comfort letter or other opinion required to be provided in connection with the Registration Statement or the SEC’s review thereof, nothing in this Agreement shall require (i) the Company or its Tax advisors to provide an opinion with respect to the Intended Tax Treatment or any other Tax consequences of the Transaction other than solely with respect to the Company Shareholders or (ii) the Purchaser or its Tax advisors to provide an opinion with respect to the Intended Tax Treatment or any other Tax consequences of the Transaction other than solely with respect to the Purchaser or the Purchaser shareholders and securityholders, in each case, other than, to the extent so requested or required by the SEC, a customary opinion regarding the material accuracy of any disclosure regarding U.S. federal income tax considerations of the Transactions included in the Registration Statement as may be required to satisfy applicable rules and regulations promulgated by the SEC.
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7.12 Public Announcements.
(a) The Parties agree that during the Interim Period no public release, filing or announcement concerning this Agreement or the Ancillary Documents or the transactions contemplated hereby or thereby shall be issued by any Party or any of their Affiliates without the prior written consent of Purchaser, Pubco and the Company (which consent shall not be unreasonably withheld, conditioned or delayed), except as such release or announcement may be required by applicable Law or the rules or regulations of any securities exchange, in which case the applicable Party shall use commercially reasonable efforts to allow Purchaser, Pubco and the Company reasonable time to comment on, and arrange for any required filing with respect to, such release or announcement in advance of such issuance; provided that subject to this Section 7.12, the Parties and their Affiliates may make internal communications regarding this Agreement or the Ancillary Documents or the transactions contemplated hereby or thereby to their and their Affiliates’ respective directors, officers and employees without the consent of any other Party and may make public statements regarding this Agreement or the Ancillary Documents or the transactions contemplated hereby or thereby containing information or events already publicly known other than as a result of a breach of this Section 7.12.
(b) Purchaser and the Company shall mutually agree upon and, as promptly as practicable after the execution of this Agreement (but in any event within four (4) Business Days thereafter), issue a press release announcing the execution of this Agreement (the “Signing Press Release”). Promptly after the issuance of the Signing Press Release, Purchaser shall file a current report on Form 8-K (the “Signing Filing”) with the Signing Press Release and a description of this Agreement as required by Federal Securities Laws, which the Company shall review, comment upon and approve (which approval shall not be unreasonably withheld, conditioned or delayed) prior to filing. Pubco, Purchaser and the Company shall mutually agree upon and, as promptly as practicable after the Closing (but in any event within four (4) Business Days thereafter), issue a press release announcing the consummation of the Transactions (the “Closing Press Release”). Promptly after the issuance of the Closing Press Release, Pubco shall file a report of foreign private issuer on Form 6-K and a shell company report on Form 20-F (the “Closing Filing”) with the Closing Press Release and a description of the Closing as required by Federal Securities Laws which the Company and Purchaser shall review, comment upon and approve (which approval shall not be unreasonably withheld, conditioned or delayed) prior to filing. In connection with the preparation of the Signing Press Release, the Signing Filing, the Closing Press Release, the Closing Filing, or any other report, statement, filing notice or application made by or on behalf of a Party to any Governmental Authority or other third party in connection with the transactions contemplated hereby, each Party shall, upon request by any other Party, furnish the Parties with all information concerning themselves, their respective directors, officers and equity holders, and such other matters as may be reasonably necessary or advisable in connection with the transactions contemplated hereby, or any other report, statement, filing, notice or application made by or on behalf of a Party to any third party and/ or any Governmental Authority in connection with the transactions contemplated hereby.
7.13 Confidential Information.
(a) The Company hereby agrees that during the Interim Period, and, in the event that this Agreement is terminated in accordance with ARTICLE IX, for a period of one (1) year after such termination, it shall, and shall cause its Representatives to: (i) treat and hold in strict confidence any Purchaser Confidential Information, and will not use for any purpose (except in connection with the consummation of the transactions contemplated by this Agreement or the Ancillary Documents, performing their obligations hereunder or thereunder or enforcing their rights hereunder or thereunder), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise make available to any third party any of the Purchaser Confidential Information without Purchaser’s prior written consent; and (ii) in the event that the Company, or any of its Representatives, during the Interim Period or, in the event that this Agreement is terminated in accordance with ARTICLE IX, for a period of one (1) year after such termination, becomes legally compelled to disclose any Purchaser Confidential Information, (A) provide Purchaser to the extent legally permitted with prompt written notice of such requirement so that Purchaser or an Affiliate thereof may seek, at Purchaser’s cost, a protective Order or other remedy or waive compliance with this Section 7.13(a), and (B) in the event that such protective Order or other remedy is not obtained, or Purchaser waives compliance with this Section 7.13(a), furnish only that portion of such Purchaser Confidential Information which is legally required to be provided as advised by outside counsel and to exercise its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such Purchaser Confidential Information. In the event that this Agreement is terminated and the transactions contemplated hereby are not consummated, the Company shall, and shall cause its Representatives to, promptly deliver to Purchaser or destroy (at the Company’s election) any and all copies (in whatever form or medium) of Purchaser Confidential Information and destroy all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based thereon; provided that the Company and its Representatives shall be entitled to keep any records required by applicable Law or bona fide record retention policies; provided, further that any Purchaser Confidential Information that is not returned or destroyed, including any oral Purchaser Confidential Information, shall remain subject to the confidentiality obligations set forth in this Agreement.
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(b) Purchaser hereby agrees that during the Interim Period, and, in the event that this Agreement is terminated in accordance with ARTICLE IX, for a period of one (1) year after such termination, it shall, and shall cause its Representatives to: (i) treat and hold in strict confidence any Company Confidential Information, and will not use for any purpose (except in connection with the consummation of the transactions contemplated by this Agreement or the Ancillary Documents, performing its obligations hereunder or thereunder or enforcing its rights hereunder or thereunder), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise make available to any third party any of the Company Confidential Information without the Company’s prior written consent; and (ii) in the event that Purchaser or any of its Representatives, during the Interim Period or, in the event that this Agreement is terminated in accordance with ARTICLE IX, for a period of one (1) year after such termination, becomes legally compelled to disclose any Company Confidential Information, (A) provide the Company to the extent legally permitted with prompt written notice of such requirement so that the Company may seek, at the Company’s sole expense, a protective Order or other remedy or waive compliance with this Section 7.13(b) and (B) in the event that such protective Order or other remedy is not obtained, or the Company waives compliance with this Section 7.13(b), furnish only that portion of such Company Confidential Information which is legally required to be provided as advised by outside counsel and to exercise its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such Company Confidential Information. In the event that this Agreement is terminated and the transactions contemplated hereby are not consummated, Purchaser shall, and shall cause its Representatives to, promptly deliver to the Company or destroy (at Purchaser’s election) any and all copies (in whatever form or medium) of Company Confidential Information and destroy all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based thereon; provided that Purchaser and its Representatives shall be entitled to keep any records required by applicable Law or bona fide record retention policies; provided, further that any Company Confidential Information that is not returned or destroyed, including any oral Company Confidential Information, shall remain subject to the confidentiality obligations set forth in this Agreement. Notwithstanding the foregoing, Purchaser and its Representatives shall be permitted to disclose any and all Company Confidential Information to the extent required by the Federal Securities Laws.
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7.14 Post-Closing Board of Directors and Executive Officers.
(a) The Parties shall take all necessary action, including causing the directors of Merger Sub to resign, so that effective as of the Closing, Merger Sub will appoint a new board of directors pursuant to the terms of the Surviving Purchaser Subsidiary A&R Memorandum and Articles.
(b) The Parties shall take all necessary action, including causing the directors of Pubco to resign, so that effective as of the Closing, Pubco’s board of directors (the “Post-Closing Pubco Board”) will consist of between seven (7) to nine (9) individuals. Immediately after the Closing, the Parties shall take all necessary action to designate and appoint to the Post-Closing Pubco Board. If the Post-Closing Pubco Board (i) consists of seven (7) members, then (A) two (2) persons shall be designated by Purchaser prior to the Closing upon mutual agreement with the Company’s chairman and (B) five (5) persons shall be designated by the Company prior to the Closing (the “Company Director Designees”); or (ii) consists of nine (9) members, then (A) three (3) persons shall be designated by Purchaser prior to the Closing upon mutual agreement with the Company’s chairman (such directors or the directors set forth in Section (A), the “Purchaser Director Designee”) and (B) six (6) persons shall be Company Director Designees. The Purchaser and the Company acknowledge and agree that Charles Ratelband and Per Regnarsson shall be among the initial Purchaser Director Designees.
(c) The Parties shall take all action necessary, including causing the executive officers of Pubco to resign, so that Svante Kumlin can serve as the post-Closing Chief Executive Officer and President.
7.15 Indemnification of Directors and Officers; Tail Insurance.
(a) The Parties agree that all rights to exculpation, indemnification and advancement of expenses existing in favor of the current or former directors and officers of Purchaser, Company, Pubco, and Merger Sub (the “D&O Indemnified Persons”) as provided in their respective Organizational Documents or under any agreement relating to the exculpation or indemnification of, or advancement of expenses to, any D&O Indemnified Person or any employment or other similar agreement between any D&O Indemnified Person and Purchaser, Company, Pubco, or Merger Sub, in each case as in effect on the date of this Agreement, shall survive the Closing and continue in full force and effect in accordance with their respective terms to the extent permitted by applicable Law. For a period of six (6) years after the Closing, Pubco shall cause the Organizational Documents of Purchaser, Pubco and the Company to contain provisions no less favorable with respect to exculpation and indemnification of and advancement of expenses to D&O Indemnified Persons than are set forth as of the date of this Agreement in the Organizational Documents of Purchaser, Company, Pubco, and Merger Sub to the extent permitted by applicable Law. The provisions of this Section 7.15 shall survive the Closing and are intended to be for the benefit of, and shall be enforceable by, each of the D&O Indemnified Persons and their respective heirs and representatives.
(b) At the Closing, Pubco shall, or shall cause Purchaser (at Pubco’s expense) to, subject to the approval of the Company (which approval shall not be unreasonably withheld, delayed or denied) obtain and fully pay the premium for a “tail” insurance policy naming the directors and officers of Purchaser as direct beneficiaries that provides coverage for up to a six-year period from and after the Closing for events occurring prior to the Closing (the “D&O Tail Insurance”) that is, in the aggregate, not less advantageous to such directors and officers than Purchaser’s existing policy (true, correct and complete copies of which have been heretofore made available to Purchaser or its agents or representatives), except that in no event shall Pubco be required to pay an annual premium for such policy in excess of three hundred percent (300%) of the aggregate annualized premium payable by Purchaser for its existing policy. Purchaser shall provide the Company a copy of the D&O Tail Insurance policy and premium cost at least ten (10) Business Days in advance of the Closing Date for review. If obtained, Purchaser shall maintain the D&O Tail Insurance in full force and effect, continue to honor the obligations thereunder and timely pay or caused to be paid all premiums with respect to the D&O Tail Insurance.
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7.16 Use of Trust Account Proceeds. The Parties agree that after the Closing, the funds in the Trust Account, after taking into account payments for the Redemption, and any proceeds received by Pubco or Purchaser from any PIPE Financing shall first be used (i) to pay Purchaser’s accrued Transaction Expenses, (ii) to pay Purchaser’s deferred Transaction Expenses (including cash amounts payable to its underwriter and any legal fees) of the IPO, and (iii) to pay any loans owed by Purchaser to Sponsor for Transaction Expenses (including deferred Transaction Expenses), other administrative costs and expenses incurred by or on behalf of Purchaser and any premiums for the D&O Tail Insurance. Such amounts, as well as any Transaction Expenses that are required or permitted to be paid by delivery of Pubco Securities, will be paid at the Closing. Any remaining cash will be distributed to a Target Company and used for working capital and general corporate purposes.
7.17 Nasdaq Capital Market Listing. Purchaser, the Company and Pubco shall use their respective reasonable best efforts to cause, as promptly as practicable after the date of this Agreement, but in no event later than the Closing Date; (a) Pubco’s initial listing application with the Nasdaq Capital Market in connection with the Transactions to have been approved; (b) Pubco to satisfy all applicable initial and continuing listing requirements of the Nasdaq Capital Market; and (c) the Pubco Ordinary Shares to have been approved for listing on the Nasdaq Capital Market, subject to official notice of issuance.
7.18 PIPE Financing. During the Interim Period, each of Purchaser, Pubco and the Company will use their reasonable efforts to minimize the amount of funds in the Trust Account that are redeemed by Public Shareholders in the Redemption. Without limiting anything to the contrary contained herein, during the Interim Period, Pubco and Purchaser shall use their commercially reasonable efforts to enter into and consummate the Subscription Agreements with PIPE Investors relating to a PIPE Financing. Pubco, Purchaser, and the Company shall, and shall cause their respective Representatives to, cooperate with each other and their respective Representatives in connection with such PIPE Financing and use their respective commercially reasonable efforts to cause such PIPE Financing to occur (including having the Company’s senior management participate in any investor meetings and roadshows as reasonably requested by Purchaser). None of Purchaser, Pubco, or the Company shall enter into any PIPE Financing arrangement without the consent of the others, such consent not to be unreasonably withheld.
7.19 Company Re-registration. Promptly after the date of this Agreement, the Company shall use its best efforts and take all necessary actions required to complete the Company Re-registration.
7.20 Pubco Name Change. In connection with the adoption of the Pubco A&R Memorandum and Articles, Pubco shall change its name from “ClimateRock Holdings Limited” to “E.E.W. Eco Energy World,” or such other name as mutually agreed by the parties.
ARTICLE VIII
CLOSING CONDITIONS
8.1 Conditions to Each Party’s Obligations. The obligations of each Party to consummate the Transactions shall be subject to the satisfaction or written waiver (where permissible) by the Company and Purchaser of the following conditions:
(a) Required Purchaser Shareholder Approval. Purchaser Shareholder Approval Matters that are submitted to the vote of the shareholders of Purchaser at Purchaser Extraordinary General Meeting in accordance with the Proxy Statement shall have been approved by the requisite vote of the shareholders of Purchaser at Purchaser Extraordinary General Meeting in accordance with Purchaser’s Organizational Documents, applicable Law and the Proxy Statement (the “Required Purchaser Shareholder Approval”).
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(b) Antitrust Laws. Any waiting period (and any extension thereof) prescribed by the Antitrust Laws of the relevant jurisdiction and applicable to the consummation of this Agreement shall have expired or been terminated.
(c) No Adverse Law or Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) or Order that is then in effect and which has the effect of making the transactions or agreements contemplated by this Agreement illegal or which otherwise prevents or prohibits consummation of the Transactions.
(d) Net Tangible Assets Test. Purchaser shall have not received valid redemption requests (that have not subsequently been withdrawn) that would require it to redeem Purchaser Class A Ordinary Shares in an amount that would cause Purchaser not to have, at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act).
(e) Registration Statement. The Registration Statement shall have been declared effective by the SEC and shall remain effective as of the Closing, and no stop order or similar order shall be in effect with respect to the Registration Statement and no proceeding seeking such a stop order shall have been initiated by the SEC and remain pending.
(f) Nasdaq Listing. Upon the Closing, Pubco’s initial listing application with the Nasdaq Capital Market in connection with the Closing shall have been approved and, immediately following the Closing, Pubco shall satisfy any applicable initial and continuing listing requirements of the Nasdaq Capital Market. In addition, Pubco shall not have received any notice of non-compliance therewith, and the Pubco Ordinary Shares, shall have been approved for listing on the Nasdaq Capital Market.
(g) Unconditionality. The Pubco Offer shall have been declared wholly unconditional.
8.2 Conditions to Obligations of the Company. In addition to the conditions specified in Section 8.1, the obligations of the Company to consummate the Company Share Transfer and the other transactions contemplated by this Agreement are subject to the satisfaction or written waiver (by the Company) of the following conditions:
(a) Representations and Warranties.
(i) Each of the representations and warranties (x) of Purchaser contained in Section 4.1 (Organization and Standing), Section 4.2 (Authorization and Binding Agreement), Section 4.5 (Capitalization), Section 4.18 (Finders and Brokers), and Section 4.21 (Trust Account) and (y) of Pubco and Merger Sub contained in Section 5.1 (Organization and Standing), Section 5.2 (Authorization; Binding Agreement), Section 5.5 (Ownership) and Section 5.9 (Finders and Brokers), in each case, shall be true and correct in all material respects (without giving any effect to any limitation as to “materiality,” “in all material respects” or “Material Adverse Effect” or any similar limitation set forth therein), in each case as of the Closing as if made anew at and as of such time (except, in each case, to the extent any such representation and warranty expressly relates to an earlier date, and in such case, such representation and warranty shall be true and correct in such manner as of such earlier date).
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(ii) The representations and warranties of Purchaser contained in Section 6.8 (Absence of Changes) shall be true and correct in all respects as of the date of this Agreement.
(iii) Each of the representations and warranties of Purchaser, Pubco, and Merger Sub contained in ARTICLE IV and ARTICLE V of this Agreement other than the representations and warranties of Purchaser described in Section 8.2(a)(i) and Section 8.2(a)(ii), shall be true and correct (without giving any effect to any limitation as to “materiality,” “in all material respects” or “Material Adverse Effect” or any similar limitation set forth therein but giving effect to the use of the defined term “Purchaser Material Contract”) as of the Closing as if made anew at and as of such time (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, such representations and warranties shall be true and correct on and as of such earlier date), except, in each case, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a Material Adverse Effect.
(b) Agreements and Covenants. Purchaser shall have performed in all material respects all of its obligations and complied in all material respects with all of its agreements and covenants under this Agreement to be performed or complied with by it on or prior to the Closing Date.
(c) No Purchaser Material Adverse Effect. No Material Adverse Effect shall have occurred with respect to Purchaser since the date of this Agreement which is continuing and uncured.
(d) Minimum Cash Condition. Upon the Closing, the Purchaser shall have cash and cash equivalents, including funds remaining in the Trust Account (after giving effect to the completion of the Redemption and the payment of Purchaser’s and the Company’s Transaction Expenses) and taking into account the proceeds from any PIPE Financing, of at least Forty Million U.S. Dollars ($40,000,000).
(e) Officer Certificate. Purchaser shall have delivered to the Company a certificate, dated the Closing Date, signed by an executive officer of Purchaser in such capacity, certifying as to the conditions specified in Sections 8.2(a), 8.2(b), 8.2(c) and 8.2(d).
8.3 Conditions to Obligations of Purchaser. In addition to the conditions specified in Section 8.1, the obligations of Purchaser to consummate the Transactions are subject to the satisfaction or written waiver (by Purchaser) of the following conditions:
(a) Representations and Warranties.
(i) Each of the representations and warranties (x) of the Company contained in Section 6.1 (Organization and Standing), Section 6.2 (Authorization; Binding Agreement), Sections 6.3(a) and (b) (Capitalization) and Section 6.26 (Finders and Brokers) (collectively, the “Fundamental Representations”) in each case, shall be true and correct in all material respects (without giving any effect to any limitation as to “materiality,” “in all material respects” or “Material Adverse Effect” or any similar limitation set forth therein), in each case as of the Closing as if made anew at and as of such time (except, in each case, to the extent any such representation and warranty expressly relates to an earlier date, and in such case, such representation and warranty shall be true and correct in such manner as of such earlier date).
(ii) The representations and warranties of the Company contained in Section 6.8(a) (Absence of Certain Changes) shall be true and correct in all respects as of the date of this Agreement.
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(iii) Each of the representations of the Company contained in ARTICLE VI of this Agreement other than the representations and warranties of the Company described in Section 8.3(a)(i) and Section 8.3(a)(ii), shall be true and correct (without giving any effect to any limitation as to “materiality,” “in all material respects” or “Material Adverse Effect” or any similar limitation set forth therein but giving effect to the use of the defined term “Company Material Contract”) as of the Closing as if made anew at and as of such time (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, such representations and warranties shall be true and correct on and as of such earlier date), except, in each case, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a Material Adverse Effect.
(b) Agreements and Covenants. The Company shall have performed in all material respects all of its obligations and complied in all material respects with all of its agreements and covenants under this Agreement to be performed or complied with by it on or prior to the Closing Date.
(c) No Material Adverse Effect. No Material Adverse Effect shall have occurred with respect to the Target Companies taken as a whole since the date of this Agreement which is continuing and uncured.
(d) Officer Certificate. Purchaser shall have received a certificate from the Company, dated as the Closing Date, signed by an executive officer of the Company in such capacity, certifying as to the conditions specified in Sections 8.3(a), 8.3(b) and 8.3(c).
(e) Secretary Certificates.
(i) Purchaser shall have received a certificate from the Company, dated as the Closing Date, signed by the Secretary of the Company in such capacity, certifying as to the validity and effectiveness of, and attaching, (A) copies of its Organizational Documents as in effect as of the Closing Date, (B) the requisite resolutions of its board of directors authorizing and approving the execution, delivery and performance of this Agreement and each Ancillary Document to which it is or is required to be a party or bound, and the consummation of the Transactions, (C) evidence that the Company Shareholder has consented to the Transactions, and (D) the incumbency of its officers authorized to execute this Agreement or any Ancillary Document to which the Company is or is required to be a party or otherwise bound.
(ii) The Company shall have received a certificate from Purchaser dated as the Closing Date, signed by the Secretary of Purchaser in such capacity, certifying as to the validity and effectiveness of, and attaching, (A) copies of its Organizational Documents as in effect as of the Closing Date, (B) the requisite resolutions of its board of directors authorizing and approving the execution, delivery and performance of this Agreement and each Ancillary Document to which it is or is required to be a party or bound, and the consummation of the Merger, the Company Share Transfer, and the other transactions contemplated hereby and thereby, (C) evidence that the Required Purchaser Shareholder Approval has been obtained and (D) the incumbency of its officers authorized to execute this Agreement or any Ancillary Document to which Purchaser is or is required to be a party or otherwise bound.
(f) Re-registration. The Company shall have delivered to Purchaser a certified copy of the certificate of incorporation on re-registration of the Company issued by the United Kingdom Registrar of Companies pursuant to Section 101 of the UK Act following completion of the Company Re-registration.
(g) Takeover Panel. The Company shall have confirmed to Purchaser in writing that it has informed The Panel on Takeovers and Mergers in the United Kingdom (the “Takeover Panel”) of completion of the Company Re-registration.
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8.4 Frustration of Conditions. Notwithstanding anything contained herein to the contrary, no Party may rely on the failure of any condition set forth in this ARTICLE VIII to be satisfied if such failure was caused by the failure of such Party or its Affiliates (or with respect to the Company, any Target Company or Company Shareholder) to comply with or perform any of its covenants or obligations set forth in this Agreement.
ARTICLE IX
TERMINATION AND EXPENSES
9.1 Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing as follows:
(a) by mutual written consent of Purchaser and the Company;
(b) by written notice by Purchaser or the Company if any of the conditions to the Closing set forth in ARTICLE VIII have not been satisfied or waived by the earlier of April 29, 2023, and the then applicable deadline for Purchaser to complete its initial business combination in accordance with its Organizational Documents (the “Outside Date”); provided, however, the right to terminate this Agreement under this Section 9.1(a) shall not be available to a Party if the breach or violation by such Party or its Affiliates (or with respect to the Company, the Pubco or Merger Sub) of any representation, warranty, covenant or obligation under this Agreement was the primary cause of, or primarily resulted in, the failure of the Closing to occur on or before the Outside Date;
(c) by written notice by either Purchaser or the Company if a Governmental Authority of competent jurisdiction shall have issued an Order or taken any other action permanently restraining, enjoining or otherwise prohibiting the Transactions, and such Order or other action has become final and non-appealable; provided, however, that the right to terminate this Agreement pursuant to this Section 9.1(c) shall not be available to a Party if the failure by such Party or its Affiliates to comply with any provision of this Agreement has been a primary cause of, or primarily resulted in, such Order or action by such Governmental Authority;
(d) by written notice by the Company to Purchaser, if (i) there has been a material breach by Purchaser of any of its representations, warranties, covenants or agreements contained in this Agreement, or if any representation or warranty of Purchaser shall have become untrue or inaccurate, in any case, which would result in a failure of a condition set forth in Section 8.2(a) or Section 8.2(b) to be satisfied (treating the Closing Date for such purposes as the date of such breach), and (ii) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (A) twenty (20) days after written notice of such breach or inaccuracy is provided to Purchaser or (B) the Outside Date; provided that the Company shall not have the right to terminate this Agreement pursuant to this Section 9.1(d) if at such time the Company is in material uncured breach of this Agreement;
(e) by written notice by Purchaser to the Company, if (i) there has been a material breach by the Company of any of its representations, warranties, covenants or agreements contained in this Agreement, or if any representation or warranty of such Parties shall have become untrue or inaccurate, in any case, which would result in a failure of a condition set forth in Section 8.3(a) or Section 8.3(b) to be satisfied (treating the Closing Date for such purposes as the date of such breach), and (ii) the breach or inaccuracy is incapable of being cured or is not cured within the earlier of (A) twenty (20) days after written notice of such breach or inaccuracy is provided to the Company or (B) the Outside Date; provided that Purchaser shall not have the right to terminate this Agreement pursuant to this Section 9.1(e) if at such time Purchaser is in material uncured breach of this Agreement;
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(f) by written notice by Purchaser to the Company, if there shall have been a Material Adverse Effect on the Target Companies taken as a whole following the date of this Agreement which is uncured for at least ten (10) Business Days after written notice of such Material Adverse Effect is provided by Purchaser to the Company; or
(g) by written notice by either Purchaser or the Company to the other, if Purchaser Extraordinary General Meeting is held (including any adjournment or postponement thereof) and has concluded, Purchaser’s shareholders have duly voted, and the Required Purchaser Shareholder Approval was not obtained; provided, however, that the right to terminate this Agreement pursuant to this Section 9.1(g) shall not be available to a Party if the failure by such Party or its Affiliates to comply with any provision of this Agreement has been a primary cause of, or primarily resulted in, the failure to obtain the Required Purchaser Shareholder Approval.
9.2 Effect of Termination. This Agreement may only be terminated in the circumstances described in Section 9.1 and pursuant to a written notice delivered by the applicable Party to the other applicable Parties, which sets forth the basis for such termination, including the provision of Section 9.1 under which such termination is made. In the event of the valid termination of this Agreement pursuant to Section 9.1, this Agreement shall forthwith become void and no further effect, and there shall be no Liability on the part of any Party or any of their respective Representatives whatsoever, and all rights and obligations of each Party shall cease, except: Sections 7.12, 7.13, 9.3, 10.1, ARTICLE XII and this Section 9.2 shall survive the termination of this Agreement, and (ii) nothing herein shall relieve any Party from Liability for any Willful Breach of any covenant under this Agreement or any Fraud claim with respect to any representation or warranty under this Agreement, in either case, prior to termination of this Agreement (in each case of clauses (i) and (ii) above, subject to Section 10.1). Without limiting the foregoing, and except as provided in this Section 9.2 and Section 9.3 (but subject to Section 10.1, and subject to the right to seek injunctions, specific performance or other equitable relief in accordance with Section 11.7), no party shall be entitled to seek monetary damages prior to the Closing with respect to any breach of any representation, warranty, covenant or other agreement contained in this Agreement by another Party or with respect to the Transactions.
9.3 Fees and Transaction Expenses. Unless otherwise expressly provided herein, all Transaction Expenses shall be paid by the Party incurring such expenses. Notwithstanding the foregoing, all SEC filing fees or printer expenses related to the Registration Statement and any fees relating to antitrust filings shall be borne by Purchaser.
ARTICLE X
WAIVER
10.1 Waiver of Claims Against Trust. Reference is made to the IPO Prospectus. The Company hereby represents and warrants that it has read the IPO Prospectus and understands that Purchaser has established the Trust Account containing the proceeds of the IPO and the overallotment shares acquired by Purchaser’s underwriters and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of Purchaser’s public shareholders (including overallotment shares acquired by Purchaser’s underwriters) (the “Public Shareholders”) and that, except as otherwise described in the IPO Prospectus, Purchaser may disburse monies from the Trust Account only: (a) to the Public Shareholders in the event they elect to redeem their Purchaser Ordinary Shares in connection with the consummation of its initial business combination (as such term is used in the IPO Prospectus) (“Business Combination”) or in connection with an amendment to Purchaser’s Organizational Documents to extend Purchaser’s deadline to consummate a Business Combination, (b) to the Public Shareholders if Purchaser fails to consummate a Business Combination within twelve (12) months after the closing of the IPO, subject to extension, (c) with respect to any interest earned on the amounts held in the Trust Account, amounts necessary to pay for any taxes, and (d) to Purchaser after or concurrently with the consummation of a Business Combination. For and in consideration of Purchaser entering into this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company hereby agrees on behalf of itself and its Affiliates that, notwithstanding anything to the contrary in this Agreement, neither the Company nor any of its respective Affiliates do now or shall at any time hereafter have any right, title, interest or claim of any kind in or to any monies in the Trust Account or distributions therefrom to Purchaser’s shareholders, or make any claim against the Trust Account (including any distributions therefrom to Purchaser’s shareholders), regardless of whether such claim arises as a result of, in connection with or relating in any way to, this Agreement or any proposed or actual business relationship between Purchaser or any of its Representatives, on the one hand, and the Company or any of its respective Representatives, on the other hand, or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (collectively, the “Trust Account Released Claims”). The Company on behalf of itself and its Affiliates hereby irrevocably waives any Trust Account Released Claims that any such Party or any of its Affiliates may have against the Trust Account (including any distributions therefrom to Purchaser’s shareholders) now or in the future as a result of, or arising out of, any negotiations, contracts or agreements with Purchaser or its Representatives and will not seek recourse against the Trust Account (including any distributions therefrom to Purchaser’s shareholders) for any reason whatsoever (including for an alleged breach of this Agreement or any other agreement with Purchaser or its Affiliates). The Company agrees and acknowledges that such irrevocable waiver is material to this Agreement and specifically relied upon by Purchaser and its Affiliates to induce Purchaser to enter in this Agreement, and the Company further intends and understands such waiver to be valid, binding and enforceable against such Party and each of its Affiliates under applicable Law. To the extent that the Company or any of its respective Affiliates commences any Action based upon, in connection with, relating to or arising out of any matter relating to Purchaser or its Representatives, which proceeding seeks, in whole or in part, monetary relief against Purchaser or its Representatives, the Company hereby acknowledges and agrees that its and its Affiliates’ sole remedy shall be against funds held outside of the Trust Account and that such claim shall not permit such Party or any of its Affiliates (or any Person claiming on any of their behalves or in lieu of them) to have any claim against the Trust Account (including any distributions therefrom to Purchaser’s shareholders) or any amounts contained therein. In the event that the Company or any of its respective Affiliates commences Action based upon, in connection with, relating to or arising out of any matter relating to Purchaser or its Representatives which proceeding seeks, in whole or in part, relief against the Trust Account (including any distributions therefrom to Purchaser’s shareholders) or the Public Shareholders, whether in the form of money damages or injunctive relief, Purchaser and its Representatives, as applicable, shall be entitled to recover from the Company and its respective Affiliates, as applicable, the associated legal fees and costs in connection with any such Action, in the event Purchaser or its Representatives, as applicable, prevails in such Action. This Section 10.1 shall survive termination of this Agreement for any reason and continue indefinitely.
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ARTICLE XI
MISCELLANEOUS
11.1 Survival. Representations and warranties of the Parties contained in this Agreement or in any certificate, or instrument delivered by or on behalf of the Parties pursuant to this Agreement shall not survive the Closing, and from and after the Closing, the Company and Purchaser and their respective Representatives shall not have any further obligations, nor shall any claim be asserted or action be brought against any of the Parties or their respective Representatives with respect thereto. The covenants and agreements made by the Parties in this Agreement or in any certificate or instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such covenants or agreements, shall not survive the Closing, except for those covenants and agreements contained herein and therein that by their terms apply or are to be performed in whole or in part after the Closing (which such covenants shall survive the Closing and continue until fully performed in accordance with their terms).
11.2 Notices. Except as otherwise expressly provided herein, any notice, consent, waiver and other communication hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by e-mail, with confirmation of receipt, (iii) one (1) Business Day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) Business Days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable Party at the following addresses (or at such other address for a Party as shall be specified by like notice):
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If to Purchaser at or prior to the Closing, to:
ClimateRock London, SW3 3DD United Kingdom |
with a copy (which will not constitute notice) to:
Ellenoff Grossman & Schole LLP |
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If to the Company, to:
E.E.W. Eco Energy World PLC London W1S 1HN Attn: Mr. Svante Kumlin, CEO |
with a copy (which will not constitute notice) to:
White & Case LLP London EC2N 1DW Guy Potel Monica Holden Email: ross.allardice@whitecase.com guy.potel@whitecase.com Mholden@whitecase.com
and
White & Case LLP
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If to Pubco or Merger Sub prior to the Closing, to:
ClimateRock Holdings Limited London, SW3 3DD United Kingdom Attn: Per Regnarsson Telephone No.: +44 203 954 0590 Email: Info@climate-rock.com |
with a copy (which will not constitute notice) to:
Ellenoff Grossman & Schole LLP |
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If to Pubco, Purchaser or the Company after the Closing, to:
E.E.W. Eco Energy World London W1S 1HN Attn: Mr. Svante Kumlin, CEO |
with a copy (which will not constitute notice) to:
White & Case LLP London EC2N 1DW Guy Potel Monica Holden Email: ross.allardice@whitecase.com guy.potel@whitecase.com Mholden@whitecase.com
and
White & Case LLP
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11.3 Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. This Agreement shall not be assigned by operation of Law or otherwise without the prior written consent of Purchaser, Pubco and the Company and any assignment without such consent shall be null and void; provided that no such assignment shall relieve the assigning Party of its obligations hereunder.
11.4 Third Parties. Except for the rights of the D&O Indemnified Persons set forth in Section 7.15, which the Parties acknowledge and agree are express third party beneficiaries of this Agreement, nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any Person that is not a Party hereto or thereto or a successor or permitted assign of such a Party.
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11.5 Governing Law; Jurisdiction. This Agreement, and any claim, action, suit, investigation or proceeding of any kind whatsoever, including any counterclaim, cross-claim, or defense, regardless of the legal theory under which such liability or obligation may be sought to be imposed, including statutes of limitations, whether sounding in contract or tort, or whether at law or in equity, or otherwise under any legal or equitable theory, that may be based upon, arising out of or related to this Agreement, any Ancillary Document or the negotiations, execution or performance of this Agreement, any Ancillary Document or the transactions contemplated hereby or thereby, shall be construed in accordance with and governed by the Laws of the State of Delaware, except that the Laws of England and Wales, and the Laws of Cayman Islands solely to the extent required thereby, shall apply to the Pubco Offer, Company Share Transfer, and the Merger, respectively, in each case without giving effect to the conflict of laws principles of the State of Delaware or any other jurisdiction that would cause the Laws of any jurisdiction other than the State of Delaware to apply. Any claim, action, suit, investigation or proceeding of any kind whatsoever, including any counterclaim, cross-claim, or defense, regardless of the legal theory under which such liability or obligation may be sought to be imposed, whether sounding in contract or tort, or whether at law or in equity, or otherwise under any legal or equitable theory, that may be based upon, arising out of or related to this Agreement or the negotiation, execution or performance of this Agreement or the transactions contemplated hereby brought by any other party or its successors or assigns shall be brought and determined only in the Court of Chancery of the State of Delaware in and for New Castle County, Delaware or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court. Each Party hereto hereby (a) irrevocably consents and submits to the exclusive jurisdiction of any specified court for itself and with respect to its property, generally and unconditionally, in any such claim, action, suit, proceeding or investigation, (b) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, (c) agrees that all claims in respect of the claim, action, suit, proceeding or investigation shall be heard and determined only in any such court and (d) agrees not to bring any claim, action, suit, proceeding or investigation arising out of and relating to this Agreement or the transactions contemplated hereby in any other court. Each Party hereto agrees not to commence any claim, action, suit, proceeding or investigation relating thereto except in the courts described above in the State of Delaware, other than the actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in the State of Delaware as described herein, and no Party shall file a motion to dismiss any action filed in the State of Delaware consistent with this Section 11.5, on any jurisdiction or venue-related grounds, including the doctrine of forum non conveniens. Each Party hereto irrevocably agrees that venue would be proper in the courts of Delaware described above, and hereby irrevocably waives any objection that any such court is an improper or inconvenient forum for the resolution of any Action. Nothing herein shall be deemed to affect the right of any Party to serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction, in each case, to enforce judgments obtained in any claim, Action, suit, investigation or proceeding brought pursuant to this Section 11.5.
11.6 WAIVER OF JURY TRIAL. THE PARTIES TO THIS AGREEMENT HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT EACH SUCH PARTY MAY HAVE TO TRIAL BY JURY IN ANY CLAIM, ACTION, SUIT, INVESTIGATION OR PROCEEDING OF ANY KIND OR NATURE ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY ANCILLARY DOCUMENT CONTEMPLATED HEREBY OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER LEGAL OR EQUITABLE THEORY. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, ACTION, SUIT, INVESTIGATION OR PROCEEDING WILL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE IRREVOCABLE WAIVER OF SUCH PARTY’S RIGHT TO TRIAL BY JURY. EACH PARTY HERETO (I) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
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11.7 Specific Performance. Each Party acknowledges that the rights of each Party to consummate the transactions contemplated hereby are unique, recognizes and affirms that in the event of a breach of this Agreement by any Party, money damages may be inadequate and the non-breaching Parties may have not adequate remedy at law, and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by an applicable Party in accordance with their specific terms or were otherwise breached. Accordingly, each Party shall be entitled to seek an injunction or restraining order to prevent breaches of this Agreement and to seek to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or to prove that money damages would be inadequate, this being in addition to any other right or remedy to which such Party may be entitled under this Agreement, at law or in equity.
11.8 Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
11.9 Amendment. This Agreement may be amended, supplemented or modified only by execution of a written instrument signed by Purchaser, Pubco and the Company.
11.10 Waiver. Purchaser on behalf of itself and its Affiliates and the Company on behalf of itself and its Affiliates may in its sole discretion (i) extend the time for the performance of any obligation or other act of any other non-affiliated Party hereto, (ii) waive any inaccuracy in the representations and warranties by such other non-affiliated Party contained herein or in any document delivered pursuant hereto and (iii) waive compliance by such other non-affiliated Party with any covenant or condition contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party or Parties to be bound thereby. Notwithstanding the foregoing, no failure or delay by a Party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder.
11.11 Entire Agreement. This Agreement and the documents or instruments referred to herein, including any exhibits and schedules attached hereto, which exhibits and schedules are incorporated herein by reference, together with the Ancillary Documents, embody the entire agreement and understanding of the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein or the documents or instruments referred to herein, which collectively supersede all prior agreements and the understandings among the Parties with respect to the subject matter contained herein.
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11.12 Interpretation. The table of contents and the Article and Section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the Parties and shall not in any way affect the meaning or interpretation of this Agreement. In this Agreement, unless the context otherwise requires: (a) any pronoun used shall include the corresponding masculine, feminine or neuter forms, and words in the singular, including any defined terms, include the plural and vice versa; (b) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity; (c) any accounting term used and not otherwise defined in this Agreement or any Ancillary Document has the meaning assigned to such term in accordance with GAAP or IFRS, as the context requires; (d) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words “without limitation”; (e) the words “herein,” “hereto,” and “hereby” and other words of similar import shall be deemed in each case to refer to this Agreement as a whole and not to any particular Section or other subdivision of this Agreement; (f) the word “if” and other words of similar import when used herein shall be deemed in each case to be followed by the phrase “and only if”; (g) the term “or” means “and/or”; (h) any reference to the term “ordinary course” or “ordinary course of business” shall be deemed in each case to be followed by the words “consistent with past practice”; (i) any agreement, instrument, insurance policy, Law or Order defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument, insurance policy, Law or Order as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes, regulations, rules or orders) by succession of comparable successor statutes, regulations, rules or orders and references to all attachments thereto and instruments incorporated therein; (j) except as otherwise indicated, all references in this Agreement to the words “Section,” “Article,” “Schedule” and “Exhibit” are intended to refer to Sections, Articles, Schedules and Exhibits to this Agreement; and (k) the term “Dollars” or “$” means United States dollars. Any reference in this Agreement to a Person’s directors shall include any member of such Person’s governing body and any reference in this Agreement to a Person’s officers shall include any Person filling a substantially similar position for such Person. Any reference in this Agreement or any Ancillary Document to a Person’s shareholders or shareholders shall include any applicable owners of the equity interests of such Person, in whatever form, including with respect to Purchaser its shareholders under the Cayman Act or DGCL, as then applicable, or its Organizational Documents. The Parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement. To the extent that any Contract, document, certificate or instrument is represented and warranted to by the Company to be given, delivered, provided or made available by the Company, in order for such Contract, document, certificate or instrument to have been deemed to have been given, delivered, provided and made available to Purchaser or its Representatives, such Contract, document, certificate or instrument shall have been posted to the electronic data site maintained on behalf of the Company for the benefit of Purchaser and its Representatives and Purchaser and its Representatives have been given access to the electronic folders containing such information.
11.13 Counterparts. This Agreement and each Ancillary Document may be executed and delivered (including by facsimile or other electronic transmission) in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
11.14 Legal Representation. The Parties agree that, notwithstanding the fact that EGS may have, prior to Closing, jointly represented Purchaser and Sponsor in connection with this Agreement, and has also represented Purchaser and its Affiliates in connection with matters other than the transaction that is the subject of this Agreement, EGS will be permitted in the future, after Closing, to represent Sponsor or its Affiliates in connection with matters in which such Persons are adverse to Pubco, Purchaser or any of their respective Affiliates, including any disputes arising out of, or related to, this Agreement. The Company, Pubco, and Merger Sub, who are or have the right to be represented by independent counsel in connection with the Transactions, hereby agree, in advance, to waive (and to cause their Affiliates to waive) any actual or potential conflict of interest that may hereafter arise in connection with EGS’s future representation of one or more of Sponsor or its Affiliates in which the interests of such Person are adverse to the interests of Pubco, Merger Sub, Purchaser, the Company, or any of their respective Affiliates, including any matters that arise out of this Agreement or that are substantially related to this Agreement or to any prior representation by EGS of Sponsor, Purchaser or any of their respective Affiliates. The Parties acknowledge and agree that, for the purposes of the attorney-client privilege, Sponsor shall be deemed the client of EGS with respect to the negotiation, execution and performance of this Agreement and the Ancillary Documents. All such communications shall remain privileged after the Closing and the privilege and the expectation of client confidence relating thereto shall belong solely to Sponsor, shall be controlled by Sponsor and shall not pass to or be claimed by Pubco or Purchaser; provided, further, that nothing contained herein shall be deemed to be a waiver by Pubco, Purchaser or any of their respective Affiliates of any applicable privileges or protections that can or may be asserted to prevent disclosure of any such communications to any third party.
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ARTICLE XII
DEFINITIONS
12.1 Certain Definitions. For purposes of this Agreement, capitalized terms used in this Agreement but not otherwise defined herein shall have the meanings set forth below:
“Action” means any notice of noncompliance or violation, or any claim, demand, charge, action, suit, litigation, audit, settlement, complaint, stipulation, assessment or arbitration, or any subpoena (including any formal request for information), inquiry, hearing, proceeding, controversy, or investigation, by or before any Governmental Authority.
“Adjusted Exchange Consideration” means an amount equal to the sum of (i) the Exchange Consideration, plus (ii) the aggregate amount of the exercise prices for all Company Ordinary Shares under In-the-Money Vested Company Options in accordance with their terms (and assuming no cashless exercise) plus (iii) the aggregate proceeds actually received by the Company following the date hereof and prior to the Closing for issuance of equity securities permitted by clause (w) in the proviso of Section 7.2(b)(ii).
“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person. For the avoidance of doubt, U.N. SDG Support, LLC shall be deemed to be an Affiliate of Purchaser prior to the Closing.
“Ancillary Documents” means the Holder Support Agreement, the New Registration Rights Agreement, the Subscription Agreements, the Confidentiality Agreement, the Pubco A&R Memorandum and Articles, Plan of Merger and other documents to be filed with the Registrar of Companies of the Cayman Islands in respect of the Merger, the Pubco Offer Documents, the Surviving Purchaser Subsidiary A&R Memorandum and Articles, and each other agreement, instrument or document attached hereto as an Exhibit, and the other agreements, certificates and instruments to be executed or delivered by any of the Parties hereto in connection with or pursuant to this Agreement.
“Benefit Plans” of any Person means any and all deferred compensation, executive compensation, incentive compensation, equity purchase or other equity-based compensation plan, severance or termination pay, holiday, vacation or other bonus plan or practice, hospitalization or other medical, life or other insurance, supplemental unemployment benefits, profit sharing, pension, or retirement plan, program, agreement, commitment or arrangement, and each other employee benefit plan, program, agreement or arrangement, including each “employee benefit plan” as such term is defined under Section 3(3) of ERISA, maintained or contributed to or required to be contributed to by a Person for the benefit of any employee or terminated employee of such Person, or with respect to which such Person has any Liability, whether direct or indirect, actual or contingent, whether formal or informal, and whether legally binding or not.
“Business Day” means any day other than a Saturday, Sunday or a legal holiday on which commercial banking institutions in New York, New York or Cayman Islands are authorized to close for business, excluding as a result of “stay at home,” “shelter-in-place,” “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any Governmental Authority so long as the electronic funds transfer systems, including for wire transfers, of commercially banking institutions in New York, New York and Cayman Islands are generally open for use by customers on such day.
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“Cayman Act” means the Companies Act of the Cayman Islands (Revised), as amended.
“Code” means the Internal Revenue Code of 1986, as amended, and any successor statute thereto, as amended. Reference to a specific section of the Code shall include such section and any valid treasury regulation promulgated thereunder.
“Company Confidential Information” means all confidential or proprietary documents and information concerning the Target Companies or any of their respective Representatives, furnished in connection with this Agreement or the transactions contemplated hereby; provided, however, that Company Confidential Information shall not include any information which, (i) at the time of disclosure by Purchaser or its Representatives, is generally available publicly and was not disclosed in breach of this Agreement or (ii) at the time of the disclosure by the Company or its Representatives to Purchaser or its Representatives was previously known by such receiving party without violation of Law or any confidentiality obligation by the Person receiving such Company Confidential Information.
“Company Convertible Loans” means, collectively, the loans evidenced by (a) that certain convertible loan agreement by and between Company and Anatino Properties Limited dated July 9, 2021, as amended, for a total principal of €7.5 million and (b) that certain convertible loan agreement by and between Company and KRC Capital B.V. dated May 28, 2021, as amended, for a total principal of €2 million.
“Company Convertible Securities” means, collectively, any Company Options, warrants or rights to subscribe for or purchase any capital stock of the Company or securities convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire any capital stock of the Company.
“Company Equity Plan” means the E.E.W. Eco Energy World Plc 2021 Share Option Plan.
“Company IP License” means any license, sub-license and other agreements or permissions, under which a Target Company is a licensee or otherwise is authorized to use or practice any Intellectual Property of a third party, excluding (a) licenses for Open Source Materials, (b) “shrink wrap,” “click wrap,” and “off the shelf” Software licenses and (c) any other agreements relating to any Software or to the provision of Software-enabled services that is/are commercially available to the public generally with license, maintenance, support and other fees of less than $500,000 per year.
“Company Options” means, collectively, all outstanding options to purchase Company Ordinary Shares, whether or not exercisable and whether or not vested, immediately prior to the Effective Time under the Company Equity Plan or otherwise.
“Company Ordinary Shares” shall mean the ordinary shares in issue, par value €0.05 per share, of the Company as of the date of this Agreement.
“Company Re-registration” means the re-registration of the Company as a private company limited by shares, the steps to effect which shall include, but not be limited to (i) preparing a circular to be sent to the shareholders of the Company in respect of the proposed re-registration of the Company as a private company limited by shares, which shall include all information required and / or recommended by the Takeover Panel, (ii) passing a special resolution by the requisite majority of the Company’s shareholders at a properly convened general meeting of the Company to (A) re-register the Company as a private company limited by shares, (B) change the name of the Company to “E.E.W. Eco Energy World Limited” (or such other name as the Company shall nominate) and (C) adopt new articles of association of the Company, (iii) execute and file Form RR02 (Application by a public company for re-registration as a private limited company) with the United Kingdom Registrar of Companies, together with all necessary enclosures and (iv) the Company taking any steps (in its sole and absolute discretion) to address any application by any shareholder(s) of the Company pursuant to section 98 of the UK Act to cancel the special resolution effecting the re-registration of the Company as a private company limited by shares.
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“Company Securities” means, collectively, the Company Ordinary Shares and any other Company Convertible Securities.
“Company Security Holders” means, collectively, the holders of Company Securities.
“Company Shareholders” means, collectively, the holders of Company Ordinary Shares.
“Company Shareholder Acceptance” means the form of acceptance agreement to be used by shareholders to evidence such Company Shareholder’s acceptance of the Pubco Offer.
“Company VDR” means the electronic data room hosted at www.ecoenergyworld.app.box.com, accessible as of 8:00PM, New York Time on October 5, 2022, containing copies of documents and other information relating to the Company made available to Purchaser, a copy of the contents of which is contained on a USB, delivered by the Company to Purchaser on the date of this Agreement.
“Confidentiality Agreement” means that certain Confidentiality Agreement dated as of May 5, 2022 between Purchaser and the Company.
“Consent” means any consent, approval, waiver, authorization or Permit of, or notice to or declaration or filing with any Governmental Authority or any other Person.
“Contracts” means all contracts, agreements, binding arrangements, bonds, notes, indentures, mortgages, debt instruments, purchase order, licenses (and all other contracts, agreements or binding arrangements concerning Intellectual Property), franchises, leases and other instruments or obligations of any kind, written or oral (including any amendments and other modifications thereto), excluding (a) any Benefit Plan or Company Benefit Plan, (b) licenses for Open Source Materials, (c) “shrink wrap,” “click wrap,” and “off the shelf” Software licenses and (d) any other agreements relating to any Software or to the provision of Software-enabled services that is/are commercially available to the public generally with license, maintenance, support and other fees of less than $500,000 per year.
“Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled,” “Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing a Person (the “Controlled Person”) shall be deemed Controlled by (a) any other Person (i) owning beneficially, as meant in Rule 13d-3 under the Exchange Act, securities entitling such Person to cast ten percent (10%) or more of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive ten percent (10%) or more of the profits, losses, or distributions of the Controlled Person; (b) an officer, director, general partner, partner (other than a limited partner), manager, or member (other than a member having no management authority that is not a Person described in clause (a) above) of the Controlled Person; or (c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew, mother-in-law, father-in-law, sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a trust for the benefit of an Affiliate of the Controlled Person or of which an Affiliate of the Controlled Person is a trustee.
“Copyrights” means any works of authorship, mask works and all copyrights therein, including all renewals and extensions, copyright registrations and applications for registration and renewal, and non-registered copyrights.
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“Environmental Law” means any Law in any way relating to (a) the protection of human health and safety, (b) the protection, preservation or restoration of the environment and natural resources (including air, water vapor, surface water, groundwater, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), or (c) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of Hazardous Materials, including the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., the Federal Water Pollution Control Act, 33 U.S.C. Section 1151 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 111 et seq., Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq. (to the extent it relates to exposure to hazardous substances), the Asbestos Hazard Emergency Response Act, 15 U.S.C. Section 2601 et seq., the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq., the Oil Pollution Act of 1990 and analogous state acts.
“ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Exchange Consideration” means an aggregate value equal to Six Hundred Fifty Million U.S. Dollars ($650,000,000).
“Foreign Plan” means any plan, fund (including any superannuation fund) or other similar program or arrangement established or maintained outside the United States by the Company or any one or more of its Subsidiaries primarily for the benefit of employees of the Company or such Subsidiaries residing outside the United States, which plan, fund or other similar program or arrangement provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.
“Founder Registration Rights Agreement” means the Registration Rights Agreement, dated as of April 27, 2022, by and among Purchaser, Sponsor and the other “Investors” named therein.
“Fraud” means with respect to any Party, means an actual and intentional fraud by such Party of the representations and warranties set forth in ARTICLE IV, ARTICLE V, or ARTICLE VI as applicable, or any certificate delivered hereunder, with the intent that another Party rely on such representations and warranties, coupled with such other Party’s detrimental reliance on such representations and warranties under circumstances that constitute common law fraud under the Laws of the State of Delaware. For the avoidance of doubt, “Fraud” does not include any claim for equitable fraud, promissory fraud, constructive fraud, unfair dealings fraud, or any torts based on negligence or recklessness.
“Fully-Diluted Company Ordinary Shares” means the total number of issued and outstanding Company Ordinary Shares immediately prior to the Effective Time, plus (i) the number of Company Ordinary Shares into which the issued and outstanding In-the-Money Vested Company Options are exercisable as of the Effective Time, plus, (ii) without duplication of clause (i), the additional number of Company Ordinary Shares into which the issued and outstanding In-the-Money Company Options will be exercisable if vested prior to December 31, 2023, (iii) the number of Company Ordinary Shares into which the Company Convertible Securities issued pursuant to the Company Convertible Loans are converted as of the Effective Time, and (iv) the number of shares issued pursuant to clause (w) in the proviso of Section 7.2(b)(ii).
“GAAP” means generally accepted accounting principles as in effect in the United States of America.
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“Governmental Authority” means any federal, state, local, foreign or other governmental, quasi-governmental or administrative body, instrumentality, department or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.
“Grid Connection Agreement” means for a Project, any transmission or distribution connection agreement with the applicable transmission or distribution network operator relating to the provision of grid transmission or distribution services relating to that Project.
“Grid Connection Application” means for a Project, any application submitted to procure a Grid Connection Offer for that Project.
“Grid Connection Documents” means for a Project, the Grid Connection Application (if any), the Grid Connection Offer (if any) and the Grid Connection Agreement (if any) (or any one or combination of them, as the context requires) relating to that Project.
“Grid Connection Offer” means for a Project, a contestable and non-contestable offer or non-contestable offer only (as applicable) for electricity connection works relating to that Project from the applicable transmission or distribution network operator to the Project (or other Target Project SPV as applicable) named on the Grid Connection Application for that Project, as varied, supplemented or novated from time to time.
“Hazardous Material” means any waste, gas, liquid or other substance or material that is defined, listed or designated as a “hazardous substance,” “pollutant,” “contaminant,” “hazardous waste,” “regulated substance,” “hazardous chemical,” or “toxic chemical” (or by any similar term) under any Environmental Law, or any other material regulated, or that could result in the imposition of Liability or responsibility, under any Environmental Law, including petroleum and its by-products, asbestos, polychlorinated biphenyls, radon, mold, and urea formaldehyde insulation.
“IFRS” means international financial reporting standards, as adopted by the International Accounting Standards Board.
“Indebtedness” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money (including the outstanding principal and accrued but unpaid interest), (b) all obligations for the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business), (c) any other indebtedness of such Person that is evidenced by a note, bond, debenture, credit agreement or similar instrument, (d) all obligations of such Person under leases that should be classified as capital leases in accordance with GAAP or IFRS (as applicable based on the accounting principles used by the applicable Person), (e) all obligations of such Person for the reimbursement of any obligor on any line or letter of credit, banker’s acceptance, guarantee or similar credit transaction, in each case, that has been drawn or claimed against, (f) all obligations of such Person in respect of banker’s acceptances issued or created, (g) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically or upon the happening of a contingency, (h) all obligations secured by an Lien on any property of such Person, (i) any premiums, prepayment fees or other penalties, fees, costs or expenses associated with payment of any Indebtedness of such Person and (j) all obligation described in clauses (a) through (i) above of any other Person which is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss.
“Intellectual Property” means all of the following as they exist in any jurisdiction throughout the world: Patents, Trademarks, Copyrights, Trade Secrets, Internet Assets, Software and other intangible rights recognized as protectable intellectual property under the Laws of any country.
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“Internet Assets” means any and all domain name registrations, web sites and related rights and documentation related thereto.
“In-the-Money Company Option” means a Company Option with an exercise price less than the Per Share Price.
“In-the-Money Vested Company Option” means a vested In-the-Money Company Option.
“Investment Company Act” means the U.S. Investment Company Act of 1940, as amended.
“IPO” means the initial public offering of Purchaser Public Units pursuant to the IPO Prospectus.
“IPO Prospectus” means the final prospectus of Purchaser, dated April 27, 2022, and filed with the SEC on April 29, 2022 (File Nos. 333-263542).
“IRS” means the U.S. Internal Revenue Service (or any successor Governmental Authority).
“Knowledge” means, with respect to (i) the Company, the actual knowledge of the Persons listed on Schedule 1.1(a), after reasonable inquiry or (ii) any other Party, (A) if an entity, the actual knowledge of its directors and executive officers, after reasonable inquiry, or (B) if a natural person, the actual knowledge of such Party after reasonable inquiry.
“Law” means any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, Order or Consent that is or has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
“Liabilities” means any and all liabilities, Indebtedness, Actions or obligations of any nature (whether absolute, accrued, contingent or otherwise, whether known or unknown, whether direct or indirect, whether matured or unmatured, whether due or to become due and whether or not required to be recorded or reflected on a balance sheet under GAAP or IFRS (as applicable based on the accounting principles used by the applicable Person) or other applicable accounting standards), including Tax liabilities due and Transaction Expenses.
“Lien” means any mortgage, pledge, security interest, attachment, right of first refusal, option, proxy, voting trust, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof), restriction (whether on voting, sale, transfer, disposition or otherwise), any subordination arrangement in favor of another Person, or any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar Law.
“Lost Certificate Indemnity” means a letter executed by way of deed by a holder of Company Ordinary Shares informing the Company of a lost share certificate, confirming ownership and title to the Company Ordinary Shares represented by such share certificate, and agreeing irrevocably to indemnify the Company in respect of any loss arising as a result of such lost share certificate, in form and substance reasonably acceptable to the Company and Purchaser.
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“Material Adverse Effect” means, with respect to any specified Person, any fact, event, occurrence, change or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect upon (a) the business, assets, Liabilities, results of operations, or financial condition of such Person and its Subsidiaries, taken as a whole or (b) the ability of such Person or any of its Subsidiaries on a timely basis to consummate the Transactions or to perform its obligations hereunder or under any Ancillary Documents to which it is a party or bound; provided, however, that any changes or effects directly or indirectly attributable to, resulting from, relating to or arising out of the following (by themselves or when aggregated with any other, changes or effects) shall not be deemed to be, constitute, or be taken into account when determining whether there has or may, would or could have occurred a Material Adverse Effect: (i) general changes in the financial or securities markets or general economic or political conditions in the country or region in which such Person or any of its Subsidiaries do business (including with respect to or as a result of any material worsening of the ongoing COVID-19 pandemic); (ii) changes, conditions or effects that generally affect the industries in which such Person or any of its Subsidiaries principally operate (including with respect to or as a result of any material worsening of the ongoing COVID-19 pandemic); (iii) changes in GAAP or IFRS (as applicable based on the accounting principles used by the applicable Person) or other applicable accounting principles or mandatory changes in the regulatory accounting requirements applicable to any industry in which such Person and its Subsidiaries principally operate; (iv) conditions caused by acts of God, terrorism, war (whether or not declared) or natural disaster; (v) any failure in and of itself by such Person and its Subsidiaries to meet any internal or published budgets, projections, forecasts or predictions of financial performance for any period (provided that the underlying cause of any such failure may be considered in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur to the extent not excluded by another exception herein); (vi) changes or proposed changes in any Law or other binding directives issued by any Governmental Authority; (vii) any actual or potential sequester, stoppage, shutdown, default or similar event or occurrence by or involving any Governmental Authority; and (viii) with respect to Purchaser, the consummation and effects of the Redemption; provided further, however, that any event, occurrence, fact, condition, or change referred to in clauses (i) - (iv) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred or could reasonably be expected to occur solely to the extent that such event, occurrence, fact, condition, or change has a disproportionate effect on such Person or any of its Subsidiaries compared to other participants in the industries in which such Person or any of its Subsidiaries primarily conducts its businesses. Notwithstanding the foregoing, with respect to Purchaser, the amount of the Redemption or the failure to obtain the Required Purchaser Shareholder Approval shall not be deemed to be a Material Adverse Effect on or with respect to Purchaser.
“Merger Sub Ordinary Shares” means the ordinary shares, par value $0.01 per share, of Merger Sub.
“Nasdaq” means the Nasdaq Capital Market.
“Non-U.S. Plan” means any Company Benefit Plan maintained, sponsored or contributed to (or required to be contributed to) by a Target Company for the benefit of employees or terminated employees primarily working or engaged in a jurisdiction other than the United States, other than any agreement, arrangement, plan, policy or program maintained by or required to be maintained by a Governmental Authority.
“Open Source Materials” means Software or other material that is distributed as “free software,” “open source software” or under similar licensing or distribution terms—including (a) the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Affero General Public License (AGPL), Mozilla Public License (MPL), Server Side Public License (SSPL), Redis Source Available License Agreement, European Union Public License (EUPL), BSD licenses, Artistic License, Netscape Public License, Sun Community Source License (SCSL), Sun Industry Standards License (SISL), Apache License, any “sharealike” Creative Commons licenses (such as CC-BY-SA 4.0), (b) any license that includes the Commons Clause and (c) any license that is approved by, or substantially similar to a license approved by, the Open Source Initiative (www.opensource.org/licenses).
“Order” means any order, decree, ruling, judgment, injunction, writ, determination, binding decision, verdict or judicial award that is or has been made, entered, rendered, or otherwise put into effect by or under the authority of any Governmental Authority.
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“Organizational Documents” means, with respect to any Person that is an entity, its certificate of incorporation or formation, bylaws, operating agreement, memorandum and articles of association or similar organizational documents, in each case, as amended.
“Patents” means any patents, patent applications and the inventions, designs and improvements described and claimed therein, patentable inventions and other patent rights (including any divisionals, provisionals, continuations, continuations-in-part, substitutions or reissues thereof, whether or not patents are granted or issued on any such applications and whether or not any such applications are amended, modified, withdrawn or refiled).
“PCAOB” means the U.S. Public Company Accounting Oversight Board (or any successor thereto).
“Per Share Price” means an amount equal to (i) the Adjusted Exchange Consideration, divided by (ii) the Fully-Diluted Company Ordinary Shares.
“Permits” means all federal, state, local or foreign permits, grants, easements, consents, approvals, authorizations, exemptions, licenses, franchises, concessions, ratifications, permissions, clearances, confirmations, endorsements, waivers, certifications or registrations of any Governmental Authority.
“Permitted Liens” means (a) Liens for Taxes or assessments and similar governmental charges or levies, which either are (i) not delinquent or (ii) being contested in good faith and by appropriate proceedings, and adequate reserves have been established (in the case of Purchaser, in accordance with GAAP) with respect thereto, (b) other Liens imposed by operation of Law arising in the ordinary course of business for amounts which are not due and payable and as would not in the aggregate materially adversely affect the value of, or materially adversely interfere with the use of, the property subject thereto, (c) Liens incurred or deposits made in the ordinary course of business in connection with social security, (d) Liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the ordinary course of business, or (e) Liens arising under this Agreement or any Ancillary Document.
“Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.
“Personal Data” means any data or information that is defined as “personal data,” “personally identifiable information,” “personal information,” “protected health information” or similar term under any applicable Privacy Laws.
“Personal Property” means any machinery, equipment, tools, vehicles, furniture, leasehold improvements, office equipment, plant, parts and other tangible personal property.
“Power Purchase Agreement” means a contract for difference or power purchase agreement to be entered into in respect of a Project between a Target Project SPV or any Affiliate thereof and: (i) a licensed supplier, off-taker or trading service provider; or (ii) a major domestic or international corporation, in each case, in respect of the physical or virtual sale and purchase of the renewable electrical output and/or renewable energy guarantees of origin generated by that Project and/or such other products or environmental attributes associated with the electrical output of that Project.
“Privacy Laws” means all applicable Laws relating to privacy and protection of Personal Data, including the General Data Protection Regulation, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”); the Health Information Technology for Economic and Clinical Health Act, the California Consumer Privacy Act, the Privacy Act 1988 (Commonwealth of Australia) and the Privacy and Data Protection Act 2014 (Victoria, Australia), in each case to the extent applicable to a Target Company.
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“Privacy Policies” means all written policies and notices published from time to time by a Target Company, regarding the processing or security of Personal Data.
“Project Documents” means for each Project, the Property Agreements (if any) and the Grid Connection Documents (if any).
“Projects” means those solar photovoltaic projects being developed by the Target Companies, as are described in the Company VDR.
“Property” means for a Project, the property or site on which that Project is planned to be constructed and operated
“Property Agreements” means for a Project, any agreement, exclusivity agreement, option, license, lease or heads of terms or letter of intent (if any) entered into by any Target Project SPV in relation to the Property for that Project.
“Pubco Memorandum and Articles of Association” means the Memorandum and Articles of Association of Pubco.
“Pubco Offer Documents” means the Exchange Offer Prospectus and the Company Shareholder Acceptance.
“Pubco Ordinary Shares” means the ordinary shares of Pubco par value $0.0001 per share.
“Pubco Private Warrant” means one whole warrant entitling the holder thereof to purchase one Pubco Ordinary Share at a purchase price of $11.50 per full share.
“Pubco Public Warrant” means one whole warrant entitling the holder thereof to purchase one Pubco Ordinary Share at a purchase price of $11.50 per full share.
“Pubco Securities” means the Pubco Ordinary Shares, and the Pubco Warrants, collectively.
“Pubco Warrants” means the Pubco Private Warrants and Pubco Public Warrants, collectively.
“Purchaser Class A Ordinary Shares” means the Class A ordinary share, par value $0.0001 per share, of Purchaser.
“Purchaser Class B Ordinary Shares” means the Class B ordinary shares, par value $0.0001 per share, of Purchaser.
“Purchaser Confidential Information” means all confidential or proprietary documents and information concerning Purchaser or any of its Representatives; provided, however, that Purchaser Confidential Information shall not include any information which, (i) at the time of disclosure by the Company or any of its respective Representatives, is generally available publicly and was not disclosed in breach of this Agreement or (ii) at the time of the disclosure by Purchaser or its Representatives to the Company or any of its respective Representatives, was previously known by such receiving party without violation of Law or any confidentiality obligation by the Person receiving such Purchaser Confidential Information.
“Purchaser Memorandum and Articles” means the amended and restated memorandum and articles of association of Purchaser, as amended and in effect under the Cayman Act; provided that references herein to the Purchaser Memorandum and Articles for periods after the Merger includes the Surviving Purchaser Subsidiary A&R Memorandum and Articles.
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“Purchaser Ordinary Shares” means Purchaser Class A Ordinary Shares and Purchaser Class B Ordinary Shares, collectively.
“Purchaser Preference Shares” means the preference shares, par value $0.0001 per share, of Purchaser.
“Purchaser Private Warrant” means one private placement warrant that was issued to Sponsor at the time of the consummation of the IPO, entitling the holder thereof to purchase one (1) Purchaser Class A Ordinary Share at a purchase price of $11.50 per share.
“Purchaser Public Units” means the units issued in the IPO (including overallotment units acquired by Purchaser’s underwriter) consisting of one (1) Purchaser Class A Ordinary Share, one (1) right that entitles the holder thereof to receive one-tenth (1/10) of one Purchaser Class A Ordinary Share, and one-half of one redeemable Purchaser Public Warrant.
“Purchaser Public Warrant” means one (1) warrant that was issued at the time of the consummation of the IPO, entitling the holder thereof to purchase one (1) Purchaser Class A Ordinary Share at a purchase price of $11.50 per share.
“Purchaser Right” means one right that was included as part of each Purchaser Public Unit entitling the holder thereof to receive one-tenth (1/10th) of a Purchaser Class A Ordinary Share upon the consummation by Purchaser of its Business Combination.
“Purchaser Securities” means Purchaser Public Units, Purchaser Ordinary Shares, Purchaser Preference Shares, Purchaser Rights, and Purchaser Warrants, collectively.
“Purchaser Warrants” means Purchaser Private Warrants and Purchaser Public Warrants, collectively.
“Redemption Price” means an amount equal to price at which each Purchaser Class A Ordinary Share is redeemed or converted pursuant to the Redemption (as equitably adjusted for share splits, share dividends, combinations, recapitalizations and the like after the Closing).
“Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, or leaching into the indoor or outdoor environment, or into or out of any property.
“Remedial Action” means all actions to (i) clean up, remove, treat, or in any other way address any Hazardous Material, (ii) prevent the Release of any Hazardous Material so it does not endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (iii) perform pre-remedial studies and investigations or post-remedial monitoring and care, or (iv) correct a condition of noncompliance with Environmental Laws.
“Representatives” means, as to any Person, such Person’s Affiliates and the respective managers, directors, officers, employees, independent contractors, consultants, advisors (including financial advisors, counsel and accountants), agents and other legal representatives of such Person or its Affiliates.
“SEC” means the U.S. Securities and Exchange Commission (or any successor Governmental Authority).
“Securities Act” means the Securities Act of 1933, as amended.
“Software” means any computer software programs, including all source code, object code, and documentation related thereto and all software modules, tools and databases.
“SOX” means the U.S. Sarbanes-Oxley Act of 2002, as amended.
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“Sponsor” means U.N. SDG Support, LLC, a Delaware limited liability company, in its capacity as sponsor of Purchaser.
“Subsidiary” means, with respect to any Person, any corporation, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons will be deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons will be allocated a majority of partnership, association or other business entity gains or losses or will be or control the managing director, managing member, general partner or other managing Person of such partnership, association or other business entity. A Subsidiary of a Person will also include any variable interest entity which is consolidated with such Person under applicable accounting rules.
“Target Companies” means, collectively, the Company and its direct and indirect Subsidiaries.
“Target Project SPV” means each Target Company which acts as a special purpose vehicle for a Project.
“Tax Return” means any return, declaration, report, claim for refund, information return or other documents (including any related or supporting schedules, statements or information) filed or required to be filed in connection with the determination, assessment or collection of any Taxes or the administration of any Laws or administrative requirements relating to any Taxes.
“Taxes” means (a) all direct or indirect U.S. federal, state, local, non-U.S. and other net income, gross income, gross receipts, sales, use, value-added, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, social security and related contributions due in relation to the payment of compensation to employees, excise, severance, stamp, occupation, premium, property, windfall profits, alternative minimum, estimated, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto, and (b) any liability for payment of amounts described in clause (a) whether as a result of being a member of an affiliated, consolidated, combined or unitary group for any period or otherwise through operation of law.
“Taxing Authority” shall mean any U.S. federal, state, provincial, municipal, local or non-U.S., authority, service, body or official competent to assess, collect or impose a liability for Taxes.
“Trade Secrets” means (a) any trade secrets, (b) confidential business information, and (c) concepts, ideas, designs, research or development information, processes, procedures, techniques, technical information, specifications, operating and maintenance manuals, engineering drawings, methods, know-how, data, mask works, discoveries, inventions, modifications, extensions and improvements that are subject to trade secret protection, know-how protection or protection of confidential information under the Laws of any jurisdiction.
“Trademarks” means any trademarks, service marks, trade dress, trade names, brand names, designs, logos, or corporate names (including, in each case, the goodwill associated therewith), whether registered or unregistered, and all registrations and applications for registration and renewal thereof.
“Transaction Expenses” means, with regard to a Party, all fees and expenses of any of such Party incurred or payable as of the Closing and not paid prior to the Closing (i) (x) in the case of the Company, in connection with the consummation of the transactions contemplated hereby, and (y) in the case of the Purchaser, Pubco, or Merger Sub in connection with the consummation of the transactions contemplated hereby, the Purchaser’s initial public offering or their respective operations, including any amounts payable to professionals (including investment bankers, brokers, finders, attorneys, accountants and other consultants and advisors) retained by or on behalf of such Party, (ii) any change in control bonus, transaction bonus, retention bonus, termination or severance payment or payment relating to terminated options, warrants or other equity appreciation, phantom equity, profit participation or similar rights, in any case, to be made to any current or former employee, independent contractor, director or officer of any Target Company at or after the Closing pursuant to any agreement to which any Target Company is a party prior to the Closing which become payable (including if subject to continued employment) as a result of the execution of this Agreement or the consummation of the transactions contemplated hereby, and (iii) any sales, use, real property transfer, stamp, stock transfer, documentary, excise, recording, registration, value-added or other similar transfer Taxes imposed on Purchaser, Pubco, Merger Sub or any Target Company or otherwise imposed in connection with the Transactions.
“Transactions” shall mean the transactions contemplated by or pursuant to this Agreement or the Ancillary Documents, including the Merger and Company Share Transfer.
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“Trust Account” means the trust account established by Purchaser with the proceeds from the IPO pursuant to the Trust Agreement in accordance with the IPO Prospectus.
“Trust Agreement” means that certain Investment Management Trust Agreement, dated as of April 27, 2022, as it may be amended, by and between Purchaser and the Trustee, as well as any other agreements entered into related to or governing the Trust Account.
“Trustee” means Continental Stock Transfer & Trust Company, in its capacity as trustee under the Trust Agreement.
“UK Act” means the Companies Act 2006 (c 46), as amended.
“Willful Breach” means an intentional and willful breach, or an intentional and willful failure to perform, in each case that is the consequence of an act or omission by a Party with the knowledge that the taking of such act or failure to take such act would cause an actual breach of this Agreement.
12.2 Section References. The following capitalized terms, as used in this Agreement, have the respective meanings given to them in the Section as set forth below adjacent to such terms:
| Term | Section | |
| Acquisition Proposal | 7.6(a) | |
| Agreement | Preamble | |
| Alternative Transaction | 7.6(a) | |
| Antitrust Laws | 7.9(b) | |
| Audited Company Financials | 6.7(a) | |
| Business Combination | 10.1 | |
| Closing | 3.1 | |
| Closing Date | 3.1 | |
| Closing Filing | 7.12(b) | |
| Closing Press Release | 7.12(b) | |
| Company | Preamble | |
| Company Benefit Plan | 6.19(a) | |
| Company Certificates | 2.5(a) | |
| Company Disclosure Schedules | Article VI | |
| Company Financials | 6.7(a) | |
| Company IP | 6.13(a) | |
| Company Material Contract | 6.12(a) | |
| Company Ordinary Shares | 6.3(a) | |
| Company Permits | 6.10 | |
| Company Real Property Leases | 6.15 | |
| Company Registered IP | 6.13(a) | |
| Company Share Transfer | Recital E | |
| Company Ordinary Shares | 6.3(a) | |
| D&O Indemnified Persons | 7.15(a) | |
| D&O Tail Insurance | 7.15(b) | |
| DGCL | 1.1 | |
| Effective Time | 1.2 | |
| Enforceability Exceptions | 4.2 | |
| Environmental Permits | 6.20(a) | |
| Expenses | 9.3 | |
| Exchange Offer Prospectus | 7.11(a) | |
| Federal Securities Laws | 7.7 | |
| Fundamental Representations | 8.3(a) | |
| Interim Balance Sheet Date | 6.7(a) |
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| Interim Period | 7.1 | |
| Interim Period Financials | 7.4(b) | |
| Letter of Transmittal | 2.5(a) | |
| Merger | Recital E | |
| Merger | Recital E | |
| Merger Sub | Preamble | |
| OFAC | 4.19(c) | |
| Outside Date | 9.1(a) | |
| Party(ies) | Preamble | |
| PIPE Financing | Recital H | |
| PIPE Investor | Recital H | |
| PIPE Shares | Recital H | |
| Plan of Merger | 1.2 | |
| Post-Closing Pubco Board | 7.14(a) | |
| Proxy Statement | 7.11(a) | |
| Pubco | Preamble | |
| Pubco A&R Memorandum and Articles | Recital K | |
| Pubco Offer | Recital E | |
| Pubco Option | 2.3 | |
| Public Certifications | 4.6(a) | |
| Public Shareholders | 10.1 | |
| Purchaser | Preamble | |
| Purchaser Certificate of Merger | 1.2 | |
| Purchaser Disclosure Schedules | Article IV | |
| Purchaser Extraordinary General Meeting | 7.11(a) | |
| Purchaser Financials | 4.6(c) | |
| Purchaser Material Contract | 4.14(a) | |
| Purchaser Shareholder Approval Matters | 7.11(a) | |
| Redemption | 2.1 | |
| Registrar | 2.5(a) | |
| Registration Statement | 7.11(a) | |
| Related Person | 7.11(a) | |
| Required Purchaser Shareholder Approval | 8.1(a) | |
| SEC Reports | 4.6(a) | |
| Signing Filing | 7.12(b) | |
| Signing Press Release | 7.12(b) | |
| Subscription Agreements | Recital H | |
| Surviving Company Subsidiary | 2.1 | |
| Takeover Panel | 8.3(g) | |
| Top Customers | 1.1 | |
| Transmittal Documents | 2.5(b) | |
| Trust Account Released Claims | 10.1 | |
| UK Takeover Code | 6.29 | |
| Unconditional Date | Recital I | |
| Holder Support Agreement | Recital G |
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IN WITNESS WHEREOF, each Party hereto has caused this Business Combination Agreement to be signed and delivered as of the date first written above.
| Purchaser: | ||
| CLIMATEROCK | ||
| By: | /s/ Per Regnarsson | |
| Name: | Per Regnarsson | |
| Title: | Chief Executive Officer | |
| Pubco: | ||
| CLIMATEROCK HOLDINGS LIMITED | ||
| By: | /s/ Per Regnarsson | |
| Name: | Per Regnarsson | |
| Title: | Director | |
| Merger Sub: | ||
| CLIMATEROCK MERGER SUB LIMITED | ||
| By: | /s/ Per Regnarsson | |
| Name: | Per Regnarsson | |
| Title: | Director | |
| The Company: | ||
| E.E.W. ECO ENERGY WORLD PLC | ||
| By: | /s/ Svante Kumlin | |
| Name: | Svante Kumlin | |
| Title: | Director | |
Signature Page to Business Combination Agreement
Exhibit 10.1
PRIVATE AND CONFIDENTIAL
To the attention of:
Mr. Charles Ratelband
ClimateRock
50 Sloane Avenue, London. SW3 3DD
London, 21 September 2022
Dear Charles,
Pursuant to our prior conversations , we are pleased to now formally confirm the arrangements under which Gluon Partners LLP, (“GLUON”, “we” or “us”) is engaged by ClimateRock, a special purpose acquisition company, with an address 50 Sloane Avenue, London, SW3 3DD, United Kingdom (hereinafter, the “Company” or “you”), to act in an exclusive consultancy role for the management and coordination of one or more business combinations between the Company and one or more energy transition companies (each of those a “Transaction” and all together, the “Transactions”) and the coordination of other advisors involved in the Transactions and the integration of their respective services. It is understood that where references are made to the future, such as “will”, this is also deemed to include Services (as defined below) provided prior to the execution of the agreement.
| 1. | Scope of Services |
Our consultancy services (the “Services”) will include the evaluation of targets, the preparation, analysis and management of material information regarding potential Transactions and business combination scenarios and the evaluation of financing scenarios, including the coordination and integration of advisory work provided by other advisors, and predominantly Alantra, Newbridge Securities Corp., K2 Management, Ellenoff Grossman & Schole LLP, Simmons & Simmons, and Maxim Group LLC.
We will not be responsible for giving or obtaining commercial advice or special advice or service in areas which are outside our expertise, such as that normally carried out by a financial, legal, accountancy, tax or environmental adviser, or where you will (or customarily would) have other advisers involved.
In providing the Services, GLUON may assume that all your directors and officers and employees named by you from whom we receive instructions are duly authorized to give any such instructions and may do anything which is reasonable or necessary either for GLUON to perform the Services or to comply with any applicable laws, rules, regulations, authorizations, consents or practices as may be reasonable or appropriate.
| 2. | Fees |
Transaction Success Fee
The Company shall pay GLUON a remuneration for its Services as follows:
| ● | USD 500,000 upon Completion of one or more Transactions with an aggregate purchase price equal to or less than USD 400,000,000; and |
| ● | USD 500,000 upon Completion of one or more Transactions with an aggregate purchase price of greater than USD 400,000,000. For the avoidance of doubt this means that the total remuneration for Transactions with an aggregate purchase price of more than USD 400,000,001 will be USD 1,000,000. |
The Transaction purchase price will correspond to the purchase price paid to the sellers of the applicable Target, including cash, debt and equity funded payments.
Each Transaction Success Fee shall be payable upon consummation of the applicable Transaction (i.e. when the transaction is closed, following fulfillment, if applicable, of conditions precedent) regardless of (i) the calendar for the payment of the purchase price, (ii) how the purchase price is funded, (iii) any deferred payment subsequent to consummation of the Transaction, or (iv) any adjustments to the price of the Transaction subsequent to consummation (“Completion”).
In the event of Completion, any accrued fees (i.e. $10,000/month recurring fees) owed by the Company to GLUON will be waived.
| 3. | Expenses, Invoicing and Taxes |
In addition to the fees described in Section 2 above, the Company will reimburse GLUON for all reasonable and documented out-of-pocket expenses incurred in connection with providing the Services for the Transactions, which will be billed from time-to-time. Generally, these represent travel, accommodation, document production, telecommunications and courier costs and related matters; provided that (i) no individual expense (or series of related expenses) in excess of USD 10,000 shall be incurred without prior written approval by the Company and (ii) no expenses may be incurred, in the aggregate, in excess of USD 50,000 without prior written approval by the Company.
The Company will pay its own fees and expenses and general Transaction related fees and expenses incurred in connection with providing the Services for the Transaction including without limitation, those related to the Company’s legal counsels and auditors, any due diligence investigations conducted by third parties commissioned by the Company, the cost of any investor presentations, fees, and printing costs.
All amounts payable to GLUON under the terms of this letter agreement shall be paid to GLUON free and clear of, and without any deduction or withholding for or on account of, any current or future taxes, levies, duties, or charges. Without limiting the foregoing, all amounts payable will be exclusive of value added tax or any other similar taxes (“VAT”). All amounts charged will be invoiced together with VAT, where appropriate.
All amounts payable by the Company hereunder shall be payable within 15 days of presentation of an invoice by GLUON. All invoicing will be in USD.
50 Sloane Avenue, London SW3 3DD, United Kingdom
2
| 4. | Information, Confidentiality and Publicity |
The Company will furnish or cause to be furnished to GLUON such information as we believe appropriate to execute the Transactions and will provide GLUON with access to the officers, directors, employees, auditors, counsels and other representatives of the Company and its affiliates.
GLUON will rely on the accuracy and completeness, without independent verification, of any information we receive in connection with this engagement. We will not independently evaluate or appraise any assets or liabilities that may be involved in this engagement.
The Company will be solely responsible for the content of the information it will furnish to GLUON that is used in the course of the Transactions; provided that any information provided on behalf of a Target shall be to the best of the Company’s knowledge. Consequently, it should not be understood that GLUON, through the elaboration of the documents regarding the Transactions (hereinafter the “Analysis”), guarantees the completeness or accuracy of facts set forth in such documents which were not generated by or derived from GLUON.
The criteria used to prepare the Analysis are based on estimates of future results of the Company and the targets, their businesses and assets and in light of the inherent uncertainties of any information concerning the future, some of these hypotheses might not materialize as defined herein.
Also, the Analysis are based on current economic and market conditions and, in case these vary in the future, they should be revised.
In light of the foregoing, neither GLUON nor any of its subsidiaries, officers, directors, employees, auditors, counsels and other representatives accept any responsibility whatsoever for damages or losses that, directly or indirectly, may derive from the decisions that are adopted based on the Analysis, nor of the use that the recipients make of the Analysis, except in the case of damages or losses resulting from a GLUON’s misconduct or negligence.
GLUON acknowledges that, in connection with the Services to be provided pursuant to this letter agreement, certain confidential, non-public and proprietary information concerning the Company, the Targets, any potential business combination and any potential investors in connection therewith (“Company Confidential Information”) has been or may be directly or indirectly disclosed by the Company, a Target or their respective Representatives to GLUON or its Representatives. GLUON agrees that, without the Company’s prior consent, no Company Confidential Information will be (x) used by GLUON or its Representatives other than in connection with performing the Services under this agreement or (y) disclosed, in whole or in part, by GLUON or its Representatives to any other person other than: (i) to those Representatives of GLUON who need access to such Confidential Information for purposes of performing the Services to be provided hereunder, who are informed of the confidential nature of such information and bound by non-disclosure and non-use obligations consistent with the provisions of this agreement; (ii) to the Company, its Board of Directors or executive officers and each of the Company’s other Representatives bound by confidentiality obligations; or (iii) as may be required by applicable law, regulation, SEC or stock exchange requirement or legal process (“Legal Requirement”). The term “Company Confidential Information” does not include any information: (a) that was already in the possession of GLUON or any of its Representatives on a non-confidential basis prior to the time of disclosure to GLUON or such Representatives; (b) obtained by GLUON or any of its Representatives from a third person which, insofar as is known to GLUON or such Representatives after reasonably inquiry, is not subject to any prohibition against disclosure; (c) which was or is independently developed by GLUON or any of its Representatives without use of or reference to any Confidential Information or violating any confidentiality obligations under this agreement or any applicable PIPE agreement; or (d) which was or becomes generally available to the public through no fault of or breach of this agreement or, if applicable, any PIPE engagement by GLUON or its Representatives. If GLUON or its Representative becomes required by Legal Requirement to disclose any Confidential Information, (x) GLUON shall provide prompt notice thereof (to the extent permitted by Legal Requirement) to the Company reasonably in advance of any disclosure, (y) GLUON will (and will cause its Representatives to) reasonably cooperate (at the sole expense of the Company) with any reasonable request of the Company to seek an order or other remedy to prevent or narrow such disclosure, and (z) if after compliance with clauses (x) and (y) above, such disclosure is still required after giving effect to any successful efforts by the Company to prevent or narrow such disclosure, GLUON or its Representative, as applicable, may disclose only that Confidential Information which its counsel advises it is required by Legal Requirement to disclose. For purposes of this letter agreement, the term “Representatives” with respect to any person shall mean such person’s affiliates and its and its affiliate’s respective directors, managers, officers, employees, consultants, shareholders, advisors, appraisers, agents and other representatives.
50 Sloane Avenue, London SW3 3DD, United Kingdom
3
GLUON acknowledges that U.S. securities laws and other laws prohibit any person who has material, non-public information concerning a public company from purchasing or selling any of its securities, and from communicating such information to any person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. GLUON acknowledges that the confidentiality provisions of this Section 4 shall be deemed to be an agreement to keep the Company Confidential Information in confidence as contemplated by Regulation FD promulgated by the SEC. In addition, GLUON acknowledges and agrees that some of the Company Confidential Information (including the fact that discussions between the Company and any Target have been undertaken with respect to a Transaction) may be considered “material non-public information” for purposes of the federal securities laws and that GLUON and its Representatives will abide by all securities laws relating to the handling of and acting upon material non-public information of the Company.
Any advice or opinions provided by GLUON may not be disclosed or referred to publicly or to any third party except in accordance with our prior written consent, except when required to be disclosed by any supervisory body or authority or by other Legal Requirement. The Company agrees to keep confidential the terms of this engagement.
The Company acknowledges and agrees that GLUON may describe or refer to GLUON’s involvement in any Transaction resulting from its engagement under this letter agreement and its services rendered in any advertisements placed in financial or other newspapers and journals (at GLUON’s expense) and in any pitch, presentation or other such similar marketing materials which GLUON uses as part of its ordinary course of management and financial consultancy services, in the web page of the GLUON Group or in its annual reports provided that (i) the intended Transactions are completed, (ii) the Transaction becomes public other than as a result of GLUON’s disclose.
The obligations of GLUON set forth in this Section 4 shall remain in effect during the term of this agreement and for a period of two (2) years after the termination or expiration of this agreement.
| 5. | Delegation and agents |
The Company agrees that GLUON, after written approval by the Company which not be unreasonably withheld may appoint one or more of its subsidiaries or affiliates or such other person or persons as GLUON thinks fit to act as agent, delegate, sub-contractor or otherwise in connection with or pursuant to the Transactions and also agrees that we may authorise such persons to further sub-delegate their appointment.
This power of delegation shall be without prejudice to GLUON’s responsibility to the Company for the fulfilment of GLUON’s obligations. References in this letter agreement to “GLUON”, “we” and “us” shall, save where the context otherwise requires, include any such subsidiaries, affiliates, agents, delegates, or subcontractors.
50 Sloane Avenue, London SW3 3DD, United Kingdom
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| 6. | Term and Termination |
This engagement comes in full force and effect on the date of signature by both the Company and GLUON and may be terminated (i) by the Company or by GLUON at any time with or without cause upon 15 days written notice and without any liability or continuing obligation to you or to us (a “Convenience Termination”) or (ii) by providing written notice to the other party in the event that the other party has breached this letter agreement in any material respect and failed to cure such breach within 10 days after receipt of notice of such material breach from the terminating party (a “Cause Termination”);provided that, Section 4 (Information, Confidentiality and Publicity), Section 8 (Liability and Indemnification), Section 10 (Applicable Law and Jurisdiction), Section 11 (Waiver Against Trust) will remain in full force and effect regardless of any such termination. It is agreed that by executing this agreement the Company also ratifies any and all Services provided by Gluon prior to the execution of this agreement.
GLUON will be entitled to receive the Transaction Success Fee while this letter agreement is in force or in the case of a Convenience Termination by the Company or a Cause Termination by GLUON, within 12 months of the date of termination of this letter agreement. For the avoidance of doubt, in the event of a Convenience Termination by GLUON or a Cause Termination by the Company, GLUON shall not be entitled to any Transaction Success Fee after such termination. No termination or expiration of this letter agreement or GLUON’s engagement hereunder shall affect the Company’s obligation to reimburse GLUON in accordance with Section 3 herein for its reasonable accrued expenses incurred in performance of the Services prior to such termination.
| 7. | Exclusivity |
While this agreement is in force, you undertake not to entrust to other consultants similar undertakings relating to the Services described in this letter agreement in Europe and the United Kingdom.
| 8. | Liability and indemnification |
Subject to Section 11, the Company agrees to indemnify and hold harmless GLUON and its directors, officers, agents, employees, affiliates and controlling parties (each a “Indemnified Party”) from and against any and all losses, claims, damages or liabilities (or actions in respect thereof) relating to the performance by GLUON of the Services contemplated by this letter agreement and will reimburse any Indemnified Party for all expenses (including reasonable legal fees and expenses) as they are incurred in connection with investigating, preparing or defending any such action or claim, except where a court of competent jurisdiction has rendered a final judgment that such action or claim resulted from GLUON’s wilful misconduct or gross negligence.
50 Sloane Avenue, London SW3 3DD, United Kingdom
5
GLUON will only be liable (whether directly or indirectly, in contract or tort or otherwise) to the Company and any of its affiliates in connection with the Transaction when a court of competent jurisdiction has rendered a final judgment that such action or claim resulted from GLUON wilful misconduct or gross negligence. The parties agree to limit the liability of GLUON when it has acted with gross negligence or wilful misconduct up to the amount of the fees paid by the Company in accordance with this document. This limitation of responsibility is the result of the negotiations held by the parties, whereby the amount of the fees to be received by GLUON has been agreed taking into account the maximum amount which may be claimed to GLUON in connection with its liability hereunder. Any responsibility on the side of the GLUON shall be assumed by GLUON and, accordingly, any responsibility of its group companies and its board members, directors or employees, is hereby expressly assumed by GLUON.
Client agrees that GLUON cannot be held liable or deemed in default under the present letter agreement for any breach of an obligation arising hereunder, when such failure is solely the responsibility of a third party, which is not under the control of GLUON. In addition, GLUON’s liability cannot be increased by any agreement made by the Company, with a third party, without the consent of GLUON, that limits the liability of that third party.
| 9. | Data Protection |
The Company is hereby informed and expressly consents, by signing this agreement, to the processing of the personal data voluntarily provided in the course of the Transaction, as well as of any data which might be provided to GLUON, directly or indirectly, for the enforcement of this agreement or regarding the contracting of any service or product, even after the end of the contractual relation, including, if applicable, any communication or international data transfer among members of the GLUON Group which might be made for the purposes specified in our Data Protection Policy (the “Data Protection Policy”).
Where you provide personal data on behalf of another individual, you are responsible for notifying that individual that you have provided their personal data to us and directing them to our Data Protection Policy so they can see how we will process their personal data. The Company guarantees the accuracy and truthfulness of the personal data provided, undertaking to keep them duly updated and to notify to GLUON of any changes.
By executing this agreement, the Company accepts the processing and communication of its personal data by GLUON for the delivery of information and advertising on the GLUON Group products and services. In any case, your consent to the treatment of your data for these purposes is revocable, and you may withdraw your consent or exercise any of the rights mentioned in our Data Protection Policy.
50 Sloane Avenue, London SW3 3DD, United Kingdom
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| 10. | Applicable law and jurisdiction |
This agreement shall be governed by and construed in accordance with the laws of the United Kingdom. The parties irrevocably agree that the Courts of the United Kingdom have the exclusive jurisdiction to settle any disputes which may arise out of or in connection with this letter and that accordingly any suit, action or proceeding arising out of or in connection with this letter may be brought in such courts.
| 11. | Waiver Against Trust |
Reference is made to the final prospectus of The Company, dated as of April 27, 2022 and filed with the Securities and Exchange Commission (File No. 333- 263542) on April 29, 2022 (the “Prospectus”). GLUON understands that The Company has established a trust account (the “ Trust Account” ) containing the proceeds of its initial public offering (the “ IPO” ) and the overallotment securities acquired by its underwriters and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of the Company’ s public stockholders (including overallotment shares acquired by the Company’s underwriters), and that, the Company may disburse monies from the Trust Account only as described in the Prospectus, its organizational documents or the Investment Management Trust Agreement entered into in connection with the IPO. For and in consideration of the Company entering into this letter agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, GLUON hereby agrees on behalf of itself and its affiliates that, notwithstanding anything to the contrary in this letter agreement, neither GLUON nor any of its affiliates do now or shall at any time hereafter have any right, title, interest or claim of any kind in or to any monies in the Trust Account or distributions therefrom, or make any claim against the Trust Account (including any distributions therefrom), regardless of whether such claim arises as a result of, in connection with or relating in any way to, this letter agreement or any proposed or actual business relationship between the Company or its Representatives, on the one hand, and GLUON or its Representatives, on the other hand, or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (collectively, the “Released Claims”). GLUON on behalf of itself and its affiliates hereby irrevocably waives any Released Claims that GLUON or any of its affiliates may have against the Trust Account (including any distributions therefrom) now or in the future as a result of, or arising out of, this letter agreement and will not seek recourse against the Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of this Letter agreement or any other agreement with the Company or its affiliates). GLUON agrees and acknowledges that such irrevocable waiver is material to this letter agreement and specifically relied upon by the Company and its affiliates to induce the Company to enter in this letter agreement, and GLUON further intends and understands such waiver to be valid, binding and enforceable against GLUON and each of its affiliates under applicable law. The provisions of this Section 11 shall survive any expiration or termination of this letter agreement and continue indefinitely.
| 12. | General |
This letter agreement represents the entire agreement between the Company and GLUON with respect to this engagement and may only be amended in writing. Each provision of this letter agreement is severable and if any such provision is or becomes invalid or illegal or unenforceable, the remaining provisions will not be affected.
50 Sloane Avenue, London SW3 3DD, United Kingdom
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This letter agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original of this letter agreement, but all the counterparts shall together constitute the same agreement.
Should the terms and conditions of the present agreement become acceptable to you, please sign and return the copy enclosed.
Before signing this document, please read the basic data protection information given in the Data Protection clause. By signing this document, you consent to the processing of your personal data in the terms and conditions stipulated in such clause.
In this letter agreement, the term: (i) “including” (and with correlative meaning “include”) shall be deemed in each case to be followed by the words “without limitation”; (ii) “person” shall refer to any individual, corporation, partnership, trust, limited liability company or other entity or association, including any governmental or regulatory body, whether acting in an individual, fiduciary or any other capacity; and (iii) “affiliate” shall mean, with respect to any specified person, any other person or group of persons acting together that, directly or indirectly, through one or more intermediaries controls, is controlled by or is under common control with such specified person (where the term “control” (and any correlative terms) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities, by contract or otherwise).
For the avoidance of doubt, any reference in this letter agreement to an affiliate of the Company prior to the closing of a business combination will include its sponsor, U.N. SDG Support LLC.
Yours sincerely,
Gluon Partners LLP
| /S/ Maxamilian Delamain | |
| Maxamilian Delamain | |
| Agreed and accepted, | |
| Climate Rock | |
| /S/ Charles Ratelband | |
| Charles Ratelband |
50 Sloane Avenue, London SW3 3DD, United Kingdom
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Exhibit 10.2
AMENDMENT NO. 1 TO
LETTER
AGREEMENT
This First Amendment (the “Amendment”) to the letter agreement dated September 21, 2022 (the “Letter Agreement”) is made and entered into as of the 5th day of October 2022 by and between ClimateRock (the “Company”) and Gluon Partners LLP (“Gluon”). The Company and Gluon are herein collectively referred to as the “Parties” with each individually being a “Party.”
WITNESSETH:
Whereas, the Parties entered into that certain Letter Agreement; and
Whereas, the Parties desire to modify certain terms of the Letter Agreement, all as more fully described herein.
Now, therefore, in consideration of the foregoing and the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
| 1. | Definitions. Capitalized terms used and not otherwise defined herein shall have the meaning ascribed to such terms in the Letter Agreement. |
| 2. | Amendments. |
The following are hereby added as Section 2 of the Letter Agreement (replacing prior Section 2):
Transaction Success Fee and financing related fees
The Company shall pay GLUON a remuneration for its Services as follows:
| ● | USD 250,000 upon Completion of one or more Transactions with an aggregate purchase price equal to or more than USD 400,000,000. |
The Transaction purchase price will correspond to the purchase price paid to the sellers of the applicable Target, including cash, debt and equity funded payments.
The Transaction Success Fee shall be payable upon consummation of the applicable Transaction (i.e. when the transaction is closed, following fulfillment, if applicable, of conditions precedent) regardless of (i) the calendar for the payment of the purchase price, (ii) how the purchase price is funded, (iii) any deferred payment subsequent to consummation of the Transaction, or (iv) any adjustments to the price of the Transaction subsequent to consummation (“Completion”).
With respect to any financing undertaken by the Company (or any successor to the Company) introduced by Gluon during the term of the Agreement the following fees will be payable by the Company to Gluon:
| ● | For an issuance of the Company’s senior, subordinated and/or mezzanine debt securities debt securities, a cash fee payable at any closing equal to two percent (2.0%) of the gross proceeds received by the Company at such closing; |
| ● | For equity, equity-linked or convertible securities, a cash fee payable at each closing equal to five percent (5.0%) of the gross proceeds received by the Company at such closing. |
In the event of Completion, any accrued fees (i.e. $10,000/month recurring fees) owed by the Company to GLUON will be waived.
| 3. | Reference to and Effect on the Letter Agreement. Except as specifically modified or amended by the terms of this Amendment, the Letter Agreement and all provisions contained therein are, and shall continue, in full force and effect and are hereby ratified and confirmed. All references in the Letter Agreement to itself shall be deemed references to the Letter Agreement as amended hereby. |
| 4. | Counterparts. This Amendment may be executed in any number of separate counterparts, each of which shall be deemed an original and all of which shall be deemed to be one and the same instrument. |
| 5. | Governing Law. This Amendment shall be governed by the laws of United Kingdom without regard to principles of conflict of laws. |
| 6. | Successors and Assigns. This Amendment shall be binding upon the parties and their respective successors and assigns. |
| 7. | Headings. Headings in this Amendment are included for convenience of reference purposes only and shall not constitute a part of this Amendment for any other purpose. |
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In witness whereof, the Parties hereto have executed this Amendment as of the day and year first above written.
| CLIMATEROCK | ||
| By: | /s/ Charles Ratelband | |
| Name: | Charles Ratelband | |
| GLUON PARTNERS LLP | ||
| By: | /s/ Maxamilian Delamain | |
| Name: | Maxamilian Delamain | |
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Exhibit 10.3
DATED 21 September 2022
LOAN AGREEMENT
Between
(1) ClimateRock ‘The Borrower’
and
(2) Eternal BV ‘The Lender’
THIS AGREEMENT is dated and made on the 21th day of September 2022.
BETWEEN:
| (1) | ClimateRock (the “Borrower”), 50 Sloane Avenue, London, SW3 3DD, The United Kingdon and |
| (2) | Eternal BV (the “Lender”), Mariëndaal 8, 6861 WN Oosterbeek, The Netherlands. |
NOW IT IS HEREBY AGREED as follows:
BACKGROUND
The Lender has agreed to provide the Borrower with a loan facility of USD 180,000 on an unsecured basis (the “Loan”).
| 1. | Definitions and Interpretation |
| 1.1 | In this agreement:- |
|
“Advance” |
means an advance made or to be made by the Lender to the Borrower under this Agreement; |
| “Business Day” | a day other than a Saturday, Sunday or public holiday in England when banks in London are open for business; |
|
“Commencement Date”
“Drawdown Date”
“Drawdown Notice”
|
means the date of this Agreement;
means the date on which an Advance is made;
means a notice for the drawdown substantially as per the Schedule 1; |
| “Event of Default” | means any event or circumstance as specified in clause 12;
|
| “Final Repayment Date” | means 31 March 2024;
|
|
“Finance Documents”
|
means this agreement, the Security Documents and any other document designated as such by the Lender and the Borrower;
|
| “Interest Payment Date” | means 31 December 2022, 31 December 2023 and the Final Repayment Date;
|
| “Potential Event of Default” | means any event or circumstances which would, on the giving of notice, expiry of any grace period or making of any determination under this Agreement, become an Event of Default;
|
| “Repayment Date” | means each of the dates specified in clause 6;
|
| “Security” | means any mortgage, debenture, charge (whether fixed or floating, legal or equitable), pledge, lien, assignment by way of security, title retention or any other type of arrangement having a similar effect to any of them;
|
| “Tax Deduction” | means a deduction or withholding for, or on account of, Tax from a payment under the Finance Documents;
|
| “Unpaid Amount” | means any sum or amount which is not paid on the due date for its payment under this Agreement;
|
| “Warranties” | means the representations and Warranties set out at clause 10. |
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| 1.2 | Any reference in this agreement to a statute or a provision of a statute shall be construed as a reference to that statute or provision as amended, re-enacted or extended at the relevant time. |
| 1.3 | The headings in this agreement are for convenience only and shall not affect their interpretation. |
| 2. | The Facility |
Subject to and in accordance with this agreement the Lender agrees to lend to the Borrower a loan facility up to USD 180,000 available to withdraw in the period from 21 September 2022 to 31 March 2023 (the “Loan Date”).
| 3. | Purpose |
| 3.1 | The Borrower shall use all sums borrowed by it under this agreement to support anticipated offering costs and expenses. |
| 3.2 | The Lender is not obliged to monitor or verify how any amount under this agreement is used. |
| 4. | Drawdown |
Subject to clause 5 below:
| 4.1 | The Loan is available for drawing by the Borrower in unlimited number of instalments in the period form 21 September 2022 to 31 March 2023. |
| 4.2 | The Lender shall pay to the Borrower in immediately available cleared funds during the Drawdown Period, to or for the account of the Borrower as per request of the Borrower, following total receipt of the Drawdown Notice. |
| 4.3 | Delivery of the Drawdown Notice shall constitute a representation and warranty by the Borrower that on the date of the Drawdown Notice and the proposed Drawdown Date, the Warranties are correct and that no Event of Default or Potential Event of Default is continuing or would result from the proposed Loan. |
| 4.4 | The Drawdown Notice cannot be revoked without the written consent of the Lender. |
| 4.5 | Any payment which is due to be made on a day which is not a Business Day shall be made on the next Business Day. |
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| 5. | Interest |
| 5.1 | The Loan shall bear interest at an annual rate of 0 percent. |
| 6. | Repayments |
| 6.1 | The Borrower shall repay the Loan in full by way of a single or multiple repayments before or on the Final Repayment Date. |
| 7. | Re-borrowing |
The Borrower may not re-borrow any part of the Loan which has been repaid.
| 8. | Payments |
All payments made by the Borrower to the Lender under this agreement shall be made in full and paid on the due date for that payment in US dollars and in immediately cleared funds to the account of the Lender IBAN: NL72 INGB 0006 7128 70 Or any other account as the Lender may notify the Borrower.
| 9. | Value Added Tax |
All consideration expressed to be payable under a Finance Document by the Borrower to the Lender shall be deemed to be exclusive of any VAT.
| 10. | Representations and Warranties |
The Borrower represents and warrants as follows:
| 10.1 | The Borrower has the power to use its assets and carry on its business as it is being conducted, and to execute, deliver and perform its obligations under the Finance Documents and the transactions contemplated by them. |
| 10.2 | The Borrower has taken all necessary action and obtained all required or desirable consents to enable it to execute, deliver and perform its obligations under this agreement and to make this agreement admissible in evidence in its jurisdiction of incorporation. Any such authorisations are in full force and effect. |
| 10.3 | The information, in written or electronic format, supplied by the Borrower to the Lender in connection with the Facility and this agreement was, at the time it was supplied, to the best of the Borrower’s knowledge: |
| 10.3.1 | complete, true and accurate in all material respects at the time it was supplied; and |
| 10.3.2 | not misleading in any material respect, nor rendered misleading by a failure to disclose other information, except to the extent that it was amended, superseded or updated by more recent information supplied by the Borrower to the Lender. |
| 10.4 | Each set of financial statements delivered to the Lender by the Borrower were prepared in accordance with consistently applied accounting principles, standards and practices generally accepted in its jurisdiction of incorporation, and present the Borrower’s financial condition and operations during the relevant accounting period fairly and accurately. |
| 10.5 | No litigation, arbitration or administrative proceedings are taking place, pending or, to the Borrower’s knowledge, threatened against it or any of its assets. |
| 10.6 | No Event of Default has occurred, is continuing or will occur when an Advance is made. |
| 10.7 | There has been no material adverse change in the business or financial condition of the Borrower since the date of this agreement. |
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| 11. | Covenants |
The Borrower covenants with the Lender as follows:
| 11.1 | The Borrower shall not sell, lease, transfer or otherwise dispose of any of its assets other than: |
| 11.1.1 | trading stock in the ordinary course of business; |
| 11.1.2 | assets whose market value is worth less than USD100,000. |
| 11.2 | The Borrower shall notify the Lender of any Potential Event of Default or Event of Default (and the steps being taken, if any, to remedy it) promptly on becoming aware of its occurrence. |
| 11.3 | The Borrower shall supply to the Lender its financial statements for the financial year. |
| 11.4 | The Borrower shall supply to the Lender: |
| 11.4.1 | details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against the Lender as soon as it becomes aware of them. |
| 11.4.2 | any further information about the financial condition, business and operations of the Borrower that the Lender may reasonably request. |
| 12. | Events of Default |
The Loan plus accrued interest shall (subject to the service of notice from the Lender to the Borrower) become immediately due and payable by the Borrower, in so far as remaining unpaid, if an Event of Default occurs.
Each of the events or circumstances set out below is an Event of Default.
| 12.1 | The Borrower fails to pay any sum payable by it under the Finance Documents when due, unless its failure to pay is caused solely by an administrative error or technical problem and payment is made within 30 Business Days of its due date. |
| 12.2 | The Borrower fails (other than a failure to pay) to comply with any provision of the Finance Documents and (if the Lender considers, acting reasonably, that the default is capable of remedy) such default is not remedied within 30 days of:- |
| 12.2.1 | the Borrower becoming aware of the default; or |
| 12.2.2 | the Lender notifying the Borrower of the default and the remedy required, Whichever is the earliest. |
| 12.3 | Any representation, warranty or statement made, repeated or deemed made by the Borrower in, or pursuant to, the Finance Documents is (or proves to have been) incomplete, untrue, incorrect or misleading when made, repeated or deemed made. |
| 12.4 | Any indebtedness of the Borrower is not paid when due; or |
| 12.4.1 | any indebtedness becomes due, or capable of being declared due, prior to its stated maturity by reason of default; or |
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| 12.4.2 | any expropriation, attachment, sequestration, distress, execution or enforcement of Security affects any of the Borrower’s assets. |
| 12.5 | An event or circumstance referred to in Clause 12.4 shall not constitute an Event of Default if the aggregate amount of the indebtedness is less than USD 1,000. |
| 12.6 | Any action, proceedings, procedure or step is taken in relation to: |
| 12.6.1 | the suspension of payments, winding up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Borrower; or |
| 12.6.2 | the appointment of a liquidator, receiver, administrator, compulsory manager or other similar officer in respect of the Borrower or any of its assets. |
| 12.7 | Any Security on or over the assets of the Borrower becomes enforceable and is not discharged within 30 days of enforcement commencing. |
| 12.8 | Where any event occurs (or circumstances exist) which, in the reasonable opinion of the Lender, is likely to materially and adversely affect the ability of the Borrower to perform all or any of its obligations under, or otherwise comply with, the terms of the Finance Documents or any of them. |
| 13. | Assignment and Transfer |
| 13.1 | The Lender may assign any of its rights, or transfer any of its rights or obligations by novation. |
| 13.2 | The Borrower may not assign any of its rights or obligations under the Finance Documents. |
| 14. | Set-Off |
| 14.1 | The Lender may set off any amounts owing under this agreement against any sums owing the Lender to the Borrower. |
| 14.2 | The Lender shall not be obliged to exercise any rights given to it under this clause. |
| 15. | Remedies, Waivers, Amendments and Consents |
| 15.1 | Any amendment to this agreement shall be in writing and signed by or on behalf of each party. |
| 15.2 | Any waiver of any right or consent given under this agreement is only effective if it is in writing and signed by the waiving and consenting party, and applies only in the circumstances for which it is given. |
| 15.3 | No delay or failure to exercise any right under this agreement shall operate as a waiver of that right. |
| 15.4 | No single or partial exercise of any right under this agreement shall prevent any further exercise of the same or any other right under this agreement. |
| 15.5 | Rights and remedies under this agreement are cumulative and not exclusive of any other rights or remedies provided by law or otherwise. |
| 16. | Severance |
If any provision of this agreement is held by any competent authority to be invalid or unenforceable in whole or in part, the validity of the other provisions of this document and the remainder of the provision in question shall not be affected thereby.
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| 17. | Third Party Rights |
A person who is not a party to this agreement shall have no rights under this agreement pursuant to the Contracts (Rights of Third Parties) Act 1999.
| 18. | Communications |
| 18.1 | All communications between the parties about the loan shall be in writing and delivered by hand or sent by pre-paid first class post or sent by fax or e-mail: |
| 18.1.1 | (in the case of communications to the Lender) to its registered office or such changed address as shall be notified to the Borrower by the Lender; or |
| 18.1.2 | (in the case of the communications to the Borrower) to the registered office of the addressee (if it is a company) or (in any other case) to any address of the Borrower set out in any document which forms part of the contract or such other address as shall be notified to the Lender by the Borrower. |
| 18.2 | Communications shall be deemed to have been received: |
| 18.2.1 | if sent by pre-paid first class post, two Business Days after posting (exclusive of the day of posting); or |
| 18.2.2 | if delivered by hand, on the day of delivery; or |
| 18.2.3 | if sent by fax or e-mail on a Business Day prior to 4.00 pm, at the time of transmission and otherwise on the next Business Day. |
| 18.3 | Communications addressed to the Lender shall be marked for the attention of Charles Ratelband. |
| 19. | Waiver against trust account |
The Lender hereby agrees on behalf of itself and its affiliates that, notwithstanding anything to the contrary in this agreement, neither the Lender nor any of its affiliates do now or shall at any time hereafter have any right, title, interest or claim of any kind in or to any monies in the trust account of Borrower (as described in detail in the IPO prospectus of Borrower) or distributions therefrom, or make any claim against the trust account (including any distributions therefrom), regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability.
| 20. | Governing Law and Jurisdiction |
This Deed shall be governed by, construed and enforced in accordance with the law of England and Wales to the jurisdiction of which the parties hereto submit.
7
IN WITNESS OF WHICH the parties have signed this agreement the day and year first above written.
| /s/ Per Regnarsson | /s/ Charles Ratelband | |
| Signed by Per Regnarsson | Signed by Charles Ratelband for and on behalf of the Lender | |
| Re for and on behalf of the Borrower ClimateRock |
Eternal BV |
8
SCHEDULE 1
Drawdown Notice
To: Eternal BV, The Lender
From: ClimateRock, The Borrower
Date:21 September 2022
Re: Loan Agreement dated 21 September 2022 made between the Lender and the Borrower for an amount of up to USD 180,000.
We refer to the Loan Agreement. Terms defined in the Loan Agreement shall have their defined meanings when used in this Drawdown Notice.
We confirm the total drawdown the Loan as follows:
Amount: USD 180,000
Drawdown Period: 21 eptember 2022 to 31 March 2023
We represent and warrant that the Warranties as set out in the Loan Agreement are true and correct in all material respects as at the date of this notice and will be true and correct in all material respects immediately.
We confirm that no Event of Default or Potential Event of Default has occurred as at the date of this notice.
We acknowledge that this Drawdown Notice cannot be revoked without the written consent of the Lender.
| Signed by Per Regnarsson | Signed by Charles Ratelband for and on behalf of the Lender | |
| Re for and on behalf of the Borrower ClimateRock |
Eternal BV |
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Per Regnarsson, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of ClimateRock; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | (Paragraph intentionally omitted in accordance with SEC Release Nos. 34-47986 and 34-54942); |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting. |
| Date: November 9, 2022 | By: | /s/ Per Regnarsson |
| Per Regnarsson | ||
|
Chief Executive Officer (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Abhishek Bawa, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of ClimateRock; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | (Paragraph intentionally omitted in accordance with SEC Release Nos. 34-47986 and 34-54942); |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting. |
| Date: November 9, 2022 | By: | /s/Abhishek Bawa |
| Abhishek Bawa | ||
|
Chief Financial Officer (Principal Financial and Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of ClimateRock (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Per Regnarsson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: November 9, 2022 | ||
| /s/ Per Regnarsson | ||
| Name: | Per Regnarsson | |
| Title: | Chief
Executive Officer (Principal Executive Officer) | |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of ClimateRock (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Abhishek Bawa, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: November 9, 2022 | ||
| /s/ Abhishek Bawa | ||
| Name: | Abhishek Bawa | |
| Title: |
Chief Financial Officer (Principal Financial and Accounting Officer) | |